LG.Philips LCD Reports Fourth Quarter 2004 Results

LG.Philips LCD Reports Fourth Quarter 2004 Results

    Business Editors

    SEOUL, South Korea--(BUSINESS WIRE)--Jan. 24, 2005--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 full-year periods ended December 31, 2004. Amounts in Korean Won are translated into US dollars at the noon buying rate in effect on December 31, 2004, which was KRW 1,035.1 per US dollar.

--	Sales in the fourth quarter of 2004 increased by 3% to KRW 1,933 billion (USD 1,867 million) from sales of KRW 1,875 billion (USD 1,811 million) in the third quarter of 2004. Sales decreased by 9% in the fourth quarter of 2004 from KRW 2,135 billion (USD 2,063 million) in the fourth quarter of 2003 due to decreases in panel prices. Fourth quarter 2004 sales comparisons, from both a sequential and year-on-year perspective, were also impacted by the Korean Won appreciation against the US Dollar during this period. Revenues for 2004 were KRW 8,328 billion (USD 8,046 million), an increase of 37% from KRW 6,098 billion (USD 5,891 million) in 2003.
--	Operating income in the fourth quarter of 2004 decreased by 99% from KRW 256 billion (USD 247 million) in the third quarter of 2004. Operating income decreased to KRW 2 billion (USD 1.9 million) in the fourth quarter of 2004 from KRW 552 billion (USD 533 million) in the fourth quarter of 2003. Operating income for 2004 was KRW 1,728 billion (USD 1,669 million), an increase of 61% from KRW 1,074 billion (USD 1,038 million) in 2003.
--	EBITDA in the fourth quarter of 2004 decreased by 27% to KRW 412 billion (USD 398 million) from KRW 568 billion (USD 549 million) in the third quarter of 2004. EBITDA in the fourth quarter of 2004 decreased by 51% from KRW 837 billion (USD 809 million) in the fourth quarter of 2003. EBITDA for 2004 was KRW 2,994 billion (USD 2,892 million), an increase of 43% from KRW 2,091 billion (USD 2,020 million) in 2003.
--	Net income in the fourth quarter of 2004 decreased by 88% from KRW 291 billion (USD 281 million) in the third quarter of 2004. Net income decreased to KRW 35 billion (USD 34 million) in the fourth quarter of 2004 from KRW 544 billion (USD 526 million) in the fourth quarter of 2003. Net income for 2004 was KRW 1,655 billion (USD 1,599 million), an increase of 62% from KRW 1,019 billion (USD 984 million) in 2003.

    "We continue making steady gains towards our goal of becoming the number one LCD company in the industry," said Bon Joon Koo, Vice Chairman and CEO of LG.Philips LCD. "In the third quarter of 2004 we began mass production at the world's largest sixth generation factory, 'P6', reaching an average capacity of 35,000 input sheets per month in the fourth quarter. Our advanced technology enables us to further enhance our product offerings, strengthen our market position and fortify our strategic relationships with key customers. We remain committed to growing the LCD TV segment and have announced plans for our seventh generation factory, 'P7', which will enable us to meet the future product needs of our customers and capitalize on the growing global opportunity for LCD TVs."

