##### Table of Contents

As filed with the Securities and Exchange Commission on April 29, 2016







UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 20-F





(Mark One)

| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------------

OR



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2015

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------

Date of event requiring this shell company report

For the transition period from
 to

Commission file number 1-32238





LG Display
Co., Ltd.

(Exact name of Registrant as specified in its charter)

LG Display Co., Ltd.

(Translation of Registrants name into English)





The Republic
of Korea

(Jurisdiction of incorporation or organization)

LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 07336, Republic of Korea

(Address of principal executive offices)

WonJong Han

LG Twin
Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 07336, Republic of Korea

Telephone No.: +82-2-3777-1010

Facsimile No.: +82-2-3777-0785

(Name, telephone, e-mail and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.



|                                                                                    |  |                                          
|----------------------------------------------------------------------------------- |  | -----------------------------------------
|Title of each class                                                                 |  | Name of each exchange on which
registered
|American Depositary Shares, each representing one-half
of one share of Common Stock |  | New York Stock Exchange                  
|Common Stock, par valueW5,000 per share                                             |  | New York Stock Exchange*                 



|* | Not for trading, but only in connection with the registration of the American Depositary Shares.
|- | ------------------------------------------------------------------------------------------------

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for
which there is a reporting obligation pursuant to Section 15(d) of the Act.

None





Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period
covered by the annual report.

357,815,700 shares of common stock, par valueW5,000 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    x  Yes     ̈  No

Note  Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.

If this report is an annual or transition report, indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934.     ̈  Yes    x  No

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    x  Yes     ̈  No

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).     ̈  Yes     ̈  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition
of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):



|                           |  |                      |  |                         
|-------------------------- |  | -------------------- |  | ------------------------
|Large accelerated filer  x |  | Accelerated filer   ̈ |  | Non-accelerated filer   ̈

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements
included in this filing:



|             |  |                                                                                                          |  |         
|------------ |  | -------------------------------------------------------------------------------------------------------- |  | --------
|U.S. GAAP   ̈ |  | International Financial Reporting Standards as issued by the International Accounting Standards Board  x |  | Other   ̈

If Other has been checked in response to the previous question, indicate by check mark which
financial statement item the registrant has elected to
follow.     ̈  Item 17     ̈  Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).     ̈  Yes    x  No









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##### Table of Contents

TABLE OF CONTENTS



|                                                |  |                                                                |   |      |    | 
|----------------------------------------------- |  | -------------------------------------------------------------- | - | ---- | -- | 
|                                                |  |                                                                |   | Page |   
|Presentation of Financial and Other Information |  |                                                                | 1 |     
|                                                | 
|Forward-Looking Statements                      |  |                                                                | 2 |     
|                                                | 
|PART I                                          |  |                                                                |   |     
|                                                |  |                                                               
|Item 1.                                         |  | Identity of Directors, Senior Management and Advisers          |   |      | 3  | 
|                                                |  |                                                               
|Item 2.                                         |  | Offer Statistics and Expected Timetable                        |   |      | 3  | 
|                                                |  |                                                               
|Item 3.                                         |  | Key Information                                                |   |      | 3  | 
|                                                |  |                                                               
|                                                |  | Item 3.A. Selected Financial Data                              |   |      | 3  | 
|                                                |  |                                                               
|                                                |  | Item 3.B. Capitalization and Indebtedness                      |   |      | 6  | 
|                                                |  |                                                               
|                                                |  | Item 3.C. Reasons for the Offer and Use of Proceeds            |   |      | 6  | 
|                                                |  |                                                               
|                                                |  | Item 3.D. Risk Factors                                         |   |      | 6  | 
|                                                |  |                                                               
|Item 4.                                         |  | Information on the Company                                     |   |      | 24 | 
|                                                |  |                                                               
|                                                |  | Item 4.A. History and Development of the Company               |   |      | 24 | 
|                                                |  |                                                               
|                                                |  | Item 4.B. Business Overview                                    |   |      | 26 | 
|                                                |  |                                                               
|                                                |  | Item 4.C. Organizational Structure                             |   |      | 37 | 
|                                                |  |                                                               
|                                                |  | Item 4.D. Property, Plants and Equipment                       |   |      | 37 | 
|                                                |  |                                                               
|Item 4A.                                        |  | Unresolved Staff Comments                                      |   |      | 38 | 
|                                                |  |                                                               
|Item 5.                                         |  | Operating and Financial Review and Prospects                   |   |      | 38 | 
|                                                |  |                                                               
|                                                |  | Item 5.A. Operating Results                                    |   |      | 38 | 
|                                                |  |                                                               
|                                                |  | Item 5.B. Liquidity and Capital Resources                      |   |      | 53 | 
|                                                |  |                                                               
|                                                |  | Item 5.C. Research and Development, Patents and Licenses, etc. |   |      | 56 | 
|                                                |  |                                                               
|                                                |  | Item 5.D. Trend Information                                    |   |      | 59 | 
|                                                |  |                                                               
|                                                |  | Item 5.E. Off-Balance Sheet Arrangements                       |   |      | 59 | 
|                                                |  |                                                               
|                                                |  | Item 5.F. Tabular Disclosure of Contractual Obligations        |   |      | 59 | 
|                                                |  |                                                               
|                                                |  | Item 5.G. Safe Harbor                                          |   |      | 59 | 
|                                                |  |                                                               
|Item 6.                                         |  | Directors, Senior Management and Employees                     |   |      | 59 | 
|                                                |  |                                                               
|                                                |  | Item 6.A. Directors and Senior Management                      |   |      | 59 | 
|                                                |  |                                                               
|                                                |  | Item 6.B. Compensation                                         |   |      | 62 | 



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|         |  |                                                                   |  |  |    | 
|-------- |  | ----------------------------------------------------------------- |  |  | -- | 
|         |  | Item 6.C. Board Practices                                         |  |  | 63 | 
|         |  |                                                                  
|         |  | Item 6.D. Employees                                               |  |  | 64 | 
|         |  |                                                                  
|         |  | Item 6.E. Share Ownership                                         |  |  | 64 | 
|         |  |                                                                  
|Item 7.  |  | Major Shareholders and Related Party Transactions                 |  |  | 65 | 
|         |  |                                                                  
|         |  | Item 7.A. Major Shareholders                                      |  |  | 65 | 
|         |  |                                                                  
|         |  | Item 7.B. Related Party Transactions                              |  |  | 65 | 
|         |  |                                                                  
|         |  | Item 7.C. Interests of Experts and Counsel                        |  |  | 66 | 
|         |  |                                                                  
|Item 8.  |  | Financial Information                                             |  |  | 67 | 
|         |  |                                                                  
|         |  | Item 8.A. Consolidated Statements and Other Financial
Information |  |  | 67 | 
|         |  |                                                                  
|         |  | Item 8.B. Significant Changes                                     |  |  | 69 | 
|         |  |                                                                  
|Item 9.  |  | The Offer and Listing                                             |  |  | 69 | 
|         |  |                                                                  
|         |  | Item 9.A. Offer and Listing Details                               |  |  | 69 | 
|         |  |                                                                  
|         |  | Item 9.B. Plan of Distribution                                    |  |  | 70 | 
|         |  |                                                                  
|         |  | Item 9.C. Markets                                                 |  |  | 70 | 
|         |  |                                                                  
|         |  | Item 9.D. Selling Shareholders                                    |  |  | 74 | 
|         |  |                                                                  
|         |  | Item 9.E. Dilution                                                |  |  | 74 | 
|         |  |                                                                  
|         |  | Item 9.F. Expenses of the Issue                                   |  |  | 74 | 
|         |  |                                                                  
|Item 10. |  | Additional Information                                            |  |  | 74 | 
|         |  |                                                                  
|         |  | Item 10.A. Share Capital                                          |  |  | 74 | 
|         |  |                                                                  
|         |  | Item 10.B. Memorandum and Articles of Association                 |  |  | 74 | 
|         |  |                                                                  
|         |  | Item 10.C. Material Contracts                                     |  |  | 78 | 
|         |  |                                                                  
|         |  | Item 10.D. Exchange Controls                                      |  |  | 78 | 
|         |  |                                                                  
|         |  | Item 10.E. Taxation                                               |  |  | 82 | 
|         |  |                                                                  
|         |  | Item 10.F. Dividends and Paying Agents                            |  |  | 86 | 
|         |  |                                                                  
|         |  | Item 10.G. Statements by Experts                                  |  |  | 86 | 
|         |  |                                                                  
|         |  | Item 10.H. Documents on Display                                   |  |  | 86 | 
|         |  |                                                                  
|         |  | Item 10.I. Subsidiary Information                                 |  |  | 86 | 
|         |  |                                                                  
|Item 11. |  | Quantitative and Qualitative Disclosures about Market Risk        |  |  | 86 | 
|         |  |                                                                  
|Item 12. |  | Description of Securities Other than Equity Securities            |  |  | 89 | 



(ii)



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|          |  |                                                                              |  |  |    | 
|--------- |  | ---------------------------------------------------------------------------- |  |  | -- | 
|          |  |                                                                             
|PART II   |  |                                                                              |  |  |    | 
|          |  |                                                                             
|Item 13.  |  | Defaults, Dividend Arrearages and Delinquencies                              |  |  | 90 | 
|          |  |                                                                             
|Item 14.  |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |  |  | 90 | 
|          |  |                                                                             
|Item 15.  |  | Controls and Procedures                                                      |  |  | 90 | 
|          |  |                                                                             
|Item 16.  |  | [RESERVED]                                                                   |  |  | 91 | 
|          |  |                                                                             
|Item 16A. |  | Audit Committee Financial Expert                                             |  |  | 91 | 
|          |  |                                                                             
|Item 16B. |  | Code of Ethics                                                               |  |  | 91 | 
|          |  |                                                                             
|Item 16C. |  | Principal Accountant Fees and Services                                       |  |  | 91 | 
|          |  |                                                                             
|Item 16D. |  | Exemptions from the Listing Standards for Audit Committees                   |  |  | 92 | 
|          |  |                                                                             
|Item 16E. |  | Purchases of Equity Securities by the Issuer and Affiliated
Purchasers       |  |  | 92 | 
|          |  |                                                                             
|Item 16F. |  | Change in Registrants Certifying Accountant                                 |  |  | 92 | 
|          |  |                                                                             
|Item 16G. |  | Corporate Governance                                                         |  |  | 92 | 
|          |  |                                                                             
|Item 16H. |  | Mine Safety Disclosure                                                       |  |  | 94 | 
|          |  |                                                                             
|PART III  |  |                                                                              |  |  |    | 
|          |  |                                                                             
|Item 17.  |  | Financial Statements                                                         |  |  | 95 | 
|          |  |                                                                             
|Item 18.  |  | Financial Statements                                                         |  |  | 95 | 
|          |  |                                                                             
|Item 19.  |  | Exhibits                                                                     |  |  | 96 | 



(iii)



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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

In this annual report, the terms we, us, our and LG Display refer to LG Display Co., Ltd. and,
unless otherwise indicated or required by context, our consolidated subsidiaries. Notwithstanding the foregoing, in the context of any legal proceedings or governmental investigations, LG Display refers to LG Display Co., Ltd. and does
not include any of its subsidiaries, or any other entities or persons.

The financial statements included in this annual report are
prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. As such, we make an explicit and unreserved statement of compliance with IFRS, as issued by the
IASB, with respect to our consolidated financial statements as of December 31, 2014 and 2015 and for each of the years ended in the three-year period ended December 31, 2015 included in this annual report.

Unless expressly stated otherwise, all financial data included in this annual report are presented on a consolidated basis.

All references to Korean Won, Won or W in this annual report are to the currency of the
Republic of Korea, all references to U.S. dollars or US$ are to the currency of the United States, all references to Japanese Yen, Yen or ¥ are to the currency of Japan, all references
to RMB or Chinese Renminbi are to the currency of the Peoples Republic of China, all references to NT$ are to the currency of Taiwan, all references to Euro or  are to the
official currency of the European Economic and Monetary Union, all references to PLN are to the currency of the Republic of Poland, all references to R$ are to the currency of Brazil, and all references to SG$ are
to the currency of Singapore.

Any discrepancies in any table between the totals and the sums of the amounts listed are due to rounding.

For your convenience, this annual report contains translations of Won amounts into U.S. dollars at the noon buying rate in New York City
for cable transfers in Korean Won as certified by the Federal Reserve Bank of New York for customs purposes in effect on December 31, 2015, which was W1,169.26 = US$1.00.



1



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FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this annual report. Our forward-looking statements contain information regarding, among other
things, our financial condition, future plans and business strategy. Words such as contemplate, seek to, anticipate, believe, estimate, expect, intend,
plan and similar expressions, as they relate to us, are intended to identify a number of these forward-looking statements. These forward-looking statements reflect managements present expectations and projections about future
events and are not a guarantee of future performance. Although we believe that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks, uncertainties and assumptions about us, including,
among other things:



| |  |  | the cyclical nature of our industry;
| | - |  | ------------------------------------



| |  |  | our dependence on introducing new products on a timely basis;
| | - |  | -------------------------------------------------------------



| |  |  | our dependence on growth in the demand for our products;
| | - |  | --------------------------------------------------------



| |  |  | our ability to compete effectively;
| | - |  | -----------------------------------



| |  |  | our dependence on a select group of key customers;
| | - |  | --------------------------------------------------



| |  |  | our ability to successfully manage our capacity expansion and allocation in response to changing industry and market conditions;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | our dependence on key personnel;
| | - |  | --------------------------------



| |  |  | general economic and political conditions, including those related to the display panel industry;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | possible disruptions in commercial activities caused by events such as natural disasters, terrorist activity and armed conflict;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | fluctuations in foreign currency exchange rates; and
| | - |  | ----------------------------------------------------



| |  |  | those other risks identified in the Risk Factors section of this annual report.
| | - |  | ---------------------------------------------------------------------------------

Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks, uncertainties and assumptions, the events discussed in the forward-looking statements in this annual report might not occur and our actual results could differ materially from those
anticipated in these forward-looking statements.

All subsequent forward-looking statements attributable to us or any person acting on our
behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.



2



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##### Table of Contents

PART I



|Item 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|------- | -----------------------------------------------------

Not applicable.



|Item 2. | OFFER STATISTICS AND EXPECTED TIMETABLE
|------- | ---------------------------------------

Not applicable.



|Item 3. | KEY INFORMATION
|------- | ---------------



|Item 3.A. | Selected Financial Data
|--------- | -----------------------

The selected consolidated financial data set
forth below as of and for the years ended December 31, 2011, 2012, 2013, 2014 and 2015 have been derived from our consolidated financial statements and the related notes, which have been prepared under IFRS as issued by the IASB. Our audited
consolidated financial statements as of December 31, 2014 and 2015 and for each of the years in the three-year period ended December 31, 2015 and the related notes are included in this annual report.

The information set forth below is not necessarily indicative of the results of future operations and should be read in conjunction with
Item 5. Operating and Financial Review and Prospects and our consolidated financial statements and related notes included in this annual report.

In addition to preparing financial statements in accordance with IFRS as issued by the IASB included in this annual report, we also prepare
financial statements in accordance with Korean International Financial Reporting Standards, or K-IFRS, as adopted by the Korean Accounting Standards Board, or KASB, which we are required to file with the Financial Services Commission and the Korea
Exchange under the Financial Investment Services and Capital Markets Act of Korea. See Item 10.B. Memorandum and Articles of AssociationBusiness Report. English translations of such financial statements are furnished to the SEC on
Form 6-K, which are not incorporated by reference to this or any of our previous annual reports on Form 20-F. The operating profit or loss presented in the consolidated statements of comprehensive income or loss prepared in accordance with K-IFRS
for the years ended December 31, 2014 and 2015 included in the Form 6-K furnished to the SEC on February 26, 2016 is a profit of W1,357 billion and W1,626 billion, respectively. For further information,
please see the Form 6-K furnished to the SEC on February 26, 2016, which is not incorporated by reference to this annual report.

Pursuant to the IFRS as issued by IASB, we are not required to separately present operating profit or loss in our consolidated statements of
comprehensive income or loss prepared in accordance with IFRS. Therefore, the financial statements included in this annual report, which are prepared in accordance with IFRS as issued by IASB, do not present operating profit or loss as a separate
line item.

Consolidated statements of comprehensive income (loss) data



|                                               |  |                                                 |         |   |                                                |   |         |      |  |   |         |   |  |      |         |   |         |   |         |   |  |     |         |  
|---------------------------------------------- |  | ----------------------------------------------- | ------- | - | ---------------------------------------------- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - | ------- | - | ------- | - |  | --- | ------- | -
|                                               |  | Year ended December 31,                         |        
|                                               |  | 2011                                            |         |   | 2012                                           |   |         | 2013 |  |   | 2014    |   |  | 2015 |         |   | 2015(1) |  
|                                               |  | (in billions of Won, except for per share data) |         |   | (in millions of US$, exceptfor per share data) |  
|Revenue                                        |  | W                                               | 24,291  |   |                                                | W | 29,430  |      |  | W | 27,033  |   |  | W    | 26,456  |   |         | W | 28,384  |   |  | US$ | 24,275  |  
|Cost of sales                                  |  |                                                 | (23,081 | ) |                                                |   | (26,425 | )    |  |   | (23,525 | ) |  |      | (22,667 | ) |         |   | (24,070 | ) |  |     | (20,586 | )
|Gross profit                                   |  |                                                 | 1,210   |   |                                                |   | 3,005   |      |  |   | 3,508   |   |  |      | 3,789   |   |         |   | 4,314   |   |  |     | 3,689   |  
|Selling expenses                               |  |                                                 | (728    | ) |                                                |   | (814    | )    |  |   | (732    | ) |  |      | (747    | ) |         |   | (878    | ) |  |     | (751    | )
|Administrative expenses (2)                    |  |                                                 | (430    | ) |                                                |   | (494    | )    |  |   | (518    | ) |  |      | (520    | ) |         |   | (593    | ) |  |     | (507    | )
|Research and development expenses
(2)          |  |                                                 | (816    | ) |                                                |   | (785    | )    |  |   | (1,096  | ) |  |      | (1,164  | ) |         |   | (1,218  | ) |  |     | (1,042  | )
|Profit (loss) before income tax                |  |                                                 | (1,081  | ) |                                                |   | 459     |      |  |   | 830     |   |  |      | 1,242   |   |         |   | 1,434   |   |  |     | 1,226   |  
|Income tax expense (benefit)                   |  |                                                 | (293    | ) |                                                |   | 222     |      |  |   | 411     |   |  |      | 325     |   |         |   | 411     |   |  |     | 352     |  
|Profit (loss) for the year                     |  |                                                 | (788    | ) |                                                |   | 237     |      |  |   | 419     |   |  |      | 917     |   |         |   | 1,023   |   |  |     | 874     |  
|Total comprehensive income (loss) for the year |  |                                                 | (757    | ) |                                                |   | 97      |      |  |   | 397     |   |  |      | 843     |   |         |   | 1,003   |   |  |     | 858     |  
|Basic earnings (loss) per share (Won, US$)     |  | W                                               | (2,155  | ) |                                                | W | 652     |      |  | W | 1,191   |   |  | W    | 2,527   |   |         | W | 2,701   |   |  | US$ | 2.31    |  
|Diluted earnings (loss) per share (Won, US$)   |  | W                                               | (2,155  | ) |                                                | W | 652     |      |  | W | 1,191   |   |  | W    | 2,527   |   |         | W | 2,701   |   |  | US$ | 2.31    |  



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Consolidated statements of financial position data



|                                         |  |                      |        |  |                      |   |        |      |  |   |        |  |  |      |        |  |         |   |        |  |  |     |        | 
|---------------------------------------- |  | -------------------- | ------ |  | -------------------- | - | ------ | ---- |  | - | ------ |  |  | ---- | ------ |  | ------- | - | ------ |  |  | --- | ------ | 
|                                         |  | As of December 31,   |       
|                                         |  | 2011                 |        |  | 2012                 |   |        | 2013 |  |   | 2014   |  |  | 2015 |        |  | 2015(1) |  
|                                         |  | (in billions of Won) |        |  | (in millions of US$) |  
|Cash and cash equivalents                |  | W                    | 1,518  |  |                      | W | 2,339  |      |  | W | 1,022  |  |  | W    | 890    |  |         | W | 752    |  |  | US$ | 643    | 
|Deposits in banks                        |  |                      | 815    |  |                      |   | 315    |      |  |   | 1,302  |  |  |      | 1,526  |  |         |   | 1,772  |  |  |     | 1,515  | 
|Trade accounts and notes receivable, net |  |                      | 2,740  |  |                      |   | 3,334  |      |  |   | 3,129  |  |  |      | 3,444  |  |         |   | 4,098  |  |  |     | 3,505  | 
|Inventories                              |  |                      | 2,317  |  |                      |   | 2,390  |      |  |   | 1,933  |  |  |      | 2,754  |  |         |   | 2,352  |  |  |     | 2,012  | 
|Total current assets                     |  |                      | 7,858  |  |                      |   | 8,915  |      |  |   | 7,732  |  |  |      | 9,241  |  |         |   | 9,532  |  |  |     | 8,152  | 
|Property, plant and equipment, net       |  |                      | 14,697 |  |                      |   | 13,108 |      |  |   | 11,808 |  |  |      | 11,403 |  |         |   | 10,546 |  |  |     | 9,019  | 
|Total assets                             |  |                      | 25,163 |  |                      |   | 24,456 |      |  |   | 21,715 |  |  |      | 22,967 |  |         |   | 22,577 |  |  |     | 19,309 | 
|Trade accounts and notes payable         |  |                      | 3,783  |  |                      |   | 4,147  |      |  |   | 3,000  |  |  |      | 3,392  |  |         |   | 2,765  |  |  |     | 2,365  | 
|Current financial liabilities            |  |                      | 895    |  |                      |   | 1,015  |      |  |   | 908    |  |  |      | 968    |  |         |   | 1,416  |  |  |     | 1,211  | 
|Other accounts payable                   |  |                      | 3,993  |  |                      |   | 2,811  |      |  |   | 1,454  |  |  |      | 1,508  |  |         |   | 1,500  |  |  |     | 1,283  | 
|Total current liabilities                |  |                      | 9,911  |  |                      |   | 9,206  |      |  |   | 6,789  |  |  |      | 7,550  |  |         |   | 6,607  |  |  |     | 5,651  | 
|Non-current financial liabilities        |  |                      | 3,722  |  |                      |   | 3,441  |      |  |   | 2,995  |  |  |      | 3,279  |  |         |   | 2,808  |  |  |     | 2,402  | 
|Long-term advance received               |  |                      | 669    |  |                      |   | 1,050  |      |  |   | 427    |  |  |      |       |  |         |   |       |  |  |     |       | 
|Total liabilities                        |  |                      | 15,032 |  |                      |   | 14,215 |      |  |   | 10,918 |  |  |      | 11,184 |  |         |   | 9,872  |  |  |     | 8,443  | 
|Share capital and share premium          |  |                      | 4,040  |  |                      |   | 4,040  |      |  |   | 4,040  |  |  |      | 4,040  |  |         |   | 4,040  |  |  |     | 3,455  | 
|Retained earnings                        |  |                      | 6,063  |  |                      |   | 6,239  |      |  |   | 6,663  |  |  |      | 7,455  |  |         |   | 8,159  |  |  |     | 6,978  | 
|Total equity                             |  |                      | 10,131 |  |                      |   | 10,240 |      |  |   | 10,797 |  |  |      | 11,783 |  |         |   | 12,705 |  |  |     | 10,866 | 

Other financial data



|                                                    |  |                                                                 |        |    |                                                               |   |        |      |  |   |        |   |  |      |        |   |         |   |        |   |  |     |        |  
|--------------------------------------------------- |  | --------------------------------------------------------------- | ------ | -- | ------------------------------------------------------------- | - | ------ | ---- |  | - | ------ | - |  | ---- | ------ | - | ------- | - | ------ | - |  | --- | ------ | -
|                                                    |  | Year ended December 31,                                         |       
|                                                    |  | 2011                                                            |        |    | 2012                                                          |   |        | 2013 |  |   | 2014   |   |  | 2015 |        |   | 2015(1) |  
|                                                    |  | (in billions of Won, except for percentages and per share data) |        |    | (in millions of US$, exceptfor percentages and pershare data) |  
|Gross margin (3)                                    |  |                                                                 | 5.0    | %  |                                                               |   | 10.2   | %    |  |   | 13.0   | % |  |      | 14.3   | % |         |   | 15,2   | % |  |     | 15.2   | %
|Net margin (4)                                      |  |                                                                 | (3.2   | )% |                                                               |   | 0.8    | %    |  |   | 1.5    | % |  |      | 3.5    | % |         |   | 3.6    | % |  |     | 3.6    | %
|EBITDA (5)                                          |  | W                                                               | 2,657  |    |                                                               | W | 5,087  |      |  | W | 4,784  |   |  | W    | 4,795  |   |         | W | 4,880  |   |  | US$ | 4,174  |  
|Capital expenditures                                |  |                                                                 | 4,063  |    |                                                               |   | 3,972  |      |  |   | 3,473  |   |  |      | 2,983  |   |         |   | 2,365  |   |  |     | 2,023  |  
|Depreciation and amortization (6)                   |  |                                                                 | 3,651  |    |                                                               |   | 4,469  |      |  |   | 3,834  |   |  |      | 3,492  |   |         |   | 3,376  |   |  |     | 2,887  |  
|Net cash provided by operating activities           |  |                                                                 | 3,666  |    |                                                               |   | 4,570  |      |  |   | 3,585  |   |  |      | 2,865  |   |         |   | 2,727  |   |  |     | 2,332  |  
|Net cash used in investing activities               |  |                                                                 | (3,494 | )  |                                                               |   | (3,688 | )    |  |   | (4,504 | ) |  |      | (3,451 | ) |         |   | (2,732 | ) |  |     | (2,337 | )
|Net cash provided by (used in) financing activities |  |                                                                 | (278   | )  |                                                               |   | (48    | )    |  |   | (391   | ) |  |      | 405    |   |         |   | (174   | ) |  |     | (149   | )
|Dividends declared per share (Won, US$)(7)          |  |                                                                 |       |    |                                                               |   |       |      |  |   |       |   |  | W    | 500    |   |         | W | 500    |   |  | US$ | 0.4    |  



|(1) | For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,169.26 to US$1.00, the noon buying rate in effect on December 31, 2015 as certified by the Federal Reserve
Bank of New York for customs purposes. This translation should not be construed as a representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Amortization expenses related to certain research and development activities included in administrative expenses for the year ended December 31, 2011 have been reclassified as research and
development expenses to conform to the criteria of classification for the years ended December 31, 2012, 2013, 2014 and 2015.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Gross margin represents gross profit divided by revenue.
|--- | --------------------------------------------------------

|(4) | Net margin represents profit (loss) for the year divided by revenue.
|--- | --------------------------------------------------------------------

|(5) | EBITDA is defined as profit (loss) for the year excluding interest expense, income tax expense (benefit), depreciation and amortization of intangible assets and interest income. EBITDA is a key financial measure used by
our senior management to internally evaluate the performance of our business and for other required or discretionary purposes. Specifically, our significant capital assets are in different stages of depreciation, and because we do not have separate
operating divisions, our senior management uses EBITDA internally to measure the performance of these assets on a comparable basis. We also believe that the presentation of EBITDA will enhance an investors understanding of our operating
performance as we believe it is commonly reported and widely used by analysts and investors in our industry. It also provides useful information for comparison on a more comparable basis of our operating performance and those of our competitors, who
follow different accounting policies. For example, depreciation on most of our equipment is made based on a four-year useful life while most of our competitors use different depreciation schedules from our own. EBITDA is not a measure determined in
accordance with IFRS. EBITDA should not be considered as an alternative to gross profit, cash flows from operating activities or profit (loss) for the year, as determined in accordance with IFRS. Our calculation of EBITDA may not be comparable to
similarly titled measures reported by other companies. A reconciliation of profit (loss) for the year to EBITDA is as follows:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



4



---

##### Table of Contents

|                                  |  |                         |       |   |                      |   |       |      |  |   |       |   |  |      |       |   |         |   |       |   |  |     |       |  
|--------------------------------- |  | ----------------------- | ----- | - | -------------------- | - | ----- | ---- |  | - | ----- | - |  | ---- | ----- | - | ------- | - | ----- | - |  | --- | ----- | -
|                                  |  | Year ended December 31, |      
|                                  |  | 2011                    |       |   | 2012                 |   |       | 2013 |  |   | 2014  |   |  | 2015 |       |   | 2015(1) |  
|                                  |  | (in billions of Won)    |       |   | (in millions of US$) |  
|Profit (loss) for the year        |  | W                       | (788  | ) |                      | W | 237   |      |  | W | 419   |   |  | W    | 917   |   |         | W | 1,023 |   |  | US$ | 875   |  
|Interest income                   |  |                         | (58   | ) |                      |   | (29   | )    |  |   | (39   | ) |  |      | (49   | ) |         |   | (57   | ) |  |     | (49   | )
|Interest expense                  |  |                         | 145   |   |                      |   | 188   |      |  |   | 159   |   |  |      | 110   |   |         |   | 128   |   |  |     | 109   |  
|Income tax expense (benefit)      |  |                         | (293  | ) |                      |   | 222   |      |  |   | 411   |   |  |      | 325   |   |         |   | 411   |   |  |     | 352   |  
|Depreciation                      |  |                         | 3,413 |   |                      |   | 4,196 |      |  |   | 3,598 |   |  |      | 3,222 |   |         |   | 2,969 |   |  |     | 2,539 |  
|Amortization of intangible assets |  |                         | 238   |   |                      |   | 273   |      |  |   | 236   |   |  |      | 270   |   |         |   | 406   |   |  |     | 347   |  
|                                  |  |                         |       |   |                      |   |       |      |  |   |       |   |  |      |       |   |         |   |       |   |  |     |       |  
|EBITDA                            |  | W                       | 2,657 |   |                      | W | 5,087 |      |  | W | 4,784 |   |  | W    | 4,795 |   |         | W | 4,880 |   |  | US$ | 4,174 |  
|                                  |  |                         |       |   |                      |   |       |      |  |   |       |   |  |      |       |   |         |   |       |   |  |     |       |  



|(6) | Includes amortization of intangible assets.
|--- | -------------------------------------------

|(7) | Dividends declared per share represent cash dividends declared for the year divided by outstanding shares of common stock as of December 31.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------

