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 July 2005
LG.Philips LCD Co., Ltd.
(Translation of Registrant’s name into English)
20 Yoido-dong, Youngdungpo-gu, Seoul 150-721, The Republic of Korea
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
Q2 05 Earnings Results
| I. | Performance in Q2 2005 – Korean GAAP Consolidated Financial Data |
(Unit: KRW B)
| Item |
Q2 05 |
Q1 05 |
Q2 04 |
QoQ |
YoY |
|||||||
| Quarterly Results |
||||||||||||
| Revenues |
2,308 | 2,064 | 2,332 | 11.8 | % | -1.0 | % | |||||
| Operating Income |
29 | -135 | 771 | — | -96.2 | % | ||||||
| Ordinary Income |
1 | -157 | 750 | — | -99.9 | % | ||||||
| Net Income |
41 | -79 | 701 | — | -94.2 | % |
| II. | Event of Q2 2005 Earnings Results |
| 1. Provider of Information: IR team | ||
| 2. Participants: | Institutional investors, securities analysts, etc. | |
| 3. Event: | Q2 05 Earnings Results | |
| 4. Date & Time: | 4:30 p.m. (Korea Time) on July 11, 2005 in Korean | |
| 9:00 p.m. (Korea Time) on July 11, 2005 in English | ||
| 5. Venue & Method: | 1) Earnings release conference in Korean: | |
| - Conference room, Korea Exchange (21st floor, New building) | ||
| 2) Conference call in English: | ||
| - Please refer to IR homepage of LG.Philips LCD Co., Ltd. at www.lgphilips-lcd.com. | ||
| 6. Contact Information | ||
| 1) | Head of Disclosure: | Dong Joo Kim, Vice President, Finance & Risk Management Department (82-2-3777-0702) | ||
| 2) | Main Contact for Disclosure-related Matters: | |||
| Jaeho Park, Assistant Manager, Financing Team (82-2-3777-1053) | ||||
| 3) | Relevant Team: IR team (82-2-3777-1010) | |||
| III. | Remarks |
| 1. | Please note that the presentation materials for Q2 05 Earnings Results are attached as an appendix and accessible on IR homepage of LG.Philips LCD Co., Ltd. at www.lgphilips-lcd.com. |
| 2. | Please note that the financial data included in the investor presentation and press release are prepared on a consolidated Korean GAAP basis only (US GAAP consolidated and Korean GAAP non-consolidated information are stated below). |
| 3. | Financial data for Q2 05 are unaudited and unreviewed. They are provided for the convenience of investors and can be subject to change. |
| * | The following US GAAP consolidated information and Korean GAAP non-consolidated information are included for the convenience of investors. |
US GAAP consolidated information
(Unit: KRW B)
| Item |
Q2 05 |
Q1 05 |
Q2 04 |
QoQ |
YoY |
|||||||
| Quarterly Results |
||||||||||||
| Revenues |
2,308 | 2,064 | 2,330 | 11.8 | % | -0.9 | % | |||||
| Operating Income |
36 | -126 | 773 | — | -95.3 | % | ||||||
| Ordinary Income |
3 | -148 | 759 | — | -99.6 | % | ||||||
| Net Income |
38 | -95 | 711 | — | -94.7 | % |
Korean GAAP non-consolidated information
(Unit: KRW B)
| Item |
Q2 05 |
Q1 05 |
Q2 04 |
QoQ |
YoY |
|||||||
| Quarterly Results |
||||||||||||
| Revenues |
2,029 | 1,770 | 2,277 | 14.6 | % | -10.9 | % | |||||
| Operating Income |
28 | -162 | 771 | — | -96.4 | % | ||||||
| Ordinary Income |
1 | -163 | 748 | — | -99.9 | % | ||||||
| Net Income |
41 | -79 | 701 | — | -94.2 | % |
| Attached: | 1) Press Release | |
| 2) Presentation Material | ||
Attachment 1. Press Release
LG.PHILIPS LCD REPORTS SECOND QUARTER 2005 RESULTS
SEOUL, Korea July 11, 2005 – LG.Philips LCD [NYSE: LPL, KRX: 034220], one of the world’s leading TFT-LCD manufacturers, today reported unaudited earnings results based on consolidated Korean GAAP for the three-month period ended June 30, 2005. Amounts in Korean Won are translated into US dollars at the noon buying rate in effect on June 30, 2005, which was KRW 1,034.5 per US dollar.
| • | Sales in the second quarter of 2005 increased by 12% to KRW 2,308 billion (USD 2,231 million) from sales of KRW 2,064 billion (USD 1,995 million) in the first quarter of 2005 and decreased 1% compared to KRW 2,332 billion (USD 2,254 million) in the second quarter of 2004. Second quarter 2005 sales were led by increased shipments of large and wide LCD TV panels, desktop monitor panels, and notebook panels. |
| • | Operating income in the second quarter of 2005 swung to an operating profit of KRW 29 billion (USD 28 million) from a loss of KRW 135 billion (USD 130 million) in the first quarter of 2005, compared to an operating profit of KRW 771 billion (USD 745 million) in the second quarter of 2004. |
| • | EBITDA in the second quarter of 2005 increased by 64% to KRW 442 billion (USD 427 million) from KRW 269 billion (USD 260 million) in the first quarter of 2005. EBITDA in the second quarter of 2005 decreased by 57% from KRW 1,034 billion (USD 1,000 million) in the second quarter of 2004. |
| • | Net income in the second quarter of 2005 swung to a profit of KRW 41 billion (USD 40 million) from a loss of KRW 79 billion (USD 76 million) in the first quarter of 2005, compared to a net profit of KRW 701 billion (USD 678 million) in the second quarter of 2004. |
“In this dynamically expanding industry, LG.Philips LCD continues to be the number one provider of large TFT-LCD panels, with a large panel revenue market share of 24.2% in the second quarter according to DisplaySearch,” said Bon Joon Koo, Vice Chairman and CEO of LG.Philips LCD. “In the second quarter, we were encouraged by the growth in shipments of LCD TV panels and remain committed to executing our leadership strategy. Furthermore, our notable accomplishments during the quarter included signing a new supply agreement with HP for TFT-LCD panels, as well as receiving the Society of Information Display ‘Display of the Year Award’ for the second consecutive year and DisplaySearch’s overall ‘Customer Satisfaction Award’ for the fourth consecutive year.”
