AUO — Interim / Quarterly Report 2017

Nov 13, 2017

Stock Code ： 2409

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Interim Financial Statements

June 30, 2017 and 2016 (With Independent Auditors’ Review Report)

The 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 auditors’ review report and consolidated financial statements, the Chinese version shall prevail.

1

Independent Auditors’ Review Report

To the Board of Directors of AU Optronics Corp.:

We have reviewed the accompanying consolidated balance sheets of AU Optronics Corp. and its subsidiaries (“the Company”) as of June 30, 2017 and 2016 and the related consolidated statements of comprehensive income for the three months ended June 30, 2017 and 2016 and for the six months ended June 30, 2017 and 2016, as well as the consolidated statements of changes in equity and cash flows for the six months ended June 30, 2017 and 2016. These consolidated interim financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these consolidated interim financial statements based on our review.

We conducted our reviews in accordance with Statement on Auditing Standard No. 36, “Engagements to Review Financial Statements”. A review consists principally of inquiries of the Company’s personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with the generally accepted auditing standards, the objective of which is the expression of an opinion regarding the consolidated interim financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements referred to in the first paragraph in order for them to be in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Accounting Standard 34 “Interim Financial Reporting” endorsed by the Financial Supervisory Commission of the Republic of China.

We have audited the consolidated financial statements of the Company for the year ended December 31, 2016 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China, in which we issued an unqualified opinion on February 13, 2017. In our opinion, the consolidated balance sheet as of December 31, 2016 and the related disclosures that extracted from the annual consolidated financial statements for the year ended December 31, 2016 included in the consolidated interim financial statements referred to above, in all material aspects, present fairly.

The engagement partners on the review resulting in this independent auditors’ review report are Wei, Shing-Hai and Lu, Chien-Hui.

KPMG Hsinchu, Taiwan (Republic of China) July 25, 2017

Notice 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 Financial Reporting Standards, International Accounting Standards, interpretations as well as related guidance endorsed 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.

The 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 auditors’ review report and consolidated financial statements, the Chinese version shall prevail.

2

Reviewed only, not audited in accordance with generally accepted auditing standards as of June 30, 2017 and 2016

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2017, December 31, 2016 and June 30, 2016 (Expressed in thousands of New Taiwan dollars)

June 30, 2017 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(1)) $ 102,800,518 23 1110 Financial assets measured at fair value through profit or loss－current (Note 6(2)) 57,094 - 1170 Notes and accounts receivable, net (Note 6(5)) 42,218,055 9 1180 Accounts receivable from related parties, net (Note 6(5)&7) 2,518,107 1 1210 Other receivables from related parties (Note 7) 175,941 - 1220 Current tax assets 9,794 - 130X Inventories (Note 6(6)) 25,539,903 6 1476 Other current financial assets (Note 6(5)&8) 451,111 - 1460 Noncurrent assets held for sale (Note 6(8)) - - 1479 Other current assets (Note 6(11)) 7,399,598 2 181,170,121 41 Noncurrent assets: 1523 Available-for-sale financial assets－ noncurrent (Note 6(3)) 4,371,875 1 1543 Financial assets carried at cost－ noncurrent (Note 6(4)) 207,815 - 1550 Investments in equity-accounted investees (Note 6(7)) 5,077,657 1 1600 Property, plant and equipment (Note 6(8),7&8) 216,104,848 49 1760 Investment property (Note 6(9)&8) 465,868 - 1780 Intangible assets (Note 6(10)) 13,451,955 3 1840 Deferred tax assets 14,285,376 3 1900 Other noncurrent assets (Note 6(11)&8) 6,007,625 2 259,973,019 59 Total assets $ 441,143,140 100	June 30, 2017	December 31, 2016	June 30, 2016 Amount % 72,954,216 18 528,433 - 34,416,938 8 2,775,437 1 231,352 - 14,645 - 27,754,179 7 1,462,132 - - - 5,285,292 1 145,422,624 35 2,157,676 1 137,182 - 12,233,614 3 214,058,959 51 465,868 - 14,269,862 3 16,914,666 4 11,724,614 3 271,962,441 65 417,385,065 100 June 30, 2017 Liabilities and Stockholders’ Equity Amount % Current liabilities: 2100 Short-term borrowings (Note 6(12)) $ 2,160,253 1 2120 Financial liabilities measured at fair value through profit or loss－current (Note 6(2)) 250,713 - 2125 Hedging derivative financial liabilities －current (Note 6(2)) - - 2170 Notes and accounts payable 45,303,374 10 2180 Notes and accounts payable to related parties (Note 7) 7,537,175 2 2213 Equipment and construction payable 9,536,832 2 2220 Other payables to related parties (Note 7) 14,436 - 2230 Current tax liabilities 5,518,916 1 2250 Provisions－current (Note 6(14)) 926,675 - 2399 Other current liabilities 30,131,718 7 2322 Current installments of long-term borrowings (Note 6(13)&8) 16,871,558 4 118,251,650 27 Noncurrent liabilities: 2510 Hedging derivative financial liabilities －noncurrent (Note 6(2)) - - 2540 Long-term borrowings, excluding current installments (Note 6(13)&8) 105,675,736 24 2550 Provisions－noncurrent (Note 6(14)) 1,014,773 - 2570 Deferred tax liabilities 3,200,365 1 2600 Other noncurrent liabilities 1,855,444 - 111,746,318 25 Total liabilities 229,997,968 52 Equity:(Note 6(17)) Equity attributable to shareholders of AU Optronics Corp.: 3100 Common stock 96,242,451 22 3200 Capital surplus 60,022,161 13 3300 Retained earnings 38,160,464 9 3400 Other components of equity (17,708 ) - 194,407,368 44 Non-controlling interests: 36XX Non-controlling interests 16,737,804 4 Total equity 211,145,172 48 Total Liabilities and Equity $ 441,143,140 100	June 30, 2017	December 31, 2016	June 30, 2016
		Amount % 80,191,248 19 65,669 - 45,710,177 11 2,533,224 1 34,288 - 14,057 - 27,679,335 6 559,946 - 228,015 - 6,330,283 1 163,346,242 38 2,836,696 1 193,582 - 5,178,337 1 222,741,832 52 465,868 - 13,602,834 3 14,364,745 3 7,039,115 2 266,423,009 62 429,769,251 100			Amount % 526,723 - 896,998 - 3,540 - 51,148,055 13 8,823,065 2 12,647,041 3 27,341 - 949,890 - 1,783,407 - 22,385,488 5 18,074,627 4 117,266,175 27 - - 106,187,993 26 1,038,264 - 3,705,300 1 1,936,337 - 112,867,894 27 230,134,069 54 96,242,451 22 59,979,723 14 24,243,153 6 779,372 - 181,244,699 42 18,390,483 4 199,635,182 46 429,769,251 100	Amount % 1,575,893 - 112,505 - - - 48,730,166 12 8,351,570 2 11,223,760 3 27,718 - 2,056,907 - 4,409,010 1 24,811,200 6 21,093,266 5 122,391,995 29 8,446 - 94,669,791 23 1,098,217 - 4,478,604 1 3,428,347 1 103,683,405 25 226,075,400 54 96,242,451 23 60,428,105 14 10,988,365 3 3,114,284 1 170,773,205 41 20,536,460 5 191,309,665 46 417,385,065 100

See accompanying notes to the consolidated interim financial statements

3

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

AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and six months ended June 30, 2017 and 2016 (Expressed in thousands of New Taiwan dollars, except for earnings per share)

Three months ended June 30, 2017 2016 Amount % Amount % 4110 Revenue $ 84,806,534 100 80,361,430 100 4190 Less: sales return and discount 394,134 - 270,527 - Net revenue(Note 6(19)&7) 84,412,400 100 80,090,903 100 5000 Cost of sales(Note 6(6),(20),(21)&7) 67,291,581 80 74,526,564 93 Gross profit 17,120,819 20 5,564,339 7 Operating expenses:(Note 6(20),(21)&7) 6100 Selling and distribution expenses 932,815 1 996,454 1 6200 General and administrative expenses 2,072,060 2 2,267,229 3 6300 Research and development expenses 2,439,915 3 2,184,965 3 Total operating expenses 5,444,790 6 5,448,648 7 Profit (loss) from operations 11,676,029 14 115,691 - Non-operating income and expenses: 7010 Other income (Note 6(22)&7) 604,695 1 500,176 1 7020 Other gains and losses (Note 6(2),(23)&7) 4,511 - (341,135) - 7050 Finance costs (Note 6(8)&(24)) (712,271) (1) (562,079) (1) 7060 Share of profit of equity-accounted investees (Note 6(7)) 71,095 - 47,189 - Total non-operating income and expenses (31,970 ) - (355,849 ) - 7900 Profit (loss) before income tax 11,644,059 14 (240,158) - 7950 Less: income tax expense(Note 6(25)) 2,697,570 3 563,416 1 8200 Profit (loss) for the period 8,946,489 11 (803,574 ) (1 ) 8300 Other comprehensive income: (Note 6(7),(17)&(25)) 8310 Items that will never be reclassified to profit or loss 8320 Equity-accounted investees – share of other comprehensive income 387 - 238 - 8349 Related tax - - - - 387 - 238 - 8360 Items that are or may be reclassified subsequently to profit or loss 8361 Foreign operations – foreign currency translation differences 1,123,037 1 (1,992,396) (2) 8362 Net change in fair value of available-for-sale financial assets 1,058,081 1 185,131 - 8363 Effective portion of changes in fair value of cash flow hedges - - 1,748 - 8370 Equity-accounted investees – share of other comprehensive income (loss) 2,596 - (22,950) - 8399 Related tax (161,213 ) - 338,914 - 2,022,501 2 (1,489,553 ) (2 ) 8300 Other comprehensive income (loss), net of tax 2,022,888 2 (1,489,315 ) (2 ) 8500 Total comprehensive income (loss) for the period $ 10,969,377 13 (2,292,889 ) (3 ) Profit (loss) attributable to: 8610 Shareholders of AU Optronics Corp. $ 9,829,784 12 (572,407) (1) 8620 Non-controlling interests (883,295 ) (1 ) (231,167 ) - $ 8,946,489 11 (803,574 ) (1 ) Total comprehensive income (loss) attributable to: 8710 Shareholders of AU Optronics Corp. $ 11,596,261 14 (1,421,125) (2) 8720 Non-controlling interests (626,884 ) (1 ) (871,764 ) (1 ) $ 10,969,377 13 (2,292,889 ) (3 ) Earnings per share(Note 6(26)) 9750 Basic earnings per share $ 1.02 (0.06 ) 9850 Diluted earnings per share $ 1.01 (0.06 )

Six months ended June 30, 2017 2016 Amount % Amount % 173,651,659 100 151,770,131 100 682,443 - 543,996 - 172,969,216 100 151,226,135 100 138,415,648 80 145,272,276 96 34,553,568 20 5,953,859 4 1,880,431 1 1,999,390 1 4,059,300 2 4,541,704 3 4,920,401 3 4,393,992 3 10,860,132 6 10,935,086 7 23,693,436 14 (4,981,227 ) (3 ) 2,085,900 1 1,028,486 1 (836,528) - (632,240) - (1,436,622) (1) (1,100,199) (1) 87,615 - 159,994 - (99,635 ) - (543,959 ) - 23,593,801 14 (5,525,186) (3) 5,212,679 3 858,812 1 18,381,122 11 (6,383,998 ) (4 ) 714 - 238 - - - - - 714 - 238 - (3,365,799) (2) (3,398,594) (2) 1,535,179 1 80,473 - (21,992) - 2,293 - (56,536) - (339,634) - 477,390 - 611,949 - (1,431,758 ) (1 ) (3,043,513 ) (2 ) (1,431,044 ) (1 ) (3,043,275 ) (2 ) 16,950,078 10 (9,427,273 ) (6 ) 19,308,977 11 (6,049,733) (4) (927,855 ) - (334,265 ) - 18,381,122 11 (6,383,998 ) (4 ) 18,512,611 11 (8,020,669) (5) (1,562,533 ) (1 ) (1,406,604 ) (1 ) 16,950,078 10 (9,427,273 ) (6 ) 2.01 (0.63 ) 1.96 (0.63 )

2017 Amount % 173,651,659 100 682,443 - 172,969,216 100 138,415,648 80 34,553,568 20 1,880,431 1 4,059,300 2 4,920,401 3 10,860,132 6 23,693,436 14 2,085,900 1 (836,528) - (1,436,622) (1) 87,615 - (99,635 ) - 23,593,801 14 5,212,679 3 18,381,122 11 714 - - - 714 - (3,365,799) (2) 1,535,179 1 (21,992) - (56,536) - 477,390 - (1,431,758 ) (1 ) (1,431,044 ) (1 ) 16,950,078 10 19,308,977 11 (927,855 ) - 18,381,122 11 18,512,611 11 (1,562,533 ) (1 ) 16,950,078 10 2.01 1.96

See accompanying notes to the consolidated interim financial statements

4

Reviewed only, not audited in accordance with generally accepted auditing standards AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the six months ended June 30, 2017 and 2016 (Expressed in thousands of New Taiwan dollars)

