China Airlines, Ltd. and Subsidiaries
Consolidated Financial Statements for theThree Months Ended March 31, 2023 and 2022 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, 2023 and 2022, and the related consolidated
statements of comprehensive income, the consolidated statements of changes in equity and cash flows forthe three months then ended, and the related notes to the consolidated financial statements, including asummary 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 in accordance with the Regulations Governing the Preparation of Financial Reports
by Securities Issuers and International Accounting Standard 34 “Interim Financial Reporting” endorsed
and issued into effect by the Financial Supervisory Commission of the Republic of China. Our
responsibility is to express a conclusion on the consolidated financial statements based on our reviews.
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 report of other auditors. The total assets of these subsidiaries were NT$14,903,992 thousand
and NT$13,940,928 thousand, representing 5.06% and 4.90% of the consolidated total assets as of March
31, 2023 and 2022, respectively, and the total revenue of these subsidiaries were NT$2,514,815 thousand
and NT$22,085 thousand, representing 5.89% and 0.06% of the consolidated total revenue, for the threemonths ended March 31, 2023 and 2022, respectively.
Scope of Review
Except as explained in the following paragraph, we conducted our reviews in accordance with theStandards on Review Engagements of the Republic of China 2410 “Review of Interim 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 other review procedures. A review is substantially less in scope thanan 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, 2023 and 2022, the combined total assets of these non-significant subsidiaries were
NT$20,916,254 thousand and NT$20,406,838 thousand, respectively, representing 7.11% and 7.18%,
respectively, of the consolidated total assets, and the combined total liabilities of these non-significant
subsidiaries were NT$11,630,863 thousand and NT$11,180,765 thousand, respectively, representing
5.28% and 5.47%, respectively, of the consolidated total liabilities; for the three months ended March 31,
2023 and 2022, the amounts of the combined comprehensive income (loss) of these non-significant
subsidiaries were NT$77,583 thousand and NT$(164,937) thousand, respectively, representing 4.93% and(8.59%), respectively, of the consolidated total comprehensive income. As of March 31, 2023 and 2022,
the aforementioned investments accounted for using the equity method were NT$1,529,074 thousand andNT$1,536,795 thousand, respectively; for the three months ended March 31, 2023 and 2022, the amountsof the Group’s share of the profit of such investments accounted for using the equity method were
NT$70,278 thousand and NT$(50,965) 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 using the equity
method as described in the preceding paragraph been reviewed, nothing has come to our attention thatcaused us to believe that the accompanying consolidated financial statements do not present fairly, in allmaterial respects, the consolidated financial position of the Group as of March 31, 2023 and 2022, and ofits consolidated financial performance and its consolidated cash flows for the three months ended March
31, 2023 and 2022 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
Kuan-Hao Lee and Shiuh-Ran-Cheng.

Deloitte & Touche
Taipei, Taiwan
Republic of China
May 10, 2023
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, 2023
(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, 2022
(Reviewed)
Amount%$ 35,548,668
120,5219,304,339
3,994,787
10,907,369
6,231
692,625
35,664
10,865,968
1,584,601

12
3
1
4
4
1

$ 34,980,469
119,462
6,218,617
4,031,662
11,126,642
4,849
963,004
5,259
10,775,467
1,596,912

12
2
1
4
4
1

$ 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
-

73,060,773

25

69,822,343

24

72,502,799

26

81,123
204,523
1,529,074
125,725,341
56,595,656
2,071,955
837,864
8,239,702
25,958,524

43
19
1
3
9

123,033
205,765
1,453,244
128,207,404
59,015,407
2,072,012
883,420
8,446,347
24,183,218

44
20
1
3
8

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

221,243,762

75

224,589,850

76

211,810,837

74$ 294,304,535

100$ 294,412,193

100$ 284,313,636

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, 2022
(Audited)
Amount%LIABILITIES AND EQUITYCURRENT LIABILITIESShort-term borrowings (Notes 19 and 31)
Short-term bills payable (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)$

835,000
9,983,959
1,357,805
317,810
17,409,654
15,207,259
492,415
3,691,812
3,027,890
2,350,000
13,225,516
3,355,958

3
1
6
5
1
1
1
5
1

26

71,255,078

29,721,744
7,654,401
59,634,532
1,314,650
17,286,990
289,180
15,370,394
9,158,212
2,336,713

10
3
20
1
6
5
3
1

Total non-current liabilities

142,766,816

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 non-current liabilities (Note 31)

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 20 and 26)
Share capital
Capital surplus
Retained earnings
Legal reserve
Unappropriated retained earnings
Total retained earnings
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 10, 2023)-3-

2,135,000
830,000
9,664,811
1,143,039
500,31723,452,466
12,241,624
515,516
4,585,889
3,107,154
2,350,000
13,000,582
3,918,504

1
3
8
4
2
1
1
5
1

77,444,902$$

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

24

47,143,079

17

32,190,102
7,649,674
65,109,050
1,280,906
17,271,121
166,864
15,439,535
9,229,640
2,366,781

11
3
22
6
5
3
1

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
-

49

150,703,673

51

157,230,705

55

220,211,718

75

221,958,751

75

204,373,784

72

60,135,374
3,144,366

20
1

60,135,374
3,120,311

20
1

59,935,427
2,950,940

21
1925,385
7,690,235
8,615,620(321,967)(30,875)3
3-925,385
6,384,381
7,309,766(534,375)(30,875)

1
2
3-

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

4
4
1-

71,542,518

24

70,000,201

24

77,032,664

27

2,550,299

1

2,453,241

1

2,907,188

1

74,092,817

25

72,453,442

25

79,939,852

28$ 294,304,535

100$ 294,412,193

100$ 284,313,636

100

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

For the Three Months Ended March 31
2023
2022
Amount%Amount%OPERATING REVENUE (Notes 4, 27 and 32)$ 42,691,908

100$ 37,233,283

100

OPERATING COSTS (Notes 4, 11, 15, 17, 21, 24, 25,
27 and 32)

37,493,621

88

31,734,202

86

GROSS PROFIT

5,198,287

12

5,499,081

14

OPERATING EXPENSES (Notes 4, 15, 25 and 27)

3,372,528

8

1,873,052

5

PROFIT FROM OPERATIONS

1,825,759

4

3,626,029

9502,368
31,070(700,663)

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

70,278-(50,965)-(96,947)-(73,677)-

1,728,812

4

3,552,352

9332,3281

741,6212

1,396,484

3

2,810,731

7(17,958)-

70,548-(42,127)

-

3,534

-

6,624
(53,461)-

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 (loss) of associates and joint
ventures (Note 14)
Total non-operating income and expenses
PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Notes 4 and 28)
NET INCOME FOR THE PERIODOTHER COMPREHENSIVE INCOME
Items that will not be reclassified subsequently to
profit or loss:(Loss) gain on hedging instruments subject tobasis adjustment
Unrealized (loss) gain 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-

(13,536)
60,546(Continued)

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

For the Three Months Ended March 31
2023
2022
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)
Gain (loss) on hedging instruments not subject tobasis adjustment (Notes 4, 21, 26 and 31)
Income tax relating to items that may bereclassified subsequently to profit or loss
(Note 28)$

72,202-

1(1,264,133)(3)(56,868)
229,6781

240,843(951,088)

1(2)

176,2171(890,542)(2)$

1,572,701

4$

1,920,189

5$

1,305,854
90,6303-$

3,072,308(261,577)

8
(1)

$

1,396,484

3$

2,810,731

7$

1,480,870
91,831

4-$

2,174,446(254,257)

6
(1)

$

1,572,701

4$

1,920,189

5

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

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

EARNINGS PER SHARE (NEW TAIWANDOLLARS; Note 29)
Basic
Diluted

$$(2,307)-

288,853

0.22
0.21

$

$
$

0.52
0.50

The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ review report dated May 10, 2023)-5-(Concluded)

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

Share Capital

Capital Surplus

Legal Reserve

Equity Attributable to Owners of the Company
Other Equity
Unrealized
Exchange
Gain (Loss) on
Differences on
Financial
Translation ofAssets at Fair
the Financial
Value ThroughStatements of
Other
UnappropriForeign
Comprehensive
ated Earnings
Operations
Income$ 59,412,243$ 2,694,529$-$ 9,253,848

Basis adjustment to gain (loss) on hedging instruments

-

-

-

-

-

-

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

-

-

-

3,072,308-

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

-

-

-

523,184

256,411BALANCE AT MARCH 31, 2022

$ 59,935,427$ 2,950,940

BALANCE AT JANUARY 1, 2023

$ 60,135,374$ 3,120,311

Basis adjustment to gain (loss) on hedging instruments-

Issuance of employee share options by subsidiaries

Gain (Loss) on
Hedging
Instruments

Treasury
Shares Held by
Subsidiaries(5,512)$ 2,839,419

$

Total

Non-controlling
Interests

Total Equity(30,875)$ 74,043,573$ 3,161,445$ 77,205,018

35,050-35,050-35,050---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

-

-

-

-

-

-

779,595-

779,595$-$ 12,326,156$(66,201)$(1,404)$ 1,918,621$(30,875)$ 77,032,664$ 2,907,188$ 79,939,852$

925,385$ 6,384,381$(4,298)$40,918$$(30,875)$ 70,000,201$ 2,453,241$ 72,453,442

-

-

-

-

-

37,392-37,392-37,392-

24,055

-

-

-

-

-

-

24,055

5,227

29,282

Net income (loss) for the three months ended March 31, 2023

-

-

-

1,305,854

-

-

-

-

1,305,854

90,6301,396,484

Other comprehensive income (loss) for the three months
ended March 31, 2023, net of income tax

