SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2004
LG.Philips LCD Co., Ltd.
(Translation of Registrant’s name into English)
20 Yoido-dong, Youngdungpo-gu, Seoul 150-721, The Republic of Korea
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1):
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(7):
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
3Q04 Earnings Results
1. Performance in 3Q 2004
(in billions of KRW, Korean GAAP)
| 2Q ’04 |
3Q ’03 |
|||||||||||
| Items |
3Q ’04 |
Amount |
Change |
Amount |
Change |
|||||||
| A. Consolidated Financial Data |
||||||||||||
| Revenues |
1,875 | 2,332 | -19.6 | % | 1,681 | 11.5 | % | |||||
| Operating Income |
256 | 771 | -66.8 | % | 365 | -29.9 | % | |||||
| Ordinary Income |
240 | 750 | -68.0 | % | 359 | -33.1 | % | |||||
| Net Income |
291 | 701 | -58.5 | % | 343 | -15.2 | % | |||||
| B. Non-consolidated Financial Data |
||||||||||||
| Revenues |
1,836 | 2,277 | -19.4 | % | 1,669 | 10.0 | % | |||||
| Operating Income |
244 | 772 | -68.4 | % | 376 | -35.1 | % | |||||
| Ordinary Income |
237 | 749 | -68.4 | % | 358 | -33.8 | % | |||||
| Net Income |
291 | 701 | -58.5 | % | 343 | -15.2 | % | |||||
| 2. Provider of Information: |
IR team |
| 3. Participants: |
Institutional investors, securities analysts, etc. |
| 4. Event: |
3Q04 Earnings Results |
| 5. Date & Time: |
5:00 p.m. (Korea Time) on October 11, 2004 in Korean |
| 9:00 p.m. (Korea Time) on October 11, 2004 in English |
| 6. Method: |
Conference call |
7. Contact Information
| i. Head of Disclosure: |
Dong Joo Kim, Vice President, Finance & Risk Management |
| Department (82-2-3777-0702) |
ii. Main Contact for Disclosure-related Matters:
| Jaeho Park, Assistant Manager, Financing Team |
| (82-2-3777-1053) |
| iii. Relevant Team: |
IR team (82-2-3777-1010) |
8. Remarks
| i. | Please note that the presentation materials for 3Q04 Earnings Results are attached as an appendix and accessible on LG.Philips LCD Co., Ltd.’s IR homepage at www.lgphilips-lcd.com. |
| ii. | Please note that the financial data included in the investor presentation and press release are prepared on K GAAP consolidated basis only (attached US GAAP consolidation in investor presentation). K GAAP non-consolidated information is included in this filing for the convenience of investors. |
| iii. | Financial data for 3Q04 are unaudited and unreviewed and provided for the convenience of investors and can be subject to change. |
Appendix 1: Press Release
LG.PHILIPS LCD REPORTS THIRD QUARTER RESULTS
SEOUL, Korea (Oct. 11, 2004) – LG.Philips LCD (NYSE: LPL, KSE: 034220), one of the world’s leading TFT-LCD manufacturers, today reported unaudited earnings results based on consolidated Korean GAAP for the three-month and nine-month periods ended September 30, 2004. Amounts in Korean Won are translated into US dollars at the exchange rate of KRW 1,152 per US dollar as of September 30, 2004.
| · | Sales increased by 11.5% to KRW 1,875 billion (USD 1,601 million) in the third quarter of 2004 from KRW 1,681 billion (USD 1,425 million) in the third quarter of 2003 due to increased demand. Sales in the third quarter declined 19.6% compared to the second quarter of 2004 due to pricing pressure as a result of increased capacity in the industry, which stemmed in part from the easing of industry-wide shortages of materials and a build-up of inventory. |
| · | Operating income decreased by 29.9% to KRW 256 billion (USD 223 million) in the third quarter of 2004 from KRW 365 billion (USD 318 million) in the third quarter of 2003 and by 66.8% from KRW 771 billion in the second quarter of 2004. |
| · | Net income decreased by 15.2% to KRW 291 billion (USD 252 million) in the third quarter of 2004 from KRW 343 billion (USD 298 million) in the third quarter of 2003. This represents a decrease of 58.5% from KRW 701 billion (USD 609 million) in the second quarter of 2004. |
“In our first quarter as a public company, we continued to experience year-on-year revenue growth, as we utilized our increased capacity to generate higher sales to our global merchant customers,” said Bon Joon Koo, Chief Executive Officer, LG.Philips LCD. “It was a notable quarter in which we completed the world’s first concurrent dual listing with our IPO on the Korea Stock Exchange and the New York Stock Exchange, successfully commenced production at our sixth generation fabrication facility (P6) and maintained our position as the largest merchant supplier of TFT-LCD panels in the world,” concluded Mr. Koo.
Third Quarter Financial Review
Revenue and Cost
Revenue increased by 11.5% to KRW 1,875 billion (USD 1,601 million) in the three-month period ended September 30, 2004, from KRW1,681 billion (USD 1,425 million) in the corresponding period in 2003. Increases in capacity contributed to additional unit sales of large-size panels for notebook
computers, desktop monitors and TVs in the three-month period ended September 30, 2004, compared to the corresponding period in 2003. TFT LCD panels for desktop monitors accounted for 54.5% in terms of revenue, with notebook computers accounting for 26.5%, TVs accounting for 13.5% and applications accounting for 5.4%.