    Fourth Quarter Financial Review

    Revenue and Cost

    Revenues decreased by 9% to KRW 1,933 billion (USD 1,867 million) in the three-month period ended December 31, 2004, from KRW 2,135 billion (USD 2,063 million) in the corresponding period in 2003 due to decreases in panel prices. The effect of the overall decrease in panel prices was offset by an increase in the volume of panels for notebook computers, desktop monitors and TVs resulting from increased production capacity, especially from P6, which commenced operations in August 2004. TFT-LCD panels for desktop monitors, notebook computers, TVs and applications accounted for 53%, 27%, 15% and 5% respectively on a revenue basis, in the fourth quarter of 2004, compared to 55%, 27%, 14% and 4% respectively on a revenue basis, in the third quarter of 2004.
    Overall, LG.Philips LCD shipped a total of 771,000 square meters of net display area, a 38% sequential quarterly increase, with an average selling price per square meter of net display area of USD 2,304 in the fourth quarter of 2004. This represents a decline in the selling price per square meter of net display area of approximately 19% compared to the average of the third quarter of 2004 and a decline of 14% at the end of the fourth quarter as compared to the end of the third quarter of 2004.
    The cost of goods sold per square meter of net display area shipped was KRW 2,271 thousand (USD 2,194) for the fourth quarter of 2004, down 9.0% from the third quarter of 2004. Cost of goods sold increased to KRW 1,840 billion (USD 1,778 million), or 22% year-on-year and 18% compared to the third quarter of 2004, as a result of increased volume year-on-year.
    "As we announced in December 2004, price declines in the fourth quarter were greater than we anticipated earlier in that period," said Ron Wirahadiraksa, President and Chief Financial Officer of LG.Philips LCD. "Yet, despite these conditions, LG.Philips LCD continued to execute well on its plan to sustain market leadership, manufacturing efficiencies and sound financial management."
    Mr. Wirahadiraksa continued, "Our strength and commitment to state-of-the-art manufacturing resulted in an impressive 38% increase in area shipped for the quarter, while at the same time, we were able to reduce our costs of goods sold. In 2005, we believe there will be strong growth in consumer demand for flat screen TVs, and our focus remains the same: superior execution, prudent cost-cutting measures and investing in our business to further improve our competitive position and long-term growth prospects."

    Liquidity

    As of December 31, 2004, LG.Philips LCD had KRW 1,361 billion (USD 1,315 million) of cash and cash equivalents. Total debt at December 31, 2004, was KRW 2,679 billion (USD 2,588 million) with a net-debt-to-equity ratio of 23%.

    During the fourth quarter of 2004, LG.Philips LCD issued USD 200 million of US dollar-denominated floating rate notes and KRW 300 billion of Korean Won-denominated fixed rate bonds. The capital raised is being used for general investment purposes and refinancing of existing debt.

    Capital Spending

    Capital expenditures in the fourth quarter of 2004 sequentially decreased to KRW 473 billion (USD 457 million) from KRW 1,434 billion (USD 1,385 million) in the third quarter of 2004, and from KRW 544 billion (USD 526 million) in the fourth quarter 2003. The capital expenditures for the fourth quarter of 2004 were mainly used for investments in P6 and ongoing operations.

    Utilization and Capacity

    Total input capacity on an area basis increased approximately 24% in the fourth quarter compared to the third quarter, due mainly to the ramp-up of P6. P6 averaged 35,000 input sheets per month for the fourth quarter of 2004.

    Outlook

    The following expectations are based on current information as of January 24, 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.
    According to DisplaySearch, the TFT-LCD industry should experience both unit and area growth in 2005. LG.Philips LCD plans to increase its output to meet this anticipated growth and to meet its customers' needs.
    "We expect the industry supply/demand balance will begin to stabilize in the second quarter and then show signs of strengthening later in the year," commented Mr. Wirahadiraksa. "For the first quarter of 2005, we see our area shipments increasing approximately 9% quarter-on-quarter. We expect a high single digit rate decline on the ASP per net display area shipped at the end of the first quarter of 2005 as compared to the end of the fourth quarter of 2004. As a result, we expect our EBITDA margin rate in the first quarter of 2005 to be in the range of the mid-teens."

    Earnings Conference and Conference Call

    LG.Philips LCD will hold a Korean language earnings conference on January 24, 2005 at 4:30 p.m. Korea Standard Time on the 21st floor of the Korea Stock Exchange (KSE). An English language conference call will follow at 10:00 p.m. Korea Standard Time (8:00 a.m. EST and 1:00 p.m. GMT). The call-in number is 1566-2256 for callers in Korea and +82-2-6677-2256 for callers outside of Korea. The confirmation number is 3777. Corresponding slides will be available at the Investor Relations section of the LG.Philips LCD website. http://www.lgphilips-lcd.com
    Investors can listen to the conference call over the Internet at http://www.lgphilips-lcd.com. To listen to the live call, please go to the Investor Relations section of the website at least 15 minutes prior to the call to register and install any necessary audio software.
    For those who are unable to participate in the call, a replay will be available for 30 days after the call. The call-in number is 031-810-3100 for callers in Korea and +82-31-810-3100 for callers outside of Korea. The confirmation number for the replay is 22619#.