-

-

-

-

(2,543)(35,503)

213,062-

175,016

1,201

176,217

Total comprehensive income (loss) for the three months
ended March 31, 2023

-

-

-

1,305,854(2,543)(35,503)

213,062-

1,480,870

91,831

1,572,701$ 60,135,374$ 3,144,366

925,385$ 7,690,235(30,875)$ 71,542,518$ 2,550,299$ 74,092,817

BALANCE AT JANUARY 1, 2022

Convertible bonds converted to ordinary shares

BALANCE AT MARCH 31, 2023$

The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ review report dated May 10, 2023)

-6-

$

$

(120,079)(6,841)

$

$

5,415

$

(570,995)(320,541)$

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

For the Three Months Ended
March 312023
2022
CASH FLOWS FROM OPERATING ACTIVITIESIncome 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
Compensation costs of employee share options
Share of (profit) loss of associates and joint ventures
Gain 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
Net defined benefit liabilities
Other liabilities
Cash generated from operations
Interest received
Interest paid
Income tax paid
Net cash generated from operating activities-7-$

1,728,812$

3,552,352

7,773,390
55,129-7,350,563
56,6229,618(339)(359,319)
29,282(70,278)(9,911)
251,718(634,309)
700,663
1,401,821
70,261(686)(36,197)
50,965(2,715)282,340(133,352)
565,657
1,376,905(7,047)(721)
250,871(184,707)
245,125(117,243)
36,215(94,402)357,299(3,184,480)
6,042,242(417,836)
628,707(71,428)
53,286
14,479,848
384,581(685,466)(61,937)

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)

14,117,026

9,147,250(Continued)

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

For the Three Months Ended
March 312023
2022
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
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$ (8,461,435)
5,405,253(3,963,415)
3,924,220(1,332,538)
8,956(45,110)3,436(2,410,610)(8,815)(1,332)$ (7,233,050)
10,804,786(1,329,640)
3,573,027(557,457)
5,195(2,130)41,099(6,147,227)(78,033)(75,621)(6,881,390)(999,051)

1,300,000
830,000
259,979(5,959,431)(3,507,611)
29,031(111,617)(200)
1,107,017(12,108,229)(2,869,152)
23,978(22,088)(7,159,649)(13,868,674)

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE
OF CASH HELD IN FOREIGN CURRENCIES

492,212387,183

NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS

568,199(5,333,292)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
PERIOD

34,980,469

45,269,866

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD$ 35,548,668$ 39,936,574

Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowing
Increase 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

The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ review report dated May 10, 2023)-8-(Concluded)

CHINA AIRLINES, LTD. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022
(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 aviation equipment; 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, 2023, December 31, 2022 andMarch 31, 2022, CADF and NDF held a combined 39.69%, 39.69% and 39.82%, 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 10, 2023.

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. The IFRSs in issue but not yet endorsed and issued into effect by the FSC

New, Amended and Revised Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture”
Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback”
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”
Amendments to IAS 1 “Non-current Liabilities with Covenants”-9-

Effective Date
Announced by IASB (Note 1)
To be determined by IASB
January 1, 2024 (Note 2)
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2024
January 1, 2024

Note 1: Unless stated otherwise, the above IFRSs are effective for annual reporting periods beginningon or after their respective effective dates.
Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback
transactions entered into after the date of initial application of IFRS 16.
As of the date the consolidated financial statements were authorized for issue, the Group is
continuously assessing the possible impact of the application of other standards and interpretations on
the Group’s financial position and financial performance and will disclose the relevant impact when theassessment is completed.

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
Except for the policies listed below, the accounting policies adopted for these consolidated financial
statements are the same as those for the consolidated financial statements for the year ended December 31,
2022.
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 and issued into effect by the FSC. Disclosure information included in these interim consolidated
financial statements is less than the disclosure information required in a complete 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 and net defined benefit liabilities which are measured at thepresent value of the defined benefit obligation less the fair value of plan assets.
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); andc. 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, 2022.
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.

- 10 -

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.

5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATIONUNCERTAINTY
The material accounting judgments and key sources of estimation uncertainty for these interim consolidated
financial statements are the same as those applied for the consolidated financial statements for the year
ended December 31, 2022.

6. CASH AND CASH EQUIVALENTS

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

March 31,2023

December 31,
2022

384,494
10,738,676$

599,368
8,001,937

March 31,2022$

523,061
21,747,854

20,681,220
3,744,278

20,620,078
5,759,086

16,040,588
1,625,071$ 35,548,668$ 34,980,469$ 39,936,574

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 31,2023

December 31,
2022

March 31,2022

0%-4.55%

0%-1.00%

0%-1.97%

0.42%-5.32%
0.75%-5.00%

0.33%-4.95%
0.58%-4.70%

0.06%-1.77%
0.20%-0.53%

The Group designated some deposits denominated in USD and repurchase agreements collateralized bybonds denominated in USD as hedging instruments to avoid exchange rate fluctuations on final paymentsof aircraft orders and prepayments for equipment, and applied cash flow hedge accounting to hedge its
foreign exchange exposure. The contract information is as follows:
Maturity Date
March 31, 2023
December 31, 2022
March 31, 2022

Subject

2023.4.7-2023.5.30 Financial assets for hedging - current
2023.1.3-2023.1.18 Financial assets for hedging - current
2022.4.26-2022.4.28 Financial assets for hedging - current- 11 -

Carrying Value$ 3,963,415
3,987,730
1,375,358

Impact on comprehensive income (loss)
Recognized in
Other
Comprehensive
Income (Loss)
For the three months ended March 31, 2023
For the three months ended March 31, 2022

$ (24,315)
70,548For the three months ended March 31, 2023 and 2022, the amount of hedging instrument settlements
recognized as prepayments for equipment were $0 and $43,812 thousand, respectively.

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)March 31,2023

December 31,
2022

March 31,2022

$ 120,521$ 119,462$ 142,467

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

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME(FVTOCI)
Investments in Equity Instruments
March 31,2023

December 31,
2022

March 31,2022

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

49,004$81,905

32,11941,12881,123$ 123,033$

36,60935,211$

71,820

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.

- 12 -

9. FINANCIAL ASSETS AT AMORTIZED COST
March 31,2023

December 31,
2022

March 31,2022

$ 9,304,339-$ 6,218,617-$ 9,582,742
561$ 9,304,339$ 6,218,617$ 9,583,303

$

$

$

Current
Time deposits with original maturities of morethan 3 months
Government bonds

Non-current
Time deposits with original maturities of morethan 1 year

204,523

205,765

223,264

The ranges of interest rates for time deposits with original maturities of more than 3 months were0.92%-5.26%, 0.45%-5.05% and 0.21%-1.11% per annum as of March 31, 2023, December 31, 2022 andMarch 31, 2022, respectively.

10. NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE
March 31,2023
Notes receivable$

203,644

December 31,
2022$

72,435

March 31,
2022
$

245

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

10,965,061(261,336)
10,703,725

11,315,652(261,445)
11,054,207

10,797,371(245,196)
10,552,175$ 10,907,369$ 11,126,642$ 10,552,420

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.

- 13 -

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, 2023

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

1.03%

4.36%

46.59%

94.34%

98.36%

Total

Gross carrying amount
Loss allowance (lifetime ECLs)$ 10,707,691(109,970)$

99,796(4,354)$

15,141(7,054)$

3,303(3,116)$

139,130(136,842)$ 10,965,061(261,336)

Amortized cost

$ 10,597,721$

95,442

$

8,087

$

187

$

2,288

$ 10,703,725

Not Past Due

1 to 30 Days
Past Due

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

1.04%

7.66%

11.02%

46.42%

99.29%

December 31, 2022

Expected credit loss rate

Total

Gross carrying amount
Loss allowance (lifetime ECLs)$ 11,076,632(114,644)$

82,406(6,315)$

16,704(1,841)

$

517
(240)

$

139,393(138,405)$ 11,315,652(261,445)

Amortized cost

$ 10,961,988$

76,091$

14,863

$

277

$

988

$ 11,054,207

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%March 31, 2022

Expected credit loss rate

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 -

The movements of the loss allowance of accounts receivables were as follows:
For the Three Months Ended
March 312023
2022
Balance at January 1
Add: Net remeasurement of loss allowance
Add: Amounts recovered
Less: Amounts written off
Foreign exchange gains and losses$ 261,445
(108)
(1)

$ 235,560
9,618
176
(163)
5

Balance at March 31$ 261,336$ 245,196

December 31,
2022

March 31,2022

11. INVENTORIESMarch 31,2023
Aircraft spare parts
Items for in-flight sale
Work in process - maintenance services
Others$9,854,248
642,000
275,853
93,867$ 10,865,968$

9,756,141
625,959
301,368
91,999$7,773,739
648,631
350,980
87,897$ 10,775,467$

8,861,247

The operating costs for the three months ended March 31, 2023 and 2022 included losses from inventory
write-downs of $137,717 thousand and $169,321 thousand, respectively.

12. NON-CURRENT ASSETS HELD FOR SALE
March 31,2023
Aircraft held for sale$-

December 31,
2022
$

-

March 31,2022
$ 64,016

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.

