Edgar Filing: LG Display Co., Ltd.

(In millions of won)

September 30, 2017

December 31, 2016

Guaranteed deposits in banks

W1,225,963

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 November 2017

LG Display Co., Ltd.

(Translation of Registrant’s name into English)

LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 07336, 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 ☒ 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 ☒

QUARTERLY REPORT

(From January 1, 2017 to September 30, 2017)

THIS IS A TRANSLATION OF THE QUARTERLY 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. REFERENCES TO “Q1”, “Q2”, “Q3” AND “Q4” OF A FISCAL YEAR ARE REFERENCES TO THE THREE-MONTH PERIODS ENDED MARCH 31, JUNE 30, SEPTEMBER 30 AND DECEMBER 31, RESPECTIVELY, OF SUCH FISCAL YEAR. REFERENCES TO “Q1~Q3” OF A FISCAL YEAR ARE REFERENCES TO THE NINE-MONTH PERIOD ENDED SEPTEMBER 30 OF SUCH FISCAL YEAR.

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. K-IFRS ALSO DIFFERS IN CERTAIN RESPECTS FROM THE INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ISSUED BY THE INTERNATIONAL ACCOUNTING STANDARDS BOARD. 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	6
	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		9
	A.	Major products	9
	B.	Average selling price trend of major products	9
	C.	Major raw materials	10

4.	Production and Equipment		10
	A.	Production capacity and output	10
	B.	Production performance and utilization ratio	10
	C.	Investment plan	11

5.	Sales		11
	A.	Sales performance	11
	B.	Sales route and sales method	11

6.	Market Risks and Risk Management		12
	A.	Market risks	12
	B.	Risk management	13


7.	Derivative Contracts		13
	A.	Currency risks	13
	B.	Interest rate risks	13

8.	Major Contracts		14

9.	Research & Development		14
	A.	Summary of R&D-related expenditures	14
	B.	R&D achievements	14

10.	Intellectual Property		18

11.	Environmental and Safety Matters		18

12.	Financial Information		20
	A.	Financial highlights (Based on consolidated K-IFRS)	20
	B.	Financial highlights (Based on separate K-IFRS)	21
	C.	Consolidated subsidiaries	21
	D.	Status of equity investment	22

13.	Audit Information		23
	A.	Audit service	23
	B.	Non-audit service	23

14.	Board of Directors		23
	A.	Members of the board of directors	23
	B.	Committees of the board of directors	24
	C.	Independence of directors	25

15.	Information Regarding Shares		25
	A.	Total number of shares	25
	B.	Shareholder list	25

16.	Directors and Employees		25
	A.	Directors	25
	B.	Employees	26

17.	Material Events Subsequent to the Reporting Period		26

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

1.	Company

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 07336, Republic of Korea, and our telephone number is +82-2-3777-1010. Our website address is http://www.lgdisplay.com.

Domestic credit rating

(1)

Corporate bonds


Subject instrument	Month of rating	Credit rating⁽¹⁾	Rating agency (Rating range)
Corporate bonds	April 2015	AA	NICE Information Service Co., Ltd. (AAA ~ D)
	June 2016
	September 2016
	May 2017
	April 2015	AA	Korea Investors Service, Inc. (AAA ~ D)
	April 2016
	May 2017
	October 2017
	May 2015	AA	Korea Ratings Corporation (AAA ~ D)
	April 2016
	September 2016
	May 2017
	October 2017

(1)	Domestic corporate bond credit ratings are generally defined to indicate the following:


Subject instrument	Credit rating	Definition
Corporate bonds	AAA	Strongest capacity for timely repayment.
	AA+/AA/AA-	Very strong capacity for timely repayment. This capacity may, nevertheless, be slightly inferior than is the case for the highest rating category
	A+/A/A-	Strong capacity for timely repayment. This capacity may, nevertheless, be more vulnerable to adverse changes in circumstances or in economic conditions than is the case for higher rating categories.
	BBB+/BBB/BBB-	Capacity for timely repayment is adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity.
	BB+/BB/BB-	Capacity for timely repayment is currently adequate, but that there are some speculative characteristics that make the repayment uncertain over time.
	B+/B/B-	Lack of adequate capacity for repayment and speculative characteristics. Interest payment in time of unfavorable economic conditions is uncertain.
	CCC	Lack of capacity for even current repayment and high risk of default.
	CC	Greater uncertainties than higher ratings.
	C	High credit risk and lack of capacity for timely repayment.
	D	Insolvency.

(2)

Commercial paper


Subject instrument	Month of rating	Credit rating⁽¹⁾	Rating agency (Rating range)
Commercial paper	October 2015	A1	Korea Investors Service, Inc. (A1 ~ D)
	October 2015	A1	NICE Information Service Co., Ltd. (A1 ~ D)
	June 2016	A1	Korea Ratings Corporation (A1 ~ D)
	June 2016	A1	NICE Information Service Co., Ltd. (A1 ~ D)
	September 2016	A1	NICE Information Service Co., Ltd. (A1 ~ D)
	September 2016	A1	Korea Ratings Corporation (A1 ~ D)
	May 2017	A1	Korea Investors Service, Inc. (A1 ~ D)
	May 2017	A1	Korea Ratings Corporation (A1 ~ D)
	October 2017	A1	Korea Investors Service, Inc. (A1 ~ D)

(1)	Domestic commercial paper credit ratings are generally defined to indicate the following:


Subject instrument	Credit rating	Definition
Commercial paper	A1	Timely repayment capability is at the highest level with extremely low investment risk and is stable such that it will not be influenced by any reasonably foreseeable changes in external factors.
	A2	Strong capacity for timely repayment with very low investment risk. This capacity may, nevertheless, be slightly inferior than is the case for the highest rating category.
	A3	Capacity for timely repayment is adequate with low investment risk. This capacity may, nevertheless, be somewhat influenced by sudden changes in external factors.
	B	Capacity for timely repayment is acknowledged, but there are some speculative characteristics.
	C	Capacity for timely repayment is questionable.
	D	Insolvency.

LOGO ‘+’ or ‘-’ modifier can be attached to ratings A2 through B to differentiate ratings within broader rating categories.

Capitalization

(1)

Change in capital stock (as of September 30, 2017)

There were no changes to our issued capital stock during the quarterly reporting period ended September 30, 2017.

(2)

Convertible bonds

Not applicable.

Voting rights (as of September 30, 2017)


			(Unit: share)
Description			Number of shares
A. Total number of shares issued⁽¹⁾:	Common shares	⁽¹⁾		357,815,700

	Preferred shares			—
B. Shares without voting rights:	Common shares			—
	Preferred shares			—
C. Shares subject to restrictions on voting rights pursuant to our articles of incorporation:	Common shares			—
	Preferred shares			—
D. Shares subject to restrictions on voting rights pursuant to regulations:	Common shares			—
	Preferred shares			—
E. Shares with restored voting rights:	Common shares			—
	Preferred shares			—
Total number of issued shares with voting rights (=A – B – C – D + E):	Common shares			357,815,700

	Preferred shares			—

(1)	Authorized: 500,000,000 shares

Dividends

Dividends for the three most recent fiscal years


Description (unit)		2017 Q1~Q3		2016			2015
Par value (Won)			5,000		5,000			5,000
Profit for the period (million Won)⁽¹⁾			1,765,772		906,713			966,553
Earnings per share (Won)⁽²⁾			4,935		2,534			2,701

Total cash dividend amount for the period (million Won)			—		178,908			178,908

Total stock dividend amount for the period (million Won)			—		—			—

Cash dividend payout ratio (%)⁽³⁾			—		19.73	%		18.51	%
Cash dividend yield (%)⁽⁴⁾	Common shares		—		1.58	%		1.97	%
	Preferred shares		—		—			—
Stock dividend yield (%)	Common shares		—		—			—
	Preferred shares		—		—			—
Cash dividend per share (Won)	Common shares		—		500			500
	Preferred shares		—		—			—
Stock dividend per share (share)	Common shares		—		—			—
	Preferred shares		—		—			—

(1)	Based on profit for the period attributable to the owners of the controlling company.

(2)	Earnings per share is based on par value of W5,000 per share and is calculated by dividing net income by weighted average number of common shares.

(3)	Cash dividend payout ratio is the percentage that is derived by dividing total cash dividend by profit for the period attributable to the owners of the controlling company.

(4)

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 shares 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.

2.	Business

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 and OLED.

As of September 30, 2017, in order to support our business activities, we operated TFT-LCD and OLED production and research facilities in Paju and Gumi in Korea, and we have also established subsidiaries in the Americas, Europe and Asia.

As of September 30, 2017, our business consisted of the manufacture and sale of display and display related products utilizing TFT-LCD, OLED and other technologies under a single reporting business segment.

2017 Q1~Q3 consolidated operating results highlights


	(Unit: In billions of Won)
2017 Q1~Q3	Display business
Sales Revenue		20,664
Gross Profit		4,489
Operating Profit		2,417

Industry

(1)

Industry characteristics and growth potential

•

The entry barriers to manufacture display panels are relatively high due to the technology and capital intensive nature of the mass manufacturing process that is required to achieve economies of scale, among other factors.

•

While growth in the market for displays used in notebook computer, monitor and other traditional IT products has stagnated or declined, the market for small- and medium-sized displays (including those used in smartphones) in the rapidly evolving IT environment has shown steady growth. The display market for televisions has also shown steady growth mainly due to growing demand from developing countries as well as from consumers in general for larger sized display panels. As for displays used in industrial, automobile and other value added products, we expect to see growth in these markets.

(2)

Cyclicality

•

The display panel business is highly cyclical and sensitive to fluctuations in the general economy. The industry experiences recurring volatility caused by imbalances between supply and demand due to capacity expansion and changing production utilization rates within the industry.

•

Macroeconomic factors and other causes of business cycles can affect the rate of growth in demand for display panels. Accordingly, if supply exceeds demand, average selling prices of display panels may decrease. Conversely, if growth in demand outpaces growth in supply, average selling prices may increase.

(3)

Market conditions

•

Recently, various Chinese manufacturers have been actively reviewing making investments in ultra-large scale production facilities in order to secure competitiveness in the large display panel market. As a result, there is a concern regarding excessive competition in the LCD industry.

•

Most display panel manufacturers are located in Asia.

Korea: LG Display, Samsung Display, etc.

Taiwan: AU Optronics, Innolux, CPT, HannStar, etc.

Japan: Japan Display, Sharp, Panasonic LCD, etc.

China: BOE, CSOT, CEC Panda, etc.

(4)

Market shares

•

Our worldwide market share of large-sized display panels (i.e., panels that are 9 inches or larger) based on revenue is as follows:


	2017 Q1~Q3			2016			2015
Panels for Televisions⁽¹⁾		28.6	%		28.2	%		25.4	%
Panels for Monitors		36.1	%		36.6	%		39.0	%
Panels for Notebook Computers		21.3	%		27.8	%		27.3	%
Panels for Tablet Computers		28.3	%		24.1	%		22.5	%

Total		29.5	%		29.4	%		27.7	%

Source: Large-Area Display Market Tracker (IHS Technology)

(1)	Includes panels for public displays.

(5)

Competitiveness

•

Our ability to compete successfully depends on factors both within and outside our control, including product pricing, our relationship with customers, timely investments, adaptable production capabilities, development of new and premium products through technological advances, competitive production costs, 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 various technologies and products, including display panels with OLED, IPS, in-TOUCH and other technologies. With respect to OLED panels, following our supply of the world’s first 55-inch OLED 3D panels for televisions in January 2013, we have supplied ultra-high definition (“Ultra HD”) OLED panels for televisions, flexible plastic OLED panels for smartphones, round OLED panels for wearable devices among others and have shown that we are technologically a step ahead of the competition. With respect to TFT-LCD panels, we are leading the market with our differentiated products with IPS technology, such as our ultra-large and high definition Ultra HD television panels and 21:9 screen aspect ratio ultra-wide IPS curved monitors, and have prepared our production facilities to produce products with in-TOUCH technology.

•

Moreover, we entered into long-term sales contracts with major global firms to secure customers and expand partnerships for technology development.

New businesses

For our continued growth, we are actively exploring and preparing for new business opportunities that may arise in the changing market environment. As such, we are continually reviewing and looking at opportunities in the display and promising new industries.

3.	Major Products and Raw Materials

Major products

We manufacture TFT-LCD and OLED panels, of which a significant majority is sold overseas.


			(Unit: In billions of Won, except percentages)
Business area	Sales type	Items (Market)	Usage	Major trademark	Sales in 2017 Q1~Q3 (%)
Display	Product/ Service/ Other sales	Display panel (Overseas⁽¹⁾)	Panels for notebook computers, monitors, televisions, smartphones, tablets, etc.	LG Display	19,239 (93.1%)
		Display panel (Korea⁽¹⁾)	Panels for notebook computers, monitors, televisions, smartphones, tablets, etc.	LG Display	1,425 (6.9%)

Total					20,664 (100.0%)

•

Period: January 1, 2017 ~ September 30, 2017.

(1)	Based on ship-to-party.

Average selling price trend of major products

The average selling price of LCD panels per square meter of net display area shipped in the third quarter of 2017 increased by approximately 5% compared to the second quarter of 2017, largely as a result of a comparative increase in the shipment of small- and medium-sized panels, which generally have higher selling prices per square meter of net display area compared to other panels, while average selling prices of LCD panels exhibited varying trends according to demand by product category. There is no assurance that the average selling prices of LCD panels will not fluctuate in the future due to changes in market conditions.

(Unit: US$ / m²)

Description

2017 Q3

2017 Q2

2017 Q1

2016 Q4

Display panel⁽¹⁾⁽²⁾

600

574

608

642

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

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

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, except percentages)
Business area	Purchase type		Items		Usage		Cost⁽¹⁾		Ratio (%)			Suppliers
Display		Raw materials		Backlights		Display panel manufacturing		2,084		20.0	%		HeeSung Electronics, etc.
				Polarizers				1,565		15.0	%		LG Chem, etc.
				Glass				1,257		12.1	%		NEG, Asahi Glass, etc.
				Printed circuit boards				997		9.6	%		Korea SMT, etc.
				Others				4,503		43.3	%

Total								10,407		100.0	%

•

Period: January 1, 2017 ~ September 30, 2017.

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

4.	Production and Equipment

Production capacity and output

(1)

Production capacity

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

(Unit: 1,000 glass sheets)

Business area

Items

Location of facilities

2017 Q1~Q3⁽¹⁾

2016⁽²⁾

2015⁽²⁾

Display

Display panel

Gumi, Paju,
Guangzhou, Ochang

7,723

9,906

9,781

(1)	Calculated based on the maximum monthly input capacity (based on glass input substrate size for eighth generation glass sheets) during the period multiplied by the number of months in the period (i.e., 6 months).

(2)	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, Paju, Guangzhou and Ochang facilities in the periods indicated.

(Unit: 1,000 glass sheets)

Business area

Items

Location of facilities

2017 Q1~Q3

2016

2015

Display

Display panel

Gumi, Paju,
Guangzhou, Ochang

6,858

8,996

8,609

•

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

Production performance and utilization ratio


		(Unit: Hours, except percentages)
Production facilities	Available working hours in 2017 Q1~Q3	Actual working hours in 2017 Q1~Q3	Average utilization ratio
Gumi	6,552⁽¹⁾ (273 days)⁽²⁾	6,340⁽¹⁾ (264 days)⁽²⁾	96.8%
Paju	6,552⁽¹⁾ (273 days)⁽²⁾	6,552⁽¹⁾ (273 days)⁽²⁾	100.0%
Guangzhou	6,552⁽¹⁾ (273 days)⁽²⁾	6,552⁽¹⁾ (273 days)⁽²⁾	100.0%
Ochang	6,552⁽¹⁾ (273 days)⁽²⁾	5,688⁽¹⁾ (237 days)⁽²⁾	86.8%

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

(2)	Number of days is calculated by averaging the number of working days for each facility.

Investment plan

In 2016, our total capital expenditures on a cash out basis was W3.7 trillion. In 2017, we plan to continue capital expenditures to lead the market for OLED panels, prepare for mass production of future display products and respond to increases in demand for large-sized panels.

Sales

Sales performance


					(Unit: In billions of Won)
Business area	Sales types		Items (Market)			2017 Q1~Q3		2016		2015
Display		Products, etc.		Display panel	Overseas⁽¹⁾		19,239		24,679		26,166
Display		Products, etc.		Display panel	Korea⁽¹⁾		1,425		1,825		2,218
					Total		20,664		26,504		28,384

(1)	Based on ship-to-party.

Sales route and sales method

(1)

Sales organization

•

As of September 30, 2017, each of our television, IT, mobile and OLED businesses 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

•

As part of our sales strategy, we have secured stable sales to major personal computer manufacturers and leading consumer electronics manufacturers globally, led the television market with our OLED and other market leading television panels, increased the proportion of sales of our differentiated television panels, such as our Ultra HD and large television panels, in our product mix and strengthened sales of high-resolution, IPS, narrow bezel and other high-end display panels in the monitor, notebook computer and tablet markets.

•

In the smartphone, commercial products (including interactive whiteboards and video wall displays), industrial products (including aviation and medical equipment) and automobile displays segments, we have continued to build a strong and diversified business portfolio by expanding our business with customers with a global reach on the strength of our differentiated products applying IPS, plastic OLED, high-resolution, high-reliability, Super Narrow bezel, in-TOUCH and other technologies.

(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

Market risks

The display industry continues to experience continued declines in the average selling prices of TFT-LCD and OLED 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 display 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 manufacturers in Korea, Taiwan, China and Japan coupled with changes in the production mix of such manufacturers.

Our ability to compete successfully depends on factors both within and outside our control, including product pricing, performance and reliability, timely investments, adaptable production capabilities, utilization of differentiated technologies in 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 foreign currency denominated purchases of raw materials are denominated mainly in U.S. dollars and Japanese Yen. Seeking to achieve stable management, we take every precaution in our foreign currency risk management to minimize the risk of foreign currency fluctuations on our foreign currency denominated assets and liabilities.

Risk management

As the average selling prices of TFT-LCD and OLED panels can continue to decline over time irrespective of industry-wide cyclical fluctuations, we may find it hard to manage risks associated with certain factors that are outside our control. However, we counteract such declines in average selling prices by increasing the proportion of high value added panels in our product mix while also implementing various cost reduction measures. In addition, in order to manage our risk against foreign currency fluctuations, we continually monitor our currency position and risk, and when needed, we may from time to time enter into cross-currency interest rate swap contracts and foreign currency forward contracts.

7.	Derivative Contracts

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 Japanese Yen and the Chinese Yuan.

•

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 and the Chinese Yuan.

•

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.

•

During the first nine months of 2017, we entered into an aggregate of US$100 million in Won/US$ forward foreign exchange contracts with Shinhan Bank and HSBC, which contracts were subsequently settled on June 26, 2017. As of September 30, 2017, there are no outstanding amounts to be settled under our foreign currency derivative instruments.

We recognized a gain on valuation of derivative instruments in the amount of W3,106 million with respect to foreign exchange derivative instruments held during the first nine months of 2017.

Interest rate risks

•

Our exposure to interest rate risks relates primarily to our floating rate long term loan obligations. We have established and are managing interest rate risk policies to minimize uncertainty and costs associated with interest rate fluctuations by monitoring cyclical interest rate fluctuations and enacting countermeasures.

•

As of September 30, 2017, we have entered into an aggregate of W350 billion in interest rate swap agreements with Shinhan Bank and NongHyup Bank, for which we have not applied hedge accounting.

We recognized a gain on valuation of derivative instruments in the amount of W592 million with respect to interest rate derivative instruments held during the first nine months of 2017.

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
	Hewlett-Packard	January 2011 ~	Patent licensing of semi-conductor device technology
	Ignis Innovation, Inc.	July 2016 ~	Patent licensing of OLED related technology
Technology licensing/supply agreement	HannStar Display Corporation	December 2013 ~	Patent cross-licensing of LCD technology
	AU Optronics Corporation	August 2011~	Patent cross-licensing of LCD technology
	Innolux Corporation	July 2012 ~	Patent cross-licensing of LCD technology
	Universal Display Corporation	January 2015 ~ December 2022	Patent cross-licensing of OLED related technology

9.	Research & Development

Summary of R&D-related expenditures


	(Unit: In millions of Won, except percentages)
Items		2017 Q1~Q3			2016			2015
Material Cost			468,972			677,423			679,603
Labor Cost			482,611			479,650			510,455
Depreciation Expense			218,826			136,826			196,799
Others			212,339			129,348			159,983

Total R&D-Related Expenditures			1,382,748			1,423,247			1,546,840

	Selling & Administrative Expenses		661,991			880,794			995,336
Accounting Treatment⁽¹⁾	Manufacturing Cost		468,509			220,165			324,437
	Development Cost (Intangible Assets)		252,248			322,288			227,067

R&D-Related Expenditures / Revenue Ratio (Total R&D-Related Expenditures ÷ Revenue for the period × 100)			6.7	%		5.4	%		5.4	%

(1)	For accounting treatment purposes, selling & administrative expenses are presented as research and development expenses in our statements of comprehensive income, net of amortization of capitalized intangible asset development costs.

R&D achievements

Achievements in 2015

(1)

Developed the world’s narrowest, at the time, module bezel (0.7mm) LTPS smartphone display (5.3-inch FHD in-TOUCH)

•

Developed the world’s first FHD in-TOUCH display (LTPS 5.3-inch FHD) applying the “Neo Edge” module process (new manufacturing technology) in January 2015

•

Set-up glue & laser cutting process, 0.6mm panel bezel (L/R)

(2)

Developed the world’s first QHD in-TOUCH LTPS smartphone display (5.5-inch QHD)

•

Developed LTPS 5.5-inch QHD display applying LG Display’s new capacitive type in-cell touch technology with “all points sensing” in March 2015; luminance: 500nit, contrast ratio: 1500:1(using photo alignment & negative LC), 0.95mm panel bezel (L/R)

•

Delivered differentiated value proposition based on touch performance, simplified SCM process and competitive cost innovation

(3)

Developed the world’s narrowest, at the time, bezel videowall product (49-inch FHD)

•

Developed the world’s narrowest bezel videowall product (bezel to bezel 3.5mm)

•

Optimized sizing of panel PAD and mechanical bezel

(4)

Developed 43-inch Ultra HD slim and light LED television product

•

Achieved LCD module thickness of 8.4mm

•

Reduced thickness through publication of set LCM parts (back cover and middle cabinet)

(5)

Developed the world’s first Ultra HD OLED television product (55-inch, 65-inch and 77-inch Ultra HD)

•

Developed the world’s first Ultra HD television product lineup

(6)

Developed the world’s first Ultra HD television product applying DRD technology (55-inch, 49-inch and 43-inch Ultra HD)

•

World’s first application of Ultra HD DRD technology based on an RGBW(M+) pixel structure

•

Utilized RGBW(M+) technology to optimize picture quality (high definition, high luminance, low energy consumption and High Dynamic Range (“HDR”))

(7)

Developed Ultra HD asymmetric RGBW(M+) structure product (15.6-inch)

•

Improved panel transmittance, lowered energy consumption and enhanced outdoor visibility compared to previous models

(8)

Developed the world’s first “second display” LTPS smartphone product (5.7-inch QHD+)

•

Delivered differentiated set design through the realization of a second display by applying a panel exterior manufacturing process

•

Developed panel and instrumental optics technology for the independent operation of main display and second display

•

Developed advanced power consumption technology for the realization of “Always On Display” functionality for the second display

(9)

Developed the world’s first four-sided borderless monitor product (23.8-inch FHD and 27-inch QHD)

•

Developed the world’s first four-sided borderless design LCD module

•

Improved design by reducing lower bezel size from 12.6mm to 6.15mm (23.8-inch FHD)

(10)

Developed the world’s first in-TOUCH notebook product (15.6-inch and 14-inch FHD)

•

Improved touch functionality and cost competitiveness through world’s first application of in-TOUCH technology on notebook products

•

Simplified customer supply chain management by providing “touch” total solution

(11)

Developed the world’s first 15.6-inch FHD notebook narrow bezel (2.9mm) product

•

Ultra-light and narrow concept project for 15.6-inch line extension to LG Electronics’ 13.3-inch and 14-inch Gram products

•

Delivered differentiated design utilizing 2.9mm bezels (Top/L/R)

•

Ultra slim and light design (225g, 2.3t)

(12)

Developed 1900R curved monitor product (34-inch, 21:9 screen aspect ratio)

•

Strengthened product competitiveness by improving the curvature radius of 21:9 screen aspect ratio monitors (3800 reduced to 1900R)

•

Applied 0.25T etching to address looseness and backlight bleeding attributable to curved screen

•

Applied COT structure to enhance panel transmittance and address color mixing defects

(13)

Developed the world’s first four-sided borderless 55-inch Ultra HD LED television product

•

Developed panel reverse structure in order to deliver a four-sided borderless product

(14)

Developed the world’s first a-Si 98-inch Quad Ultra HD 120Hz television product

•

Developed the world’s first drive technology for a-Si based extra-large 8K 120Hz panels

(15)

Developed the world’s first 65-inch 8K M+ product

•

Achieved cost competitiveness and maximized 8K transmittance by applying GIP/Source single bank for the first time in the world

•

Developed super resolution (4K enhanced to 8K) and M+ algorithm technologies

(16)

Developed 75-inch Ultra HD Signage product

•

Delivered 11.9mm thickness on large-size LCD module

Achievements in 2016

(1)

Developed the world’s narrowest, at the time, bezel videowall product (55-inch/49-inch FHD, bezel to bezel 1.8mm)

•

Delivered 0.9mm even bezel, four-sided borderless product (bezel to bezel 1.8mm)

(2)

Developed the world’s first ultra-stretch format display product (86-inch, 58:9 screen aspect ratio)

•

Developed new display panel size and screen aspect ratio (86-inch, 58:9 screen aspect ratio)

•

Applied next-generation stain (per pixel) offset technology

(3)

Developed the world’s first ultra-large display product utilizing data single bank and GIP technology (86-inch Ultra HD)

•

Achieved cost-competitiveness by developing world’s first ultra-large display product utilizing data single bank and GIP technology

(4)

Developed the world’s first in-TOUCH monitor product (23-inch)

•

Improved touch functionality and strengthened cost-competitiveness by applying the world’s first in-TOUCH technology to monitor display products

•

Simplified customer software configuration management by providing touch total solution

(5)

Developed ultra-slim OLED television display product applying high dynamic range (65-inch, 800 nit luminance, 2.52 mm module thickness)

•

Applied high dynamic range (HDR) technology to achieve 800 nit peak luminance and improved display quality

•

Achieved module thickness of 2.52mm (without back cover) and 5.92mm (with back cover)

(6)

Developed combined 5.3-inch QHD in-TOUCH + 3D cover glass product for LG Electronics

•

Developed world class smartphone product (G5) through collaboration with other LG Group companies

•

Strengthened competitiveness of design by achieving processability and productivity for 0.4t 3D cover glass

•

Improved power consumption of AoD Mode from Self Font Generation technology and operation optimization

(7)

Developed the world’s first large-scale outdoor high luminance 3000 nit product (75-inch Ultra HD)

•

Developed the world’s first large-scale outdoor 75-inch Ultra HD, high luminance 3000 nit product

•

Achieved cost competitiveness and power consumption reduction through utilization of high transmittance M+ panel

(8)

Developed the world’s first FHD/Ultra HD multi-input Interactive Whiteboard product (75-inch Ultra HD)

•

Strengthened product competitiveness through delivery of customer FHD/Ultra HD selective input functionality

(9)

Developed 4.9mm depth Art Slim2 Ultra HD television (55-inch/65-inch Ultra HD)

•

Strengthened design competitiveness through delivery of ultra-slim product with application of Glass Light Guide Plate

(10)

Developed the world’s largest 21:9 screen aspect ratio curved monitor (37.5-inch UltraWide Quad HD (“WQHD”)+)

•

Continued pioneering of the market with the world’s largest 21:9 screen aspect ratio IPS curved monitor lineup (37.5-inch, 2300R curvature radius, 44mm curvature depth)

•

Established flagship line through application of new high definition technology (WQHD+, 3840 x 1600 resolution)

•

Improved panel transmittance and backlight bleeding through our first-time application of a Super-IPS COT panel structure to monitor models

(11)

Developed the world’s first in-TOUCH GIP/DRD notebook product (15.6-inch FHD)

•

Strengthened competitiveness through application of GIP/DRD technology to FHD-quality notebook in-TOUCH products

(12)

Developed a transparent 32-inch FHD product

•

Achieved high transmittance of transparent panel through application of RGBW(M+) panel technology

(13)

Developed the world’s first Light Absorption Polarizer (“LAP”) product (65-inch/60-inch Ultra HD)

•

Developed differentiated wide color gamut solution

(14)

Developed the world’s first Ultra HD DRD product (50-inch Ultra HD)

•

Utilized Ultra HD RGBW(M+) pixel structure-based DRD technology to strengthen product competitiveness and optimize picture quality (high definition, high luminance, low energy consumption and HDR)

(15)

Developed a 5.7-inch QHD flexible display product

•

Developed a flexible display smartphone product through collaboration with other LG Group companies

•

Reduced the lower bezel size by 0.59mm and improved power consumption by applying VESA Display Stream Compression 1.1

(16)

Developed the world’s first wallpaper OLED television product (65-inch Ultra HD)

•

Achieved an ultra-slim wallpaper-style design that completely sticks to walls (65-inch, 3.9 mm hindmost thickness, 7.4 kg)

•

Achieved long-distance signal and power transmission technology for the separation of the driver circuit

Achievements in 2017

(1)

Developed 5.7-inch QHD+ full vision display (LG Electronics)

•

Developed a full vision display smartphone product (G6) through strategic collaboration with other LG Group companies

•

Applied first 18:9 screen aspect ratio with 4-corner round display

(2)

Developed mobile LTPS 30Hz product (SH 5.1-inch FHD)

•

Secured 30Hz low-frequency drive technology based on LTPS TFT-LCD

•

Reduced logic power consumption through 30Hz low-frequency drive (reduced from 96mW to 69mW on 5.1-inch FHD)

(3)

Developed and released the world’s first Crystal Sound OLED, or CSO, television product

•

Released product with a new platform concept through development of OLED panel product with integrated speakers

•

Delivered OLED television product that achieves differentiated value not only in picture quality and design, but also sound quality

(4)

Developed notebook oxide product (13.9-inch, Ultra HD)

•

Achieved high definition/narrow bezel product through application of oxide BCE GIP technology

•

Delivered low power consumption product through application of low refresh rate, or LRR, technology

(5)

Developed medical monitor product for surgical endoscope (27.0-inch, Ultra HD)

•

Newly entered the medical devices market through development and production of medical monitor product for surgical endoscope

•

Achieved high definition (3,840 x 2,160), high luminance (800 nit) and high contrast ratio (1,300:1)

•

Implemented coverglass direct bonding applying our own manufacturing processes (M6 line)

(6)

Developed the world’s first four-side borderless monitor with a resolution of 8K4K (31.5-inch 8K4K Oxide)

•

Pioneered Ultra HD Premium MNT market through development of the world’s first four-side borderless monitor with a resolution of 8K4K

•

Delivered Ultra HD based on oxide GIP (280 PPI with a resolution of 7680x4320)

•

Delivered wide color gamut (Adobe RGB 100%/DCI 98%), four-side borderless

(7)

Developed the world’s largest automotive Center Information Display (“CID”) product (15.4-inch Widescreen Ultra Extended Graphics Array (“WUXGA”))

•

Developed the world’s largest auto component display in the automotive industry

•

Guaranteed the first 1000hr reliability in the automotive industry

(8)

Developed the world’s first 88-inch Ultra Stretch display product

•

Strengthened competitiveness through application of smart (digital) stepper

10.

