Edgar Filing: LG Display Co., Ltd.

Form 6-K

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 March 2012

LG Display Co., Ltd.

(Translation of Registrant’s name into English)

LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 150-721,

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

ANNUAL REPORT

(From January 1, 2011 to December 31, 2011)

THIS IS A TRANSLATION OF THE ANNUAL REPORT ORIGINALLY PREPARED IN KOREAN AND IS IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SUPERVISORY COMMISSION.

IN THE TRANSLATION PROCESS, SOME PARTS OF THE REPORT WERE REFORMATTED, REARRANGED OR SUMMARIZED AND CERTAIN NUMBERS WERE ROUNDED FOR THE CONVENIENCE OF READERS.

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A CONSOLIDATED BASIS IN ACCORDANCE WITH KOREAN INTERNATIONAL FINANCIAL REPORTING STANDARDS, OR K-IFRS, WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES IN THIS DOCUMENT.

Contents



1.	Company		4
	A.	Name and contact information	4
	B.	Domestic credit rating	4
	C.	Capitalization	5
	D.	Voting rights	6
	E.	Dividends	6

2.	Business		7
	A.	Business overview	7
	B.	Industry	7
	C.	New businesses	9

3.	Major Products and Raw Materials		12
	A.	Major products in 2011	12
	B.	Average selling price trend of major products	12
	C.	Major raw materials	12

4.	Production and Equipment		13
	A.	Production capacity and output	13
	B.	Production performance and utilization ratio	13
	C.	Investment plan	13

5.	Sales		14
	A.	Sales performance	14
	B.	Sales route and sales method	14

6.	Market Risks and Risk Management		15
	A.	Market risks	15
	B.	Risk management	15

7.	Derivative Contracts		15
	A.	Currency risks	15
	B.	Interest rate risks	16

8.	Major Contracts		16

9.	Research & Development		16
	A.	Summary of R&D expenses	16
	B.	R&D achievements	17


10.	Intellectual Property		27

11.	Environmental Matters		28

12.	Financial Information		29
	A.	Financial highlights (Based on consolidated K-IFRS)	29
	B.	Financial highlights (Based on separate K-IFRS)	30
	C.	Consolidated subsidiaries	31
	D.	Status of equity investment	32

13.	Audit Information		33
	A.	Audit service	33
	B.	Non-audit service	33

14.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		34
	A.	Risk relating to forward-looking statements	34
	B.	Financial condition and results of operations	34

15.	Board of Directors		38
	A.	Independence of directors	38
	B.	Members of the board of directors	39
	C.	Committees of the board of directors	40

16.	Information Regarding Shares		40
	A.	Total number of shares	40
	B.	Shareholder list	40

17.	Directors and Employees		41
	A.	Directors	41
	B.	Employees	42

Attachment: 1. Financial Statements in accordance with K-IFRS

1. Company

A. Name and contact information

The name of our company is “EL-GI DISPLAY CHUSIK HOESA,” which shall be “LG Display Co., Ltd.” in English.

Our principal executive office is located at LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 150-721, Republic of Korea, Republic of Korea, and our telephone number is +82-2-3777-1114. Our website address is http://www.lgdisplay.com.

B. Domestic credit rating


Subject instruments	Month of rating	Credit rating	Rating agency (Rating range)
Commercial Paper	January 2006	A1	National Information & Credit Evaluation, Inc. (A1 ~ D)
	June 2006
	December 2006
	June 2007
	December 2007
	September 2008
	December 2008
	June 2006	A1	Korea Investors Service, Inc. (A1 ~ D)
	January 2007
	June 2007
	December 2007
	September 2008

Corporate Debenture	June 2006	AA-	National Information & Credit Evaluation, Inc. (AAA ~ D)
	December 2006	A+
	June 2007
	September 2008
	July 2009	AA-
	October 2009	AA-
	February 2010
	May 2010
	December 2010
	July 2011
	June 2006	AA-	Korea Investors Service, Inc. (AAA ~ D)
	January 2007	A+
	June 2007
	September 2008


July 2009	AA-
December 2009
February 2010
May 2010
August 2010
February 2011
April 2011
August 2011
October 2011
October 2009	AA-	Korea Ratings, Inc. (AAA ~ D)
December 2009
August 2010
December 2010
February 2011
April 2011
July 2011
October 2011

C. Capitalization

(1) Change in capital stock (as of December 31, 2011)

(Unit: Won, Share)


Date	Description	Change in number of common shares	Face amount per share
July 23, 2004	Offering ⁽¹⁾	33,600,000	5,000
September 8, 2004	Follow-on offering ⁽²⁾	1,715,700	5,000
July 27, 2005	Follow-on offering ⁽³⁾	32,500,000	5,000

(1)	ADSs offering: 24,960,000 shares (US$30 per share, US$15 per ADS) / Initial public offering in Korea: 8,640,000 shares ((Won)34,500 per share)

(2)	ADSs offering: 1,715,700 shares ((Won)34,500 per share) pursuant to the exercise of greenshoe option by the underwriters

(3)	ADSs offering: 32,500,000 shares (US$42.64 per share, US$21.32 per ADS)

(2) Convertible bonds (as of December 31, 2011)

(Unit: In millions of Won, Share)


Issue date:		April 18, 2007
Maturity:		April 18, 2012
Face amount: ⁽¹⁾		(Won)513,480
Conversion shares:		Registered common shares
Conversion period:		Convertible into shares of common stock during the period from April 19, 2008 to April 3, 2012
Conversion price: ⁽²⁾		(Won)47,892 per share
Outstanding	Face amount:	(Won)61,618
	Number of convertible shares: ⁽²⁾	1,286,594 shares, assuming full conversion
Remarks:		- Registered form
		- Listed on Singapore Exchange

(1)	Face amount translated from US$550 million at the noon buying rate of the Federal Reserve Bank of New York in effect on April 10, 2007 (which was the date the convertible bond purchase agreement was entered into), which was (Won)933.6 = US$1.00.

(2)

Conversion price was adjusted from (Won)49,070 to (Won)48,760 and the number of convertible shares was adjusted from 10,464,234 to 10,530,762 following the approval by the shareholders of a cash dividend of (Won)750 per share at the annual general meeting of shareholders on February 29, 2008. Conversion price was further adjusted from (Won)48,760 to (Won)48,251 and the number of shares issuable upon conversion was adjusted from 10,530,762 to 10,641,851 following the approval by the shareholders of a cash dividend of (Won)500 per share at the annual general meeting of shareholders on March 13, 2009. Conversion price was further adjusted from (Won)48,251 to (Won)48,075 and the number of shares issuable upon conversion was adjusted from 10,641,851 to 10,680,811 following the approval by the shareholders of a cash dividend of (Won)500 per share at the annual general meeting of shareholders on March 12, 2010. In April 2010, certain holders of our US$550 million convertible bonds due 2012 exercised their put option for an aggregate principal amount of US$484 million and were repaid at 109.75% of their principal amount. The remaining US$66 million matures in 2012 at 116.77% of their principal amount. Accordingly, the number of shares issuable upon conversion changed from 10,680,811 to 1,281,697. Conversion price was further adjusted from (Won)48,075 to (Won)47,892 and the number of shares issuable upon conversion was adjusted from 1,281,697 to 1,286,594 following the approval by the shareholders of a cash dividend of (Won)500 per share at the annual general meeting of shareholders on March 11, 2011.

D. Voting rights (as of December 31, 2011)

(Unit: share)



Description	Number of shares
1. Shares with voting rights (A—B):		357,815,700
A. Total shares issued:		357,815,700
B. Shares without voting rights:		—
2. Shares with restricted voting rights		—

Total number of shares with voting rights (1—2):		357,815,700

E. Dividends

At the annual general meeting of shareholders on March 9, 2012, we did not declare a cash dividend to our shareholders.

Dividends during the recent three fiscal years


Description (unit)	2011			2010			2009
Par value (Won)		5,000			5,000			5,000
Profit (loss) for the period / Net income (million Won)		(991,032	)⁽³⁾		1,002,648	⁽³⁾		1,067,947	⁽⁴⁾
Earnings per share (Won) ⁽¹⁾		(2,770	)		2,802			2,985
Total cash dividend amount (million Won)		—			178,908			178,908
Total stock dividend amount (million Won)		—			—			—
Cash dividend payout ratio (%)		—			17.8			16.8
Cash dividend yield (%) ⁽²⁾		—			1.3			1.3
Stock dividend yield (%)		—			—			—
Cash dividend per share (Won)		—			500			500
Stock dividend per share (share)		—			—			—

(1)	Earnings per share is based on par value of (Won)5,000 per share and is calculated by dividing net income by weighted average number of common stock.

(2)

Cash dividend yield is the percentage that is derived by dividing cash dividend by the arithmetic average of the daily closing prices of our common stock during the one-week period ending two trading days prior to the closing of the register of shareholders for the purpose of determining the shareholders entitled to receive annual dividends.

(3)	Profit for the period based on separate K-IFRS.

(4)	Net income based on non-consolidated Korean GAAP.

2. Business

A. Business overview

We were incorporated in February 1985 under the laws of the Republic of Korea. LG Electronics and LG Semicon transferred their respective LCD business to us in 1998, and since then, our business has been focused on the research, development, manufacture and sale of display panels, applying technologies such as TFT-LCD, LTPS-LCD and OLED.

As of December 31, 2011, we operated TFT-LCD and OLED production facilities in Paju and Gumi, Korea and a LCD research center in Paju, Korea. We have also established subsidiaries in the Americas, Europe and Asia.

As of December 31, 2011, our business consisted of the manufacture and sale of LCD and OLED panels and monitor products. Because our non-LCD business represented an extremely small portion of our assets and revenues as of and for the year ended December 31, 2011, we have included them as part of our LCD reporting business segment.

2011 Financial highlights by business (based on K-IFRS)

(Unit: In billions of Won)


2011	LCD business
Sales Revenue		24,291
Gross Profit		1,210
Operating Profit (Loss)		(924	)

B. Industry

(1) Industry characteristics and growth potential

TFT-LCD technology is one of the widely used technologies in the manufacture of flat panel displays, and the demand for flat panel displays is growing. The flat panel display industry is characterized by entry barriers due to rapidly evolving technology, capital-intensive characteristics, and the significant investments required to achieve economies of scale, among other factors. There is intense competition among the players in the industry, and the industry’s production capacity, including ours, is continually increasing.

The demand for LCD panels for notebook computers and desktop monitors has grown, to a degree, in tandem with the growth in the information technology industry. The demand for LCD panels for television sets has been growing as digital broadcasting is becoming more common and as LCD television has come to play an important role in the digital display market. In addition, markets for small- to medium-sized LCD panels, such as those used in mobile phones (including smartphones), smartbooks, medical applications, automobile navigation systems and e-books, among others, have shown continued growth.

The average selling prices of LCD panels may continue to decline with time irrespective of general business cycles as a result of, among other factors, technology advancements and cost reductions.

(2) Cyclicality

The TFT-LCD business is highly cyclical. In spite of the increased demand for products, this industry has experienced periodic volatility caused by imbalances between supply and demand due to capacity expansion within the industry.

Intense competition and expectations of demand growth may lead panel manufacturers to invest in manufacturing capacity on similar schedules, resulting in a surge in capacity when production is ramped up at new fabrication facilities.

During such surges in production capacity, the average selling prices of display panels may decline. Conversely, demand surges and inability of supply to meet such demand may lead to price increases.

(3) Market conditions

The TFT-LCD industry is highly competitive due largely to additional capacity expansion driven by TFT-LCD panel makers.

Most TFT-LCD panel makers are located in Asia.

Korea: LG Display, Samsung Electronics, Samsung Mobile Display, Hydis Technologies, etc.

Taiwan: AU Optronics, Chimei Innolux, Chunghwa Picture Tubes, HannStar Display, etc.

Japan: Sharp, Panasonic LCD, etc.

China: SVA-NEC, Beijing BOE Optronics Technology, etc.

(4) Market shares

Our worldwide market share for large-sized TFT-LCD panels based on revenue is as follows:


	2011⁽¹^) (4)	2010 ^(2) (4)	2009 ^(3) (5)
Panels for Notebook Computers ⁽⁶⁾	34.9%	33.2%	30.3%
Panels for Monitors	28.0%	26.5%	23.9%
Panels for Televisions	25.3%	23.4%	24.4%
Total	27.7%	25.4%	25.2%

(1)	Source: 2011 Q4 DisplaySearch Quarterly Large-Area TFT LCD Shipment Report (advanced version with LED backlight).

(2)	Source: 2010 Q4 DisplaySearch Large-Area TFT LCD Shipment Report (advanced version with LED backlight).

(3)	Source: 2009 Q4 DisplaySearch Large-Area TFT LCD Shipment Report.

(4)	Based on TFT-LCD panels that are 9 inches or larger.

(5)	Based on TFT-LCD panels that are 10 inches or larger.

(6)	Includes panels for netbooks.

(5) Competitiveness

Our ability to compete successfully depends on factors both within and outside our control, including product pricing, our relationship with customers, successful and timely investment and product development, cost competitiveness, success in marketing to our end-brand customers, component and raw material supply costs, foreign exchange rates and general economic and industry conditions.

In order to compete effectively, it is critical to be cost competitive and maintain stable and long-term relationships with customers which will enable us to be profitable even in a buyer’s market.