    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 13,000 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 millions of KRW) (The financial statements are based on unaudited Korean GAAP)

------------------------------- 2004 ------------------------------- Three months Twelve months ended Dec. 31 ended Dec. 31 -------------------------------

NET REVENUES 1,932,732 100% 8,328,170 100% Cost of goods sold (1,839,558)-95% (6,299,513)-76% --------------- ---------------

GROSS PROFIT 93,174 5% 2,028,657 24%

Selling, general & administrative (91,233) -5% (300,300) -4%

--------------- ---------------

OPERATING INCOME 1,941 0% 1,728,357 21%

Interest income 6,965 0% 19,963 0% Interest expense (15,797) -1% (53,262) -1% Foreign exchange gain (loss), net 34,496 2% 10,531 0% Others, net (8,660) 0% (17,647) 0% --------------- --------------- Total other income (expense) 17,004 1% (40,415) 0% --------------- ---------------

INCOME BEFORE INCOME TAX EXPENSE 18,945 1% 1,687,942 20%

Income tax expense 16,476 1% (32,497) 0%

--------------- --------------- NET INCOME(LOSS) 35,421 2% 1,655,445 20% --------------- ---------------

------------------------------- 2003 ------------------------------- Three months Twelve months ended Dec. 31 ended Dec. 31 -------------------------------

NET REVENUES 2,135,178 100% 6,098,335 100% Cost of goods sold (1,507,654)-71% (4,792,050)-79% --------------- ---------------

GROSS PROFIT 627,524 29% 1,306,285 21%

Selling, general & administrative (75,255) -4% (232,165) -4%

--------------- ---------------

OPERATING INCOME 552,269 26% 1,074,120 18%

Interest income 1,935 0% 6,393 0% Interest expense (23,086) -1% (80,700) -1% Foreign exchange gain (loss), net 2,719 0% 12,068 0% Others, net (1,880) 0% 990 0% --------------- --------------- Total other income (expense) (20,312) -1% (61,249) -1% --------------- ---------------

INCOME BEFORE INCOME TAX EXPENSE 531,957 25% 1,012,871 17%

Income tax expense 11,998 1% 6,402 0%

--------------- --------------- NET INCOME(LOSS) 543,955 25% 1,019,273 17% --------------- ---------------

-- 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)

------------------------------ 2004 ------------------------------ December 31 September 30 ------------------------------

ASSETS Current assets: Cash and cash equivalents 1,361,239 13% 1,211,843 12% Trade accounts and notes receivable 890,507 9% 885,790 9% Inventories 805,288 8% 692,395 7% Other receivables and assets 334,444 3% 127,888 1% Total current assets 3,391,478 33% 2,917,916 30% --------------- --------------

Investments and other non-current assets 245,632 2% 292,942 3% Property, plant and equipment, net 6,528,182 63% 6,327,617 65% Other Intangible assets, net 192,010 2% 198,100 2%

--------------- --------------

Total assets 10,357,302 100% 9,736,575 100%

--------------- -------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:

Short-term debt 694,230 7% 632,052 6% Trade accounts and notes payable 581,581 6% 1,497,482 15% Other payables and accrued liabilities 1,292,453 12% 213,867 2%

--------------- --------------

Total current liabilities 2,568,264 25% 2,343,401 24%

--------------- --------------

Long-term debt 1,984,432 19% 1,651,164 17% Reserves for pension 31,964 0% 43,050 0%

--------------- --------------

Total liabilities 4,584,660 44% 4,037,615 41% --------------- --------------

Common Stock and additional paid-in capital 2,638,850 25% 2,640,848 27% Accumulated result 3,091,674 30% 3,056,254 31% Capital adjustment 42,118 0% 1,858 0% Shareholders' equity 5,772,642 56% 5,698,960 59%

--------------- --------------

Total liabilities and shareholders' equity 10,357,302 100% 9,736,575 100%

--------------- --------------

----------------------------- 2003 ----------------------------- December 31 September 30 -----------------------------