Overall, LG.Philips LCD shipped a total of 560,194 square meters of net display area with an average selling price per square meter of USD 2,857 in the third quarter of 2004. This represents a decrease of 8.8% year-on-year and a decrease of 19.6% compared to the second quarter of 2004.
Cost of goods sold increased to KRW 1,555 billion, or 24.1% year-on-year and 4.6% compared to the second quarter of 2004, as a result of increased volume year-on-year and the start of depreciation of P6.
“While we experienced greater than expected pricing declines during the quarter, we believe these declines should lead to increased acceptance and sales in the global TV market,” commented Ron Wirahadiraksa, Chief Financial Officer, LG.Philips LCD. “Furthermore, we believe that LG.Philips LCD is well positioned to capture market share and to grow our customer relationships. Our funding position has strengthened considerably due to the IPO proceeds and to strong cash-flow from operations,” concluded Mr. Wirahadiraksa.
Liquidity
As of September 30, 2004, LG.Philips LCD had KRW 1,212 billion (USD 1,052 million) of cash and cash equivalents. Total debt at September 30, 2004, was KRW 2,283 billion (USD 1,982 million) with a net-debt-to-equity ratio of 18.8%.
Capital Spending
Third quarter capital expenditure increased to KRW 1,434 billion (USD 1,245 million) from KRW 386 million during the third quarter of 2003 mainly due to investments in P6, LG.Philips LCD’s most recent, sixth generation, fabrication facility.
Utilization and Capacity
The capacity of our G5 lines increased approximately 5% in the third quarter. P6 input glass averaged 10K per month for the quarter.
Outlook
The TFT-LCD industry should experience both unit and area growth in the fourth quarter of 2004 and during 2005.
LG.Philips LCD will increase its output to meet this growth and to meet its customers’ needs.
We expect prices to further stabilize, as they currently are, in Q4 2004. Prices in the first half of 2005 are expected to remain weak for both PC computers and TVs and to improve in the second half of 2005, mainly due to growing demand for LCD TVs.
Web Cast and Replay
LG.Philips LCD will hold conference calls to review earnings and performance trends today, October 11, 2004. There will be a Korean language conference call at 5:00 p.m. Korea Standard Time. The call-in number is 1566-2255 for callers in Korea and +82-31-500-0500 for callers outside of Korea with a confirmation number of 3777 for both phone numbers.
In addition, there will be an English language conference call at 9:00 p.m. Korea Standard Time (8:00 am in New York and 1:00 p.m. in London). The call in number is 1566-2256 for callers in Korea and +82-31-500-0501 for callers outside of Korea with a confirmation number of 3777 for both phone numbers. There will be corresponding slides available at LG.Philips LCD’s website: http://www.lgphilips-lcd.com
For those who will be unable to participate on the call, a replay will be available for 30 days after the call. The call in number is 031-500-0401 for callers in Korea and +82-31-500-0401 for callers outside of Korea with a confirmation number of 17213# for both phone numbers.
Alternatively, investors can listen to the conference call over the Internet at http://www.lgphilips-lcd.com. To listen to the live call, please go to the Investor Relations section of the Web site at least 15 minutes prior to the call to register, download and install any necessary audio software.
About LG.Philips LCD
LG.Philips LCD (NYSE: LPL, KSE: 034220) is a leading manufacturer and supplier of thin film transistor liquid crystal display (TFT-LCD) panels. The Company manufactures TFT-LCD panels in a
wide range of sizes and specifications primarily for use in notebook computers, desktop monitors and televisions. Headquartered in Seoul, South Korea, LG.Philips LCD currently operates six fabrication facilities in Korea and has approximately 12,000 employees in locations around the world. For more information about the Company, please visit http://www.lgphilips-lcd.com. LG.Philips LCD makes “Technology you can see!”
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Additional information as to factors that may cause actual results to differ materially from our forward-looking statements can be found in our filings with the United States Securities and Exchange Commission.