Balance at January 1, 2016 $ Appropriation of earnings Legal reserve Cash dividends distributed to shareholders Loss for the period Other comprehensive income (loss), net of tax Total comprehensive income (loss) for the period Adjustments to capital surplus and retained earnings for changes in investees’ equity Group reorganization Changes in non-controlling interests Balance at June 30, 2016 $ Balance at January 1, 2017 $ Appropriation of earnings Legal reserve Cash dividends distributed to shareholders Profit (loss) for the period Other comprehensive income (loss), net of tax Total comprehensive income (loss) for the period Adjustments to capital surplus and retained earnings for changes in investees’ equity Changes in non-controlling interests Balance at June 30, 2017 $			**Equity attributable to shareholders of AU Optronics Corp. **	**Equity attributable to shareholders of AU Optronics Corp. **	**Equity attributable to shareholders of AU Optronics Corp. **	**Equity attributable to shareholders of AU Optronics Corp. **	**Equity attributable to shareholders of AU Optronics Corp. **		Equity attributable to shareholders of AU Optronics Corp. 181,985,222 - (3,368,486 ) (6,049,733) (1,970,936 ) (8,020,669 ) 157,132 20,006 - 170,773,205 181,244,699 - (5,389,577 ) 19,308,977 (796,366 ) 18,512,611 39,635 - 194,407,368	Non- controlling interests 22,651,183 - - (334,265) (1,072,339 ) (1,406,604 ) (572,155 ) 37,036 (173,000 ) 20,536,460 18,390,483 - - (927,855) (634,678 ) (1,562,533 ) 4,639 (94,785 ) 16,737,804	Total equity 204,636,405 - (3,368,486 ) (6,383,998) (3,043,275 ) (9,427,273 ) (415,023 ) 57,042 (173,000 ) 191,309,665 199,635,182 - (5,389,577 ) 18,381,122 (1,431,044 ) 16,950,078 44,274 (94,785 ) 211,145,172
	Capital Stock	Capital surplus 60,249,983 - - - - - 158,116 20,006 - 60,428,105 59,979,723 - - - - - 42,438 - 60,022,161	Retained earnings Legal reserve Unappropriated earnings Subtotal 2,164,596 18,242,681 20,407,277 493,196 (493,196 ) - - (3,368,486 ) (3,368,486 ) - (6,049,733) (6,049,733) - 291 291 - (6,049,442 ) (6,049,442 ) - (984 ) (984 ) - - - - - - 2,657,792 8,330,573 10,988,365 2,657,792 21,585,361 24,243,153 781,894 (781,894 ) - - (5,389,577 ) (5,389,577 ) - 19,308,977 19,308,977 - 714 714 - 19,309,691 19,309,691 - (2,803 ) (2,803 ) - - - 3,439,686 34,720,778 38,160,464			Other components of equity		Subtotal 5,085,511 - - - (1,971,227 ) (1,971,227 ) - - - 3,114,284 779,372 - - - (797,080 ) (797,080 ) - - (17,708 **) **
	Common stock 96,242,451 - - - - - - - - 96,242,451 96,242,451 - - - - - - - 96,242,451		Legal reserve 2,164,596 493,196 - - - - - - - 2,657,792 2,657,792 781,894 - - - - - - 3,439,686	Unappropriated **earnings **	Cumulative translation differences 5,612,885 - - - (2,051,400 ) (2,051,400 ) - - - 3,561,485 536,819 - - - (2,312,929 ) (2,312,929 ) - - (1,776,110 **) **	Unrealized gains (losses) on available- for-sale financial assets (539,653 ) - - - 78,331 78,331 - - - (461,322 ) 224,299 - - - 1,534,103 1,534,103 - - 1,758,402	Unrealized gains (losses) on cash flow hedges 12,279 - - - 1,842 1,842 - - - 14,121 18,254 - - - (18,254 ) (18,254 ) - - -
				18,242,681 (493,196 ) (3,368,486 ) (6,049,733) 291 (6,049,442 ) (984 ) - - 8,330,573 21,585,361 (781,894 ) (5,389,577 ) 19,308,977 714 19,309,691 (2,803 ) - 34,720,778

See accompanying notes to the consolidated interim financial statements

5

Reviewed only, not audited in accordance with generally accepted auditing standards AU OPTRONICS CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the six months ended June 30, 2017 and 2016 (Expressed in thousands of New Taiwan dollars)

Cash flows from operating activities: Profit (loss) before income tax $ Adjustments for: Depreciation Amortization Interest expense Interest income Share of profit of equity-accounted investees Losses (gains) on disposals of property, plant and equipment, net Impairment losses on assets Changes in fair values of financial instruments Unrealized foreign currency exchange losses Others Subtotal of income and expense items not affecting cash flows Change in operating assets and liabilities: - notes and accounts receivable - receivables from related parties - inventories - other current assets - notes and accounts payable - payables to related parties - net defined benefit liability - provisions - other current liabilities Subtotal of net changes in operating assets and liabilities Subtotal of adjustment items Cash generated from operations Cash received from interest income Cash received from dividend income Cash paid for interest Cash paid for income taxes Net cash provided by operating activities Cash flows from investing activities: Acquisitions of financial assets carried at cost Proceeds from disposals of equity-accounted investees Acquisitions of property, plant and equipment Proceeds from disposals of property, plant and equipment Increase in refundable deposits Increase in intangible assets Decrease (increase) in other financial assets Net cash used in investing activities Cash flows from financing activities: Increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Decrease in guarantee deposits received Net change of non-controlling interests and others Net cash provided by financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period $	Six months endedJune 30,	Six months endedJune 30,
	2017 23,593,801 18,673,261 343,436 1,436,622 (267,809) (87,615) 225,396 - (637,710) 402,998 (24,209 ) 20,064,370 2,160,031 17,261 2,064,616 634,426 (5,092,010) (1,298,795) (55,463) (862,203) 2,277,965 (154,172 ) 19,910,198 43,503,999 282,079 29,239 (1,277,956) (625,007 ) 41,912,354 (14,233) 57 (18,216,313) 503,882 (392,939) (192,556) 21,893 (18,290,209 ) 1,633,530 18,206,235 (18,804,742) (43,925) 11,350 1,002,448 (2,015,323 ) 22,609,270 80,191,248 102,800,518	2016 (5,525,186 ) 19,277,891 495,896 1,100,199 (256,720) (159,994) (18,443) 34,747 (755,397) 343,371 (6,085 ) 20,055,465 (3,184,601) (290,131) 3,828,182 9,428,612 (2,597,023) (975,897) (62,518) (501,517) (3,438,391 ) 2,206,716 22,262,181 16,736,995 286,012 2,607 (989,190) (1,212,669 ) 14,823,755 (66,948) - (26,355,114) 207,267 (15,732) (190,479) (28,500 ) (26,449,506 ) (17,821) 38,098,171 (29,998,038) (22,587) (1,625,018 ) 6,434,707 (735,440 ) (5,926,484) 78,880,700 72,954,216

See accompanying notes to the consolidated interim financial statements

6

Reviewed only, not audited in accordance with generally accepted auditing standards as of June 30, 2017 and 2016 AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

June 30, 2017 and 2016 (Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

1. Organization

AU Optronics Corp. (“AUO”) was founded on August 12, 1996 and is located in Hsinchu Science Park, the Republic of China (“ROC”). AUO’s main activities are the research, development, production and sale of thin film transistor liquid crystal displays (“TFT-LCDs”) and other flat panel displays used in a wide variety of applications. AUO also engages in the production and sale of solar modules and systems. AUO’s common shares have been publicly listed on the Taiwan Stock Exchange since September 2000, and its American Depositary Shares (“ADSs”) have been listed on the New York Stock Exchange since May 2002.

On September 1, 2001 and October 1, 2006, Unipac Optoelectronics Corp. (“Unipac”) and Quanta Display Inc. (“QDI”) were merged with and into AUO, respectively. AUO is the surviving Company, whereas Unipac and QDI were dissolved.

The consolidated interim financial statements comprise AUO and its subsidiaries (collectively as “the Company”).

2. The Authorization of Financial Statements

These consolidated interim financial statements were approved and authorized for issue by the Board of Directors of AUO on July 25, 2017.

3. Application of New Standards, Amendments and Interpretations

• (1) Impact of adoption of new, revised or amended standards and interpretations endorsed by the Financial Supervisory Commission, ROC (“FSC”)

In preparing the accompanying consolidated financial statements, the Company has adopted the following International Financial Reporting Standards (“IFRS”), International Accounting Standards (“IAS”), and Interpretations that have been issued by the International Accounting Standards Board (“IASB”) (collectively, “IFRSs”) and endorsed by the FSC, with effect from 2017.

	Effective Date
New, Revised or Amended Standards and Interpretations	Issued by IASB
Amendments to IFRS 10, IFRS 12 and IAS 28,Investments Entities:	January 1, 2016
Applying the Consolidation Exception
Amendments to IFRS 11,Joint Arrangements: Accounting for	January 1, 2016
Acquisitions of Interests in Joint Operations
IFRS 14,Regulatory Deferral Accounts	January 1, 2016
Amendments to IAS 1,Presentation of Financial Statements - Disclosure	January 1, 2016
Initiative

(Continued)

7

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

New, Revised or Amended Standards and Interpretations

Effective Date Issued by IASB

Amendments to IAS 16 and IAS 38,Clarification of Acceptable Methods of Depreciation and Amortization Amendments to IAS 16 and IAS 41,Agriculture: Bearer Plants Amendments to IAS 19,Defined Benefit Plans: Employee Contributions Amendments to IAS 27,Equity Method in Separate Financial Statements Amendments to IAS 36,Impairment of Assets - Recoverable Amount Disclosures for Non-Financial Assets Amendments to IAS 39,Financial Instruments - Novation of Derivatives and Continuation of Hedge Accounting Annual Improvements to IFRSs 2010 – 2012 Cycle and 2011 – 2013 Cycle Annual Improvements to IFRSs 2012 – 2014 Cycle IFRIC 21,Levies

January 1, 2016 January 1, 2016 July 1, 2014 January 1, 2016 January 1, 2014 January 1, 2014 July 1, 2014 January 1, 2016 January 1, 2014

The initial adoption of aforementioned IFRSs endorsed by the FSC has not had a significant impact on the Company’s consolidated interim financial statements.

• (2) Impact of the IFRSs that have been endorsed by the FSC but not yet in effect

According to Ruling No. 1060025773 issued on July 14, 2017 by the FSC, commencing from 2018, the Company is required to adopt the IFRSs that have been endorsed by the FSC with effective date from 2018. The related new, revised or amended standards and interpretations are set out below:

New, Revised or Amended Standards and Interpretations

Effective Date **Issued by IASB **

Amendments to IFRS 2,Share-based Payments - Classification and Measurement of Share-based Payment Transactions Amendments to IFRS 4,Insurance Contracts - Applying IFRS 9, Financial Instruments with IFRS 4, Insurance Contracts IFRS 9,Financial Instruments IFRS 15,Revenue from Contracts with Customers Amendments to IAS 7,Statement of Cash Flows - Disclosure Initiative Amendments to IAS 12,Income Taxes - Recognition of Deferred Tax Assets for Unrealized Losses Amendments to IAS 40,Transfers of Investment Property

January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2017 January 1, 2017 January 1, 2018

(Continued)

8

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

New, Revised or Amended Standards and Interpretations	Effective Date Issued by IASB
Annual Improvements to IFRSs 2014 – 2016 Cycle: IFRS 12,Disclosure of Interests in Other Entities IFRS 1,First-time Adoption of International Financial Reporting Standards_and IAS 28,_Investments in Associates and Joint Ventures IFRIC 22,Foreign Currency Transactions and Advance Consideration	January 1, 2017 January 1, 2018 January 1, 2018

Except for the items discussed below, the Company believes that the initial adoption of abovementioned standards or interpretations will not have any significant impact on its accounting policies.

a. IFRS 9, Financial Instruments

IFRS 9 replaces the existing guidance in IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including replacing the “incurred loss” model with an “expected credit loss” model for calculating impairment on financial assets, and the new general hedge accounting requirements.

Under IFRS 9, a new “expected credit loss” model is used to measure the impairment of financial assets. A loss allowance for expected credit losses should be recognized on financial assets measured at amortized cost and financial assets mandatorily measured at fair value through other comprehensive income.

The main changes in hedge accounting are amendments to application requirements for hedge accounting. Compared with IAS 39, the main changes include: (i) enhancing types of transactions eligible for hedge accounting; (ii) changing the way hedging derivative instruments are accounted for; and (iii) replacing retrospective effectiveness assessment with the principle of economic relationship between the hedging instrument and the hedged item.

The Company is currently revamping its accounting procedures and internal control over financial reporting in accordance with the requirement of this Standard, and also, is assessing the potential impact to the Company as a result of the initial adoption of IFRS 9. Based on the Company’s preliminary view, the initial adoption of IFRS 9 would not have a material impact on the measurement for the Company’s financial instruments. However, the impact of adopting IFRS 9 on the Company’s consolidated financial statements for the year 2018 will depend on the financial instruments that the Company holds then and the economic condition at the same time, as well as accounting judgments that the Company will make in the future.

(Continued)

9

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

• b. IFRS 15, Revenue from Contracts with Customers and related amendments

IFRS 15 establishes a five-step model framework for recognizing revenue that apply to all contracts with customers, and will supersede IAS 18, Revenue , IAS 11, Construction Contracts , and a number of revenue-related interpretations.

When applying IFRS 15, the Company shall recognize revenue when a customer obtains control of the goods and services, by applying the following steps:

• (i) Identify the contract with the customer;

• (ii) Identify the performance obligations;

• (iii) Determine the transaction price;

• (iv) Allocate the transaction price to the performance obligations in the contracts; and

• (v) Recognize revenue when the entity satisfies a performance obligation.

When IFRS 15 and related amendments become effective, the Company may elect to apply this Standard either retrospectively to each prior reporting period presented or retrospectively with a recognition of cumulative effect of the initial adoption of this Standard at the date of initial adoption.

The Company is currently revamping its accounting procedures and internal control over financial reporting in accordance with the requirement of this Standard, and also, is assessing the potential impact to the Company resulting from the initial adoption of IFRS 15. Based on the Company’s preliminary view, the initial adoption of IFRS 15 would not have significant differences and influences on the current recognition of the Company’s revenue from contracts with customers. However, the impact of adopting IFRS 15 on the Company’s consolidated financial statements for the year 2018 will depend on the relative contracts with customers then.

• (3) The IFRSs issued by the IASB but not yet endorsed by the FSC

A summary of the new standards and amendments issued by the IASB but not yet endorsed by the FSC is set out below.

New, Revised or Amended Standards and Interpretations	Effective Date **Issued by IASB **
Amendments to IFRS 10 and IAS 28,Sale or Contribution of Assets between an Investor and its Associate or Joint Venture IFRS 16,Leases IFRS 17,Insurance Contracts IFRIC 23,Uncertainty over Income Tax Treatments	Subject to IASB’s announcement January 1, 2019 January 1, 2021 January 1, 2019

Except for the item discussed below, the Company believes that the initial adoption of abovementioned standards or interpretations will not have any significant impact on its accounting policies.

(Continued)

10

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

IFRS 16, Leases

IFRS 16 sets out the accounting standards for leases that will supersede IAS 17, Leases and a number of related interpretations.

