Table of Contents | | As filed with the Securities and Exchange Commission on April 29, 2024 | | --- | --- | | | UNITED STATES | | | SECURITIES AND EXCHANGE COMMISSION | | | WASHINGTON, D.C. 20549 | | | FORM 20-F | | (Mark One) | | | ☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES | | | EXCHANGE ACT OF 1934 | | | OR | | ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE | | | ACT OF 1934 | | | For the fiscal year ended December 31, 2023 | | | OR | | ☐ ...

SEOUL, South Korea, April 22, 2024 /PRNewswire/ -- LG Display, the world's leading innovator of display technologies, announced today that it has developed the first-ever Gaming OLED panel with a switchable refresh rate and resolution. The company has begun mass production of the 31.5-inch panel this month, accelerating its push into the high-end gaming display market with new concept products.This groundbreaking Gaming OLED panel allows users to freely choose between a high refresh rate (FHD∙480Hz) and a h ...

Financial Performance - Total Assets for FY 2023 increased slightly to 35,759,297,833,297 won from 35,686,018,172,675 won in FY 2022[2] - Total Liabilities rose significantly to 26,988,754,065,870 won in FY 2023 compared to 24,366,791,561,867 won in FY 2022[2] - Revenues decreased to 21,330,818,934,958 won in FY 2023 from 26,151,780,519,939 won in FY 2022[2] - Operating Income worsened to -2,510,163,608,358 won in FY 2023 from -2,085,046,847,403 won in FY 2022[2] - Net Income improved slightly to -2,576,729,162,648 won in FY 2023 from -3,195,584,891,222 won in FY 2022[2] - Total revenue for 2023 was W 21,330,819 million, a decrease from W 26,151,781 million in 2022[20] - Operating loss for 2023 was W 2,510,164 million, compared to W 2,085,047 million in 2022[20] - Net loss for 2023 was W 2,576,729 million, an improvement from W 3,195,585 million in 2022[20] - Revenue from OLED products increased to 48% of total revenue in 2023, up from 40% in 2022[182] - Revenue from TV products declined significantly from W6,975,269 million in 2022 to W4,331,474 million in 2023[194] - Revenue from China decreased from W17,434,407 million in 2022 to W14,704,357 million in 2023, while revenue from the United States dropped from W3,078,924 million to W2,079,628 million[193] Subsidiaries Performance - LG Display (China) Co., Ltd. reported a profit of W 108,801 million for 2023, with revenue of W 1,145,472 million[15] - LG Display High-Tech (China) Co., Ltd. reported a profit of W 374,836 million for 2023, with revenue of W 2,432,838 million[15] - Total assets for LG Display Guangzhou Co., Ltd. were W 3,912,242 million in 2022, with net income of W 143,464 million[14] - LG Display Vietnam Haiphong Co., Ltd. reported total assets of W 4,911,791 million in 2022, with net income of W 112,167 million[14] - LG Display High-Tech (China) Co., Ltd. reported the highest net income among subsidiaries at W374,836 million in 2023[26] - LG Display Vietnam Haiphong Co., Ltd. generated the highest sales among subsidiaries at W2,773,046 million in 2023[26] - LG Display Guangzhou Co., Ltd. reported a net income of W96,945 million in 2023, reflecting strong performance[26] - LG Display Nanjing Co., Ltd. recorded a net income of W85,121 million in 2023, indicating solid profitability[26] - LG Display (China) Co., Ltd. achieved a net income of W108,801 million in 2023, showcasing robust financial health[26] - The Group's total net income from subsidiaries in 2023 was W976,533 million, demonstrating overall profitability[26] - LG Display (China) Co., Ltd. reported revenue of 1,921,939 million won and a profit of 133,486 million won for the year 2022[28] - LG Display High-Tech (China) Co., Ltd. reported revenue of 2,766,043 million won and a loss of 561,016 million won for the year 2022[28] Cash Flow and Liquidity - Cash and cash equivalents increased to 2,257,522 million won in FY 2023 from 1,824,649 million won in FY 2022[7] - Trade accounts and notes receivable rose to 3,218,093 million won in FY 2023 from 2,358,914 million won in FY 2022[7] - Inventories decreased to 2,527,728 million won in FY 2023 from 2,872,918 million won in FY 2022[7] - Cash flows from operating activities for LG Display (China) Co., Ltd. were W 426,643 million in 2023[15] - Cash flows from investing activities for LG Display High-Tech (China) Co., Ltd. were negative W 979,167 million in 2023[15] - Operating cash flow for 2023 was W2,576,729 million, compared to W3,195,585 million in 2022, showing a decrease of 19.4%[22] - Cash generated from operating activities in 2023 was W2,819,329 million, compared to W3,588,627 million in 2022, showing a decrease of 21.4%[23] - Net cash provided by financing activities in 2023 was W1,350,863 million, a decrease of 30.6% from W1,946,024 million in 2022[23] - Net cash used in investing activities in 2023 was W2,589,336 million, a significant improvement from W6,700,169 million in 2022, reflecting a reduction of 61.4%[23] - LG Display (China) Co., Ltd. generated cash flows from operating activities of 486,103 million won in 2022[28] - LG Display High-Tech (China) Co., Ltd. generated cash flows from operating activities of 153,043 million won in 2022[28] - LG Display (China) Co., Ltd. had a net decrease in cash and cash equivalents of 106,226 million won in 2022[28] - LG Display High-Tech (China) Co., Ltd. had a net increase in cash and cash equivalents of 114,231 million won in 2022[28] Expenses and Costs - Research and development expenses for 2023 were W 1,379,653 million, slightly down from W 1,382,406 million in 2022[20] - Depreciation and amortization expenses increased to W11,194,213 million in 2023 from W10,424,557 million in 2022, reflecting a 7.4% rise[22] - Finance costs increased to W1,162,598 million in 2023 from W781,205 million in 2022, marking a 48.8% rise[22] - Selling and administrative expenses decreased to W1,475,687 million in 2023 from W1,826,719 million in 2022, with significant reductions in shipping and warranty expenses[183] - Personnel expenses decreased to W3,704,380 million in 2023 from W3,874,664 million in 2022, with salaries and wages accounting for W2,850,927 million[184] - Expenses related to defined benefit plans recognized in profit or loss for 2023 totaled W149,937 million, with current service cost at W173,879 million and net interest cost at (W23,942) million[168] Assets and Liabilities - Non-current financial liabilities increased to 11,439,776 million won in FY 2023 from 9,622,352 million won in FY 2022[7] - Total Shareholders' Equity dropped to 8,770,543,767,427 won in FY 2023 from 11,319,226,610,808 won in FY 2022[2] - Changes in trade accounts and notes receivable showed a decrease of W1,013,938 million in 2023 compared to an increase of W1,833,491 million in 2022[22] - Inventories decreased to W336,993 million in 2023 from W390,672 million in 2022, a reduction of 13.7%[22] - Other current assets increased to W92,983 million in 2023 from W43,583 million in 2022, reflecting a 113.3% rise[22] - Trade accounts and notes payable increased by W323,548 million in 2023 compared to a decrease of W282,082 million in 2022[22] - The Group's non-financial assets, including property, plant, and equipment, and intangible assets, amounted to W21,974,287 million as of December 31, 2023[136] - The Group had W3,797,057 million of deferred tax assets and W869,364 million of unrecognized tax credit carryforwards as of December 31, 2023[138] - The Group's intellectual property rights as of December 31, 2023, were valued at W828,779 million, with patents accounting for W826,435 million[166] - The Group's plan assets as of December 31, 2023, were valued at W1,897,025 million, primarily maintained with Mirae Asset Securities Co., Ltd., KB Insurance Co., Ltd., and others[160] - The company has accounts receivable sales negotiating facilities of up to USD 1,000 million (W1,289,400 million) with Korea Development Bank and other banks[171] - Letters of credit agreements with financial institutions totaled USD 2,070 million (W2,669,058 million) as of December 31, 2023[172] Impairment and Losses - Loss on foreign currency translation decreased to W241,701 million in 2023 from W449,980 million in 2022, a reduction of 46.3%[22] - Impairment loss on property, plant, and equipment rose to W1,260,436 million in 2023 from W60,072 million in 2022, a significant increase[22] - The Group recognized an impairment loss of W93,966 million for Display (Large OLED) CGU in 2022, allocated to goodwill, development costs, intellectual property rights, and others[157] - The Group recognized an impairment loss of W33,386 million for development projects unlikely to generate revenue[157] - Provisions for warranties decreased from W249,368 million at the start of 2023 to W173,795 million by the end of the year, with usage of W177,419 million during the year[169] Tax and Currency - Income tax benefit for 2023 was W762,712 million, with an effective tax rate influenced by non-deductible expenses and tax credits[188] - The global minimum tax rate under the BEPS 2.0 framework is set at 15% for multinational enterprise groups with consolidated group revenue of EUR 750 million or more in at least two of the four preceding years[189] - LG Display Vietnam Haiphong Co., Ltd. is eligible for tax credits reducing its effective tax rate below 15%, potentially exempt from the global minimum tax if the government support qualifies as a QRTC[190] - Unrecognized deferred tax liabilities related to investments in subsidiaries amounted to W523,448 million as of December 31, 2023[191] - Total reserves increased from W479,628 million in 2022 to W515,976 million in 2023, driven by changes in foreign currency translation differences and other comprehensive income[192] - Unused tax credit carryforwards as of December 31, 2023, totaled W869,364 million, with expiration dates ranging from 2025 to 2033[196] - Deferred tax assets increased from W2,640,731 