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 October 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
Q3 05 Earnings Results
I. Performance in Q3 2005 – Korean GAAP Consolidated Financial Data
(Unit: KRW B)
| Item |
Q3 05 |
Q2 05 |
Q3 04 |
QoQ |
YoY |
|||||||
| Quarterly Results |
||||||||||||
| Revenues |
2,741 | 2,308 | 1,875 | 18.8 | % | 46.2 | % | |||||
| Operating Income |
240 | 29 | 256 | 727.6 | % | -6.3 | % | |||||
| Ordinary Income |
217 | 1 | 240 | 21,600.0 | % | -9.6 | % | |||||
| Net Income |
227 | 41 | 291 | 453.7 | % | -22.0 | % |
II. Event of Q3 2005 Earnings Results
| 1. | Provider of Information: | IR team | ||
| 2. | Participants: | Institutional investors, securities analysts, etc. | ||
| 3. | Event: | Q3 05 Earnings Results | ||
| 4. | Date & Time: | 4:30 p.m. (Korea Time) on October 11, 2005 in Korean | ||
| 9:00 p.m. (Korea Time) on October 11, 2005 in English | ||||
| 5. | Venue & Method: | 1) Earnings release conference in Korean: | ||
| - International Conference room, Korea Exchange, Seoul | ||||
| (1st floor, Main building) | ||||
| 2) Conference call in English: | ||||
| - Please refer to IR homepage of LG.Philips LCD Co., Ltd. at | ||||
| www.lgphilips-lcd.com. | ||||
| 6. | Contact Information | |||
| 1) Head of Disclosure: |
Dong Joo Kim, Vice President, Finance & Risk Management | |||
| Department (82-2-3777-0702) | ||||
| 2) Main Contact for Disclosure-related Matters: | ||||
| Jicheon Chang, Assistant Manager, Financing Team | ||||
| (82-2-3777-1277) | ||||
| 3) Relevant Team: |
IR team (82-2-3777-1010) | |||
III. Remarks
| 1. | Please note that the presentation materials for Q3 05 Earnings Results are attached as an appendix and accessible on IR homepage of LG.Philips LCD Co., Ltd. at www.lgphilips-lcd.com. |
| 2. | 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 stated below). |
| 3. | Financial data for Q3 05 are unaudited and unreviewed. They are 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. |
US GAAP consolidated information
(Unit: KRW B)
| Item |
Q3 05 |
Q2 05 |
Q3 04 |
QoQ |
YoY |
|||||||
| Quarterly Results |
||||||||||||
| Revenues |
2,741 | 2,308 | 1,874 | 18.8 | % | 46.3 | % | |||||
| Operating Income |
239 | 36 | 265 | 563.9 | % | -9.8 | % | |||||
| Ordinary Income |
216 | 3 | 250 | 7,100.0 | % | -13.6 | % | |||||
| Net Income |
238 | 38 | 298 | 526.3 | % | -20.1 | % |
Korean GAAP non-consolidated information
(Unit: KRW B)
| Item |
Q3 05 |
Q2 05 |
Q3 04 |
QoQ |
YoY |
|||||||
| Quarterly Results |
||||||||||||
| Revenues |
2,416 | 2,029 | 1,836 | 19.1 | % | 31.6 | % | |||||
| Operating Income |
243 | 28 | 244 | 767.9 | % | -0.4 | % | |||||
| Ordinary Income |
214 | 1 | 237 | 21,300.0 | % | -9.7 | % | |||||
| Net Income |
227 | 41 | 291 | 453.7 | % | -22.0 | % |
| Attached: | 1) Press Release | |
| 2) Presentation Material |
Attachment 1. Press Release
LG.PHILIPS LCD REPORTS THIRD QUARTER 2005 RESULTS
SEOUL, Korea October 11, 2005 – LG.Philips LCD [NYSE: LPL, KRX: 034220], one of the world’s leading TFT-LCD manufacturers, today reported unaudited earnings results based on consolidated Korean GAAP for the three-month period ended September 30, 2005. Amounts in Korean Won are translated into US dollars at the noon buying rate in effect on September 30, 2005, which was KRW 1,042.4 per US dollar.