LG.Philips LCD
CONSOLIDATED STATEMENTS OF INCOME
( in KRW millions)
(the financial statements are made under the Korean GAAP and are unaudited)
| 2004 |
2003 |
|||||||||||||||||||||||
| Three months ended Sept. 30 |
Nine months ended Sept. 30 |
Three months ended Sept. 30 |
Nine months ended Sept. 30 |
|||||||||||||||||||||
| NET REVENUES |
1,875,195 | 100 | % | 6,395,438 | 100 | % | 1,681,124 | 100 | % | 3,963,157 | 100 | % | ||||||||||||
| Cost of sales |
(1,555,192 | ) | -83 | % | (4,459,955 | ) | -70 | % | (1,252,640 | ) | -75 | % | (3,284,396 | ) | -83 | % | ||||||||
| GROSS PROFIT |
320,003 | 17 | % | 1,935,483 | 30 | % | 428,484 | 25 | % | 678,761 | 17 | % | ||||||||||||
| Selling, general & administrative |
(63,626 | ) | -3 | % | (209,067 | ) | -3 | % | (62,622 | ) | -4 | % | (156,910 | ) | -4 | % | ||||||||
| OPERATING INCOME |
256,377 | 14 | % | 1,726,416 | 27 | % | 365,862 | 22 | % | 521,851 | 13 | % | ||||||||||||
| Interest income |
5,227 | 0 | % | 12,998 | 0 | % | 2,382 | 0 | % | 4,458 | 0 | % | ||||||||||||
| Interest expense |
(11,775 | ) | -1 | % | (37,465 | ) | -1 | % | (22,105 | ) | -1 | % | (57,614 | ) | -1 | % | ||||||||
| Foreign exchange gain (loss),net |
(7,784 | ) | 0 | % | (23,965 | ) | 0 | % | 10,763 | 1 | % | 9,349 | 0 | % | ||||||||||
| Others, net |
(1,884 | ) | 0 | % | (8,987 | ) | 0 | % | 1,864 | 0 | % | 2,870 | 0 | % | ||||||||||
| Total other income (expense) |
(16,216 | ) | -1 | % | (57,419 | ) | -1 | % | (7,096 | ) | 0 | % | (40,937 | ) | -1 | % | ||||||||
| INCOME BEFORE INCOME TAX EXPENSE |
240,161 | 13 | % | 1,668,997 | 26 | % | 358,766 | 21 | % | 480,914 | 12 | % | ||||||||||||
| Income tax expense |
50,707 | 3 | % | (48,973 | ) | -1 | % | (15,709 | ) | -1 | % | (5,596 | ) | 0 | % | |||||||||
| NET INCOME(LOSS) |
290,868 | 16 | % | 1,620,024 | 25 | % | 343,057 | 20 | % | 475,318 | 12 | % | ||||||||||||
- These financial statements are provided for information purposes only
LG.Philips LCD
CONSOLIDATED BALANCE SHEET
( in KRW millions)
(the financial statements are made under the Korean GAAP and are unaudited)
| 2004 |
2003 |
|||||||||||||||||||
| September 30 |
June 30 |
December 31 |
September 30 |
|||||||||||||||||
| ASSETS |
||||||||||||||||||||
| Current assets: |
||||||||||||||||||||
| Cash and cash equivalents |
1,211,843 | 12 | % | 559,936 | 7 | % | 503,946 | 8 | % | 174,012 | 3 | % | ||||||||
| Trade accounts and notes receivable |
885,790 | 9 | % | 1,342,193 | 16 | % | 1,140,732 | 18 | % | 933,727 | 17 | % | ||||||||
| Inventories |
692,395 | 7 | % | 452,856 | 5 | % | 337,175 | 5 | % | 355,969 | 6 | % | ||||||||
| Other receivables and assets |
127,888 | 1 | % | 147,773 | 2 | % | 138,688 | 2 | % | 151,863 | 3 | % | ||||||||
| Total current assets |
2,917,916 | 30 | % | 2,502,758 | 30 | % | 2,120,541 | 33 | % | 1,615,571 | 29 | % | ||||||||
| Investments and other non-current assets |
292,942 | 3 | % | 138,611 | 2 | % | 168,851 | 3 | % | 122,699 | 2 | % | ||||||||
| Property, plant and equipment, net |
6,327,617 | 65 | % | 5,534,822 | 66 | % | 3,947,407 | 61 | % | 3,523,203 | 64 | % | ||||||||
| Other Intangible assets, net |
198,100 | 2 | % | 200,831 | 2 | % | 222,479 | 3 | % | 229,187 | 4 | % | ||||||||
| Total assets |
9,736,575 | 100 | % | 8,377,022 | 100 | % | 6,459,278 | 100 | % | 5,490,660 | 100 | % | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||||||||
| Current liabilities: |
||||||||||||||||||||
| Short-term debt |
632,052 | 6 | % | 575,421 | 7 | % | 609,662 | 9 | % | 1,195,356 | 22 | % | ||||||||
| Trade accounts and notes payable |
1,497,482 | 15 | % | 1,677,328 | 20 | % | 1,426,947 | 22 | % | 1,199,976 | 22 | % | ||||||||
| Other payables and accrued liabilities |