million in 2022 to W3,560,792 million in 2023, primarily due to tax loss carryforwards and other temporary differences[197] - The Group is exposed to currency risk on transactions denominated in USD, CNY, and JPY, which are not the functional currency of the Controlling Company[199] - Foreign currency gain in 2023 was W1,398,181 million, down from W3,098,553 million in 2022[186] Accounting Policies and Financial Instruments - Intra-group transactions and unrealized gains/losses are eliminated in consolidation, with unrealized gains/losses adjusted against investments based on the Group's interest in the investee[60] - Foreign operations' financials are translated into the Group's presentation currency using exchange rates at the reporting date for assets/liabilities and transaction dates for income/expenses[61] - Cash and cash equivalents include short-term highly liquid investments with an original maturity of three months or less[62] - Financial assets are measured at amortized cost if they meet specific conditions and are not designated as at fair value through profit or loss (FVTPL)[64] - The Group derecognizes financial liabilities when contractual obligations are discharged, cancelled, or expired[65] - Hedge accounting is used to manage risks related to changes in fair value and foreign currency risk, with effectiveness assessed both at inception and on an ongoing basis[66][73] - Property, plant, and equipment are measured at cost less accumulated depreciation and impairment losses, with subsequent costs capitalized if they enhance future economic benefits[75][79] - Intangible assets are initially measured at cost and subsequently at cost less accumulated amortization and impairment losses, with development costs capitalized if specific criteria are met[86][88] - The Group capitalizes borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets[81] - Expected credit losses (ECLs) are estimated using a probability-weighted approach, considering both historical and forward-looking information[95][99] - The Group's financial assets are assessed for credit impairment at each reporting period-end, with loss allowances deducted from the gross carrying amount[100] - Financial assets are written off when the Group has no reasonable expectations of recovering the asset, with no significant recovery expected from the written-off amounts[101] - The Group reviews the carrying amounts of non-financial assets at each reporting date to determine if there is any indication of impairment[103] - The recoverable amount of an asset or cash-generating unit is determined as the greater of its value in use and its fair value less costs to sell[104] - Impairment losses are recognized in profit or loss and allocated first to reduce the carrying amount of goodwill, then to other assets on a pro rata basis[105] - The Group's deferred tax assets recognition process involves high subjective judgment in estimating future taxable profits[125] - The recoverable amount of Display CGU is determined based on its value in use, using a 5-year business plan approved by management[159] - The Group's expected rate of salary increase decreased from 4.7% in 2022 to 4.0% in 2023, while the discount rate for defined benefit obligations decreased from 5.4% to 4.6%[161] - The Group's subsidiaries in China were provided with payment guarantees totaling CNY 850 million (W153,714 million), JPY 900 million (W8,214 million), VND 73,279 million (W3,898 million), and USD 0.5 million (W689 million) for local tax and utility payments[165] - Display CGU's recoverable amount exceeded its carrying amount by W975,459 million, with a sensitivity to a 0.92% increase in the discount rate potentially causing the carrying amount to exceed the recoverable amount[167]

Financial Data and Key Metrics Changes - Revenue in Q2 2023 was KRW 4.739 trillion, up 7% quarter-over-quarter [15] - Operating loss was KRW 881 billion, reduced from the previous quarter due to increased shipments and improved operational efficiency [19] - Cash and cash equivalents were KRW 3.853 trillion, with inventory valued at KRW 2.62 trillion [40] - Debt-to-equity ratio was 293% and net debt-to-equity ratio was 143% [40] Business Line Data and Key Metrics Changes - TV panels accounted for 24% of revenue mix, driven by growth in OLED TV panel shipments [16] - IT panels represented 42% of revenue, up 4 percentage points quarter-over-quarter [16] - Mobile and other panels made up 23% of revenue, down 9 percentage points due to seasonal declines [16] - Auto business maintained a steady revenue mix of 11% [16] Market Data and Key Metrics Changes - Order backlog is currently KRW 20 trillion, expected to support consistent revenue growth [6] - Area shipment increased by 11% quarter-over-quarter to 4.72 million square meters [20] - Average selling price (ASP) per square meter was $803, down 6% quarter-over-quarter [20] Company Strategy and Development Direction - The company aims to strengthen its OLED market share across all panel sizes, expecting OLED revenue mix to surpass 50% this year [18] - Focus on diversifying product portfolio into new applications like gaming and transparent displays [23] - Plans to increase contract-based business revenue mix to 40% this year and 50% next year, targeting 70% in the next 2-3 years [43] Management Comments on Operating Environment and Future Outlook - Management anticipates a turnaround to profit in Q4 2023, driven by healthy inventory levels and growth in contract-based business [45] - The market is not yet in full recovery, but inventory soundness is improving, leading to growth in panel purchases [42] - The company is closely monitoring external environments to enhance financial soundness and upgrade business structure [45] Other Important Information - The company is investing in IT OLED Gen 6, with plans to continue into the first half of next year [29] - Investment guidance for 2023 remains mid to high KRW 3 trillion, with potential reductions for 2024 based on market demand and technological developments [52][53] Q&A Session Summary Question: What will be the biggest contribution to the expected turnaround in Q4? - Management indicated that the turnaround is expected from increased shipments, particularly in large and medium-sized OLED panels as inventory levels decrease [26][27] Question: What is the expected investment for 2023 and 2024? - The company confirmed the investment guidance for 2023 remains mid to high KRW 3 trillion, with potential reductions for 2024 based on market conditions [50][52] Question: What is the company's outlook on the auto business orders? - The auto business has received KRW 4 trillion in orders, with expectations for continued growth in the coming years [62] Question: What is the status of the LCD fab in Guangzhou, China? - Management stated that half of the fab is still operational, and there are no significant updates regarding asset rationalization at this time [64]

[SEC Filing Information](index=1&type=section&id=SEC%20Filing%20Information) This section outlines the administrative details of LG Display Co., Ltd.'s Form 6-K filing as a foreign private issuer [Filing Details](index=1&type=section&id=Filing%20Details) This section identifies LG Display Co., Ltd. as a foreign private issuer filing a Form 6-K for June 2023 under Form 20-F - Registrant is **LG Display Co., Ltd.**, a foreign private issuer[1](index=1&type=chunk) - Filing is a **Form 6-K** for the month of **June 2023**[1](index=1&type=chunk) - The company files annual reports under **Form 20-F**[2](index=2&type=chunk) [Signatures](index=3&type=section&id=Signatures) The report was signed by Suk Heo, Director and Head of IR Division, on June 30, 2023 - Report signed by **Suk Heo**, Director / Head of IR Division[8](index=8&type=chunk) - Signature date: **June 30, 2023**[8](index=8&type=chunk) [Notification of Earnings Release Conference Call](index=2&type=section&id=Notification%20of%20Earnings%20Release%20Conference%20Call) This section announces LG Display Co., Ltd.'s Q2 '23 Earnings Release Conference Call on July 26, 2023 [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) This section provides the schedule and objectives for LG Display Co., Ltd.'s Q2 '23 Earnings Release Conference Call Conference Call Summary | Detail | Description | | :----- | :---------- | | Date & Time | 14:00 (KST) July 26, 2023 | | Objective | To announce Q2 '23 Earnings Results | | Participants | Investors, securities analysts, etc. | | Subject | Q2 '23 Earnings Results and Q&A | [Additional Information & Communication Guidelines](index=2&type=section&id=Additional%20Information%20%26%20Communication%20Guidelines) This section outlines the availability of presentation materials, question submission process, and quiet period guidelines for the earnings call - Presentation material will be available on the Company's **IR website** after disclosure[5](index=5&type=chunk) - Questions will be collected in advance via webcast registration, with high-interest topics addressed during the call[5](index=5&type=chunk) - A **quiet period** will be observed until the Earnings Release, limiting communication on performance forecasts and major business contents[5](index=5&type=chunk)

Table of Contents As filed with the Securities and Exchange Commission on April 27, 2023 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR SHELL CO ...

LG Display Co., Ltd. (NYSE:LPL) Q1 2023 Earnings Conference Call April 26, 2023 1:00 AM ET Company Participants Brian Heo - In-Charge of IR Sunghyun Kim - Chief Financial Officer Hee-Yeon Kim - CSO Seung-Min Lim - Senior Vice President of Corporate Planning Eric Ki Hwan Son - Vice President of Auto Marketing Seong Gon Kim - In-Charge of Medium Display Marketing Hee-Yeon Kim - Senior Managing Director/CSO/IR Conference Call Participants Junghoon Chang - Samsung Securities Won-suk Chung - HI Investments and S ...