| • | Sales in the third quarter of 2005 increased by 19% to KRW 2,741 billion (USD 2,630 million) from sales of KRW 2,308 billion (USD 2,214 million) in the second quarter of 2005 and increased 46% compared to KRW 1,875 billion (USD 1,799 million) in the third quarter of 2004. Third quarter 2005 sales were led by the growing demand for large and wide LCD TV panels and a stronger pricing environment for notebook panels. |
| • | Operating profit in the third quarter of 2005 increased to KRW 240 billion (USD 230 million) from KRW 29 billion (USD 28 million) in the second quarter of 2005, and compared to an operating profit of KRW 256 billion (USD 246 million) in the third quarter of 2004. |
| • | EBITDA in the third quarter of 2005 increased by 54% to KRW 681 billion (USD 653 million) from KRW 442 billion (USD 424 million) in the second quarter of 2005. EBITDA increased by 20% from KRW 568 billion (USD 545 million) in the third quarter of 2004. |
| • | Net income in the third quarter of 2005 increased to a net profit of KRW 227 billion (USD 218 million) from KRW 41 billion (USD 39 million) in the second quarter of 2005, and compared to a net profit of KRW 291 billion (USD 279 million) in the third quarter of 2004. |
“During the third quarter, we further enhanced our product portfolio, consistently reduced our square meter costs and continued on our path of market leadership,” said Bon Joon Koo, Vice Chairman and CEO of LG.Philips LCD. “As we predicted, large and wide LCD TVs are becoming mainstream, and we are driving this growth through our cutting-edge products, manufacturing excellence and innovative partnerships. Notably, our strategic investment in a new module plant in Poland, announced during the third quarter, will enable us to better serve the fast-growing European LCD TV market while strengthening relationships with our customers there.”
Third Quarter Financial Review
Revenue and Cost
Revenue in the three-month period ended September 30, 2005 increased by 46% to KRW 2,741 billion (USD 2,630 million) from KRW 1,875 billion (USD 1,799 million) in the corresponding period in 2004, as increases in shipments were robust due to growing TV demand and a stabilizing pricing environment. TFT-LCD panels for desktop monitors, TVs, notebook computers and “other applications” accounted for 45%, 29%, 22% and 4%, respectively, on a revenue basis in the third quarter of 2005, compared to 53%, 24%,18% and 5%, respectively, on a revenue basis in the second quarter of 2005.
Overall, the Company shipped a total of 1,248,000 square meters of net display area in the third quarter of 2005, a 13.9% sequential quarterly increase, with an average selling price per square meter of net display area of USD 2,121. This represents an increase in the average selling price per square meter of net display area of approximately 2.9% compared to the average of the second quarter of 2005, and an increase of 2.3% at the end of the third quarter as compared to the end of the second quarter of 2005.
The total cost of goods sold increased to KRW 2,367 billion (USD 2,271 million), or 52% year-on-year and 9% compared to the second quarter of 2005, primarily as a result of increased shipments. The cost of goods sold per square meter of net display area shipped was KRW 1,896 thousand (USD 1,819) for the third quarter of 2005, down 4.2% from the second quarter of 2005.
“In the third quarter, we experienced increased demand, especially in the LCD TV and notebook panel segments, and, as a result, we shipped a record amount of display area, despite a strong competitive environment,” said Ron Wirahadiraksa, President and CFO of LG.Philips LCD. “We were able to meet this demand growth due in large part to the successful ramp up of our P6 facility, which achieved its initial design capacity of 90,000 sheets per month this quarter. While we continued to increase capacity, we were also intensely focused on cost reduction, which continued to show improvement.”
Liquidity
As of September 30, 2005, LG.Philips LCD had KRW 2,129 billion (USD 2,042 million) of cash and cash equivalents. Total debt was KRW 3,618 billion (USD 3,471 million), and the net-debt-to-equity ratio was 20% as of September 30, 2005, compared to 40% last quarter, in large part due to the USD 1.4 billion follow-on equity offering in July 2005.
Capital Spending
Capital expenditures in the third quarter of 2005 decreased to KRW 1,380 billion (USD 1,324 million) from KRW 1,434 billion (USD 1,376 million) in the third quarter of 2004. Our capital expenditures for the third quarter of 2005 were mainly used for continued investment in P6 and P7.
Utilization and Capacity
Total input capacity on an area basis increased approximately 17% in the third quarter compared to the second quarter, due mainly to P6 achieving its initial design capacity of 90,000 input sheets per month. The Company intends to expand this capacity further over time.
Outlook
The following expectations are based on current information as of October 11, 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.
“For the fourth quarter of 2005, we anticipate our area shipments will increase by a low teens percentage quarter-on-quarter due to continued growth, especially in the rapidly expanding TV segment,” commented Mr. Wirahadiraksa. “We expect our average selling price per square meter of net display area shipped at the end of the fourth quarter of 2005 to be flat to slightly down, as compared to the end of the third quarter of 2005, largely due to potentially weaker pricing for some monitors. Our EBITDA margin for the fourth quarter is expected to be in the mid-to-high twenties. Our CAPEX guidance for 2005 remains unchanged from the previous quarter’s guidance, and at this stage, we maintain our preliminary CAPEX for 2006 to be in the range of KRW 3.5 trillion to KRW 4.5 trillion.”
Earnings Conference and Conference Call
LG.Philips LCD will hold a Korean language earnings conference on October 11, 2005 at 4:30 p.m. Korea Standard Time on the 1st floor, in the International Conference Room of the Korea Exchange Building (KRX). An English language conference call will follow at 9:00 p.m. Korea Standard Time, 8:00 a.m. EST and 1:00 p.m. GMT. The call-in number is 031-810-3001 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 38104#.
