Chunghwa Telecom Co., Ltd. and Subsidiaries Consolidated Financial Statements as of December 31, 2019 and 2020 and for Each of the Three Years in the Period Ended December 31, 2020 and Report of Independent Registered Public Accounting Firm ) 6 - - 2 4 24 11 57 38 70 66 95 33 249 479 555 219 120 854 712 260 221 172 122 397 2,608 1,627 4,235 2,763 5,334 2,763 2,406 5,264 13,394 13,791 18,026 $ $ US$ (Note US$ (Note 20 20 - - 3 0 5 3 0 2 58 67 646 314 101 927 6,999 6,157 3,382 1,600 1,042 7,289 1,967 6,215 4,827 3,415 1,890 2,676 13,437 15,591 23,988 73,2 19,980 45,684 77,574 77,574 67,574 76,11 11,1 NT$ 118,907 149,79 147,824 3 387,27 506,18 $ $ - - - - 90 97 841 157 654 207 984 587 9 5,812 3,291 1,600 6, 1,912 6,467 4,748 3,505 1,543 2,676 16,840 15,312 22,953 66,143 26,713 92,856 77,574 77,574 65,984 10,115 NT$ 201 149,762 146,234 374, 384,272 477,128 $ $ 40 40 9 , , 8 8 6 6 33 3 , 40 , 2 , 41 , 2 , 2 4, 30 31 6 , 36 , 1 , 22 23 2 40 25 40 31 7 414, , 3, 3 3 Notes 3, 8 4, , 2 , 14 24, 2 , 14 , 14 14, 14,30 , 4 3 3 3 3 3 3, 4, 17, 3 17, 4, 3, 3 17, 4, 3, es term loans term - in capital in - s lities at fair value through profit or profit loss through value lities at fair les m loans m term loans term bills payable term ter - - - Total currentTotal liabilities noncurrentTotal liabilities liabilitiesTotal retainedTotal earnings parent the attributable of toequity Total stockholders equityTotal Legal reserve Legal Special reserve Unappropriated earnings Short Short Financial liabi Contract liabilities notespayable andTrade accounts to Payables related parties Current liabilities tax liabilities Lease Other payab Provisions Currentportionlong of Other current liabilities Long Bonds payable Contract liabilities liabilities tax income Deferred Provisions liabilities Lease depositsCustomers’ liabilities defined benefit Net Other noncurrent liabiliti stock Common Additionalpaid Retained earnings Others PARENT LIABILITIES EQUITY AND CURRENT LIABILITIES LIABILITIES NONCURRENT OF THE TO STOCKHOLDERS EQUITY ATTRIBUTABLE INTERESTS NONCONTROLLING TOTAL - 3 - ) 6 - - 3 8 1 82 84 24 89 36 79 214 026 190 806 442 218 256 238 392 343 112 120 188 , 1,083 2,913 3 10,022 15,1 18, $ $ US$ (Note US$ (Note 20 20 5 7 0 2 10 230 677 5,331 2,306 6,124 2,349 7,193 6,69 2,495 9,621 3,133 1,000 3,373 2,214 5,266 30,420 22,622 12,409 81,803 11,009 90,285 NT$ 281,416 424,37 506,18 $ $ - 3 1 17 8 778 943 9 ,072 4,441 1,8 7,498 2,430 7,154 7,139 2,601 8,169 3,259 2,128 2,679 6,101 34,050 26,408 17,344 94 11,364 47,047 NT$ 201 283,694 383,056 477,128 $ $ 31 9 , , 36 40, 41 40, 3 41 41 8 9 2 , , , 42 , 3 , , , 40 31 14 , 3 31 36, 40 , 19 , 31 4 4 40 , , , 16, , 3, 7 ,8 4, , , , 14 3, 21 3, 3, 15 3 3 Notes , 14 3 12,40 13,29 3 3 12, 3, 17 4, , 14 3 20,3 20,41 , 14 3, 11, 4, 3, 4 3, 10 4, 3, 18 4, 3, 4 3, 4 financial statements. financial income consolidated consolidated ) assets BALANCE SHEETS from related parties from s use assets - of - Total currentTotal assets noncurrentTotal eceivable Millions of MillionsNew of U.S. Dollars or Taiwan Cash and equivalents cash throughorvalue profit loss Financialat fair assets assets financial Hedging