213,867 | 2 | % | 199,750 | 2 | % | 197,504 | 3 | % | 111,962 | 2 | % | ||||||||
| Total current liabilities |
2,343,401 | 24 | % | 2,452,499 | 29 | % | 2,234,113 | 35 | % | 2,507,294 | 46 | % | ||||||||
| Long-term debt |
1,651,164 | 17 | % | 1,648,542 | 20 | % | 1,310,164 | 20 | % | 590,654 | 11 | % | ||||||||
| Reserves for pension |
43,050 | 0 | % | 39,347 | 0 | % | 20,965 | 0 | % | 26,344 | 0 | % | ||||||||
| Total liabilities |
4,037,615 | 41 | % | 4,140,388 | 49 | % | 3,565,242 | 55 | % | 3,124,292 | 57 | % | ||||||||
| Common Stock and additional paid-in capital |
2,640,848 | 27 | % | 1,450,000 | 17 | % | 1,450,000 | 22 | % | 1,450,000 | 26 | % | ||||||||
| Accumulated result |
3,056,254 | 31 | % | 2,765,385 | 33 | % | 1,436,229 | 22 | % | 892,275 | 16 | % | ||||||||
| Capital adjustment |
1,858 | 0 | % | 21,249 | 0 | % | 7,806 | 0 | % | 24,093 | 0 | % | ||||||||
| Shareholders’ equity |
5,698,960 | 59 | % | 4,236,634 | 51 | % | 2,894,036 | 45 | % | 2,366,368 | 43 | % | ||||||||
| Total liabilities and shareholders’ equity |
9,736,575 | 100 | % | 8,377,022 | 100 | % | 6,459,278 | 100 | % | 5,490,660 | 100 | % | ||||||||
- These financial statements are provided for information purposes only
LG.Philips LCD
CONSOLIDATED STATEMENTS OF CASH FLOW
( in KRW millions)
(the financial statements are made under the Korean GAAP and are unaudited)
| 2004 |
2003 |
|||||||||||
| Three months ended Sept. 30 |
Nine months ended Sept. 30 |
Three months ended Sept. 30 |
Nine months ended Sept. 30 |
|||||||||
| Net Income |
290,868 | 1,620,024 | 343,057 | 475,318 | ||||||||
| Depreciation |
309,620 | 850,839 | 263,274 | 687,769 | ||||||||
| Amortization |
10,974 | 33,750 | 11,097 | 33,055 | ||||||||
| Others |
1,787 | 24,378 | 461 | 19,749 | ||||||||
| Operating Cash Flow |
613,249 | 2,528,991 | 617,889 | 1,215,891 | ||||||||
| Net Change in Working Capital |
230,040 | 17,136 | (283,925 | ) | (337,607 | ) | ||||||
| Change in A/R |
458,029 | 254,322 | (260,762 | ) | (430,032 | ) | ||||||
| Change in inventory |
(240,490 | ) | (355,219 | ) | (31,839 | ) | 49,259 | |||||
| Change in A/P |
52,565 | 85,601 | 65,623 | 89,081 | ||||||||
| Change in others |
(40,064 | ) | 32,432 | (56,947 | ) | (45,915 | ) | |||||
| Cash Flow from Operation |
843,289 | 2,546,127 | 333,964 | 878,284 | ||||||||
| Capital Expenditures |
(1,432,812 | ) | (3,402,287 | ) | (386,391 | ) | (900,171 | ) | ||||
| Delivery |
(1,331,947 | ) | (3,288,947 | ) | (386,399 | ) | (895,039 | ) | ||||
| Intangible assets investment |
(12,303 | ) | (19,161 | ) | 0 | (2,638 | ) | |||||
| Others |
(88,562 | ) | (94,179 | ) | 8 | (2,494 | ) | |||||
| Cash Flow before Financing |
(589,523 | ) | (856,160 | ) | (52,427 | ) | (21,887 | ) | ||||
| Cash Flow from Financing Activities |
50,581 | 373,208 | (51,898 | ) | 125,593 | |||||||
| Proceeds from IPO |
1,190,849 | 1,190,849 | 0 | 0 | ||||||||
| Net Cash Flow |
651,907 | 707,897 | (104,325 | ) | 103,706 | |||||||
- These financial statements are provided for information purposes only
LG.Philips LCD
CONSOLIDATED STATEMENTS OF INCOME
( in KRW millions)
(the financial statements are made under the US GAAP and are unaudited)
| 2004 |
2003 |
|||||||||||||||||||||||
| Three months ended Sept. 30 |
Nine months ended Sept. 30 |
Three months ended Sept. 30 |
Nine months ended Sept. 30 |
|||||||||||||||||||||
| NET REVENUES |
1,873,579 | 100 | % | 6,392,062 | 100 | % | 1,681,158 | 100 | % | 3,963,209 | 100 | % | ||||||||||||
| Cost of sales |
(1,543,259 | ) | -82 | % | (4,423,667 | ) | -69 | % | (1,247,672 | ) | -74 | % | (3,245,974 | ) | -82 | % | ||||||||
| GROSS PROFIT |
330,320 | 18 | % | 1,968,395 | 31 | % | 433,486 | 26 | % | 717,235 | 18 | % | ||||||||||||