Operating data



|                                           |  |                         |         |  |      |  |         |      |  |  |         |  |  |      |         |  |  |  |         | 
|------------------------------------------ |  | ----------------------- | ------- |  | ---- |  | ------- | ---- |  |  | ------- |  |  | ---- | ------- |  |  |  | ------- | 
|                                           |  | Year ended December 31, |        
|                                           |  | 2011                    |         |  | 2012 |  |         | 2013 |  |  | 2014    |  |  | 2015 |        
|                                           |  | (in thousands)          |        
|Number of panels sold by product category: |  |                         |         |  |      |  |         |      |  |  |         |  |  |      |         |  |  |  |         | 
|Televisions(1)                             |  |                         | 53,084  |  |      |  | 56,490  |      |  |  | 53,797  |  |  |      | 51,358  |  |  |  | 55,319  | 
|Notebook computers(2)                      |  |                         | 62,923  |  |      |  | 69,559  |      |  |  | 55,559  |  |  |      | 50,175  |  |  |  | 45,509  | 
|Desktop monitors(3)                        |  |                         | 50,247  |  |      |  | 51,819  |      |  |  | 49,986  |  |  |      | 43,848  |  |  |  | 41,912  | 
|Tablet computers(4)                        |  |                         | 35,640  |  |      |  | 56,526  |      |  |  | 63,840  |  |  |      | 50,995  |  |  |  | 31,476  | 
|Mobile and other applications(5)           |  |                         | 164,702 |  |      |  | 164,409 |      |  |  | 162,011 |  |  |      | 216,479 |  |  |  | 216,565 | 
|                                           |  |                         |         |  |      |  |         |      |  |  |         |  |  |      |         |  |  |  |         | 
|Total                                      |  |                         | 366,596 |  |      |  | 398,803 |      |  |  | 385,193 |  |  |      | 412,855 |  |  |  | 390,781 | 
|                                           |  |                         |         |  |      |  |         |      |  |  |         |  |  |      |         |  |  |  |         | 





|(1) | For the years ended December 31, 2011 and 2012, includes television sets manufactured and sold by our former joint venture company L&T Display Technology (Xiamen) Limited, which was dissolved in August 2015.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes semi-finished products manufactured by our former joint venture company LUCOM Display Technology (Kunshan) Ltd. through June 2014 when we disposed of our entire investment in such company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes desktop monitors manufactured and sold by our joint venture company L&T Display Technology (Fujian) Limited.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(4) | We established tablet computers as a new product category in our audited consolidated financial statements for the three-year period ended December 31, 2013 included in the annual report on Form 20-F filed with the
SEC on April 30, 2014. Previously, tablet computer panels were reported in the notebook computer and mobile and other application product categories.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes, among others, panels for mobile devices, including smartphones and other types of mobile phones, and industrial and other applications, including entertainment systems, automotive displays, portable navigation
devices and medical diagnostic equipment.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                 |  |                         |        |  |                      |   |        |      |  |   |        |  |  |      |        |  |         |   |        |  |  |     |        | 
|-------------------------------- |  | ----------------------- | ------ |  | -------------------- | - | ------ | ---- |  | - | ------ |  |  | ---- | ------ |  | ------- | - | ------ |  |  | --- | ------ | 
|                                 |  | Year ended December 31, |       
|                                 |  | 2011                    |        |  | 2012                 |   |        | 2013 |  |   | 2014   |  |  | 2015 |        |  | 2015(6) |  
|                                 |  | (in billions of Won)    |        |  | (in millions of US$) |  
|Revenue by product category:     |  |                         |        |  |                      |   |        |      |  |   |        |  |  |      |        |  |         |   |        |  |  |     |        | 
|Televisions(1)                   |  | W                       | 11,579 |  |                      | W | 13,512 |      |  | W | 11,795 |  |  | W    | 10,540 |  |         | W | 10,854 |  |  | US$ | 9,283  | 
|Notebook computers(2)            |  |                         | 3,246  |  |                      |   | 3,667  |      |  |   | 2,819  |  |  |      | 2,669  |  |         |   | 2,509  |  |  |     | 2,146  | 
|Desktop monitors(3)              |  |                         | 4,975  |  |                      |   | 5,039  |      |  |   | 5,256  |  |  |      | 4,660  |  |         |   | 4,553  |  |  |     | 3,894  | 
|Tablet computers(4)              |  |                         | 2,224  |  |                      |   | 3,714  |      |  |   | 3,575  |  |  |      | 3,542  |  |         |   | 2,510  |  |  |     | 2,147  | 
|Mobile and other applications(5) |  |                         | 2,190  |  |                      |   | 3,371  |      |  |   | 3,537  |  |  |      | 5,005  |  |         |   | 7,919  |  |  |     | 6,773  | 
|                                 |  |                         |        |  |                      |   |        |      |  |   |        |  |  |      |        |  |         |   |        |  |  |     |        | 
|Total sales of goods             |  | W                       | 24,214 |  |                      | W | 29,303 |      |  | W | 26,982 |  |  | W    | 26,416 |  |         | W | 28,345 |  |  | US$ | 24,243 | 
|Royalties                        |  |                         | 61     |  |                      |   | 38     |      |  |   | 19     |  |  |      | 15     |  |         |   | 19     |  |  |     | 16     | 
|Others                           |  |                         | 16     |  |                      |   | 89     |      |  |   | 32     |  |  |      | 25     |  |         |   | 20     |  |  |     | 16     | 
|                                 |  |                         |        |  |                      |   |        |      |  |   |        |  |  |      |        |  |         |   |        |  |  |     |        | 
|Revenue                          |  | W                       | 24,291 |  |                      | W | 29,430 |      |  | W | 27,033 |  |  | W    | 26,456 |  |         | W | 28,384 |  |  | US$ | 24,275 | 
|                                 |  |                         |        |  |                      |   |        |      |  |   |        |  |  |      |        |  |         |   |        |  |  |     |        | 





|(1) | For the years ended December 31, 2011 and 2012, includes television sets manufactured and sold by our former joint venture company L&T Display Technology (Xiamen) Limited, which was dissolved in August 2015.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes semi-finished products manufactured by our former joint venture company LUCOM Display Technology (Kunshan) Ltd. through June 2014 when we disposed of our entire investment in such company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes desktop monitors manufactured and sold by our joint venture company L&T Display Technology (Fujian) Limited.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(4) | We established tablet computers as a new product category in our audited consolidated financial statements for the three-year period ended December 31, 2013 included in the annual report on Form 20-F filed with the
SEC on April 30, 2014. Previously, tablet computer panels were reported in the notebook computer and mobile and other application product categories.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes, among others, panels for mobile devices, including smartphones and other types of mobile phones, and industrial and other applications, including entertainment systems, automotive displays, portable navigation
devices and medical diagnostic equipment.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



5



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##### Table of Contents

|(6) | For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,169.26 to US$1.00, the noon buying rate in effect on December 31, 2015 as certified by the Federal Reserve
Bank of New York for customs purposes. This translation should not be construed as a representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Exchange Rates

The table below sets
forth, for the periods and dates indicated, information concerning the noon buying rate for Korean Won, expressed in Korean Won per one U.S. dollar. The noon buying rate is the rate in New York City for cable transfers in foreign
currencies as certified for customs purposes by the Federal Reserve Bank of New York. Unless otherwise stated, translations of Korean Won amounts into U.S. dollars in this annual report were made at the noon buying rate in effect on
December 31, 2015, which was W1,169.26 to US$1.00. We do not intend to imply that the Korean Won or U.S. dollar amounts referred to herein could have been or could be converted into U.S. dollars or Korean Won, as the case may
be, at any particular rate, or at all. On April 22, 2016, the noon buying rate was W1,147.85 = US$1.00.

Fluctuation
in the exchange rate between the Korean Won and the U.S. dollar will affect the amount of U.S. dollars received in respect of cash dividends or other distributions paid in Korean Won by us on, and the Korean Won proceeds received from any sales of,
our common stock.



|                         |  |                          |         |  |                 |   |         |      |  |   |         |  |  |   |         | 
|------------------------ |  | ------------------------ | ------- |  | --------------- | - | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|Year ended December 31,  |  | At End of Period         |         |  | Average Rate(1) |   |         | High |  |   | Low     | 
|                         |  | (Korean Won per US$1.00) |        
|2011                     |  | W                        | 1,158.5 |  |                 | W | 1,106.9 |      |  | W | 1,197.5 |  |  | W | 1,049.2 | 
|2012                     |  |                          | 1,063.2 |  |                 |   | 1,126.2 |      |  |   | 1,185.0 |  |  |   | 1,063.2 | 
|2013                     |  |                          | 1,055.3 |  |                 |   | 1,094.7 |      |  |   | 1,161.3 |  |  |   | 1,050.1 | 
|2014                     |  |                          | 1,090.9 |  |                 |   | 1,052.3 |      |  |   | 1,117.7 |  |  |   | 1,008.9 | 
|2015                     |  |                          | 1,169.3 |  |                 |   | 1,131.0 |      |  |   | 1,196.4 |  |  |   | 1,063.0 | 
|October                  |  |                          | 1,140.5 |  |                 |   | 1,143.2 |      |  |   | 1,180.0 |  |  |   | 1,120.9 | 
|November                 |  |                          | 1,149.4 |  |                 |   | 1,153.5 |      |  |   | 1,172.7 |  |  |   | 1,136.5 | 
|December                 |  |                          | 1,169.3 |  |                 |   | 1,169.9 |      |  |   | 1,188.0 |  |  |   | 1,140.7 | 
|2016 (through April 22)  |  |                          | 1,147.9 |  |                 |   | 1,183.7 |      |  |   | 1,242.6 |  |  |   | 1,126.0 | 
|January                  |  |                          | 1,210.0 |  |                 |   | 1,203.3 |      |  |   | 1,217.0 |  |  |   | 1,190.4 | 
|February                 |  |                          | 1,238.1 |  |                 |   | 1,216.2 |      |  |   | 1,242.6 |  |  |   | 1,186.1 | 
|March                    |  |                          | 1,138.9 |  |                 |   | 1,181.6 |      |  |   | 1,229.6 |  |  |   | 1,138.9 | 
|April (through April 22) |  |                          | 1,147.9 |  |                 |   | 1,145.7 |      |  |   | 1,158.4 |  |  |   | 1,126.0 | 



|(1) | The average rate for each full year is calculated as the average of the noon buying rates on the last business day of each month during the relevant year. The average rate for a full month (or portion thereof) is
calculated as the average of the noon buying rates on each business day during the relevant month (or portion thereof).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 3.B. | Capitalization and Indebtedness
|--------- | -------------------------------

Not applicable.



|Item 3.C. | Reasons for the Offer and Use of Proceeds
|--------- | -----------------------------------------

Not applicable.



|Item 3.D. | Risk Factors
|--------- | ------------

You should carefully consider the risks described below.

Risks Relating to Our Industry

Our industry
is subject to cyclical fluctuations, including recurring periods of capacity increases, that may adversely affect our results of operations.

Display panel manufacturers are vulnerable to cyclical market conditions. Intense competition and expectations of growth in demand across the
industry may cause display panel manufacturers to make additional investments in manufacturing capacity on similar schedules, resulting in a surge in capacity when production is ramped up at new fabrication facilities. During such surges in capacity
growth, as evidenced by past experiences, customers can exert strong downward pricing pressure, resulting in sharp declines in average selling prices and significant fluctuations in the panel manufacturers gross margins. Conversely, demand
surges and fluctuations in the supply chain can lead to price increases.



6



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##### Table of Contents

From time to time, we have been affected by overcapacity in the industry relative to the general
demand for display panels which, together with uncertainties in the current global economic environment, has contributed to a general decline in the average selling prices of a number of our display panel products. Our average revenue per square
meter of net display area, which is derived by dividing our total revenue by total square meters of net display area shipped, decreased by 10.4% from US$723 in 2013 to US$648 in 2014 and further decreased by 5.7% to US$612 in 2015 as the operation
of new fabrication facilities by our competitors, as well as weakening demand for consumer electronics products, contributed to downward pricing pressure.

We attempt to counteract, at least in part, the effects of overcapacity in the industry by increasing the proportion of high margin,
differentiated specialty products based on newer technologies in our product mix, which are relatively less affected by the industry-wide overcapacity problems affecting display panel products using older technologies, while also engaging in cost
reduction efforts.

While we believe that overcapacity and other cyclical issues in the industry are best addressed by increasing the
proportion of high margin, differentiated specialty products based on newer technologies in our product mix that are tailored to our customers evolving needs, we also address overcapacity issues by, in the short-term, adjusting the utilization
rates of our existing fabrication facilities based on our assessment of industry inventory levels and demand for our products and, in the mid- to long-term, by fine-tuning our investment strategies relating to product development and capacity growth
in light of our assessment of future market conditions.

However, we cannot provide any assurance that an increase in demand, which helped
to mitigate the impact of industry-wide overcapacity in the past, can be sustained in future periods. We will therefore continue to closely monitor the overcapacity issues in the industry and respond accordingly. However, construction of new
fabrication facilities and other capacity expansion projects in the display panel industry are undertaken with a multiple-year time horizon based on expectations of future market trends. Therefore, even if overcapacity issues persist in the
industry, there may be continued capacity expansion in the near future due to pre-committed capacity expansion projects in the industry that were undertaken in past years. Any significant industry-wide capacity increases that are not accompanied by
a sufficient increase in demand could further drive down the average selling price of our panels, which would negatively affect our gross margin. Any decline in prices may be further compounded by a seasonal weakening in demand growth for end
products such as personal computer products, consumer electronics products and mobile and other application products. Furthermore, once the differentiated products that had a positive impact on our performance mature in their technology cycle, if we
are not able to develop and commercialize newer products to offset the price erosion of such maturing products in a timely manner, our ability to counter the impact of cyclical market conditions on our gross margins would be further limited. We
cannot provide assurance that any future downturns resulting from any large increases in capacity or other factors affecting the industry would not have a material adverse effect on our business, financial condition and results of operations.

A global economic downturn may result in reduced demand for our products and adversely affect our profitability.

In recent years, difficulties affecting the global financial sectors, adverse conditions and volatility in the worldwide credit and financial
markets, fluctuations in oil and commodity prices and the general weakness of the global economy have increased the uncertainty of global economic prospects in general and have adversely affected the global and Korean economies. The recent global
economic downturn has adversely affected demand for consumer products manufactured by our customers in Korea and overseas, including televisions, notebook computers, desktop monitors, tablet computers and mobile and other application products
utilizing display panels, which in turn led them to reduce or plan reductions of their production. For example, in 2013 compared to 2012, demand for our products in terms of sales revenue and sales volume decreased due in part to inventory
adjustments by our customers in light of lingering uncertainties in the global economic environment.

We cannot provide any assurance that
demand for our products can be sustained at current levels in future periods or that the demand for our products will not decrease again in the future due to such economic downturns which may adversely affect our profitability. We may decide to
adjust our production levels in the future subject to market demand for our products, the production outlook of the global display panel industry, in particular, the display panel industry, and global economic conditions in general. Any decline in
demand for display panel products may adversely affect our business, results of operations and/or financial condition.

Our industry continues to
experience steady declines in the average selling prices of display panels irrespective of cyclical fluctuations in the industry, and our margins would be adversely impacted if prices decrease faster than we are able to reduce our costs.

The average selling prices of display panels have declined in general and are expected to continually decline with time
irrespective of industry-wide cyclical fluctuations as a result of, among other factors, technological advancements and cost reductions. Although we may be able to take advantage of the higher selling prices typically associated with new products
and technologies when they are first introduced in the market, such prices decline over time, and in certain cases, very rapidly, as a result of market competition or otherwise. If we are unable to effectively anticipate and counter the price
erosion that accompanies our products, or if the average selling prices of our display panels decrease faster than the speed at which we are able to reduce our manufacturing costs, our gross margin would decrease and our results of operations and
financial condition may be materially and adversely affected.



7



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##### Table of Contents

We operate in a highly competitive environment and we may not be able to sustain our current market
position.

The display panel industry is highly competitive. We have experienced pressure on the prices and margins of our major
products due largely to additional capacity from panel makers in Korea, Taiwan, China and Japan. Our main competitors in the industry include Samsung Display, Innolux, AU Optronics, Chunghwa Picture Tubes, HannStar Display, BOE, China Star
Optolectronics Technology, CEC Panda, Japan Display, Sharp and Panasonic LCD.

Some of our competitors may currently, or at some point in
the future, have greater financial, sales and marketing, manufacturing, research and development or technological resources than we do. In addition, our competitors may be able to manufacture panels on a larger scale or with greater cost
efficiencies than we do and we anticipate increases in production capacity in the future by other display panel manufacturers using similar display panel technologies as us. Any price erosion resulting from strong global competition or additional
industry capacity may materially adversely affect our financial condition and results of operations.

In addition, consolidation within
the industry in which we operate may result in increased competition as the entities emerging from such consolidation may have greater financial, manufacturing, research and development and other resources than we do, especially if such mergers or
consolidations result in vertical integration and operational efficiencies. For example, in April 2016, Foxconn Technology Group, an integrated electronics contract manufacturer for end-brands, entered into a definitive agreement to acquire a
majority stake in our competitor, Sharp. Increased competition resulting from such mergers or consolidations may lead to decreased margins, which may have a material adverse effect on our financial condition and results of operations.

We and our competitors each seek to establish our own products and technologies as the industry standards. For example, in the large-sized
television panel market, we currently manufacture primarily 32-inch, 42-inch, 43-inch, 49-inch and 55-inch television panels and utilize white RGB, or WRGB, technology for our organic light-emitting diode, or OLED, television panels. Other display
panel manufacturers produce competing large-sized television panels in slightly different dimensions, such as 39-inch, 39.5-inch, 40-inch, 48-inch and 58-inch panels and utilize competing display panel technologies. If our competitors panels
or the technologies they adopt become the market standard, we may lose market share and may not realize the expected return on our investments in the technologies we utilize in our display panels, which may have a material adverse effect on our
financial condition and results of operations.

Our ability to compete successfully also depends on factors both within and outside our
control, including product pricing, performance and reliability, our relationship with customers, successful and timely investment and product development, success or failure of our end-brand customers in marketing their brands and products,
component and raw material supply costs, and general economic and industry conditions. We cannot provide assurance that we will be able to maintain a competitive advantage with respect to all these factors and, as a result, we may be unable to
sustain our current market position.

Our operating results fluctuate from period to period, so you should not rely on period-to-period comparisons
to predict our future performance.

Our industry is affected by market conditions that are often outside the control of
manufacturers. Our results of operations may fluctuate significantly from period to period due to a number of factors, including seasonal variations in consumer demand, capacity ramp-up by competitors, industry-wide technological changes, the loss
of a key customer and the postponement, rescheduling or cancellation of large orders by a key customer, any of which may or may not reflect a continued trend from one period to the next. As a result of these factors and other risks discussed in this
section, you should not rely on period-to-period comparisons to predict our future performance.

Risks Relating to Our Company

Our financial condition may be adversely affected if we cannot introduce new products to adapt to rapidly evolving customer needs on a timely basis.

Our success will depend greatly on our ability to respond quickly to rapidly evolving customer requirements and to develop and
efficiently manufacture new and differentiated products in anticipation of future demand. A failure or delay on our part to develop and efficiently manufacture products of such quality and technical specifications that meet our customers
evolving needs may adversely affect our business.



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Close cooperation with our customers to gain insights into their product needs and to understand
general trends in the end-product market is a key component of our strategy to produce successful products. In addition, when developing new products, we often work closely with equipment suppliers to design equipment that will make our production
processes for such new products more efficient. If we are unable to work together with our customers and equipment suppliers, or to sufficiently understand their respective needs and capabilities or general market trends, we may not be able to
introduce or efficiently manufacture new products in a timely manner, which may have a material adverse effect on our financial situation.

In addition, product differentiation, especially the ability to develop and market differentiated specialty products that command higher
premiums in a timely manner, has become a key competitive strategy in the display panel market. This is in part due to trends in consumer electronics and other markets, such as televisions, tablet computers and mobile devices, where the growth in
demand is led by end products employing newer technologies with specifications tailored to deliver enhanced performance, convenience and user experience in a cost-efficient and timely manner. Accordingly, we have focused our efforts on developing
and marketing differentiated specialty products, including our television panels utilizing ultra-high definition, or Ultra HD, technologies, Advanced High-Performance In-Place Switching, or AH-IPS, panels for tablet computers, mobile devices,
notebook computers and desktop monitors, ultra-large and ultra-thin OLED television and public display panels and flexible OLED smartphone and smartwatch panels. We have also focused our efforts on cost reductions in the production process, in
particular of panels with newer technologies, such as OLED, in order to improve or maintain our profit margins while offering competitive prices to our customers.

We have developed differentiated sales and marketing strategies to promote our panels for differentiated specialty products as part of our
strategy to grow our operations to meet increasing demand for new applications in consumer electronics and other markets. However, we cannot provide assurance that the differentiated products we develop and market will be responsive to our end
customers needs nor that our products will be successfully incorporated into end products or new applications that lead market growth in consumer electronics or other markets.

Problems with product quality, including defects, in our products could result in a decrease in customers and sales, unexpected expenses and loss of
market share.

Our products are manufactured using advanced, and often new, technology and must meet stringent quality
requirements. Products manufactured using advanced and new technology, such as ours, may contain undetected errors or defects, especially when first introduced. For example, our latest display panels may contain defects that are not detected until
after they are shipped or installed because we cannot test for all possible scenarios. Such defects could cause us to incur significant re-designing costs, divert the attention of our technology personnel from product development efforts and
significantly affect our customer relations and business reputation. In addition, future product failures could cause us to incur substantial expense to repair or replace defective products. We recognize a provision for warranty obligations based on
the estimated costs that we expect to incur under our basic limited warranty for our products, which covers defective products and is normally valid for eighteen months from the date of purchase. The warranty provision is largely based on historical
and anticipated rates of warranty claims, and therefore we cannot provide assurance that the provision would be sufficient to cover any surge in future warranty expenses that significantly exceed historical and anticipated rates of warranty claims.
In addition, if we deliver products with errors or defects, or if there is a perception that our products contain errors or defects, our credibility and the market acceptance and sales of our products could be harmed. Widespread product failures may
damage our market reputation and reduce our market share and cause our sales to decline.

We sell our products to a select group of key customers,
including our largest shareholder, and any significant decrease in their order levels will negatively affect our financial condition and results of operations.

A substantial and growing portion of our sales is attributable to a limited group of end-brand customers and their designated system
integrators. Sales attributed to our end-brand customers are for their end-brand products and do not include sales to these customers for their system integration activities for other end-brand products, if any. Our top ten end-brand customers,
including LG Electronics Inc., our largest shareholder, together accounted for approximately 76% of our sales in 2013, 79% in 2014 and 82% in 2015.

We benefit from the strong collaborative relationships we maintain with our end-brand customers by participating in the development of their
products and gaining insights about levels of future demand for our products and other industry trends. Customers look to us for a dependable supply of quality products, even during downturns in the industry, and we benefit from the brand
recognition of our customers end products. The loss of these end-brand customers, as a result of their entering into strategic supplier arrangements with our competitors or otherwise, would thus result not only in reduced sales, but also in
the loss of these benefits. We cannot provide assurance that a select group of key end-brand customers, including our largest shareholder, will continue to place orders with us in the future at the same levels as in prior periods, or at all.



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We engage in related party transactions with LG Electronics and its affiliates:



| |  |  | Sales to LG Electronics  sales to LG Electronics and its subsidiaries, which include sales to LG Electronics both as an end-brand customer and a system integrator, amounted to 25.9%, 27.0% and 23.5% of our sales
in 2013, 2014 and 2015, respectively.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sales to LG International  sales to LG International Corp., our affiliated trading company, and its subsidiaries amounted to 5.4%, 3.5% and 3.5% of our sales in 2013, 2014 and 2015, respectively.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We expect that we will continue to be dependent upon LG Electronics and its affiliates for a significant portion of our
revenue for the foreseeable future. See Item 7.B. Related Party Transactions for a description of these related party transactions with LG Electronics and its affiliates. Our results of operations and financial condition could therefore
be affected by the overall performance of LG Electronics and its affiliates.

Any material deterioration in the financial condition of our key
end-brand customers, their system integrators or our affiliated trading company will have an adverse effect on our results of operations.

Our top ten end-brand customers together accounted for approximately 76% of our sales in 2013, 79% in 2014 and 82% in 2015. Although we
negotiate directly with our end-brand customers concerning the price and quantity of the sales, for some sales transactions we invoice the end-brand customers designated system integrators. In addition, a portion of our sales to end-brand
customers and their system integrators located in certain regions are sold through our affiliated trading company, LG International and its subsidiaries. Our credit policy typically requires payment within 30 to 90 days, and payments on the vast
majority of our sales have typically been collected within 60 days. Although we have not experienced any material problems relating to customer payments to date, as a result of our significant dependence on a concentrated group of end-brand
customers and their designated system integrators, as well as the sales we make to our affiliated trading company and its subsidiaries, we are exposed to credit risks associated with these entities.

Consolidation and other changes at our end-brand customers could cause sales of our products to decline.

Mergers, acquisitions, divestments or consolidations involving our end-brand customers can present risks to our business, as management at the
new entity may change the way they do business, including their transactions with us, or may decide not to use us as one of their suppliers of display panels. In addition, we cannot provide assurance that a combined entity resulting from a merger,
acquisition or consolidation or a newly formed entity resulting from a divestment will continue to purchase display panels from us at the same level, if at all, as each entity purchased in the aggregate when they were separate companies or that a
divested company will purchase panels from us at the same level, if at all, as prior to the divestment.

Our results of operations depend on our
ability to keep pace with changes in technology.

Advances in technology typically lead to rapid declines in sales volumes for
products made with older technologies and may lead to these products becoming less competitive in the marketplace, or even obsolete. As a result, we will likely be required to make significant expenditures to develop or acquire new process and
product technologies, along with corresponding manufacturing capabilities. For example, the expanding mobile display market for smart devices such as smartphones and smartwatches has resulted in increased demand for display panels using new
energy-efficient technologies that provide for greater resolutions, wider viewing angles, high light transmittance and stability of images even when used on a touchscreen device. We have introduced mobile display products based on AH-IPS, which have
helped us quickly secure a leading role in this market.

While thin-film transistor liquid crystal display, or TFT-LCD, technology
undergoes continued innovation, we and our competitors are also developing new display technologies that depart from TFT-LCD technology, such as OLED technology. In particular, we and some of our competitors have already commenced mass production of
OLED products. We began production of OLED panels for televisions on our E3 production lines in January 2013 and commenced mass production of OLED panels for smartphones on our E2 production lines and OLED panels for televisions on our E4 production
lines in December 2013 and December 2014, respectively.



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With the launch of retail sales of 55-inch and 65-inch OLED televisions by certain of our
customers starting in the first quarter of 2013 and third quarter of 2015, respectively, we intend to deploy greater resources into expanding our large-sized OLED panel fabrication capabilities with the aim of maintaining our early competitive edge
in the market. Our ability to develop differentiated products with new display technologies and utilize advanced manufacturing processes to increase production yields while lowering production cost will be critical to our sustained competitiveness.
However, we cannot provide assurance that we will be able to continue to successfully develop new products or manufacturing processes through our research and development efforts or through obtaining technology licenses, or that we will keep pace
with technological changes in the marketplace.

Our revenue depends on continuing demand for televisions, notebook computers, desktop monitors,
tablet computers and mobile and other application products with panels of the type we produce. Our sales may not grow at the rate we expect if consumers do not purchase these products.

Currently, our total sales are derived principally from customers who use our products in televisions, notebook computers, desktop monitors,
tablet computers and mobile and other application products with display devices. In particular, a substantial percentage of our sales is derived from end-brand customers, or their designated system integrators, who use our panels in their
televisions, which accounted for 43.6%, 39.8% and 38.2% of our total revenue in 2013, 2014 and 2015, respectively. A substantial portion of our sales is also derived from end-brand customers, or their designated system integrators, who use our
panels in their notebook computers, which accounted for 10.4%, 10.1% and 8.8% of our total revenue in 2013, 2014 and 2015, respectively, those who use our panels in their desktop monitors, which accounted for 19.4%, 17.6% and 16.0% of our total
revenue in 2013, 2014 and 2015, respectively, those who use our panels in their tablet computers, which accounted for 13.2%, 13.4% and 8.8% of our total revenue in 2013, 2014 and 2015, respectively, and those who use our panels in their mobile and
other applications, which accounted for 13.1%, 18.9% and 27.9% of our total revenue in 2013, 2014 and 2015, respectively. Although the degree to which our total sales are dependent on sales of television panels has decreased in recent years,
television panels remain our largest product category in terms of revenue and we will therefore continue to be dependent on continuing demand from the television industry. In addition, we will continue to be dependent on continuing demand from the
personal computer industry, the tablet computer industry and the mobile device industry for a substantial portion of our sales. Any downturn in any of those industries in which our customers operate would result in reduced demand for our products,
which may in turn result in reduced revenue, lower average selling prices and/or reduced margins.

The emergence of OLED technology as an
alternative to panels with TFT-LCD technology may erode sales of our TFT-LCD panels, which may have a material adverse effect on our financial condition and results of operations.

While our revenue and sales volume is predominantly derived from the sale of display panels with TFT-LCD technology, new display technologies,
such as OLED technology, are at various stages of development and production by us and other display panel makers. OLED technology is widely seen in the display industry as a successor technology to TFT-LCD technology and is gaining wider market
acceptance for use in display panels for televisions, smartphones and tablet computers, and industrial and other applications, including public displays, entertainment systems, automotive displays, portable navigation devices and medical diagnostic
equipment. We have recognized the importance and potential of OLED technology and have in recent years engaged in research and development and invested in production facilities to develop and commercialize OLED panels for small-, medium- and
large-sized products. We began production of OLED panels for televisions on our E3 production lines in January 2013 and commenced mass production of OLED panels for smartphones on our E2 production lines and OLED panels for televisions on our E4
production lines in December 2013 and December 2014, respectively.

Our early efforts in developing and commercializing OLED technology
were recognized by the Society for Information Display, a display panel industry group, when we were awarded the Silver Award for Display Application of the Year for our circular plastic OLED panels for smartphones and Silver Award for the Display
of the Year for our 65-inch Ultra HD curved OLED panels for televisions in June 2015, as well as Best in Show Award for our product line-up of 55-inch, 65-inch and 77-inch Ultra HD curved OLED television panels in June 2014. While we aim to maintain
our early competitive edge in the market for OLED panels, the market for OLED panels is in the early stages of development and we expect competition will intensify.