1
Second Quarter Financial Review
Revenue and Cost
Revenues in the three-month period ended June 30, 2005 decreased by 1.0% to KRW 2,308 billion (USD 2,231 million) from KRW 2,332 billion (USD 2,254 million) in the corresponding period in 2004, as increases in shipments mostly offset the effect of decreases in panel prices. TFT-LCD panels for desktop monitors, notebook computers, TVs and “other applications” accounted for 53%, 18%, 24% and 5%, respectively, on a revenue basis in the second quarter of 2005, compared to 56%, 18%, 22% and 4%, respectively, on a revenue basis in the first quarter of 2005.
Overall, LG.Philips LCD shipped a total of 1,096,000 square meters of net display area in the second quarter of 2005, a 14% sequential quarterly increase, with an average selling price per square meter of net display area of USD 2,062. This represents a decline in the average selling price per square meter of net display area of approximately 1.1% compared to the average of the first quarter of 2005 and an increase of 1.6% at the end of the second quarter as compared to the end of the first quarter of 2005.
Total cost of goods sold increased to KRW 2,169 billion (USD 2,097 million), or 46% year-on-year and 3% compared to the first quarter of 2005, primarily as a result of increased shipments. The cost of goods sold per square meter of net display area shipped was KRW 1,980 thousand (USD 1,913) for the second quarter of 2005, down 9.8% from the first quarter of 2005.
“In the second quarter we experienced increased demand for monitor and LCD TV panels,” said Ron Wirahadiraksa, President and Chief Financial Officer of LG.Philips LCD. “In anticipation of this demand, we continued the successful ramp-up of our P6 facility. TV panel shipments have benefited from LCD TV sets approaching more attractive ‘sweet spot’ prices. We have already taken a leading position in this segment and we expect to further strengthen our market position in the second half of 2005 as demand grows. As our ‘P6’ facility approaches its design capacity in Q3, we also expect further progress on our cost down efforts, especially for large and wide panels.”
Liquidity
As of June 30, 2005, LG.Philips LCD had KRW 1,331 billion (USD 1,287 million) of cash and cash equivalents. Total debt was KRW 3,589 billion (USD 3,469 million), with a net-debt-to-equity ratio of 40% as of June 30, 2005.
Capital Spending
Capital expenditures in the second quarter of 2005 increased to KRW 969 billion (USD 937 million) from KRW 453 billion (USD 438 million) in the first quarter of 2005, and from KRW 1,239 billion (USD 1,198 million) in the second quarter of 2004. Our capital expenditures for the second quarter of 2005 were mainly used for P6 and P7.
2
Utilization and Capacity
Total input capacity on an area basis increased approximately 11.4% in the second quarter compared to the first quarter, due mainly to the ongoing ramp-up of P6. P6 averaged 72,000 input sheets per month for the second quarter of 2005.
Outlook
The following expectations are based on current information as of July 11, 2005. The Company does not expect to update its expectations until next quarter’s earnings release. However, the Company may update its full business outlook, or any portion thereof, at any time for any reason.
“We expect the business environment to continue strengthening in the second half of 2005,” commented Mr. Wirahadiraksa. “For the third quarter of 2005, we believe our area shipments will increase by a mid teen percentage quarter-on-quarter due to continued growth in the monitor and TV segments. We expect a single digit percentage increase in our average sales price per square meter of net display area shipped at the end of the third quarter of 2005 as compared to the end of the second quarter of 2005. We continue to lead the TFT-LCD market expansion and remain well positioned with the ramp up of our P6 facility and the construction of our P7 facility. Our CAPEX guidance for 2005 remains unchanged from the previous quarter’s guidance. At this stage, we estimate our preliminary CAPEX for 2006 to be in the range of KRW 3.5 trillion to KRW 4.5 trillion.”
Earnings Conference and Conference Call
LG.Philips LCD will hold a Korean language earnings conference on July 11, 2005 at 4:30 p.m. Korea Standard Time on the 21st floor of the Korea Exchange (KRX). An English language conference call will follow at 9:00 p.m. Korea Standard Time 8:00 p.m. EST and 1:00 p.m. GMT. The call-in number is 02-3288-5446 for callers in Korea and +82-2-3288-5446 for callers outside of Korea. The confirmation number is 4590#. Corresponding slides will be available at the Investor Relations section of the LG.Philips LCD website. http://www.lgphilips-lcd.com
Investors can listen to the conference call over the Internet at http://www.lgphilips-lcd.com. To listen to the live call, please go to the Investor Relations section of the website at least 15 minutes prior to the call to register and install any necessary audio software.
For those who are unable to participate in the call, a replay will be available for 30 days after the call. The call-in number is 02-3288-5446 for callers in Korea and +82-2-3288-5446 for callers outside of Korea. The confirmation number for the replay is 4591# (Press 2005042719 when asked for the authorization number.)
