China Airlines, Ltd. and Subsidiaries
Consolidated Financial Statements for theThree Months Ended March 31, 2022 and 2021 andIndependent Auditors’ Review ReportINDEPENDENT AUDITORS’ REVIEW REPORTThe Board of Directors and Shareholders
China Airlines, Ltd.
Introduction
We have reviewed the accompanying consolidated balance sheets of China Airlines, Ltd. and its
subsidiaries (collectively, the “Group”) as of March 31, 2022 and 2021, the related consolidated
statements of comprehensive income, changes in equity and cash flows for the three months then ended,and the related notes to the consolidated financial statements, including a summary of significant
accounting policies (collectively referred to as the “consolidated financial statements”). Management is
responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers andInternational Accounting Standard 34 “Interim Financial Reporting” endorsed and issued into effect by
the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a
conclusion on the consolidated financial statements based on our reviews.
We did not review the financial statements of some subsidiaries included in the consolidated financial
statements of the Group, but such statements were reviewed by other auditors. Our conclusion, insofar as
it relates to the amounts included in the consolidated financial statements for these subsidiaries, is based
solely on the reports of other auditors. The total assets of these subsidiaries were NT$13,940,928
thousand and NT$11,831,573 thousand, which represented 4.90% and 4.37% of the consolidated total
assets as of March 31, 2022 and 2021, respectively; and the total revenue of these subsidiaries was
NT$22,085 thousand and NT$14,968 thousand, which represented 0.06% and 0.05% of the consolidated
total revenue for the three months ended March 31, 2022 and 2021, respectively.
Scope of Review
Except as explained in the following paragraph, we conducted our reviews in accordance with theStatement of Auditing Standard No. 65 “Review of Financial Information Performed by the Independent
Auditor of the Entity”. A review of consolidated financial statements consists of making inquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical and otherreview procedures. A review is substantially less in scope than an audit and consequently does not enable
us to obtain assurance that we would become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.

-1-Basis for Qualified Conclusion
As disclosed in Notes 13 and 14 to the consolidated financial statements, the financial statements of somenon-significant subsidiaries and investments accounted for using the equity method were not reviewed.
As of March 31, 2022 and 2021, the combined total assets of these non-significant subsidiaries were
NT$20,406,838 thousand and NT$20,742,633 thousand, respectively, representing 7.18% and 7.67%,
respectively, of the consolidated total assets, and the combined total liabilities of these non-significant
subsidiaries were NT$11,180,765 thousand and NT$10,977,026 thousand, respectively, representing
5.47% and 5.20%, respectively, of the consolidated total liabilities; for the three months ended March 31,
2022 and 2021, the amounts of the combined comprehensive income (loss) of these non-significant
subsidiaries were NT$(164,937) thousand and NT$(168,915) thousand, respectively, representing (8.59%)
and 11.36%, respectively, of the consolidated total comprehensive income. As of March 31, 2022 and
2021, the aforementioned investments accounted for using the equity method were NT$1,536,795
thousand and NT$1,889,627 thousand, respectively; and for the three months ended March 31, 2022 and
2021, the amounts of the Group’s share of the profit of such investments accounted for using the equity
method were NT$(50,965) thousand and NT$(81,674) thousand, respectively.
Qualified Conclusion
Based on our reviews, except for adjustments, if any, as might have been determined to be necessary had
the financial statements of the non-significant subsidiaries and investments accounted for by using theequity method as described in the preceding paragraph been reviewed, nothing has come to our attention
that caused us to believe that the accompanying consolidated financial statements do not present fairly, inall material respects, the consolidated financial position of the Group as of March 31, 2022 and 2021 andits consolidated financial performance and its consolidated cash flows for the three months ended March
31, 2022 and 2021 in accordance with the Regulations Governing the Preparation of Financial Reports by
Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed andissued into effect by the Financial Supervisory Commission of the Republic of China.
The engagement partners on the reviews resulting in this independent auditors’ review report are
Jui-Chan Huang and Shiuh-Ran Cheng.

Deloitte & Touche
Taipei, Taiwan
Republic of China
May 9, 2022
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 accounting principles andpractices generally accepted in the Republic of China and not those of any other jurisdictions. The
standards, procedures and practices to review such consolidated financial statements are those generally
applied in the Republic of China.
For the convenience of readers, the independent auditors’ review report and the accompanying
consolidated financial statements have been translated into English from the original Chinese version
prepared and used in the Republic of China. If there is any conflict between the English version and theoriginal Chinese version or any difference in the interpretation of the two versions, the Chinese-language
independent auditors’ review report and consolidated financial statements shall prevail.
-2-

CHINA AIRLINES, LTD. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In Thousands of New Taiwan Dollars)

March 31, 2022
(Reviewed)
Amount%ASSETS
CURRENT ASSETS
Cash and cash equivalents (Notes 4, 6 and 31)
Financial assets at fair value through profit or loss - current (Notes 4, 7 and 31)
Financial assets at amortized cost - current (Notes 4, 9 and 31)
Financial assets for hedging - current (Notes 4, 6 and 31)
Notes and accounts receivable, net (Notes 4, 5, 10 and 31)
Notes and accounts receivable - related parties (Notes 31 and 32)
Other receivables (Note 31)
Current tax assets (Notes 4 and 28)
Inventories, net (Notes 4 and 11)
Non-current assets held for sale (Notes 4, 5 and 12)
Other current assets (Note 18)

March 31, 2021
(Reviewed)
Amount%$ 39,936,574
142,467
9,583,303
1,528,634
10,552,420
2,937
963,62259,4738,861,247
64,016808,106

14
4
1
4
3
-

$ 45,269,866
155,780
13,028,521
3,563,319
13,473,493
2,348
752,764
59,3418,814,975
36,719692,464

15
5
1
5
3
-

$ 24,026,029
257,820
1,536,398
3,319,084
9,296,240
2,852
734,498
70,381
8,264,929
89,956
1,105,885

9
1
1
4
3
-

72,502,799

26

85,849,590

29

48,704,072

18

71,820223,264
1,536,795
131,513,405
55,222,077
2,074,464
964,007
7,277,204
12,927,801

46
19
1
3
5

67,88470,596
1,555,016
129,632,046
56,061,967
2,074,531
1,008,992
6,930,97811,469,481

1
44
19
1
2
4

161,331353,462
1,889,627
143,241,463
57,790,916
2,074,731
1,030,289
6,048,683
9,225,197

1
53
21
1
2
4

211,810,837

74

208,871,491

71

221,815,699

82$ 284,313,636

100$ 294,721,081

100$ 270,519,771

100

Total current assets
NON-CURRENT ASSETS
Financial assets at fair value through other comprehensive income - non-current (Notes 4, 8 and 31)
Financial assets at amortized cost - non-current (Notes 4, 9 and 31)
Investments accounted for using the equity method (Notes 4 and 14)
Property, plant and equipment (Notes 4, 5, 15 and 33)
Right-of-use assets (Notes 4, 21 and 33)
Investment properties (Notes 4 and 16)
Other intangible assets (Notes 4 and 17)
Deferred tax assets (Notes 4, 5 and 28)
Other non-current assets (Notes 18, 21, 31 and 33)
Total non-current assets
TOTAL

December 31, 2021
(Audited)
Amount%LIABILITIES AND EQUITYCURRENT LIABILITIESShort-term borrowings (Notes 19 and 31)
Financial liabilities for hedging - current (Notes 4, 21 and 31)
Notes and accounts payable (Note 31)
Accounts payable - related parties (Notes 31 and 32)
Contract liabilities - current (Notes 4, 5 and 23)
Other payables (Notes 22 and 31)
Current tax liabilities (Notes 4 and 28)
Provisions - current (Notes 4, 24 and 31)
Lease liabilities - current (Notes 4 and 21)
Current portion of bonds payable and put option of convertible bonds (Notes 4, 20 and 31)
Current portion of long-term borrowings (Notes 19, 31 and 33)
Other current liabilities (Note 31)$

1,932,000
8,438,097
1,115,600
130,5723,868,712
14,661,347
3,054,287
3,247,236
2,533,452
2,525,000
9,324,318
2,408,484

1
3
1
5
1
1
1
1
3
1

17

53,239,105

27,874,799
10,352,160
77,989,467
831,704
15,855,239
14,530655,319
13,488,258
9,569,563
599,666

10
4
27
6
5
3
-

Total non-current liabilities

157,230,705

Total liabilities

Total current liabilities
NON-CURRENT LIABILITIESFinancial liabilities for hedging - non-current (Notes 4, 21 and 31)
Bonds payable - non-current (Notes 4, 20 and 31)
Long-term borrowings - non-current (Notes 19, 31 and 33)
Contract liabilities - non-current (Notes 4 and 23)
Provisions - non-current (Notes 4, 24 and 31)
Current tax liabilities - non-current (Notes 4 and 28)
Deferred tax liabilities (Notes 4 and 28)
Lease liabilities - non-current (Notes 4 and 21)
Net defined benefit liabilities - non-current (Notes 4, 5 and 25)
Other noncurrent liabilities (Note 31)

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 20 and 26)
Share capital
Capital surplus
Retained earnings (accumulated deficit)
Legal reserve
Special reserve
Unappropriated retained earnings (accumulated deficit)
Total retained earnings (accumulated deficit)
Other equity
Treasury shares
Total equity attributable to owners of the Company
NON-CONTROLLING INTERESTS (Note 26)
Total equity
TOTAL

The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ review report dated May 9, 2022)-3-

1,932,000
8,582,710
1,036,009
105,378
4,086,926
11,044,426
4,280,518
3,308,241
2,639,995
2,525,000
5,402,924
2,198,952

1
3
1
4
2
1
1
1
2
1

47,143,079$$

1,932,000
8,168,211
1,398,349
103,450
3,540,129
8,061,204
226,604
1,262,426
2,562,559
6,150,000
17,931,908
1,056,195

1
3
1
1
3
1
2
7
-

18

52,393,035

19

27,839,847
11,125,026
85,069,285
635,633
15,406,987
29,0601,021,553
12,758,050
9,814,737
576,780

10
4
29
5
1
4
3
-

30,606,694
16,152,661
71,546,595
1,417,609
14,415,791
842,194
72,651
13,497,658
9,735,920
534,867

11
6
27
1
5
5
4
-

55

164,276,958

56

158,822,640

59

204,373,784

72

217,516,063

74

211,215,675

78

59,935,427
2,950,940

21
1

59,412,243
2,694,529

20
1

54,209,926
1,187,345

20-

12,326,156
12,326,156
1,851,016(30,875)

4
4
1-

9,253,848
9,253,848
2,713,828(30,875)

3
3
1-(1,369,957)(1,369,957)
2,352,322(30,875)

1-

77,032,664

27

74,043,573

25

56,348,761

21

2,907,188

1

3,161,445

1

2,955,335

1

79,939,852

28

77,205,018

26

59,304,096

22$ 284,313,636

100$ 294,721,081

100$ 270,519,771

100

CHINA AIRLINES, LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)(Reviewed, Not Audited)

For the Three Months Ended March 31
2022
2021
Amount%Amount%OPERATING REVENUE (Notes 4, 27 and 32)$ 37,233,283

100$ 27,827,656

100

OPERATING COSTS (Notes 4, 11, 17, 21, 24, 25, 27
and 32)

31,734,202

86

26,159,788

94

GROSS PROFIT

5,499,081

14

1,667,868

6

OPERATING EXPENSES (Notes 4, 25 and 27)

1,873,052

5

2,137,046

8

PROFIT (LOSS) FROM OPERATIONS

3,626,029

9(469,178)(2)

278,803
264,142(565,657)1
1(2)

95,820(219,433)(657,383)(1)(2)(50,965)-(81,674)-(73,677)-(862,670)(3)

PROFIT (LOSS) BEFORE INCOME TAX

3,552,352

9(1,331,848)(5)

INCOME TAX (EXPENSE) BENEFIT (Notes 4
and 28)(741,621)(2)

115,301

1

NET INCOME (LOSS) FOR THE PERIOD

2,810,731

7(1,216,547)(4)70,548

-

6,434

-

3,534

-

(2,419)-(13,536)
60,546

-

(376)
3,639
(Continued)

NON-OPERATING INCOME AND EXPENSES
Other income (Note 27)
Other gains and losses (Notes 15 and 27)
Finance costs (Notes 27 and 31)
Share of the profit of associates and joint ventures(Note 14)
Total non-operating income and expenses

OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to
profit or loss:
Gain on hedging instruments subject to basis
adjustment
Unrealized gain (loss) on investments in equity
instruments at fair value through othercomprehensive income
Income tax relating to items that will not bereclassified subsequently to profit or loss
(Note 28)

-4-

CHINA AIRLINES, LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In Thousands of New Taiwan Dollars, Except Earnings (Loss) Per Share)(Reviewed, Not Audited)

For the Three Months Ended March 31
2022
2021
Amount%Amount%Items that may be reclassified subsequently to profit
or loss:
Exchange differences on translation of thefinancial statements of foreign operations(Notes 4 and 26)
Loss on hedging instruments not subject to basis
adjustment (Notes 4, 21, 26 and 31)
Income tax relating to items that may bereclassified subsequently to profit or loss
(Note 28)

$

7,163

-

(3)

(350,502)(1)

240,843(951,088)

1(2)

69,066(274,273)(1)(890,542)(2)(270,634)(1)$

1,920,189

5$ (1,487,181)(5)$

3,072,308(261,577)8(1)$ (1,019,376)(197,171)

(3)
(1)

$

2,810,731

7$ (1,216,547)(4)$

2,174,446(254,257)6(1)$ (1,290,426)(196,755)

(4)
(1)

$

1,920,189

5$ (1,487,181)(5)

Other comprehensive income (loss) for theperiod, net of income tax
TOTAL COMPREHENSIVE INCOME (LOSS) FOR
THE PERIODNET INCOME (LOSS) ATTRIBUTABLE TO:
Owners of the Company
Non-controlling interests

TOTAL COMPREHENSIVE INCOME (LOSS)ATTRIBUTABLE TO:
Owners of the Company
Non-controlling interests

EARNINGS (LOSS) PER SHARE (NEW TAIWANDOLLARS; Note 29)
Basic
Diluted72,202-(1,264,133)

$
$

0.52
0.50

$

$
$

(0.19)(0.19)

The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ review report dated May 9, 2022)-5-(Concluded)

CHINA AIRLINES, LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(In Thousands of New Taiwan Dollars)(Reviewed, Not Audited)

Share Stock

Capital Surplus

Legal Reserve

Equity Attributable to Owners of the Company
Other Equity
Exchange
Unrealized
Differences on
Gain (Loss) on
Translation of Financial Assets
Unapproprithe Financial
at Fair Value
ated Earnings
Statements ofThrough Other(Accumulated
ForeignComprehensive
Special Reserve
Deficit)Operations
Income$ 54,209,846$ 1,187,327$$

Basis adjustment to gain (loss) on hedging instruments

-

-

-

-

-

-

-

Net loss for the three months ended March 31, 2021

-

-

-

-

(1,019,376)-

Other comprehensive income (loss) for the three months ended
March 31, 2021, net of income tax

-

-

-

-

-

Total comprehensive income (loss) for the three months ended
March 31, 2021

-

-

-

-

Convertible bonds converted to ordinary shares

80

18

-

BALANCE AT MARCH 31, 2021

$ 54,209,926$ 1,187,345$-

BALANCE AT JANUARY 1, 2022

$ 59,412,243$ 2,694,529$-

Basis adjustment to gain (loss) on hedging instruments--

Net income (loss) for the three months ended March 31, 2022-

Other comprehensive income (loss) for the three months ended
March 31, 2022, net of income tax
Total comprehensive income (loss) for the three months ended
March 31, 2022

BALANCE AT JANUARY 1, 2021

Convertible bonds converted to ordinary shares
BALANCE AT MARCH 31, 2022

Gain (Loss) on
Hedging
Instruments

Treasury
SharesHeld by
Subsidiaries

71,359$ 2,606,659

$

Total

Non-controlling
Interests

Total Equity(30,875)$ 57,559,483$ 3,152,090$ 60,711,573

79,606-

79,606-

79,606---(1,019,376)(197,171)(1,216,547)

5,693(1,507)(275,236)-(271,050)

416(270,634)(1,019,376)

5,693(1,507)(275,236)-(1,290,426)(196,755)(1,487,181)

-

-

-

-

-

-

98

-

98

$

-

$ (1,369,957)$(128,559)$

69,852$ 2,411,029$(30,875)$ 56,348,761$ 2,955,335$ 59,304,096$-$ 9,253,848$(120,079)$(5,512)$ 2,839,419$(30,875)$ 74,043,573$ 3,161,445$ 77,205,018

-

-

-

-

-

35,050-35,050-35,050---3,072,308

-

-

-

-

3,072,308(261,577)

2,810,731

-

-

-

-

-

53,8784,108(955,848)-(897,862)

