Q4 '05 Quarterly Presentation (Uploading) · Launch of new BenQ-Siemens brand with a 3-event strategy targeting diverse key audiences: • Brand launch in Berlin & Beijing: Top tier

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Q4 2005 Investor BriefingBenQ: BBringing EEnjoyment ‘N QQuality to LLife

BenQ Corporation

14 March 2006

BenQ Confidential (2006/3/14) 2006, BenQ Corporation

Meeting Overview

Q4 Financial Highlights

Business Update

BenQ Mobile Integration Briefing

New Product Launches

Q1 Guidance

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We have made forward-looking statements in the presentation. Our forward-looking statements contain information regarding, among other things, our financial conditions, future expansion plans and business strategies. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks, uncertainties, and assumptions about us.

We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events in the conference might not occur and our actual results could differ materially from those anticipated in these forward-looking statements.

Safe Harbor Notice

Q4 Financial Highlights

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Significant progress in Q4 with reductions in operating expenses.Overall gross margin impacted by

•Sub-optimal product portfolio—revamped.•Push-out of low-end handsets.•Time to market challenges—being addressed.

Significant progress in Q4 with reductions in operating expenses.Overall gross margin impacted by

•Sub-optimal product portfolio—revamped.•Push-out of low-end handsets.•Time to market challenges—being addressed.

Q4 2005 Income Statement – QoQ Analysis

Core business, Unaudited, Prepared by BenQ Corp. on a consolidated basis.

QoQ

Change%

Net Sales 34.09 100.0% 66.30 100.0% 94%

Cost of Goods Sold (30.97) (90.8%) (60.92) (91.9%) 97%

Gross Profit 3.12 9.2% 5.38 8.1% 73%

Operating Expenses (3.42) (10.0%) (14.45) (21.8%) 322%

Operating Income (0.30) (0.9%) (9.06) (13.7%) 2891%

Net Non-op Items 0.39 1.1% 3.34 5.0% 756%

Income before Tax 0.09 0.3% (5.72) -8.6% -6680%

Income Tax (0.07) (0.2%) (0.30) (0.5%) 329%

Net Income 0.02 0.0% (6.02) -9.1% -40265%

Fully Diluted EPS (NT$) 0.01 (2.45)

Q3 2005 Q4 2005Amount : NT $ Billion E xcept E PS Data

11.4%

(10.4%)

1.7%


Overall profitability impacted in ’05 by integration at BenQ Mobile.Computing Products seeing improving market standing over six quarters: BenQ No. 1 in 20-inch-or-above segment for LCD monitors.Projector No. 2 brand globally in Q4.

Overall profitability impacted in ’05 by integration at BenQ Mobile.Computing Products seeing improving market standing over six quarters: BenQ No. 1 in 20-inch-or-above segment for LCD monitors.Projector No. 2 brand globally in Q4.

Q4 2005 Income Statement – YoY Analysis


QoQ

Change%

Net Sales 164.95 100.0% 162.33 100.0% -2%

Cost of Goods Sold (146.06) (88.5%) (147.39) (90.8%) 1%

Gross Profit 18.89 11.5% 14.94 9.2% -21%

Operating Expenses (15.64) (9.5%) (24.91) (15.3%) 59%

Operating Income 3.25 2% (9.97) (6.1%) -407%

Net Non-op Items 4.80 2.9% 4.92 3.0% 3%

Income before Tax 8.01 4.9% (5.04) -3.1% -163%

Income Tax (0.40) (0.2%) (0.18) (0.1%) -55%

Net Income 7.61 4.6% (5.23) -3.2% -169%

Fully Diluted EPS (NT$) 3.28 (2.12)

12-Months 2004 12-Months 2005Amount : NT $ Billion E xcept E PS Data

10.5%

(4.8%)

1.7%

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Q3 2005 Balance Sheet Highlights