3
About LG.Philips LCD
LG.Philips LCD [NYSE: LPL, KRX: 034220] is a leading manufacturer and supplier of thin film transistor liquid crystal display (TFT-LCD) panels. The Company manufactures TFT-LCD panels in a wide range of sizes and specifications primarily for use in notebook computers, desktop monitors and televisions. Headquartered in Seoul, South Korea, LG.Philips LCD currently operates six fabrication facilities in Korea and has approximately 15,000 employees in locations around the world.
For more information about the Company, please visit http://www.lgphilips-lcd.com. LG.Philips LCD makes “Technology you can see!”
Forward-Looking Statement Disclaimer
This press release contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Additional information as to factors that may cause actual results to differ materially from our forward-looking statements can be found in our filings with the United States Securities and Exchange Commission.
| Investor Relations Contacts: | ||
| Jay Hong [Korea] | Monica Huang [USA] | |
| LG.Philips LCD | Sloane & Company | |
| Tel: +822-3777-1010 | Tel: +1-212-446-1874 | |
| Email: jay.hong@lgphilips-lcd.com | Email: Mhuang@sloanepr.com | |
| Media Contacts: | ||
| Elliot Sloane [USA] | Sue Kim [Korea] | |
| Sloane & Company | LG.Philips LCD | |
| Tel: +1-212-446-1860 | Tel: +822-3777-0970 | |
| Email: ESloane@sloanepr.com | Email: sue.kim@lgphilips-lcd.com | |
4
LG.Philips LCD
CONSOLIDATED STATEMENTS OF INCOME
( In millions of KRW)
(The financial statements are based on unaudited Korean GAAP)
| 2005 |
2004 |
|||||||||||||||||||||||
| Three months ended Jun 30 |
Six months ended Jun 30 |
Three months ended Jun 30 |
Six months ended Jun 30 |
|||||||||||||||||||||
| NET REVENUES | 2,308,330 | 100 | % | 4,372,376 | 100 | % | 2,332,230 | 100 | % | 4,520,243 | 100 | % | ||||||||||||
| Cost of goods sold |
(2,168,882 | ) | -94 | % | (4,270,896 | ) | -98 | % | (1,486,762 | ) | -64 | % | (2,904,764 | ) | -64 | % | ||||||||
| GROSS PROFIT | 139,448 | 6 | % | 101,480 | 2 | % | 845,468 | 36 | % | 1,615,479 | 36 | % | ||||||||||||
| Selling, general & administrative |
(109,962 | ) | -5 | % | (206,570 | ) | -5 | % | (74,475 | ) | -3 | % | (145,440 | ) | -3 | % | ||||||||
| OPERATING INCOME | 29,486 | 1 | % | (105,090 | ) | -2 | % | 770,993 | 33 | % | 1,470,039 | 33 | % | |||||||||||
| Interest income |
12,050 | 1 | % | 21,041 | 0 | % | 3,835 | 0 | % | 7,771 | 0 | % | ||||||||||||
| Interest expense |
(29,849 | ) | -1 | % | (50,721 | ) | -1 | % | (8,177 | ) | 0 | % | (25,690 | ) | -1 | % | ||||||||
| Foreign exchange gain (loss), net |
(9,454 | ) | 0 | % | (18,984 | ) | 0 | % | (4,832 | ) | 0 | % | (16,180 | ) | 0 | % | ||||||||
| Others, net |
(1,698 | ) | 0 | % | (3,062 | ) | 0 | % | (12,228 | ) | -1 | % | (7,105 | ) | 0 | % | ||||||||
| Total other income (expense) |
(28,951 | ) | -1 | % | (51,726 | ) | -1 | % | (21,402 | ) | -1 | % | (41,204 | ) | -1 | % | ||||||||
| INCOME BEFORE INCOME TAX EXPENSE |
535 | 0 | % | (156,816 | ) | -4 | % | 749,591 | 32 | % | 1,428,835 | 32 | % | |||||||||||
| Income tax expense |
40,509 | 2 | % | 119,030 | 3 | % | (48,360 | ) | -2 | % | (99,680 | ) | -2 | % | ||||||||||
| NET INCOME (LOSS) | 41,044 | 2 | % | (37,786 | ) | -1 | % | 701,231 | 30 | % | 1,329,155 | 29 | % | |||||||||||
- These financial statements are provided for informational purposes only
LG.Philips LCD
CONSOLIDATED BALANCE SHEET
( In millions of KRW)
(The financial statements are based on unaudited Korean GAAP)
| 2005 |
2004 |
||||||||||||||||||||
| Jun 30 |
Mar 31 |
Jun 30 |
Mar 31 |
||||||||||||||||||
| ASSETS | |||||||||||||||||||||
| Current assets: |
|||||||||||||||||||||
| Cash and cash equivalents |
1,330,973 | 11 | % | 1,350,492 | 12 | % | 559,936 | 7 | % | 542,257 | 7 | % | |||||||||
| Trade accounts and notes receivable |
1,215,026 | 10 | % | 1,098,624 | 10 | % | 1,342,193 | 7 | % | 1,247,435 | 17 | % | |||||||||
| Inventories |
721,298 | 6 | % | 736,916 | 7 | % | 452,856 | 16 | % | 378,665 | 5 | % | |||||||||
| Other receivables and assets |
299,725 | 3 | % | 351,035 | 3 | % | 147,773 | 2 | % | 174,491 | 2 | % | |||||||||
| Total current assets |
3,567,022 | 30 | % | 3,537,067 | 32 | % | 2,502,758 | 30 | % | 2,342,848 | 32 | % | |||||||||
| Investments and other non-current assets |
350,716 | 3 | % | 307,355 | 3 | % | 138,611 | 2 | % | 149,372 | 2 | % | |||||||||