7,320(890,542)

-

-

-

-

3,072,308

53,8784,108(955,848)-

2,174,446(254,257)

1,920,189

523,184

256,411

-

-

-

-

-

-

-

779,595-

779,595$ 59,935,427$ 2,950,940-$ 12,326,156(1,404)$ 1,918,621(30,875)$ 77,032,664$ 2,907,188$ 79,939,852

$

-

-

$

-

$

(350,581)

The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ review report dated May 9, 2022)

-6-

$

$

(134,252)(66,201)$$$

CHINA AIRLINES, LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In Thousands of New Taiwan Dollars)(Reviewed, Not Audited)

For the Three Months Ended
March 312022
2021
CASH FLOWS FROM OPERATING ACTIVITIESIncome (loss) before income tax
Adjustments for:
Depreciation expense
Amortization expense
Expected credit loss recognized on trade receivables
Net gain on fair value changes of financial assets at fair value
through profit or loss
Interest income
Share of loss (profit) of associates and joint ventures(Gain) loss on disposal of property, plant and equipment
Loss on inventories and property, plant and equipment
Net gain on foreign currency exchange
Finance costs
Recognition of provisions
OthersChanges in operating assets and liabilities
Financial assets mandatorily classified as at fair value through profit
or loss
Notes and accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Other current assets
Notes and accounts payable
Accounts payable - related parties
Other payables
Contract liabilities
Provisions
Other current liabilities
Defined benefit liabilities
Other liabilities
Cash generated from operations
Interest received
Interest paid
Income tax paid

3,552,352$ (1,331,848)

7,350,563
56,622
9,618

7,881,376
54,3289,370(686)(36,197)
50,965(2,715)282,340(133,352)
565,657
1,376,905(7,047)(149)(41,153)
81,67436,476386,381(452,373)
657,383
1,372,144(2,666)

13,401
3,093,322
371(191,504)(978,275)(169,945)(202,207)
9,816(3,665,249)
414,285(1,309,962)(150,046)(245,212)
8,624
9,692,444
28,995(555,744)(18,445)

17,007345,392(20,911)
111,511504,149(258,198)(10,756)(21,963)(287,580)(372,673)(313,099)
40,211732
5,602
8,390,367
43,637(612,422)(22,876)

Net cash generated from operating activities

9,147,250

7,798,706

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at amortized cost
Proceeds from sale of financial assets at amortized cost
Purchase of financial assets for hedging
Proceeds from sale of financial assets for hedging
Payments for property, plant and equipment(7,233,050)
10,804,786(1,329,640)
3,573,027(557,457)(983,424)
5,994,682(2,537)
4,604,205(189,642)(Continued)-7-$

CHINA AIRLINES, LTD. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In Thousands of New Taiwan Dollars)(Reviewed, Not Audited)

For the Three Months Ended
March 312022
2021
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Decrease in refundable deposits
Increase in prepayments for equipment
Increase in computer software costs
Increase in restricted assets
Net cash (used in) generated from investing activities

$

5,195
(2,130)41,099(6,147,227)(78,033)(75,621)$770(19,011)
16,114(6,529,185)(8,266)(77,553)(999,051)

2,806,153(200)
1,107,017(12,108,229)(2,869,152)
23,978(22,088)(8,088,882)
230,925(3,304,180)(2,743,077)
61,302(63,533)(13,868,674)(13,907,445)

387,183

202,678

NET DECREASE IN CASH AND CASH EQUIVALENTS(5,333,292)(3,099,908)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
PERIOD45,269,866

27,125,937

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD$ 39,936,574$ 24,026,029

CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term bills payable
Repayments of bonds payable
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayments of the principal portion of lease liabilities
Proceeds from guarantee deposits received
Refund of guarantee deposits received
Net cash used in financing activities
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE
OF CASH HELD IN FOREIGN CURRENCIESThe accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ review report dated May 9, 2022)-8-(Concluded)

CHINA AIRLINES, LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)(Reviewed, Not Audited)

1. GENERAL INFORMATION
China Airlines, Ltd. (the “Company”) was founded in 1959 and its shares have been listed on the Taiwan
Stock Exchange since February 26, 1993. The Company is primarily involved in (a) air transport services
for passengers, cargo and mail; (b) ground services and routine aircraft maintenance; (c) major maintenanceof flight equipment; (d) communications and data processing services to other airlines; (e) the sale ofaircraft parts, equipment and the entire aircraft; and (f) leasing of aircraft.
The major shareholders of the Company are China Aviation Development Foundation (“CADF”) andNational Development Fund (“NDF”), Executive Yuan. As of March 31, 2022, December 31, 2021 andMarch 31, 2021, CADF and NDF held a combined 39.82%, 40.17% and 44.03%, respectively of theCompany’s shares.

2. APPROVAL OF FINANCIAL STATEMENTS
The consolidated financial statements of the Company and its subsidiaries (collectively referred to as the“Group”) were approved by the Company’s board of directors on May 9, 2022.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS
a. Initial application of the amendments to the International Financial Reporting Standards (IFRS),International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC)(collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission(FSC)
The application of the IFRSs endorsed and issued into effect by the FSC did not have material impact
on the Group’s accounting policies.
b. New IFRSs in issue but not yet endorsed and issued into effect by the FSC
Effective Date
Announced by IASB (Note 1)

New IFRSs
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between An Investor and Its Associate or Joint Venture”
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17
Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 Comparative Information”
Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
(Continued)-9-Effective Date
Announced by IASB (Note 1)

New IFRSs
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting Estimates”
Amendments to IAS 12 “Deferred Tax related to Assets andLiabilities arising from a Single Transaction”

January 1, 2023 (Note 2)
January 1, 2023 (Note 3)
January 1, 2023 (Note 4)(Concluded)Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods
beginning on or after their respective effective dates.
Note 2: The amendments will be applied prospectively for annual reporting periods beginning on orafter January 1, 2023.
Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting
policies that occur on or after the beginning of the annual reporting period beginning on orafter January 1, 2023.
Note 4: Except for deferred taxes that will be recognized on January 1, 2022 for temporary differences
associated with leases and decommissioning obligations, the amendments will be applied
prospectively to transactions that occur on or after January 1, 2022.
As of the date the consolidated financial statements were authorized for issue, the Group is
continuously assessing the possible impact that the application of other standards and interpretations
will have on the Group’s financial position and financial performance and will disclose the relevant
impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExcept for the policies listed below, the accounting policies adopted for these consolidated financial
statements are the same as those of for the consolidated financial statements for the year ended December
31, 2021.
Statement of Compliance
The consolidated financial statements have been prepared in accordance with the Regulations Governing
the Preparation of Financial Reports by Securities Issuers and IAS 34 “Interim Financial Reporting” asendorsed by the FSC. Disclosure information included in these interim consolidated financial statements isless than the disclosures required in a full set of annual consolidated financial statements.
Basis of Preparation
The consolidated financial statements have been prepared on the historical cost basis except for financial
instruments which are measured at fair value.
The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fairvalue measurement inputs are observable and based on the significance of the inputs to the fair value
measurement in its entirety, are described as follows:a. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
b. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and- 10 -

c. Level 3 inputs are unobservable inputs for an asset or liability.
Basis of Consolidation
The consolidated financial statements reporting principles are the same as those in the consolidated
financial statements for the year ended December 31, 2021.
Employee Benefits
Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determinedpension cost rate at the end of the prior financial year, adjusted for significant market fluctuations since thattime and for significant plan amendments, settlements, or other significant one-off events.
Income Tax
Income tax expense represents the sum of the tax currently payable and deferred tax. Interim period income
taxes are assessed on an annual basis and calculated by applying to an interim period’s pre-tax income thetax rate that would be applicable to expected total annual earnings.
Lease
The Group negotiates with the lessor for rent concessions as a direct consequence of the Covid-19 tochange the lease payments originally due by June 30, 2022, that results in the revised consideration for thelease substantially the same as, or less than, the consideration for the lease immediately preceding thechange. There is no substantive change to other terms and conditions. The Group elects to apply thepractical expedient to rent concessions for the abovementioned lease contracts, and therefore, does notassess whether the rent concessions are lease modifications. Instead, the Group recognizes the reduction inlease payment in profit or loss in the period in which the events or conditions that trigger the concession
occurs, and makes a corresponding adjustment to the lease liability.
Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods
in which they are incurred.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATIONUNCERTAINTY
The critical accounting judgments and key sources of estimation uncertainty for these interim consolidated
financial statements are the same as those applied for the annual consolidated financial statements for theyear ended December 31, 2021.

6. CASH AND CASH EQUIVALENTS

Cash on hand and revolving fund
Checking accounts and demand deposits
Cash equivalents
Time deposits with original maturities of lessthan three months
Repurchase agreements collateralized by bonds$

March 31,2022

December 31,
2021

523,061
21,747,854$

294,026
28,507,427

March 31,2021$

107,856
12,030,912

16,040,588
1,625,071

11,347,326
5,121,087

9,512,184
2,375,077$ 39,936,574$ 45,269,866$ 24,026,029- 11 -

The market rate intervals of cash in the bank and cash equivalents at the end of the reporting period were as
follows:

Bank balanceTime deposits with original maturities of less than
three months
Repurchase agreements collateralized by bonds

March 31,2022

December 31,
2021

March 31,2021

0%-1.97%0%-1.9%0%-1.90%

0.06%-1.77%
0.20%-0.53%

0.07%-0.41%
0.20%-0.45%

0.13%-2.40%
0.22%-0.41%

The Group designated some deposits denominated in USD and repurchase agreements collateralized bybonds as hedging instruments to avoid exchange rate fluctuations on final payments of aircraft orders andprepayments for equipment, and applied cash flow hedge accounting to hedge its foreign exchange
exposure. The contract information is as follows:
Maturity Date
March 31, 2022
December 31, 2021
March 31, 2021

Subject

Carrying Value

2022.4.26-2022.4.28 Financial assets for hedging - current
2022.2.7-2022.2.14 Financial assets for hedging - current
2021.4.1-2021.8.2 Financial assets for hedging - current$ 1,375,358
3,545,706
3,314,286

Impact on comprehensive income (loss)
Recognized in
Other
Comprehensive
Income (Loss)
For the three months ended March 31, 2022
For the three months ended March 31, 2021

$ 70,548
6,434

For the three months ended March 31, 2021 and 2022, the amount of hedging instrument settlements
recognized as prepayments for equipment were $43,812 thousand and $99,507 thousand, respectively.

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)March 31,2022

December 31,
2021

March 31,2021

$ 142,467$ 155,780$ 257,820

Financial assets - current
Financial assets mandatorily classified as at
FVTPL
Non-derivative financial assets
Beneficiary certificates- 12 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME(FVTOCI)
Investments in Equity Instruments
March 31,2022

December 31,
2021

March 31,2021

Non-current
Foreign investments
Unlisted shares
Domestic investments
Unlisted shares$

36,609$35,211$

71,820$39,080$ 129,488

28,804

31,84367,884$ 161,331

These investments in equity instruments are not held for trading. Instead, they are held for medium- tolong-term strategic purposes and are expected to profit through long-term investments. Accordingly, themanagement elected to designate these investments in equity instruments as at FVTOCI as they believe thatrecognizing short-term fluctuations in these investments’ fair values in profit or loss would not be
consistent with the Group’s strategy of holding these investments for long-term purposes.

9. FINANCIAL ASSETS AT AMORTIZED COST
March 31,2022

December 31,
2021

March 31,2021

$ 9,582,742
561$ 13,027,969
552$ 1,534,735
1,663$ 9,583,303$ 13,028,521$ 1,536,398

$

$

$

Current
Time deposits with original maturities of morethan 3 months
Government bondNon-current
Time deposits with original maturities of morethan 1 year

223,264

70,596353,462

The ranges of interest rates for time deposits with original maturities of more than 3 months wereapproximately 0.21%-1.11%, 0.21%-1.05% and 0.21%-1.10% per annum as of March 31, 2022, December
31, 2021 and March 31, 2021, respectively.

- 13 -

10. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE
March 31,2022
Notes receivable$

December 31,
2021

245

$

1,547

March 31,
2021
$

1,860

Accounts receivable
At amortized cost
Gross carrying amountLess: Allowance for impairment loss

10,797,371(245,196)
10,552,175

13,707,506(235,560)
13,471,946$ 10,552,420$ 13,473,493

9,509,934(215,554)
9,294,380$

9,296,240

The average credit period was 7 to 55 days. In determining the recoverability of a trade receivable, theGroup considered any change in the credit quality of the receivable since the date credit was initiallygranted to the end of the reporting period, and any allowance for impairment loss was based on theestimated irrecoverable amounts determined by reference to the Group’s past default experience with thecounterparty and an analysis of the counterparty’s current financial position. The Group adopted a policy of
only dealing with entities that are rated the equivalent of investment grade or higher and obtaining
sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.
Credit rating information is obtained from independent rating agencies where available or, if not available,
the Group uses other publicly available financial information or its own trading records to rate its major
customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored andthe aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure
is controlled by counterparty limits that are reviewed and approved by the risk management committee
annually.
The Group applies the simplified approach to allowing for expected credit losses prescribed by IFRS 9,which permits the use of lifetime expected loss allowance for all accounts receivable. The expected credit
losses on accounts receivable are estimated using a provision matrix by reference to past default experience
with the debtors and an analysis of the debtors’ current financial position, adjusted for general economic
conditions of the industry in which the debtors operate and an assessment of both the current as well as theforecasted direction of economic conditions at the reporting date. As the Group’s historical credit loss
experience does not show significantly different loss patterns for different customer segments, the loss
allowance based on the past due status is not further distinguished according to the different segments of theGroup’s customer base.
The Group writes off accounts receivable when there is information indicating that the debtor isexperiencing severe financial difficulty and there is no realistic prospect of recovery. For accounts
receivable that have been written off, the Group continues to engage in enforcement activity to attempt torecover the past due receivables. Where recoveries are made, these are recognized in profit or loss.
The following table details the loss allowance of accounts receivable based on the Group’s provision
matrix.
March 31, 2022

Expected credit loss rate

Not Past Due

1 to 30 Days
Past Due

31 to 60 Days
Past Due61 to 90 Days
Past DueOver 90 Days
Past Due

0.75%

8.43%

41.57%

99.94%

100.00%Total

Gross carrying amount
Loss allowance (lifetime ECLs)$ 10,560,993(79,187)$

73,732(6,216)$

4,879(2,028)$3,518(3,516)$

154,249(154,249)$ 10,797,371(245,196)

Amortized cost

$ 10,481,806$

67,516

$

2,851

$

2

$

-

$ 10,552,175- 14 -

December 31, 2021
Not Past Due

1 to 30 Days
Past Due

31 to 60 Days
Past Due61 to 90 Days
Past DueOver 90 Days
Past Due

0.56%

6.79%

20.75%

99.92%

99.99%

Expected credit loss rate

Total

Gross carrying amount
Loss allowance (lifetime ECLs)$ 13,481,446(75,114)$61,988(4,211)$9,884(2,051)$

2,499(2,497)$

151,689(151,687)$ 13,707,506(235,560)

Amortized cost

$ 13,406,332$

57,777

$

7,833

$

2

$

2

$ 13,471,946

Not Past Due

1 to 30 Days
Past Due

31 to 60 Days
Past Due61 to 90 Days
Past DueOver 90 Days
Past Due

0.30%

0.67%

0.10%

22.45%

94.51%March 31, 2021

Expected credit loss rate

Total

Gross carrying amount
Loss allowance (lifetime ECLs)$

8,935,260(27,517)$

261,227(1,745)$110,923
(107)

$

7,238
(1,625)$

195,286(184,560)$

9,509,934(215,554)

Amortized cost$

8,907,743$

259,482$

110,816

$

5,613

$

10,726$

9,294,380

The movements of the loss allowance of accounts receivables were as follows:
For the Three Months Ended
March 31
2022
2021
Balance at January 1
Add: Net remeasurement of loss allowance
Add: Amounts recovered
Less: Amounts written off
Foreign exchange gains and losses$ 235,560
9,618
176
(163)
5

$ 206,152
9,370
106
(76)
2

Balance at March 31$ 245,196$ 215,554

March 31,2022

December 31,
2021

March 31,2021

$ 7,773,739
648,631
350,980
87,897$ 7,603,809
621,181534,073
55,912$ 7,348,878
627,067
241,072
47,912$ 8,861,247$ 8,814,975$ 8,264,929

11. INVENTORIES

Aircraft spare parts
Items for in-flight sale
Work in process - maintenance services
OthersThe operating costs recognized for the three months ended March 31, 2022 and 2021 included losses frominventory write-downs of $169,321 thousand and $188,279 thousand, respectively.