Change %

Cash & Equivalent 8.14 8.4% 11.11 7.3% 36%

Accounts Receivable 21.18 22.0% 42.01 27.8% 98%

Inventories 21.20 22.0% 29.96 19.8% 41%

L-T Investments 26.38 27.4% 30.60 20.2% 16%

Total Assets 96.37 100.0% 151.35 100.0% 57%

Liabilities 49.00 50.8% 90.23 59.6% 84%

( Debt ) 12.86 13.3% 16.69 11.0% 17%

Equities 47.36 49.1% 44.43 29.4% -6%

Q3 2005 Q4 2005


Key Financial Ratios


Q2 2005 Q3 2005 Q4 2005

A/ R T urnover 48 days 5 5 days 5 3 days

Inventory T urnover 47 days 5 0 days 38 days

A/ P T urnover 76 days 8 2 days 8 1 days

ROA* 2.2% 0.1% -3.9%

ROE * 4.2% 0.2% -13.6%

T otal Debt / T ota l Assets 12.4% 13.3% 10.7%* Annualized

Cash conversion cycle improving with the additions of Siemens Mobile Devices assets.

Cash conversion cycle improving with the additions of Siemens Mobile Devices assets.

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Business Update


Sales Breakdown by Business

0

10

20

30

40

50

60

70

1Q,04 2Q,04 3Q,04 4Q,04 1Q,05 2Q,05 3Q,05 4Q,05

Computing Products Digital Media Mobile BusinessUnit: NTD Billion

42.21 42.06 40.33 40.27

32.3329.67

34.09

66.30

17% 22% 15% 15%

11%9%

7%

42%

14% 13% 13% 16%13% 11%

10%

8%

69% 65% 72% 69% 76% 80%83% 50%

• Computing Products/Digital Media grew strongly in Q4.• Projectors recording solid QoQ growth.• Computing Products/Digital Media grew strongly in Q4.• Projectors recording solid QoQ growth.

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Dissolution of investee company

Copax Photonics Corp.

DVD recorder business phased

out.

MP3 business re-directed to

focus on PRC plus emerging

market opportunities.

Restructuring of management

team at BenQ America.

BenQ Further Streamlines…

Increased focus on core business.

Re-directing resources to higher-return businesses.

Better focus on market-specific opportunities; aligned to deliver greater synergies with BenQ Mobile.

Revamped managerial resources to address channel weaknesses.

Operating Events Impact

BenQ MobileIntegration Briefing

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Offloading complexity: Consolidation of product and platform development at self-

sufficient R&D sites

Realizing synergies: One global product house going forward (R&D, SCM,

Procurement) with no duplication in functions, increasing speed while driving down

cost

Structuring market-driven organization: Category managers in charge of each identified

key customer segment

Ensuring Time-to-Market of products

Production / R&D / Design

Synergies

Launch of new BenQ-Siemens brand with a 3-event strategy targeting diverse key

audiences:

• Brand launch in Berlin & Beijing: Top tier news, business and industry media

• 3GSM Barcelona: Technology and trade press

• CeBIT Hanover: Consumer and general media

12 new BenQ-Siemens handsets in Q1 2006, including first HSDPA phone (3.5 G)

Mid- and high-end phones are listed on tier-one operators' roadmaps (e.g. EF81, S68,

EF91, etc.)

Sales Development /

Branding

BenQ Mobile – Five months since closing…


Synergies on material cost-down to accelerate with ramp-up of new handsets – with

some room for improvement

Savings in functional expenses well on track

•Reduced operating expenses by > 25% QoQ

•Target: additional 100 Mio € functional cost reduction in 2006

Target is to break even by the end of 2006 providing the basis for a sustainable

business recovery in 2007

500 Mio €in Savings

Reversing Volume Loss

Significant improvements both in terms of units and ASP are in sight

Pipeline of new products is being rolled out / customer acceptance strong

New products provide broader revenue base and generate substantial sales margins


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Mobile Business Regaining Strength

