SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of January 2005
LG.Philips LCD Co., Ltd.
(Translation of Registrant’s name into English)
20 Yoido-dong, Youngdungpo-gu, Seoul 150-721, The Republic of Korea
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
Q4 04 Earnings Results
I. Performance in Q4 2004 – Consolidated Financial Data
(Unit: KRW B, Korean GAAP)
| Items |
Q4 04 |
Q3 04 Amount |
Q4 03 Amount |
QoQ |
YoY |
|||||||
| 1. Quarterly Results |
||||||||||||
| Revenues |
1,933 | 1,875 | 2,135 | 3.1 | % | -9.5 | % | |||||
| Operating Income |
2 | 256 | 552 | -99.2 | % | -99.6 | % | |||||
| Ordinary Income |
19 | 240 | 532 | -92.1 | % | -96.4 | % | |||||
| Net Income |
35 | 291 | 544 | -88.0 | % | -93.6 | % | |||||
| 2. Cumulative Results from the beginning of the fiscal year |
||||||||||||
| Revenues |
8,328 | 6,395 | 6,098 | 30.2 | % | 36.6 | % | |||||
| Operating Income |
1,728 | 1,726 | 1,074 | 0.1 | % | 60.9 | % | |||||
| Ordinary Income |
1,688 | 1,669 | 1,013 | 1.1 | % | 66.6 | % | |||||
| Net Income |
1,655 | 1,620 | 1,019 | 2.2 | % | 62.4 | % | |||||
| * | For the purpose of comparison, the past financial statements are reclassified pursuant to the enactment of Korean GAAP. |
II. Event of Q4 2004 Earnings Results
| 1. Provider of Information: |
IR team | |
| 2. Participants: |
Institutional investors, securities analysts, etc. | |
| 3. Event: |
Q4 04 Earnings Results | |
| 4. Date & Time: |
4:30 p.m. (Korea Time) on January 24, 2005 in Korean | |
| 10:00 p.m. (Korea Time) on January 24, 2005 in English | ||
| 5. Venue & Method: |
1) Earnings release conference in Korean: | |
| - Conference room, Korea Stock Exchange (21st floor, New building) | ||
| 2) Conference call in English: | ||
| - Please refer to LG.Philips LCD Co., Ltd.’s IR homepage at www.lgphilips-lcd.com. | ||
6. Contact Information
| i. |
Head of Disclosure: | Dong Joo Kim, Vice President, Finance & Risk Management | ||
| Department (82-2-3777-0702) | ||||
| ii. |
Main Contact for Disclosure-related Matters: | |||
| Jaeho Park, Assistant Manager, Financing Team | ||||
| (82-2-3777-1053) | ||||
| iii. |
Relevant Team: | IR team (82-2-3777-1010) | ||
III. Remarks
| i. |
Please note that the presentation materials for Q4 04 Earnings Results are attached as an appendix and accessible on LG.Philips LCD Co., Ltd.’s IR homepage at www.lgphilips-lcd.com. | |
| ii. |
Please note that the financial data included in the investor presentation and press release are prepared on a consolidated Korean GAAP basis only (US GAAP consolidated and Korean GAAP non-consolidated information are attached). | |
| iii. |
Financial data for Q4 04 are unaudited and provided for the convenience of investors and can be subject to change. | |
 |
The following US GAAP consolidated information and Korean GAAP non-consolidated information are included for the convenience of investors. |
1. US GAAP consolidated information
(Unit: KRW B, US GAAP)
| Items |
Q4 04 |
Q3 04 Amount |
Q4 03 Amount |
QoQ |
YoY |
|||||||
| 1. Quarterly Results |
||||||||||||
| Revenues |
1,933 | 1,874 | 2,135 | 3.1 | % | -9.5 | % | |||||
| Operating Income |
14 | 265 | 549 | -94.7 | % | -97.4 | % | |||||
| Ordinary Income |
41 | 250 | 501 | -83.6 | % | -91.8 | % | |||||
| Net Income |
56 | 298 | 480 | -81.2 | % | -88.3 | % | |||||
| 2. Cumulative Results from the beginning of the fiscal year |
||||||||||||
| Revenues |
8,325 | 6,392 | 6,098 | 30.2 | % | 36.5 | % | |||||
| Operating Income |
1,760 | 1,746 | 1,122 | 0.8 | % | 56.9 | % | |||||
| Ordinary Income |
1,742 | 1,701 | 1,061 | 2.4 | % | 64.2 | % | |||||
| Net Income |
1,704 | 1,648 | 1,006 | 3.4 | % | 69.4 | % | |||||
2. Korean GAAP non-consolidated information
(Unit: KRW B, Korean GAAP)
| Items |
Q4 04 |
Q3 04 Amount |
Q4 03 Amount |
QoQ |
YoY |
||||||||
| 1. Quarterly Results |
|||||||||||||
| Revenues |
1,851 | 1,836 | 2,091 | 0.8 | % | 11.5 | % | ||||||
| Operating Income |
(67 | ) | 244 | 553 | Loss | Loss | |||||||
| Ordinary Income |
20 | 237 | 531 | -91.6 | % | -96.2 | % | ||||||
| Net Income |
35 | 291 | 544 | -88.0 | % | -93.6 | % | ||||||
| 2. Cumulative Results from the beginning of the fiscal year |
|||||||||||||
| Revenues |
8,080 | 6,229 | 6,031 | 29.7 | % | 34.0 | % | ||||||
| Operating Income |
1,641 | 1,707 | 1,087 | -3.9 | % | 51.0 | % | ||||||
| Ordinary Income |
1,683 | 1,663 | 1,010 | 1.2 | % | 66.6 | % | ||||||
| Net Income |
1,655 | 1,620 | 1,019 | 2.2 | % | 62.4 | % | ||||||
| * | For the purpose of comparison, the past financial statements are reclassified pursuant to the enactment of Korean GAAP. |
Appendix 1 : Press Release
LG.PHILIPS LCD REPORTS FOURTH QUARTER 2004 RESULTS
SEOUL, Korea (January 24, 2005) – LG.Philips LCD (NYSE: LPL, KSE: 034220), one of the world’s leading TFT-LCD manufacturers, today reported unaudited earnings results based on consolidated Korean GAAP for the three-month and full-year periods ended December 31, 2004. Amounts in Korean Won are translated into US dollars at the noon buying rate in effect on December 31, 2004, which was KRW 1,035.1 per US dollar.