[Form 6-K Filing Information](index=1&type=section&id=FORM%206-K%20FILING%20INFORMATION) LG Display Co., Ltd. filed Form 6-K for March 2023 as a foreign private issuer under Form 20-F [Form 6-K Details](index=1&type=section&id=Form%206-K%20Details) This section details the filing of Form 6-K by LG Display Co., Ltd. for March 2023, indicating it is a foreign private issuer filing under Form 20-F and not submitting in paper format as per Regulation S-T Rule 101(b)(1) or 101(b)(7) - LG Display Co., Ltd. filed Form 6-K for March 2023[1](index=1&type=chunk) - The company files annual reports under Form 20-F[1](index=1&type=chunk) - The filing is not submitted in paper format as permitted by Regulation S-T Rule 101(b)(1) or 101(b)(7)[2](index=2&type=chunk)[3](index=3&type=chunk) [Submission of Audit Report & Financial Highlights](index=2&type=section&id=SUBMISSION%20OF%20AUDIT%20REPORT%20%26%20FINANCIAL%20HIGHLIGHTS) This section presents the unqualified audit report for FY 2022 and highlights the significant decline in the company's financial performance [Audit Report Overview](index=2&type=section&id=Audit%20Report%20Overview) LG Display Co., Ltd. submitted an unqualified audit report on its consolidated financial statements for FY 2022, prepared by Samjong Accounting Corporation (KPMG) on March 3, 2023 - The audit report on consolidated financial statements for FY 2022 received an **unqualified opinion**, consistent with FY 2021[6](index=6&type=chunk) - Samjong Accounting Corporation (KPMG) served as the external auditor, with the report dated March 3, 2023[7](index=7&type=chunk) [Financial Highlights of Consolidated Financial Statements](index=2&type=section&id=Financial%20Highlights%20of%20Consolidated%20Financial%20Statements) The company experienced a significant decline in financial performance in FY 2022 compared to FY 2021, reporting substantial operating, ordinary, and net losses, alongside a decrease in total assets and shareholders' equity Financial Highlights (FY 2022 vs. FY 2021) | Items | FY 2022 (KRW) | FY 2021 (KRW) | Change (YoY) | | :-------------------------- | :-------------------- | :-------------------- | :----------- | | Total Assets | 35,686,018,172,675 | 38,154,514,943,430 | -6.47% | | Total Liabilities | 24,366,791,561,867 | 23,392,013,818,123 | +4.17% | | Total Shareholders' Equity | 11,319,226,610,808 | 14,762,501,125,307 | -23.33% | | Revenues | 26,151,780,519,939 | 29,878,043,071,138 | -12.47% | | Operating Income | -2,085,046,847,403 | 2,230,608,127,616 | -193.48% (Loss) | | Ordinary Income | -3,433,370,081,840 | 1,718,884,560,453 | -299.75% (Loss) | | Net Income | -3,195,584,891,222 | 1,333,544,156,243 | -339.67% (Loss) | | Total Shareholders' Equity / Capital Stock | 633% | 825% | -192 p.p. | - The company shifted from profitability in FY 2021 to significant losses across operating, ordinary, and net income in FY 2022[6](index=6&type=chunk) [Independent Auditors' Report](index=5&type=section&id=INDEPENDENT%20AUDITORS'%20REPORT) The independent auditors issued an unqualified opinion, detailing key audit matters on asset impairment and deferred tax recognition [Opinion](index=5&type=section&id=Opinion) The auditors issued an unqualified opinion, stating that LG Display Co., Ltd.'s consolidated financial statements for December 31, 2022 and 2021, fairly present the financial position, performance, and cash flows in accordance with Korean International Financial Reporting Standards (K-IFRS) - The auditors provided an **unqualified opinion** on the consolidated financial statements for 2022 and 2021[11](index=11&type=chunk) - The financial statements were prepared in accordance with Korean International Financial Reporting Standards (K-IFRS)[11](index=11&type=chunk) [Basis for Opinion](index=5&type=section&id=Basis%20for%20Opinion) The audit was conducted in accordance with Korean Standards on Auditing, ensuring independence and ethical responsibilities were met - Audits were conducted in accordance with Korean Standards on Auditing[12](index=12&type=chunk) - Auditors maintained independence and fulfilled ethical responsibilities[12](index=12&type=chunk) [Key Audit Matters](index=5&type=section&id=Key%20Audit%20Matters) Two key audit matters were identified for the 2022 consolidated financial statements: the determination of cash generating units (CGUs) and impairment assessment for the Display (Large OLED) CGU, and the assessment of deferred tax asset recognition - Key audit matters include the determination of CGU and impairment assessment for Display (Large OLED) CGU, due to significant judgment in assessing cash inflows and estimating value in use[14](index=14&type=chunk)[15](index=15&type=chunk) - The Group recognized an impairment loss of **1.33 trillion KRW** relating to the Display (Large OLED) CGU in 2022[14](index=14&type=chunk) - Assessment of deferred tax assets recognition is a key audit matter due to subjective management judgment in estimating future taxable profits and utilizing deductible temporary differences and tax loss carryforwards[18](index=18&type=chunk)[19](index=19&type=chunk) [Determination of cash generating unit (CGU) and impairment assessment for Display (Large OLED) CGU](index=5&type=section&id=Determination%20of%20cash%20generating%20unit%20(CGU)%20and%20impairment%20assessment%20for%20Display%20(Large%20OLED)%20CGU) The Group changed its CGU identification in 2022 due to the withdrawal of the domestic LCD TV business, leading to a 1.33 trillion KRW impairment loss for the Display (Large OLED) CGU - The Group recognized an impairment loss of **1.33 trillion KRW** relating to the Display (Large OLED) CGU during 2022[14](index=14&type=chunk) - The change in CGU identification was driven by the withdrawal of the domestic LCD TV business and related business reorganization[14](index=14&type=chunk) - Audit procedures included evaluating internal controls, assessing CGU identification basis, testing inter-dependencies, comparing forecasts to actual results, and performing sensitivity analysis on discount and terminal growth rates[21](index=21&type=chunk) [Assessment of recognition of deferred tax assets](index=6&type=section&id=Assessment%20of%20recognition%20of%20deferred%20tax%20assets) The assessment of deferred tax assets, totaling 2.65 trillion KRW as of December 31, 2022, was a key audit matter due to the high degree of subjective management judgment required in estimating future taxable profits - Deferred tax assets amounted to **2.65 trillion KRW** and unrecognized tax credit carryforwards to **660.67 billion KRW** as of December 31, 2022[18](index=18&type=chunk) - The recognition of deferred tax assets involves significant management judgment in estimating future taxable profits, revenue, and operating expenditures[19](index=19&type=chunk) - Audit procedures included evaluating internal controls, analyzing future taxable income estimates against financial budgets and historical performance, and assessing the Group's ability to accurately forecast[22](index=22&type=chunk) [Other Matter](index=7&type=section&id=Other%20Matter) The audit procedures and practices used in the Republic of Korea for consolidated financial statements may differ from those generally accepted in other countries - Audit procedures in Korea may differ from international standards[23](index=23&type=chunk) [Responsibilities of Management and Those Charged with Governance](index=7&type=section&id=Responsibilities%20of%20Management%20and%20Those%20Charged%20with%20Governance) Management is responsible for preparing and fairly presenting the consolidated financial statements in accordance with K-IFRS, including internal controls and assessing the Group's ability to continue as a going concern - Management is responsible for the preparation and fair presentation of financial statements in accordance with K-IFRS and for internal controls[24](index=24&type=chunk) - Management is also responsible for assessing the Group's ability to continue as a going concern[25](index=25&type=chunk) - Those charged with governance oversee the Group's financial reporting process[26](index=26&type=chunk) [Auditors' Responsibilities for the Audit](index=7&type=section&id=Auditors'%20Responsibilities%20for%20the%20Audit) Auditors aim to obtain reasonable assurance that financial statements are free from material misstatement, exercising professional judgment and skepticism - Auditors' objective is to obtain reasonable assurance that financial statements are free from material misstatements[27](index=27&type=chunk) - Responsibilities include identifying and assessing risks of material misstatement, understanding internal control, evaluating accounting policies and estimates, and concluding on the going concern basis[28](index=28&type=chunk) - Auditors communicate planned scope, timing, and significant audit findings, including internal control deficiencies, to those charged with governance[29](index=29&type=chunk) [Consolidated Financial Statements](index=9&type=section&id=CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the Group's consolidated financial statements, including statements of financial position, comprehensive income, changes in equity, and cash flows for 2022 and 2021 [Consolidated Statements of Financial Position](index=9&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) As of December 31, 2022, LG Display Co., Ltd. reported a decrease in total assets and total shareholders' equity compared to 2021, while total liabilities increased Consolidated Statements of Financial Position (KRW millions) | Items | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------ | :---------------- | :---------------- | :----------- | | Total Assets | 35,686,019 | 38,154,515 | -6.47% | | Total Liabilities | 24,366,792 | 23,392,014 | +4.17% | | Total Equity | 11,319,227 | 14,762,501 | -23.33% | | Current Assets | 9,444,035 | 13,187,067 | -28.40% | | Non-current Assets | 26,241,984 | 24,967,448 | +5.11% | | Current Liabilities | 13,961,520 | 13,994,817 | -0.24% | | Non-current Liabilities | 10,405,272 | 9,397,197 | +10.73% | - Cash and cash equivalents significantly decreased from **3.54 trillion KRW** in 2021 to **1.82 trillion KRW** in 2022, a **48.48% decline**[34](index=34&type=chunk) - Property, plant and equipment, net, increased slightly from **20.56 trillion KRW** in 2021 to **20.95 trillion KRW** in 2022[34](index=34&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=10&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The Group reported a significant shift from profit in 2021 to a substantial loss in 2022, primarily driven by a sharp decline in gross profit and a negative operating profit Consolidated Statements of Comprehensive Income (Loss) (KRW millions) | Items | 2022 | 2021 | Change (YoY) | | :-------------------------------- | :----------- | :----------- | :----------- | | Revenue | 26,151,781 | 29,878,043 | -12.47% | | Cost of sales | (25,027,703) | (24,572,939) | +1.85% | | Gross profit | 1,124,078 | 5,305,104 | -78.81% | | Operating profit (loss) | (2,085,047) | 2,230,608 | -193.48% (Loss) | | Profit (loss) before income tax | (3,433,370) | 1,718,885 | -299.75% (Loss) | | Net Income (Loss) | (3,195,585) | 1,333,544 | -339.67% (Loss) | | Basic earnings (loss) per share (won) | (8,584) | 3,315 | -358.97% (Loss) | - Finance income increased significantly by **105.03%** from **425.84 billion KRW** in 2021 to **873.06 billion KRW** in 2022, while finance costs also rose by **5.43%**[35](index=35&type=chunk) - Other non-operating income surged by **154.43%** to **3.19 trillion KRW** in 2022, but other non-operating expenses more than tripled to **4.45 trillion KRW**[35](index=35&type=chunk) [Consolidated Statements of Changes in Equity](index=11&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) The Group's total equity decreased significantly by 23.33% in 2022, primarily due to a substantial loss for the year attributable to owners of the Controlling Company (3.07 trillion KRW) and dividends paid (232.58 billion KRW) Consolidated Statements of Changes in Equity (KRW millions) | Items | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------------------ | :---------------- | :---------------- | :----------- | | Balances at January 1 | 14,762,501 | 12,731,428 | +15.95% | | Loss for the year | (3,195,585) | 1,333,544 | -339.67% (Loss) | | Total other comprehensive income (loss) | 40,947 | 701,612 | -94.17% | | Total comprehensive income (loss) for the year | (3,154,638) | 2,035,156 | -254.07% (Loss) | | Dividends paid | (232,580) | — | N/A | | Balances at December 31 | 11,319,227 | 14,762,501 | -23.33% | - Retained earnings decreased from **8.54 trillion KRW** in 2021 to **5.36 trillion KRW** in 2022, a **37.26% reduction**[37](index=37&type=chunk) - Foreign currency translation differences in reserves shifted from a gain of **705.32 billion KRW** in 2021 to a loss of **57.03 billion KRW** in 2022[37](index=37&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Group experienced a significant decrease in net cash provided by operating activities and a substantial increase in net cash used in investing activities in 2022 Consolidated Statements of Cash Flows (KRW millions) | Cash Flow Category | 2022 | 2021 | Change (YoY) | | :-------------------------------- | :----------- | :----------- | :----------- | | Net cash provided by operating activities | 3,011,020 | 5,753,446 | -47.67% | | Net cash used in investing activities | (6,700,169) | (4,263,080) | +57.17% | | Net cash provided by (used in) financing activities | 1,946,024 | (2,466,136) | +178.91% | | Net decrease in cash and cash equivalents | (1,743,125) | (975,770) | +78.65% | | Cash and cash equivalents at December 31 | 1,824,649 | 3,541,597 | -48.48% | - Acquisition of property, plant and equipment increased by **61.69%** to **5.08 trillion KRW** in 2022[41](index=41&type=chunk) - Proceeds from short-term borrowings increased by **74.37%** to **4.49 trillion KRW** in 2022, and proceeds from long-term borrowings more than tripled to **4.17 trillion KRW**[41](index=41&type=chunk) [Notes to the Consolidated Financial Statements](index=14&type=section&id=NOTES%20TO%20THE%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes supporting the consolidated financial statements, covering reporting entity, accounting policies, and specific financial line items [1. Reporting Entity](index=14&type=section&id=1.%20Reporting%20Entity) LG Display Co., Ltd. is a public corporation listed on the Korea Exchange and NYSE, primarily manufacturing and selling TFT-LCD and OLED panels, with LG Electronics Inc. as a major shareholder - LG Display Co., Ltd. manufactures and sells TFT-LCD and OLED panels, with operations in Korea, China, and Vietnam[43](index=43&type=chunk) - As of December 31, 2022, LG Electronics Inc. owns **37.9%** of the Controlling Company's common stock[43](index=43&type=chunk) - The company has **357,815,700 common shares** outstanding and **16,674,488 American Depository Shares (ADSs)** outstanding as of December 31, 2022[44](index=44&type=chunk) [Description of the Controlling Company](index=14&type=section&id=Description%20of%20the%20Controlling%20Company) LG Display Co., Ltd. was incorporated in February 1985 and listed on the Korea Exchange in 2004, and on the NYSE as ADSs, with LG Electronics Inc. holding a 37.9% stake - The Controlling Company's main business is to manufacture and sell displays and related products[43](index=43&type=chunk) - As of December 31, 2022, LG Electronics Inc. owns **37.9% (135,625,000 shares)** of the Controlling Company's common stock[43](index=43&type=chunk) [Consolidated Subsidiaries as of December 31, 2022](index=15&type=section&id=Consolidated%20Subsidiaries%20as%20of%20December%2031,%202022) The Group's consolidated subsidiaries as of December 31, 2022, include numerous entities across the US, Germany, Japan, Taiwan, China, Singapore, and Vietnam, primarily engaged in selling or manufacturing display products - The Group has a global presence with subsidiaries in key markets for display product sales and manufacturing[46](index=46&type=chunk) - Most subsidiaries are **100% owned**, with notable exceptions being L&T Display Technology (Fujian) Limited (**51%**) and LG Display (China) Co., Ltd. (**70%**)[46](index=46&type=chunk) - LG DISPLAY FUND I LLC received a **33.14 billion KRW** capital increase from the Controlling Company in 2022[46](index=46&type=chunk) [Summary of financial information of subsidiaries](index=16&type=section&id=Summary%20of%20financial%20information%20of%20subsidiaries) In 2022, the consolidated subsidiaries collectively reported 26.18 trillion KRW in total assets and 37.67 trillion KRW in sales, with a net income of 159.52 billion KRW, representing a significant decline in net income compared to 2021 Consolidated Subsidiaries Financial Summary (KRW millions) | Item | 2022 | 2021 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Total assets | 26,175,261 | 27,571,283 | -5.06% | | Total liabilities | 16,759,132 | 18,034,412 | -7.07% | | Total shareholders' equity | 9,416,129 | 9,536,871 | -1.27% | | Sales | 37,666,612 | 40,683,820 | -7.39% | | Net income (loss) | 159,516 | 979,823 | -83.72% | - LG Display High-Tech (China) Co., Ltd. reported a net loss of **561.02 billion KRW** in 2022, significantly impacting the overall subsidiary net income[48](index=48&type=chunk) - LG Display America, Inc. and LG Display Guangzhou Co., Ltd. were among the top contributors to sales in both years[48](index=48&type=chunk)[49](index=49&type=chunk) [Information of subsidiaries with significant non-controlling interests](index=18&type=section&id=Information%20of%20subsidiaries%20with%20significant%20non-controlling%20interests) LG Display (China) Co., Ltd. and LG Display High-Tech (China) Co., Ltd. have significant non-controlling interests (30% each), with the latter reporting a substantial loss attributable to non-controlling interests in 2022 Significant Subsidiaries with Non-Controlling Interests (KRW millions) | Item | LG Display (China) Co., Ltd. (2022) | LG Display High-Tech (China) Co., Ltd. (2022) | LG Display (China) Co., Ltd. (2021) | LG Display High-Tech (China) Co., Ltd. (2021) | | :------------------------------------ | :---------------------------------- | :--------------------------------------- | :---------------------------------- | :--------------------------------------- | | Percentage of ownership in NCI (%) | 30 | 30 | 30 | 30 | | Net assets | 2,153,893 | 2,515,258 | 2,295,520 | 3,090,221 | | Book value of non-controlling interests | 646,199 | 753,191 | 680,757 | 925,848 | | Revenue | 1,921,939 | 2,766,043 | 2,175,878 | 2,817,308 | | Profit (Loss) for the year | 133,486 | (561,016) | 380,788 | 125,446 | | Profit (Loss) attributable to NCI | 39,981 | (168,474) | 114,301 | 37,803 | | Dividends distributed to NCI | 56,056 | — | — | — | - LG Display (China) Co., Ltd. distributed **56.06 billion KRW** in dividends to non-controlling interests in 2022[50](index=50&type=chunk) - LG Display High-Tech (China) Co., Ltd. experienced a significant shift from profit in 2021 to a substantial loss in 2022, impacting non-controlling interests[50](index=50&type=chunk)[51](index=51&type=chunk) [2. Basis of Presenting Financial Statements](index=20&type=section&id=2.%20Basis%20of%20Presenting%20Financial%20Statements) The consolidated financial statements are prepared in accordance with K-IFRS on a historical cost basis, with certain exceptions for fair value measurement, and rely on management's estimates and judgments - Consolidated financial statements are prepared in accordance with Korean International Financial Reporting Standards (K-IFRS)[52](index=52&type=chunk) - The statements are primarily based on historical cost, with exceptions for fair value measurement of certain financial instruments and net defined benefit liabilities[54](index=54&type=chunk)[57](index=57&type=chunk) - Key areas requiring significant estimates and judgments include financial instruments, impairment assessment of non-financial assets (including CGU determination), deferred tax assets and liabilities, provisions, inventories, and employee benefits[55](index=55&type=chunk)[58](index=58&type=chunk)[61](index=61&type=chunk) [Statement of Compliance](index=20&type=section&id=Statement%20of%20Compliance) The consolidated financial statements comply with K-IFRS and were authorized by the Board of Directors on January 26, 2023, for submission to the shareholders' meeting on March 21, 2023 - Financial statements are prepared in accordance with K-IFRS[52](index=52&type=chunk) - Statements were authorized by the Board of Directors on January 26, 2023[53](index=53&type=chunk) [Basis of Measurement](index=20&type=section&id=Basis%20of%20Measurement) The financial statements are prepared on a historical cost basis, except for specific material items like derivative financial instruments, financial assets/liabilities at FVTPL/FVOCI, and net defined benefit liabilities, which are measured at fair value or present value - Consolidated financial statements are prepared on the historical cost basis[54](index=54&type=chunk) - Exceptions to historical cost include derivative financial instruments, financial assets/liabilities at FVTPL/FVOCI, and net defined benefit liabilities[57](index=57&type=chunk) [Functional and Presentation Currency](index=20&type=section&id=Functional%20and%20Presentation%20Currency) Each subsidiary's financial statements are presented in its functional currency, while the consolidated financial statements are presented in Korean won, the Controlling Company's functional currency - Each subsidiary's financial statements are in its functional currency[54](index=54&type=chunk) - Consolidated financial statements are presented in Korean won[54](index=54&type=chunk) [Use of Estimates and Judgments](index=20&type=section&id=Use%20of%20Estimates%20and%20Judgments) The preparation of financial statements requires management to make significant judgments, estimates, and assumptions, which are reviewed continuously - Management makes judgments, estimates, and assumptions that affect reported amounts[55](index=55&type=chunk) - Key areas of estimation uncertainty include provisions, inventories, impairment assessment of non-financial assets, employee benefits, and deferred tax assets/liabilities[58](index=58&type=chunk)[61](index=61&type=chunk) [3. Summary of Significant Accounting Policies](index=21&type=section&id=3.