If OLED panels gain market acceptance as an alternative to TFT-LCD panels and we are unable to develop and commercialize OLED technology in a
commercially viable and timely manner to offset declining sales of our TFT-LCD panels, or if customers prefer panels developed and manufactured by our competitors utilizing competing types of OLED technologies, this would have a material adverse
effect on our financial condition and results of operations. See also We operate in a highly competitive environment and we may not be able to sustain our current market position. above.



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We will have significant capital requirements in connection with our business strategy and if capital
resources are not available we may not be able to implement our strategy and future plans.

In connection with our strategy to
further enhance the diversity and capacity of our display panel production, we estimate that we will continue to incur significant capital expenditures for the enhancement of existing production facilities, including the construction of additional,
and the conversion of existing, production lines, and the construction of new production facilities. In response to and in anticipation of growing demand in the China market, we commenced mass production at our GP1 fabrication facility, our newest
eighth-generation panel fabrication facility located in Guangzhou, China, in September 2014. In line with our goal of establishing and maintaining an early competitive edge in the market for OLED panels, we began production of OLED panels for
televisions on our E3 production lines in January 2013 and commenced mass production of OLED panels for smartphones on our E2 production lines and OLED panels for televisions on our E4 production lines in December 2013 and December 2014,
respectively. In anticipation of growing demand for OLED panels, in July 2015, we announced plans for our new E5 production line on which we expect to commence mass production of OLED panels in the first half of 2017, subject to market conditions
and any changes in our investment timetable. In addition, in November 2015, we announced plans for the construction of our P10 fabrication facility in Paju, Korea. We expect production primarily of OLED panels to commence at the new Paju fabrication
facility in the first half of 2018, subject to market conditions and any changes in our investment timetable. In February 2014, we commenced mass production of low temperature polycrystalline silicon, or LTPS, based TFT backplanes at our LTPS
production lines, AP3, which were converted from a set of existing production lines in our P61 fabrication facility located in Gumi City that previously produced amorphous silicon, or a-Si, based TFT backplanes. In September 2013, we entered into a
memorandum of understanding with Gumi City and North Gyeongsang Province for their administrative assistance in connection with our additional W0.8 trillion investment to convert an additional set of a-Si production lines into LTPS
production lines in our P61 fabrication facility to augment our AP3 production lines. In July 2015, we entered into another memorandum of understanding with Gumi City and North Gyeongsang Province for their administrative assistance in connection
with our W1.05 trillion investment in our new E5 production line, as mentioned above.

In 2015, our total capital
expenditure on a cash out basis amounted to W2.4 trillion. In 2016, we currently expect that our total capital expenditures on a cash out basis will be higher than in 2015, primarily to fund the construction of our P10 fabrication
facility in Paju, Korea and expansion of our OLED panel production capacities to respond to increases in demand for our panels, while maintaining and making improvements to our existing facilities. This amount is subject to periodic assessment, and
we cannot provide any assurance that this amount may not change materially after assessment.

These capital expenditures will be made well
in advance of any additional sales that will be generated from these expenditures. However, in the event of adverse market conditions, or if our actual expenditures far exceed our planned expenditures, our external financing activities combined with
our internal sources of liquidity may not be sufficient to effect our current and future operational plans, and we may decide not to expand the capacity of certain of our facilities or construct new production facilities as scheduled or at all. Our
ability to obtain additional financing will depend upon a number of factors outside our control, including general economic, financial, competitive, regulatory and other considerations.

In recent years, difficulties affecting the global financial sectors, adverse conditions and volatility in the worldwide credit and financial
markets, fluctuations in oil and commodity prices and the general weakness of the global economy have increased the uncertainty of global economic prospects in general and have adversely affected the global and Korean economies. Because we rely on
financing both within and outside of Korea from time to time, difficulties affecting the global and Korean economies, including any increase in market volatility and their lingering effects, could adversely affect our ability to obtain sufficient
financing on commercially reasonable terms. The failure to obtain sufficient financing on commercially reasonable terms to complete our expansion plans could delay or impair our ability to pursue our business strategy, which could materially and
adversely affect our business and results of operations.

Our manufacturing processes are complex and periodic improvements to increase efficiency
can expose us to potential disruptions in operations.

The manufacturing processes for TFT-LCD, OLED and other display products
are highly complex, requiring sophisticated and costly equipment that is periodically modified and upgraded to improve manufacturing yields and product performance, and reduce unit manufacturing costs. These updates expose us to the risk that from
time to time production difficulties will arise that could cause delivery delays, reduced output or both. We cannot provide assurance that we will not experience manufacturing problems in achieving acceptable output, product delivery delays or both
as a result of, among other factors, construction delays, difficulties in upgrading or modifying existing production lines or building new plants, difficulties in modifying existing or adopting new manufacturing line technologies or processes or
delays in equipment deliveries, any of which could constrain our capacity and adversely affect our results of operations.



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We may be unable to successfully execute our growth strategy or manage and sustain our growth on a timely
basis, if at all, and, as a result, our business may be harmed.

We have experienced, and expect to continue to experience, rapid
growth in the scope and complexity of our operations due to the building of new fabrication facilities and the expansion and conversion of existing fabrication facilities to meet the evolving and anticipated demands of our customers. For example, we
increased our capacity at our Korean facilities by commencing mass production at our E2 production lines in December 2013. In addition, we converted existing production lines and established our AP3 production lines and commenced mass production of
LTPS based displays for mobile devices in February 2014 and invested in additional production lines and established our E4 production lines and commenced mass production of OLED panels for televisions in December 2014. See Item 4.D. Property,
Plants and EquipmentCurrent Facilities. With respect to our overseas facilities in recent years, we commenced mass production at our module production plant at our GP1 fabrication facility in Guangzhou, China in September 2014. See also
We will have significant capital requirements in connection with our business strategy and if capital resources are not available we may not be able to implement our strategy and future plans. above.

Sustained growth in the scope and complexity of our operations may strain our managerial, financial, manufacturing and other resources. We may
experience manufacturing difficulties in starting new production lines, upgrading existing facilities or building new plants as a result of cost overruns, construction delays or shortages of, or quality problems with, materials, labor or equipment,
any of which could result in a loss of future revenue. We may also incur opportunity costs if we misjudge the anticipated demand for certain display panel products and allocate our limited resources in increasing production capacity for such display
panel products at the cost of maintaining existing or increasing production capacity of other display panel products that turn out to be more popular. In addition, failure to keep up with our competitors in future investments in next-generation
panel fabrication facilities or in the upgrading of manufacturing capacity of existing facilities would impair our ability to effectively compete within the display panel industry. Failure to obtain intended economic benefits from expansion projects
could adversely affect our business, financial condition and results of operations.

If we cannot maintain high capacity utilization rates, our
profitability will be adversely affected.

The production of display panels entails high fixed costs resulting from considerable
expenditures for the construction of complex fabrication and assembly facilities and the purchase of costly equipment. We aim to maintain high capacity utilization rates so that we can allocate these fixed costs over a greater number of panels
produced and realize a higher gross margin. However, due to any number of reasons, including fluctuating demand for our products or overcapacity in the display industry, we may need to reduce production, resulting in lower-than-optimal capacity
utilization rates. As such, we cannot provide assurance that we will be able to sustain our capacity utilization rates in the future nor can we provide assurance that we will not reduce our utilization rates in the future as market and industry
conditions change.

Limited availability of raw materials, components and manufacturing equipment could materially and adversely affect our
business, results of operations or financial condition.

Our production operations depend on obtaining adequate supplies of
quality raw materials and components on a timely basis. As a result, it is important for us to control our raw material and component costs and reduce the effects of fluctuations in price and availability. In general, we source most of our raw
materials as well as key components, such as glass substrates, driver integrated circuits, polarizers and color filters used in both our TFT-LCD and OLED products, backlight units and liquid crystal materials used in our TFT-LCD products and hole
transport materials and emission materials used in our OLED products, from two or more suppliers for each key component. However, we may establish a working relationship with a single supplier if we believe it is advantageous to do so due to
performance, quality, support, delivery, capacity, price or other considerations. We may experience shortages in the supply of these key components, as well as other components or raw materials, as a result of, among other things, anticipated
capacity expansion in the display industry or our dependence on a limited number of suppliers. Our results of operations would be adversely affected if we were unable to obtain adequate supplies of high-quality raw materials or components in a
timely manner or make alternative arrangements for such supplies in a timely manner.

Furthermore, we may be limited in our ability to
pass on increases in the cost of raw materials and components to our customers. We do not typically enter into binding long-term contracts with our customers, and even in those cases where we do enter into long-term agreements with certain of our
major end-brand customers, the price terms are contained in the purchase orders which are generally placed by them one month in advance of delivery. Except under certain special circumstances, the price terms in the purchase orders are not subject
to change. Prices for our products are generally determined through negotiations with our customers, based generally on the complexity of the product specifications and the labor and technology involved in the design or production processes.
However, if we become subject to any significant increase in the cost of raw materials or components that were not anticipated when negotiating the price terms after the purchase orders have been placed, we may be unable to pass on such cost
increases to our customers.



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We have purchased, and expect to purchase, a substantial portion of our equipment from a limited
number of qualified foreign and local suppliers. From time to time, increased demand for new equipment may cause lead times to extend beyond those normally required by the equipment vendors. The unavailability of equipment, delays in the delivery of
equipment, or the delivery of equipment that does not meet our specifications, could delay implementation of our expansion plans and impair our ability to meet customer orders. This could result in a loss of revenue and cause financial stress on our
operations.

Earthquakes, tsunamis, floods and other natural calamities could materially adversely affect our business, results of operations or
financial condition.

If earthquakes, tsunamis, floods or any other natural calamities were to occur in the future in any area
where any of our assets, suppliers or customers are located, our business, results of operations or financial condition could be adversely affected. A number of suppliers of our raw materials, components and manufacturing equipment, as well as
customers of our products, are located in countries which have suffered natural calamities such as earthquakes and tsunamis in the recent past, such as Japan and Taiwan. Any occurrence of such natural calamities in Japan or any other countries where
our suppliers are located may lead to shortages or delays in the supply of raw materials, components or manufacturing equipment. In addition, natural calamities in areas where our customers are located, including Japan, may cause disruptions in
their businesses, which in turn could adversely impact their demand for our products.

Purchase orders from our customers, which are placed
generally one month in advance of delivery, vary in volume from period to period, and we operate with a modest inventory, which may make it difficult for us to efficiently allocate capacity on a timely basis in response to changes in demand.

Our major customers and their designated system integrators provide us with three- to six-month rolling forecasts of their
product requirements. However, firm orders are not placed until one month before delivery when negotiations on purchase prices are also finalized. Firm orders may be less than anticipated based on these three- to six-month forecasts. Due to the
cyclicality of the display industry, purchase order levels from our customers have varied from period to period. Although we typically operate with a two- to four-week inventory, it may be difficult for us to adjust production costs or to allocate
production capacity in a timely manner to compensate for any such volatility in order volumes. Our inability to respond quickly to changes in overall demand for display products as well as changes in product mix and specifications may result in lost
revenue, which would adversely affect our results of operations.

We may experience losses on inventories.

Frequent new product introductions in the computer and consumer electronics industries can result in a decline in the average selling prices
of our display panels and the obsolescence of our existing display panel inventory. This can result in a decrease in the stated value of our panel inventory, which we value at the lower of cost or market value.

We manage our inventory based on our customers and our own forecasts and typically operate with a two- to four-week inventory. Although
adjustments are regularly made based on market conditions, we typically deliver our goods to the customers one month after a firm order has been placed. While we maintain open channels of communication with our major customers to avoid unexpected
decreases in firm orders or subsequent changes to placed orders, and try to minimize our inventory levels, such actions by our customers may have an adverse effect on our inventory management.

Sanctions or judgments 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, LG Display received notices of investigation by the U.S. Department of Justice, the
European Commission, the Korea Fair Trade Commission and the Japan Fair Trade Commission with respect to possible anti-competitive activities in the TFT-LCD industry. Subsequently, the Competition Bureau of Canada, the Secretariat of Economic Law of
Brazil, the Taiwan Fair Trade Commission and the Federal Competition Commission of Mexico announced investigations regarding the same.



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In November 2008, LG Display executed an agreement with the U.S. Department of Justice whereby LG
Display and LG Display America pleaded guilty to a Sherman Antitrust Act violation and agreed to pay a single total fine of US$400 million. In December 2008, the U.S. District Court for the Northern District of California accepted the terms of the
plea agreement and entered a judgment against LG Display and LG Display America and ordered the payment of US$400 million, which has since been paid. The agreement resolved all federal criminal charges against LG Display and LG Display America in
the United States in connection with this matter, provided that LG Display continues to cooperate with the U.S. Department of Justice in connection with the ongoing proceedings.

In December 2010, the European Commission issued a decision finding that LG Display engaged in anti-competitive activities in the TFT-LCD
industry in violation of European Union competition laws, and imposed a fine of 215 million. In February 2011, LG Display filed with the European Union General Court an application for partial annulment and reduction of the fine imposed by the
European Commission. In November 2011, LG Display received a request for information from the European Commission relating to certain alleged anti-competitive activities in the TFT-LCD industry and has responded to the request. In February 2014, the
European Union General Court reduced the fine to 210 million and LG Display paid the fine in full in April 2014. In May 2014, LG Display filed an appeal with the European Court of Justice requesting annulment of the European Union General
Courts judgment and further reduction of the fine imposed by the European Commissions decision, and in April 2015 the European Court of Justice upheld the decision of the European Union General Court.

In November 2009, the Taiwan Fair Trade Commission terminated its investigation without any finding of violations or levying of fines. Also,
in February 2012, the Competition Bureau of Canada terminated its investigation without any finding of violations or levying of fines. In August 2014, the Japan Fair Trade Commission terminated its investigation without any finding of violations or
levying of fines. In August 2014, LG Display executed a settlement agreement with the Brazilian Administrative Council for Economic Defense (CADE), for R$33.9 million, which resolved all administrative charges against LG Display provided that it
continues to cooperate with the ongoing investigation.

In December 2011, the Korea Fair Trade Commission imposed a fine of
W31.4 billion after finding that LG Display and certain of its subsidiaries engaged in anti-competitive activities in violation of Korean fair trade laws. In December 2011, LG Display filed an appeal of the decision with the Seoul
High Court. In February 2014, the Seoul High Court annulled the decision of the Korea Fair Trade Commission. In March 2014, the Korea Fair Trade Commission filed an appeal of the Seoul High Court decision with the Supreme Court of Korea. In June
2014, the Supreme Court of Korea upheld the lower courts decision.

After the commencement of the U.S. Department of Justice
investigation, a number of class action complaints were filed against LG Display, LG Display America and other TFT-LCD panel manufacturers in the United States and Canada alleging violation of respective antitrust laws and related laws. In a series
of decisions in 2007 and 2008, the class action lawsuits in the United States were transferred to the Northern District of California for pretrial proceedings, which we refer to as the MDL Proceedings. In March 2010, the federal district court
granted the class certification motion filed by the indirect purchaser plaintiffs, and granted in part and denied in part the class certification motion filed by the direct purchaser plaintiffs. In January 2011, 78 entities (including groups of
affiliated entities) submitted requests for exclusion from the direct purchaser class. In April 2012, ten entities (including groups of affiliated companies) submitted requests for exclusion from the indirect purchaser class. In addition, since
2010, the attorneys general of Arkansas, California, Florida, Illinois, Michigan, Mississippi, Missouri, New York, Oklahoma, Oregon, South Carolina, Washington, West Virginia and Wisconsin filed complaints against LG Display, alleging similar
antitrust violations as alleged in the MDL Proceedings.

In June 2011, LG Display reached a settlement with the direct purchaser class,
which the federal district court approved in December 2011. In July 2012, LG Display reached a settlement with the indirect purchaser class plaintiffs and with the state attorneys general of Arkansas, California, Florida, Michigan, Missouri, New
York, West Virginia and Wisconsin, which was approved by the federal district court in April 2013 and, in the case of the state attorneys general actions, by their respective state governments. LG Display has since reached settlement with each of
the attorneys general that had filed action.

In addition, in relation to the MDL Proceedings, in 2009, ATS Claim, LLC (assignee of Ricoh
Electronics, Inc.), AT&T Corp. and its affiliates, Motorola Mobility, Inc. (Motorola), and Electrograph Technologies Corp. and its subsidiary filed separate claims in the United States, and all of the actions were subsequently
consolidated into the MDL Proceedings. In 2010, TracFone Wireless Inc., Best Buy Co., Inc. and its affiliates, Target Corp., Sears, Roebuck and Co., Kmart Corp., Old Comp Inc., Good Guys, Inc., RadioShack Corp., Newegg Inc., Costco Wholesale Corp.,
Sony Electronics, Inc. and its affiliate, SB Liquidation Trust and the trustee of the Circuit City Stores, Inc. Liquidation Trust filed separate claims in the United States. In 2011, the AASI Creditor Liquidating Trust on behalf of All American
Semiconductor Inc., CompuCom Systems, Inc., Interbond Corporation of America, Jaco Electronics, Inc., Office Depot, Inc., P.C. Richard & Son Long Island Corporation, MARTA Cooperative of America, Inc., ABC Appliance, Inc., Schultze Agency
Services, LLC on behalf of Tweeter Opco, LLC and its affiliate, T-Mobile U.S.A., Inc., Tech Data Corporation and its affiliate filed similar claims in the United States. In 2012, ViewSonic Corp., NECO Alliance
LLC, Rockwell Automation LLC, Proview Technology Inc. and its affiliates filed similar claims. In November 2013, Acer America Corporation and its affiliates filed similar claims in the United States. The cases were transferred to the MDL Proceedings
for pretrial proceedings. In December 2012, Sony Europe Limited and its affiliate filed similar claims in the High Court of Justice in the United Kingdom. As of April 28, 2016, LG Display has reached settlement with each of the plaintiffs
mentioned above, except as to Motorola and Costco Wholesale Corp.



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In July 2013, the Motorola case was remanded to the District Court for the Northern District of
Illinois (the NDIL Court). In September 2013, LG Display and defendants in the Motorola case submitted a motion for reconsideration of a summary judgment ruling on the Foreign Trade Antitrust Improvements Act (FTAIA) to the
NDIL Court. In January 2014, the NDIL Court granted defendants motion for reconsideration based on the FTAIA and Motorola appealed to the United States Court of Appeals for the 7th Circuit (the 7th Circuit Appeals Court). In
November 2014, oral hearing took place before the 7th Circuit Appeals Court for the Motorola case, and the 7th Circuit Appeals Court affirmed the NDIL Courts decision. In March 2015, Motorola filed a Petition for Writ of Certiorari with the
Supreme Court of the United States. In June 2015, the Supreme Court of the United States denied Motorolas Petition for Writ of Certiorari. In July 2015, the NDIL Court dismissed LG Display from the Motorola case.

In July 2013, the Costco case was remanded to the District Court for the Western District of Washington (the WDWA Court). In
September 2014, jury trial for the Costco case commenced in the WDWA Court. In October 2014, the jury rendered a verdict of approximately US$36.7 million for Costco Wholesale Corp. against LG Display and AU Optronics. In June 2015, the court entered
judgment in favor of Costco Wholesale Corp. for US$61.9 million (including treble damages and offset), and LG Display filed combined motions for (i) judgment as a matter of law; (ii) in the alternative, a new trial; and
(iii) amendment of findings in bench trial. In March 2016, the WDWA Court denied LG Displays combined motions and we filed notice of appeal to the United States Court of Appeals for the 9th Circuit.

In December 2014, iiyama (UK) Limited and its affiliates (iiyama) filed claims in the High Court of Justice in the United Kingdom
against LG Display and other unrelated entities alleging damages arising from the European Commissions finding on December 8, 2010 that the Company engaged in anticompetitive activities in the LCD industry in violation of European
competition laws. In October 2015, we issued an application contesting the jurisdiction of the English courts to hear the claims of iiyama. A hearing of such application is scheduled to take place in May 2016.

In 2007, class action complaints were filed against LG Display and other TFT-LCD manufacturers in Canadian provinces of British Columbia,
Ontario and Quebec. The Ontario Superior Court of Justice certified the class in May 2011. In April 2014, we appealed the class certification decision to the Court of Appeal for Ontario, which upheld the lower courts decision in an order dated
December 2015. LG Display is currently defending against their claims. The actions in Quebec and British Columbia have been held in abeyance.

In December 2013, a class action complaint was filed in the Central District in Israel. In June 2015, we filed a motion to cancel leave to
serve process, which was denied in March 2016. In April 2016, we appealed this decision.

In each of the foregoing matters that are
ongoing, we are continually evaluating the merits of the respective claims and vigorously defending ourselves. Irrespective of the validity or the successful assertion of the claims described above, we may incur significant costs with respect to
litigating or settling any or all of the asserted claims. See Item 8.A. Consolidated Statements and Other Financial InformationLegal ProceedingsAntitrust and Others for a description of these matters. While we continue to
vigorously defend the various proceedings described above, it is possible that one or more proceedings may result in cash outflow to settle or resolve these claims. We have recognized provisions with respect to those legal claims in which our
management has concluded that there is a present or constructive obligation arising from a past event, it is more likely than not that an outflow of resources will result to settle the obligation, and a reliable estimate can be made of the amount of
the obligation. However, the actual outcomes may be materially different from those estimated as of December 31, 2015 and may have a material adverse effect on our operating results or financial condition.

We need to observe certain financial and other covenants under the terms of our debt obligations, the failure to comply with which would put us in
default under such debt obligations.

We are subject to financial and other covenants, including maintenance of credit ratings and
debt-to-equity ratios, under certain of our debt obligations. The documentation for such debt also contains negative pledge provisions limiting our ability to provide liens on our assets as well as cross-default and cross-acceleration clauses, which
give related creditors the right to accelerate the amounts due under such debt if an event of default or acceleration has occurred with respect to our existing or future indebtedness, or if any material part of our indebtedness or indebtedness of
our subsidiaries is capable of being declared payable before the stated maturity date. In addition, such covenants restrict our ability to raise future debt financing.



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If we breach the financial or other covenants contained in the documentation governing our debt
obligations, our financial condition will be adversely affected to the extent we are not able to cure such breaches, obtain a waiver from the relevant lenders or debtholders or repay the relevant debt.

Our results of operations are subject to exchange rate fluctuations.

There has been considerable volatility in foreign exchange rates in recent years, including rates between the Korean Won and the U.S. dollar
and between the Korean Won and the Japanese Yen. To the extent that we incur costs in one currency and make sales in another, our profit margins may be affected by changes in the exchange rates between the two currencies.

Our sales of display panels are denominated mainly in U.S. dollars, whereas our purchases of raw materials are denominated mainly in U.S.
dollars and Japanese Yen. Our expenditures on capital equipment are denominated principally in Korean Won. In 2015, 93.6% of our sales were denominated in U.S. dollars. During the same period, 86.7% of our purchases of raw materials and components
were denominated in U.S. dollars and 10.7% in Japanese Yen. In addition, 59.4% of our equipment purchases and construction costs were denominated in Korean Won, 16.2% in Chinese Renminbi, 15.6% in U.S. dollars and 8.7% in Japanese Yen.

Accordingly, fluctuations in exchange rates, in particular between the U.S. dollar and the Korean Won as well as between the Japanese Yen and
the Korean Won, affect our pre-tax income, and in recent years, the value of the Won relative to the U.S. dollar and Japanese Yen has fluctuated widely. See Item 3.A. Selected Financial DataExchange Rates. Although a depreciation
of the Korean Won against the U.S. dollar increases the Korean Won value of our export sales and enhances the price-competitiveness of our products in foreign markets in U.S. dollar terms, it also increases the cost of imported raw materials and
components in Korean Won terms and our cost in Korean Won of servicing our U.S. dollar denominated debt. A depreciation of the Korean Won against the Japanese Yen increases the Korean Won cost of our Japanese Yen denominated purchases of raw
materials and components and, to the extent we have any debt denominated in Japanese Yen, our cost in Korean Won of servicing such debt, but has relatively little impact on our sales as most of our sales are denominated in U.S. dollars. In addition,
continued exchange rate volatility may also result in foreign exchange losses for us. Although a depreciation of the Korean Won against the U.S. dollar, in general, has a net positive impact on our results of operations that more than offsets the
net negative impact caused by a depreciation of the Korean Won against the Japanese Yen, we cannot provide assurance that the exchange rate of the Korean Won against foreign currencies will not be subject to significant fluctuations, or that the
impact of such fluctuations will not adversely affect the results of our operations.

Our business relies on our patent rights which may be narrowed
in scope or found to be invalid or otherwise unenforceable.

Our success will depend, to a significant extent, on our ability to
obtain and enforce our patent rights both in Korea and worldwide. The coverage claimed in a patent application can be significantly reduced before a patent is issued, either in Korea or abroad. Consequently, we cannot provide assurance that any of
our pending or future patent applications will result in the issuance of patents. Patents issued to us may be subjected to further proceedings limiting their scope and may not provide significant proprietary protection or competitive advantage. Our
patents also may be challenged, circumvented, invalidated or deemed unenforceable. In addition, because patent applications in certain countries generally are not published until more than 18 months after they are first filed, because we currently
monitor patent applications filed only by other parties in Korea, Japan and the United States, and because publication of discoveries in scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were, or any
of our licensors was, the first creator of inventions covered by pending patent applications, that we or any of our licensors will be entitled to any rights in purported inventions claimed in pending or future patent applications, or that we were,
or any of our licensors was, the first to file patent applications on such inventions.

Furthermore, pending patent applications or
patents already issued to us or our licensors may become subject to dispute, and any dispute could be resolved against us. For example, we may become involved in re-examination, reissue or interference proceedings and the result of these proceedings
could be the invalidation or substantial narrowing of our patent claims. We also could be subject to court proceedings that could find our patents invalid or unenforceable or could substantially narrow the scope of our patent claims. In addition,
depending on the jurisdiction, statutory differences in patentable subject matter may limit the protection we can obtain on some of our inventions.

Failure to protect our intellectual property rights could impair our competitiveness and harm our business and future prospects.

We believe that developing new products and technologies that can be differentiated from those of our competitors is critical to the success
of our business. We take active measures to obtain international protection of our intellectual property by obtaining patents and undertaking monitoring activities in our major markets. However, we cannot assure you that the measures we are taking
will effectively deter competitors from improper use of our proprietary technologies. Our competitors may misappropriate our intellectual property, disputes as to ownership of intellectual property may arise and our intellectual property may
otherwise become known or independently developed by our competitors.



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Any failure to protect our intellectual property could impair our competitiveness and harm our
business and future prospects.

Our rapid introduction of new technologies and products may increase the likelihood that third parties will assert
claims that our products infringe upon their proprietary rights.

The rapid technological changes that characterize our industry
require that we quickly implement new processes and components with respect to our products. Often with respect to recently developed processes and components, a degree of uncertainty exists as to who may rightfully claim ownership rights in such
processes and components. Uncertainty of this type increases the risk that claims alleging that such components or processes infringe upon third party rights may be brought against us. Although we take and will continue to take steps to ensure that
our new products do not infringe upon third party rights, if our products or manufacturing processes are found to infringe upon third party rights, we may be subject to significant liabilities and be required to change our manufacturing processes or
be prohibited from manufacturing certain products, which could have a material adverse effect on our operations and financial condition.

We may be required to defend against charges of infringement of patent or other proprietary rights of third parties. Although patent and other
intellectual property disputes in our industry have often been settled through licensing or similar arrangements, such defense could require us to incur substantial expense and to divert significant resources of our technical and management
personnel, and could result in our loss of rights to develop or make certain products or require us to pay monetary damages or royalties to license proprietary rights from third parties. Furthermore, we cannot be certain that the necessary licenses
would be available to us on acceptable terms, if at all. Accordingly, an adverse determination in a judicial or administrative proceeding or failure to obtain necessary licenses could prevent us from manufacturing and selling certain of our
products. Any such litigation, whether successful or unsuccessful, could result in substantial costs to us and diversions of our resources, either of which could adversely affect our business.

In December 2013, Delaware Display Group LLC and Innovative Display Technologies LLC filed a patent infringement action against LG Display and
LG Display America in the U.S. District Court for the District of Delaware. In December 2015, Delaware Display Group LLC and Innovative Display Technologies LLC filed a new patent infringement action against LG Display and LG Display America in the
U.S. District Court for the District of Delaware with respect to three patents that were dismissed without prejudice from the aforementioned patent infringement action. LG Display is currently defending against their claims.

In March 2014, Surpass Tech Innovation LLC filed a patent infringement action against LG Display and LG Display America in the U.S. District
Court for the District of Delaware. As of November 21, 2014, the case is stayed pending Inter Partes Review.

We rely on technology provided by
third parties and our business will suffer if we are unable to renew our licensing arrangements with them.

From time to time, we
have obtained licenses for patent, copyright, trademark and other intellectual property rights to process and device technologies used in the production of our display panels. We have entered into key licensing arrangements with third parties, for
which we have made, and continue to make, periodic license fee payments. In addition, we also have cross-license agreements with certain other third parties. These agreements terminate upon the expiration of the respective terms of the patents. See
Item 5.C. Research and Development, Patents and Licenses, etc.Intellectual PropertyLicense Agreements.

If we are
unable to renew our technology licensing arrangements on acceptable terms, we may lose the legal protection to use certain of the processes we employ to manufacture our products and be prohibited from using those processes, which may prevent us from
manufacturing and selling certain of our products, including our key products. In addition, we could be at a disadvantage if our competitors obtain licenses for protected technologies on more favorable terms than we do.

In the future, we may also need to obtain additional patent licenses for new or existing technologies. We cannot provide assurance that these
license agreements can be obtained or renewed on acceptable terms or at all, and if not, our business and operating results could be adversely affected.



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We rely upon trade secrets and other unpatented proprietary know-how to maintain our competitive position
in the display panel industry and any loss of our rights to, or unauthorized disclosure of, our trade secrets or other unpatented proprietary know-how could negatively affect our business.

