Taiwan Mobile Co., Ltd.

2Q14 Results Summary July 28, 2014

The information contained in this presentation, including all forwardlooking information, is subject to change without notice, whether as a result of new information, future events or otherwise, and Taiwan Mobile Co., Ltd. (the “Company”) undertakes no obligation to update or revise the information contained in this presentation. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is the information intended to be a complete statement of the Company, markets or developments referred to in this presentation.

Business Overview

TWM’s Performance

Mobile Service Revenue

Unit: NT$mn

Unit: NT$mn Unit: NT$mn 2% YoY 16,299 16,182 16,151 16,043 15,899 2Q13 3Q13 4Q13 1Q14 2Q14

VAS Revenue

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17% YoY
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Peer Comparison - ARPU

Unit: NT$

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762
749 750
737 731
TWM
731 735 728
714 718 FET
623
612 609
588 591 CHT
2Q13 3Q13 4Q13 1Q14 2Q14
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Based on IFRS – Residual Value Method, i.e. excluding revenue adjustments under the current bundle sales accounting policy.

Smartphone as % of total handsets sold

700 LTE enabled devices

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HTC LG Sony M8 G3 Z2a

Samsung Samsung Note 3 S5

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HTC HTC ASUS Desire 816 Desire 610 PadFone S

Samsung HTC One Note 3 Neo Mini 2

Mobile data adoption rate

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Infocus ASUS TWM Amazing TWM Amazing Samsung M511 Zenfone 5 X2 X1 Core Lite

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Samsung Galaxy Samsung TWM Amazing ASUS Samsung Tab 10.5 Galaxy P6 Fonepad 7 Galaxy Tab 4 Tab 8.4 5

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Sub base
2Q14 ARPU
YoY growth
Analogue TV 1% $494
Cable Internet 5% $546
DTV 55% $133
Blended ARPU * $796 +2% YoY
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Calculation based on total cable TV revenue excluding content agency revenue

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momo
2Q14 2Q13 YoY
(Unit: NT$bn)
Total Revenue 5.62 4.89 15%
- Online Shopping 3.52 2.66 32%
- TV Home Shopping & Other 2.10 2.23 -6%
EBITDA 0.39 0.28 43%
EBITDA margin 7.0% 5.6%
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Note: momo announced the sale of its cosmetics stores and department store operations on March 28, 2014 and August 30, 2013, respectively. The related operating results of the aforementioned business lines were reclassified retroactively as discontinued operations and thus were not included in the table above.

Financial Overview

NT$bn	Revenue	Revenue	Revenue	Revenue	EBITDA	EBITDA	EBITDA	EBITDA
	Telecom	CATV	momo	Total	Telecom	CATV	momo	Total
2Q14	19.73	1.58	5.62	26.94	6.85	0.86	0.39	8.16
% of total	73%	6%	21%	100%	84%	11%	5%	100%
2Q14 YoY	-2%	2%	15%	1%	2%	3%	43%	4%
1Q14 YoY	3%	3%	15%	5%	2%	5%	35%	3%

Note: The combined total of telecom, CATV and momo does not equal the consolidated total of each account due to other revenue and minor adjustments / eliminations.

NT$mn	2Q14	YoY	as % of 2Q14 Guidance	1H14
Revenue	26,936	1%	95%	54,663
Cost	(17,333)	3%	92%	(35,323)
Operating expenses	(4,210)	-4%	92%	(8,835)
Operating income	5,394	0%	112%	10,505
Net non-operating items	(199)	-57%	45%	(231)
Income before tax	5,195	5%	118%	10,274
Net income	4,137	5%	116%	8,221
EPS (NT$)	1.54	5%	116%	3.06
EBITDA	8,164	4%	105%	15,936
EBITDA margin	30.31%			29.15%