| • | Sales in the fourth quarter of 2004 increased by 3% to KRW 1,933 billion (USD 1,867 million) from sales of KRW 1,875 billion (USD 1,811 million) in the third quarter of 2004. Sales decreased by 9% in the fourth quarter of 2004 from KRW 2,135 billion (USD 2,063 million) in the fourth quarter of 2003 due to decreases in panel prices. Fourth quarter 2004 sales comparisons, from both a sequential and year-on-year perspective, were also impacted by the Korean Won appreciation against the US dollar during this period. Revenues for 2004 were KRW 8,328 billion (USD 8,046 million), an increase of 37% from KRW 6,098 billion (USD 5,891 million) in 2003. |
| • | Operating income in the fourth quarter of 2004 decreased by 99% from KRW 256 billion (USD 247 million) in the third quarter of 2004. Operating income decreased to KRW 2 billion (USD 1.9 million) in the fourth quarter of 2004 from KRW 552 billion (USD 533 million) in the fourth quarter of 2003. Operating income for 2004 was KRW 1,728 billion (USD 1,669 million), an increase of 61% from KRW 1,074 billion (USD 1,038 million) in 2003. |
| • | EBITDA in the fourth quarter of 2004 decreased by 27% to KRW 412 billion (USD 398 million) from KRW 568 billion (USD 549 million) in the third quarter of 2004. EBITDA in the fourth quarter of 2004 decreased by 51% from KRW 837 billion (USD 809 million) in the fourth quarter of 2003. EBITDA for 2004 was KRW 2,994 billion (USD 2,892 million), an increase of 43% from KRW 2,091 billion (USD 2,020 million) in 2003. |
| • | Net income in the fourth quarter of 2004 decreased by 88% from KRW 291 billion (USD 281 million) in the third quarter of 2004. Net income decreased to KRW 35 billion (USD 34 million) in the fourth quarter of 2004 from KRW 544 billion (USD 526 million) in the fourth quarter of 2003. Net income for 2004 was KRW 1,655 billion (USD 1,599 million), an increase of 62% from KRW 1,019 billion (USD 984 million) in 2003. |
“We continue making steady gains towards our goal of becoming the number one LCD company in the industry,” said Bon Joon Koo, Vice Chairman and CEO of LG.Philips LCD. “In the third quarter of 2004, we began mass production at the world’s largest sixth generation factory, ‘P6’, reaching an average capacity of 35,000 input sheets per month in the fourth quarter. Our advanced technology enables us to further enhance our product offerings, strengthen our market position and fortify our strategic relationships with key customers. We remain committed to growing the LCD TV segment and have announced plans for our seventh generation factory, ‘P7’, which will enable us to meet the future product needs of our customers and capitalize on the growing global opportunity for LCD TVs.”
1
Fourth Quarter Financial Review
Revenue and Cost
Revenues decreased by 9% to KRW 1,933 billion (USD 1,867 million) in the three-month period ended December 31, 2004, from KRW 2,135 billion (USD 2,063 million) in the corresponding period in 2003 due to decreases in panel prices. The effect of the overall decrease in panel prices was offset by an increase in the volume of panels for notebook computers, desktop monitors and TVs resulting from increased production capacity, especially from P6, which commenced operations in August 2004. TFT-LCD panels for desktop monitors, notebook computers, TVs and applications accounted for 53%, 27%, 15% and 5% respectively on a revenue basis, in the fourth quarter of 2004, compared to 55%, 27%, 14% and 4% respectively on a revenue basis, in the third quarter of 2004.
Overall, LG.Philips LCD shipped a total of 771,000 square meters of net display area, a 38% sequential quarterly increase, with an average selling price per square meter of net display area of USD 2,304 in the fourth quarter of 2004. This represents a decrease in the selling price per square meter of net display area of approximately 19% compared to the average of the third quarter of 2004 and a decline of 14% at the end of the fourth quarter as compared to the end of the third quarter of 2004.
The cost of goods sold per square meter of net display area shipped was KRW 2,271 thousand (USD 2,194) for the fourth quarter of 2004, down 9.0% from the third quarter of 2004. Cost of goods sold increased to KRW 1,840 billion (USD 1,778 million), or 22% year-on-year and 18% compared to the third quarter of 2004, as a result of increased volume year-on-year.
“As we announced in December 2004, price declines in the fourth quarter were greater than we anticipated earlier in that period,” said Ron Wirahadiraksa, President and Chief Financial Officer of LG.Philips LCD. “Yet, despite these conditions, LG.Philips LCD continued to execute well on its plan to sustain market leadership, manufacturing efficiencies and sound financial management.”
Mr. Wirahadiraksa continued, “Our strength and commitment to state-of-the-art manufacturing resulted in an impressive 38% increase in area shipped for the quarter, while at the same time, we were able to reduce our costs of goods sold. In 2005, we believe there will be strong growth in consumer demand for flat screen TVs, and our focus remains the same: superior execution, prudent cost-cutting measures and investing in our business to further improve our competitive position and long-term growth prospects.”