We also rely upon trade secrets, unpatented proprietary know-how and information, as well as continuing technological innovation in our
business. The information we rely upon includes price forecasts, core technology and key customer information. We enter into confidentiality agreements with each of our employees and consultants upon the commencement of an employment or consulting
relationship. These agreements generally provide that all inventions, ideas, discoveries, improvements and copyrightable material made or conceived by the individual arising out of the employment or consulting relationship and all confidential
information developed or made known to the individual during the term of the relationship is our exclusive property. We cannot provide assurance that these types of agreements will be fully enforceable, or that they will not be breached. We also
cannot be certain that we will have adequate remedies for any such breach. The disclosure of our trade secrets or other know-how as a result of such a breach could adversely affect our business. Also, our competitors may come to know about or
determine our trade secrets and other proprietary information through a variety of methods. Disputes may arise concerning the ownership of intellectual property or the applicability or enforceability of our confidentiality agreements, and there can
be no assurance that any such disputes would be resolved in our favor. Furthermore, others may acquire or independently develop similar technology, or if patents are not issued with respect to technologies arising from our research, we may not be
able to maintain information pertinent to such research as proprietary technology or trade secrets and that could have an adverse effect on our competitive position within the display panel industry.

We rely on key researchers and engineers, senior management and production facility operators, and the loss of the services of any such personnel or the
inability to attract and retain them may negatively affect our business.

Our success depends to a significant extent upon the
continued service of our research and development and engineering personnel, and on our ability to continue to attract, retain and motivate qualified researchers and engineers, especially during periods of rapid growth. In particular, our focus on
leading the market in introducing new products and advanced manufacturing processes has meant that we must aggressively recruit research and development personnel and engineers with expertise in cutting-edge technologies.

We also depend on the services of experienced key senior management, and if we lose their services, it would be difficult to find and
integrate replacement personnel in a timely manner, if at all. We also employ highly skilled line operators at our various production facilities.

The loss of the services of any of our key research and development and engineering personnel, senior management or skilled operators without
adequate replacement, or the inability to attract new qualified personnel, would have a material adverse effect on our operations.

The interests of
LG Electronics, our largest shareholder, and any directors or officers nominated by it, may differ from or conflict with those of us or our other shareholders.

When exercising its rights as our largest shareholder, LG Electronics may take into account not only our interests but also its interests and
the interests of its affiliates. LG Electronics interests may at times conflict with ours in a number of areas relating to our business, including potential acquisitions of businesses or properties, incurrence of indebtedness, financial
commitments, sales and marketing functions, indemnity arrangements, service arrangements and the exercise by LG Electronics of significant influence over our management and affairs. See Item 6.A. Directors and Senior Management for a
description of the composition of our current board of directors and senior management.

Labor unrest may disrupt our operations.

As of December 31, 2015, approximately 69.2% of our total employees, including those of our subsidiaries, were union members, and
production employees accounted for substantially all of these members. We have a collective bargaining arrangement with our labor union, which is negotiated once a year. Any deterioration in our relationship with our employees or labor unrest
resulting in a work stoppage or strike may have a material adverse effect on our financial condition and results of operations.



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We may be exposed to potential claims for unpaid wages arising from the Supreme Court of Koreas
interpretation of ordinary wages.

Under the Labor Standards Act, an employee is legally entitled to ordinary wages.
Under the guidelines previously issued by the Ministry of Employment and Labor (formerly the Ministry of Labor), ordinary wages include base salary and certain fixed monthly allowances for overtime work performed during night shifts and holidays.
Prior to the Supreme Court of Koreas decision described below, we and other companies in Korea had interpreted these guidelines as excluding from the scope of ordinary wages, fixed bonuses that are paid other than on a monthly basis, namely on
a bi-monthly, quarterly or biannual basis.

On December 18, 2013, the Supreme Court of Korea ruled that regular bonuses (including
those that are paid other than on a monthly basis) shall be deemed ordinary wages if these bonuses are paid regularly and uniformly on a fixed basis notwithstanding differential amounts based on seniority. Under
this decision, any collective bargaining agreement or labor-management agreement which attempts to exclude such regular bonuses from ordinary wage will be deemed void for violation of the mandatory provisions of Korean law. However, the Supreme
Court of Korea further ruled that an employees claim for underpayments under the expanded scope of ordinary wages for the past three years within the statute of limitations may be denied based on principles of good faith if (i) there is
an agreement between the employer and employees that the regular bonus shall be excluded from ordinary wage in determining the total amount of wage, (ii) such claim results in further wage payments that far exceed the level of total amount of
wage agreed between the employer and employees and (iii) such claim would cause an unexpected financial burden to the employer leading to material managerial difficulty or a threat to the employers existence. The principles of good faith,
however, do not apply to an agreement on wages entered into between the employer and employees after December 18, 2013, the date of the above decision of the Supreme Court of Korea.

Due in part to the decision, we incurred additional labor costs in the form of a one time increase in the base salaries of some of our
employees in 2014. See Item 5.A. Operating ResultsComparison of 2014 to 2013. While we have not received any claims from our current or former employees for additional payments under the expanded scope of ordinary wages and
anticipate that it is unlikely that any such claims would be brought or would result in additional payments, if any such additional payments are incurred, they may have an adverse effect on our financial condition and results of operation.

We are subject to strict safety and environmental regulations and we may be subject to fines or restrictions that could cause our operations to be
interrupted.

Our manufacturing processes involve hazardous materials and generate chemical waste, waste water and other
industrial waste at various stages in the manufacturing process, and we are subject to a variety of laws and regulations relating to the use, storage, discharge and disposal of such chemical by-products and waste substances. We have enacted safety
measures, engaged in employee education on handling such materials and installed various types of safety and anti-pollution equipment, consistent with industry standards, for the treatment of chemical waste and equipment for the recycling of treated
waste water at our various facilities. See Item 4.B. Business OverviewEnvironmental Matters for a description of the anti-pollution equipment that we have installed in our various facilities. However, we cannot provide assurance
that our protocols will always be followed and safety or environmental related claims will not be brought against us or that the local or national governments will not take steps toward adopting more stringent safety or environmental standards. For
example, in February 2015, we were issued a corrective order and assessed a fine of W276 million for violating the Occupational Health and Safety Act in connection with an accidental exposure of nitrogen gas at one of our production
facilities in Paju, Korea in January 2015. Further in connection with such incident, in January 2016, the Goyang Branch Court of the Uijeongbu District Court imposed a fine of W10 million on us and a suspended sentence on five of
our employees involved in the incident, citing violations of the Occupational Health and Safety Act. Appellate proceedings are in progress at the Uijeongbu District Court.

Any failure on our part to comply with any present or future safety and environmental regulations could result in the assessment of damages or
imposition of fines against us, suspension of production or a cessation of operations. In addition, safety and environmental regulations could require us to acquire costly equipment or to incur other significant compliance expenses that may
materially and negatively affect our financial condition and results of operations.

Risks Relating to our American Depositary Shares, or ADSs, or our
Common Stock

Future sales of shares of our common stock in the public market may depress our stock price and make it difficult for you to
recover the full value of your investment in our common stock or our ADSs.

We cannot predict the effect, if any, that market
sales of shares of our common stock or the availability of our common stock for sale will have on the market price of our common stock prevailing from time to time. Our largest shareholder, LG Electronics, currently owns 37.9% of our voting stock.
There is no assurance that LG Electronics will not sell all or a part of its ownership interest in us.



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Any future sales by LG Electronics or any future issuance by us of a significant number of shares
of our common stock in the public market, or the perception that any of these events may occur, could cause the market price of our common stock to decrease or to be lower than it might be in the absence of these events or perceptions.

Our public shareholders may have more difficulty protecting their interests than they would as shareholders of a U.S. corporation.

Our corporate affairs are governed by our articles of incorporation and by the laws governing Korean corporations. The rights and
responsibilities of our shareholders and members of our board of directors under Korean law may be different from those that apply to shareholders and directors of a U.S. corporation. For example, minority shareholder rights afforded under Korean
law often require the minority shareholder to meet minimum shareholding requirements in order to exercise certain rights. In the case of public companies, a shareholder must own, individually or collectively with other shareholders, at least 0.01%
of our common stock for at least six consecutive months in order to file a derivative suit on our behalf. While the facts and circumstances of each case will differ, the duty of care required of a director under Korean law may not be the same as the
fiduciary duty of a director of a U.S. corporation. Therefore, holders of our common stock or our ADSs may have more difficulty protecting their interests against actions of our management, members of our board of directors or controlling
shareholders than they would as shareholders of a U.S. corporation.

You may be limited in your ability to deposit or withdraw the common stock
underlying the ADSs, which may adversely affect the value of your investment.

Under the terms of our deposit agreement, holders
of common stock may deposit such common stock with the depositarys custodian in Korea and obtain ADSs, and holders of ADSs may surrender ADSs to the depositary and receive common stock. However, to the extent that a deposit of common stock
exceeds the difference between:



| |  |  | the aggregate number of shares of common stock we have consented to allow to be deposited for the issuance of ADSs (including deposits in connection with offerings of ADSs and stock dividends or other distributions
relating to ADSs); and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the number of shares of common stock on deposit with the custodian for the benefit of the depositary at the time of such proposed deposit,
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

such common stock will not be accepted for deposit unless (1) our consent, subject to governmental authorization, with respect to such deposit has been
obtained or (2) such consent is no longer required under Korean laws and regulations.

Under the terms of the deposit agreement, no
consent is required if the shares of common stock are obtained through a dividend, free distribution, rights offering or reclassification of such stock. The current limit on the number of shares that may be deposited into our ADR facility is
68,095,700 as of April 28, 2016.The number of shares issued or sold in any subsequent offering by us or our major shareholders, subject to government authorization, raises the limit on the number of shares that may be deposited into the
ADR facility, except to the extent such deposit is prohibited by applicable laws or violates our articles of incorporation, or we decide with the ADR depositary to limit the number of shares of common stock so offered that would be eligible for
deposit under the deposit agreement in order to maintain liquidity for the shares in Korea as may be requested by the relevant Korean authorities. We might not consent to the deposit of any additional shares of common stock. As a result, if a holder
surrenders ADSs and withdraws common stock, it may not be able to deposit the common stock again to obtain ADSs.

Holders of ADSs will not have
preemptive rights in some circumstances.

The Korean Commercial Code of 1962, as amended, and our articles of incorporation
require us, with some exceptions, to offer shareholders the right to subscribe for new shares of our common stock in proportion to their existing shareholding ratio whenever new shares are issued, except under certain circumstances as provided in
our articles of incorporation. Accordingly, if we issue new shares to non-shareholders based on such exception, a holder of our ADSs may experience dilution in its holdings. Furthermore, if we offer any right to subscribe for additional shares of
our common stock or any rights of any other nature to existing shareholders subject to their preemptive rights, the depositary, after consultation with us, may make the rights available to holders of our ADSs or use reasonable efforts to dispose of
the rights on behalf of such holders and make the net proceeds available to such holders. The depositary, however, is not required to make available to holders any rights to purchase any additional shares of our common stock unless it deems that
doing so is lawful and feasible and



| |  |  | a registration statement filed by us under the U.S. Securities Act of 1933, as amended, is in effect with respect to those shares; or
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the offering and sale of those shares is exempt from or is not subject to the registration requirements of the Securities Act.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



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We are under no obligation to file any registration statement with the SEC or to endeavor to
cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, a holder of our ADSs may be unable to participate in our rights offerings
and may experience dilution in its holdings. If a registration statement is required for a holder of our ADSs to exercise preemptive rights but is not filed by us or is not declared effective, the holder will not be able to exercise its preemptive
rights for additional ADSs and it will suffer dilution of its equity interest in us. If the depositary is unable to sell rights that are not exercised or not distributed or if the sale is not lawful or feasible, it will allow the rights to lapse, in
which case the holder will receive no value for these rights.

Holders of ADSs will not be able to exercise dissent and appraisal rights unless they
have withdrawn the underlying shares of our common stock and become our direct shareholders.

In some limited circumstances,
including the transfer of the whole or any significant part of our business and our merger or consolidation with another company, dissenting shareholders have the right to require us to purchase their shares under Korean law. However, a holder of
our ADSs will not be able to exercise such dissent and appraisal rights if the depositary refuses to do so on their behalf. Our deposit agreement does not require the depositary to take any action in respect of exercising dissent and appraisal
rights. In such a situation, holders of our ADSs must initiate the withdrawal of the underlying common stock from the ADS facility (and incur charges relating to that withdrawal) by the day immediately following the date of public disclosure of our
board of directors resolution of a merger or other events triggering appraisal rights and become our direct shareholder prior to the record date of the shareholders meeting at which the relevant transaction is to be approved, in order to
exercise dissent and appraisal rights.

Dividend payments and the amount you may realize upon a sale of our common stock or ADSs that you hold will
be affected by fluctuations in the exchange rate between the U.S. dollar and the Korean Won.

Cash dividends, if any, in respect
of the shares represented by our ADSs will be paid to the depositary in Korean Won and then converted by the depositary into U.S. dollars, subject to certain conditions. Accordingly, fluctuations in the exchange rate between the Korean Won and the
U.S. dollar will affect, among other things, the amounts a holder will receive from the depositary in respect of dividends, the U.S. dollar value of the proceeds that a holder would receive upon sale in Korea of the shares of our common stock
obtained upon surrender of ADSs and the secondary market price of ADSs. Such fluctuations will also affect the U.S. dollar value of dividends and sales proceeds received by holders of our common stock.

Risks Relating to Korea

If economic conditions in
Korea deteriorate, our current business and future growth could be materially and adversely affected.

In recent years, adverse
conditions and volatility in the worldwide financial markets, fluctuations in oil and commodity prices and the general weakness of the global economy have contributed to the uncertainty of global economic prospects in general and have adversely
affected, and may continue to adversely affect, the Korean economy. The value of the Won relative to major foreign currencies has fluctuated significantly. See Item 3.A. Selected Financial DataExchange Rates. A depreciation of the
Won increases the cost of imported goods and services and the Won revenue needed by Korean companies to service foreign currency denominated debt. An appreciation of the Won, on the other hand, causes export products of Korean companies to be less
competitive by raising their prices in terms of the relevant foreign currency and reduces the Won value of such export sales. Furthermore, as a result of adverse global and Korean economic conditions, there has been continuing volatility in the
stock prices of Korean companies. See Item 9.C. MarketsThe Korea Exchange. Future declines in the KOSPI and large amounts of sales of Korean securities by foreign investors and subsequent repatriation of the proceeds of such sales
may continue to adversely affect the value of the Won, the foreign currency reserves held by financial institutions in Korea, and the ability of Korean companies to raise capital. Any future deterioration of the Korean or global economy could
adversely affect our business, financial condition and results of operations.

Developments that could have an adverse impact on
Koreas economy in the future include:



| |  |  | declines in consumer confidence and a slowdown in consumer spending in the Korean or global economy;
| | - |  | ----------------------------------------------------------------------------------------------------



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| |  |  | adverse changes or volatility in foreign currency reserve levels, commodity prices (including oil prices), exchange rates (including fluctuation of the U.S. dollar, the Euro or the Japanese Yen exchange rates or
revaluation of the Chinese Renminbi), interest rates, inflation rates or stock markets;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | continuing adverse conditions in the economies of countries that are important export markets for Korea, such as China, the United States, Europe and Japan, or in emerging market economies in Asia or elsewhere;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increased sovereign default risk in select countries and the resulting adverse effects on the global financial markets;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | a continuing rise in the level of household debt and increasing delinquencies and credit defaults by retail or small- and medium-sized enterprise borrowers;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the continued growth of the Chinese economy, to the extent its benefits (such as increased exports to China) are outweighed by its costs (such as competition in export markets or for foreign investment and the
relocation of the manufacturing base from Korea to China), as well as a slowdown in the growth of Chinas economy, which is Koreas most important export market;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the economic impact of any pending or future free trade agreements;
| | - |  | -------------------------------------------------------------------



| |  |  | social and labor unrest;
| | - |  | ------------------------



| |  |  | further decreases in the market prices of Korean real estate;
| | - |  | -------------------------------------------------------------



| |  |  | a decrease in tax revenue and a substantial increase in the Korean governments expenditures for fiscal stimulus measures, unemployment compensation and other economic and social programs that, together, would lead
to an increased Korean government budget deficit;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | financial problems or lack of progress in the restructuring of large troubled companies, their suppliers or the financial sector;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | loss of investor confidence arising from corporate accounting irregularities or corporate governance issues at certain Korean companies;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | increases in social expenditures to support an aging population in Korea or decreases in economic productivity due to the declining population size in Korea;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | geo-political uncertainty and risk of further attacks by terrorist groups around the world;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | the occurrence of severe health epidemics in Korea or other parts of the world, such as the Middle East Respiratory Syndrome outbreak in Korea in 2015;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | natural or man-made disasters that have a significant adverse economic or other impact on Korea (such as the sinking of the Sewol ferry in 2014, which significantly dampened consumer sentiment in Korea) or its major
trading partners;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | deterioration in economic or diplomatic relations between Korea and its trading partners or allies, including deterioration resulting from territorial or trade disputes or disagreements in foreign policy;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | political uncertainty or increasing strife among or within political parties in Korea;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | hostilities or political or social tensions involving oil producing countries in the Middle East and North Africa and any material disruption in the supply of oil or sudden increase in the price of oil;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | political or social tensions involving Russia and any resulting adverse effects on the global supply of oil or the global financial markets; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an increase in the level of tensions or an outbreak of hostilities between North Korea and Korea or the United States.
| | - |  | ----------------------------------------------------------------------------------------------------------------------

Escalations in tensions with North Korea could have an adverse effect on us and the market value of our common stock.

Relations between Korea and North Korea have been tense throughout Koreas modern history. The level of tension between the two Koreas
has fluctuated and may increase abruptly as a result of future events. In particular, since the death of Kim Jong-il in December 2011, there has been increased uncertainty with respect to the future of North Koreas political leadership and
concern regarding its implications for political and economic stability in the region. Although Kim Jong-ils third son, Kim Jong-un, has assumed power as his fathers designated successor, the long-term outcome of such leadership
transition remains uncertain.



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In addition, there have been heightened security concerns in recent years stemming from North
Koreas nuclear weapon and long-range missile programs as well as its hostile military and other actions against Korea. Some of the significant incidents in recent years include the following:



| |  |  | From time to time, North Korea has conducted ballistic missile tests. Most recently in February 2016, North Korea launched a long-range rocket in violation of its agreement with the United States as well as United
Nations sanctions barring it from conducting launches that use ballistic missile technology. Despite international condemnation, North Korea released a statement that it intends to continue its rocket launch program.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | North Korea renounced its obligations under the Nuclear Non-Proliferation Treaty in January 2003 and conducted three rounds of nuclear tests between October 2006 to February 2013, which increased tensions in the region
and elicited strong objections worldwide. In response, the United Nations Security Council unanimously passed a series of resolutions that condemned North Korea for the nuclear tests and imposed expanded sanctions against North Korea. In January
2016, North Korea conducted a fourth nuclear test, claiming that the test involved its first hydrogen bomb, which claim has not been independently verified. In response to such test (as well as North Koreas long-range rocket launch in February
2016), the United Nations Security Council unanimously passed a resolution in March 2016 condemning North Koreas actions and significantly expanding the scope of the sanctions applicable to North Korea.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In August 2015, two Korean soldiers were injured in a landmine explosion near the Korean demilitarized zone. Claiming the landmines were set by North Koreans, the Korean army re-initiated its propaganda program toward
North Korea utilizing loudspeakers near the demilitarized zone. In retaliation, the North Korean army fired artillery rounds on the loudspeakers, resulting in the highest level of military readiness for both Koreas. High-ranking officials from North
Korea and Korea subsequently met for discussions and entered into an agreement on August 25, 2015 intended to diffuse military tensions.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In March 2010, a Korean naval vessel was destroyed by an underwater explosion, killing many of the crewmen on board. The Korean government formally accused North Korea of causing the sinking, while North Korea denied
responsibility. Moreover, in November 2010, North Korea fired more than one hundred artillery shells that hit Koreas Yeonpyeong Island near the Northern Limit Line, which acts as the de facto maritime boundary between Korea and North Korea on
the west coast of the Korean peninsula, causing casualties and significant property damage. The Korean government condemned North Korea for the attack and vowed stern retaliation should there be further provocation.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

North Koreas economy also faces severe challenges, which may further aggravate social and political pressures within North Korea. There
can be no assurance that the level of tensions affecting the Korean peninsula will not escalate in the future. Any further increase in tensions, which may occur, for example, if North Korea experiences a leadership crisis, high level contacts
between Korea and North Korea break down or military hostilities occur, could have a material adverse effect on our operations and the market value of our common stock and ADSs.

If the Korean government deems that emergency circumstances are likely to occur, it may restrict holders of our ADSs and the depositary from converting
and remitting dividends and other amounts in U.S. dollars.

Under the Korean Foreign Exchange Transaction Law, if the Korean
government deems that certain emergency circumstances, including sudden fluctuations in interest rates or exchange rates, extreme difficulty in stabilizing the balance of payments or substantial disturbance in the Korean financial and capital
markets, are likely to occur, it may impose any necessary restrictions as requiring Korean or foreign investors to obtain prior approval from the Minister of Strategy and Finance for the acquisition of Korean securities or the repatriation of
interest, dividends or sales proceeds arising from disposition of such securities or other transactions involving foreign exchange. See Item 10.D. Exchange Controls.



|Item 4. | INFORMATION ON THE COMPANY
|------- | --------------------------



|Item 4.A. | History and Development of the Company
|--------- | --------------------------------------

We are a leading innovator
of TFT-LCD, OLED and other display panel technologies. We manufacture display panels in a broad range of sizes and specifications primarily for use in televisions, notebook computers, desktop monitors, tablet computers and various other
applications, including mobile devices.



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##### Table of Contents

The origin of our display business, which first started with TFT-LCD panels, can be traced to the
TFT-LCD research that began in 1987 at the Goldstar R&D Center, which was then part of LG Electronics Inc. TFT-LCD research continued at the Anyang R&D Center, a research and development center established by LG Electronics in 1990 in
Anyang, Korea, which was subsequently moved to our Paju Display Cluster in 2008, and which today continues to lead our technology innovation efforts. In 1993, the TFT-LCD business division was launched within LG Electronics, and in September 1995
mass production of TFT-LCD panels began at P1, its first fabrication facility, producing mainly TFT-LCD panels for notebook computers and other applications. In December 1997, LG Semicon Inc., a subsidiary of LG Electronics, began mass production at
P2, producing mainly TFT-LCD panels for notebook computers.

We were incorporated in 1985 under the laws of the Republic of Korea under
the original name of LG Soft, Ltd., a subsidiary of LG Electronics whose main business was the development and marketing of software. At the end of 1998, LG Electronics and LG Semicon transferred their respective TFT-LCD-related businesses to LG
Soft, which, as part of the business transfer, changed its name to LG LCD Co., Ltd.

In July 1999, LG Electronics entered into a joint
venture agreement with Koninklijke Philips Electronics N.V., pursuant to which Philips Electronics acquired a 50% interest in LG LCD. In connection with this transaction, LG LCD transferred its existing software-related business to LG Electronics in
order to focus solely on the TFT-LCD business. The joint venture, which was renamed LG.Philips LCD Co., Ltd., was officially launched in August 1999. In July 2004, we completed our initial public offering and listed shares of our common stock on the
Korea Exchange under the identifying code 034220 and our ADSs on the New York Stock Exchange under the symbol LPL. Prior to the listings, LG Electronics and Philips Electronics terminated the joint venture agreement and
entered into a shareholders agreement to reflect new arrangements between them as controlling shareholders. The shareholders agreement automatically terminated upon Philips Electronics sale of all of its remaining ownership
interest in us in March 2009. Effective March 3, 2008, we changed our name from LG.Philips LCD Co., Ltd. to LG Display Co., Ltd. in order to reflect the expansion of our business scope and shift in business model, fully expressing our
commitment to the future.

We launched our OLED Business Unit in June 2008 in anticipation of future growth of the OLED business. The
origin of our OLED business began with our acquisition of LG Electronics active matrix OLED, or AMOLED, business in January 2008 by way of taking over its inventory, intellectual property rights and employees related to the AMOLED business. In
2012, partly in recognition of the growing importance of OLED to the future of our business, especially in connection with large-sized products, we restructured our internal organization relating to our OLED business, breaking up the OLED Business
Unit and transferring our mobile-related business (including OLED products for mobile and other applications) to the newly created IT/Mobile Business Division and transferring our OLED television panel business to the Television Business Division.
We were the first in the world to commence mass production of 55-inch OLED television panels in 2013. In December 2014, we established a separate OLED Business Division to strengthen our OLED business and solidify our competitive advantages. In
December 2015, in order to achieve synergies and further strengthen our OLED business, we acquired LG Chems OLED light business by way of assuming the inventory, intellectual property rights and employees related to the OLED light business.
Our principal executive offices are located at LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 07336 and our telephone number is +82-2-3777-1010.

We have continued to develop our manufacturing process technologies and expand our production facilities. Each successive generation of our
fabrication facilities has been designed to process increasingly larger-size glass substrates, which allows us to cut a larger number of panels, sometimes with larger sizes, from each glass substrate. The ability to process larger glass substrates
allows us to produce a larger variety of display sizes to accommodate evolving business and consumer demands. For example, in order to respond to business and consumer demands for large-sized panels for televisions, in September 2014, we commenced
mass production at our GP1 fabrication facility in Guangzhou, China, which is optimized to large-sized full HD and Ultra HD TFT-LCD panels for televisions. In addition, due to the large number of fabrication facilities we operate, we have the
flexibility to make strategic decisions based on market demand to convert existing production lines housed within a fabrication facility to manufacture display panels based on newer technologies. For example, we established our AP3 production lines
by converting a set of existing production lines in our P61 fabrication facility, which originally produced a-Si based display panels, to produce LTPS based display panels for mobile devices and commenced mass production in February 2014.

We work closely with the local authorities where our fabrication facilities are located, and we have signed a number of memoranda of
understandings, the latest one having been signed in July 2015, with Gumi City and North Gyeongsang Province for their administrative assistance in connection with our investment at our Gumi Display Cluster in our new E5 production line on which we
expect to commence mass production of OLED panels in the first half of 2017, subject to market conditions and any changes in our investment timetable.



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##### Table of Contents

With respect to our on-going expansion and conversion projects, we are currently constructing our
P10 fabrication facility in Paju, Korea, which is expected to commence production primarily of OLED panels in the first half of 2018. We are also in the process of installing our new E5 production line on which we expect to commence mass production
of OLED panels in the first half of 2017, as discussed above. Each of our on-going expansion projects are subject to market conditions and any changes in our investment timetable. See Item 4.D. Property, Plants and EquipmentCapital
Expenditures.

With respect to our assembly facilities, from 1995 to early 2003, we assembled all panels in our Gumi assembly
facility adjacent to our P1 facility. In May 2003, we commenced operations at a new assembly facility in Nanjing, China, which we built and have since expanded, in order to better serve the needs of our global customers with manufacturing facilities
in China. In January 2006, we commenced operations at a new assembly facility in Paju, Korea. In February 2007, we commenced mass production at our module production plant in Wroclaw, Poland. In December 2007, we commenced mass production at our
module production plant in Guangzhou, China.

For a description of cash outflows relating to our capital expenditures in the past three
fiscal years, see Item 5.A. Operating ResultsOverviewManufacturing Productivity and Costs.



|Item 4.B. | Business Overview
|--------- | -----------------

Overview

We manufacture TFT-LCD and OLED technology-based display panels in a broad range of sizes and specifications primarily for use in televisions,
notebook computers, desktop monitors, tablet computers and mobile devices, including smartphones, and we are one of the worlds leading suppliers of ultra-high definition, or UHD, television panels. We also manufacture display panels for
industrial and other applications, including entertainment systems, automotive displays, portable navigation devices and medical diagnostic equipment. In 2015, we sold a total of 162.8 million display panels that are nine inches or larger.
According to IHS Technology, we had a global market share for display panels of nine inches or larger of approximately 27.2% based on sales revenue in 2015.

We currently operate fabrication facilities, which include separately designated sets of fabrication production lines housed in certain
facilities, located in our Display Clusters in Gumi and Paju, Korea and in Guangzhou, China. We also currently operate module facilities located in China (Nanjing, Guangzhou and Yantai), Korea (Gumi and Paju) and Poland (Wroclaw). For a full
description of our current facilities, see Item 4.D. Property, Plants and EquipmentCurrent Facilities.

We seek to build
our market position based on collaborative relationships with our customers and suppliers, a focus on high-end differentiated specialty display products and manufacturing productivity. Our end-brand customers include many of the worlds leading
manufacturers of televisions, notebook computers, desktop monitors, tablet computers and mobile phones such as LG Electronics. For a description of our sales to LG Electronics, our largest shareholder, see Item 7.B. Related Party
Transactions.

At the direction of our end-brand customers, we typically ship our display panels to their original equipment
manufacturers, known as system integrators, who use our display panels in products they assemble on a contract basis for our end-brand customers. Our sales are conducted through our multi-channel sales and distribution network, including
direct sales to end-brand customers and their system integrators, sales through our overseas subsidiaries and sales through our affiliated trading company, LG International, and its subsidiaries. For a description of our sales arrangements with LG
International, see Item 7.B. Related Party Transactions.

Our sales were W27,033 billion in 2013,
W26,456 billion in 2014 and W28,384 billion (US$24,275 million) in 2015.

Technology Description

TFT-LCD Technology

A TFT-LCD panel consists of two thin glass substrates and polarizer films between which a layer of liquid crystals is deposited and behind
which a light source called a backlight unit is mounted. The frontplane glass substrate is fitted with a color filter, while the backplane glass substrate, also called a TFT array, has many thin film transistors, or TFT, formed on its surface. The
liquid crystals are normally aligned to allow the polarized light from the backlight unit to pass through the two glass panels. When voltage is applied to the transistors on the TFT array, the liquid crystals change their alignment and alter the
amount of light that passes through them. Meanwhile, the color filter on the frontplane glass substrate gives each pixel its own color. The combination of these pixels in different colors and levels of brightness forms the image on the panel.



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##### Table of Contents

The process for manufacturing a TFT-LCD panel consists of four steps:



| |  |  | TFT array process  involves fabricating a large number of thin film transistors on the backplane glass substrate. The number of transistors corresponds to the number of pixels on the screen. The process is
similar to the process for manufacturing semiconductor chips, except that transistors are fabricated on large glass substrates instead of silicon wafers. Unlike in the semiconductor industry, however, the number of transistors per glass substrate is
not a primary driver of the manufacturing costs for TFT-LCDs. Once the TFT array process on glass substrates is completed, the substrates are cut into panel-sized pieces;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Color filter process  involves fabricating a large number of color regions on the frontplane glass substrate that will overlay the TFT array prior to the cell process. The colored dots of red, green and
blue combine to form various colors. The process is similar to the TFT array process but involves depositing colored dyes instead of transistors;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Cell process  involves joining together the backplane glass substrate that is arrayed with transistors and the frontplane glass substrate that is patterned with a color filter. The space between the two
glass substrates is filled with liquid crystal materials. The resulting panel is called a cell; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Module assembly process  involves connecting additional components, such as driver integrated circuits and backlight units, to the cell.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------

The TFT array, color filter and cell processes are capital-intensive and require highly automated production equipment and are the primary
determinants of fixed manufacturing cost. In contrast, the module assembly process involves semi-automated production equipment and manual labor to assemble the various components. Materials are the primary drivers of variable manufacturing cost.

