AUO : 2Q2022(English)

Stock Code:2409

AUO CORPORATION (FORMERLY AU OPTRONICS CORP.)

AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors' Review Report

For the Six Months Ended June 30, 2022 and 2021

The independent auditors' review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' review report and consolidated financial statements, the Chinese version shall prevail.

Independent Auditors' Review Report

To the Board of Directors of AUO Corporation:

Introduction

We have reviewed the accompanying consolidated balance sheets of AUO Corporation (formerly AU Optronics Corp.) and its subsidiaries (" the Company" ) as of June 30, 2022 and 2021, and the related consolidated statements of comprehensive income for the three months and six months ended June 30, 2022 and 2021, as well as the changes in equity and cash flows for the six months ended June 30, 2022 and 2021, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34, " Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with Statement of Auditing Standard 65, " Review of Financial Information Performed by the Independent Auditor of the Entity" . A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2022 and 2021, and its consolidated financial performance for the three months and six months ended June 30, 2022 and 2021, as well as its consolidated cash flows for the six months ended June 30, 2022 and 2021 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34, " Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors' review report are Yu, Chi-Lung and Yu, Wan-Yuan.

KPMG

Hsinchu, Taiwan (Republic of China)

July 27, 2022

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Accounting Standard 34, " Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. The standards, procedures and practices to review such consolidated financial statements are those generally accepted and applied in the Republic of China.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with the generally accepted auditing standards as of June 30, 2022 and 2021

AUO CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2022, December 31, 2021, and June 30, 2021

(Expressed in thousands of New Taiwan dollars)

			June 30, 2022			December 31, 2021	June 30, 2021
	Assets		Amount	%		Amount	%			Amount	%
	Current assets:
1100	Cash and cash equivalents (Note 6(1))	$	84,942,092		21		79,944,686		19			99,551,438			22
1110	Financial assets at fair value through profit or loss－
	current (Note 6(2))		521,802		-		159,270		-			75,127			-
1136	Financial assets at amortized cost－current (Note		10,000,000		3		10,000,000		2			10,000,000			2
	6(4))
1170	Notes and accounts receivable, net (Note 6(5))		29,453,025		7		59,093,573		14			60,320,210			14
1180	Accounts receivable from related parties, net (Notes		1,826,239		-		2,479,395		1			2,441,818			1
	6(5)&7)
1210	Other receivables from related parties (Note 7)		1,834,655		-		20,699		-			709,766			-
1220	Current tax assets		48,750		-		60,802		-			147,789			-
130X	Inventories (Note 6(6))		37,240,719		9		34,489,088		8			31,412,570			7
1460	Noncurrent assets held for sale (Note 6(9))		-		-		-		-			171,768			-
1476	Other current financial assets (Notes 6(5),(7),(9),		2,852,526		1		2,186,682		-			875,661			-
	(20)&8)
1479	Other current assets (Note 6(13))		3,997,682		1		3,592,203		1			4,007,623			1
			172,717,490		42		192,026,398		45			209,713,770			47
	Noncurrent assets:
1517	Financial assets at fair value through other
	comprehensive income－noncurrent (Note 6(3))		1,404,735		-		1,308,157		-			651,471			-
1550	Investments in equity-accounted investees (Notes
	6(7)&7)		25,375,086		6		25,447,133		6			22,403,993			5
1600	Property, plant and equipment (Notes 6(9),7&8)		174,553,561		43		171,222,045		40			176,099,505			40
1755	Right-of-use assets (Notes 6(10)&8)		10,375,488		3		10,638,373		3			10,925,558			3
1760	Investment property (Note 6(11))		1,409,986		-		1,437,692		-			1,462,784			-
1780	Intangible assets (Note 6(12))		11,672,131		3		11,756,955		3			12,807,781			3
1840	Deferred tax assets		6,578,820		2		6,466,588		2			6,020,831			1
1900	Other noncurrent assets (Notes 6(4),(13)&8)		4,318,179		1		4,507,705		1			3,582,623			1
			235,687,986		58		232,784,648		55			233,954,546			53