ASSETS Current assets: Cash and cash equivalents 503,946 8% 174,012 3% Trade accounts and notes receivable 1,140,732 18% 933,727 17% Inventories 337,175 5% 355,969 6% Other receivables and assets 138,688 2% 151,863 3% Total current assets 2,120,541 33% 1,615,571 29%

-------------- --------------

Investments and other non-current assets 168,851 3% 122,699 2% Property, plant and equipment, net 3,947,407 61% 3,523,203 64% Other Intangible assets, net 222,479 3% 229,187 4%

-------------- --------------

Total assets 6,459,278 100% 5,490,660 100%

-------------- -------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:

Short-term debt 609,662 9% 1,195,356 22% Trade accounts and notes payable 1,426,947 22% 1,199,976 22% Other payables and accrued liabilities 197,504 3% 111,962 2%

-------------- --------------

Total current liabilities 2,234,113 35% 2,507,294 46%

-------------- --------------

Long-term debt 1,310,164 20% 590,654 11% Reserves for pension 20,965 0% 26,344 0%

-------------- --------------

Total liabilities 3,565,242 55% 3,124,292 57% -------------- --------------

Common Stock and additional paid-in capital 1,450,000 22% 1,450,000 26% Accumulated result 1,436,229 22% 892,275 16% Capital adjustment 7,806 0% 24,093 0% Shareholders' equity 2,894,036 45% 2,366,368 43%

-------------- --------------

Total liabilities and shareholders' equity 6,459,278 100% 5,490,660 100%

-------------- --------------

-- 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)

--------------------- --------------------- 2004 2003 ------------------------------------------- Three Twelve Three Twelve months months months months ended ended ended ended Dec. 31 Dec. 31 Dec. 31 Dec. 31 ------------------------------------------- Net Income 35,421 1,655,445 543,956 1,019,273 Depreciation 372,864 1,228,190 272,619 960,388 Amortization 11,318 45,048 11,191 44,246 Others (74,078) (47,211) 26,400 46,149 --------- ----------- --------- ----------- Operating Cash Flow 345,526 2,881,473 854,166 2,070,056 Net Change in Working Capital (198,454) (155,339) (75,750) (413,356) Change in accounts receivable (147,078) 184,547 (189,851) (619,883) Change in inventory (118,237) (468,114) (14,182) 35,077 Change in accounts payable 93,951 179,409 97,112 186,193 Change in others (27,090) (51,181) 31,171 (14,743) --------- ----------- --------- ----------- Cash Flow from Operation 147,072 2,726,134 778,416 1,656,700 Capital Expenditures (472,691) (3,892,757) (543,709) (1,443,880) Delivery (467,223) (3,879,494) (539,741) (1,434,780) Intangible assets investment (5,710) (7,884) (2,566) (5,204) Others 241 (5,380) (1,402) (3,896) --------- ----------- --------- ----------- Cash Flow before Financing(325,619) (1,166,623) 234,707 212,820 Cash Flow from Financing Activities 477,014 835,066 95,227 220,820 Proceeds from IPO (1,999) 1,188,850 0 0 --------- ----------- --------- ----------- Net Cash Flow 149,396 857,293 329,934 433,640 --------- ----------- --------- -----------

-- 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)

------------------------------- 2004 ------------------------------- Three months Twelve months ended Dec. 31 ended Dec. 31 --------------------------------

REVENUE 1,932,732 100% 8,324,794 100% Cost of goods sold (1,822,573)-94% (6,246,240)-75%

--------------- ---------------

GROSS PROFIT 110,159 6% 2,078,554 25%

Selling, general & administrative (95,640) -5% (318,449) -4%

--------------- ---------------

OPERATING INCOME 14,519 1% 1,760,105 21%

Interest income 6,966 0% 19,964 0% Interest expense (17,217) -1% (58,049) -1% Foreign exchange gain (loss),net 37,172 2% 19,125 0% Others, net (184) 0% 673 0% --------------- --------------- Total other income (expense) 26,737 1% (18,287) 0% --------------- ---------------

