HTC 2007 Annual Report Download - page 67

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AN OVERVIEW OFTHE COMPANY'S FINANCIAL STATUS
20.STOCKHOLDERS' EQUITY
> C a p i t a l S t o ck
The Company's outstanding common stock as
of January 1, 2005 amounted to NT$2,714,276
thousand, divided into 271,427 thousand shares
at NT$10.00 par value. After the registration of
the conversion of bonds into 4,884 thousand
shares (NT$48,838 thousand) was completed,
these shares were transferred to common
stocks. In the first and second quarters of 2005,
holders of US$45,970 thousand in bonds
requested to convert their holdings into 12,452
thousand shares (NT$124,519 thousand). In
June 2005, the stockholders approved the
transfer of retained earnings amounting to
NT$577,527 thousand and employee bonuses
amounting to NT$105,000 thousand to capital
stock. As a result, the amount of the Company's
outstanding common stock as of December 31,
2005 increased to NT$3,570,160 thousand,
divided into 357,016 thousand common shares
at NT$10.00 par value.
In May 2006, the stockholders approved the
transfer of retained earnings amounting to
NT$714,032 thousand and employee bonuses
amounting to NT$80,000 thousand to capital
stock.
In April 2007, the Company retired 3,624
thousand treasury shares (NT$36,240
thousand, or US$1,118 thousand). Also, in June
2007, the stockholders approved the transfer of
retained earnings amounting to NT$1,298,385
thousand (US$40,036 thousand) and employee
bonuses amounting to NT$105,000 thousand
(US$3,238 thousand) to capital stock. As a
result, the amount of the Company's outstanding
common stock as of December 31, 2007
increased to NT$5,731,337 thousand
(US$176,729 thousand), divided into 573,134
thousand common shares at NT$10.00
(US$0.30) par value.
In their meeting on December 11, 2002, the
Company's Board of Directors resolved to issue
7,000 thousand units of employee stock options
in accordance with Article 28.3 of the Securities
and Exchange Law. Each option represents the
right to buy one newly issued common share of
the Company. The exercise price is the closing
price of the Company's common shares on the
option issuance date or the share par value,
whichever is higher. The option holders can
exercise their right for up to 35% of the granted
option units no earlier than two years from the
grant date. After three years from the grant date,
VI
2005 2006 2007
NT$ NT$ NT$ US$(Note 3)
Service cost $ 44,766 $ 5,259 $ 4,930 $ 152
Interest cost 10,042 9,400 8,591 265
Projected return on plan assets ( 5,782) ( 10,320) ( 8,979 ) ( 277)
Amortization of unrecognized net transition obligation, net - - - -
Amortization of net pension benefit 6,154 1,708 2,182 67
Net pension cost $ 55,180 $ 6,047 $ 6,724 $ 207
The reconciliation between pension fund status and prepaid pension cost as of December 31, 2005, 2006
and 2007 is as follows:
2005 2006 2007
NT$ NT$ NT$ US$(Note 3)
Present actuarial value of benefit obligation
Vested benefits $ 792 $ - $ - $ -
Non-vested benefits 127,313 153,371 170,751 5,265
Accumulated benefit obligation 128,105 153,371 170,751 5,265
Additional benefits on future salaries 161,127 159,023 145,588 4,489
Projected benefit obligation 289,232 312,394 316,339 9,754
Plan assets at fair value ( 274,197) ( 311,532) ( 348,439 ) ( 10,744)
Funded status 15,035 862 ( 32,100 ) ( 990)
Unrecognized pension loss ( 64,795) ( 74,882) ( 63,087 ) ( 1,945)
Prepaid pension cost $( 49,760) $( 74,020) $( 95,187) $( 2,935)
Assumptions used in actuarially determining the present value of the projected benefit obligation were as
follows:
2005 2006 2007
Weighted-average discount rate 3.25% 2.75% 2.75%
Assumed rate of increase in future compensation 4.75% 4.25% 4.00%
Expected long-term rate of return on plan assets 3.25% 2.75% 2.75%
•The vested benefits as of D ece m ber 31, 2005, 2006 and 2007 a m ounted to N T$962 thousand, N T$0 thousand and N T$0
thousand, respectively.
FINANCEI INDEPENDENT AUDITORS' REPORT l