From: To:

Plain-vanilla portfolio

• Market leading• Compelling on lifestyle benefits• Potent multimedia functions

ASP over last five quarters

S88 S68

EF91S81 EF51

EF81

Q1'05 Q2'05 Q3'05 Q4'05 Q1'06


Strategy / Value

Proposition

New positioning

• Successful three-step brand introduction

• Fusion of engineering competence with lifestyle and design

Repositioning as an Industry leader

• Leadership in innovation

– Radio Technology HSDPA, Services over the Air

– Display Technology OLED

– Material Technology

• Leadership in design and user experience

– 1/3 of devices with awards

– Slim line in all form factors

– Dedicated interfaces and “Simplexity”

• Leadership in multimedia and applications

– 10/12 with camera up to 3.2 Mpix

– 11/12 with Multimedia

– Onboard navigation

– Cameras incl. autofocus

– DRM “Playsforsure” and Google

– 3D sound

Restored customer confidence


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Launching BenQ-Siemens with a 3-event strategy targeting diverse key audiences

March

Berlin & Beijing

Brand launch

January February

3GSM Barcelona

First detailed hands-on exposure of BenQ-Siemens to larger B2B and press audience

CeBIT 2006 Hanover

Consumer launch of "Exploration" Brand

Place

Target

• Top tier news, business and industry media

• Tailored analyst briefings

• Focus on technology and trade press

• Building on momentum from brand launch

• Consumer and general media

Target group

BenQ-Siemens


CeBIT Impressions

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Leading the news agenda at CeBIT 2006

• Final part of the trilogy supporting the brand roll out• Focus on creating strong visual images for broadcast media and

photographers and capturing pre-event coverage opportunities

Results from March 8th to 13th….• 750 media attendees at booth incl. 35 tv teams and incl. 350

international media• 1000 press kits were distributed at booth and press center• 633 clippings achieved so far (just five countries are covered!)

– 132 print, 437 online, 64 TV• 41 media received interviews with executives • Story featured on at least 5 news wires incl. dpa, Reuters, ddp, ap

and afp


Critical Milestones—Paths to Competitiveness

No. 2 Top line

improvementFurther

improve cost and synergies

Technology leadership in Technology (e.g. HDSDPA, OLED), Design and User Experience (Awards, dedicated music keys, material); Multimedia

Adjustments to handset portfolio on track; already launched twelve new handsets on time in Q1.

New handsets drive up ASP sequentially.

Material savings to accelerate beginning in Q2/Q3 with ramped-up production of new models—redoubling BenQ resources to achieve cost-cutting goals.

Re-invest in Market share

Reevaluate growth perspectives by product and Region (North America, India, Africa

Increasingly leverage complementary (BenQ-Siemens) presence

No. 3 Expanding

Market Share

Stopping volume erosion in Q3 and Q4.

Secure transition/carve out of business

Reorganize/Integrate operations

Reduce cost to achieve 500’ cost savings

Achieve credibility with consumers: Outstanding Operator listings status

No. 1Achieving

Operational and Market

Stability

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New Product Launches


Mobile BG

Super slim slide phone with semi-automatic slider mechanismRich multi-media applicationsLarge and high-quality TFT displayExtendable memory

BenQ mobile CL71Enjoy Digital Life

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Mobile BG

Brilliant Active Matrix OLED with 170o viewing angle and 10,000:1 contrast ratio for display of multimedia content, 2.0”, 176 x 220 pixels 2.0 megapixel camera with 16x smooth digital zoom, autofocus and LED flashFull multimedia support: video recording/playback, music player, microSD™ card slotDirect printing of pictures with PictBridge

BenQ-Siemens S88For the Love of Color

Astral WhiteCosmic Black

The world’s first Active Matrix OLED screen—on a mobile handset.

The world’s first Active Matrix OLED screen—on a mobile handset.