Liquidity
As of December 31, 2004, LG.Philips LCD had KRW 1,361 billion (USD 1,315 million) of cash and cash equivalents. Total debt at December 31, 2004, was KRW 2,679 billion (USD 2,588 million) with a net-debt-to-equity ratio of 23%.
During the fourth quarter of 2004, LG.Philips LCD issued USD 200 million of US dollar-denominated floating rate notes and KRW 300 billion of Korean Won-denominated fixed rate bonds. The capital raised is being used for general investment purposes and refinancing of existing debt.
2
Capital Spending
Capital expenditures in the fourth quarter of 2004 sequentially decreased to KRW 473 billion (USD 457 million) from KRW 1,434 billion (USD 1,385 million) in the third quarter of 2004, and from KRW 544 billion (USD 526 million) in the fourth quarter 2003. The capital expenditures for the fourth quarter of 2004 were mainly used for investments in P6 and ongoing operations.
Utilization and Capacity
Total input capacity on an area basis increased approximately 24% in the fourth quarter compared to the third quarter, due mainly to the ramp-up of P6. P6 averaged 35,000 input sheets per month for the fourth quarter of 2004.
Outlook
The following expectations are based on current information as of January 24, 2005. The Company does not expect to update its expectations until next quarter’s earnings release. However, the Company may update its full business outlook, or any portion thereof, at any time for any reason.
According to DisplaySearch, the TFT-LCD industry should experience both unit and area growth in 2005. LG.Philips LCD plans to increase its output to meet this anticipated growth and to meet its customers’ needs.
“We expect the industry supply/demand balance will begin to stabilize in the second quarter and then show signs of strengthening later in the year,” commented Mr. Wirahadiraksa. “For the first quarter of 2005, we see our area shipments increasing approximately 9% quarter-on-quarter. We expect a high single digit rate decline on the ASP per net display area shipped at the end of the first quarter of 2005 as compared to the end of the fourth quarter of 2004. As a result, we expect our EBITDA margin rate in the first quarter of 2005 to be in the range of the mid-teens.”
Earnings Conference and Conference Call
LG.Philips LCD will hold a Korean language earnings conference on January 24, 2005 at 4:30 p.m. Korea Standard Time on the 21st floor of the Korea Stock Exchange (KSE). An English language conference call will follow at 10:00 p.m. Korea Standard Time (8:00 a.m. EST and 1:00 p.m. GMT). The call-in number is 1566-2256 for callers in Korea and +82-2-6677-2256 for callers outside of Korea. The confirmation number is 3777. Corresponding slides will be available at the Investor Relations section of the LG.Philips LCD website. http://www.lgphilips-lcd.com
Investors can listen to the conference call over the Internet at http://www.lgphilips-lcd.com. To listen to the live call, please go to the Investor Relations section of the website at least 15 minutes prior to the call to register and install any necessary audio software.
For those who are unable to participate in the call, a replay will be available for 30 days after the call. The call-in number is 031-810-3100 for callers in Korea and +82-31-810-3100 for callers outside of Korea. The confirmation number for the replay is 22619#.
3
About LG.Philips LCD
LG.Philips LCD (NYSE: LPL, KSE: 034220) is a leading manufacturer and supplier of thin film transistor liquid crystal display (TFT-LCD) panels. The Company manufactures TFT-LCD panels in a wide range of sizes and specifications primarily for use in notebook computers, desktop monitors and televisions. Headquartered in Seoul, South Korea, LG.Philips LCD currently operates six fabrication facilities in Korea and has approximately 10,000 employees in locations around the world.
For more information about the Company, please visit http://www.lgphilips-lcd.com.
LG.Philips LCD makes “Technology you can see!”
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements. 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. Additional information as to 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.
| Investor Relations Contacts: |
||
| Jay Hong (Korea) |
Monica Huang (USA) | |
| LG.Philips LCD |
Sloane & Company | |
| Tel: +822-3777-1010 |
Tel: +1-212-446-1874 | |
| Email: jay.hong@lgphilips-lcd.com |
Email: Mhuang@sloanepr.com | |