- 15 -

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.
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,
2023
2022
2022

Air transportation
Aircraft maintenance

82
100

82
100

82
100

A holding company, real estate andhotel services
General investment
Cleaning of aircraft and maintenance ofmachine and equipment
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
94

97

97

97

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, 2023 and 2022 was reported according to financial statements that were notreviewed by independent auditors, except for Mandarin Airlines and Tigerair Taiwan Co., Ltd.
The board of directors of Tigerair Taiwan Co., Ltd. resolved to issue 36,000 thousand ordinary shares forcash on February 13, 2023 to strengthen its capital structure. The board of directors of the Company
approved the subscription plan at $25 per share on March 9, 2023. The Company subscribed for 23,993
thousand shares in April 2023. The proportion of ownership of the Group decreased to 81%.
In addition, Tigerair Taiwan Co., Ltd. applied for a listing on the Taiwan Innovation Board of the Taiwan
Stock Exchange on December 21, 2022. The board of directors of the Taiwan Stock Exchange reviewed thelisting application on February 21, 2023. The result of the review was approved, and it will be reported tothe competent authority.
In November 2022, Taiwan Aircraft Maintenance and Engineering Co., Ltd. made up a loss of $140,000
thousand by capital reduction; the proportion of ownership of the Company remained unchanged.
In December 2022, Cal Hotel Co., Ltd. made up a loss of $130,200 thousand by capital reduction; theproportion of ownership of the Company remained unchanged.

- 16 -

14. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates
Investments in joint ventures

March 31,2023

December 31,
2022

March 31,
2022

$

$

$

904,253624,821885,608
567,636

910,664
626,131$ 1,529,074$ 1,453,244$ 1,536,795

March 31,2023

December 31,
2022

March 31,2022

a. Investments in associates
The investments in associates were as follows:

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

526,980
316,775$

518,715309,705$

537,629
315,516

60,49857,18857,519$ 904,253$ 885,608$ 910,664

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,
2023
2022
2022

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

20%
28%
28%

20%
28%
28%

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 31
2023
2022
Dynasty Holidays
Airport Air Cargo Terminal (Xiamen)
Airport Air Cargo Service (Xiamen)
Eastern United International Logistics (Holdings) Ltd. (HongKong)- 17 -

$

5,024
5,125

$

5,213
5,204

2,943

3,324

$ 13,092$ 13,741

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, whichhave not been independently reviewed. However, the management determined that there would havebeen no significant adjustments had these investees’ financial statements been independently reviewed.
China Aircraft Services issued ordinary shares to meet the need for funds in March 2022. The Group
did not participate in the subscription, so its proportion of ownership 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,has been reclassified as financial assets at fair value through other comprehensive income in March
2022.
Dynasty Holidays was classified as an associate accounted for using the equity method. On May 31,
2022, the provisional shareholders’ meeting was held, and the shareholders resolved to dissolve
Dynasty Holidays. However, the liquidation process is in progress in accordance with Japanese
regulations.
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 31,2023

December 31,
2022

March 31,2022

$ 509,397
91,067
16,8237,534$ 448,222
92,68419,1967,534$ 484,066
110,263
23,9277,875$ 624,821$ 567,636$ 626,131

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,
2023
2022
2022
China Pacific Catering Services
China Pacific Laundry Services
NORDAM Asia Ltd.
Delica International Co., Ltd.

51%
55%
49%
51%

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 parties havethe right 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.

- 18 -

The investment gain (loss) recognized for joint ventures accounted for using the equity method was asfollows:
For the Three Months Ended
March 312023
2022
China Pacific Catering Services
China Pacific Laundry Services
NORDAM Asia Ltd.
Delica International Co., Ltd.

$ 61,176(1,617)(2,373)-$ (49,185)(10,613)(4,908)-$ 57,186$ (64,706)

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, 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

Accumulated depreciationand impairment

5,237,084(Continued)- 19 -

Freehold Land

Buildings

FlightEquipment

OthersTotal

Cost
Balance at January 1, 2023
Additions
Disposals
Reclassification
Net exchange differences$

995,869(3,305)$ 16,078,284
17,778(1,122)259(6,112)$ 256,431,520
1,195,253(568,195)
547,875-$ 18,281,257
119,507(167,526)
13,184(679)$ 291,786,930
1,332,538(736,843)
561,318(10,096)

Balance at March 31, 2023$

992,564$ 16,089,087$ 257,606,453$ 18,245,743$ 292,933,847

Balance at January 1, 2023
Depreciation expense
Disposals
Reclassification
Net exchange differences

$

-

$

(8,113,161)(124,416)
1,122
3,555

$ (142,420,987)(3,933,693)
495,722648-$ (13,045,378)(239,525)
167,025582$ (163,579,526)(4,297,634)
663,869
648
4,137

Balance at March 31, 2023

$

-

$

(8,232,900)$ (145,858,310)$ (13,117,296)$ (167,208,506)

Balance at March 31, 2023,
net value$992,564$

7,856,187$ 111,748,143$$ 125,725,341

Accumulated depreciationand impairment

5,128,447(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
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

45-55 years
10-25 years
25 years
3-13 years
3-15 years
5 years
3-5 years
3-5 years
15-25 years
7-13 years
10-20 years
6-8 years
3-7 years
7-12 years
3-15 years
5-12 years

Refer to Note 33 for the carrying amounts of property, plant and equipment pledged by 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.

- 20 -

To replace aging aircraft and revitalize the fleet, the Company’s board of directors resolved the sale of five
747-400F aircraft on May 10, 2023.

16. INVESTMENT PROPERTIES

Carrying amount
Investment properties

March 31,2023

December 31,
2022

March 31,2022

$ 2,071,955$ 2,072,012$ 2,074,464

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 all $2,488,931 thousand as of March
31, 2023, December 31, 2022 and March 31, 2021. The fair value valuations were performed byindependent qualified professional valuers, and the future income evaluated by management was based onmarket transactions.
All of the Group’s investment properties were held under freehold interest.

17. OTHER INTANGIBLE ASSETS
Computer
Software Cost

Others

Accumulated
Amortization

Net Value

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)$

964,007

Balance at January 1, 2023
Additions
Reclassification
Amortization expense
Effects of exchange rate changes$ 1,913,404
8,815(18,731)-$

168,280-$ (1,198,264)
19,490(55,129)(1)$

883,4208,815
759(55,129)(1)

Balance at March 31, 2023

$ 1,903,488$

168,280$ (1,233,904)$

837,864

The above items of other intangible assets are amortized on a straight-line basis over 2-16 years.

- 21 -

18. OTHER ASSETSMarch 31,2023

December 31,
2022

March 31,2022

Current
Temporary payments
Prepayments
Restricted assets
Others$381,122871,192
13,336
318,951$

243,064
991,200
13,336349,312$

178,820374,8119,559
244,916$

1,584,601$

1,596,912$

808,106$ 19,674,930
4,644,653
862,650
740,742
14,816
20,733$ 18,445,099
4,127,308
888,831
689,124
14,797
18,059$9,981,257
1,282,550
975,252
655,340
18,38815,014$ 25,958,524$ 24,183,218$ 12,927,801

Non-current
Prepayments for aircraft
Prepayments - long-term
Refundable deposits
Restricted assets
Other financial assets
OthersThe prepayments for aircraft are comprised of prepaid deposits and capitalized interest from the purchase of
A321neo, A320neo, B777F and B787-9 aircraft. For details of the contract for the purchase of the aircraft,refer to Note 34.

19. BORROWINGSa. Short-term borrowings
March 31,2023

December 31,
2022

March 31,2022

Bank loans - unsecured$ 2,135,000$

835,000$ 1,932,000Interest rates

1.49%-1.81%

1.39%-1.90%

0.90%-1.35%

March 31,2023

December 31,
2022

March 31,2022

b. Short-term bills payable

Commercial paper$ 830,000

Annual discount rates

1.49%-1.80%- 22 -$-$-

c. Long-term borrowings

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

March 31,2023

December 31,
2022

March 31,2022

$ 16,928,052
35,056,385$ 21,730,551
35,978,893$ 26,049,892
36,628,750

20,700,000
49,323
72,635,114
13,000,582

20,670,000
44,87878,334,566
13,225,516

20,740,000
26,251
83,392,391
5,402,924$ 59,634,532$ 65,109,050$ 77,989,467

1.14%-2.08%

0.90%-2.02%

0.83%-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 31,2023

December 31,
2022

March 31,2022

2009.2.42034.10.12

2009.2.42034.10.12

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 Group to guarantee the commercial
paper issued. As of March 31, 2023, December 31, 2022 and March 31, 2022, such commercial papers
were issued at discount rates of 1.8570%-2.0817%, 1.683%-1.9013% and 0.9963%-1.143%,
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, 2023, the Group had madea drawdown in the amount of $34,800 million and repaid $15,920 million of the drawdown.

- 23 -

20. BONDS PAYABLE
March 31,2023
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 seventh-time issued$

Less: Current portion and put option of
convertible bonds$

December 31,
2022

1,000,000$

1,000,000

March 31,2022$

1,000,000--

1,300,000

3,275,000

3,275,000

4,500,000

3,500,000
2,229,401
10,004,401

3,500,000
2,224,674
9,999,674

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

2,350,000

2,350,000

2,525,000

7,649,674$ 10,352,160

Conditions

Rate (%)

7,654,401$

Related issuance conditions were as follows:
Category
Seven-year private unsecured bonds - issued at par in May
2017; repayable on due date; interest of 1.75% 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 April
2021; repayable in lump sum upon maturity; 0.8612%
discount rate p.a.

Period2017.5.19-2024.5.19

Principal repayable on due date;indicator rate; payable annually

1.75

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 April 2026;
0.8612 discount rate p.a.