A substantial portion of our sales is attributable to a limited number of end-brand customers and their designated system integrators. The loss of these end-brand customers, as a result of customers entering into strategic supplier arrangements with our competitors or otherwise, would result in reduced sales.

Developing new products and technologies that can be differentiated from those of our competitors is critical to the success of our business. It is important that we take active measures to protect our intellectual property internationally by obtaining patents and undertaking monitoring activities in our major markets. It is also necessary to recruit and retain experienced key managerial personnel and skilled line operators.

As a leading technology innovator in the display industry, we continue to focus on delivering differentiated value to our customers by developing new technologies and products, including in the categories of 3D, touch screens and next generation displays. With respect to 3D technology, we have commenced mass production of high definition 3D panels with reduced degrees of “crosstalk,” or the degree of 3D image overlapping, of less than 1% (which is less than what the human eye can perceive). We have also acquired the technical skills and have established a supply chain management system that enables us to provide one-stop solutions to our customers with respect to touch module products. In addition, we have shown that we are technologically a step ahead of the competition by developing products such as 10.1-inch flexible LCDs, 2.6 mm thin televisions (the thinnest in the world at the time) and 19-inch flexible e-papers. We are a leader in large OLED panel display technology, as demonstrated by our 55-inch OLED display panel unveiled at the Consumer Electronics Show in Las Vegas in January 2012, which was the largest OLED panel at the time.

Moreover, we entered into long-term sales contracts with major global firms, including those in the United States and Japan, to secure customers and expand partnerships for technology development.

C. New businesses

In order to meet the rapidly increasing market demand for large TFT-LCD panels, we successfully commenced mass production at P83, an eighth generation fabrication line located in our P8 facility, in March 2011. In January 2011, we also decided to invest in a new eighth generation production facility, P9.

We also plan to strengthen our market position in future display technologies by strengthening our OLED business, accelerating the development of flexible display technologies and maintaining our leadership position in the LED backlight LCD market.

We are making an effort to increase our competitiveness, including in the LCD component parts market, by forming cooperative relationships with suppliers and purchasers of our products. As part of this effort, in March 2005, we established a joint venture company, Paju Electric Glass Co., Ltd., with Nippon Electric Glass Co., Ltd. We invested (Won)14.4 billion in return for a 40% interest in Paju Electric Glass Co., Ltd. In November 2010 and April 2011, we invested an additional (Won)14.8 billion and (Won)4.4 billion, respectively, in Paju Electric Glass Co., Ltd. but the additional investments did not change our percentage interest in Paju Electric Glass Co., Ltd. In July 2008, we purchased 6,850,000 shares of common stock of New Optics Ltd. at a purchase price of (Won)9.7 billion, and in February 2010, we purchased an additional 1,000,000 shares of common stock of New Optics at a purchase price of (Won)2.5 billion. In addition, in February 2009, we purchased 3,000,000 shares of common stock of LIG ADP Co., Ltd. (formerly ADP Engineering Co., Ltd.) at a purchase price of (Won)6.3 billion. In May 2009, we purchased 6,800,000 shares of common stock of Wooree LED Co., Ltd. at a purchase price of (Won)11.9 billion. In December 2009, we purchased 420,000 global depositary shares representing 420,000 shares of Prime View International Co., Ltd’s common stock at a purchase price of US$9.9 million. In January 2010, we purchased 10.8 million shares of Can Yang Investment Limited representing a 15% interest at a purchase price of US$10.8 million. In October 2010, we invested an additional US$4.5 million and acquired 4.8 million additional shares of Can Yang Investment Limited.

In October 2008, we established a joint venture company, Suzhou Raken Technology Ltd., with AmTRAN Technology Co., Ltd., a Taiwan corporation. We invested US$10.4 million in return for a 51% interest in Suzhou Raken Technology Ltd. Suzhou Raken Technology Ltd. will supply both parties with TFT-LCD modules and TFT-LCD televisions. Through the establishment of this joint venture, we are able to further expand our customer base by securing a stable long-term panel dealer. In 2009 and 2010, we invested an additional US$58.7 million and US$14.5 million, respectively, in Suzhou Raken Technology Ltd., but the additional investments did not change our percentage interest in Suzhou Raken Technology Ltd.

As part of our strategy to expand our production capacity overseas, we signed an investment agreement and a joint venture agreement in November 2009 with the City of Guangzhou, China, to build an eighth-generation panel fabrication facility in China.

In December 2009, certain LG affiliates and we entered into a joint venture investment agreement and established a joint venture company, Global OLED Technology LLC, for purposes of managing the patent assets relating to OLED technology that we acquired from Eastman Kodak Company in December 2009. As of December 31, 2009, we had invested (Won)72.3 billion in return for a 49% equity interest in the joint venture company. In June 2010, we sold (Won)19.0 billion worth of our equity interest in the joint venture company. After such sale, our equity interest was reduced to 32.73%.

In December 2009, we acquired a 30.6% limited partnership interest in LB Gemini New Growth Fund No. 16. Under the limited partnership agreement, we agreed to invest a total amount of (Won)30 billion in the fund, and as of December 31, 2010, we had invested (Won)8.3 billion in the fund. By becoming a limited partner of this fund, our aim is to seek direct investment opportunities as well as to receive benefits from the investment. In February 2011, we received a distribution of (Won)1.4 billion from the fund, and in March and April 2011, we invested an additional (Won)1.9 billion and (Won)3.1 billion, respectively, in the fund. In June 2011, we received a further distribution of (Won)0.7 billion as return of principal and (Won)0.9 billion as dividends and we invested an additional (Won)1.2 billion in the fund. In December 2011, we invested an additional (Won)2.0 billion in the fund. The additional investments did not change our investment commitment amount of (Won)30 billion or our limited partnership interest in the fund, which remained at 30.6%.

In order to establish a production base for LCD modules, LCD television sets and LCD monitors, we entered into a joint investment agreement with Top Victory Investment Ltd. in January 2010 and established L&T Display Technology (Xiamen) Ltd. and L&T Display Technology (Fujian) Ltd. in Xiamen and Fujian, China, respectively. We invested (i) W7.1 billion and acquired a 51% equity interest in L&T Display Technology (Xiamen) Ltd. and (ii) (Won)10.1 billion and acquired a 51% equity interest in L&T Display Technology (Fujian) Ltd.

In May 2010, we completed the acquisition of the LCD module division of LG Innotek Co., Ltd. Through this acquisition, we expect to improve our module manufacturing process and simplify our supply chain which will increase our efficiency and competitiveness.

In August 2010, in order to strengthen our competitiveness in the LED backlight LCD market, we entered into a joint venture with Everlight Electronics Co., Ltd. and AmTRAN Technology Co., Ltd. and established Eralite Optoelectronics (Jiangsu) Co., Ltd., a company that specializes in LED packaging and manufacturing, in Suzhou, China. We invested US$4 million and acquired a 20% equity interest in Eralite Optoelectronics (Jiangsu) Co., Ltd.

In September 2010, in order to strengthen our OLED business, we acquired a 20% equity interest in YAS Co., Ltd., which develops and manufactures OLED deposition equipment components, at a purchase price of (Won)10 billion.

In November 2010, in order to strengthen our e-book business, we acquired a 100% equity interest in Image & Materials, Inc., a company that develops and manufactures e-book deposition equipment components, at a purchase price of (Won)35 billion. In each of June 2011, September 2011 and February 2012, we invested an additional (Won)3.0 billion in Image & Materials, Inc.

In October 2010, in order to strengthen our competitiveness in the e-book market, we entered into a joint venture with Iriver Ltd. and established L&I Electronics Technology (Dongguan) Limited, a company that specializes in e-book manufacturing, in Dongguan, China. We invested US$2.6 million and acquired a 51% equity interest in L&I Electronics Technology (Dongguan) Limited.

In November 2010, in order to build Backlight-Module-System (BMS) lines that would help differentiate our technical skills from those of our competitors and increase our cost competitiveness, we entered into a joint venture with Compal Electronics, Inc., a Taiwanese company, and established LUCOM Display Technology (Kunshan) Ltd. in Kunshan, China. We invested US$2.3 million and acquired a 51% equity interest in LUCOM Display Technology (Kunshan) Ltd. In February and April 2011, we invested an additional US$ 3.1 million and US$2.3 million, respectively, in LUCOM Display Technology (Kunshan) Ltd., but the additional investments did not change our percentage interest in LUCOM Display Technology (Kunshan) Ltd.

In April 2011, in order to enhance the product quality and assist the local development of coaters, a component used in our TFT-LCD products, we invested (Won)20 billion and acquired a 16.6% interest in Narae Nanotech Corporation, a Korean equipment manufacturer. In June 2011, we invested an additional (Won)10.0 billion and acquired a further 7.7% interest in Narae Nanotech Corporation. As of December 31, 2011, we held a 23% equity interest in Narae Nanotech Corporation.

In December 2011, in order to improve our cost competitiveness with respect to the glass substrate etching stage of our TFT-LCD panel manufacturing process, we invested (Won)10.6 billion and acquired a 20.3% interest in Avatec Co., Ltd., a third party glass substrate etching processor.

In December 2011, in order to expand our module production capacity, we established LG Display U.S.A. Inc. in Texas, United States, and LG Display Reynosa S.A. de C.V. in Reynosa, Mexico. We invested in the form of paid-in capital (Won)12.4 billion and (Won)9.2 billion in LG Display U.S.A. Inc. and LG Display Reynosa S.A. de C.V., respectively. We currently own a 100% interest in LG Display U.S.A. Inc. and a 99% interest in LG Display Reynosa S.A. de C.V. LG Display U.S.A. Inc. owns the remaining 1% interest in LG Display Reynosa S.A. de C.V.

3. Major Products and Raw Materials

A. Major products in 2011

We manufacture TFT-LCD panels, of which a significant majority is exported overseas.

(Unit: In billions of Won)

Business

area

Sales

Type

Items (Market)

Usage

Major

trademark

Sales (%)

TFT-LCD

Product/

Service/

Other Sales

TFT-LCD

(Overseas ⁽ ¹⁾)

Panels for Notebook Computer,

Monitor, Television, etc

LG Display

22,328

(91.9%)

TFT-LCD

(Korea ⁽ ¹⁾)

Panels for Notebook Computer,

Monitor, Television, etc

LG Display

1,963

(8.1%)

Total

24,291

(100%)

-	Period: January 1, 2011 ~ December 31, 2011.

(1)	Based on ship-to-party.

B. Average selling price trend of major products

The average selling price of LCD panels per square meter of net display area in the fourth quarter of 2011 decreased by 3% from the third quarter of 2011. There is no assurance that the average selling prices of LCD panels will not fluctuate in the future due to changes in supply and demand.

(Unit: US$ / m²)


Description	2011 Q4		2011 Q3		2011 Q2		2011 Q1
TFT-LCD panel ⁽¹^)(2)(3)		684		705		747		708

(1)	Quarterly average selling price per square meter of net display area shipped.

(2)	Excludes semi-finished products in the cell process.

C. Major raw materials

Prices of major raw materials depend on fluctuations in supply and demand in the market as well as on change in size and quantity of raw materials due to the increased production of large-sized panels.

(Unit: In billions of Won)


Business Area	Purchase type	Items	Usage	Purchase price ⁽¹⁾		Ratio (%)			Suppliers
TFT-LCD	Raw Materials	Glass	LCD panel manufacturing		3,489		21.60	%	Samsung Corning Precision Glass Co., Ltd., Nippon Electric Glass Co., Ltd., etc.
		Backlight			5,087		31.50	%	Heesung Electronics Ltd., etc.
		Polarizer			2,483		15.38	%	LG Chem, etc.
		Others			5,090		31.52	%	-
Total					16,149		100	%	-

-	Period: January 1, 2011 ~ December 31, 2011.

(1)	Based on total cost for purchase of raw materials which includes manufacturing and development costs, etc.

4. Production and Equipment

A. Production capacity and output

(1) Production capacity

The table below sets forth the production capacity of our Gumi and Paju facilities in the periods indicated.

(Unit: 1,000 Glass sheets)

Business area

Items

Business place

2011 ⁽¹⁾

2010 ⁽¹⁾

2009 ⁽¹⁾

TFT-LCD

Gumi, Paju

8,376

7,509

6,219

(1)	Calculated based on the maximum monthly input capacity (based on glass input substrate size for eighth generation glass sheets) during the year multiplied by the number of months in a year (i.e., 12 months).

(2)	Production output

The table below sets forth the production output of our Gumi and Paju facilities in the periods indicated.

(Unit: 1,000 Glass sheets)


Business area	Items		Business place		2011		2010		2009
TFT-LCD		TFT-LCD		Gumi, Paju		6,850		6,490		5,231

-	Based on glass input substrate size for eighth generation glass sheets.

B. Production performance and utilization ratio

(Unit: Hours)


Business place (area)	Available working hours of 2011	Actual working hours of 2011	Average utilization ratio
Gumi (TFT-LCD)	8,760 ⁽¹⁾ (365 days) ⁽²⁾	8,678 ⁽¹⁾ (362 days) ⁽²⁾	99.1%
Paju (TFT-LCD)	8,406 ⁽¹⁾ (350 days) ⁽²⁾	7,842 ⁽¹⁾ (327 days) ⁽²⁾	93.3%

(1)	Based on the assumption that all working hours in a day (i.e., 24 hours) have been fully utilized.