| Media Contacts: |
||
| Elliot Sloane (USA) |
Sue Kim (Korea) | |
| Sloane & Company |
Edelman | |
| Tel: +1-212-446-1860 |
Tel: + 822-2022-8239 | |
| Email: ESloane@sloanepr.com |
Email: Sue.kim@edelman.com | |
4
LG.Philips LCD
CONSOLIDATED STATEMENTS OF INCOME
( In millions of KRW)
(The financial statements are based on unaudited Korean GAAP)
| 2004 |
2003 |
|||||||||||||||||||||||
| Three months ended Dec. 31 |
Twelve months ended Dec. 31 |
Three months ended Dec. 31 |
Twelve months ended Dec. 31 |
|||||||||||||||||||||
| NET REVENUES |
1,932,732 | 100 | % | 8,328,170 | 100 | % | 2,135,178 | 100 | % | 6,098,335 | 100 | % | ||||||||||||
| Cost of goods sold |
(1,839,558 | ) | -95 | % | (6,299,513 | ) | -76 | % | (1,507,654 | ) | -71 | % | (4,792,050 | ) | -79 | % | ||||||||
| GROSS PROFIT |
93,174 | 5 | % | 2,028,657 | 24 | % | 627,524 | 29 | % | 1,306,285 | 21 | % | ||||||||||||
| Selling, general & administrative |
(91,233 | ) | -5 | % | (300,300 | ) | -4 | % | (75,255 | ) | -4 | % | (232,165 | ) | -4 | % | ||||||||
| OPERATING INCOME |
1,941 | 0 | % | 1,728,357 | 21 | % | 552,269 | 26 | % | 1,074,120 | 18 | % | ||||||||||||
| Interest income |
6,965 | 0 | % | 19,963 | 0 | % | 1,935 | 0 | % | 6,393 | 0 | % | ||||||||||||
| Interest expense |
(15,797 | ) | -1 | % | (53,262 | ) | -1 | % | (23,086 | ) | -1 | % | (80,700 | ) | -1 | % | ||||||||
| Foreign exchange gain (loss), net |
34,496 | 2 | % | 10,531 | 0 | % | 2,719 | 0 | % | 12,068 | 0 | % | ||||||||||||
| Others, net |
(8,660 | ) | 0 | % | (17,647 | ) | 0 | % | (1,880 | ) | 0 | % | 990 | 0 | % | |||||||||
| Total other income (expense) |
17,004 | 1 | % | (40,415 | ) | 0 | % | (20,312 | ) | -1 | % | (61,249 | ) | -1 | % | |||||||||
| INCOME BEFORE INCOME TAX EXPENSE |
18,945 | 1 | % | 1,687,942 | 20 | % | 531,957 | 25 | % | 1,012,871 | 17 | % | ||||||||||||
| Income tax expense |
16,476 | 1 | % | (32,497 | ) | 0 | % | 11,998 | 1 | % | 6,402 | 0 | % | |||||||||||
| NET INCOME(LOSS) |
35,421 | 2 | % | 1,655,445 | 20 | % | 543,955 | 25 | % | 1,019,273 | 17 | % | ||||||||||||
- These financial statements are provided for informational purposes only
5
LG.Philips LCD
CONSOLIDATED BALANCE SHEET
( In millions of KRW)
(The financial statements are based on unaudited Korean GAAP)
| 2004 |
2003 |
|||||||||||||||||||
| December 31 |
September 30 |
December 31 |
September 30 |
|||||||||||||||||
| ASSETS |
||||||||||||||||||||
| Current assets: |
||||||||||||||||||||
| Cash and cash equivalents |
1,361,239 | 13 | % | 1,211,843 | 12 | % | 503,946 | 8 | % | 174,012 | 3 | % | ||||||||
| Trade accounts and notes receivable |
890,507 | 9 | % | 885,790 | 9 | % | 1,140,732 | 18 | % | 933,727 | 17 | % | ||||||||
| Inventories |
805,288 | 8 | % | 692,395 | 7 | % | 337,175 | 5 | % | 355,969 | 6 | % | ||||||||
| Other receivables and assets |
334,444 | 3 | % | 127,888 | 1 | % | 138,688 | 2 | % | 151,863 | 3 | % | ||||||||
| Total current assets |
3,391,478 | 33 | % | 2,917,916 | 30 | % | 2,120,541 | 33 | % | 1,615,571 | 29 | % | ||||||||
| Investments and other non-current assets |
245,632 | 2 | % | 292,942 | 3 | % | 168,851 | 3 | % | 122,699 | 2 | % | ||||||||
| Property, plant and equipment, net |
6,528,182 | 63 | % | 6,327,617 | 65 | % | 3,947,407 | 61 | % | 3,523,203 | 64 | % | ||||||||
| Other Intangible assets, net |
192,010 | 2 | % | 198,100 | 2 | % | 222,479 | 3 | % | 229,187 | 4 | % | ||||||||
| Total assets |
10,357,302 | 100 | % | 9,736,575 | 100 | % | 6,459,278 | 100 | % | 5,490,660 | 100 | % | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||||||||
| Current liabilities: |
||||||||||||||||||||
| Short-term debt |
694,230 | 7 | % | 632,052 | 6 | % | 609,662 | 9 | % | 1,195,356 | 22 | % | ||||||||
| Trade accounts and notes payable |
581,581 | 6 | % | 1,497,482 | 15 | % | 1,426,947 | 22 | % | 1,199,976 | 22 | % | ||||||||
| Other payables and accrued liabilities |
1,292,453 | 12 | % | 213,867 | 2 | % | 197,504 | 3 | % | 111,962 | 2 | % | ||||||||
| Total current liabilities |
2,568,264 | 25 | % | 2,343,401 | 24 | % | 2,234,113 | 35 | % | 2,507,294 | 46 | % | ||||||||
| Long-term debt |
1,984,432 | 19 | % | 1,651,164 | 17 | % | 1,310,164 | 20 | % | 590,654 | 11 | % | ||||||||
| Reserves for pension |
31,964 | 0 | % | 43,050 | 0 | % | 20,965 | 0 | % | 26,344 | 0 | % | ||||||||
| Total liabilities |
4,584,660 | 44 | % | 4,037,615 | 41 | % | 3,565,242 | 55 | % | 3,124,292 | 57 | % | ||||||||