INCOME BEFORE INCOME TAX EXPENSE 41,256 2% 1,741,818 21%

Income tax expense 14,297 1% (38,131) 0%

--------------- --------------- NET INCOME(LOSS) 55,553 3% 1,703,687 20% --------------- ---------------

------------------------------- 2003 ------------------------------- Three months Twelve months ended Dec. 31 ended Dec. 31 -------------------------------

REVENUE 2,135,145 100% 6,098,354 100% Cost of goods sold (1,495,618)-70% (4,741,592)-78%

--------------- ---------------

GROSS PROFIT 639,527 30% 1,356,762 22%

Selling, general & administrative (90,127) -4% (234,555) -4%

--------------- ---------------

OPERATING INCOME 549,400 26% 1,122,207 18%

Interest income 1,935 0% 6,393 0% Interest expense (22,876) -1% (83,619) -1% Foreign exchange gain (loss),net (25,759) -1% 15,015 0% Others, net (1,666) 0% 1,081 0% --------------- --------------- Total other income (expense) (48,366) -2% (61,130) -1% --------------- ---------------

INCOME BEFORE INCOME TAX EXPENSE 501,034 23% 1,061,077 17%

Income tax expense (21,132) -1% (54,574) -1%

--------------- --------------- NET INCOME(LOSS) 479,902 22% 1,006,503 17% --------------- ---------------

-- 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)

------------------------------ 2004 ------------------------------ December 31 September 30 ------------------------------

ASSETS Current assets: Cash and cash equivalents 1,361,239 13% 1,211,843 13% Accounts receivable (Trade, others) 954,316 9% 890,754 9% Inventories 804,117 8% 691,145 7% Other current assets 279,256 3% 125,323 1% Total current assets 3,398,928 33% 2,919,065 30%

--------------- --------------

Investments and other non-current assets 262,160 3% 311,099 3% Property, plant and equipment, net 6,563,977 64% 6,360,059 66% Intangible assets, net 37,435 0% 33,335 0%

--------------- --------------

Total assets 10,262,500 100% 9,623,558 100%

--------------- -------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:

Short-term debt 696,212 7% 632,052 7% Trade accounts and notes payable 583,117 6% 491,903 5% Other payables and accrued liabilities 1,294,755 13% 1,219,145 13%

--------------- --------------

Total current liabilities 2,574,084 25% 2,343,100 24%

--------------- --------------

Long-term debt 1,993,150 19% 1,657,916 17% Other non-current liabilities 31,964 0% 46,249 0%

--------------- --------------

Total liabilities 4,599,198 45% 4,047,265 42%

Common Stock & APIC 2,628,519 26% 2,629,530 27% Retained Earnings 3,001,042 29% 2,945,489 31% Capital adjustment 33,742 0% 1,274 0% Shareholders' equity 5,663,303 55% 5,576,293 58%

--------------- --------------

Total liabilities and shareholders' equity 10,262,500 100% 9,623,558 100%

--------------- --------------

----------------------------- 2003 ----------------------------- December 31 September 30 -----------------------------

ASSETS Current assets: Cash and cash equivalents 504,014 8% 174,012 3% Accounts receivable (Trade, others) 1,159,767 18% 973,855 18% Inventories 335,921 5% 354,518 7% Other current assets 146,594 2% 133,642 2% Total current assets 2,146,296 34% 1,636,027 30%

-------------- --------------

Investments and other non-current assets 193,116 3% 191,881 4% Property, plant and equipment, net 3,974,315 63% 3,552,620 66% Intangible assets, net 29,260 0% 26,241 0%

-------------- --------------

Total assets 6,342,987 100% 5,406,769 100%

-------------- -------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:

Short-term debt 625,675 10% 1,214,027 22% Trade accounts and notes payable 403,522 6% 342,336 6% Other payables and accrued liabilities 1,223,053 19% 966,750 18%

-------------- --------------

Total current liabilities 2,252,250 36% 2,523,113 47%

-------------- --------------

Long-term debt 1,318,581 21% 591,886 11% Other non-current liabilities 20,965 0% 26,345 0%