About LG.Philips LCD
LG.Philips LCD [NYSE: LPL, KRX: 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 17,000 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 |
LG.Philips LCD | |
| Tel: +1-212-446-1860 |
Tel: +822-3777-0970 | |
| Email: ESloane@sloanepr.com |
Email: sue.kim@lgphilips-lcd.com | |
LG.Philips LCD
CONSOLIDATED STATEMENTS OF INCOME
( In millions of KRW)
(The financial statements are based on unaudited Korean GAAP)
| 2005 |
2004 |
|||||||||||||||||||||||
| Three months ended Sep 30 |
Nine months ended Sep 30 |
Three months ended Sep 30 |
Nine months ended Sep 30 |
|||||||||||||||||||||
| NET REVENUES |
2,740,507 | 100 | % | 7,112,883 | 100 | % | 1,875,195 | 100 | % | 6,395,438 | 100 | % | ||||||||||||
| Cost of goods sold |
(2,367,145 | ) | -86 | % | (6,638,041 | ) | -93 | % | (1,555,192 | ) | -83 | % | (4,459,955 | ) | -70 | % | ||||||||
| GROSS PROFIT |
373,362 | 14 | % | 474,842 | 7 | % | 320,003 | 17 | % | 1,935,483 | 30 | % | ||||||||||||
| Selling, general & administrative |
(132,959 | ) | -5 | % | (339,529 | ) | -5 | % | (63,626 | ) | -3 | % | (209,067 | ) | -3 | % | ||||||||
| OPERATING INCOME |
240,403 | 9 | % | 135,313 | 2 | % | 256,377 | 14 | % | 1,726,416 | 27 | % | ||||||||||||
| Interest income |
15,446 | 1 | % | 36,487 | 1 | % | 5,227 | 0 | % | 12,998 | 0 | % | ||||||||||||
| Interest expense |
(27,954 | ) | -1 | % | (78,675 | ) | -1 | % | (11,775 | ) | -1 | % | (37,465 | ) | -1 | % | ||||||||
| Foreign exchange gain (loss), net |
(2,055 | ) | 0 | % | (21,039 | ) | 0 | % | (7,784 | ) | 0 | % | (23,965 | ) | 0 | % | ||||||||
| Others, net |
(8,881 | ) | 0 | % | (11,943 | ) | 0 | % | (1,884 | ) | 0 | % | (8,987 | ) | 0 | % | ||||||||
| Total other income (expense) |
(23,444 | ) | -1 | % | (75,170 | ) | -1 | % | (16,216 | ) | -1 | % | (57,419 | ) | -1 | % | ||||||||
| INCOME BEFORE INCOME TAX EXPENSE |
216,959 | 8 | % | 60,143 | 1 | % | 240,161 | 13 | % | 1,668,997 | 26 | % | ||||||||||||
| Income tax expense |
10,013 | 0 | % | 129,043 | 2 | % | 50,707 | 3 | % | (48,973 | ) | -1 | % | |||||||||||
| NET INCOME (LOSS) |
226,972 | 8 | % | 189,186 | 3 | % | 290,868 | 16 | % | 1,620,024 | 25 | % | ||||||||||||
- These financial statements are provided for informational purposes only
LG.Philips LCD
CONSOLIDATED BALANCE SHEET
( In millions of KRW)
(The financial statements are based on unaudited Korean GAAP)
| 2005 |
2004 |
|||||||||||||||||||||
| Sep 30 |
Jun 30 |
Sep 30 |
Jun 30 |
|||||||||||||||||||
| ASSETS |
||||||||||||||||||||||
| Current assets: |
||||||||||||||||||||||
| Cash and cash equivalents |
2,129,456 | 16 | % | 1,330,973 | 11 | % | 1,211,843 | 12 | % | 559,936 | 7 | % | ||||||||||
| Trade accounts and notes receivable |
1,307,958 | 10 | % | 1,215,026 | 10 | % | 885,790 | 9 | % | 1,342,193 | 16 | % | ||||||||||
| Inventories |
724,954 | 5 | % | 721,298 | 6 | % | 692,395 | 7 | % | 452,856 | 5 | % | ||||||||||
| Other receivables and assets |
248,701 | 2 | % | 299,725 | 3 | % | 127,888 | 1 | % | 147,773 | 2 | % | ||||||||||
| Total current assets |
4,411,069 | 33 | % | 3,567,022 | 30 | % | 2,917,916 | 30 | % | 2,502,758 | 30 | % | ||||||||||
| Investments and other non-current assets |
413,959 | 3 | % | 350,716 | 3 | % | 292,942 | 3 | % | 138,611 | 2 | % | ||||||||||
| Property, plant and equipment, net |
8,548,527 | 63 | % | 7,754,666 | 65 | % | 6,327,617 | 65 | % | 5,534,822 | 66 | % | ||||||||||
| Other Intangible assets, net |
167,933 | 1 | % | 171,311 | 1 | % | 198,100 | 2 | % | 200,831 | 2 | % | ||||||||||
| Total assets |
13,541,488 | 100 | % | 11,843,715 | 100 | % | 9,736,575 | 100 | % | 8,377,022 | 100 | % | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||||||||||
| Current liabilities: |
||||||||||||||||||||||
| Short-term debt |
794,504 | 6 | % | 631,798 | 5 | % | 632,052 | 6 | % | 575,421 | 7 | % | ||||||||||