1.45

2018.11.30-2023.11.30

2018.11.30-2025.11.30

2019.06.21-2024.06.21

2019.06.21-2026.06.21

2021.4.28-2026.4.28

1.32

1.45

1.10

1.32

-

a. 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.

- 24 -

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. Because
the Company distributed cash dividends on July 12, 2022, the conversion price was adjusted to
NT$18.3. As of March 31, 2023, a total face value of NT$2,211,200 thousand of convertible bonds
was converted into 116,379 thousand ordinary shares of the Company.
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 0.8612% per annum on initial recognition.
Proceeds from issuance
Equity component
Liability component at the date of issuanceInterest charged at an effective interest rate
Convertible bonds converted into ordinary shares
Liability component at December 31, 2022
Interest charged at an effective interest rate

$ 4,500,000(188,862)
4,311,138
45,648(2,132,112)
2,224,674
4,727

Liability component at March 31, 2023

$ 2,229,401

b. On March 9, 2023, the board of directors of the Company resolved to issue unsecured corporate bonds.
The unsecured corporate bonds may be issued by installments in 2023 with a limited total face value of$8,000 million. The face value of a bond is $1,000 thousand.

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

Carrying amounts
Land
Buildings
Flight equipment
Other equipment$

March 31,2023

December 31,
2022

5,782,095
3,330,549
47,468,343
14,669$$ 56,595,656

5,747,477
2,801,527
50,452,470
13,933$ 59,015,407

March 31,2022$

5,973,087
2,208,745
47,034,384
5,861$ 55,222,077

For the Three Months Ended
March 312023
2022
Additions to right-of-use assets
Depreciation for right-of-use assets
Land
Buildings
Flight equipment
Other equipment$ 1,095,882$ 2,526,134$$

103,413
182,569
3,188,889
828$ 3,475,699- 25 -

56,23485,6813,040,938
302$ 3,183,155

b. Lease liabilities

Carrying amounts
Current
Non-current

March 31,2023

December 31,
2022

March 31,2022

$ 3,107,154$ 15,370,394$ 3,027,890$ 15,439,535$ 2,639,995$ 13,488,258

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

Land
Buildings
Flight equipment
Other equipment

March 31,2023

December 31,
2022

March 31,2022

0%-1.80%
0%-4.65%
0.68%-3.34%
0%-1.43%

0%-1.80%
0%-4.65%
0.68%-3.34%
0%-1.43%0%-2.00%
0%-2.98%
0.68%-3.34%
0%-1.43%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, 2023

December 31, 2022

March 31, 2022

Subject

Carrying Value

2023.9.13-2034.12.13 Financial liabilities for hedging current
Financial liabilities for hedging non-current
2023.2.7-2034.12.13 Financial liabilities for hedging current
Financial liabilities for hedging non-current
2022.6.11-2034.2.14 Financial liabilities for hedging current
Financial liabilities for hedging non-current$

9,554,562
29,716,985
9,817,440
32,183,170
8,567,537
27,874,799

Influence of comprehensive income (loss)
Recognized in
Other
Comprehensive
Income (Loss)
For the three months ended March 31, 2023
For the three months ended March 31, 2022$

- 26 -

288,521(1,390,319)

Reclassified toIncome$(28,698)
172,265

d. Material leasing activities and terms
China Airlines, Mandarin Airlines and Tigerair Taiwan leased ten 777-300ER planes, nineteen
A330-300 planes, twelve 737-800 planes, ten A320-200 planes, four A320neo planes, ten A321neo
planes, and three ATR72-600 planes for operation, lease periods are 4 to 16 years from February 2007
to December 2034. The rental pricing method is partly a fixed amount of funds, and some of them arefloating 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.
The information of refundable deposits and letter of credit due to rental of planes:

Refundable deposits
Credit guarantees

March 31,2023

December 31,
2022

March 31,
2022

$

$

$

549,947
2,111,975

553,3212,085,941

666,676
1,790,226

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 $912,387 thousand, $909,342
thousand and $900,268 thousand on March 31, 2023, December 31, 2022 and March 31, 2022,
respectively.
Taiwan Air Cargo Terminal Co. and CAA signed a BOT contract with a land lease agreement. For
details, please refer to Note 34.
e. Lease agreement signed but not yet delivered
In October 2019, the Company signed a rental contract for eight A321neo with CALC Lease
Corporation, which is expected to be introduced between 2022 and 2024. As of March 31, 2023, four
A321neo have been delivered.
In February 2020, Tigerair Taiwan Co., Ltd. signed a rental contract for eight A320neo with ICBC
Lease Corporation, which is expected to be delivered between 2021 and 2024. As of March 31, 2023,
four A321neo have been delivered.
The Group also signed related aircraft purchase agreement, please refer to Note 34 for details.
f. Aircraft leases
In order to revitalize assets, the Company signed a lease agreement for two 747-400F with US Cargo
Company in August 2021 and September 2021. The lease commencement date was on July 15 andOctober 10, 2022, respectively.
g. Other lease information
The Group uses operating lease agreement for investment properties, refer to Note 16.
For the Three Months Ended
March 312023
2022
Short-term leases and low-value asset leases
Total cash outflow for leases$
18,158$ (3,918,344)- 27 -$
12,777$ (3,215,686)

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 for suchlease.

22. OTHER PAYABLES
March 31,2023
Fuel costs
Short-term employee benefits
Repair expenses
Terminal surcharges
Ground service expenses
Commission expenses
Interest expenses
Others$3,731,148
2,106,424
1,748,801
1,112,631
958,248
132,704
128,123
2,323,545

December 31,
2022$

4,715,624
4,194,176
1,518,603
901,498
899,401
85,140102,550
2,790,267

March 31,2022$

3,101,781
2,932,049
1,237,284
683,247
807,289
94,223
113,853
2,074,700$ 12,241,624$ 15,207,259$ 11,044,426

March 31,2023

December 31,
2022

March 31,2022

3,410,511
21,341,146
15,459$23. CONTRACT LIABILITIESFrequent flyer program
Advance ticket sales
Others3,185,357
15,505,203-$

2,941,279
1,967,543
9,808$ 24,767,116$ 18,690,560$

4,918,630$ 23,452,466
1,314,650$ 17,409,654
1,280,906$

4,086,926
831,704$ 24,767,116$ 18,690,560$

4,918,630

March 31,2023

December 31,
2022

March 31,2022

Operating leases - aircraft$ 21,872,879$ 20,962,933$ 19,163,480

Current
Non-current

$

$

$

Current
Non-current$

24. PROVISIONS

4,585,889
17,286,990$ 21,872,879- 28 -

3,691,812
17,271,121$ 20,962,933

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

Aircraft Lease
Contracts
Balance at January 1, 2022
Additional provisions recognized
Usage
Effect of foreign currency exchange differences$ 18,654,223
1,376,905(1,309,962)
442,314

Balance at March 31, 2022

$ 19,163,480

Balance at January 1, 2023
Additional provisions recognized
Usage
Effect of foreign currency exchange differences$ 20,962,933
1,401,821(417,836)(74,039)

Balance at March 31, 2023

$ 21,872,879

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, 2022 and 2021.
For the Three Months Ended
March 312023
2022
Operating costs
Operating expenses$ 222,504
88,754$ 228,632
92,760$ 311,258$ 321,392

March 31,2023

December 31,
2022

March 31,2022

7,000,000$ 70,000,000$ 60,135,374

7,000,000$ 70,000,000$ 60,135,374

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

26. EQUITY
a. Share capital
Ordinary shares

Number of shares authorized (in thousands ofshares)Amount of shares authorized
Amount of shares issued- 29 -

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 $0 and $798,700 thousand, respectively, forthe three months ended March 31, 2023 and 2022. The number of ordinary shares exchanged was 0 and
52,318 thousand, respectively, and completed the registration of the change in equity after the issuanceof new shares.
b. Capital surplus
March 31,2023

December 31,
2022

March 31,2022

$ 2,092,431
1,725$ 2,092,431
1,725$ 1,924,792-

929,548929,535

913,590

24,602547

540

96,06096,073112,018$ 3,144,366$ 3,120,311$ 2,950,940

May be used to offset a deficit, distributed
as cash dividends, or transferred to sharecapital (1)Issuance of convertible bonds in excess of parvalue and conversion premium
Dividend distributed to subsidiaries
Expired equity component of convertible
bonds
May only be used to offset a deficit (2)Long-term investments
May not be used for any purpose
Equity component of convertible bonds

1) Such capital surplus may be used to offset a deficit; when the Company has no deficit, such capitalsurplus may be distributed as cash dividends or transferred to share capital (limited to a certain
percentage of the Company’s capital surplus and to once a year).
2) Such capital surplus arises from the effects of changes in ownership interests in subsidiaries
resulting from equity transactions other than actual disposals or acquisitions or from changes incapital surplus of subsidiaries accounted for using the equity method.
c. Appropriation of earnings and dividend policy
Under the Company Act, where the Company makes a profit in a fiscal year, the profit shall be firstutilized for paying taxes, offsetting losses of previous years, setting aside as 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, which is to
distribute dividends and bonus no less than 50% of the remaining profit and undistributed retained
earnings. The dividends and bonuses 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. If surplus earnings are
distributed in the form of new shares, the distribution of shares shall be resolved in the shareholders’meeting; if such earnings are distributed in the form of cash, the cash distribution shall be authorized
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, a report of such distribution shall be
submitted to the shareholders’ meeting. If the Company has no losses, according to laws andregulations, the Company can distribute its capital reserve, in whole or in part, by issuing new shares orcash based on financial, business and management considerations. If such capital reserve is distributed- 30 -

in the form of new shares, it shall be resolved by a meeting of the shareholders; if such capital reserve isdistributed in the form of cash, it shall be authorized 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.
The distribution of dividends should be resolved and recognized in the shareholders’ meeting in thecurrent year.
1) Appropriation of earnings in 2021
The appropriation of earnings in 2021 which was proposed and recognized in the shareholders’meeting on May 26, 2022 is as follows:

