LG.Philips LCD
CONSOLIDATED BALANCE SHEET
(In millions of KRW)
(The financial statements are based on unaudited US GAAP)
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2007
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2006
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Dec 31
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Sep 30
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Dec 31
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Sep 30
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ASSETS
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Current assets:
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Cash and cash equivalents
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1,196,423
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9
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%
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1,656,419
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12
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%
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954,362
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7
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%
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471,747
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3
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%
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Short term Financial Instruments
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785,000
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6
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%
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0
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0
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%
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0
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0
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%
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0
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0
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%
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Trade accounts and notes receivable
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2,339,690
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17
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%
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2,258,545
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16
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%
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859,300
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6
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%
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1,330,539
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10
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%
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Inventories
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823,924
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6
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%
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904,642
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6
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%
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1,051,590
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8
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%
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1,147,575
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8
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%
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Other current assets
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609,339
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4
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%
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351,889
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3
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%
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289,049
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2
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%
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326,424
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2
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%
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Total current assets
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5,754,376
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42
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%
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5,171,495
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37
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%
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3,154,301
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23
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%
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3,276,285
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24
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%
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Investments and other non-current assets
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421,183
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3
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%
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756,043
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5
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%
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794,998
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6
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%
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710,701
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5
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%
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Property, plant and equipment, net
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7,591,654
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55
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%
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8,069,844
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57
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%
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9,485,148
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70
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%
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9,663,242
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71
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%
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Intangible assets, net
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77,487
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1
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%
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72,995
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1
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%
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61,911
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0
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%
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45,380
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0
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%
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Total assets
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13,844,700
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100
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%
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14,070,377
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100
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%
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13,496,358
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100
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%
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13,695,608
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100
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%
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LIABILITIES AND SHAREHOLDERS EQUITY
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Current liabilities:
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Short-term debt
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413,896
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3
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%
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922,616
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7
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%
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814,777
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6
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%
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672,853
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5
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%
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Trade accounts and notes payable
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994,701
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7
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%
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1,144,782
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8
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%
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949,436
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7
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%
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881,443
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6
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%
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Other payables and accrued liabilities
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1,040,702
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8
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%
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853,271
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6
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%
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1,482,954
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11
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%
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1,236,235
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9
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%
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Total current liabilities
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2,449,299
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18
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%
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2,920,669
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21
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%
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3,247,167
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24
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%
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2,790,531
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20
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%
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Long-term debt
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3,044,252
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22
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%
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3,552,685
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25
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%
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3,291,065
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24
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%
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3,801,984
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28
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%
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Other non-current liabilities
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102,370
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1
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%
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116,436
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1
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%
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84,556
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1
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%
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75,560
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1
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%
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Total liabilities
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5,595,921
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40
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%
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6,589,790
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47
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%
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6,622,788
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49
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%
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6,668,075
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49
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%
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Common stock and additional paid-in capital
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4,038,716
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29
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%
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4,037,977
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29
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%
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4,036,025
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30
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%
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4,035,331
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29
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%
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Retained earnings
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4,194,292
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30
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%
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|
3,444,649
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24
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%
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|
2,849,912
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|
21
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%
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|
2,994,673
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22
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%
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Capital adjustment
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15,685
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0
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%
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(2,123
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)
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0
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%
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(12,367
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)
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0
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%
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(2,471
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)
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0
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%
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Controlling Interest equity
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8,248,693
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60
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%
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7,480,503
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53
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%
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6,873,570
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51
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%
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7,027,533
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51
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%
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Minority Interest equity
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86
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0
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%
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84
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0
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%
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0
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0
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%
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0
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0
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%
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Total shareholders equity
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8,248,779
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60
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%
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7,480,587
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53
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%
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6,873,570
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51
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%
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7,027,533
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51
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%
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Total liabilities and shareholders equity
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13,844,700
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100
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%
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14,070,377
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|
100
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%
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|
13,496,358
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|
|
100
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%
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13,695,608
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|
100
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%
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- These financial statements are provided for informational purposes only.