| Common Stock and additional paid-in capital |
2,638,850 | 25 | % | 2,640,848 | 27 | % | 1,450,000 | 22 | % | 1,450,000 | 26 | % | ||||||||
| Accumulated result |
3,091,674 | 30 | % | 3,056,254 | 31 | % | 1,436,229 | 22 | % | 892,275 | 16 | % | ||||||||
| Capital adjustment |
42,118 | 0 | % | 1,858 | 0 | % | 7,806 | 0 | % | 24,093 | 0 | % | ||||||||
| Shareholders’ equity |
5,772,642 | 56 | % | 5,698,960 | 59 | % | 2,894,036 | 45 | % | 2,366,368 | 43 | % | ||||||||
| Total liabilities and shareholders’ equity |
10,357,302 | 100 | % | 9,736,575 | 100 | % | 6,459,278 | 100 | % | 5,490,660 | 100 | % | ||||||||
- These financial statements are provided for informational purposes only
6
LG.Philips LCD
CONSOLIDATED STATEMENTS OF CASH FLOW
( In millions of KRW)
(The financial statements are based on unaudited Korean GAAP)
| 2004 |
2003 |
|||||||||||
| Three months ended Dec. 31 |
Twelve months ended Dec. 31 |
Three months ended Dec. 31 |
Twelve months ended Dec. 31 |
|||||||||
| Net Income |
35,421 | 1,655,445 | 543,956 | 1,019,273 | ||||||||
| Depreciation |
372,864 | 1,228,190 | 272,619 | 960,388 | ||||||||
| Amortization |
11,318 | 45,048 | 11,191 | 44,246 | ||||||||
| Others |
(74,078 | ) | (47,211 | ) | 26,400 | 46,149 | ||||||
| Operating Cash Flow |
345,526 | 2,881,473 | 854,166 | 2,070,056 | ||||||||
| Net Change in Working Capital |
(198,454 | ) | (155,339 | ) | (75,750 | ) | (413,356 | ) | ||||
| Change in accounts receivable |
(147,078 | ) | 184,547 | (189,851 | ) | (619,883 | ) | |||||
| Change in inventory |
(118,237 | ) | (468,114 | ) | (14,182 | ) | 35,077 | |||||
| Change in accounts payable |
93,951 | 179,409 | 97,112 | 186,193 | ||||||||
| Change in others |
(27,090 | ) | (51,181 | ) | 31,171 | (14,743 | ) | |||||
| Cash Flow from Operation |
147,072 | 2,726,134 | 778,416 | 1,656,700 | ||||||||
| Capital Expenditures |
(472,691 | ) | (3,892,757 | ) | (543,709 | ) | (1,443,880 | ) | ||||
| Delivery |
(467,223 | ) | (3,879,494 | ) | (539,741 | ) | (1,434,780 | ) | ||||
| Intangible assets investment |
(5,710 | ) | (7,884 | ) | (2,566 | ) | (5,204 | ) | ||||
| Others |
241 | (5,380 | ) | (1,402 | ) | (3,896 | ) | |||||
| Cash Flow before Financing |
(325,619 | ) | (1,166,623 | ) | 234,707 | 212,820 | ||||||
| Cash Flow from Financing Activities |
477,014 | 835,066 | 95,227 | 220,820 | ||||||||
| Proceeds from IPO |
(1,999 | ) | 1,188,850 | 0 | 0 | |||||||
| Net Cash Flow |
149,396 | 857,293 | 329,934 | 433,640 | ||||||||
- These financial statements are provided for informational purposes only
7
LG.Philips LCD
CONSOLIDATED STATEMENTS OF INCOME
( In millions of KRW)
(The financial statements are based on unaudited US GAAP)
| 2004 |
2003 |
|||||||||||||||||||||||
| Three months ended Dec. 31 |
Twelve months ended Dec. 31 |
Three months ended Dec. 31 |
Twelve months ended Dec. 31 |
|||||||||||||||||||||
| REVENUE |
1,932,732 | 100 | % | 8,324,794 | 100 | % | 2,135,145 | 100 | % | 6,098,354 | 100 | % | ||||||||||||
| Cost of goods sold |
(1,822,573 | ) | -94 | % | (6,246,240 | ) | -75 | % | (1,495,618 | ) | -70 | % | (4,741,592 | ) | -78 | % | ||||||||
| GROSS PROFIT |
110,159 | 6 | % | 2,078,554 | 25 | % | 639,527 | 30 | % | 1,356,762 | 22 | % | ||||||||||||
| Selling, general & administrative |
(95,640 | ) | -5 | % | (318,449 | ) | -4 | % | (90,127 | ) | -4 | % | (234,555 | ) | -4 | % | ||||||||
| OPERATING INCOME |
14,519 | 1 | % | 1,760,105 | 21 | % | 549,400 | 26 | % | 1,122,207 | 18 | % | ||||||||||||
| Interest income |
6,966 | 0 | % | 19,964 | 0 | % | 1,935 | 0 | % | 6,393 | 0 | % | ||||||||||||
| Interest expense |
(17,217 | ) | -1 | % | (58,049 | ) | -1 | % | (22,876 | ) | -1 | % | (83,619 | ) | -1 | % | ||||||||
| Foreign exchange gain (loss), net |
37,172 | 2 | % | 19,125 | 0 | % | (25,759 | ) | -1 | % | 15,015 | 0 | % | |||||||||||
| Others, net |
(184 | ) | 0 | % | 673 | 0 | % | (1,666 | ) | 0 | % | 1,081 | 0 | % | ||||||||||
| Total other income (expense) |
26,737 | 1 | % | (18,287 | ) | 0 | % | (48,366 | ) | -2 | % | (61,130 | ) | -1 | % | |||||||||
| INCOME BEFORE INCOME TAX EXPENSE |
41,256 | 2 | % | 1,741,818 | 21 | % | 501,034 | 23 | % | 1,061,077 | 17 | % | ||||||||||||
| Income tax expense |
14,297 | 1 | % | (38,131 | ) | 0 | % | (21,132 | ) | -1 | % | (54,574 | ) | -1 | % | |||||||||
| NET INCOME(LOSS) |
55,553 | 3 | % | 1,703,687 | 20 | % | 479,902 | 22 | % | 1,006,503 | 17 | % | ||||||||||||
- These financial statements are provided for informational purposes only