Legal reserve
Cash dividends

Appropriationof Earnings

Dividends Per
Share (NT$)$$0.83145736

925,385
5,000,000

2) Appropriation of earnings in 2022
The appropriation of earnings in 2022, which was proposed by the Company’s board of directors on
March 9, 2023, is as follows:
Appropriationof Earnings
Legal reserve
Special reserve
Cash dividends$

305,592
534,375
2,772,207

Dividends Per
Share (NT$)$0.46099444

The appropriation of earnings in 2022 is subject to the resolution of the shareholders in their
meeting on May 31, 2023.
d. Other equity items
The movement of other equity items is as follows:
Exchange
Differences on theTranslation of the
Financial
Statements ofForeign
Operations
Balance at 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 FVTOCI

Gain (Loss) on
Hedging
Instruments

Total(5,512)$ 2,839,419$ 2,713,828

65,861--

65,861--(980,015)(980,015)--(214,794)$ (120,079)$(214,794)(Continued)- 31 -

Exchange
Differences on theTranslation of the
Financial
Statements ofForeign
Operations
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
Balance at March 31, 2022$$

(11,983)$

Balance at March 31, 2023

$

$

3,534
574

Gain (Loss) on
Hedging
Instruments$

238,961

Total

$

3,534
227,552

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

35,05035,050(1,404)$ 1,918,621$ 1,851,016

Unrealized Gain
(Loss) on
Financial Assets
at FVTOCI

Gain (Loss) on
Hedging
Instruments

Total

40,918$ (570,995)$ (534,375)(3,446)--(3,446)--228,674

228,674--

42,14342,143903(42,127)
6,624(57,755)(42,127)(50,228)(2,543)(35,503)

213,062

175,016--

37,39237,3925,415$ (320,541)$ (321,967)(66,201)

Exchange
Differences on theTranslation of the
Financial
Statements ofForeign
Operations
Balance at January 1, 2023
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

Unrealized Gain
(Loss) on
Financial Assets
at FVTOCI(4,298)(6,841)$$$e. Non-controlling interests
For the Three Months Ended
March 312023
2022
Beginning balance
Net profit (loss) attributable to non-controlling interests
Exchange differences on translation of the financial statements offoreign operations
Cumulative gain (loss) on changes in fair value of hedging
instruments- 32 -$ 2,453,241
90,630$ 3,161,445(261,577)

1,139

6,341

(10)

1,224
(Continued)

For the Three Months Ended
March 31
2023
2022
Cumulative gain (loss) arising on changes in fair value ofhedging instruments
Reclassified to profit or loss
Effects of income tax
Outstanding share options held by employees of subsidiaries
Ending balance

$

88
(16)
1,201
5,227

$ 2,550,299

$

(245)
7,320
-

$ 2,907,188(Concluded)

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

Period of Treasury Shares

Number of
Shares,Beginning ofYear

For the three months ended March 31, 2023
For the three months ended March 31, 2022

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$ 40,455$ 40,455

2,075$ 39,418$ 39,418

2,075$ 55,289$ 55,289

March 31, 2023
Mandarin Airlines
December 31, 2022
Mandarin Airlines
March 31, 2022
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.

- 33 -

27. NET INCOME
a. Revenue
For the Three Months Ended
March 31
2023
2022
Passenger
Cargo
Others$ 24,549,091
15,704,004
2,438,813$

2,185,039
32,779,543
2,268,701$ 42,691,908$ 37,233,283

b. Other income
For the Three Months Ended
March 312023
2022
Interest income
Others$ 359,319
143,049$

36,197
242,606$ 502,368$ 278,803

c. Other gains and losses
For the Three Months Ended
March 312023
2022
Gain on disposal of property, plant and equipment
Gain on financial assets mandatorily classified as at FVTPL
Net foreign exchange gains
Others

$

9,911
339
89,149(68,329)

$

2,715
686
275,940(15,199)$

31,070$ 264,142

d. Finance costs
For the Three Months Ended
March 312023
2022
Interest expense
Bonds payable
Bank loans
Interest on lease liabilities
Loss arising from derivatives designated as hedging
instruments in cash flow hedge accounting relationships
reclassified from equity to profit or loss$

30,530277,180
392,575378$ 700,663- 34 -$

41,367
190,533
333,757$ 565,657(Continued)

For the Three Months Ended
March 312023
2022
Capitalization interest$

79,490Capitalization rate

1.64%-1.71%$

16,717

0.63%-0.70%(Concluded)e. Depreciation and amortization expense
For the Three Months Ended
March 312023
2022
Property, plant, equipment
Right-of-use assets
Investment properties
Intangible assets$ 4,297,634
3,475,699
57
55,129$ 4,167,342
3,183,155
66
56,622

Depreciation and amortization expense$ 7,828,519$ 7,407,185

An analysis of depreciation by function
Operating costs
Operating expenses$ 7,375,118
398,272$ 7,080,678
269,885$ 7,773,390$ 7,350,563

$

1,255
53,874$

1,298
55,324$

55,129$56,622An analysis of amortization by function
Operating costs
Operating expenses

f. Employee benefits expense
For the Three Months Ended
March 31
2023
2022
Post-employment benefits
Defined contribution plan
Defined benefit plan

Other employee benefits
Salary expenses
Personnel service expenses- 35 -$

132,742
311,258$

128,528
321,392$

444,000$

449,920$ 5,180,501
1,824,895$ 5,944,428
1,400,103$ 7,005,396$ 7,344,531(Continued)

For the Three Months Ended
March 312023
2022
An analysis of employee benefits expense by function
Operating costs
Operating expenses$ 5,895,492
1,553,904$ 6,506,322
1,288,129$ 7,449,396$ 7,794,451(Concluded)

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, 2023 and 2022, the estimated amount of compensation of
employees were $47,122 thousand and $124,243 thousand, respectively.
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
2023
2022
Current tax
Current year
Adjustments for prior periods
Deferred tax
Current year$

Income tax expense recognized in profit or loss

- 36 -$

47,593-$ 1,219,661(16,973)284,735(461,067)

332,328$

741,621

b. Income tax recognized in other comprehensive income
For the Three Months Ended
March 31
2023
2022
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

$

903
6,624

$ (11,983)
574(57,771)

238,716$ (50,244)$ 227,307

c. Income tax assessment
The income tax returns of the Company through 2020 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.

29. EARNINGS PER SHARE
For the Three Months Ended
March 312023
2022
Basic earnings per share
Diluted earnings per share

$
$

0.22
0.21

$
$

0.52
0.50

Earnings used in the computation of basic earnings per share
Effect of potentially dilutive ordinary shares:
Interest on convertible bonds (after tax)

$ 1,305,854$ 3,072,308

4,724

6,529

Earnings used in the computation of diluted earnings per share$ 1,310,578$ 3,078,837

6,011,463

5,965,183

6,765
125,071

16,118
166,755

6,143,299

6,148,056

In thousands of shares
Weighted average number of ordinary shares in computation of basic
earnings 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 per share- 37 -

The Group may settle compensation or bonuses paid to employees in cash or shares; therefore, the Groupassumes that the entire amount of the compensation or bonuses will be settled in shares and the resulting
potential shares will be 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, 2022.

31. FINANCIAL INSTRUMENTS
a. Fair values of financial instruments not measured 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, 2023
Carrying
AmountFair Value

December 31, 2022
Carrying
AmountFair Value

March 31, 2022
Carrying
AmountFair Value

Financial liabilities
Bonds payable$ 10,004,401$ 10,292,958$

9,999,674$ 10,313,545$ 12,877,160$ 14,100,109

Lease liabilities and long-term borrowings are floating-rate financial liabilities, so their carrying
amounts are their fair values. Fair values of bonds 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); and- 38 -

3) 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, 2023
Level 1
Financial assets at FVTPL
Domestic money market
funds
Financial assets at FVTOCI
Investments in equity
instruments
Unlisted shares domestic
Unlisted shares foreign

Level 2

Level 3

Total$

120,521

$

-

$

-

$

120,521

$

-

$

-

$

32,119$32,119--49,00449,004

$

-

$

-

$

81,123$

81,123Financial assets for hedging$

3,963,415

$

6,816

$

24,556$

3,994,787

Financial liabilities forhedging$ 39,271,547$

73,215$

41,793$ 39,386,555

December 31, 2022
Level 1
Financial assets at FVTPL
Domestic money market
funds
Financial assets at FVTOCI
Investments in equity
instruments
Unlisted shares domestic
Unlisted shares foreign

Level 2

Level 3

Total$

119,462

$

-

$

-

$

119,462

$

-

$

-

$

41,128$41,128--81,905

81,905

$

-

$

-

$

123,033$

123,033

Financial assets for hedging$

3,987,730

$

4,935

$

38,997$

4,031,662

Financial liabilities forhedging$ 42,000,610$

117,693$

55,758$ 42,174,061- 39 -

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

There were no transfers between Levels 1 and 2 in the current period.
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 currency options and fuel options and swap 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 currency
options and fuel options and swap.
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.