(2)	No. of days are calculated by averaging the no. of working days for each facility. For Paju, includes facilities that commenced production in March 2011.

C. Investment plan

In connection with our strategy to expand our TFT-LCD production capacity, we incurred capital expenditures of approximately W4.1 trillion in 2011 and estimate that we will incur capital expenditures on a cash out basis of approximately (Won)4 trillion in 2012. Such amount is subject to change depending on business conditions and market environment.

5. Sales

A. Sales performance

(Unit: In billions of Won)


Business area	Sales types	Items (Market)		2011		2010		2009
TFT-LCD	Products, etc.	TFT-LCD	Overseas ⁽¹⁾		22,328		23,806		18,833
			Korea ⁽ ¹⁾		1,963		1,706		1,205
			Total		24,291		25,512		20,038

(1)	Based on ship-to-party.

B. Sales route and sales method

(1) Sales organization

As of December 31, 2011, each of our IT Business Unit, Television Business Unit and Mobile/OLED Business Unit had individual sales and customer support functions.

Sales subsidiaries in the United States, Germany, Japan, Taiwan, China and Singapore perform sales activities and provide local technical support to customers.

(2) Sales route

Sales of our products take place through one of the following two routes:

LG Display HQ and overseas manufacturing subsidiaries g Overseas sales subsidiaries (USA/Germany/Japan/Taiwan/China/Singapore), etc. g System integrators and end-brand customers g End users

LG Display HQ and overseas manufacturing subsidiaries g System integrators and end-brand customers g End users

(3) Sales methods and sales terms

Direct sales and sales through overseas subsidiaries, etc. Sales terms are subject to change depending on the fluctuation in the supply and demand of LCD panels.

(4) Sales strategy

To secure stable sales to major personal computer makers and leading consumer electronics makers globally. To increase sales of high-end notebook computer products (including smartbooks, IPS and slim and narrow bezel notebook computer products), to strengthen sales of the high-end monitor segment (such as LED, IPS, slim and narrow bezel and 3D monitors), to lead in the large and wide television market (including the LED television market) and to continually increase our market share in the 3D television market by utilizing film patterned retarder technology.

In the small- to medium-sized products segment, which is centered on high-end products applying IPS technology, to strengthen our business portfolio by developing a diverse range of products, such as mobile phone (including smartphone), smartbook, car navigation, e-book, industrial products (including aviation and medical equipment), etc.

(5) Purchase orders

Customers generally place purchase orders with us one month prior to delivery. Our customary practice for procuring orders from our customers and delivering our products to such customers is as follows:

Receive order from customer (overseas sales subsidiaries, etc.) g Headquarter is notified g Manufacture product g Ship product (overseas sales subsidiaries, etc.) g Sell product (overseas sales subsidiaries, etc.)

6. Market Risks and Risk Management

A. Market risks

Our industry continues to experience continued declines in the average selling prices of display panels irrespective of cyclical fluctuations in the industry, and our margins would be adversely impacted if prices decrease faster than we are able to reduce our costs.

The TFT-LCD industry is highly competitive. We have experienced pressure on the prices and margins of our major products due largely to additional industry capacity from panel makers in Korea, Taiwan, China and Japan. Our main competitors in the industry include Samsung Electronics, Samsung Mobile Display, Infovision, Hydis Technologies, AU Optronics, Chimei Innolux, Chunghwa Picture Tubes, HannStar Display, SVA-NEC, Beijing BOE Optronics Technology, Sharp, Hitachi, TMDisplay, Mitsubishi and Panasonic LCD.

Our ability to compete successfully depends on factors both within and outside our control, including product pricing, performance and reliability, successful and timely investment and product development, success or failure of our end-brand customers in marketing their brands and products, component and raw material supply costs, and general economic and industry conditions. We cannot provide assurance that we will be able to compete successfully with our competitors on these fronts and, as a result, we may be unable to sustain our current market position.

Our results of operations are subject to exchange rate fluctuations. To the extent that we incur costs in one currency and generate sales in a different currency, our profit margins may be affected by changes in the exchange rates between the two currencies. Our sales of display panels are denominated mainly in U.S. dollars, whereas our purchases of raw materials are denominated mainly in U.S. dollars and Japanese Yen. Our risk management policy regarding foreign currency risk is to minimize the impact of foreign currency fluctuations on our foreign currency denominated assets and liabilities.

B. Risk management

The average selling prices of display panels have declined in general and could continue to decline with time irrespective of industry-wide cyclical fluctuations. Certain contributing factors for this decline will be beyond our ability to control and manage. However, in anticipation of such price decline we have continued to develop new technologies and have implemented various cost reduction measures. In addition, in order to manage our risk against foreign currency fluctuations, we may from time to time enter into cross-currency interest rate swap contracts and foreign currency forward contracts.

7. Derivative Contracts

A. Currency risks

We are exposed to currency risks on sales, purchases and borrowings that are denominated in currencies other than in Won, our functional currency. These currencies are primarily the U.S. dollar, the Euro, the Japanese Yen and the Chinese Renminbi.

We generally use forward exchange contracts with a maturity of less than one year to hedge against currency risks.

Interest on borrowings is denominated in the currency of the borrowing. Generally, borrowings are denominated in currencies that match the cash flows generated by our underlying operations, primarily in Won, the U.S. dollar, the Japanese Yen and the Chinese Renminbi.

In respect of other monetary assets and liabilities denominated in foreign currencies, we ensure that our net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates, when necessary, to address short-term imbalances. In addition, we also adjust the factoring volumes of foreign currency denominated receivables and utilize usances as means of settling accounts payable relating to capital expenditures for our facilities, in response to currency fluctuations.

B. Interest rate risks

Our exposure to interest rate risks relates primarily to our long term debt obligations. To the extent necessary, we may from time to time enter into interest swap contracts to hedge our interest rate risks. As of December 31, 2011, we had no interest swap contracts outstanding.

8. Major contracts

Our material contracts, other than contracts entered into in the ordinary course of business, are set forth below:


Type of agreement	Name of party	Term	Content
Technology licensing agreement	Semiconductor Energy Laboratory	October 2005 ~	Patent licensing of LCD and OLED related technology
	Fergason Patent Properties	October 2007 ~	Patent licensing of LCD driving technology
	Hewlett-Packard	January 2011 ~	Patent licensing of semi-conductor device technology
Technology licensing/supply agreement	Chunghwa Picture Tubes	November 2007 ~	Patent cross-licensing of LCD technology
	Hannstar Display Corporation	November 2009 ~	Patent cross-licensing of LCD technology
	AU Optronics Corporation	August 2011~	Patent cross-licensing of LCD technology

9. Research & Development

A. Summary of R&D expenses

(Unit: In millions of Won, except percentages)


Items	2011		2010		2009
Material Cost		550,200		616,072		400,467
Labor Cost		365,375		285,212		191,507
Depreciation Expense		217,874		93,365		89,459
Others		180,582		122,619		92,905


Total R&D Expense		1,314,031		1,117,268		774,338
	Selling & Administrative Expenses	248,328		264,073		168,081
Accounting Treatment	Manufacturing Cost	942,015		717,848		505,585
	Development Cost (Intangible Assets)	123,688		135,347		100,672
R&D Expense / Sales Ratio (Total R&D Expense ÷ Sales for the period × 100)		5.4	%	4.4	%	3.8	%

B. R&D achievements

Achievements in 2009

Developments of 15.6-inch, 18.5-inch HD monitors for emerging market

Achieving cost reduction by focusing on basic functions and by applying GIP and DRD

Development of 22-inch WSXGA+ monitor applying White LED backlight

Development of our first environmentally friendly slim model (14.5mm in thickness)

Reduces power consumption by 47% compared to conventional CCFL model by applying White LED backlight

Development of 24-inch WUXGA+ monitor applying GIP

Development of the world’s first monitor applying IPS GIP technology

Increased cost competitiveness by applying 960ch source driver integrated circuits chip, which reduces the number of integrated circuits: 8ea g 6ea

Development of 55/47/42-inch FHD LED models

Development of “Direct thicker” LED model MP

Realization of TM240Hz

240Hz driving technology development

Development of the world’s first 1 Gate 1 Drain 240Hz driving technology

Development of low voltage liquid crystal development

Improving contrast ratio by 2.7%

Decreases voltage used in liquid crystals reducing circuit heat; decreases voltage by 6.9%

Development of Ez (Easy) Gamma technology

Minimize Gamma difference by using new measuring algorithm: 2.2±0.6 g 2.2±0.25

Development of 22-inch White+ technology

Increases transmissivity by 66% by using White+ Quad type pixel structure

Development of 55FHD direct slim LED model

Development of the world’s first direct-mounted 16.3mm depth slim LCM

Realization of 240 block local dimming and Trumotion 240Hz

10)

Development of 42HD GIP +TRD technology

The world’s first application of the 42HD GIP + TRD structure

Removal of gate drive integrated circuits: 3ea g 0ea

Reduction in source drive integrated circuits: 6ea g 2ea

11)

Development of TV3 CR5 Color PR

Realization of 100% BT709 reiteration rate by applying RGB Color Locus

Achieving a 5% increase in CR by decreasing size of Color PR pigment

12)

Development of the world’s first slim 27W FHD TN monitors

Reduces thickness by applying edge-mounted backlight: 37.2t g 21.6t

Reduces power consumption by 60% compared to conventional models by applying 4Lamp

Realization of MPRT 8ms by applying BDI technology

13)

Development of the world’s first 25W FHD TN new size monitors

Development of new aspect ratio model: 16:9 wide-format

Reduction in the number of driver integrated circuits by applying 960ch Source Driver: 8ea g 6ea

Removal of gate driver integrated circuits by applying GIP technology

14)

Development of 16:9 wide-format power consumption saving monitors (200W HD+, 215W FHD, 230W FHD)

Reduces power consumption by 40% compared to conventional models by applying 2Lamp

Slim design which reduces thickness: 17.0t g 14.5t

To meet Energy Star 5.0 standards

15)

Development of the world’s first 22-inch WSXGA+ DRD (Double Rate Driving) monitors

A 50% reduction in source driver integrated circuits by applying Double Rate Driving technology: 8ea g 4ea

Removal of gate driver integrated circuits by applying GIP technology

Application of optimum thin-film transistor structure for Double Rate Driving monitors

16)

Development of the world’s first 23W e-IPS monitors

Slim design: Reduces thickness by applying edge-mounted backlight: 35.7t g 17t

Reduces power consumption by 50% compared to conventional model by applying 4Lamp

Realization of high aperture ratio by applying UH-IPS technology

Reduction in the number of integrated circuits by applying 960ch source driver: 8ea g 6ea

Removal of gate driver integrated circuits by applying GIP technology

To meet Energy Star 5.0 standards

17)

Development of high efficiency backlight technology

Removal of DBDEF-D Sheet by increasing backlight luminance level by more than 30% g development of high efficiency lamp and improvement of optics sheet optical efficiency

18)

Development of GIP and high aperture ratio technology for QHD IPS model

Stable GIP output in QHD IPS models

Maximizing transmissivity by applying UH-IPS technology and asymmetric pixel design

19)

Development of three-dimensional display technology using the shutter glasses method.

