LG Display (LPL)

Foreign Currency Risk

The primary foreign currency to which we are exposed is the U.S. dollar. We are also exposed, to a lesser extent, to other foreign currencies, including the Euro and the Japanese Yen. As of December 31, 2008, we had U.S. dollar-denominated sales-related accounts receivable of US$1,524.7 million, which represented 95.1% of our total sales-related accounts receivable balance. As of December 31, 2008, we also had Japanese Yen-denominated sales-related accounts receivable of ¥1,427.2 million and Euro-denominated sales-related accounts receivable of €10.7 million, which represented 1.0% and 0.9% of our total sales-related accounts receivable balance, respectively.

In addition to relying on natural hedges created by foreign currency payables and receivables, we enter into short-term, foreign currency forward contracts with major financial institutions to minimize the impact of foreign currency fluctuations on our results of operations. Gains and losses on foreign currency forward contracts are recorded in the period of the exchange rate changes as foreign exchange gain or loss or capital adjustment.

The table below sets forth our outstanding foreign currency forward contracts as of December 31, 2008. The number of foreign currency forward contracts that we entered into, and the aggregate contract amount thereof, decreased in 2008, compared to 2007, due primarily to a change in our internal risk management policy. Based on our overall foreign currency exposure as of December 31, 2008, a short-term 10% appreciation or depreciation of the U.S. dollar against the Korean Won may have a material effect on our short-term financial condition, results of operations or cash flows.

We hedge against the effect of exchange rate fluctuations of the U.S. dollar against the Korean Won on our U.S. dollar debt exposure using cross-currency swap contracts and sales exposure using forward contracts. As of December 31, 2008, US$150 million of our US$901.7 million aggregate principal amount of U.S. dollar-denominated floating rate long-term borrowings are hedged against foreign exchange rate and interest rate fluctuations. The table below sets out our foreign currency forward contracts and cross currency interest rate swap contracts as of December 31, 2008.

Foreign Currency Risk

The primary foreign currencies to which we are exposed are the U.S. dollar, Euro and the Japanese Yen. As of December 31, 2006, we had U.S. dollar-denominated sales-related accounts receivable of US$875.5 million, which represented 93.6% of our total sales-related accounts receivable balance. As of December 31, 2006, we also had Euro-denominated sales-related accounts receivable of €41.4 million and Japanese Yen-denominated sales-related accounts receivable of ¥674.6 million, which represented 5.7% and 0.6% of our total sales-related accounts receivable balance, respectively.

We enter into short-term, foreign currency forward contracts with major financial institutions to minimize the impact of foreign currency fluctuations on our results of operations. Gains and losses on foreign currency forward contracts are recorded in the period of the exchange rate changes as foreign exchange gain or loss or capital adjustment.

The table below sets forth our outstanding foreign currency forward contracts as of December 31, 2006. Based on our overall foreign currency exposure as of December 31, 2006, including derivative financial instruments, foreign currency-denominated receivables and payables and U.S.-dollar denominated senior floating rate notes, we do not believe that a short-term 10% appreciation or depreciation of the U.S. dollar against the Korean Won or the Japanese Yen would have a significant effect on our short-term financial condition, results of operations or cash flows.

We hedge against the effect of exchange rate fluctuations of the U.S. dollar against the Korean Won on our U.S. dollar debt exposure using cross-currency swap contracts and on our long-term sales exposure using forward contracts. As of December 31, 2006, US$100.0 million of our US$1,045.0 million aggregate principal amount of U.S. dollar-denominated floating rate long-term borrowings are hedged against foreign exchange rate and interest rate fluctuations. The table below sets out our foreign currency forward contracts, foreign currency cross currency swap contracts and currency option contracts as of December 31, 2006.

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Foreign Currency Risk

The primary foreign currencies to which we are exposed are the U.S. dollar, the Taiwanese dollar, Euro and the Japanese yen. As of December 31, 2005, we had U.S. dollar-denominated accounts receivable of US$480 million, which represented 38.7% of our total accounts receivable balance. As of December 31, 2005, we also had Taiwanese dollar-denominated accounts receivable of NT$10,773 million and Euro-denominated accounts receivable of €142 million, which represented 26.4% and 13.6% of our total accounts receivable balance, respectively. We also had Japanese yen-denominated accounts receivable of ¥16,914 million as of December 31, 2005, which represented 11.6% of our total accounts receivable balance. In addition, as of December 31, 2005 we had Japanese yen-denominated accounts payable of ¥11,150 million and other accounts payable of ¥16,170 million, arising primarily from our purchases of raw materials and equipment, respectively, from Japanese suppliers.

We enter into short-term, foreign currency forward contracts with major financial institutions to minimize the impact of foreign currency fluctuations on our results of operations. Gains and losses on foreign currency forward contracts are recorded in the period of the exchange rate changes as foreign exchange gain or loss or capital adjustment.

The table below sets forth our outstanding foreign currency forward contracts as of December 31, 2005. Based on our overall foreign currency exposure as of December 31, 2005, including derivative financial instruments, foreign currency-denominated receivables and payables and U.S.-dollar denominated senior floating rate notes, we do not believe that a short-term 10% appreciation or depreciation of the U.S. dollar against the Korean Won or the Japanese Yen would have a significant effect on our short-term financial condition, results of operations or cash flows.

We hedge against the effect of exchange rate fluctuations of the U.S. dollar against the Korean Won on our U.S. dollar debt exposure using cross-currency swap contracts and on our long-term sales exposure using forward contracts. As of December 31, 2005, US$430 million of our US$1,183.3 million aggregate principal amount of U.S. dollar-denominated long-term borrowings are hedged against foreign exchange rate and interest rate fluctuations. The table below sets out our foreign currency forward contracts and foreign currency cross currency swap contracts as of December 31, 2005.

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Foreign Currency Risk

The primary foreign currencies to which we are exposed are the U.S. dollar and the Japanese yen. As of December 31, 2004, we had U.S. dollar-denominated accounts receivable of US$494 million, which represented 53.4% of our total accounts receivable balance. We also had Japanese yen-denominated accounts receivable of ¥3,396 million as of December 31, 2004, which represented 3.6% of our total accounts receivable balance. In addition, as of December 31, 2004 we had Japanese yen-denominated accounts payable of ¥10,440 million, arising primarily from our purchases of raw materials and equipment from Japanese suppliers.

We enter into short-term, foreign currency forward contracts with major financial institutions to minimize the impact of foreign currency fluctuations on our results of operations. Gains and losses on foreign currency forward contracts are recorded in the period of the exchange rate changes as foreign exchange gain or loss.

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The table below sets forth our outstanding foreign currency forward contracts as of December 31, 2004. Based on our overall foreign currency exposure as of December 31, 2004, including derivative financial instruments, foreign currency-denominated receivables and payables and U.S.-dollar denominated senior floating rate notes, we do not believe that a short-term 10% appreciation or depreciation of the U.S. dollar against the Korean Won or the Japanese yen would have a significant effect on our financial condition, results of operations or cash flows.

Beginning on May 6, 2003, we began to hedge against the effect of exchange rate fluctuations of the U.S. dollar against the Korean Won on our U.S. dollar debt exposure using cross-currency swap contracts and on our long-term sales exposure using forward contracts. Currently, US$600 million of our US$724 million aggregate principal amount of U.S. dollar-denominated long-term borrowings are hedged against foreign exchange rate and interest rate fluctuations.