Intellectual Property

As of September 30, 2017, our cumulative patent portfolio (including patents that have already expired) included a total of 33,671 patents, consisting of 15,747 in Korea and 17,924 in other countries.

11.

Environmental and Safety Matters

We are subject to a variety of environmental laws and 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 relevant laws and regulations in each area of the environment, including with respect to the treatment of chemical by-products. 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.

In accordance with the Framework Act on Low Carbon, Green Growth, we implemented the greenhouse gas emission and energy consumption target system from 2012 to 2014. In 2015, we implemented the greenhouse gas trading system, under which we are responsible to meet our emission targets based on the emission credits allocated to us by the Ministry of Environment of the Korean government. As a result, we have been investing in additional equipment and there may be other costs associated with meeting reduction targets, which may have a negative effect on our profitability or production activities. As a designated company subject to greenhouse gas emission targets under the Framework Act on Low Carbon, Green Growth, if we fail to meet a reduction target and are unable to comply with the government’s subsequent enforcement notice relating to such failure, we may be subject to fines. Furthermore, as a designated company subject to the Act on Allocation and Trading of Greenhouse Gas Emissions, if do not have enough emission credits, we may be required to purchase additional credits or be subject to fines.

In connection with the greenhouse gas emission and energy reduction target system, we submitted a statement of our domestic emissions and energy usage for 2016 to the Korean government in March 2017 after it was certified by BSI Korea, a government-designated certification agency. The table below sets forth yearly levels of our greenhouse gases emissions and energy usage in the statement submitted to the Korean government:


	(Unit: thousand tonnes of CO₂ equivalent; Tetra Joules)
Category	2016		2015		2014
Greenhouse gases		5,851		7,348		7,537
Energy		60,423		60,146		60,002

Operations at our manufacturing plants are subject to regulation and periodic scheduled and unscheduled on-site inspections by the 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 to manage our water and air pollution, toxic materials and waste. In December 2013, to ensure safe water quality and reduce costs, we entered into a contract with a specialist company to operate our waste water treatment facilities. In stages beginning in November 1997, we have obtained environmental management system ISO 14001 certifications for our domestic panel and module production facilities and our overseas module production plants in Nanjing, Yantai and Guangzhou, China, and with respect to our domestic panel and module production plants, we received ISO 50001 certification in December 2013 for our energy management system.

In addition, in August 2014, GP1, our newest eighth-generation panel fabrication facility located in Guangzhou, China, was the first electronics plant in China to receive the “Green Plant” designation under China’s Green China Policy, in addition to receiving ISO 14001, ISO 50001, OHSAS 18001, ISO 9001, PAS 2050 and ISO 14064-1 certifications. Furthermore, with respect to our production facilities in Gumi, we have been certified by the Ministry of Environment as a “Green Company” for P1 and our Gumi module production plant since 1997, P2 and P3 since 2006 and P4, P5 and P6 since 2008. Also, we received certification to self-inspect designated waste products with respect to our Paju plant by the Ministry of Environment in 2011, which was recertified in 2013. In recognition of our efforts to reduce greenhouse gas emissions, we were awarded a commendation from the Minster of Environment in the efforts against climate change category in the 2013 Green Management Awards, which was jointly hosted by the Ministry of Environment and the Ministry of Trade, Industry & Energy. In addition, in recognition of our efforts to improve recycling and reduce waste, we received a citation in 2014 for being a leading recycling company from the Prime Minister of Korea and, in recognition of our continued water conservation activities (reuse system investments, etc.) and greenhouse gas emission reduction activities (process gas and energy reduction, etc.), we attained the highest level, Leadership A, and received the grand prize award at the CDP Water Korea Best Awards in 2016 from the Carbon Disclosure Project, which was presided over by the Carbon Disclosure Project Korea Committee. We also attained a Leadership A in the climate change information technology sector and received a carbon management honors award. In 2017, in recognition of efficient control, management and operating systems implemented in our manufacturing facilities, we received the top-level certification, Level 1, under the Factory Energy Management System evaluation presided by the Korea Energy Agency.

In the case of the European Union’s Restriction of Hazardous Substances (RoHS) Directive 2011/65/EU, with the adoption of Directive (EU) 2015/863 in 2016, four additional substances (four phthalate substances) will be added to the six already restricted substances and the additional restrictions are scheduled to come into effect on July 22, 2019. In order to address the latent risk elements of the four phthalate substances scheduled to be restricted in 2019 and to establish a more stable management system, we implemented in 2016 a preemptive response process with respect to such four phthalate substances. In implementing this process, we collaborated with external agencies to ascertain regulatory trends and establish our response strategy, and we formulated and applied effective management measures through the collaborative efforts of our development, procurement and quality teams. Beryllium (Be) was not designated internationally as a mandatorily restricted substance but has continued to be the subject of discussion for restriction, and certain of our customers have designated it as a restricted substance not to be used in products. Accordingly, we have completed verification of the parts used in products for customers who have banned the use of Beryllium. We have also conducted verification of the parts used in products for all customers who are expected to implement a ban and we have established a Beryllium verification process for parts in development. Through such efforts, we have established a voluntary hazardous substance response process that can be expanded to products for all customers, not only those who have requested a response.

In October 2005, we became the first display panel company to receive accreditation as an International Accredited Testing Laboratory by the Korea Laboratory Accreditation Scheme, which is operated by the Korean Ministry of Trade, Industry & Energy. In September 2006, we received international accreditation from TUV SUD, EU’s German accreditation agency, as a RoHS testing laboratory. Our efforts to keep pace with the increasingly stringent accreditation standards and to receive and maintain such accreditations are part of our on-going efforts to systematically monitor environmentally controlled substances in our component parts inventory. Moreover, we participated in reforming IEC 62321, an international testing standard published by the International Electrotechnical Commission and used by RoHS, and the commission adopted our halogen-free combustion ion chromatography method in as IEC 62321-3-2, which was published in June 2013.

In February 2015, we were issued a corrective order and assessed a fine of W276 million, which we subsequently followed and paid, respectively, for violating the Occupational Health and Safety Act in connection with an accidental nitrogen gas exposure at one of our production facilities in Paju, Korea in January 2015. In 2016, we were assessed an additional fine of W10 million in connection with such accidental exposure for other violations of the Occupational Health and Safety Act. To prevent such accidents happening again in the future, we have strengthened our safety standards and management and employee education.

In 2015 and 2016, we were assessed fines in the aggregate amount of W1.6 million, which we subsequently paid, for failure to meet certain reporting obligations under the Industrial Safety and Health Act. To prevent such violations from occurring again, we have strengthened our monitoring process and management and employee education training initiatives.

In June 2017, we were assessed a fine of W1 million, which we subsequently paid, for failure to meet certain waste disposal subcontractor requirements under the Waste Management Act. To prevent such violations from occurring again, we are strengthening the periodic evaluation process for our waste management subcontractors.

In June 2017, we were investigated by the Ministry of Employment and Labor in connection with the occurrence of a safety accident and found to be in violation of certain provisions of the Industrial Safety and Health Act relating to supervisory obligations. As a result, we were issued a corrective order and assessed a fine of W2.4 million. Relevant authorities are currently conducting further investigations. In order to prevent such accidents from occurring again, we are strengthening our safety management standards and training for our employees.

12.

Financial Information

Financial highlights (Based on consolidated K-IFRS)


	(Unit: In millions of Won)
Description	As of September 30, 2017			As of December 31, 2016			As of December 31, 2015
Current assets		11,334,062			10,484,186			9,531,634
Quick assets		8,670,030			8,196,401			7,179,965
Inventories		2,664,032			2,287,785			2,351,669
Non-current assets		17,457,667			14,400,150			13,045,526
Investments in equity accounted investees		119,724			172,683			384,755
Property, plant and equipment, net		15,004,141			12,031,449			10,546,020
Intangible assets		888,592			894,937			838,730
Other non-current assets		1,445,210			1,301,081			1,276,021

Total assets		28,791,729			24,884,336			22,577,160

Current liabilities		8,079,139			7,058,219			6,606,712
Non-current liabilities		5,544,478			4,363,729			3,265,492

Total liabilities		13,623,617			11,421,948			9,872,204

Share capital		1,789,079			1,789,079			1,789,079
Share premium		2,251,113			2,251,113			2,251,113
Retained earnings		10,582,527			9,004,283			8,158,526
Other equity		(88,404	)		(88,478	)		(5,766	)
Non-controlling interest		633,797			506,391			512,004

Total equity		15,168,112			13,462,388			12,704,956


	(Unit: In millions of Won, except for per share data and number of consolidated entities)
Description	For the nine months ended September 30, 2017		For the year ended December 31, 2016		For the year ended December 31, 2015
Revenue		20,664,143		26,504,074		28,383,884
Operating profit		2,417,142		1,311,416		1,625,566
Operating profit from continuing operations		1,893,409		931,508		1,023,456
Profit for the period		1,893,409		931,508		1,023,456
Profit attributable to:
Owners of the Company		1,765,772		906,713		966,553
Non-controlling interest		127,637		24,795		56,903
Basic earnings per share		4,935		2,534		2,701
Diluted earnings per share		4,935		2,534		2,701
Number of consolidated entities		20		19		18

Financial highlights (Based on separate K-IFRS)


	(Unit: In millions of Won)
Description	As of September 30, 2017		As of December 31, 2016		As of December 31, 2015
Current assets		9,093,211		8,712,575		8,246,330
Quick assets		7,221,721		7,005,592		6,396,117
Inventories		1,871,490		1,706,983		1,850,213
Non-current assets		15,729,352		13,100,175		11,964,363
Investments		2,781,868		2,656,026		2,543,205
Property, plant and equipment, net		11,136,767		8,757,973		7,719,022
Intangible assets		697,218		673,966		607,398
Other non-current assets		1,113,499		1,012,210		1,094,738

Total assets		24,822,563		21,812,750		20,210,693

Current liabilities		7,047,907		6,176,344		6,505,979
Non-current liabilities		4,453,877		3,400,959		2,375,131

Total liabilities		11,501,784		9,577,303		8,881,110

Share capital		1,789,079		1,789,079		1,789,079
Share premium		2,251,113		2,251,113		2,251,113
Retained earnings		9,280,587		8,195,255		7,289,333
Reserves		0		0		58

Total equity		13,320,779		12,235,447		11,329,583


	(Unit: In millions of Won, except for per share data)
Description	For the nine months ended September 30, 2017		For the year ended December 31, 2016		For the year ended December 31, 2015
Revenue		19,160,088		24,419,295		25,856,426
Operating profit		1,631,938		709,138		770,856
Operating profit from continuing operations		1,273,308		967,078		968,209
Profit for the period		1,273,308		967,078		968,209
Basic earnings per share		3,559		2,703		2,706
Diluted earnings per share		3,559		2,703		2,706

Consolidated subsidiaries (as of September 30, 2017)


Company Interest	Primary Business	Location	Equity
LG Display America, Inc.	Sales	U.S.A.		100	%
LG Display Japan Co., Ltd.	Sales	Japan		100	%
LG Display Germany GmbH	Sales	Germany		100	%
LG Display Taiwan Co., Ltd.	Sales	Taiwan		100	%
LG Display Nanjing Co., Ltd.	Manufacturing	China		100	%
LG Display Shanghai Co., Ltd.	Sales	China		100	%
LG Display Poland Sp. zo.o.	Manufacturing	Poland		100	%
LG Display Guangzhou Co., Ltd.	Manufacturing	China		100	%
LG Display Shenzhen Co., Ltd.	Sales	China		100	%
LG Display Singapore Pte. Ltd.	Sales	Singapore		100	%
L&T Display Technology (Fujian) Limited	Manufacturing and sales	China		51	%
LG Display Yantai Co., Ltd.	Manufacturing	China		100	%
Nanumnuri Co., Ltd.	Workplace services	Korea		100	%
LG Display (China) Co., Ltd.	Manufacturing and sales	China		70	%
Unified Innovative Technology, LLC	Managing intellectual property	U.S.A.		100	%
LG Display Guangzhou Trading Co., Ltd.	Sales	China		100	%
Global OLED Technology LLC	Managing intellectual property	U.S.A.		100	%
LG Display Vietnam Haiphong Co., Ltd.	Manufacturing	Vietnam		100	%
Suzhou Lehui Display Co., Ltd.	Manufacturing and sales	China		100	%
MMT (Money Market Trust)	Money market trust	Korea		100	%

Status of equity investments (as of September 30, 2017)

(1)

Consolidated subsidiaries

Company

Investment Amount
(in millions)

Initial Equity
Investment Date

Equity
Interest

LG Display America, Inc.

US$411

September 24, 1999

100

LG Display Japan Co., Ltd.

¥95

October 12, 1999

100

LG Display Germany GmbH

EUR1

November 5, 1999

100

LG Display Taiwan Co., Ltd.

NT$116

May 19, 2000

100

LG Display Nanjing Co., Ltd.

CNY3,020

July 15, 2002

100

LG Display Shanghai Co., Ltd.

CNY4

January 16, 2003

100

LG Display Poland Sp. zo.o.

PLN511

September 6, 2005

100

LG Display Guangzhou Co., Ltd.

CNY1,655

August 7, 2006

100

LG Display Shenzhen Co., Ltd.

CNY4

August 28, 2007

100

LG Display Singapore Pte. Ltd.

US$1.1

January 12, 2009

100

L&T Display Technology (Fujian) Limited

CNY116

January 5, 2010

LG Display Yantai Co., Ltd.

CNY1,008

April 19, 2010

100

Nanumnuri Co., Ltd.

W800

March 19, 2012

100

LG Display (China) Co., Ltd.⁽¹⁾

CNY8,232

December 27, 2012

Unified Innovative Technology, LLC

US$9

March 21, 2014

100

LG Display Guangzhou Trading Co., Ltd.

CNY1.2

May 27, 2015

100

Global OLED Technology LLC

US$138

May 7, 2015

100

LG Display Vietnam Haiphong Co., Ltd.

US$100

May 13, 2016

100

Suzhou Lehui Display Co., Ltd.

CNY637

July 1, 2016

100

MMT (Money Market Trust)⁽²⁾

W157,335

March 31, 2017

100

(1)	In June 2017, LG Display Guangzhou Co., Ltd., our consolidated subsidiary, invested an additional W8,557 million in LG Display (China) Co., Ltd.

(2)	We conducted money market trust acquisitions in the amount of W157,335 million during the nine months ended September 30, 2017.

(2)

Affiliated companies

Company⁽¹⁾

Carrying Amount
(in millions)

Date of
Incorporation

Equity
Interest

Paju Electric Glass Co., Ltd.

W48,236

January 2005

Invenia Co., Ltd.

W3,161

January 2001

Wooree E&L Co., Ltd.

W7,407

June 2008

LB Gemini New Growth Fund No. 16⁽²⁾

W5,761

December 2009

Can Yang Investments Limited⁽³⁾

W2,063

January 2010

YAS Co., Ltd.

W10,665

April 2002

Avatec Co., Ltd.

W22,123

August 2000

Arctic Sentinel, Inc.

—

June 2008

CYNORA GmbH⁽⁴⁾

W20,308

March 2003

(1)	During the nine months ended September 30, 2017, we divested our entire equity interest in New Optics Ltd. and Narae Nanotech Corporation.

(2)	We participate as a limited member in LB Gemini New Growth Fund No. 16. During the reporting period, we received a distribution of W2,076 million as return of principal from our investments. The distribution did not affect our percentage interest.

(3)	During the reporting period, we recognized an impairment loss of W4,234 million, the difference between the carrying amount and the recoverable amount of our equity interest in Can Yang Investments Limited, which loss was categorized as finance costs.

(4)	In September 2017, we acquired 88,584 preferred shares with voting rights of CYNORA GmbH for W20,308 million. As of September 30, 2017, our percentage ownership interest in CYNORA GmbH is 14%, and we are entitled to appoint one director of CYNORA GmbH.

13.

Audit Information

Audit service


	(Unit: In millions of Won, hours)
Description	2017 Q1~Q3	2016	2015
Auditor	KPMG Samjong	KPMG Samjong	KPMG Samjong
Activity	Audit by independent auditor	Audit by independent auditor	Audit by independent auditor
Compensation⁽¹⁾	1,040 (450)⁽²⁾	1,020 (440)⁽²⁾	990 (400)⁽²⁾
Time required	11,521	18,291	17,530

(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.

Non-audit service

None.

14.

Board of Directors

Members of the board of directors

As of September 30, 2017 our board of directors consisted of two non-outside directors, one non-standing director and four outside directors.


		(As of September 30, 2017)
Name	Position	Primary responsibility
Sang Beom Han	Representative Director (non-outside), Chief Executive Officer and Vice Chairman	Chairman of the board of directors
Sang Don Kim⁽¹⁾	Director (non-outside), Chief Financial Officer and Senior Vice President	Overall head of finances
Hyun Hwoi Ha⁽²⁾	Director (non-standing)	Related to the overall management
Jin Jang⁽³⁾	Outside Director	Related to the overall management
Joon Park⁽⁴⁾	Outside Director	Related to the overall management
Sung Sik Hwang⁽⁵⁾	Outside Director	Related to the overall management
Kun Tai Han⁽⁶⁾	Outside Director	Related to the overall management

(1)	Sang Don Kim was reappointed for another term as a non-outside director at the annual general meeting of shareholders held on March 23, 2017.

(2)

Hyun Hwoi Ha was appointed as a non-standing director at the annual general meeting of shareholders held on March 23, 2017. Mr. Ha is also the chief executive officer of LG Corp., a non-standing director of LG Hausys, Ltd., a non-standing director of LG International Corp., a non-standing director of LG Uplus Corp., a non-standing director of LG Economic Research Institute and a non-standing director of LG CNS Co., Ltd.

(3)	Jin Jang was reappointed for another term as an outside director at the annual general meeting of shareholders held on March 23, 2017. Mr. Jang is also the chief executive officer of Silicon Display Co., Ltd.

(4)	Joon Park is also an outside director of Green Cross Holdings Corp.

(5)	Sung Sik Hwang is also an outside director of Kyobo Life Insurance Co., Ltd.

(6)	Kun Tai Han is also the chief executive officer of Hans Consulting.

Committees of the board of directors

We have the following committees that serve under our board of directors: Audit Committee, Outside Director Nomination Committee and Management Committee. The Management Committee consists of two non-outside directors, Sang Boem Han and Sang Don Kim.

During the reporting period, two meetings of the Outside Director Nomination Committee were held and the composition of the Outside Director Nomination Committee was as follows.


	(As of March 8, 2017)
Committee	Composition	Member
Outside Director Nomination Committee	1 non-standing director and 2 outside directors	Yu Sig Kang, Joon Park⁽¹⁾, Sung Sik Hwang

(1)	Joon Park was appointed as a member of the outside director nomination committee of the board of directors by the board of directors on January 23, 2017.

As of September 30, 2017, the composition of the Audit Committee was as follows.


		(As of September 30, 2017)
Committee	Composition	Member
Audit Committee	3 outside directors	Sung Sik Hwang⁽¹⁾, Joon Park, Kun Tai Han⁽²⁾

(1)	Sung Sik Hwang is the audit committee chairman.

(2)	Kun Tai Han was appointed as a member of the audit committee of the board of directors at the annual general meeting of shareholders held on March 23, 2017.

Independence of directors

Directors are appointed in accordance with the procedures of the Commercial Act and other relevant laws and regulations. Our board of directors is independent as four out of the seven directors that comprise the board are outside directors. Outside directors candidates are nominated for appointment at a shareholders’ meeting after undergoing rigorous review by the Outside Director Nomination Committee.

All of our current outside directors were nominated by the Outside Director Nomination Committee, and all of our current non-outside directors were nominated by the board of directors.

15.

Information Regarding Shares

Total number of shares

(1)

Total number of shares authorized to be issued (as of September 30, 2017): 500,000,000 shares.

(2)

Total shares issued and outstanding (as of September 30, 2017): 357,815,700 shares.

Shareholder list

(1)

Largest shareholder and related parties as of September 30, 2017:


Name	Relationship	Number of shares of common stock	Equity interest
LG Electronics	Largest Shareholder	135,625,000	37.90%
Sang Beom Han	Related Party	31,355	0.01%
Sang Don Kim	Related Party	4,000	0.00%

(2)

Shareholders who are known to us to own 5% or more of our shares as of September 30, 2017:


Beneficial owner	Number of shares of common stock		Equity interest
LG Electronics		135,625,000		37.90	%
National Pension Service		32,930,270		9.20	%

16.

Directors and Employees

Directors

(1)

Remuneration for directors in 2017 Q1~Q3


	(Unit: person, in millions of Won)
Classification	No. of directors⁽¹⁾		Amount paid⁽²⁾		Per capita average remuneration paid⁽³⁾
Non-outside directors		3		2,442		814
Outside directors who are not audit committee members		1		59		59
Outside directors who are audit committee members		3		176		59
Total		7		2,677		932

(1)	Number of directors as of September 30, 2017.

(2)	Amount paid is calculated on the basis of amount of cash actually paid.

(3)	Per capita average remuneration paid is calculated by dividing total amount paid by the average number of directors for the nine months ended September 30, 2017.

(2)

Remuneration for individual directors and audit committee members

Not required for quarterly reports.

(3)

Stock options

Not applicable.

Employees

As of September 30, 2017, we had 33,127 employees (excluding our executive officers). On average, our male employees have served 9.0 years and our female employees have served 7.5 years. The total amount of salary paid to our employees for the nine months ended September 30, 2017 based on income tax statements submitted to the Korean tax authority in accordance with Article 20 of the Income Tax Act was W1,428,185 million for our male employees and W340,688 million for our female employees. The following table provides details of our employees as of September 30, 2017:


	(Unit: person, in millions of Won, year)
	Number of employees⁽¹⁾		Total salary in 2017 Q1~Q3^(2)(3)(4)		Total salary per capita⁽⁵⁾		Average years of service
Male		24,899		1,428,185		58		9.0
Female		8,228		340,688		41		7.5
Total		33,127		1,768,873		54		8.7

(1)	Excludes temporary employees hired for temporarily required tasks or as temporary replacements for employees on maternity/child-rearing leaves.

(2)	Welfare benefits and retirement expenses have been excluded. Total welfare benefit provided to our employees for the nine months ended September 30, 2017 was W271,071 million and the per capita welfare benefit provided was W8.3 million.

(3)	Based on income tax statements (amounts are based on pre-income tax figures), which are submitted to the Korean tax authority in accordance with Article 20 of the Income Tax Act.

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

(5)	Calculated using the average number of employees (male: 24,517, female: 8,277) for the nine months ended September 30, 2017.

17.

Material Events Subsequent to the Reporting Period

On October 27, 2017, we issued corporate bonds in an aggregate amount of Won 200 billion. The following table provides details of such issuance:

Type of Securities

Type of
Offering

Issue
Date

Issue Amount

Interest
Rate

Credit Rating

Date of Maturity

Underwriters

Corporate Bonds

Public

October 27, 2017

Won 150,000,000,000

2.564%

AA (Korea
Investors
Service;
Korea
Ratings
Corporation)

October 27, 2020

KB Securities; Korea Investment & Securities; CAPE Investment & Securities; NH Investment & Securities; Mirae Asset Daewoo

October 27, 2017

Won 50,000,000,000

2.911

October 27, 2022

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Financial Statements

(Unaudited)

September 30, 2017 and 2016

(With Independent Auditors’ Review Report Thereon)

Table of Contents


	Page
Independent Auditors’ Review Report		29

Condensed Consolidated Interim Statements of Financial Position		31

Condensed Consolidated Interim Statements of Comprehensive Income (Loss)		32

Condensed Consolidated Interim Statements of Changes in Equity		33

Condensed Consolidated Interim Statements of Cash Flows		34

Notes to the Condensed Consolidated Interim Financial Statements		36

Independent Auditors’ Review Report

Based on a report originally issued in Korean

To the Board of Directors and Shareholders

LG Display Co., Ltd.:

Reviewed Financial Statements

We have reviewed the accompanying condensed consolidated interim financial statements of LG Display Co., Ltd. and subsidiaries (the “Group”) which comprise the condensed consolidated interim statement of financial position as of September 30, 2017, the condensed consolidated interim statements of comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2017 and 2016, the statements of changes in equity and cash flows for the nine-month periods ended September 30, 2017 and 2016, and notes comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Condensed Consolidated Interim Financial Statements

Management is responsible for the preparation and fair presentation of these condensed consolidated interim financial statements in accordance with Korean International Financial Reporting Standards No. 1034, Interim Financial Reporting, and for such internal controls as management determines necessary to enable the preparation of condensed consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to issue a report on these condensed consolidated interim financial statements based on our reviews.

We conducted our reviews in accordance with the Review Standards for Quarterly and Semiannual Financial Statements established by the Security and Futures Commission of the Republic of Korea. A review of interim financial information consists principally of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial statements referred to above are not presented fairly, in all material respects, in accordance with Korean International Financial Reporting Standards No. 1034, Interim Financial Reporting.

Other Matters

The procedures and practices utilized in the Republic of Korea to review such condensed consolidated interim financial statements may differ from those generally accepted and applied in other countries.

We audited the consolidated statement of financial position as of December 31, 2016 and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this review report, in accordance with Korean Standards on Auditing, and our report thereon, dated February 21, 2017, expressed an unqualified opinion. The accompanying condensed consolidated statement of financial position of the Group as of December 31, 2016, presented for comparative purposes, is not different from that audited by us from which it was derived in all material respects.

KPMG Samjong Accounting Corp.