| Selling, general & administrative |
(65,609 | ) | -4 | % | (222,809 | ) | -3 | % | (50,065 | ) | -3 | % | (144,428 | ) | -4 | % | ||||||||
| OPERATING INCOME |
264,711 | 14 | % | 1,745,586 | 27 | % | 383,421 | 23 | % | 572,807 | 14 | % | ||||||||||||
| Interest income |
5,227 | 0 | % | 12,998 | 0 | % | 2,382 | 0 | % | 4,458 | 0 | % | ||||||||||||
| Interest expense |
(13,870 | ) | -1 | % | (40,832 | ) | -1 | % | (21,888 | ) | -1 | % | (60,743 | ) | -2 | % | ||||||||
| Foreign exchange gain (loss),net |
(6,001 | ) | 0 | % | (18,046 | ) | 0 | % | 39,115 | 2 | % | 40,774 | 1 | % | ||||||||||
| Others, net |
269 | 0 | % | 856 | 0 | % | 1,176 | 0 | % | 2,747 | 0 | % | ||||||||||||
| Total other income (expense) |
(14,375 | ) | -1 | % | (45,024 | ) | -1 | % | 20,785 | 1 | % | (12,764 | ) | 0 | % | |||||||||
| INCOME BEFORE INCOME TAX EXPENSE |
250,336 | 13 | % | 1,700,562 | 27 | % | 404,206 | 24 | % | 560,043 | 14 | % | ||||||||||||
| Income tax expense |
47,557 | 3 | % | (52,428 | ) | -1 | % | (17,048 | ) | -1 | % | (33,442 | ) | -1 | % | |||||||||
| NET INCOME(LOSS) |
297,893 | 16 | % | 1,648,134 | 26 | % | 387,158 | 23 | % | 526,601 | 13 | % | ||||||||||||
- These financial statements are provided for information purposes only
LG.Philips LCD
CONSOLIDATED BALANCE SHEET
( in KRW millions)
(the financial statements are made under the US GAAP and are unaudited)
| 2004 |
2003 |
|||||||||||||||||||
| September 30 |
June 30 |
December 31 |
September 30 |
|||||||||||||||||
| ASSETS |
||||||||||||||||||||
| Current assets: |
||||||||||||||||||||
| Cash and cash equivalents |
1,211,843 | 13 | % | 559,936 | 7 | % | 504,014 | 8 | % | 174,012 | 3 | % | ||||||||
| Trade accounts and notes receivable |
885,312 | 9 | % | 1,347,128 | 16 | % | 1,159,767 | 18 | % | 973,855 | 18 | % | ||||||||
| Inventories |
691,145 | 7 | % | 451,383 | 5 | % | 335,921 | 5 | % | 354,518 | 7 | % | ||||||||
| Other receivables and assets |
130,693 | 1 | % | 163,987 | 2 | % | 146,594 | 2 | % | 133,642 | 2 | % | ||||||||
| Total current assets |
2,918,993 | 30 | % | 2,522,434 | 31 | % | 2,146,296 | 34 | % | 1,636,027 | 30 | % | ||||||||
| Investments and other non-current assets |
311,099 | 3 | % | 150,117 | 2 | % | 193,116 | 3 | % | 191,881 | 4 | % | ||||||||
| Property, plant and equipment, net |
6,360,059 | 66 | % | 5,565,875 | 67 | % | 3,974,315 | 63 | % | 3,552,620 | 66 | % | ||||||||
| Other Intangible assets, net |
33,335 | 0 | % | 26,934 | 0 | % | 29,260 | 0 | % | 26,241 | 0 | % | ||||||||
| Total assets |
9,623,486 | 100 | % | 8,265,360 | 100 | % | 6,342,987 | 100 | % | 5,406,769 | 100 | % | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||||||||
| Current liabilities: |
||||||||||||||||||||
| Short-term debt |
632,052 | 7 | % | 575,617 | 7 | % | 625,675 | 10 | % | 1,214,027 | 22 | % | ||||||||
| Trade accounts and notes payable |
491,903 | 5 | % | 438,438 | 5 | % | 403,522 | 6 | % | 342,336 | 6 | % | ||||||||
| Other payables and accrued liabilities |
1,219,073 | 13 | % | 1,441,381 | 17 | % | 1,223,053 | 19 | % | 966,750 | 18 | % | ||||||||
| Total current liabilities |
2,343,028 | 24 | % | 2,455,436 | 30 | % | 2,252,250 | 36 | % | 2,523,113 | 47 | % | ||||||||
| Long-term debt |
1,658,444 | 17 | % | 1,656,606 | 20 | % | 1,318,581 | 21 | % | 591,886 | 11 | % | ||||||||
| Reserves for pension |
45,721 | 0 | % | 39,347 | 0 | % | 20,965 | 0 | % | 26,345 | 0 | % | ||||||||
| Total liabilities |
4,047,193 | 42 | % | 4,151,389 | 50 | % | 3,591,796 | 57 | % | 3,141,344 | 58 | % | ||||||||
| Common Stock and additional paid-in capital |
2,629,530 | 27 | % | 1,450,000 | 18 | % | 1,450,000 | 23 | % | 1,450,000 | 27 | % | ||||||||
| Accumulated result |