| Property, plant and equipment, net |
7,754,666 | 65 | % | 7,007,543 | 64 | % | 5,534,821 | 66 | % | 4,583,751 | 63 | % | |||||||||
| Other Intangible assets, net |
171,311 | 1 | % | 182,626 | 2 | % | 200,832 | 2 | % | 211,168 | 3 | % | |||||||||
| Total assets | 11,843,715 | 100 | % | 11,034,591 | 100 | % | 8,377,022 | 100 | % | 7,287,139 | 100 | % | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
|||||||||||||||||||||
| Current liabilities: |
|||||||||||||||||||||
| Short-term debt |
631,798 | 5 | % | 550,652 | 5 | % | 575,421 | 7 | % | 570,355 | 8 | % | |||||||||
| Trade accounts and notes payable |
651,783 | 6 | % | 612,242 | 6 | % | 438,438 | 5 | % | 403,063 | 6 | % | |||||||||
| Other payables and accrued liabilities |
1,836,142 | 16 | % | 1,666,845 | 15 | % | 1,438,639 | 17 | % | 1,387,802 | 19 | % | |||||||||
| Total current liabilities |
3,119,723 | 26 | % | 2,829,739 | 26 | % | 2,452,498 | 29 | % | 2,361,220 | 32 | % | |||||||||
| Long-term debt |
2,957,417 | 25 | % | 2,478,725 | 22 | % | 1,648,543 | 20 | % | 1,351,729 | 19 | % | |||||||||
| Reserves for pension |
54,160 | 0 | % | 42,352 | 0 | % | 39,347 | 0 | % | 28,564 | 0 | % | |||||||||
| Total liabilities | 6,131,300 | 52 | % | 5,350,816 | 48 | % | 4,140,388 | 49 | % | 3,741,513 | 51 | % | |||||||||
| Common Stock and additional paid-in capital |
2,668,718 | 23 | % | 2,638,850 | 24 | % | 1,450,000 | 17 | % | 1,450,000 | 20 | % | |||||||||
| Accumulated result |
3,053,889 | 26 | % | 3,012,845 | 27 | % | 2,765,385 | 33 | % | 2,064,005 | 28 | % | |||||||||
| Capital adjustment |
(10,192 | ) | 0 | % | 32,080 | 0 | % | 21,249 | 0 | % | 31,621 | 0 | % | ||||||||
| Shareholders’ equity | 5,712,415 | 48 | % | 5,683,775 | 52 | % | 4,236,634 | 51 | % | 3,545,626 | 49 | % | |||||||||
| Total liabilities and shareholders’ equity | 11,843,715 | 100 | % | 11,034,591 | 100 | % | 8,377,022 | 100 | % | 7,287,139 | 100 | % | |||||||||
- These financial statements are provided for informational purposes only
LG.Philips LCD
CONSOLIDATED STATEMENTS OF CASH FLOW
( In millions of KRW)
(The financial statements are based on unaudited Korean GAAP)
| 2005 |
2004 |
|||||||||||
| Three months ended Jun 30 |
Six months ended Jun 30 |
Three months ended Jun 30 |
Six months ended Jun 30 |
|||||||||
| Net Income | 41,044 | (37,786 | ) | 701,231 | 1,329,155 | |||||||
| Depreciation |
411,549 | 814,200 | 269,446 | 541,219 | ||||||||
| Amortization |
11,582 | 23,128 | 11,464 | 22,776 | ||||||||
| Others |
31,379 | 48,873 | 22,964 | 28,386 | ||||||||
| Operating Cash Flow |
495,554 | 848,415 | 1,005,105 | 1,921,536 | ||||||||
| Net Change in Working Capital |
(123,032 | ) | (393,083 | ) | (45,836 | ) | (218,698 | ) | ||||
| Change in accounts receivable |
(98,702 | ) | (309,121 | ) | (87,252 | ) | (211,099 | ) | ||||
| Change in inventory |
15,690 | 84,063 | (70,670 | ) | (112,160 | ) | ||||||
| Change in accounts payable |
36,217 | 67,412 | 40,492 | 34,708 | ||||||||
| Change in others |
(76,237 | ) | (235,437 | ) | 71,594 | 69,853 | ||||||
| Cash Flow from Operation |
372,522 | 455,332 | 959,269 | 1,702,838 | ||||||||
| Capital Expenditures |
(968,719 | ) | (1,421,392 | ) | (1,239,074 | ) | (1,969,475 | ) | ||||
| Acquisition of PP&E |
(965,886 | ) | (1,415,708 | ) | (1,224,352 | ) | (1,969,684 | ) | ||||
| (Delivery) |
(1,160,525 | ) | (2,070,414 | ) | (1,221,475 | ) | (2,127,711 | ) | ||||
| (Other account payables) |
194,639 | 654,706 | (2,877 | ) | 158,027 | |||||||
| Intangible assets investment |
(266 | ) | (2,427 | ) | (1,096 | ) | (1,096 | ) | ||||
| Others |
(2,567 | ) | (3,257 | ) | (13,626 | ) | 1,305 | |||||
| Cash Flow before Financing |
(596,197 | ) | (966,060 | ) | (279,805 | ) | (266,637 | ) | ||||
| Cash Flow from Financing Activities |
576,678 | 935,794 | 297,484 | 322,627 | ||||||||
| Proceeds from IPO |
0 | 0 | 0 | 0 | ||||||||
| Net Cash Flow |
(19,519 | ) | (30,266 | ) | 17,679 | 55,990 | ||||||
- These financial statements are provided for informational purposes only
LG.Philips LCD
CONSOLIDATED STATEMENTS OF INCOME
( In millions of KRW)
(The financial statements are based on unaudited US GAAP)
| 2005 |
2004 |
|||||||||||||||||||||||
| Three months ended Jun 30 |
Six months ended Jun 30 |
Three months ended Jun 30 |
Six months ended Jun 30 |
|||||||||||||||||||||
| REVENUE |
2,308,330 | 100 | % | 4,372,376 | 100 | % | 2,330,470 | 100 | % | 4,518,483 | 100 | % | ||||||||||||