Seoul, Korea

November 10, 2017

This report is effective as of November 10, 2017 the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying condensed consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that the above review report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Statements of Financial Position

(Unaudited)

As of September 30, 2017 and December 31, 2016


(In millions of won)	Note		September 30, 2017			December 31, 2016
Assets
Cash and cash equivalents		4, 25	W	1,974,036			1,558,696
Deposits in banks		4, 25		1,328,010			1,163,750
Trade accounts and notes receivable, net		5, 14, 25, 27		4,847,867			4,957,993
Other accounts receivable, net		5, 25		87,416			143,592
Other current financial assets		6, 25		23,790			28,016
Inventories		7		2,664,032			2,287,785
Prepaid income taxes				371			592
Other current assets		5		408,540			343,762

Total current assets				11,334,062			10,484,186
Deposits in banks		4, 25		11			13
Investments in equity accounted investees		8		119,724			172,683
Other non-current financial assets		6, 25		63,522			74,633
Property, plant and equipment, net		9, 17		15,004,141			12,031,449
Intangible assets, net		10, 17		888,592			894,937
Deferred tax assets		23		972,821			867,011
Other non-current assets		5		408,856			359,424

Total non-current assets				17,457,667			14,400,150

Total assets			W	28,791,729			24,884,336

Liabilities
Trade accounts and notes payable		25, 27	W	2,962,856			2,877,326
Current financial liabilities		11, 25		1,218,849			667,909
Other accounts payable		25		2,621,112			2,449,517
Accrued expenses				652,139			639,629
Income tax payable				371,785			257,082
Provisions		13		73,814			55,972
Advances received				134,188			61,818
Other current liabilities		13		44,396			48,966

Total current liabilities				8,079,139			7,058,219
Non-current financial liabilities		11, 25		4,165,532			4,111,333
Non-current provisions		13		24,043			8,155
Defined benefit liabilities, net		12		297,306			142,987
Long-term advances received		14		960,361			—
Deferred tax liabilities		23		27,324			32,108
Other non-current liabilities		13		69,912			69,146

Total non-current liabilities				5,544,478			4,363,729

Total liabilities				13,623,617			11,421,948

Equity
Share capital		15		1,789,079			1,789,079
Share premium				2,251,113			2,251,113
Retained earnings				10,582,527			9,004,283
Reserves		15		(88,404	)		(88,478	)

Total equity attributable to owners of the Controlling Company				14,534,315			12,955,997

Non-controlling interests				633,797			506,391

Total equity				15,168,112			13,462,388

Total liabilities and equity			W	28,791,729			24,884,336

See accompanying notes to the condensed consolidated interim financial statements.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Statements of Comprehensive Income (Loss)

(Unaudited)

For the three-month and nine-month periods ended September 30, 2017 and 2016


(In millions of won, except earnings per share)	Note	For the three-month period ended September 30						For the nine-month period ended September 30
		2017			2016			2017			2016
Revenue	16, 17, 27	W	6,973,095			6,723,775		W	20,664,143			18,568,118
Cost of sales	7, 18, 27		(5,717,586	)		(5,784,216	)		(16,175,486	)		(16,391,890	)

Gross profit			1,255,509			939,559			4,488,657			2,176,228
Selling expenses	19		(212,817	)		(165,580	)		(678,546	)		(491,349	)
Administrative expenses	19		(170,625	)		(152,396	)		(511,032	)		(451,529	)
Research and development expenses			(286,074	)		(298,420	)		(881,937	)		(826,275	)

Operating profit			585,993			323,163			2,417,142			407,075

Finance income	22		35,752			92,766			164,176			165,474
Finance costs	22		(45,954	)		(60,494	)		(192,961	)		(192,080	)
Other non-operating income	21		226,800			231,530			767,282			860,948
Other non-operating expenses	21		(205,871	)		(335,345	)		(873,892	)		(995,176	)
Equity in gain (loss) of equity accounted investees, net			2,003			(3,169	)		6,915			5,477

Profit before income tax			598,723			248,451			2,288,662			251,718
Income tax expense	23		(121,479	)		(58,897	)		(395,253	)		(144,893	)

Profit for the period			477,244			189,554			1,893,409			106,825

Other comprehensive income (loss)
Items that will never be reclassified to profit or loss
Remeasurements of net defined benefit liabilities	12		(3,639	)		(1,033	)		(11,963	)		(3,817	)
Other comprehensive income (loss) from asssociates and joint ventures			(45	)		(7	)		448			203
Related income tax	12		881			250			2,895			924

			(2,803	)		(790	)		(8,620	)		(2,690	)
Items that are or may be reclassified to profit or loss
Net change in fair value of available-for-sale financial assets	22		—			—			—			(77	)
Foreign currency translation differences for foreign operations			109,892			(237,609	)		(895	)		(315,442	)
Other comprehensive income (loss) from asssociates and joint ventures			204			4,009			2,367			(2,362	)
Related income tax	22		—			—			—			19

			110,096			(233,600	)		1,472			(317,862	)

Other comprehensive income (loss) for the period, net of income tax			107,293			(234,390	)		(7,148	)		(320,552	)

Total comprehensive income (loss) for the period		W	584,537			(44,836	)	W	1,886,261			(213,727	)

Profit attributable to:
Owners of the Controlling Company		W	441,982			177,825			1,765,772			108,676
Non-controlling interests			35,262			11,729			127,637			(1,851	)

Profit for the period		W	477,244			189,554		W	1,893,409			106,825

Total comprehensive income (loss) attributable to:
Owners of the Controlling Company		W	532,860			(27,145	)		1,757,226			(172,160	)
Non-controlling interests			51,677			(17,691	)		129,035			(41,567	)

Total comprehensive income (loss) for the period		W	584,537			(44,836	)	W	1,886,261			(213,727	)

Earnings per share (In won)
Basic earnings per share	24	W	1,235			497		W	4,935			304

Diluted earnings per share	24	W	1,235			497		W	4,935			304

See accompanying notes to the condensed consolidated interim financial statements.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Statements of Changes in Equity

(Unaudited)

For the nine-month periods ended September 30, 2017 and 2016


	Attributable to owners of the Controlling Company
(In millions of won)	Share capital		Share premium		Retained earnings			Reserves			Sub-total			Non-controlling interests			Total equity
Balances at January 1, 2016	W	1,789,079		2,251,113		8,158,526			(5,766	)		12,192,952			512,004			12,704,956

Total comprehensive income (loss) for the period
Profit(loss) for the period		—		—		108,676			—			108,676			(1,851	)		106,825
Other comprehensive income (loss)
Net change in fair value of available-for-sale financial assets, net of tax		—		—		—			(58	)		(58	)		—			(58	)
Remeasurements of net defined benefit liabilities, net of tax		—		—		(2,893	)		—			(2,893	)		—			(2,893	)
Foreign currency translation differences for foreign operations, net of tax		—		—		—			(275,726	)		(275,726	)		(39,716	)		(315,442	)
Other comprehensive income (loss) from asssociates and joint ventures		—		—		203			(2,362	)		(2,159	)		—			(2,159	)

Total other comprehensive loss		—		—		(2,690	)		(278,146	)		(280,836	)		(39,716	)		(320,552	)

Total comprehensive income (loss) for the period	W	—		—		105,986			(278,146	)		(172,160	)		(41,567	)		(213,727	)

Transaction with owners, recognized directly in equity
Dividends to equity holders		—		—		(178,908	)		—			(178,908	)		—			(178,908	)
Subsidiaries’ dividends distributed to non-controlling interests		—		—		—			—			—			(10,658	)		(10,658	)

Balances at September 30, 2016	W	1,789,079		2,251,113		8,085,604			(283,912	)		11,841,884			459,779			12,301,663

Balances at January 1, 2017	W	1,789,079		2,251,113		9,004,283			(88,478	)		12,955,997			506,391			13,462,388

Total comprehensive income (loss) for the period
Profit for the period		—		—		1,765,772			—			1,765,772			127,637			1,893,409
Other comprehensive income (loss)
Remeasurements of net defined benefit liabilities, net of tax		—		—		(9,068	)		—			(9,068	)		—			(9,068	)
Foreign currency translation differences for foreign operations, net of tax		—		—		—			(2,293	)		(2,293	)		1,398			(895	)
Other comprehensive income from asssociates and joint ventures		—		—		448			2,367			2,815			—			2,815

Total other comprehensive income (loss)		—		—		(8,620	)		74			(8,546	)		1,398			(7,148	)

Total comprehensive income for the period	W	—		—		1,757,152			74			1,757,226			129,035			1,886,261

Transaction with owners, recognized directly in equity
Dividends to equity holders		—		—		(178,908	)		—			(178,908	)		—			(178,908	)
Subsidiaries’ dividends distributed to non-controlling interests		—		—		—			—			—			(5,929	)		(5,929	)
Capital contribution from non-controlling interests		—		—		—			—			—			4,300			4,300

Balances at September 30, 2017	W	1,789,079		2,251,113		10,582,527			(88,404	)		14,534,315			633,797			15,168,112

See accompanying notes to the condensed consolidated interim financial statements.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Statements of Cash Flows

(Unaudited)

For the nine-month periods ended September 30, 2017 and 2016


(In millions of won)	Note	2017			2016
Cash flows from operating activities:
Profit for the period		W	1,893,409			106,825
Adjustments for:
Income tax expense	23		395,253			144,893
Depreciation	18		2,013,067			2,035,720
Amortization of intangible assets	18		316,036			265,905
Gain on foreign currency translation			(128,321	)		(67,054	)
Loss on foreign currency translation			85,638			97,423
Expenses related to defined benefit plans	12		148,679			165,833
Gain on disposal of property, plant and equipment			(14,259	)		(7,662	)
Loss on disposal of property, plant and equipment			9,340			3,122
Gain on disposal of intangible assets			(308	)		—
Loss on disposal of intangible assets			9			20
Impairment loss on intangible assets			1,717			125
Finance income			(103,672	)		(124,025	)
Finance costs			118,544			128,488
Equity in gain of equity method accounted investees, net	8		(6,915	)		(5,477	)
Other income			(16,505	)		(15,546	)
Other expenses			165,368			133,661

			2,983,671			2,755,426
Changes in
Trade accounts and notes receivable			223,256			(9,725	)
Other accounts receivable			35,132			46,085
Other current assets			9,105			(110,854	)
Inventories			(370,064	)		(98,484	)
Other non-current assets			(115,894	)		(97,887	)
Trade accounts and notes payable			45,297			256,237
Other accounts payable			(66,742	)		(40,616	)
Accrued expenses			20,974			(78,084	)
Other current liabilities			(4,228	)		4,557
Long-term advance received			1,020,470			—
Other non-current liabilities			5,178			14,004
Provisions			(130,380	)		(107,083	)
Defined benefit liabilities, net			(6,311	)		(119,841	)

			665,793			(341,691	)
Cash generated from operating activities			5,542,873			2,520,560
Income taxes paid			(358,096	)		(169,412	)
Interests received			36,855			36,290
Interests paid			(99,246	)		(95,367	)

Net cash provided by operating activities		W	5,122,386			2,292,071

See accompanying notes to the condensed consolidated interim financial statements.

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Condensed Consolidated Interim Statements of Cash Flows, Continued

(Unaudited)

For the nine-month periods ended September 30, 2017 and 2016


(In millions of won)	Note		2017			2016
Cash flows from investing activities:
Dividends received			W	8,639			59,023
Proceeds from withdrawal of deposits in banks				1,358,632			2,247,561
Increase in deposits in banks				(1,522,890	)		(1,880,547	)
Acquisition of available-for-sale financial assets				(195	)		(747	)
Proceeds from disposal of available-for-sale financial assets				—			419
Acquisition of financial assets at fair value through profit or loss				—			(1,500	)
Acquisition of investments in equity accounted investees				(20,308	)		—
Proceeds from investments in equity accounted investees				6,697			21,907
Acquisition of property, plant and equipment				(4,798,574	)		(2,558,563	)
Proceeds from disposal of property, plant and equipment				114,624			32,885
Acquisition of intangible assets				(335,803	)		(318,087	)
Proceeds from disposal of intangible assets				874			151
Government grants received				1,505			2,699
Receipt from (payment for) settlement of derivatives				2,745			(36	)
Proceeds from collection of short-term loans				693			4,650
Increase in short-term loans				—			(2,132	)
Increase in long-term loans				(300	)		(23,817	)
Decrease in deposits				3,639			472
Increase in deposits				(2,534	)		(6,899	)

Net cash used in investing activities				(5,182,556	)		(2,422,561	)

Cash flows from financing activities:		26
Proceeds from short-term borrowings				—			107,345
Repayments of short-term borrowings				(113,209	)		—
Proceeds from issuance of debentures				298,780			298,784
Proceeds from long-term debt				847,702			1,483,343
Repayments of long-term debt				—			(347,693	)
Repayments of current portion of long-term debt and debentures				(364,774	)		(832,939	)
Subsidiaries’ dividends distributed to non-controlling interests				(5,929	)		(10,658	)
Capital contribution from non-controlling interests				4,300			—
Dividends paid				(178,908	)		(178,908	)

Net cash provided by financing activities				487,962			519,274

Net increase in cash and cash equivalents				427,792			388,784
Cash and cash equivalents at January 1				1,558,696			751,662
Effect of exchange rate fluctuations on cash held				(12,452	)		(64,509	)

Cash and cash equivalents at September 30			W	1,974,036			1,075,937

See accompanying notes to the condensed consolidated interim financial statements.

1.	Reporting Entity

(a)

Description of the Controlling Company

LG Display Co., Ltd. (the “Controlling Company”) was incorporated in February 1985 and the Controlling Company is a public corporation listed in Korea Exchange since 2004. The main business of the Controlling Company and its subsidiaries (the “Group”) is to manufacture and sell displays and its related products. As of September 30, 2017, the Group is operating Thin Film Transistor Liquid Crystal Display (“TFT-LCD”) and Organic Light Emitting Diode (“OLED”) panel manufacturing plants in Gumi, Paju and China and TFT-LCD and OLED module manufacturing plants in Gumi, Paju, China, Poland and Vietnam. The Controlling Company is domiciled in the Republic of Korea with its address at 128 Yeouidae-ro, Yeongdeungpo-gu, Seoul, the Republic of Korea. As of September 30, 2017, LG Electronics Inc., a major shareholder of the Controlling Company, owns 37.9% (135,625,000 shares) of the Controlling Company’s common stock.

The Controlling Company’s common stock is listed on the Korea Exchange under the identifying code 034220. As of September 30, 2017, there are 357,815,700 shares of common stock outstanding. The Controlling Company’s common stock is also listed on the New York Stock Exchange in the form of American Depository Shares (“ADSs”) under the symbol “LPL”. One ADS represents one-half of one share of common stock. As of September 30, 2017, there are 29,572,308 ADSs outstanding.

1.	Reporting Entity, Continued

(b)

Consolidated Subsidiaries as of September 30, 2017

(In millions)

Subsidiaries

Location

Percentage of
ownership

Fiscal
year end

Date of
incorporation

Business

Capital stocks

LG Display
America, Inc.

San Jose,

U.S.A.

100%

December 31

September 24,
1999

Sell Display products

USD 411

LG Display
Japan Co., Ltd.

Tokyo,
Japan

100%

December 31

October 12,
1999

Sell Display products

JPY 95

LG Display
Germany GmbH

Eschborn,
Germany

100%

December 31

November 5,
1999

Sell Display products

EUR 1

LG Display
Taiwan Co., Ltd.

Taipei,
Taiwan

100%

December 31

April 12,

1999

Sell Display products

NTD 116

LG Display
Nanjing Co., Ltd.

Nanjing,
China

100%

December 31

July 15,

2002

Manufacture Display
products

CNY 3,020

LG Display
Shanghai Co., Ltd.

Shanghai,
China

100%

December 31

January 16,
2003

Sell Display products

CNY 4

LG Display
Poland Sp. z o.o.

Wroclaw,
Poland

100%

December 31

September 6,
2005

Manufacture Display
products

PLN 511

LG Display
Guangzhou Co., Ltd.

Guangzhou,
China

100%

December 31

June 30,

2006

Manufacture Display
products

CNY 1,655

LG Display
Shenzhen Co., Ltd.

Shenzhen,
China

100%

December 31

August 28,
2007

Sell Display products

CNY 4

LG Display
Singapore Pte. Ltd.

Singapore

100%

December 31

January 12,
2009

Sell Display products

USD 1.1

L&T Display Technology
(Fujian) Limited

Fujian,

China

51%

December 31

January 5,
2010

Manufacture and sell
LCD module and
LCD monitor sets

CNY 116

LG Display Yantai Co., Ltd.

Yantai,

China

100%

December 31

April 19,

2010

Manufacture Display
products

CNY 1,008

Nanumnuri Co., Ltd.

Gumi,

South Korea

100%

December 31

March 21,

2012

Janitorial services

KRW 800

LG Display
(China) Co., Ltd.(*1)

Guangzhou,
China

70%

December 31

December 10,
2012

Manufacture and sell
Display products

CNY 8,232

Unified Innovative Technology, LLC

Wilmington,
U.S.A.

100%

December 31

March 12,

2014

Manage intellectual
property

USD 9

LG Display Guangzhou
Trading Co., Ltd.

Guangzhou,
China

100%

December 31

April 28,

2015

Sell Display products

CNY 1.2

Global OLED

Technology, LLC

Herndon,
U.S.A.

100%

December 31

December 18,
2009

Manage OLED
intellectual property

USD 138

LG Display Vietnam Haiphong
Co., Ltd.

Haiphong,

Vietnam

100%

December 31

May 5,

2016

Manufacture Display
products

USD 100

Suzhou Lehui Display Co., Ltd.

Suzhou,
China

100%

December 31

July 1,

2016

Manufacture and sell
LCD module and
LCD monitor sets

CNY 637

Money Market Trust(*2)

Seoul,

South Korea

100%

December 31

—

Money market trust

KRW 157,335

(*1)	In September 2017, LG Display Guangzhou Co., Ltd. (“LGDGZ”) contributed W8,557 million in cash for the capital increase of LG Display (China) Co., Ltd. (“LGDCA”).

(*2)	For the nine-month period ended September 30, 2017, the Controlling Company acquired W157,335 million in Money Market Trust.

2.	Basis of Presenting Financial Statements

(a)

Statement of Compliance

The condensed consolidated interim financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRSs”) No.1034, Interim Financial Reporting. They do not include all of the information required for full annual consolidated financial statements and should be read in conjunction with the consolidated financial statements of the Group as of and for the year ended December 31, 2016.

(b)

Basis of Measurement

The condensed consolidated interim financial statements have been prepared on the historical cost basis except for the following material items in the statements of financial position:

•

derivative instruments, financial assets at fair value through profit or loss and available-for-sale financial assets are measured at fair value, and

•

net defined benefit liabilities are recognized as the present value of defined benefit obligations less the fair value of plan assets

(c)

Functional and Presentation Currency

The condensed consolidated interim financial statements are presented in Korean won, which is the Controlling Company’s functional currency.

(d)

Use of Estimates and Judgments

The preparation of the condensed consolidated interim financial statements in conformity with K-IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied in its consolidated financial statements as of and for the year ended December 31, 2016.

3.	Summary of Significant Accounting Policies

The significant accounting policies followed by the Group in the preparation of its condensed consolidated interim financial statements are the same as those followed by the Group in its preparation of the consolidated financial statements as of and for the year ended December 31, 2016, except for the application of K-IFRS No. 1034, Interim Financial Reporting, and the amended accounting standards explained below:

(a)

Changes in Accounting Policies

(i)

K-IFRS No. 1007, Statement of Cash Flows

The Group has adopted the amendment to K-IFRS No. 1007, Statement of Cash Flows, since January 1, 2017. The amendment to K-IFRS No. 1007 is part of the disclosure initiative to improve presentation and disclosure in financial statements and requires an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities including both changes due to cash flows and non-cash changes such as changes from financing cash flows, changes arising from obtaining or losing control of subsidiaries or other businesses, the effect of changes in foreign exchange rates and changes in fair value and other changes. The Group has applied the amendment and disclosed changes in liabilities arose from financing activities including both changes due to cash flows and non-cash changes in note 26.

(ii)

K-IFRS No. 1012, Income Taxes

The Group has adopted the amendment to K-IFRS No. 1012, Income Taxes, since January 1, 2017. The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendment provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. There is no impact of applying this amendment on the condensed consolidated interim financial statements.

3.	Summary of Significant Accounting Policies, Continued

(b)

New and Amended Standards and Interpretations Not Yet Adopted

A number of new standards and interpretations are effective for annual periods beginning after January 1, 2017 and earlier application is permitted; however, the Group has not early adopted the following new standards and interpretations in preparing these condensed consolidated interim financial statements.

(i)

K-IFRS No. 1109, Financial Instruments

The Group plans to adopt K-IFRS No. 1109, Financial Instruments, in its consolidated financial statements for annual periods beginning on January 1, 2018, assess the financial impact of the adoption of K-IFRS No. 1109 and disclose the results in its consolidated financial statements for the year ending December 31, 2017. As of September 30, 2017, other than the potential impacts described in the consolidated financial statements as of and for the year ended December 31, 2016, there are no significant changes in relation to preparation for the adoption of this new standard.

(ii)

K-IFRS No. 1115, Revenue from Contracts with Customers

The Group plans to adopt K-IFRS No. 1115, Revenue from Contracts with Customers, in its consolidated financial statements for annual periods beginning on January 1, 2018, assess the financial impact of the adoption of K-IFRS No. 1115 and disclose the results in its consolidated financial statements for the year ending December 31, 2017. As of September 30, 2017, other than the potential impacts described in the consolidated financial statements as of and for the year ended December 31, 2016, there are no significant changes in relation to preparation for the adoption of this new standard.

(iii)

K-IFRS No. 2112, Foreign Currency Transactions and Advance Consideration

According to the new interpretation, K-IFRS No. 2112, Foreign Currency Transactions and Advance Consideration, the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognizes the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. If there are multiple payments or receipts in advance, the entity shall determine a date of the transaction for each payment or receipt of advance consideration. K-IFRS No. 2122 is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. Management is currently assessing the potential impact on its condensed consolidated interim financial statements resulting from the application of new interpretation.

4.	Cash and Cash Equivalents and Deposits in Banks

Cash and cash equivalents and deposits in banks as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Current assets
Cash and cash equivalents
Demand deposits	W	1,974,036		1,558,696
Deposits in banks
Time deposits	W	1,255,624		1,091,364
Restricted cash (*)		72,386		72,386

	W	1,328,010		1,163,750

Non-current assets
Deposits in banks
Restricted cash (*)	W	11		13

	W	3,302,057		2,722,459

(*)	Restricted cash includes mutual growth fund to aid LG Group’s second and third-tier suppliers, pledge to enforce investment plans according to the receipt of subsidies from Gumi city and Gyeongsangbuk-do and others.

5.	Receivables and Other Assets

(a)

Trade accounts and notes receivable as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Trade, net	W	3,854,287		3,916,171
Due from related parties		993,580		1,041,822

	W	4,847,867		4,957,993

(b)

Other accounts receivable as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Current assets
Non-trade receivable, net	W	75,007		134,161
Accrued income		12,409		9,431

	W	87,416		143,592

Due from related parties included in other accounts receivable, as of September 30, 2017 and December 31, 2016 are W4,292 million and W5,231 million, respectively.

5.	Receivables and Other Assets, Continued

(c)

The aging of trade accounts and note receivable, other accounts receivable and long-term non-trade receivable as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017
	Book value						Impairment loss
	Trade accounts and notes receivable		Other accounts receivable		Long-term non-trade receivable		Trade accounts and notes receivable			Other accounts receivable			Long-term non-trade receivable
Not past due	W	4,847,723		78,966		8,738		(1,906	)		(359	)		—
Past due 1-15 days		1,681		8,325		—		(5	)		(5	)		—
Past due 16-30 days		253		10		—		—			—			—
Past due 31-60 days		80		175		—		—			(1	)		—
Past due more than 60 days		41		703		—		—			(398	)		—

	W	4,849,778		88,179		8,738		(1,911	)		(763	)		—

5.	Receivables and Other Assets, Continued


(In millions of won)	December 31, 2016
	Book value						Impairment loss
	Trade accounts and notes receivable		Other accounts receivable		Long-term non-trade receivable		Trade accounts and notes receivable			Other accounts receivable			Long-term non-trade receivable
Not past due	W	4,958,591		140,893		2,643		(1,488	)		(669	)		(23	)
Past due 1-15 days		386		2,298		—		—			(20	)		—
Past due 16-30 days		417		309		—		—			—			—
Past due 31-60 days		65		640		—		—			(6	)		—
Past due more than 60 days		22		545		—		—			(398	)		—

	W	4,959,481		144,685		2,643		(1,488	)		(1,093	)		(23	)

The movement in the allowance for impairment in respect of trade accounts and notes receivable, other accounts receivable and long-term non-trade receivable for the nine-month period ended September 30, 2017 and the year ended December 31, 2016 are as follows:


(In millions of won)	2017								2016
	Trade accounts and notes receivable		Other accounts receivable			Long-term non-trade receivable			Trade accounts and notes receivable			Other accounts receivable		Long-term non-trade receivable
Balance at the beginning of the period	W	1,488		1,093			23			1,507			566		52
(Reversal of) bad debt expense		423		(330	)		(23	)		(19	)		527		(29	)

Balance at the reporting date	W	1,911		763			—			1,488			1,093		23

5.	Receivables and Other Assets, Continued

(d)

Other assets as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Current assets
Advance payments	W	7,349		9,297
Prepaid expenses		162,598		74,657
Value added tax refundable		228,193		259,808
Emission rights		10,400		—

	W	408,540		343,762

Non-current assets
Long-term prepaid expenses	W	408,856		358,424
Long-term advanced payment		—		1,000

	W	408,856		359,424

6.	Other Financial Assets

(a)

Other financial assets as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Current assets
Available-for-sale financial assets	W	6		—
Deposits		5,315		20,320
Short-term loans		18,469		7,696

	W	23,790		28,016

Non-current assets
Financial asset at fair value through profit or loss	W	1,382		1,382
Available-for-sale financial assets		6,772		7,993
Deposits		26,535		27,635
Long-term loans		19,653		34,760
Long-term non-trade receivable		8,738		2,619
Derivatives(*)		442		244

	W	63,522		74,633

Other financial assets of related parties as of September 30, 2017 and December 31, 2016 are W1,000 million and W3,488 million, respectively.

(*)	Represents interest rate swap contracts related to borrowings with variable interest rate.

6.	Other Financial Assets, Continued

(b)

Available-for-sale financial assets as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Current assets
Debt securities
Government bonds	W	6		—
Non-current assets
Debt securities
Government bonds	W	156		154
Equity securities
Intellectual Discovery, Ltd.	W	729		729
Kyulux, Inc.		1,968		3,266
Henghao Technology Co., Ltd.		1,559		1,559
ARCH Venture Fund Vill, L.P.		2,360		2,285

	W	6,616		7,839

	W	6,778		7,993

7.	Inventories

Inventories as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Finished goods	W	1,115,425		930,818
Work-in-process		802,723		685,913
Raw materials		461,111		354,791
Supplies		284,773		316,263

	W	2,664,032		2,287,785

For the nine-month periods ended September 30, 2017 and 2016, the amount of inventories recognized as cost of sales, inventory write-downs and reversal and usage of inventory write-downs included in cost of sales are as follows:


(In millions of won)	2017			2016
Inventories recognized as cost of sales	W	16,175,486			16,391,890
Including: inventory write-downs		253,311			330,705
Including: reversal and usage of inventory write-downs		(204,123	)		(363,755	)

8.	Investments in Equity Accounted Investees

Associates as of September 30, 2017 are as follows:

(In millions of won)

Associates

Location

Percentage of ownership

Fiscal
year end

Date of
incorporation

Business

Carrying
amount

September 30,
2017

December 31,
2016

Paju Electric Glass
Co., Ltd.

Paju,

South Korea

40%

December 31

January
2005

Manufacture electric

glass for FPDs

48,236

New Optics Ltd.

Yangju,

South Korea

—

46%

December 31

August

2005

Manufacture back light

parts for TFT-LCDs

—

INVENIA Co., Ltd.(*1)

Seongnam,

South Korea

13%

December 31

January
2001

Develop and manufacture

equipment for FPDs

3,161

WooRee E&L
Co., Ltd.(*1)

Ansan,

South Korea

14%

December 31

June 2008

Manufacture LED back

light unit packages

7,407

LB Gemini New
Growth Fund No. 16(*2)

Seoul,

South Korea

31%

December 31

December
2009

Invest in small and middle sized

companies and benefit

from M&A opportunities

5,761

Can Yang
Investments Limited(*1)(*3)

Hong Kong

December 31

January
2010

Develop, manufacture

and sell LED parts

2,063

YAS Co., Ltd.(*1)

Paju,

South Korea

15%

18%

December 31

April
2002

Develop and

manufacture deposition

equipment for OLEDs

10,665

Narenanotech Corporation

Yongin,

South Korea

—

23%

December 31

December
1995

Manufacture and sell FPD manufacturing

equipment

—

AVATEC Co., Ltd.(*1)

Daegu,

South Korea

17%

December 31

August
2000

Process and sell

glass for FPDs

22,123

Arctic Sentinel, Inc.(*1)

Los Angles,

U.S.A.

10%

March 31

June 2008

Develop and manufacture

tablet for kids

—

CYNORA GmbH (*1)(*4)

Bruchsal,

Germany

14%

—

December 31

March
2003

Develop organic emitting materials for displays

and lighting devices

20,308

119,724

8.	Investments in Equity Accounted Investees, Continued

(*1)

Although the Controlling Company’s share interests in INVENIA Co., Ltd., WooRee E&L Co., Ltd., Can Yang Investments Limited, YAS Co., Ltd., AVATEC Co., Ltd. Arctic Sentinel, Inc. and CYNORA GmbH are below 20%, the Controlling Company is able to exercise significant influence through its right to appoint a director to the board of directors of each investee and the transactions between the Controlling Company and the investees are significant. Accordingly, the investments in these investees have been accounted for using the equity method.

(*2)

The Controlling Company is a member of a limited partnership in the LB Gemini New Growth Fund No.16 (“the Fund”). For the nine-month period ended September 30, 2017, the Controlling Company received W2,076 million from the Fund as capital distribution and there were no changes in the Controlling Company’s ownership percentage in the Fund. On the other hand, a resolution to dissolve the fund was approved at the general meeting and the fund is in process of liquidation as of September 30, 2017. Accordingly, there were no additional investments for the nine-month period ended September 30, 2017.

(*3)

The Controlling Company recognized an impairment loss of W4,234 million as finance cost for the difference between the carrying amount and the recoverable amount of investments in Can Yang Investments Limited.

(*4)

In September 2017, the Controlling Company invested W20,308 million and acquired 88,584 shares of preferred stock with voting rights in CYNORA GmbH. As of September 30, 2017, the Controlling Company‘s ownership percentage in CYNORA GmbH is 14% and the Controlling Company has the right to appoint a director to the board of directors of the investee.

For the nine-month period ended September 30, 2017, the Controlling Company disposed of the entire investments in New Optics Ltd. and Narenanotech Corporation.

9.	Property, Plant and Equipment

For the nine-month periods ended September 30, 2017 and 2016, the Group purchased property, plant and equipment of W5,036,458 million and W3,203,954 million, respectively. The capitalized borrowing costs and the annualized capitalization rate were W29,963 million and 1.89%, and W8,025 million and 2.17% for the nine-month periods ended September 30, 2017 and 2016, respectively. Also, for the nine-month periods ended September 30, 2017 and 2016, the Group disposed of property, plant and equipment with carrying amounts of W71,627 million and W28,345 million, respectively, and recognized W14,259million and W9,340 million as gain and loss, respectively, on disposal of property, plant and equipment for the nine-month period ended September 30, 2017 (gain and loss for the nine-month period ended September 30, 2016: W7,662 million and W3,122 million, respectively).

10.	Intangible Assets

The Group capitalizes expenditures related to development activities, such as expenditures incurred on designing, manufacturing and testing of products after those related activities meet the capitalization criteria of development costs including technical feasibility, future economic benefits and others. The balances of capitalized development costs as of September 30, 2017 and December 31, 2016 are W288,642 million and W256,340 million, respectively.

11.	Financial Liabilities

(a)

Financial liabilities as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Current
Short-term borrowings	W	—		113,209
Current portion of long-term debt		1,218,849		554,700

	W	1,218,849		667,909

Non-current
Won denominated borrowings	W	1,221,421		821,922
Foreign currency denominated borrowings		1,522,686		1,777,877
Bonds		1,421,346		1,511,062
Derivatives(*)		79		472

	W	4,165,532		4,111,333

(*)

Represents interest rate swap contracts related to borrowings with variable interest rate.