Realization of stable rate of 172Hz

Realization of 4port low voltage differential signaling frequencies at a rate of 400MHz

Realization of ODC (Over Driver Circuit) tuning of GTG 3.5ms which is optimum for three-dimensional display

20)

Development of 17.1-inch wide-format slim (flat type) panel applying COG (Chip On Panel) chip, our largest slim (flat type) panel

Development of our largest size slim (flat type) model (previously, our largest model was the 15.4-inch wide-format)

Reduction in thickness: 6.5mm g 4.3mm

21)

Development of new high resolution 101W model (1024x600, 1366x768)

Achieving higher resolution: 1024x576 g 1024x600, 1366x768

22)

Development of world’s first 17.3-inch HD+ LED panel for notebook computers

New size and resolution for 16:9 wide-format

Existing model: 17.1-inch WXGA+ 1400x900 / New model: 17.3-inch HD+ 1600x900

23)

Development of 13.3-inch HD LED panel for notebook computers

New size and resolution for 16:9 wide-format

24)

Development of world’s first 14.0-inch HD+ LED panel for notebook computers

New size and HD+ resolution (1600x900) for 16:9 wide-format

25)

Development of world’s first 15.6-inch HD+ LED panel for notebook computers

First HD+ resolution (1600x900) for 16:9 wide-format

26)

Development of world’s first 15.6-inch FHD LED panel for notebook computers

First FHD resolution (1920x1080) for 16:9 wide-format

27)

Development of the first Green PC models (13.3-inch, 14.0-inch, 15.6-inch)

First models applying Green product concept (halogen free, low power consumption)

28)

Development of DRD (Double Rate Driving) technology applying COG (Chip on Glass)

Development of the first COG that applies DRD technology (a 50% reduction in the number of COG drive integrated circuits)

29)

Development of 10.1-inch SD (1024 x 600) model for netbooks

Improved resolution: 1024 x 576g1024 x 600

Reduction in cost by applying COG instead of COF

30)

Development of 10.1-inch HD (1366 x 768) model for netbooks

Highest resolution among 10.1-inch models

Reduction in cost by applying GIP technology

31)

Development of 17.1-inch WUXGA flat type model

Development of largest flat type model (previously, largest model was 15.4-inch)

The thinnest among 17.1-inch models

Reduction in thickness: 6.5t g 4.3t

32)

Developments of 11.6-inch HD monitor for netbooks

Development of largest/ highest resolution monitor for netbooks

Reduction in cost by applying GIP technology

33)

Development of low-cost 26-inch and 32-inch HD model for televisions

World’s first monitor without a cover shield

Application of sheet type support side

Reduction in cost by applying low-cost single bottom covers for mold frames

34)

Development of large-sized (42-inch/47-inch) edge type LED LCD model for televisions

Development of our first model for televisions applying edge type LED backlight (mass production commenced in September 2009)

Slim depth (11.9mm in thickness) & narrow bezel (18mm in thickness)

35)

Development of world’s first S/D-IC + Tcon merging technology applicable to television monitors

Minimizing size of printed circuit board by applying 1380ch S/D-IC + ASIC technology and removing ASIC chip

A 49% cost reduction in manufacturing circuits

36)

Achieving a full product line-up for netbook monitors

A full product line-up that covers the full spectrum of netbook monitor sizes from 8.9-inch to 11.6-inch models

37)

Development of our first flat type monitor for netbooks

Development of 11.6-inch flat type HD monitor

38)

Development of new LED-applied model utilizing vertical LED array technology

Development of 15.6-inch HD model applying vertical

LED array technology (technology applied in existing models: horizontal LED array)

Reduction in power consumption and raw material costs

39)

Development of world’s first 21.5W FHD IPS monitor applying white LED backlight technology

Application of environmentally friendly components including white LED backlight and halogen free parts

Achievement of high luminance (more than 330nit) by applying high efficiency white LED backlight

A 100% sRGB coverage

40)

Development of world’s first 27W QHD IPS monitor applying white LED backlight technology

Application of environmentally friendly components including white LED backlight and halogen free parts

Achievement of high luminance (more than 380nit) by applying high efficiency white LED backlight

A 100% sRGB coverage

Realization of high resolution (2560x1440)

Removal of gate driver integrated circuits by applying GIP technology

41)

Development of world’s first 19-inch WXGA monitor applying DRD (Double Rate Driver)

A 50% reduction in the number of source driver integrated circuits by applying DRD (Double Rate Driving) technology

Removal of gate driver integrated circuits by applying GIP technology

Optimization of TFT design structure for DRD (Double Rate Driver) technology

42)

Development of world’s first 22W e-IPS monitor applying GIP technology

Achievement of high aperture ratio by applying UH-IPS technology

Reduction in the number of source driver integrated circuits by applying 960 channel chip (8eag6ea)

Removal of gate driver integrated circuits by applying GIP technology

43)

Development of world’s first QHD new high resolution monitor (27W QHD)

Achievement of high resolution (2560 x 1440)

Maximization of aperture ratio applying UH-IPS technology and elimination of gate driver integrated circuits by applying GIP technology

Achievement of high luminance and sRGB coverage of 100% applying high efficiency white LED

44)

Development of world’s first monitor applying GIP, DRD (Double Rate Driver) and I-VCOM monitor (185W HD)

50% reduction in the number of source driver integrated circuits by applying DRD (Double Rate Driving) technology

Elimination of gate driver integrated circuits by applying GIP technology

Elimination of DBEF Optical sheet by applying I-VCOM technology and optical efficiency improvement in backlight

45)

Development of shutter glasses type three-dimensional monitor with full high definition

172Hz operation frame rate

Highest data interface speed of over 400MHz in 4port LVDS interface and achievement of GTG 3.5ms by optimal tuning of ODC (Over Driving Circuit)

46)

One layer vertical LED monitor development and reinforcement of monitor product line up (200W HD+, 215W FHD, 230W FHD)

Minimization of the number of LED PKG applying vertical array structure

Elimination of DBEF Sheet applying two-in-one LED PKG

Slim design: optimization of mechanical structure

47)

Development of world’s first notebook monitor applying 2ea Sheet Backlight

Achieving cost competitiveness by switching from conventional 3~4ea sheet to 2ea complex sheet backlight (with the Diffuser Sheet eliminated)

Achievements

in 2010

48)

Development of 9.7-inch AH-IPS model for Apple’s i-Pad.

Development of the world’s first IPS Tablet

Achieving the following viewing angles by applying AH-IPS: top (80°) / bottom (80°) / left (80°) / right (80°)

49)

Development of second Green PC products (13.3-inch, 14.0-inch and 15.6-inch in high-definition)

Thin and light; low electricity consumption thereby increasing battery life

Development of Company-led flat product market

50)

Development of world’s first TruMotion 480Hz product (47-inch and 55-inch in full high-definition)

World’s first application of 240hz driving technology and scanning technology to achieve TruMotion 480Hz.

50% reduction in source driver integrated circuits (from 16ea to 8ea) by applying 1 gate 1 drain technology

51)

World’s first full high-definition 47-inch three-dimensional display panels using Glass Patterned Retarder (GPR) technology

Achieving full high-definition for three-dimensional display panels using GPR technology

52)

Development of our first large-sized display panels viewable in three-dimension using shutter glasses (42-inch, 47-inch, 55-inch in full high-definition)

Achieving high aperture ratio by applying S-IPS V technology

Removal of gate driver integrated circuits by applying GIP technology

Reduction in the number of integrated circuits (from 8ea to 6ea) by applying 960Ch source driver integrated circuits

53)

World’s first LCD product which uses the LCD monitor’s bottom cover as the back cover of a television set (32-inch, 37-inch and 42-inch in full high-definition)

Removal of the television set back cover by replacing it with the LCD monitor’s bottom cover. Co-designed with a third party

54)

Development of 42-inch and 47-inch full high-definition display panels for television to be sold in emerging markets

Focusing on basic functions and removing functions that are costly

Achieving cost reduction by applying GIP technology

55)

Development of intra interface technology for large-sized, high resolution, high frequency display panels

Improved data transmission rate (from 660Mbps to 1.6Gbps)

Developing slim PCBs by decreasing the number of transmission lines

56)

Development of our first 21.5-inch and 26-inch full high-definition Edge LED products

Application of 21.5-inch, 26-inch full high-definition TV LED BL and mid-sized full high-definition model Slim TCON (176Pin g 88Pin)

57)

Development of our first 32 high-definition Edge LED product

Application of 32-inch high-definition TV Edge LED BL

58)

Development of our first 37-inch full high-definition M240Hz product

Development of 37-inch full high-definition 240Hz panel. Development and mass production of MEMC 240Hz with TCON model.

59)

Development of 240Hz panel for LG Electronics’ Borderless TV

Development of Narrow Bezel 240Hz panel (Bezel 14mm g 7mm) for LG Electronics’ Borderless TV

60)

Development of the world’s first slim 23W full high-definition monitor in IPS mode

Slim design by applying slim-type LED backlight (thickness: 14.5t g 11.5t)

Cost saving by applying low voltage liquid crystal

Removal of gate driver integrated circuits by applying GIP technology

61)

Development of the world’s first slim 185W high-definition monitor in TN mode

Slim design by applying slim-type LED backlight (thickness: 11.5t g 9.7t)

50% reduction in source driver integrated circuits by applying DRD (Double Rate Driving) technology

Elimination of optical sheet by applying new TFT structure technology (I-VCOM)

Removal of gate driver integrated circuits by applying GIP technology

62)

Development of 42-inch, 47-inch and 55-inch full high-definition monitors applying low cell gap (3.1 g 2.8um) technology

Enhanced 3D performance (3D CrossTalk 10.x% g 5.x%)

World’s first application of this technology in 42-inch, 47 inch and 55-inch full high-definition products

63)

Development of ultra slim 0.2t glass 12.1-inch notebook computer

Realization of ultra slim product by applying 0.2t glass and flat screen backlight structure

64)

Development of world’s first ultra slim 19SX TN monitor

Slim design by applying slim type LED backlight (thickness: 15.5 g 9.9t)

50% reduction (6ea to 3ea) in the number of source driver integrated circuits by applying DRD (Double Rate Driving) technology

Elimination of gate driver integrated circuits by applying GIP technology

65)

Development of 215FHD e-IPS monitor products applying LED PKG

Reduction in the number of LED and LED array cost through optimization of LED PKG’s beam and size

Realization of 2 sheet structure by adopting I-VCOM resulting in increased transmittance and backlight luminance

Elimination of gate driver integrated circuits by applying GIP technology

Minimization of LCM thickness by applying thin LED array structure (14.5t g 10.2t)

66)

Development and application of LED PKG in 215FHD TN monitor products

Reduction in the number of LED and LED array cost through optimization of LED PKG’s beam and size

Elimination of DBEF sheet by adopting I-VCOM resulting in increased transmittance and backlight luminance

Elimination of gate driver integrated circuits by applying GIP technology

Minimization of LCM thickness by applying thin LED array structure (14.5t g 10.2t)

67)

Development of world’s first slim TN monitor (185W HD, 20W HD+, 215W/23W FHD)

Developing ultra slim monitor by cooperating with set makers in the design process (SET standard: over 20t g 12.9t)

Minimization of LCM thickness by applying thin LED array structure (11.5t g 8.2t)

Simplification of circuit by developing T-con + Scaler 1chip

68)

Development of world’s first ultra slim 215W FHD TN monitor

Developing ultra slim monitor by cooperating with set makers in the design process (SET standard: 12.9t g 7.2t)

Minimization of LCM thickness by applying thin LED array structure (8.2t g 6t)

69)

Development of the world’s first 3D FPR type 42-inch, 47-inch and 55-inch full high definition panels

Improved 3D performance (cross talk 1.0% i, 3D luminance 170 nit)

70)

Development of our first 42-inch, 47-inch and 55-inch full high definition panels with built-in 3D formatters

Development of our first products with built-in MEMC and 3D formatters

71)

Development of the world’s first real 240Hz applying GIP driving technology

First to develop real 240Hz applying GIP driving technology

Reduced the number of driver integrated circuits by applying 960ch Source Driver: 8ea g 6 ea

72)

Development of panels for Macbook Air

Development and mass production of 116HD, 133 WXGA+ panels

Application of Z-inversion technology for low energy consumption

73)

Introduction of the world’s first high definition shutter glasses type 3D notebook product (17.3 inch full high definition)

Development of 172Hz high recharging speed notebook LCD panel

Development of Timing Controller (TC) driving technology

74)

The first all-in-one touch panel notebook from an LCD panel manufacturer (15.6 inch high definition add-on touch notebook)

The world’s first large size (15.6-inch) notebook panel to receive Win7 Touch certification (received on July 23, 2010)

The world’s first LCD and touch panel integrated add-on touch module developed by an LCD panel manufacturer

75)

Introduction of the world’s first Micro Film 3D notebook (15.6-inch full high definition)

The world’s first 3D FPR type notebook (developed timely to win market share in the 3D market)

76)

Development of the world’s first 240Hz 23W IPS monitor

The world’s first to realize 240Hz by application of 120Hz panel driving and scanning technologies

Achievement of Motion Picture Response Time (MPRT) of 8ms

77)

Development of the world’s first add-on infrared camera type 215W IPS monitor

Realization of thin LCM (20.5t) by application of the world’s first add-on infrared camera

Improved touch capabilities (dead zone free and multi-touch) and the first in the world to receive Win 7 Logo certification

Touch location auto correction by applying auto calibration

78)

Development of 20-inch high definition and 23-inch full high definition e-IPS monitor products applying widescreen LED PKG

Reduction in the number of LED and LED array cost through optimization of LED PKG’s beam and size

Elimination of gate driver integrated circuits by applying GIP technology

Cost reduction and lower power consumption (20% reduction for driver integrated circuits) by using low voltage driver integrated circuits

Minimization of LCM thickness by applying thin LED array structure (for 20-inch high definition panels: 14.5t g 10.2t)

79)

Development of 20-inch high definition and 23-inch full high definition TN monitor products applying widescreen LED PKG

Reduction in the number of LED and LED array cost through optimization of LED PKG’s beam and size

Elimination of DBEF sheet by adopting I-VCOM resulting in increased transmittance and backlight luminance (for 20-inch high definition monitors)

50% reduction in the number of source driver integrated circuits by applying DRD technology (for 23-inch full high definition panels)

Elimination of gate driver integrated circuits by applying GIP technology

Minimization of LCM thickness by applying thin LED array structure (11.5t g 10.2t)

Achievements

in 2011

80)

Introduction of glass-free mobile 3D product (4.3-inch WVGA)

Development and preparation for mass production of our first glass-free 3D product (utilizing barrier cell)

81)

Introduction of the world’s first 12.5-inch AH-IPS notebook product

Development of the world’s first 12.5-inch notebook utilizing AH-IPS technology

Achievement of a maximum circuit logic power of 1.0W

Development of a slim and light AH-IPS model (development of a model that utilizes IPS and flat PCB)

82)

Introduction of an integrated 14.0-inch touch panel notebook product

Development of a 14.0-inch touch panel notebook product as part of our plan to develop and expand our integrated touch panel products portfolio

83)

Introduction of our 15.6-inch dream color IPS notebook product

Development of a notebook utilizing H-IPS technology

Realization of a 100% color reproduction rate by applying RGB LED technology

Realization of 1.073G color by applying 10-bit color depth technology

84)

Development and mass production of 9.7-inch LCD panels for i-Pad 2

Application of AH-IPS and slim LCD technology

Decreased thickness by 20% and weight by 7% compared to LCD panel for i-Pad 1

85)

Development of the world’s first 3D FPR 23-inch FHD TN monitor product

Minimization of flicker / crosstalk by applying FPR technology

Minimization of cost increase by applying one layer 3D film

Realization of high luminance 3D images (two times the luminance compared to images from monitors utilizing shutter glass technology)

86)

Introduction of our first 50-inch Cinema TV product

Application of 21:9 screen display ratio (2560 x 1080 resolution)

Application of 960ch + EPI source driver integrated circuits for optimal high-resolution

Application of scanning technology under the Horizontal 2Edge structure

87)

Development of the world’s first 3D FPR 23-inch IPS FHD monitor product

Minimization of flicker / crosstalk by applying FPR technology

Minimization of cost increase by applying one layer 3D film

Realization of high luminance 3D images (two times the luminance compared to images from monitors utilizing shutter glass technology)

88)

Development and introduction of the world’s first 15.6-inch HD FPR 3D notebook product

Realization of the world’s first 15.6-inch HD FPR 3D product

Realization of high luminance 3D images (two times the luminance compared to images from notebooks utilizing shutter glass technology)

Minimization of cost increase by applying one layer 3D film

89)

Development and introduction of the world’s first 17.3-inch Dream Color AH-IPS notebook product

Development of the world’s first 17.3-inch notebook computer applying AH-IPS

Realization of Dream Color (100% color reproduction rate) by applying RGB LED

Realization of 1.073G color by applying Color Depth 10-bit technology

Realization of 89 degrees viewing angle (up/down/left/right) by applying IPS technology

90)

Development and introduction of a 15.6-inch HD product with the world’s lowest (at the time) power consumption from logic circuit (0.5W).