LG.Philips LCD
CONSOLIDATED STATEMENTS OF CASH FLOW
(In millions of KRW)
(The financial statements are based on unaudited US GAAP)
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2007
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2006
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|
Three months
ended Dec 31
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Twelve months
ended Dec 31
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Three months
ended Dec 31
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Twelve months
ended Dec 31
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Net Income
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749,643
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1,344,379
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(144,761
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)
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(692,779
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)
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Depreciation
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727,209
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2,780,812
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710,783
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2,597,479
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Amortization
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9,148
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15,824
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|
1,788
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6,766
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Others
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138,948
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|
306,995
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|
13,780
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|
15,841
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Operating Cash Flow
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1,624,948
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4,448,010
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|
581,590
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|
1,927,307
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|
Net Change in Working Capital
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21,276
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(1,141,503
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)
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|
590,275
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(61,807
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)
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Change in accounts receivable
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(15,611
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)
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|
(1,446,420
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)
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|
483,584
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|
409,123
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|
Change in inventory
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80,718
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|
227,666
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|
|
95,985
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|
|
(362,013
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)
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Change in accounts payable
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(168,546
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)
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|
36,778
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|
63,038
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|
256,642
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|
Change in others
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124,715
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|
40,473
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|
(52,332
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)
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(365,559
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)
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Cash Flow from Operation
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1,646,224
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|
3,306,507
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|
1,171,865
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|
1,865,500
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Cash Flow from Investing
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(1,050,619
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)
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(2,382,074
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)
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(324,404
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)
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|
(3,067,195
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)
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Acquisition of property, plant and equipment
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(266,290
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)
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(1,577,319
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)
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(330,887
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)
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(3,075,985
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)
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(Delivery)
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(281,134
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)
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(960,948
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)
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|
(521,337
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)
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(2,833,983
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)
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(Other account payables)
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|
14,844
|
|
|
(616,371
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)
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|
190,450
|
|
|
(242,002
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)
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Intangible assets investment
|
|
(3,079
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)
|
|
(18,651
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)
|
|
(2,888
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)
|
|
(8,251
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)
|
Others
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|
(781,250
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)
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|
(786,104
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)
|
|
9,371
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|
|
17,041
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|
|
|
|
|
|
|
|
|
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|
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|
Cash Flow before Financing
|
|
595,605
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|
|
924,433
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|
|
847,461
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|
|
(1,201,695
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)
|
Cash Flow from Financing Activities
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|
(1,055,601
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)
|
|
(682,372
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)
|
|
(364,846
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)
|
|
576,605
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|
|
|
|
|
|
|
|
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|
Net Cash Flow
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(459,996
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)
|
|
242,061
|
|
|
482,615
|
|
|
(625,090
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)
|
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|
|
|
|
|
|
|
|
|
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|
-These financial statements are provided for informational purposes only (Unaudited).
LG.Philips LCD
Net Income Reconciliation to US GAAP
(In millions of KRW)
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|
|
|
|
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|
|
2007
|
|
|
2007
|
|
|
|
Q4
|
|
|
Q3
|
|
Net Income under K GAAP
|
|
759,908
|
|
|
524,231
|
|
US GAAP Adjustments
|
|
(10,265
|
)
|
|
(22,522
|
)
|
Depreciation of PP&E
|
|
(655
|
)
|
|
(655
|
)
|
Amortization of IPR
|
|
10,937
|
|
|
9,321
|
|
Adjustment of AR discount loss
|
|
(1
|
)
|
|
(34
|
)
|
Capitalization of financial interests
|
|
(80
|
)
|
|
7,045
|
|
Inventory Valuation effect of US GAAP Adjustments
|
|
(116
|
)
|
|
(76
|
)
|
Pension expense
|
|
(106
|
)
|
|
(260
|
)
|
Income tax effect of US GAAP Adjustments
|
|
(2,388
|
)
|
|
(14,523
|
)
|
ESOP
|
|
(738
|
)
|
|
(738
|
)
|
Convertible bonds (including FX valuation)
|
|
(9,882
|
)
|
|
(18,710
|
)
|
Stock appreciation right
|
|
381
|
|
|
(553
|
)
|
Cash flow hedge
|
|
(7,400
|
)
|
|
(3,339
|
)
|
Others
|
|
(217
|
)
|
|
0
|
|
|
|
|
|
|
|
|
Net Income under US GAAP
|
|
749,643
|
|
|
501,709
|
|
|
|
|
|
|
|
|
- These financial statements are provided for informational purposes only(Unaudited).