(b)

Short-term borrowings as of September 30, 2017 and December 31, 2016 are as follows:

(In millions of won, USD)

Lender

Annual interest rate
as of
September 30, 2017 (%)

September 30,
2017

December 31,
2016

Standard Chartered Bank Korea Limited

—

113,209

Foreign currency equivalent

—

USD 94

(c)

Won denominated long-term borrowings as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
Lender	Annual interest rate as of September 30, 2017 (%)		September 30, 2017			December 31, 2016
Woori Bank		3-year Korean Treasury Bond rate - 1.25, 2.75	W	2,092			2,991
Shinhan Bank		CD rate (91days) + 0.30		200,000			200,000
Korea Development Bank and others		CD rate (91days) + 0.64~0.74 2.28~2.58		1,020,000			620,000
Less current portion of long-term borrowings				(671	)		(1,069	)

			W	1,221,421			821,922

11.	Financial Liabilities, Continued

(d)

Foreign currency denominated long-term borrowings as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won, USD and CNY)
Lender	Annual interest rate as of *September 30, 2017 (%)()**		September 30, 2017			December 31, 2016
The Export-Import Bank of Korea and others		3ML+0.55~1.04	W	808,423			1,027,225
Standard Chartered Bank Korea Limited		—		—			8,469
China Construction Bank and others		USD: 3ML+0.80~2.00 CNY: 4.28		1,352,718			926,058

Foreign currency equivalent				USD 1,395			USD 1,157
				CNY 3,263			CNY 3,264
Less current portion of long-term borrowings				(638,455	)		(183,875	)

			W	1,522,686			1,777,877

(*)

ML represents Month LIBOR (London Inter-Bank Offered Rates).

(e)

Details of bonds issued and outstanding as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	Maturity		Annual interest rate as of September 30, 2017 (%)		September 30, 2017			December 31, 2016
*Won denominated bonds()**
Publicly issued bonds		October 2017 ~ June 2022		1.73~3.73	W	2,005,000			1,885,000
Less discount on bonds						(3,931	)		(4,182	)
Less current portion						(579,723	)		(369,756	)

					W	1,421,346			1,511,062

(*)

Principal of the won denominated bonds is to be repaid at maturity and interests are paid quarterly.

12.	Employee Benefits

The Controlling Company and certain subsidiaries’ defined benefit plans provide a lump-sum payment to an employee based on final salary rates and length of service at the time the employee leaves the Controlling Company or certain subsidiaries.

(a)

Net defined benefit liabilities recognized as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017			December 31, 2016
Present value of partially funded defined benefit obligations	W	1,523,269			1,401,396
Fair value of plan assets		(1,225,963	)		(1,258,409	)

	W	297,306			142,987

(b)

Expenses recognized in profit or loss for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Current service cost	W	49,034		52,705		146,885		158,124
Net interest cost		598		2,569		1,794		7,709

	W	49,632		55,274		148,679		165,833

(c)

Plan assets as of September 30, 2017 and December 31, 2016 are as follows:

As of September 30, 2017, the Controlling Company maintains the plan assets primarily with Mirae Asset Daewoo Co., Ltd., Shinhan Bank and others.

(d)

Remeasurements of the net defined benefit liabilities included in other comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30						For the nine-month periods ended September 30
	2017			2016			2017			2016
Remeasurements of net defined benefit liabilities	W	(3,639	)		(1,033	)		(11,963	)		(3,817	)
Tax effect		881			250			2,895			924

Remeasurements of net defined benefit liabilities, net of income tax	W	(2,758	)		(783	)		(9,068	)		(2,893	)

13.	Provisions and Other Liabilities

(a)

Changes in provisions for the period ended September 30, 2017 are as follows:


(In millions of won)
	*Warranties ()**			Others		Total
Balance at January 1, 2017	W	62,462			1,665		64,127
Additions		164,110			877		164,987
Usage		(131,257	)		—		(131,257	)

Balance at September 30, 2017	W	95,315			2,542		97,857

Current	W	71,272			2,542		73,814
Non-current	W	24,043			—		24,043

(*)

The provision for warranties covers defective products and is normally applicable for 18 months from the date of purchase. The warranty liability is calculated by using historical and anticipated rates of warranty claims, and costs per claim to satisfy the Group’s warranty obligation.

(b)

Other liabilities as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Current liabilities
Withholdings	W	37,809		40,190
Unearned revenues		6,587		8,776

	W	44,396		48,966

Non-current liabilities
Long-term accrued expenses	W	69,753		65,616
Long-term other accounts payable		159		3,530

	W	69,912		69,146

14.	Contingencies and Commitments

(a)

Legal Proceedings

Delaware Display Group LLC and Innovative Display Technologies LLC (“DDG” and “IDT”)

In December 2013, Delaware Display Group LLC and Innovative Display Technologies LLC filed a patent infringement case (“First Case”) against the Controlling Company and LG Display America, Inc. in the United States District Court for the District of Delaware and “DDG” and “IDT” filed a new patent infringement case against the Controlling Company and LG Display America, Inc. over the three patents that were dismissed without prejudice from the First Case in December 2015. Additionally, in August 2016, Innovative Display Technologies LLC filed a new patent infringement case against the Controlling Company and LG Display America, Inc. in the United States District Court for the Eastern District of Texas with respect to two new patents. In March 2017, the parties reached settlements in principle through mediation. In April 2017, the parties filed a stipulation of dismissal and amicably settled all claims asserted in the above-mentioned patent litigations.

Surpass Tech Innovation LLC

In March 2014, Surpass Tech Innovation LLC filed a complaint in the United States District Court for the District of Delaware against the Controlling Company and LG Display America, Inc. for alleged patent infringement. In April 2017, the case was terminated pursuant to a stipulation of dismissal filed by Surpass Tech Innovation LLC.

Others

The Group is defending against various claims in addition to pending proceedings described above. The Group does not have a present obligation for these matters and has not recognized any provision at September 30, 2017.

(b)

Commitments

Factoring and securitization of accounts receivable

The Controlling Company has agreements with Korea Development Bank and several other banks for accounts receivable sales negotiating facilities of up to an aggregate of USD 1,793 million (W2,056,584 million) in connection with the Controlling Company’s export sales transactions with its subsidiaries. As of September 30, 2017, no short-term borrowings were outstanding in connection with these agreements. In connection with all of the contracts in this paragraph, the Controlling Company has sold its accounts receivable with recourse.

14.	Contingencies and Commitments, Continued

The Controlling Company and oversea subsidiaries entered into agreements with financial institutions for accounts receivables sales negotiating facilities. The respective maximum amount of accounts receivables sales and the amount of sold accounts receivables before maturity by contract are as follows:


(In millions of USD and KRW)
Classification	Financial institutions		Maximum				Not yet due
			Contractual amount		KRW equivalent		Contractual amount		KRW equivalent
Controlling Company		Shinhan Bank		KRW 90,000		90,000		—		—
		Sumitomo Mitsui Banking Corporation		USD 20		22,934		—		—
		Bank of Tokyo-Mitsubishi UFJ		USD 70		80,269		—		—
		BNP Paribas		USD 150		172,005		—		—
				USD 240				—
				KRW 90,000		365,208		—		—
Subsidiaries
LG Display Singapore Pte. Ltd.		Standard Chartered Bank		USD 300		344,010		—		—
LG Display Taiwan Co., Ltd.		BNP Paribas		USD 82		94,029		—		—
		Hongkong & Shanghai Banking Corp.		USD 60		68,802		—		—
		Taishin International Bank		USD 280		321,076		—		—
		Sumitomo Mitsui Banking Corporation		USD 100		114,670		—		—
LG Display Germany GmbH		Citibank		USD 160		183,472		—		—
		BNP Paribas		USD 75		86,003		—		—
LG Display America, Inc.		Hongkong & Shanghai Banking Corp.		USD 400		458,680		—		—
		Standard Chartered Bank		USD 400		458,680		—		—
		Sumitomo Mitsui Banking Corporation		USD 250		286,675		—		—
LG Display Japan Co., Ltd.		Sumitomo Mitsui Banking Corporation		USD 90		103,203		—		—
LG Display Guangzhou Trading Co., Ltd.		Industrial and Commercial Bank of China		USD 64		73,389		—		—

				USD 2,261		2,592,689		—		—

				USD 2,501				—
				KRW 90,000		2,957,897		—		—

In connection with all of the contracts in the above table, the Controlling Company has sold its accounts receivable without recourse.

14.	Contingencies and Commitments, Continued

Letters of credit

As of September 30, 2017, the Controlling Company has agreements in relation to the opening of letters of credit up to USD 30 million (W34,401 million) with KEB Hana Bank, USD 80 million (W91,736 million) with Bank of China and USD 50 million (W57,335 million) with Sumitomo Mitsui Banking Corporation.

Payment guarantees

The Controlling Company obtained payment guarantees amounting to USD 900 million (W1,032,030 million) from KEB Hana Bank and others for advance received related to the long-term supply agreements and USD 8.5 million (W9,747 million) from Shinhan bank for value added tax payments in Poland.

LG Display (China) Co., Ltd. and other subsidiaries are provided with payment guarantees from the Bank of China and other various banks amounting to CNY 3,760 million (W648,036 million), JPY 700 million (W7,143 million), EUR 2.5 million (W3,377 million), VND 40,922 million (W2,070 million), USD 0.5 million (W573 million) and PLN 0.2 million (W63 million), respectively, for their local tax payments and utility payments.

Credit facility

LG Display Vietnam Co., Ltd. and other subsidiary have entered into long-term credit facility agreements of up to USD 525 million (W602,018 million) with Sumitomo Mitsui Banking Corporation and other various banks and borrowings as of September 30, 2017 amount to USD 390 million (W447,213 million).

License agreements

As of September 30, 2017, in relation to its LCD business, the Group has technical license agreements with Hitachi Display, Ltd. and others and has a trademark license agreement with LG Corp.

Long-term supply agreement

As of September 30, 2017, in connection with long-term supply agreements with customers, the Controlling Company USD 900 million (W1,032,030 million) in long-term advance. The advance received will be offset against outstanding accounts receivable balances after a given period of time, as well as those arising from the supply of products thereafter. The Controlling Company received payment guarantees amounting to USD 900 million (W1,032,030 million) from KEB Hana Bank and other various banks relating to advance received.

Pledged Assets

Regarding the secured bank loan amounting to USD 300 million (W343,161 million) and CNY 1,964 million (W338,461 million) from China Construction Bank, as of September 30, 2017, the Group provided its property, plant and equipment and others with carrying amount of W425,314 million as pledged assets.

15.	Capital and Reserves

(a)

Share capital

The Controlling Company is authorized to issue 500,000,000 shares of capital stock (par value W5,000), and as of September 30, 2017 and December 31, 2016, the number of issued common shares is 357,815,700. There have been no changes in the capital stock from January 1, 2016 to September 30, 2017.

(b)

Reserves

Reserves consist mainly of the following:

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Other comprehensive loss from associates and joint venture

The other comprehensive loss from associates and joint venture comprises the amount related to change in equity of investments in equity accounted investees.

Reserves as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017			December 31, 2016
Foreign currency translation differences for foreign operations	W	(61,335	)		(59,042	)
Other comprehensive loss from associates (excluding remeasurements)		(27,069	)		(29,436	)

	W	(88,404	)		(88,478	)

16.

Revenue

Details of revenue for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Sales of goods	W	6,962,663		6,714,672		20,627,084		18,541,255
Royalties		4,584		1,651		15,799		10,217
Others		5,848		7,452		21,260		16,646

	W	6,973,095		6,723,775		20,664,143		18,568,118

17.	Geographic and Other Information

The following is a summary of sales by region based on the location of the customers for the three-month and nine-month periods ended September 30, 2017 and 2016.

(a)

Revenue by geography


(In millions of won)
(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
Region	2017		2016		2017		2016
Domestic	W	420,259		435,018		1,425,205		1,425,064
Foreign
China		4,534,031		4,717,986		13,466,122		12,733,440
Asia (excluding China)		662,844		477,990		1,881,814		1,558,662
The Americas		757,264		606,738		2,050,958		1,485,808
Europe (excluding Poland)		383,288		281,774		1,009,403		648,331
Poland		215,409		204,269		830,641		716,813

Sub total	W	6,552,836		6,288,757		19,238,938		17,143,054

Total	W	6,973,095		6,723,775		20,664,143		18,568,118

Sales to Company A and Company B amount to W6,458,984 million and W4,784,436 million, respectively, for the nine-month period ended September 30, 2017 (the nine-month period ended September 30, 2016: W6,114,130 million and W4,247,605 million). The Group’s top ten end-brand customers together accounted for 80% of sales for the nine-month period ended September 30, 2017 (the nine-month period ended September 30, 2016: 81%).

17.	Geographic and Other Information, Continued

(b)

Non-current assets by geography


(In millions of won)	September 30, 2017				December 31, 2016
Region	Property, plant and equipment		Intangible assets		Property, plant and equipment		Intangible assets
Domestic	W	11,136,880		697,218		8,758,171		673,966
Foreign
China		3,294,479		18,156		3,079,724		23,298
Others		572,782		173,218		193,554		197,673

Sub total		3,867,261		191,374		3,273,278		220,971

Total	W	15,004,141		888,592		12,031,449		894,937

(c)

Revenue by product and services


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
Product	2017		2016		2017		2016
Panels for:
Televisions	W	2,828,842		2,595,755		8,871,495		7,111,441
Desktop monitors		1,144,986		1,080,550		3,355,549		2,925,806
Tablet products		630,351		611,282		1,702,224		2,022,838
Notebook computers		513,477		623,805		1,627,822		1,687,761
Mobile and others		1,855,439		1,812,383		5,107,053		4,820,272

	W	6,973,095		6,723,775		20,664,143		18,568,118

18.	The Nature of Expenses and Others

The classification of expenses by nature for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30						For the nine-month periods ended September 30
	2017			2016			2017			2016
Changes in inventories	W	(320,648	)		(38,877	)		(376,247	)		(140,286	)
Purchases of raw materials, merchandise and others		3,730,920			3,780,682			10,131,999			10,205,881
Depreciation and amortization		834,107			700,345			2,329,103			2,301,625
Outsourcing fees		205,591			195,384			559,830			596,196
Labor costs		789,156			762,574			2,318,758			2,298,548
Supplies and others		334,926			247,733			887,204			733,883
Utility		235,905			221,814			636,247			629,540
Fees and commissions		170,389			159,999			507,608			467,642
Shipping costs		60,732			56,264			183,161			159,282
Advertising		51,400			16,683			140,858			44,519
Warranty expenses		37,858			34,065			164,110			109,258
Taxes and dues		18,199			18,674			69,059			56,422
Travel		23,543			17,623			65,274			54,061
Others		222,625			253,055			655,465			691,021

	W	6,394,703			6,426,018			18,272,429			18,207,592

Total expenses consist of cost of sales, selling, administrative, research and development expenses and other non-operating expenses, excluding foreign exchange differences.

19.	Selling and Administrative Expenses

Details of selling and administrative expenses for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Salaries	W	78,565		72,692		237,005		212,791
Expenses related to defined benefit plans		6,826		7,504		20,627		22,432
Other employee benefits		25,825		23,307		70,832		64,290
Shipping costs		50,956		47,761		157,296		134,231
Fees and commissions		49,501		45,467		144,775		141,029
Depreciation		34,971		31,253		103,670		98,236
Taxes and dues		7,314		7,881		35,445		22,469
Advertising		51,400		16,683		140,858		44,519
Warranty expenses		37,858		34,065		164,110		109,258
Rent		6,384		6,294		20,243		19,043
Insurance		3,131		3,362		9,365		8,234
Travel		7,047		5,230		20,704		17,171
Training		5,003		3,296		13,459		11,762
Others		18,661		13,181		51,189		37,413

	W	383,442		317,976		1,189,578		942,878

20.	Personnel Expenses

Details of personnel expenses for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Salaries and wages	W	651,558		618,783		1,920,447		1,848,953
Other employee benefits		119,113		112,564		346,674		343,368
Contributions to National Pension plan		18,572		18,012		54,324		51,693
Expenses related to defined benefit plan		49,632		55,274		148,679		165,833

	W	838,875		804,633		2,470,124		2,409,847

21.	Other Non-operating Income and Other Non-operating Expenses

(a)

Details of other non-operating income for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Foreign currency gain	W	223,696		211,730		744,635		826,063
Gain on disposal of property, plant and equipment		907		711		14,259		7,662
Gain on disposal of intangible assets		—		—		308		—
Rental income		612		1,023		1,490		3,711
Others		1,585		18,066		6,590		23,512

	W	226,800		231,530		767,282		860,948

(b)

Details of other non-operating expenses for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Foreign currency loss	W	198,270		309,939		848,464		948,627
Loss on disposal of property, plant and equipment		3,970		634		9,340		3,122
Loss on disposal of intangible assets		9		—		9		20
Impairment loss on intangible assets		40		40		1,717		125
Donations		2,301		12,550		12,753		17,387
Expenses related to legal proceedings or claims and others		1,281		12,182		1,609		25,895

	W	205,871		335,345		873,892		995,176

22.	Finance Income and Finance Costs

(a)

Finance income and costs recognized in profit and loss for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Finance income
Interest income	W	16,953		10,188		41,246		30,650
Foreign currency gain		18,462		73,004		119,232		122,710
Gain on disposal of investments in equity accounted investees		—		8,303		—		8,303
Gain on transaction of derivatives		—		1,271		3,106		3,811
Gain on valuation of derivatives		337		—		592		—

	W	35,752		92,766		164,176		165,474

Finance costs
Interest expense	W	23,342		28,045		70,628		88,211
Foreign currency loss		21,860		16,428		73,074		71,976
Loss on disposal of investments in equity accounted investees		—		260		42,023		5,622
Loss on impairment of investments in equity accounted investees		—		—		4,234		6,137
Loss on impairment of available-for-sale financial assets		—		—		1,298		—
Loss on sale of trade accounts and notes receivable		272		719		421		2,717
Loss on transaction of derivatives		150		1,382		361		3,762
Loss on valuation of derivatives		—		13,338		—		12,715
Other		330		322		922		940

	W	45,954		60,494		192,961		192,080

(b)

Finance income and costs recognized in other comprehensive income or loss for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Net change in fair value of available-for-sale financial assets	W	—		—		—		(77	)
Tax effect		—		—		—		19

Finance income (costs) recognized in other comprehensive income or loss after tax	W	—		—		—		(58	)

23.	Income Taxes

(a)

Details of income tax expense for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30					For the nine-month periods ended September 30
	2017			2016		2017			2016
Current tax expense	W	188,966			51,205		502,952			134,572
Deferred tax expense (benefit)		(67,487	)		7,692		(107,699	)		10,321

Income tax expense	W	121,479			58,897		395,253			144,893

(b)	Deferred Tax Assets and Liabilities

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the deferred tax assets at the reporting date will be realized with the Group’s estimated future taxable income.

Deferred tax assets and liabilities as of September 30, 2017 and December 31, 2016 are attributable to the following:


(In millions of won)	Assets				Liabilities						Total
	September 30, 2017		December, 31, 2016		September 30, 2017			December, 31, 2016			September 30, 2017			December, 31, 2016
Other accounts receivable, net	W	—		—		(1,404	)		(1,190	)		(1,404	)		(1,190	)
Inventories, net		47,487		35,771		—			—			47,487			35,771
Defined benefit liabilities, net		49,719		10,817		—			—			49,719			10,817
Investments in subsidiaries and associates		38,305		34,777		—			—			38,305			34,777
Accrued expenses		127,478		122,998		—			—			127,478			122,998
Property, plant and equipment		374,006		338,860		—			—			374,006			338,860
Intangible assets		3,323		744		(27,320	)		(31,771	)		(23,997	)		(31,027	)
Provisions		23,217		15,051		—			—			23,217			15,051
Gain or loss on foreign currency translation, net		11		11		—			—			11			11
Others		25,005		21,435		—			—			25,005			21,435
Tax credit carryforwards		285,670		287,400		—			—			285,670			287,400

Deferred tax assets (liabilities)	W	974,221		867,864		(28,724	)		(32,961	)		945,497			834,903

Statutory tax rate applicable to the Controlling Company is 24.2% for the nine-month period ended September 30, 2017. Meanwhile, effective tax rate for the nine-month period ended September 30, 2017 decreased primarily due to change of the probability of utilizing deferred tax assets including tax credit carryforwards.

24.	Earnings Per Share

(a)

Basic earnings per share for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In won and number of shares)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Profit for the period	W	441,981,942,670		177,824,586,727		1,765,772,319,875		108,675,894,795
Weighted-average number of common stocks outstanding		357,815,700		357,815,700		357,815,700		357,815,700

Earnings per share	W	1,235		497		4,935		304

For the three-month and nine-month periods ended September 30, 2017 and 2016, there were no events or transactions that resulted in changes in the number of common stocks used for calculating earnings per share.

(b)

Diluted earnings per share for the nine-month periods ended September 30, 2017 and 2016 are not calculated since there was no potential common stock.

25.	Financial Risk Management

The Group is exposed to credit risk, liquidity risk and market risks. The Group identifies and analyzes such risks, and controls are implemented under a risk management system to monitor and manage these risks at below a threshold level.

(a)

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

(i)

Currency risk

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the Group, Korean won (KRW). The currencies in which these transactions primarily are denominated are USD, CNY, JPY, etc.

Interest on borrowings is denominated in the currency of the borrowing. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Group, primarily KRW and USD.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Group adopts policies to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

25.	Financial Risk Management, Continued

i) Exposure to currency risk

The Group’s exposure to foreign currency risk based on notional amounts as of September 30, 2017 and December 31, 2016 is as follows:


(In millions)	September 30, 2017
	USD			JPY			CNY			TWD			EUR			PLN			VND
Cash and cash equivalents		492			243			4,132			35			3			149			1,081,797
Deposits in banks		—			—			1,700			—			—			—			—
Trade accounts and notes receivable		3,799			2			896			—			—			—			—
Non-trade receivable		10			1,491			54			4			6			—			639
Other assets denominated in foreign currencies		1			206			115			6			—			—			1,947
Trade accounts and notes payable		(1,222	)		(14,603	)		(2,484	)		—			—			—			(46,647	)
Other accounts payable		(209	)		(11,971	)		(1,411	)		(6	)		(6	)		(3	)		(1,225,052	)
Long-term other account payable		—			—			(1	)		—			—			—			—
Debt		(1,395	)		—			(3,263	)		—			—			—			—

Net exposure		1,476			(24,632	)		(262	)		39			3			146			(187,316	)

25.	Financial Risk Management, Continued


(In millions)	December 31, 2016
	USD			JPY			CNY			TWD			EUR			PLN			VND
Cash and cash equivalents		518			308			3,785			36			1			77			338,770
Deposits in banks		—			—			500			—			—			—			—
Trade accounts and notes receivable		3,558			10			1,776			—			—			—			—
Non-trade receivable		52			2,434			199			12			—			2			—
Long-term non-trade receivable		2			—			—			—			—			—			—
Other assets denominated in foreign currencies		1			259			210			6			—			—			506
Trade accounts and notes payable		(1,204	)		(14,940	)		(2,567	)		—			—			—			—
Other accounts payable		(397	)		(9,836	)		(771	)		(7	)		(2	)		(5	)		(665,869	)
Debt		(1,251	)		—			(3,264	)		—			—			—			—

Net exposure		1,279			(21,765	)		(132	)		47			(1	)		74			(326,593	)

Average exchange rates applied for the nine-month periods ended September 30, 2017 and 2016 and the exchange rates at September 30, 2017 and December 31, 2016 are as follows:


(In won)	Average rate				Reporting date spot rate
	2017		2016		September 30, 2017		December 31, 2016
USD	W	1,138.67		1,161.32	W	1,146.70		1,208.50
JPY		10.18		10.70		10.20		10.37
CNY		167.49		176.22		172.35		173.26
TWD		37.28		35.83		37.74		37.41
EUR		1,267.31		1,296.67		1,350.87		1,267.60
PLN		297.15		297.66		312.96		287.62
VND		0.0501		0.0520		0.0505		0.0531

25.	Financial Risk Management, Continued

ii) Sensitivity analysis

A weaker won, as indicated below, against the following currencies which comprise the Group’s assets or liabilities denominated in foreign currency as of September 30, 2017 and December 31, 2016, would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considers to be reasonably possible as of the end of reporting period. The analysis assumes that all other variables, in particular interest rates, would remain constant. The changes in equity and profit or loss would have been as follows:


(In millions of won)	September 30, 2017						December 31, 2016
	Equity			Profit or loss			Equity			Profit or loss
USD (5 percent weakening)	W	54,056			95,747			57,111			63,337
JPY (5 percent weakening)		(9,676	)		(9,056	)		(8,972	)		(7,237	)
CNY (5 percent weakening)		(1,328	)		(2,919	)		(3,410	)		7,077
TWD (5 percent weakening)		74			1			88			—
EUR (5 percent weakening)		7			581			(40	)		(79	)
PLN (5 percent weakening)		2,354			(188	)		1,129			(167	)
VND (5 percent weakening)		(359	)		(359	)		(867	)		—

A stronger won against the above currencies as of September 30, 2017 and December 31, 2016 would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

(ii)

Interest rate risk

Interest rate risk arises principally from the Group’s debentures and borrowings. The Group establishes and applies its policy to reduce uncertainty arising from fluctuations in the interest rate and to minimize finance cost and manages interest rate risk by monitoring of trends of fluctuations in interest rate and establishing plan for countermeasures.

Profile

The interest rate profile of the Group’s interest-bearing financial instruments as of September 30, 2017 and December 31, 2016 is as follows:


(In millions of won)
	September 30, 2017			December 31, 2016
Fixed rate instruments
Financial assets	W	3,302,209			2,722,600
Financial liabilities		(2,723,141	)		(2,203,378	)

	W	579,068			519,222

Variable rate instruments
Financial liabilities	W	(2,661,161	)		(2,575,392	)

25.	Financial Risk Management, Continued

ii) Equity and profit or loss sensitivity analysis for variable rate instruments

As of September 30, 2017 and December 31, 2016, a change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below for each 12-month period following the reporting dates. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.


(In millions of won)	Equity					Profit or loss
	1%p increase			1%p decrease		1%p increase			1%p decrease
September 30, 2017
Variable rate instruments(*)	W	(17,519	)		17,519		(17,519	)		17,519
December 31, 2016
Variable rate instruments(*)	W	(16,868	)		16,868		(16,868	)		16,868

(*)	Financial instruments subject to interest rate swap not qualified for hedging are excluded.

25.	Financial Risk Management, Continued

(b)

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

The Group’s exposure to credit risk of trade and other receivables is influenced mainly by the individual characteristics of each customer. However, management believes that the demographics of the Group’s customer base, including the default risk of the country in which customers operate, do not have a significant influence on credit risk since the majority of the customers are global electronic appliance manufacturers operating in global markets.

The Group establishes credit limits for each customer and each new customer is analyzed quantitatively and qualitatively before determining whether to utilize third party guarantees, insurance or factoring as appropriate.

The Group does not establish allowances for receivables under insurance or receivables from customers with a high credit rating. For the rest of the receivables, the Group establishes an allowance for impairment of trade and other receivables that have been individually or collectively evaluated for impairment and estimated on the basis of historical loss experience for assets.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Cash and cash equivalents	W	1,974,036		1,558,696
Deposits in banks		1,328,021		1,163,763
Trade accounts and notes receivable, net		4,847,867		4,957,993
Non-trade receivable, net		75,007		134,161
Accrued income		12,409		9,431
Available-for-sale financial assets		162		154
Financial assets at fair value through profit or loss		1,382		1,382
Deposits		31,850		47,954
Short-term loans		18,469		7,696
Long-term loans		19,653		34,760
Long-term non-trade receivable		8,738		2,619
Derivatives		442		244

	W	8,318,036		7,918,853

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises primarily from the sales and investing activities. Trade accounts and notes receivables are insured in order to manage credit risk and uninsured trade accounts and notes receivables are managed in accordance with the Group’s management policy.

25.	Financial Risk Management, Continued

(c)

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group has historically been able to satisfy its cash requirements from cash flows from operations and debt and equity financing. To the extent that the Group does not generate sufficient cash flows from operations to meet its capital requirements, the Group may rely on other financing activities, such as external long-term borrowings and offerings of debt securities, equity-linked and other debt securities. In addition, the Group maintains a line of credit with various banks

The following are the contractual maturities of financial liabilities, including estimated interest payments, as of September 30, 2017.


(In millions of won)			Contractual cash flows
	Carrying amount		Total		6 months or less		6-12 months			1-2 years		2-5 years		More than 5 years
Non-derivative financial liabilities :
Secured bank loan	W	681,622		706,537		12,587		303,354			390,596		—		—
Unsecured bank loans		2,701,611		2,845,359		32,039		376,263			1,342,509		1,010,033		84,515
Unsecured bond issues		2,001,069		2,107,701		393,385		228,231			404,470		1,081,615		—
Trade accounts and notes payable		2,962,856		2,962,856		2,962,856		—			—		—		—
Other accounts payable		2,621,112		2,621,483		2,620,041		1,442			—		—		—
Long-term other accounts payable		159		159		—		—			159		—		—
Derivative financial liabilities		79		78		166		(88	)		—		—		—

	W	10,968,508		11,244,173		6,021,074		909,202			2,137,734		2,091,648		84,515

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

25.	Financial Risk Management, Continued

(d)

Capital management

Management’s policy is to maintain a capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Liabilities to equity ratio, net borrowings to equity ratio and other financial ratios are used by management to achieve an optimal capital structure. Management also monitors the return on capital as well as the level of dividends to ordinary shareholders.


(In millions of won)
	September 30, 2017			December 31, 2016
Total liabilities	W	13,623,617			11,421,948
Total equity		15,168,112			13,462,388
Cash and deposits in banks (*1)		3,302,046			2,722,446
Borrowings (including bonds)		5,384,302			4,778,770
Total liabilities to equity ratio		90	%		85	%
Net borrowings to equity ratio (*2)		14	%		15	%

(*1)	Cash and deposits in banks consist of cash and cash equivalents and current deposit in banks.

(*2)	Net borrowings to equity ratio is calculated by dividing total borrowings (including bonds) less cash and current deposits in banks by total equity.