Under IFRS 16, a lessee is required to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with exception for leases of low-value assets and short-term leases which the Company may elect to apply the accounting method similar to the accounting for operating lease under IAS 17. Additionally, a depreciation expense charged on the right-of-use asset and an interest expense accrued on the lease liability, for which interest is computed by using effective interest method, are recognized separately on the statement of comprehensive income. On the statement of cash flows, cash payments for the principal amount and the interest of the lease liability are generally classified within financing activities.

When IFRS 16 becomes effective, as a lessee, the Company may elect to apply this Standard either retrospectively to each prior reporting period presented or retrospectively with a recognition of cumulative effect of the initial adoption of this Standard at the date of initial adoption. As a lessor, the Company is not required to make any adjustments for leases except it is an intermediate lessor in a sub-lease.

The Company has performed a preliminary assessment and identification on whether its current operating leases are in the scope of IFRS 16, in which the main impact is that, in case a lease contract meets the lease definition in this Standard, the Company shall recognize an asset and a liability. The related impact of adoption IFRS 16 by the Company will be disclosed when the Company completes the assessment.

Except for the aforementioned impact, as of the date that the accompanying consolidated interim financial statements were issued, the Company continues in assessing the potential impact on its financial position and results of operations as a result of the application of other standards, interpretations and amendments. The potential impact will be disclosed when the assessment is complete.

4. Summary of Significant Accounting Policies

(1) Statement of compliance

The accompanying consolidated interim financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”) and IAS 34, Interim Financial Reporting , as endorsed by the FSC. The consolidated interim financial statements do not present all the disclosures required for a complete set of annual consolidated financial statements prepared under the IFRSs endorsed and issued into effect by the FSC for application.

Except as described below, the significant accounting policies applied in the consolidated interim financial statements are the same as those applied in the consolidated financial statements for the year ended December 31, 2016, and have been applied consistently to all periods presented in the consolidated interim financial statements. Refer to note 4 of the consolidated financial statements for the year ended December 31, 2016 for the details.

(Continued)

11

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(2) Basis of consolidation

Principles of preparation of the consolidated interim financial statements are the same as those applied in the consolidated financial statements for the year ended December 31, 2016. Refer to note 4(3) of the consolidated financial statements for the year ended December 31, 2016.

List of subsidiaries in the consolidated interim financial statements was as follows:

Name of Investor	Name of Subsidiary	Main Activities and Location Holding and trading company (Malaysia) Venture capital investment (Taiwan ROC) Venture capital investment (Taiwan ROC) Manufacturing and sale of color filters (Taiwan ROC) Sale of TFT-LCD panels; leasing (Taiwan ROC) Design, development and implementation of environmentally friendly projects and solutions (Taiwan ROC) Manufacturing, design and sale of TFT-LCD modules, TV set, backlight modules and related parts (Taiwan ROC) Holding company (Taiwan ROC) Manufacturing and sale of ingots and solar wafers (Taiwan ROC) Renewable energy power generation (Taiwan ROC) Solar power generation (Taiwan ROC) Renewable energy power generation (Taiwan ROC) Renewable energy power generation (Taiwan ROC) Renewable energy power generation (Taiwan ROC) Manufacturing and sale of solar wafers (Malaysia)	Percentage of Ownership (%)	Percentage of Ownership (%)	Percentage of Ownership (%)
			June 30, 2017 100.00 100.00 100.00 - 100.00 100.00(2) 51.04 99.99 96.04 100.00 - 100.00 100.00 100.00(2) 100.00	December 31, 2016	June 30, 2016
AUO AUO AUO AUO AUO AUO AUO, Konly and Ronly AUO, Konly and Ronly AUO, Konly and Ronly Konly Konly Konly Konly Konly ACTW	AU Optronics (L) Corp. (AULB) Konly Venture Corp. (Konly) Ronly Venture Corp. (Ronly) Taiwan CFI Co., Ltd. (CFI) (Previously named as “Toppan CFI (Taiwan) Co., Ltd. (Toppan CFI)”) Space Money Inc. (SMI) U-Fresh Technology Inc. (UTI) Darwin Precisions Corporation (DPTW) Sanda Materials Corporation (SDMC) AUO Crystal Corp. (ACTW) Fargen Power Corporation (FGPC) Evergen Power Corporation (EGPC) LiGen Power Corporation (LGPC) TronGen Power Corporation (TGPC) ChampionGen Power Corporation (CGPC) AUO Crystal (Malaysia) Sdn. Bhd. (ACMK)			100.00 100.00 100.00 -(5) 100.00 - 51.04 99.99 96.31 100.00 -(6) 100.00 100.00 - 100.00	100.00 100.00 100.00 100.00 100.00 - 48.80(1) 99.99 96.44 100.00 100.00 100.00 100.00(2) - - 100.00

(Continued)

12

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Name of Investor	Name of Subsidiary	Main Activities and Location Manufacturing and sale of ingots (Japan) Sales and sales support of TFT-LCD panels (United States) Sales support of TFT-LCD panels (Japan) Sales support of TFT-LCD panels (Netherlands) Sales support of TFT-LCD panels (South Korea) Holding company and sales support of TFT-LCD panels (Singapore) Assembly of solar modules (Czech Republic) Sales support of TFT-LCD panels (PRC) Manufacturing and assembly of TFT-LCD modules (PRC) Manufacturing and assembly of TFT-LCD modules (PRC) Manufacturing and assembly of TFT-LCD modules (PRC) Repairing of TFT-LCD modules; injecting and stamping parts; manufacturing and sale of mold (Slovakia Republic) Manufacturing TFT-LCD panels based on low temperature polysilicon technology (Singapore) Manufacturing and sale of TFT-LCD panels (PRC) Research and development and IP related business (United States) Holding company (Malaysia) Manufacturing and sale of liquid crystal products and related parts (PRC) Holding company (Malaysia) Holding company (BVI)	Percentage of Ownership (%)	Percentage of Ownership (%)	Percentage of Ownership (%)
			June 30, 2017 99.9991 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 51.00 100.00 100.00 100.00 100.00 100.00	December 31, 2016	June 30, 2016
SDMC AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB AULB and DPTW AUXM DPTW DPTW	M.Setek Co., Ltd. (M.Setek) AU Optronics Corporation America (AUUS) AU Optronics Corporation Japan (AUJP) AU Optronics Europe B.V. (AUNL) AU Optronics Korea Ltd. (AUKR) AU Optronics Singapore Pte. Ltd. (AUSG) AU Optronics (Czech) s.r.o. (AUCZ) AU Optronics (Shanghai) Co., Ltd. (AUSH) AU Optronics (Xiamen) Corp. (AUXM) AU Optronics (Suzhou) Corp., Ltd. (AUSZ) AU Optronics Manufacturing (Shanghai) Corp. (AUSJ) AU Optronics (Slovakia) s.r.o. (AUSK) AFPD Pte., Ltd. (AUST) AU Optronics (Kunshan) Co., Ltd. (AUKS) a.u. Vista Inc. (AUVI) BriView (L) Corp. (BVLB) BriView (Xiamen) Corp. (BVXM) Darwin Precisions (L) Corp. (DPLB) Forhouse International Holding Ltd. (FHVI)			99.9991 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 51.00 100.00 100.00 100.00(4) 100.00 100.00	99.9991 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 51.00 100.00 100.00 100.00(4) 100.00 100.00

(Continued)

13

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Name of Investor	Name of Subsidiary	Main Activities and Location Holding company (BVI) Holding company (Mauritius) Holding company (Samoa) Holding company (Samoa) Holding company (Mauritius) Holding company (Mauritius) Manufacturing of motorized treadmills (PRC) Manufacturing and sale of light guide plates, backlight modules and related parts (PRC) Manufacturing and sale of light guide plates, backlight modules and related parts (PRC) Manufacturing and sale of precision plastic parts (PRC) Manufacturing and sale of light guide plates, backlight modules and related parts (PRC) Manufacturing and sales of precision metal parts (PRC) Holding company (Hong Kong) Manufacturing, assembly and sale of automotive parts (Slovakia Republic) Manufacturing and sale of backlight modules and related parts (PRC) Manufacturing and sale of backlight modules and related parts (PRC) Manufacturing and sale of backlight modules and related parts (PRC) Manufacturing and sale of liquid crystal products and related parts (PRC) Manufacturing and sale of solar modules (PRC)	Percentage of Ownership (%)	Percentage of Ownership (%)	Percentage of Ownership (%)
			June 30, 2017 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00(3) 100.00 100.00 100.00(3) 100.00 100.00 100.00 100.00 100.00(3) 100.00 100.00	December 31, 2016	June 30, 2016
DPTW FHVI FHVI FHVI FHVI FRVI FFMI FTMI FTMI FWSA and FTMI PMSA FLMI DPLB DPLB DPHK DPHK DPHK BVLB AUSG	Force International Holding Ltd. (FRVI) Fortech International Corp. (FTMI) Forward Optronics International Corp. (FWSA) Prime Forward International Ltd. (PMSA) Full Luck Precisions Co., Ltd. (FLMI) Forefront Corporation (FFMI) Forthouse Electronics (Suzhou) Co., Ltd. (FHWJ) Fortech Electronics (Suzhou) Co., Ltd. (FTWJ) Fortech Optronics (Xiamen) Co., Ltd. (FTXM) Suzhou Forplax Optronics Co., Ltd. (FPWJ) Fortech Electronics (Kunshan) Co., Ltd. (FTKS) Full Luck (Wujiang) Precisions Co., Ltd. (FLWJ) Darwin Precisions (Hong Kong) Limited (DPHK) Darwin Precisions (Slovakia) s.r.o. (DPSK) Darwin Precisions (Suzhou) Corp. (DPSZ) Darwin Precisions (Xiamen) Corp. (DPXM) Darwin Precisions (Chengdu) Corp. (DPCD) BriView (Hefei) Co., Ltd. (BVHF) AUO Energy (Tianjin) Corp. (AETJ)			100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00(3) 100.00 100.00 100.00 100.00 100.00(3) 100.00 100.00	100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00(3) 100.00 100.00(2) 100.00 100.00 100.00(3) 100.00 100.00

(Continued)

14

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Name of Investor	Name of Subsidiary	Main Activities and Location Sale and sales support of solar-related products (United States) Sales support of solar modules (Netherlands)	Percentage of Ownership (%)	Percentage of Ownership (%)	Percentage of Ownership (%)
			June 30, 2017 100.00 100.00	December 31, 2016	June 30, 2016
AUSG AUSG	AUO Green Energy America Corp. (AEUS) AUO Green Energy Europe B.V. (AENL)			100.00 100.00	100.00 100.00

• Note 1: Although the Company did not own more than 50% of DPTW’s ownership interests for the six months ended June 30, 2016, it was considered to have de facto control over the operating policies of DPTW. As a result, DPTW was accounted for as a subsidiary of the Company.

• Note 2: TGPC was incorporated in April 2016. DPSK was incorporated in May 2016. UTI was incorporated in January 2017. CGPC was incorporated in May 2017.

• Note 3: As part of a business restructuring, DPCD, FLWJ and FTXM have been resolved by their respective boards of directors for liquidation. The liquidation is still in process for these entities as of June 30, 2017.

• Note 4: As part of a business restructuring, BVLB disposed all its shareholdings in wholly owned subsidiary, BVXM, to AUXM in March 2016. This was treated as an equity transaction as there was no change in control of BVXM by the Company.

• Note 5: On October 1, 2016, CFI was amalgamated to AUO and dissolved on that day.

• Note 6: Konly disposed all its shareholdings in EGPC to Star River Energy Corporation (“SREC”) in October, 2016.

(3) Employee benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially-determined pension cost rate at the end of prior fiscal year, adjusted for significant market fluctuations subsequent to the end of prior fiscal year and for significant curtailments, settlements, or other significant one-time events.

(4) Income taxes

The Company measures and discloses interim period income tax expense in accordance with paragraph B12 of IAS 34, Interim Financial Reporting .

Income tax expense is best estimated by multiplying pre-tax income of the interim period by a projected annual effective tax rate, and is recognized as current tax expense.

15

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Income taxes that are recognized directly in equity or other comprehensive income are measured in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding tax bases at the tax rates that are expected to be applied in the year in which the asset is realized or the liability is settled.

5. Critical Accounting Judgments and Key Sources of Estimation and Assumption Uncertainty

The preparation of the consolidated interim financial statements in conformity with the Regulations and IAS 34, Interim Financial Reporting , as endorsed by the FSC requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing the consolidated interim financial statements, critical accounting judgments and key sources of estimation uncertainty used by management in the application of accounting policies are consistent with those described in note 5 of the consolidated financial statements for the year ended December 31, 2016.

6. Description of Significant Accounts

Except as described below, the description of significant accounts in the accompanying consolidated interim financial statements is not materially different from those described in note 6 of the consolidated financial statements for the year ended December 31, 2016.

(1) Cash and Cash Equivalents

June 30, 2017 Cash on hand, demand deposits and checking accounts $ 40,345,317 Time deposits 55,143,532 Government bonds with reverse repurchase agreements 7,311,669 $ 102,800,518	December 31, 2016 (in thousands) 42,389,461 37,676,746 125,041 80,191,248	June 30, 2016
		42,225,874 29,803,325 925,017
		72,954,216

Refer to note 6(28) for the disclosure of currency risk and sensitivity analysis of the financial assets and liabilities of the Company.

As at June 30, 2017, December 31, 2016 and June 30, 2016, no cash and cash equivalents were pledged with banks as collaterals.