Mobile BG

Recognizable music-oriented design and user interface3D surround sound and 6 equalizersVoice & FM radio recordingEnjoy music with a wireless Bluetooth® Stereo Handset

BenQ-Siemens EF51 Absolutely Music

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Mobile BGBenQ-Siemens EF91 Thrilling Speed and Top Performance

High-speed data transfer and downloads via HSDPAExcellent high-resolution camera (3.2 megapixel, autofocus camera, 14x digital zoom) & high-brightness LED flashBrilliant display (262,144 colors, LTPS TFT, 240 x 320 pixels, 2.0 inches)Intelligent power saving via light sensor

The world’s first HSDPA handset.

The world’s first HSDPA handset.


BenQ mobile E61Your Fascinating Music Phone

Mobile BG

Exquisite and fashion ID design Musical fun with dedicated MP3 top access key Extendable memory card (Mini SD)VGA camera, 2x/4x linear digital zoomLoud speaker playing

E61: first ever handset equipped with a top-access key pad.

E61: first ever handset equipped with a top-access key pad.

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Mobile BGBenQ-Siemens S81Slim Look – Full UMTS

UMTS with high-speed data rate (384 Kbps) realized in a slim designVideo telephony via VGA cameraVideo streaming and downloading with H.264/AAC+ formatMP3 player – microSD™ card slot (min 30 MB built-in memory)Integrated 1.3 megapixel camera with LED flashFull PIM function and easy PC synchronization

The world’s slimmest 3G UMTS candybar phone.

The world’s slimmest 3G UMTS candybar phone.


Mobile BGBenQ-Siemens EF81UMTS Performance In Lean Design

UMTS in a 15.9 mm slim magnesium clamshell 2.0 megapixel camera for video telephony, still photography and video recordingTwo large displays (2.2 inch QVGA and 1.3 inch QQVGA)Premium materialsWide range of Headset Bluetooth® solutions

Slimmest 3G clamshell phone in the world, featuring mineral glass and steel magnesium casing.

Slimmest 3G clamshell phone in the world, featuring mineral glass and steel magnesium casing.

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Mobile BGBenQ-Siemens S68Professional Convenience

Premium slim design with an extraordinary finishFocus on core business functionsConvenient usage with voice message and dictaphone key, Fast Dialing™ keyOptimal visibility of display content under all lighting conditionsDesign focused on best ergonomics and usability


Mobile BG

Full multimedia support: video recording, playback and streamingLatest audio codecs: MP3-eAAC+ and enhanced music sorting Best-in-class loudspeaker for superior sound1.3 megapixel camera with 5x digital zoomVideo ringtones and sound recorder 128 MB RS-MultiMediaCard & Headset Stereo bundled for up to 10 h of music listening

BenQ-Siemens C81Multimedia Companion

One of many award-winning BenQ Mobile handsets.

One of many award-winning BenQ Mobile handsets.

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Mobile BG

Full business functionality: Windows Mobile™ 5.0, SKYPE, ActiveSync, e-mail push, document browsing and editing incl. PowerPointMobile navigator with integrated GPS receiver & onboard navigation solution (optional) Seamless connectivity: WLAN 802.11 b/g, Bluetooth®, USB, SDIO slot Easy date input: QWERTY keyboard, large touchscreen displayFull multimedia features: 1.3 megapixel camera, media player for video & music, …

BenQ-Siemens P51 The Smart Navigator

GPS and SKYPE enabled.GPS and SKYPE enabled.