| Cost of goods sold |
(2,159,070 | ) | -94 | % | (4,249,213 | ) | -97 | % | (1,468,752 | ) | -63 | % | (2,880,408 | ) | -64 | % | ||||||||
| GROSS PROFIT |
149,260 | 6 | % | 123,163 | 3 | % | 861,718 | 37 | % | 1,638,075 | 36 | % | ||||||||||||
| Selling, general & administrative |
(113,148 | ) | -5 | % | (212,557 | ) | -5 | % | (88,399 | ) | -4 | % | (157,200 | ) | -3 | % | ||||||||
| OPERATING INCOME |
36,112 | 2 | % | (89,394 | ) | -2 | % | 773,319 | 33 | % | 1,480,875 | 33 | % | |||||||||||
| Interest income |
12,050 | 1 | % | 21,041 | 0 | % | 3,835 | 0 | % | 7,771 | 0 | % | ||||||||||||
| Interest expense |
(30,878 | ) | -1 | % | (53,698 | ) | -1 | % | (9,630 | ) | 0 | % | (26,962 | ) | -1 | % | ||||||||
| Foreign exchange gain (loss), net |
(14,797 | ) | -1 | % | (23,448 | ) | -1 | % | (8,314 | ) | 0 | % | (12,045 | ) | 0 | % | ||||||||
| Others, net |
315 | 0 | % | 494 | 0 | % | 36 | 0 | % | 586 | 0 | % | ||||||||||||
| Total other income (expense) |
(33,310 | ) | -1 | % | (55,611 | ) | -1 | % | (14,073 | ) | -1 | % | (30,650 | ) | -1 | % | ||||||||
| INCOME BEFORE INCOME TAX EXPENSE |
2,802 | 0 | % | (145,005 | ) | -3 | % | 759,246 | 33 | % | 1,450,225 | 32 | % | |||||||||||
| Income tax expense |
35,632 | 2 | % | 88,930 | 2 | % | (48,673 | ) | -2 | % | (99,985 | ) | -2 | % | ||||||||||
| NET INCOME (LOSS) |
38,434 | 2 | % | (56,075 | ) | -1 | % | 710,573 | 30 | % | 1,350,240 | 30 | % | |||||||||||
- These financial statements are provided for informational purposes only
LG.Philips LCD
CONSOLIDATED BALANCE SHEET
( In millions of KRW)
(The financial statements are based on unaudited US GAAP)
| 2005 |
2004 |
||||||||||||||||||||
| Jun 30 |
Mar 31 |
Jun 30 |
Mar 31 |
||||||||||||||||||
| ASSETS |
|||||||||||||||||||||
| Current assets: |
|||||||||||||||||||||
| Cash and cash equivalents |
1,330,973 | 11 | % | 1,350,492 | 12 | % | 559,936 | 7 | % | 542,257 | 8 | % | |||||||||
| Accounts receivable (Trade, others) |
1,215,026 | 10 | % | 1,098,624 | 10 | % | 1,341,749 | 16 | % | 1,246,724 | 17 | % | |||||||||
| Inventories |
720,836 | 6 | % | 736,872 | 7 | % | 451,383 | 5 | % | 377,419 | 5 | % | |||||||||
| Other current assets |
297,800 | 3 | % | 320,980 | 3 | % | 169,366 | 2 | % | 194,850 | 3 | % | |||||||||
| Total current assets |
3,564,635 | 30 | % | 3,506,968 | 32 | % | 2,522,434 | 31 | % | 2,361,250 | 33 | % | |||||||||
| Investments and other non-current assets |
361,190 | 3 | % | 345,175 | 3 | % | 150,117 | 2 | % | 157,301 | 2 | % | |||||||||
| Property, plant and equipment, net |
7,788,439 | 66 | % | 7,043,223 | 64 | % | 5,565,875 | 67 | % | 4,612,781 | 64 | % | |||||||||
| Intangible assets, net |
36,058 | 0 | % | 37,712 | 0 | % | 26,934 | 0 | % | 27,610 | 0 | % | |||||||||
| Total assets |
11,750,322 | 100 | % | 10,933,078 | 100 | % | 8,265,360 | 100 | % | 7,158,942 | 100 | % | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
|||||||||||||||||||||
| Current liabilities: |
|||||||||||||||||||||
| Short-term debt |
633,107 | 5 | % | 552,293 | 5 | % | 575,617 | 7 | % | 570,847 | 8 | % | |||||||||
| Trade accounts and notes payable |
651,783 | 6 | % | 612,255 | 6 | % | 438,438 | 5 | % | 402,334 | 6 | % | |||||||||
| Other payables and accrued liabilities |
1,840,072 | 16 | % | 1,670,054 | 15 | % | 1,441,381 | 17 | % | 1,387,180 | 19 | % | |||||||||
| Total current liabilities |
3,124,962 | 27 | % | 2,834,602 | 26 | % | 2,455,436 | 30 | % | 2,360,361 | 33 | % | |||||||||
| Long-term debt |
3,005,875 | 26 | % | 2,488,016 | 23 | % | 1,656,606 | 20 | % | 1,359,359 | 19 | % | |||||||||
| Other non-current liabilities |
54,852 | 0 | % | 42,318 | 0 | % | 39,347 | 0 | % | 28,525 | 0 | % | |||||||||
| Total liabilities |
6,185,689 | 53 | % | 5,364,936 | 49 | % | 4,151,389 | 50 | % | 3,748,245 | 52 | % | |||||||||
| Common Stock & APIC |
2,630,379 | 22 | % | 2,629,478 | 24 | % | 1,450,000 | 18 | % | 1,450,000 | 20 | % | |||||||||
| Retained Earnings |
2,944,967 | 25 | % | 2,906,533 | 27 | % | 2,647,595 | 32 | % | 1,937,022 | 27 | % | |||||||||
| Capital adjustment |
(10,713 | ) | 0 | % | 32,131 | 0 | % | 16,376 | 0 | % | 23,675 | 0 | % | ||||||||
| Shareholders’ equity |
5,564,633 | 47 | % | 5,568,142 | 51 | % | 4,113,971 | 50 | % | 3,410,697 | 48 | % | |||||||||
| Total liabilities and shareholders’ equity |