- 40 -

The multiplier and liquidity discount of financial instruments based on Level 3 fair value
measurement were as follows:

March 31, 2023
December 31, 2022
March 31, 2022

Multiplier

Liquidity
Discount

0.74-14.31
0.39-12.39
0.74-14.31

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, 2023
Recognized in other comprehensive income$ (16,761)(2,278)$ 123,033(41,910)

Balance at March 31, 2023

$ (19,039)$

81,123

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$

71,820Because 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.
c. Categories of financial instruments
March 31,2023

December 31,
2022

120,5213,994,787
58,295,299$

March 31,2022

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

119,462
4,031,662
55,105,434$

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

81,123123,033

71,82039,386,555
142,144,628

42,174,061
147,815,221

36,457,509
146,249,385

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.

- 41 -

Note 2: The balances include financial liabilities measured at amortized cost, which compriseshort-term borrowings, short-term bills payable, notes and accounts payable, accounts payable- related parties, other payables, bonds payable, long-term borrowings, lease liabilities,
provisions, part of other current liabilities, part of other non-current liabilities and guarantee
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 rate 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.
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 increased by one dollar against U.S. dollars and all other variables
were held constant, there would be a decrease in pre-tax profit of $218,495 thousand and anincrease in pre-tax other comprehensive income of $1,056,478 thousand, for the three months
ended March 31, 2023, and a decrease in pre-tax profit of $68,564 thousand and an increase in
pre-tax other comprehensive income of $1,214,782 thousand, for the three months ended March
31, 2022.

- 42 -

The Group’s hedging strategy is to enter into foreign exchange forward contracts and foreign
currency option contracts to avoid exchange rate exposure of its foreign currency denominatedreceipts and payments and to manage exchange rate exposure of its aircraft prepayments in thenext 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 currency options contracts and foreignexchange forward contracts and their corresponding hedged items are the same, the Group
performs a qualitative assessment of the effectiveness, and it is expected that the value of theforeign currency option contracts, foreign exchange forward contracts and the value of thecorresponding 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 hedging of foreign currency risk.
Please refer to Note 21 for aircraft rental contract for hedging.
March 31, 2023
Hedging Instruments
Cash flow hedge
Aircraft rentals forward exchange
contracts
Aircraft prepayments forward exchange
contracts

Notional
AmountMaturity

Forward Rate

NTD/USD

NTD141,114/
USD4,629

2023.4.102023.9.27

29.631-30.702

NTD/USD

NTD2,957,317/
USD97,000

2023.4.282024.3.29

29.292-31.748

Currency

Line Item in
Balance Sheet

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

Carrying AmountAsset
Liability

$

239

$

6,577

-

68,456

The abovementioned hedging instruments applied hedge accounting. The book value of other
equity for each hedging item (aircraft rentals and aircraft prepayments in U.S. dollars) was$(61,640) thousand.
December 31, 2022
Hedging Instruments
Cash flow hedge
Aircraft rentals forward exchange
contracts
Aircraft prepayments forward exchange
contracts

Notional
AmountMaturity

Forward Rate

NTD/USD

NTD138,344/
USD4,510

2023.1.182023.8.25

29.979-30.702

NTD/USD

NTD3,312,883/
USD 108,000

2023.1.192023.6.30

29.5-31.9

Currency

Line Item in
Balance Sheet

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

Carrying AmountAsset
Liability

$

-

$

4,935

198

110,563

The abovementioned hedging instruments applied hedge accounting. The book value of other
equity for each hedging item (aircraft rentals and aircraft prepayments in U.S. dollars) was$(105,826) thousand.
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 -

For the three months ended March 31, 2023
Hedging Gains(Losses)
Recognized in
Other
Comprehensive
IncomeComprehensive Income
Cash flow hedge
Aircraft rentals
Aircraft prepayments

Note:

AmountReclassified toProfit and Lossand theAdjusted Line
Item

$

437
6,357

$

(410)
-

$

6,794

$

(410)

(Note)

Decrease in operating costs or exchange loss.

For the three months ended March 31, 2023, the amounts of hedging instrument settlements
recognized as aircraft prepayments were $(37,392) 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.

b) Interest rate risk
The Group enters into interest rate swap contracts to hedge against the risks on changes ininterest rates of long-term borrowings. The Group was exposed to interest rate risk because
entities in the Group borrowed funds at both fixed and floating interest rates. The risk ismanaged by the Group by maintaining an appropriate mix of fixed and floating rate borrowings,
and using interest rate swap contracts.
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 31,2023

December 31,
2022

March 31,2022

$ 56,599,301
86,754,308$ 59,825,679
89,811,596$ 56,678,987
94,093,154- 44 -

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, 2023 would havedecreased by $54,221 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, 2022 would havedecreased by $58,808 thousand.
The following tables summarize the information relating to the hedges for interest rate risk.
March 31, 2023
Hedging Instrument
Cash flow hedge Interest expense on
long-term
borrowings - interest
rate swaps

Currency

NTD

Notional
Amount

NTD900,000

Maturity2027.4.1
2027.5.24

Forward Rate

1.39-1.58

Line Item in
Balance Sheet

Carrying AmountAsset
Liability

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

$

-

$

4,759

The abovementioned hedging instruments applied hedge accounting. The book value of other
equity for each hedging item (interest expense on long-term borrowings) was $(4,759)
thousand.
December 31, 2022
Hedging Instrument
Cash flow hedge Interest expense on
long-term
borrowings - interest
rate swaps

Currency

NTD

Notional
Amount

NTD900,000

Maturity2027.4.1
2027.5.24

Forward Rate

1.39-1.58

Line Item in
Balance Sheet

Carrying AmountAsset
Liability

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

$

-

$

6,932

The abovementioned hedging instruments applied hedge accounting. The book value of other
equity for each hedging item (interest expense on long-term borrowings) was $(6,932)
thousand.
For the three months ended March 31, 2023
Hedging Gain
(Loss)
Recognized in
Other
Comprehensive
IncomeComprehensive Income
Cash flow hedge
Interest expense on long-term borrowings
Note:

Increase in finance costs or other losses.
- 45 -$

2,173

AmountReclassified toProfit and Lossand theAdjusted Line
Item

$

(378)

(Note)c) Other price risk
The Group was exposed to fuel price risk on its purchase of aviation fuel. The Group enters into
fuel options contracts and swap contracts to hedge against adverse risks on fuel price changes.
March 31, 2023
Hedging Instrument
Cash flow hedges aviation fuel - fueloptions

Cash flow hedges aviation fuel - swap

Notional
AmountCurrency

Maturity

Forward RateLine Item in
Balance Sheet

Carrying AmountAsset
Liability

USD

NTD18,6142023.6.302024.3.31

USD60-USD139

Financial assets forhedging - current/
liabilities for hedging current

USD

NTD4252023.12.31

USD78

Financial assets forhedging - current/
liabilities for hedging current$

24,556$-41,368425

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$(19,039) thousand.
December 31, 2022
Hedging Instrument
Cash flow hedges aviation fuel - fueloptions

Cash flow hedges aviation fuel - swap

Notional
AmountCurrency

Maturity

Forward RateLine Item in
Balance Sheet

Carrying AmountAsset
Liability

USD

NTD7,094

2023.3.312023.12.31

USD60-USD148

Financial assets forhedging - current/
liabilities for hedging current

USD

NTD9,667

2023.3.31

USD96

Financial assets forhedging - current/
liabilities for hedging current$

38,997$-46,091

9,667

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$(16,761) thousand.
March 31, 2022
Hedging Instrument
Cash flow hedges fuel options

Notional
AmountCurrency
USD

NTD125,457

Maturity

Forward Rate

2022.6.302023.12.31

USD60-USD177

Line Item in
Balance Sheet

Carrying AmountAsset
Liability

Financial assets forhedging - current/
liabilities for hedging current$ 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.
For the three months ended March 31, 2023

Comprehensive Income
Cash flow hedges - aviation fuel- 46 -

Hedging Gain
(Loss)
Recognized in
Other
Comprehensive
IncomeAmountReclassified toProfit and Lossand theAdjusted LineItem

$ (2,278)$ (12,745)(Note)

Note:

Increase in operating costs.

For the three months ended March 31, 2022
Hedging Gain
(Loss)
Recognized in
Other
Comprehensive
IncomeComprehensive Income
Cash flow hedges - aviation fuelNote:

$ 119,334

AmountReclassified toProfit and Lossand theAdjusted Line
Item$

42,529(Note)

Increase in operating costs.

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
2023
2022
Other
Other
CompreComprehensive
hensive
Pre-tax Profit
IncomePre-tax Profit
IncomeIncrease
Increase
Increase
Increase(Decrease)(Decrease)(Decrease)(Decrease)
Fuel price increase of5%
Fuel price decrease of
5%

$

1,208
(1,208)$952$ 12,585(952)(12,585)$

6,273(6,273)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, 2022. 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.)