| Trade accounts and notes payable |
730,003 | 5 | % | 651,783 | 6 | % | 489,602 | 5 | % | 438,438 | 5 | % | ||||||||||
| Other payables and accrued liabilities |
1,816,328 | 13 | % | 1,836,142 | 16 | % | 1,221,747 | 13 | % | 1,438,639 | 17 | % | ||||||||||
| Total current liabilities |
3,340,835 | 25 | % | 3,119,723 | 26 | % | 2,343,401 | 24 | % | 2,452,498 | 29 | % | ||||||||||
| Long-term debt |
2,822,930 | 21 | % | 2,957,417 | 25 | % | 1,651,164 | 17 | % | 1,648,543 | 20 | % | ||||||||||
| Reserves for pension |
59,528 | 0 | % | 54,160 | 0 | % | 43,050 | 0 | % | 39,347 | 0 | % | ||||||||||
| Total liabilities |
6,223,293 | 46 | % | 6,131,300 | 52 | % | 4,037,615 | 41 | % | 4,140,388 | 49 | % | ||||||||||
| Common Stock and additional paid-in capital |
4,069,499 | 30 | % | 2,668,718 | 23 | % | 2,640,848 | 27 | % | 1,450,000 | 17 | % | ||||||||||
| Accumulated result |
3,280,838 | 24 | % | 3,053,889 | 26 | % | 3,056,254 | 31 | % | 2,765,385 | 33 | % | ||||||||||
| Capital adjustment |
(32,142 | ) | 0 | % | (10,192 | ) | 0 | % | 1,858 | 0 | % | 21,249 | 0 | % | ||||||||
| Shareholders’ equity |
7,318,195 | 54 | % | 5,712,415 | 48 | % | 5,698,960 | 59 | % | 4,236,634 | 51 | % | ||||||||||
| Total liabilities and shareholders’ equity |
13,541,488 | 100 | % | 11,843,715 | 100 | % | 9,736,575 | 100 | % | 8,377,022 | 100 | % | ||||||||||
- 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 Korean GAAP)
| 2005 |
2004 |
|||||||||||
| Three months ended Sep 30 |
Nine months ended Sep 30 |
Three months ended Sep 30 |
Nine months ended Sep 30 |
|||||||||
| Net Income |
226,972 | 189,186 | 290,868 | 1,620,024 | ||||||||
| Depreciation |
440,522 | 1,254,722 | 309,620 | 850,839 | ||||||||
| Amortization |
11,097 | 34,225 | 10,974 | 33,750 | ||||||||
| Others |
29,241 | 78,354 | 1,787 | 24,378 | ||||||||
| Operating Cash Flow |
707,832 | 1,556,487 | 613,249 | 2,528,991 | ||||||||
| Net Change in Working Capital |
55,994 | (337,329 | ) | 230,040 | 17,136 | |||||||
| Change in accounts receivable |
(95,131 | ) | (404,252 | ) | 458,029 | 254,322 | ||||||
| Change in inventory |
(3,657 | ) | 80,406 | (240,490 | ) | (355,219 | ) | |||||
| Change in accounts payable |
83,020 | 150,432 | 52,565 | 85,601 | ||||||||
| Change in others |
71,762 | (163,915 | ) | (40,064 | ) | 32,432 | ||||||
| Cash Flow from Operation |
763,826 | 1,219,158 | 843,289 | 2,546,127 | ||||||||
| Capital Expenditures |
(1,380,277 | ) | (2,801,669 | ) | (1,432,812 | ) | (3,402,287 | ) | ||||
| Acquisition of PP&E |
(1,370,812 | ) | (2,786,520 | ) | (1,331,947 | ) | (3,288,947 | ) | ||||
| (Delivery) |
(1,207,522 | ) | (3,277,936 | ) | (1,102,461 | ) | (3,231,135 | ) | ||||
| (Other account payables) |
(163,290 | ) | 491,416 | (229,486 | ) | (57,812 | ) | |||||
| Intangible assets investment |
(7,720 | ) | (10,147 | ) | (12,303 | ) | (19,161 | ) | ||||
| Others |
(1,745 | ) | (5,002 | ) | (88,562 | ) | (94,179 | ) | ||||
| Cash Flow before Financing |
(616,451 | ) | (1,582,511 | ) | (589,523 | ) | (856,160 | ) | ||||
| Cash Flow from Other Financing Activities |
13,754 | 949,548 | 50,581 | 373,208 | ||||||||
| Proceeds from Additional Stocks |
1,401,180 | 1,401,180 | 1,190,849 | 1,190,849 | ||||||||
| Net Cash Flow |
798,483 | 768,217 | 651,907 | 707,897 | ||||||||
- These financial statements are provided for informational purposes only
LG.Philips LCD
CONSOLIDATED STATEMENTS OF INCOME
( In millions of KRW)
(The financial statements are based on unaudited US GAAP)
| 2005 |
2004 |
|||||||||||||||||||||||
| Three months ended Sep 30 |
Nine months ended Sep 30 |
Three months ended Sep 30 |
Nine months ended Sep 30 |
|||||||||||||||||||||
| REVENUE |
2,740,507 | 100 | % | 7,112,883 | 100 | % | 1,873,579 | 100 | % | 6,392,062 | 100 | % | ||||||||||||
| Cost of goods sold |