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the Group's significant accounting policies, covering consolidation, foreign currency, inventories, financial instruments, property, plant and equipment, intangible assets, impairment, leases, provisions, employee benefits, revenue, operating segments, finance income/costs, income tax, and earnings per share - The Group uses the acquisition method for business combinations and consolidates entities it controls[60](index=60&type=chunk)[62](index=62&type=chunk) - Financial assets are classified and measured at amortized cost, FVOCI, or FVTPL based on business model and contractual cash flow characteristics[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - Non-financial assets are reviewed for impairment annually, with recoverable amount determined by value in use or fair value less costs to sell[141](index=141&type=chunk)[142](index=142&type=chunk) [Consolidation](index=21&type=section&id=Consolidation) The Group applies the acquisition method for business combinations and consolidates entities it controls, accounting for investments in associates and joint ventures using the equity method - Business combinations are accounted for using the acquisition method[60](index=60&type=chunk) - Subsidiaries are entities controlled by the Group, and their financial statements are included from the date control commences[62](index=62&type=chunk) - Investments in associates and joint ventures are accounted for using the equity method[66](index=66&type=chunk) [Foreign Currency Transaction and Translation](index=23&type=section&id=Foreign%20Currency%20Transaction%20and%20Translation) Foreign currency transactions are translated at transaction date exchange rates, with monetary assets and liabilities retranslated at reporting date rates and differences recognized in profit or loss - Transactions in foreign currencies are translated at exchange rates at the dates of the transactions[71](index=71&type=chunk) - Monetary assets and liabilities denominated in foreign currencies are retranslated at the reporting date exchange rate, with differences recognized in profit or loss[71](index=71&type=chunk) - Financial position and performance of foreign operations are translated into Korean won, with foreign currency differences recognized in other comprehensive income (loss)[72](index=72&type=chunk) [Cash and cash equivalents](index=24&type=section&id=Cash%20and%20cash%20equivalents) Cash and cash equivalents include all cash balances and highly liquid short-term investments with original maturities of three months or less that are readily convertible to known amounts of cash - Cash and cash equivalents include cash balances and short-term highly liquid investments with original maturity of three months or less[74](index=74&type=chunk) [Inventories](index=24&type=section&id=Inventories) Inventories are measured at the lower of cost and net realizable value, with cost determined using the weighted-average method and including all necessary acquisition and production costs - Inventories are measured at the lower of cost and net realizable value[75](index=75&type=chunk) - Cost is based on the weighted-average method and includes all costs to bring inventories to their existing location and condition[75](index=75&type=chunk) [Financial Instruments](index=24&type=section&id=Financial%20Instruments) Financial instruments are classified and measured at amortized cost, FVOCI, or FVTPL based on the Group's business model and contractual cash flow characteristics, with derivatives initially recognized and subsequently measured at fair value - Financial assets are classified as measured at amortized cost, FVOCI (debt or equity), or FVTPL[78](index=78&type=chunk) - Derivatives are initially recognized and subsequently measured at fair value[99](index=99&type=chunk) - The Group applies fair value hedge accounting for fair value risk and cash flow hedge accounting for foreign currency risk of highly probable forecasted transactions[100](index=100&type=chunk)[102](index=102&type=chunk)[104](index=104&type=chunk) [Property, Plant and Equipment](index=29&type=section&id=Property,%20Plant%20and%20Equipment) Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, with depreciation recognized on a straight-line basis over estimated useful lives - Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses[108](index=108&type=chunk) - Depreciation is recognized on a straight-line basis over estimated useful lives, with land not depreciated[111](index=111&type=chunk) Estimated Useful Lives of Property, Plant and Equipment | Item | Estimated useful lives (years) | | :------------------------ | :--------------------------- | | Buildings and structures | 20~40 | | Machinery | 4, 5 | | Furniture and fixtures | 4 | | Equipment, tools and vehicles | 2, 4, 12 | [Borrowing Costs](index=30&type=section&id=Borrowing%20Costs) Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalized as part of the asset's cost, while other borrowing costs are expensed as incurred - Borrowing costs directly attributable to qualifying assets are capitalized[112](index=112&type=chunk) - Other borrowing costs are recognized as an expense immediately[112](index=112&type=chunk) [Government Grants](index=31&type=section&id=Government%20Grants) Government grants related to asset acquisition are deducted from the asset's carrying amount and recognized as reduced depreciation expense, while grants for expenses are deducted from relevant expenses - Grants for asset acquisition are deducted from the asset's carrying amount and recognized as reduced depreciation[114](index=114&type=chunk) - Grants for expenses are recognized as a deduction from relevant expenses[115](index=115&type=chunk) - Grants for immediate financial support are recognized as income when receivable[116](index=116&type=chunk) [Intangible Assets](index=31&type=section&id=Intangible%20Assets) Intangible assets are measured at cost less accumulated amortization and impairment losses, with goodwill tested annually for impairment and development expenditure capitalized if specific criteria are met - Intangible assets are measured at cost less accumulated amortization and impairment losses[116](index=116&type=chunk) - Goodwill is tested annually for impairment[117](index=117&type=chunk) - Development expenditure is capitalized if technical feasibility, intention, ability to use/sell, probable future economic benefits, and reliable measurement criteria are met[118](index=118&type=chunk)[125](index=125&type=chunk) - Amortization is on a straight-line basis, except for intangible assets with indefinite useful lives (e.g., condominium and golf club memberships) which are not amortized[123](index=123&type=chunk)[126](index=126&type=chunk) [Investment Property](index=33&type=section&id=Investment%20Property) Investment properties are held to earn rentals or for capital appreciation, initially measured at cost, and subsequently at cost less accumulated depreciation and impairment loss - Investment properties are held to earn rentals or for capital appreciation[127](index=127&type=chunk) - Initially measured at cost, then at cost less accumulated depreciation and impairment loss[127](index=127&type=chunk) - Land is not depreciated; other investment properties are depreciated on a straight-line basis over 20 years[129](index=129&type=chunk) [Impairment](index=34&type=section&id=Impairment) The Group recognizes loss allowance for financial assets based on expected credit losses (ECL), and reviews non-financial assets for impairment at each reporting date, with recoverable amount determined as the greater of value in use and fair value less costs to sell - Loss allowance for financial assets is recognized at expected credit loss (ECL), either lifetime or 12-month ECLs[130](index=130&type=chunk)[134](index=134&type=chunk) - Non-financial assets are reviewed for impairment, and recoverable amount is the greater of value in use and fair value less costs to sell[141](index=141&type=chunk)[142](index=142&type=chunk) - Impairment losses are recognized in profit or loss, and reversals are possible for non-goodwill assets if estimates change[143](index=143&type=chunk)[144](index=144&type=chunk) [Leases](index=37&type=section&id=Leases) As a lessee, the Group recognizes right-of-use assets and lease liabilities, depreciating assets over the lease term or useful life, while as a lessor, leases are classified as finance or operating leases - As a lessee, the Group recognizes right-of-use assets and lease liabilities at the lease commencement date[148](index=148&type=chunk) - Right-of-use assets are depreciated over the lease term or useful life, and lease liabilities are measured at the present value of lease payments[149](index=149&type=chunk)[150](index=150&type=chunk) - As a lessor, leases are classified as finance or operating leases; finance leases are recognized as receivables, and operating lease payments as income[155](index=155&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) [Provisions](index=39&type=section&id=Provisions) Provisions are recognized when the Group has a present legal or constructive obligation from a past event, the outflow of economic benefits is probable, and the amount can be reliably estimated - Provisions are recognized for present legal or constructive obligations from past events, with probable outflow of economic benefits and reliable estimation[161](index=161&type=chunk) - Provisions are reviewed and adjusted at each reporting period-end[163](index=163&type=chunk) - Warranty obligations are accrued based on estimated costs from historical and anticipated claim rates[164](index=164&type=chunk) [Non-current Assets Held for Sale](index=39&type=section&id=Non-current%20Assets%20Held%20for%20Sale) Non-current assets or disposal groups are classified as held-for-sale if their recovery is highly probable through sale rather than continuing use, are available for