- 47 -$ 25,583,508

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 are 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.
March 31, 2023
The Weighted
Average
Effective
Interest Rate(%)
Lease liabilities
Floating interest rate
liabilities
Hedging instruments
Bonds payable

2.5895Less than
1 Year
$1.74772.84911.04603,309,761

1 to 5 Years

Over 5 Years$$

8,391,365

8,365,775

17,297,034
13,609,792
2,454,645

50,236,983
34,460,587
7,734,465

10,663,652
11,615,159-$ 36,671,232$ 100,823,400$ 30,644,586

Less than
1 Year1 to 5 Years

Over 5 Years$$

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

2.5047$

1.57942.83901.04654,001,479

9,815,619

7,695,130

15,275,398
11,026,182
2,454,645

53,591,807
27,455,159
7,729,726

12,743,750
7,480,222-$ 32,757,704$ 98,592,311$ 27,919,102- 48 -

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

Less than
1 Year2.4115

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$

1.04562.89831.0846

9,485,120

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

Related Party Type
Major shareholder of the Company
Joint venture- 49 -For the Three Months Ended
March 31
2023
2022
$
$

2,946
17,175

$
$

2,233
5,862

c. Purchases
For the Three Months Ended
March 312023
2022

Related Party Type
Major shareholders of the Company
Associate
Joint venture$
6,253$ 80,322$ 498,194$
4,698$ 105,952$ 69,070

December 31,
2022

March 31,2022

d. Accounts receivable - related parties (generated by operations)
March 31,2023

Related Party Type
Major shareholders of the Company
Joint venture

$

1,668
4,563

$

3,804
1,045

$

856
2,081

$

6,231

$

4,849

$

2,937

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 31,2023

Related Party Type
Major shareholders of the Company
Associate
Joint venture

$

3,279
32,766464,272$ 500,317

December 31,
2022$

39,491
275,898
2,421

March 31,2022$

$ 317,810

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

The remaining balance of accounts payable - related parties will be paid in cash if they are not secured.
f. Lease arrangements
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, 2023 and 2022, the Company paid rentals of $6,253
thousand and $4,698 thousand, respectively.
g. Endorsements and guarantees
March 31, 2023
Authorized
ActualAmountAmount Used

December 31, 2022
Authorized
ActualAmountAmount Used

March 31, 2022
Authorized
ActualAmountAmount Used

$ 3,850,000
2,850,976$ 1,334,640
284,457$ 3,850,000
2,868,466$ 1,444,200
286,202$ 3,850,000
2,679,427$ 1,553,760
267,3412,000,000

1,517,000

2,000,000

1,517,000

2,000,000

1,565,000

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

- 50 -

h. Remuneration of key management personnel
For the Three Months Ended
March 312023
2022
Short-term employee benefits
Post-employment benefits$

22,250800$

23,596
13,062$

23,050$36,658The remuneration of directors and key executives, as determined by the remuneration committee, isbased on the performance of individuals and market trends.

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

Property, plant and equipment
Restricted assets

March 31,2023

December 31,
2022

March 31,2022

$ 33,439,518
754,078$ 36,711,923
765,059$ 31,229,703
664,899$ 34,193,596$ 37,476,982$ 31,894,602

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, 2023 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.

- 51 -

However, TACT filed an arbitration in 2012 to revise the total amount of expenditure to $6,840,000
thousand. As of March 31, 2023, TACT had signed the following construction contracts with unrelatedparties:

Client NameContract Title

Contract
Amount(VAT Included)

HTS CONSTRUCTION
CO., LTD.

Project A of the renovation and expansion project of
Taoyuan Air Cargo Terminal for the plan tocontinue to operate - the waterproof landsideterminal walkway construction project$ 11,200INBRIDGE
CONSTRUCTION CO.,LTD.

Project A of the renovation and expansion project of
Taoyuan Air Cargo Terminal for the plan tocontinue to operate - steel structure rust removal
and painting of three-dimensional parking lot,mechanical and electrical pipeline renewal andexterior wall painting project

77,770

As of March 31, 2023, the accumulated payments of construction in process for construction equipment
were $4,799 thousand (VAT included). The amounts were recognized as construction in progress.
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% for lessthan $2 billion and 8% for $2 billion to $4 billion.
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.

- 52 -

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,
2023, the list price had been paid in the amount of US$60,694 thousand (recognized as prepayments foraircraft). In October 2019, the Company signed a contract with International Aero Engines Company topurchase four backup engines of A321neo. The total list price of the four engines is US$60,289
thousand. As of March 31, 2023, two out of the four backup engines have been delivered. The Groupalso 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. In January 2022, the Company signed
an additional contract with Boeing Company to purchase another four 777F aircraft. The expected
delivery periods are from 2023 to 2024. The total list price of the ten aircraft is US$3,905,142 thousand.
As of March 31, 2023, five out of ten aircraft have been delivered. The total list price of the remaining
five aircraft is US$2,019,932 thousand, and the list price has been paid in the amount of US$402,320
thousand (recognized as prepayments for aircraft).
e. On September 28, 2022, the Company signed a contract with the Boeing Company to purchase sixteen
787-9 aircraft and the option to purchase eight 787-9 aircraft. The total list price of the sixteen aircraft is
US$5,868,695 thousand, and the list price of the option to purchase eight aircraft is US$3,039,894
thousand. The sixteen aircraft’s expected delivery periods are from 2025 to 2027. As of March 31,
2023, the list price has been paid in the amount of US$137,678 thousand (recognized as prepayments
for aircraft). On May 10, 2023, the Company’s board of directors resolved to exercise the option topurchase eight aircraft. The expected delivery periods are from 2026 to 2028. As of March 31, 2023, thelist price has been paid in the amount of US$18,240 thousand (recognized as prepayments for aircraft).
f. 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,
2023, 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, 2023, one out of the two backup engines has beendelivered, and the other was expected to be delivered in 2025. The Group also signed related aircraft
lease agreement, please refer to Note 21.
g. On March 27, 2023, the board of directors of Mandarin Airlines approved to sign a contract with
AVIONS DE TRANSPORT REGIONAL G.I.E to purchase three ATR-600 aircraft. The total amountof the contract is not more than US$69,000 thousand.

- 53 -

35. IMPACT OF COVID-19
For the three months ended March 31, 2022, because of the COVID-19 pandemic, the Group received
subsidies of $402,567 thousand, for airport landing fees and parking fees, etc. The subsidies for housing
and land rental, and salary and interest expense was $276,314 thousand. These subsidies were recognized asother income or deduction from other expenses. The Group has not received such subsidies since 2023.
The Group has obtained a relief loan from the government. Refer to Note 19 for details on the amount ofloan 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:
March 31, 2023
Foreign
Currency(In Thousands)

Exchange Rate

Carrying
Amount1,306,875
40,434
245,653
5,831,344
421,989

30.4878
33.2226
3.87900.22914.4405$ 39,843,757
1,343,333
952,883
1,336,147
1,873,840

2,246,487
8,720
56,2164,490,232
113,26130.4878
33.2226
3.87900.22914.440568,490,457
289,705
218,062
1,028,855
502,935

Financial assets
Monetary items
USD
EUR
HKD
JPY
RMB

$

Financial liabilities
Monetary items
USD
EUR
HKD
JPY
RMB

- 54 -

December 31, 2022
Foreign
Currency(In Thousands)

Exchange Rate

Carrying
Amount1,130,182
35,074
310,589
6,179,784
572,690

30.6748
32.7869
3.93860.23174.4131$ 34,668,125
1,149,979
1,223,286
1,431,856
2,527,337

2,255,888
6,849
48,341
3,309,634
112,93930.6748
32.7869
3.93860.23174.4131

69,198,932
224,557
190,397
766,842
498,411

Exchange Rate

Carrying
Amount987,534
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

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

Financial assets
Monetary items
USD
EUR
HKD
JPY
RMB

$

Financial liabilities
Monetary items
USD
EUR
HKD
JPY
RMB
March 31, 2022
Foreign
Currency(In Thousands)
Financial assets
Monetary items
USD
EUR
HKD
JPY
RMB

$

Financial liabilities
Monetary items
USD
EUR
HKD
JPY
RMB

For the three months ended March 31, 2023 and 2022, the Group’s net foreign exchange gains were$89,149 thousand and $275,940 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.

- 55 -

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)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.

- 56 -

For the three months ended March 31, 2023 and 2022, financial information of reportable segments is listed
below:For the Three Months Ended March 31, 2023
Air
Adjustments
Transportation
Othersand Elimination
Operating revenue$ 41,825,634$

2,225,713$(1,359,439)

Operation profit and loss
Interest revenue
Investment income (loss) accounted forusing the equity method
Revenue
Financial costs
Expenses$$

64,000$(16,997)

1,778,756$ 42,691,908$$$ 175,901,444$ 14,314,030$(5,822,522)

1,728,812$ 184,392,952
1,529,074
108,382,509

Total assets$ 294,304,535

For the Three Months Ended March 31, 2022
Air
Adjustments
Transportation
Othersand Elimination
Operating revenue$ 36,188,614$

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

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

3,843,400

Total$ 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
Assets1,825,759
359,319
70,278242,448(700,663)(68,329)

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- 57 -TABLE 1

CHINA AIRLINES, LTD. AND SUBSIDIARIESFINANCING PROVIDED TO OTHERSFOR THE THREE MONTHS ENDED MARCH 31, 2023
(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

$ 106,707$ 106,707$ 106,707

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$ 156,070$ 312,140

NoteTABLE 2

CHINA AIRLINES, LTD. AND SUBSIDIARIESENDORSEMENTS/GUARANTEES PROVIDEDFOR THE THREE MONTHS ENDED MARCH 31, 2023
(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 (%)$ 14,308,503
14,308,503$ 3,850,000
2,850,976$ 3,850,000
2,850,976$ 1,334,640
284,457

