LG 2005 Annual Report Download

Download and view the complete annual report

Please find the complete 2005 LG annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 74

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74

Life’s Good
ANNUAL REPORT 2005

Table of contents

  • Page 1
    ANNUAL REPORT 2005 L i f e 's G o o d

  • Page 2
    ... IDEA OF PRODUCT IDEA OF LIFE 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 IDEA OF MANAGEMENT MESSAGE FROM THE CEO R&D IDEA OF BUSINESS MOBILE COMMUNICATIONS COMPANY DIGITAL DISPLAY COMPANY DIGITAL MEDIA COMPANY DIGITAL APPLIANCE COMPANY 48...

  • Page 3
    OF PRODUCT LG mind-boggling ideas often come from the hearts of customers. The ideas are not just brewed from laboratories but from our customers' desires. Their desires have changed the world. Sometimes, our products responded to their desires have changed the world. 01

  • Page 4
    TIMELESS SHOWPIECE • LG 60" HD DVR BUILT-IN PLASMA TV LG ELECTRONICS

  • Page 5
    ... defy the limits. Today, TVs are no longer a passive product but an active multiple display. With LG HD DVR built-in plasma TVs which allow pause and repeat of live broadcasting programs, and LG DMB phones, which feature wireless digital broadcasting services, enjoy more freedom at home or on the go...

  • Page 6
    RESONATING CENTERPIECE • LG HOME THEATER SYSTEM with FLAT PANEL SPEAKER LG ELECTRONICS

  • Page 7
    ...? The LG home theater system with wallmount flat panel speakers and the sleek LG air conditioner which comes with changeable pictures on the front, will redress your living room like a gallery displayed with works of an installation art. Properly representing your pride, these digital masterpieces...

  • Page 8
    PIANO BLACK OUTFITTED • LG DUAL CORE NOTEBOOK PC LG ELECTRONICS

  • Page 9
    ... The LG notebook PC exquisitely blended with shiny crystal black and sheer white colors. The LG slide phone 'Chocolate' outfitted with pure black with a sensual red touchpad at its core. These showcase the beauty of minimal simplicity, the most coveted style in the latest digital products. Their...

  • Page 10
    GET THE DIFFERENCE • LG TV REFRIGERATOR LG ELECTRONICS

  • Page 11
    ... away from home? The LG full HD TV revives pictureperfect images more vivid than reality bringing heart-pounding pleasure to your home. The LG TV refrigerator broadcasting service makes your kitchen a very unique place. In your living room and kitchen, enjoy your favorites with LG products. SEE THE...

  • Page 12
    Life's Good There are many electronic companies in the world that serve up something quite new in technology, product quality, and service. There is LG Electronics, foremost among them in bringing it all. Our ideas essentially come from the hearts of our customers, ultimately to help them achieve ...

  • Page 13
    ...dining table brimming with the smiles of family members ��� Life is full of special moments and Every moment counts in making life happy. In those life's special moments and places, LG Electronics is always there for you. Special Gifts Growing Love Thrilling Moments Unforgettable Memories

  • Page 14
    ... to face with my friends living out of town and frequently send my motion pictures to my family. Maybe that's the reason I look better than before. For my boyfriend, who often says my smile is the best gift in the world, I upgraded my cell phone to the latest LG UMTS (WCDMA) phone. Now he sees my...

  • Page 15
    UMTS (WCDMA) Phone

  • Page 16
    Multimedia DMB Notebook PC

  • Page 17
    ... a balmy breeze in a sunny park. But lately, since we are bombarded with work, we take the LG multimedia DMB notebook PC everywhere and get our jobs done right. At a roadside cafe, We enjoy not only a cup of coffee, but also movies, games, Internet, music, and TV programs with the LG DMB notebook...

  • Page 18
    ... plays. There's no need to worry of missing our favorite soccer games with the HD DVR built-in Plasma TV as it allows us to repeat and record live broadcasting programs. We think we ought to charge admission for this special presentation. Ideas Bring the Soccer Spectacle Alive Here's how to watch...

  • Page 19
    HD DVR built-in plasma TV

  • Page 20

  • Page 21
    ... was always a wonderful welcome when I came home from school. My dad's boastful display of his weekend salad special on the table���. Every time I opened the refrigerator, I felt how much my mom took great care of us. These and many other good memories have soothed me in difficult times. Now...

  • Page 22
    Life's Good!

  • Page 23
    ..., convenient function, beautiful design, winning-concept customer service, and in their midst, our LG Electronics' employees all combine together on one front: helping more people to talk, have great times, and experience growing love. Ultimately, LG ideas are designed to provide unprecedented...