immediate sale, and their sale is highly probable - Non-current assets are classified as held-for-sale if recovery is highly probable through sale and they are available for immediate sale[166](index=166&type=chunk) - Assets held for sale are measured at the lower of carrying amount and fair value less costs to sell[166](index=166&type=chunk) - Non-current assets classified as held for sale are not depreciated[167](index=167&type=chunk) [Employee Benefits](index=40&type=section&id=Employee%20Benefits) The Group recognizes short-term employee benefits on an undiscounted basis, calculates net defined benefit obligations by discounting future benefits and deducting plan assets, and expenses defined contribution plan obligations as services are rendered - Short-term employee benefits are recognized on an undiscounted basis[169](index=169&type=chunk) - For defined benefit plans, the net obligation is calculated by estimating and discounting future benefits, less the fair value of plan assets[172](index=172&type=chunk) - Actuarial gains and losses from defined benefit plans are recognized immediately in retained earnings[173](index=173&type=chunk) - Termination benefits are expensed at the earlier of when the offer cannot be withdrawn or restructuring costs are recognized[177](index=177&type=chunk) [Revenue from contracts with customers](index=41&type=section&id=Revenue%20from%20contracts%20with%20customers) Revenue from goods sales is measured at the fair value of consideration, net of returns and discounts, applying a five-stage revenue recognition model, primarily recognizing product revenue upon shipment or delivery - Revenue from sales of goods is measured at the fair value of consideration, net of estimated returns, discounts, and incentives[178](index=178&type=chunk) - The Group applies a five-stage revenue recognition model[179](index=179&type=chunk) - Product revenue is recognized when a customer obtains control, typically upon shipment or delivery[180](index=180&type=chunk) [Operating Segments](index=41&type=section&id=Operating%20Segments) The Board of Directors is identified as the chief operating decision maker (CODM), and no operating segment information is included in these consolidated financial statements as the CODM does not review discrete financial information for any specific component - The Board of Directors is identified as the chief operating decision maker (CODM)[182](index=182&type=chunk) - No operating segment information is included as the CODM does not review discrete financial information for any component[182](index=182&type=chunk) [Finance Income and Finance Costs](index=42&type=section&id=Finance%20Income%20and%20Finance%20Costs) Finance income includes interest and dividend income, gains on disposal of debt instruments, and fair value changes of FVTPL financial instruments, while finance costs comprise interest expense on borrowings, unwinding of discount on provisions, and losses from FVTPL financial instruments and impairment - Finance income includes interest income, dividend income, gains on disposal of debt instruments, and fair value changes of FVTPL financial instruments[184](index=184&type=chunk) - Finance costs include interest expense on borrowings, unwinding of discount on provisions, and losses from FVTPL financial instruments and impairment[185](index=185&type=chunk) - Borrowing costs directly attributable to qualifying assets are capitalized[185](index=185&type=chunk) [Income Tax](index=42&type=section&id=Income%20Tax) Income tax expense comprises current and deferred tax, recognized in profit or loss unless related to business combinations or items recognized directly in equity or other comprehensive income - Income tax expense comprises current and deferred tax, recognized in profit or loss unless specified otherwise[186](index=186&type=chunk) - Current tax is the expected tax payable for the year, using enacted or substantively enacted tax rates[187](index=187&type=chunk) - Deferred tax is recognized using the asset and liability method for temporary differences, measured at expected future tax rates[188](index=188&type=chunk) [Earnings (Loss) Per Share](index=43&type=section&id=Earnings%20(Loss)%20Per%20Share) Basic earnings (loss) per share (EPS) is calculated by dividing profit or loss attributable to ordinary shareholders by the weighted average number of common stocks outstanding, with diluted EPS adjusting for dilutive potential common stocks - Basic EPS is calculated by dividing profit/loss attributable to ordinary shareholders by weighted average common stocks outstanding[192](index=192&type=chunk) - Diluted EPS adjusts for the effects of all dilutive potential common stocks[192](index=192&type=chunk) [Standards issued but not yet effective](index=43&type=section&id=Standards%20issued%20but%20not%20yet%20effective) Amendments to K-IFRS No. 1001 regarding classification of current/non-current liabilities are effective for annual periods beginning after January 1, 2024, with other new and amended standards not expected to significantly impact the Group's consolidated financial statements - Amendments to K-IFRS No. 1001 on current/non-current liabilities classification are effective no earlier than January 1, 2024[193](index=193&type=chunk) - Other new and amended standards are not expected to have a significant impact[195](index=195&type=chunk) [4. Cash and Cash Equivalents and Deposits in Banks](index=45&type=section&id=4.%20Cash%20and%20Cash%20Equivalents%20and%20Deposits%20in%20Banks) As of December 31, 2022, cash and cash equivalents decreased significantly by 48.48% to 1.82 trillion KRW, while deposits in banks more than doubled to 1.72 trillion KRW, largely due to an increase in restricted deposits Cash and Cash Equivalents and Deposits in Banks (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------ | :---------------- | :---------------- | :----------- | | Cash and cash equivalents | 1,824,649 | 3,541,597 | -48.48% | | Deposits in banks (current) | 1,722,607 | 743,305 | +131.75% | | Time deposits | 267,163 | 2,600 | +10175.58% | | Restricted deposits | 1,455,444 | 740,705 | +96.50% | - Restricted deposits include funds for supplier aid, investment plans with grants, and guarantees for subsidiary borrowings[196](index=196&type=chunk) [5. Trade Accounts and Notes Receivable, Other Accounts Receivable and Others](index=46&type=section&id=5.%20Trade%20Accounts%20and%20Notes%20Receivable,%20Other%20Accounts%20Receivable%20and%20Others) Trade accounts and notes receivable decreased by 48.44% in 2022, while other accounts receivable increased by 38.99%, driven by a significant non-trade receivable from a patent contract ruling Receivables and Other Current Assets (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------------------ | :---------------- | :---------------- | :----------- | | Trade accounts and notes receivable, net | 2,358,914 | 4,574,789 | -48.44% | | Other accounts receivable, net | 169,426 | 121,899 | +38.99% | | Non-trade receivables, net | 146,921 | 108,875 | +34.95% | | Accrued income | 22,505 | 13,024 | +72.79% | | Other current assets | 324,891 | 728,363 | -55.41% | | Value added tax refundable | 220,182 | 608,476 | -63.80% | - A compensation receivable of **120.39 billion KRW (USD 95 million)** was recognized in 2022 due to a favorable ruling in Sharp's patent contract, with **31.98 billion KRW (USD 25 million)** remaining as of December 31, 2022[199](index=199&type=chunk) - The allowance for impairment for trade accounts and notes receivable decreased by **27.33%** in 2022, while for other accounts receivable, it decreased by **11.47%**[201](index=201&type=chunk) [Trade accounts and notes receivable](index=46&type=section&id=Trade%20accounts%20and%20notes%20receivable) Trade accounts and notes receivable, net, decreased by 48.44% from 4.57 trillion KRW in 2021 to 2.36 trillion KRW in 2022, with significant declines from both third parties and related parties Trade Accounts and Notes Receivable (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------ | :---------------- | :---------------- | :----------- | | Due from third parties | 2,042,746 | 3,818,980 | -46.49% | | Due from related parties | 316,168 | 755,809 | -58.17% | | Total | 2,358,914 | 4,574,789 | -48.44% | [Other accounts receivable](index=46&type=section&id=Other%20accounts%20receivable) Other accounts receivable, net, increased by 38.99% to 169.43 billion KRW in 2022, primarily driven by a 120.39 billion KRW compensation receivable from a patent contract ruling Other Accounts Receivable (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------ | :---------------- | :---------------- | :----------- | | Non-trade receivables, net | 146,921 | 108,875 | +34.95% | | Accrued income | 22,505 | 13,024 | +72.79% | | Long-term non-trade receivables | — | 2,376 | -100.00% | | Total | 169,426 | 124,275 | +36.33% | - A compensation receivable of **USD 95 million (120.39 billion KRW)** was recognized in 2022 due to a favorable patent contract ruling[199](index=199&type=chunk) [Aging of trade accounts and notes receivable, and other accounts receivable](index=47&type=section&id=Aging%20of%20trade%20accounts%20and%20notes%20receivable,%20and%20other%20accounts%20receivable) The current portion of trade accounts and notes receivable decreased by 49.01% in 2022, while the current portion of other accounts receivable increased by 33.20% Aging of Receivables (KRW millions) | Item | December 31, 2022 (Book Value) | December 31, 2021 (Book Value) | Change (YoY) | | :------------------------------------ | :----------------------------- | :----------------------------- | :----------- | | Trade accounts and notes receivable (Current) | 2,332,769 | 4,575,354 | -49.01% | | Other accounts receivable (Current) | 166,067 | 124,877 | +33.00% | | Allowance for impairment (Trade accounts) | (875) | (1,204) | -27.33% | | Allowance for impairment (Other accounts) | (1,778) | (2,005) | -11.37% | - Bad debt expense reversal for trade accounts and notes receivable was **329 million KRW** in 2022, compared to an expense of **157 million KRW** in 2021[201](index=201&type=chunk) [Other current assets](index=48&type=section&id=Other%20current%20assets) Other current assets decreased significantly by 55.41% to 324.89 billion KRW in 2022, primarily due to a 63.80% reduction in value-added tax refundable Other Current Assets (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------ | :---------------- | :---------------- | :----------- | | Advanced payments | 22,134 | 44,907 | -50.72% | | Prepaid expenses | 74,420 | 67,540 | +10.19% | | Value added tax refundable | 220,182 | 608,476 | -63.80% | | Right to recover returned goods | 8,155 | 7,440 | +9.61% | | Total | 324,891 | 728,363 | -55.41% | [6. Other Financial Assets](index=49&type=section&id=6.