(2,364,366 | ) | -86 | % | (6,613,579 | ) | -93 | % | (1,543,259 | ) | -82 | % | (4,423,667 | ) | -69 | % | ||||||||
| GROSS PROFIT |
376,141 | 14 | % | 499,304 | 7 | % | 330,320 | 18 | % | 1,968,395 | 31 | % | ||||||||||||
| Selling, general & administrative |
(137,490 | ) | -5 | % | (350,047 | ) | -5 | % | (65,609 | ) | -4 | % | (222,809 | ) | -3 | % | ||||||||
| OPERATING INCOME |
238,651 | 9 | % | 149,257 | 2 | % | 264,711 | 14 | % | 1,745,586 | 27 | % | ||||||||||||
| Interest income |
15,446 | 1 | % | 36,487 | 1 | % | 5,227 | 0 | % | 12,998 | 0 | % | ||||||||||||
| Interest expense |
(27,451 | ) | -1 | % | (81,149 | ) | -1 | % | (13,870 | ) | -1 | % | (40,832 | ) | -1 | % | ||||||||
| Foreign exchange gain (loss), net |
(9,568 | ) | 0 | % | (33,016 | ) | 0 | % | (6,002 | ) | 0 | % | (18,047 | ) | 0 | % | ||||||||
| Others, net |
(1,021 | ) | 0 | % | (527 | ) | 0 | % | 271 | 0 | % | 857 | 0 | % | ||||||||||
| Total other income (expense) |
(22,594 | ) | -1 | % | (78,205 | ) | -1 | % | (14,374 | ) | -1 | % | (45,024 | ) | -1 | % | ||||||||
| INCOME BEFORE INCOME TAX EXPENSE |
216,057 | 8 | % | 71,052 | 1 | % | 250,337 | 13 | % | 1,700,562 | 27 | % | ||||||||||||
| Income tax expense |
21,952 | 1 | % | 110,882 | 2 | % | 47,557 | 3 | % | (52,428 | ) | -1 | % | |||||||||||
| NET INCOME(LOSS) |
238,009 | 9 | % | 181,934 | 3 | % | 297,894 | 16 | % | 1,648,134 | 26 | % | ||||||||||||
- These financial statements are provided for informational purposes only
LG.Philips LCD
CONSOLIDATED BALANCE SHEET
( In millions of KRW)
(The financial statements are based on unaudited US GAAP)
| 2005 |
2004 |
|||||||||||||||||||||
| Sep 30 |
Jun 30 |
Sep 30 |
Jun 30 |
|||||||||||||||||||
| ASSETS |
||||||||||||||||||||||
| Current assets: |
||||||||||||||||||||||
| Cash and cash equivalents |
2,129,456 | 16 | % | 1,330,973 | 11 | % | 1,211,843 | 13 | % | 559,936 | 7 | % | ||||||||||
| Trade accounts and notes receivable |
1,307,958 | 10 | % | 1,215,026 | 10 | % | 885,312 | 9 | % | 1,341,749 | 16 | % | ||||||||||
| Inventories |
723,917 | 5 | % | 720,836 | 6 | % | 691,145 | 7 | % | 451,383 | 5 | % | ||||||||||
| Other current assets |
248,029 | 2 | % | 297,800 | 3 | % | 130,765 | 1 | % | 169,366 | 2 | % | ||||||||||
| Total current assets |
4,409,360 | 33 | % | 3,564,635 | 30 | % | 2,919,065 | 30 | % | 2,522,434 | 31 | % | ||||||||||
| Investments and other non-current assets |
434,718 | 3 | % | 361,167 | 3 | % | 311,099 | 3 | % | 150,117 | 2 | % | ||||||||||
| Property, plant and equipment, net |
8,578,817 | 64 | % | 7,788,439 | 66 | % | 6,360,059 | 66 | % | 5,565,875 | 67 | % | ||||||||||
| Intangible assets, net |
42,341 | 0 | % | 36,058 | 0 | % | 33,335 | 0 | % | 26,934 | 0 | % | ||||||||||
| Total assets |
13,465,236 | 100 | % | 11,750,299 | 100 | % | 9,623,558 | 100 | % | 8,265,360 | 100 | % | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||||||||||
| Current liabilities: |
||||||||||||||||||||||
| Short-term debt |
794,689 | 6 | % | 633,107 | 5 | % | 632,052 | 7 | % | 575,617 | 7 | % | ||||||||||
| Trade accounts and notes payable |
730,003 | 5 | % | 651,783 | 6 | % | 491,903 | 5 | % | 438,438 | 5 | % | ||||||||||
| Other payables and accrued liabilities |
1,820,576 | 14 | % | 1,840,072 | 16 | % | 1,219,144 | 13 | % | 1,441,381 | 17 | % | ||||||||||
| Total current liabilities |
3,345,268 | 25 | % | 3,124,962 | 27 | % | 2,343,099 | 24 | % | 2,455,436 | 30 | % | ||||||||||
| Long-term debt |
2,875,674 | 21 | % | 3,005,875 | 26 | % | 1,657,916 | 17 | % | 1,656,606 | 20 | % | ||||||||||
| Other non-current liabilities |
61,138 | 0 | % | 54,829 | 0 | % | 46,249 | 0 | % | 39,347 | 0 | % | ||||||||||
| Total liabilities |
6,282,080 | 47 | % | 6,185,666 | 53 | % | 4,047,264 | 42 | % | 4,151,389 | 50 | % | ||||||||||
| Common Stock & APIC |
4,032,294 | 30 | % | 2,630,379 | 22 | % | 2,629,531 | 27 | % | 1,450,000 | 18 | % | ||||||||||