  • Page 24
    Brilliant smiles of your loved ones, The Best Way to Show You Care, Victory of your favorite football team, All the family joining in preparation of the dinner table ��� Happiness is not somewhere over the rainbow. It's everywhere close to you. LG Electronics is always within your reach.

  • Page 25
    OF MANAGEMENT At LG Electronics, our new ideas arise from various sources, from the process of our steady innovation activities to our experience garnered from both failure and success. Putting our management on a firm basis of creative strategies, we continue to widen the untapped market ...

  • Page 26
    ...address our commitment to put it all on the line to meet out customers' needs. Our customer-oriented objectives are not written in a book but practiced as fundamental management principles. From our first product, the radio, to today's industry-leading digital TVs and mobile phones, all our products...

  • Page 27
    Presently, we aspire to achieve our vision to rank among the "Global Top 3" Electronics and telecommunications companies by 2010. 24� 25

  • Page 28
    ...anytime anywhere through DMB phones, exchange data through digital TVs, and enjoy entertainment through internet-enabling EV-DO notebook PCs. While they play Plasma TVs with built-in DVR, which even allow them to pause or repeat live HD broadcasting programs, their robot vacuum cleaner takes care of...

  • Page 29
    vision GLOBAL TOP 3 BY 2010 Growth Strategy Core Competency > Corporate Culture â- FAST INNOVATION â- FAST GROWTH â- PRODUCT LEADERSHIP â- MARKET LEADERSHIP â- PEOPLE LEADERSHIP â- NO EXCUSES â- 'WE' NOT 'I' â- FUN WORKPLACE G R E AT C O M PA N Y G R E AT P E O P L E > 26� 27

  • Page 30
    LG ELECTRONICS

  • Page 31
    ... has defied conventional time and mobility limits of TVs. Other advances include the slim phone, terrestrial DMB-enabled PDAs, and steam-powered drum washing machines. Also noteworthy were commercial rollout of the all-new home networking solution, the 50" plasma single scan panel, and the...

  • Page 32
    ...mount projector, the cell phone shaped with sports car flair, the superslim slide phone with a sensual touchpad only 14.9mm thin, the Eagle Eyes LCD monitor exquisitely blending linear and curvilinear lines, the digital video recording (DVR) plasma TV in a piano black frame, the drum washing machine...

  • Page 33
    OF BUSINESS At LG Electronics, we aspire to address customer needs from A to Z. From product planning, aesthetic designs, functional features to customer services, all our ideas are firmly based on offering customers what they truly want in their lives. Ultimately, delivering value-packed ...

  • Page 34
    ... will go. At LG Electronics' Mobil e Communications Company, technology has been growing as fast as ever, outpacing the products of competitors. Its diversified all-in-one offerings coupled with cross-network wireless communications and entertainment services include a new MP3 player, digital camera...

  • Page 35
    Ultra Slim UMTS U880 Roberto Cavalli 32� 33

  • Page 36
    .... The Mobile Communications Company introduced DMB (Digital Multimedia Broadcasting ) handsets capable of receiving terrestrial digital broadcasting signals wirelessly or through satellite transmissions, 5-mega pixel digital camera handsets, and super-slim slide handsets including "Chocolate" which...

  • Page 37
    LG-F9200 LG-VX1000 LG-U900 slim UMTS (WCDMA) handset, has created sensation in the UK and Italy, making headway in the 3rd-generation mobile communications market in Europe. • Recent releases of multimediaenhanced mobile handset upgrades have received favorable response in the United States. LG...

  • Page 38
    42" HD DVR Built-in Plasma TV LG ELECTRONICS

  • Page 39
    ...screen size, LG's plasma TV offers size up to an enormous 102" and LCD TV up to 55, along with ultra-slim depth and wall mountable design. LG's high-end TV offers options such as wireless broadcasting service, built-in multi memory card slot and DVR which enables the TV to record automatically while...

  • Page 40
    ...This state-of-the-art product was awarded the 2006 Best of Innovations Award of the Consumer Electronics Association (CEA). • As for plasma modules, the Digital Display Company developed the world's first 50" plasma single scan panel. Securing world's largest plasma TV production capacity with the...

  • Page 41
    ..., the Digital Display Company seeks to open a new frontier in display through multimedia integrated digital TVs that provide fun and convenience, along with monitors with cutting-edge technology that provide an optimal computing environment. Slim LCD Monitor Wall-mount Projector 60" Plasma TV 47...

  • Page 42
    ... products. Bundled with a PC, set-top box, surround sound system, DVD Recorder, and hard disk drive at the core, the LG AV center features them all. The speed and performance of LG Desktop and Notebook PCs have been dramatically upgraded through the adaptation of cutting-edge computing platforms. LG...