Application of DRD Z-inversion, HVDD and low voltage process

Application of high intensity LED (2.3cd) and Vcut light guide plate

Increase in battery life due to logic circuit power consumption reduction

91)

Development of the world’s smallest (at the time) Narrow Bezel Notebook Model

The first in the world to apply 4.5 mm narrow bezel

Formation of camera hole by B/M mask patterning

92)

Development of a new 10.1-inch WX smartbook LCD

Development of the our first 10.1-inch WXGA LCD following in the footsteps of our 9.7-inch XGA model

Realization of reduced power consumption, high permeability and increased viewing angle by application of IPS technology.

93)

Development of a 42-inch full high-definition product applying COT technology

Simplifying panel production process by applying COT (Color Filter on TFT) technology

Luminance increased by 10%

94)

Development of 42-inch, 47-inch and 55-inch direct slim LCD TV

Development of the world’s first direct-mounted 11.0mm depth ultra-slim LCM model

Application of 96 block local dimming and M240Hz technology

95)

Development of a 47-inch super narrow public display panel

Development of our first super narrow bezel (seam 6.9mm) product for application in public display panels

96)

Introduction of the world’s first 15.6-inch full high-definition AH-IPS notebook product

Development of the world’s first 15.6-inch full high-definition model applying AH-IPS technology

Development of slim & light AH-IPS model (thickness: 3.4mm; weight: 330g)

Achieving the following viewing angles by applying IPS technology; 178° from top to bottom; 178° from left to right

97)

Development of a 15.6-inch full high-definition notebook applying a new backlight arrangement

Optimization of light placement by application of New Concept LED Backlight

Reduction in the number of LED integrated circuits (78ea g 10ea) by application of mid-power LED

Reduced energy consumption pursuant to a reduction in the number of LED integrated circuits (7.4W g 5.9W)

98)

Development of the world’s first 215/25/27 full high-definition TN and 215 full high-definition IPS 3D monitor

Minimization of flicker/crosstalk by application of FPR technology

Minimization of cost increase by applying one-layered 3D film

Realization of high luminance 3D images (two times the luminance compared to images from monitors utilizing shutter glass technology)

99)

Development of a 4.5-inch true HD AH-IPS display smartphone product

For 4G LTE smartphones (introduced by LG Electronics in September 2011)

Application of true HD720 resolution and AH-IPS technology

100)

Development of the world’s first 14.0-inch HD 3D FPR notebook product

Realization of the world’s first 14.0-inch 3D FPR display

Realization of high luminance 3D images (two times the luminance compared to images from notebook panels utilizing shutter glass technology)

101)

Development of the world’s first AH-IPS GIP / DRD column inversion technology

Development of AH-IPS GIP / DRD by application of shrink GIP technology

Realization of TN-equivalent panel size through reduced panel load

Achieved TN-equivalent logic energy consumption levels

10. Intellectual Property

As of December 31, 2011, we held a total of 16,944 patents, comprising 7,508 in Korea and 9,436 in other countries.

11. Environmental Matters

We are subject to a variety of environmental regulations and we may be subject to fines or restrictions that could cause our operations to be interrupted. Our manufacturing processes generate worksite waste, including water and air pollutants, at various stages in the manufacturing process, and we are subject to a variety of laws and regulations relating to the use, storage, discharge and disposal of such chemical by-products and waste substances. We have installed various types of anti-pollution equipment, consistent with environmental standards, for the treatment of chemical waste and equipment for the recycling of treated waste water at our various facilities. However, we cannot provide assurance that environmental claims will not be brought against us or that the local or national governments will not take steps toward adopting more stringent environmental standards. Any failure on our part to comply with any present or future environmental regulations could result in the assessment of damages or imposition of fines against us, suspension of production or a cessation of operations. In addition, environmental regulations could require us to acquire costly equipment or to incur other significant compliance expenses that may materially and negatively affect our financial condition and results of operations.

We have also voluntarily agreed to reduce emission of greenhouse gases, such as triflouride oxide and perfluoro compounds, or PFCs, including sulfur hexafluoride, or SF6, gases, by installing abatement systems to meet voluntary emissions targets for the TFT-LCD industry for 2010. As part of our voluntary activities to reduce emission of greenhouse gases, we installed triflouride oxide abatement systems at all of our production lines. We also installed an SF6 abatement system in P1 in April 2005, and we, along with LG International Corp., have taken steps to install additional SF6 abatement systems through the use of Clean Development Mechanism, or CDM, projects. On July 10, 2010, after becoming the first TFT-LCD company to receive the UNFCCC CDM Executive Board’s approval of our CDM project, we installed an SF6 abatement system in P6. We received a total of 343,971 tons of certified emission reduction credits from the UN for the reduction of greenhouse gas emissions during the period from August 1, 2010 to December 31, 2010, all of which was sold in December 2011. We were the first LCD company to receive such certified emission reduction credits pursuant to an SF6 decomposition CDM project. Currently, a third party accreditation agency is also examining the reduction of our greenhouse gas emissions during the period from January 1, 2011 to August 31, 2011 as part of our application for receiving certified emission reduction credits from the UN. In August 2011, we commenced the installation of an SF6 abatement system in P7 through the implementation of CDM projects which is expected to become operational in 2012 and further reduce our greenhouse gas emissions.

Under the Framework Act on Low Carbon, Green Growth, the Korean government has designated us as one of the companies subject to greenhouse gas emission and energy consumption targets. As a result, we may need to invest in additional equipment and there may be other costs associated with meeting the reduction target for 2012, which may have a negative effect on our profitability or production activities. In addition, if we fail to meet our reduction target and are unable to comply with the government’s subsequent enforcement notice relating to such failure, we may be subject to fines.

In connection with the greenhouse gas emission reduction target system, we submitted a statement of our domestic emissions and energy usage for the years 2007 through 2010 to the Korean government (i.e., the Ministry of Environment and the Ministry of Knowledge Economy), which was certified by DNV Certification Co., Ltd., a government-designated certification agency. We are currently preparing a statement of our domestic emissions and energy usage for the year 2011, which we plan to submit to the Ministry of Environment and the Ministry of Knowledge Economy by the end of March 2012 after certification by Lloyd’s Register Quality Assurance, another government-designated certification agency. In addition, in order to improve the efficiency and reliability of measuring our greenhouse gas emission reduction activities, we have begun implementing improvements in our electronic greenhouse gas inventory system and plan to complete such improvements in 2012.

Operations at our manufacturing plants are subject to regulation and periodic monitoring by the Korean Ministry of Environment and local environmental protection authorities. We believe that we have adopted adequate anti-pollution measures and have minimized our impact on the environment by improving existing and developing new technologies for the effective maintenance of environmental protection standards consistent with local industry practice. In addition, we have continually monitored, and we believe that we are in compliance in all material respects with, the applicable environmental laws and regulations in Korea. Expenditures related to such compliance may be substantial. Such expenditures are generally included in capital expenditures. As required by Korean law, we employ licensed environmental specialists for each environmental area, including air quality, water quality, toxic materials and radiation. We currently have ISO 14001 certifications with respect to the environmental record for P1 through P8, our OLED production facility in Gumi, Korea, our Gumi module production plant and our Paju module production plant, as well as our module production plants in Nanjing and Guangzhou, China.

In addition, with respect to P1 through P8 and our module production plants in Gumi and Paju, we have established and are currently operating a new green management system, which was certified by BSI Group Korea in November 2011. Furthermore, we have been certified by the Korean Ministry of Environment as a “Green Company”, with respect to our environmental record for P1 and our module production plant in Gumi since 1997, with respect to our operations at P2 and P3 since 2006, and with respect to our operations at P4, P5 and P6 since 2008, and received commendations from the Prime Minister and the Minister of Environment of Korea for our efforts to promote recycling.

We also have an internal monitoring system to control the use of hazardous substances in the manufacture of our products as we are committed to compliance with all applicable environmental laws and regulations, including European Union Restriction of Hazardous Substances (RoHS) Directive 2002/95/EC, which took effect in July 2006, and restricts the use of certain hazardous substances in the manufacture of electrical and electronic equipment.

In addition, as part of our commitment to purchase environment-friendly raw materials, we have implemented a green purchasing system that prevents the introduction of hazardous materials at the purchasing stage. The green purchasing system has been a key component in our efforts to comply with RoHS and other applicable environmental laws and regulation.

In October 2005, we became the first TFT-LCD company to receive accreditation as an International Accredited Testing Laboratory by the Korea Laboratory Accreditation Scheme, which is operated by the Korean Ministry of Knowledge Economy. In September 2006, we received international accreditation from TUV SUD, EU’s German accreditation agency, as a RoHS testing laboratory. Moreover, we participated in reforming IEC 62321 by 2012, a RoHS international testing standard, by including a halogen-free combustion ion chromatography method in our committee draft that we submitted in June 2010.

12. Financial Information

A. Financial highlights (Based on consolidated K-IFRS)

(Unit: In millions of Won)


Description	As of December 31, 2011		As of December 31, 2010		As of December 31, 2009
Current assets		7,858,065		8,840,433		8,226,142
Quick assets		5,540,695		6,625,216		6,558,362
Inventories		2,317,370		2,215,217		1,667,780
Non-current assets		17,304,866		15,017,225		11,477,335
Investments in equity accounted investees		385,145		325,532		282,450
Property, plant and equipment, net		14,696,849		12,815,401		9,596,497
Intangible assets		535,114		539,901		352,393
Other non-current assets		1,687,758		1,336,391		1,245,995
Total assets		25,162,931		23,857,658		19,703,477
Current liabilities		9,911,434		8,881,829		6,495,071


Non-current liabilities	5,120,469	3,914,862		3,168,657
Total liabilities	15,031,903	12,796,691		9,663,728
Share capital	1,789,079	1,789,079		1,789,079
Share premium	2,251,113	2,251,113		2,251,113
Reserves	12,181	(35,298	)	(51,005	)
Retained earnings	6,063,359	7,031,163		6,050,562
Non-controlling interest	15,296	24,910		0
Total equity	10,131,028	11,060,967		10,039,749

(Unit : In millions of Won, except for per share data and number of consolidated entities)


Description	For the year ended December 31, 2011			For the year ended December 31, 2010		For the year ended December 31, 2009
Revenue		24,291,289			25,511,535		20,037,701
Results (loss) from operating activities		(924,336	)		1,310,472		1,010,352
Income (loss) from continuing operation		(787,895	)		1,159,234		1,117,778
Profit (loss) for the period		(787,895	)		1,159,234		1,117,778
Profit (loss) attributable to:
Owners of the Company		(771,223	)		1,156,343		1,117,778
Non-controlling interest		(16,672	)		2,891		—
Basic earnings (loss) per share		(2,155	)		3,232		3,124
Diluted earnings (loss) per share		(2,155	)		3,152		3,124
Number of consolidated entities		18			16		11

B. Financial highlights (Based on separate K-IFRS)

(Unit: In millions of Won)


Description	As of December 31, 2011		As of December 31, 2010		As of December 31, 2009
Current assets		7,326,764		8,499,873		7,973,355
Quick assets		5,414,054		6,739,908		6,687,050
Inventories		1,912,710		1,759,965		1,286,305
Non-current assets		16,947,200		14,658,125		11,283,512
Investments		1,386,313		1,279,831		1,075,229
Property, plant and equipment, net		13,522,553		11,688,061		8,730,263
Intangible assets		479,510		483,260		340,885


