LG Display (LPL) - 2023 Q1 - Quarterly Report

Form 6-K Filing Information LG Display Co., Ltd. filed Form 6-K for March 2023 as a foreign private issuer under Form 20-F Form 6-K Details 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] - The company files annual reports under Form 20-F[1] - The filing is not submitted in paper format as permitted by Regulation S-T Rule 101(b)(1) or 101(b)(7)[2][3] Submission of Audit Report & Financial Highlights This section presents the unqualified audit report for FY 2022 and highlights the significant decline in the company's financial performance Audit Report Overview 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] - Samjong Accounting Corporation (KPMG) served as the external auditor, with the report dated March 3, 2023[7] Financial Highlights of Consolidated Financial Statements 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] Independent Auditors' Report The independent auditors issued an unqualified opinion, detailing key audit matters on asset impairment and deferred tax recognition 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] - The financial statements were prepared in accordance with Korean International Financial Reporting Standards (K-IFRS)[11] Basis for Opinion 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] - Auditors maintained independence and fulfilled ethical responsibilities[12] Key Audit Matters 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][15] - The Group recognized an impairment loss of 1.33 trillion KRW relating to the Display (Large OLED) CGU in 2022[14] - 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][19] Determination of cash generating unit (CGU) and impairment assessment for Display (Large OLED) CGU 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] - The change in CGU identification was driven by the withdrawal of the domestic LCD TV business and related business reorganization[14] - 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] Assessment of recognition of deferred tax assets 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] - The recognition of deferred tax assets involves significant management judgment in estimating future taxable profits, revenue, and operating expenditures[19] - 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] Other Matter 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] Responsibilities of Management and Those Charged with Governance 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] - Management is also responsible for assessing the Group's ability to continue as a going concern[25] - Those charged with governance oversee the Group's financial reporting process[26] Auditors' Responsibilities for the Audit 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] - 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] - Auditors communicate planned scope, timing, and significant audit findings, including internal control deficiencies, to those charged with governance[29] Consolidated Financial Statements 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 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] - Property, plant and equipment, net, increased slightly from 20.56 trillion KRW in 2021 to 20.95 trillion KRW in 2022[34] Consolidated Statements of Comprehensive Income (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] - 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] Consolidated Statements of Changes in Equity 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] - 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] Consolidated Statements of Cash Flows 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] - 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] Notes to the Consolidated Financial Statements This section provides detailed notes supporting the consolidated financial statements, covering reporting entity, accounting policies, and specific financial line items 1. Reporting Entity 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] - As of December 31, 2022, LG Electronics Inc. owns 37.9% of the Controlling Company's common stock[43] - The company has 357,815,700 common shares outstanding and 16,674,488 American Depository Shares (ADSs) outstanding as of December 31, 2022[44] Description of the Controlling Company 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] - As of December 31, 2022, LG Electronics Inc. owns 37.9% (135,625,000 shares) of the Controlling Company's common stock[43] Consolidated Subsidiaries as of December 31, 2022 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] - Most subsidiaries are 100% owned, with notable exceptions being L&T Display Technology (Fujian) Limited (51%) and LG Display (China) Co., Ltd. (70%)[46] - LG DISPLAY FUND I LLC received a 33.14 billion KRW capital increase from the Controlling Company in 2022[46] Summary of financial information of subsidiaries 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] - LG Display America, Inc. and LG Display Guangzhou Co., Ltd. were among the top contributors to sales in both years[48][49] Information of subsidiaries with significant non-controlling interests 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] - 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][51] 2. Basis of Presenting Financial Statements 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] - The statements are primarily based on historical cost, with exceptions for fair value measurement of certain financial instruments and net defined benefit liabilities[54][57] - 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][58][61] Statement of Compliance 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] - Statements were authorized by the Board of Directors on January 26, 2023[53] Basis of Measurement 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] - Exceptions to historical cost include derivative financial instruments, financial assets/liabilities at FVTPL/FVOCI, and net defined benefit liabilities[57] Functional and Presentation Currency 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] - Consolidated financial statements are presented in Korean won[54] Use of Estimates and Judgments 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] - Key areas of estimation uncertainty include provisions, inventories, impairment assessment of non-financial assets, employee benefits, and deferred tax assets/liabilities[58][61] 3. Summary of Significant Accounting Policies 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][62] - Financial assets are classified and measured at amortized cost, FVOCI, or FVTPL based on business model and contractual cash flow characteristics[78][79][80][82][83] - Non-financial assets are reviewed for impairment annually, with recoverable amount determined by value in use or fair value less costs to sell[141][142] 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] - Subsidiaries are entities controlled by the Group, and their financial statements are included from the date control commences[62] - Investments in associates and joint ventures are accounted for using the equity method[66] Foreign Currency Transaction and Translation 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] - Monetary assets and liabilities denominated in foreign currencies are retranslated at the reporting date exchange rate, with differences recognized in profit or loss[71] - Financial position and performance of foreign operations are translated into Korean won, with foreign currency differences recognized in other comprehensive income (loss)[72] Cash and cash equivalents 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] 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] - Cost is based on the weighted-average method and includes all costs to bring inventories to their existing location and