8
LG.Philips LCD
CONSOLIDATED BALANCE SHEET
( In millions of KRW)
(The financial statements are based on unaudited US GAAP)
| 2004 |
2003 |
|||||||||||||||||||
| December 31 |
September 30 |
December 31 |
September 30 |
|||||||||||||||||
| ASSETS |
||||||||||||||||||||
| Current assets: |
||||||||||||||||||||
| Cash and cash equivalents |
1,361,239 | 13 | % | 1,211,843 | 13 | % | 504,014 | 8 | % | 174,012 | 3 | % | ||||||||
| Accounts receivable (Trade, others) |
954,316 | 9 | % | 890,754 | 9 | % | 1,159,767 | 18 | % | 973,855 | 18 | % | ||||||||
| Inventories |
804,117 | 8 | % | 691,145 | 7 | % | 335,921 | 5 | % | 354,518 | 7 | % | ||||||||
| Other current assets |
279,256 | 3 | % | 125,323 | 1 | % | 146,594 | 2 | % | 133,642 | 2 | % | ||||||||
| Total current assets |
3,398,928 | 33 | % | 2,919,065 | 30 | % | 2,146,296 | 34 | % | 1,636,027 | 30 | % | ||||||||
| Investments and other non-current assets |
262,160 | 3 | % | 311,099 | 3 | % | 193,116 | 3 | % | 191,881 | 4 | % | ||||||||
| Property, plant and equipment, net |
6,563,977 | 64 | % | 6,360,059 | 66 | % | 3,974,315 | 63 | % | 3,552,620 | 66 | % | ||||||||
| Intangible assets, net |
37,435 | 0 | % | 33,335 | 0 | % | 29,260 | 0 | % | 26,241 | 0 | % | ||||||||
| Total assets |
10,262,500 | 100 | % | 9,623,558 | 100 | % | 6,342,987 | 100 | % | 5,406,769 | 100 | % | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||||||||
| Current liabilities: |
||||||||||||||||||||
| Short-term debt |
696,212 | 7 | % | 632,052 | 7 | % | 625,675 | 10 | % | 1,214,027 | 22 | % | ||||||||
| Trade accounts and notes payable |
583,117 | 6 | % | 491,903 | 5 | % | 403,522 | 6 | % | 342,336 | 6 | % | ||||||||
| Other payables and accrued liabilities |
1,294,755 | 13 | % | 1,219,145 | 13 | % | 1,223,053 | 19 | % | 966,750 | 18 | % | ||||||||
| Total current liabilities |
2,574,084 | 25 | % | 2,343,100 | 24 | % | 2,252,250 | 36 | % | 2,523,113 | 47 | % | ||||||||
| Long-term debt |
1,993,150 | 19 | % | 1,657,916 | 17 | % | 1,318,581 | 21 | % | 591,886 | 11 | % | ||||||||
| Other non-current liabilities |
31,964 | 0 | % | 46,249 | 0 | % | 20,965 | 0 | % | 26,345 | 0 | % | ||||||||
| Total liabilities |
4,599,198 | 45 | % | 4,047,265 | 42 | % | 3,591,796 | 57 | % | 3,141,344 | 58 | % | ||||||||
| Common Stock & APIC |
2,628,519 | 26 | % | 2,629,530 | 27 | % | 1,450,000 | 23 | % | 1,450,000 | 27 | % | ||||||||
| Retained Earnings |
3,001,042 | 29 | % | 2,945,489 | 31 | % | 1,297,355 | 20 | % | 817,453 | 15 | % | ||||||||
| Capital adjustment |
33,742 | 0 | % | 1,274 | 0 | % | 3,836 | 0 | % | -2,028 | 0 | % | ||||||||
| Shareholders’ equity |
5,663,303 | 55 | % | 5,576,293 | 58 | % | 2,751,191 | 43 | % | 2,265,425 | 42 | % | ||||||||
| Total liabilities and shareholders’ equity |
10,262,500 | 100 | % | 9,623,558 | 100 | % | 6,342,987 | 100 | % | 5,406,769 | 100 | % | ||||||||
- These financial statements are provided for informational purposes only
9
LG.Philips LCD
CONSOLIDATED STATEMENTS OF CASH FLOW
(In millions of KRW)
(The financial statements are based on unaudited US GAAP)
| 2004 |
2003 |
|||||||||||
| Three months ended Dec. 31 |
Twelve months ended Dec. 31 |
Three months ended Dec. 31 |
Twelve months ended Dec. 31 |
|||||||||
| Cash flows from operating activities: |
||||||||||||
| Net income |
55,553 | 1,703,687 | 479,902 | 1,006,503 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
| Depreciation |
374,429 | 1,224,118 | 270,178 | 956,997 | ||||||||
| Amortization |
1,658 | 6,405 | 1,564 | 5,406 | ||||||||
| Others, net |
(61,180 | ) | (65,823 | ) | 24,146 | 46,104 | ||||||
| Change in operating assets and liabilities: |
||||||||||||
| Change in A/R |
(67,573 | ) | 204,970 | (167,422 | ) | (607,480 | ) | |||||
| Change in inventory |
(118,316 | ) | (468,196 | ) | 18,597 | 62,288 | ||||||
| Change in A/P |
93,183 | 181,421 | 67,544 | 152,743 | ||||||||
| Change in others |
(105,370 | ) | (43,641 | ) | 73,377 | 49,278 | ||||||
| Net cash provided by operating activities |
172,384 | 2,742,941 | 767,886 | 1,671,839 | ||||||||
| Cash flows from investing activities: |
||||||||||||
| Purchase of property, plant and equipment |
(469,228 | ) | (3,885,650 | ) | (528,172 | ) | (1,438,230 | ) | ||||
| Proceeds from sales of property, plant and equipment |
2,005 | 6,156 | 1,120 | 3,450 | ||||||||
| Others, net |
(10,991 | ) | (13,263 | ) | (5,008 | ) | (17,919 | ) | ||||
| Net cash used in investing activities |