- 15 -

12. NON-CURRENT ASSETS HELD FOR SALE

Aircraft held for sale

March 31,2022

December 31,
2021

March 31,2021

$ 64,016$ 36,719$ 89,956

To enhance its competitiveness, the Company plans to introduce new aircraft and retire old aircraft
according to a planned schedule. Such aircraft, classified as non-current assets held for sale, had an original
carrying amount which was higher than the expected sale price and which was recognized as an impairment
loss, and would be continuously assessed whether there are further impairments in subsequent periods.
However, the actual loss shall be identified by the actual sale price.
The fair value measurement is classified as Level 3, and the fair value was determined according to similartransactions of the related markets and the proposed sale prices were based on the current status of theaircraft.

13. SUBSIDIARIES
Subsidiaries included in the consolidated financial statements are as follows:

Investor Company
China Airlines, Ltd.

Investee Company
Tigerair Taiwan Co., Ltd. (Note)
Taiwan Aircraft Maintenance And
Engineering Co., Ltd.
Cal-Dynasty International
Cal-Asia Investment
Dynasty Aerotech International Corp.
Yestrip
Cal Park
Cal Hotel Co., Ltd.
Sabre Travel Network (Taiwan)
Mandarin Airlines

Cal-Dynasty International
Taiwan Airport Services

Note:

Taiwan Air Cargo Terminal (Note)
Kaohsiung Catering Services, Ltd.
Taoyuan International Airport Services
Taiwan Airport Services (Note)
Global Sky Express
Dynasty Properties Co., Ltd.
Dynasty Hotel of Hawaii, Inc.
Taiwan Airport Service (Samoa)

Main Businesses and Products

Proportion of Ownership (%)
March 31,
December 31,
March 31,
2022
2021
2021

Air transportation
Aircraft maintenance

82
100

82
100

81
100

A holding company, real estate andhotel services
General investment
Cleaning of aircraft and maintenance ofmachine and equipment
Travel business
Real estate lease and international trade
Hotel business
Sale and maintenance of hardware andsoftware
Air transportation and maintenance of
aircraft
Air cargo and storage
In-flight catering
Airport services
Airport services
Forwarding and storage of air cargo
Real estate management
Hotel businessAirport supporting service andinvestment

100

100

100

100
100

100
100

100
100

100
100
94

100
100
94

100
100
100
94

97

97

94

59
54
49
48
25
100
100
100

59
54
49
48
25
100
100
100

59
54
49
48
25
100
100
100

Proportion of ownership is considered from the perspective of the Group.

The Company has control over Taoyuan International Airport Service, Taiwan Airport Service and Global
Sky Express despite its ownership of less than 50% and for the other subsidiaries, the Company had control
and more than 50% of their voting shares. The above financial information of the subsidiaries for the threemonths ended March 31, 2022 and 2021 was reported according to financial statements that were notreviewed by independent auditors, except for Mandarin Airlines and Tigerair Taiwan Co., Ltd.
Tigerair Taiwan Co., Ltd. planned to issue ordinary shares for cash to meet the needs for funds. The boardof directors of the Company approved the plan to issue ordinary shares for cash at $25 per share on August
5, 2021. The Company subscribed for 101,212 thousand shares in September 2021. The proportion ofownership of the Group increased to 82%. Because the shares were subscribed at a percentage different
from its existing ownership percentage, the Company’s retained earnings decreased by $54,449 thousand.

- 16 -

To strengthen the capital structure of Mandarin Airlines, the board of directors of the Company approved
the plan to issue ordinary shares for cash at $10 per share on August 26, 2021. The Company subscribed for
199,677 thousand shares in September 2021. The proportion of ownership of the Group increased to 97%.
Because the shares were subscribed at a percentage different from its existing ownership percentage, theCompany’s retained earnings decreased by $50,190 thousand.
The liquidation of Yestrip Co., Ltd. was completed on April 22, 2021, and the Company recognized aliquidation loss of $540 thousand.

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates
Investments in joint ventures

March 31,2022

December 31,
2021

March 31,
2021

$

$

864,178
690,838$ 1,072,589
817,038$ 1,536,795$ 1,555,016$ 1,889,627

March 31,2022

December 31,
2021

March 31,
2021

$

$

$

910,664
626,131

a. The investments in associates were as follows:

Unlisted companies
China Aircraft Services
Dynasty Holidays
Airport Air Cargo Terminal (Xiamen)
Airport Air Cargo Service (Xiamen)
Eastern United International Logistics(Holdings) Ltd. (Hong Kong)

537,629
315,516
57,519$910,664$

513,059
298,971

250,420
4,485
487,319
276,386

52,14853,979864,178$ 1,072,589

At the end of the reporting period, the proportion of ownership and voting rights of associates held by
the Group were as follows:
Proportion of Ownership and Voting Rights
March 31,
December 31,
March 31,
2022
2021
2021

Name of Associate
China Aircraft Services
Dynasty Holidays
Airport Air Cargo Terminal (Xiamen)
Airport Air Cargo Service (Xiamen)
Eastern United International Logistics(Holdings) Ltd. (Hong Kong)- 17 -

4%
20%
28%
28%

20%
20%
28%
28%

20%
20%
28%
28%

35%

35%

35%

The investment gain (loss) recognized for associates accounted for using the equity method was asfollows:
For the Three Months Ended
March 312022
2021
China Aircraft Services
Dynasty Holidays
Airport Air Cargo Terminal (Xiamen)
Airport Air Cargo Service (Xiamen)
Eastern United International Logistics (Holdings) Ltd. (Hong
Kong)

$

5,213
5,204

$ (27,310)(438)
10,908
6,233

3,324

2,844

$ 13,741$ (7,763)

The investments accounted for using the equity method and the share of profit or loss and othercomprehensive income of those investments were based on the associates’ financial statements whichhave not been reviewed. However, the management determined that there would have been no
significant adjustments had these investees’ financial statements been independently reviewed.
China Aircraft Services issued ordinary shares to meet the needs for funds in March 2022. The Group
did not participate in the subscription, so the proportion of ownership of the Group decreased from 20%
to 4% and the Group lost significant influence over China Aircraft Services. Therefore, the investment
in China Aircraft Services which was initially classified as investments accounted for using the equity
method was reclassified as financial assets at fair value through other comprehensive income since
March 2022.
b. Investments in joint ventures
The investments in joint ventures were as follows:

China Pacific Catering Services
China Pacific Laundry Services
NORDAM Asia Ltd.
Delica International Co., Ltd.

March 31,2022

December 31,
2021

March 31,2021

$ 484,066
110,263
23,9277,875$ 533,251
120,876
28,8367,875$ 630,774
141,441
36,952
7,871$ 626,131$ 690,838$ 817,038

At the end of the reporting period, the proportion of ownership and voting rights in joint ventures heldby the Group were as follows:
Proportion of Ownership and Voting Rights
March 31,
December 31,
March 31,
2022
2021
2021
China Pacific Catering Services
China Pacific Laundry Services
NORDAM Asia Ltd.
Delica International Co., Ltd.

51%
55%
49%
51%

- 18 -

51%
55%
49%
51%

51%
55%
49%
51%

The Group entered into a joint venture agreement with the Taikoo Group to invest in China Pacific
Catering Services and China Pacific Laundry Services. According to the agreement, both sides have theright to make major motion vetoes on the board of directors, and therefore, the Group does not havecontrol.
To expand the Group’s catering business, Kaohsiung Catering entered into a joint venture agreementwith a Japanese brand company to invest in Delica International Co, Ltd., with the Japanese brandcompany having the right to make decisions on operations, and therefore, the Group does not havecontrol.
The investment (loss) gain recognized for joint ventures accounted for using the equity method was asfollows:
For the Three Months Ended
March 312022
2021
China Pacific Catering Services
China Pacific Laundry Services
NORDAM Asia Ltd.
Delica International Co., Ltd.

$ (49,185)(10,613)(4,908)-$ (65,184)(7,912)(815)-$ (64,706)$ (73,911)

The investments accounted for using the equity method and the share of profit or loss and othercomprehensive income of those investments were based on these investees’ financial statements whichwere not independently reviewed. However, the management determined that there would have been no
significant adjustments had these investees’ financial statements been independently reviewed.
For information on the major businesses and products and the locations of registration for the major
business offices of the above entities, refer to Tables 6 and 7 (names, locations, and related informationof investees on which the Company exercises significant influence and investment in mainland China)
following the notes to the consolidated financial statements.

15. PROPERTY, PLANT AND EQUIPMENT
Freehold Land

Buildings

FlightEquipment

OthersTotal

Cost
Balance at January 1, 2021
Additions
Disposals
Reclassification
Net exchange differences$

955,823
2,869$ 15,705,635
12,731
5,297$ 282,007,135
12,266(1,072,693)
6,633,856-$ 17,058,648
164,645(46,317)
13,958558$ 315,727,241
189,642(1,119,010)
6,647,814
8,724

Balance at March 31, 2021$

958,692$ 15,723,663$ 287,580,564$ 17,191,492$ 321,454,411(Continued)- 19 -

Freehold Land

Buildings

FlightEquipment

Others

Total

Accumulated depreciationand impairment
Balance at January 1, 2021
Depreciation expense
Disposals
Reclassification
Net exchange differences

$

-

$

(7,121,637)(123,184)(2,882)$ (155,376,265)(4,504,782)
838,779-$ (11,747,645)(220,509)
45,56289(474)$ (174,245,547)(4,848,475)
884,341
89(3,356)

Balance at March 31, 2021

$

-

$

(7,247,703)$ (159,042,268)$ (11,922,977)$ (178,212,948)

Balance at March 31, 2021,
net value$

958,692$

8,475,960$ 128,538,296$

5,268,515$ 143,241,463

Balance at January 1, 2022
Additions
Disposals
Reclassification
Net exchange differences$

943,305
16,835$ 15,921,862
30,895(238)
3,733
31,133$ 247,842,073
288,157(160,176)
5,301,405-$ 17,625,366
238,405(66,673)
38,372
3,387$ 282,332,606
557,457(227,087)
5,343,510
51,355

Balance at March 31, 2022$

960,140$ 15,987,385$ 253,271,459$ 17,838,857$ 288,057,841

Balance at January 1, 2022
Depreciation expense
Disposals
Reclassification
Net exchange differences

$

-

$

(7,582,813)(125,038)
238(17,530)$ (132,691,333)(3,803,900)
118,241
159,472-$ (12,426,414)(238,404)
65,923
1(2,879)$ (152,700,560)(4,167,342)
184,402
159,473(20,409)

Balance at March 31, 2022

$

-

$

(7,725,143)$ (136,217,520)$ (12,601,773)$ (156,544,436)

Balance at March 31, 2022,
net value$960,140$

8,262,242$ 117,053,939$$ 131,513,405

Cost

Accumulated depreciationand impairment

5,237,084(Concluded)
Reclassification is mainly resulted from the transfer of prepayments for equipment.
Property, plant and equipment are depreciated on a straight-line basis over the estimated useful life of theasset as follows:
Buildings
Main buildings
Others
Machinery equipment
Electro-mechanical equipment
Others
Office equipment
Leasehold improvements
Building improvements
OthersAssets leased to others

45-55 years
10-25 years
25 years
3-13 years
3-15 years
5 years
3-5 years
3-5 years(Continued)- 20 -

Flight equipment and equipment under finance leases
Airframes
Aircraft cabins
EnginesHeavy maintenance on aircraft
Engine overhauls
Landing gear overhauls
Repairable spare parts
Leased aircraft improvements

15-25 years
7-20 years
10-20 years
6-8 years
3-10 years
7-12 years
3-15 years
5-12 years(Concluded)

Refer to Note 33 for the carrying amounts of property, plant and equipment and right-of-use assets pledgedby the Group.
Based on the particularity of risk in the aviation industry, all of the Group’s assets such as aircraft, realestate, and movable property are adequately insured to diversify the potential risk related to operations.

16. INVESTMENT PROPERTIES

Carrying amount
Investment properties

March 31,2022

December 31,
2021

March 31,2021

$ 2,074,464$ 2,074,531$ 2,074,731

The investment properties held by the Group were land located in Nankan and buildings in Taipei, whichwere all leased to others. The buildings are depreciated on a straight-line basis over 55 years.
The fair values of the investment properties held by the Group were both $2,488,931 thousand as of March
31, 2021 and December 31, 2021. In addition, management assessed that there was no significant difference
between the fair values on March 31, 2022 and December 31, 2021. The fair value valuations were
performed by independent qualified professional valuers, and the future income which was evaluated bymanagement was based on market transactions.
All of the Group’s investment properties were held under freehold interests.

17. OTHER INTANGIBLE ASSETS
Computer
Software Cost

Others

Accumulated
Amortization

Net Value

Balance at January 1, 2021
Additions
Amortization expense$ 1,763,644
8,266
-

$

186,197-$(873,490)(54,328)$ 1,076,351
8,266(54,328)

Balance at March 31, 2021

$ 1,771,910$

186,197$(927,818)$ 1,030,289

Balance at January 1, 2022
Additions
Reclassification
Amortization expense$ 1,880,049
11,637(28,345)-$

168,280-$ (1,039,337)
28,345(56,622)$ 1,008,992
11,637(56,622)

Balance at March 31, 2022

$ 1,863,341$

168,280$ (1,067,614)$- 21 -

964,007

The above items of other intangible assets are amortized on a straight-line basis over 2-16 years.
In addition, the Group has $16,600 thousand installment payable for the purchase of trademark.

18. OTHER ASSETSMarch 31,2022

December 31,
2021

March 31,2021

Current
Temporary payments
Prepayments
Restricted assets
Others$

178,820374,8119,559
244,916$

138,688327,140
9,562
217,074$

626,997
264,231
11,000203,657$

808,106$

692,464$

1,105,885$

9,981,257
1,282,550
975,252
655,340
18,38815,014$

8,624,307
1,249,389
1,000,457
568,247
18,497
8,584$

5,349,874
2,373,661
1,090,546
374,058
18,06018,998$ 11,469,481$

9,225,197

Non-current
Prepayments for aircraft
Prepayments - long-term
Refundable deposits
Restricted assets
Other financial assets
Others$ 12,927,801

The prepayments for aircraft are comprised of prepaid deposits and capitalized interest from the purchase of
A321neo, A320neo and B777F aircraft. For details of the contract for the purchase of the aircraft, refer toNote 34.

19. BORROWINGSa. Short-term borrowings
March 31,2022

December 31,
2021

March 31,2021

Bank loans - unsecured$ 1,932,000$ 1,932,000$ 1,932,000Interest rates

0.90%-1.35%

0.90%-1.26%

0.92%-1.28%- 22 -

b. Long-term borrowings

Unsecured bank loans
Secured bank loans
Commercial paper
Proceeds from issue
Less: Unamortized discounts

March 31,2022

December 31,
2021

March 31,2021

$ 26,049,892
36,628,750$ 33,248,892
35,721,925$ 22,433,196
39,587,276

20,740,000
26,251
83,392,391
5,402,924

25,450,000
27,214
94,393,603
9,324,318

27,480,000
21,96989,478,503
17,931,908$ 77,989,467$ 85,069,285$ 71,546,595

0.83%-1.63%

0.81%-1.22%

0.81%-1.63%

Less: Current portion

Interest rates

Secured bank loans are secured by flight equipment, buildings, and other equipment, refer to Note 33.
Bank loans (denominated in New Taiwan dollars) are repayable quarterly, semiannually or in lump sum
upon maturity. The related information is summarized as follows:

Periods

March 31,2022

December 31,
2021

March 31,2021

2009.2.42032.6.30

2009.2.42032.6.30

2009.2.42032.6.30

The Group has note issuance facilities (NIFs) obtained from certain financial institutions. The NIFs,
with various maturities until September 2026, were used by the Company to guarantee the commercial
paper issued. As of March 31, 2022, December 31, 2021 and March 31, 2021, such commercial paper
was issued at discount rates of 0.9963%-1.143%, 0.985%-1.097% and 1.0177%-1.0997%, respectively.
In accordance with the “Regulations on Relief and Revitalization Measures for Industries andEnterprises Affected by Severe Pneumonia with Novel Pathogens” endorsed by the Ministry ofTransportation and Communications and the “Operational Guides on Relief Loan Guarantees for Ailing
Aviation Industry Affected by Severe Pneumonia with Novel Pathogens”, the Group applied for a
special loan project to maintain its operations, and the fund along with subsidized interest rates were
provided by the government. The total amount of the loans is $35,480 million, which shall be repaid
within 2 years to 4 years from the date of initial drawdown. As of March 31, 2022, the Group had madea drawdown in the amount of $34,101 million.