| Retained Earnings |
3,182,954 | 24 | % | 2,944,967 | 25 | % | 2,945,489 | 31 | % | 2,647,595 | 32 | % | ||||||||||
| Capital adjustment |
(32,092 | ) | 0 | % | (10,713 | ) | 0 | % | 1,274 | 0 | % | 16,376 | 0 | % | ||||||||
| Shareholders’ equity |
7,183,156 | 53 | % | 5,564,633 | 47 | % | 5,576,294 | 58 | % | 4,113,971 | 50 | % | ||||||||||
| Total liabilities and shareholders’ equity |
13,465,236 | 100 | % | 11,750,299 | 100 | % | 9,623,558 | 100 | % | 8,265,360 | 100 | % | ||||||||||
- 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)
| 2005 |
2004 |
|||||||||||
| Three months ended Sep 30 |
Nine months ended Sep 30 |
Three months ended Sep 30 |
Nine months ended Sep 30 |
|||||||||
| Cash flows from operating activities: |
||||||||||||
| Net income |
238,009 | 181,934 | 297,894 | 1,648,134 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
| Depreciation |
440,892 | 1,255,835 | 312,615 | 849,689 | ||||||||
| Amortization |
1,436 | 5,242 | 1,293 | 4,747 | ||||||||
| Others, net |
52,126 | 107,240 | (16,435 | ) | (4,643 | ) | ||||||
| Change in operating assets and liabilities: |
||||||||||||
| Change in A/R |
(90,238 | ) | (456,946 | ) | 468,313 | 272,543 | ||||||
| Change in inventory |
(3,080 | ) | 80,273 | (237,939 | ) | (349,880 | ) | |||||
| Change in A/P |
83,021 | 148,897 | 53,053 | 88,238 | ||||||||
| Change in others |
43,464 | (105,387 | ) | (26,158 | ) | 61,729 | ||||||
| Net cash provided by operating activities |
765,630 | 1,217,088 | 852,636 | 2,570,557 | ||||||||
| Cash flows from investing activities: |
||||||||||||
| Purchase of property, plant and equipment |
(1,370,812 | ) | (2,786,520 | ) | (1,446,738 | ) | (3,416,422 | ) | ||||
| Proceeds from sales of property, plant and equipment |
223 | 2,727 | 955 | 4,151 | ||||||||
| Others, net |
(9,688 | ) | (17,876 | ) | 714 | (2,272 | ) | |||||
| Net cash used in investing activities |
(1,380,277 | ) | (2,801,669 | ) | (1,445,069 | ) | (3,414,543 | ) | ||||
| Cash flows from financing activities: |
||||||||||||
| Financing Activities |
13,754 | 949,548 | 50,575 | 358,052 | ||||||||
| New Equity & Others |
1,401,180 | 1,401,180 | 1,190,849 | 1,190,849 | ||||||||
| Net cash provided by financing activities |
1,414,934 | 2,350,728 | 1,241,424 | 1,548,901 | ||||||||
| Effect of exchange rate change on cash and cash equivalents |
(1,804 | ) | 2,070 | 2,916 | 2,914 | |||||||
| Net increase (decrease) in cash |
798,483 | 768,217 | 651,907 | 707,829 | ||||||||
- These financial statements are provided for informational purposes only
LG.Philips LCD
Net Income Reconciliation to US GAAP
( In millions of KRW)
| 2005 |
||||||
| Three months ended Sep 30 |
Nine months ended Sep 30 |
|||||
| Net Income under K GAAP |
226,972 | 189,186 | ||||
| US GAAP Adjustments |
11,037 | (7,252 | ) | |||
| Depreciation of property, plant and equipment |
(655 | ) | (1,965 | ) | ||
| Amortization of Intellectual Property Rights |
9,095 | 30,081 | ||||
| Adjustment of AR discount loss |
670 | 765 | ||||
| Capitalization of financial interests |
(2,827 | ) | (3,540 | ) | ||
| Inventory Valuation effect of US GAAP Adjustments |
(10 | ) | (963 | ) | ||
| Pension expense |
(318 | ) | (53 | ) | ||
| Income tax effect of US GAAP Adjustments |
11,352 | (18,748 | ) | |||
| ESOP |
(737 | ) | (2,597 | ) | ||
| Convertible bonds (including FX valuation) |
(4,589 | ) | (8,596 | ) | ||
| Stock appreciation right |
(944 | ) | (1,636 | ) | ||
| Net Income under US GAAP |
238,009 | 181,934 | ||||
- These financial statements are provided for informational purposes only
Attachment 2. Presentation Material
Q3 05 Earnings Results
October 11, 2005
| 1 |
|
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 September 30, 2005, 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 Q305 Earnings Presentation.
