LG 2000 Annual Report Download - page 60

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Pursuant to a joint venture agreement with Koninklijke Philips Electronics N.V. (“Philips”) in July 1999, the Company transferred
certain of the Company’s stock rights in LG.Philips LCD Co., Ltd. to Philips. As a result, the Company reduced its ownership of
LG.Philips LCD Co., Ltd. to 50% and recognized a gain on disposal of investment of W247,800 million and W1,179,939 million for
the years ended December 31, 2000 and 1999, respectively.
In 1999, the Company transferred its own patents in relation to Thin Film Transistor Liquid Crystal Displays (“TFT-LCD”) to
LG.Philips LCD Co., Ltd. in exchange for W288,000 million and recognized a gain on disposal of intangible assets amounting to
W281,391 million. According to the equity method of accounting, unrealized profit of approximately W253,252 million, net of
realized profit, arising from the sales of the patents by the Company to LG. Philips LCD Co., Ltd., an equity-method investee, is
fully eliminated and charged to investment in LG. Philips LCD Co., Ltd.
Senior secured note issued by Zenith outstanding at December 31, 2000 and 1999, was converted from the Company’s receivables
from Zenith according to the reorganization plan of Zenith approved by the court in the United States of America on November 5,
1999 (see Note 14). The note’s terms and conditions are as follows :
Interest : Effective August 1, 2000, terms were changed from LIBOR+6.5% on a quarterly basis to LIBOR+3.0% on an annual
basis
Maturity of principal : November 1, 2009
8. Property, Plant and Equipment:
Property, plant and equipment as of December 31, 2000 and 1999 comprise the following :
Millions of won 2000 1999
Buildings W1,095,616 W1,000,223
Structures 107,578 94,673
Machinery and equipment 1,282,603 985,193
Tools 776,989 697,789
Furniture and fixtures 484,019 405,810
Vehicles 27,099 24,777
3,773,904 3,208,465
Accumulated depreciation (1,500,218) (1,270,871)
2,273,686 1,937,594
Land 794,384 702,810
Construction in progress 218,694 77,973
Machinery in transit 50,324 7,872
W3,337,088 W2,726,249
As of December 31, 2000 and 1999, the value of the Company’s land, as determined by the local government in Korea for property
tax assessment purpose, approximates W655,189 million and W581,759 million, respectively.
As of December 31, 2000 and 1999, property, plant and equipment, other than land and certain construction in progress, are insured
against fire and other casualty losses up to approximately W3,871,698 million and W4,009,987 million, respectively. See Note 6 for
additional insurance policies for property, plant and equipment.
A substantial portion of property, plant and equipment as of December 31, 2000 and 1999 is pledged as collateral for various loans
from banks, including Korea Development Bank, up to a maximum Won equivalent amount of approximately W649,139 million and
W583,009 million, respectively (see Notes 10 and 11).
9. Intangible Assets :
Intangible assets as of December 31, 2000 and 1999 comprise the following :
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