Attachment 2.
Presentation Material
Q4 07 Earnings Results
January 14, 2008
Disclaimer
This presentation contains forward-looking statements. We may also make written or oral forward-looking statements in our
periodic reports to the United States Securities and Exchange Commission and the Korean Financial Supervisory Service, in our annual report to shareholders, in our proxy statements, in our offering circulars and prospectuses, in press releases and
other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These
statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of
them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. We
caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to: our highly competitive environment; the cyclical
nature of our industry; our ability to introduce new products on a timely basis; our dependence on growth in the demand for our products; our ability to successfully execute our expansion strategy; our dependence on key personnel; and general
economic and political conditions, including those related to the TFT-LCD industry; possible disruptions in business activities caused by natural and human-induced disasters, including terrorist activity and armed conflict; and fluctuations in
foreign currency exchange rates. Additional information as to these and other factors that may cause actual results to differ materially from our forward-looking statements can be found in our filings with the United States Securities and Exchange
Commission.
This presentation also includes information regarding our historical financial performance through
December 31, 2007, and our expectations regarding future performance as reflected in certain non-GAAP financial measures as defined by United States Securities and Exchange Commission rules. As required by such rules, we have provided a
reconciliation of those measures to the most directly comparable GAAP measures, which is available on our investor relations website at http://www.lgphilips-lcd.com under the file name Q4 2007 Earnings Results Presentation.
Q4 07
Earnings Results
Income Statement
QoQ YoY YoY
KRW b Q4 07 Q3 07 Q4 06 2007 2006
Change
Change
Change
Revenue 4,322 3,953 3,065 9% 41% 14,352 10,624 35% COGS 3,240 3,061 3,090 6% 5% 12,115 10,932 11%
Gross Profit 1,082 892(25) 21% N/A 2,237(308) N/A Operating Income 869 693(177) 25% N/A 1,504(879) N/A EBITDA 1,775 1,376 559 29% 218% 4,516 1,767 156% Income before tax 1,006 659(212) 53% N/A 1,543(1,021) N/A Net income 760 524(174) 45% N/A
1,344(769) N/A
Margin (%)
Gross margin 25 23(1) 2 26 Operating margin 20 18(6) 2 26 EBITDA margin 41 35 18 6 23 Net margin 18 13(6) 5 24
16(3) 19
10(8) 18
9(7) 16
K
GAAP (Consolidated)
Source: Unaudited, Company financials
Balance Sheet
KRW B Q4 07 Q3 07 Q4 06 QoQ YoY
Assets 13,780 14,044 13,488 (2%) 2%
Cash* 1,981 1,656 954 20% 108%
Inventory 824 906 1,053 (9%) (22%)
Liabilities 5,491 6,525 6,598 (16%) (17%)
Short-term debt 414 923 814 (55%) (49%)
Long-term debt 2,992 3,509 3,307
(15%) (10%)
Shareholders equity 8,289 7,519 6,890 10% 20%
Net debt to equity ratio (%) 17 37 46 (20) (29)
Source: Unaudited, Company financials
* Cash includes short term financial
instruments (785)
K GAAP (Consolidated)
Cash Flow
KRW B Q4 07 Q3 07 Q4 06 QoQ YoY 2007 2006 YoY
Net income 760 524 (174) 236 934 1,344 (769) 2,113
Depreciation & Amortization 745 680 722 65 23 2,830 2,638 192