- 23 -

20. BONDS PAYABLE
March 31,2022
Unsecured corporate bonds first-time issued in2016
Unsecured corporate bonds second-time issued in2016
Unsecured corporate bonds first-time issued in2017
Unsecured corporate bonds second-time issued in2017
Unsecured corporate bonds first-time issued in2018
Unsecured corporate bonds first-time issued in2019
Convertible bonds sixth-time issued
Convertible bonds seventh-time issued$

December 31,
2021

-

$

-

March 31,2021$

2,350,000--

2,500,000

1,000,000

1,000,000

1,000,000

1,300,000

1,300,000

2,600,000

4,500,000

4,500,000

4,500,000

3,500,000
2,577,160
12,877,160

3,500,000
379,284
2,970,742
13,650,026

3,500,000
5,852,661
22,302,661

2,525,000

2,525,000

6,150,000$ 10,352,160$ 11,125,026$ 16,152,661

Conditions

Rate (%)

Principal repayable in May of 2020 and2021; indicator rate; payableannually
Principal repayable in September of2020 and 2021; indicator rate;
payable annuallyPrincipal repayable on due date;indicator rate; payable annually

1.19

2017.5.19-2024.5.19

Principal repayable on due date;indicator rate; payable annually

1.75

2017.10.12-2020.10.12

Principal repayable on due date;indicator rate; payable annually

1.14

2017.10.12-2022.10.12

Principal repayable in October of 2021
and 2022; indicator rate; payableannually
Principal repayable in November of2022 and 2023; indicator rate;
payable annuallyPrincipal repayable in November of2024 and 2025; indicator rate;
payable annuallyPrincipal repayable in June of 2023 and2024; indicator rate; payableannually
Principal repayable in June of 2025 and2026; indicator rate; payableannually
Unless bonds are converted to sharecapital or redeemed, principal
repayable one time in January 2023;
1.3821 discount rate p.a.
Unless bonds are converted to sharecapital or redeemed, principal
repayable one time in April 2026;
0.8612 discount rate p.a.

1.45

Less: Current portion and put option of
convertible bonds

Related issuance conditions were as follows:
Category

PeriodFive-year unsecured bonds - issued at par in May 2016;
repayable in May 2020 and 2021; 1.19% interest p.a.,payable annually
Five-year unsecured bonds - issued at par in September
2016; repayable in September 2020 and 2021; 1.08%
interest p.a., payable annually
Three-year private unsecured bonds - issued at par in May
2017; repayable on due date; interest of 1.2% p.a.,payable annually
Seven-year private unsecured bonds - issued at par in May
2017; repayable on due date; interest of 1.75% p.a.,payable annually
Three-year private unsecured bonds - issued at par in
October 2017; repayable on due date; interest of 1.14%
p.a., payable annually
Five-year private unsecured bonds - issued at par in October
2017; repayable in October 2021 and 2022; 1.45%
interest p.a., payable annually
Five-year private unsecured bonds - issued at par in
November 2018; repayable in November 2022 and 2023;
1.32% interest p.a., payable annually
Seven-year private unsecured bonds - issued at par in
November 2018; repayable in November 2024 and 2025;
1.45% interest p.a., payable annually
Five-year private unsecured bonds - issued at par in June
2019; repayable in June 2023 and 2024; 1.10% interestp.a., payable annually
Seven-year private unsecured bonds - issued at par in June
2019; repayable in June 2025 and 2026; 1.32% interestp.a., payable annually
Five-year convertible bonds - issued at discount in January
2018; repayable in lump sum upon maturity; 1.3821%
discount rate p.a.

2016.5.26-2021.5.26

Five-year convertible bonds - issued at discount in April
2021; repayable in lump sum upon maturity; 0.8612%
discount rate p.a.

2021.4.28-2026.4.28

2016.9.27-2021.9.27

2017.5.19-2020.5.19

2018.11.30-2023.11.30

2018.11.30-2025.11.30

2019.06.21-2024.06.21

2019.06.21-2026.06.21

2018.1.30-2023.1.30- 24 -

1.08

1.20

1.32

1.45

1.10

1.32

-

-

a. The Company issued its 2016 first unsecured corporate bonds with a face value of $5,000 million, andthe purchasers of the bonds included Mandarin Airlines and Sabre Travel Network (Taiwan), who held
a cumulative face value of $150,000 thousand which was eliminated from the consolidated financial
statements. These bonds were redeemed in May 2021.
b. The Company issued the sixth issue of its unsecured convertible bonds, and the issuance conditions
were as follows:
1) The holders may demand a lump-sum payment for the bonds upon maturity.
2) The holders can request that the Company repurchase their bonds at face value on the third
anniversary of the offering date. The holders can exercise the right to sell on January 30, 2021.
3) The Company may redeem the bonds at face value between April 30, 2018 and December 20, 2022
under certain conditions. The Company resolved to exercise the right of redemption on January 14,2022. The reference date of redemption of the bonds is March 9, 2022 and the actual face value ofredemption is $200 thousand.

4) Between April 30, 2018 and January 30, 2023 (except for the period between the former dividend
date and the date of the dividend declaration on record), holders may convert their bonds into theCompany’s ordinary shares. The initial conversion price was set at NT$13.2, which is subject toadjustment if there is a capital injection by cash, share dividend distribution, and the proportion of
cash dividends per share in market price exceeding 1.5%. Because the Company distributed cash
dividends on July 29, 2019, the conversion price was adjusted to NT$12.6. As of the reference dateof redemption of the bonds which was on March 9, 2022, a total face value of NT$5,999,800
thousand of convertible bonds was converted into 476,174 thousand ordinary shares of theCompany.
The convertible bonds contain both liability and equity components. The equity component waspresented in equity under the heading of capital surplus - options. The effective interest rate of theliability component was 1.3821% per annum on initial recognition.
Proceeds from issuance
Equity component$ 6,012,000(409,978)Liability component at the date of issuance$ 5,602,022

c. The Company issued the seventh issue of its unsecured convertible bonds, and the issuance conditions
were as follows:
1) The holders may demand a lump-sum payment for the bonds upon maturity.
2) The holders can request that the Company repurchase their bonds at face value on the third
anniversary of the offering date. The holders can exercise the right to sell on April 28, 2024.
3) The Company may redeem the bonds at face value between July 28, 2021 and March 18, 2026
under certain conditions.

4) Between July 28, 2021 and April 28, 2026 (except for the period between the former dividend date
and the date of the dividend declaration on record), holders may convert their bonds into theCompany’s ordinary shares. The initial conversion price was set at NT$19 per share, which is
subject to adjustment if there is a capital injection by cash or share dividend distribution. As of
March 31, 2022, a total face value of NT$1,831,300 thousand of convertible bonds was converted
into 96,384 thousand ordinary shares of the Company.

- 25 -

The convertible bonds contain both liability and equity components. The equity component was presented
in equity under the heading of capital surplus - options. The effective interest rate of the liability component
was 0.8612% per annum on initial recognition.
Proceeds from issuance
Equity component$ 4,500,000(188,862)

Liability component at the date of issuance$ 4,311,138

21. LEASE AGREEMENTS
a. Right-of-use assets

Carrying amounts
Land
Buildings
Flight equipment
Other equipment$

March 31,2022

December 31,
2021

7,235,065
946,767
47,034,384
5,861

$

$ 55,222,077

7,335,883
1,018,252
47,701,558
6,274$ 56,061,967

March 31,2021$

7,542,964
1,363,432
48,876,393
8,127$ 57,790,916

For the Three Months Ended
March 31
2022
2021
Additions to right-of-use assets
Depreciation for right-of-use assets
Land
Buildings
Flight equipment
Other equipment$ 2,526,134$ 1,374,300$$

56,23485,6813,040,938
302

102,486
201,366
2,725,484
3,498$ 3,183,155$ 3,032,834

March 31,2022

December 31,
2021

March 31,2021

$ 2,639,995$ 13,488,258$ 2,533,452$ 12,758,050$ 2,562,559$ 13,497,658

b. Lease liabilities

Carrying amounts
Current
Non-current- 26 -

Range of discount rate for lease liabilities (include leases denominated in USD designated as hedging
instruments):

Land
Buildings
Flight equipment
Other equipment

March 31,2022

December 31,
2021

March 31,2021

0%-2.00%
0%-2.98%
0.68%-3.34%
0%-1.43%

0.81%-2.00%
0%-2.98%
0.68%-3.34%
0%-1.43%

1.09%-1.80%
0%-2.98%
0.68%-3.34%
1.06%-1.50%

c. Financial liabilities under hedge accounting
The Group specifies a part of aircraft leases denominated in USD as hedging instruments to avoid
exchange rate fluctuations in passenger revenue and applies the accounting treatment of cash flow
hedging. The lease information is as follows:
Maturity Date
March 31, 2022

December 31, 2021

March 31, 2021

2022.6.11-2034.2.14

2022.2.9-2033.12.12

2022.2.9-2028.5.15

Subject
Financial liabilities for hedging current
Financial liabilities for hedging non-current
Financial liabilities for hedging current
Financial liabilities for hedging non-current
Financial liabilities for hedging current
Financial liabilities for hedging non-current

Carrying Value$

8,567,537
27,874,799
8,434,893
27,839,847
8,165,713
30,606,694

Influence of comprehensive income
Recognized in
Other
Comprehensive
IncomeFor the three months ended March 31, 2022
For the three months ended March 31, 2021

$ (1,390,319)(359,570)

Reclassified toIncome$172,265
150,096d. Material leasing activities and terms
China Airlines, Mandarin Airlines and Tigerair Taiwan leased ten 777-300ER planes, nineteen
A330-300 planes, fourteen 737-800 planes, ten A320-200 planes, three A320 neo, three A321 neo, two
ERJ190 planes and three ART72-600 planes for operation, lease periods are 3 to 16 years fromFebruary 2007 to February 2034. The rental pricing method is partly a fixed amount of funds, and someof them are floating rents; floating rents are according to benchmark ratio, and the rent is revised every
half year. When the lease expires, the lessee does not have purchase rights.

- 27 -

The information of refundable deposits and letter of credit due to rental of planes:

Refundable deposits
Credit guarantees

March 31,2022

December 31,
2021

March 31,
2021

$

$

$

666,676
1,790,226

682,376
1,699,376

716,694
1,766,692

CAL Park, and Taoyuan International Airport Service signed a BOT contract with a land leaseagreement, for the details for the lease agreement, please refer to Note 34. The lease includes an option
to extend the lease, as it is not possible to extend the lease, the amount of the lease related to the period
covered by the option is not included in the lease liability. If the amount of the extended lease period is
included in the lease liability, the lease liability would have increased by $900,268 thousand, $897,264
thousand and $888,623 thousand on March 31, 2022, December 31, 2021, and March 31, 2021,
respectively.
Taiwan Air Cargo Terminal Co. and CAA signed a BOT contract with a land lease agreement. For
details, please refer to Note 34.
e. Lease agreement signed but not yet delivered
In September 2019, the Company signed a rental contract for six A321neo with Air Lease Corporation,
which is expected to be introduced between 2021 and 2022. As of March 31, 2022, three A321neo havebeen delivered.
In October 2019, the Company signed a rental contract for eight A321neo with CALC Lease
Corporation, which is expected to be introduced between 2022 and 2024.
In February 2020, Tigerair Taiwan Co., Ltd. signed a rental contract for eight A320neo with ICBC
Lease Corporation, which is expected to be delivered between 2021 and 2024. As of March 31, 2022,
three A321neo have been delivered.
The Group also signed related aircraft purchase agreement, please refer to Note 34 for details.
f. Sale and leaseback
In order to revitalize assets and strengthen financial structure, the Company signed a sale and leaseback
agreement for five A330-300 with CALC Lease Corporation in June 2021 and September 2021. Thoseaircraft were sold for $2,810,098 thousand and the Company recognized a loss of $342,080 thousand.
The lease term is 4 years without renewal option or right of first refusal and the annual lease payments
for each aircraft are US$4,200 thousand to US$4,823 thousand.
g. Aircraft leases
In order to revitalize assets, the Company signed a lease agreement for two 747-400F with US Cargo
Company in August 2021 and September 2021.

- 28 -

h. Other lease information
The Group uses operating lease agreement for investment properties, refer to Note 16.
For the Three Months Ended
March 31
2022
2021
Short-term leases and low-value asset leases
Total cash outflow for leases$
12,777$ (3,215,686)$
6,507$ (3,100,692)

The Group chooses to waive the recognition of the contract provisions for the short-term leases andlow-value asset leases, and does not recognize the related right-of-use assets and lease liabilities forsuch lease.

22. OTHER PAYABLES
March 31,2022
Fuel costs
Short-term employee benefits
Repair expenses
Ground service expenses
Terminal surcharges
Interest expenses
Commission expenses
Others$3,101,781
2,932,049
1,237,284
807,289
683,247
113,853
94,223
2,074,700

December 31,
2021$

March 31,2021

3,049,812
5,848,866
1,580,899
778,546
716,531
83,250149,2962,454,147$

2,178,473
1,610,364
717,310818,197415,349
170,560
140,492
2,010,459$ 11,044,426$ 14,661,347$

8,061,204

March 31,2022

December 31,
2021

March 31,2021

$ 2,941,279
1,967,543
9,808$ 2,810,482
1,693,863-$ 2,504,217
2,442,307
11,214$ 4,918,630$ 4,504,345$ 4,957,738$ 4,086,926
831,704$ 3,868,712
635,633$ 3,540,129
1,417,609$ 4,918,630$ 4,504,345$ 4,957,738

23. CONTRACT LIABILITIESFrequent flyer program
Advance ticket sales
OthersCurrent
Non-current- 29 -

24. PROVISIONSMarch 31,2022

December 31,
2021

March 31,2021

Operating leases - aircraft$ 19,163,480$ 18,654,223$ 15,678,217

Current
Non-current

$

$

$

3,308,241
15,855,239$ 19,163,480

3,247,236
15,406,987$ 18,654,223

1,262,426
14,415,791$ 15,678,217
Aircraft Lease
Contracts

Balance at January 1, 2021
Additional provisions recognized
Usage
Effect of foreign currency exchange differences$ 14,534,286
1,372,144(313,099)
84,886

Balance at March 31, 2021

$ 15,678,217

Balance at January 1, 2022
Additional provisions recognized
Usage
Unwinding of discounts and effects of changes in the discount rate
Effect of foreign currency exchange differences$ 18,654,223
1,376,905(1,309,962)(113,204)
555,518

Balance at March 31, 2022

$ 19,163,480

The Group leased flight equipment under operating lease agreements. Under the contracts, when the leases
expire and the equipment is returned to the lessor, the flight equipment has to be repaired according to the
expected years of use, number of flight hours, flight cycles and the number of engine revolution. The Group
had existing obligations to recognize provisions when signing a lease or during the lease term. Tigerair
Taiwan Co., Ltd. also leased flight equipment under operating lease agreements. In accordance with thecontract, Tigerair had to pay the maintenance reserve monthly accounted for by using the actual number offlight hours.