  • Page 43
    Piano Black T 1 Express Dual Notebook PC 40� 41

  • Page 44
    ...Recorder, DVD Recorder with a built-in 160GB hard drive, and other varieties, while making the world's first commercial roll-out of a DVR with the built-in Microsoft's Electric Gripper (EGP). • Sales of PCs All-in one Car AV Navigation LG ELECTRONICS Home Theater System Super Multi DVD Recorder

  • Page 45
    ... Player bearing the LG brand name went into full swing and the Company launched the world's first Sonoma-platform Notebook PCs. Adding multimedia functions to various models, it has developed a series of world's first Notebook PCs. These include an EV-DO wireless Internet Notebook PC, Napa-platform...

  • Page 46
    TV Refrigerator LG ELECTRONICS

  • Page 47
    ... washing machines showing the washing process, home network systems controlling all digital home appliances, heater-cooler air conditioners, and kebab microwave ovens. Concerns about people's wellbeing resulted in the release of cyclone vacuum cleaners filtering bacteria, refrigerators...

  • Page 48
    ...-side refrigerators, drum washing machines, and premium air conditioners have become popular top-shelf items in North America, Latin America, and Europe. • In the global air conditioner market, upgrades of customized LG air conditioning systems are continuing the Company's established name. With...

  • Page 49
    ...generation robot vacuum cleaner with extended battery hour. • As kitchen interior design goes to tailored trends, the Company provides LG kitchen systems with tailored dishwashers, light wave microwave ovens, refrigerators, wine cellars, and so on. The world's first rollout of LG Home Net, a home...

  • Page 50
    Shared Benefits, Shared Future We hope for mother nature become greener and cleaner. We hope brightness shines throughout society. We hope smiles spread from face to face. These hopes are the fuel that moves us forward. These hopes are the vehicle that excels us to lead. LG ELECTRONICS

  • Page 51
    ... technology Application of eco-friendly refrigerant and pollution-free foam Aiming to achieve zero Ozone-Depleting Potential(ODP) and Global Warming Potential (GWP) values Mobile Phone The Environmental Declaration of Product(EDP) certificate acquired in 2004 Air Conditioner Products using eco...

  • Page 52
    ... in Europe, and donated up-to-date digital products to the Russia National Library. • We hold or sponsor broadcasting and other cultural events, each designed to suit the cultural traits of individual countries. The quiz programs LG supporting themed on stimulating student learning, has been aired...

  • Page 53
    ... FC (Brazil), Liverpool (UK), Olympic Lyon (France), and Cienciano (Peru). • Our passion also goes to other sports arenas. We have sponsored the Cricket World Cup and LG International Action Sports Championship. As of 2006, we support the European Ice Hockey Tournament as an official partner. 50...

  • Page 54
    ...C T S & F I G U R E S LG ELECTRONICS O R G A N I Z AT I O N MOBILE COMMUNICATIONS COMPANY DIGITAL DISPLAY COMPANY DIGITAL MEDIA COMPANY DIGITAL APPLIANCE COMPANY KOREA CUSTOMER SALES & SERVICE MARKETING CFO HUMAN RESOURCES CTO EUROPEAN HEADQUARTERS NORTH AMERICAN HEADQUARTERS CHINA HEADQUARTERS...

  • Page 55
    ...,000 40,000 SALES BY COMPANY � SALES BY REGION SALES BY COMPANY * Global revenue refers to the total revenue of KOREA 25% CIS NORTH AMERICA the global subsidiaries' account excluding internal transactions 23% SALES BY REGION 6.5% as of 2005 MIDDLE EAST & AFRICA MC 28% DD 28% DA 28% DM 16...

  • Page 56
    GLOBAL TOP SELLERS * as of 2005 NO.1 29% OPTICAL STORAGES 16% HOME THEATER SYSTEMS 20.9% CDMA HANDSETS 17.4% RESIDENTIAL A/Cs 10% DVD PLAYERS NO.2 27% PLASMA PANELS 15% PLASMA TVs EMPLOYEES OVERSEAS * as of March 2006 56.4% 40,689 KOREA 31,415 43.6% LG ELECTRONICS

  • Page 57
    ... DRM DS, DAV MNT WM DTV, PDP CAST DAV TV MWO, RAC, MOTOR, MGT, VC, RO COMP CDMA PHONE PC GSM PHONE TV, WM, VCR, AUDIO REF, WM, TV, Audio EUROPE UNITED KINGDOM POLAND MIDDLE EAST EGYPT TURKEY ASIA INDIA INDONESIA THAILAND THAILAND VIETNAM CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA...