IPS Technology

In-Plane Switching, or IPS, is a liquid crystal switching technology that was developed to address commonly faced problems with TFT-LCD panels
that utilized other liquid crystal technologies, namely narrow viewing angles, inconsistent picture uniformity and slow response times. Unlike other liquid crystal technologies where the liquid crystals are aligned vertically or at an angle in
relation to the glass substrate, with IPS technology, the liquid crystals are aligned horizontally in parallel to the glass substrate, which allows for wider viewing angles, greater picture uniformity and faster response times. Our TFT-LCD display
panels, including our TFT-LCD television panels, utilize IPS technology.

Advanced High Performance IPS, or AH-IPS, is our next-generation
IPS technology that integrates ultra-fine pitch technology and high transmittance technology, which allows for ultra-high resolution imagery, increased luminance and greater energy efficiency. For example, in April 2014, we produced a 5.5-inch quad
high definition (Quad HD) smartphone panel, which has four times the resolution (538 pixels-per-inch) of a conventional HD panel. AH-IPS is currently utilized in our smartphone panels and other mobile display products, as well as certain
of our panels for notebook computers, tablet computers and desktop monitors.

OLED Technology

An OLED panel consists of a thin film of organic material encased between anode and cathode electrodes. When a current is applied, light is
emitted directly from the organic material. Because a separate backlight is not needed, OLED panels can be lighter and thinner compared to TFT-LCD panels, which require a separate backlight. In addition, images projected on OLED panels have higher
contrast ratios and more realistic color reproduction compared to images projected on TFT-LCD panels.



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##### Table of Contents

We utilize different types of sub-pixel and backplane technologies in our OLED panels. Under the
RGB sub-pixel structure, a combination of red, green and blue sub-pixels without color filters or white sub-pixels are used to produce a range of colors. While we, along with most of our competitors, utilize RGB sub-pixel technology for small- and
medium-sized products, there are various technical challenges in scaling RGB sub-pixel technology for large-sized products, such as television panels. For our OLED television panels, we have overcome these challenges by opting to utilize our WRGB
sub-pixel structure, whereby red, green and blue color filters are placed over white OLED sub-pixels to produce a range of colors and began production of OLED television panels on our E3 production lines in January 2013 and mass production of OLED
television panels on our E4 production lines in December 2014. As for backplane technology, our large-sized OLED products are produced using oxide TFT backplane technology as compared to our smaller-sized OLED products which utilize LTPS backplane
technology, as described in greater detail below.

Backplane Technology

Oxide TFT

We use oxide
TFT technology to produce backplanes for use in our large-sized OLED panels, such as the panels used in OLED television products. The traditional amorphous silicon-based TFT, or a-Si TFT, backplane technology has certain limitations that render it
unsuitable for producing backplanes for use in large-sized OLED panels with high resolutions and fast refresh rates. For example, in larger and higher-resolution display panels, a-Si TFT backplanes consume increased rates of power and experience a
decrease in the rate at which each transistor is able to switch between images, or the rate of mobility.

As an alternative to a-Si TFT
backplane technology, we have successfully adopted a metal oxide-based TFT, or simply oxide TFT, backplane technology. In place of the amorphous silicon-based semiconductors used in a-Si TFT backplanes, oxide TFT backplanes utilize metal oxide-based
semiconductors, which consume less energy, have a higher rate of mobility and allow for construction of display panels with narrower bezels as compared to display panels with traditional a-Si TFT backplanes.

We were the first company in the display industry to successfully adopt oxide TFT technology in large-sized OLED products, which has been a
key factor in reducing the costs of manufacturing large-sized OLED panels in large quantities. Because the manufacturing process of oxide TFT-based OLED panels are similar to the process used to manufacture TFT-LCD panels, we are able to use our
existing TFT-based production lines with relatively little modification to mass produce large-sized OLED panels.

Low Temperature
Polycrystalline Silicon

Low temperature polycrystalline silicon, or LTPS, backplanes have superior current-driving capacity and
produce brighter images, while consuming less energy compared to a-Si TFT or oxide TFT backplanes, due to their higher mobility rates. However, due to a complex manufacturing process, LTPS backplanes have relatively higher production costs compared
to a-Si TFT or oxide TFT backplanes, making it uneconomical to use in the production of large-sized panels. As a result, we generally utilize LTPS backplanes in the production of smaller-sized panels, particularly in TFT-LCD and OLED smartphone
panels.

3D Technology

Film-Type Patterned Retarder

Film-Type Patterned Retarder 3D, or FPR 3D, technology is utilized in display panels to display three-dimensional imagery when viewed with
polarized glasses. A patterned retarder film polarizes images projected on the display panel into left and right images, which are then received by the respective side of the polarized glasses worn by the viewer to create a 3D effect. As both the
right and left images are received simultaneously by the polarized glasses, there is no flicker effect commonly associated with display panels utilizing shutter glass technology, which projects left and right images in alternative succession. 3D
television sets using our FPR 3D television panel products were first introduced to the market in March 2011.



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##### Table of Contents

Products

We manufacture display panels of various specifications that are integrated by our customers into principally the following products:



| |  |  | Televisions, which utilize large-sized display panels ranging from 22 inches to 105 inches in size, including Ultra HD television panels, which have four times the number of pixels compared to conventional HD television
panels;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Notebook computers, which utilize display panels ranging from 10.1 inches to 17.3 inches in size;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | Desktop monitors, which utilize large-sized display panels ranging from 15.6 inches to 34 inches in size;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | Tablet computers, which utilize display panels ranging from 6 inches to 12.9 inches in size; and
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | Mobile and other applications, which utilize a wide array of display panel sizes, including smartphones and other types of mobile phones and industrial and other applications, including entertainment systems, automotive
displays, portable navigation devices and medical diagnostic equipment.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Unless otherwise specified, when we refer to panels
in this annual report, we mean assembled cells with added components, such as driver integrated circuits and backlight units.

We design
and manufacture our panels to meet the various size and performance specifications of our customers, including specifications relating to thinness, weight, resolution, color quality, power consumption, response times and viewing angles. The
specifications vary from product to product. For television panels, a premium is placed on faster response times, wider viewing angles, higher resolution and greater color fidelity. Notebook computer panels require an emphasis on thinness, light
weight and power efficiency, while desktop monitor panels demand a greater focus on brightness, color brilliance and wide viewing angles.

In addition to manufacturing and selling display panels, we also manufacture and sell television sets and desktop monitors through our joint
venture companies. See Joint Ventures.

Televisions

Our television display panels range from 22 inches to 105 inches in size. We began mass production of television display panels in 2001. Our
sales of display panels for televisions were W11,795 billion, or 43.6% of our total revenue, in 2013, W10,540 billion, or 39.8% of our total revenue, in 2014 and W10,854 billion (US$9,283 million),
or 38.2% of our total revenue, in 2015 and constituted our largest product category in each of the past three years. In 2015, our principal products in this category in terms of sales revenue consisted of 32-inch, 42-inch, 43-inch, 49-inch and
55-inch display panels.

Brand manufacturers of televisions and their distribution channels prefer long-term arrangements with a limited
number of display panel suppliers that can offer a full product line, and we believe that we are well positioned to meet their requirements with our strengths in technology, manufacturing scale and efficiency as well as the breadth of our product
portfolio.

Notebook Computers

Our display panels for notebook computers range from 10.1 inches to 17.3 inches in size in a variety of display formats and constituted our
fifth largest product category in terms of sales revenue in 2015. Revenue from sales of our display panels for notebook computers was W2,819 billion, or 10.4% of our total revenue, in 2013, W2,669 billion, or 10.1%
of our total revenue, in 2014 and W2,509 billion (US$2,146 million), or 8.8% of our total revenue, in 2015. In 2015, our principal products in terms of sales revenue in this category were 13.3-inch, 14.0-inch and 15.6-inch display
panels.



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##### Table of Contents

Consumer demand for notebook computers has steadily declined in recent years due in part from
competition from tablet computers and smartphones that are more economical and convenient to use compared to notebook computers while offering similar levels of computing functionality.

Desktop Monitors

Our desktop monitor display panels range from 15.6 inches to 34 inches in size in a variety of display resolutions and formats. Revenue from
sales of our display panels for desktop monitors was W5,256 billion, or 19.4% of our total revenue, in 2013, W4,660 billion, or 17.6% of our total revenue, in 2014 and W4,553 billion (US$3,894
million), or 16.0% of our total revenue, in 2015 and constituted our third largest product category in each of the past three years.

In
recent years, consumer demand for larger desktop monitors has steadily grown. In 2015, our principal products in terms of sales revenue in this category were 21.5-inch, 23-inch and 27-inch display panels.

Tablet Computers

Our tablet computer display panels range from 6 inches to 12.9 inches in size in a variety of display formats and constituted our fourth
largest product category in 2015. Revenue from sales of our display panels for tablet computers was W3,575 billion, or 13.2% of our total revenue, in 2013, W3,542 billion, or 13.4% of our total revenue, in 2014 and
W2,510 billion (US$2,147 million), or 8.8% of our total revenue, in 2015.

After experiencing steady growth in consumer
demand for tablet computers since they were first introduced, consumer demand has generally plateaued in recent years. In 2015, our principal products in terms of sales revenue in this category were display panels smaller than 10 inches.

Mobile and Other Applications

Our product portfolio also includes panels for mobile and other applications, which utilize a wide array of display panel sizes, including
smartphones and other types of mobile phones and industrial and other applications, including entertainment systems, automotive displays, portable navigation devices and medical diagnostic equipment. Display panels that are nine inches and smaller
are referred to as small- and medium-sized panels, with those smaller than four inches being considered small-sized panels.

This has been
our fastest growing category of products in terms of revenue growth in recent years, driven largely by an increase in demand for increasingly larger-sized smartphone panels. Revenue from sales of our display panels for mobile and other applications
was W3,537 billion, or 13.1% of our total revenue, in 2013, W5,005 billion, or 18.9% of our total revenue, in 2014 and W7,919 billion (US$6,773 million), or 27.9% of our total revenue, in 2015. In
2015, sales of panels for smartphones continued to constitute a significant majority in terms of both sales revenue and sales volume in the mobile and other applications category.

Some of the panels we produce for industrial products, such as medical diagnostic equipment, are highly specialized niche products
manufactured to the specifications of our clients, while others, such as industrial controllers, may be manufactured by slightly modifying a standard product design for our other products, such as desktop monitors. Display panels for these other
applications broaden our sales base and product mix. They are also often a good channel through which we can commercialize a particular technology that we have developed. We generally determine the production level and specification of our display
panels for mobile and other applications by assessing various business opportunities as they arise.

Sales and Marketing

Customer Profile

Our display panels are included primarily in televisions, notebook computers, desktop monitors, tablet computers and mobile and other
applications sold by our global end-brand customers, including LG Electronics. LG Electronics is our largest shareholder, and the terms of our sales to LG Electronics are negotiated based on then-prevailing market prices as adjusted for LG
Electronics requirements, including volume and specifications. See Item 7.B. Related Party Transactions for further description of our sales to LG Electronics.



30



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We negotiate directly with our end-brand customers concerning the terms and conditions of the
sales, but typically ship our display panels to designated system integrators at the direction of these end-brand customers. Sales data to end-brand customers include direct sales to these end-brand customers as well as sales to their designated
system integrators, including through our affiliated trading company, LG International, and its subsidiaries, as further discussed below under Sales.

A substantial portion of our sales is attributable to a limited number of our end-brand customers. Our top ten end-brand customers together
accounted for approximately 76% of our sales in 2013, 79% in 2014 and 82% in 2015. Of our top ten end-brand customers, two of them accounted for more than 10% of our sales on an individual basis for each of the past three years. For example, sales
to LG Electronics, including as a system integrator, amounted to 25.9%, 27.0% and 23.5%of our sales in 2013, 2014 and 2015, respectively.

In addition to our top ten end-brand customers, we sell our display panels to a variety of other manufacturers of computers and electronic
products. Sales to these other manufacturers constituted approximately 24% of our sales in 2013, 21% in 2014 and 18% in 2015, respectively.

The following table sets forth for the years indicated the geographic breakdown of our sales by the region where purchase orders originate,
without regard to the location of end-brand customers. The figures below therefore reflect orders from our end-brand customers, their system integrators and our affiliated trading company, LG International, and its subsidiaries:



|                       |  |                                                                  |        |  |      |  |       |       |  |   |        |  |  |       |       |   |          |   |        |   |  |     |        |  |  |  |       |  
|---------------------- |  | ---------------------------------------------------------------- | ------ |  | ---- |  | ----- | ----- |  | - | ------ |  |  | ----- | ----- | - | -------- | - | ------ | - |  | --- | ------ |  |  |  | ----- | -
|                       |  | Year ended December 31,                                          |       
|                       |  | 2013                                                             |        |  | 2014 |  |       | 2015  | 
|                       |  | Sales                                                            |        |  | %    |  |       | Sales |  |   | %      |  |  | Sales |       |   | Sales(3) |   |        | % | 
|                       |  | (in billions of Won and millions of US$, except for percentages) |       
|Korea                  |  | W                                                                | 2,692  |  |      |  | 10.0  | %     |  | W | 2,608  |  |  |       | 9.9   | % |          | W | 2,218  |   |  | US$ | 1,897  |  |  |  | 7.8   | %
|China                  |  |                                                                  | 15,230 |  |      |  | 56.3  |       |  |   | 15,774 |  |  |       | 59.6  |   |          |   | 19,375 |   |  |     | 16,570 |  |  |  | 68.3  |  
|Europe                 |  |                                                                  | 3,626  |  |      |  | 13.4  |       |  |   | 2,997  |  |  |       | 11.3  |   |          |   | 2,204  |   |  |     | 1,885  |  |  |  | 7.8   |  
|Asia (excluding China) |  |                                                                  | 2,558  |  |      |  | 9.5   |       |  |   | 2,415  |  |  |       | 9.1   |   |          |   | 2,012  |   |  |     | 1,721  |  |  |  | 7.1   |  
|Americas               |  |                                                                  | 2,446  |  |      |  | 9.0   |       |  |   | 2,026  |  |  |       | 7.7   |   |          |   | 1,981  |   |  |     | 1,694  |  |  |  | 7.0   |  
|Others (1)             |  |                                                                  | 481    |  |      |  | 1.8   |       |  |   | 636    |  |  |       | 2.4   |   |          |   | 594    |   |  |     | 508    |  |  |  | 2.0   |  
|                       |  |                                                                  |        |  |      |  |       |       |  |   |        |  |  |       |       |   |          |   |        |   |  |     |        |  |  |  |       |  
|Total (2)              |  | W                                                                | 27,033 |  |      |  | 100.0 | %     |  | W | 26,456 |  |  |       | 100.0 | % |          | W | 28,384 |   |  | US$ | 24,275 |  |  |  | 100.0 | %
|                       |  |                                                                  |        |  |      |  |       |       |  |   |        |  |  |       |       |   |          |   |        |   |  |     |        |  |  |  |       |  



|(1) | Includes Oceania, Africa and the Middle East.
|--- | ---------------------------------------------

|(2) | Figures provided in this table include our revenue attributable to royalty and others.
|--- | --------------------------------------------------------------------------------------

|(3) | For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,169.26 to US$1.00, the noon buying rate in effect on December 31, 2015 as certified by the Federal Reserve
Bank of New York for customs purposes. This translation should not be construed as a representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Sales

Our sales
and marketing departments seek to maintain and strengthen relationships with our current customers in existing markets as well as expand our business in new markets and with new customers. We currently have wholly-owned sales subsidiaries in the
United States, Japan, Germany, Taiwan, China and Singapore. As of December 31, 2015, our sales and marketing force employed a total of 1,527 employees in regional offices in these countries and in our head office in Korea.

The focus of our sales activities is on strengthening our relationships with large end-brand customers, with whom we maintain strong
collaborative relationships. Customers look to us for a reliable supply of a wide range of display products. We believe our reliability and scale as a supplier helps support our customers product positions. We view our relationships with our
end-brand customers as important to their product development strategies, and we collaborate with our end-brand customers in the design and development stages of their new products. In addition, our sales teams coordinate closely with our end-brand
customers designated system integrators to ensure timely delivery. For each key customer, we appoint an account manager who is primarily responsible for our relationship with that specific customer, complemented by a product development team
consisting of engineers who participate in meetings with that customer to understand the customers specific needs.

We do not
typically enter into binding long-term contracts with our customers. However, we have in place long-term supply and purchase agreements with certain major end-brand customers, whereby we and our end-brand customers agree on general volume parameters
and, in some cases, product specifications and delivery terms. These agreements serve as an indication of the size and key components of a customers order, and neither party is committed to supply or purchase any products until a firm purchase
order is issued.



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Our sales are conducted through our multi-channel sales and distribution network, including
direct sales to end-brand customers and their system integrators, sales through our overseas subsidiaries and sales through our affiliated trading company, LG International, and its subsidiaries. Our sales subsidiaries procure purchase orders from,
and distribute our products to, system integrators and end-brand customers located in their region. In regions where we do not have a sales subsidiary, or where doing so is consistent with local market practices, we sell our products to LG
International and its subsidiaries. These subsidiaries of LG International process orders from and distribute products to customers located in their region. Sales to LG International and its subsidiaries amounted to 3.5% in 2015. See Item 7.B.
Related Party Transactions for further discussion of these sales arrangements.

Our end-brand customers or their system integrators
generally place purchase orders with us one month prior to delivery based on our non-binding supply and purchase agreements with them. Generally, the head office of an end-brand customer provides us with three- to six-month forecasts, which,
together with our own forecasts, enable us to plan our production schedule in advance. Our customers usually issue monthly purchase orders containing prices we have negotiated with the end-brand customer one month prior to delivery, at which point
the customer becomes committed to the order at the volumes and prices indicated in the purchase orders. Under certain special circumstances, however, a negotiated price may be subject to change during the one-month period prior to delivery.

Prices for our products are generally determined based on negotiations with our end-brand customers. Pricing of our display panel products is
generally market-driven, based on the complexity of the product specifications and the labor and technology involved in the design or production processes.

We generally provide a limited warranty to our end-brand customers, including the provision of replacement parts and warranty services for our
products. Costs incurred under our warranty liabilities consist primarily of repairs. We set aside a warranty reserve based on our historical experience and future expectations as to the rate and cost of claims under our warranties.

Our credit policy typically requires payment within 30 to 90 days, and payments on the vast majority of our sales have typically been
collected within 60 days. Where system integrators located in certain regions are invoiced directly, we have established certain measures, such as factoring arrangements and accounts receivable insurance programs, to protect us from excessive
exposure to credit risks. To date we have not experienced any material problems relating to customer payments.

Competition

The display panel industry is highly competitive. Due to the capital intensive nature of the display panel industry and the high production
volumes required to achieve economies of scale, the international market for display devices is characterized by significant barriers to entry, but the competition among the relatively small number of major producers is intense. In the case of
TFT-LCD panel manufacturers, currently almost all of them are located in Asia, and we compete principally with manufacturers from Korea, Taiwan, China and Japan.

The principal elements of competition for customers in the display panel market include:



| |  |  | product portfolio range and availability;
| | - |  | -----------------------------------------



| |  |  | product specifications and performance;
| | - |  | ---------------------------------------



| |  |  | price;
| | - |  | ------



| |  |  | capacity allocation and reliability;
| | - |  | ------------------------------------



| |  |  | customer service, including product design support; and
| | - |  | -------------------------------------------------------



| |  |  | logistics support and proximity of regional stocking facilities.
| | - |  | ----------------------------------------------------------------

Our principal competitors
are:



| |  |  | Samsung Display in Korea;
| | - |  | -------------------------



| |  |  | Innolux, AU Optronics, Chunghwa Picture Tubes and HannStar Display in Taiwan;
| | - |  | -----------------------------------------------------------------------------



| |  |  | Japan Display, Sharp and Panasonic LCD in Japan; and
| | - |  | ----------------------------------------------------



| |  |  | BOE, China Star Optoelectronics and CEC Panda in China.
| | - |  | -------------------------------------------------------



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According to IHS Technology, in 2015, Korean display panel manufacturers had a market share of 48.2% of the
9-inch or larger panel market based on revenue, Taiwanese manufacturers had 33.4%, Chinese manufacturers had 11.6% and Japanese manufacturers had 6.6%. Our market share of the 9-inch or larger panel market based on revenue was approximately 27.2%.

Components, Raw Materials and Suppliers

Components and raw materials accounted for 66.7% of our cost of sales in 2013, 61.2% in 2014 and 65.5% in 2015. The key components and raw
materials of our display products include glass substrates, driver integrated circuits, polarizers and color filters used in both our TFT-LCD and OLED products, backlight units and liquid crystal materials used in our TFT-LCD products, and hole
transport materials and emission materials used in our OLED products. We source these components and raw materials from outside sources, although, unlike many other display panel manufacturers, we produce a substantial portion of the color filters
we use. With respect to glass substrates, Paju Electric Glass Co., Ltd., a joint venture company of which we and Nippon Electric Glass Co., Ltd. own 40% and 60%, respectively, provides us with a stable supply at competitive prices.

We generally negotiate non-binding master supply agreements with our suppliers several times a year, but pricing terms are negotiated on a
quarterly basis, or if necessary, on a monthly basis. Firm purchase orders are issued generally six weeks prior to the scheduled delivery, except in the case of purchase orders for driver integrated circuits, which are issued generally six to ten
weeks prior to the scheduled delivery. We purchase our components and raw materials based on forecasts from our end-brand customers as well as our own assessments of our end-brand customers needs.

In order to reduce our component and raw material costs and our dependence on any one supplier, we generally develop compatible components and
raw materials and purchase our components and raw materials from more than one source. However, we source certain key components and raw materials from a limited group of suppliers in order to ensure timely supply and consistent quality. Also, in
order to facilitate implementation of our cost reduction strategies, we continually review for potential cost savings in sourcing our components and raw materials from suppliers based in Korea and those based abroad, including competitiveness of the
prices offered by such suppliers and any potential for reduction in logistics and transportation costs. We perform periodic evaluations of our component and raw material suppliers based on a number of factors, including the quality and price of the
components, delivery and response time, the quality of the services and the financial health of the suppliers. We reassess our supplier pool accordingly.

We maintain a strategic relationship with many of our material suppliers, and from time to time, we make equity investments in our material
suppliers as part of our efforts to secure a stable supply of key components and raw materials. For example, we have invested, and currently hold a 45.9% equity interest, in New Optics Ltd., our supplier of backlight units.

We generally maintain a component and raw material inventory sufficient for approximately 10 days, or 20 days for driver integrated circuits,
as a safeguard against potential disruptions in supply.

In addition to components and raw materials, the manufacturing of our products
requires significant quantities of electricity and water. In order to obtain and maintain reliable electric power and water supplies, we have our own back-up power generation facilities and water storage tanks as well as easy access to nearby water
sources. To date we have not experienced any material problems with our electricity and water supplies.

Equipment, Suppliers and Third Party
Processors

We depend on a limited number of equipment manufacturers for equipment tailored to specific requirements. Since our
manufacturing processes depend on the quality and technological capacity of our equipment, we work closely with the equipment manufacturers in the design process to ensure that the equipment meets our specifications. The principal types of equipment
we use to manufacture display panels include deposition equipment, steppers, developers and coaters.

We purchase equipment from a small
number of qualified vendors to ensure consistent quality, timely delivery and performance. We maintain strategic relationships with many equipment manufacturers as part of our efforts to ensure quality while reducing costs. For example, we have
invested, and currently hold a 23.0% equity interest, in Narae Nanotech Corporation, a Korean equipment manufacturer that supplies us with coaters.

Historically, we have relied on a small number of overseas vendors for equipment purchases, but in recent years, we have diversified and
localized our equipment purchases by shifting some of our purchases to local vendors. In 2015, approximately 72.9% of our equipment for our facilities in Korea was purchased from local vendors on an invoiced basis. We plan to maintain this
localization effort as part of our sourcing diversification and cost reduction strategy. A large majority of the equipment purchased from overseas vendors are from Japanese vendors. In the procurement of equipment from Japan, we also use LG
Internationals subsidiary in Japan in order to take advantage of their relationships with vendors, experience in negotiations and logistics as well as their ability to obtain volume discounts. See Item 7.B. Related Party
Transactions.



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Our engineers begin discussions with equipment manufacturers far in advance of the planned
installation of equipment in a new fabrication facility, and we typically execute a letter of intent with the vendors in advance of our planned installation to ensure timely delivery of main equipment with long-term delivery schedules. Engineers
from our vendors typically accompany the new equipment to our fabrication facilities to assist in the installation process to ensure proper operation. To date, we have not experienced any material problems with our equipment supplies or
after-delivery services. In addition, we outsource certain manufacturing processes to third party processers from time to time to supplement our processing capacity, and in certain cases, we maintain strategic relationships with such third party
processors. For example, we have invested, and currently hold a 16.3% equity interest, in AVATEC Co., Ltd., a third party processor that etches glass substrates.

Quality Control

We believe that our
advanced production capabilities and our reputation for high quality and reliable products have been important factors in attracting and retaining key customers. We have implemented quality inspection and testing procedures at all of our fabrication
facilities and assembly facilities. Our quality control procedures are carried out at three stages of the manufacturing process:



| |  |  | incoming quality control with respect to components and raw materials;
| | - |  | ----------------------------------------------------------------------



| |  |  | in-process quality control, which is conducted at a series of control points in the manufacturing process; and
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | outgoing quality control, which focuses on packaging, delivery and post-delivery services to customers.
| | - |  | -------------------------------------------------------------------------------------------------------

With respect to incoming quality control, we perform quality control procedures for the raw materials and components that we purchase. These
procedures include testing samples of large batches, obtaining vendor testing reports and testing to ensure compatibility with other components and raw materials, as well as vendor qualification and vendor rating. Our in-process quality control
includes various programs designed to detect, as well as prevent, quality deviations, reduce manufacturing costs, ensure on-time delivery, increase in-process yields and improve field reliability of our products. We perform outgoing quality control
based on burn-in testing and final visual inspection of our products and accelerated life testing of samples. We inspect and test our completed display panels to ensure that they meet our high production standards. We also provide post-delivery
services to our customers, and maintain warranty exchange inventories in regional hubs to meet our customers needs.

Our quality
assurance team works to ensure effective and consistent application of our quality control procedures, which include six-sigma quality control procedures, and to introduce new methodologies that could further enhance our quality control procedures.
Our quality assurance programs have received accredited ISO/TS 16949 certifications. The ISO/TS certification process involves subjecting our manufacturing processes and quality management systems to reviews and observation for various fixed
periods. ISO/TS certification is required by certain European countries and the United States in connection with sales of industrial products in those countries, and provides independent verification to our customers regarding the quality control
measures employed in our manufacturing and assembly processes.

Insurance

We currently have property insurance coverage, including business interruption coverage, for our production facilities in Gumi and Paju, Korea,
for up to W2.7 trillion in the aggregate, and for our GP1 fabrication facility located in Guangzhou China for up to RMB9.3 billion in the aggregate. We also have insurance coverage for work-related injuries to our employees,
accidents during overseas business travel, damage during construction, damage to products and equipment during shipment, damage to equipment during installation at our fabrication facilities, automobile accidents, bodily injury and property damage
from gas accidents, as well as mandatory unemployment insurance for our workers and director and officer liability insurance. In addition, we maintain general and product liability, employment practice liability, aviation product liability and
world-wide cargo insurance. Our dormitories in Gumi and Paju, Korea have fire insurance coverage for up to W506 billion in the aggregate. Our subsidiaries also have insurance coverage for damage to office fixtures and equipment and
life and disability insurance for their employees. All of our overseas manufacturing subsidiaries also carry property insurance, business interruption insurance and commercial general liability insurance.



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Environmental Matters

Our production processes generate various forms of chemical and other industrial waste, waste water and greenhouse gas emissions at various
stages in the manufacturing process. We have installed various types of anti-pollution equipment for the treatment and recycling of such waste products and aggressively engage in greenhouse gas emission reduction and energy conservation efforts.

As a member of the World Display device Industry Cooperation Committee, or WDICC, a TFT-LCD industry organization focusing on
environmental issues, we have voluntarily agreed to reduce emission of greenhouse gases, such as nitrogen trifluoride, or NF3, and sulfur hexafluoride, or SF6, gases, by developing and adopting cost-effective abatement technologies and systems and
increasing the number of abatement systems installed in our facilities. We installed NF3 abatement systems at all of our production lines when the production facilities were being constructed. In addition, we have voluntarily installed SF6 abatement
systems in P61 and P7.

We also have an internal monitoring system to control the use of hazardous substances in the manufacture of our
products as we are committed to compliance with all applicable environmental laws and regulations, including European Union Restriction of Hazardous Substances, or RoHS, Directive 2011/65/EU, which restricts the use of certain hazardous substances
in the manufacture of electrical and electronic equipment. Furthermore, we are operating a green purchasing system, which excludes the hazardous materials at the purchasing stage. This system has enabled us to comply with various
environmental legislations of hazardous substances, including the European Union RoHS. For the more efficient operation of our waste water treatment equipment, we have also entered into an agreement with HiEntech, a wholly owned subsidiary of LG
Electronics, for the operation of our water treatment system.

Operations at our manufacturing plants are subject to regulation and
periodic scheduled and unscheduled on-site inspections by the Korean Ministry of Environment and local environmental protection authorities. We believe that we have adopted adequate anti-pollution measures for the effective maintenance of
environmental protection standards consistent with local industry practice, and that we are in compliance in all material respects with the applicable environmental laws and regulations in Korea, including the Framework Act on Low Carbon, Green
Growth, the Korean government, under which we are required to submit periodic greenhouse gas emission and energy usage statements, performance reports and greenhouse gas emission and energy usage reduction plans to the Korean government.
Expenditures related to such compliance may be substantial and are generally included in capital expenditures. As required by Korean law, we employ licensed environmental specialists for each environmental area, including air quality, water quality,
toxic materials and radiation.