Mobile BGBenQ-Siemens CF61 Multifaceted Snapshot Phone

Exchangeable front covers to suit your style3D surround sound allows you to enjoy music with friendsHigh-quality 1.3 megapixel camera with "9 consecutive shots" & "living picture" optionsMicroSD™ slot

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Mobile BGBenQ-Siemens EL71Unexpected Finishing

Real metal finish – brushed aluminum and magnesium Slim and compact slider – 16.5 mm thinVery bright QVGA display for optimal readability both indoors and outdoors, 262,144 colors

Opal BlackQuartz Anthracite


Computing Products BG

Color consistent between monitors, devices, real environment simulation. By “luminance Compensation” function of the wired controller, we can let the brightness of this LCD monitor is the same as before.The Independent Six-Color Adjustment (Red, Green, Blue, Cyan, Yellow, Magenta) User Friendly

BenQ FP91R

Integrated multimedia speakers Lightning-fast 6ms response timeHigh 300 cd/m2 brightness, a 700:1 contrast ratio D-Sub/DVI dual input for maximum compatibility

BenQ FP92E

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Computing Products BG

Joybook S61

Intel® Core™ Duo Processor T2300 (1.66GHz, 2MB L2 Cache, 667MHz FSB)

Genuine Windows® XP operation system

12.1" UltraVivid widescreen NB with Digital TV (DVB-T)

Ultra light weight 1.5kg equipped with optical drive (without battery)

Full-sized ergonomic curved keyboard design

Joybook S73

Intel® Core™ Duo Processor T2300(1.66GHz, 2MB L2 Cache, 667MHz FSB)

Genuine Windows® XP operation system

14.1" UltraVivid widescreen NB with Digital TV (DVB-T)

Multiple choice of output interface: DVI-D/VGA/S-Video

ATI® MR X1600 with 256MB VRAM


Digital Media BG-New Projector Line-up

W100 Home Entertainment SeriesNative 16:92500:1 High Contrast25 db Whisper Quite DesignEquipped with 7 segment color wheel for vivid

color

CP120 Commuter SeriesThe World Smallest Wireless Projector

Compact Size (< A5); Light Weight (2.9lbs)Built-in Wireless Connectivity (802.11 a/b/g)

1500 ANSI Lumens2000:1 high contrast

Carl Zeiss Len Design Real Time Auto Keystone

CP120

MP770

PE7700

W100

W10000

SP820

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1920 X 1080 High-resolution DisplaySenseye technologyCompelling audio experience promised by D2Audio ® SoundSuiteConntetor Auto Detection

BenQ PH4281/PL4271

BenQ VL3231

1920 X 1080 High-resolution DisplaySenseye technologyHumanity feature design, such as Ambient Light Sensor,

HDMI, Swivel +15。~ -15。

Digital Media BG

Q1 Guidance

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2006 Q1 Guidance

Computing Products

• LCD monitor: strength continues into Q1; positioned to gain share.

• Optical Disk Drive, Joybook down slightly on seasonality.

Digital Media

• LCD TV, projector down slightly in Q1.

Mobile Business

• Volume expected to come in below Q4 level on seasonality and

product transition; ASP expected to improve.

Overall Q1 revenue below that of Q4.

BenQ Corporation N on-c ons ol id ated Bal anc e S h eets ( P arent Com pany O nl y )

D ec em b er 3 1, 2 0 0 4 and 2 0 0 5 (expressed in thousands of New Taiwan dollars)

2 0 0 5 . 1 2 . 3 1 2 0 0 4 . 1 2 . 3 1

A s s e ts N T $ N T $ C u r r e n t a s s e ts :

C a s h a n d c a s h e q u i v a l e n t s $161,789 - 599,457 1 S h o r t -t e r m i n v e s t m e n t s 104,572 - 5,431,034 7 N o t e s a n d a c c o u n t s r e c e i v a b l e , n e t 6,498,786 8 5,463,363 7 R e c e i v a b l e s f r o m r e l a t e d p a r t i e s 26,122,736 29 20,254,426 26

O t h e r f i n a n c i a l a s s e t s �c u r r e n t 7,203,237 8 91,054 - I n v e n t o r i e s , n e t 5,581,355 6 3,859,895 5 P r e p a i d e x p e n s e s a n d o t h e r c u r r e n t a s s e t s 1,988,102 2 306,704 1 D e f e r r e d i n c o m e t a x a s s e t s -c u r r e n t 463,010 1 551,148 1