Other non-current assets	1,558,824		1,206,973		1,137,135
Total assets	24,273,964		23,157,998		19,256,867
Current liabilities	9,485,333		8,453,869		6,120,663
Non-current liabilities	5,101,714		3,833,454		3,102,006
Total liabilities	14,587,047		12,287,323		9,222,669
Share capital	1,789,079		1,789,079		1,789,079
Share premium	2,251,113		2,251,113		2,251,113
Reserves	(3,944	)	(7,795	)	(17,366	)
Retained earnings	5,650,669		6,838,278		6,011,372
Total equity	9,686,917		10,870,675		10,034,198

(Unit: In millions of Won, except for per share data)


Description	For the year ended December 31, 2011			For the year ended December 31, 2010		For the year ended December 31, 2009
Revenue		23,471,309			25,004,257		20,119,342
Results (loss) from operating activities		(1,251,083	)		1,024,394		976,863
Income (loss) from continuing operation		(991,032	)		1,002,648		1,088,814
Profit (loss) for the period		(991,032	)		1,002,648		1,088,814
Basic earnings (loss) per share		(2,770	)		2,802		3,043
Diluted earnings (loss) per share		(2,770	)		2,726		3,043

C. Consolidated subsidiaries (as of December 31, 2011)


Company	Primary Business	Location	Ownership Percentage
LG Display America, Inc.	Sales	U.S.A.		100	%
LG Display Germany GmbH	Sales	Germany		100	%
LG Display Japan Co., Ltd.	Sales	Japan		100	%
LG Display Taiwan Co., Ltd.	Sales	Taiwan		100	%
LG Display Nanjing Co., Ltd.	Manufacturing and sales	China		100	%
LG Display Shanghai Co., Ltd.	Sales	China		100	%
LG Display Poland Sp. zo.o.	Manufacturing and sales	Poland		80	%
LG Display Guangzhou Co., Ltd.	Manufacturing and sales	China		90	%
LG Display Shenzhen Co., Ltd.	Sales	China		100	%
LG Display Singapore Pte. Ltd.	Sales	Singapore		100	%


L&T Display Technology (Xiamen) Co., Ltd.	Manufacturing and sales	China	51	%
L&T Display Technology (Fujian) Co., Ltd.	Manufacturing and sales	China	51	%
LG Display Yantai Co., Ltd.	Manufacturing and sales	China	100	%
L&I Electronic Technology (Dongguan) Limited	Manufacturing and sales	China	51	%
Image & Materials, Inc.	Manufacturing and sales	Korea	100	%
LUCOM Display Technology (Kunshan) Limited	Manufacturing and sales	China	51	%
LG Display U.S.A. Inc.	Manufacturing and sales	U.S.A.	100	%
LG Display Reynosa S.A. de C.V.	Manufacturing	Mexico	100	%

D. Status of equity investment (as of December 31, 2011)

Company

Investments

Initial Equity
Investment Date

Ownership
Ratio

LG Display America, Inc.

US$185,000,000

September 24, 1999

100

LG Display Germany GmbH

EUR960,000

November 5, 1999

100

LG Display Japan Co., Ltd.

¥95,000,000

October 12, 1999

100

LG Display Taiwan Co., Ltd.

NT$115,500,000

May 19, 2000

100

LG Display Nanjing Co., Ltd.

CNY2,552,191,315

July 15, 2002

100

LG Display Shanghai Co., Ltd.

CNY4,138,650

January 16, 2003

100

LG Display Poland Sp. zo.o.

PLN410,327,700

September 6, 2005

LG Display Guangzhou Co., Ltd.

CNY895,904,754

August 7, 2006

LG Display Shenzhen Co., Ltd.

CNY3,775,250

August 28, 2007

100

LG Display Singapore Pte. Ltd.

SGD1,400,000

January 12, 2009

100

L&T Display Technology (Xiamen) Co., Ltd.

CNY41,785,824

January 5, 2010

L&T Display Technology (Fujian) Co., Ltd.

CNY59,197,026

January 5, 2010

LG Display Yantai Co., Ltd.

CNY273,048,000

April 19, 2010

100

L&I Electronic Technology (Dongguan) Limited

CNY17,062,560

October 25, 2010

Image & Materials, Inc.

(Won) 40,999,919,576

November 29, 2010

100

LG Display U.S.A. Inc.

US$10,920,000

December 8, 2011

100

LG Display Reynosa S.A. de C.V.

MXN111,998,058

December 30, 2011

100

LUCOM Display Technology (Kunshan) Limited

CNY50,353,677

December 27, 2010

Suzhou Raken Technology Co., Ltd.

CNY569,455,395

October 7, 2008

Paju Electric Glass Co., Ltd.

(Won) 33,648,000,000

March 25, 2005

TLI Co., Ltd.

(Won) 14,073,806,250

May 16, 2008


AVACO Co., Ltd.	(Won)6,172,728,120	June 9, 2008	20	%
Guangzhou Vision Display Technology Research and Development Limited	CNY25,000,000	July 11, 2008	50	%
NEW OPTICS, Ltd.	(Won)12,199,600,000	July 30, 2008	42	%
LIG ADP Co., Ltd.	(Won)6,330,000,000	February 24, 2009	13	%
Wooree LED Co., Ltd.	(Won)11,900,000,000	May 22, 2009	30	%
Dynamic Solar Design Co., Ltd.	(Won)6,066,658,000	June 24, 2009	40	%
RPO, Inc.	US$12,285,022	November 3, 2009	26	%
Global OLED Technology LLC	US$45,170,000	December 23, 2009	33	%
LB Gemini New Growth Fund No. 16	(Won)14,460,647,109	December 7, 2009	31	%
Can Yang Investment Ltd.	US$15,300,000	January 27, 2010	12	%
YAS Co., Ltd.	(Won)10,000,000,000	September 16, 2010	19	%
Eralite Optoelectronics (Jiangsu) Co., Ltd.	US$4,000,000	September 28, 2010	20	%
Narae Nanotech Corporation	(Won)30,000,000,000	April 22, 2011	23	%
Avatec Co., Ltd.	(Won)10,600,000,000	December 6, 2011	20	%

13. Audit Information

A. Audit service

(Unit: In millions of Won, hours)


Description	2011	2010	2009
Auditor	KPMG Samjong	KPMG Samjong	KPMG Samjong
Activity	Audit by independent auditor	Audit by independent auditor	Audit by independent auditor
Compensation ⁽¹⁾	850 (285)⁽²⁾	850 (585)⁽³⁾	700 (540)⁽⁴⁾
Time required	16,154	16,646	17,569

(1)	Compensation amount is the contracted amount for the full fiscal year.

(2)	Compensation amount in ( ) is for Form 20-F filing and SOX 404 audit.

(3)	Compensation amount in ( ) is for K-IFRS audit of 2009 financial statements, Form 20-F filing and SOX 404 audit.

(4)	Compensation amount in ( ) is for US-GAAP audit, Form 20-F filing and SOX 404 audit.

B. Non-audit service

(Unit: In millions of Won)


Fiscal Year	Contract Date	Service Description	Compensation	Note
2011	September 19, 2011	Improvements to document management and processing	80	LGCNS retained KPMG Samjong to provide the service jointly to LG Display.

14. Management’s Discussion and Analysis of Financial Condition and Results of Operations

A. Risk Relating to Forward-looking Statements

The annual report contains forward-looking statements that are, by their nature, subject to significant risks and uncertainties. These forward-looking statements reflect our current views as of the date of this report with respect to future events and are not a guarantee of future performance or results. Actual results may differ materially from information contained in the forward-looking statements as a result of a number of factors beyond our control. We have no obligation to update or correct the forward-looking statements contained in these materials subsequent to the date hereof. All forward-looking statements attributable to us in this report are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

B. Overview

In 2011, despite the challenging market environment, we were able to further strengthen our position as the leader in the global display panel industry by developing differentiated products and technologies. For example, we believe our FPR 3D panels, which were first introduced to the market in early 2011, were instrumental in the very strong growth of the 3D panel market, which grew forty-fold in China alone and almost ten-fold globally in 2011. Also, as the market for mobile devices such as smartphones and smartbooks continued its growth in 2011, our mobile display panels utilizing AH-IPS technology further solidified their position in the market.

In addition, our ART TV and Blade Monitor received recognition for their innovative design and technology as they garnered international product design awards in 2011. We have also developed hinge-up displays for notebook computers, also known as Shuriken displays, which are optimized for use in ultrabooks, Intel’s new ultra-slim notebook platform.

We have also continued our efforts to enhance our manufacturing productivity in 2011, and as a result, the productivity levels at our fabrication facilities have been some of the highest in the industry. We have also continued our efforts to reduce cost of sales by lowering overhead costs and further developing the synergistic relationships we have with our strategic suppliers. In addition, we continued to foster a work-friendly corporate environment.

As a result of these efforts, we had the largest market share in the large size panel market in 2011, according to data published by DisplaySearch.

C. Financial Condition and Results of Operations

(1) Results of operations (Based on consolidated, K-IFRS)

We led the market with our products and technologies that can be differentiated from those of our competitors. For example, we captured a 40% share of the 3D television panel market with our products utilizing FPR 3D technology and we continued to lead the smartbook display market with our AH-IPS products.

We are also supporting domestic companies with which we have cooperative relationships to become more competitive on the global stage. The number of domestic companies which receive our support increased from 18 in 2010 to 25 in 2011 and the number of domestic companies with which we have a cooperative relationship increased from 61 in 2010 to 85 in 2011. We have also established a task force with television set manufacturers to jointly develop differentiated products, from planning to manufacturing stages. The establishment of cooperative production structures with these manufacturers has helped to reduce costs and to develop products with slimmer designs and other design innovations.

However, due to decreases in selling prices resulting from difficult market conditions in 2011, our revenue was approximately (Won)24,291 billion, a decrease of approximately 5% compared to our revenue in 2010. We recorded a loss from operating activities of approximately (Won)924 billion and a loss for the year of approximately (Won)788 billion in 2011. Despite such results, we were able to maintain the largest market share for large size products as the proportion of sales derived from our differentiated products, such as FPR 3D, AH-IPS and smartbook products, increased in 2011 compared to 2010.

(Unit: In millions of Won)


Description	2011			2010			Changes
Revenue		24,291,289			25,511,535			(1,220,246	)
Cost of sales		(23,081,322	)		(21,780,880	)		(1,300,442	)
Gross profit		1,209,967			3,730,655			(2,520,688	)
Other income		1,223,545			1,483,443			(259,898	)
Selling expenses		(728,419	)		(846,376	)		117,957
Administrative expenses		(564,337	)		(521,035	)		(43,302	)
Research and development expenses		(681,228	)		(674,684	)		(6,544	)
Other expenses		(1,383,864	)		(1,861,531	)		477,667
Results from operating activities		(924,336	)		1,310,472			(2,234,808	)
Finance income		207,266			240,988			(33,722	)
Finance costs		(363,309	)		(288,472	)		(74,837	)
Other non-operating loss, net		(16,627	)		(15,611	)		(1,016	)
Equity income on investment, net		16,047			18,192			(2,145	)
Profit (loss) before income tax		(1,080,959	)		1,265,569			(2,346,528	)
Income tax expense (benefit)		(293,064	)		106,335			(399,399	)
Profit (loss) for the period		(787,895	)		1,159,234			(1,947,129	)

(a) Selected financial ratios


Ratios	Calculation	2011 Ratio			2010 Ratio			Change
Current ratio	(current assets ÷ current liabilities) x 100		79.3	%		99.5	%		(20.2	)%
Debt to equity ratio	(total liabilities ÷ total equity) x 100		148.4	%		115.7	%		32.7	%
Operating margin	(results from operating activities ÷ revenue) x 100		(3.8	)%		5.1	%		(8.9	)%
Net margin	(profit for the period ÷ revenue) x 100		(3.2	)%		4.5	%		(7.7	)%
Return on assets	(profit for the period ÷ total assets) x 100		(3.1	)%		4.9	%		(8.0	)%
Return on equity	(profit for the period ÷ total equity) x 100		(7.8	)%		10.5	%		(18.3	)%
Net cash from operating activities to assets ratio	(net cash from operating activities ÷ total assets) x 100		14.6	%		20.5	%		(5.9	%)

Ratios

Calculation

2011
Ratio

Revenue growth

(current year revenue ÷ prior year revenue) x 100 -1

(4.8

Operating profit growth

(current year results from operating activities ÷ prior year results from operating activities) x 100 -1

Not
Applicable

Net profit growth

(current year profit ÷ prior year profit) x 100 -1

Not
Applicable

Total assets growth

(current year end total assets ÷ prior year end total assets) x 100 -1

5.5

Asset turnover

Revenue ÷ ((total assets at beginning of year + total assets at end of year) ÷ 2)

1.0

(b) Revenue and cost of sales

Our cost of sales as a percentage of revenue increased by 9.6 percentage points from 85.4% in 2010 to 95.0% in 2011. Our cost of sales as a percentage of revenue increased in 2011 compared to 2010 because decreases in the selling prices of our products, resulting from downward price pressure due to unfavorable macroeconomic conditions, outpaced a decrease in the cost of sales per unit resulting from our continued efforts to maximize production capacity and minimize loss.