16

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(2) Derivative Financial Instruments and Hedging Instruments

a. Derivative Financial Instruments

Financial assets measured at fair value through profit or loss – current: Foreign currency forward contracts $ Financial liabilities measured at fair value through profit or loss – current: Foreign currency forward contracts $ Hedging derivative financial liabilities – current: Interest rate swap contracts $ Hedging derivative financial liabilities – noncurrent: Interest rate swap contracts $	June 30, 2017 57,094 250,713 - -	December 31, 2016 (in thousands) 65,669 896,998 3,540 -	June 30, 2016 528,433
			112,505
			-
			8,446

As of June 30, 2017, December 31, 2016 and June 30, 2016, outstanding foreign currency forward contracts were as follows:

June 30, 2017 Contract item Maturity date Contract amount (in thousands) Sell USD / Buy NTD Jul. 2017 – Sep. 2017 USD623,400 / NTD18,879,274 Sell USD / Buy JPY Jul. 2017 – Nov. 2017 USD110,329 / JPY12,211,960 Sell NTD / Buy JPY Aug. 2017 NTD1,468,976 / JPY5,360,000 Sell USD / Buy CNY Jul. 2017 – Oct. 2017 USD96,900 / CNY664,917 Sell EUR / Buy JPY Jul. 2017 – Sep. 2017 EUR73,000 / JPY8,943,606 Sell EUR / Buy CZK Jul. 2017 – Aug. 2017 EUR3,390 / CZK90,701 Sell USD / Buy MYR Jul. 2017 – Sep. 2017 USD734 / MYR3,153 Sell CNY / Buy USD Jul. 2017 – Aug. 2017 CNY62,742 / USD9,161 Sell CNY / Buy JPY Jul. 2017 – Nov. 2017 CNY268,917 / JPY4,304,895 Sell USD / Buy SGD Jul. 2017 USD5,485 / SGD7,591

(Continued)

17

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

	December 31, 2016	December 31, 2016
Contract item Sell USD / Buy NTD Sell USD / Buy JPY Sell NTD / Buy JPY Sell USD / Buy CNY Sell EUR / Buy JPY Sell EUR / Buy CZK Sell EUR / Buy USD Sell USD / Buy MYR Sell JPY / Buy NTD Sell CNY / Buy USD Sell EUR / Buy NTD Sell CNY / Buy JPY Sell USD / Buy SGD	Maturity date Jan. 2017 – Feb. 2017 Jan. 2017 – Mar. 2017 Mar. 2017 Jan. 2017 – Jun. 2017 Mar. 2017 Jan. 2017 – Feb. 2017 Mar. 2017 Jan. 2017 – Mar. 2017 Mar. 2017 Jan. 2017 – Apr. 2017 Jan. 2017 Jan. 2017 – Jul. 2017 Jan. 2017	Contract amount
		(in thousands) USD711,000 / NTD22,687,304 USD126,730 / JPY13,860,716 NTD1,474,085 / JPY5,400,000 USD96,000 / CNY662,180 EUR90,000 / JPY10,693,738 EUR3,190 / CZK85,791 EUR41,000 / USD44,148 USD741 / MYR3,296 JPY50,000 / NTD13,725 CNY359,763 / USD52,189 EUR5,000 / NTD171,967 CNY588,583 / JPY9,068,273 USD170,157 / SGD245,680

	June 30, 2016
Contract item Sell USD / Buy NTD Sell USD / Buy JPY Sell NTD / Buy JPY Sell NTD / Buy USD Sell USD / Buy CNY Sell EUR / Buy JPY Sell EUR / Buy CZK Sell USD / Buy SGD Sell EUR / Buy USD Sell USD / Buy MYR Sell JPY / Buy NTD Sell CNY / Buy USD Sell EUR / Buy NTD Sell CNY / Buy EUR Sell CNY / Buy JPY	Maturity date Jul. 2016 – Aug. 2016 Jul. 2016 – Nov. 2016 Jul. 2016 – Aug. 2016 Jul. 2016 – Sep. 2016 Jul. 2016 – Oct. 2016 Jul. 2016 – Sep. 2016 Jul. 2016 – Aug. 2016 Jul. 2016 Nov. 2016 Jul. 2016 – Sep. 2016 Sep. 2016 Jul. 2016 Jul. 2016 – Aug. 2016 Jul. 2016 Aug. 2016 – Dec. 2016	Contract amount
		(in thousands) USD229,000 / NTD7,422,134 USD167,972 / JPY17,975,713 NTD333,545 / JPY1,097,000 NTD97,853 / USD3,017 USD121,500 / CNY796,668 EUR93,000 / JPY11,243,558 EUR3,660 / CZK98,939 USD4,290 / SGD5,769 EUR47,000 / USD53,957 USD605 / MYR2,464 JPY4,840,000 / NTD1,481,646 CNY1,219,719 / USD183,700 EUR14,000 / NTD512,168 CNY2,672 / EUR360 CNY358,653 / JPY5,486,626

(Continued)

18

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Net gains (losses) of foreign currency forward contracts were as follows:

Unrealized gains (losses) $ Realized gains (losses) **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) (547,139) 922,653 637,710 755,397 354,701 (619,530 ) 821,220 (226,767 ) (192,438 ) 303,123 1,458,930 528,630
	2017 (547,139) 354,701 (192,438 )

AUO entered into interest rate swap contracts with several banks to manage interest rate risk exposure arising from financing activities. As of June 30, 2017, there was no outstanding interest rate swap contract. As of December 31, 2016 and June 30, 2016, AUO’s total notional amount of outstanding interest rate swap contracts amounted to $1,760,000 thousand and $2,560,000 thousand, respectively, and all of which were related to effective hedges. For the six months ended June 30, 2017 and 2016, no unrealized gains or losses resulting from change in fair value of interest rates swap contracts were recognized in profit and loss.

b. Hedge accounting

The Company entered into Plain Vanilla type interest rate swap contracts as the primary hedging instrument. The Company paid interest based on fixed rate and received market floating-rate from the counterparty. The aforementioned hedging contracts were intended to protect the Company from the risk of future cash flow fluctuation of debt bearing floating interest rate. These contracts were designated as cash flow hedges and met the criteria for hedge accounting.

Details of hedged items designated as cash flow hedges and their respective hedging derivative financial instruments were as follows:

	December 31, 2016
Hedged item Long-term borrowings with floating interest rate	Hedging instrument Fair value of hedging instrument (in thousands) Interest rate swap contracts $ (3,540)	Expected period of cash flows Jan. 2017 – Aug. 2017	Expected period of recognition in comprehensive income
			Jan. 2017 – Aug. 2017

(Continued)

19

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

June 30, 2016

Hedged item Hedging instrument Fair value of hedging instrument (in thousands) Long-term borrowings with floating interest rate Interest rate swap contracts $ (8,446) Available-for-sale Financial Assets－noncurrent June 30, 2017 Equity securities– listed company $ 4,371,875 Financial Assets Carried at Cost－noncurrent June 30, 2017 Equity securities– unlisted company $ 207,815	Fair value of hedging instrument		Expected period of cash flows Jul. 2016 – Aug. 2017 December 31, 2016	Expected period of recognition in comprehensive income

• －

• (3) Available-for-sale Financial Assets noncurrent

• －

• (4) Financial Assets Carried at Cost noncurrent

Given that the probabilities for each assumption in the range of estimated fair value of the aforementioned investments held by the Company cannot be reasonably determined, the Company had determined that the fair value thereof could not be reliably measured and therefore were measured at cost less any impairment loss at period-end.

(5) Notes and Accounts Receivable, net (Including Related and Unrelated Parties)

June 30, 2017 Notes and accounts receivable $ 45,656,739 Less: allowance for doubtful accounts (102,536) allowance for sales returns and discounts (818,041 ) $ 44,736,162 Notes and accounts receivable, net $ 42,218,055 Accounts receivable from related parties, net $ 2,518,107	December 31, 2016 (in thousands) 49,201,632 (104,617) (853,614 ) 48,243,401 45,710,177 2,533,224	June 30, 2016
		38,295,635 (96,432) (1,006,828 )
		37,192,375
		34,416,938
		2,775,437

(Continued)

20

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Aging analysis of notes and accounts receivable, which were past due but not impaired, was as follows:

June 30, 2017 Past due less than 60 days $ 374,358 Past due 61~180 days 8,030 Past due over 180 days - $ 382,388	December 31, 2016 (in thousands) 531,327 9,505 1,020 541,852	June 30, 2016 822,385 40,619 24,580 887,584

The movement in the allowance for doubtful accounts was as follows:

Balance at beginning of the period$ Provisions (reversals) charged to (against) expense Write-offs Effect of changes in foreign currency exchange rates Balance at end of the period **$ **	Six months endedJune 30, 2017 2016 Individually assessed for impairment Collectively assessed for impairment Individually assessed for impairment Collectively assessed for impairment (in thousands) 41,812 62,805 11,714 58,183 3,463 (3,510) 24,373 11,339 (2) - - (7,630) (1,049 ) (983 ) (859 ) (688 ) 44,224 58,312 35,228 61,204
	Individually assessed for impairment 41,812 3,463 (2) (1,049 ) 44,224

The payment terms granted to customers are generally 30 to 60 days from the end of the month during which the invoice is issued. The Company evaluates possible uncollected amounts and uses allowance for doubtful accounts to record its doubtful receivable expenses. When evaluating the allowances, the Company considers the historical experience, the customer credits and the account aging analysis. While it is determined a receivable is uncollectible, receivable balances is offset against the allowance for doubtful accounts.

The Company entered into financing facilities with banks to factor certain of its accounts receivable without recourse, details of which were as follows:

		June 30, 2017
Underwriting bank Chinatrust Commercial Bank Taishin Bank Bank of Taiwan Taipei Fubon Bank	Factoring limit USD 230,000 USD 80,000 USD 250,000 USD 120,000	Amount advanced (in thousands) - - - -	Amount sold and derecognized - - - -	Principal terms
				See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(c) and (e)

(Continued)

21

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

June 30, 2017

		June 30, 2017
Underwriting bank E. Sun Bank DBS Bank Taishin Bank	Factoring limit USD 50,000 USD 154,000 USD 35,000	Amount advanced (in thousands) - - -	Amount sold and derecognized - - USD 6,693	Principal terms
				See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(d) and (f)

	December 31, 2016	December 31, 2016	December 31, 2016
Underwriting bank Chinatrust Commercial Bank Taishin Bank Bank of Taiwan Taipei Fubon Bank E. Sun Bank DBS Bank Taishin Bank	Factoring limit USD 230,000 USD 80,000 USD 250,000 USD 120,000 USD 100,000 USD 184,000 USD 35,000	Amount advanced (in thousands) - - - - - - -	Amount sold and derecognized - - - - - - USD 8,780	Principal terms
				See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(d) and (f)

		June 30, 2016
Underwriting bank Chinatrust Commercial Bank Taishin Bank Bank of Taiwan Taipei Fubon Bank E. Sun Bank DBS Bank Taishin Bank	Factoring limit USD 230,000 USD 80,000 USD 250,000 USD 75,000 USD 120,000 USD 60,000 USD 166,000 USD 35,000	Amount advanced (in thousands) USD 30,000 USD 30,000 USD 19,200 EUR 30,000 USD 25,000 - USD 10,000 USD 30,000 -	Amount sold and derecognized USD 33,390 USD 33,390 USD 19,200 EUR 30,000 USD 27,871 - USD 11,123 USD 30,074 USD 12,274	Principal terms
				See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(c) and (e) See notes(a)~(d) and (f)

Note (a): Under these facilities, the Company transferred accounts receivable to the respective underwriting banks, which are without recourse.

Note (b): The Company informed its customers pursuant to the respective facilities to make payment directly to the respective underwriting banks.

Note (c): As of June 30, 2017, December 31, 2016 and June 30, 2016, total outstanding receivables after the above assignment transactions, net of fees charged by underwriting banks, of $203,254 thousand, $283,694 thousand and $746,514 thousand, respectively, were classified under other current financial assets.

(Continued)

22

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

• Note (d): To the extent of the amount transferred to the underwriting banks, risks of non-collection or potential payment default by customers in the event of insolvency are borne by respective banks. The Company is not responsible for the collection of receivables subject to these facilities, or for any legal proceedings and costs thereof in collecting these receivables.

• Note (e): To the extent of the amount transferred to the underwriting banks, risks of non-collection or potential payment default by customers in the event of insolvency are borne by respective banks. The Company is not responsible for the collection of receivables subject to these facilities, or for any legal proceedings and costs thereof in collecting these receivables. In case any commercial dispute between the Company and customers or other reasons results in the Company’s failure to perform the obligation under these facilities, the banks have requested the Company to issue promissory notes in the amounts equal to 10 percent of respective facilities or to transfer receivables in the amounts equal to 10 percent of respective facilities. Other than such arrangements, no collaterals were provided by the Company.

Note (f): The Company bears all risks deriving from the customers except credit risk.

(6) Inventories

June 30, 2017 Finished goods $ 9,713,885 Work-in-progress 10,585,881 Raw materials 5,240,137 $ 25,539,903	December 31, 2016 (in thousands) 9,532,199 11,100,347 7,046,789 27,679,335	June 30, 2016 11,424,213 10,568,455 5,761,511
		27,754,179

For the three months ended June 30, 2017 and 2016 and for the six months ended June 30, 2017 and 2016, the amounts of inventories that were charged to cost of sales were $66,980,668 thousand, $76,353,838 thousand, $138,023,250 thousand and $146,234,227 thousand, respectively, and the net of provisions (reversals) that charged to (against) cost of sales in the consolidated statement of comprehensive income for inventories written down to net realizable value amounted to $310,913 thousand, $(1,827,274) thousand, $392,398 thousand and $(961,951) thousand for the three months ended June 30, 2017 and 2016 and for the six months ended June 30, 2017 and 2016, respectively.

As at June 30, 2017, December 31, 2016 and June 30, 2016, none of the Company’s inventories was pledged as collateral.

(Continued)

23

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(7) Investments in equity-accounted Investees

Investments in equity-accounted investees at the reporting dates consisted of the following:

June 30, 2017 Associates $ 4,767,666 Joint ventures 309,991 $ 5,077,657	December 31, 2016 (in thousands) 4,853,325 325,012 5,178,337	June 30, 2016
		4,644,746 7,588,868
		12,233,614

Except as described below, there was no significant change in the Company’s investments in equity-accounted investees for the six months ended June 30, 2017 and 2016. Refer to note 6(7) of the consolidated financial statements for the year ended December 31, 2016 for the related disclosures.

a. Associates

Name of associate Lextar Electronics Corp. (“Lextar”) Raydium Semiconductor Corporation (“Raydium”) SREC Daxin Materials Corp. (“Daxin”) Others	Principal activities Manufacturing and sales of Light Emitting Diode IC design Holding company Research, manufacturing, and sales of display related chemicals	Principal place of business Taiwan ROC Taiwan ROC Taiwan ROC Taiwan ROC	June 30, 2017 Amount Ownership interest (in thousands) % $ 3,083,587 27 667,612 18 513,163 34 503,304 25 - $ 4,767,666	December 31, 2016	December 31, 2016	June 30, 2016	June 30, 2016
				Amount	Ownership interest Amount Ownership interest % (in thousands) % 25 $ 3,230,891 25 18 561,014 16 34 266,349 35 25 470,951 25 115,541 $ 4,644,746		Ownership interest
				(in thousands) $ 3,082,856 712,829 531,805 525,835 - $ 4,853,325		(in thousands) % $ 3,230,891 25 561,014 16 266,349 35 470,951 25 115,541 $ 4,644,746

There is no individually significant associate for the Company. The following table summarized the amount recognized by the Company at its share of those associates.