25. RETIREMENT BENEFIT PLANS
Employee benefits expense in respect of the Group’s defined retirement benefit plan was calculated using
the actuarially determined pension cost discount rate as of December 31, 2021 and 2020.
For the Three Months Ended
March 31
2022
2021
Operating costs
Operating expenses- 30 -$ 228,632
92,760$ 243,547
96,330$ 321,392$ 339,877

26. EQUITY
a. Share capital
Ordinary shares

Number of shares authorized (in thousands ofshares)Amount of shares authorized
Amount of shares issued

March 31,2022

December 31,
2021

March 31,2021

7,000,000$ 70,000,000$ 59,935,427

7,000,000$ 70,000,000$ 59,412,243

7,000,000$ 70,000,000$ 54,209,926

The Company issued the 6th and the 7th domestic unsecured convertible bonds, and the holders of theconvertible bonds applied for conversion in the amount of $798,700 thousand and $100 thousand,respectively, for the three months ended March 31, 2022 and 2021. The number of ordinary sharesexchanged was 52,318 thousand and 8 thousand, respectively, and completed the registration of thechange in equity after the issuance of new shares.
b. Capital surplus

Issuance of convertible bonds in excess of parvalue and conversion premium
Retirement of treasury shares
Expired employee share options
Long-term investments
Bonds payable equity component
OthersMarch 31,2022

December 31,
2021

March 31,2021

$ 1,924,792
540
112,018
913,590$ 1,668,381
540
155,676
869,932$$ 2,950,940$ 2,694,529$ 1,187,345

146,369
33,513
11,747
119,134
409,971466,611

The capital surplus from shares issued in excess of par (including additional paid-in capital from theconverted convertible bonds) may be used to offset deficits; when the Company has no deficit, suchcapital surplus may be distributed as cash dividends or transferred to capital (but limited to a certain
percentage of the Company’s paid-in capital on a yearly basis).
The capital surplus arising from long-term investments, expired employee share options, dividends
distributed to subsidiaries and retirement of treasury shares may not be used for any purpose, except foroffsetting a deficit. The capital surplus arising from the conversion of convertible bonds may not be
used for any purpose.
c. Appropriation of earnings and dividend policy
Under the dividend policy as set forth in the Company’s Articles of Incorporation (the “Articles”),
where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes,
offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting
aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining
profit together with any undistributed retained earnings shall be used by the Company’s board of
directors as the basis for proposing a distribution plan, which is to distribute dividends and bonus noless than 50% of the remaining profit and undistributed retained earnings. The dividends and bonus
mentioned above can be distributed in the form of new shares or cash, and the cash dividends should be
no less than 30% of the total dividends.
- 31 -

Under the Company Act, if surplus earnings are distributed in the form of new shares, the distributionof shares shall be approved in the meeting of the board of directors; if such earnings are distributed in
the form of cash, the cash distribution shall be authorized after a resolution has been adopted by amajority vote at a meeting of the board of directors attended by two-thirds of the total number of
directors; and in addition, a report of such distribution shall be submitted to the shareholders’ meeting.
If the Company has no loss, according to laws and regulations, the Company can distribute its capitalreserve, in whole or in part, by issuing new shares or cash based on financial, business and management
considerations. If such surplus earnings is distributed in the form of new shares, it shall be approved bya meeting of the board of directors; if such surplus earning is distributed in the form of cash, it shall beauthorized after a resolution has been adopted by a majority vote at a meeting of the board of directors
attended by two-thirds of the total number of directors; and in addition thereto a report of such
distribution shall be submitted to the shareholders’ meeting.
Under the dividend policy as set forth in the Company’s Articles of Incorporation (the “Articles”) basedon the amended Company Act, where the Company made profit in a fiscal year, the profit shall be firstutilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve 10% of theremaining profit, setting aside or reversing a special reserve in accordance with the laws andregulations, and then any remaining profit together with any undistributed retained earnings shall be
used by the Company’s board of directors as the basis for proposing a distribution plan with due
consideration of any future aircraft acquisition plans and fund demands, which should be resolved in theshareholders’ meeting for the distribution of dividends and bonuses to shareholders by cash or shares(cash dividends cannot be less than 30% of total dividends distributed). However, if the Company’s
profit before tax in a fiscal year after deductions for the abovementioned items is not sufficient forearnings distribution, retained earnings can be used as a supplement for the deficiency.
The Company shall set aside profits as a legal reserve until the legal reserve amounts to the authorized
capital. The legal reserve could be used for offsetting deficit of the Company. If the Company has no
deficit in a fiscal year, the Company can distribute all or part of the capital surplus by cash or shareswith due consideration of finance, marketing and management requirements in accordance with thelaws and regulations.
The distribution of dividends should be resolved and recognized in the shareholders’ meeting in thecurrent year.
1) Offsetting deficit in 2020
On August 12, 2021, the offsetting of deficit in 2020 was resolved and recognized in theshareholders’ meeting. The deficit included a net income of $140,000 thousand and negative
adjustment of other retained earnings of $490,581 thousand; thus, the remaining amount ofaccumulated deficit was $350,581 thousand. The deficit was offset by the capital reserve of$350,581 thousand.
2) Appropriation of earnings in 2021
On March 15, 2022, the appropriation of earnings in 2021 which was resolved in the meeting of theCompany’s board of directors as follows:

Legal reserve
Cash dividends

Appropriationof Earnings

Dividends Per
Share (NT$)$$0.83636529

925,385
5,000,000

The appropriation of earnings in 2021 is subject to the resolution of the shareholders in their
meeting on May 26, 2022.
- 32 -

d. Other equity items
The movement of other equity items is as follows:
Exchange
Differences on
the Translationof the Financial
Statements ofForeign
Operations

Unrealized Gain
(Loss) on
Financial Assets
at FVTOCI

Gain (Loss) on
Hedging
Instruments

Total

71,359$ 2,606,659$ 2,543,766

7,102

-

-

7,102

-

-

(201,215)(201,215)--(143,208)(143,208)(1,409)(2,419)912

69,187(2,419)68,6905,693(1,507)(275,236)(271,050)--

79,606

79,606

Balance on January 1, 2021
Exchange differences on translation of
the financial statements of foreign
operations
Cumulative gain (loss) on changes infair value of hedging instruments
Cumulative gain (loss) on changes infair value of hedging instruments
reclassified to profit or loss
Unrealized gain (loss) on financial
assets at fair value through othercomprehensive income
Effects of income tax
Other comprehensive income (loss)
recognized in the period
Transferred to initial carrying amountof hedged items$ (134,252)

Balance on March 31, 2021

$ (128,559)$

69,852$ 2,411,029$ 2,352,322

Balance on January 1, 2022
Exchange differences on translation of
the financial statements of foreign
operations
Cumulative gain (loss) on changes infair value of hedging instruments
Cumulative gain (loss) on changes infair value of hedging instruments
reclassified to profit or loss
Unrealized gain (loss) on financial
assets at fair value through othercomprehensive income
Effects of income tax
Other comprehensive income (loss)
recognized in the period
Transferred to initial carrying amountof hedged items$ (120,079)$(5,512)$ 2,839,419$ 2,713,828

65,861--

65,861--(980,015)(980,015)--(214,794)(214,794)(11,983)

3,534
574

238,961

3,534
227,552

53,8784,108(955,848)(897,862)--

35,05035,050

Balance on March 31, 2022$

(1,404)$ 1,918,621$ 1,851,016(66,201)- 33 -$$

e. Non-controlling interests
For the Three Months Ended
March 312022
2021
Beginning balance
Net (loss) income attributable to non-controlling interests
Exchange differences on translation of the financial statements offoreign operations
Cumulative gain on changes in fair value of hedging instruments
Cumulative gain on changes in fair value of hedging instruments
reclassified to profit or loss
Effects of income tax$ 3,161,445(261,577)$ 3,152,090(197,171)

6,341
1,224

61
6

(245)
7,320

438
(89)
416

Ending balance$ 2,907,188$ 2,955,335

f. Treasury shares
Treasury shares are the Company’s shares held by its subsidiaries as of the reporting date and were as
follows:(In Thousands of Shares)

Purpose of Treasury Shares

Number of
Shares,Beginning ofYear

For the three months ended March 31, 2022
For the three months ended March 31, 2021

Subsidiary

2,075
2,075
Shares(In Thousands)

Reduction
During theYear-

Number of
Shares, End of
Year
2,075
2,075

Carrying
AmountMarket Value

2,075$ 55,289$ 55,289

2,075$ 57,156$ 57,156

2,075$ 31,638$ 31,638

March 31, 2022
Mandarin Airlines
December 31, 2021
Mandarin Airlines
March 31, 2021
Mandarin Airlines

The above acquisitions by subsidiaries of the Company’s shares in previous years was due toinvestment planning. The shares of the Company held by its subsidiaries were treated as treasury shares.
The subsidiaries can exercise shareholders’ right on these treasury shares, except for the right tosubscribe for the Company’s new shares and voting rights.

- 34 -

27. NET INCOME
a. Revenue
For the Three Months Ended
March 31
2022
2021
Passenger
Cargo
Others$2,185,039
32,779,543
2,268,701$ 37,233,283$

1,974,969
24,025,206
1,827,481$ 27,827,656

b. Other income
For the Three Months Ended
March 312022
2021
Interest income
Others$36,197
242,606$

41,15354,667$ 278,803$

95,820c. Other gains and losses
For the Three Months Ended
March 312022
2021
Gain (loss) on disposal of property, plant and equipment
Gain on financial assets mandatorily classified as at FVTPL
Net foreign exchange gains (losses)
Others

$

2,715
686
275,940(15,199)$ (36,476)
149(127,657)(55,449)$ 264,142$ (219,433)

d. Finance costs
For the Three Months Ended
March 312022
2021
Interest expense
Bonds payable
Bank loans
Interest on lease liabilities$

41,367
190,533
333,757$

72,539206,467
378,377$ 565,657$ 657,383

Capitalization interest$$

Capitalization rate

0.63%-0.70%- 35 -

16,7178,293

0.72%-1.11%

e. Depreciation and amortization expenses
For the Three Months Ended
March 312022
2021
Property, plant, equipment
Right-of-use assets
Investment properties
Intangible assets$ 4,167,342
3,183,155
66
56,622$ 4,848,475
3,032,834
67
54,328Depreciation and amortization expenses$ 7,407,185$ 7,935,704

An analysis of depreciation by function
Operating costs
Operating expenses$ 7,080,678
269,885$ 7,506,640
374,736$ 7,350,563$ 7,881,376

$

1,298
55,324$

3,822
50,506$56,622$54,328An analysis of amortization by function
Operating costs
Operating expenses

f. Employee benefits expense
For the Three Months Ended
March 31
2022
2021
Post-employment benefits
Defined contribution plan
Defined benefit plan

Other employee benefits
Salary expenses
Personnel service expenses

An analysis of employee benefits expense by function
Operating costs
Operating expenses$

128,528
321,392$

132,328
339,877$

449,920$472,205$ 5,944,428
1,400,103$ 4,482,317
1,120,329$ 7,344,531$ 5,602,646$ 6,506,322
1,288,129$ 4,879,279
1,195,572$ 7,794,451$ 6,074,851

According to the Company’s articles, the Company accrues compensation of employees at rates of noless than 3% of the net profit before income tax and compensation of employees. When the Company
has an accumulated deficit, the Company shall set aside some amounts to offset the deficit in advance.
For the three months ended March 31, 2022, the estimated amount of compensation of employees was$124,243 thousand, and for the three months ended March 31, 2021, the compensation of employees
was not estimated since the Company had an accumulated deficit.

- 36 -

Material differences between such estimated amounts and the amounts proposed by the board of
directors on or before the date that the annual consolidated financial statements are authorized for issue
are adjusted in the year that the compensation and remuneration are recognized. If there is a change inthe proposed amounts after the annual consolidated financial statements are authorized for issue, thedifferences are recorded as a change in the accounting estimate.
Information on the compensation of employees resolved by the Company’s board of directors isavailable at the Market Observation Post System website of the Taiwan Stock Exchange.

28. INCOME TAX
a. Income tax expense recognized in profit or loss
The major components of tax expense (benefit) were as follows:
For the Three Months Ended
March 31
2022
2021
Current tax
Current year
Adjustments for prior periods
Deferred tax
Current year

$ 1,219,661(16,973)$(461,067)

Income tax expense (benefit) recognized in profit or loss$

741,621

28,101(143,402)$(115,301)

b. Income tax recognized in other comprehensive income
For the Three Months Ended
March 31
2022
2021
Deferred tax
Recognized in other comprehensive income
Translation of foreign operations
Fair value changes of financial assets at FVTOCIFair value changes of hedging instruments for cash flow
hedging
Total income tax recognized in other comprehensive income$ (11,983)
574$

238,716$ 227,307(1,409)912
69,187$

68,690c. Income tax assessment
The income tax returns of the Company through 2018 have been examined by the tax authorities. And
the income tax returns of the Company’s subsidiaries through 2019 have been examined by the tax
authorities.

- 37 -

29. EARNINGS (LOSS) PER SHARE
For the Three Months Ended
March 312022
2021
Basic earnings (loss) per share
Diluted earnings (loss) per share$$

Earnings (loss) used in the computation of basic earnings (loss) per
share

0.52
0.50

$ 3,072,308$ (1,019,376)

6,529

-

$ 3,078,837$ (1,019,376)

5,965,183

5,418,911

16,118
166,755-

6,148,056

5,418,911

Effect of potentially dilutive ordinary shares:
Interest on convertible bonds (after tax)
Earnings (loss) used in the computation of diluted earnings (loss) pershare$ (0.19)$ (0.19)

In thousands of shares
Weighted average number of ordinary shares in computation of basic
earnings (loss) per share
Effect of potentially dilutive ordinary shares:
Compensation of employees or bonuses issued to employees
Convertible bonds
Weighted average number of ordinary shares used in thecomputation of diluted earnings (loss) per share

If the Group offered to settle compensation or bonuses paid to employees in cash or shares, the Groupassumed the entire amount of the compensation or bonuses would be settled in shares and the resulting
potential shares were included in the weighted average number of shares outstanding used in thecomputation of diluted earnings per share, if the effect is dilutive. Such dilutive effect of the potential
shares was included in the computation of diluted earnings per share until the number of shares to be
distributed to employees is resolved in the following year.

30. CAPITAL MANAGEMENT
The goal, policies and procedures as well as the composition of the Group’s capital management are thesame as those stated in Note 30 to the Group’s consolidated financial statements for the year ended
December 31, 2021.

31. FINANCIAL INSTRUMENTS
a. Financial instruments not evaluated at fair value
Except as detailed in the following table, the management considers the carrying amounts of financial
assets and financial liabilities recognized in the financial statements as approximating their fair values.
March 31, 2022
Carrying
AmountFair Value

December 31, 2021
Carrying
AmountFair Value

March 31, 2021
Carrying
AmountFair Value

Financial liabilities
Bonds payable$ 12,877,160$ 14,100,109$ 13,650,026- 38 -$ 14,557,830$ 22,302,661$ 23,734,187

Lease liabilities and long-term borrowings are floating-rate financial liabilities, so their carrying
amounts are their fair values. Fair values of bond payable trading in OTC are based on quoted market
prices (Level 1).
b. Fair value of financial instruments measured at fair value on a recurring basis
The following table provides an analysis of financial instruments that are measured subsequent to initialrecognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value isobservable:
1) Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active
markets for identical assets or liabilities;2) Level 2 fair value measurements are those derived from inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) orindirectly (i.e. derived from prices); and3) Level 3 fair value measurements are those derived from valuation techniques that include inputs forthe asset or liability that are not based on observable market data (unobservable inputs).
March 31, 2022
Level 1
Financial assets at FVTPL
Domestic money market
funds
Financial assets at FVTOCI
Investments in equity
instruments
United shares domestic
Unlisted shares foreign

Level 2

Level 3

Total$

142,467

$

-

$

-

$

142,467

$

-

$

-

$

35,211$35,211--36,60936,609

$

-

$

-

$

71,820$71,820Financial assets for hedging$

1,375,358

$

6,402

$

146,874$

1,528,634

Financial liabilities forhedging$ 36,442,336

$

-

$

15,173$ 36,457,509- 39 -

December 31, 2021
Level 1
Financial assets at FVTPL
Domestic money market
funds
Financial assets at FVTOCI
Investments in equity
instruments
United shares domestic
Unlisted shares foreign

Level 2

Level 3

Total$

155,780

$

-

$

-

$

155,780

$

-

$

-

$

28,804$28,804--39,08039,080

$

-

$

-

$

67,884$67,884

Financial assets for hedging$

3,545,706$-$

17,613$3,563,319

Financial liabilities forhedging$ 36,274,740

$

449

$

2,755

$ 36,277,944

March 31, 2021
Level 1
Financial assets at FVTPL
Domestic money market
funds
Financial assets at FVTOCI
Investments in equity
instruments
United shares domestic
Unlisted shares foreign

Level 2

Level 3

Total$

257,820

$

-

$

-

$

257,820

$

-

$

-

$

31,843$31,843--

129,488

129,488

$

-

$

-

$

161,331$

161,331

Financial assets for hedging$

3,314,286

$

-

$

4,798

$

3,319,084

Financial liabilities forhedging$ 38,772,407

$

2,498

$

-

There were no transfers between Levels 1 and 2 in the current period.

- 40 -$ 38,774,905

4) Valuation techniques and inputs applied for Level 2 fair value measurement
Financial Instrument
Derivatives

Valuation Techniques and Inputs
The fair values of derivatives (except for options) have been
determined based on discounted cash flow analysis using
interest yield curves applicable for the duration of thederivatives. The estimates and assumptions that the Group
used to determine the fair values are identical to those used in
the pricing of financial instruments for market participants.

5) Valuation techniques and inputs applied for Level 3 fair value measurement
The fair values of fuel options are determined using option pricing models where the significant
unobservable inputs are implied fluctuation. Changes in the implied fluctuations used in isolation
would result in an increase or decrease in the fair value of the fuel options.
The domestic and foreign unlisted equity investment are based on the comparative company
valuation to estimate the fair value. The main assumptions are based on the multiplier of the market
price of the comparable listed company and the net value per share, which have considered theliquidity discount. The higher the multiplier or the lower the liquidity discount, the higher the fairvalue of the relevant financial instruments.
The multiplier and liquidity discount of financial instruments based on Level 3 fair value
measurement were as follows:

March 31, 2022
December 31, 2021
March 31, 2021

Multiplier

Liquidity
Discount

0.74-14.31
0.74-14.31
0.79-16.32

80%
80%
80%

The movements of financial instruments based on Level 3 fair value measurement were as follows:
Derivative
Instruments

EquityInstruments

Balance at January 1, 2022
Recognized in other comprehensive income

$

6,124
119,334$

67,884
3,936

Balance at March 31, 2022

$ 125,458$

71,820

Balance at January 1, 2021
Recognized in other comprehensive income$(2,260)$ 163,746(2,415)

Balance at March 31, 2021$

(2,260)$ 161,331

Because some financial instruments and nonfinancial instruments may not have their fair values
disclosed, the total fair value disclosed herein is not the total value of the Group’s collective
instruments.