(478,214 | ) | (3,892,757 | ) | (532,060 | ) | (1,452,699 | ) | ||||
| Cash flows from financing activities: |
||||||||||||
| Financing Activities |
461,863 | 819,915 | 94,569 | 214,777 | ||||||||
| New Equity & Others |
(1,999 | ) | 1,188,850 | |||||||||
| Net cash provided by financing activities |
459,864 | 2,008,765 | 94,569 | 214,777 | ||||||||
| Effect of exchange rate change on cash and cash equivalents |
(4,638 | ) | (1,724 | ) | (393 | ) | (209 | ) | ||||
| Net increase (decrease) in cash |
149,396 | 857,225 | 330,002 | 433,708 | ||||||||
- These financial statements are provided for informational purposes only
10
LG.Philips LCD
Net Income Reconciliation to US GAAP
( In millions of KRW)
| 2004 |
||||||
| Three months ended Dec. 31 |
Twelve months ended Dec. 31 |
|||||
| Net Income under K GAAP |
35,421 | 1,655,445 | ||||
| US GAAP Adjustments |
20,132 | 48,242 | ||||
| Depreciation of property, plant and equipment |
(655 | ) | (2,706 | ) | ||
| Amortization of Intellectual Property Rights |
9,850 | 37,501 | ||||
| Adjustment of AR discount loss |
(206 | ) | 1,379 | |||
| Capitalization of financial interests |
4,008 | 11,709 | ||||
| Inventory Valuation effect of US GAAP Adjustments |
(110 | ) | 1,170 | |||
| Cash flow hedge account |
0 | (3,376 | ) | |||
| Pension expense |
(788 | ) | (2,132 | ) | ||
| Income tax effect of US GAAP Adjustments |
(2,179 | ) | (5,634 | ) | ||
| Others |
10,212 | 10,331 | ||||
| Net Income under US GAAP |
55,553 | 1,703,687 | ||||
- These financial statements are provided for informational purposes only
11
Appendix 2: IR Presentation
Q4 04 Earnings Results
January 24, 2005
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 Securities and Exchange Commission.
This presentation also includes information regarding our historical financial performance through December 31, 2004, and our expectations regarding future performance as reflected in certain non-GAAP financial measures as defined by 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 Earnings Presentation.
Agenda
Q4 04 Earnings Results
Performance Highlights
Outlook
20”W
26”W
32”W
42”W
Paju-P7
Q4 04 Earnings Results
Q4 04 Income Statement
KRW bn
Q4 04 Q3 04 Q4 03 QoQ change YoY change
1,933
1,840
93
2
412
19
35
1,875
1,555
320
256
568
240
291
2,135
1,508
627
552
837
532
544
3%
18%
(71%)
(99%)
(27%)
(92%)
(88%)
(9%)
22%
(85%)
(100%)
(51%)
(96%)
(94%)
Revenue
COGS
Gross profit
Operating income
EBITDA
Income before tax
Net income
Margin (%)
5
0
21
2
17
14
30
16
(24)
(26)
(18)
(23)
(12)
(14)
(9)
(14)
29
26
39
25
Gross margin
Operating margin
EBITDA margin
Net margin
K GAAP (Consolidated)
Source: Unaudited, Company financials
Q4 04 Balance Sheet
KRW bn
Q4 04 Q3 04 Q4 03 QoQ change YoY change
6%
12%
16%
14%
10%
20%
1%
4
60%
170%
139%
29%
14%
51%
99%
(26)
10,357
1,361
805
4,585
694
1,985
5,772
23
6,459
504
337
3,565
610
1,311
2,894
49
9,736
1,212
692
4,037
632
1,651
5,699
19
Assets
Cash & equivalent
Inventory
Liabilities
Short term debt
Long term debt
Shareholders’ equity
Net debt to equity ratio (%)
Source: Unaudited, Company financials
K GAAP (Consolidated)
Q4 04 Cash Flow
KRW bn
Q4 04 Q3 04 Q4 03 QoQ change YoY change
Net income
Depreciation & Amortization
Others
Working capital
Cash flow from operations
CAPEX
Cash flow before financing
Financing activities
Cash proceeds from IPO
Net change in cash
(256)
63
(76)
(428)
(697)
961
264
424
(1,191)
(503)
(509)
100
(100)
(123)
(632)
71
(561)
380
0
(181)
35
384
(74)
(198)
147
(473)
(326)
475
0
149
544
284
26
(75)
779
(544)
235
95
0
330
291
321
2
230
844
(1,434)
(590)
51
1,191
652
Source: Unaudited, Company financials
K GAAP (Consolidated)
Performance Highlights
Shipments and ASP
Total K m² *
ASP/m² (US$)
1,600
$4,000
$3,554
$3,512
$3,342
1,400
$3,133
$3,500
$2,929
$2,857
1,200
$2,782
$3,000
$2,304
$2,500
1,000
771
$2,000
800
561
$1,500
600
543
531
560
455
367
400
$1,000
295
200
$500
$0
0
Q3
Q2
Q104
Q4
Q3
Q2
Q103
Q4
Total K m²
ASP/m²
Source: Company financials
* Net display area shipped
Revenue: Product Mix
4%
3%
5%
100%
15%
15%
14%
80%
27%
29%
27%
60%
40%
55%
53%
53%
20%
0%
Q304
Q403
Q404
TV
NBPC
MNT
APPL
Source: Company financials
Q4 04 Capacity Update
5th generation capacity increased by approximately 10%
P6 input capacity averaged 35K per month for the quarter
Unit: Quarterly input capacity
by Area (sq.m)
1500
1200
900
600
300
0
Q304
Q204
Q104
Q404
P5
P4
P1~P3
P6
Source: Company financials
Cash ROIC
EBITDA margin