| 2 |
|
Agenda
Q3 05 Earnings Results
Performance Highlights
Outlook
32”W
37”W
42”W
47”W
Paju-P7
| 3 |
|
Q3 05 Earnings Results
| 4 |
|
Q3 05 Income Statement
KRW b Q3 05 Q2 05 Q3 04 QoQ change YoY change
Revenue 2,741 2,308 1,875 19% 46%
COGS 2,367 2,169 1,555 9% 52%
Gross profit 374 139 320 169% 17%
Operating income 240 29 256 728% (6%)
EBITDA 681 442 568 54% 20%
Income before tax 217 1 240 N/A (10%)
Net income 227 41 291 454% (22%)
Margin (%)
Gross margin 14 6 17 8 (3)
Operating margin 9 1 14 8 (5)
EBITDA margin 25 19 30 6 (5)
Net margin 8 2 16 6 (8)
Source: Unaudited, Company financials
K GAAP (Consolidated)
| 5 |
|
Q3 05 Balance Sheet
KRW b Q3 05 Q2 05 Q3 04 QoQ change YoY change
Assets 13,541 11,844 9,736 14% 39%
Cash & equivalent 2,129 1,331 1,212 60% 76%
Inventory 725 721 692 1% 5%
Liabilities 6,223 6,131 4,037 2% 54%
Short term debt 795 632 632 26% 26%
Long term debt 2,823 2,957 1,651 (5%) 71%
Shareholders’ equity 7,318 5,713 5,699 28% 28%
Net debt to equity ratio (%) 20 40 19 (20) 1
Source: Unaudited, Company financials
K GAAP (Consolidated)
| 6 |
|
Q3 05 Cash Flow
KRW b Q3 05 Q2 05 Q3 04 QoQ change YoY change
Net income 227 41 291 186 (64)
Depreciation & Amortization 452 423 321 29 131
Others 29 32 2 (3) 27
Working capital 56 (123) 230 179 (174)
Cash flow from operations 764 373 844 391 (80)
CAPEX (1,380) (969) (1,434) (411) 54
Cash flow before financing (616) (596) (590) (20) (26)
Financing activities 13 577 51 (564) (38)
Cash proceeds from follow-on 1,401 0 1,191 * 1,401 210
Net change in cash 798 (19) 652 817 146
Source: Unaudited, Company financials
K GAAP (Consolidated)
| * |
|
Cash proceeds from IPO |
| 7 |
|
Performance Highlights
| 8 |
|
Shipments and ASP
Total k m2 *
3,000 2,000 1,000 0
Q3 Q4 Q1 05 Q2 Q3
ASP**/m2 (USD) $4,000 $3,000 $2,000 $1,000 $0 $2,857 $2,304 $2,085 $2,062 $2,121
560
771
958
1,096
1,248
Display area shipment in m2 (k)
ASP per m2 (USD)
Source: Company financials
| * |
|
Net display area shipped |
** Quarterly average selling price per square meter of net display area shipped
9
Revenue: Product Mix
4% 14%
55%
27%
5%
24%
53%
18% 4% 29% 45% 22%
Q3 04 Q2 05 Q3 05
Notebooks
Monitors
TV
Applications
Source: Company financials
10
Q3 05 Capacity Update
P6 has achieved initial design capacity of 90 K per month for the quarter
Unit: Quarterly input capacity by Area (k m² )
2,500 2,000 1,500 1,000 500
0
Q304 Q4 Q105 Q2 Q3
P6
P5 P4 P1~P3
Source: Company financials
11
Cash ROIC
EBITDA margin
30%
21%
13%
19%
25%
Q304 Q4 Q105
Q2 Q3
Sales / IC*
140% 141% 136%134%133%
Q304 Q4 Q105 Q2 Q3
Cash ROIC
42%
35% 29% 25% 18%
Q304 Q4 Q105 Q2 Q3
K GAAP (Consolidated)
Source: Unaudited, Company financials
* IC (Invested Capital) equals average of net debt and equity for the designated period ; Quarterly ratios are annualized
12
Outlook
13
Outlook
Total Shipments in m2
Q4 05 vs. Q3 05 : Low teens (%)
ASP per m2 shipped
End of Q4 05 vs. End of Q3 05
: Flat to slightly down (%)
EBITDA Margin
Q4 05: Mid-to-high twenties (%)
CAPEX 2006 (E)
3.5 to 4.5 trillion KRW
Capex schedule (KRW b)
4,580
3,144
1,436
3,500—4,500
1,700
800
2005E
2006E
1,000-2,000
Others
P7
Future production facilities