Contract assets notes net andTrade receivable, accounts R Inventories Prepayments assets Other current monetary Other current assets throughorvalue profit loss Financialat fair assets throughvalue other comprehensive Financialat fair assets equity method accounted Investments using for Contract assets plantProperty, equipment and Right properties Investment Intangible assets assets tax income Deferred obtainingcosts of Incremental contract a assets defined benefit Net Prepayments Other noncurrent assets CHUNGHWA TELECOMSUBSIDIARIES CO., LTD. AND CHUNGHWA CONSOLIDATED 2020 31,December 2019 and (In ASSETS CURRENT ASSETS ASSETS NONCURRENT TOTAL part the notesof an accompanying integral are The CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2018, 2019 and 2020 (In Millions of New Taiwan or U.S. Dollars, Except Earnings Per Share That Are in New Taiwan or U.S. Dollars) 2018 2019 2020 Notes NT$ NT$ NT$ US$ (Note 6) REVENUES 3, 31, 40, 45 $ 215,483 $ 207,520 $ 207,609 $ 7,393 OPERATING COSTS 3, 11, 29, 31, 32, 40, 45 139,545 135,953 137,029 4,880 GROSS PROFIT 75,938 71,567 70,580 2,513 OPERATING EXPENSES Marketing 23,170 22,220 20,913 745 General and administrative 4,589 4,758 5,006 178 Research and development 3,725 3,941 3,850 137 Expected credit loss (reversal of credit loss) 920 (125) 45 2 Total operating expenses 3, 10, 29, 32, 40, 45 32,404 30,794 29,814 1,062 OTHER INCOME AND EXPENSES 16, 18, 19, 20, 32, 45 110 (127) 1,595 57 INCOME FROM OPERATIONS 43,644 40,646 42,361 1,508 NON-OPERATING INCOME AND EXPENSES Interest income 45 197 251 116 4 Other income 9, 32, 40 700 531 470 17 Other gains and losses 15, 32, 38, 40 (46) 84 (159) (6) Interest expenses 17, 32, 40, 45 (18) (104) (206) (7) Share of profits of associates and joint ventures accounted for using equity method 15, 45 509 459 244 9 Total non-operating income and expenses 1,342 1,221 465 17 INCOME BEFORE INCOME TAX 44,986 41,867 42,826 1,525 INCOME TAX EXPENSE 3, 33 6,405 7,946 8,122 289 NET INCOME 38,581 33,921 34,704 1,236 TOTAL OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified to profit or loss: Remeasurements of defined benefit pension plans 29 (1,215) 1,527 1,193 43 Unrealized gain or loss on investments in equity instruments at fair value through other comprehensive income 3, 30, 38 (346) 171 519 18 Gain or loss on hedging instruments subject to basis adjustment 3, 21 2 (1) 2 - (Continued) - 4 - CHUNGHWA TELECOM CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2018, 2019 and 2020 (In Millions of New Taiwan or U.S. Dollars, Except Earnings Per Share That Are in New Taiwan or U.S. Dollars) 2018 2019 2020 Notes NT$ NT$ NT$ US$ (Note 6) Share of remeasurements of defined benefit pension plans of associates and joint ventures 15 $ 2 $ (2) $ (4) $ - Income tax relating to items that will not be reclassified to profit or loss 33 450 (305) (239) (9) (1,107) 1,390 1,471 52 Items that may be reclassified subsequently to profit or loss: Exchange differences arising from the translation of the foreign operations 90 (61) (177) (6) Share of exchange differences arising from the translation of the foreign operations of associates