14,308,503

2,000,000

2,000,000

1,517,000$

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 -

-

5.38
3.99

$ 35,771,259
35,771,259

Yes
Yes

No
No

No
No

-

2.80

35,771,259

Yes

No

No

TABLE 3

CHINA AIRLINES, LTD. AND SUBSIDIARIES
MARKETABLE SECURITIES HELDMARCH 31, 2023
(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
The Grand Hi Lai Hotel
Mandarin Airlines

Cal-Asia Investment

Sabre Travel Network (Taiwan)

Taiwan Airport Services

Kaohsiung Catering Services

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

Relationshipwith theHoldingCompany-

Financial Statement AccountMarch 31, 2023
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

16,724
1,672
1,100,000
28,400,000
1,072

Parent company Financial assets at FVTOCI - non-current$

23,3152,331
32,119
-

13.59
11.00
4.00
-

2,074,628

40,45525,64632,119-Note 1--40,455--23,3582.59
5.45

23,358Note 2
Note 2-

18,077---50,96351,481--

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

Beneficiary certificates
FSITC Money Market Fund-

Financial assets at FVTPL - current

99,582

18,077

SharesTransAsia Airways-

Financial assets at FVTPL - current

2,277,786-

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

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

3,163,289
3,728,020

50,96351,482

Note 1: The subsidiary’s net asset value was $25,646 thousand, which included ordinary shares and preference shares as of March 31, 2023.
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

-

$

Note

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, 2023
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)Transaction Details
Company Name

China Airlines, Ltd.
(“China Airlines”)

Related Party

Mandarin Airlines
China Pacific Catering Services
Taiwan Air Cargo Terminal
Taoyuan International Airport Service

Nature of Relationship

Subsidiary
Equity-method investee
Subsidiary
Subsidiary

Purchase/
Sale

Amount

% of
Total

Sale
Purchase
Purchase
Purchase$ (271,539)
424,734
121,698
253,684(0.72)
1.25
0.36
0.75

- 61 -

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

Abnormal Transaction
Payment Terms
2 months
90 days
30 days
40 days

Unit Price$--$ 183,892(420,991)( 41,491)(217,714)

1.69(21.56)(2.13)(11.15)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, 2023
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Overdue
Company Name

Related Party

Nature of RelationshipEnding Balance

Turnover Rate

China Pacific Catering Services

China Airlines

Parent company$ 420,991

5.03

Taoyuan International Airport Service

China Airlines

Parent company

217,714

4.76- 62 -

Amount$Action Taken

Amounts Received
in Subsequent
Period--$ 143,727--

123,214

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, 2023
(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 andsoftwareTaiwan 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, 2023
2022

Number of
Shares

As of March 31, 2023
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

151,546,405
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
100.0093.93

12,289383,846
465,000
137,500

12,289383,846
465,000
137,500

20,626,644
21,494,637
33,480,000
13,750,000

77,27077,270JPY

Air transportation and maintenance of aircraft
Airport services

$

Note

16,764 Note 4(1,063) Notes 1 and 4
51,622 Note 4
15,918 Notes 2 and 4

509,397
403,458
592,701
194,324

119,952(42,997)
7,744
8,931

61,176(21,068)
7,744
8,389

47.35
53.67
100.0055.00

93,714357,492
302,527
91,067(21,281)
16,449(2,406)(2,940)(10,077)
8,004 Note 5(2,422) Note 4(1,617)-

77,270100.00151,817

7,301

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

160
250,000
313,631,656
56,000,000

20.00
25.00
78.41
100.008,553
1,085,058
432,7211,188
428,630(18,600)

297
336,078 Note 4(18,600)-

37,97537,975

3,797,500

49.00

16,823(4,843)(2,373)-

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

3.86
1.08

53,392
2,132

428,630(21,281)

16,538
(229)

-

JPY

1,745,217
1,196,801
1,842,543
1,367,414

Share of Profit(Loss)

7,184 $
(1,092)
95,646
16,2188,000
2,500
5,640,197
1,350,000$

Net Income(Loss) of theInvestee

7,294 Notes 1 and 4

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

60,49819,646

2,943

Taiwan Airport Services

Taiwan Airport Service (Samoa)

Samoa

Airport services and investment

US$

5,877

US$

5,877

-

100.00448,151

15,677

4,949 Note 3

Kaohsiung Catering Services

Delica International Co., Ltd.

Kaohsiung, Taiwan

Catering business

10,2001,020,000

51.00

7,534

-

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.

10,200- 63 ----TABLE 7

CHINA AIRLINES, LTD. AND SUBSIDIARIESINFORMATION ON INVESTMENTS IN MAINLAND CHINAFOR THE THREE MONTHS ENDED MARCH 31, 2023
(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,
2023

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

Forwarding and storage $ 1,130,018
of air cargo(RMB 254,480)

Indirect(Note 1)

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

Forwarding and storage
62,167of air cargo(RMB 14,000)

Indirect(Note 1)

Taikoo (Xiamen) Landing
Gear Services

Landing gear
2,533,232
maintenance services (US$ 83,090)

Indirect(Note 1)

Taikoo Spirit Aerospace
Systems (Jinjang)Composite material

Indirect(Note 1)

355,579(US$ 11,663)

Remittance of Funds

Outward$127,621 $(US$4,186)

Accumulated
Outward
Remittance forInvestment
from Taiwan asof March 31,
2023

Inward--(US$59,373
1,947)

65,5852,151)

-

(US$

-

(US$

19,390636)$

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

$271,970(US$8,920)$659,839(Note 3)

$44,455,690(Note 4)

Investment
Gain (Loss)$
127,621 $17,645(US$
4,186) (RMB 3,989)

14.00

-

14.00

(US$

59,373
18,967
1,947) (RMB 4,288)

65,5852,151)

-

2.59

-

(US$

-

5.45

-

(US$

19,390636)-

Investment Amount
Authorized by the Investment
Commission, MOEA

Accumulated
Carrying
Repatriation ofAmountInvestment
as ofIncome as ofMarch 31, 2023
March 31, 2023--

Accumulated Outward Remittance forInvestment in Mainland China as ofMarch 31, 2023

% Ownershipof Direct orIndirect
Investment

Net Income(Loss) of
the Investee

$
(RMB

(RMB

2,512 $
250,820 $107,822559) (RMB 56,485) (US$3,537)(Note 2)
2,563
145,649600) (RMB 32,800) (US$-47,577
1,561)(Note 2)-

23,358(RMB 5,260) (US$10,869357)(Continued)- 64 -

Taiwan Airport Services

Investee Company

Accumulated
Outward
Remittance forMain Businesses andMethod ofPaid-in Capital
Investment
Products
Investment
from Taiwan asof January 1,
2023

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

Forwarding and storage $ 1,130,018
of air cargo(RMB 254,480)

Indirect(Note 5)$
122,511 $(US$4,018)

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

Forwarding and storage
62,167of air cargo(RMB 14,000)

Indirect(Note 5)

(US$

Remittance of Funds

Outward

Inward-58,742
1,927)

Accumulated
Outward
Remittance forInvestment
from Taiwan asof March 31,
2023

$

-

-

$
122,511 $17,645(US$
4,018) (RMB 3,989)

14.00

58,742
18,967
1,927) (RMB 4,288)

14.00

(US$

Accumulated Outward
Remittance for Investment in
Mainland China as of March 31, 2023

Investment Amounts Authorized by
Investment Commission, MOEA

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

$181,253(US$5,945)$181,253(US$5,945)$118,750(Note 4)Net Income(Loss) of theInvestee% Ownershipof Direct orIndirect
Investment

Investment
Gain (Loss)

Accumulated
Carrying
Repatriation ofAmount as ofInvestment
March 31, 2023 Income as ofMarch 31, 2023$
(RMB

2,512 $
276,160 $
138,450559) (RMB 62,191) (US$4,541)(RMB

2,563
171,126600) (RMB 38,537) (US$63,7752,092)

Note 1: The Company invested in CAL-Asia Investment, which invested in a company located in mainland China.
Note 2: As of March 31, 2023, 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, 2023
(In Thousands of New Taiwan Dollars)Intercompany Transactions
No.

Company Name

Related Party

Natural of
Relationship(Note 1)

Financial Statement Account0

China Airlines, Ltd.

Mandarin Airlines
Taiwan Air Cargo Terminal
Taoyuan International Airport Service
Mandarin Airlines
Taoyuan International Airport Service

a
a
a
a
a

Air transport service revenue
Other operating costs
Airport service costs
Accounts receivable - related parties
Accounts payable - related parties

1

Taiwan Air Cargo Terminal

China Airlines, Ltd.

b

2

Mandarin Airlines

China Airlines, Ltd.
China Airlines, Ltd.

3

Taoyuan International Airport Services

China Airlines, Ltd.
China Airlines, Ltd.

Amount(Note 2)

Transaction Criteria% of Total
Consolidated
Total Revenue
or Assets$ 255,713
121,698
253,684
183,892
217,714The same as ordinary transactions
The same as ordinary transactions
The same as ordinary transactions
The same as ordinary transactions
The same as ordinary transactions

0.60
0.29
0.59
0.06
0.07

Sales revenue

121,698

The same as ordinary transactions

0.29

b
b

Air transport service costs
Accounts payable - related parties

255,713
183,892

The same as ordinary transactions
The same as ordinary transactions

0.60
0.06

b
b

Airport service revenue
Accounts receivable - related parties

253,684
217,714The same as ordinary transactions
The same as ordinary transactions

0.59
0.07

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, 2023

SharesNumber ofPercentage ofSharesOwnership (%)

Name of Major Shareholder

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

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

31.05
8.64

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 -