Source: Company financials, Delivery basis
14
Questions and Answers
15
Appendix
16
US GAAP Income Statement
KRW b Q3 05 Q2 05 Q3 04 QoQ change YoY change
Revenue 2,741 2,308 1,874 19% 46%
COGS 2,364 2,159 1,543 9% 53%
Gross profit 377 149 331 153% 14%
Operating income 239 36 265 564% (10%)
EBITDA 672 437 576 54% 17%
Income before tax 216 3 250 N/A (14%)
Net income 238 38 298 526% (20%)
Margin (%)
Gross margin 14 6 18 8 (4)
Operating margin 9 2 14 7 (5)
EBITDA margin 25 19 31 6 (6)
Net margin 9 2 16 7 (7)
Source: Unaudited, Company financials
17
US GAAP Balance Sheet
KRW b Q3 05 Q2 05 Q3 04 QoQ change YoY change
Assets 13,465 11,750 9,623 15% 40%
Cash & equivalent 2,129 1,331 1,212 60% 76%
Inventory 724 721 691 0% 5%
Liabilities 6,282 6,186 4,047 2% 55%
Short term debt 795 633 632 26% 26%
Long term debt 2,876 3,006 1,658 (4%) 73%
Shareholders’ equity 7,183 5,564 5,576 29% 29%
Net debt to equity ratio (%) 21 41 19 (20) 2
Source: Unaudited, Company financials
18
US GAAP Cash Flow
KRW b Q3 05 Q2 05 Q3 04 QoQ change YoY change
Net income 238 38 298 200 (60)
Depreciation & Amortization 442 414 314 28 128
Others 52 45 (14) 7 66
Working capital 32 (124) 257 156 (225)
Cash flow from operations 764 373 855 391 (91)
CAPEX (1,380) (969) (1,445) (411) 65
Cash flow before financing (616) (596) (590) (20) (26)
Financing activities 13 577 51 (564) (38)
Cash proceeds 1,401 0 1,191 1,401 210
Net change in cash 798 (19) 652 817 146
Source: Unaudited, Company financials
19
Net Income Reconciliation to US GAAP
KRW b Q3 05 Q2 05
Net income under K GAAP 227 41
US GAAP adjustments 11 (3)
Depreciation of PP&E (1) (1)
Amortization of IPR 9 9
Adjustment of AR discount loss 1 1
Capitalization of financial interests (3) (1)
Pension expense 0 (1)
Income tax effect of US GAAP adjustments 12 (4)
ESOP (1) (1)
Convertible bonds (including FX valuation) (5) (4)
Stock appreciation right (1) (1)
Net income under US GAAP 238 38
Source: Unaudited, Company financials
20
EBITDA Reconciliation
K GAAP (KRW b) Q3 05 Q2 05 Q3 04 QoQ change YoY change
1. Net income 227 41 291 186 (64)
2. Interest expense 28 30 12 (2) 16
3. Interest income (16) (12) (5) (4) (11)
4. Provision (benefit) for income taxes (10) (40) (51) 30 41
5. Depreciation of PP&E 441 412 310 29 131
6. Amortization of intangible asset 11 11 11 0 0
7. Amortization of debt issuance cost 0 0 0 0 0
EBITDA (1+2+3+4+5+6+7) 681 442 568 239 113
US GAAP (KRW b) Q3 05 Q2 05 Q3 04 QoQ change YoY change
1. Net income 238 38 298 200 (60)
2. Interest expense 27 31 14 (4) 13
3. Interest income (15) (12) (5) (3) (10)
4. Provision (benefit) for income taxes (22) (36) (48) 14 26
5. Depreciation of PP&E 441 412 313 29 128
6. Amortization of intangible asset 1 2 1 (1) 0
7. Amortization of debt issuance cost 2 2 3 0 (1)
EBITDA (1+2+3+4+5+6+7) 672 437 576 235 96
21
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.
22
LG.Philips LCD makes
Technology you can see!
23
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: October 11, 2005 |
By: | /s/ Ron H. Wirahadiraksa | ||||
| (Signature) | ||||||
| Name: | Ron H. Wirahadiraksa | |||||
| Title: | Joint Representative Director/ | |||||
| President & Chief Financial Officer | ||||||