Cash ROIC
39%
35%
36%
16%
54%
52%
42%
2004
2003
2002
2001
Sales / IC *
13%
1.6
1.5
2004
2003
2002
2001
1.1
K GAAP (Consolidated)
0.8
2003
2002
2001
2004
Source: Unaudited, Company financials
* IC (Invested Capital) equals average of net debt and equity for the designated period
Outlook
Q1 05 Outlook
ASP per sq. m
n Dec. 04 vs. Mar. 05 : High single digit (%) •
n Q4 04 vs. Q1 05 Total Shipments (m2) ~9% ”
EBITDA Margin
Q1 05 Mid-teens
CAPEX Outlook
Capex schedule (KRW bn)
4,580
3,818
341
3,144
2,212
1,265
1,436
2005(E)
2004
P6
Others
P7
Source: Company financials, Delivery base
Questions and Answers
Appendix
US GAAP Income Statement
KRW bn
Q4 04 Q3 04 Q4 03 QoQ change YoY change
Revenue
COGS
Gross profit
Operating income
EBITDA
Income before tax
Net income
1,933
1,823
110
14
429
41
56
2,135
1,496
639
549
795
501
480
3%
18%
(67%)
(95%)
(25%)
(84%)
(81%)
(9%)
22%
(83%)
(97%)
(46%)
(92%)
(88%)
1,874
1,543
331
265
571
251
298
Margin (%)
6
1
22
3
(12)
(13)
(8)
(13)
(24)
(25)
(15)
(19)
30
26
37
22
18
14
30
16
Gross margin
Operating margin
EBITDA margin
Net margin
Source: Unaudited, Company financials
US GAAP Balance Sheet
KRW bn
Q4 04 Q3 04 Q4 03 QoQ change YoY change
Assets
Cash & equivalent
Inventory
Liabilities
Short term debt
Long term debt
Shareholders’ equity
Net debt to equity ratio (%)
10,262
1,361
804
4,599
696
1,993
5,663
23
7%
12%
16%
14%
10%
20%
2%
4
62%
170%
139%
28%
11%
51%
106%
(29)
6,343
504
336
3,592
626
1,319
2,751
52
9,623
1,212
691
4,047
632
1,658
5,576
19
Source: Unaudited, Company financials
US GAAP Cash Flow
KRW bn
Q4 04 Q3 04 Q4 03 QoQ change YoY change
(242)
65
(68)
(431)
(676)
956
280
408
(1,191)
(503)
(424)
104
(90)
(189)
(599)
54
(545)
364
0
(181)
56
376
(66)
(198)
168
(478)
(310)
459
0
149
480
272
24
(9)
767
(532)
235
95
0
330
298
311
2
233
844
(1,434)
(590)
51
1,191
652
Net income
Depreciation & Amortization
Others
Working capital
Cash flow from operations
CAPEX
Cash flow before financing
Financing activities
Cash proceeds from IPO
Net change in cash
Source: Unaudited, Company financials
Net Income Reconciliation to US GAAP
KRW bn
Q4 04 Q1~Q4 04
Net income under K GAAP
35
21
(1)
10
0
4
0
0
(1)
(1)
10
56
1,655
49
(3)
38
2
12
1
(3)
(2)
(6)
10
1,704
US GAAP adjustments
Depreciation of PP&E
Amortization of IPR
Adjustment of AR discount loss
Capitalization of financial interests
Inventory valuation effect of US GAAP adjustments
Cash flow hedge account
Pension expense
Income tax effect of US GAAP adjustments
Others (ESOP, etc)
Net income under US GAAP
Source: Unaudited, Company financials
EBITDA Reconciliation
K GAAP (KRW bn)
Q4 04 Q3 04 Q4 03 QoQ change YoY change
1. Net income
(256)
4
2
35
63
0
0
(156)
(509)
(7)
5
(4)
100
0
0
(425)
291
12
5
(51)
310
11
0
568
544
23
2
(12)
273
11
0
837
35
16
7
(16)
373
11
0
412
2. Interest expense
3. Interest income
4. Provision (benefit) for income taxes
5. Depreciation of PP&E
6. Amortization of intangible asset
7. Amortization of debt issuance cost
EBITDA (1+2-3+4+5+6+7)
US GAAP (KRW bn)
Q4 04 Q3 04 Q4 03 QoQ change YoY change
1. Net income
(242)
3
2
34
65
0
0
(142)
(424)
(6)
5
(35)
104
0
0
(366)
298
14
5
(48)
309
2
1
571
480
23
2
21
270
2
1
795
56
17
7
(14)
374
2
1
429
2. Interest expense
3. Interest income
4. Provision (benefit) for income taxes
5. Depreciation of PP&E
6. Amortization of intangible asset
7. Amortization of debt issuance cost
EBITDA (1+2-3+4+5+6+7)
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. Specifically, our significant capital assets are in different stages of depreciation, and because we do not have separate operating divisions, our senior management uses EBITDA internally to measure the performance of these assets on a comparable basis. We also believe that the presentation of EBITDA will enhance an investor’s 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. For example, depreciation on most of our equipment is made based on a four-year useful life while most of our competitors use different depreciation schedules from our own. 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.
55” Wide Full HDTV
LG.Philips LCD makes
Technology you can see!
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.
| LG.Philips LCD Co., Ltd. | ||||
| (Registrant) | ||||
| Date: January 24, 2005 |
By: |
/s/ Ron H. Wirahadiraksa | ||
| (Signature) | ||||
| Name: |
Ron H. Wirahadiraksa | |||
| Title: |
Joint Representative Director/ | |||
| President & Chief Financial Officer | ||||