%20Other%20Financial%20Assets) Current other financial assets increased significantly by 142.45% to 165.36 billion KRW in 2022, driven by a substantial rise in derivatives at fair value through profit or loss, while non-current other financial assets also increased by 84.04% to 289.10 billion KRW Other Financial Assets (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------------------------ | :---------------- | :---------------- | :----------- | | Current assets: | | | | | Financial assets at FVTPL | 119,417 | 14,314 | +734.27% | | Cash flow hedging derivatives | — | 905 | -100.00% | | Financial assets carried at amortized cost | 45,938 | 52,957 | -13.25% | | Total current other financial assets | 165,355 | 68,203 | +142.45% | | Non-current assets: | | | | | Financial assets at FVTPL | 208,524 | 102,861 | +102.73% | | Financial assets carried at amortized cost | 80,574 | 53,329 | +51.09% | | Total non-current other financial assets | 289,098 | 156,211 | +84.04% | - Derivatives at FVTPL (current) increased from **12.74 billion KRW** in 2021 to **119.42 billion KRW** in 2022, reflecting cross currency interest rate swap contracts not designated as hedging instruments[204](index=204&type=chunk) - Equity instruments at FVTPL (non-current) increased by **96.83%** to **96.06 billion KRW** in 2022[204](index=204&type=chunk) [7. Inventories](index=50&type=section&id=7.%20Inventories) Total inventories decreased by 14.10% to 2.87 trillion KRW in 2022, primarily driven by reductions in finished goods and raw materials, while inventory write-downs included in the cost of sales increased by 9.37% Inventories (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :---------------- | :---------------- | :---------------- | :----------- | | Finished goods | 822,177 | 1,180,329 | -30.34% | | Work-in-process | 1,235,363 | 1,202,548 | +2.73% | | Raw materials | 651,602 | 786,739 | -17.20% | | Supplies | 163,776 | 180,759 | -9.39% | | Total Inventories | 2,872,918 | 3,350,375 | -14.10% | - Inventories recognized as cost of sales increased by **2.34%** to **25.03 trillion KRW** in 2022[206](index=206&type=chunk) - Inventory write-downs increased from **224.58 billion KRW** in 2021 to **245.62 billion KRW** in 2022[206](index=206&type=chunk) [8. Investments in Equity Accounted Investees](index=51&type=section&id=8.%20Investments%20in%20Equity%20Accounted%20Investees) Investments in equity accounted investees decreased by 13.90% to 109.12 billion KRW in 2022, primarily due to the reclassification of Nanosys Inc. to a financial asset at FVTPL and a net loss from other associates Investments in Equity Accounted Investees (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :-------------------------------- | :---------------- | :---------------- | :----------- | | Total Investments | 109,119 | 126,719 | -13.90% | | Paju Electric Glass Co., Ltd. | 42,784 | 48,398 | -11.59% | | WooRee E&L Co., Ltd. | 13,576 | 11,947 | +13.64% | | YAS Co., Ltd. | 28,976 | 27,337 | +5.99% | | AVATEC Co., Ltd. | 20,133 | 20,708 | -2.78% | | Material Science Co., Ltd. | 3,650 | 3,679 | -0.79% | | Nanosys Inc. | — | 14,650 | -100.00% | | Other associates (aggregate book value) | 66,335 | 78,321 | -15.31% | - Nanosys Inc. was reclassified from an associate to a financial asset at FVTPL in 2022 due to loss of the right to appoint board members[210](index=210&type=chunk)[217](index=217&type=chunk) - Dividends received from equity method investees increased by **9.67%** to **4.46 billion KRW** in 2022[212](index=212&type=chunk) [9. Property, Plant and Equipment](index=57&type=section&id=9.%20Property,%20Plant%20and%20Equipment) The net book value of property, plant and equipment increased slightly by 1.89% to 20.95 trillion KRW in 2022, with additions offset by depreciation and a significant impairment loss primarily related to the Display (Large OLED) CGU Property, Plant and Equipment (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------------------ | :---------------- | :---------------- | :----------- | | Book value as of January 1 | 20,558,446 | 20,139,703 | +2.08% | | Additions | 5,782,395 | 3,714,719 | +55.66% | | Depreciation | (3,985,785) | (3,977,253) | +0.21% | | Impairment loss | (1,257,255) | (17,964) | +6990.00% | | Book value as of December 31 | 20,946,933 | 20,558,446 | +1.89% | - A significant impairment loss of **1.26 trillion KRW** was recognized in 2022, primarily for the Display (Large OLED) CGU[218](index=218&type=chunk)[219](index=219&type=chunk) - Capitalized borrowing costs increased by **135.39%** to **152.07 billion KRW** in 2022, with a capitalization rate of **3.11%**[222](index=222&type=chunk) [10. Intangible Assets and Non-financial Assets Impairment](index=60&type=section&id=10.%20Intangible%20Assets%20and%20Non-financial%20Assets%20Impairment) The net book value of intangible assets increased by 6.57% to 1.75 trillion KRW in 2022, but a significant impairment loss of 1.33 trillion KRW was recognized for the Display (Large OLED) CGU due to unfavorable business environment changes Intangible Assets (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------------------ | :---------------- | :---------------- | :----------- | | Book value as of January 1 | 1,644,898 | 1,020,088 | +61.25% | | Additions (internally developed) | 502,755 | 362,897 | +38.55% | | Additions (external purchases) | 314,038 | 834,514 | -62.49% | | Amortization | (570,868) | (523,448) | +9.06% | | Impairment loss | (134,397) | (29,488) | +355.78% | | Book value as of December 31 | 1,752,957 | 1,644,898 | +6.57% | - An impairment loss of **1.33 trillion KRW** was recognized for the Display (Large OLED) CGU in 2022, allocated to goodwill, development costs, and others[225](index=225&type=chunk)[239](index=239&type=chunk) - The recoverable amount of Display (Large OLED) CGU was **3.00 trillion KRW**, which was exceeded by its carrying amount[239](index=239&type=chunk) - Development costs for 'Mobile and others' increased by **160.40%** to **199.55 billion KRW** for completed projects and by **10.95%** to **125.04 billion KRW** for in-process projects in 2022[228](index=228&type=chunk)[229](index=229&type=chunk) [11. Investment Property](index=65&type=section&id=11.%20Investment%20Property) The Group recognized 28.27 billion KRW in investment property as of December 31, 2022, primarily from a transfer from property, plant and equipment, offset by depreciation and an impairment loss Investment Property (KRW millions) | Item | 2022 | | :------------------------------------ | :----------- | | Book value as of January 1, 2022 | W — | | Transfer from property, plant and equipment | 36,809 | | Depreciation | (804) | | Impairment loss | (7,736) | | Book value as of December 31, 2022 | 28,269 | - Rental income from investment property was **358 million KRW** in 2022[240](index=240&type=chunk) [12. Financial Liabilities](index=66&type=section&id=12.%20Financial%20Liabilities) Total current financial liabilities increased by 34.89% to 5.49 trillion KRW in 2022, driven by a significant rise in short-term borrowings, while non-current financial liabilities also increased by 10.57% to 9.62 trillion KRW Financial Liabilities (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------------------ | :---------------- | :---------------- | :----------- | | Current financial liabilities | 5,489,254 | 4,069,712 | +34.89% | | Short-term borrowings | 2,578,552 | 613,733 | +320.15% | | Current portion of long-term borrowings and bonds | 2,855,565 | 3,393,506 | -15.85% | | Non-current financial liabilities | 9,622,352 | 8,702,745 | +10.57% | | Won denominated borrowings | 1,644,602 | 2,173,500 | -24.33% | | Foreign currency denominated borrowings | 6,780,593 | 5,487,091 | +23.57% | | Bonds | 1,132,098 | 995,976 | +13.67% | - Short-term borrowings increased by **320.15%** to **2.58 trillion KRW** in 2022, with a significant portion from The Export-Import Bank of Korea and others[242](index=242&type=chunk) - Foreign currency denominated long-term borrowings increased by **23.57%** to **6.78 trillion KRW** in 2022[243](index=243&type=chunk) - Convertible bonds issued in 2019 were fully redeemed in 2022, with **USD 667 million** redeemed via bondholders' put option and the remaining **USD 21 million** via the Group's early redemption right[246](index=246&type=chunk) [13. Employee Benefits](index=70&type=section&id=13.%20Employee%20Benefits) The Group's net defined benefit assets increased significantly to 447.52 billion KRW in 2022, primarily due to a substantial increase in the fair value of plan assets and a decrease in defined benefit obligations Employee Benefits (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------------------ | :---------------- | :---------------- | :----------- | | Net defined benefit liabilities (assets) | (445,990) | (66,687) | +568.79% | | Defined benefit assets, net | 447,521 | 68,276 | +555.46% | | Present value of defined benefit obligations | 1,602,697 | 1,684,096 | -4.71% | | Fair value of plan assets | 2,048,687 | 1,750,783 | +17.02% | | Expenses related to defined benefit plans | 168,260 | 144,241 | +16.65% | | Remeasurements of net defined benefit liabilities (before tax) | 165,896 | (220,885) | +175.11% | | Expected rate of salary increase | 4.7% | 3.7% | +1.0 p.p. | | Discount rate for defined benefit obligations | 5.4% | 3.1% | +2.3 p.p. | - The weighted average remaining maturity of defined benefit obligations decreased from **15.63 years** in 2021 to **12.95 years** in 2022[250](index=250&type=chunk) - A **1% decrease** in the discount rate would increase defined benefit obligations by **211.37 billion KRW**, while a **1% increase** in salary would increase them by **220.95 billion KRW**[255](index=255&type=chunk) [14. Provisions](index=74&type=section&id=14.%20Provisions) Total provisions increased by 1.16% to 259.48 billion KRW in 2022, with warranty provisions remaining the largest component and litigation and claims provisions newly recognized Provisions (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------ | :---------------- | :---------------- | :----------- | | Balance at January 1 | 266,373 | N/A | N/A | | Additions (reversal) | 252,259 | N/A | N/A | | Usage | (259,153) | N/A | N/A | | Balance at December 31 | 259,479 | 266,373 (implied) | +1.16% | | Litigation and claims | 1,680 | — | N/A | | Warranties | 249,368 | 257,126 | -2.99% | | Others | 8,431 | 9,247 | -8.82% | | Current provisions | 173,322 | 173,431 | -0.06% | | Non-current provisions | 86,157 | 92,942 | -7.30% | - Product warranties are calculated using historical and anticipated rates of warranty claims and costs[256](index=256&type=chunk) [15. Contingent Liabilities and Commitments](index=75&type=section&id=15.