- 41 -

c. Categories of financial instruments
March 31,2022

December 31,
2021

142,467
1,528,634
62,920,659$

March 31,2021

Financial assets
Financial assets at FVTPL
Financial assets for hedging
Financial assets at amortized cost (Note 1)
Financial assets at FVTOCI - investments inequity instruments$

155,780
3,563,319
74,194,351$

257,820
3,319,084
37,443,143

71,82067,884

161,331

36,457,509
146,249,385

36,277,944
160,383,305

38,774,905
155,516,020

Financial liabilities
Financial liabilities for hedging
Financial liabilities at amortized cost (Note 2)

Note 1: The balances include financial assets measured at amortized cost, which comprise cash andcash equivalents, time deposits with original maturities of more than 3 months, notes andaccounts receivable, accounts receivable - related parties, other receivables, refundable
deposits and other restricted financial assets.
Note 2: The balances include financial liabilities measured at amortized cost, which compriseshort-term borrowings, short-term notes payable, notes and accounts payable, accounts
payable - related parties, other payables, bonds payable, long-term borrowings, leaseliabilities, provisions, part of other current liabilities, part of other non-current liabilities andguarantee deposits.
d. Financial risk management objectives and policies
The Group has risk management and hedging strategies to respond to changes in the economic andfinancial environment and in the fuel market. To reduce the financial risks from changes in interest,
exchange rates and in fuel prices, the Group has its operating costs stay within a specified range byusing appropriate financial hedging instruments and hedging percentages in accordance with the“Processing Program of Derivative Financial Instrument Transactions” approved by the Group’s
shareholders to reduce the impact of market price changes on earnings. These risks include market risk(including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
In addition, the Company has a risk committee, which meets periodically to evaluate the performance of
derivative instruments and determine the appropriate hedging percentage. This committee informs theGroup of global economic and financial conditions, controls the entire financial risk resulting fromchanges in the financial environment and fuel prices, and develops the strategy and response to avoid
financial risk with the assistance of financial risk experts to effect risk management.
1) Market risk
The Group is primarily exposed to the financial risks of changes in foreign currency exchange rates
and interest rates. The Group entered into derivative financial instruments to manage its exposure toforeign currency risk and interest rate risk. The Group enters into foreign exchange forward
contracts, foreign currency option contracts, and interest swap contracts with fair values that arehighly negatively correlated to the fair values of hedged items and evaluates the hedging
effectiveness of these instruments periodically.

- 42 -

a) Foreign currency risk
The Group enters into foreign currency option contracts to hedge against the risks on change in
related exchange rates, enters into forward contracts to hedge against the risks on changes inforeign-currency assets, liabilities and commitments in the related exchange rates.
Sensitivity analysis
The Group was mainly exposed to the U.S. dollar.
An increase/decrease in U.S. dollars one dollar against New Taiwan dollars when reporting
foreign currency risk internally to key management personnel represents management’s
assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis
included only outstanding foreign currency denominated monetary items, and adjusts theirtranslation at the end of the reporting period for U.S. dollars increase/decrease by one dollar
against New Taiwan dollars in foreign currency rates.
When New Taiwan dollars increase one dollar against U.S. dollars and all other variables were
held constant, there would be a decrease in pre-tax profit and an increase in othercomprehensive income for the three months ended March 31, 2022 of $68,564 thousand and$1,214,782 thousand, respectively, and a decrease in pre-tax deficit and increase in pre-tax othercomprehensive income for the three months ended March 31, 2021 of $271,676 thousand and$1,237,102 thousand, respectively.
The Group’s hedging strategy is to enter into foreign exchange forward contracts to avoid
exchange rate exposure of its foreign currency denominated receipts and payments and to
manage exchange rate exposure of its aircraft prepayments in the next year. Those transactions
are designated as cash flow hedges. When forecasted purchases actually take place, basis
adjustments are made to the initial carrying amounts of hedged items.
For the hedges of highly probable aircraft prepayments, as the critical terms (i.e. the notionalamount, useful life and underlying asset) of the foreign exchange forward contracts and theircorresponding hedged items are the same, the Group performs a qualitative assessment of theeffectiveness, and it is expected that the value of the foreign exchange forward contracts and thevalue of the corresponding hedged items will systematically change in the opposite direction in
response to movements in the underlying exchange rates.
The following table summarizes the information relating to the hedges of foreign currency risk.
Please refer to Note 21 for aircraft rental contract for hedging.
March 31, 2022
Hedging Instruments
Cash flow hedge
Aircraft rentals forward exchange
contracts

Currency

NTD/USD

Notional
AmountMaturity

Forward Rate

NTD251,919/
USD9,055

2022.4.272022.12.23

27.6-28.6

Line Item in
Balance Sheet

Financial assets forhedging - current/
liabilities for hedging current

Carrying AmountAsset
Liability

$

6,402

$

-

The abovementioned hedging instruments applied hedge accounting. The book value of other
equity for each hedging item (aircraft rentals in U.S. dollars) was $6,402 thousand.

- 43 -

December 31, 2021
Hedging Instruments
Cash flow hedge
Aircraft rentals forward exchange
contracts

Currency

NTD/USD

Notional
AmountMaturity

Forward Rate

NTD215,651/
USD7,785

2022.4.292022.12.31

27.6-27.9

Line Item in
Balance Sheet

Carrying AmountAsset
Liability

Financial assets forhedging - current/
liabilities for hedging current

$

-

$

449

The abovementioned hedging instruments applied hedge accounting. The book value of other
equity for each hedging item (aircraft rentals in U.S. dollars) was $(449) thousand.
March 31, 2021
Notional
AmountMaturity

Forward Rate

NTD/USD

NTD85,216/
USD2,932

2021.4.282021.11.9

28.48-29.72

NTD/USD

NTD28,571/
USD1,000

2021.5.28

29.38

Hedging Instruments
Cash flow hedge
Aircraft rentals forward exchange
contracts
Aviation fuel - forward
exchange contracts

Currency

Line Item in
Balance Sheet

Carrying AmountAsset
Liability

Financial assets forhedging/liabilities forhedging
Financial assets forhedging - current/
liabilities for hedging current

$

-

$

-

1,638

860

The abovementioned hedging instruments applied hedge accounting. The book value of other
equity for each hedging item (aircraft rentals and aviation fuel in U.S. dollars) was $(2,498)
thousand.
For the three months ended March 31, 2022
Hedging Gains(Losses)
Recognized in
Other
Comprehensive
IncomeComprehensive Income
Cash flow hedge
Aircraft rentals
Note:

$

6,852

AmountReclassified toProfit and Lossand theAdjusted Line
Item

$

-

(Note)

Decrease in operating costs or exchange loss.

For the three months ended March 31, 2021
Hedging Gains(Losses)
Recognized in
Other
Comprehensive
IncomeComprehensive Income
Cash flow hedge
Aircraft rentals
Aviation fuel

Note:

$

1,874
4,934

$ (1,844)(5,394)$

6,808$ (7,238)

Decrease in operating costs or foreign exchange loss.

- 44 -

AmountReclassified toProfit and Lossand theAdjusted Line
Item

(Note)

b) Interest rate risk
The Group was exposed to interest rate risk because entities in the Group borrowed funds atboth fixed and floating interest rates. The risk is managed by the Group by maintaining anappropriate mix of fixed and floating rate borrowings.
The carrying amounts of the Group’s financial liabilities with exposure to interest rates at theend of the reporting period were as follows:

Fair value interest rate risk
Cash flow interest rate risk

March 31,2022

December 31,
2021

March 31,2021

$ 56,678,987
94,093,154$ 56,279,341
105,262,530$ 67,774,114
100,771,675

Sensitivity analysis
The sensitivity analysis below was determined based on the Group’s exposure to interest rates
for both derivatives and non-derivative instruments at the end of the reporting period. For
floating rate liabilities, the analysis was prepared assuming the amount of the liability
outstanding at the end of the reporting period was outstanding for the whole year. A one yard
(25 basis points) increase or decrease was used when reporting interest rate risk internally to key
management personnel and represents management’s assessment of the reasonably possible
change in interest rates.
Had interest rates increased by one yard (25 basis points) and all other variables been held
constant, the Group’s pretax profit for the three months ended March 31, 2022 would havedecreased by $58,808 thousand.
Had interest rates increased by one yard (25 basis points) and all other variables been held
constant, the Group’s pretax profit for the three months ended March 31, 2021 would havedecreased by $62,982 thousand.
c) Other price risk
The Group was exposed to fuel price risk on its purchase of aviation fuel. The Group enters into
fuel options contract to hedge against adverse risks on fuel price changes.
March 31, 2022
Hedging Instrument
Cash flow hedges fuel options

Currency
USD

Notional
Amount
NTD125,457

Maturity

Forward Rate

2022.6.302023.12.31

USD60-USD177

Line Item in
Balance Sheet
Financial assets forhedging - current/
liabilities for hedging current

Carrying AmountAsset
Liability$ 146,874$

15,173Hedge accounting continues to be applied to the abovementioned hedging instruments. The
carrying amount of other equity for each hedging item (fuel payments in U.S. dollars) was$125,457 thousand.

- 45 -

December 31, 2021
Hedging Instrument
Cash flow hedges fuel options

Currency

Notional
AmountUSD

NTD6,124

Maturity

Forward Rate

2022.1.312022.9.30

USD62-USD122

Line Item in
Balance Sheet

Carrying AmountAsset
Liability

Financial assets forhedging - current/
liabilities for hedging current$

17,613$

2,755

Hedge accounting continues to be applied to the abovementioned hedging instruments. The
carrying amount of other equity for each hedging item (fuel payments in U.S. dollars) was$6,124 thousand.
March 31, 2021
Hedging Instrument
Cash flow hedges fuel options

Currency

Notional
AmountUSD

NTD2,260

Maturity
2021.7.312021.9.30

Forward Rate
USD68.20-USD76.10

Line Item in
Balance Sheet

Carrying AmountAsset
Liability

Financial assets forhedging - current/
liabilities for hedging current

$

4,798

$

-

Hedge accounting continues to be applied to the abovementioned hedging instruments. The
carrying amount of other equity for each hedging item (fuel payments in U.S. dollars) was$2,260 thousand.
For the three months ended March 31, 2022
Hedging Gains(Losses)
Recognized in
Other
Comprehensive
IncomeComprehensive Income
Cash flow hedges - fuel options
Note:$ 119,334

AmountReclassified toProfit and Lossand theAdjusted Line
Item$

42,529(Note)

Increase in operating costs.

For the three months ended March 31, 2021
Hedging Gains(Losses)
Recognized in
Other
Comprehensive
IncomeComprehensive Income
Cash flow hedges - fuel options
Note:

$

Increase in operating costs.

- 46 -

2,260

AmountReclassified toProfit and Lossand theAdjusted Line
Item
$

-

(Note)

Sensitivity analysis
The sensitivity analysis below was determined based on the exposure to fuel price risks at theend of the reporting period.
For the Three Months Ended March 31
2022
2021
Other
Other
CompreComprehensive
hensive
Pre-tax Profit
IncomePre-tax Profit
IncomeIncrease
Increase
Increase
Increase(Decrease)(Decrease)(Decrease)(Decrease)
A 5% increase infuel price
A 5% decrease infuel price$

12,585(12,585)

$

6,273

$

(6,273)-$(2,260)(2,260)2) Credit risk
The objective, policies and procedure of credit risk management are the same as the consolidated
financial statements for the year ended December 31, 2021. Related illustration can be referred to in
Note 31.
3) Liquidity risk
The objective of the Group’s management of liquidity is to maintain cash and cash equivalents
sufficient for operating purposes, marketable securities with high liquidity and loan commitmentsthat are sufficient to ensure that the Group has adequate financial flexibility.
Undrawn Bank
Loan
Commitments(Unsecured)
The Group (China Airlines, Ltd., Mandarin Airlines and Tigerair Taiwan Co.,Ltd.)

$ 25,558,021

Liquidity and interest risk rate table
The following table shows the remaining contractual maturity analysis of the Group’s financial
liabilities with agreed-upon repayment periods, which were based on the date the Group may berequired to pay the first repayment and financial liabilities is evaluated based on undiscounted cash
flows, including cash flows of interest and principal.
Bank loans with a repayment on demand clause were included in the second column of the tablebelow regardless of whether or not the banks would choose to exercise early their rights to
repayment. The maturity dates for other non-derivative financial liabilities were based on theagreed-upon repayment dates. The Group’s liquidity analysis for its derivative financial instruments
is also shown in the following table. The table was based on the undiscounted contractual net cash
inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted grosscash inflows and outflows on those derivatives that require gross settlement. When the amountpayable or receivable is not fixed, the amount disclosed has been determined by reference to theprojected interest rates as illustrated by yield curves at the end of the reporting period.

- 47 -

March 31, 2022
The Weighted
Average
Effective
Interest Rate(%)
Lease liabilities
Floating interest rate
liabilities
Hedging instruments
Bonds payable

2.4115Less than 1Year

1 to 5 Years

Over 5 Years

2,943,827$ 10,304,781$

8,213,613
9,629,350
2,664,665

66,493,855
27,574,753
10,464,439

12,480,648
2,157,445-$ 23,451,455$ 114,837,828$ 24,123,213

Less than 1Year

1 to 5 Years

Over 5 Years

$

$

$

1.04562.89831.0846

9,485,120

December 31, 2021
The Weighted
Average
Effective
Interest Rate(%)
Lease liabilities
Floating interest rate
liabilities
Hedging instruments
Bonds payable

2.4651$0.90052.9022
1.46863,440,414

9,119,294

7,314,114

12,123,745
9,375,841
2,740,146

71,980,918
28,118,375
12,303,090

13,979,191
1,532,555-$ 27,680,146$ 121,521,677$ 22,825,860

Less than 1Year

1 to 5 Years

Over 5 Years$$

March 31, 2021
The Weighted
Average
Effective
Interest Rate(%)
Lease liabilities
Floating interest rate
liabilities
Hedging instruments
Bonds payable

2.3020$0.95833.0521
0.95883,512,867

9,876,067

7,940,094

20,762,065
9,221,894
6,307,714

56,340,681
25,150,304
9,148,751

16,043,825
1,158,792
1,261,984$ 39,804,540$ 100,515,803$ 26,404,695- 48 -

32. TRANSACTIONS WITH RELATED PARTIESThe transactions between subsidiaries (obtain business) relationship with China Airlines, Ltd., remaining
account balance, revenue and expense are eliminated when combined, which is not disclosed in this note.
Besides information disclosed elsewhere in other notes, details of transactions between the Group and otherrelated parties are as follows:a. Related party name and relationship
Related Party Name

Relationship with the Company

China Aircraft Service
Airport Air Cargo Terminal (Xiamen) Co., Ltd.
Airport Air Cargo Service (Xiamen) Co., Ltd.
Eastern United International Logistics (Hong Kong)
Dynasty Holidays
China Pacific Catering Services
China Pacific Laundry Services
Nordam Asia Ltd.
Delica International Co., Ltd.
China Aviation Development Foundation
Others

Associate (became not related party since
March 2022)
Associate
Associate
Associate
Associate
Joint venture
Joint venture
Joint venture
Joint venture
Director of the Company and major shareholder
Director, key management personnel, chairman,
general manager of the Group, spouse andsecond-degree relative

b. Operating income

Account Items
Other income

For the Three Months Ended
March 31
2022
2021

Related Party Type
Major shareholder of the Company
Joint venture

$
$

2,233
5,862

$
$

5,412
4,690

c. Purchases

Related Party TypeFor the Three Months Ended
March 31
2022
2021

Major shareholder of the Company
Associate
Joint venture$
4,698$ 105,952$ 69,070$$$

12,51092,634
61,201d. Accounts receivable - related parties (generated by operations)
March 31,2022

Related Party Type
Major shareholder of the Company
Joint venture- 49 -

December 31,
2021

March 31,
2021

$

856
2,081

$

785
1,563

$

1,220
1,632

$

2,937

$

2,348

$

2,852

The receivables are not guaranteed, and there is no allowance for doubtful accounts related to accounts
receivable - related parties. The payment periods of such accounts were within 30 to 90 days, and there
are no overdue payments.
e. Accounts payable - related parties (generated by operations)
March 31,2022

Related Party Type
Major shareholder of the Company
Associate
Joint venture$

December 31,
2021

1,484
36,18067,714$$ 105,378

1,816
68,82659,930March 31,2021$

$ 130,572

2,816
38,687
61,947$ 103,450

The remaining balance of accounts payable - related parties will be paid in cash if they are not secured.
f. Lease arrangements (operating leases)
Under an operating lease agreement, the Company rented flight training machines and flight simulatorsfrom China Aviation Development Foundation to train pilots, the Company paid the rental based on
usage hours. For the three months ended March 31, 2022 and 2021, the Company paid rentals of $4,698
thousand and $12,510 thousand, respectively.
g. Endorsements and guarantees
March 31, 2022
Authorized
ActualAmountAmount Used

December 31, 2021
Authorized
ActualAmountAmount Used

March 31, 2021
Authorized
ActualAmountAmount Used$$

1,663,320
258,454$ 3,850,000
2,671,771$ 1,782,980
266,577

1,459,000

2,000,000

1,366,500

The Company
Cal Park
Tigerair Taiwan Co., Ltd.
Taiwan Aircraft Maintenanceand Engineering Co., Ltd.