The Company’s share of: Profit for the period $ Other comprehensive income (loss) for the period Total comprehensive income for the period **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 72,534 15,653 99,160 36,771 2,983 (5,293 ) (55,822 ) (24,421 ) 75,517 10,360 43,338 12,350
	2017 72,534 2,983 75,517

(Continued)

24

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

b. Joint ventures

Name of joint ventures AUO SunPower Sdn. Bhd. (“AUSP”) Others	Principal activities Manufacturing and sales of solar power products	Principal place of business Malaysia	June 30, 2017 Amount Ownership interest (in thousands) % $ - - 309,991 $ 309,991	December 31, 2016
				Amount

AUO, through its subsidiary AUSG, entered into a joint venture agreement with SunPower Technology, Ltd. (“SPTL”) which is 100% owned by SunPower Corporation. In accordance with the joint venture agreement, the Company acquired its 50% ownership interests of AUSP on July 5, 2010 (co-investment date) by contributing technology with an estimated fair value of US$30,000 thousand and agreed to contribute additional cash over time. The total cash payments made by the Company amounted to US$180,069 thousand. In September 2016, AUSG disposed of its entire 50% interest in AUSP to SPTL. Refer to note 6(7) of the consolidated financial statements for the year ended December 31, 2016 for the related disclosures.

There is no individually significant joint venture for the Company. The following table summarized the amount recognized by the Company at its share of those joint ventures.

The Company’s share of: Profit (loss) for the period $ Other comprehensive loss for the period Total comprehensive income (loss) for the period **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) (1,439) 31,536 (11,545) 123,223 - (17,419 ) - (314,975 ) (1,439 ) 14,117 (11,545 ) (191,752 )
	2017 (1,439) - (1,439 **) **

As at June 30, 2017, December 31, 2016 and June 30, 2016, none of the Company’s investments in equity-accounted investees was pledged as collateral.

25

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(8) Property, Plant and Equipment

Movements in the cost, depreciation and impairment of the Company’s property, plant and equipment for the six months ended June 30, 2017 and 2016 were as follows:

Cost: Land $ Buildings Machinery and equipment Other equipment Accumulated depreciation and impairment loss: Land Buildings Machinery and equipment Other equipment Prepayments for purchase of land and equipment, and construction in progress Net carrying amounts $ Cost: Land $ Buildings Machinery and equipment Other equipment Accumulated depreciation and impairment loss: Land Buildings Machinery and equipment Other equipment Prepayments for purchase of land and equipment, and construction in progress Net carrying amounts **$ **	Six months endedJune 30, 2017	Six months endedJune 30, 2017
	Balance, Beginning of Period Additions Disposal, write off, reclassification and others (in thousands) 8,873,981 865,956 (72,943) 130,595,844 373,292 (2,196,521) 798,046,434 900,478 (6,153,487) 32,419,736 2,009,782 (4,609,910 ) 969,935,995 4,149,508 (13,032,861 ) 173,397 - (58,130) 36,028,301 1,602,302 (1,545,674) 698,110,663 14,365,037 (8,973,437) 26,154,173 2,705,922 (4,889,684 ) 760,466,534 18,673,261 (15,466,925 ) 13,272,371 11,214,671 (5,761,966 ) 222,741,832 Six months endedJune 30, 2016		Balance, End of Period
			9,666,994 128,772,615 792,793,425 29,819,608
			961,052,642
			115,267 36,084,929 703,502,263 23,970,411
			763,672,870
			18,725,076
			216,104,848
	Balance, Beginning of Period 9,112,286 122,156,354 779,019,328 34,248,005 944,535,973 184,889 32,791,946 694,955,031 30,215,702 758,147,568 22,397,204 208,785,609	Additions Disposal, write off, reclassification and others (in thousands) - 169,885 629 (407,642) 1,235,552 9,899,059 2,297,258 (3,476,071 ) 3,533,439 6,185,231 - 25,883 1,552,253 1,102,943 15,286,812 (2,673,728) 2,438,826 (5,609,770 ) 19,277,891 (7,154,672 ) 22,541,480 (14,863,581 )	Balance, End of Period
			9,282,171 121,749,341 790,153,939 33,069,192
			954,254,643
			210,772 35,447,142 707,568,115 27,044,758
			770,270,787
			30,075,103
			214,058,959

26

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Except as described below, there was no significant change in the Company’s property, plant and equipment for the six months ended June 30, 2017 and 2016. Refer to note 6(8) of the consolidated financial statements for the year ended December 31, 2016 for the related disclosures.

M.Setek reclassified part of its land and buildings as noncurrent assets held for sale in the consolidated balance sheet as of December 31, 2016, and the disposal transaction was completed in March 2017. The selling price (net of costs of disposal) and gain on disposal were $330,536 thousand and $106,141 thousand, respectively.

The capitalized borrowing costs in connection with the expenditures on the acquisition and construction of property, plant and equipment were as follows:

Capitalized borrowing costs **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 171,198 101,688 311,511 148,660	Six months ended June 30,	Six months ended June 30,
	2017 171,198		2016
			148,660

The interest rates applied for the abovementioned capitalization, ranged from 1.09% to 4.85% and 1.12% to 4.37% for the six months ended June 30, 2017 and 2016, respectively.

Certain property, plant and equipment were pledged as collateral, see note 8.

(9) Investment Property

Land $	June 30, 2017 465,868	December 31, 2016 (in thousands) 465,868	June 30, 2016
			465,868

There were no significant additions, disposals and recognition or reversal of impairment losses on the Company’s investment property for the six months ended June 30, 2017 and 2016. For other relevant information, refer to note 6(9) of the consolidated financial statements for the year ended December 31, 2016.

The fair value of the Company’s investment property was not materially different from those disclosed in note 6(9) of the consolidated financial statements for the year ended December 31, 2016.

Certain investment property were pledged as collateral, see note 8.

(Continued)

27

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(10) Intangible Assets

June 30, 2017 Goodwill $ 11,456,176 Patent and technology fee 12,271,323 Less: accumulated amortization and impairment loss (10,275,544 ) $ 13,451,955	December 31, 2016 (in thousands) 11,456,176 12,078,767 (9,932,109 ) 13,602,834	June 30, 2016 11,456,176 12,082,226 (9,268,540 )
		14,269,862

There were no significant additions, disposals and recognition or reversal of impairment losses on the Company’s intangible assets for the six months ended June 30, 2017 and 2016. Information on amortization for the periods presented is disclosed in note 6(21). For other relevant information, refer to note 6(10) of the consolidated financial statements for the year ended December 31, 2016.

(11) Other Current Assets and Other Noncurrent Assets

June 30, 2017 Prepayment for equipment $ 462,144 Refundable and overpaid tax 2,629,635 Long-term prepaid rents 1,850,017 Prepayments for purchases 3,017,026 Long-term receivables 1,855,607 Refundable deposits 517,471 Others 3,075,323 13,407,223 Less: current (7,399,598 ) Noncurrent $ 6,007,625	December 31, 2016 (in thousands) 463,910 3,015,534 1,940,489 3,360,869 1,974,271 133,221 2,481,104 13,369,398 (6,330,283 ) 7,039,115	June 30, 2016 8,598,578 2,902,378 2,039,554 1,114,979 - 144,460 2,209,957
		17,009,906 (5,285,292 )
		11,724,614

(12) Short-term Borrowings

Unsecured borrowings $ Unused credit facility $ Interest rate	June 30, 2017 2,160,253 40,412,838 4.35%~ 4.39%	December 31, 2016 (in thousands) 526,723 33,877,442 4.35%~ 4.39%	June 30, 2016 1,575,893
			31,206,593
			1.05%~ 4.13%

(Continued)

28

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(13) Long-term Borrowings

Bank or agent bank Syndicated loans: Bank of Taiwan and others Bank of Taiwan and others Bank of Taiwan and others Bank of Taiwan and others Bank of Taiwan and others Bank of Taiwan and others First Commercial Bank and others Standard Chartered Bank and others Bank of China and others Unsecured loans Mortgage loans Less: transaction costs Less: current portion Unused credit facility Interest rate range	Durations From Feb. 2015 to Feb. 2020 $ From Apr. 2016 to Apr. 2021 From Jan. 2014 to Jan. 2019 From May 2017 to May 2022 From Feb. 2013 to Mar. 2017 From Dec. 2009 to Oct. 2016 From Feb. 2016 to Feb. 2019 From Sep. 2014 to Jun. 2017 From Nov. 2015 to Nov. 2023 From Jul. 2011 to Apr. 2022 From Apr. 2016 to Apr. 2032 $ $	June 30 2017 25,800,000 32,600,000 20,444,000 500,000 - - 2,695,868 - 26,447,598 13,933,390 530,762 122,951,618 (404,324 ) 122,547,294 (16,871,558 ) 105,675,736 29,575,064 1.10%~ 5.15%	December 31, 2016 (in thousands) 25,800,000 25,000,000 23,672,000 - 7,596,757 - 3,000,000 2,358,776 21,216,394 16,005,955 95,727 124,745,609 (482,989 ) 124,262,620 (18,074,627 ) 106,187,993 43,228,323 1.09%~ 4.90%	June 30, 2016
				25,800,000 11,800,000 26,900,000 - 11,056,757 5,937,182 3,000,000 3,260,886 12,620,515 15,813,970 88,015 116,277,325 (514,268 ) 115,763,057 (21,093,266 ) 94,669,791 52,526,415 1.12%~ 4.90%

These credit facilities contain covenants that require the Company to maintain certain financial ratios, calculating based on the Company’s annual consolidated financial statements prepared in accordance with Taiwan Financial Reporting Standards, such as current ratio, leverage ratio, interest coverage ratio, tangible net worth and others as specified in the loan agreements. As of June 30, 2017, the Company complied with all financial covenants required under each of the loan agreements.

Refer to note 8 for assets pledged as collateral to secure the aforementioned long-term borrowings. For other relevant information, refer to note 6(14) of the consolidated financial statements for the year ended December 31, 2016.

(Continued)

29

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(14) Provisions

Warranties Balance at January 1, 2017 $ 1,528,898 Additions (Reversals) 165,669 Usage (101,854) Effect of change in exchange rate 64 Balance at June 30, 2017 1,592,777 Less: current (827,496 ) Noncurrent $ 765,281 Balance at January 1, 2016 $ 1,819,519 Additions (Reversals) (156,150) Usage (72,261) Effect of change in exchange rate (2 ) Balance at June 30, 2016 1,591,106 Less: current (783,938 ) Noncurrent $ 807,168 Current $ 756,079 Noncurrent 772,819 Balance at December 31, 2016 $ 1,528,898	Litigation, claims and others (in thousands) 1,292,773 99,014 (1,025,032) (18,084 ) 348,671 (99,179 ) 249,492 4,316,817 652,485 (925,591) (127,590 ) 3,916,121 (3,625,072 ) 291,049 1,027,328 265,445 1,292,773	Total 2,821,671 264,683 (1,126,886) (18,020 ) 1,941,448 (926,675 ) 1,014,773 6,136,336 496,335 (997,852) (127,592 ) 5,507,227 (4,409,010 ) 1,098,217 1,783,407 1,038,264 2,821,671

• a. Provisions for warranties

The provisions for warranties for the six months ended June 30, 2017 and 2016 were estimated based on historical experience of warranty claims rate associated with similar products and services. The Company expects most warranty claims will be made within two years from the date of the sale of the product.

• b. Provisions for litigation, claims and others

The provisions for litigation, claims and others are expected to be paid over the years in accordance with the outcome of litigation and claims and settlement agreements. See note 9(6) for further information.

(15) Operating Leases

There was no significant addition in the Company’s operating lease contracts for the six months ended June 30, 2017 and 2016. Refer to note 6(16) of the consolidated financial statements for the year ended December 31, 2016 for the details.

(Continued)

30

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(16) Employee Benefits

• a. Defined benefit plans

Subsequent to December 31, 2016, there was no significant market volatility, significant curtailment, reimbursement and settlement or other significant one-time events. Therefore, the pension cost in the consolidated interim financial statements was measured and disclosed by the Company according to the pension cost valued by actuary as of December 31, 2016 and 2015.

For the three months ended June 30, 2017 and 2016 and for the six months ended June 30, 2017 and 2016, the Company set aside $5,492 thousand, $7,076 thousand, $10,994 thousand and $14,035 thousand, respectively, of the pension costs under the defined benefit plans.

• b. Defined contribution plans

AUO and its subsidiaries in the ROC have set up defined contribution plans in accordance with the ROC Labor Pension Act. For the three months ended June 30, 2017 and 2016 and for the six months ended June 30, 2017 and 2016, these companies set aside $247,718 thousand, $232,756 thousand, $485,994 thousand and $467,008 thousand, respectively, of the pension costs under the pension plan to the ROC Bureau of the Labour Insurance. Except for the aforementioned companies, other foreign subsidiaries recognized pension expenses of $210,740 thousand, $260,144 thousand, $437,922 thousand and $581,735 thousand for the three months ended June 30, 2017 and 2016 and for the six months ended June 30, 2017 and 2016, respectively, for the defined contribution plans based on their respective local government regulations.

(17) Capital and Other Components of Equity

• a. Common stock

AUO’s authorized common stock, with par value of $10 per share, all amounted to $100,000,000 thousand as at June 30, 2017, December 31, 2016 and June 30, 2016.

AUO’s issued and outstanding common stock, with par value of $10 per share, all amounted to $96,242,451 thousand as at June 30, 2017, December 31, 2016 and June 30, 2016.

AUO’s ADSs were listed on the New York Stock Exchange. Each ADS represents 10 shares of common stock. As of June 30, 2017, AUO had issued 47,251 thousand ADSs, which represented 472,508 thousand shares of its common stock.