(Unit: In millions of Won, except percentages)


Description	2011			2010			Changes
Description	2011			2010			Amount			Percentage
Revenue		24,291,289			25,511,535			(1,220,246	)		(4.78	)%
Cost of sales		23,081,322			21,780,880			1,300,442			5.97	%
Gross profit		1,209,967			3,730,655			(2,520,688	)		(67.57	)%
Cost of sales as a percentage of sales		95.0	%		85.4	%

Revenue attributable to panels for mobile applications and others as a percentage of total revenue increased by 4.5 percentage points in 2011 compared to 2010 primarily due to an increase in demand for smartphones and growth in our customer base. Revenue from panels for notebook computers as a percentage of total revenue increased by 3.8 percentage points in 2011 compared to 2010 due to increased demand for tablet personal computers, including smartbooks, and continued increase in our market share. While revenue from panels for televisions as a percentage of total revenue generally decreased in 2011 compared to 2010, the proportion of revenue from FPR 3D television panels and other high value added television panels increased during the same period.


Categories	2011			2010			Difference
Panels for televisions		47.7	%		55.2	%		(7.5	)%
Panels for desktop monitors		20.4	%		21.2	%		(0.8	)%
Panels for notebook computers		21.1	%		17.3	%		3.8	%
Panels for mobile applications and others		10.8	%		6.3	%		4.5	%

(d) Production capacity

Our annual production capacity increased by 17% in 2011 compared to 2010, in large part due to the successful ramp-up of P83.

(2) Financial condition (based on consolidated, K-IFRS)

Our current assets decreased by (Won)982 billion from (Won)8,840 billion as of December 31, 2010 to (Won)7,858 billion as of December 31, 2011 and our non-current assets increased by (Won)2,288 billion from (Won)15,017 billion as of December 31, 2010 to (Won)17,305 billion as of December 31, 2011. Our current liabilities increased by (Won)1,030 billion from (Won)8.882 billion as of December 31, 2010 to (Won)9,911 billion as of December 31, 2011 and our non-current liabilities increased by (Won)1,206 billion from (Won)3,915 billion as of December 31, 2010 to (Won)5,120 billion as of December 31, 2011. Our total equity decreased by (Won)930 billion from (Won)11,061 billion as of December 31, 2010 to (Won)10,131 billion as of December 31, 2011.

(Unit: In millions of Won)


Description	2011		2010			Changes
Current assets		7,858,065		8,840,433			(982,368	)
Non-current assets		17,304,866		15,017,225			2,287,641
Total assets		25,162,931		23,857,658			1,305,273
Current liabilities		9,911,434		8,881,829			1,029,605
Non-current liabilities		5,120,469		3,914,862			1,205,607
Total liabilities		15,031,903		12,796,691			2,235,212
Share capital		1,789,079		1,789,079			—
Share premium		2,251,113		2,251,113			—
Reserves		12,181		(35,298	)		47,479
Retained earnings		6,063,359		7,031,163			(967,804	)
Non-controlling interest		15,296		24,910			(9,614	)
Total equity		10,131,028		11,060,967			(929,939	)
Total liabilities and equity		25,162,931		23,857,658			1,305,273

In 2011, we continued our efforts to maximize capacity and minimize loss and we also commenced mass production at P83 in March 2011, which led to an increase in production capacity. As a result of our increased production levels, our inventory increased by (Won)102 billion from December 31, 2010 to December 31, 2011.

Net trade accounts and notes receivable as of December 31, 2011 was (Won)2,740 billion, a decrease of (Won)261 billion from net trade accounts and notes receivable as of December 31, 2010. Trade accounts and notes receivable amounting to (Won)1,631 billion (approximately US$1,414 million) and (Won)1,290 billion (approximately US$1,133 million) were sold to financial institutions, but are current and outstanding, as of December 31, 2011 and 2010, respectively.

The book value of our total tangible assets as of December 31, 2011 was (Won)14,697 billion, an increase of (Won)1,881 billion from the book value of our total tangible assets as of December 31, 2010. The increase was primarily due to our investments in P9.

Trade accounts and notes payable as of December 31, 2011 was (Won)3,783 billion, an increase of (Won)821 billion from trade accounts and notes payable as of December 31, 2010. The increase was primarily due to an increase in our purchase of components and raw materials corresponding to an increase in our production levels in 2011, as well as extension of payment dates of our trade accounts and notes payable.

Other accounts payable as of December 31, 2011 was (Won)3,993 billion, an increase of (Won)1,400 billion from other accounts payable as of December 31, 2010. The increase was primarily due to an increase in large-scale investments, including investments in P9, which increased the outstanding payments for services and products associated with such investments.

(3) Liquidity and capital resources

In 2011, our net cash from operating activities amounted to (Won)3,666 billion, our net cash used in financing activities, including the incurrence of short- and long-term borrowings as well as the issuance of corporate debentures, amounted to (Won)278 billion and our net cash used in investing activities, including the acquisition of tangible assets and our acquisition of investments in equity accounted investees, amounted to (Won)3,494 billion.

We currently expect our total capital expenditures on a cash-out basis to be approximately (Won)4 trillion in 2012. However, there are a number of variables that may cause us to reassess our estimated capital expenditures including, among others, changes in market conditions and the expected commencement of operation of P98, our eighth generation fabrication line located in our P9 facility, in the second quarter of 2012. Accordingly, our estimated capital expenditures may change.

(Unit: In millions of Won)


Description	2011			2010			Changes
Results (loss) from operating activities		(924,336	)		1,310,472			(2,234,808	)
Net cash provided by operating activities		3,665,858			4,883,532			(1,217,674	)
Net cash provided by (used in) financing activities		(278,249	)		408,126			(686,375	)
Net cash used in investing activities		(3,494,461	)		(4,515,167	)		1,020,706
Cash and cash equivalents at Dec. 31, 2011		1,517,977			1,631,009			(113,032	)

15. Board of Directors

A. Independence of directors

–

Outside director: Independent

–

Non-outside director: Not independent

–

Each of our outside directors meets the applicable independence standards set forth under the applicable laws and regulations. Each of our outside directors was nominated by the Outside Director Nomination and Corporate Governance Committee, was approved by the board of directors and was appointed at the general meeting of shareholders. None of our outside directors has or had any business transaction or any related party transactions with us. Our outside directors are comprised of four persons, three of whom are also members of our audit committee. As of the date of this report, our non-outside directors are the chief executive officer, the chief financial officer and a non-standing director.

B. Members of the board of directors

(as of December 31, 2011)


Name	Date of birth	Position	Business experience	First Elected
Young Soo Kwon *	February 6, 1957	Representative Director, President and Chief Executive Officer	President and Chief Financial Officer of LG Electronics	January 1, 2007
James (Hoyoung) Jeong	November 2, 1961	Director and Chief Financial Officer	Executive Vice President and Chief Financial Officer of LG Electronics	January 1, 2008
Yu Sig Kang	November 3, 1948	Director	Vice Chairman, Representative Director, LG Corp.	March 11, 2011
Tae Sik Ahn	March 21, 1956	Outside Director	Dean, College of Business Administration and Graduate School of Business, Seoul National University	March 12, 2010
William Y. Kim	June 6, 1956	Outside Director	Partner, Ropes & Gray LLP	February 29, 2008
Jin Jang	November 28, 1954	Outside Director	Chair Professor, Department of Information Display, Kyung Hee University	March 11, 2011

*	Resigned on March 9, 2012.

(as of March 28, 2012)


Name	Date of birth	Position	Business experience	First Elected
Sang Beom Han *	June 18, 1955	Representative Director, Chief Executive Officer and Executive Vice President	Head of LG Display TV Business Division	March 9, 2012
James (Hoyoung) Jeong	November 2, 1961	Director and Chief Financial Officer	Executive Vice President and Chief Financial Officer of LG Electronics	January 1, 2008
Yu Sig Kang	November 3, 1948	Director	Vice Chairman, Representative Director, LG Corp.	March 11, 2011
Tae Sik Ahn	March 21, 1956	Outside Director	Dean, College of Business Administration and Graduate School of Business, Seoul National University	March 12, 2010
William Y. Kim	June 6, 1956	Outside Director	Partner, Ropes & Gray LLP	February 29, 2008
Jin Jang	November 28, 1954	Outside Director	Chair Professor, Department of Information Display, Kyung Hee University	March 11, 2011
Dong Il Kwon *	February 5, 1957	Outside Director	Professor, Department of Materials Science and Engineering, Seoul National University	March 9, 2012

*	At the annual general meeting of shareholders on March 9, 2012, Sang Beom Han was newly elected as our representative director and chief executive officer and Dong Il Kwon was newly elected as our outside director by our shareholders.

C. Committees of the board of directors

(as of December 31, 2011)


Committee	Composition	Member
Audit Committee	3 outside directors	Tae Sik Ahn, Jin Jang, William Y. Kim
Outside Director Nomination and Corporate Governance Committee	1 non-outside director and 2 outside directors	James (Hoyoung) Jeong, William Y. Kim, Jin Jang
Remuneration Committee	1 non-outside director and 2 outside directors	William Y. Kim, James (Hoyoung) Jeong, Tae Sik Ahn

(as of March 28, 2012)


Committee	Composition	Member
Audit Committee	3 outside directors	Tae Sik Ahn, Jin Jang, William Y. Kim
Outside Director Nomination and Corporate Governance Committee	1 non-outside director and 2 outside directors	James (Hoyoung) Jeong, Dong Il Kwon ⁽¹⁾, Jin Jang
Remuneration Committee	1 non-outside director and 2 outside directors	William Y. Kim, James (Hoyoung) Jeong, Tae Sik Ahn
Management Committee ⁽²⁾	2 non-outside directors	Sang Beom Han ⁽¹⁾, James (Hoyoung) Jeong ⁽¹⁾

(1)	At the annual general meeting of shareholders on March 9, 2012, Dong Il Kwon became a member of the Outside Director Nomination and Corporate Governance Committee and Sang Beom Han and James (Hoyoung) Jeong became members of the Management Committee.

(2)	Established at the annual general meeting of shareholders on March 9, 2012.

16. Information Regarding Shares

A. Total number of shares

(1) Total number of shares authorized to be issued (as of December 31, 2011): 500,000,000 shares.

(2) Total shares issued and outstanding (as of December 31, 2011): 357,815,700 shares.

B. Shareholder list

(1) Largest shareholder and related parties:

(Unit: share)


Name	Relationship	As of December 31, 2011
LG Electronics	Largest Shareholder	135,625,000 (37.9%)
Young Soo Kwon	Related Party	23,000 (0.0%)

(Unit: share)


Name	Relationship	As of March 28, 2012
LG Electronics	Largest Shareholder	135,625,000 (37.9%)
Sang Beom Han	Related Party	930 (0.0%)

(2) Shareholders who are known to us to own 5% or more of our shares as of December 31, 2011:


Beneficial Owner	Number of Shares of Common Stock		Percentage
LG Electronics		135,625,000		37.9	%
National Pension Service		21,633,625		6.1	%

17. Directors and Employees

A. Directors

(1) Remuneration for directors in 2011 (H1)

(Unit: In millions of Won)


Classification	No. of directors ⁽¹⁾		Amount paid ⁽²⁾			Per capita average remuneration paid ⁽⁶⁾		Remarks
Non-outside directors		3		1,246	⁽³⁾		415		—
Outside directors who are not audit committee members		1		39	⁽⁴⁾		33		—
Outside directors who are audit committee members		3		90	⁽⁵⁾		28		—
Total		7		1,374			—		—

-	Period: January 1, 2011 ~ June 30, 2011

(1)	Number of directors as at June 30, 2011.

(2)	Amount paid is calculated on the basis of actually paid amount except accrued salary and severance benefits.

(3)	Among the non-outside directors, Yu Sig Kang does not receive any remuneration.

(4)	Includes remuneration for Dongwoo Chun whose term expired on March 11, 2011.

(5)	Includes remuneration for Yoshihide Nakamura whose term expired on March 11, 2011.

(6)	Per capita average remuneration paid is calculated by dividing total amount paid by the average number of directors for the six months ended June 30, 2011.

(2) Remuneration for directors in 2011 (H2)

(Unit: person, in millions of Won)


Classification	No. of directors ⁽¹⁾		Amount paid ⁽²⁾			Per capita average remuneration paid ⁽⁵⁾		Remarks
Non-outside directors		3		646	⁽³⁾		215		—
Outside directors who are not audit committee members		0		0			—		—
Outside directors who are audit committee members		3		84	⁽⁴⁾		28		—
Total		6		730			—		—

-	Period: June 30, 2011 ~ December 31, 2011

(1)	No. of directors as at December 31, 2011.

(2)	Amount paid is calculated on the basis of actually paid amount except accrued salary and severance benefits.

(3)	Among the non-outside directors, Yu Sig Kang does not receive any remuneration.

(4)	Includes remuneration for Jang Jin, who replaced Sunny Yi, as an outside director who is an audit committee member.

(5)	Per capita average remuneration paid is calculated by dividing total amount paid by the average number of directors for the six months ended December 31, 2011.

(3) Stock option

The following table sets forth certain information regarding our stock options as of December 31, 2011.

