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207206
VII
A REVIEW AND ANALYSIS OFTHE COMPANY'S FINANCIAL CONDITION
AND OPERATING RESULTS,AND A LISTING OFRISKS
1.
F
INANCIAL CONDITION
U
nit :
N
T$ thousands
Difference
Item
2007 2006
Amount
%
current assets
83,172,719 61,810,772 21,361,947 35
long-term investments
2,899,109 824,481 2,074,628 252
Properties
3,715,901 2,909,624 806,277 28
other assets
656,817 449,300 207,517 46
Total assets
90,444,546 65,994,177 24,450,369 37
current liabilities
34,368,139 23,421,319 10,946,820 47
Long-term liabilities
-- 0 0
other liabilities
628 640 ( 12) ( 2)
Total liabilities
34,368,767 23,421,959 10,946,808 47
Capital stock
5,731,337 4,364,192 1,367,145 31
Capital surplus
4,415,845 4,452,688 ( 36,843) ( 1)
Retained earnings
45,920,120 33,988,785 11,931,335 35
Equity adjustments
8,477 10,548 ( 2,071) ( 19)
Treasury stock
0( 243,995) 243,995 (100)
Total stockholders' equity
56,075,779 42,572,218 13,503,561 32
N
ote: Explanations of the
m
ain reasons for and the i
m
pact of any
m
aterial changes
(
a change fro
m
the previous period of 20 percent or
m
ore and a
m
ounting to at least
N
T$10
m
illion
)
in
H
TC
'
s
assets, liabilities, and shareholders
'
equity in the
m
ost recent two fiscal years, and the plan for related future
m
easures.
Explanation:
(
1
)
The increase in current assets for the period was pri
m
arily due to an increase in current-period operating revenue and profits and the corresponding increase in bank deposits.
(
2
)
The increase in long-ter
m
invest
m
ents for the current period was pri
m
arily due to the establish
m
ent and develop
m
ent of overseas sales locations, and new invest
m
ents in
H
TC Asia
Pacific,
H
TC A
m
erica,
H
TC Europe and the
S
hanghai
m
aintenance facilities.
(
3
)
The increase in fixed assets for the current period was pri
m
arily due to the co
m
pletion and initial use during the current period of the plants and office buildings
H
TC engaged others
to build on its own land.
(
4
)
Increases for other assets in the current period were pri
m
arily due to increases in deferred inco
m
e tax assets, resulting fro
m
increased allocations to warranty reserves and
m
arketing
fees payable based on an increase in revenues for the period.
(
5
)
The increase in current liabilities for the period was pri
m
arily due to increases in
m
arketing fees payable and warranty reserves resulting fro
m
own-brand and teleco
m
provider brand
business growth. Although there was a one-ti
m
e
N
T$1.67 billion royalty reserve reversal in the current year,
m
arketing fees payable and warranty reserves increased by
N
T$2.2 billion
and
N
T$2.1 billion respectively fro
m
the previous period, which also increased current liabilities for the period.
(
6
)
The increase in capital stock for the period was pri
m
arily due to a capital increase out of undistributed earnings and e
m
ployee bonuses in the current period. In 2007
H
TC retired all
treasury stock, a total of 3,624,000 shares.
(
7
)
The increase in retained earnings for the period was pri
m
arily due to a net basic inco
m
e inflow in the current period.
A REVIEW AND A NALYSIS OF THE C OMPANY'S
FINANCIAL CO NDITIO N AND OPERATIN G RESULTS,
AND A LISTIN G OF RISKS