(Continued)

31

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

b. Capital surplus

The components of capital surplus were as follows:

June 30, 2017 From common stock $ 52,756,091 From convertible bonds 6,049,862 From others 1,216,208 $ 60,022,161	December 31, 2016 (in thousands) 52,756,091 6,049,862 1,173,770 59,979,723	June 30, 2016
		52,756,091 6,049,862 1,622,152
		60,428,105

According to the ROC Company Act, capital surplus, including premium from stock issuing and donations received, shall be applied to offset accumulated deficits before it can be used to issue common stock as stock dividends or distribute cash as cash dividends according to the proportion of shareholdings. Pursuant to the ROC Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the total sum of capital surplus capitalized per annum shall not exceed 10 percent of the paid-in capital.

c. Legal reserve

According to the ROC Company Act, 10 percent of the annual earnings after payment of income taxes due and offsetting accumulated deficits, if any, shall be allocated as legal reserve until the accumulated legal reserve equals the paid-in capital. When a company incurs no loss, it may, pursuant to a resolution to be adopted by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by cash, only the portion of legal reserve which exceeds 25 percent of the paid-in capital may be distributed.

d. Distribution of earnings

In accordance with AUO’s amended Articles of Incorporation approved in the annual shareholders’ meeting held on June 15, 2017, where 10 percent of the annual earnings, after payment of income taxes due and offsetting accumulated deficits, if any, shall be set aside as a legal reserve until the accumulated legal reserve equals AUO’s paid-in capital. In addition, a special reserve in accordance with applicable laws and regulations shall also be set aside. The remaining current-year earnings together with accumulated undistributed earnings from preceding years can be distributed after the earnings distribution plan proposed by the board of directors is approved by resolution of the shareholders’ meeting.

AUO’s dividend policy is to pay dividends from surplus considering factors such as AUO’s current and future investment environment, cash requirements, domestic and overseas competitive conditions and capital budget requirements, while taking into account shareholders’ interest, maintenance of balanced dividend and AUO’s long-term financial plan. If the current-year retained earnings available for distribution reaches 2% of the paid-in capital of AUO, dividend to be distributed shall be no less than 20% of the current-year retained earnings available for distribution. If the current-year retained earnings available for distribution does not reach 2% of the paid-in capital of

(Continued)

32

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

AUO, AUO may decide not to distribute dividend. The cash portion of the dividend shall not be less than 10% of the total dividend distributed during the year in the form of cash and stock. The dividend distribution ratio aforementioned could be adjusted in the shareholders’ meeting after taking into consideration factors such as finance, business and operations, etc.

Pursuant to relevant laws or regulations or as requested by the local authority, a special reserve equivalent to the total net balance of items that are accounted for as a reduction to the other components of shareholders’ equity shall be set aside from current earnings, and not distributed. Amounts of subsequent decrease pertaining to the total net balance of items that are accounted for as a reduction to the other shareholders’ equity shall be reversed accordingly from special reserve to undistributed earnings.

AUO’s appropriations of earnings for 2015 had been approved in the shareholders’ meeting held on June 16, 2016. The appropriations and dividends per share were as follows:

Legal reserve $ Cash dividends to shareholders $	For fiscalyear 2015	For fiscalyear 2015
	Appropriation of earnings Dividends per share (in thousands, except for per share data) 493,196 3,368,486 $0.35 3,861,682	Dividends per share

The aforementioned appropriations of earnings for 2015 was consistent with the resolutions of the board of directors’ meeting held on March 10, 2016.

AUO’s appropriations of earnings for 2016 had been approved in the shareholders’ meeting held on June 15, 2017. The appropriations and dividends per share were as follows:

Legal reserve $ Cash dividends to shareholders $	For fiscalyear 2016
	Appropriation of earnings Dividends per share (in thousands, except for per share data) 781,894 5,389,577 $0.56 6,171,471

The aforementioned appropriations of earnings for 2016 was consistent with the resolutions of the board of directors’ meeting held on March 22, 2017.

Information on the approval of board of directors and shareholders for AUO’s appropriations of earnings are available at the Market Observation Post System website.

(Continued)

33

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

e. Other components of equity

Balance at January 1, 2017 $ Foreign operations – foreign currency translation differences Effective portion of changes in fair value of cash flow hedges Net change in fair value of available-for-sale financial assets Equity-accounted investees – share of other comprehensive income Related tax Balance at June 30, 2017 $ Balance at January 1, 2016 $ Foreign operations – foreign currency translation differences Effective portion of changes in fair value of cash flow hedges Net change in fair value of available-for-sale financial assets Equity-accounted investees – share of other comprehensive income Realized gain on sales of securities reclassified to profit or loss Related tax Balance at June 30, 2016 $	Cumulative translation differences 536,819 (2,692,206) - - (55,460) 434,737 (1,776,110 ) 5,612,885 (2,254,057) - - (337,492) (1,553) 541,702 3,561,485	Unrealized gains (losses) on available- for-sale financial assets Unrealized gains (losses) on cash flow hedges (in thousands) 224,299 18,254 - - - (21,992) 1,535,179 - (1,076) - - 3,738 1,758,402 - (539,653) 12,279 - - - 2,293 80,473 - (2,142) - - - - (451 ) (461,322 ) 14,121	Total
			779,372 (2,692,206) (21,992) 1,535,179 (56,536) 438,475
			(17,708 )
			5,085,511 (2,254,057) 2,293 80,473 (339,634) (1,553) 541,251
			3,114,284

f. Non-controlling interests, net of tax

Balance at beginning of the period $ Equity attributable to non-controlling interests: Loss for the period Adjustment of changes in ownership of investees Foreign currency translation differences Remeasurement of defined benefit plans Cash dividends from subsidiaries Proceeds from subsidiaries capital increase Proceeds from capital return upon dissolution of subsidiary Redemption of subsidiary treasury shares Balance at end of the period **$ **

Six months endedJune 30, 2017 2016 (in thousands) 18,390,483 22,651,183 (927,855) (334,265) 4,639 (75,920) (634,678) (1,072,286) - (53) (106,135) (87,749) 11,350 4,146 - (89,397) - (459,199 ) 16,737,804 20,536,460

(Continued)

34

Notes to Consolidated Interim Financial Statements

AU OPTRONICS CORP. AND SUBSIDIARIES

(18) Share-based Payments

There was no significant change in the Company’s share-based payments for the six months ended June 30, 2017 and 2016. Refer to note 6(19) of the consolidated financial statements for the year ended December 31, 2016 for the related information.

(19) Revenue

Sale of goods $ Other operating revenue **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 81,663,454 77,708,216 167,867,476 146,418,053 2,748,946 2,382,687 5,101,740 4,808,082 84,412,400 80,090,903 172,969,216 151,226,135	Six months ended June 30,	Six months ended June 30,
	2017 81,663,454 2,748,946 84,412,400		2016
			146,418,053 4,808,082
		172,969,216	151,226,135

Refer to note 13 for further revenue information by operating segment.

(20) Remuneration to Employees and Directors

According to AUO’s Articles of Incorporation, AUO should distribute remuneration to employees and directors not less than 5% and not more than 1% of annual profits, respectively, after offsetting accumulated deficits, if any. Only employees, including employees of affiliate companies that meet certain conditions are subject to the abovementioned remuneration which to be distributed in stock or cash. The said conditions and distribution method are decided by board of directors or the personnel authorized by board of directors.

AUO accrued remuneration to employees based on the profit before income tax excluding the remuneration to employees and directors for each period, multiplied by the percentage resolved by board of directors. For the three months and six months ended June 30, 2017, AUO accrued the remuneration to employees amounting to $1,235,820 thousand and $2,425,364 thousand, respectively. Remuneration to directors was estimated based on the amount expected to pay and recognized together with the remuneration to employees as cost of sales or operating expenses. Additionally, AUO did not accrue any remuneration to employees and directors due to net loss for the six months ended June 30, 2016. If remuneration to employees is resolved to be distributed in stock, the number of shares is determined by dividing the amount of remuneration by the closing price of the shares (ignoring ex-dividend effect) on the day preceding the board of directors’ meeting. If there is a change in the proposed amounts after the annual consolidated financial statements are authorized for issue, the differences are accounted for as a change in accounting estimate and adjusted prospectively to next year’s profit or loss.

Remuneration to employees and directors for 2016 in the amounts of $1,107,486 thousand and $24,226 thousand, respectively, in cash for payment had been approved in the meeting of board of directors held on March 22, 2017. The aforementioned approved amounts are the same as the amounts charged against earnings of 2016.

35

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Remuneration to employees and directors for 2015 in the amounts of $665,815 thousand and $13,316 thousand, respectively, in cash for payment had been approved in the meeting of board of directors held on March 10, 2016. The aforementioned approved amounts are the same as the amounts charged against earnings of 2015.

The information about AUO’s remuneration to employees and directors is available at the Market Observation Post System website.

(21) Additional Information of Expenses by Nature

Employee benefits expenses: Salaries and wages Labor and health insurances Retirement benefits Other employee benefits Depreciation Amortization Employee benefits expenses: Salaries and wages Labor and health insurances Retirement benefits Other employee benefits Depreciation Amortization		Three months endedJune 30,	Three months endedJune 30,	Three months endedJune 30,	Three months endedJune 30,
		2017	2016 Total Recognized in cost of sales Recognized in operating expenses (in thousands) 8,753,716 5,850,137 1,926,438 485,471 332,719 120,170 463,950 408,725 91,251 460,099 651,154 176,830 8,833,031 8,582,364 1,031,944 173,191 248,096 - months ended June 30,		2016
	Recognized in cost of sales $ 6,526,143 365,268 378,043 378,351 7,788,755 173,191	Recognized in operating expenses			Recognized in operating expenses	Total
		2,227,573 120,203 85,907 81,748 1,044,276 - Six				7,776,575 452,889 499,976 827,984 9,614,308 248,096
		2017	Total Recognized in cost of sales (in thousands) 18,103,250 12,361,903 961,165 673,634 934,910 879,098 960,810 1,256,363 18,673,261 17,211,053 343,436 495,896		2016
	Recognized in cost of sales $ 13,554,084 719,468 761,300 786,554 16,573,350 343,436	Recognized in operating expenses			Recognized in operating expenses	Total
		4,549,166 241,697 173,610 174,256 2,099,911 -			3,853,240 239,433 183,680 295,444 2,066,838 -	16,215,143 913,067 1,062,778 1,551,807 19,277,891 495,896

36

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(22) Other Income

Interest income on bank deposits $ Interest income on government bonds with reverse repurchase agreements and others Rental income, net Grants Insurance compensation and others **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 147,858 127,115 262,525 254,994 4,807 (796) 5,284 1,726 126,579 118,780 248,308 253,826 213,517 142,163 1,362,875 169,788 111,934 112,914 206,908 348,152 604,695 500,176 2,085,900 1,028,486	Six months ended June 30,	Six months ended June 30,
	2017 147,858 4,807 126,579 213,517 111,934 604,695		2016
			254,994 1,726 253,826 169,788 348,152
		2,085,900	1,028,486

(23) Other Gains and Losses

Foreign exchange gains (losses), net$ Gains (losses) on valuation of financial instruments measured at fair value through profit or loss, net Gains (losses) on disposals of property, plant and equipment, net Litigation losses and others **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 111,123 (276,274) (1,428,862) (390,386) (192,438) 303,123 1,458,930 528,630 89,048 13,284 (225,396) 18,443 (3,222 ) (381,268 ) (641,200 ) (788,927 ) 4,511 (341,135 ) (836,528 ) (632,240	Six months ended June 30,	Six months ended June 30,
	2017 111,123 (192,438) 89,048 (3,222 ) 4,511		2016
			(390,386) 528,630 18,443 (788,927 )
			(632,240

(24) Finance Costs

Interest expense on bank borrowings $ Interest expense on others **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 612,179 496,201 1,250,544 980,874 100,092 65,878 186,078 119,325 712,271 562,079 1,436,622 1,100,199	Six months ended June 30,	Six months ended June 30,
	2017 612,179 100,092 712,271		2016
			980,874 119,325
			1,100,199

(Continued)

37

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(25) Income Taxes

The Company cannot file a consolidated tax return under local regulations. Therefore, AUO and its subsidiaries calculate their income taxes liabilities individually on a stand-alone basis using the enacted tax rates in their respective tax jurisdictions.

Income tax expense is best estimated by multiplying pre-tax income of the interim period by a projected annual effective tax rate as forecasted by the management.

The components of income tax expense were as follows:

Current income tax expense Current year $ Adjustment to prior years and others **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 2,634,351 490,857 5,149,366 765,966 63,219 72,559 63,313 92,846 2,697,570 563,416 5,212,679 858,812	Six months ended June 30,	Six months ended June 30,
	2017 2,634,351 63,219 2,697,570		2016
			765,966 92,846
		5,212,679	858,812

Income taxes expense (benefit) recognized in other comprehensive income were as follows:

Items that are or may be reclassified subsequently to profit or loss: Foreign operations – foreign currency translation differences $ Cash flow hedges Equity-accounted investees – share of other comprehensive income **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 161,213 (336,311) (473,652) (558,740) - 358 (3,738) 451 - (2,961 ) - (53,660 ) 161,213 (338,914 ) (477,390 ) (611,949 )	Six months ended June 30,	Six months ended June 30,
	2017 161,213 - - 161,213		2016
			(558,740) 451 (53,660 )
			(611,949 )

As of June 30, 2017, the tax authorities have completed the examination of income tax returns of AUO through 2014.

(Continued)

38

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Information on the integrated income tax system was as follows:

June 30, 2017 Unappropriated earnings generated after 1998 $ 34,720,778 Balance of the imputation credit account $ 4,159,250 Creditable ratios for distribution of AUO’s earnings for ROC resident shareholders	December 31, 2016 June 30, 2016 (in thousands) 21,585,361 8,330,573 4,083,362 4,795,800 2016 (Estimated) 2015 (Actual) 19.27% 26.29%	June 30, 2016
		4,795,800
		2015 (Actual)
		26.29%

The abovementioned integrated income tax information is prepared in accordance with Decree No. 10204562810 announced on October 17, 2013 by the ROC Ministry of Finance.