  • Page 58
    ... LGESH Shanghai LGSI New Delhi LGEIL Dhaka LGEHN Hangzhou LGEKS Kunshan LGETR Taizhou LGETT Taipei LGEHZ Huizhou LGEHK Hong Kong LGEVN Hanoi LGEPH Manila LGEMT Bangkok LGETH LGENI Lagos LGEML Kuala Lumpur LGESL Singapore Nairobi LGEIN Jakarta LGESA Johannesburg LGEAP Sydney LG ELECTRONICS

  • Page 59
    LGECI Toronto LGEUS New Jersey Chicago ZENITH Englewood LGEMU San Diego LGEMX Maxicali LGERS Reynosa LGEAI Huntsville LGEMM Monterrey LGEMS Maxico City LGEPS Panama LGECB Bogota LGEAZ Manaus LGEPR Lima LIAISON OFFICE LGESP Taubate LGECL Santiago Buenos Aires 56� 57

  • Page 60
    ...Ltd. Langchao LG Digital Mobile Communication Co., Ltd. LG Electronics (Kunshan) Computer Co., Ltd. LG Electronics (Nanjing) Plasma Co., Ltd. Qingdao LG Langchao Digital Communication Co., Ltd. LG Electronics (Taizhou) Refrigeration Co., Ltd. LG Electronics Nature (Hangzhou) Recording Media Co., Ltd...

  • Page 61
    LGECI Toronto LGEUS New Jersey Chicago ZENITH Englewood LGEMU San Diego LGEMX Maxicali LGERS Reynosa LGEAI Huntsville LGEMM Monterrey LGEMS Maxico City LGEPS Panama LGECB Bogota LGEAZ Manaus LGEPR Lima LGESP Taubate LIAISON OFFICE LGECL Santiago Buenos Aires GLOBAL NETWORK 56� 57

  • Page 62
    ... Head of North American Headquarters BOARD OF DIRECTORS Directors S.S. Kim Vice Chairman CEO Young-Soo Kwon President CFO Yu-Sig Kang Vice Chairman LG Corp. Outside Directors Suk-Jean Kang Chairman CEO Consulting Group Il-Sup Kim Managing Partner Dasan Accounting Corp. Nyum Jin Professor...

  • Page 63
    FINANCIAL STATEMENTS 58� 59

  • Page 64
    ... Other current assets, net Total current assets Property, plant and equipment, net Long-term financial instruments Long-term investment securities Equity method investment securities Refundable deposits Long-term prepaid expenses Deferred income tax assets Long-term loans receivable, net Intangible...

  • Page 65
    ... maturities of long-term debts Trade accounts and notes payable Other accounts payable Income taxes payable Accrued expenses Withholdings Unearned income Advances from customers Derivatives transaction credit Other current liabilities, net Total current liabilities Debentures and convertible bonds...

  • Page 66
    ... losses Loss from transfer of trade accounts and notes receivable Loss from disposal of property, plant and equipment Loss from disposal of investment securities Loss on impairment of investment securities Loss on impairment of intangible assets Additional payment of income taxes Loss on settlement...

  • Page 67
    ...securities using the equity method Others Income before income taxes Income tax...545,954 9,890 9,517 LG ELECTRONICS INC. NON-CONSOLIDATED STATEMENTS ...accounting principle Changes in retained earnings arising from equity method accounting Net income Transfer from voluntary reserve Reserve for research...

  • Page 68
    ... valuation of securities using the equity method Gain on valuation of derivatives, net Gain on settlement of derivatives, net Provision for product warranty Loss on payment guarantees Loss on redemption of debentures Reversal of accounts receivables Others Changes in operating assets and liabilities...

  • Page 69
    ...Increase in advances from customers Decrease in income taxes payable Payment of severance benefits Increase in severance insurance deposits Decrease in contribution to the National Pension Fund Increase in deferred income tax liabilities Reversal of product warranty Dividend received Others Net cash...

  • Page 70
    ...from long-term debt Repayment of debentures Payment of dividends Proceeds from disposal of treasury stock Acquisition of treasury stock Net cash used in financing activities Net increase (decrease) in cash and...,243) (989,580) 906,581 275,120 (196,634) 11,318 (46,298) (218,736) 111,563 LG ELECTRONICS

  • Page 71
    ...equipment commercialized • The world's first Internet-enabled washing machine, air conditioner, and microwave oven launched • LG.Philips Displays, a joint venture with Philips established 2002 • Under the LG Holding Company system, the Company spun off to LG Electronics (LGE) & LG Electronics...

  • Page 72
    ...alchemy that turns to Exceptional technology, Products with function and beauty, Pleasant encounter with customers With award-winning service. Whether in research places, Office rooms, manufacturing sites, Or concession stores, LG ideas Emerge and evolve. At LG Electronics, It's all about ideas that...

  • Page 73
    w w w. l g e . c o m LG Twin Towers, 20 Yeouido-dong, Yeongdeungpo-gu, Seoul 150-721, Korea / T 82-2-3777-1114

  • Page 74