T o ta l c u r r e n t a s s e ts 48,123,587 54 36,557,081 48 L o n g -te r m e q u i ty i n v e s tm e n ts :

E q u i t y m e t h o d 31,670,537 35 30,393,198 40 C o s t o r l o w e r -o f -c o s t -o r -m a r k e t m e t h o d 1,435,406 2 1,594,978 2 33,105,943 37 31,988,176 42

P r o p e r ty , p l a n t a n d e q u i p m e n t:

L a n d 2,135,410 2 2,135,472 3 B u i l d i n g s 3,552,743 4 3,552,100 5 M a c h i n e r y a n d e q u i p m e n t 2,436,393 3 2,452,524 3 F u r n i t u r e a n d f i x t u r e s 146,528 - 139,819 - M i s c e l l a n e o u s e q u i p m e n t 69,441 - 69,770 - P r e p a y m e n t s f o r p l a n t a n d e q u i p m e n t 283,095 - 212,610 - 8,623,610 9 8,562,295 11 L e s s : a c c u m u l a t e d d e p r e c i a t i o n (2,830,831) (3) (2,492,858) (3)

N e t p r o p e r ty , p l a n t a n d e q u i p m e n t 5,792,779 6 6,069,437 8

O th e r a s s e ts �� A s s e t s f o r l e a s e 997,171 1 1,013,907 1 R e f u n d a b l e d e p o s i t s 8,584 - 53,083 - D e f e r r e d a s s e t s 1,042,532 1 130,810 - D e f e r r e d i n c o m e t a x a s s e t s -n o n c u r r e n t 973,344 1 788,418 1

T o ta l o th e r a s s e ts 3,021,631 3 1,986,218 2 T o ta l a s s e ts

$9 0 , 0 4 3 , 9 4 0 1 0 0 7 6 , 6 0 0 , 9 1 2 1 0 0

2 0 0 5 . 1 2 . 3 1 2 0 0 4 . 1 2 . 3 1

L i a b i l i ti e s a n d S to c k h o l d e r s ’ E q u i ty N T $ N T $ C u r r e n t l i a b i l i ti e s :

S h o r t -t e r m b o r r o w i n g s $2,635,137 3 - -

N o t e s a n d a c c o u n t s p a y a b l e 4,706,044 5 5,875,657 8

P a y a b l e s t o r e l a t e d p a r t i e s 21,183,189 18 13,339,328 17

B o n d s p a y a b l e 1,138,662 6 1,400 -

A c c r u e d e x p e n s e s a n d o t h e r c u r r e n t l i a b i l i t i e s

3,418,044 4 3,576,749 5

I n c o m e t a x p a y a b l e - - 251,707 -

D e f e r r e d i n t e r -c o m p a n y p r o f i t 332,702 1 5,377 -

T o ta l c u r r e n t l i a b i l i ti e s 33,413,778 37 23,050,218 30

B o n d s p a y a b l e 7,050,000 8 4,287,855 6

O th e r l i a b i l i ti e s 5,148,897 6 184,976 -

T o ta l l i a b i l i ti e s 45,612,675 51 27,523,049 36

S to c k h o l d e r s ’ e q u i ty :

C o m m o n s to c k :

C o m m o n s t o c k 26,186,722 29 23,150,141 30

C o n v e r t i b l e b o n d s a p p l i e d f o r c o n v e r s i o n 13,063 - - -

26,199,785 29 23,150,141 30

C a p i ta l s u r p l u s : A d d i t i o n a l p a i d -i n c a p i t a l i n e x c e s s o f t h e c o m m o n s t o c k ’ s p a r v a l u e

8,295,561 9 5,152,848 7

C o n v e r t i b l e b o n d s c o n v e r t e d i n e x c e s s o f t h e c o m m o n s t o c k ’ s p a r v a l u e