(26) Earnings per Share

Three	months	ended	Six months ended
	June 30,		June 30,
2017		2016	2017 2016
(in thousands, except			for per share data)

Basic earnings per share Profit (loss) attributable to AUO’s shareholders $ Weighted-average number of common shares outstanding during the period Basic earnings per share $ Diluted earnings per share Profit (loss) attributable to AUO’s shareholders $ Weighted-average number of common shares outstanding during the period Effect of employee remuneration in stock Diluted earnings per share **$ **	9,829,784 9,624,245 1.02 9,829,784 9,624,245 88,908 9,713,153 1.01	(572,407 ) 9,624,245 (0.06 ) (572,407 ) 9,624,245 - 9,624,245 (0.06 **) **	19,308,977 9,624,245	(6,049,733 )
				9,624,245
			2.01 19,308,977	(0.63 )
				(6,049,733 )
			9,624,245 215,449	9,624,245 -
			9,839,694	9,624,245
			1.96	(0.63 )

(Continued)

39

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

(27) Financial Instruments

• a. Fair value and carrying amount

The carrying amount of the Company’s non-derivative financial instruments － current, including cash and cash equivalents, receivables or payables (including related parties), other current financial assets, and short-term borrowings, were considered to approximate their fair value due to their short-term nature.

Except for aforementioned financial instruments, the carrying amount and fair value of other financial instruments of the Company as of June 30, 2017, December 31, 2016 and June 30, 2016 were as follows:

June 30, 2017 Carrying Amount Fair Value Financial assets: Available-for-sale financial assets－noncurrent $ 4,371,875 4,371,875 Foreign currency forward contracts 57,094 57,094 Long-term receivables 1,855,607 1,855,607 Refundable deposits 517,471 517,471 Financial liabilities: Long-term borrowings (including current installments) 122,547,294 122,547,294 Foreign currency forward contracts 250,713 250,713 Interest rate swap contracts - - Guarantee deposits received 811,430 811,430	**June 30, 2017 **	**June 30, 2017 **	**December 31, 2016 **	**December 31, 2016 **	**June 30, 2016 **	**June 30, 2016 **
	Carrying **Amount **	**Fair Value **	Carrying **Amount **	**Fair Value **	Carrying **Amount **	**Fair Value **
		4,371,875 57,094 1,855,607 517,471 122,547,294 250,713 - 811,430			2,157,676 528,433 - 144,460 115,763,057 112,505 8,446 885,678	2,157,676 528,433 - 144,460 115,763,057 112,505 8,446 885,678

b. Valuation techniques and assumptions applied in fair value measurement

The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined with reference to quoted market prices. The fair vales of other financial assets and financial liabilities without quoted market prices are estimated using valuation approach. The estimates and assumptions used are the same as those used by market participants in the pricing of financial instruments.

Fair value of foreign currency forward contract is measured based on the maturity date of each contract with quoted spot rate and quoted swap points from Reuters quote system. Fair value of interest rate swap contract is measured based on reasonable valuation model and assumptions with reference to market valuation information provided by counterparties, i.e. financial institutions.

Fair value of long-term receivable is determined by discounting the expected cash flows at a market interest rate.

The refundable deposits and guarantee deposits received are based on carrying amount as there is no fixed maturity.

(Continued)

40

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

The fair value of floating-rate long-term borrowings approximates to their carrying value.

The Company refers to the quoted spot rates from Reuters quote system for US Dollar’s closing price and other currencies’ buy rates, which has been applied consistently to all periods presented and served as the basis for retranslation of the fair value of abovementioned financial instruments that denominated in foreign currencies.

• c. Fair value measurements recognized in the consolidated balance sheets

The Company determines fair value based on assumptions that market participants would use in pricing an asset or a liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

• (i) Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets.

• (ii) Level 2 inputs: Other than quoted prices included within Level 1, inputs are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• (iii) Level 3 inputs: Derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value measurement level of an asset or a liability within their fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

Level 1 June 30, 2017 Assets: Available-for-sale financial assets－ noncurrent $ 4,371,875 Foreign currency forward contracts - Long-term receivables - Liabilities: Foreign currency forward contracts -	Level 2 Level 3 (in thousands) - - 57,094 - 1,855,607 - 250,713 -	Total
		4,371,875 57,094 1,855,607 250,713

(Continued)

41

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Level 1 December 31, 2016 Assets: Available-for-sale financial assets－ noncurrent $ 2,836,696 Foreign currency forward contracts - Long-term receivables - Liabilities: Foreign currency forward contracts - Interest rate swap contracts - June 30, 2016 Assets: Available-for-sale financial assets－ noncurrent $ 2,157,676 Foreign currency forward contracts - Liabilities: Foreign currency forward contracts - Interest rate swap contracts -

Level 2

There were no transfers between Level 1 and 2 for the six months ended June 30, 2017 and 2016.

(28) Financial Risk Management

Except as described below, both the goals and policies of the Company’s financial risk management and the Company’s exposure to credit risk, liquidity risk and market risk were not materially different from those disclosed in note 6(29) of the consolidated financial statements for the year ended December 31, 2016.

Refer to note 6(5) for the information about past-due aging analysis.

a. Exposure of currency risk

The Company’s significant exposure to foreign currency risk was as follows:

June 30, 201 Foreign currency amounts Exchange rate (in thousands) Financial assets Monetary items USD $ 2,080,845 30.370 JPY 23,624,954 0.2708 EUR 61,639 34.743 Non-monetary items USD 3,300 30.370 RMB 19,241 4.4716 Financial liabilities Monetary items USD 1,009,222 30.370 JPY 25,982,869 0.2708 EUR 2,598 34.743	June 30, 201	June 30, 201	7	Dece	mber 31, 20	16	June 30, 201	June 30, 201	6
	Foreign currency amounts	Exchange rate	NTD	Foreign currency amounts	Exchange rate	NTD	Foreign currency amounts	Exchange rate	NTD
					32.312 0.2773 33.895 32.312 4.6391 32.312 0.2773 33.895			32.286 0.3127 35.850 32.286 4.8416 32.286 0.3127 35.850	(in thousands) 53,877,069 9,047,462 4,577,471 7,331,053 101,194 32,048,440 8,698,593 58,830

(Continued)

42

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

b. Sensitivity analysis

The Company’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade receivables, loans and borrowings and trade payables that are denominated in foreign currency. Depreciation or appreciation of the NTD by 1% against the USD, EUR and JPY at June 30, 2017 and 2016, while all other variables were remained constant, would have increased or decreased the net profit before tax for the six months ended June 30, 2017 and 2016 as follows:

		Six months ended	Six months ended
		June 30,
		2017	2016
		(in thousands)
1% of depreciation	$	339,579	266,961
1% of appreciation		(339,579)	(266,961)

• c. Foreign exchange gain (loss) on monetary items

With varieties of functional currencies within the consolidated entities of the Company, the Company disclosed foreign exchange gain (loss) on monetary items in aggregate. The aggregate of realized and unrealized foreign exchange gains (losses) for the three months ended June 30, 2017 and 2016 and for the six months ended June 30, 2017 and 2016 were $111,123 thousand, $(276,274) thousand, $(1,428,862) thousand and $(390,386) thousand, respectively.

(29) Capital Management

The objectives, policies and procedures of the Company’s capital management have been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2016. Also, there was no significant change in the Company’s capital management information as disclosed for the year ended December 31, 2016. Refer to note 6(30) of the consolidated financial statements for the year ended December 31, 2016 for the relevant information.

7. Related-party Transactions

All inter-company transactions and balances between AUO and its subsidiaries are eliminated in the consolidated interim financial statements and are not disclosed in the note. The transactions between the Company and other related parties are set out as follows:

• (1) Name and relationship of related parties

The following is a summary of related parties that have had transactions with the Company during the periods presented in the consolidated interim financial statements.

(Continued)

43

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Name of related party

Relationship with the Company

Lextar Electronics Corporation (“Lextar”) Associate of the Company Lextar Electronics (Suzhou) Co., Ltd. (“LESZ”) Subsidiary of Lextar Lextar Electronics (Xiamen) Co., Ltd. (“LEXM”) Subsidiary of Lextar Wellypower Optronics (Suzhou) Corporation Subsidiary of Lextar (“AOC”) Raydium Semiconductor Corporation (“Raydium”) Associate of the Company Dazzo Technology Corporation (“Dazzo”) Subsidiary of Raydium[(i)] Star River Energy Corp. (“SREC”) Associate of the Company Sungen Power Corporation (“SGPC”) Subsidiary of SREC Evergen Power Corporation (“EGPC”) Subsidiary of SREC[(ii)] Daxin Materials Corp. (“Daxin”) Associate of the Company AUO SunPower Sdn. Bhd. (“AUSP”) Joint venture of the Company[(iii)] BVCH Optronics (Sichuan) Corp. (“BVCH”) Joint venture of the Company Evonik Forhouse Optical Polymers Corp. (“EFOP”) Joint venture of the Company Wibase Industrial Solutions Inc. (“WIS”) (formerly DPTW represented as a director of iSAFE Technology Inc.) WIS Qisda Corporation (“Qisda”) AUO’s director Qisda Japan Co., Ltd. (“QJTO”) Subsidiary of Qisda BenQ Corporation (“BenQ”) Subsidiary of Qisda BenQ Materials Corp. (“BMC”) Subsidiary of Qisda Qisda (Suzhou) Co., Ltd. (“QCSZ”) Subsidiary of Qisda Qisda Electronics (Suzhou) Co., Ltd. (“QCES”) Subsidiary of Qisda Qisda Optronics (Suzhou) Co., Ltd. (“QCOS”) Subsidiary of Qisda BenQ Europe B.V. (“BQE”) Subsidiary of Qisda BenQ Asia Pacific Corp. (“BQP”) Subsidiary of Qisda BenQ America Corporation (“BQA”) Subsidiary of Qisda Mainteq Europe B.V. (“MQE”) Subsidiary of Qisda BenQ Medical Technology Corp. (“TMC”) Subsidiary of Qisda BenQ Australia Pty Ltd. (“BQau”) Subsidiary of Qisda BenQ Co., Ltd. (“BQC”) Subsidiary of Qisda BenQ Logistic (Shanghai) Co., Ltd. (“BQls”) Subsidiary of Qisda BenQ Guru Software Co., Ltd. (“GSS”) Subsidiary of Qisda BenQ Guru Corporation (“GST”) Subsidiary of Qisda BenQ Material (Suzhou) Co., Ltd. (“BMS”) Subsidiary of Qisda Daxon Biomedical (Suzhou) Co., Ltd. (“DTB”) Subsidiary of Qisda Nanjing BenQ Hospital Co., Ltd. (“QCHN”) Subsidiary of Qisda Suzhou BenQ Hospital Co., Ltd. (“QCHS”) Subsidiary of Qisda BenQ Foundation Substantive related party

(i) On October 1, 2016, Raydium, the associate of the Company, issued its new shares in exchange for all outstanding shares of another associate of the Company, Dazzo.

• (ii) The Company disposed all its shareholdings in EGPC to SREC in October 2016.

(Continued)

44

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

• (iii) In September 2016, the Company disposed of its entire 50% interest in AUSP to SPTL. Refer to note 6(7) for the related disclosures.

• (2) Compensation to key management personnel

Key management personnel’s compensation comprised:

Short-term employee benefits $ Post-employment benefits **$ **	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 25,680 24,038 52,419 49,371 605 514 1,206 1,072 26,285 24,552 53,625 50,443	Six months ended June 30,	Six months ended June 30,
	2017 25,680 605 26,285		2016
			49,371 1,072
		53,625	50,443

• (3) Except for otherwise disclosed in other notes to the consolidated interim financial statements, the Company’s significant related party transactions and balances were as follows:

• a. Sales

Associates $ Joint ventures Others $ Associates Joint ventures Others	Sales	Sales	Sales	Sales	Sales
	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 3,543 154,508 1,076,714 440,485 - 1,345,318 - 2,893,288 3,581,283 2,802,836 6,839,964 5,630,037 3,584,826 4,302,662 7,916,678 8,963,810 Accounts receivable from relatedparties June 30, 2017 December 31, 2016 June 30, 2016 (in thousands) $ 4,368 58,755 89,750 - - 581,445 2,513,739 2,474,469 2,104,242 $ 2,518,107 2,533,224 2,775,437		Six months ended June 30,
					2016
					440,485 2,893,288 5,630,037
			7,916,678		8,963,810
		December 31, 2016 June 30, 2016 (in thousands) 58,755 89,750 - 581,445 2,474,469 2,104,242 2,533,224 2,775,437		June 30, 2016
				2,775,437

The collection terms for sales to related parties were month-end 30 to 55 days. The pricing for sales to related parties were not materially different from those with third parties.

45

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

b. Purchases

Associates $ Joint ventures Others $ Associates Joint ventures Others	Purchases	Purchases	Purchases	Purchases	Purchases
	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 2,042,494 2,471,148 4,304,904 4,888,345 205,822 933,500 485,558 2,233,927 4,241,293 4,430,835 8,760,355 8,804,139 6,489,609 7,835,483 13,550,817 15,926,411 Notes and accounts payable to relatedparties June 30, 2017 December 31, 2016 June 30, 2016 (in thousands) $ 3,134,975 3,734,927 3,589,250 - - 271,272 4,402,200 5,088,138 4,491,048 $ 7,537,175 8,823,065 8,351,570		Six months ended June 30,
					2016
					4,888,345 2,233,927 8,804,139
			13,550,817		15,926,411
		December 31, 2016 June 30, 2016 (in thousands) 3,734,927 3,589,250 - 271,272 5,088,138 4,491,048 8,823,065 8,351,570		June 30, 2016
				8,351,570

The payment terms for purchases from related parties were 30 to 120 days. The pricing and payment terms with related parties were not materially different from those with third parties.