Others
107 35 25 72 82 227 81 146
Working capital 34 (294) 599 328 (565) (1,095) (84) (1,011)
Cash flow from Operations 1,646 945 1,172 701 474 3,306 1,866 1,440
Cash flow from Investing* (266) (328) (324) 62 58 (1,597) (3,067) 1,470
Cash flow before Financing 1,380 617 848 763 532 1,709 (1,201) 2,910
Other financing activities (1,055) (199) (366) (856) (689) (682) 576 (1,258)
Net change in cash 325 418 482 (93) (157) 1,027 (625) 1,652
Source: Unaudited, Company financials
* Cash flow from Investing excludes
short term financial instruments (785)
K GAAP (Consolidated)
Performance
Highlights
Shipments and ASP
Total K m² * ASP/m² ** (USD) $2,000
5,000
$1,414 $1,375 $1,364 4,000 $1,287 $1,274 3,418 3,127
3,000 2,822 $1,000 2,275 2,243 2,000
1,000
0 $0 Q4 06 Q1 07 Q2 07 Q3
07 Q4 07
[Graphic Appears Here]
Display area shipment in K m2
[Graphic Appears Here]
ASP per m2 (USD)
Source: Company financials
* Net display area shipped
** Quarterly average selling price per square meter of net display area shipped
Revenue: Product
Mix
%
100
5%
5%
5%
5%
22%
21%
22%
21%
27%
25%
25%
28%
50
47%
48%
50%
45%
0
Q1 07
Q2 07
Q3 07
Q4 07
TVs
Applications
Monitors Notebooks
Source: Company financials
(Based on USD)
Q4 07 Capacity
Update
P7 averaged 136K sheets per month for the fourth quarter
Quarterly input capacity by Area (K m² )
5,000 4,000 3,000 2,000 1,000 0
3,607 1,032 1,211 534 418 413 Q4 06
3,481 1,021 1,162 520 416 362 Q1 07
3,898 1,298 1,228 549 437 386 Q2 07
4,554 1,675 1,367 605 487 420 Q3
07
4,761 1,787 1,400 641 501 432 Q4 07
P7 P6 P5 P4 P1-P3
Source: Company financials
Cash ROIC
EBITDA margin
Cash ROIC
41%
35% 72% 25% 18% 19% 51%
32% Q4 06 Q1 07 Q2 07 Q3 07
Q4 07 23% 20%
Sales / IC* 175%
148% Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 124% 126% 107%
K GAAP (C
onsolidated)
Q4 06 Q1 07 Q2 07 Q3 07 Q4 07
Source:
Unaudited, Company financials
* IC (Invested Capital) equals average of net debt and equity for the designated period;
Quarterly ratios are annualized 10
Outlook
11
Outlook
Q1 08
Total Shipment in m² Low single digit (%) Down
(QoQ) TV High single digit (%) Down
IT High single digit (%) Up
Avg QoQ ASP per m² Mid single digit (%) Down
(USD) TV Mid single digit (%) Down
IT High single digit (%) Down
End QoQ ASP per m² High single digit (%) Down
(USD) TV Mid single digit (%) Down
IT Mid Teens (%) Down
COGS per m² Low single digit (%) Down
EBITDA margin Mid Thirties (%)
2008 CAPEX Approx. KRW 3 Trillion
CAPEX Schedule (KRW)
961B 535B 223B 203B 2007
Approx. 3T 2 T 0.4 T 0.6 T 2008
Future P7 Max Capa Others
Source: Company financials, delivery base
Questions and
Answers
13
Appendix
14
US GAAP Income
Statement
KRW B Q4 07 Q3 07 Q4 06 QoQ YoY 2007 2006 YoY
Revenue 4,322 3,953 3,065 9% 41% 14,352 10,624 35%
COGS 3,227 3,053 3,076 6% 5% 12,072 10,910 11%
Gross Profit 1,095 900 (11)
22% N/A 2,280 (286) N/A
Operating Income 864 672 (172) 29% N/A 1,478 (882) N/A
EBITDA 1,778 1,352 574 32% 210% 4,500 1,814 148%
Income before tax 998 651 (186) 53% N/A 1,553 (935) N/A
Net income 750 502
(145) 49% N/A 1,344 (693) N/A
Margin (%)
Gross margin 25 23 0 2 25 16 (3) 19
Operating margin 20 17 (6) 3 26 10 (8)
18
EBITDA margin 41 34 19 7 22 31 17 14
Net margin 17 13 (5) 4 22 9 (7) 16
Source: Unaudited, Company financials
US GAAP (Consolidated)
US GAAP Balance Sheet
KRW B Q4 07 Q3 07 Q4 06 QoQ YoY