25.	Financial Risk Management, Continued

(e)

Determination of fair value

(i)

Measurement of fair value

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Current Assets and Liabilities

The carrying amounts approximate fair value because of the short maturity of these instruments.

ii)

Trade Receivables and Other Receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. The carrying amounts of short-term receivables approximate fair value.

iii)

Investments in Equity and Debt Securities

The fair value of marketable available-for-sale financial assets is determined by reference to their quoted closing bid price at the reporting date. The fair value of non-marketable securities is determined using valuation methods.

iv)

Non-derivative Financial Liabilities

Fair value, which is determined for disclosure purposes, except for the liabilities at FVTPL, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

25.	Financial Risk Management, Continued

(ii)

Fair values versus carrying amounts

The fair values of financial assets and liabilities, together with the carrying amounts shown in the condensed consolidated interim statements of financial position, are as follows:


(In millions of won)	September 30, 2017					December 31, 2016
	Carrying amounts		Fair values			Carrying amounts		Fair values
Assets carried at fair value
Available-for-sale financial assets	W	162		162			154		154
Financial assets at fair value through profit or loss		1,382		1,382			1,382		1,382
Derivatives		442		442			244		244
Assets carried at amortized cost
Cash and cash equivalents	W	1,974,036		(*	)		1,558,696		(*	)
Deposits in banks		1,328,021		(*	)		1,163,763		(*	)
Trade accounts and notes receivable		4,847,867		(*	)		4,957,993		(*	)
Non-trade receivable		75,007		(*	)		134,161		(*	)
Accrued income		12,409		(*	)		9,431		(*	)
Deposits		31,850		(*	)		47,954		(*	)
Short-term loans		18,469		(*	)		7,696		(*	)
Long-term loans		19,653		(*	)		34,760		(*	)
Long-term non-trade receivable		8,738		(*	)		2,619		(*	)
Liabilities carried at fair value
Derivatives	W	79		79			472		472
Liabilities carried at amortized cost
Secured bank loans	W	681,622		681,622			700,820		700,820
Unsecured bank loans		2,701,611		2,708,187			2,197,132		2,200,522
Unsecured bond issues		2,001,069		2,014,187			1,880,818		1,903,863
Trade accounts and notes payable		2,962,856		(*	)		2,877,326		(*	)
Other accounts payable		2,621,112		2,621,461			2,449,517		2,449,938
Long-term other accounts payable		159		156			3,530		3,891

(*)	Excluded from disclosures as the carrying amount approximates fair value.

The basis for determining fair values above by the Group are consistent with those disclosed in the financial statements as of and for the year ended December 31, 2016.

25.	Financial Risk Management, Continued

(iii)

Financial Instruments measured at cost

Available-for-sale financial assets measured at cost as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Intellectual Discovery Co., Ltd.	W	729		729
Kyulux, Inc.		1,968		3,266
Henghao Technology Co., Ltd.		1,559		1,559
ARCH Venture Fund VIII, L.P		2,360		2,285

	W	6,616		7,839

Available-for-sale-financial assets consist of investments in equity securities and the fair value of some investments in equity securities are measured at cost because the range of reasonable fair value measurements is significant and the probabilities of the various estimates cannot be reasonably assessed since there is not a quoted price in an active market for an identical instrument.

25.	Financial Risk Management, Continued

(iv)

Fair values of financial assets and liabilities

Fair value hierarchy

The table below analyzes financial instruments carried at fair value based on the input variables used in the valuation method to measure fair value of assets and liabilities. The different levels have been defined as follows:

•

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

•

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

•

Level 3: inputs for the asset or liability that are not based on observable market data

ii)

Financial instruments measured at fair value

Fair value hierarchy classifications of the financial instruments that are measured at fair value as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	Level 1		Level 2		Level 3		Total
September 30, 2017
Assets
Available-for-sale financial assets	W	162		—		—		162
Financial assets at fair value through profit or loss		—		—		1,382		1,382
Derivatives		—		—		442		442
Liabilities
Derivatives		—		—		79		79

(In millions of won)	Level 1		Level 2		Level 3		Total
December 31, 2016
Assets
Available-for-sale financial assets	W	154		—		—		154
Financial assets at fair value through profit or loss		—		—		1,382		1,382
Derivatives		—		—		244		244
Liabilities
Derivatives		—		—		472		472

25.	Financial Risk Management, Continued

iii)

Financial instruments not measured at fair value but for which the fair value is disclosed

Fair value hierarchy classifications, valuation technique and inputs for fair value measurements of the financial instruments not measured at fair value but for which the fair value is disclosed as of September 30, 2017 and December 31, 2016 are as follows:

(In millions of won)

September 30, 2017

Valuation
technique

Input

Classification

Level 1

Level 2

Level 3

Liabilities

Secured bank loans

—

681,622

Discounted
cash flow

Discount rate

Unsecured bank loans

—

2,708,187

Discounted
cash flow

Discount rate

Unsecured bond issues

—

2,014,187

Discounted
cash flow

Discount rate

Other accounts payable

—

2,621,461

Discounted
cash flow

Discount rate

Long-term other accounts payable

—

156

Discounted
cash flow

Discount rate

(In millions of won)

December 31, 2016

Valuation
technique

Input

Classification

Level 1

Level 2

Level 3

Liabilities

Secured bank loans

—

700,820

Discounted
cash flow

Discount rate

Unsecured bank loans

—

2,200,522

Discounted
cash flow

Discount rate

Unsecured bond issues

—

1,903,863

Discounted
cash flow

Discount rate

Other accounts payable

—

2,449,938

Discounted
cash flow

Discount rate

Long-term other accounts payable

—

3,891

Discounted
cash flow

Discount rate

iv)

The interest rates applied for determination of the above fair value as of September 30, 2017 and December 31, 2016 are as follows:


	September 30, 2017	December 31, 2016
Debentures, loans and others	1.27~2.73%	1.48~2.68%

26.	Changes in liabilities arising from financing activities

Changes in liabilities arising from financing activities for the period ended September 30, 2017 are as follows:


(In millions of won)						Non-cash transactions
	January 1, 2017		Cash flows from financing activities			Reclassification			Gain or loss on foreign currency translation			Effective interest adjustment		September 30, 2017
Short-term borrowings	W	113,209		(113,209	)		—			—			—		—
Current portion of long-term debt		554,700		(364,774	)		1,051,679			(23,214	)		458		1,218,849
Long-term borrowings		2,599,799		847,702			(662,171	)		(41,223	)		—		2,744,107
Bonds		1,511,062		298,780			(389,508	)		—			1,012		1,421,346

	W	4,778,770		668,499			—			(64,437	)		1,470		5,384,302

27.	Related Parties and Others

(a)

Related parties

Related parties as of September 30, 2017 are as follows:


Classification		Description
Associates(*)		Paju Electric Glass Co., Ltd. and others
Subsidiaries of Associates		AVATEC Electronics Yantai Co., Ltd. and others
Entity that has significant influence over the Controlling Company		LG Electronics Inc.
Subsidiaries of the entity that has significant influence over the Controlling Company		Subsidiaries of LG Electronics Inc.

(*)	Details of associates are described in note 8.

Related parties other than associates that have transactions such as sales or balance of trade accounts and notes receivable and payable with the Group as of September 30, 2017 and December 31, 2016 are as follows:


Classification	September 30, 2017	December 31, 2016
Subsidiaries of	Shinbo Electric Co., Ltd.	Shinbo Electric Co., Ltd.
Associates	—	New Optics USA, Inc.
	—	NEWOPTIX RS. SA DE CV.
Entity that has significant influence over the Controlling Company	LG Electronics Inc.	LG Electronics Inc.
	Hiplaza Co., Ltd.	Hiplaza Co., Ltd.
Subsidiaries of the	Hi Entech Co., Ltd.	Hi Entech Co., Ltd.
entity that has	LG Hitachi Water Solutions Co., Ltd.	LG Hitachi Water Solutions Co., Ltd.
significant influence	LG Innotek Co., Ltd.	LG Innotek Co., Ltd.
over the Controlling	Hanuri Co., Ltd.	Hanuri Co., Ltd.
Company	Hi M Solutek	Hi M Solutek
	Inspur LG Digital Mobile Communications Co., Ltd.	Inspur LG Digital Mobile Communications Co., Ltd.
	Qingdao LG Inspur Digital Communication Co., Ltd.	Qingdao LG Inspur Digital Communication Co., Ltd.
	Hientech (Tianjin) Co., Ltd.	Hientech (Tianjin) Co., Ltd.
	P.T. LG Electronics Indonesia	P.T. LG Electronics Indonesia
	—	LG Innotek Yantai Co., Ltd.
	LG Electronics Wroclaw Sp. z o.o.	LG Electronics Wroclaw Sp. z o.o.
	LG Electronics Reynosa, S.A. DE C.V.	LG Electronics Reynosa, S.A. DE C.V.
	—	LG Electronics Thailand Co., Ltd.
	LG Electronics Taiwan Taipei Co., Ltd.	LG Electronics Taiwan Taipei Co., Ltd.
	—	LG Electronics Shenyang Inc.
	LG Electronics RUS, LLC	LG Electronics RUS, LLC

27.	Related Parties and Others, Continued


Classification	September 30, 2017	December 31, 2016
	LG Electronics Nanjing New Technology co., LTD.	LG Electronics Nanjing New Technology co., LTD.
	LG Electronics Mlawa Sp. z o.o.	LG Electronics Mlawa Sp. z o.o.
	LG Electronics Mexicali, S.A. DE C.V.	LG Electronics Mexicali, S.A. DE C.V.
	LG Electronics India Pvt. Ltd.	LG Electronics India Pvt. Ltd.
	LG Electronics do Brasil Ltda.	LG Electronics do Brasil Ltda.
	LG Electronics Air-Conditioning (Shandong) Co., Ltd.	LG Electronics Air-Conditioning (Shandong) Co., Ltd.
	LG Electronics Almaty Kazakhstan	LG Electronics Almaty Kazakhstan
	LG Electronics S.A. (Pty) Ltd.	LG Electronics S.A. (Pty) Ltd.
	LG Electronics Singapore PTE LTD.	LG Electronics Singapore PTE LTD.
	LG Electronics Japan, Inc.	LG Electronics Japan, Inc.
	LG Electronics U.S.A., Inc.	LG Electronics U.S.A., Inc.
	LG Electronics Vietnam Haiphong Co., Ltd.	LG Electronics Vietnam Haiphong Co., Ltd.
	LG Electronics Deutschland GmbH	LG Electronics Deutschland GmbH
	LG Electronics Egypt S.A.E.	LG Electronics Egypt S.A.E.
	LG Electronics Alabama Inc.	LG Electronics Alabama Inc.
	LG Electronics (China) Co., Ltd.	—
	LG Electronics Ticaret A.S.	—
	PT.LG Electronics Service Indonesia	—
	LG Electronics Polska SP.ZO.O	—
	LG Japan Lab. Inc.	—

27.	Related Parties and Others, Continued

(b)

Significant transactions such as sales of goods and purchases of raw material and outsourcing service and others, which occurred in the normal course of business with related parties for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month period ended September 30, 2017
					Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Associates and their subsidiaries
INVENIA Co., Ltd.	W	—		—		691		2,188		—		24
AVATEC Co., Ltd.		—		—		—		—		24,685		40
Paju Electric Glass Co., Ltd.		—		—		94,966		—		—		1,025
WooRee E&L Co., Ltd.		—		—		—		—		—		22
YAS Co., Ltd.		—		—		1,141		20,059		—		650

	W	—		—		96,798		22,247		24,685		1,761

Entity that has significant influence over the Controlling Company
LG Electronics Inc.	W	325,287		—		12,627		176,092		—		26,041
Subsidiaries of the entity that has significant influence over the Controlling Company
LG Electronics India Pvt. Ltd.	W	25,127		—		—		—		—		22
LG Electronics Vietnam Haiphong Co., Ltd.		50,073		—		—		—		—		29

27.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2017
					Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
LG Electronics Nanjing New Technology co., LTD.	W	82,025		—		—		47		—		19
LG Electronics RUS, LLC		27,693		—		—		—		—		279
LG Electronics do Brasil Ltda.		54,085		—		—		—		—		131
LG Innotek Co., Ltd.		4,406		—		52,007		—		—		470
Qingdao LG Inspur Digital Communication Co., Ltd.		22,170		—		—		—		—		—
Inspur LG Digital Mobile Communications Co., Ltd.		53,016		—		—		—		—		—
LG Electronics Mexicali, S.A. DE C.V.		99,798		—		—		—		—		106
LG Electronics Mlawa Sp. z o.o.		131,698		—		—		—		—		358
LG Electronics Taiwan Taipei Co., Ltd.		3,134		—		—		—		—		75
LG Hitachi Water Solutions Co., Ltd.		—		—		—		78,854		—		—
LG Electronics Reynosa, S.A. DE C.V.		344,094		—		—		—		—		551
LG Electronics Almaty Kazakhstan		3,363		—		—		—		—		—
HiEntech Co., Ltd.		—		—		—		3,261		—		7,320
Hientech (Tianjin) Co., Ltd.		—		—		—		4,432		—		2,276
LG Electronics S.A. (Pty) Ltd.		2,227		—		—		—		—		4
LG Electronics Air-Conditioning (Shandong) Co., Ltd.		—		—		2		24		—		121
Hi M Solutek		—		—		1		—		—		413
Others		840		—		—		14		—		1,583

	W	903,749		—		52,010		86,632		—		13,757

	W	1,229,036		—		161,435		284,971		24,685		41,559

27.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2017
					Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Associates and their subsidiaries
New Optics Ltd.(*)	W	1		—		—		—		4		6
INVENIA Co., Ltd.		10		—		1,304		49,576		—		175
AVATEC Co., Ltd.		—		530		—		—		65,899		538
Paju Electric Glass Co., Ltd.		—		8,109		289,760		—		—		3,218
Shinbo Electric Co., Ltd.(*)		15,812		—		—		—		—		21
Narenanotech Corporation(*)		—		—		279		21,727		—		244
WooRee E&L Co., Ltd.		—		—		—		—		—		110
YAS Co., Ltd.		—		—		2,871		64,337		—		2,132

	W	15,823		8,639		294,214		135,640		65,903		6,444

Entity that has significant influence over the Controlling Company
LG Electronics Inc.	W	1,179,201		—		28,583		672,789		—		86,303
Subsidiaries of the entity that has significant influence over the Controlling Company
LG Electronics India Pvt. Ltd.	W	63,346		—		—		—		—		75
LG Electronics Vietnam Haiphong Co., Ltd.		149,796		—		—		4,799		—		167
LG Electronics Nanjing New Technology co., LTD.		231,352		—		—		89		—		390

27.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2017
					Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
LG Electronics RUS, LLC	W	71,976		—		—		—		—		730
LG Electronics do Brasil Ltda.		174,348		—		—		—		—		364
LG Innotek Co., Ltd.		10,919		—		147,955		—		—		4,445
Qingdao LG Inspur Digital Communication Co., Ltd.		56,855		—		—		—		—		—
Inspur LG Digital Mobile Communications Co., Ltd.		175,352		—		—		—		—		—
LG Electronics Mexicali, S.A. DE C.V.		263,418		—		—		—		—		175
LG Electronics Mlawa Sp. z o.o.		624,133		—		—		—		—		798
LG Electronics Taiwan Taipei Co., Ltd.		10,187		—		—		—		—		114
LG Hitachi Water Solutions Co., Ltd.		—		—		—		156,163		—		1,531
LG Electronics Reynosa, S.A. DE C.V.		938,543		—		—		—		—		1,391
LG Electronics Almaty Kazakhstan		10,642		—		—		—		—		12
HiEntech Co., Ltd.		—		—		—		5,061		—		26,146
Hientech (Tianjin) Co., Ltd.		—		—		—		13,509		—		12,735
LG Electronics S.A. (Pty) Ltd.		11,760		—		—		—		—		18
LG Electronics Air-Conditioning (Shandong) Co., Ltd.		—		—		254		3,700		—		1,207
Hi M Solutek		—		—		3		—		—		1,943
Others		866		—		—		14		—		3,025

	W	2,793,493		—		148,212		183,335		—		55,266

	W	3,988,517		8,639		471,009		991,764		65,903		148,013

(*)

Represents transactions occurred prior to disposal of the entire investments.

27.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Joint Venture
Suzhou Raken Technology Co., Ltd.(*1)	W	2		1,378		—		—		—		—
Associates and their subsidiaries
New Optics Ltd.	W	287		—		11,441		—		1,795		80
New Optics USA, Inc.		—		—		—		—		7		—
NEWOPTIX RS. SA DE CV		6		—		—		—		—		—
INVENIA Co., Ltd.		—		—		1,011		5,497		—		316
TLI Inc.		—		—		17,358		—		—		547
AVACO Co., Ltd.(*2)		423		—		20		38		—		6
AVATEC Co., Ltd.		—		—		—		—		17,187		309
Paju Electric Glass Co., Ltd.		—		—		123,396		—		—		1,015
LB Gemini New Growth Fund No. 16		—		—		—		—		—		—
Shinbo Electric Co., Ltd.		7,181		—		86,221		—		792		125
Narenanotech Corporation		—		—		132		2,217		—		155
ADP System Co., Ltd.		—		—		—		3		—		—
YAS Co., Ltd.		—		—		491		43,486		—		645
WooRee E&L Co., Ltd.		—		—		—		—		—		—

	W	7,897		—		240,070		51,241		19,781		3,198

27.	Related Parties, Continued


(In millions of won)	For the three-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Entity that has significant influence over the Controlling Company
LG Electronics Inc.	W	371,184		—		5,378		182,006		—		11,791
Subsidiaries of the entity that has significant influence over the Controlling Company
LG Electronics India Pvt. Ltd.	W	23,570		—		—		—		—		13
LG Electronics Vietnam Haiphong Co., Ltd.		40,332		—		—		—		—		44
LG Electronics Nanjing New Technology co., LTD.		67,600		—		—		—		—		380
LG Electronics RUS, LLC		30,986		—		—		—		—		403
LG Electronics do Brasil Ltda.		35,789		—		—		—		—		164
LG Innotek Co., Ltd.		3,913		—		41,905		—		—		6,456
Qingdao LG Inspur Digital Communication Co., Ltd.		7,494		—		—		—		—		—
Inspur LG Digital Mobile Communications Co., Ltd.		90,083		—		—		—		—		—
LG Electronics Mexicali, S.A. DE C.V		65,696		—		—		—		—		45
LG Electronics Mlawa Sp. z o.o.		165,932		—		—		—		—		172
LG Electronics Taiwan Taipei Co., Ltd.		2,896		—		—		—		—		14
LG Electronics Wroclaw Sp. Z o.o		17,002		—		—		—		—		7
LG Hitachi Water Solutions Co., Ltd.		301		—		—		66,610		—		—

27.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
LG Electronics Reynosa, S.A. DE C.V.	W	304,238		—		—		—		—		547
HiEntech Co., Ltd.		—		—		—		—		—		6,402
Hientech (Tianjin) Co., LTD		—		—		—		—		—		9,756
LG Electronics Air-Conditioning (Shandong) Co., Ltd.		3		—		—		—		—		—
LG Electronics Almaty Kazakhstan		5,124		—		—		—		—		7
LG Electronics S.A. (Pty) Ltd.		7,372		—		—		—		—		8
Others		—		—		—		—		—		746

	W	868,331		—		41,905		66,610		—		25,164

	W	1,247,414		1,378		287,353		299,857		19,781		40,153

(*1)	Represents transactions occurred prior to exchange of equity interests.

(*2)	Represents transactions occurred prior to disposal of the entire investments.

27.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Joint Venture
Suzhou Raken Technology Co., Ltd.(*1)	W	59,388		31,280		—		—		—		543
Associates and their subsidiaries
New Optics Ltd.	W	287		—		39,463		—		5,650		167
New Optics USA, Inc.		—		—		—		—		509		—
NEWOPTIX RS. SA DE CV		17		—		—		—		—		—
INVENIA Co., Ltd.		44		—		1,317		39,931		—		965
TLI Inc.		—		101		51,565		—		—		2,138
AVACO Co., Ltd.(*2)		—		128		703		31,575		—		1,357
AVATEC Co., Ltd.		—		265		—		—		50,410		948
Paju Electric Glass Co., Ltd.		—		21,030		345,034		—		—		2,466
LB Gemini New Growth Fund No. 16		—		7,598		—		—		—		—
Shinbo Electric Co., Ltd.		33,256		—		265,089		—		2,059		166
Narenanotech Corporation		17		—		369		18,211		—		692
ADP System Co., Ltd.		—		—		—		17		—		—
YAS Co., Ltd.		44		—		1,316		68,492		—		1,184
WooRee E&L Co., Ltd.		—		—		—		—		—		32

	W	33,665		29,122		704,856		158,226		58,628		10,115

27.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Entity that has significant influence over the Controlling Company
LG Electronics Inc.	W	1,235,505		—		15,629		423,975		—		46,978
Subsidiaries of the entity that has significant influence over the Controlling Company
LG Electronics India Pvt. Ltd.	W	64,132		—		—		—		—		26
LG Electronics Vietnam Haiphong Co., Ltd.		107,118		—		—		—		—		77
LG Electronics Nanjing New Technology co., LTD.		158,492		—		—		—		—		1,450
LG Electronics RUS, LLC		70,930		—		—		—		—		2,714
LG Electronics do Brasil Ltda.		96,660		—		—		—		—		3,185
LG Innotek Co., Ltd.		8,484		—		149,914		—		—		22,408
Qingdao LG Inspur Digital Communication Co., Ltd.		39,215		—		—		—		—		—
Inspur LG Digital Mobile Communications Co., Ltd.		302,225		—		—		—		—		—
LG Electronics Mexicali, S.A. DE C.V		160,996		—		—		—		—		45
LG Electronics Mlawa Sp. z o.o.		381,700		—		—		—		—		431
LG Electronics Taiwan Taipei Co., Ltd.		7,154		—		—		—		—		20
LG Electronics Wroclaw Sp. Z o.o		249,846		—		—		—		—		32
LG Hitachi Water Solutions Co., Ltd.		—		—		—		92,939		—		3,677

27.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
LG Electronics Reynosa, S.A. DE C.V.	W	776,157		—		—		—		—		1,295
HiEntech Co., Ltd.		—		—		—		—		—		18,954
Hientech (Tianjin) Co., LTD		—		—		—		—		—		24,639
LG Electronics Air-Conditioning (Shandong) Co., Ltd.		—		—		—		—		—		4,107
LG Electronics Almaty Kazakhstan		11,438		—		—		—		—		7
LG Electronics S.A. (Pty) Ltd.		15,142		—		—		—		—		24
Others		2,312		—		—		—		—		2,408

	W	2,452,001		—		149,914		92,939		—		85,499

	W	3,780,559		60,402		870,399		675,140		58,628		143,135

(*1)	Represents transactions occurred prior to exchange of equity interests.

(*2)	Represents transactions occurred prior to disposal of the entire investments.

27.	Related Parties and Others, Continued

(c)

Trade accounts and notes receivable and payable as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	Trade accounts and notes receivable and others				Trade accounts and notes payable and others
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Associates
New Optics Ltd.(*)	W	—		1,000		—		8,616
INVENIA Co., Ltd.		500		833		6,307		6,515
AVATEC Co., Ltd.		—		—		3,704		5,190
Paju Electric Glass Co., Ltd.		—		—		66,396		71,685
Shinbo Electric Co., Ltd.(*)		—		85,011		—		64,693
Narenanotech Corporation(*)		—		300		—		2,826
WooRee E&L Co., Ltd.		—		—		13		—
YAS Co., Ltd.		500		833		23,344		3,531

	W	1,000		87,977		99,764		163,056

Entity that has significant influence over the Controlling Company
LG Electronics Inc.	W	348,782		357,577		173,655		160,309
Subsidiaries of the entity that has significant influence over the Controlling Company
LG Electronics India Pvt. Ltd.	W	15,637		4,651		—		—
LG Electronics Vietnam Haiphong Co., Ltd.		32,799		35,121		484		7
LG Electronics Nanjing New Technology co., LTD.		62,224		51,794		247		78
LG Electronics RUS, LLC		26,635		47,686		45		—
LG Electronics do Brasil Ltda.		34,702		14,299		2		27

27.	Related Parties and Others, Continued


(In millions of won)
	Trade accounts and notes receivable and others				Trade accounts and notes payable and others
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
LG Innotek Co., Ltd.	W	1,456		1,070		52,684		50,919
Qingdao LG Inspur Digital Communication Co., Ltd.		16,083		7,007		—		—
Inspur LG Digital Mobile Communications Co., Ltd.		56,090		72,963		—		5
LG Electronics Mexicali, S.A. DE C.V.		56,106		11,959		94		13
LG Electronics Mlawa Sp. z o.o.		95,904		222,480		3		27
LG Hitachi Water Solutions Co., Ltd.		—		—		96,614		108,119
LG Electronics Reynosa, S.A. DE C.V.		244,804		93,873		264		259
HiEntech Co., Ltd.		—		—		4,164		4,080
Hientech (Tianjin) Co., LTD		—		—		5,191		3,746
Others		6,650		42,084		3,340		2,962

	W	649,090		604,987		163,132		170,242

	W	998,872		1,050,541		436,551		493,607

(*)	Excluded from related parties due to disposal of equity investments during the nine-month period ended September 30, 2017.

27.	Related Parties and Others, Continued

(d)

Details of significant cash transactions such as loans and collection of loans, which occurred in the normal course of business with related parties for the nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)
	2017				2016
Associates	Loans		Collection of loans		Loans		Collection of loans
INVENIA Co., Ltd.	W	—		333		—		—
YAS Co., Ltd.		—		333		—		—
New Optics Ltd.(*)	W	—		—		1,000		—

	W	—		666		1,000		—

(*)	Excluded from related parties due to disposal of equity investments during the nine-month period ended September 30, 2017.

27.	Related Parties and Others, Continued

(e)

Conglomerate Transactions

Transactions, trade accounts and notes receivable and payable, and others between the Group and certain companies and their subsidiaries, which are included in LG Group, one of conglomerates according to the Monopoly Regulation and Fair Trade Act for the three-month and nine-month periods ended September 30, 2017 and 2016 and as of September 30, 2017 and December 31, 2016 are as follows. These entities are not affiliates according to K-IFRS No. 1024, Related Party Disclosures.


(In millions of won)
	For the three-month period ended September 30, 2017				For the nine-month period ended September 30, 2017				September 30, 2017
	Sales and others		Purchase and others		Sales and others		Purchase and others		Trade accounts and notes receivable and others		Trade accounts and notes payable and others
LG Chem Ltd.	W	8,243		240,357		8,243		681,537		6,090		125,775
LG Chem (Nanjing) Information & Electronics Materials Co., Ltd.		—		103,543		—		309,011		—		74,659
LG Chem (China) Investment Co., Ltd.		—		1,559		—		4,850		—		1,236
Serveone Co., Ltd.		97		403,278		346		1,048,259		21,758		430,661
Serveone (Nanjing) Co., Ltd.		—		32,782		—		88,602		—		51,311
Serveone Construction (Nanjing) Co., Ltd.		—		21,739		—		61,608		—		21,135
Serveone Guangzhou Co., Ltd.		—		26,822		—		70,957		—		27,487
Serveone Vietnam Co., Ltd.		—		9,023		—		15,098		—		8,967
Silicon Works Co., Ltd.		—		163,019		—		448,486		—		120,765
LG CNS Co., Ltd.		184		60,885		323		126,323		—		52,779
LG CNS China Inc.		—		8,892		—		19,958		—		5,561
LG N-Sys Inc.		—		3,315		—		10,145		—		5,553
LG International Corp.		4,637		29,252		13,878		81,044		8,632		24,359

27.	Related Parties and Others, Continued


(In millions of won)
	For the three-month period ended September 30, 2017				For the nine-month period ended September 30, 2017				September 30, 2017
	Sales and others		Purchase and others		Sales and others		Purchase and others		Trade accounts and notes receivable and others		Trade accounts and notes payable and others
LG International (America) Inc.	W	4,839		34,035		17,104		99,733		3,883		13,659
LG International (Japan) Ltd.		22,808		379,659		105,637		969,387		2,344		180,001
LG International (Singapore) Pte. Ltd.		153,564		669		409,688		812		104,827		12
Pantos Logistics Co., Ltd.		10		22,625		34		69,948		—		15,018
Pantos Logistics (Shenzhen) Co., Ltd.		—		18,371		—		91,833		—		7,058
LG Corp.		—		15,804		—		46,762		4,700		7,791
Others		499		26,806		2,356		97,119		5,555		16,006

	W	194,881		1,602,435		557,609		4,341,472		157,789		1,189,793

27.	Related Parties and Others, Continued


(In millions of won)
	For the three-month period ended September 30, 2016				For the nine-month period ended September 30, 2016				December 31, 2016
	Sales and others		Purchase and others		Sales and others		Purchase and others		Trade accounts and notes receivable and others		Trade accounts and notes payable and others
LG Chem Ltd.	W	22		207,137		35		717,737		30		106,790
LG Chem (Nanjing) Information & Electronics Materials Co., Ltd.		—		100,176		—		276,072		—		79,117
LG Chem (China) Investment Co., Ltd.		—		—		—		—		—		734
Serveone Co., Ltd.		1,607		305,420		1,872		728,320		20,157		398,671
Serveone (Nanjing) Co., Ltd.		—		25,913		—		73,023		—		47,485
Serveone Construction (Nanjing) Co., Ltd.		—		14,545		—		38,953		—		8,951
Serveone Guangzhou Co., Ltd.		—		24,048		—		66,885		—		19,719
Serveone Vietnam Co., Ltd.		—		3,632		—		3,725		—		587
Silicon Works Co., Ltd.		—		137,143		—		433,263		13		106,313
LG CNS Co., Ltd.		—		39,682		417		92,261		—		89,152
LG CNS China Inc.		—		8,631		—		23,872		—		8,597
LG N-Sys Inc.		—		1,126		—		5,489		—		9,259
LG International Corp.		5,388		13,825		8,262		69,730		16,951		16,930
LG International (America) Inc.		4,608		13,189		17,472		17,435		3,594		20,449

LG International (Japan) Ltd.		38,321		291,968		107,406		551,034		14,603		125,689

27.	Related Parties and Others, Continued


(In millions of won)
	For the three-month period ended September 30, 2016				For the nine-month period ended September 30, 2016				December 31, 2016
	Sales and others		Purchase and others		Sales and others		Purchase and others		Trade accounts and notes receivable and others		Trade accounts and notes payable and others
LG International (Singapore) Pte. Ltd.	W	72,545		472		337,439		1,662		31,071		—
Pantos Logistics Co., Ltd.		7		20,638		7		47,615		—		8,183
Pantos Logistics (Shenzhen) Co., Ltd.		—		17,324		—		72,929		—		8,577
LG Corp.		—		15,205		—		41,836		7,937		—
Others		4,500		23,371		12,371		72,718		6,558		13,364

	W	126,998		1,263,445		485,281		3,334,559		100,914		1,068,567

27.	Related Parties and Others, Continued

(f)

Key management personnel compensation

Compensation costs of key management for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Short-term benefits	W	858		534		2,866		2,066
Expenses related to the defined benefit plan		95		93		392		804

	W	953		627		3,258		2,870

Key management refers to the registered directors who have significant control and responsibilities over the Controlling Company’s operations and business.