• c. Acquisition of property, plant and equipment

Associates **$ **	Acquisitionprices	Acquisitionprices	Acquisitionprices
	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 1,549 - 1,549 -	Six months ended June 30,
	2017 1,549		2016
			-

• d. Disposal of property, plant and equipment and others

Others **$ **	Proceeds from disposal	Proceeds from disposal	Proceeds from disposal
	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) (17 ) - 1,297 -	Six months ended June 30,
	2017 (17 )		2016
			-

46

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Others **$ **	Gains on disposal	Gains on disposal	Gains on disposal
	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) (2 ) - 167 -	Six months ended June 30,
	2017 (2 **) **		2016
			-

• e. Other related party transactions

Associates Joint ventures Others Associates Joint ventures Others Associates $ Joint ventures Others: BMC Others **$ **	Other receivables due from relatedparties(including dividends) June 30, 2017 December 31, 2016 June 30, 2016 (in thousands) $ 159,751 10,970 204,141 - - 5,559 16,190 23,318 21,652 $ 175,941 34,288 231,352 Other payables due to relatedparties June 30, 2017 December 31, 2016 June 30, 2016 (in thousands) $ 5,285 16,218 8,093 246 406 2,550 8,905 10,717 17,075 $ 14,436 27,341 27,718 Rental income	Other receivables due from relatedparties(including dividends)	Other receivables due from relatedparties(including dividends)	Other receivables due from relatedparties(including dividends)	Other receivables due from relatedparties(including dividends)
				June 30, 2016
				204,141 5,559 21,652
				231352
				June 30, 2016
				8,093 2,550 17,075
				27,718
	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 12,614 8,437 22,616 15,623 1,653 1,653 3,306 3,306 15,622 15,987 31,437 31,831 1,531 1,237 2,923 9,710 31,420 27,314 60,282 60,470		Six months ended June 30,
	2017 12,614 1,653 15,622 1,531 31,420				2016
					15,623 3,306 31,831 9,710
			60,282		60,470

(Continued)

47

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Associates $ Joint ventures Others $ Associates $ Joint ventures Others **$ **	Administration and other income	Administration and other income	Administration and other income
	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 5,769 2,426 6,921 5,579 - 2,426 - 5,559 803 372 1,752 998 6,572 5,224 8,673 12,136 Rental and other expenses	Six months ended June 30,
			2016
			5,579 5,559 998
		8,673	12,136
	Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in thousands) 7,511 9,983 14,732 20,295 384 475 704 804 6,448 12,296 15,991 30,301 14,343 22,754 31,427 51,400	Six months ended June 30,
	2017 7,511 384 6,448 14,343		2016
			20,295 804 30,301
		31,427	51,400

The Company leased portion of its facilities to related parties. The collection term was 15 days from quarter-end, and the pricing was not materially different from that with third parties.

For the six months ended June 30, 2017 and 2016, the Company entitled for cash dividends declared by the associates of $173,036 thousand and $198,828 thousand, respectively. As of June 30, 2017 and 2016, total outstanding dividend receivables classified under other receivables due from related parties, amounted to $143,797 thousand and $196,221 thousand, respectively.

8. Pledged Assets

The carrying amounts of the assets which the Company pledged as collateral were as follows:

Pledged assets Restricted cash in banks(i) Land and building (including investment property) Machinery, equipment and prepayments for equipment	Pledged to secure R&D projects, oil purchases and guarantees for foreign labors and customs duties $ Long-term borrowings Long-term borrowings **$ **	June 30, 2017 71,681 42,507,460 21,557,594 64,136,735	December 31, 2016 (in thousands) 93,379 52,076,840 27,058,442 79,228,661	June 30, 2016
				84,953 67,859,829 27,631,788
				95,576,570

(i) Classified as other current financial assets and other noncurrent assets by its liquidity.

(Continued)

48

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

9. Significant Contingent Liabilities and Unrecognized Commitments

The significant commitments and contingencies of the Company as of June 30, 2017, in addition to those disclosed in other notes to the consolidated interim financial statements, were as follows:

• (1) As of June 30, 2017, the Company had the following outstanding letters of credit for the purpose of purchasing machinery and equipment and materials:

Currency USD JPY	June 30, 2017
	(in thousands) 12,966 1,381,341

• (2) Starting 1998, AUO has entered into technical collaboration, patent licensing, and/or patent cross licensing agreements with Fujitsu Display Technologies Corp. (subsequently assumed by Fujitsu Limited), Toppan Printing Co., Ltd. (“Toppan Printing”), Semiconductor Energy Laboratory Co., Ltd., Japan Display Inc. (formerly Japan Display East Inc./Hitachi Displays, Ltd.), Panasonic Liquid Crystal Display Co., Ltd. (formerly IPS Alpha Technology, Ltd.), LG Display Co., Ltd., Sharp Corporation, Samsung Electronics Co., Ltd., Hydis Technologies Co., Ltd. and others. AUO believes that it is in compliance with the terms and conditions of the aforementioned agreements.

• (3) In April 2011, AUO signed a long-term materials supply agreement with Korean OCI Company Ltd. (“OCI”), under which, AUO and OCI agreed on the supply of certain polysilicon. Purchase prices were determined and adjusted through negotiation on each order basis between both parties. AUO paid proportionate prepayments in three installments to OCI in 2011. In May 2015 and December 2016, the supply agreement was amended and the amended effective term is from April 15, 2011 to December 31, 2020.

• (4) Starting from 2006, DPTW has entered into a long-term materials supply agreement with Evonik Forhouse Optical Polymers Corp. (“EFOP”), under which, DPTW and EFOP agreed on the supply of certain optical-grade molding compounds at negotiated prices and quantities.

• (5) As of June 30, 2017, significant outstanding purchase commitments for construction in progress, property, plant and equipment totaled $36,396,368 thousand.

• (6) Since December 2006, AUO and certain of its subsidiaries, along with various competitors in the TFT-LCD industry, were under investigation for alleged violation of antitrust and competition laws of certain jurisdictions. Set forth below is a list of the material antitrust proceedings against AUO and certain of its subsidiaries.

(Continued)

49

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

United States

In 2012, the Northern California Court rendered judgment against AUO and AUUS regarding the alleged violations of Section 1 of the Sherman Act and imposed a fine of US$500 million against AUO. Such fine was fully paid by AUO as of December 31, 2015. The Northern California Court also placed AUO and AUUS on probation as well as assigned a monitor and required AUO to adopt an effective antitrust compliance program. The probationary period and monitorship ended in December 2016.

Antitrust Civil Actions Lawsuits

There were over 100 civil lawsuits filed against AUO, AUUS and various manufacturers in the TFT-LCD industry in the United States and Canada alleging, among other things, antitrust violations. As of July 25, 2017, AUO and AUUS have reached settlement agreements with the relevant plaintiffs. In addition to the above cases in the United States and Canada, a lawsuit was filed by certain consumers in Israel against certain LCD manufacturers including AUO in the District Court of the Central District in Israel (“Israeli Court”). The defendants contested various issues including whether the lawsuit was properly served. In December 2016, the Israeli Court overturned the original decision and revoked the permission for this case to serve out of Israeli jurisdiction. The decision of the Israeli Court is appealable but subject to the permission by the Supreme Court. The ultimate outcome of these matters is uncertain and will depend on further court proceedings.

• (7) In July and August of 2014, SunPower Technology, Ltd. (“SPTL”), AUO and AUSG submitted certain disputes for arbitration in the International Court of Arbitration of the International Chamber of Commerce in San Francisco, U.S. in connection with the joint venture agreement among the parties. The arbitration was amicably settled by the parties in September 2016. AUSG sold all of its shares in the joint venture company AUSP to SPTL at the price of US$170,100 thousand. Please see note 6(7)b. of the consolidated financial statements for the year ended December 31, 2016 for further details. The shares purchase price shall be paid by SPTL in accordance with the agreement and guaranteed by SunPower Corporation, SPTL’s parent company. The parties have reached amicable agreements regarding the relevant issues, including terminations of the joint venture agreement and relevant agreements and agreed to terminate the arbitration.

• (8) At the end of February 2017, one of AUO’s subsidiaries in the PRC, AUSZ received an administrative complaint filed by Shenzhen China Star Optoelectronics Technology Co., Ltd (“CSOT”) alleging that AUSZ infringes two PRC patents, and the complaint requests that AUSZ cease the alleged infringing act. Based on the Company’s initial investigation, it believes that its subsidiary does not infringe the two PRC patents as alleged, and further that the two PRC patents appear to be invalid. In response to such administrative complaint, its subsidiary has filed a request to invalidate the two PRC patents accordingly. This matter is currently suspended pending the outcome of the invalidation proceeding. In April 2017, CSOT filed civil lawsuits in the Intermediate People’s Court of Shenzhen Municipality against the subsidiary claiming infringement of the same two PRC patents. In June 2017, CSOT filed civil lawsuits in the No.1 Intermediate People’s Court of Chongqing Municipality against the subsidiary claiming infringement of three PRC patents (including one of the above mentioned PRC patents). CSOT requested that AUSZ cease the alleged infringing act and claimed RMB49.91 million for economic loss for each of the said respective PRC patents and compensation for reasonable fees and litigation expenses such

50

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

as notarization fees and attorney fees incurred by CSOT. AUSZ has filed objections to jurisdiction. Based on the Company’s initial investigation, it believes that its subsidiary does not infringe the said respective PRC patents as alleged. While the subsidiary intends to defend against the matters vigorously, the ultimate outcome will depend on further proceedings, and currently there is no material adverse effect on the Company’s business or results of operations. Management is reviewing the merits of this matter on an on-going basis and continuously taking appropriate actions for the interest of the Company and its customers.

As of July 25, 2017, the Company has made certain provisions with respect to certain of the above lawsuits as the management deems appropriate, considering factors such as the nature of the litigation or claims, the materiality of the amount of possible loss, the progress of the cases and the opinions or views of legal counsel and other advisors. Management will reassess all litigation and claims at each reporting date based on the facts and circumstances that exist at that time, and will make additional provisions or adjustments to previous provisions. The ultimate amount cannot be ascertained until the relevant cases are closed. The ultimate resolution of the legal proceedings and/or lawsuits cannot be predicted with certainty. While management intends to defend certain of the lawsuits described above vigorously, there is a possibility that one or more legal proceedings or lawsuits may result in an unfavorable outcome to the Company. In addition to the matters described above, the Company is also a party to other litigations or proceedings that arise during the ordinary course of business. Except as mentioned above, the Company, to its knowledge, is not involved as a defendant in any material litigation or proceeding which could be expected to have a material adverse effect on the Company’s business or results of operations.

10. Significant Disaster Losses: None.

11. Subsequent Event

Except for otherwise disclosed in the other notes to the consolidated interim financial statements, there is no significant reportable subsequent event.

12. Others

• (1) Seasonality of operations

The Company’s operations are not materially influenced by seasonality or cyclicality.

• (2) There have been environmental proceedings relating to the development project of the Central Taiwan Science Park in Houli, Taichung, which AUO’s second 8.5-generation fab is located at and which has been established since 2010. The proceedings were initiated by six residents in Houli District, Taichung City (the “Plaintiffs”) to object the administrative dispositions of the environmental assessment and development approval issued in 2010 by the Environmental Protection Administration of the Executive Yuan of Taiwan to the third phrase development area in the Central Taiwan Science Park (the “Project”). On August 8, 2014, the Plaintiffs reached a settlement with the defendants (i.e. the governmental authorities, including the Environmental Protection Administration of the Executive Yuan of Taiwan, the Ministry of Science and Technology (former National Science Council of the ROC Executive Yuan) and the Central Taiwan Science Park Development Office) in the Taipei High Administrative Court. The second phase environmental impact assessment for

51 (Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

the Project continues to proceed. Primarily in light of the settlement and based on the principle of protection of reliance under the Administrative law and in light of the relevant approvals issued by the government to the Company, currently management does not believe that this event will have a material adverse effect on the Company’s operation and will continue to monitor the development of this event.

13. Segment Information

Operating segment information

The Company has two operating segments: display and solar. The display segment generally is engaged in the research, development, design, manufacturing and sale of flat panel displays and most of our products are TFT-LCD panels. The solar segment primarily is engaged in the design, manufacturing and sale of ingots, solar wafers and solar modules, as well as providing technical engineering services and maintenance services for solar system projects.

Segment results are excluding non-operating income and expenses and income tax expense (benefit). There are no differences between the consolidated financial statements for the three months ended June 30, 2017 and 2016 and for the six months ended June 30, 2017 and 2016 with the financial results received by the Company’s chief operating decision maker. The accounting policies for the operating segments are the same as those used in preparation of the consolidated financial statements of the Company. The Company uses the net revenue, profit (loss) from operations and segment profit (loss) excluding depreciation and amortization as the basis of segment performance assessment.

Net revenue from external customers $ Segment profit (loss) $ Net non-operating income and expenses Consolidated profit before income tax Segment profit (loss) excluding depreciation and amortization $ Segment assets	Three months ended June 30, 2017	Three months ended June 30, 2017	Three months ended June 30, 2017
	Display 79,914,300 11,803,912 20,389,041	Solar Adjustment and elimination (in thousands) 4,498,100 - (127,883 ) - $ 293,210 - $	Total segments
			84,412,400 11,676,029 (31,970 ) 11,644,059 20,682,251 441,143,140

52

(Continued)

AU OPTRONICS CORP. AND SUBSIDIARIES

Notes to Consolidated Interim Financial Statements

Net revenue from external customers $ Segment profit (loss) $ Net non-operating income and expenses Consolidated loss before income tax Segment profit (loss) excluding depreciation and amortization $ Segment assets Net revenue from external customers $ Segment profit (loss) $ Net non-operating income and expenses Consolidated profit before income tax Segment profit (loss) excluding depreciation and amortization $ Segment assets Net revenue from external customers $ Segment profit (loss) $ Net non-operating income and expenses Consolidated loss before income tax Segment profit (loss) excluding depreciation and amortization $ Segment assets	Three months ended June 30, 2016	Three months ended June 30, 2016	Three months ended June 30, 2016
	Display Solar Adjustment and elimination (in thousands) 73,956,357 6,134,546 - (223,900 ) 339,591 - $ 9,172,761 805,334 - $ Six months endedJune 30, 2017		Total segments
			80,090,903 115,691 (355,849 ) (240,158 ) 9,978,095 417,385,065
	Display Solar Adjustment and elimination (in thousands) 163,362,260 9,606,956 - 24,190,685 (497,249 ) - $ 42,363,327 346,806 - $ Six months ended June 30, 2016		Total segments
			172,969,216 23,693,436 (99,635 ) 23,593,801 42,710,133 441,143,140
	Display 137,539,581 (5,468,915 ) 13,373,906	Solar Adjustment and elimination (in thousands) 13,686,554 - 487,688 - $ 1,418,654 - $	Total segments
			151,226,135 (4,981,227) (543,959 ) (5,525,186 ) 14,792,560 417,385,065

53