-------------- --------------

Total liabilities 3,591,796 57% 3,141,344 58%

Common Stock & APIC 1,450,000 23% 1,450,000 27% Retained Earnings 1,297,355 20% 817,453 15% Capital adjustment 3,836 0% (2,028) 0% Shareholders' equity 2,751,191 43% 2,265,425 42%

-------------- --------------

Total liabilities and shareholders' equity 6,342,987 100% 5,406,769 100%

-------------- --------------

-- 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)

--------------------- --------------------- 2004 2003 --------------------- --------------------- Three Twelve Three Twelve months months months months ended ended ended ended Dec. 31 Dec. 31 Dec. 31 Dec. 31 ------------------------------------------- Cash flows from operating activities: Net income 55,553 1,703,687 479,902 1,006,503 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 374,429 1,224,118 270,178 956,997 Amortization 1,658 6,405 1,564 5,406 Others, net (61,180) (65,823) 24,146 46,104 Change in operating assets and liabilities: Change in A/R (67,573) 204,970 (167,422) (607,480) Change in inventory (118,316) (468,196) 18,597 62,288 Change in A/P 93,183 181,421 67,544 152,743 Change in others (105,370) (43,641) 73,377 49,278 --------- ----------- --------- ----------- Net cash provided by operating activities 172,384 2,742,941 767,886 1,671,839 --------- ----------- --------- -----------

Cash flows from investing activities: Purchase of property, plant and equipment (469,228) (3,885,650) (528,172) (1,438,230) Proceeds from sales of property, plant and equipment 2,005 6,156 1,120 3,450 Others, net (10,991) (13,263) (5,008) (17,919) --------- ----------- --------- ----------- Net cash used in investing activities (478,214) (3,892,757) (532,060) (1,452,699) --------- ----------- --------- -----------

Cash flows from financing activities: Financing Activities 461,863 819,915 94,569 214,777 New Equity & Others (1,999) 1,188,850 --------- ----------- --------- ----------- Net cash provided by financing activities 459,864 2,008,765 94,569 214,777 --------- ----------- --------- -----------

Effect of exchange rate change on cash and cash equivalents (4,638) (1,724) (393) (209)

--------- ----------- --------- ----------- Net increase (decrease) in cash 149,396 857,225 330,002 433,708 --------- ----------- --------- -----------

-- These financial statements are provided for informational purposes only

LG.Philips LCD Net Income Reconciliation to US GAAP ( In millions of KRW)

-------------------------- 2004 -------------------------- Three Twelve months months ended ended Dec. 31 Dec. 31 -------------------------- Net Income under K GAAP 35,421 1,655,445 US GAAP Adjustments 20,132 48,242 Depreciation of property, plant and equipment (655) (2,706) Amortization of Intellectual Property Rights 9,850 37,501 Adjustment of AR discount loss (206) 1,379 Capitalization of financial interests 4,008 11,709 Inventory Valuation effect of US GAAP Adjustments (110) 1,170 Cash flow hedge account 0 (3,376) Pension expense (788) (2,132) Income tax effect of US GAAP Adjustments (2,179) (5,634) Others 10,212 10,331 -------------------------- Net Income under US GAAP 55,553 1,703,687 --------------------------

-- These financial statements are provided for informational purposes only

--30--VP/ny*

CONTACT: LG.Philips LCD Investor Relations: Jay Hong (Korea), +822-3777-1010 jay.hong@lgphilips-lcd.com or Sloane & Company Investor Relations: Monica Huang (USA), +1-212-446-1874 Mhuang@sloanepr.com or Sloane & Company Media Contacts: Elliot Sloane (USA), +1-212-446-1860 ESloane@sloanepr.com or Edelman Media Contacts: Sue Kim (Korea), + 822-2022-8239 Sue.kim@edelman.com

KEYWORD: SOUTH KOREA INTERNATIONAL ASIA PACIFIC INDUSTRY KEYWORD: HARDWARE COMPUTERS/ELECTRONICS MANUFACTURING EARNINGS CONFERENCE CALLS SOURCE: LG.Philips LCD

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