%20Contingent%20Liabilities%20and%20Commitments) The Group is involved in anti-trust litigations and other disputes with uncertain outcomes, and has significant commitments including factoring agreements, letters of credit, payment guarantees, and capital expenditure commitments of 1.20 trillion KRW - The Group is involved in anti-trust litigations and other disputes, with the timing and amount of outflows currently not reliably estimable[258](index=258&type=chunk)[259](index=259&type=chunk) - The Controlling Company has accounts receivable sales negotiating facilities of up to **USD 950 million (1.20 trillion KRW)** with recourse, with **380.88 billion KRW** outstanding but past due as of December 31, 2022[260](index=260&type=chunk) - The Group has sold **1.99 trillion KRW (USD 1.57 billion)** of accounts receivable without recourse as of December 31, 2022[261](index=261&type=chunk)[262](index=262&type=chunk) - Commitments for capital expenditures on property, plant and equipment and intangible assets amounted to **1.20 trillion KRW** as of December 31, 2022[267](index=267&type=chunk) [16. Share Capital, Share Premium and Reserves](index=78&type=section&id=16.%20Share%20Capital,%20Share%20Premium%20and%20Reserves) The Controlling Company's share capital and share premium remained unchanged in 2022, while total reserves decreased by 10.70% to 479.63 billion KRW, primarily due to a shift from a gain to a loss in foreign currency translation differences - Share capital (**1.79 trillion KRW**) and share premium (**2.25 trillion KRW**) remained unchanged from 2021 to 2022[268](index=268&type=chunk)[269](index=269&type=chunk) Reserves (KRW millions) | Item | December 31, 2022 | December 31, 2021 | Change (YoY) | | :------------------------------------------ | :---------------- | :---------------- | :----------- | | Loss on valuation of derivatives | — | (9,227) | +100.00% | | Foreign currency translation differences for foreign operations | 509,620 | 566,651 | -10.06% | | Other comprehensive loss from associates | (29,992) | (20,282) | +47.87% | | Total Reserves | 479,628 | 537,142 | -10.70% | - The change in reserves for 2022 was a loss of **57.51 billion KRW**, compared to a gain of **700.59 billion KRW** in 2021[272](index=272&type=chunk) [17. Revenue](index=79&type=section&id=17.%20Revenue) Total revenue decreased by 12.47% to 26.15 trillion KRW in 2022, primarily due to a 212.96 billion KRW hedging loss reclassified from other comprehensive income to revenue Revenue Details (KRW millions) | Item | 2022 | 2021 | Change (YoY) | | :---------------- | :----------- | :----------- | :----------- | | Sales of goods | 26,318,585 | 29,824,886 | -11.76% | | Royalties | 12,402 | 13,977 | -11.39% | | Others | 33,750 | 39,180 | -13.86% | | Hedging loss | (212,956) | — | N/A | | Total Revenue | 26,151,781 | 29,878,043 | -12.47% | - A hedging loss of **212.96 billion KRW** was reclassified from accumulated other comprehensive income to revenue in 2022[273](index=273&type=chunk) [18. Geographic and Other Information](index=80&type=section&id=18.%20Geographic%20and%20Other%20Information) In 2022, foreign revenue decreased by 12.17%, with China remaining the largest market but experiencing a 12.25% decline, while TV product revenue saw a significant 26.32% decrease Revenue by Geography (KRW millions) | Region | 2022 | 2021 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | Domestic | 678,246 | 632,531 | +7.23% | | Foreign | 25,686,491 | 29,245,512 | -12.17% | | China | 17,434,407 | 19,866,707 | -12.25% | | United States | 3,078,924 | 3,263,055 | -5.64% | | Poland | 1,387,946 | 1,699,955 | -18.35% | | Total Revenue | 26,364,737 | 29,878,043 | -11.76% | Revenue by Product and Services (KRW millions) | Product/Service | 2022 | 2021 | Change (YoY) | | :-------------------- | :----------- | :----------- | :----------- | | TV | 6,975,269 | 9,466,192 | -26.32% | | IT | 11,197,954 | 12,458,740 | -10.16% | | Mobile and others | 8,191,514 | 7,953,111 | +3.00% | | Total Revenue | 26,364,737 | 29,878,043 | -11.76% | - Sales to Company A and Company B, the top two end-brand customers, decreased by **2.40%** and **20.67%** respectively in 2022, but together accounted for **86% of total sales**[276](index=276&type=chunk) [19. The Nature of Expenses and Others](index=82&type=section&id=19.%20The%20Nature%20of%20Expenses%20and%20Others) Total expenses increased by 7.06% to 29.73 trillion KRW in 2022, primarily driven by a significant increase in impairment losses on property, plant and equipment and intangible assets, as well as higher outsourcing and utility costs Expenses by Nature (KRW millions) | Item | 2022 | 2021 | Change (YoY) | | :------------------------------------ | :----------- | :----------- | :----------- | | Changes in inventories | 477,457 | (1,179,232) | N/A (Shift from decrease to increase) | | Purchases of raw materials, merchandise and others | 13,521,132 | 15,207,659 | -11.09% | | Depreciation and amortization | 4,557,457 | 4,500,701 | +1.26% | | Outsourcing | 1,096,681 | 776,755 | +41.19% | | Labor | 3,669,275 | 3,795,943 | -3.34% | | Utility | 1,189,105 | 1,029,953 | +15.45% | | Impairment loss on property, plant and equipment | 1,260,436 | 19,085 | +6597.88% | | Impairment loss on intangible assets | 136,372 | 29,488 | +362.41% | | Total Expenses | 29,726,194 | 27,766,666 | +7.06% | - The significant increase in impairment losses on property, plant and equipment and intangible assets was a major driver of the overall expense increase[280](index=280&type=chunk) [20. Selling and Administrative Expenses](index=83&type=section&id=20.%20Selling%20and%20Administrative%20Expenses) Selling and administrative expenses decreased slightly by 1.39% to 1.83 trillion KRW in 2022, mainly due to significant reductions in shipping costs and advertising expenses, partially offset by increases in warranty expenses and fees Selling and Administrative Expenses (KRW millions) | Item | 2022 | 2021 | Change (YoY) | | :------------------------------------ | :----------- | :----------- | :----------- | | Salaries | 354,709 | 387,414 | -8.44% | | Expenses related to defined benefit plans | 26,872 | 22,859 | +17.56% | | Shipping | 213,613 | 298,684 | -28.41% | | Fees and commissions | 272,337 | 248,478 | +9.60% | | Depreciation | 263,739 | 267,042 | -1.24% | | Advertising | 108,315 | 126,335 | -14.30% | | Warranty | 251,395 | 216,873 | +16.00% | | Total | 1,826,719 | 1,852,452 | -1.39% | [21. Personnel Expenses](index=83&type=section&id=21.%20Personnel%20Expenses) Total personnel expenses decreased by 1.72% to 3.87 trillion KRW in 2022, primarily due to a reduction in salaries and wages, despite increases in other employee benefits and expenses related to defined benefit/contribution plans Personnel Expenses (KRW millions) | Item | 2022 | 2021 | Change (YoY) | | :------------------------------------ | :----------- | :----------- | :----------- | | Salaries and wages | 2,975,325 | 3,138,798 | -5.21% | | Other employee benefits | 652,915 | 589,598 | +10.74% | | Contributions to National Pension plan | 77,062 | 68,962 | +11.75% | | Expenses related to defined benefit plans and defined contribution plans | 169,362 | 144,739 | +17.01% | | Total | 3,874,664 | 3,942,097 | -1.72% | [22. Other Non-operating Income and Other Non-operating Expenses](index=84&type=section&id=22.%20Other%20Non-operating%20Income%20and%20Other%20Non-operating%20Expenses) Other non-operating income increased significantly by 154.43% to 3.19 trillion KRW in 2022, mainly driven by a substantial rise in foreign currency gain, but other non-operating expenses more than tripled to 4.45 trillion KRW due to a massive increase in impairment loss on property, plant, and equipment Other Non-operating Income (KRW millions) | Item | 2022 | 2021 | Change (YoY) | | :------------------------------------ | :----------- | :----------- | :----------- | | Foreign currency gain | 3,098,553 | 1,210,689 | +155.94% | | Gain on disposal of property, plant and equipment | 25,737 | 19,367 | +32.89% | | Reversal of impairment loss on property, plant and equipment | 3,181 | 1,121 | +183.76% | | Total Other Non-operating Income | 3,185,837 | 1,252,135 | +154.43% | Other Non-operating Expenses (KRW millions) | Item | 2022 | 2021 | Change (YoY) | | :------------------------------------ | :----------- | :----------- | :----------- | | Foreign currency loss | 2,957,048 | 1,161,628 | +154.57% | | Loss on disposal of property, plant and equipment | 54,432 | 64,350 | -15.39% | | Impairment loss on property, plant, and equipment | 1,260,436 | 19,085 | +6597.88% | | Impairment loss on intangible assets | 136,372 | 29,488 | +362.41% | | Impairment loss on investments | 7,736 | — | N/A | | Total Other Non-operating Expenses | 4,446,414 | 1,280,859 | +247.14% | [23. Finance Income and Finance Costs](index=85&type=section&id=23.%20Finance%20Income%20and%20Finance%20Costs) Finance income more than doubled to 873.06 billion KRW in 2022, primarily driven by a significant increase in foreign currency gain and gain on valuation of financial liabilities at FVTPL, while finance costs also increased by 5.43% to 966.36 billion KRW Finance Income (KRW millions) | Item | 2022 | 2021 | Change (YoY) | | :------------------------------------ | :-

Financial Performance - LG Display's revenue decreased by 17% from KRW 8,807 billion in Q4 2021 to KRW 7,302 billion in Q4 2022[4] - The company experienced an operating loss of KRW 876 billion in Q4 2022, compared to an operating income of KRW 476 billion in Q4 2021[4] - EBITDA significantly decreased by 87% from KRW 1,645 billion in Q4 2021 to KRW 209 billion in Q4 2022[4] - Net income showed a substantial decrease from KRW 180 billion in Q4 2021 to a net loss of KRW 2,094 billion in Q4 2022[4] - The operating margin declined from 5.4% in Q4 2021 to -12% in Q4 2022[19] Financial Position - Total assets decreased from KRW 40,134 billion in Q3 2022 to KRW 35,686 billion in Q4 2022[34] - Inventory decreased from KRW 4,517 billion in Q3 2022 to KRW 2,873 billion in Q4 2022[34] - Shareholder's equity decreased from KRW 14,284 billion in Q3 2022 to KRW 11,319 billion in Q4 2022[34] - The net debt to equity ratio increased from 84% in Q3 2022 to 101% in Q4 2022[34] Cash Flow - Cash flow from operating activities decreased from KRW 937 billion in Q3 2022 to KRW 855 billion in Q4 2022[24]

LG Display Co., Ltd. (NYSE:LPL) Q4 2022 Earnings Conference Call January 26, 2023 8:00 PM ET Company Participants Brian Heo - Investor Relations Sunghyun Kim - Chief Financial Officer Hee Yeon Kim - Chief Strategic Officer Ki Hwan Son - Vice President, Auto Marketing Seong Gon Kim - In Charge, Medium Display Marketing Seung Min Lim - Vice President, Corporate Planning Operator Good morning and good evening. First of all, thank you all for joining this conference call. And now we will begin the Conference of ...