Assets 13,845 14,070 13,496 (2%) 3%
Cash* 1,981 1,656 954 20% 108%
Inventory 824 905 1,052 (9%) (22%)
Liabilities 5,596 6,590 6,623 (15%) (16%)
Short-term debt 414 923 815 (55%) (49%)
Long-term debt 3,044 3,553 3,291
(14%) (8%)
Shareholders equity 8,249 7,480 6,873 10% 20%
Net debt to equity ratio (%) 18 38 46 (20) (28)
Source: Unaudited, Company financials
* Cash includes short term financial
instruments (785)
US GAAP (Consolidated)
US GAAP Cash Flow
KRW B Q4 07 Q3 07 Q4 06 QoQ YoY 2007 2006 YoY
Net income 750 502 (145) 248 895 1,344 (693) 2,037
Depreciation & Amortization 736 671 713 65 23 2,797 2,604 193
Others
139 85 17 54 122 307 21 286
Working capital 21 (313) 587 334 (566) (1,142) (66) (1,076)
Cash flow from Operations 1,646 945 1,172 701 474 3,306 1,866 1,440
Cash flow from Investing* (266) (328) (324) 62 58 (1,597) (3,067) 1,470
Cash flow before Financing 1,380 617 848 763 532 1,709 (1,201) 2,910
Other financing activities (1,055) (199) (366) (856) (689) (682) 576 (1,258)
Net change in cash 325 418 482 (93) (157) 1,027 (625) 1,652
Source: Unaudited, Company financials
* Cash flow from Investing excludes
short term financial instruments (785)
US GAAP (Consolidated)
Net Income
Reconciliation to US GAAP
KRW B Q4 07 Q3 07 2007 2006
Net Income under K GAAP 760 524 1,344 (769)
US GAAP Adjustments (10) (22) 0 76
Depreciation of PP&E (1) (1) (3) (3)
Amortization of IPR 11 10 40 38
Adjustment of AR discount loss 0 0 (1) 0
Capitalization of financial
interests 0 7 5 7
Inventory valuation 0 0 (1) 0
Pension expense 0 0 3 1
Income tax effect of US GAAP Adjustments (2) (14) (10) (10)
ESOP (1) (1) (3) (3)
Convertible bonds (including FX valuation) (10) (19) (19) 47
Stock appreciation right 0 (1) (3) 1
Cash flow hedge (7) (3) (8) (2)
Others 0 0 0 0
Net Income under US GAAP 750 502 1,344 (693)
Source: Unaudited, Company financials
EBITDA Reconciliation
K GAAP (KRW B) Q4 07 Q3 07 Q4 06 QoQ YoY 2007 2006 YoY
1. Net Income 760 524 (174) 236 934 1,344 (769) 2,113
2. Interest Expense 45 53 54 (8) (9) 201 179 22
3. Interest Income (21)
(16) (5) (5) (16) (58) (29) (29)
4. Provision (benefit) for Income Taxes 246 135 (38) 111 284 199 (252) 451
5. Depreciation of PP&E 726 667 715 59 11 2,776 2,593 183
6. Amortization of Intangible Asset 19 13 7 6 12 54 45 9
7. Amortization of Debt Issuance Cost 0 0 0 0 0 0 0 0
EBITDA
(1+2+3+4+5+6+7) 1,775 1,376 559 399 1,216 4,516 1,767 2,749
US GAAP (KRW B) Q4 07 Q3 07 Q4 06 QoQ YoY
2007 2006 YoY
1. Net Income 750 502 (145) 248 895 1,344 (693) 2,037
2. Interest Expense 65 45 51 20 14 206 169 37
3. Interest Income (21) (16) (5) (5) (16) (58) (29) (29)
4. Provision
(benefit) for Income Taxes 248 149 (41) 99 289 209 (242) 451
5. Depreciation of PP&E 727 668 711 59 16 2,781 2,597 184
6. Amortization of Intangible Asset 9 3 2 6 7 16 7 9
7. Amortization of Debt Issuance Cost 0 1 1 (1) (1) 2 5 (3)
EBITDA (1+2+3+4+5+6+7) 1,778 1,352 574 426 1,204 4,500 1,814 2,686
EBITDA
Reconciliation (Continued)
EBITDA is defined as net income (loss) plus: interest income (expense); provision (benefit) for
income taxes; depreciation of property, plant and equipment; amortization of intangible assets; and amortization of debt issuance cost. EBITDA is a key financial measure used by our senior management to internally evaluate the performance of our
business and for other required or discretionary purposes.