We have been certified by the Korean Ministry of Environment as a Green Company, with respect
to our environmental record for our P1 through P62 facilities and our module production plant in Gumi. In addition, we have received ISO 14001 and ISO 50001 certifications from the International Organization for Standardization and KS 7001 and KS
7002 certifications from the Korean Standards Service network with respect to our environmental and energy management systems for our P1 through P9 facilities and our Gumi and Paju module production plants. Our module production plants in Nanjing,
Yantai and Guangzhou, China have also received ISO 14001 certification. Our GP1 fabrication facility was the first plant in China to receive the Green Plant designation under Chinas Green China Policy. Our GP1 fabrication facility
has also received ISO 14001 and OHSAS 18001 certifications.

Joint Ventures

We consider joint ventures an important part of our business, both operationally and strategically. We have used joint ventures to enter into
new geographic markets, in particular China, to gain new customers and/or strengthen positions with existing customers and to procure certain components and raw materials. When entering new geographic markets where we do not have substantial local
experience and infrastructure, teaming up with a local partner can reduce capital investment by leveraging the pre-existing infrastructure of local partners. In addition, local partners in these markets can provide knowledge and insight into local
customs and practices and access to local suppliers of raw materials and components. All of these advantages can reduce the risk, and thereby enhance the prospects for the success, of an entry into a new geographic market. If the partner of the
joint venture already has an established customer base, it can also be an effective means to acquire such new customers. Joint venture arrangements also allow us to access technology we would otherwise have to develop independently, thereby reducing
the time and cost of development. They can also provide the opportunity to create synergies and applications of technology that would not otherwise be possible.



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From time to time, we have pursued a number of joint venture initiatives. For example, in
September 2012, we entered into a joint venture agreement with Guangzhou GET Technologies Development Co., Ltd., or GET Tech, and Shenzhen SKYWORTH-RGB Electronic Co., Ltd., or Skyworth, establishing LG Display (China) Co., Ltd., which owns and
operates our GP1 fabrication facility in Guangzhou, China. See Item 4.D. Property, Plants and Equipment Current Facilities. We acquired a 70.0% equity interest in LG Display (China) and have committed to invest a total of
approximately US$934 million over a period of two years from the date of incorporation of LG Display (China). Each of GET Tech and Skyworth owns a 20.0% and 10.0% equity interest in LG Display (China), respectively.

We intend to continue to seek strategic acquisition and joint venture opportunities and conduct feasibility studies with respect to
establishing new manufacturing subsidiaries in strategic locations to deepen our market penetration, achieve economies of scale, increase our customer base, expand our geographical reach and reduce costs.

Subsidiaries

The following table sets
forth summary information for our subsidiaries as of December 31, 2015:



|                                       |  |                              |  |                            |  |                     |  |                        |  |  |                                   |  |  |                             |     |   |  |  |     |  
|-------------------------------------- |  | ---------------------------- |  | -------------------------- |  | ------------------- |  | ---------------------- |  |  | --------------------------------- |  |  | --------------------------- | --- | - |  |  | --- | -
|Subsidiary                             |  | MainActivities               |  | JurisdictionofOrganization |  | Date ofOrganization |  | Total EquityInvestment |  |  | Percentageof OurOwnershipInterest |  |  | Percentageof OurVotingPower |    
|LG Display Taiwan Co., Ltd.            |  | Sales                        |  | Taiwan                     |  | April 1999          |  | NT$                    |  |  | 115,500,000                       |  |  |                             | 100 | % |  |  | 100 | %
|LG Display America, Inc.               |  | Sales                        |  | U.S.A.                     |  | September 1999      |  | US$                    |  |  | 411,000,000                       |  |  |                             | 100 | % |  |  | 100 | %
|LG Display Japan Co., Ltd.             |  | Sales                        |  | Japan                      |  | October 1999        |  | ¥                      |  |  | 95,000,000                        |  |  |                             | 100 | % |  |  | 100 | %
|LG Display Germany GmbH                |  | Sales                        |  | Germany                    |  | November 1999       |  |                       |  |  | 960,000                           |  |  |                             | 100 | % |  |  | 100 | %
|LG Display Nanjing Co., Ltd.           |  | Manufacturingand sales       |  | China                      |  | July 2002           |  | RMB                    |  |  | 2,936,759,345                     |  |  |                             | 100 | % |  |  | 100 | %
|LG Display Shanghai Co., Ltd.          |  | Sales                        |  | China                      |  | January 2003        |  | RMB                    |  |  | 4,138,650                         |  |  |                             | 100 | % |  |  | 100 | %
|LG Display Poland Sp. zo.o.            |  | Manufacturingand sales       |  | Poland                     |  | September 2005      |  | PLN                    |  |  | 511,071,000                       |  |  |                             | 100 | % |  |  | 100 | %
|LG Display Guangzhou Co., Ltd.         |  | Manufacturingand sales       |  | China                      |  | June 2006           |  | RMB                    |  |  | 1,654,693,079                     |  |  |                             | 100 | % |  |  | 100 | %
|LG Display Shenzhen Co., Ltd.          |  | Sales                        |  | China                      |  | August 2007         |  | RMB                    |  |  | 3,775,250                         |  |  |                             | 100 | % |  |  | 100 | %
|LG Display Singapore Pte. Ltd.         |  | Sales                        |  | Singapore                  |  | January 2009        |  | SG$                    |  |  | 1,400,000                         |  |  |                             | 100 | % |  |  | 100 | %
|LG Display Yantai Co., Ltd.            |  | Manufacturingand sales       |  | China                      |  | April 2010          |  | RMB                    |  |  | 1,007,720,600                     |  |  |                             | 100 | % |  |  | 100 | %
|L&T Display Technology (Fujian) Ltd.   |  | Manufacturingand sales       |  | China                      |  | January 2010        |  | RMB                    |  |  | 59,197,026                        |  |  |                             | 51  | % |  |  | 51  | %
|LG Display USA Inc.                    |  | Manufacturingand sales       |  | U.S.A.                     |  | October 2011        |  | US$                    |  |  | 201,116                           |  |  |                             | 100 | % |  |  | 100 | %
|Nanumnuri Co., Ltd.                    |  | Workplaceservices            |  | Korea                      |  | March 2012          |  | Won                    |  |  | 800,000,000                       |  |  |                             | 100 | % |  |  | 100 | %
|LG Display (China) Co., Ltd.           |  | Manufacturingand sales       |  | China                      |  | December 2012       |  | RMB                    |  |  | 5,703,466,124                     |  |  |                             | 70  | % |  |  | 70  | %
|Unified Innovative Technology, LLC     |  | Managingintellectualproperty |  | U.S.A.                     |  | March 2014          |  | US$                    |  |  | 9,000,000                         |  |  |                             | 100 | % |  |  | 100 | %
|Global OLED Technology LLC             |  | Managingintellectualproperty |  | U.S.A.                     |  | December 2009       |  | US$                    |  |  | 138,010,000                       |  |  |                             | 100 | % |  |  | 100 | %
|LG Display Guangzhou Trading Co., Ltd. |  | Sales                        |  | China                      |  | April 2015          |  | RMB                    |  |  | 1,223,960                         |  |  |                             | 100 | % |  |  | 100 | %



|N.B. | See Note 1(b) of the notes to our financial statements for changes to our subsidiaries during the year ended December 31, 2015.
|---- | -------------------------------------------------------------------------------------------------------------------------------



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|Item 4.C. | Organizational Structure
|--------- | ------------------------

These matters are discussed under Item 4.B.
where relevant.



|Item 4.D. | Property, Plants and Equipment
|--------- | ------------------------------

Current Facilities

The following table sets forth the size, location and primary use of our fabrication facilities.



|                     |  |               |     |  |                             |                |          |                  |                                    |  |         |                                  |  |                                                                      
|-------------------- |  | ------------- | --- |  | --------------------------- | -------------- | -------- | ---------------- | ---------------------------------- |  | ------- | -------------------------------- |  | ---------------------------------------------------------------------
|Fabrication Facility |  | Generation(1) |     |  | Mass ProductionCommencement |                | Location |                  | Gross Floor Area(in square meters) |  |         | Primary Types of Panels Produced
|P2                   |  |               | 3.5 |  |                             | December 1997  |          | Gumi, Korea      |                                    |  | 71,149  |                                  |  | Automotive                                                           
|P3                   |  |               | 4   |  |                             | April 2000     |          | Gumi, Korea      |                                    |  | 71,149  |                                  |  | Mobile, Automotive                                                   
|P4                   |  |               | 5   |  |                             | March 2002     |          | Gumi, Korea      |                                    |  | 97,621  |                                  |  | Mobile, Notebook Computer,Desktop Monitor, TabletComputer, Automotive
|P5                   |  |               | 5   |  |                             | May 2003       |          | Gumi, Korea      |                                    |  | 97,621  |                                  |  | Notebook Computer,Desktop Monitor, TabletComputer                    
|P61 (2)              |  |               | 6   |  |                             | August 2004    |          | Gumi, Korea      |                                    |  | 288,602 |                                  |  | Mobile, Desktop Monitor,Tablet Computer                              
|P62                  |  |               | 6   |  |                             | April 2009     |          | Gumi, Korea      |                                    |  | 101,607 |                                  |  | Notebook Computer,Desktop Monitor, Television                        
|P7                   |  |               | 7   |  |                             | January 2006   |          | Paju, Korea      |                                    |  | 311,942 |                                  |  | Television, Desktop Monitor                                          
|P8(3)                |  |               | 8   |  |                             | March 2009     |          | Paju, Korea      |                                    |  | 529,446 |                                  |  | Television, Desktop Monitor                                          
|P9 (4)               |  |               | 8   |  |                             | June 2012      |          | Paju, Korea      |                                    |  | 331,005 |                                  |  | Desktop Monitor, NotebookComputer, Tablet Computer                   
|GP1                  |  |               | 8   |  |                             | September 2014 |          | Guangzhou, China |                                    |  | 330,678 |                                  |  | Television                                                           
|Ochang(5)            |  |               | 2   |  |                             | January 2012   |          | Ochang, Korea    |                                    |  | 7,129   |                                  |  | OLED General Lighting,Automotive                                     



|(1) | Based on internal reference to evolutions in facility design, material flows and input substrate sizes. There are several definitions of generations in the display industry. There has been no consensus in
the display industry on a uniform definition. References to generations made in this annual report are based on our current definition of generations as indicated in the table below.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                 |  |       |           |  |       |  |                                               |       |  |  |                    |  |  |       |                                                      |  |       |  |                            |       |  |  |                            |  |  |  |               | 
|-------------------------------- |  | ----- | --------- |  | ----- |  | --------------------------------------------- | ----- |  |  | ------------------ |  |  | ----- | ---------------------------------------------------- |  | ----- |  | -------------------------- | ----- |  |  | -------------------------- |  |  |  | ------------- | 
|Substrate Sizes (in millimeters) |  | Gen 2 |           |  | Gen 3 |  |                                               | Gen 4 |  |  | Gen 5              |  |  | Gen 6 |                                                      |  | Gen 7 |  |                            | Gen 8 | 
|                                 |  |       | 370 x 470 |  |       |  | 550 x 650590 x 670600 x 720620 x 750650 x 830 |       |  |  | 680 x 880730 x 920 |  |  |       | 1,000 x 1,2001,100 x 1,2501,100 x 1,3001,200 x 1,300 |  |       |  | 1,500 x 1,8001,500 x 1,850 |       |  |  | 1,870 x 2,2001,950 x 2,250 |  |  |  | 2,200 x 2,500 | 



|(2) | Gross floor area of P61 fabrication facility includes gross floor area of AP3 production lines.
|--- | -----------------------------------------------------------------------------------------------

|(3) | Gross floor area of P8 fabrication facility includes gross floor area of AP2, E2 and E3 production lines.
|--- | ---------------------------------------------------------------------------------------------------------

|(4) | Gross floor area of P9 fabrication facility includes gross floor area of E4 production lines.
|--- | ---------------------------------------------------------------------------------------------

|(5) | Gross floor area of OLED light production facilities which we lease from LG Chem. We acquired the OLED light business from LG Chem in December 2015.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

For input substrate size, initial design capacity and year-end input capacity as a result of ramp-up for each of our fabrication facilities, please see
Item 5.A. Operating ResultsOverviewManufacturing Productivity and Costs.



37



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Housed within certain fabrication facilities, we also operate separately designated fabrication
production lines. The following table sets forth the location and primary use of our separately designated production lines.



|                 |  |                |   |  |                             |               |          |     |                                  |                           
|---------------- |  | -------------- | - |  | --------------------------- | ------------- | -------- | --- | -------------------------------- | --------------------------
|Production Lines |  | Generation (1) |   |  | Mass ProductionCommencement |               | Location |     | Primary Types of Panels Produced
|AP2              |  |                | 4 |  |                             | July 2010     |          | P8  |                                  | LTPS backplanes for mobile
|AP3              |  |                | 6 |  |                             | February 2014 |          | P61 |                                  | LTPS backplanes for mobile
|E2               |  |                | 4 |  |                             | December 2013 |          | P8  |                                  | OLED mobile               
|E3               |  |                | 8 |  |                             | January 2013  |          | P8  |                                  | OLED television           
|E4               |  |                | 8 |  |                             | December 2014 |          | P9  |                                  | OLED television           



|(1) | Based on internal reference to evolutions in facility design, material flows and input substrate sizes.
|--- | -------------------------------------------------------------------------------------------------------

We also currently operate module assembly facilities located in China (Nanjing, Guangzhou and Yantai), Korea (Gumi and Paju) and Poland
(Wroclaw). In addition, we operate a research and development facility in Paju, Korea, which we refer to as the R&D Center. We opened the R&D Center in April 2012 to consolidate our research and development efforts for next-generation
display technologies. The following table sets forth the size of our R&D Center and module assembly facilities.



|                            |  |                                    |         |  |                              |                                      
|--------------------------- |  | ---------------------------------- | ------- |  | ---------------------------- | -------------------------------------
|Facility                    |  | Gross Floor Area(in square meters) |         |  | Mass Production Commencement
|R&D Center                  |  |                                    | 69,857  |  |                              | Not applicable (opened in April 2012)
|Gumi assembly facility      |  |                                    | 159,201 |  |                              | January 1995                         
|Nanjing assembly facility   |  |                                    | 165,002 |  |                              | May 2003                             
|Paju assembly facility      |  |                                    | 223,664 |  |                              | January 2006                         
|Wroclaw assembly facility   |  |                                    | 106,928 |  |                              | February 2007                        
|Guangzhou assembly facility |  |                                    | 139,590 |  |                              | December 2007                        
|Yantai assembly facility    |  |                                    | 78,285  |  |                              | May 2010                             

Capital Expenditures

We are currently constructing our P10 fabrication facility in Paju, Korea, which is expected to commence production primarily of OLED panels in
the first half of 2018. We are also in the process of installing, at our Gumi Display Cluster, our new E5 production line on which we expect to commence mass production of OLED panels in the first half of 2017. Each of our expansion and conversion
projects is subject to market conditions and any changes in our investment timetable.

We currently expect that, in 2016, our total
capital expenditures on a cash out basis will be higher than in 2015, primarily to fund the construction of our P10 fabrication facility in Paju Korea and expansion of our OLED panel production capacities to respond to increases in demand for our
panels, while maintaining and making improvements to our existing facilities. This amount is subject to periodic assessment, and we cannot provide any assurance that this amount may not change materially after assessment. We may undertake further
expansion projects in the future with respect to our existing facilities as our overall business strategy may require.



|Item 4A. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

We do not have any unresolved comments from the SEC staff
regarding our periodic reports under the Exchange Act.



|Item 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------- | --------------------------------------------



|Item 5.A. | Operating Results
|--------- | -----------------

Overview

Our results of operations are affected principally by overall market conditions, our manufacturing productivity and costs, and our product mix.

Market Conditions

The display industry in which we operate is affected by market conditions that are often outside the control of individual manufacturers. Our
results of operations might fluctuate significantly from period to period due to market factors, such as seasonal variations in demand, surges in production capacity by competitors and changes in technology. Over the past decade, the display
industry has grown significantly as a result of cost reductions and product improvements that stimulated demand for TFT-LCD and OLED panels. With respect to the TFT-LCD industry, the industry grew from 586 million units in 2004 to
3,521 million units in 2015 and market revenue grew from US$49 billion to US$111 billion during the same period according to IHS Technology.



38



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While TFT-LCD panels still predominantly constitute the display industry, the industry in recent
years has witnessed the introduction of display panels based on new technologies, such as OLED technology, that have begun to compete with TFT-LCD panels. In particular, we and some of our competitors have already commenced mass production of OLED
panels. Currently, small-sized panels for use in mobile devices such as smartphones make up the bulk of the OLED panel market, accounting for almost 93% of industry revenue from global sales of OLED panels in 2015. These small-sized OLED panels
compete with more advanced TFT-LCD products such as our AH-IPS products. However, as of 2015, the OLED market was relatively small compared to the TFT-LCD market. According to IHS Technology, 362 million OLED panel units that are less than nine
inches were sold in 2015, with market revenue of approximately US$12 billion in that same year. We believe, however, that the market may change rapidly as a growing array of large-sized OLED panels are introduced to the market and advances in the
related technology and manufacturing processes enable mass production in a cost-efficient manner. In December 2014, we commenced mass production of 55-inch, 65-inch and 77-inch Ultra HD OLED television panels on our E4 production lines.

While the display industry has grown rapidly, it has also experienced business cycles with significant and rapid price declines from time to
time. Historically, display panel manufacturers have increased display area fabrication capacity rapidly. Capacity expansion occurs especially rapidly when several manufacturers ramp-up new factories at the same time. During such surges in the rate
of supply growth, our customers are able to exert downward pricing pressure, leading to sharp declines in average selling prices and significant fluctuations in our gross margin. In addition, regardless of relative capacity expansion, we expect
average selling prices of our existing products will decline as the cost of manufacturing declines due to technology advances and component cost reductions. Conversely, constraints in the industry supply chain or increased demand for new technology
products have led to increased prices for display panels in some past periods.

According to IHS Technology, the display industry for
panels that are nine inches or larger expanded slightly in 2014 compared to 2013, with total market revenue increasing from US$73 billion in 2013 to US$74 billion in 2014. The average selling price of those panels decreased during the same period by
2% from approximately US$105 in 2013 to approximately US$103 in 2014. In 2015, the display industry for panels that are nine inches or larger contracted, with total market revenue decreasing to US$64 billion. The average selling price of those
panels further decreased during the same period by 12% to approximately US$91 in 2015.

We strive to mitigate the effect of industry
cyclicality and the resulting price fluctuations by planning capacity expansions and capacity allocations, or shifting our product mix, to capture premium prices in specific emerging product categories. As part of our strategy, we have been
proceeding with the construction of new fabrication facilities and additional investments to upgrade and convert existing facilities and production lines to produce differentiated specialty display panels based on newer technologies that command
higher premiums. For example, we started mass production at our AP3 production lines in February 2014, our GP1 fabrication facility in Guangzhou, China in September 2014 and our E4 production lines in December of 2014. Construction of our P10
fabrication facility is currently under way in Paju, Korea and we expect production to commence at that fabrication facility in the first half of 2018, subject to market conditions and any changes in our investment timetable. In addition, we are in
the process of installing, at our Gumi Display Cluster, our new E5 production line on which we expect to commence mass production of OLED panels in the first half of 2017, subject to market conditions and any changes in our investment timetable. We
also recently decided to invest in the construction of a new OLED light panel fabrication facility in Gumi, Korea.

In addition, we are
vigorously pursuing our strategy to develop differentiated specialty products and technologies that better address our customers needs, thereby delivering greater value to our customers. In many cases, these efforts go hand-in-hand with our
efforts to develop products based on new technologies that allow us to realize greater premiums. For example, we have allocated greater amounts of our resources to the development and production of OLED television panels, public display panels,
display panels utilizing AH-IPS technology for various tablet computers, smartphones, notebook computers, desktop monitors and other applications and flexible OLED technology for smartphones and smartwatches. In particular, we are deploying greater
resources into large-sized OLED television panels to maintain our early competitive edge in such market.

Another key aspect of our
strategy is to foster close cooperation with our customers and build on our strategic relationships with many of our key suppliers. Success of a new product depends on, among other things, working closely with our customers to gain insights into
their product needs and to understand general trends in the market. At the same time, we often work with our equipment suppliers to design equipment that can enhance the efficiency of our production processes for such new products.



39



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##### Table of Contents

Manufacturing Productivity and Costs

We seek to continually enhance our manufacturing productivity and thereby reduce the cost of producing each panel. We have significantly
expanded our production capacity by investing in fabrication facilities that can process increasingly larger-size glass substrates. The following table shows the input substrate size, initial design capacity and year-end input capacity as a result
of ramp-up for each of our fabrication facilities as of the dates indicated:



|          |  |                                              |                    |  |                                              |  |         |                                 |  |  |         |  |  |  |         |  |  |  |         | 
|--------- |  | -------------------------------------------- | ------------------ |  | -------------------------------------------- |  | ------- | ------------------------------- |  |  | ------- |  |  |  | ------- |  |  |  | ------- | 
|Facility  |  | Primary InputSubstrates Size(in millimeters) |                    |  | Initial
Design Capacity
(in input substrates |  |         | Year-end Input Capacity(1)      | 
|          |  | per month)                                   |                    |  | 2013                                         |  |         | 2014                            |  |  | 2015    | 
|          |  |                                              |                    |  |                                              |  |         | (in input substrates per month) | 
|P1(2)     |  |                                              | 370x470            |  |                                              |  | 30,000  |                                 |  |  | N/A     |  |  |  | N/A     |  |  |  | N/A     | 
|P2        |  |                                              | 590x670            |  |                                              |  | 60,000  |                                 |  |  | 79,000  |  |  |  | 84,000  |  |  |  | 76,000  | 
|P3        |  |                                              | 680x880            |  |                                              |  | 60,000  |                                 |  |  | 84,000  |  |  |  | 85,000  |  |  |  | 67,000  | 
|P4        |  |                                              | 1,000x1,200        |  |                                              |  | 60,000  |                                 |  |  | 131,000 |  |  |  | 125,000 |  |  |  | 98,000  | 
|P5        |  |                                              | 1,100x1,250        |  |                                              |  | 60,000  |                                 |  |  | 109,000 |  |  |  | 129,000 |  |  |  | 126,000 | 
|P61(3)    |  |                                              | 1,500x1,850        |  |                                              |  | 90,000  |                                 |  |  | 132,000 |  |  |  | 93,000  |  |  |  | 93,000  | 
|P62       |  |                                              | 1,500x1,850        |  |                                              |  | 60,000  |                                 |  |  | 59,000  |  |  |  | 50,000  |  |  |  | 46,000  | 
|P7        |  |                                              | 1,950x2,250        |  |                                              |  | 90,000  |                                 |  |  | 197,000 |  |  |  | 224,000 |  |  |  | 227,000 | 
|P8(4)     |  |                                              | 2,200x2,500730x920 |  |                                              |  | 339,000 |                                 |  |  | 395,000 |  |  |  | 401,000 |  |  |  | 384,000 | 
|P9        |  |                                              | 2,200x2,500        |  |                                              |  | 60,000  |                                 |  |  | 58,000  |  |  |  | 51,000  |  |  |  | 50,000  | 
|GP1       |  |                                              | 2,200 x 2,500      |  |                                              |  | 60,000  |                                 |  |  | N/A     |  |  |  | 78,000  |  |  |  | 96,000  | 
|Ochang(5) |  |                                              | 320 x 470          |  |                                              |  | 4,000   |                                 |  |  | N/A     |  |  |  | N/A     |  |  |  | 1,000   | 



N/A = Not
applicable.

|(1) | Year-end input capacity is the total input substrates for the month that had the highest monthly input substrates during the fiscal year.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

|(2) | We ceased production and closed P1 in July 2013.
|--- | ------------------------------------------------

|(3) | Includes input capacity of AP3 production lines.
|--- | ------------------------------------------------

|(4) | Includes input capacity of AP2, E2, E3 and E4 production lines.
|--- | ---------------------------------------------------------------

|(5) | Year-end input capacity for 2015 represents the total input substrates after our acquisition of the OLED light business from LG Chem in December 2015.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------

Our cash outflows for capital expenditures amounted to W3,473 billion in 2013, W2,983 billion in 2014 and
W2,365 billion (US$2,023 million) in 2015. Such capital expenditures relate mainly to the construction and equipping of our E4 production lines, as well as continued investments in our GP1 fabrication facility and E2, E3 and AP3
production lines, in 2013, continued investments in our GP1 fabrication facility and E3, AP3 and E4 production lines in 2014 and continued investments in our GP1 fabrication facility and E4 production lines, in 2015. Capital expenditures were also
incurred for the acquisition of new equipment during the same period. Our depreciation expense as a percentage of revenue decreased from 13.3% in 2013 to 12.2% in 2014 and to 10.5% in 2015. The decrease in 2014 compared to 2013 was primarily due to
the end of the estimated useful life of certain machinery and equipment assets in the second expansion to our P8 fabrication facility and AP2 production lines. The decrease in 2015 compared to 2014 was also primarily due to the end of the estimated
useful life of certain machinery and equipment assets in the second expansion to our P8 fabrication facility and AP2 production lines. We currently expect that, in 2016, our total capital expenditures on a cash out basis will be higher than in 2015,
primarily to fund the construction of our P10 fabrication facility in Paju Korea and expansion of our OLED panel production capacities to respond to increases in demand for our panels, while maintaining and making improvements to our existing
facilities. This amount is subject to periodic assessment, and we cannot provide any assurance that this amount may not change materially after assessment.

Since inception we have designed our fabrication facilities in-house and co-developed most equipment sets with our suppliers. These efforts
have enabled us to gain valuable experience in designing and operating next generation fabrication facilities capable of processing increasingly larger-size glass substrates. We have been able to leverage this experience to achieve and maintain high
production output and yields at our fabrication facilities, thereby lowering costs. In addition, in recent years, we have substituted a portion of our equipment purchased from overseas vendors with purchases from local vendors to diversify our
supply source and reduce costs. For example, in 2015, we purchased approximately 72.9% of our equipment for our facilities in Korea from local suppliers on an invoiced basis. We also fabricate certain components internally, such as color filters,
which are one of the industrys higher-cost components.



40



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We also continue to make various process improvements at our fabrication facilities, including
enhancing the performance of process equipment, efficiency of material flows and quality of process and product designs. For example, we have reduced the number of mask steps in the TFT process from four to three with respect to certain models,
thereby enabling us to process a higher number of substrates in a given period of time. Such process improvements result in increased unit output of our fabrication facilities without significant capital investment, thus enabling us to reduce fixed
costs on a per panel basis. In addition, in commencing mass production of large-sized OLED products, we have made modifications to certain of our existing TFT-LCD production lines to convert them into OLED panel production lines. Because our
large-sized OLED panels employ oxide TFT backplane technology, which can be produced using manufacturing processes similar to the processes used to manufacture TFT-LCD panels, relatively little modification has been necessary, thereby reducing the
costs of additional investments needed for the conversion of our production lines.

Raw materials comprise the largest component of our
costs. We monitor the prices at which we can procure raw materials from suppliers and to the extent overseas suppliers are able to provide raw materials at competitive prices, we intend to diversify our supplier base by procuring raw materials from
such overseas suppliers. We have also been able to leverage our scale and leading industry position to obtain competitive prices from our suppliers. Certain strategic decisions, such as fabricating our own color filters, one of the higher cost
components, have also been important drivers of our cost control.

The size of our operations has also expanded considerably from 2002 to
date, enabling us to benefit from economies of scale. As a result of the above factors, our cost of sales per square meter of net display area, which is derived by dividing total costs of sales by total square meters of net display area shipped,
decreased by 11.6% from US$629 in 2013 to US$556 in 2014 and further decreased by 6.7% to US$519 in 2015.

Product Mix

Our product mix reflects our strategic capacity allocation among various product markets, and is continually reviewed and adjusted based on the
demand for, and our assessment of the profitability of, display panels in different markets and size categories. In recent years, we believe market demand has been shaped by a shift toward larger-sized panels, especially in the television and
desktop panel markets, and a shift toward differentiated specialty products based on newer technologies, especially in the display panel markets for Ultra HD televisions, ultra-thin notebooks, tablet computers and smartphones. In response to such
market trends, we have increased our production capacity and sales of larger-sized panels, as well as developing and commercializing differentiated specialty products for a variety of applications. For example, with respect to our television panel
product portfolio, we increased sales of our large-sized panels and the proportion of sales of our 49-inch, 55-inch and 65-inch television panels in our product mix increased between 2013 and 2015 in order to meet increased demand for large-sized
television panels. In addition, with respect to our desktop monitor products, we have expanded our product portfolio to offer panels with full high definition, or Full HD, resolution ranging from 21.5 inches to 34 inches in a variety of screen
aspect ratios, including 21:9 screen aspect ratio for ultra-widescreen monitors, in order to capture the market for large-size desktop monitors. At the same time, in response to increasing market demand for differentiated specialty products, we have
developed and commercialized, for example, tablet computer panels utilizing AH-IPS technology with increasingly higher resolution and other features, smartphone and smartwatch panels utilizing flexible OLED technology and large-sized curved
television panels utilizing our Ultra HD and OLED technologies.

