LG Display (LPL)

Sanctions against us and other TFT-LCD panel producers for possible anti-competitive activities may have a direct and indirect material impact on our operations.

In December 2006, we received notice that we were under investigation by the Korea Fair Trade Commission, the Japan Fair Trade Commission, the Antitrust Division of the U.S. Department of Justice, and the European Commission with respect to possible anti-competitive activities in the TFT-LCD industry. We later received notice that we were under similar investigations by the Canadian Competition Bureau and the Taiwan Fair Trade Commission. In November 2008, we executed an agreement with the U.S. Department of Justice under which we and our subsidiary, LG Display America, Inc., would plead guilty to a criminal Sherman Act violation and pay a single total fine of US$400 million. In December 2008, the United States District Court for the Northern District of California accepted the terms of the plea agreement and entered a judgment that sentenced us and LG Display America, Inc. to pay the US$400 million according to the following schedule: US$20 million, and interest thereon, by June 15, 2009, and US$76 million, and interest thereon, by each of June 15, 2010, June 15, 2011, June 15, 2012, June 15, 2013 and December 15, 2013, respectively. The agreement resolves all federal criminal charges against us in the United States in connection with this matter, provided we continue to cooperate with the ongoing investigation. We are cooperating with the ongoing investigations by the U.S. Department of Justice and other regulatory bodies.

Subsequent to the commencement of the U.S. Department of Justice investigation, a number of purported class action lawsuits were filed against us and other TFT-LCD panel manufacturers in various U.S. federal district courts, alleging violation of U.S. antitrust laws and other related laws. In a series of decisions in 2007 and 2008, all of such cases were transferred to the Northern District of California for pretrial proceedings. An additional claim by a customer’s assignee has also been filed in the Northern District of California. Purported class action complaints have also been filed against us in various Canadian courts, alleging violation of Canadian antitrust laws. We intend to defend these suits vigorously.

In addition, purported class action lawsuits have been brought against us, and certain of our officers and directors, in the United States District Court for the Southern District of New York in 2007, alleging, among other things, that we and certain of our officers and directors violated the U.S. Securities Exchange Act of 1934, or the Exchange Act, in connection with possible anti-competitive activities in the TFT-LCD industry. We intend to defend these suits vigorously.

In connection with these ongoing proceedings and claims, our management evaluates, based on the relevant facts and legal principles, the likelihood of an unfavorable outcome and whether the amount of the loss could be reasonably estimated. In each case (other than the U.S. federal criminal case), our management has determined that no provision was required to be taken at this time, as the conditions for taking such a provision (i.e., that a loss be both probable and reasonably estimable) had not been met. Significant subjective judgments were required in these evaluations, including judgments regarding the validity of asserted claims and the likely outcome of these proceedings. The outcome of these proceedings, however, is subject to a number of factors beyond our control, most

12

Table of Contents

notably the uncertainty associated with predicting decisions by courts and regulatory agencies. In addition, estimates of the potential costs associated with legal and regulatory proceedings frequently cannot be subjected to any sensitivity analysis, as damage estimates or settlement offers by claimants may bear little or no relation to the eventual outcome. While our management is not able to estimate the possible loss that may result from these proceedings and claims at this time, these proceedings and claims may result in significant financial liability to us, which may have a material adverse effect on our business, results of operations and financial condition. Furthermore, irrespective of the validity or the successful assertion of the above-referenced claims, we are incurring significant legal and other costs with respect to such claims. See “Item 8.A. Consolidated Statements and Other Financial Information—Legal Proceedings” for a description of these matters.

Sanctions against us and other TFT-LCD panel producers for possible anti-competitive activities may have a direct and indirect material impact on our operations.

In December 2006, we received notice that we were under investigation by the Korean Fair Trade Commission, the Japanese Fair Trade Commission, the Antitrust Division of the U.S. Department of Justice, the European Commission and regulatory bodies of other competitive markets with respect to possible anti-competitive activities in the TFT-LCD industry. We are cooperating fully with the investigations, which are ongoing.

Subsequent to the commencement of the U.S. Department of Justice investigation, a number of purported class action lawsuits were filed against us and other TFT-LCD panel manufacturers in various federal district courts, alleging violation of U.S. antitrust laws and other related laws. In addition, purported class action lawsuits have been brought against us, and certain of our officers and directors, in the United States District Court for the Southern District of New York in 2007, alleging, among other things, that we and certain of our officers and directors violated the U.S. Securities Exchange Act of 1934, or the Exchange Act, in connection with possible anti-competitive activities in the TFT-LCD industry. While we intend to defend these suits vigorously, it is too early in the proceedings to evaluate the probability of a favorable or unfavorable outcome of the actions, or to estimate the potential loss, if any.

An adverse final resolution of the U.S. Department of Justice or other regulators’ investigations or the civil claims described above would result in significant financial liability to, and other adverse effects upon, us, which would have a material adverse effect on our business, results of operations and financial condition. Furthermore, irrespective of the validity or the successful assertion of the above-referenced claims, we could incur significant costs with respect to defending against or settling such claims, which could have a material adverse effect on our results of operations or financial condition or cash flows. See “Item 8.A. Consolidated Statements and Other Financial Information—Legal Proceedings” for a description of these matters.

Sanctions against us and other TFT-LCD panel producers for possible anti-competitive activities may have a direct and indirect material impact on our operations.

In December 2006, we received notice that we were under investigation by the Korean Fair Trade Commission, the Japanese Fair Trade Commission, the Antitrust Division of the U.S. Department of Justice and regulatory bodies of other competitive markets with respect to possible anti-competitive activities in the TFT-LCD industry. We are cooperating fully with the investigations, which remain preliminary.

Subsequent to the commencement of the U.S. Department of Justice investigation, a number of purported class action lawsuits were filed against us and other TFT-LCD panel manufacturers in various federal district courts, alleging violation of U.S. antitrust laws and other related laws. In addition, purported class action lawsuits have been brought against us, and certain of our officers and directors, in the United States District Court for the Southern District of New York in 2007, alleging, among other things, that we and certain of our officers and directors violated the U.S. Securities Exchange Act of 1934, or the Exchange Act, in connection with possible anti-competitive activities in the TFT-LCD industry. While we intend to defend these suits vigorously, it is too early in the proceedings to evaluate the probability of a favorable or unfavorable outcome of the actions, or to estimate the potential loss, if any.

11

Table of Contents

An adverse final resolution of the U.S. Department of Justice or other regulators’ investigations or the civil claims described above would result in significant financial liability to, and other adverse effects upon, us, which would have a material adverse effect on our business, results of operations and financial condition. Furthermore, irrespective of the validity or the successful assertion of the above-referenced claims, we could incur significant costs with respect to defending against or settling such claims, which could have a material adverse effect on our results of operations or financial condition or cash flows. See “Item 8.A. Consolidated Statements and Other Financial Information—Legal Proceedings” for a description of these matters.