Total Assets	$ 408,405,476 100	424,811,046 100	443,668,316 100

	Liabilities and Equity
	Current liabilities:
2100	Short-term borrowings (Note 6(14))	$
2120	Financial liabilities at fair value through profit or
	loss－current (Note 6(2))
2170	Notes and accounts payable
2180	Accounts payable to related parties (Note 7)
2213	Equipment and construction payable (Note 7)
2220	Other payables to related parties (Note 7)
2230	Current tax liabilities
2250	Provisions－current (Note 6(16))
2280	Lease liabilities－current (Note 6(10))
2399	Other current liabilities (Notes 6(9),(18),(20)&(21))
2322	Current installments of long-term borrowings
	(Notes 6(15)&8)

	Noncurrent liabilities:
2527	Contract liabilities－nonccurrent (Note 6(20))
2540	Long-term borrowings, excluding current
	installments (Notes 6(15)&8)
2550	Provisions－noncurrent (Note 6(16))
2570	Deferred tax liabilities
2580	Lease liabilities－noncurrent (Note 6(10))
2600	Other noncurrent liabilities
	Total liabilities
	Equity (Note 6(18)):
	Equity attributable to shareholders of AUO
	Corporation:
3100	Common stock
3200	Capital surplus
3300	Retained earnings
3400	Other components of equity
3500	Treasury shares
	Non-controlling interests
36XX	Non-controlling interests
	Total equity
	Total Liabilities and Equity	$

June 30, 2022			December 31, 2021	June 30, 2021
Amount	%			Amount		%		Amount			%
52,100		-		45,324		-		52,000			-
162,903		-		132,797		-		189,667			-
43,912,644		11		54,574,143		13		48,702,088			11
7,639,149		2		8,825,361		2		8,013,417			2
5,696,110		1		4,317,199		1		3,281,801			1
37,491		-		72,411		-		46,820			-
3,608,128		1		2,607,235		1		2,813,077			1
845,999		-		942,290		-		772,565			-
570,379		-		534,706		-		523,689			-
40,073,063		10		34,869,439		8		27,896,404			6
7,345,731		2			16,833,597			4		19,835,308			4
109,943,697		27			123,754,502			29		112,126,836			25
7,489,702		2		8,739,846		2		9,989,990			2
45,381,972		11		37,821,267		9		84,215,436			19
888,272		-		946,018		-		988,789			-
4,678,540		1		4,224,720		1		3,051,967			1
8,903,667		2		9,190,535		2		9,436,470			2
1,862,654		1			2,167,687			1		2,016,134			1
69,204,807		17			63,090,073			15		109,698,786			25
179,148,504		44			186,844,575			44		221,825,622			50

96,242,451		24		96,242,451		23		96,242,451		22
60,563,956		15		60,057,001		14		60,387,991		13
70,649,426		17		80,669,998		19		58,360,974		13
(3,913,402)	(1)	(4,743,182)	(1)	(4,244,665)	(1)
(392,369)	-		(439,228)	-		(981,164)	-
223,150,062		55		231,787,040		55		209,765,587		47
6,106,910		1		6,179,431		1		12,077,107		3
229,256,972		56		237,966,471		56		221,842,694		50
408,405,476		100		424,811,046		100		443,668,316		100

See accompanying notes to consolidated financial statements.

(Expressed in

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards

AUO CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the Three and Six Months Ended June 30, 2022 and 2021 thousands of New Taiwan dollars, except for Earnings per share)