NT$bn	2Q14	1Q14	2Q13	2Q14	1Q14	2Q13
Total Assets	143.08	142.93	111.81 Liabilities	89.70	78.51	61.36
Current Assets	26.81	28.54	31.74 Current Liabilities	55.39	49.62	42.31
- Cash & Cash Equivalents	6.00	8.18	11.28 - ST Debts	15.88	25.55	4.77
- Accounts Receivable	14.33	14.15	13.00 - Other Current Liabilities	39.51	24.07	37.54
- Inventories	3.06	2.94	3.18 Non-Current Liabilities	34.31	28.89	19.05
- Other Current Assets	3.42	3.27	4.28 - Long-Term Borrowings	29.08	23.08	14.79
Non-current Assets	116.27	114.39	80.08 - Deferred Income Tax Liability	2.44	2.66	2.48
- Long-term Investment	2.57	2.47	3.27 - Other Non-current Liabilities	2.79	3.15	1.78
- Property and Equipment	45.27	42.81	42.38
- Concession	39.70	40.02	4.11
- Other Non-current Assets	28.73	29.09	30.32 Shareholders' Equity	53.38	64.42	50.46
			2Q13 - Paid-in Capital - Capital Surplus	34.21	34.21	34.21
	2Q14	1Q14
				12.48	12.48	12.43
Current Ratio	48%	58%	75% - Legal Reserve	21.54	19.26	19.26
Net Debt to Equity	73%	63%	16% - Un-appropriated Earnings	4.83	6.61	6.61
Net Debt to EBITDA (x)	1.22	1.30	0.27 - Treasury Shares	(31.08)	(31.08)	(31.08)
ROE (annualized)	33%	27%	32% - Retained Earnings & Others*	11.40	22.94	9.02

Including accumulated profits, minority interest and other equity items

NT$bn	2Q14	1Q14	2Q13
Operating Cash Flow	6.68	6.84	7.42
Investing Cash Flow	(4.79)	(0.99)	(5.12)
Financing Cash Flow	(4.07)	(5.63)	2.90

NT$bn	2Q14	1Q14	2Q13
Cash CAPEX	(4.78)	(2.27)	(2.71)
Free Cash Flow	1.90	4.57	4.70

3Q14 Guidance & Board Resolutions

NT$bn	3Q14F	3Q13	YoY
Revenue	28.30	27.08	5%
EBITDA	7.89	8.02	-2%
Operating Income	4.72	5.54	-15%
Non-operating Expense	0.62	0.29	115%
Net Income	3.44	4.27	-19%
EPS (NT$)	1.28	1.58	-19%

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ECB Issuance

The board today (July 28, 2014) approved the issuance of a 5-year EuroConvertible Bond of no more than US$500mn with a zero coupon, zero yield to maturity, conversion premium of 20% to 32.5%, and no conversion price adjustment for dividend yield below 5.8%.

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Capex Guidance Revision The board today (July 28, 2014) approved an additional NT$1.82bn capex budget for 2014 mainly to reflect momo’s investment of its logistics and warehousing center. Thus, 2014 capex is revised to be NT$15.4bn: NT$9.8bn for mobile, NT$2.1bn for fixed-line, NT$1bn for cable TV, and NT$2.5bn for momo and other subsidiaries.

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Regulatory Update

NCC approved TWM and FET returning their respective 5MHz 2G spectrums on the 1800MHz band on July 16, 2014. Accordingly, TWM will be able to launch 1800 LTE service by the end of September.

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Awards and Recognition

Won the “Trusted Brand Gold Award” by Reader’s Digest for the eleventh consecutive year.
Received the highest “A[++] ” rating among listed companies in
“Transparency and Information Disclosure” from Taiwan’s Securities and Futures Institute for the ninth year in a row.
For the eighth time, winner of the “Corporate Social Responsibility Award” .
by Global Views Monthly

Acceleration in the deployment of the 4G network, growing number and greater variety of LTE devices and the earlier-than-expected availability of the 1800MHz LTE spectrum will propel customers’ migration to 4G services. TWM is best positioned to capture the business upside of the LTE services.

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AI assistant

Taiwan Mobile Co., Ltd. Interim / Quarterly Report 2014

52277_rns_2014-09-25_dee9ed7f-1f7b-424f-a319-5ce86517c61c.pdf