2,945,489 | 31 | % | 2,647,595 | 32 | % | 1,297,355 | 20 | % | 817,453 | 15 | % | ||||||||
| Capital adjustment |
1,274 | 0 | % | 16,376 | 0 | % | 3,836 | 0 | % | -2,028 | 0 | % | ||||||||
| Shareholders’ equity |
5,576,293 | 58 | % | 4,113,971 | 50 | % | 2,751,191 | 43 | % | 2,265,425 | 42 | % | ||||||||
| Total liabilities and shareholders’ equity |
9,623,486 | 100 | % | 8,265,360 | 100 | % | 6,342,987 | 100 | % | 5,406,769 | 100 | % | ||||||||
- These financial statements are provided for information purposes only
LG.Philips LCD
CONSOLIDATED STATEMENTS OF CASH FLOW
( in KRW millions)
(the financial statements are made under the US GAAP and are unaudited)
| 2004 |
2003 |
|||||||||||
| Three months ended Sept. 30 |
Nine months ended Sept. 30 |
Three months ended Sept. 30 |
Nine months ended Sept. 30 |
|||||||||
| Net Income |
297,893 | 1,648,134 | 387,158 | 526,601 | ||||||||
| Depreciation |
308,848 | 845,391 | 263,001 | 686,819 | ||||||||
| Amortization |
2,196 | 6,099 | 1,387 | 3,842 | ||||||||
| Others |
1,787 | 24,378 | (25,700 | ) | 37,388 | |||||||
| Operating Cash Flow |
610,724 | 2,524,002 | 625,846 | 1,254,650 | ||||||||
| Net Change in Working Capital |
233,018 | 24,606 | (286,309 | ) | (350,513 | ) | ||||||
| Change in A/R |
458,029 | 254,322 | (255,081 | ) | (440,058 | ) | ||||||
| Change in inventory |
(240,490 | ) | (355,219 | ) | (31,100 | ) | 43,691 | |||||
| Change in A/P |
52,565 | 85,601 | 66,661 | 85,199 | ||||||||
| Change in others |
(37,086 | ) | 39,902 | (66,789 | ) | (39,345 | ) | |||||
| Cash Flow from Operation |
843,742 | 2,548,608 | 339,537 | 904,137 | ||||||||
| Capital Expenditures |
(1,433,265 | ) | (3,404,768 | ) | (390,868 | ) | (920,639 | ) | ||||
| Delivery |
(1,332,400 | ) | (3,291,428 | ) | (391,168 | ) | (910,058 | ) | ||||
| Intangible assets investment |
(12,303 | ) | (19,161 | ) | 0 | (2,638 | ) | |||||
| Others |
(88,562 | ) | (94,179 | ) | 300 | (7,943 | ) | |||||
| Cash Flow before Financing |
(589,523 | ) | (856,160 | ) | (51,331 | ) | (16,502 | ) | ||||
| Cash Flow from Financing Activities |
50,581 | 373,208 | (52,994 | ) | 120,208 | |||||||
| Proceeds from IPO |
1,190,849 | 1,190,849 | ||||||||||
| Net Cash Flow |
651,907 | 707,897 | (104,325 | ) | 103,706 | |||||||
- These financial statements are provided for information purposes only
LG.Philips LCD
Net Income Reconciliation to US GAAP
( in KRW millions)
| 2004 | ||||||
| Three months ended Sept. 30 |
|
Nine months ended Sept. 30 |
| |||
| Net Income under K GAAP |
290,868 | 1,620,024 | ||||
| US GAAP Adjustments |
7,025 | 28,110 | ||||
| Depreciation of property, plant and equipment |
(772 | ) | (2,051 | ) | ||
| Amortization of Intellectual Property rights |
8,778 | 27,651 | ||||
| Adjustment of AR discount loss |
1,064 | 1,585 | ||||
| Capitalization of financial interests |
2,345 | 7,701 | ||||
| Inventory Valuation effect of US GAAP Adjustments |
1,143 | 1,280 | ||||
| Cash flow hedge account |
(1,615 | ) | (3,376 | ) | ||
| Pension expense |
(886 | ) | (1,344 | ) | ||
| Income tax effect of US GAAP Adjustments |
(3,151 | ) | (3,455 | ) | ||
| Others |
119 | 119 | ||||
| Net Income under US GAAP |
297,893 | 1,648,134 | ||||
- These financial statements are provided for information purposes only
Appendix 2: IR Presentation
1
Earnings Results October 11, 2004 Q3 04
2
Forward-looking caution you that a number of
We may also make written or oral forward-looking These statements are based on current We Additional information as to these and other As required by such rules, we have provided a GAAP measures, which is available on our under the file name 3Q Earnings Presentation. com
.
Statements that are not historical facts, including statements lcd
-lgphilips
.