			Three Months Ended June 30,				Six Months Ended June 30,
			2022								2021						2022							2021
4110	Revenue		Amount	%			Amount	%			Amount	%		Amount	%
$	63,667,638					101			96,162,225			100			146,054,031					101		179,502,338			101
4190	Less: sales return and discount		783,196			1		506,725		-			1,641,727			1		906,219		1
	Net revenue (Notes 6(20)&7)		62,884,442		100		95,655,500		100		144,412,304		100		178,596,119		100
5000	Cost of sales (Notes 6(6),(10),(17),(21),(22)&7)		61,159,684			97		68,166,356		71		130,993,329			91		132,844,142		74
	Gross profit		1,724,758		3		27,489,144		29		13,418,975		9		45,751,977		26
	Operating expenses (Notes
	6(10),(17),(19),(21),(22)&7):
6100	Selling and distribution expenses		1,203,628		2		1,367,306		1		2,419,077		2		2,467,294		1
6200	General and administrative expenses		1,984,163		3		2,467,976		3		3,957,069		3		4,723,528		3
6300	Research and development expenses		3,182,021			5		3,368,755		4		6,389,686			4		6,257,823		4
	Total operating expenses		6,369,812			10		7,204,037		8		12,765,832			9		13,448,645		8
	Profit (loss) from operations		(4,645,054)	(7)	20,285,107		21		653,143		-		32,303,332		18
	Non-operating income and expenses:
7100	Interest income (Note 6(23))		171,465		-			125,197		-			283,824		-		230,779		-
7010	Other income (Notes 6(10),(23)&7)		728,983		1		276,002		-			1,210,964		1		578,774		1
7020	Other gains and losses (Notes 6(7)&(23))		(62,051)	-			(93,753)	-			76,161		-		476,833		-
7050	Finance costs (Notes 6(9)&(23))		(275,406)	-			(617,037)	-			(673,969)	-		(1,286,207)	(1)
	Share of profit of equity-accounted investees (Note
7060	6(7))		438,661			-			852,753		1		821,067			1		1,155,556		1
	Total non-operating income and expenses		1,001,652			1		543,162		1		1,718,047			2		1,155,735		1
7900	Profit (loss) before income tax		(3,643,402)	(6)	20,828,269		22		2,371,190		2		33,459,067		19
7950	Less: income tax expense (Note 6(24))		2,053,814			3		965,813		1		2,893,777			2		1,755,096		1
8200	Profit (loss) for the period		(5,697,216)	(9)	19,862,456		21		(522,587)	-		31,703,971		18
8300	Other comprehensive income (Notes 6(7),(18)&(24)):
8310	Items that will never be reclassified to profit or
	loss
8316	Unrealized gain (loss) on equity investments at
	fair value through other comprehensive income		(34,088)	-			(10,083)	-			(47,516)	-		(23,520)	-
8320	Equity-accounted investees - share of other
	comprehensive income		(641,462)	(1)	(275,558)	-			(1,135,336)	(1)	45,980		-
8349	Related tax		-				-			-			-			-				-		-			-
8360	Items that are or may be reclassified		(675,550)	(1)	(285,641)	-			(1,182,852)	(1)	22,460		-
	subsequently to profit or loss
8361	Foreign operations - foreign currency translation
	differences		(451,276)	(1)	(821,835)	(1)	2,138,716		1		(1,446,526)	(1)
8370	Equity-accounted investees - share of other
	comprehensive income		(39,177)	-			(89,171)	-			369,707		-		37,939		-
8399	Related tax		65,794			-			142,508		-			(460,024)	-		233,468		-
	Other comprehensive income (loss), net of tax		(424,659)	(1)	(768,498)	(1)	2,048,399		1		(1,175,119)	(1)
8300		(1,100,209)	(2)	(1,054,139)	(1)	865,547		-		(1,152,659)	(1)
	Total comprehensive income (loss) for the period	$
8500	(6,797,425)	(11)	18,808,317		20		342,960		-		30,551,312		17
	Profit (loss) attributable to:
8610	Shareholders of AUO Corporation	$	(5,632,459)	(9)	19,530,948		21		(468,083)	-		31,365,039		18
8620	Non-controlling interests	$	(64,757)	-			331,508		-			(54,504)	-		338,932		-
	Total comprehensive income (loss) attributable to:	(5,697,216)	(9)	19,862,456		21		(522,587)	-		31,703,971		18
8710	Shareholders of AUO Corporation	$	(6,676,789)	(11)	18,565,680		20		385,032		-		30,380,804		17
8720	Non-controlling interests	$	(120,636)	-			242,637		-			(42,072)	-		170,508		-
	Earnings (loss) per share (NT$, Note 6(25))	(6,797,425)	(11)	18,808,317		20		342,960		-		30,551,312		17
	$				(0.59)				2.06					(0.05)				3.30
9750	Basic earnings (loss) per share
9850	Diluted earnings (loss) per share	$
			(0.59)				2.04					(0.05)				3.25

See accompanying notes to consolidated financial statements.