3,850,000
2,679,427
2,000,000$

1,553,760
267,341
1,565,000

3,850,000
2,590,360
2,000,000$

h. Remuneration of key management personnel
For the Three Months Ended
March 31
2022
2021
Short-term employee benefits
Post-employment benefits$

23,596
13,062

$

9,336
590

$

36,658$

9,926

The remuneration of directors and key executives, as determined by the remuneration committee, isbased on the performance of individuals and market trends.

- 50 -

33. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY
The following assets were pledged or mortgaged as collateral for long-term bank loans, lease liabilities andbusiness transactions:

Property, plant and equipment
Right-of-use assets
Restricted assets

March 31,2022

December 31,
2021

March 31,2021

$ 31,229,703
55,222,077
664,899$ 31,823,285
56,061,967
577,809$ 33,316,314
57,790,916
385,058$ 87,116,679$ 88,463,061$ 91,492,288

The above restricted assets included pledged time deposits and demand deposits which were madeaccording to loan agreements.

34. SIGNIFICANT COMMITMENTS AND CONTINGENT LIABILITIESIn addition to those disclosed in the other notes, significant commitments and contingent liabilities of theGroup at March 31, 2022 were as follows:a. Taiwan Air Cargo Terminal Co. (TACT) signed a terminal construction contract with Civil Aeronautics
Administrations (CAA) on January 14, 2000. The chartered operation period (COP) is 20 years from thedate of transfer of the chartered operation rights from CAA to TACT. TACT filed an application for a
10-year extension of the COP for the cargo terminals in the Taiwan Taoyuan International Airport andKaohsiung International Airport and received the approval from Taoyuan Airport Corporation and CAA
in July 2013 and July 2015, respectively.
However, TACT filed an arbitration in 2012 to revise the total amount of expenditure to $6,840,000
thousand. As of March 31, 2022, TACT had signed the following construction contracts with unrelatedparties:

Client NameContract Title

CECI Engineering
Consultant, Inc., Taiwan

Cargo Terminal Expansion Construction Consultant
Contract

Contract
Amount (VAT
Included)$ 192,000

Assets acquired from cargo terminal improvements, equipment acquisition and subsequent equipment
acquisition and replacement will be transferred to the government without any compensation when thechartered operating license expires.
TACT should pay royalties to Taoyuan Airport Corporation and CAA during the chartered operation
period. The calculation is based on annual sales (including operating and non-operating revenue but
excluding the rental revenue from specific districts), and Taoyuan Airport Corporation and CAA havethe option to adjust the royalty rates every 3 years starting from the date of transfer of the charteredoperation rights on the basis of actual revenue and expenditures. The current royalty rate is 6%.

- 51 -

b. CAL Park Co., Ltd. (“CAL Park”) signed “Taiwan Taoyuan International Airport Aviation Operation
Center (including Airport Hotel) Construction Operating Contract” with the CAA on September 20,
2006. However, on November 1, 2010, the Taoyuan Airport Corporation took over the CAA’s rights on
this contract from the CAA. The contract is effective for 50 years (consisting of the development stage
and operating period) from the contract date. Three years before contract expiry date, CAL Park has thefirst option to renew the contract with a 20-year extension.
CAL Park’s business scope includes providing business and other operating space related to civil airtransport, hotels, aviation service and related industries adhered to the base and essential services law
and approved by the Taoyuan Airport Corporation.
CAL Park should pay land rentals on the date of the registration of surface rights. The rental rates forthe development stage differ from those for the operation period. The rental rates should follow Article
No. 2 of the “Regulations for Favorable Rentals Regarding Public Land Lease and Superficies inInfrastructure Projects,” which states that rental calculation in the development stage should include theland value added tax plus the necessary maintenance fee; in the operation period, rentals are 60% of theamount based on the National Building Land Rental Standard plus land value tax, value-added tax andthe necessary maintenance fees.
During the 50 years beginning from the initial operation date of CAL Park to the end of the construction
period, CAL Park should pay royalties based on the operating revenue estimated in the financial plan of
its investment execution proposal. If the sales and business tax declared and filed by a business entity
for a single year exceeds 10% of the operating revenue as estimated in the financial plan in its
investment execution proposal, CAL Park should pay additional royalties at 10% of this excess.
CAL Park should submit the asset transfer plan within five years before the expiry date of the charteredoperation period, begin the negotiation of the asset transfer contract, and complete the assignment nolater than three years before the expiry date of the chartered period. If CAA decides not to keep thebuilding and equipment on the base area, CAL Park should remove all related building and equipment
within three months after the expiry date.
c. In October 2019, the Company signed a contract with Airbus S.A.S. to purchase eleven A321neo
aircraft and an option to purchase five A321neo aircraft. The total list price of the eleven aircraft is
US$1,676,413 thousand, and the list price of the option to purchase five aircraft is US$769,922
thousand. The expected delivery periods of the eleven aircraft are from 2024 to 2026. As of March 31,
2022, the list price had been paid in the amount of US$32,578 thousand (recognized as prepayments foraircraft). In October 2019, the Company signed a contract with International Aero Engines Company topurchase four backup engines of A321neo. As of March 31, 2022, one out of the four backup engines
has been delivered. The Group also signed related aircraft lease agreement, please refer to Note 21.
d. In July and August 2019, the Company signed a contract with Boeing Company to purchase three 777F
aircraft and exercised the option to purchase three 777F aircraft. The expected delivery periods are from2020 to 2023. In January 2022, the Company signed an additional contract with Boeing Company topurchase another four 777F aircraft. The expected delivery periods are from 2023 to 2024. The total list
price of the ten aircraft is US$3,914,818 thousand. As of March 31, 2022, four out of ten aircraft havebeen delivered. The total list price of the remaining six aircraft is US$2,421,027 thousand, and the list
price that has been paid was US$286,723 thousand (recognized as prepayments for aircraft).
e. In October 2019, Tigerair Taiwan Co., Ltd. signed a contract with Airbus S.A.S. to purchase sevenA320neo aircraft and an option to purchase two A320neo aircraft. The total list price of the sevenaircraft is US$729,746 thousand, and the list price of the option to purchase two aircraft is US$208,499
thousand. The expected delivery period of the seven aircraft ranges from 2025 to 2027. As of March 31,
2022, the list price has been paid in the amount of US$18,549 thousand (recognized as prepayments foraircraft). In addition, in December 2019, Tigerair Taiwan Co., Ltd. signed a contract with International
Aero Engines Company to purchase two backup engines of A320neo aircraft. The total list price of thetwo engines is US$27,345 thousand. As of March 31, 2022, one out of the two backup engines has been
- 52 -

delivered, and the other was expected to be delivered in 2025. The Group also signed related aircraft
lease agreement, please refer to Note 21.

35. IMPACT OF COVID-19
Since the outbreak of the COVID-19 in January 2020, the coronavirus has become a pandemic. The
pandemic has now spread around the world and most countries have not removed their travel restrictions.
Because the number of inbound and outbound passengers has decreased significantly, the Group adjusts the
proportion between passenger aircraft and cargo aircraft used in operations to comply with thegovernment’s epidemic prevention policy and cater to market demand. The Company reduces the frequencyof passenger air services that have been severely affected, uses the passenger aircraft to support the cargoflight arrangement and expands the function of all-cargo aircraft to maximize the opportunities from air
cargo business. Since March 2020, cargo has become the main source of revenue for the Group.
The Group continues to adjust the response measures according to the situation. In addition, to ensure theadequate liquidity, the Group also implements measures for human resource management such as
postponing the hiring of newcomers, relaxing the application of special leave, loosening the restrictions onleave without pay, encouraging employees to take leave, adjusting working hours and salaries, etc. The
Group’s policies to control spending include suspension of non-urgent capital expenditures, reduction inand postponement of payments.
For the three months ended March 31, 2022 and 2021, because of the COVID-19 pandemic, the Company
received subsidies of $402,567 thousand and $182,959 thousand, respectively, for airport landing fees andparking fees, etc. The subsidies for housing and land rental, and salary and interest expense were $276,314
thousand and $171,862 thousand, respectively. These subsidies were recognized as other income or
deduction from other expenses.
The Group has obtained relief loan from the government. Refer to Note 19 for details on the amount of loan
and its allocation.

36. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIESThe following information was aggregated by the foreign currencies other than functional currency ofentities in the Group and the exchange rates between foreign currencies and respective functional currencies
were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:(In Thousands of Foreign Currencies)
March 31, 2022
Foreign
Currencies (InThousands)

Exchange Rate

Carrying
AmountFinancial assets
Monetary items
USD
EUR
HKD
JPY
RMB

$

- 53 -

987,534
28,746
237,5029,026,766
530,105

28.6533
31.9489
3.65630.23434.5086$ 28,296,100
918,412868,381
2,114,987
2,390,016(Continued)

Foreign
Currencies (InThousands)

Exchange Rate

Carrying
AmountFinancial liabilities
Monetary items
USD
EUR
HKD
JPY
RMB

$

2,142,808
5,198
55,2402,990,835
116,34428.6553
31.9489
3.65630.23434.5086$ 61,398,524
166,072
201,975
700,758
524,544(Concluded)

December 31, 2021
Foreign
Currencies (InThousands)

Exchange Rate

Carrying
Amount1,123,112
24,700551,856
5,082,118
768,075

27.700831.44653.54990.24074.3459$ 31,111,094
776,718
1,959,032
1,223,259
3,337,976

2,116,761
3,724
65,6412,810,820
112,02527.700831.44653.54990.24074.345958,635,978117,119
233,020
676,564
486,852

Exchange Rate

Carrying
AmountFinancial assets
Monetary items
USD
EUR
HKD
JPY
RMB

$

Financial liabilities
Monetary items
USD
EUR
HKD
JPY
RMB
March 31, 2021
Foreign
Currencies (InThousands)
Financial assets
Monetary items
USD
EUR
HKD
JPY
RMB

$

- 54 -

641,441
17,284
236,1363,860,686
377,306

28.571433.44483.66970.25744.3459$ 18,326,876
578,061
866,549
993,741
1,639,733(Continued)

Foreign
Currencies (InThousands)

Exchange Rate

Carrying
AmountFinancial liabilities
Monetary items
USD
EUR
HKD
JPY
RMB

$

2,154,151
6,378
66,767
3,054,320
110,21328.571433.44483.66970.25744.3459$ 61,547,099
213,297
245,015
786,182
478,976(Concluded)

For the three months ended March 31, 2022 and 2021, the Group’s net foreign exchange gains (losses) were$275,940 thousand and $(127,657) thousand, respectively. It is impractical to disclose net foreign exchange
gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions
and functional currencies of the entities in the Group.

37. ADDITIONAL DISCLOSURESa. Following are the additional disclosures required by the Securities and Futures Bureau for the Company
and its investees:
1) Financing provided to others: Table 1 (attached)2) Endorsements/guarantees provided: Table 2 (attached)
3) Marketable securities held: Table 3 (attached)4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20%of the paid-in capital: None
5) Acquisitions of individual real estates at costs of at least NT$300 million or 20% of the paid-in
capital: None
6) Disposals of individual real estates at costs of at least NT$300 million or 20% of the paid-in capital:
None7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of thepaid-in capital: Table 4 (attached)
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in
capital: Table 5 (attached)9) Names, locations, and related information of investees over which the Company exercises
significant influence: Table 6 (attached)10) Trading in derivative instruments (Note 31)
b. Information on investments in mainland China: Table 7 (attached)- 55 -

c. Business relationships and important transactions between China Airlines, Ltd. and its subsidiaries:
Table 8 (attached)d. Information of major shareholders: Table 9 (attached)

38. SEGMENT INFORMATIONThe Group mainly engages in air transportation services for passengers, cargo and others. Its major
revenue-generating asset is its aircraft fleet, which is used jointly for passenger and cargo services. Thus,
the Group’s sole reportable segment is its flight segment. For operating segment reporting in the
consolidated financial statements, the reportable segment of the Group and its subsidiaries comprises theflight and the non-flight business departments. The accounting policy applied for reportable segments are
consistent with the policies aforementioned in Note 4.
For the three months ended March 31, 2022 and 2021, financial information of reportable segments is listed
below:For the Three Months Ended March 31, 2022
Adjustments
AirandTransportation
OthersEliminations
Operating revenue$ 36,188,614$

2,144,846$(1,100,177)

Operation profit and loss
Interest revenue
Investments income accounted forusing the equity method
Revenue
Financial costs
Expenses$$(199,736)$(17,635)

3,843,400$ 37,233,283$

3,626,029
36,197(50,965)
521,947(565,657)(15,199)

Profit before income tax
Identifiable assets
Investments accounted for using theequity method
AssetsTotal$$ 180,663,070$ 14,293,087$(6,146,211)

3,552,352$ 188,809,946
1,536,795
93,966,895

Total assets$ 284,313,636
For the Three Months Ended March 31, 2021
Adjustments
AirandTransportation
OthersEliminations

Total

Operating revenue$ 26,857,874$

1,803,484$(833,702)$ 27,827,656

Operation profit and loss
Interest revenue
Investment income accounted for using
the equity method
Revenue
Financial costs
Expenses$$(151,484)$(20,916)$(296,778)(469,178)
41,153(81,674)
54,816(657,383)(219,582)

Loss before income tax$(1,331,848)(Continued)- 56 -

For the Three Months Ended March 31, 2021
Adjustments
AirandTransportation
OthersEliminations
Identifiable assets
Investments accounted for using theequity method
Assets$ 194,406,269$ 14,752,152$(6,051,311)

Total$ 203,107,110
1,889,627
65,523,034

Total assets$ 270,519,771(Concluded)- 57 -TABLE 1

CHINA AIRLINES, LTD. AND SUBSIDIARIESFINANCING PROVIDED TO OTHERSFOR THE THREE MONTHS ENDED MARCH 31, 2022
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)No.

Lender1

Cal-Dynasty International

Borrower

Financial
Statement
Account

Dynasty Hotel of Notes receivable
Hawaii, Inc.

RelatedParty

HighestBalance for
the PeriodEndingBalance

ActualBorrowed
AmountInterest Rate
(%)

Yes

$ 100,287$ 100,287$ 100,287

2.25

Nature ofFinancing

Short-term
financingfacility isnecessary

Note 1:

The maximum amount of loans to others by the Group is up to 40% of the Group’s net worth as stated in its latest financial statements.

Note 2:The maximum amount of loans to an individual counterparty by the Group is up to 20% of the Group's net worth as stated in its latest financial statements.

- 58 -

Business
Transaction
AmountReasons for
Short-term
Financing$Operatingcycle capital
expenditure-

Allowance for
Impairment
Loss
$

-

Collateral
Item

Value

$

-

Financing
Limit for
Each
Borrower

Aggregate
FinancingLimit$ 146,123$ 292,246

NoteTABLE 2

CHINA AIRLINES, LTD. AND SUBSIDIARIESENDORSEMENTS/GUARANTEES PROVIDEDFOR THE THREE MONTHS ENDED MARCH 31, 2022
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Endorsee/Guarantee
Endorser/
Guarantor

No.

0

Name

China Airlines
Cal Park(the “Company”) Tigerair Taiwan Co., Ltd.

Taiwan Aircraft Maintenanceand Engineering Co., Ltd.

Relationship100% owned subsidiary
82.27% owned subsidiaryby direct and indirect
holdings
100% owned subsidiary

Limit onEndorsement/
Guarantee
Given on Behalfof Each Party(Note 1)

Maximum
AmountEndorsed/
Guaranteed
During the
PeriodOutstanding
Endorsement/
Guarantee atthe End of the
PeriodRatio ofAccumulated
Endorsement/ Endorsement/ Endorsement/
AmountAggregate
Endorsement/
Guarantee
Guarantee
Guarantee
Actual AmountEndorsed/Endorsement/
Guarantee toGiven by Parent
Given byGiven on Behalf
Borrowed
Guaranteed by
Guarantee
Net Equity inon Behalf of
Subsidiaries on of Companies in
Collateral
Limit (Note 2)
Latest Financial
Subsidiaries Behalf of Parent Mainland China
Statements (%)$ 15,406,532
15,406,532$ 3,850,000
2,679,427$ 3,850,000
2,679,427$ 1,553,760
267,341

15,406,532

2,000,000

2,000,000

1,565,000$

Note 1:

Based on the Company’s guidelines, the maximum amount of guarantee to an individual counterparty is up to 20% of the Company’s shareholders’ equity.

