LG 2004 Annual Report Download - page 102

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LG Electronics Inc.
Notes to Non-Consolidated Financial Statements
December 31, 2004 and 2003
In order to reduce the impact of changes in exchange rates, the Company has also entered into foreign currency option contracts. An
unrealized valuation gain and loss amounting to 12,051 million and 1,422 million, respectively, were recorded to current
operations for the year ended December 31, 2004.
A summary of the terms of outstanding currency option contracts as of December 31, 2004, is as follows:
In order to reduce the impact of changes in interest rates and exchange rates, the Company has also entered into a cross currency swap
contract. An unrealized valuation gain of 31,568 million was recorded to current operations for the year ended December 31, 2004.
A summary of the terms of the outstanding cross currency swap contract as of December 31,2004, is as follows:
Option type
Put
Call
Amount (in millions)
US$160
US$150
Exercise price
1,035.0/US$ ~ 1,170.0/US$
1,053.1/US$ ~ 1,188.0/US$
Contract due date
January 4, 2005 through June 10, 2005
January 4, 2004 through June 10, 2005
Standard Chartered Bank
Barclays Bank
(in millions)
Disbursement
110,000
117,150
Receipts
US$93
100
Receipts
4.50%
5.00%
Disbursement
3M LIBOR + 0.79%
3M LIBOR + 1.17%
Maturity
November 7, 2005
February 26, 2007
Transaction amount Annual interest rate (%)
As a result of the above derivatives contracts, a realized gain of 38,367 million and a realized of 12,716 million were recorded as a
non-operating income and expense, respectively, for the year ended December 31, 2004.
As of December 31, 2004, the Company is named as a defendant in legal actions which were brought against the Company by
Matsushita Electric Industrial Co., Ltd. in Japan and AVS Corporation in Canada. In addition, the Company is named as either the
defendant or the plaintiff in various foreign and domestic legal actions arising from the normal course of business. The aggregate
amounts of domestic claims as the defendant and plaintiff amounted to approximately 17,232 million as of December 31, 2004. The
Company believes that the outcome of these legal actions is uncertain but, in any event, they would not result in a material ultimate
loss for the Company.