condition[75] Financial Instruments 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] - Derivatives are initially recognized and subsequently measured at fair value[99] - 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][102][104] Property, Plant and Equipment 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] - Depreciation is recognized on a straight-line basis over estimated useful lives, with land not depreciated[111] 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 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] - Other borrowing costs are recognized as an expense immediately[112] Government Grants 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] - Grants for expenses are recognized as a deduction from relevant expenses[115] - Grants for immediate financial support are recognized as income when receivable[116] Intangible Assets 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] - Goodwill is tested annually for impairment[117] - Development expenditure is capitalized if technical feasibility, intention, ability to use/sell, probable future economic benefits, and reliable measurement criteria are met[118][125] - 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][126] Investment Property 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] - Initially measured at cost, then at cost less accumulated depreciation and impairment loss[127] - Land is not depreciated; other investment properties are depreciated on a straight-line basis over 20 years[129] 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][134] - 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][142] - Impairment losses are recognized in profit or loss, and reversals are possible for non-goodwill assets if estimates change[143][144] 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] - 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][150] - As a lessor, leases are classified as finance or operating leases; finance leases are recognized as receivables, and operating lease payments as income[155][158][159] 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] - Provisions are reviewed and adjusted at each reporting period-end[163] - Warranty obligations are accrued based on estimated costs from historical and anticipated claim rates[164] Non-current Assets Held for Sale 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] - Assets held for sale are measured at the lower of carrying amount and fair value less costs to sell[166] - Non-current assets classified as held for sale are not depreciated[167] Employee Benefits 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] - For defined benefit plans, the net obligation is calculated by estimating and discounting future benefits, less the fair value of plan assets[172] - Actuarial gains and losses from defined benefit plans are recognized immediately in retained earnings[173] - Termination benefits are expensed at the earlier of when the offer cannot be withdrawn or restructuring costs are recognized[177] Revenue from contracts with customers 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] - The Group applies a five-stage revenue recognition model[179] - Product revenue is recognized when a customer obtains control, typically upon shipment or delivery[180] Operating Segments 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] - No operating segment information is included as the CODM does not review discrete financial information for any component[182] Finance Income and Finance Costs 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] - Finance costs include interest expense on borrowings, unwinding of discount on provisions, and losses from FVTPL financial instruments and impairment[185] - Borrowing costs directly attributable to qualifying assets are capitalized[185] Income Tax 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] - Current tax is the expected tax payable for the year, using enacted or substantively enacted tax rates[187] - Deferred tax is recognized using the asset and liability method for temporary differences, measured at expected future tax rates[188] Earnings (Loss) Per Share 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] - Diluted EPS adjusts for the effects of all dilutive potential common stocks[192] Standards issued but not yet effective 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] - Other new and amended standards are not expected to have a significant impact[195] 4. Cash and Cash Equivalents and Deposits in Banks 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] 5. Trade Accounts and Notes Receivable, Other Accounts Receivable and Others 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] - 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] Trade accounts and notes receivable 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 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] Aging of trade accounts and notes receivable, and other accounts receivable 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] Other current assets 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 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] - Equity instruments at FVTPL (non-current) increased by 96.83% to 96.06 billion KRW in 2022[204] 7. Inventories 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] - Inventory write-downs increased from 224.58 billion KRW in 2021 to 245.62 billion KRW in 2022[206] 8. Investments in Equity Accounted Investees 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][217] - Dividends received from equity method investees increased by 9.67% to 4.46 billion KRW in 2022[212] 9. Property, Plant and Equipment 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][219] - Capitalized borrowing costs increased by 135.39% to 152.07 billion KRW in 2022, with a capitalization rate of 3.11%[222] 10. Intangible Assets and Non-financial Assets Impairment 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][239] - The recoverable amount of Display (Large OLED) CGU was 3.00 trillion KRW, which was exceeded by its carrying amount[239] - 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][229] 11. Investment Property 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] 12. Financial Liabilities 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] - Foreign currency denominated long-term borrowings increased by 23.57% to 6.78 trillion KRW in 2022[243] - 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] 13. Employee Benefits 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] - 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] 14. Provisions 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] 15. Contingent Liabilities and Commitments 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][259] - 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] - The Group has sold 1.99 trillion KRW (USD 1.57 billion) of accounts receivable without recourse as of December 31, 2022[261][262] - Commitments for capital expenditures on property, plant and equipment and intangible assets amounted to 1.20 trillion KRW as of December 31, 2022[267] 16. Share Capital, Share Premium and Reserves 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][269] 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] 17. Revenue 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] 18. Geographic and Other Information 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] 19. The Nature of Expenses and Others 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] 20. Selling and Administrative Expenses 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 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 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 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) | | :------------------------------------ | :-