The following table sets forth our revenue by product category for the
years indicated and revenue in each product category as a percentage of our total revenue:



|                                 |  |                                                                  |        |  |      |  |       |       |  |   |        |  |  |       |       |   |          |   |        |   |  |     |        |  |  |  |       |  
|-------------------------------- |  | ---------------------------------------------------------------- | ------ |  | ---- |  | ----- | ----- |  | - | ------ |  |  | ----- | ----- | - | -------- | - | ------ | - |  | --- | ------ |  |  |  | ----- | -
|                                 |  | Year ended December 31,                                          |       
|                                 |  | 2013                                                             |        |  | 2014 |  |       | 2015  | 
|                                 |  | Sales                                                            |        |  | %    |  |       | Sales |  |   | %      |  |  | Sales |       |   | Sales(4) |   |        | % | 
|Panels for:                      |  | (in billions of Won and millions of US$, except for percentages) |       
|Televisions                      |  | W                                                                | 11,795 |  |      |  | 43.6  | %     |  | W | 10,540 |  |  |       | 39.8  | % |          | W | 10,854 |   |  | US$ | 9,283  |  |  |  | 38.2  | %
|Notebook computers(1)            |  |                                                                  | 2,819  |  |      |  | 10.4  |       |  |   | 2,669  |  |  |       | 10.1  |   |          |   | 2,509  |   |  |     | 2,146  |  |  |  | 8.8   |  
|Desktop monitors(2)              |  |                                                                  | 5,256  |  |      |  | 19.4  |       |  |   | 4,660  |  |  |       | 17.6  |   |          |   | 4,553  |   |  |     | 3,894  |  |  |  | 16.0  |  
|Tablet computers                 |  |                                                                  | 3,575  |  |      |  | 13.2  |       |  |   | 3,542  |  |  |       | 13.4  |   |          |   | 2,510  |   |  |     | 2,147  |  |  |  | 8.8   |  
|Mobile and other applications(3) |  |                                                                  | 3,537  |  |      |  | 13.1  |       |  |   | 5,005  |  |  |       | 18.9  |   |          |   | 7,919  |   |  |     | 6,773  |  |  |  | 27.9  |  
|                                 |  |                                                                  |        |  |      |  |       |       |  |   |        |  |  |       |       |   |          |   |        |   |  |     |        |  |  |  |       |  
|Sales of goods                   |  | W                                                                | 26,982 |  |      |  | 99.8  | %     |  | W | 26,416 |  |  |       | 99.8  | % |          | W | 28,345 |   |  | US$ | 24,243 |  |  |  | 99.9  | %
|Royalties and others             |  |                                                                  | 51     |  |      |  | 0.2   |       |  |   | 40     |  |  |       | 0.2   |   |          |   | 39     |   |  |     | 32     |  |  |  | 0.1   |  
|                                 |  |                                                                  |        |  |      |  |       |       |  |   |        |  |  |       |       |   |          |   |        |   |  |     |        |  |  |  |       |  
|Revenue                          |  | W                                                                | 27,033 |  |      |  | 100.0 | %     |  | W | 26,456 |  |  |       | 100.0 | % |          | W | 28,384 |   |  | US$ | 24,275 |  |  |  | 100.0 | %
|                                 |  |                                                                  |        |  |      |  |       |       |  |   |        |  |  |       |       |   |          |   |        |   |  |     |        |  |  |  |       |  



|(1) | Includes semi-finished products manufactured by our former joint venture company LUCOM Display Technology (Kunshan) Ltd. through June 2014 when we disposed of our entire investment in such company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes desktop monitors manufactured and sold by our joint venture company L&T Display Technology (Fujian) Limited.
|--- | ---------------------------------------------------------------------------------------------------------------------



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|(3) | Includes, among others, panels for mobile devices, including smartphones and other types of mobile phones, and industrial and other applications, including entertainment systems, automotive displays, portable navigation
devices and medical diagnostic equipment.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,169.26 to US$1.00, the noon buying rate in effect on December 31, 2015 as certified by the Federal Reserve
Bank of New York for customs purposes. This translation should not be construed as a representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table sets forth our sales volume by product category for the years indicated and as a percentage of our total panels sold:



|                                  |  |                                        |         |  |      |  |       |                 |  |  |         |  |  |                 |       |   |   |  |         |  |  |  |       |  
|--------------------------------- |  | -------------------------------------- | ------- |  | ---- |  | ----- | --------------- |  |  | ------- |  |  | --------------- | ----- | - | - |  | ------- |  |  |  | ----- | -
|                                  |  | Year ended December 31,                |        
|                                  |  | 2013                                   |         |  | 2014 |  |       | 2015            | 
|Panels for                        |  | Number ofPanels                        |         |  | %    |  |       | Number ofPanels |  |  | %       |  |  | Number ofPanels |       |   | % | 
|                                  |  | (in thousands, except for percentages) |        
|Televisions                       |  |                                        | 53,797  |  |      |  | 14.0  | %               |  |  | 51,358  |  |  |                 | 12.4  | % |   |  | 55,319  |  |  |  | 14.2  | %
|Notebook computers (1)            |  |                                        | 55,559  |  |      |  | 14.4  |                 |  |  | 50,175  |  |  |                 | 12.2  |   |   |  | 45,509  |  |  |  | 11.6  |  
|Desktop monitors (2)              |  |                                        | 49,986  |  |      |  | 13.0  |                 |  |  | 43,848  |  |  |                 | 10.6  |   |   |  | 41,912  |  |  |  | 10.7  |  
|Tablet computers                  |  |                                        | 63,840  |  |      |  | 16.6  |                 |  |  | 50,995  |  |  |                 | 12.4  |   |   |  | 31,476  |  |  |  | 8.1   |  
|Mobile and other applications (3) |  |                                        | 162,011 |  |      |  | 42.1  |                 |  |  | 216,479 |  |  |                 | 52.4  |   |   |  | 216,565 |  |  |  | 55.4  |  
|                                  |  |                                        |         |  |      |  |       |                 |  |  |         |  |  |                 |       |   |   |  |         |  |  |  |       |  
|Total                             |  |                                        | 385,193 |  |      |  | 100.0 | %               |  |  | 412,855 |  |  |                 | 100.0 | % |   |  | 390,781 |  |  |  | 100.0 | %
|                                  |  |                                        |         |  |      |  |       |                 |  |  |         |  |  |                 |       |   |   |  |         |  |  |  |       |  



|(1) | Includes semi-finished products manufactured by our former joint venture company LUCOM Display Technology (Kunshan) Ltd. through June 2014 when we disposed of our entire investment in such company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes desktop monitors manufactured and sold by our joint venture company L&T Display Technology (Fujian) Limited.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(3) | Includes, among others, panels for mobile devices, including smartphones and other types of mobile phones, and industrial and other applications, including entertainment systems, automotive displays, portable navigation
devices and medical diagnostic equipment.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Average Selling Prices

Our product mix has an impact on our average selling prices. In addition to business cycles, industry-wide supply and demand balances and other
market- or industry-wide variables, our product cost and price vary with the product display area, as well as the technology and specification of such product. Therefore, the average selling price of our products can vary over time as a result of
business cycles and the choices we make in capacity allocation for specific products. The overall average selling price of our display panels can fluctuate significantly. Our average selling price per panel, which is derived by dividing total sales
of goods by the total number of panels sold, decreased by 8.7% from W70,048 per panel in 2013 to W63,984 in 2014 but increased by 13.4% to W72,534 (US$62) in 2015. In 2014 compared to 2013, our
average selling price decreased primarily due to increases in the proportion of our mobile and other application panel units, which generally have lower selling prices relative to our larger panels in other product categories, and the proportion of
our television panel units in open cell form without backlight units, which generally have lower selling prices compared to television panels in module form with backlight units, sold in our product mix during the same period. In 2015 compared to
2014, our average selling price increased primarily due to a significant increase in the proportion of our larger-sized mobile and application panel units, which generally have higher selling prices compared to smaller-sized mobile and application
panel units, sold in our product mix during the same period, which was primarily attributable to an increase in demand for increasingly larger-sized smartphone panels from our customers.

The following table sets forth our average selling price per panel by markets for the years indicated:



|                                  |  |                           |         |  |      |   |         |         |  |   |         |  |  |     |     | 
|--------------------------------- |  | ------------------------- | ------- |  | ---- | - | ------- | ------- |  | - | ------- |  |  | --- | --- | 
|                                  |  | Average Selling Price (4) |        
|                                  |  | Year ended December 31,   |        
|                                  |  | 2013                      |         |  | 2014 |   |         | 2015(5) | 
|Televisions                       |  | W                         | 219,250 |  |      | W | 205,226 |         |  | W | 196,207 |  |  | US$ | 168 | 
|Notebook computers (1)            |  |                           | 50,739  |  |      |   | 53,194  |         |  |   | 55,132  |  |  |     | 47  | 
|Desktop monitors (2)              |  |                           | 105,149 |  |      |   | 106,276 |         |  |   | 108,632 |  |  |     | 93  | 
|Tablet computers                  |  |                           | 55,999  |  |      |   | 69,458  |         |  |   | 79,743  |  |  |     | 68  | 
|Mobile and other applications (3) |  |                           | 21,832  |  |      |   | 23,120  |         |  |   | 36,566  |  |  |     | 31  | 
|All panels                        |  |                           | 70,048  |  |      |   | 63,984  |         |  |   | 72,534  |  |  |     | 62  | 



|(1) | Includes semi-finished products manufactured by our former joint venture company LUCOM Display Technology (Kunshan) Ltd. through June 2014 when we disposed of our entire investment in such company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes desktop monitors manufactured and sold by our joint venture company L&T Display Technology (Fujian) Limited.
|--- | ---------------------------------------------------------------------------------------------------------------------

|(3) | Includes, among others, panels for mobile devices, including smartphones and other types of mobile phones, and industrial and other applications, including entertainment systems, automotive displays, portable navigation
devices and medical diagnostic equipment.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(4) | Average selling price for each market represents revenue per market divided by unit sales per market.
|--- | -----------------------------------------------------------------------------------------------------

|(5) | For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,169.26 to US$1.00, the noon buying rate in effect on December 31, 2015 as certified by the Federal Reserve
Bank of New York for customs purposes. This translation should not be construed as a representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our average revenue per square meter of net display area, which is derived by dividing our total revenue by total square meters of net display
area shipped, decreased by 10.4% from US$723 per square meter of net display area in 2013 to US$648 in 2014. In 2015, our average revenue per square meter of net display area shipped further decreased by 5.7% to US$612.

Critical Accounting Policies

We have
prepared our consolidated financial statements in accordance with IFRS as issued by the IASB. These accounting principles require us to make certain estimates and judgments that affect the reported amounts in our consolidated financial statements.
Our estimates and judgments are based on historical experience, forecasted future events and various other assumptions that we believe to be reasonable under the circumstances. Estimates and judgments may differ under different assumptions or
conditions. We evaluate our estimates and judgments on an ongoing basis. We believe the critical accounting policies discussed below are the most important to the portrayal of our financial condition and results of operations. Each of them is
dependent on projections of future market conditions and they require us to make the most difficult, subjective or complex judgments.

Inventories

We
state our inventory at the lower of cost and net realizable value. We make adjustments to reduce the cost of inventory to its net realizable value, if required, for estimated excess, obsolescence or impaired balances. Factors influencing these
adjustments include changes in demand, technological changes, product life cycle, component cost trends, product pricing, and physical deterioration. Revisions to these adjustments would be required if these factors differ from our estimates. If
future demand or market conditions for our products are less favorable than forecasted, we may be required to recognize additional write-downs, which would negatively affect our results of operations in the period in which the write-downs are
recognized. The write-downs of inventories increased by 57.8% from W211 billion in 2013 to W333 billion in 2014 and further increased by 9.3% to W364 billion (US$311 million) in 2015. The increases
were due in part to the increase in demand for differentiated specialty panels with high-end specifications. The amount of any such adjustment is recognized as cost of sales in the period for which the assessment relates.

Income Taxes

We
have significant deferred income tax assets that may be used to offset taxable income in future periods. Our ability to utilize deferred income tax assets is dependent on our ability to generate future taxable income sufficient to utilize these
deferred income tax assets before their expiration. Changes in estimates of our ability to realize our deferred tax assets are generally recognized in earnings as a component of our income tax (benefit) expense. At each reporting date, we review our
deferred tax assets for recoverability considering historical profitability, projected future taxable income, the expected timing of reversals of existing temporary differences and expiration of unused tax losses and tax credits. If we are unable to
generate sufficient future taxable income, or if we are unable to identify suitable tax planning strategies, the deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized. An increase
in unrecognized deferred tax assets would result in an increase in our effective tax rate and could materially adversely impact our operating results. Conversely, if conditions improve and we determine that previously unrecognized deferred tax
assets should be recognized because of changes in estimates in future taxable income or other conditions that affect our expected recovery of deferred tax assets, this would result in an increase in reported earnings in such period. As of
December 31, 2013, 2014 and 2015, unused tax credit carryforwards of W529 billion, W325 billion and W79 billion (US$67 million), respectively, were not recognized as deferred tax assets because
we did not believe that their realization would be probable. The decrease of W204 billion in unrecognized tax credit carryforwards in 2014 compared to 2013 was due to the expiration of unrecognized tax credit carryforwards, which
was offset in part by an increase in the minimum applicable income tax from 16% in 2013 to 17% in 2014. The decrease of W246 billion in unrecognized tax credit carryforwards in 2015 compared to 2014 was due to an increase in
projected future taxable income and the expiration of unrecognized tax credit carryforwards. If the unrecognized deferred tax assets are recognized as deferred tax assets in a future period, the effective tax rate for the period could decrease. In
estimating projected future taxable income, we considered a variety of factors, including recent overcapacity issues in the display industry and the industry-wide response to scale back capacity expansion plans and adjust utilization rates, as well
as trends in demand for display products.



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Provisions  Warranty Obligations

We recognize a provision for warranty obligations based on the estimated costs that we expect to incur under our basic limited warranty for our
products. This warranty covers defective products and is normally valid for eighteen months from the date of purchase. These liabilities are accrued when product revenue are recognized. Warranty costs primarily include raw materials and labor costs.
Factors that affect our warranty liability include historical and anticipated rates of warranty claims on repairs, calculated based on our sales volume and cost per claim to satisfy our warranty obligation. There were no changes in assumptions or
methods used which had a significant impact on the amount of warranty obligations from 2013 to 2015. As these factors are impacted by actual experience and future expectations, we periodically assess the adequacy of our recorded warranty liabilities
and adjust the amounts as necessary. We recognized warranty obligations amounting to W47 billion, W52 billion and W56 billion (US$48 million) as of December 31, 2013, 2014 and 2015,
respectively. Warranty expenses increased from W117 billion in 2013 to W188 billion in 2014 but decreased to W147 billion (US$126 million) in 2015. The increase in 2014 compared to 2013 was largely
due to certain defects in our products equipped with newer technologies, while the decrease in 2015 compared to 2014 was attributable primarily to a reduction of such defects.

Long-Lived Assets: Useful Lives, Valuation and Impairment

Property, plant and equipment are recorded at cost less accumulated depreciation over the estimated useful lives of the individual assets, with
depreciation calculated on a straight line basis. The determination of an assets useful life and salvage value requires judgment based on our historical and anticipated use of the asset. Since 1999, all new machinery is being depreciated on a
straight-line basis over four or five years. For goodwill and other intangible assets that have indefinite useful lives or that are not yet available for use, as the case may be, the recoverable amount is estimated each year at the same time
irrespective of whether there is any indication of impairment.

We review the carrying amounts of long-lived assets or cash-generating
units at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the recoverable amount of the relevant asset or cash generating unit is estimated. If circumstances require that a
long-lived asset or cash-generating unit be tested for possible impairment, and the carrying value of such long-lived asset or cash-generating unit is considered impaired after such test, an impairment charge is recorded for the amount by which the
carrying value of the long-lived asset or cash-generating unit exceeds its estimated recovery value. The recoverable amount of a long-lived asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. Fair
value is determined by employing a variety of valuation techniques as necessary, including discounted cash flow models, quoted market values and third-party independent appraisals. The determination of the value in use and the fair value requires
our judgments and assumptions about future operations. The determination of an assets useful life, and the potential impairment of our long-lived assets could have a material effect on our results of operations. In 2013, we recognized
impairment losses of W2.5 billion. In 2014, we recognized impairment losses of W8.6 billion resulting primarily from lowered estimates of economic benefits from certain property, plant and equipment assets. In 2015,
we recognized impairment losses of W3.3 billion (US$2.8 million).

Employee Benefits

Our accounting for employee benefits, which mainly consists of our defined benefit plan, involves judgments about uncertain events including,
but not limited to, discount rates, life expectancy and future pay inflation. The discount rates are determined by reference to the yield at the reporting date on high quality corporate bonds that have maturity dates approximating the terms of our
benefits obligations and that are denominated in the same currency in which the benefits are expected to be paid. Due to changing market and economic conditions, the underlying key assumptions may differ from actual developments and may lead to
significant changes in our defined benefit plan. We immediately recognize all actuarial gains and losses arising from defined benefit plans in retained earnings.



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Provisions  Legal Proceedings

We are involved from time to time in certain routine legal proceedings and governmental investigations incidental to our business. See
Item 8.A. Consolidated Statements and Other Financial InformationLegal Proceedings. We recognize provisions for claims, assessments, litigation, fines, and penalties and other sources when there is a present or constructive
obligation arising from a past event, it is more likely than not that an outflow of our resources will result to settle the obligation, and a reliable estimate can be made of the amount of the obligation. In determining whether a provision should be
recognized, we evaluate, among other factors, whether it is more likely than not that our defense to a claim will be successful and if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.
We estimate the amount of loss, considering factors such as the nature of the litigation, claim, or assessment, the progress of the case and the opinions or views of legal counsel and other advisers. These estimates have been based on our assessment
of the facts and circumstances at each reporting date and are subject to change based upon new information and intervening events. Revisions to estimates may significantly impact future net income. If any of the legal proceedings or governmental
investigations results in an outcome that differs from our estimates, we may incur charges in excess of the recorded provisions for such proceeding or investigation and our results of operations or financial position may be materially adversely
affected. We recognized provisions for litigation and claims amounting to W157 billion, W148 billion and W61 billion (US$52 million) in the statements of financial position as of December 31,
2013, 2014 and 2015, respectively. Legal costs incurred in connection with loss contingencies are expensed as incurred.

Operating Results

The following presents our consolidated results of operation information and as a percentage of our revenue for the years indicated:



|                                      |  |                                                                     |         |   |   |  |       |      |  |   |         |   |  |      |       |   |         |   |         |   |  |     |         |   |  |  |       |  
|------------------------------------- |  | ------------------------------------------------------------------- | ------- | - | - |  | ----- | ---- |  | - | ------- | - |  | ---- | ----- | - | ------- | - | ------- | - |  | --- | ------- | - |  |  | ----- | -
|                                      |  | Year ended December 31,                                             |        
|                                      |  | 2013                                                                |         |   | % |  |       | 2014 |  |   | %       |   |  | 2015 |       |   | 2015(1) |   |         | % | 
|                                      |  | (in billions of Won and in millions of US$, except for percentages) |        
|Revenue                               |  | W                                                                   | 27,033  |   |   |  | 100.0 | %    |  | W | 26,456  |   |  |      | 100.0 | % |         | W | 28,384  |   |  | US$ | 24,275  |   |  |  | 100.0 | %
|Cost of sales                         |  |                                                                     | (23,525 | ) |   |  | 87.0  |      |  |   | (22,667 | ) |  |      | 85.7  |   |         |   | (24,070 | ) |  |     | (20,586 | ) |  |  | 84.8  |  
|Gross profit                          |  |                                                                     | 3,508   |   |   |  | 13.0  |      |  |   | 3,789   |   |  |      | 14.3  |   |         |   | 4,314   |   |  |     | 3,689   |   |  |  | 15.2  |  
|Selling expenses                      |  |                                                                     | (732    | ) |   |  | 2.7   |      |  |   | (747    | ) |  |      | 2.8   |   |         |   | (878    | ) |  |     | (751    | ) |  |  | 3.1   |  
|Administrative expenses               |  |                                                                     | (518    | ) |   |  | 1.9   |      |  |   | (520    | ) |  |      | 2.0   |   |         |   | (593    | ) |  |     | (507    | ) |  |  | 2.1   |  
|Research and development expenses (2) |  |                                                                     | (1,096  | ) |   |  | 4.1   |      |  |   | (1,164  | ) |  |      | 4.4   |   |         |   | (1,218  | ) |  |     | (1,042  | ) |  |  | 4.3   |  
|Other income                          |  |                                                                     | 1,109   |   |   |  | 4.1   |      |  |   | 1,072   |   |  |      | 4.1   |   |         |   | 1,274   |   |  |     | 1,090   |   |  |  | 4.5   |  
|Other expenses                        |  |                                                                     | (1,269  | ) |   |  | 4.7   |      |  |   | (1,095  | ) |  |      | 4.1   |   |         |   | (1,327  | ) |  |     | (1,135  | ) |  |  | 4.7   |  
|Finance income                        |  |                                                                     | 185     |   |   |  | 0.7   |      |  |   | 105     |   |  |      | 0.4   |   |         |   | 159     |   |  |     | 136     |   |  |  | 0.6   |  
|Finance costs                         |  |                                                                     | (382    | ) |   |  | 1.4   |      |  |   | (216    | ) |  |      | 0.8   |   |         |   | (316    | ) |  |     | (270    | ) |  |  | 1.1   |  
|Equity income on investments, net     |  |                                                                     | 25      |   |   |  | 0.1   |      |  |   | 18      |   |  |      | 0.1   |   |         |   | 19      |   |  |     | 16      |   |  |  | 0.1   |  
|Profit before income tax              |  |                                                                     | 830     |   |   |  | 3.1   |      |  |   | 1,242   |   |  |      | 4.7   |   |         |   | 1,434   |   |  |     | 1,226   |   |  |  | 5.1   |  
|Income tax expense                    |  |                                                                     | 411     |   |   |  | 1.5   |      |  |   | 325     |   |  |      | 1.2   |   |         |   | 411     |   |  |     | 352     |   |  |  | 1.4   |  
|Profit for the year                   |  |                                                                     | 419     |   |   |  | 1.5   |      |  |   | 917     |   |  |      | 3.5   |   |         |   | 1,023   |   |  |     | 874     |   |  |  | 3.6   |  



|(1) | For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,169.26 to US$1.00, the noon buying rate in effect on December 31, 2015 as certified by the Federal Reserve
Bank of New York for customs purposes. This translation should not be construed as a representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Comparison of 2015 to 2014

Revenue

Our revenue increased by 7.3% from W26,456 billion in 2014 to W28,384 billion (US$24,275
million) in 2015. The increase in revenue resulted from increases in revenue from sales of panels for mobile and other applications and for televisions, which were in turn mainly due to an increase in the average selling price of panels for mobile
and other applications and an increase in the number of panels for televisions sold, offset in part by a decrease in revenue derived from sales of panels for notebook computers, desktop monitors and tablet computers. In particular:



| |  |  | Demand for our large-sized television panels, comprising 42-inch and larger panels, which category includes four of our five top selling television panels in 2015 in terms of sales volume, namely 42-inch, 43-inch,
49-inch and 55-inch panels, grew in 2015 compared to 2014, leading to an increase in the number of those panels sold by 11.1% from approximately 35.0 million panels in 2014 to approximately 38.9 million panels in 2015. The increase in the
number of our large-sized television panels sold more than offset a decrease in the average selling price of those panels during the same period, resulting in an increase in revenue derived from those panels.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Demand for our 15.6-inch or smaller notebook computer panels, which category includes three of our top selling notebook computer panels in 2015 in terms of sales volume, namely 13.3-inch, 14-inch and 15.6-inch panels,
fell in 2015 compared to 2014, resulting in a decrease in the number of those panels sold by 7.9% from approximately 47.8 million panels in 2014 to 44.0 million panels in 2015. The decrease in the number of those panels sold more than
offset an increase in the average selling price of those panels during the same period, resulting in a decrease in revenue derived from those panels.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | The number of units sold of our large-sized desktop monitor panels, comprising 21.5-inch and larger panels, which category includes four of our five top selling desktop monitor panels in terms of sales volume, namely
21.5-inch, 23-inch, 23.8-inch and 27-inch panels, increased by 4.9% from approximately 30.9 million panels in 2014 to 32.4 million panels in 2015. The increase in the number of those panels sold more than offset a slight decrease in the average
selling price of those panels during the same period, resulting in an increase in revenue derived from those panels. However, the increase in revenue derived from our large-sized desktop monitor panels was more than offset by a decrease in revenue
derived from our small-sized desktop monitor panels over the same period, which was due to decreases in both the sales volume and average selling price of those panels, resulting in an overall decrease in revenue from desktop monitor panels.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Demand for our tablet computer panels smaller than 10 inches fell significantly in 2015 compared to 2014, leading to a decrease in the number of those panels sold by 39.2% from 50.3 million panels in 2014 to
30.6 million panels in 2015. The decrease in the number of those panels sold more than offset an increase in the average selling price of those panels during the same period, resulting in a decrease in revenue derived from those panels.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In our mobile and other applications category, we experienced significant growth in demand for smartwatch panels and continued growth in demand for larger smartphone panels in 2015 compared to 2014. For example, the
number of units sold of panels in this category that are under 2 inches, which category includes all of our smartwatch panels, increased more than tenfold from approximately 1.0 million panels in 2014 to 13.0 million panels in 2015 and the
number of units sold of panels in this category that are between 4.2 inches and 6 inches, which category includes all of our larger smartphone panels and accounts for more than 80% of our sales volume and amount in this category in 2015, increased
by 22.4% from approximately 145.9 million panels in 2014 to 178.5 million panels in 2015. The average selling price of those panels also increased, together resulting in a significant increase in revenue derived from those panels.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenue attributable to sales of panels for televisions increased by 3.0% from approximately W10,540
billion in 2014 to approximately W10,854 billion (US$9,283 million) in 2015, resulting from an increase in the number of units sold in this category in 2015 compared to 2014, partially offset by a decrease in the average selling
price of panels in this category in 2015 compared to 2014. The total unit sales of panels for televisions increased by 7.6% from approximately 51.4 million panels in 2014 to approximately 55.3 million panels in 2015, whereas the average
selling price of panels in this category decreased by 4.4% from approximately W205,226 in 2014 to approximately W196,207 (US$168) in 2015. The increase in revenue attributable to sales of panels for televisions
primarily reflected an increase in the sales volume of our television panels that are more than 42-inch in size, in particular panels incorporating differentiated specialty features, highlighting a general migration in demand from our small-sized to
large-sized television panels. Such increase was offset in part by the decrease in the average selling price of television panels over the same period, which was mainly due to an increase in the proportion of our television panels sold in open cell
form without backlight units, which generally have lower selling prices compared to television panels in module form with backlight units, and increased downward pricing pressure resulting from capacity expansion and increased competition by our
competitors in 2015 compared to 2014.

Revenue attributable to sales of panels for notebook computers decreased by 6.0% from approximately
W2,669 billion in 2014 to approximately W2,509 billion (US$2,146 million) in 2015, resulting from a decrease in the number of units sold in this category in 2015 compared to 2014, partially offset by an increase in
the average selling price of panels in this category in 2015 compared to 2014. The total unit sales of panels for notebook computers decreased by 9.4% from approximately 50.2 million panels in 2014 to approximately 45.5 million panels in
2015, whereas the average selling price of panels in this category increased by 3.6% from approximately W53,194 in 2014 to approximately W55,132 (US$47) in 2015. The decrease in revenue attributable to sales of
panels for notebook computers primarily reflected a continued general shift in consumer demand for large smartphones as alternatives to notebook computers for mobile computing applications, which in turn results in a similar shift in market demand
for mobile panels over notebook computer panels, partially offset by the increase in the average selling price of panels, which was attributable to an increase in the proportion of panels with differentiated specialty features that command higher
selling prices, such as touch screen and AH-IPS, in our product mix for notebook computer panels.

Revenue attributable to sales of panels
for desktop monitors decreased by 2.3% from approximately W4,660 billion in 2014 to approximately W4,553 billion (US$3,894 million) in 2015, resulting from a decrease in the number of units sold in this category in
2015 compared to 2014, partially offset by an increase in the average selling price of panels in this category in 2015 compared to 2014. The total unit sales of panels for desktop monitors decreased by 4.3% from approximately 43.8 million
panels in 2014 to approximately 41.9 million panels in 2015, whereas the average selling price of panels in this category increased by 2.2% from approximately W106,276 in 2014 to approximately W108,632 (US$93)
in 2015. The decrease in revenue attributable to sales of panels for desktop monitors primarily resulted from a general decrease in demand for desktop monitors in light of increased competition among other consumer computer screen devices, partially
offset by an increase in the average selling price of our desktop monitor panels, which was attributable to an increase in the proportion of panels with differentiated specialty features that command higher selling prices, such as ultra-slim bezel
borderless designs and ultra-wide 21:9 screen aspect ratio, in our product mix for desktop panels.



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Revenue attributable to sales of panels for tablet computers decreased by 29.1% from
approximately W3,542 billion in 2014 to approximately W2,510 billion (US$2,147 million) in 2015, resulting from a significant decrease in the number of units sold in this category in 2015 compared to 2014, partially
offset by an increase in the average selling price of panels in this category in 2015 compared to 2014. The total unit sales of panels for tablet computers decreased by 38.2% from approximately 51.0 million panels in 2014 to approximately
31.5 million panels in 2015, whereas the average selling price of panels in this category increased by 14.8% from approximately W69,458 in 2014 to approximately W79,743 (US$68) in 2015. The decrease in revenue
attributable to sales of panels for tablet computers reflected a maturing of the consumer market and plateauing of demand for tablet computers in general.

Revenue attributable to sales of panels for mobile and other applications increased significantly by 58.2% from approximately
W5,005 billion in 2014 to approximately W7,919 billion (US$6,773 million) in 2015, resulting primarily from an increase in the average selling price of panels in this category in 2015 compared to 2014, while the
number of units sold in this category remained relatively stable during the same period. The average selling price of panels for mobile and other applications increased by 58.2% from approximately W23,120 in 2014 to approximately
W36,566 (US$31) in 2015, and the total unit sales of panels in this category increased slightly from approximately 216.5 million in 2014 to approximately 216.6 million in 2015. The increase in the average selling price
primarily reflected a shift in our product mix toward smartwatch panels and larger smartphone panels that are equipped with newer technologies, such as flexible OLED, Quad HD and in-TOUCH, and meet more advanced performance specifications, which
tend to command a higher price premium.

In addition, our revenue attributable to royalty and others decreased by 2.5% from
W40 billion in 2014 to W39 billion (US$34 million) in 2015. The decrease was due to a decrease in other revenue, consisting primarily of sales of raw materials on-sold to our customers for module assembly purposes
and sales of components to third party warranty service providers, from W25 billion in 2014 to W20 billion (US$17 million) in 2015, partially offset by an increase in royalties from W15 billion in
2014 to W19 billion (US$17 million) in 2015.

Cost of Sales

Cost of sales increased by 6.2% from W22,667 billion in 2014 to W24,070 billion (US$20,585 million) in 2015.
The increase in our cost of sales in 2015 compared to 2014 was attributable primarily to increases in raw materials and component costs due in part to the strengthening of the U.S. Dollar, in which 86.7% of our raw materials and component part
purchases were denominated in 2015, against the Korean Won in 2015 compared to 2014, as well as the increased share of high-end products in our product mix which contributed to the increase in costs on a per unit basis during the same period. In
addition, an increase in overhead costs also contributed to the increase in cost of sales in 2015 compared to 2014.