This presentation contains forward-looking statements. statements in our periodic reports to the United States Securities and Exchange Commission and the Korean Financial Supervisory Service, in our annual report to shareholders, in our proxy statements, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. about our beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Such factors include, but are not limited to: our highly competitive environment; the cyclical nature of This presentation also includes information regarding our historical financial performance through September as defined by Securities and Exchange Commission rules. http://www Disclaimer plans, estimates and projections, and therefore you should not place undue reliance on them. statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. important factors could cause actual results to differ materially from those contained in any forward-looking statement. our industry; our ability to introduce new products on a timely basis; our dependence on growth in the demand for our products; our ability to successfully execute our expansion strategy; our dependence on key personnel; and general economic and political conditions, including those related to the TFT-LCD industry; possible disruptions in business activities caused by natural and human-induced disasters, including terrorist activity and armed conflict; and fluctuations in foreign currency exchange rates. factors that may cause actual results to differ materially from our forward-looking statements can be found in our filings with
the Securities and Exchange Commission. 30, 2004, and our expectations regarding future performance as reflected in certain non-GAAP financial measures reconciliation of those measures to the most directly comparable investor relations website at
3
17.1”W 26”W 32”W 42”W
unaudited, prepared by LG.Philips LCD
Q3 04 Earnings Results Performance Highlights Outlook Source: 32”W 8 up
P6 -
Agenda
4
Q3 04 Earnings Results
5
Change (20%) 5% (62%) (67%) (45%) (68%) (58%) (19) (19) (14) (15)
QoQ
Change 12% 24% (25%) (30%) (13%) (33%) (15%) (8) (8) (9) (5) K GAAP (Consolidated)
YoY
2,332 1,487 845 771 1,034 750 701 36 33 44 30
Q2 04
1,681 1,253 428 365 653 359 343 25 22 39 20
Q3 03
1,875 1,555 320 256 568 240 291 17 14 30 16
Q3 04 unaudited, prepared by LG.Philips LCD
Q3 04 Income Statement KRW bn Revenue COGS Gross Profit Operating Income EBITDA Net Income before Tax Net Income Margin (%) Gross Margin Operating Margin EBITDA Margin Net Margin Source:
6
Change 16% 116% 53% (2%) 10% 0% 35% (20) QoQ
Change 77% 597% 94% 29% (47%) 179% 141% (49) K GAAP (Consolidated)
YoY
8,377 560 453 4,140 575 1,649 4,237 39
Q2 04
5,490 174 356 3,124 1,196 591 2,366 68
Q3 03
9,736 1,212 692 4,037 632 1,651 5,699 19
Q3 04 equity unaudited, prepared by LG.Philips LCD
Q3 04 Balance Sheet KRW bn Assets Cash & Equivalent Inventory Liabilities Short term debt Long term debt Shareholders’ Net debt to equity ratio(%) Source:
7
Change (410) 40 (21) 276 (115) (195) (310) (247) 1,191 634 QoQ
Change (52) 47 1 514 510 (1,048) (538) 103 1,191 756 K GAAP (Consolidated) YoY
701 281 23 (46) 959 (1,239) (280) 298 0 18 Q2 04 343 274 1 (284) 334 (386) (52) (52) 0 (104) Q3 03 291 321 2 230 844 (1,434) (590) 51 1,191 652 Q3 04 unaudited, prepared by LG.Philips LCD
Q3 04 Cash Flow KRW bn Net Income Depreciation & Amortization Others Working Capital Cash flow from Operations CAPEX Cash flow before financing Financing Activities Cash proceeds from IPO Net Change in cash Source:
8
Performance Highlights
9
(US$) $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 $2,857 560 Q3 $3,554 561 Q2 $3,512 531 Q1 04 $3,342 543 Q4 $3,133 455 Q3 Total K $2,929 367 Q2 LG.Philips LCD $2,782 295 Q1 03 Source: * Net display area shipped
*
Shipments and ASP Total K 1,000 800 600 400 200 0
10
Q3 04
4% 14% 27% 55%
APPL Q2 04 TV
4% 13% 23% 60%
NBPC MNT
2% 11% 27% 60% Q3 03 LG.Philips LCD
Revenue: Product Mix Source:
• 11
• quarter the 5% for month approximately per 10K
• Update by averaged increased Capacity capacity glass 04 input G5 P6
• Q3 •
12
62% 9mo 04 2003
54% K GAAP (Consolidated)
2002 ratios are annualized
Cash ROIC 42%
13% 2001 9mo 04
40% 2003 154% 9mo 04 2003 35% 157% 2002 2002 39% 108% 2001 *
Cash ROIC EBITDA margin 16% Sales / IC 80% 2001 Source: unaudited, prepared by LG.Philips LCD * IC (Invested Capital) equals average of net debt and equity for the designated period; 9mo 04
13
Outlook
14
2005 2005 11% 31% 58% 22% 21% 57%
)
2
7% 37% 56% 2004 13% 28% 59% 2004
TV
200 150 100 50 0 20,000 15,000 10,000 5,000 0
NBPC
Q4 04 Q4 04 MNT
Large TFT-LCD Set Demand Forecast by Units (M pcs) 8% 35% 57% Large TFT-LCD Set Demand Forecast by Area (K m 15% 26% 59%
8% 37% 55% Q3 04 13% 28% 59% Q3 04 Source: LG.Philips LCD
Outlook 50 40 30 20 10 0 4,000 3,000 2,000 1,000 0
15
3,000 ~ 3,900
(Unit : KRW bn) P7
900 2005
3,900 ~ 4,800 P6