Note 2:

Based on the Company’s guidelines, the allowable aggregate amount of collateral guarantee is up to 50% of the Company’s shareholders’ equity.

- 59 -

-

5.00
3.48

$ 38,516,332
38,516,332

Yes
Yes

No
No

No
No

-

2.60

38,516,332

Yes

No

No

TABLE 3

CHINA AIRLINES, LTD. AND SUBSIDIARIES
MARKETABLE SECURITIES HELDMARCH 31, 2022
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name

Marketable Security Type and Issuer/Name

China Airlines (the “Company”) Shares
Everest Investment Holdings Ltd. - ordinary shares
Everest Investment Holdings Ltd. - preferred shares
Chung Hua Express Co.
China Aircraft Services Limited
Jardine Air Terminal Services
The Grand Hi Lai Hotel
Mandarin Airlines

Cal-Asia Investment

SharesChina Airlines
SharesTaikoo (Xiamen) Landing Gear Services
Taikoo Spirit Aerospace Systems (Jinjiang)
Composite

Relationshipwith theHoldingCompany-

Financial Statement AccountMarch 31, 2022
Percentage of Market Value
Carrying
Ownership
or Net Asset
Amount(%)
Value

Number of
Shares/Units

Financial assets at FVTOCI - non-current
Financial assets at FVTOCI - non-current
Financial assets at FVTOCI - non-current
Financial assets at FVTOCI - non-current
Financial assets at FVTPL - current
Financial assets at FVTPL - current

1,359,368
135,937
1,100,000
28,400,000
12,000,000
4,021

Parent company Financial assets at FVTOCI - non-current$

23,6682,367
35,211
-

13.59
11.00
4.00
15.00
0.02

2,074,628

55,289-$Note

26,03535,211-

Note 1--

55,289-10,574

2.59
5.45

10,574Note 2
Note 2-36,002----Financial assets at FVTPL - current
Financial assets at FVTOCI - non-current

Beneficiary certificates
FSITC Money Market Fund-

Financial assets at FVTPL - current

119,662

36,002

SharesTransAsia Airways-

Financial assets at FVTPL - current

2,277,786-

Dynasty Aerotech International
Corp.

Beneficiary certificates
Taishin 1699 Money Market Fund-

Financial assets at FVTPL - current

349,523

4,784

-

4,784

-

Kaohsiung Catering Services

Beneficiary certificates
Prudential Financial Money Market Fund
Taishin 1699 Money Market Fund-

Financial assets at FVTPL - current
Financial assets at FVTPL - current

5,407,832
1,106,807

86,531
15,150-86,531
15,150-Government bonds
Treasury Bill (Philippines government bond)-Financial assets at amortized cost-561

Not applicable

561-

Sabre Travel Network (Taiwan)

Taiwan Airport Services

Tigerair Taiwan Co., Ltd.

Note 1: The subsidiary’s net asset value was $26,035 thousand, which included ordinary shares and preference shares as of March 31, 2022.
Note 2: The company does not issue shares because it is a limited company.
Note 3: The table only lists financial assets that are in accordance with IFRS 9- 60 -

0.40

TABLE 4

CHINA AIRLINES, LTD. AND SUBSIDIARIESTOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITALFOR THE THREE MONTHS ENDED MARCH 31, 2022
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)Transaction Details
Company Name

China Airlines, Ltd.
(“China Airlines”)

Related Party

Taiwan Air Cargo Terminal
Taoyuan International Airport Service

Nature of Relationship

Subsidiary
Subsidiary

Purchase/
Sale

Amount% of
Total

Purchase
Purchase$ 173,797
280,104

0.06
0.96- 61 -

Notes/Accounts Receivable
or Payable% ofPayment Terms Ending Balance
Total

Abnormal Transaction
Payment Terms
30 days
40 days

Unit Price$--$ (65,193)(213,487)(4.61)(15.09)Note-

TABLE 5

CHINA AIRLINES, LTD. AND SUBSIDIARIESRECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITALMARCH 31, 2022
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Overdue
Company Name

Taoyuan International Airport Service

Related Party

China Airlines

Nature of Relationship

Parent company

Ending Balance

Turnover Rate

$ 213,487

4.82- 62 -

Amount$Action Taken--

Amounts Received
in Subsequent
Period$ 121,388

Allowance for
Impairment Loss$-TABLE 6

CHINA AIRLINES, LTD. AND SUBSIDIARIESNAMES, LOCATIONS, AND OTHER INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCEFOR THE THREE MONTHS ENDED MARCH 31, 2022
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company

China Airlines, Ltd.

Investee Company

Cal Park
Mandarin Airlines
Taiwan Air Cargo Terminal
Cal-Dynasty International

Location

Main Business and ProductTaoyuan, Taiwan
Taipei, Taiwan
Taoyuan, Taiwan
Los Angeles, U.S.A.

Real estate lease and international trade
Air transportation and maintenance of aircraft
Air cargo and storage
A holding company, real estate and hotel
services
China Pacific Catering Services
Taoyuan, Taiwan
In-flight catering
Taoyuan International Airport Services Taoyuan, Taiwan
Airport services
Cal-Asia Investment
Territory of the British Virgin Islands General investment
Sabre Travel Network (Taiwan)
Taipei, Taiwan
Sale and maintenance of hardware andsoftware
China Aircraft Service
Hong Kong International Airport
Airport services
Taiwan Airport Services
Taipei, Taiwan
Airport services
Kaohsiung Catering Services
Kaohsiung, Taiwan
In-flight catering
Cal Hotel Co., Ltd
Taoyuan, Taiwan
Hotel business
China Pacific Laundry Services
Taoyuan, Taiwan
Cleaning and leasing of the towel of airlines,
hotels, restaurants and health clubs
Dynasty Aerotech International Corp. Taoyuan, Taiwan
Cleaning of aircraft and maintenance ofmachine and equipment
Dynasty Holidays
Tokyo, Japan
Travel business
Global Sky Express
Taipei, Taiwan
Forwarding and storage of air cargo
Tigerair Taiwan Co., Ltd.
Taipei, Taiwan
Air transportation and maintenance of aircraft
Taiwan Aircraft Maintenance andTaoyuan, Taiwan
Aircraft maintenanceEngineering Co., Ltd.
NORDAM Asia Ltd.
Taoyuan, Taiwan
Composite repair and manufacturing business
Taipei, Taiwan
Taipei, Taiwan

Original Investment Amount
December 31,
March 31, 2022
2021

Number of
Shares

As of March 31, 2022
Percentage ofCarrying
Ownership
Amount$1,500,000
4,039,140
1,350,000
US$ 26,145$

1,500,000
4,039,140
1,350,000
US$ 26,145

150,000,000
387,831,234
135,000,000
2,614,500

100.0096.96
54.00
100.00439,110147,000
US$
7,172
52,200439,110147,000
US$
7,172
52,20043,911,000
34,300,000
7,172,346
13,021,042

51.00
49.00
100.00
93.93

HK$

HK$

58,00012,289383,846
465,000
137,500

20,626,644
21,494,637
46,500,000
13,750,000

77,270JPY

484,066
450,081
540,771
178,807(96,440)(333,910)
8,609(12,655)(49,185)(163,616)
8,609(11,887)

47.35
53.67
100.0055.00

117,456
376,493363,751
110,263(54,362)(6,281)
28,138(19,297)- Note 6(25,740)(4,655) Note 528,509 Note 4(10,613)-77,270100.00154,7177,107

7,109 Note 4

8,000
2,500
5,640,197
1,350,000

160
250,000
313,631,656
135,000,000

20.00
25.00
78.41
100.008,509
2,391,368
530,109

3,514(725,501)(27,809)878(568,839) Note 4(27,809)-37,97537,975

3,797,500

49.00

23,927(10,017)(4,908)-Air transportation and maintenance of aircraft
Airport services

154,330
11,658154,330
11,65815,433,000
469,755

3.86
1.08

117,6722,672(725,501)(54,362)(27,992)
(585)

-

8,000
2,500
5,640,197
1,350,000

JPY

$

Note

20,702 Note 4(313,467) Notes 1 and 4
101,966
11,055 Note 277,2701,676,868
1,474,221
1,793,819
1,221,016

Share of profit(Loss)

10,569 $(323,325)
188,815
11,04912,289383,846
465,000
137,500$

Net Income(Loss) of theInvestee

Mandarin Airlines

Tigerair Taiwan Co., Ltd.
Taiwan Airport Services

Cal-Asia Investment

Eastern United International Logistics Hong Kong

Forwarding and storage of air cargo

HK$

3,329

HK$

3,329

1,050,000

35.00

57,519

9,496

3,324

Taiwan Airport Services

Taiwan Airport Service (Samoa)

Samoa

Airport services and investment

US$

5,877

US$

5,877

-

100.00426,771

5,071

5,071 Note 3

Kaohsiung Catering Services

Delica International Co., Ltd.

Kaohsiung, Taiwan

Catering business

10,2001,020,000

51.00

7,875

-

Note 1:Adopted the treasury shares method in recognizing investment income or loss.

Note 2:

Represents the consolidated financial information of the foreign holding company disclosed in accordance with local regulations.

Note 3:The company does not issue shares because it is a limited company.

Note 4:The difference is due to lease arrangement between consolidated entities.

Note 5:The difference is due to acquisition.

Note 6:

The Group lost significant influence over it during the year.

10,200- 63 ----TABLE 7

CHINA AIRLINES, LTD. AND SUBSIDIARIESINFORMATION ON INVESTMENTS IN MAINLAND CHINAFOR THE THREE MONTHS ENDED MARCH 31, 2022
(In Thousands of New Taiwan Dollars/Renminbi/U.S. Dollars, Unless Stated Otherwise)

China Airlines

Investee Company

Accumulated
Outward
Remittance forMain Businesses andMethod ofPaid-in Capital
Investment
Products
investment
from Taiwan asof January 1,
2022

Airport Air Cargo Terminal(Xiamen) Co., Ltd.

Forwarding and storage $ 1,147,349
of air cargo(RMB 254,480)

Indirect(Note 1)

Airport Air Cargo Service(Xiamen) Co., Ltd.

Forwarding and storage63,120of air cargo(RMB 14,000)

Indirect(Note 1)

Taikoo (Xiamen) Landing
Gear Services

Landing gear
2,380,803
maintenance services (US$ 83,090)

Indirect(Note 1)

Taikoo Spirit Aerospace
Systems (Jinjang)Composite material

Indirect(Note 1)

334,183(US$ 11,663)

Remittance of Funds

Outward$119,942 $(US$4,186)

Accumulated
Outward
Remittance forInvestment
from Taiwan asof March 31,
2022

Inward--(US$55,801
1,947)

61,6392,151)

-

(US$

-

(US$

18,223636)$

Upper Limit on the Amount of
Investments Stipulated by the Investment
Commission, MOEA

$255,605(US$8,920)$623,749(Note 3)$47,963,911(Note 4)

Investment
Gain (Loss)$
119,942 $
19,817(US$
4,186) (RMB 4,519)

14.00

-

14.00

(US$

55,801
19,153
1,947) (RMB 4,368)

61,6392,151)

-

2.59

-

(US$

-

5.45

-

(US$

18,223636)-

Investment Amount
Authorized by the Investment
Commission, MOEA

Accumulated
Carrying
Repatriation ofAmountInvestment
as ofIncome as ofMarch 31, 2022
March 31, 2022--

Accumulated Outward Remittance forInvestment in Mainland China as ofMarch 31, 2022

% Ownershipof Direct orIndirect
Investment

Net Income(Loss) of
the Investee

$
(RMB

(RMB

2,439 $
269,516 $
101,334633) (RMB 59,778) (US$3,537)(Note 2)
2,523
157,719611) (RMB 34,981) (US$-44,715
1,561)(Note 2)-

10,574(RMB 2,345) (US$10,215357)(Continued)- 64 -

Taiwan Airport Services

Investee Company

Accumulated
Outward
Remittance forMain Businesses andMethod ofPaid-in Capital
Investment
Products
Investment
from Taiwan asof January 1,
2022

Airport Air Cargo Terminal(Xiamen) Co., Ltd.

Forwarding and storage $ 1,147,349
of air cargo(RMB 254,480)

Indirect(Note 5)$
115,139 $(US$4,018)

Airport Air Cargo Service(Xiamen) Co., Ltd.

Forwarding and storage63,120of air cargo(RMB 14,000)

Indirect(Note 5)

(US$

Remittance of Funds

Outward

Inward-55,2081,927)

Accumulated
Outward
Remittance forInvestment
from Taiwan asof March 31,
2022

$

-

-

$
115,139 $
19,817(US$
4,018) (RMB 4,519)

14.00

55,20819,153
1,927) (RMB 4,368)

14.00

(US$

Accumulated Outward
Remittance for Investment in
Mainland China as of March 31, 2022

Investment Amounts Authorized by
Investment Commission, MOEA

Upper Limit on the Amount of
Investment Stipulated by
Investment Commission, MOEA

$170,347(US$5,945)$170,347(US$5,945)$148,835(Note 6)Net Income(Loss) of theInvestee% Ownershipof Direct orIndirect
Investment

Investment
Gain (Loss)

Accumulated
Carrying
Repatriation ofAmount as ofInvestment
March 31, 2022 Income as ofMarch 31, 2022$
(RMB

2,774 $
268,113 $
130,119633) (RMB 59,467) (US$4,541)(RMB

2,681
157,797611) (RMB 34,999) (US$59,937
2,092)

Note 1: The Company invested in CAL-Asia Investment, which invested in a company located in mainland China.
Note 2: As of March 31, 2022, the inward remittance of earnings amounted to US$3,536,561 and US$1,560,538.
Note 3: The amount comprised US$19,828,324, RMB4,200,000 and NT$36,666,667.
Note 4: The limit stated in the Investment Commission’s regulation “The Review Principle of Investment or Technical Cooperation in Mainland China” is the larger of the Company’s net asset value or 60% of the consolidated net asset value.
Note 5: Taiwan Airport Services invested in Taiwan Airport Services (Samoa), which invested in a company located in mainland China.
Note 6: The RMB and U.S. dollar amounts of assets are converted at period-end rates and the gains (losses) are converted at the average of the period-end rates for the reporting period.
(Concluded)- 65 -TABLE 8

CHINA AIRLINES, LTD. AND SUBSIDIARIES
BUSINESS RELATIONSHIPS AND IMPORTANT TRANSACTIONS BETWEEN CHINA AIRLINES, LTD. AND ITS SUBSIDIARIESFOR THE THREE MONTHS ENDED MARCH 31, 2022
(In Thousands of New Taiwan Dollars)Intercompany Transactions
No.

Company Name

Related Party

Natural of
Relationship(Note 1)

Financial Statement Account0

China Airlines, Ltd.

Taiwan Air Cargo Terminal
Taoyuan International Airport Service
Taoyuan International Airport ServiceaaaOther operating costs
Accounts payable - related parties
Airport service costs

1

Taiwan Air Cargo Terminal

China Airlines, Ltd.

b

2

Taoyuan International Airport Services

China Airlines, Ltd.
China Airlines, Ltd.

bb

Amount(Note 2)

Transaction Criteria% of Total
Consolidated
Total Revenue
or Assets$ 173,797
213,487
280,104

The same as ordinary transactions
The same as ordinary transactions
The same as ordinary transactions

0.47
0.08
0.75

Sales revenue

173,797

The same as ordinary transactions

0.47

Airport service revenue
Accounts receivable - related parties

280,104
213,487

The same as ordinary transactions
The same as ordinary transactions

0.75
0.08

Note 1: The three directional types for transactions by business relationship between China Airlines, Ltd. and its subsidiaries are as follows:a. Parent to subsidiaries.
b. Subsidiaries to parent.
c. Subsidiaries to subsidiaries.
Note 2: Intercompany transactions were eliminated in the consolidated financial statements.
Note 3: The Company only discloses transaction amounts or balances of more than $100,000 thousand.

- 66 -TABLE 9

CHINA AIRLINES, LTD.
INFORMATION OF MAJOR SHAREHOLDERSMARCH 31, 2022

SharesNumber ofPercentage ofSharesOwnership (%)

Name of Major Shareholder

China Aviation Development Foundation (CADF)
National Development Fund (NDF)

1,867,341,935
519,750,519

31.15
8.67

Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository &Clearing Corporation based on the number of ordinary shares and preference shares held byshareholders with ownership of 5% or greater, that have been issued without physical registration(including treasury shares) by the Company as of the last business day for the current quarter. The
share capital in the consolidated financial statements may differ from the actual number of shares thathave been issued without physical registration because of different preparation basis.
Note 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by theindividual truster who opened the trust account. For shareholders who declare insider shareholdings
with ownership greater than 10% in accordance with the Security and Exchange Act, theshareholdings include shares held by shareholders and those delivered to the trust over whichshareholders have rights to determine the use of trust property. For information relating to insider
shareholding declaration, please refer to Market Observation Post System.

- 67 -