(Unit: Won, Stock)

Executive

Officers (including Former

Officers)

Grant Date

Exercise Period

Exercise
Price

Number of
Granted
Options

Number of
Exercised
Options

Number of
Cancelled
Options ⁽¹⁾

Number of
Exercisable
Options ⁽¹⁾

From

Ron H.Wirahadiraksa

April 7, 2005

April 8, 2008

April 7, 2012

(Won)

44,050

100,000

50,000

Duke M. Koo

April 7, 2005

April 8, 2008

April 7, 2012

(Won)

44,050

40,000

20,000

Sang Deog Yeo

April 7, 2005

April 8, 2008

April 7, 2012

(Won)

44,050

40,000

20,000

Jae Geol Ju

April 7, 2005

April 8, 2008

April 7, 2012

(Won)

44,050

40,000

20,000

Total

220,000

110,000

(1)

When the increase rate of our share price is the same or less than the increase rate of the Korea Composite Stock Price Index (“KOSPI”) over the three-year period following the grant date, only 50% of the initially granted shares are exercisable. Since the increase rate of our share price was lower than the increase rate of KOSPI during the period from April 7, 2005 to April 7, 2008, only 50% of the 220,000 initially granted shares are exercisable.

A. Employees

As of December 31, 2011, we had 34,803 employees (excluding our executive officers). The total amount of salary paid to our employees in 2011 based on cash payment (excluding welfare benefits and retirement expenses) was (Won)1,562,234 million. The following table provides details of our employees as of December 31, 2011:

(Unit: person, in millions of Won, year)


	Number of Employees		Total Salary in 2011 ⁽¹⁾ ⁽²⁾ ⁽³⁾		Per Capita Salary ⁽⁴⁾		Average Service Year
Male		24,195		1,184,898		51		4.9
Female		10,608		377,336		37		3.4
Total		34,803		1,562,234		47		4.5

(1)	Welfare benefits and retirement expenses have been excluded. Total welfare benefit provided to our employees in 2011 was (Won)316,371 million and the per capita welfare benefit provided was (Won)9.5 million.

(2)	Based on cash payment made in Korea.

(3)	Includes incentive payments to employees who have transferred from our affiliated companies.

(4)	Per Capita Salary is calculated using the average number of employees (total: 33,448, male: 23,333, female: 10,115) in 2011.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Financial Statements

For the Years Ended December 31, 2011 and 2010

(With Independent Auditors’ Report Thereon)

Contents


	Page
Independent Auditors’ Report		45

Consolidated Statements of Financial Position		47

Consolidated Statements of Comprehensive Income		48

Consolidated Statements of Changes in Equity		49

Consolidated Statements of Cash Flows		50

Notes to Consolidated Financial Statements		52

Independent Auditors’ Report

Based on a report originally issued in Korean

To the Board of Directors and Shareholders

LG Display Co., Ltd.:

We have audited the accompanying consolidated statements of financial position of LG Display Co., Ltd and subsidiaries (the “Group”) as of December 31, 2011 and 2010 and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Korean International Financial Reporting Standards. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Group as of December 31, 2011 and 2010 and its financial performance and its consolidated cash flows for the years then ended, in accordance with Korean International Financial Reporting Standards.

Without qualifying our opinion, we draw attention to the following:

As discussed in note 20 to the consolidated financial statements, LG Display Co., Ltd., along with its subsidiaries, has been under investigations by antitrust authorities in Korea and other countries with respect to possible anti-competitive activities in the LCD industry and named as defendants in a number of federal class actions in the United States and Canada and related individual lawsuits in connection with the alleged antitrust violations concerning the sale of LCD panels. The Group estimated and recognized losses related to these legal proceedings. However, actual losses are subject to change in the future based on new developments in each matter, or changes in circumstances, which could be materially different from those estimated and recognized by the Group.

/s/ KPMG Samjong Accounting Corp.

Seoul, Korea

February 22, 2012

This report is effective as of February 22, 2012, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2011 and 2010


(In millions of won)	Note		December 31, 2011		December 31, 2010
Assets
Cash and cash equivalents	6	(Won)		1,517,977		1,631,009
Deposits in banks	6, 13			815,000		1,503,000
Trade accounts and notes receivable, net	7, 13, 19, 23			2,740,107		3,000,661
Other accounts receivable, net	7, 13			212,870		244,662
Other current financial assets	9, 13			3,297		35,370
Inventories	8			2,317,370		2,215,217
Other current assets	7			251,444		210,514

Total current assets				7,858,065		8,840,433

Investments in equity accounted investees	10			385,145		325,532
Other non-current financial assets	9, 13			84,548		83,246
Deferred tax assets	30			1,424,005		1,074,853
Property, plant and equipment, net	11, 23			14,696,849		12,815,401
Intangible assets, net	12, 23			535,114		539,901
Other non-current assets	7, 13			179,205		178,292

Total non-current assets				17,304,866		15,017,225

Total assets		(Won)		25,162,931		23,857,658

Liabilities
Trade accounts and notes payable	22	(Won)		3,782,627		2,961,995
Current financial liabilities	13, 14			894,972		2,100,979
Other accounts payable				3,992,671		2,592,527
Accrued expenses				267,595		373,717
Income tax payable				58,259		153,890
Provisions				279,403		634,815
Advances received				616,351		44,879
Other current liabilities	18			19,556		19,027

Total current liabilities				9,911,434		8,881,829

Non-current financial liabilities	13, 14			3,722,364		2,542,900
Non-current provisions				5,400		8,773
Deferred tax liabilities	30			240		6,640
Employee benefits	17			146,638		78,715
Long-term advances received	19			668,914		945,287
Other non-current liabilities	18			576,913		332,547

Total non-current liabilities				5,120,469		3,914,862

Total liabilities				15,031,903		12,796,691

Equity
Share capital	21			1,789,079		1,789,079
Share premium				2,251,113		2,251,113
Reserves	21			12,181		(35,298	)
Retained earnings				6,063,359		7,031,163

Total equity attributable to equity holders of the Company				10,115,732		11,036,057

Non-controlling interests				15,296		24,910

Total equity				10,131,028		11,060,967

Total liabilities and equity		(Won)		25,162,931		23,857,658

See accompanying notes to the consolidated financial statements.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

For the years ended December 31, 2011 and 2010


(In millions of won, except earnings per share)	Note		2011			2010
Revenue	22, 23, 24	(Won)		24,291,289			25,511,535
Cost of sales	8, 22			(23,081,322	)		(21,780,880	)

Gross profit				1,209,967			3,730,655

Other income	25			1,223,545			1,483,443
Selling expenses	16			(728,419	)		(846,376	)
Administrative expenses	16			(564,337	)		(521,035	)
Research and development expenses				(681,228	)		(674,684	)
Other expenses	25			(1,383,864	)		(1,861,531	)

Results from operating activities				(924,336	)		1,310,472

Finance income	28			207,266			240,988
Finance costs	28			(363,309	)		(288,472	)
Other non-operating loss, net				(16,627	)		(15,611	)
Equity income on investments, net				16,047			18,192

Profit (loss) before income tax				(1,080,959	)		1,265,569
Income tax expense (benefit)	29			(293,064	)		106,335

Profit (loss) for the year				(787,895	)		1,159,234

Other comprehensive income (loss)
Net change in fair value of available-for-sale financial assets	28, 29			2,700			12,063
Defined benefit plan actuarial gains (losses)	17, 29			(23,732	)		4,480
Cumulative translation differences	28, 29			47,443			6,735
Gain (loss) on sales of own shares of associate accounted for using the equity method	29			(214	)		810
Income tax benefit (expense) on other comprehensive income (loss) items	29			4,958			(5,107	)

Other comprehensive income for the year, net of income tax				31,155			18,981

Total comprehensive income (loss) for the year		(Won)		(756,740	)		1,178,215

Profit (loss) attributable to:
Owners of the Company				(771,223	)		1,156,343
Non-controlling interests				(16,672	)		2,891

Profit (loss) for the year		(Won)		(787,895	)		1,159,234

Total comprehensive income (loss) attributable to:
Owners of the Company				(741,417	)		1,175,216
Non-controlling interests				(15,323	)		2,999

Total comprehensive income (loss) for the year		(Won)		(756,740	)		1,178,215

Earnings (loss) per share
Basic earnings (loss) per share	31	(Won)		(2,155	)		3,232

Diluted earnings (loss) per share	31	(Won)		(2,155	)		3,152

See accompanying notes to the consolidated financial statements.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2011 and 2010


(In millions of won)		Share capital		Share premium		Gain (loss) on sales of own shares of associates			Translation reserve			Fair value reserve			Retained earnings			Non-controlling interest			Total equity
Balances at January 1, 2010	(Won)		1,789,079		2,251,113		—			(36,369	)		(14,636	)		6,050,562			—			10,039,749

Total comprehensive income for the year
Profit for the year			—		—		—			—			—			1,156,343			2,891			1,159,234

Other comprehensive income
Net change in fair value of available-for-sale financial assets, net of tax			—		—		—			—			9,076			—			—			9,076
Cumulative translation differences, net of tax			—		—		—			5,821			—			—			108			5,929
Defined benefit plan actuarial gain, net of tax			—		—		—			—			—			3,166			—			3,166
Gain on sales of own shares of associates accounted for using the equity method, net of tax			—		—		810			—			—			—			—			810

Total other comprehensive income			—		—		810			5,821			9,076			3,166			108			18,981

Total comprehensive income for the year	(Won)		—		—		810			5,821			9,076			1,159,509			2,999			1,178,215

Transaction with owners, recognized directly in equity
Dividends to equity holders			—		—		—			—			—			(178,908	)		—			(178,908	)
Changes in ownership interests in subsidiaries			—		—		—			—			—			—			21,911			21,911

Balances at December 31, 2010	(Won)		1,789,079		2,251,113		810			(30,548	)		(5,560	)		7,031,163			24,910			11,060,967

Balances at January 1, 2011	(Won)		1,789,079		2,251,113		810			(30,548	)		(5,560	)		7,031,163			24,910			11,060,967

Total comprehensive income (loss) for the year
Loss for the year			—		—		—			—			—			(771,223	)		(16,672	)		(787,895	)

Other comprehensive income (loss)
Net change in fair value of available-for-sale financial assets, net of tax			—		—		—			—			1,704			—			—			1,704
Cumulative translation differences, net of tax			—		—		—			45,989			—			—			1,349			47,338
Defined benefit plan actuarial loss, net of tax			—		—		—			—			—			(17,673	)		—			(17,673	)
Loss on sales of own shares of associates accounted for using the equity method, net of tax			—		—		(214	)		—			—			—			—			(214	)

Total other comprehensive income (loss)			—		—		(214	)		45,989			1,704			(17,673	)		1,349			31,155

Total comprehensive income (loss) for the year	(Won)		—		—		(214	)		45,989			1,704			(788,896	)		(15,323	)		(756,740	)

Transaction with owners, recognized directly in equity
Dividends to equity holders			—		—		—			—			—			(178,908	)		—			(178,908	)
Changes in ownership interests in subsidiaries			—		—		—			—			—			—			5,709			5,709

Balances at December 31, 2011	(Won)		1,789,079		2,251,113		596			15,441			(3,856	)		6,063,359			15,296			10,131,028

See accompanying notes to the consolidated financial statements.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2011 and 2010


(In millions of won)	Note		2011			2010
Cash flows from operating activities:
Profit (loss) for the year		(Won)		(787,895	)		1,159,234
Adjustments for:
Income tax expense (benefit)	29			(293,064	)		106,335
Depreciation	11			3,413,450			2,756,532
Amortization of intangible assets	12			237,996			168,846
Gain on foreign currency translation				(85,804	)		(119,880	)
Loss on foreign currency translation				132,295			85,263
Gain on disposal of property, plant and equipment				(740	)		(1,387	)
Loss on disposal of property, plant and equipment				862			415
Impairment loss on property, plant and equipment				3,589			—
Loss on disposal of intangible assets				1,588			—
Impairment loss on intangible assets				5,574			—
Finance income				(59,542	)		(165,465	)
Finance costs				238,737			167,843
Equity in income of equity method accounted investees, net				(16,047	)		(18,192	)
Other income				(19,591	)		(23,913	)
Other expenses				323,971			708,718
Other non-operating losses				7			275

				3,095,386			4,824,624
Change in trade accounts and notes receivable				296,691			(81,196	)
Change in other accounts receivable				(90,398	)		(13,442	)
Change in other current assets				11,010			(50,310	)
Change in inventories				(102,153	)		(510,332	)
Change in other non-current accounts receivable				—			267
Change in other non-current assets				(39,796	)		(54,146	)
Change in trade accounts and notes payable				792,128			966,567
Change in other accounts payable				97,686			(30,419	)
Change in accrued expenses				(158,640	)		68,948
Change in other current liabilities				(5,384	)		11,654
Change in long-term advance received				281,975			379,105
Change in other non-current liabilities				13,770			10,231
Change in provisions				(208,390	)		(290,536	)
Change in defined benefit obligation				(69,727	)		(103,716	)

Cash generated from operating activities				3,914,158			5,127,299
Income taxes paid				(162,266	)		(242,389	)
Interest received				65,600			110,812
Interest paid				(151,634	)		(112,190	)

Net cash from operating activities		(Won)		3,665,858			4,883,532

See accompanying notes to the consolidated financial statements.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2011 and 2010