3,934 600 2,284 1,050 2004 Maintenance / Others LG.Philips LCD
04 & 05 CAPEX Plans Source:
16
Questions and Answers
17
Appendix
18
Change (20%) 5% (62%) (66%) (45%) (67%) (58%) (19) (19) (14) (15)
QoQ
Change 11% 24% (24%) (31%) (17%) (38%) (23%) (8) (9) (11) (7)
YoY
2,330 1,469 861 773 1,036 759 711 37 33 44 31
Q2 04
1,681 1,248 433 383 689 404 387 26 23 41 23
Q3 03
1,874 1,543 331 265 571 251 298 18 14 30 16
Q3 04 unaudited, prepared by LG.Philips LCD
US GAAP Income Statement KRW bn Revenue COGS Gross Profit Operating Income EBITDA Net Income before tax Net Income Margin (%) Gross Margin Operating Margin EBITDA Margin Net Margin Source:
19
Change 16% 116% 53% (3%) 10% 0% 36% (21)
QoQ
Change 78% 597% 95% 29% (48%) 180% 146% (53)
YoY
8,265 560 451 4,151 576 1,657 4,114 41
Q2 04
5,407 174 355 3,141 1,214 592 2,266 72
Q3 03
9,623 1,212 691 4,047 632 1,658 5,576 19
Q3 04 equity unaudited, prepared by LG.Philips LCD
US GAAP Balance Sheet KRW bn Assets Cash & Equivalent Inventory Liabilities Short term debt Long term debt Shareholders’ Net debt to equity ratio(%) Source:
20
Change (413) 42 (17) 273 (115) (196) (311) (246) 1,191 634
QoQ
Change (89) 47 28 519 505 (1,043) (538) 104 1,191 757
YoY
711 269 19 (40) 959 (1,238) (279) 297 0 18
Q2 04
387 264 (26) (286) 339 (391) (52) (53) 0 (105)
Q3 03
298 311 2 233 844 (1,434) (590) 51 1,191 652
Q3 04
Cash proceeds from IPO unaudited, prepared by LG.Philips LCD
US GAAP Cash Flow KRW bn Net Income Depreciation & Amortization Others Working Capital Cash flow from Operations CAPEX Cash flow before financing Financing Activities Net Change in cash Source:
21
1,620 28 (2) 28 2 8 1 (3) (1) (3) 0 1,648 Q1~Q3 04 291 7 (1) 9 1 2 1 (2) (1) (3) 0 298 Q3 04
Depreciation of PP&E Adjustment of AR discount loss Capitalization of financial interests Cash flow hedge account Pension expense Income tax effect of US GAAP Adjustments unaudited, prepared by LG.Philips LCD Net Income Reconciliation to US GAAP KRW bn Net Income under K GAAP US GAAP Adjustments Amortization of IPR Inventory Valuation effect of US GAAP Adjustments Others Net Income under US GAAP Source:
22
Change (410) 4 1 (99) 41 (1) 0 (466) Change (413) 4 1 (97) 42 0 0 (465) QoQ QoQ
Change (52) (10) 3 (67) 47 0 0 (85) Change (89) (8) 3 (65) 46 1 0 (118) YoY YoY
701 8 4 48 269 12 0 1,034 711 10 4 49 267 2 1 1,036 Q2 04 Q2 04
343 22 2 16 263 11 0 653 387 22 2 17 263 1 1 689 Q3 03 Q3 03
291 12 5 (51) 310 11 0 568 298 14 5 (48) 309 2 1 571 Q3 04 Q3 04 K GAAP (KRW bn) Net Income Interest Expense Interest Income Provision (benefit) for income taxes Depreciation of PP&E Amortization of Intangible Asset Amortization of debt issuance cost EBITDA (1+2-3+4+5+6+7) US GAAP (KRW bn) Net Income Interest Expense Interest Income Provision (benefit) for income taxes Depreciation of PP&E Amortization of Intangible Asset Amortization of debt issuance cost EBITDA (1+2-3+4+5+6+7) unaudited, prepared by LG.Philips LCD EBITDA Reconciliation 1. 2. 3. 4. 5. 6. 7. 1. 2. 3. 4. 5. 6. 7. Source:
23
EBITDA is defined as net income (loss) plus: interest income (expense); provision (benefit) for income taxes; EBITDA is a key financial measure used by our senior management to internally evaluate the assets are in different stages of depreciation, and because we do not have separate operating divisions, our
EBITDA Reconciliation (Continued) depreciation of property, plant and equipment; amortization of intangible assets; and amortization of debt issuance cost. performance of our
business and for other required or discretionary purposes. Specifically, our significant capital senior management uses EBITDA internally to measure the performance of these assets on a comparable basis. We also believe that the presentation of EBITDA will enhance an investor’s understanding of our operating performance as we believe it is commonly reported and widely used by analysts and investors in our industry. It also provides useful information for comparison on a more comparable basis of our operating performance and those of our competitors, who follow different accounting policies. For example, depreciation on most of our equipment is made based on a four-year useful life while most of our competitors use different depreciation schedules from our own. EBITDA is not a measure determined in accordance with U.S. GAAP. EBITDA should not be considered as an alternative to operating income, cash flows from operating activities or net income, as determined in accordance with U.S. GAAP. Our calculation of EBITDA may not be comparable to similarly titled measures reported by other companies.
24
LG.Philips LCD makes Technology you can see!
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LG.Philips LCD Co., Ltd. | ||||||||
| (Registrant) | ||||||||
| By: /s/ RON H. WIRAHADIRAKSA | ||||||||
| Date: October 12, 2004 | (Signature)
Name: Ron H. Wirahadiraksa Title: Joint Representative Director and Chief Financial Officer | |||||||