28.	Subsequent Event

The Controlling Company issued the following public debentures on October 27, 2017:


(In millions of won)
Classification	Issue date		Maturity date		Interest rate			Face amount
37-1		October 27, 2017		October 27, 2020		2.564	%	W	150,000
37-2		October 27, 2017		October 27, 2022		2.911	%		50,000

								W	200,000

LG DISPLAY CO., LTD.

Condensed Separate Interim Financial Statements

(Unaudited)

September 30, 2017 and 2016

(With Independent Auditors’ Review Report Thereon)

Table of Contents


	Page
Independent Auditors’ Review Report		101

Condensed Separate Interim Statements of Financial Position		103

Condensed Separate Interim Statements of Comprehensive Income (Loss)		104

Condensed Separate Interim Statements of Changes in Equity		105

Condensed Separate Interim Statements of Cash Flows		106

Notes to the Condensed Separate Interim Financial Statements		108

100

Independent Auditors’ Review Report

Based on a report originally issued in Korean

To the Board of Directors and Shareholders

LG Display Co., Ltd.:

Reviewed Financial Statements

We have reviewed the accompanying condensed separate interim financial statements of LG Display Co., Ltd. (the “Company”) which comprise the condensed separate interim statement of financial position as of September 30, 2017, the condensed separate interim statements of comprehensive income (loss) for each of the three-month and nine-month periods ended September 30, 2017 and 2016, and statements of changes in equity and cash flows for the nine-month periods ended September 30, 2017 and 2016, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Condensed Separate Interim Financial Statements

Management is responsible for the preparation and fair presentation of these condensed separate interim financial statements in accordance with Korean International Financial Reporting Standards No. 1034, Interim Financial Reporting, and for such internal controls as management determines necessary to enable the preparation of condensed separate interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to issue a report on these condensed separate interim financial statements based on our reviews.

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the condensed separate interim financial statements referred to above are not presented fairly, in all material respects, in accordance with Korean International Financial Reporting Standards No. 1034, Interim Financial Reporting.

Other Matters

The procedures and practices utilized in the Republic of Korea to review such condensed separate interim financial statements may differ from those generally accepted and applied in other countries.

We audited the separate statement of financial position as of December 31, 2016, and the related separate statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this review report, in accordance with Korean Standards on Auditing, and our report thereon, dated February 21, 2017, expressed an unqualified opinion. The accompanying condensed separate statement of financial position of the Company as of December 31, 2016, presented for comparative purposes, is not different from that audited by us from which it was derived in all material respects.

101

KPMG Samjong Accounting Corp.

Seoul, Korea

November 10, 2017

This report is effective as of November 10, 2017, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying condensed separate interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that the above review report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

102

LG DISPLAY CO., LTD.

Condensed Separate Interim Statements of Financial Position

(Unaudited)

As of September 30, 2017 and December 31, 2016


(In millions of won)	Note		September 30, 2017		December 31, 2016
Assets
Cash and cash equivalents		4, 24	W	542,610		259,467
Deposits in banks		4, 24		1,034,015		1,076,520
Trade accounts and notes receivable, net		5, 14, 24, 26		5,301,536		5,128,925
Other accounts receivable, net		5, 24		96,381		403,744
Other current financial assets		6, 24		15,028		7,696
Inventories		7		1,871,490		1,706,983
Other current assets		5		232,151		129,240

Total current assets				9,093,211		8,712,575
Deposits in banks		4, 24		11		13
Investments		8		2,781,868		2,656,026
Other non-current financial assets		6, 24		46,543		52,649
Property, plant and equipment, net		9		11,136,767		8,757,973
Intangible assets, net		10		697,218		673,966
Deferred tax assets		22		723,784		653,613
Other non-current assets		5		343,161		305,935

Total non-current assets				15,729,352		13,100,175

Total assets			W	24,822,563		21,812,750

Liabilities
Trade accounts and notes payable		24, 26	W	2,832,331		2,738,383
Current financial liabilities		11, 24		924,404		667,735
Other accounts payable		24		2,198,870		1,921,141
Accrued expenses				606,801		590,129
Income tax payable				285,930		155,641
Provisions		13		71,896		54,040
Advances received				90,627		18,944
Other current liabilities		13		37,048		30,331

Total current liabilities				7,047,907		6,176,344
Non-current financial liabilities		11, 24		3,107,259		3,185,449
Non-current provisions		13		24,043		8,155
Defined benefit liabilities, net		12		296,368		142,212
Long-term advances received		14		960,361		—
Other non-current liabilities		13		65,846		65,143

Total non-current liabilities				4,453,877		3,400,959

Total liabilities				11,501,784		9,577,303

Equity
Share capital		15		1,789,079		1,789,079
Share premium				2,251,113		2,251,113
Retained earnings				9,280,587		8,195,255

Total equity				13,320,779		12,235,447

Total liabilities and equity			W	24,822,563		21,812,750

See accompanying notes to the condensed separate interim financial statements.

103

LG DISPLAY CO., LTD.

Condensed Separate Interim Statements of Comprehensive Income (Loss)

(Unaudited)

For the three-month and nine-month periods ended September 30, 2017 and 2016


(In millions of won, except earnings per share)	Note		For the three-month period ended September 30						For the nine-month period ended September 30
			2017			2016			2017			2016
Revenue		16, 26	W	6,594,290			6,222,819		W	19,160,088			17,166,281
Cost of sales		7, 17, 26		(5,725,300	)		(5,545,288	)		(15,872,104	)		(15,768,670	)

Gross profit				868,990			677,531			3,287,984			1,397,611
Selling expenses		18		(132,116	)		(93,563	)		(435,567	)		(281,412	)
Administrative expenses		18		(118,676	)		(104,597	)		(351,676	)		(321,334	)
Research and development expenses				(281,501	)		(293,216	)		(868,803	)		(816,447	)

Operating profit (loss)				336,697			186,155			1,631,938			(21,582	)

Finance income		21		21,710			90,112			112,861			197,943
Finance costs		21		(21,712	)		(46,057	)		(83,180	)		(108,714	)
Other non-operating income		20		115,957			195,130			502,681			691,458
Other non-operating expenses		20		(102,181	)		(285,545	)		(617,011	)		(781,117	)

Profit (loss) before income tax				350,471			139,795			1,547,289			(22,012	)
Income tax expense		22		69,130			23,295			273,981			54,184

Profit (loss) for the period				281,341			116,500			1,273,308			(76,196	)

Other comprehensive loss
Items that will never be reclassified to profit or loss
Remeasurements of net defined benefit liabilities		12		(3,639	)		(1,033	)		(11,963	)		(3,817	)
Related income tax		12		881			250			2,895			924

				(2,758	)		(783	)		(9,068	)		(2,893	)
Items that are or may be reclassified to profit or loss
Net change in fair value of available-for-sale financial assets		21		—			—			—			(77	)
Related income tax		21		—			—			—			19

				—			—			—			(58	)
Other comprehensive loss for the period, net of income tax				(2,758	)		(783	)		(9,068	)		(2,951	)

Total comprehensive income (loss) for the period			W	278,583			115,717		W	1,264,240			(79,147	)

Earnings (loss) per share (In Won)
Basic earnings (loss) per share		23	W	786			326		W	3,559			(213	)

Diluted earnings (loss) per share		23	W	786			326		W	3,559			(213	)

See accompanying notes to the condensed separate interim financial statements.

104

LG DISPLAY CO., LTD.

Condensed Separate Interim Statements of Changes in Equity

(Unaudited)

For the nine-month periods ended September 30, 2017 and 2016


(In millions of won)	Share capital		Share premium		Retained earnings			Reserves			Total equity
Balances at January 1, 2016	W	1,789,079		2,251,113		7,289,333			58			11,329,583

Total comprehensive loss for the period
Loss for the period		—		—		(76,196	)		—			(76,196	)
Other comprehensive loss
Net change in fair value of available-for-sale financial assets, net of tax		—		—		—			(58	)		(58	)
Remeasurements of net defined benefit liabilities, net of tax		—		—		(2,893	)		—			(2,893	)

Total other comprehensive loss		—		—		(2,893	)		(58	)		(2,951	)

Total comprehensive loss for the period	W	—		—		(79,089	)		(58	)		(79,147	)

Transaction with owners, recognized directly in equity
Dividends to equity holders		—		—		(178,908	)		—			(178,908	)

Balances at September 30, 2016	W	1,789,079		2,251,113		7,031,336			—			11,071,528

Balances at January 1, 2017	W	1,789,079		2,251,113		8,195,255			—			12,235,447

Total comprehensive income for the period
Profit for the period		—		—		1,273,308			—			1,273,308
Other comprehensive loss
Remeasurements of net defined benefit liabilities, net of tax		—		—		(9,068	)		—			(9,068	)

Total other comprehensive loss		—		—		(9,068	)		—			(9,068	)

Total comprehensive income for the period	W	—		—		1,264,240			—			1,264,240

Transaction with owners, recognized directly in equity
Dividends to equity holders		—		—		(178,908	)		—			(178,908	)

Balances at September 30, 2017	W	1,789,079		2,251,113		9,280,587			—			13,320,779

See accompanying notes to the condensed separate interim financial statements.

105

LG DISPLAY CO., LTD.

Condensed Separate Interim Statements of Cash Flows

(Unaudited)

For the nine-month periods ended September 30, 2017 and 2016


(In millions of won)	Note	2017			2016
Cash flows from operating activities:
Profit (loss) for the period		W	1,273,308			(76,196	)
Adjustments for:
Income tax expense	22		273,981			54,184
Depreciation	17		1,259,107			1,470,545
Amortization of intangible assets	17		292,144			244,291
Gain on foreign currency translation			(85,878	)		(52,217	)
Loss on foreign currency translation			55,743			75,324
Expenses related to defined benefit plans	12		147,640			165,587
Gain on disposal of property, plant and equipment			(50,733	)		(39,146	)
Loss on disposal of property, plant and equipment			4,628			2,394
Gain on disposal of intangible assets			(308	)		(900	)
Loss on disposal of intangible assets			9			20
Impairment loss on intangible assets			1,717			125
Finance income			(89,249	)		(196,769	)
Finance costs			69,281			85,507
Other income			(16,884	)		(15,546	)
Other expenses			142,764			104,735

			2,003,962			1,898,134
Changes in
Trade accounts and notes receivable			(89,765	)		(173,445	)
Other accounts receivable			8,870			2,400
Other current assets			(44,036	)		(33,370	)
Inventories			(164,507	)		(57,751	)
Other non-current assets			(103,977	)		(68,993	)
Trade accounts and notes payable			55,915			(268,163	)
Other accounts payable			4,361			(41,517	)
Accrued expenses			17,622			(92,516	)
Other current liabilities			6,372			(1,459	)
Other non-current liabilities			5,113			14,115
Long-term advance received			1,020,470			—
Provisions			(107,179	)		(77,769	)
Defined benefit liabilities, net			(5,447	)		(119,789	)

			603,812			(918,257	)
Cash generated from operating activities			3,881,082			903,681
Income taxes paid			(197,373	)		(38,725	)
Interests received			18,176			26,047
Interests paid			(68,601	)		(73,675	)

Net cash provided by operating activities		W	3,633,284			817,328

See accompanying notes to the condensed separate interim financial statements.

106

LG DISPLAY CO., LTD.

Condensed Separate Interim Statements of Cash Flows, Continued

(Unaudited)

For the nine-month periods ended September 30, 2017 and 2016


(In millions of won)	Note		2017			2016
Cash flows from investing activities:
Dividends received			W	316,469			514,109
Proceeds from withdrawal of deposits in banks				1,272,002			2,080,602
Increase in deposits in banks				(1,229,495	)		(1,722,000	)
Acquisition of investments				(177,643	)		(147,878	)
Proceeds from disposal of investments				6,697			22,286
Acquisition of available-for-sale financial assets				(7	)		—
Proceeds from disposal of available-for-sale financial assets				—			419
Acquisition of financial assets at fair value through profit or loss				—			(1,500	)
Acquisition of property, plant and equipment				(3,408,598	)		(1,578,478	)
Proceeds from disposal of property, plant and equipment				152,123			72,686
Acquisition of intangible assets				(329,051	)		(308,664	)
Proceeds from disposal of intangible assets				874			1,056
Government grants received				1,505			730
Receipt from (payment for) settlement of derivatives				2,745			(36	)
Proceeds from collection of short-term loans				693			4,650
Increase in long-term loans				(300	)		(21,030	)
Increase in deposits				(1,378	)		(180	)
Decrease in deposits				1,161			913

Net cash used in investing activities				(3,392,203	)		(1,082,315	)

Cash flows from financing activities:		25
Proceeds from short-term borrowings				—			107,345
Repayments of short-term borrowings				(113,209	)		—
Proceeds from issuance of debentures				298,780			298,784
Proceeds from long-term debt				400,000			919,505
Repayments of current portion of long-term debt and debentures				(364,601	)		(832,939	)
Dividends paid				(178,908	)		(178,908	)

Net cash provided by financing activities				42,062			313,787

Net increase in cash and cash equivalents				283,143			48,800
Cash and cash equivalents at January 1				259,467			108,044

Cash and cash equivalents at September 30			W	542,610			156,844

See accompanying notes to the condensed separate interim financial statements.

107

1.	Organization and Description of Business

LG Display Co., Ltd. (the “Company”) was incorporated in February 1985 and the Company is a public corporation listed in Korea Exchange since 2004. The main business of the Company is to manufacture and sell displays and its related products. As of September 30, 2017, the Company is operating Thin Film Transistor Liquid Crystal Display (“TFT-LCD”) and Organic Light Emitting Diode (“OLED”) panel manufacturing plants in Gumi, Paju and China and TFT-LCD and OLED module manufacturing plants in Gumi, Paju, China, Poland and Vietnam. The Company is domiciled in the Republic of Korea with its address at 128 Yeouidae-ro, Yeongdeungpo-gu, Seoul, the Republic of Korea. As of September 30, 2017, LG Electronics Inc., a major shareholder of the Company, owns 37.9% (135,625,000 shares) of the Company’s common stock.

The Company’s common stock is listed on the Korea Exchange under the identifying code 034220. As of September 30, 2017, there are 357,815,700 shares of common stock outstanding. The Company’s common stock is also listed on the New York Stock Exchange in the form of American Depository Shares (“ADSs”) under the symbol “LPL”. One ADS represents one-half of one share of common stock. As of September 30, 2017, there are 29,572,308 ADSs outstanding.

2.	Basis of Presenting Financial Statements

(a)

Statement of Compliance

The condensed separate interim financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRSs”) No.1034, Interim Financial Reporting. They do not include all of the information required for full annual financial statements and should be read in conjunction with the separate financial statements of the Company as of and for the year ended December 31, 2016.

These condensed interim financial statements are separate interim financial statements prepared in accordance with K-IFRS No.1027, Separate Financial Statements, presented by a parent, an investor in an associate or a venture in a joint ventures, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees.

108

2.	Basis of Presenting Financial Statements, Continued

(b)

Basis of Measurement

The condensed separate interim financial statements have been prepared on the historical cost basis except for the following material items in the statements of financial position:

•

derivative instruments, financial assets at fair value through profit or loss and available-for-sale financial assets are measured at fair value, and

•

net defined benefit liabilities are recognized as the present value of defined benefit obligations less the fair value of plan assets

(c)

Functional and Presentation Currency

The condensed separate interim financial statements are presented in Korean won, which is the Company’s functional currency.

(d)

Use of Estimates and Judgments

The preparation of the condensed separate interim financial statements in conformity with K-IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed separate interim financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied in its separate financial statements as of and for the year ended December 31, 2016.

109

3.	Summary of Significant Accounting Policies

The significant accounting policies followed by the Company in the preparation of its condensed separate interim financial statements are the same as those followed by the Company in its preparation of the separate financial statements as of and for the year ended December 31, 2016, except for the application of K-IFRS No. 1034, Interim Financial Reporting, and the amended accounting standards explained below:

(a)

Changes in Accounting Policies

(i)

K-IFRS No. 1007, Statement of Cash Flows

The Company has adopted the amendment to K-IFRS No. 1007, Statement of Cash Flows, since January 1, 2017. The amendment to K-IFRS No. 1007 is part of the disclosure initiative to improve presentation and disclosure in financial statements and requires an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities including both changes due to cash flows and non-cash changes such as changes from financing cash flows, changes arising from obtaining or losing control of subsidiaries or other businesses, the effect of changes in foreign exchange rates and changes in fair value and other changes. The Company has applied the amendment and disclosed changes in liabilities arose from financing activities including both changes due to cash flows and non-cash changes in note 25.

(ii)

K-IFRS No. 1012, Income Taxes

The Company has adopted the amendment to K-IFRS No. 1012, Income Taxes, since January 1, 2017. The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendment provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. There is no impact of applying this amendment on the condensed separate interim financial statements.

110

3.	Summary of Significant Accounting Policies, Continued

(b)

New and Amended Standards and Interpretations Not Yet Adopted

A number of new standards and interpretations are effective for annual periods beginning after January 1, 2017 and earlier application is permitted; however, the Company has not early adopted the following new standards and interpretations in preparing these condensed separate interim financial statements.

(i)

K-IFRS No. 1109, Financial Instruments

The Company plans to adopt K-IFRS No. 1109, Financial Instruments, in its separate financial statements for annual periods beginning on January 1, 2018, assessing the financial impact of the adoption of K-IFRS No. 1109 and disclose the results in its separate financial statements for the year ending December 31, 2017. As of September 30, 2017, other than the potential impacts described in the separate financial statements as of and for the year ended December 31, 2016, there are no significant changes in relation to preparation for the adoption of this new standard.

(ii)

K-IFRS No. 1115, Revenue from Contracts with Customers

The Company plans to adopt K-IFRS No. 1115, Revenue from Contracts with Customers, in its separate financial statements for annual periods beginning on January 1, 2018, assessing the financial impact of the adoption of K-IFRS No. 1115 and disclose the results in its separate financial statements for the year ending December 31, 2017. As of September 30, 2017, other than the potential impacts described in the separate financial statements as of and for the year ended December 31, 2016, there are no significant changes in relation to preparation for the adoption of this new standard.

(iii)

K-IFRS No. 2112, Foreign Currency Transactions and Advance Consideration

According to the new interpretation, K-IFRS No. 2112, Foreign Currency Transactions and Advance Consideration, the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) is the date on which an entity initially recognizes the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. If there are multiple payments or receipts in advance, the entity shall determine a date of the transaction for each payment or receipt of advance consideration. K-IFRS No. 2122 is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. Management is currently assessing the potential impact on its condensed separate interim financial statements resulting from the application of new interpretation.

111

4.	Cash and Cash Equivalents and Deposits in Banks

Cash and cash equivalents and deposits in banks as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Current assets
Cash and cash equivalents
Demand deposits	W	542,610		259,467
Deposits in banks
Time deposits	W	961,629		1,004,134
Restricted cash (*)		72,386		72,386

	W	1,034,015		1,076,520

Non-current assets
Deposits in banks
Restricted cash (*)	W	11		13

	W	1,576,636		1,336,000

(*)	Restricted cash includes mutual growth fund to aid LG Group’s second and third-tier suppliers, pledge to enforce investment plans according to the receipt of subsidies from Gumi city and Gyeongsangbuk-do and others.

5.	Receivables and Other Assets

(a)

Trade accounts and notes receivable as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Trade, net	W	487,554		275,413
Due from related parties		4,813,982		4,853,512

	W	5,301,536		5,128,925

(b)

Other accounts receivable as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Current assets
Non-trade receivable, net	W	88,261		395,534
Accrued income		8,120		8,210

	W	96,381		403,744

Due from related parties included in other accounts receivable, as of September 30, 2017 and December 31, 2016 are W30,042 million and W308,756 million, respectively.

112

5.	Receivables and Other Assets, Continued

(c)

The aging of trade accounts and note receivable, other accounts receivable and long-term non-trade receivable as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017
	Book value						Impairment loss
	Trade accounts and notes receivable		Other accounts receivable		Long-term non-trade receivable		Trade accounts and notes receivable			Other accounts receivable			Long-term non-trade receivable
Not past due	W	5,301,381		88,017		8,738		(937	)		(272	)		—
Past due 1-15 days		922		8,281		—		(5	)		(4	)		—
Past due 16-30 days		115		—		—		—			—			—
Past due 31-60 days		19		56		—		—			(1	)		—
Past due more than 60 days		41		702		—		—			(398	)		—

	W	5,302,478		97,056		8,738		(942	)		(675	)		—


(In millions of won)	December 31, 2016
	Book value						Impairment loss
	Trade accounts and notes receivable		Other accounts receivable		Long-term non-trade receivable		Trade accounts and notes receivable			Other accounts receivable			Long-term non-trade receivable
Not past due	W	5,128,853		400,829		2,354		(520	)		(380	)		(23	)
Past due 1-15 days		113		2,281		—		—			(20	)		—
Past due 16-30 days		394		309		—		—			—			—
Past due 31-60 days		63		639		—		—			(6	)		—
Past due more than 60 days		22		490		—		—			(398	)		—

	W	5,129,445		404,548		2,354		(520	)		(804	)		(23	)

113

5.	Receivables and Other Assets, Continued


(In millions of won)	2017								2016
	Trade accounts and notes receivable		Other accounts receivable			Long-term non-trade receivable			Trade accounts and notes receivable			Other accounts receivable		Long-term non-trade receivable
Balance at the beginning of the period	W	520		804			23			600			406		52
(Reversal of) bad debt expense		422		(129	)		(23	)		(80	)		398		(29	)

Balance at the reporting date	W	942		675			—			520			804		23

114

5.	Receivables and Other Assets, Continue

(d)

Other assets as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Current assets
Advance payments	W	3,078		7,240
Prepaid expenses		150,753		65,842
Value added tax refundable		67,920		56,158
Emission rights		10,400		—

	W	232,151		129,240

Non-current assets
Long-term prepaid expenses	W	343,161		304,935
Long-term advanced payment		—		1,000

	W	343,161		305,935

115

6.	Other Financial Assets

(a)

Other financial assets as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Current assets
Available-for-sale financial assets	W	6		—
Short-term loans		15,022		7,696

	W	15,028		7,696

Non-current assets
Financial asset at fair value through profit or loss	W	1,382		1,382
Available-for-sale financial assets		4,412		5,708
Deposits		13,639		13,422
Long-term loans		17,930		29,562
Long-term non-trade receivable		8,738		2,331
Derivatives(*)		442		244

	W	46,543		52,649

Other financial assets of related parties as of September 30, 2017 and December 31, 2016 are W1,000 million and W3,488 million, respectively.

(*)	Represents interest rate swap contracts related to borrowings with variable interest rate.

(b)

Available-for-sale financial assets as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Current assets
Debt securities
Government bonds	W	6		—
Non-current assets
Debt securities
Government bonds	W	156		154
Equity securities
Intellectual Discovery, Ltd.	W	729		729
Kyulux, Inc.		1,968		3,266
Henghao Technology Co., Ltd.		1,559		1,559

	W	4,256		5,554

	W	4,418		5,708

116

7.	Inventories

Inventories as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Finished goods	W	531,703		527,658
Work-in-process		722,155		633,422
Raw materials		391,814		312,013
Supplies		225,818		233,890

	W	1,871,490		1,706,983


(In millions of won)	2017			2016
Inventories recognized as cost of sales	W	15,872,104			15,768,670
Including: inventory write-downs		225,390			312,229
Including: reversal and usage of inventory write-downs		(185,454	)		(342,623	)

117

8.	Investments

(a)

Investments in subsidiaries consist of the following:


(In millions of won)					September 30, 2017					December 31, 2016
Overseas Subsidiaries	Location		Business		Percentage of ownership			Book value		Percentage of ownership			Book Value
LG Display America, Inc.		San Jose, U.S.A.		Sell Display products		100	%	W	36,815		100	%	W	36,815
LG Display Germany GmbH		Eschborn, Germany		Sell Display products		100	%		19,373		100	%		19,373
LG Display Japan Co., Ltd.		Tokyo, Japan		Sell Display products		100	%		15,686		100	%		15,686
LG Display Taiwan Co., Ltd.		Taipei, Taiwan		Sell Display products		100	%		35,230		100	%		35,230
LG Display Nanjing Co., Ltd.		Nanjing, China		Manufacture Display products		100	%		593,726		100	%		593,726
LG Display Shanghai Co., Ltd.		Shanghai, China		Sell Display products		100	%		9,093		100	%		9,093
LG Display Poland Sp. z o.o.		Wroclaw, Poland		Manufacture Display products		100	%		194,992		100	%		194,992
LG Display Guangzhou Co., Ltd.		Guangzhou, China		Manufacture Display products		100	%		293,557		100	%		293,557
LG Display Shenzhen Co., Ltd.		Shenzhen, China		Sell Display products		100	%		3,467		100	%		3,467
LG Display Singapore Pte. Ltd.		Singapore		Sell Display products		100	%		1,250		100	%		1,250
L&T Display Technology (Fujian) Limited		Fujian, China		Manufacture and sell LCD module and LCD monitor sets		51	%		10,123		51	%		10,123
LG Display Yantai Co., Ltd.		Yantai, China		Manufacture Display products		100	%		169,195		100	%		169,195
Nanumnuri Co., Ltd.		Gumi, South Korea		Janitorial services		100	%		800		100	%		800
LG Display (China) Co., Ltd.		Guangzhou, China		Manufacture and Sell Display products		51	%		723,086		51	%		723,086
Unified Innovative Technology, LLC		Wilmington, U.S.A.		Manage intellectual property		100	%		9,489		100	%		9,489
LG Display Guangzhou Trading Co., Ltd.		Guangzhou, China		Sell Display products		100	%		218		100	%		218
Global OLED Technology LLC		Herndon, U.S.A		Manage OLED intellectual property		100	%		164,322		100	%		164,322
LG Display Vietnam Haiphong Co., Ltd.		Haiphong, Vietnam		Manufacture Display Products		100	%		117,378		100	%		117,378
Suzhou Lehui Display Co., Ltd.		Suzhou, China		Manufacture and sell LCD module and LCD monitor sets		100	%		121,640		100	%		121,640
Money Market Trust(*)		Seoul, South Korea		Money market trust		100	%		157,335		—			—

								W	2,676,775				W	2,519,440

(*)	For the nine-month period ended September 30, 2017, the Company acquired W157.335 million of Money Market Trust.

118

8.	Investments, Continued.

For the nine-month period ended September 30, 2017, the aggregate amount of received dividends from subsidiaries are W10,079 million.

(b)

Investments in associates consist of the following:


(In millions of won)
					September 30, 2017					December 31, 2016
Associates	Location		Business		Percentage of ownership			Book Value		Percentage of ownership			Book Value
Paju Electric Glass Co., Ltd.		Paju, South Korea		Manufacture electric glass for FPDs		40	%	W	45,089		40	%	W	45,089
New Optics Ltd. (*1)		Yangju, South Korea		Manufacture back light parts for TFT- LCDs		—			—		46	%		14,221
INVENIA Co., Ltd.		Seongnam, South Korea		Develop and manufacture the equipment for FPDs		13	%		6,330		13	%		6,330
WooRee E&L Co., Ltd.		Ansan, South Korea		Manufacture LED back light unit packages		14	%		10,268		14	%		10,268
LB Gemini New Growth Fund No.16 (*2)		Seoul, South Korea		Invest in small and middle sized companies and benefit from M&A opportunities		31	%		434		31	%		2,510
Can Yang Investments Limited (*3)		Hong Kong		Develop, manufacture and sell LED parts		9	%		2,064		9	%		7,568
YAS Co., Ltd.		Paju, South Korea		Develop and manufacture deposition equipment for OLEDs		15	%		10,000		18	%		10,000
Narenanotech Corporation (*1)		Yongin, South Korea		Manufacture and sell FPD manufacturing equipment		—			—		23	%		30,000
AVATEC Co., Ltd.		Daegu, South Korea		Process and sell electric glass for FPDs		17	%		10,600		17	%		10,600
Arctic Sentinel, Inc.		Los Angeles U.S.A.		Develop and manufacture tablet for kids		10	%		—		10	%		—
CYNORA GmbH (*4)		Bruchsal Germany		Develop organic emitting materials for displays and lighting devices		14	%		20,308		—			—

								W	105,093				W	136,586

119

(*1)	For the nine-month period ended September 30, 2017, the Company disposed of the entire investments in New Optics Ltd. and Narenanotech Corporation.

(*2)

The Company is a member of a limited partnership in the LB Gemini New Growth Fund No.16 (“the Fund”). For the nine-month period ended September 30, 2017, the Company received W2,076 million from the Fund as capital distribution and there were no changes in the Company’s ownership percentage in the Fund. On the other hand, a resolution to dissolve the fund was approved at the general meeting and the fund is in process of liquidation as of September 30, 2017. Accordingly, there were no additional investments for the nine-month period ended September 30, 2017.

(*3)	The Company recognized an impairment loss of W5,504 million as finance cost for the difference between the carrying amount and the recoverable amount of investments in Can Yang Investments Limited.

8.	Investments, Continued.

(*4)

In September 2017, the Company invested W20,308 million and acquired 88,584 shares of preferred stock with voting rights in CYNORA GmbH. As of September 30, 2017, the Company‘s ownership percentage in CYNORA GmbH is 14% and the Company has the right to appoint a director to the board of directors of the investee.