11,750,322 | 100 | % | 10,933,078 | 100 | % | 8,265,360 | 100 | % | 7,158,942 | 100 | % | |||||||||
- These financial statements are provided for informational purposes only
LG.Philips LCD
CONSOLIDATED STATEMENTS OF CASH FLOW
(In millions of KRW)
(The financial statements are based on unaudited US GAAP)
| 2005 |
2004 |
|||||||||||
| Three months ended Jun 30 |
Six months ended Jun 30 |
Three months ended Jun 30 |
Six months ended Jun 30 |
|||||||||
| Cash flows from operating activities: |
||||||||||||
| Net income |
38,434 | (56,075 | ) | 710,573 | 1,350,240 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
| Depreciation |
411,921 | 814,943 | 267,320 | 537,074 | ||||||||
| Amortization |
1,921 | 3,806 | 1,804 | 3,454 | ||||||||
| Others, net |
40,194 | 55,114 | 10,090 | 11,792 | ||||||||
| Change in operating assets and liabilities: |
||||||||||||
| Change in A/R |
(90,196 | ) | (366,708 | ) | (83,605 | ) | (195,770 | ) | ||||
| Change in inventory |
16,108 | 83,353 | (70,443 | ) | (111,941 | ) | ||||||
| Change in A/P |
36,217 | 65,876 | 41,222 | 35,185 | ||||||||
| Change in others |
(86,300 | ) | (148,851 | ) | 82,251 | 87,887 | ||||||
| Net cash provided by operating activities |
368,299 | 451,458 | 959,212 | 1,717,921 | ||||||||
| Cash flows from investing activities: |
||||||||||||
| Purchase of property, plant and equipment |
(965,046 | ) | (1,413,204 | ) | (1,236,035 | ) | (1,966,488 | ) | ||||
| Proceeds from sales of property, plant and equipment |
(266 | ) | (2,427 | ) | 0 | 0 | ||||||
| Others, net |
(3,407 | ) | (5,761 | ) | (3,038 | ) | (2,986 | ) | ||||
| Net cash used in investing activities |
(968,719 | ) | (1,421,392 | ) | (1,239,073 | ) | (1,969,474 | ) | ||||
| Cash flows from financing activities: |
||||||||||||
| Financing Activities |
576,678 | 935,794 | 297,484 | 307,477 | ||||||||
| New Equity & Others |
0 | |||||||||||
| Net cash provided by financing activities |
576,678 | 935,794 | 297,484 | 307,477 | ||||||||
| Effect of exchange rate change on cash and cash equivalents |
4,223 | 3,874 | 56 | (2 | ) | |||||||
| Net increase (decrease) in cash |
(19,519 | ) | (30,266 | ) | 17,679 | 55,922 | ||||||
- These financial statements are provided for informational purposes only
LG.Philips LCD
Net Income Reconciliation to US GAAP
( In millions of KRW)
| 2005 |
||||||
| Three months ended Jun 30 |
Six months ended Jun 30 |
|||||
| Net Income under K GAAP |
41,044 | (37,786 | ) | |||
| US GAAP Adjustments |
(2,610 | ) | (18,289 | ) | ||
| Depreciation of property, plant and equipment |
(655 | ) | (1,310 | ) | ||
| Amortization of Intellectual Property Rights |
9,180 | 20,986 | ||||
| Adjustment of AR discount loss |
653 | 95 | ||||
| Capitalization of financial interests |
(1,252 | ) | (713 | ) | ||
| Inventory Valuation effect of US GAAP Adjustments |
63 | (953 | ) | |||
| Pension expense |
(709 | ) | 265 | |||
| Income tax effect of US GAAP Adjustments |
(4,289 | ) | (30,100 | ) | ||
| ESOP |
(902 | ) | (1,860 | ) | ||
| Convertible bonds (including FX valuation) |
(4,007 | ) | (4,007 | ) | ||
| Stock appreciation right |
(692 | ) | (692 | ) | ||
| Net Income under US GAAP |
38,434 | (56,075 | ) | |||
- These financial statements are provided for informational purposes only
Appendix 2. IR Presentation
Q2 05 Earnings Results
July 11, 2005
Disclaimer
This presentation contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the United States Securities and Exchange Commission and the Korean Financial Supervisory Service, in our annual report to shareholders, in our proxy statements, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to: our highly competitive environment; the cyclical nature of our industry; our ability to introduce new products on a timely basis; our dependence on growth in the demand for our products; our ability to successfully execute our expansion strategy; our dependence on key personnel; and general economic and political conditions, including those related to the TFT-LCD industry; possible disruptions in business activities caused by natural and human-induced disasters, including terrorist activity and armed conflict; and fluctuations in foreign currency exchange rates. Additional information as to these and other factors that may cause actual results to differ materially from our forward-looking statements can be found in our filings with the Securities and Exchange Commission.