and joint ventures 15 3 (1) (4) - Income tax relating to items that may be reclassified subsequently 33 - - - - 93 (62) (181) (6) Total other comprehensive income (loss), net of income tax (1,014) 1,328 1,290 46 TOTAL COMPREHENSIVE INCOME $ 37,567 $ 35,249 $ 35,994 $ 1,282 NET INCOME ATTRIBUTABLE TO Stockholders of the parent $ 37,557 $ 32,947 $ 33,419 $ 1,190 Noncontrolling interests 1,024 974 1,285 46 $ 38,581 $ 33,921 $ 34,704 $ 1,236 COMPREHENSIVE INCOME ATTRIBUTABLE TO Stockholders of the parent $ 36,552 $ 34,282 $ 34,713 $ 1,236 Noncontrolling interests 1,015 967 1,281 46 $ 37,567 $ 35,249 $ 35,994 $ 1,282 EARNINGS PER SHARE 34 Basic $4.84 $4.25 $4.31 $0.15 Diluted $4.83 $4.24 $4.30 $0.15 EARNINGS PER EQUIVALENT ADS Basic $48.41 $42.47 $43.08 $1.53 Diluted $48.35 $42.42 $43.03 $1.53 The accompanying notes are an integral part of the consolidated financial statements. (Concluded) - 5 - ) ) ) ) ) ) ) ) ) ) - - - 2 1 2 (1 (2 53 21 89 (71 294 476 (958 (710 (775 1,175 1,477 1,328 1,290 (1,014 38,581 37,567 33,921 35,249 34,704 35,994 13,791 (37,205 (34,746 (32,783 382,124 384,529 384,458 384,272 387,273 Equity NT$ $ $ $ Total ) ) ) ) ) ) ) ) ) - - - - - - - - - (9 (7 (1 (2 (4 42 22 63 (20 349 700 239 974 967 476 397 (958 (710 (775 8,470 1,024 1,015 9,857 9,837 1,285 1,281 10,115 11,158 erests NT$ ontrolling c Int $ $ $ Non ) ) ) ) ) ) - - - - - - - - - 2 1 2 (1 11 55 26 (51 783 826 777 157 294 , , 2 1,335 1 3,394 (1,005 37,557 36,552 32,947 34,282 33,419 34,713 1 (37,205 (34,746 (3 373,654 374,672 374,621 374, 376,115 NT$ $ $ $ Total Equity Total Stockholders theof Parent Attributable to Attributable ) ) ) - - - - - - - - - - - - - - - - - - - - - - - - s 33 (17 708 460 460 127 127 587 357 357 927 (248 (248 NT$ $ $ $ Total Other Total ) ) ) - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 2 1 1 2 2 2 on (1 (1 (1 Loss Instruments NT$ or $ $ $ Gain Hedging Othes ) ) ) - - - - - - - - - - - - - - - - - - - - - - - - 44 (17 883 538 538 197 197 735 522 522 (345 (345 on 1,240 Assets NT$ Income or Loss or $ $ $ at Fair Value at Fair through through Other Comprehensive Financial Financial Unrealized Gain Unrealized ) ) ) ) ) ) ) ) ) ) - - - - - - - - - - - - - - - - - - - - - - - - - 95 95 (79 (79 (69 (69 (11 (174 (148 (167 (167 (315 Operations NT$ Exchange Exchange Differences $ $ $ Arising from the Arising from Translation of Translation theof Foreign ) ) ) ) ) - - - - - - - - - - - - - - - - - 34 17 (51 783 937 , (757 2 1,208 5,264 he he Parent t 37,557 36,800 32,947 34,155 33,419 34,356 (37,205 (34,746 (3 f 147,281 146,876 146,825 146,2 147,824 o NT$ Earnings $ $ $ Total Retained Total - 6 - o Stockholders o Stockholders t ) ) ) ) ) - - - - - - - - - - - - - - - - 5 17 (51 783 937 , (757 2 1,208 2,406 67,026 37,557 36,800 66,626 66,575 32,947 34,155 65,984 33,419 34,356 67,574 (37,205 (34,746 (3 NT$ Earnings $ $ $ Unappropriated Equity Attributable Equity Attributable ) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (5 95 Retained Earnings 2,681 2,676 2,676 2,676 2,676 NT$ $ $ $ Special Reserve Special - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ,763 2 77,574 77,574 77,574 77,574