For the nine-month period ended September 30, 2017, the aggregate amount of received dividends from associates are W8,639 million.

9.	Property, Plant and Equipment

For the nine-month periods ended September 30, 2017 and 2016, the Company purchased property, plant and equipment of W3,709,525 million and W2,108,549 million, respectively. The capitalized borrowing costs and the annualized capitalization rate were W28,463 million and 1.87%, and W8,025 million and 2.17% for the nine-month periods ended September 30, 2017 and 2016, respectively. Also, for the nine-month periods ended September 30, 2017 and 2016, the Company disposed of property, plant and equipment with carrying amounts of W67,940 million and W18,930 million, respectively, and recognized W50,733 million and W4,628 million, respectively, as gain and loss on disposal of property, plant and equipment for the nine-month period ended September 30, 2017 (gain and loss for the nine-month period ended September 30, 2016: W39,146 million and W2,394 million, respectively).

10.	Intangible Assets

The Company capitalizes expenditures related to development activities, such as expenditures incurred on designing, manufacturing and testing of products after those related activities meet the capitalization criteria of development costs including technical feasibility, future economic benefits and others. The balances of capitalized development costs as of September 30, 2017 and December 31, 2016, are W288,642 million and W256,340 million, respectively.

120

11.	Financial Liabilities

(a)

Financial liabilities as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017		December 31, 2016
Current
Short-term borrowings	W	—		113,209
Current portion of long-term debt		924,404		554,526

	W	924,404		667,735

Non-current
Won denominated borrowings	W	1,221,421		821,922
Foreign currency denominated borrowings		464,413		851,993
Bonds		1,421,346		1,511,062
Derivatives(*)		79		472

	W	3,107,259		3,185,449

(*)	Represents interest rate swap contracts related to borrowings with variable interest rate.

(b)

Short-term borrowings as of September 30, 2017 and December 31, 2016 are as follows:

(In millions of won and USD)

Lender

Annual interest rate
as of
September 30, 2017 (%)

September 30,
2017

December 31,
2016

Standard Chartered Bank Korea Limited

—

113,209

Foreign currency equivalent

—

USD 94

(c)

Won denominated long-term borrowings as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
Lender	Annual interest rate as of September 30, 2017 (%)	September 30, 2017			December 31, 2016
Woori Bank	3-year Korean Treasury Bond rate-1.25, 2.75	W	2,092			2,991
Shinhan Bank	CD rate (91days) + 0.30		200,000			200,000
Korea Development Bank and others	CD rate (91days) + 0.64~0.74 2.28~2.58		1,020,000			620,000
Less current portion of long-term borrowings			(671	)		(1,069	)

		W	1,221,421			821,922

121

11.	Financial Liabilities, Continued

(d)

Foreign currency denominated long-term borrowings as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won and USD)
Lender	Annual interest rate as of *September 30, 2017 (%)()**		September 30, 2017			December 31, 2016
The Export-Import Bank of Korea and Others		3ML+0.55~1.04	W	808,423			1,027,225
Standard Chartered Bank Korea Limited		—		—			8,469

Foreign currency equivalent				USD 705			USD 857

Less current portion of long-term borrowings				(344,010	)		(183,701	)

			W	464,413			851,993

(*)	ML represents Month LIBOR (London Inter-Bank Offered Rates).

(e)

Details of bonds issued and outstanding as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	Maturity		Annual interest rate as of September 30, 2017 (%)		September 30, 2017			December 31, 2016
*Won denominated bonds()**
Publicly issued bonds		October 2017 ~June 2022		1.73~3.73	W	2,005,000			1,885,000
Less discount on bonds						(3,931	)		(4,182	)
Less current portion						(579,723	)		(369,756	)

					W	1,421,346			1,511,062

(*)	Principal of the won denominated bonds is to be repaid at maturity and interests are paid quarterly.

122

12.	Employee Benefits

The Company’s defined benefit plans provide a lump-sum payment to an employee based on final salary rates and length of service at the time the employee leaves the Company.

(a)

Net defined benefit liabilities recognized as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	September 30, 2017			December 31, 2016
Present value of partially funded defined benefit obligations	W	1,521,615			1,400,621
Fair value of plan assets		(1,225,247	)		(1,258,409	)

	W	296,368			142,212

(b)

Expenses recognized in profit or loss for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Current service cost	W	48,615		52,626		145,846		157,878
Net interest cost		598		2,569		1,794		7,709

	W	49,213		55,195		147,640		165,587

(c)

Plan assets as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Guaranteed deposits in banks	W	1,225,247		1,258,409

As of September 30, 2017, the Company maintains the plan assets primarily with Mirae Asset Daewoo Co., Ltd., Shinhan Bank and others.

(d)

Remeasurements of the net defined benefit liabilities included in other comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30						For the nine-month periods ended September 30
	2017			2016			2017			2016
Remeasurements of net defined benefit liabilities	W	(3,639	)		(1,033	)		(11,963	)		(3,817	)
Tax effect		881			250			2,895			924

Remeasurements of net defined benefit liabilities, net of income tax	W	(2,758	)		(783	)		(9,068	)		(2,893	)

123

13.	Provisions and Other Liabilities

(a)

Changes in provisions for the period ended September 30, 2017 are as follows:


(In millions of won)
	*Warranties ()**			Others		Total
Balance at January 1, 2017	W	60,530			1,665		62,195
Additions		140,923			877		141,800
Usage		(108,056	)		—		(108,056	)

Balance at September 30, 2017	W	93,397			2,542		95,939

Current	W	69,354			2,542		71,896
Non-current	W	24,043			—		24,043

(*)	The provision for warranties covers defective products and is normally applicable for 18 months from the date of purchase. The warranty liability is calculated by using historical and anticipated rates of warranty claims, and costs per claim to satisfy the Company’s warranty obligation.

(b)

Other liabilities as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Current liabilities
Withholdings	W	33,336		24,840
Unearned revenues		3,712		5,491

	W	37,048		30,331

Non-current liabilities
Long-term accrued expenses	W	65,846		61,615
Long-term other accounts payable		—		3,528

	W	65,846		65,143

124

14.	Contingencies and Commitments

(a)

Legal Proceedings

Delaware Display Group LLC and Innovative Display Technologies LLC (“DDG” and “IDT”)

In December 2013, Delaware Display Group LLC and Innovative Display Technologies LLC filed a patent infringement case (“First Case”) against the Company and LG Display America, Inc. in the United States District Court for the District of Delaware and “DDG” and “IDT” filed a new patent infringement case against the Company and LG Display America, Inc. over the three patents that were dismissed without prejudice from the First Case in December 2015. Additionally, in August 2016, Innovative Display Technologies LLC filed a new patent infringement case against the Company and LG Display America, Inc. in the United States District Court for the Eastern District of Texas with respect to two new patents. In March 2017, the parties reached settlements in principle through mediation. In April 2017, the parties filed a stipulation of dismissal and amicably settled all claims asserted in the above-mentioned patent litigations.

Surpass Tech Innovation LLC

In March 2014, Surpass Tech Innovation LLC filed a complaint in the United States District Court for the District of Delaware against the Company and LG Display America, Inc. for alleged patent infringement. In April 2017, the case was terminated pursuant to a stipulation of dismissal filed by Surpass Tech Innovation LLC.

Others

The Company is defending against various claims in addition to pending proceedings described above. The Company does not have a present obligation for these matters and has not recognized any provision at September 30, 2017.

125

14.	Contingencies and Commitments, Continued

(b)

Commitments

Factoring and securitization of accounts receivable

The Company has agreements with Korea Development Bank and several other banks for accounts receivable sales negotiating facilities of up to an aggregate of USD 1,793 million (W2,056,584 million) in connection with the Company’s export sales transactions with its subsidiaries. As of September 30, 2017, no short-term borrowings were outstanding in connection with these agreements. In connection with all of the contracts in this paragraph, the Company has sold its accounts receivable with recourse.

The Company has a credit facility agreement with Shinhan Bank and several other banks pursuant to which the Company could sell its accounts receivables up to an aggregate of W365,208 million in connection with its domestic and export sales transactions and, as of September 30, 2017, no accounts and notes receivable sold to Shinhan Bank were outstanding in connection with the agreement. In connection with the contract above, the Company has sold its accounts receivable without recourse.

Letters of credit

As of September 30, 2017, the Company has agreements in relation to the opening of letters of credit up to USD 30 million (W34,401 million) with KEB Hana Bank, USD 80 million (W91,736 million) with Bank of China and USD 50 million (W57,335 million) with Sumitomo Mitsui Banking Corporation.

Payment guarantees

The Company provides a payment guarantee in connection with the term loan credit facilities of LG Display Vietnam Haiphong, Co., Ltd. amounting to USD 390 million (W447,213 million) for principals.

In addition, the Company obtained payment guarantees amounting to USD 900 million (W1,032,030 million) from KEB Hana Bank and others for advance received related to the long-term supply agreements and USD 8.5 million (W9,747 million) from Shinhan bank for value added tax payments in Poland.

License agreements

As of September 30, 2017, in relation to its LCD business, the Company has technical license agreements with Hitachi Display, Ltd. and others and has a trademark license agreement with LG Corp.

Long-term supply agreement

As of September 30, 2017, in connection with long-term supply agreements with customers, the Company USD 900 million (W1,032,030 million) in long-term advance. The advance received will be offset against outstanding accounts receivable balances after a given period of time, as well as those arising from the supply of products thereafter. The Company received payment guarantees amounting to USD 900 million (W1,032,030 million) from KEB Hana Bank and other various banks relating to advance received.

126

15.	Share capital

The Company is authorized to issue 500,000,000 shares of capital stock (par value W5,000), and as of September 30, 2017 and December 31, 2016, the number of issued common shares is 357,815,700. There have been no changes in the capital stock from January 1, 2016 to September 30, 2017.

16.

Revenue

Details of revenue for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Sales of goods	W	6,582,101		6,212,820		19,117,997		17,132,667
Royalties		4,504		1,588		13,360		7,589
Others		7,685		8,411		28,731		26,025

	W	6,594,290		6,222,819		19,160,088		17,166,281

17.	The Nature of Expenses and Others

The classification of expenses by nature for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30						For the nine-month periods ended September 30
	2017			2016			2017			2016
Changes in inventories	W	(184,627	)		(9,897	)		(164,506	)		(57,751	)
Purchases of raw materials, merchandise and others		2,849,969			2,729,678			7,553,067			7,616,029
Depreciation and amortization		539,468			485,256			1,551,251			1,714,836
Outsourcing fees		1,483,811			1,381,308			4,049,078			3,627,887
Labor costs		647,908			633,961			1,914,120			1,910,812
Supplies and others		272,180			208,374			727,126			614,500
Utility		195,947			187,425			530,283			536,397
Fees and commissions		117,812			117,425			348,267			348,372
Shipping costs		33,221			28,709			89,463			88,953
Advertising		51,201			16,652			140,655			44,466
Warranty expenses		27,749			26,734			140,923			80,226
Travel		21,061			15,400			57,900			47,056
Taxes and dues		11,164			11,590			34,795			36,017
Others		196,156			228,646			576,883			625,831

	W	6,263,020			6,061,261			17,549,305			17,233,631

Total expenses consist of cost of sales, selling, administrative, research and development expenses and other non-operating expenses, excluding foreign exchange differences.

127

18.	Selling and Administrative Expenses

Details of selling and administrative expenses for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Salaries	W	53,152		48,923		159,191		143,298
Expenses related to defined benefit plans		6,480		7,178		19,592		21,615
Other employee benefits		12,523		10,574		38,084		34,813
Shipping costs		26,005		22,572		70,504		70,987
Fees and commissions		25,513		26,187		79,860		84,128
Depreciation		22,169		19,529		66,782		63,510
Taxes and dues		481		872		1,485		2,369
Advertising		51,201		16,652		140,655		44,466
Warranty expenses		27,749		26,734		140,923		80,226
Rent		2,484		2,486		7,491		7,432
Insurance		1,710		1,824		4,924		4,424
Travel		5,031		3,521		14,764		11,716
Training		4,450		2,874		11,808		10,564
Others		11,844		8,234		31,180		23,198

	W	250,792		198,160		787,243		602,746

19.	Personnel Expenses

Details of personnel expenses for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Salaries and wages	W	553,390		526,595		1,638,911		1,573,533
Other employee benefits		76,451		73,958		224,611		229,039
Contributions to National Pension plan		18,573		18,013		54,325		51,694
Expenses related to defined benefit plan		49,213		55,195		147,640		165,587

	W	697,627		673,761		2,065,487		2,019,853

128

20.	Other Non-operating Income and Other Non-operating Expenses

(a)

Details of other non-operating income for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Rental income	W	867		748		2,631		2,604
Foreign currency gain		108,750		168,902		443,399		630,262
Reversal of allowance for doubtful accounts for other receivables		215		—		379		—
Gain on disposal of property, plant and equipment		4,916		9,955		50,733		39,146
Gain on disposal of intangible assets		—		—		308		900
Commission earned		394		303		689		938
Others		815		15,222		4,542		17,608

	W	115,957		195,130		502,681		691,458

(b)

Details of other non-operating expenses for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Foreign currency loss	W	96,754		260,948		595,856		735,349
Other bad debt expenses		1,576		—		1,826		345
Loss on disposal of property, plant and equipment		1,420		184		4,628		2,394
Loss on disposal of intangible assets		9		—		9		20
Impairment loss on intangible assets		40		40		1,717		125
Donations		2,267		12,503		12,610		17,234
Expenses related to legal proceedings or claims and others		115		11,870		365		25,650

	W	102,181		285,545		617,011		781,117

129

21.	Finance Income and Finance Costs

(a)

Finance income and costs recognized in profit and loss for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Finance income
Interest income	W	8,031		5,850		19,061		21,618
Dividend income		10,079		1,379		18,718		78,521
Foreign currency gain		3,263		70,097		67,181		82,326
Gain on disposal of investments		—		11,515		4,203		11,667
Gain on transaction of derivatives		—		1,271		3,106		3,811
Gain on valuation of derivatives		337		—		592		—

	W	21,710		90,112		112,861		197,943

Finance costs
Interest expense	W	11,349		21,520		39,716		67,397
Foreign currency loss		9,678		9,510		12,453		22,280
Loss on disposal of investments		—		—		22,401		—
Loss on impairment of investments		—		—		5,504		1,632
Loss on sale of trade accounts and notes receivable		21		—		46		3
Loss on impairment of available-for-sale financial assets		—		—		1,298		—
Loss on transaction of derivatives		150		1,382		361		3,762
Loss on valuation of derivatives		—		13,338		—		12,715
Other		514		307		1,401		925

	W	21,712		46,057		83,180		108,714

(b)

Finance income and costs recognized in other comprehensive income or loss for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Net change in fair value of available-for-sale financial assets	W	—		—		—		(77	)
Tax effect		—		—		—		19

Finance income (costs) recognized in other comprehensive income or loss after tax	W	—		—		—		(58	)

130

22.	Income Taxes

(a)

Details of income tax expense for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30					For the nine-month periods ended September 30
	2017			2016		2017			2016
Current tax expense	W	111,480			1,287		341,257			11,949
Deferred tax expense (benefit)		(42,350	)		22,008		(67,276	)		42,235

Income tax expense	W	69,130			23,295		273,981			54,184

(b)

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities as of September 30, 2017 and December 31, 2016 are attributable to the following:


(In millions of won)	Assets				Liabilities						Total
	September 30, 2017		December 31, 2016		September 30, 2017			December 31, 2016			September 30, 2017			December 31, 2016
Other accounts receivable, net	W	—		—		(1,400	)		(1,190	)		(1,400	)		(1,190	)
Inventories, net		41,821		32,150		—			—			41,821			32,150
Defined benefit liabilities, net		49,719		10,817		—			—			49,719			10,817
Accrued expenses		123,466		119,952		—			—			123,466			119,952
Property, plant and equipment		185,587		177,833		—			—			185,587			177,833
Intangible assets		1,061		744		—			—			1,061			744
Provisions		23,217		15,051		—			—			23,217			15,051
Gain or loss on foreign currency translation, net		11		11		—			—			11			11
Others		14,632		10,845		—			—			14,632			10,845
Tax credit carryforwards		285,670		287,400		—			—			285,670			287,400

Deferred tax assets (liabilities)	W	725,184		654,803		(1,400	)		(1,190	)		723,784			653,613

Statutory tax rate applicable to the Company is 24.2% for the nine-month period ended September 30, 2017. Meanwhile, effective tax rate for the nine-month period ended September 30, 2017 decreased primarily due to change of the probability of utilizing deferred tax assets including tax credit carryforwards.

131

23.	Earnings (Loss) Per Share

(a)

Basic earnings (loss) per share for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In won and number of shares)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Profit (loss) for the period	W	281,340,302,457		116,500,254,294		1,273,307,737,914		(76,195,507,978	)
Weighted-average number of common stocks outstanding		357,815,700		357,815,700		357,815,700		357,815,700

Earnings (loss) per share	W	786		326		3,559		(213	)

(b)

Diluted earnings (loss) per share for the nine-month periods ended September 30, 2017 and 2016 are not calculated since there was no potential common stock.

24.	Financial Risk Management

The Company is exposed to credit risk, liquidity risk and market risks. The Company identifies and analyzes such risks, and controls are implemented under a risk management system to monitor and manage these risks at below a threshold level.

(a)

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

(i)

Currency risk

The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency of the Company, Korean won (KRW). The currencies in which these transactions primarily are denominated are USD, JPY, etc.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company adopts policies to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

132

24.	Financial Risk Management, Continued

Exposure to currency risk

The Company’s exposure to foreign currency risk based on notional amounts as of September 30, 2017 and December 31, 2016 is as follows:


(In millions)	September 30, 2017
	USD			JPY			CNY			PLN			EUR
Cash and cash equivalents		117			223			—			2			—
Trade accounts and notes receivable		4,313			1,113			—			—			—
Non-trade receivable		15			1,488			57			—			6
Trade accounts and notes payable		(1,485	)		(13,558	)		—			—			—
Other accounts payable		(92	)		(9,908	)		(244	)		(9	)		(1	)
Debt		(705	)		—			—			—			—

Net exposure		2,163			(20,642	)		(187	)		(7	)		5


(In millions)	December 31, 2016
	USD			JPY			CNY			PLN			EUR
Cash and cash equivalents		20			268			—			2			—
Trade accounts and notes receivable		3,929			1,315			—			—			—
Non-trade receivable		90			4,222			1,312			—			3
Long-term non-trade receivable		2			—			—			—			—
Other assets denominated in foreign currencies		—			51			—			—			—
Trade accounts and notes payable		(1,442	)		(14,940	)		—			—			—
Other accounts payable		(120	)		(7,161	)		(1	)		(12	)		(1	)
Debt		(951	)		—			—			—			—

Net exposure		1,528			(16,245	)		1,311			(10	)		2

133

24.	Financial Risk Management, Continued

Average exchange rates applied for the nine-month periods ended September 30, 2017 and 2016 and the exchange rates at September 30, 2017 and December 31, 2016 are as follows:


(In won)	Average rate				Reporting date spot rate
	2017		2016		September 30, 2017		December 31, 2016
USD	W	1,138.67		1,161.32	W	1,146.70		1,208.50
JPY		10.18		10.70		10.20		10.37
CNY		167.49		176.22		172.35		173.26
PLN		297.15		297.66		312.96		287.62
EUR		1,267.31		1,296.67		1,350.87		1,267.60

ii)

Sensitivity analysis

A weaker won, as indicated below, against the following currencies which comprise the Company’s assets or liabilities denominated in foreign currency as of September 30, 2017 and December 31, 2016, would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Company considers to be reasonably possible as of the end of reporting period. The analysis assumes that all other variables, in particular interest rates, would remain constant. The changes in equity and profit or loss would have been as follows:


(In millions of won)	September 30, 2017						December 31, 2016
	Equity			Profit or loss			Equity			Profit or loss
USD (5 percent weakening)	W	94,004			94,004			69,986			69,986
JPY (5 percent weakening)		(7,983	)		(7,983	)		(6,383	)		(6,383	)
CNY (5 percent weakening)		(1,221	)		(1,221	)		8,609			8,609
PLN (5 percent weakening)		(83	)		(83	)		(109	)		(109	)
EUR (5 percent weakening)		256			256			96			96

134

24.	Financial Risk Management, Continued

(ii)

Interest rate risk

Interest rate risk arises principally from the Company’s debentures and borrowings. The Company establishes and applies its policy to reduce uncertainty arising from fluctuations in the interest rate and to minimize finance cost and manages interest rate risk by monitoring of trends of fluctuations in interest rate and establishing plan for countermeasures.

Profile

The interest rate profile of the Company’s interest-bearing financial instruments as of September 30, 2017 and December 31, 2016 is as follows:


(In millions of won)	September 30, 2017			December 31, 2016
Fixed rate instruments
Financial assets	W	1,576,787			1,336,141
Financial liabilities		(2,723,141	)		(2,203,378	)

	W	(1,146,354	)		(867,237	)

Variable rate instruments
Financial liabilities	W	(1,308,443	)		(1,649,334	)

ii)

Equity and profit or loss sensitivity analysis for variable rate instruments


(In millions of won)	Equity					Profit or loss
	1%p increase			1%p decrease		1%p increase			1%p decrease
September 30, 2017
Variable rate instruments(*)	W	(7,265	)		7,265		(7,265	)		7,265
December 31, 2016
Variable rate instruments(*)	W	(9,849	)		9,849		(9,849	)		9,849

(*)	Financial instruments subject to interest rate swap not qualified for hedging are excluded.

135

24.	Financial Risk Management, Continued

(b)

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers.

The Company’s exposure to credit risk of trade and other receivables is influenced mainly by the individual characteristics of each customer. However, management believes that the demographics of the Company’s customer base, including the default risk of the country in which customers operate, do not have a significant influence on credit risk since the majority of the customers are global electronic appliance manufacturers operating in global markets.

The Company establishes credit limits for each customer and each new customer is analyzed quantitatively and qualitatively before determining whether to utilize third party guarantees, insurance or factoring as appropriate.

The Company does not establish allowances for receivables under insurance or receivables from customers with a high credit rating. For the rest of the receivables, the Company establishes an allowance for impairment of trade and other receivables that have been individually or collectively evaluated for impairment and estimated on the basis of historical loss experience for assets.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Cash and cash equivalents	W	542,610		259,467
Deposits in banks		1,034,026		1,076,533
Trade accounts and notes receivable, net		5,301,536		5,128,925
Non-trade receivable, net		88,261		395,534
Accrued income		8,120		8,210
Available-for-sale financial assets		162		154
Financial assets at fair value through profit or loss		1,382		1,382
Deposits		13,639		13,422
Short-term loans		15,022		7,696
Long-term loans		17,930		29,562
Long-term non-trade receivable		8,738		2,331
Derivatives		442		244

		W 7,031,868		6,923,460

In addition to the financial assets above, as of September 30, 2017, the Company provides payment guarantees of W447,213 million, for its subsidiaries.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises primarily from the sales and investing activities. Trade accounts and notes receivables are insured in order to manage credit risk and uninsured trade accounts and notes receivables are managed in accordance with the Company’s management policy.

136

24.	Financial Risk Management, Continued

(c)

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company has historically been able to satisfy its cash requirements from cash flows from operations and debt and equity financing. To the extent that the Company does not generate sufficient cash flows from operations to meet its capital requirements, the Company may rely on other financing activities, such as external long-term borrowings and offerings of debt securities, equity-linked and other debt securities. In addition, the Company maintains a line of credit with various banks.

The following are the contractual maturities of financial liabilities, including estimated interest payments, as of September 30, 2017.


(In millions of won)			Contractual cash flows
	Carrying amount		Total		6 months or less		6-12 months			1-2 years		2-5 years		More than 5 years
Non-derivative financial liabilities
Unsecured bank loans	W	2,030,515		2,117,879		22,292		366,290			1,064,405		626,666		38,226
Unsecured bond issues		2,001,069		2,107,701		393,385		228,231			404,470		1,081,615		—
Trade accounts and notes payable		2,832,331		2,832,331		2,832,331		—			—		—		—
Other accounts payable		2,198,870		2,198,870		2,197,428		1,442			—		—		—
Payment guarantee(*)		—		484,220		4,908		4,935			44,804		383,367		46,206
Derivative financial liabilities		79		78		166		(88	)		—		—		—

	W	9,062,864		9,741,079		5,450,510		600,810			1,513,679		2,091,648		84,432

(*)

Contractual cash flows of payment guarantee is identical to timing of principal payment.

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

137

24.	Financial Risk Management, Continued

(d)

Capital management


(In millions of won)
	September 30, 2017			December 31, 2016
Total liabilities	W	11,501,784			9,577,303
Total equity		13,320,779			12,235,447
Cash and deposits in banks (*1)		1,576,625			1,335,987
Borrowings (including bonds)		4,031,584			3,852,712
Total liabilities to equity ratio		86	%		78	%
Net borrowings to equity ratio (*2)		18	%		21	%

(*1)	Cash and deposits in banks consist of cash and cash equivalents and current deposit in banks.

(*2)	Net borrowings to equity ratio is calculated by dividing total borrowings (including bonds) less cash and current deposits in banks by total equity.

(e)

Determination of fair value

(i) Measurement of fair value

A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

i) Current Assets and Liabilities

The carrying amounts approximate fair value because of the short maturity of these instruments.

ii) Trade Receivables and Other Receivables

iii) Investments in Equity and Debt Securities

iv) Non-derivative Financial Liabilities

138

24.	Financial Risk Management, Continued

(ii)

Fair values versus carrying amounts

The fair values of financial assets and liabilities, together with the carrying amounts shown in the condensed separate interim statements of financial position, are as follows:


(In millions of won)
	September 30, 2017					December 31, 2016
	Carrying amounts		Fair values			Carrying amounts		Fair values
Assets carried at fair value
Available-for-sale financial assets	W	162		162			154		154
Financial assets at fair value through profit or loss		1,382		1,382			1,382		1,382
Derivatives		442		442			244		244
Assets carried at amortized cost
Cash and cash equivalents	W	542,610		(	*)		259,467		(	*)
Deposits in banks		1,034,026		(	*)		1,076,533		(	*)
Trade accounts and notes receivable		5,301,536		(	*)		5,128,925		(	*)
Non-trade receivable		88,261		(	*)		395.534		(	*)
Accrued income		8,120		(	*)		8,210		(	*)
Deposits		13,639		(	*)		13,422		(	*)
Short-term loans		15,022		(	*)		7,696		(	*)
Long-term loans		17,930		(	*)		29,562		(	*)
Long-term non-trade receivable		8,738		(	*)		2,331		(	*)
Liabilities carried at fair value
Derivatives	W	79		79			472		472
Liabilities carried at amortized cost
Unsecured bank loans	W	2,030,515		2,037,092			1,971,894		1,975,284
Unsecured bond issues		2,001,069		2,014,187			1,880,818		1,903,863
Trade accounts and notes payable		2,832,331		(	*)		2,738,383		(	*)
Other accounts payable		2,198,870		2,199,219			1,921,141		1,921,562
Long-term other accounts payable		—		—			3,528		3,891

(*)	Excluded from disclosures as the carrying amount approximates fair value.

The basis for determining fair values above by the Company is consistent with those disclosed in the financial statements as of and for the year ended December 31, 2016.

139

24.	Financial Risk Management, Continued

(iii)

Financial Instruments measured at cost

Available-for-sale financial assets measured at cost as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)
	September 30, 2017		December 31, 2016
Intellectual Discovery Co., Ltd.	W	729		729
Kyulux Inc.		1,968		3,266
Henghao Technology Co., Ltd.		1,559		1,559

	W	4,256		5,554

(iv)

Fair values of financial assets and liabilities

Fair value hierarchy

•

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

•

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

•

Level 3: inputs for the asset or liability that are not based on observable market data

140

24.	Financial Risk Management, Continued

ii)

Financial instruments measured at fair value

Fair value hierarchy classifications of the financial instruments that are measured at fair value as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	Level 1		Level 2		Level 3		Total
September 30, 2017
Assets
Available-for-sale financial assets	W	162		—		—		162
Financial assets at fair value through profit or loss		—		—		1,382		1,382
Derivatives		—		—		442		442
Liabilities
Derivatives		—		—		79		79


(In millions of won)	Level 1		Level 2		Level 3		Total
December 31, 2016
Assets
Available-for-sale financial assets	W	154		—		—		154
Financial assets at fair value through profit or loss		—		—		1,382		1,382
Derivatives		—		—		244		244
Liabilities
Derivatives		—		—		472		472

iii)

Financial instruments not measured at fair value but for which the fair value is disclosed

(In millions of won)

September 30, 2017

Valuation
technique

Input

Classification

Level 1

Level 2

Level 3

Liabilities

Unsecured bank loans

—

2,037,092

Discounted
cash flow

Discount rate

Unsecured bond issues

—

2,014,187

Discounted
cash flow

Discount rate

Other accounts payable

—

2,199,219

Discounted
cash flow

Discount rate

141

24.	Financial Risk Management, Continued

(In millions of won)

December 31, 2016

Valuation
technique

Input

Classification

Level 1

Level 2

Level 3

Liabilities

Unsecured bank loans

—

1,975,284

Discounted
cash flow

Discount rate

Unsecured bond issues

—

1,903,863

Discounted
cash flow

Discount rate

Other accounts payable

—

1,921,562

Discounted
cash flow

Discount rate

Long-term other accounts payable

—

3,891

Discounted
cash flow

Discount rate

iv) The interest rates applied for determination of the above fair value as of September 30, 2017 and December 31, 2016 are as follows:


	September 30, 2017	December 31, 2016
Debentures, loans and others	1.27~2.73%	1.48~2.68%

142

25.	Changes in liabilities arising from financing activities

Changes in liabilities arising from financing activities for the period ended September 30, 2017 are as follows:


(In millions of won)									Non-cash transactions
	January 1, 2017		Cash flows from financing activities			Reclassification			Gain or loss on foreign currency translation			Effective interest adjustment		September 30, 2017
Short-term borrowings	W	113,209		(113,209	)		—			—			—		—
Current portion of long-term debt		554,526		(364,601	)		752,560			(18,540	)		459		924,404
Long-term borrowings		1,673,915		400,000			(363,052	)		(25,029	)		—		1,685,834
Bonds		1,511,062		298,780			(389,508	)		—			1,012		1,421,346

	W	3,852,712		220,970			—			(43,569	)		1,471		4,031,584

143

26.	Related Parties and Others

(a)

Related parties

Related parties as of September 30, 2017 are as follows:


Classification		Description
Subsidiaries(*)		LG Display America, Inc. and others
Associates(*)		Paju Electric Glass Co., Ltd. and others
Subsidiaries of Associates		AVATEC Electronics Yantai Co., Ltd. and others
Entity that has significant influence over the Company		LG Electronics Inc.
Subsidiaries of the entity that has significant influence over the Company		Subsidiaries of LG Electronics Inc.