This presentation also includes information regarding our historical financial performance through June 30, 2005, and our expectations regarding future performance as reflected in certain non-GAAP financial measures as defined by Securities and Exchange Commission rules. As required by such rules, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available on our investor relations website at http://www.lgphilips-lcd.com under the file name Q205 Earnings Presentation.
Agenda
Q2 05 Earnings Results
Performance Highlights
Outlook
32”W
37”W
42”W
47”W
Paju-P7
Q2 05 Earnings Results
Q2 05 Income Statement
KRW b
Q2 05 Q1 05 Q2 04 QoQ change YoY change
2,308
2,169
139
29
442
1
41
2,332
1,487
845
771
1,034
750
701
2,064
2,102
(38)
(135)
269
(157)
(79)
12%
3%
N/A
N/A
64%
N/A
N/A
(1%)
46%
(84%)
(96%)
(57%)
(100%)
(94%)
Revenue
COGS
Gross profit
Operating income
EBITDA
Income before tax
Net income
Margin (%)
6
1
19
2
36
33
44
30
(2)
(7)
13
(4)
8
8
6
6
(30)
(32)
(25)
(28)
Gross margin
Operating margin
EBITDA margin
Net margin
K GAAP (Consolidated)
Source: Unaudited, Company financials
Q2 05 Balance Sheet
KRW b
Q2 05 Q1 05 Q2 04 QoQ change YoY change
11,844
1,331
721
6,131
632
2,957
5,713
40
8,377
560
453
4,140
575
1,649
4,237
39
11,035
1,350
737
5,351
551
2,479
5,684
30
7%
(1%)
(2%)
15%
15%
19%
1%
10
41%
138%
59%
48%
10%
79%
35%
1
Assets
Cash & equivalent
Inventory
Liabilities
Short term debt
Long term debt
Shareholders’ equity
Net debt to equity ratio (%)
Source: Unaudited, Company financials
K GAAP (Consolidated)
Q2 05 Cash Flow
KRW b
Q2 05 Q1 05 Q2 04 QoQ change YoY change
Net income
Depreciation & Amortization
Others
Working capital
Cash flow from operations
CAPEX
Cash flow before financing
Financing activities
Net change in cash
41
423
32
(123)
373
(969)
(596)
577
(19)
701
281
23
(46)
959
(1,239)
(280)
298
18
(79)
415
17
(270)
83
(453)
(370)
359
(11)
120
8
15
147
290
(516)
(226)
218
(8)
(660)
142
9
(77)
(586)
270
(316)
279
(37)
Source: Unaudited, Company financials
K GAAP (Consolidated)
Performance Highlights
Shipments and ASP
ASP**/m² (US$)
Total k m² *
3,000
$4,000
$3,554
$3,500
2,500
$3,000
$2,857
2,000
$2,500
$2,304
$2,085
$2,062
1,500
$2,000
1,096
958
$1,500
771
1,000
560
561
$1,000
500
$500
0
$0
Q1 05
Q4
Q3
Q2 04
Q2
Total K m²
ASP/m²
Source: Company financials
* Net display area shipped
** Quarterly average selling price per square meter of net display area shipped
Revenue: Product Mix
4%
4%
5%
100%
13%
24%
22%
80%
23%
18%
18%
60%
40%
56%
53%
60%
20%
0%
Q1 05
Q2 04
Q2 05
TV
NBPC
MNT
APPL
Source: Company financials
Q2 05 Capacity Update
P6 input capacity averaged 72 K per month for the quarter
Unit: Quarterly input capacity
by Area (k m² )
2100
1800
1500
P6
1200
P5
900
600
P4
300
P1~P3
0
Q105
Q4
Q3
Q204
Q2
Source: Company financials
Cash ROIC
EBITDA margin
Cash ROIC
45%
30%
19%
21%
13%
88%
Q105
Q4
Q3
Q204
Q2
29%
42%
18%
25%
Sales / IC*
197%
Q105
Q4
Q3
Q204
140%
Q2
134%
133%
136%
K GAAP (Consolidated)
Q105
Q4
Q3
Q204
Q2
Source: Unaudited, Company financials
* IC (Invested Capital) equals average of net debt and equity for the designated period ; Quarterly ratios are annualized
Outlook
Outlook
CAPEX schedule (KRW b)
Total Shipments in m2
Q3 05 vs. Q2 05
: Mid teens (%)
ASP per m2
End of Q3 05 vs. End of Q2 05
: Single digit (%)
CAPEX 2006 (E)
3.5 to 4.5 trillion KRW
4,580
3,818
341
3,144
2,212
1,265
1,436
2005(E)
2004
P6
Others
P7
Source: Company financials, Delivery basis
14
Questions and Answers
Appendix
US GAAP Income Statement
KRW b
Q2 05 Q1 05 Q2 04 QoQ change YoY change
Revenue
COGS
Gross profit
Operating income
EBITDA
Income before tax
Net income
2,308
2,159
149
36
437
3
38
2,330
1,469
861
773
1,036
759
711
2,064
2,090
(26)
(126)
272
(148)
(95)
12%
3%
N/A
N/A
61%
N/A
N/A
(1%)
47%
(83%)
(95%)
(58%)
(100%)
(95%)
Margin (%)
6
2
19
2
37
33
44
31
(1)
(6)
13
(5)
7
8
6
7
(31)
(31)
(25)
(29)
Gross margin
Operating margin
EBITDA margin
Net margin
Source: Unaudited, Company financials
US GAAP Balance Sheet
KRW b
Q2 05 Q1 05 Q2 04 QoQ change YoY change
Assets
Cash & equivalent
Inventory
Liabilities
Short term debt
Long term debt