7,168,462 8 7,106,864 9

C a p i t a l s u r p l u s f r o m t r e a s u r y s t o c k t r a n s a c t i o n s

12,432 - 6,812 -

C a p i t a l s u r p l u s f r o m l o n g -t e r m e q u i t y i n v e s t m e n t s

3,097,893 4 2,421,756 3

18,574,348 21 14,688,280 19

Legal reserves 4,016,353 4 3,254,424 4

R e t a i n e d e a r n i n g s (3,038,409) (3) 8,144,108 11

S p e c i a l r e s e r v e s 81,754 - - -

T r a n s l a t i o n a d j u s t m e n t 434,760 - (81,754) -

T r e a s u r y s t o c k (1,837,326) (2) (77,336) -

T o ta l s to c k h o l d e r s ’ e q u i ty 44,431,265 49 49,077,863 64 T o ta l l i a b i l i ti e s a n d s to c k h o l d e r s ’ e q u i ty

$9 0 , 0 4 3 , 9 4 0 1 0 0 7 6 , 6 0 0 , 9 1 2 1 0 0

BenQ Corporation

N on-cons ol id ated S tatem ents of I ncom e ( P arent Com pany O nl y ) Y ears end ed Decem b er 3 1, 2 0 0 4 and 2 0 0 5

(expressed in thousands of New Taiwan dollars, expec t earning s per share)

2005 2004

N T $ N T $

Net sales 124 , 4 0 6, 69 7 10 0 14 7, 770 , 156 10 0

Cost of goods sold (117, 80 0 , 512) (9 5) (136, 0 71, 9 72) (9 2)

6, 60 6, 185 5 11, 69 8, 184 8

Change in unrealized inter-company profits (327, 325) - 162, 182 -

Gross profit 6, 278, 860 5 11, 860 , 366 8

Operating expenses:

Selling (2, 9 70 , 757) (2) (3, 4 33, 615) (2)

Administrative (9 50 , 728) (1) (9 57, 4 31) (1)

Research and development (3, 273, 284 ) (3) (3, 726, 225) (3)

(7, 19 4 , 769 ) (6) (8, 117, 271) (6)

Operating income (loss) (9 15, 9 0 9 ) (1) 3, 74 3, 0 9 5 2

Non-operating income:

Interest income 33, 317 - 6, 9 72 -

Investment income - - 3, 563, 54 8 3

Dividend income 9 8, 24 3 - 169 , 0 32 -

Gain on disposal of property, plant and equipment 7, 551 - 3, 250 -

Gain on disposal of investments, net 1, 787, 359 2 382, 275 -

Foreign exchange gain, net - - 278, 0 86 -

Others 272, 19 8 - 20 0 , 0 53 -

2, 19 8, 668 2 4 , 60 3, 216 3

Non-operating expenses:

Interest expense (4 88, 9 0 1) - (24 5, 0 4 6) -

Investment loss (5, 515, 181) (5) - -

Foreign exchange loss, net (381, 650 ) - - -

Permanent decline in the long-term equity investment’s value

(14 9 , 30 7) - (350 , 0 0 0 ) -

Loss on disposal of property, plant and equipment (2, 9 4 3) - (19 , 269 ) -

Impairment loss (18, 59 8) - - -

Others (32, 30 6) - (3, 4 70 ) -

(6, 588, 886) (5) (617, 785) -

Net income before income tax expense (5, 30 6, 127) (4 ) 7, 728, 526 5

Income tax benefit (expense) 80 , 556 - (10 9 , 238) -

Net income $( 5, 225, 57 1 ) ( 4) 7 , 6 1 9 , 28 8 5

Earnings per share:

Basic earnings per share ( 2. 1 2) 3 . 1 0

Diluted earnings per share - 3 . 08

BenQ Corporation

Non-consolidated Statements of Cash Flows (Parent Company Only) Years ended December 31, 2004 and 2005