4

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards

AUO CORPORATION AND SUBSIDIARIES Consolidated Statements of Changes in Equity For the Six Months Ended June 30, 2022 and 2021 (Expressed in thousands of New Taiwan dollars)

									Equity Attributable to Shareholders of AUO Corporation
																	Other Components of Equity
																			Unrealized
																			Gains (Losses)
																			on Financial
																			Assets at Fair					Equity
			Capital Stock						Retained Earnings					Value through					Attributable to
										Cumulative	Other					Shareholders	Non-
			Common								Unappropriated			Translation	Comprehensive			Treasury	of AUO	controlling
Balance at January 1, 2021			Stock	Capital Surplus	Legal Reserve		Special Reserve		Earnings	Subtotal	Differences	Income	Subtotal	Shares	Corporation	Interests	Total Equity
$	96,242,451	60,587,684		7,691,688	2,005,384		20,561,210			30,258,282		(3,206,520)		(63,783)		(3,270,303)		(1,013,423)		182,804,691		10,985,674		193,790,365
Appropriation of earnings:
Legal reserve			-		-		735,456		-			(735,456)	-		-		-		-		-		-		-		-
Special reserve
		-		-		-		1,264,919			(1,264,919)	-		-		-		-		-		-		-		-
Cash dividends distributed to shareholders
		-		-		-		-			(2,850,967)	(2,850,967)	-		-		-		-		(2,850,967)	-		(2,850,967)
Profit for the period			-		-		-		-			31,365,039			31,365,039		-		-		-		-		31,365,039		338,932		31,703,971
Other comprehensive income (loss), net of tax			-	-		-	-		(8,030)	(8,030)	(1,006,695)	30,490		(976,205)	-		(984,235)	(168,424)	(1,152,659)
Total comprehensive income (loss) for the
period			-	-		-	-		31,357,009			31,357,009		(1,006,695)	30,490		(976,205)	-		30,380,804		170,508		30,551,312
Changes in deemed contributions from
shareholders			-		(39)	-	-		-			-		-		-		-		-		(39)	-		(39)
Adjustments for changes in investees' equity
		-		(238,690)	-	-		(401,507)	(401,507)	-		-		-		-		(640,197)	-		(640,197)
Share-based payments			-		39,036		-		-			-			-		-		-		-		32,259		71,295		796		72,091
Changes in non-controlling interests			-	-		-	-		-			-		-		-		-		-		-		920,129		920,129
Disposal of equity investments measured at
fair value through other comprehensive
income			-		-		-		-			(1,843)	(1,843)	-		1,843		1,843		-		-		-		-
Balance at June 30, 2021	$
96,242,451		60,387,991		8,427,144		3,270,303			46,663,527			58,360,974		(4,213,215)	(31,450)	(4,244,665)	(981,164)	209,765,587		12,077,107		221,842,694
Balance at January 1, 2022
$	96,242,451	60,057,001		8,427,144	3,270,303		68,972,551			80,669,998		(4,873,573)	130,391		(4,743,182)	(439,228)	231,787,040		6,179,431		237,966,471
Appropriation of earnings:
Legal reserve			-		-		5,326,268		-			(5,326,268)	-		-		-		-		-		-		-		-
Special reserve
		-		-		-		1,472,878			(1,472,878)	-		-		-		-		-		-		-		-
Cash dividends distributed to shareholders
		-		-		-		-			(9,575,824)	(9,575,824)	-		-		-		-		(9,575,824)	-		(9,575,824)
Loss for the period
		-		-		-		-			(468,083)	(468,083)	-		-		-		-		(468,083)	(54,504)	(522,587)
Other comprehensive income (loss), net of tax			-	-		-	-		(15,063)	(15,063)	2,035,967		(1,167,789)	868,178		-		853,115		12,432		865,547
Total comprehensive income (loss) for the
period			-	-		-	-		(483,146)	(483,146)	2,035,967		(1,167,789)	868,178		-		385,032		(42,072)	342,960
Changes in deemed contributions from
shareholders			-		(56)	-	-		-			-		-		-		-		-		(56)	-		(56)
Adjustments for changes in investees' equity			-		434,408		-		-			-			-		-		-		-		-		434,408		1		434,409
Share-based payments			-		72,603		-		-			-			-		-		-		-		46,859		119,462		5,058		124,520
Changes in non-controlling interests			-	-		-	-		-			-		-		-		-		-		-		(35,508)	(35,508)
Disposal of equity investments measured at
fair value through other comprehensive
income			-		-		-		-			38,398			38,398		-		(38,398)	(38,398)	-		-		-		-
Balance at June 30, 2022	$
96,242,451		60,563,956		13,753,412		4,743,181			52,152,833			70,649,426		(2,837,606)	(1,075,796)	(3,913,402)	(392,369)	223,150,062		6,106,910		229,256,972

See accompanying notes to consolidated financial statements.