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ยป66
LG Electronics Inc. The
43
rd Annual Report
Notes to Financial Statements
for the years ended December 31, 2001 and 2000
Changes in investments in subsidiaries and affiliates accounted for using the equity method for the year
ended December 31, 2001 are as follows :
Millions of Won
Balance at January 1, 2001 3,822,525
Acquisitions during the year 1,536,709
Reclassification 760
Increase in retained earnings 86,514
Increase in capital adjustments 60,392
Equity in loss of affiliates, net (862,421)
Elimination of unrealized profit (39,051)
Dividend received (119,868)
Disposal of investment securities (736,980)
Balance at December 31, 2001 3,748,580
7. Investments, Continued
On December 31, 2001 and 2000, except for the Korea stock market stabilization fund, of which the
differences between the market value and the acquisition cost are charged to current operations, the
differences between the market value and the acquisition cost of the investments in marketable equity
securities are accounted for as capital adjustments.
A senior secured note issued by Zenith outstanding on December 31, 2001 and 2000 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
In February, 2001, the Company sold 1,915,900 shares of LG Cable Ltd. in exchange for 22,449
million and recognized loss on disposal of investment of 7,456 million.
On June 29, 2001, the Company contributed its investments in Beijing LG Electronics Components Co.,
Ltd. (LGEBJ) and LG Shuguang Electronics Co., Ltd. (LGESG) to the CRT joint venture with Koninklijke Philips
Electronics N.V.(see Note 26).
In September 2001, the Company sold 4,563 thousand shares of its investment in Dacom Corporation
for 80,993 million and incurred a loss from disposal of investments amounting to 374,969 million (see
Note 14).
In 2001, the Company purchased 45,146,767 shares of common stock of LG TeleCom Ltd. for