We believe that the presentation of EBITDA will enhance an
investors understanding of our operating performance as we believe it is commonly reported and widely used by analysts and investors in our industry. It also provides useful information for comparison on a more comparable basis of our
operating performance and those of our competitors, who follow different accounting policies.
EBITDA is not a measure
determined in accordance with U.S. GAAP. EBITDA should not be considered as an alternative to operating income, cash flows from operating activities or net income, as determined in accordance with U.S. GAAP. Our calculation of EBITDA may not be
comparable to similarly titled measures reported by other companies.
20
[Graphic Appears Here]
LG. Philips LCD
makes technology you can see
Thank You !!!
1. 2008 Major Action
Items
1) Preparation for the Future
2) Performance Maximization
2. 2008 Outlook
Jan 14th, 2008
1. 2008 Major Action
Items
1) Preparation for the Future
1.Strengthening the foundation for new Biz
1) AMOLED
Short term : Focusing on small and medium biz
Mid-long term : Establishing the infra of equipment and technology for large TV biz
2) Flexible Display
Successful commercialization
- Mono E-Book (Q4 07)
- E-Newspaper (08)
Technology development
- Color E-Book
- Flexible Color OLED
3) LED NBPC
Leading market through securing cost competitiveness
4) Multi touch screen / Multi Vision
Leading public display market through
securing technology leadership
1. 2008 Major Action
Items
1) Preparation for the Future
2. Successful
Preparation of P8
3. Development of
Advanced Process
Technology
1) Maximization of Investment Efficiency
Reduce Capex through Max Capa /
Min Loss activities and the operation of the expert group
Minimize construction cost
2) Maximization of Productivity
Minimize labor cost and challenge marginal yield
3) Thorough Preparation for Sales
Establish pre-marketing plans with strategic customers
1) 3 Mask
Technology enabling to reduce number of masks for TFT
manufacturing process (4 Masks 3 Masks)
2) Inkjet Color Filter
Technology to produce C/F using high-performance
ink-jet printing method (No need for mask)
3) COT (Color Filter on TFT)
Technology to form C/F on TFT directly
(No need for making TFT and C/F separately)
1. 2008 Major Action
Items
2) Performance Maximization
1. Maximizing
productivity
2. Win-win procurement
1) Continuous Max Capa / Min Loss activities
2) Enhancing equipment technology and maximizing
equipment productivity
New organization: Manufacturing technology center
Restructuring IT system for maximizing manufacturing
efficiency
Shifting from repairing equipment after breakdown to
preventive equipment breakdown
3) Stabilizing quality through systematic
particle management
Forming a special organization for particle management
Promoting full-scale line improvement activities
1) Deriving cost reduction
idea through forming
a One Team with suppliers
2) Establishing total win-win cooperation system
through propagating LPLs best practice
3) Supporting suppliers
cost competitiveness
2. 2008 Outlook
1. TV
2. IT
3. 2008 Outlook
1) Full-blown digital broadcasting in the US from 09
2) Rapid growth
of LCD TV market in emerging markets
3) Shortage expected thanks to strong global demand
1) Impacts on demand from consumption decrease
due to the sub-prime issues and economy
slow-down in US
2) Overall tight, but less tight compared to 07
1) Favorable market situation expected overall
2) Profitability improvement
compared to 07
CFO and some of the Board of Directors to be changed due to
Philips stake sell-down in 07 and term of office expiration.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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LG.Philips LCD Co., Ltd.
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(Registrant)
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Date: January 14, 2008
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By:
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/s/ Ron H. Wirahadiraksa
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(Signature)
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Name:
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Ron H. Wirahadiraksa
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Title:
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Joint Representative Director/
President &
Chief Financial Officer
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