(expressed in thousands of New Taiwan dollars)

2005

2004

NT$ NT$ Cash flows from operating activities:

Net income $(5,225,571) 7,619,288 Adjustments to reconcile net income to net cash provided by (used in) operating

activities:

Depreciation 490,069 546,988 Amortization 185,156 66,409 Change in provision for bad debt and sales allowance 239,277 (20,184) Change in provision for inventory obsolescence (65,263) (78,094) Investment loss (income) on long-term equity investments, net 5,490,018 (3,563,548) Cash dividends received from investees accounted for by equity method 1,167,779 1,015,008 Gain on sale of short-term investments (1,779,304) (384,753) Loss(Gain) on sale of long-term investments (8,055) 2,478 Impairment loss on long-term investment 149,307 350,000 Loss (gain) on disposal of property, plant and equipment (4,608) 16,019 Fixed assets transferred to expenses Unrealized foreign exchange gain on overseas convertible bonds

- 5,026

158 (22,578)

Reversal for redemption of overseas convertible bonds (6,733) (10,509) Impairment loss 18,598 - Amortization of bond issuance cost 1,767 1,067 Differences in accounts in the accompanying balance sheets:

Notes and accounts receivable (1,274,700) 2,841,037 Receivables from related parties (5,927,352) (775,212) Inventories (1,656,197) 1,682,705 Other financial assets-current (89,969) (21,434) Prepaid expenses and other current assets (601,027) (3,418) Notes and accounts payable (1,169,613) (1,087,798) Payables to related parties 3,392,714 (2,787,584) Deferred inter-company profit 327,325 (162,182) Accrued expenses and other current liabilities (272,527) (1,047,679) Income tax payables (251,707) 190,343 Deferred income tax assets (96,788) (334,333) Other liabilities (19,105) (19,105)

Net cash provided by operating activities (6,981,483) 4,013,089

Cash flows from investing activities: Additions to long-term investments (1,323,151) (316,131) Decrease in short-term investments 7,105,766 (1,565,760) Additions to property, plant and equipment (221,289) (343,109) Proceeds from disposal of long-term investments Proceeds from disposal of property, plant and equipment

22,433 28,136

5,243 52,829

Increase in refundable deposits and deferred assets (1,003,886) (64,178) Receipt from investees’ capital reduction Net cash received from merger Cash paid for acquisition of Siemens’ mobile division

64,751 -

(3,966,600)

506,586 215,020

- Net cash provided by investing activities 706,160 (1,509,500)

Cash flows from financing activities: Increase in short-term borrowings 2,635,137 - Redemption of convertible bonds (1,400) (200,300) Acquisition of treasury stock (1,759,157) (651,354) Issuance of bonds Issuance of common stock

4,000,000 4,642,713

2,050,000 -

Directors’ and supervisors’ remuneration (54,205) (67,501) Payment of cash dividends (3,473,263) (4,123,924) Payment of employee bonuses (152,170) (50,626)

Net cash provided by (used in) financing activities 5,837,655 (3,043,705)

Net increase (decrease) in cash and cash equivalents (437,668) (540,116)

Cash and cash equivalents at beginning of period 599,457 1,139,573

Cash and cash equivalents at end of period $161,789 599,457

Additional disclosure of cash flow information: Cash paid during the period for:

Interest, excluding capitalized interest $404,752 161,760 Income taxes $272,511 253,228

Supplemental disclosure of non-cash investing and financial activities: Increase (decrease) in capital surplus from long-term equity investments $756,257 1,013,553 Increase (decrease) in translation adjustment $516,514 (558,615) Convertible bonds converted to common stock and capital surplus $97,487 426,408

Documents

Q4 '05 Quarterly Presentation (Uploading) · Launch of new BenQ-Siemens brand with a 3-event strategy targeting diverse key audiences: • Brand launch in Berlin & Beijing: Top tier