Shareholders’ equity
Net debt to equity ratio (%)
11,750
1,331
721
6,186
633
3,006
5,564
41
8,265
560
451
4,151
576
1,657
4,114
41
10,933
1,350
737
5,365
552
2,488
5,568
30
7%
(1%)
(2%)
15%
15%
21%
0%
11
42%
138%
60%
49%
10%
81%
35%
0
Source: Unaudited, Company financials
US GAAP Cash Flow
KRW b
Q2 05 Q1 05 Q2 04 QoQ change YoY change
711
269
10
(31)
959
(1,238)
(279)
297
18
(95)
405
15
(242)
83
(453)
(370)
359
(11)
133
9
30
118
290
(516)
(226)
218
(8)
(673)
145
35
(93)
(586)
269
(317)
280
(37)
38
414
45
(124)
373
(969)
(596)
577
(19)
Net income
Depreciation & Amortization
Others
Working capital
Cash flow from operations
CAPEX
Cash flow before financing
Financing activities
Net change in cash
Source: Unaudited, Company financials
Net Income Reconciliation to US GAAP
KRW b
Q2 05 Q1 05
Net income under K GAAP
(79)
(16)
(1)
12
(1)
1
(1)
0
1
(26)
(1)
0
0
(95)
41
(3)
(1)
9
1
(1)
0
0
(1)
(4)
(1)
(4)
(1)
38
US GAAP adjustments
Depreciation of PP&E
Amortization of IPR
Adjustment of AR discount loss
Capitalization of financial interests
Inventory valuation effect of US GAAP adjustments
Cash flow hedge account
Pension expense
Income tax effect of US GAAP adjustments
ESOP
Convertible bonds (including FX valuation)
Stock appreciation right
Net income under US GAAP
Source: Unaudited, Company financials
EBITDA Reconciliation
K GAAP (KRW b) Q2 05 Q1 05 Q2 04 QoQ change YoY change
1. Net income
2. Interest expense
3. Interest income
4. Provision (benefit) for income taxes
5. Depreciation of PP&E
6. Amortization of intangible asset
7. Amortization of debt issuance cost
EBITDA (1+2-3+4+5+6+7)
701
8
4
48
269
12
0
1,034
(79)
21
9
(79)
403
12
0
269
120
9
3
39
9
(1)
0
(173)
(660)
22
8
(88)
143
(1)
0
(592)
US GAAP (KRW b) Q2 05 Q1 05 Q2 04 QoQ change YoY change
1. Net income
2. Interest expense
3. Interest income
4. Provision (benefit) for income taxes
5. Depreciation of PP&E
6. Amortization of intangible asset
7. Amortization of debt issuance cost
EBITDA (1+2-3+4+5+6+7)
41
30
12
(40)
412
11
0
442
(673)
21
8
(85)
145
0
1
(599)
(95)
23
9
(53)
403
2
1
272
38
31
12
(36)
412
2
2
437
711
10
4
49
267
2
1
1,036
133
8
3
17
9
0
1
165
EBITDA Reconciliation (Continued)
EBITDA is defined as net income (loss) plus: interest income (expense); provision (benefit) for income taxes; depreciation of property, plant and equipment; amortization of intangible assets; and amortization of debt issuance
cost. EBITDA is a key financial measure used by our senior management to internally evaluate the performance of our business and for other required or discretionary purposes. Specifically, our significant capital assets are in different stages of depreciation, and because we do not have separate operating divisions, our senior management uses EBITDA internally to measure the performance of these assets on a comparable basis. We also believe that the presentation of EBITDA will enhance an investor’s understanding of our operating performance as we believe it is commonly reported and widely used by analysts and investors in our industry. It also provides useful information for comparison on a more comparable basis of our operating performance and those of our competitors, who follow different accounting policies. For example, depreciation on most of our equipment is made based on a four-year useful life while most of our competitors use different depreciation schedules from our own. EBITDA is not a measure determined in accordance with U.S. GAAP. EBITDA should not be considered as an alternative to operating income, cash flows from operating activities or net income, as determined in accordance with U.S. GAAP. Our calculation of EBITDA may not be comparable to similarly titled measures reported by other companies.
LG.Philips LCD makes
Technology you can see!
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LG.Philips LCD Co., Ltd. | ||||
| (Registrant) | ||||
| Date: July 11, 2005 | By: /s/ Ron H. Wirahadiraksa | |||
| (Signature) | ||||
| Name: | Ron H. Wirahadiraksa | |||
| Title: | Joint Representative Director/ | |||
| President & Chief Financial Officer | ||||