(*)	Details of subsidiaries and associates are described in note 8.

Related parties that have transactions such as sales or balance of trade accounts and notes receivable and payable with the Company excluding subsidiaries and associates as of September 30, 2017 and December 31, 2016 are as follows:


Classification	September 30, 2017	December 31, 2016
Subsidiaries of associates	—	New Optics USA, Inc.
	—	NEWOPTIX RS. SA DE CV
Entity that has significant influence over the Company	LG Electronics Inc.	LG Electronics Inc.

	Hiplaza Co., Ltd.	Hiplaza Co., Ltd.

Subsidiaries of the	Hi Entech Co., Ltd.	Hi Entech Co., Ltd.
entity that has	LG Hitachi Water Solutions Co., Ltd.	LG Hitachi Water Solutions Co., Ltd.
significant influence	LG Innotek Co., Ltd.	LG Innotek Co., Ltd.
over the Company	Hanuri Co., Ltd.	Hanuri Co., Ltd.
	Hi M Solutek	Hi M Solutek
	Inspur LG Digital Mobile Communications Co., Ltd.	Inspur LG Digital Mobile Communications Co., Ltd.
	Qingdao LG Inspur Digital Communication Co., Ltd.	Qingdao LG Inspur Digital Communication Co., Ltd.
	LG Electronics Mlawa Sp. z o.o.	LG Electronics Mlawa Sp. z o.o.
	—	LG Electronics U.S.A., Inc.
	LG Electronics Vietnam Haiphong Co., Ltd.	LG Electronics Vietnam Haiphong Co., Ltd.
	—	LG Electronics Thailand Co., Ltd.
	LG Electronics RUS, LLC	LG Electronics RUS, LLC
	LG Electronics Nanjing New Technology co., LTD.	LG Electronics Nanjing New Technology co., LTD.
	LG Electronics India Pvt. Ltd.	LG Electronics India Pvt. Ltd.
	LG Electronics do Brasil Ltda.	LG Electronics do Brasil Ltda.

144

26.	Related Parties and Others, Continued

(a)

Related parties, Continued


Classification	September 30, 2017	December 31, 2016
	LG Electronics Alabama Inc.	—
	LG Electronics Singapore PTE LTD.	LG Electronics Singapore PTE LTD.
	LG Electronics Japan, Inc.	LG Electronics Japan, Inc.
	P.T. LG Electronics Indonesia	P.T. LG Electronics Indonesia
	LG Electronics Almaty Kazakhstan	LG Electronics Almaty Kazakhstan
	LG Electronics S.A. (Pty) Ltd.	LG Electronics S.A. (Pty) Ltd.
	LG Electronics Mexicali S.A.DE C.V.	LG Electronics Mexicali S.A.DE C.V.
	LG Electronics Reynosa S.A. DE C.V.	LG Electronics Reynosa S.A. DE C.V.
	LG Electronics Taiwan Taipei Co., Ltd.	LG Electronics Taiwan Taipei Co., Ltd.
	—	LG Electronics Shenyang Inc.
	LG Electronics Egypt S.A.E	LG Electronics Egypt S.A.E
	—	LG Electronics Wroclaw Sp. Z o.o
	PT.LG Electronics Service Indonesia	—
	LG Electronics Ticaret A.S.	—
	LG Japan Lab. Inc.	—

145

26.	Related Parties and Others, Continued

(b)


(In millions of won)	For the three-month period ended September 30, 2017
					Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Subsidiaries
LG Display America, Inc.	W	3,019,271		—		—		—		—		8
LG Display Japan Co., Ltd.		726,449		—		—		—		—		10
LG Display Germany GmbH		426,024		—		—		—		—		423
LG Display Taiwan Co., Ltd.		322,899		—		—		—		—		334
LG Display Nanjing Co., Ltd.		4,454		—		—		—		136,328		—
LG Display Shanghai Co., Ltd.		311,912		—		—		—		—		58
LG Display Poland Sp. z o.o.		70		—		—		—		8,636		—
LG Display Guangzhou Co., Ltd.		3,057		—		2,105		—		507,848		2,644
LG Display Shenzhen Co., Ltd.		402,008		—		—		—		—		4
LG Display Yantai Co., Ltd.		9,967		—		4,041		373		663,341		3,566
LG Display (China) Co., Ltd.		26		9,575		509,452		—		—		—
LG Display Singapore Pte. Ltd.		235,069		—		—		—		—		2
L&T Display Technology (Fujian) Limited		135,927		—		—		—		—		3
Nanumnuri Co., Ltd.		24		—		—		—		—		4,324
Global OLED Technology LLC		—		—		—		—		—		1,526
LG Display Guangzhou Trading Co., Ltd.		180,841		—		—		—		—		—
LG Display Vietnam Haiphong Co., Ltd.		971		—		—		—		39,731		—
Suzhou Lehui Display Co., Ltd.		60,627		—		—		—		—		—

	W	5,839,596		9,575		515,598		373		1,355,884		12,902

146

26.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2017
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Associates and their subsidiaries
WooRee E&L Co., Ltd.	W	—		—		—		—		—		22
INVENIA Co., Ltd.		—		—		691		1,872		—		23
AVATEC Co., Ltd.		—		—		—		—		24,685		40
Paju Electric Glass Co., Ltd.		—		—		94,966		—		—		1,025
YAS Co., Ltd.		—		—		1,142		20,059		—		650

	W	—		—		96,799		21,931		24,685		1,760

Entity that has significant influence over the Company
LG Electronics Inc.	W	320,503		—		11,738		159,052		—		26,836
Subsidiaries of the entity that has significant influence over the Company
LG Electronics India Pvt. Ltd.	W	25,127		—		—		—		—		22
LG Electronics Vietnam Haiphong Co., Ltd.		50,073		—		—		—		—		43
LG Electronics Reynosa S.A. DE C.V.		11,204		—		—		—		—		551
LG Electronics Almaty Kazakhstan		3,363		—		—		—		—		—
LG Electronics S.A. (Pty) Ltd.		2,227		—		—		—		—		4
LG Electronics Mexicali S.A.DE C.V.		7,916		—		—		—		—		106
LG Electronics RUS, LLC		448		—		—		—		—		279

147

26.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2017
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
LG Innotek Co., Ltd.	W	4,406		—		48,422		—		—		627
LG Hitachi Water Solutions Co., Ltd.		—		—		—		78,853		—		—
Inspur LG Digital Mobile Communications Co., Ltd.		20,539		—		—		—		—		—
Qingdao LG Inspur Digital Communication Co., Ltd.		22,167		—		—		—		—		—
Hi Entech Co., Ltd.		—		—		—		—		—		6,650
Others		1,403		—		—		—		—		2,454

	W	148,873		—		48,422		78,853		—		10,736

	W	6,308,972		9,575		672,557		260,209		1,380,569		52,234

148

26.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2017
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Subsidiaries
LG Display America, Inc.	W	8,056,946		—		—		—		—		15
LG Display Japan Co., Ltd.		2,002,614		—		—		—		—		50
LG Display Germany GmbH		1,351,506		—		—		—		—		6,736
LG Display Taiwan Co., Ltd.		1,179,015		—		—		—		—		784
LG Display Nanjing Co., Ltd.		15,376		—		—		—		385,181		—
LG Display Shanghai Co., Ltd.		999,447		—		—		—		—		216
LG Display Poland Sp. z o.o.		1,893		—		—		—		26,022		33
LG Display Guangzhou Co., Ltd.		27,808		—		5,829		—		1,666,594		7,732
LG Display Shenzhen Co., Ltd.		1,274,715		—		—		—		—		5
LG Display Yantai Co., Ltd.		27,030		—		13,322		373		1,584,782		17,228
LG Display (China) Co., Ltd.		12,053		9,575		1,134,134		—		—		—
LG Display Singapore Pte. Ltd.		777,716		—		—		—		—		648
L&T Display Technology (Fujian) Limited		370,995		—		15		—		—		768
Nanumnuri Co., Ltd.		72		—		—		—		—		13,226
Global OLED Technology LLC		—		—		—		—		—		4,503
LG Display Guangzhou Trading Co., Ltd.		513,040		—		—		—		—		180
LG Display Vietnam Haiphong Co., Ltd.		3,289		—		—		—		39,731		—
Suzhou Lehui Display Co., Ltd.		170,909		—		—		—		—		—

	W	16,784,424		9,575		1,153,300		373		3,702,310		52,124

149

26.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2017
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Associates and their subsidiaries
New Optics Ltd.(*)	W	1		—		—		—		4		6
WooRee E&L Co., Ltd.		—		—		—		—		—		110
INVENIA Co., Ltd.		10		—		1,304		20,778		—		171
AVATEC Co., Ltd.		—		530		—		—		65,899		538
Paju Electric Glass Co., Ltd.		—		8,109		289,760		—		—		3,218
Narenanotech Corporation(*)		—		—		279		12,251		—		177
YAS Co., Ltd.		—		—		2,871		64,337		—		2,132

	W	11		8,639		294,214		97,366		65,903		6,352

Entity that has significant influence over the Company
LG Electronics Inc.	W	1,168,067		—		27,694		528,088		—		85,688
Subsidiaries of the entity that has significant influence over the Company
LG Electronics India Pvt. Ltd.	W	63,346		—		—		—		—		75
LG Electronics Vietnam Haiphong Co., Ltd.		149,796		—		—		—		—		167
LG Electronics Reynosa S.A. DE C.V.		53,202		—		—		—		—		1,391
LG Electronics Almaty Kazakhstan		10,642		—		—		—		—		12
LG Electronics S.A. (Pty) Ltd.		11,760		—		—		—		—		18
LG Electronics Mexicali S.A.DE C.V.		25,843		—		—		—		—		175
LG Electronics RUS, LLC		3,477		—		—		—		—		730

150

26.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2017
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
LG Innotek Co., Ltd.	W	10,919		—		136,493		—		—		4,445
LG Hitachi Water Solutions Co., Ltd.		—		—		—		151,845		—		—
Inspur LG Digital Mobile Communications Co., Ltd.		88,504		—		—		—		—		—
Qingdao LG Inspur Digital Communication Co., Ltd.		56,423		—		—		—		—		—
Hi Entech Co., Ltd.		—		—		—		—		—		20,030
Others		2,608		—		3		—		—		5,682

	W	476,520		—		136,496		151,845		—		32,725

	W	18,429,022		18,214		1,611,704		777,672		3,768,213		176,889

(*)	Represents transactions occurred prior to disposal of the entire investments.

151

26.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Subsidiaries
LG Display America, Inc.	W	2,733,748		—		—		—		—		5
LG Display Japan Co., Ltd.		504,459		—		—		—		—		13
LG Display Germany GmbH		503,720		—		—		—		—		1,729
LG Display Taiwan Co., Ltd.		190,740		—		—		—		—		329
LG Display Nanjing Co., Ltd.		7,129		—		—		1		103,057		—
LG Display Shanghai Co., Ltd.		406,483		—		—		—		—		57
LG Display Poland Sp. z o.o.		90		—		—		—		9,830		—
LG Display Guangzhou Co., Ltd.		9,183		—		2,387		—		530,543		3,693
LG Display Shenzhen Co., Ltd.		434,998		—		—		—		—		12
LG Display Yantai Co., Ltd.		5,651		—		6,767		—		623,962		16,493
LG Display (China) Co., Ltd.		379		—		219,058		—		—		—
LG Display Singapore Pte. Ltd.		250,970		—		—		—		—		3
L&T Display Technology (Fujian) Limited		106,886		—		1		—		—		252
Nanumnuri Co., Ltd.		13		—		—		—		—		2,304
Global OLED Technology LLC		—		—		—		—		—		1,436
LG Display Guangzhou Trading Co., Ltd.		105,700		—		—		—		—		—
Suzhou Lehui Display Co., Ltd.		50,094		—		—		—		—		—

	W	5,310,243		—		228,213		1		1,267,392		26,326

152

26.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Joint Venture
Suzhou Raken Technology Co., Ltd. (*1)	W	2		1,379		—		—		—		—
Associates and their subsidiaries
New Optics Ltd.	W	287		—		11,441		—		1,795		80
New Optics USA, Inc.		—		—		—		—		7		—
NEWOPTIX RS. SA DE CV		6		—		—		—		—		—
WooRee E&L Co., Ltd.		—		—		—		—		—		—
INVENIA Co., Ltd.		—		—		1,011		5,785		—		49
TLI Inc.		—		—		17,358		—		—		547
AVACO Co., Ltd. (*2)		—		—		20		206		—		19
AVATEC Co., Ltd.		—		—		—		—		17,187		309
Paju Electric Glass Co., Ltd.		—		—		123,396		—		—		1,015
LB Gemini New Growth Fund No.16		—		—		—		—		—		—
Narenanotech Corporation		—		—		132		2,422		—		154
ADP System Co., Ltd.		—		—		—		3		—		—
YAS Co., Ltd.		—		—		491		43,486		—		645

	W	293		—		153,849		51,902		18,989		2,818

Entity that has significant influence over the Company
LG Electronics Inc.	W	364,593		—		5,378		183,744		—		11,682

153

26.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Subsidiaries of the entity that has significant influence over the Company
LG Electronics India Pvt. Ltd.	W	23,570		—		—		—		—		13
LG Electronics Vietnam Haiphong Co., Ltd.		40,332		—		—		—		—		18
LG Electronics Reynosa S.A. DE C.V.		17,050		—		—		—		—		550
LG Electronics do Brasil Ltda.		1,393		—		—		—		—		83
LG Electronics Kazakhstan		5,124		—		—		—		—		7
LG Electronics S.A. (Pty) Ltd.		7,372		—		—		—		—		8
LG Electronics Mexicali S.A.DE C.V.		3,376		—		—		—		—		45
LG Electronics RUS, LLC		1,921		—		—		—		—		384
LG Innotek Co., Ltd.		3,913		—		41,906		—		—		3,977
LG Hitachi Water Solutions Co., Ltd.		—		—		—		66,610		—		—
Inspur LG Digital Mobile Communication Co., Ltd.		62,714		—		—		—		—		—
Qingdao LG Inspur Digital Communication Co., Ltd.		4,410		—		—		—		—		—
HiEntech Co., Ltd.		—		—		—		—		—		6,402
Others		—		—		—		1		1		941

	W	171,175		—		41,906		66,611		1		12,428

	W	5,846,306		1,379		429,346		302,258		1,286,382		53,254

(*1)	Represents transactions occurred prior to exchange of the entire investments.

(*2)	Represents transactions occurred prior to disposal of the entire investments.

154

26.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Subsidiaries
LG Display America, Inc.	W	7,206,056		—		—		—		—		175
LG Display Japan Co., Ltd.		1,323,283		—		—		—		—		32
LG Display Germany GmbH		1,291,192		—		—		—		—		3,621
LG Display Taiwan Co., Ltd.		904,128		—		—		—		—		861
LG Display Nanjing Co., Ltd.		33,224		—		—		68		330,359		1
LG Display Shanghai Co., Ltd.		1,072,678		—		—		—		—		132
LG Display Poland Sp. z o.o.		287		—		—		—		34,641		26
LG Display Guangzhou Co., Ltd.		28,433		—		5,662		—		1,400,825		8,681
LG Display Shenzhen Co., Ltd.		1,345,053		—		—		—		—		17
LG Display Yantai Co., Ltd.		19,729		—		21,859		—		1,477,995		29,293
LG Display (China) Co., Ltd.		1,335		18,119		507,104		—		—		—
LG Display Singapore Pte. Ltd.		693,122		—		—		—		—		5
L&T Display Technology (Fujian) Limited		354,125		—		10		—		—		600
Nanumnuri Co., Ltd.		39		—		—		—		—		7,390
Global OLED Technology LLC		—		—		—		—		—		4,521
LG Display Guangzhou Trading Co., Ltd.		237,402		—		—		—		—		—
Suzhou Lehui Display Co., Ltd.		50,094		—		—		—		—		—

	W	14,560,180		18,119		534,635		68		3,243,820		55,355

155

26.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Joint Venture
Suzhou Raken Technology Co., Ltd.(*1)	W	59,388		31,280		—		—		—		543
Associates and their subsidiaries
New Optics Ltd.	W	287		—		39,463		—		5,650		167
New Optics USA, Inc.		—		—		—		—		509		—
NEWOPTIX RS S.A DE C.V.		17		—		—		—		—		—
WOOREE E&L Co., Ltd.		—		—		—		—		—		32
INVENIA Co., Ltd.		44		—		1,317		16,194		—		192
TLI Inc.		—		101		51,565		—		—		2,138
AVACO Co., Ltd.(*2)		—		128		703		4,964		—		849
AVATEC CO., LTD.		—		265		—		—		50,410		948
Paju Electric Glass Co., Ltd.		—		21,030		345,034		—		—		2,466
LB Gemini New Growth Fund No.16		—		7,598		—		—		—		—
Narenanotech Corporation		17		—		369		9,558		—		330
ADP System Co., Ltd.		—		—		—		17		—		—
YAS Co., Ltd.		44		—		1,315		68,492		—		1,184

	W	409		29,122		439,766		99,225		56,569		8,306

Entity that has significant influence over the Company
LG Electronics Inc.	W	1,221,450		—		15,629		332,823		—		46,116

156

26.	Related Parties and Others, Continued


(In millions of won)	For the nine-month period ended September 30, 2016
	Sales and others		Dividend income		Purchase and others
	Sales and others		Dividend income		Purchase of raw material and others		Acquisition of property, plant and equipment		Outsourcing fees		Other costs
Subsidiaries of the entity that has significant influence over the Company
LG Electronics India Pvt. Ltd.	W	64,132		—		—		—		—		26
LG Electronics Vietnam Haiphong Co., Ltd.		107,118		—		—		—		—		51
LG Electronics Reynosa S.A. DE C.V.		36,307		—		—		—		—		1,042
LG Electronics do Brasil Ltda.		5,373		—		—		—		—		159
LG Electronics Kazakhstan		11,438		—		—		—		—		7
LG Electronics S.A. (Pty) Ltd.		15,142		—		—		—		—		24
LG Electronics Mexicali S.A.DE C.V.		9,499		—		—		—		—		45
LG Electronics RUS, LLC		4,011		—		—		—		—		798
LG Innotek Co., Ltd.		8,484		—		149,914		—		—		8,535
LG-Hitachi Water Solutions Co., Ltd.		—		—		—		92,939		—		—
Inspur LG Digital Mobile Communication Co., Ltd.		202,894		—		—		—		—		—
Qingdao LG Inspur Digital Communication Co., Ltd.		32,093		—		—		—		—		—
HiEntech Co., Ltd.		—		—		—		—		—		18,954
Others		3		—		1		1		1		3,198

	W	496,494		—		149,915		92,940		1		32,839

	W	16,337,921		78,521		1,139,945		525,056		3,300,390		143,159

(*1)	Represents transactions occurred prior to exchange of the entire investments.

(*2)	Represents transactions occurred prior to disposal of the entire investments.

157

26.	Related Parties and Others, Continued

(c)

Trade accounts and notes receivable and payable as of September 30, 2017 and December 31, 2016 are as follows:


(In millions of won)	Trade accounts and notes receivable and others				Trade accounts and notes payable and others
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Subsidiaries
LG Display America, Inc.	W	2,247,592		1,931,420		8		—
LG Display Japan Co., Ltd.		404,244		254,322		8		—
LG Display Germany GmbH		391,731		606,323		52		477
LG Display Taiwan Co., Ltd.		394,743		589,400		37		—
LG Display Nanjing Co., Ltd.		2,433		19,610		86,843		40,201
LG Display Shanghai Co., Ltd.		225,956		317,386		52		3
LG Display Poland Sp. z o.o.		46		1,775		5,828		6,972
LG Display Guangzhou Co., Ltd.		461		141,946		257,337		259,962
LG Display Guangzhou Trading Co., Ltd.		168,827		110,817		—		—
LG Display Shenzhen Co., Ltd.		171,133		244,500		—		6
LG Display Yantai Co., Ltd.		632		68,405		178,863		455,597
LG Display (China) Co., Ltd		11,614		2,793		343,026		51,389
LG Display Singapore Pte. Ltd.		236,557		286,265		1		1
L&T Display Technology (Fujian) Limited		93,932		83,074		226,490		211,092
Nanumnuri Co., Ltd.		—		—		63		1,538
LG Display Vietnam Haiphong Co., Ltd.		3,120		—		41,620		—
Suzhou Lehui Display Co., Ltd.		38,577		31,445		36,364		37,593

	W	4,391,598		4,689,481		1,176,592		1,064,831

158

26.	Related Parties and Others, Continued


(In millions of won)	Trade accounts and notes receivable and others				Trade accounts and notes payable and others
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Associates and their subsidiaries
New Optics Ltd.(*)	W	—		1,000		—		8,616
INVENIA Co., Ltd.		500		833		3,392		6,436
WooRee E&L Co., Ltd.		—		—		13		—
AVATEC Co., Ltd.		—		—		3,704		5,190
Paju Electric Glass Co., Ltd.		—		—		66,396		71,685
Narenanotech Corporation(*)		—		300		—		2,812
YAS Co., Ltd.		500		833		23,344		3,531

	W	1,000		2,966		96,849		98,270

Entity that has significant influence over the Company
LG Electronics Inc.	W	347,673		355,826		146,490		153,195

159

26.	Related Parties and Others, Continued


(In millions of won)
	Trade accounts and notes receivable and others				Trade accounts and notes payable and others
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Subsidiaries of the entity that has significant influence over the Company
LG Innotek Co., Ltd.	W	1,456		1,070		48,255		47,286
LG Hitachi Water Solutions Co., Ltd.		—		—		95,499		100,193
Hi Entech Co., Ltd.		—		—		4,164		4,080
Inspur LG Digital Mobile Communications Co., Ltd.		20,722		46,091		—		5
LG Electronics Reynosa S.A. DE C.V.		9,199		10,292		264		259
LG Electronics India Pvt. Ltd.		15,637		4,651		—		—
LG Electronics Vietnam Haiphong Co., Ltd.		32,799		35,121		—		—
LG Electronics S.A. (Pty) Ltd.		2,847		5,941		2		3
Qingdao LG Inspur Digital Communication Co., Ltd.		16,083		5,016		—		—
Others		6,010		9,301		1,498		1,744

	W	104,753		117,483		149,682		153,570

	W	4,845,024		5,165,756		1,569,613		1,469,866

(*)	Excluded from related parties due to disposal of equity investments during the nine-month period ended September 30, 2017.

160

26.	Related Parties and Others, Continued

(d)


(In millions of won)
	2017				2016
Associates	Loans		Collection of loans		Loans		Collection of loans
INVENIA Co., Ltd.	W	—		333		—		—
YAS Co., Ltd.		—		333		—		—
New Optics Ltd.(*)		—		—		1,000		—

	W	—		666		1,000		—

(*)	Excluded from related parties due to disposal of equity investments during the nine-month period ended September 30, 2017.

161

26.	Related Parties and Others, Continued

(e)

Conglomerate Transactions

Transactions, trade accounts and notes receivable and payable, and others between the Company and certain companies and their subsidiaries, which are included in LG Group, one of conglomerates according to the Monopoly Regulation and Fair Trade Act for the three-month and nine-month periods ended September 30, 2017 and 2016 and as of September 30, 2017 and December 31, 2016 are as follows. These entities are not affiliates according to K-IFRS No. 1024, Related Party Disclosures.


(In millions of won)	For the three-month period ended September 30, 2017				For the nine-month period ended September 30, 2017				September 30, 2017
	Sales and others		Purchase and others		Sales and others		Purchase and others		Trade accounts and notes receivable and others		Trade accounts and notes payable and others
LG Chem Ltd.	W	8,243		230,324		8,243		642,523		6,090		117,875
Serveone Co., Ltd.		97		361,140		346		945,770		21,758		399,624
Serveone (Nanjing) Co., Ltd.		—		2,336		—		9,663		—		2,354
Silicon Works Co., Ltd.		—		163,019		—		448,486		—		120,765
LG CNS Co., Ltd.		184		60,860		323		122,085		—		52,525
LG CNS China Inc.		—		48		—		201		—		—
BizTech Partners Co., Ltd.		—		418		—		1,246		—		—
LG N-Sys Inc.		—		3,299		—		10,112		—		5,536
LG Hausys, Ltd.		419		3		1,255		47		—		3
LG International Corp.		4,637		2,478		13,878		7,524		8,632		1,638
LG International (America) Inc.		4,839		34,068		17,104		99,733		3,876		13,627
LG International (Japan) Ltd.		—		275,282		—		765,537		126		130,279
LG International (Singapore) Pte. Ltd.		153,564		669		409,688		812		104,827		12
LG International (Deutschland) GmbH		—		401		—		20,774		—		2,464
Pantos Logistics Co., Ltd.		10		22,625		34		69,948		—		15,018
Pantos Logistics (Shanghai) Co., Ltd.		—		4,515		—		12,656		—		1,529

162

26.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2017				For the nine-month period ended September 30, 2017				September 30, 2017
	Sales and others		Purchase and others		Sales and others		Purchase and others		Trade accounts and notes receivable and others		Trade accounts and notes payable and others
Pantos Logistics Poland	W	—		233		—		651		—		95
Pantos Logistics (China) Co., Ltd.		—		131		—		250		—		131
Hi Logistics China Co., Ltd.		—		316		—		1,001		—		112
LG Management Development Institute		—		3,237		—		7,607		3,480		893
GIIR America, Inc.		—		—		—		1,527		—		—
GIIR UK Limited		—		594		—		2,950		—		—
GIIR Germany GmbH		—		1,187		—		2,972		—		1,239
HS Ad Inc.		—		2,261		—		3,973		—		1,503
LG Corp.		—		15,804		—		46,762		4,700		7,791
Lusem Co., Ltd.		2		10		10		641		1		—
LG Uplus Corp		54		136		152		453		—		—
Others		—		237		23		562		—		251

	W	172,049		1,185,631		451,056		3,226,466		153,490		875,264

163

26.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2016				For the nine-month period ended September 30, 2016				December 31, 2016
	Sales and others		Purchase and others		Sales and others		Purchase and others		Trade accounts and notes receivable and others		Trade accounts and notes payable and others
LG Chem Ltd.	W	21		198,110		34		690,052		30		98,185
Serveone Co., Ltd.		230		286,511		495		704,483		19,626		377,967
Serveone (Nanjing) Co., Ltd.		—		3,288		—		10,967		—		3,183
Silicon Works Co., Ltd.		—		137,143		—		433,263		13		106,313
LG CNS Co., Ltd.		—		39,692		417		90,323		—		87,574
LG CNS China Inc.		—		329		—		855		—		72
LG N-Sys Inc.		—		1,126		—		5,489		—		9,259
LG Hausys, Ltd.		419		5		1,279		623		—		—
LG International Corp.		5,388		2,339		8,262		7,432		16,951		1,114
LG International (America) Inc.		4,608		13,189		17,472		17,435		3,587		20,449
LG International (Japan) Ltd.		648		198,922		648		386,872		3,054		121,790
LG International (Singapore) Pte. Ltd.		72,545		472		337,439		1,662		31,071		—
LG International (Deutschland) GmbH		—		1,788		—		2,683		—		4,935
Pantos Logistics Co., Ltd.		7		20,638		7		47,615		—		8,183
Pantos Logistics (Shanghai) Co., Ltd.		—		3,807		—		11,719		—		1,819
Pantos Logistics Poland		—		319		—		529		—		110
Pantos Logistics (China) Co., Ltd.		—		149		—		149		—		4
LG Management Development Institute		—		2,963		—		7,394		3,480		376

164

26.	Related Parties and Others, Continued


(In millions of won)	For the three-month period ended September 30, 2016				For the nine-month period ended September 30, 2016				December 31, 2016
	Sales and others		Purchase and others		Sales and others		Purchase and others		Trade accounts and notes receivable and others		Trade accounts and notes payable and others
HS Ad Inc.	W	—		693		—		1,861		—		1,465
LG Corp.		—		15,205		—		41,836		7,937		—
Lusem Co., Ltd.		3		449		11		1,759		1		309
LG Uplus Corp		—		77		77		290		—		22
Others		8		2,368		43		17,739		2		364

	W	83,877		929,582		366,184		2,483,030		85,752		843,493

165

26.	Related Parties and Others, Continued

(f)

Key management personnel compensation

Compensation costs of key management for the three-month and nine-month periods ended September 30, 2017 and 2016 are as follows:


(In millions of won)	For the three-month periods ended September 30				For the nine-month periods ended September 30
	2017		2016		2017		2016
Short-term benefits	W	858		534		2,866		2,066
Expenses related to the defined benefit plan		95		93		392		804

	W	953		627		3,258		2,870

Key management refers to the registered directors who have significant control and responsibilities over the Company’s operations and business.

27.	Subsequent Event

The Company issued the following public debentures on October 27, 2017:


(In millions of won)
Classification	Issue date		Maturity date		Interest rate			Face amount
37-1		October 27, 2017		October 27, 2020		2.564	%	W	150,000
37-2		October 27, 2017		October 27, 2022		2.911	%		50,000

								W	200,000

166

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	LG Display Co., Ltd.

	(Registrant)

Date: November 14, 2017	By:	/s/ Heeyeon Kim
		(Signature)

	Name:	Heeyeon Kim
	Title:	Head of IR / Vice President

167