As a percentage of
our total cost of sales, raw materials and component costs and overhead costs increased from 64.9% and 11.7%, respectively, in 2014 to 65.5% and 11.9%, respectively, in 2015, while depreciation and amortization costs and labor costs decreased from
14.0% and 9.8%, respectively, in 2014 to 12.0% and 9.6%, respectively, in 2015.

As a percentage of revenue, cost of sales decreased from
85.7% in 2014 to 84.8% in 2015. The decrease in our cost of sales as a percentage of revenue in 2015 compared to 2014 was attributable mainly to a decrease in depreciation and amortization costs, resulting mainly from the end of estimated useful
life of certain machinery and equipment assets in our AP2 production lines and the second expansion to our P8 fabrication facilities in 2015.

Cost of sales per square meter of net display area, which is derived by dividing total cost of sales by total square meters of net display
area shipped, decreased by 6.7% from US$556 per square meter of net display area in 2014 to US$519 in 2015. Cost of sales per panel sold, which is derived by dividing total cost of sales by total number of panels sold, increased by 12.2% from
W54,903 in 2014 to W61,593 (US$53) in 2015 due in part to increases in the proportion within each of our product categories of larger panel units with differentiated specialty features, which generally have higher
cost of sales per panel relative to other panel units within each product category, sold in our product mix during the same period.

Gross Profit and Gross Margin

As a result of the cumulative effect of the reasons explained above, our gross profit increased by 13.9% from W3,789 billion
in 2014 to W4,314 billion (US$3,690 million) in 2015, and our gross margin improved from 14.3% in 2014 to 15.2% in 2015. The continued shift in our product mix toward higher-end products in 2015 resulted in increases in both the
average selling price and cost of sales per panel sold in 2015 compared to 2014, but the increase in average selling price outpaced the increase in cost of sales per panel sold because the higher-end products in our product mix tend to command
higher premiums and we were able to partially offset the increase in per unit costs by continuing to improve the efficiency of our production processes.



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Selling and Administrative Expenses

Selling and administrative expenses increased by 16.1% from W1,267 billion in 2014 to W1,471 billion
(US$1,258 million) in 2015. As a percentage of revenue, our selling and administrative expenses increased from 4.8% in 2014 to 5.2% in 2015. The increase in selling and administrative expenses in 2015 compared to 2014 was attributable primarily to
increases in:



| |  |  | advertising expense, resulting from an increase in our marketing activities in 2015, primarily in North America and Europe, in an effort to expand the market for OLED panels; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | depreciation expense, resulting primarily from an increase in capital expenditures for our OLED research and development activities.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------

Such increases were offset in part by a decrease in warranty expenses in 2015 compared to 2014 resulting from a reduction in certain defects
in our products equipped with newer technologies during such period.

The following are the major components of our selling and
administrative expenses for each of the years in the two-year period ended December 31, 2015:



|                                         |  |                         |       |  |      |   |       | 
|---------------------------------------- |  | ----------------------- | ----- |  | ---- | - | ----- | 
|                                         |  | Year ended December 31, |      
|                                         |  | 2014                    |       |  | 2015 |  
|                                         |  | (in billions of Won)    |      
|Salaries                                 |  | W                       | 257   |  |      | W | 268   | 
|Expenses related to defined benefit plan |  |                         | 28    |  |      |   | 27    | 
|Other employee benefits                  |  |                         | 69    |  |      |   | 88    | 
|Shipping costs                           |  |                         | 200   |  |      |   | 200   | 
|Fees and commissions                     |  |                         | 183   |  |      |   | 191   | 
|Depreciation                             |  |                         | 90    |  |      |   | 119   | 
|Taxes and dues                           |  |                         | 25    |  |      |   | 31    | 
|Advertising                              |  |                         | 107   |  |      |   | 266   | 
|Warranty expenses                        |  |                         | 188   |  |      |   | 147   | 
|Rent                                     |  |                         | 22    |  |      |   | 24    | 
|Insurance                                |  |                         | 11    |  |      |   | 11    | 
|Travel                                   |  |                         | 24    |  |      |   | 24    | 
|Training                                 |  |                         | 12    |  |      |   | 16    | 
|Others                                   |  |                         | 51    |  |      |   | 59    | 
|                                         |  |                         |       |  |      |   |       | 
|Total                                    |  | W                       | 1,267 |  |      | W | 1,471 | 
|                                         |  |                         |       |  |      |   |       | 

Research and Development Expenses

Research and development expenses increased by 4.6% from W1,164 billion in 2014 to W1,218 billion (US$1,042
million) in 2015. As a percentage of revenue, our research and development expenses decreased slightly from 4.4% in 2014 to 4.3% in 2015. The increase in research and development expenses in 2015 compared to 2014 was attributable to increases in
research and development activities related to OLED and next generation technologies and products and in the average number of research and development employees over the same period.

Other Income (Expense), Net

Other income includes primarily foreign currency gains from operating activities, and other expenses include primarily foreign currency losses
from operating activities and expenses related to legal proceedings or claims and others. Our total net other expense increased from W23 billion in 2014 to W53 billion (US$45 million) in 2015, primarily due to a
decrease in other miscellaneous income from W66 billion in 2014 to W28 billion (US$24 million) in 2015 as well as an increase in expenses related to legal proceedings or claims and others from W109
billion in 2014 to W128 billion (US$109 million) in 2015, offset in part by an increase in net foreign currency gain from W25 billion in 2014 to W43 billion (US$37 million) in 2015. Other
miscellaneous income in 2014 included a non-recurring gain of W35 billion which was attributable to the reimbursement of fines previously paid as a result of an appellate courts decision to overturn a fine imposed by the Korea
Fair Trade Commission. See Item 8.A.Consolidated Statements and Other Financial InformationLegal Proceedings for a discussion of our legal proceedings and associated settlement payments, and Note 25 of the notes to our
financial statements.



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Finance Income (Costs), Net

Finance income recognized in profit or loss includes primarily interest income and foreign currency gains. Finance cost recognized in profit or
loss includes primarily interest expense and foreign currency loss. Our total net finance costs increased by 42.7% from W111 billion in 2014 to W157 billion (US$134 million) in 2015.

Our finance income increased by 51.4% from W105 billion in 2014 to W159 billion (US$136 million) in 2015,
attributable primarily to our recording of a gain on disposal of investments in equity accounted investees of W23 billion (US$20 million) in 2015 compared to no such gain in 2014 and an increase in foreign currency gain by 41.8%
from W55 billion in 2014 to W78 billion (US$67 million) in 2015. We recorded a gain on disposal of investments in equity accounted investees in 2015 in connection with our acquisition in May 2015 of an additional
67% equity interest in Global OLED Technology LLC (Global OLED), through which Global OLED became our consolidated subsidiary and we recognized differences between book value and fair value of investments in Global OLED. See Note 32 of
the notes to our financial statements. The increase in foreign currency gain in 2015 compared to 2014 was due to an increase in the range of fluctuation in value of the Korean Won relative to the U.S. dollar over the same period.

Our finance costs increased by 46.3% from W216 billion in 2014 to W316 billion (US$270 million) in 2015
mainly due to an increase in foreign currency loss by 83.5% from W85 billion in 2014 to W156 billion (US$133 million) in 2015 and our recording of a loss on impairment of investments of W27 billion
(US$23 million) in 2015, compared to no such loss in 2014, as well as an increase in interest expense by 16.4% from W110 billion in 2014 to W128 billion (US$109 million) in 2015. The increase in foreign currency
loss in 2015 compared to 2014 resulted primarily from an increase in the range of fluctuation in value of the Korean Won relative to the U.S. dollar over the same period. We recorded an impairment loss in 2015 in connection with a decrease in the
carrying value of our investment in Fuhu, Inc. The increase in interest expense in 2015 compared to 2014 resulted primarily from a decrease in capitalized interest on construction loans during such period.

Income Tax Expense

Our income tax expense increased by 26.5% from W325 billion in 2014 to W411 billion (US$352 million) in 2015,
primarily due to a 15.5% increase in profit before income tax from W1,242 billion in 2014 to W1,434 billion (US$1,226 million) in 2015. Our effective tax rate increased from 26.1% in 2014 to 28.6% in 2015 primarily
due to our incurring more non-deductible expenses in 2015 compared to benefits in 2014 (which accounted for a 4.9% point increase in effective tax rate as compared to 2014) and a decrease in tax credits largely due to a decrease in capital
expenditures eligible for tax credits (which accounted for a 2.3% point increase in effective tax rate as compared to 2014) during the same period, the effect of which was offset in part by a decrease in unrecognized deferred tax assets (which
accounted for a 6.8% point decrease in effective tax rate as compared to 2014) during the same period. See Note 28 of the notes to our financial statements. As of December 31, 2015, unused tax credit carryforwards of W79
billion (US$68 million) were not recognized as deferred tax assets because we did not believe realization of such amounts would be probable. As of December 31, 2014, unused tax credit carryforwards of W325 billion were not
recognized.

Profit for the Year

As a result of the cumulative effect of the reasons explained above, our profit for the year increased by 11.6% from W917
billion in 2014 to W1,023 billion (US$874 million) in 2015.

Comparison of 2014 to 2013

Revenue

Our
revenue decreased by 2.1% from W27,033 billion in 2013 to W26,456 billion in 2014. The decrease in revenue resulted from decreases in revenue from sales of panels for televisions, notebook computers, desktop
monitors and tablet computers, which were in turn mainly due to a decrease in the number of those panels sold, coupled with a decrease in the average selling price of panels for televisions, offset in part by an increase in revenue derived from
sales of panels for mobile and other applications. In particular:



| |  |  | Demand for our large-sized television panels, comprising 42-inch and larger panels, which category includes three of our four top selling television panels in 2014 in terms of sales volume, namely 42-inch, 49-inch and
55-inch panels, grew in 2014 compared to 2013, leading to an increase in the number of those panels sold by 24.6% from approximately 28.1 million panels in 2013 to approximately 35.0 million panels in 2014. The increase in the number of
our large-size television panels sold more than offset a decrease in the average selling price of those panels during the same period, resulting in an increase in revenue derived from those panels. However, the increase in revenue derived from our
large-size television panels was more than offset by a decrease in revenue derived from our small-sized television panels over the same period, which was due to decreases in both the sales volume and average selling price of those panels, resulting
in an overall decrease in revenue from television panel sales.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Demand for our 15.6-inch or smaller notebook computer panels, which category includes three of our top selling notebook computer panels in 2014 in terms of sales volume, namely 13.3-inch, 14-inch and 15.6-inch panels,
fell in 2014 compared to 2013, resulting in a decrease in the number of those panels sold by 10.3% from approximately 53.3 million panels in 2013 to 47.8 million panels in 2014. The decrease in the number of those panels sold more than
offset an increase in the in the average selling price of those panels during the same period, resulting in a decrease in revenue derived from those panels.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The number of units sold of our large-sized desktop monitor panels, comprising 21.5-inch and larger panels, which category includes three of our four top selling desktop monitor panels in terms of sales volume, namely
21.5-inch, 23-inch and 27-inch panels, decreased by 6.4% from approximately 33.0 million panels in 2013 to 30.9 million panels in 2014. The average selling price of those panels decreased slightly during the same period, together resulting
in a decrease in revenue derived from those panels. The revenue derived from our small-sized desktop monitor panels similarly decreased during the same period as the number of those panels sold decreased by 23.5% from 17.0 million in 2013 to
13.0 million in 2014 and the average selling price of those panels also decreased during the same period.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Demand for our tablet computer panels smaller than 10 inches fell in 2014 compared to 2013, leading to a decrease in the number of those panels sold by 18.5% from 61.7 million panels in 2013 to 50.3 million
panels in 2014. However, the decrease in the number of those panels sold was more than offset by an increase in the average selling price of those panels during the same period, resulting in an increase in revenue derived from those panels.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In our mobile and other applications category, we experienced continued growth in demand for large smartphone panels in 2014 compared to 2013. For example, the number of units sold of panels in this category that are
between 3.2 inches and 6 inches, which category includes all of our smartphone panels and accounts for more than 80% of our sales volume and amount in this category, increased by 43.1% from approximately 137.5 million panels in 2013 to
196.7 million panels in 2014. The average selling price of those panels also increased, together resulting in a significant increase in revenue derived from those panels.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenue attributable to sales of panels for televisions decreased by 10.6% from approximately W11,795 billion in 2013 to
approximately W10,540 billion in 2014, resulting from decreases in both the number of units sold and average selling price of panels in this category in 2014 compared to 2013. The average selling price of panels for televisions
decreased by 6.4% from approximately W219,250 in 2013 to approximately W205,226 in 2014, and the total unit sales of panels in this category decreased by 4.5% from approximately 53.8 million panels in 2013 to
approximately 51.4 million panels in 2014. The decrease in revenue attributable to sales of panels for televisions primarily reflected a decrease in the average selling price mainly due to an increase in the proportion of our television panels
sold in open cell form without backlight units, which generally have lower selling prices compared to television panels in module form with backlight units, and increased downward pricing pressure resulting from capacity expansion and increased
competition by our competitors, in particular with respect to the market for small-sized television panels in 2014 compared to 2013. Notwithstanding the overall decreases in revenue and sales volume of our television panels, the revenue and sales
volume of our television panels that are more than 42-inch in size increased over the same period, in particular panels incorporating differentiated specialty features, highlighting a general migration in demand from our small-sized to large-sized
television panels.

Revenue attributable to sales of panels for notebook computers decreased by 5.3% from approximately
W2,819 billion in 2013 to approximately W2,669 billion in 2014, resulting from a decrease in the number of units sold in this category in 2014 compared to 2013, partially offset by an increase in the average selling
price of panels in this category in 2014 compared to 2013. The total unit sales of panels for notebook computers decreased by 9.7% from approximately 55.6 million panels in 2013 to approximately 50.2 million panels in 2014, whereas the
average selling price of panels in this category increased by 4.8% from approximately W50,739 in 2013 to approximately W53,194 in 2014. The decrease in revenue attributable to sales of panels for notebook computers
primarily reflected a continued general shift in consumer demand for large smartphones as alternatives to notebook computers for mobile computing applications, which in turn results in a similar shift in market demand for mobile panels over notebook
computer panels, partially offset by the increase in the average selling price of panels, which was attributable to an increase in the proportion of panels with differentiated specialty features that command higher selling prices, such as touch
screen and AH-IPS, in our product mix for notebook computer panels.



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Revenue attributable to sales of panels for desktop monitors decreased by 11.3% from
approximately W5,256 billion in 2013 to approximately W4,660 billion in 2014, resulting from a decrease in the number of units sold in this category in 2014 compared to 2013, partially offset by a slight increase in
the average selling price of panels in this category in 2014 compared to 2013. The total unit sales of panels for desktop monitors decreased by 12.4% from approximately 50.0 million panels in 2013 to approximately 43.8 million panels in
2014, whereas the average selling price of panels in this category increased by 1.1% from approximately W105,149 in 2013 to approximately W106,276 in 2014. The decrease in revenue attributable to sales of panels for
desktop monitors primarily resulted from a general decrease in demand for desktop monitors in light of increased competition among other consumer computer screen devices, partially offset by an increase in the average selling price of our desktop
monitor panels, which was attributable to an increase in the proportion of panels with differentiated specialty features that command higher selling prices, such as ultra-wide 21:9 screen aspect ratio and FPR 3D, in our product mix for desktop
panels.

Revenue attributable to sales of panels for tablet computers decreased slightly by 0.9% from approximately
W3,575 billion in 2013 to approximately W3,542 billion in 2014, resulting from a decrease in the number of units sold in this category in 2014 compared to 2013, partially offset by an increase in the average selling
price of panels in this category in 2014 compared to 2013. The total unit sales of panels for tablet computers decreased by 20.1% from approximately 63.8 million panels in 2013 to approximately 51.0 million panels in 2014, whereas average
selling price of panels in this category increased by 24.0% from approximately W55,999 in 2013 to approximately W69,458 in 2014. The decrease in revenue attributable to sales of panels for tablet computers reflected
a maturing of the consumer market and plateauing of demand for tablet computers in general and the consolidation of consumer demand around certain sizes and models of tablet computers. Notwithstanding the overall slight decrease in revenue derived
from our tablet computer panels, the revenue of our tablet computer panels less than 10-inch in size increased over the same period as the average selling price of certain of those panel with differentiated specialty features increased, which offset
the decrease in the number of those panels sold during the same period.

Revenue attributable to sales of panels for mobile and other
applications increased significantly by 41.5% from approximately W3,537 billion in 2013 to approximately W5,005 billion in 2014, resulting from increases in both the number of units sold and the average selling
price of panels in this category in 2014 compared to 2013. The total unit sales of panels in this category increased by 33.6% from approximately 162.0 million in 2013 to approximately 216.5 million in 2014, and the average selling price of
panels for mobile and other applications increased by 5.9% from approximately W21,832 in 2013 to approximately W23,120 in 2014. The increase in the average selling price primarily reflected a shift in our product
mix toward large smartphone panels equipped with newer technologies, such as flexible OLED and Quad HD, and meet more advanced performance specifications, which tend to command a higher price premium.

In addition, our revenue attributable to royalty and others decreased by 21.6% from W51 billion in 2013 to
W40 billion in 2014. The decrease was due to a decrease in other revenue, consisting primarily of sales of raw materials on-sold to our customers for module assembly purposes and sales of components to third party warranty service
providers, from W32 billion in 2013 to W25 billion in 2014, as well as a decrease in royalties from W19 billion in 2013 to W15 billion in 2014.

Cost of Sales

Cost of sales decreased by 3.6% from W23,525 billion in 2013 to W22,667 billion in 2014. The decrease in our
cost of sales in 2014 compared to 2013 was attributable mainly due to decreases in raw materials and component costs and depreciation and amortization costs, resulting mainly from the end of estimated useful life of certain machinery and equipment
assets in our AP2 production lines and the second expansion to our P8 fabrication facilities in 2014 and a decrease in our capital expenditures in 2014 compared to 2013 contributed to the decrease in cost of sales during the same period. Such
decreases more than offset increases related to selling more panel units and increases in overhead and labor costs in 2014 compared to 2013.

As a percentage of our total cost of sales, raw materials and component costs and depreciation and amortization costs decreased from 66.7% and
15.6%, respectively, in 2013 to 64.9% and 14.0%, respectively, in 2014, while overhead costs and labor costs increased from 9.8% and 8.3%, respectively, in 2013 to 11.7% and 9.8%, respectively, in 2014.

As a percentage of revenue, cost of sales decreased from 87.0% in 2013 to 85.7% in 2014. The decrease in our cost of sales as a percentage of
revenue in 2014 compared to 2013 was attributable to an increase in the proportion of our high margin, differentiated specialty panels based on newer technologies in our product mix during the same period.



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Cost of sales per square meter of net display area, which is derived by dividing total cost of
sales by total square meters of net display area shipped, decreased by 11.6% from US$629 per square meter of net display area in 2013 to US$556 in 2014. Cost of sales per panel sold, which is derived by dividing total cost of sales by total number
of panels sold, decreased by 10.1% from W61,073 in 2013 to W54,903 in 2014 due in part to increases in the proportion of our mobile and other application panel units, which generally have lower cost of sales per
panel relative to our larger panels in other product categories, and the proportion of our television panel units in open cell form without backlight units, which generally have lower cost of sales per panel relative to television panels in module
form with backlight units, sold in our product mix during the same period.

Gross Profit and Gross Margin

As a result of the cumulative effect of the reasons explained above, our gross profit increased by 8.0% from W3,508 billion in
2013 to W3,789 billion in 2014, and our gross margin improved from 13.0% in 2013 to 14.3% in 2014. Even though our revenue decreased in 2014 compared to 2013, the increase in the proportion of high margin, differentiated specialty
products based on newer technologies in our product mix led to the increases in our gross profit and gross margin.

Selling and
Administrative Expenses

Selling and administrative expenses increased by 1.4% from W1,250 billion in 2013 to
W1,267 billion in 2014. As a percentage of revenue, our selling and administrative expenses increased slightly from 4.6% in 2013 to 4.8% in 2014. The increase in selling and administrative expenses in 2014 compared to 2013 was
attributable primarily to increases in:



| |  |  | warranty expenses, resulting primarily from certain defects in our products equipped with newer technologies; and
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | salaries, resulting primarily from a decision by the Supreme Court of Korea in December 2013 that expanded the scope of ordinary wages. See Item 3.D. Risk FactorsRisks Relating to Our
CompanyWe may be exposed to potential claims for unpaid wages arising from the Supreme Court of Koreas interpretation of ordinary wages.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Such increases were offset in part by a decrease in advertising expense in 2014 compared to 2013 resulting from a decrease in our advertising
activities after we had concluded several advertising campaigns in 2013 to introduce our Ultra HD panels and IPS and FPR 3D technologies to the market and focused primarily on introducing our OLED panels to the market in 2014; and a decrease in
shipping costs, resulting primarily from a decrease in costs relating to our usage of air freight due to reduced usage of such freight 2014 compared to 2013.

The following are the major components of our selling and administrative expenses for each of the years in the two-year period ended
December 31, 2014:



|                                         |  |                         |       |  |      |   |       | 
|---------------------------------------- |  | ----------------------- | ----- |  | ---- | - | ----- | 
|                                         |  | Year ended December 31, |      
|                                         |  | 2013                    |       |  | 2014 |  
|                                         |  | (in billions of Won)    |      
|Salaries                                 |  | W                       | 232   |  |      | W | 257   | 
|Expenses related to defined benefit plan |  |                         | 22    |  |      |   | 28    | 
|Other employee benefits                  |  |                         | 70    |  |      |   | 69    | 
|Shipping costs                           |  |                         | 215   |  |      |   | 200   | 
|Fees and commissions                     |  |                         | 197   |  |      |   | 183   | 
|Depreciation                             |  |                         | 96    |  |      |   | 90    | 
|Taxes and dues                           |  |                         | 34    |  |      |   | 25    | 
|Advertising                              |  |                         | 145   |  |      |   | 107   | 
|Warranty expenses                        |  |                         | 117   |  |      |   | 188   | 
|Rent                                     |  |                         | 23    |  |      |   | 22    | 
|Insurance                                |  |                         | 12    |  |      |   | 11    | 
|Travel                                   |  |                         | 23    |  |      |   | 24    | 
|Training                                 |  |                         | 12    |  |      |   | 12    | 
|Others                                   |  |                         | 52    |  |      |   | 51    | 
|                                         |  |                         |       |  |      |   |       | 
|Total                                    |  | W                       | 1,250 |  |      | W | 1,267 | 
|                                         |  |                         |       |  |      |   |       | 

Research and Development Expenses

Research and development expenses increased by 6.2% from W1,096 billion in 2013 to W1,164 billion in 2014. As
a percentage of revenue, our research and development expenses increased from 4.1% in 2013 to 4.4% in 2014. The increase in research and development expenses in 2014 compared to 2013 was attributable to increases in research and development
activities related to OLED and next generation technologies and products and in the average number of research and development employees over the same period.



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Other Income (Expense), Net

Other income includes primarily foreign currency gains from operating activities, and other expenses include primarily foreign currency losses
from operating activities and expenses related to legal proceedings or claims and others. Our total net other expense decreased significantly from W160 billion in 2013 to W23 billion in 2014, primarily due to a
significant decrease in expenses related to legal proceedings or claims and others from W260 billion in 2013 to W109 billion in 2014, offset in part by a significant decrease in net foreign currency gain from
W81 billion in 2013 to W25 billion in 2014. These expenses include provisions with respect to certain legal proceedings as well as settlement payments in connection with related claims. See Item
8.A.Consolidated Statements and Other Financial InformationLegal Proceedings for a discussion of our legal proceedings and associated settlement payments.

Finance Income (Costs), Net

Finance income recognized in profit or loss includes primarily interest income and foreign currency gains. Finance cost recognized in profit or
loss includes primarily interest expense and foreign currency loss. Our total net finance costs decreased by 44.2% from W197 billion in 2013 to W111 billion in 2014.

Our finance income decreased by 43.2% from W185 billion in 2013 to W105 billion in 2014, attributable
primarily to a decrease in foreign currency gain by 61.3% from W142 billion in 2013 to W55 billion in 2014, which in turn was due to a decrease in the range of fluctuation in value of the Korean Won relative to the
U.S. dollar over the same period.

Our finance costs decreased by 43.5% from W382 billion in 2013 to
W216 billion in 2014 mainly due to a decrease in foreign currency loss by 57.3% from W199 billion in 2013 to W85 billion in 2014, resulting primarily from a decrease in the range of fluctuation in
value of the Korean Won relative to the U.S. dollar over the same period and a decrease in interest expense by 30.8% from W159 billion in 2013 to W110 billion in 2014, resulting primarily from a decrease in the
average interest rates applicable to our financial liabilities, as well as a decrease in our average amounts of financial liabilities outstanding, in 2014 compared to 2013.

Income Tax Expense

Our income tax expense decreased by 20.9% from W411 billion in 2013 to W325 billion in 2014 notwithstanding a
49.6% increase in profit before income tax from W830 billion in 2013 to W1,242 billion in 2014. Our effective tax rate decreased from 49.5% in 2013 to 26.1% in 2014 primarily due to a significant decrease in
unrecognized deferred tax assets (which accounted for an 18.5% point decrease in effective tax rate as compared to 2013) and an increase in tax credits largely due to an increase in capital expenditures eligible for tax credits (which accounted for
a 4.3% point decrease in effective tax rate as compared to 2013) during the same period. The decrease in unrecognized deferred tax assets is primarily due to the change in tax laws in Korea that resulted in adjustment to increase unrecognized
deferred tax assets in 2013.The significant decrease in unrecognized deferred tax assets in 2014 compared to 2013 was primarily due to an adjustment in the unrecognized deferred tax assets in 2013 following a change in Korean tax law during such
year. See Note 28 of the notes to our financial statements. As of December 31, 2014, unused tax credit carryforwards of W325 billion were not recognized as deferred tax assets because we did not believe realization of such
amounts would be probable. As of December 31, 2013, unused tax credit carryforwards of W529 billion were not recognized.

Profit for the Year

As a result of the cumulative effect of the reasons explained above, our profit for the year increased by 118.9% from W419
billion in 2013 to W917 billion in 2014.



|Item 5.B. | Liquidity and Capital Resources
|--------- | -------------------------------

Our principal sources of liquidity have
been net cash flows generated from our operating activities and debt financing activities. We had cash and cash equivalents of W1,022 billion, W890 billion and W752 billion (US$643 million) as of
December 31, 2013, 2014 and 2015, respectively. We also had short-term deposits in banks of W1,302 billion, W1,526 billion and W1,772 billion (US$1,515 million), respectively, as of
December 31, 2013, 2014 and 2015. Our primary use of cash has been to fund capital expenditures related to the expansion and improvement of our production capacity with respect to existing and newly developed products, including the
construction and ramping-up of new, or in certain cases, expansion or conversion of existing, fabrication facilities and production lines and the acquisition of new equipment. We also use cash flows from operations for our working capital
requirements and servicing our debt payments. We expect our cash requirements for 2016 to be primarily for capital expenditures and repayment of maturing debt.



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As of December 31, 2013, we had current assets of W7,732 billion and
current liabilities of W6,789 billion, resulting in net current assets of W943 billion. As of December 31, 2014, we had current assets of W9,241 billion and current liabilities of
W7,550 billion, resulting in net current assets of W1,691 billion. As of December 31, 2015, we had current assets of W9,532 billion (US$8,152 million) and current liabilities of
W6,607 billion (US$5,651 million), resulting in net current assets of W2,925 billion (US$2,501 million). The increase in net current assets as of December 31, 2014 compared to December 31, 2013 was
primarily attributable to a W821 billion increase in inventory as of December 31, 2014 compared to December 31, 2013 as a result of inventory replenishment and stocking by our sales subsidiaries whose inventory levels had
dropped due to an increase in the number of units sales in 2014 compared to 2013 in anticipation of future demand and stocking components and raw materials at our GP1 fabrication facility and E4 production lines, which commenced mass production in
September and December 2014, respectively. The increase in net current assets as of December 31, 2015 compared to December 31, 2014 was primarily attributable to a W653 billion (US$558 million) increase in trade accounts
and notes receivable as of December 31, 2015 compared to December 31, 2014 mainly as a result of a W1,399 billion (US$1,196 million) decrease during such period in trade accounts and notes receivable which were sold to
financial institutions but remained current and outstanding, and a W627 billion (US$536 million) decrease in trade accounts and notes payable as of December 31, 2015 compared to December 31, 2014 mainly as a result of a
decrease in purchases of raw materials and components in the fourth quarter of 2015 compared to the fourth quarter of 2014 in anticipation of weakening demand for our products in early 2016.

Our management constantly monitors our working capital, and we have historically been able to satisfy our cash requirements from cash flows
from operations and debt financing. We believe that we have sufficient working capital for our present requirements. In 2015, we issued domestic debentures in the aggregate principal amount of W300 billion (US$257 million), we
issued domestic commercial paper in the aggregate principal amount of W200 billion (US$171 million) and we entered into a number of facility loan agreements, from which we have drawn down the full aggregate principal amount of
US$300 million (W352 billion) and RMB1,964 million (W350 billion) as of December 31, 2015 in long-term loans, primarily to fund our capital expenditures and refinance our existing borrowings maturing in 2015.
We have pledged property, plant and equipment and other assets in the amount of RMB8,382 million (W1,496 billion) as security in connection with such facility loan agreements.

Our ability to satisfy our cash requirements from cash flows from operations and financing activities will be affected by our ability to
maintain and improve our margins and, in the case of external financing, market conditions, which in turn may be affected by several factors outside of our control. Therefore, we re-evaluate our capital requirements regularly in light of our cash
flows from operations, the progress of our expansion plans and market conditions. To the extent that we do not generate sufficient cash flows from our operations to meet our capital requirements, we may rely on other financing activities, such as
external long-term borrowings and securities offerings, including the issuance of equity, equity-linked and other debt securities.

Our
net cash provided by operating activities amounted to W3,585 billion in 2013, W2,865 billion in 2014 and W2,727 billion (US$2,332 million) in 2015. The decrease in net cash provided by operating
activities in 2014 compared to 2013 was mainly due to a decrease in cash collected from sales resulting from a decrease in sales and an increase of cash paid for purchases of components and raw materials to stock our production facilities in
anticipation of future demand. The decrease in net cash provided by operating activities in 2015 compared to 2014 was mainly due to (i) an increase of cash paid for purchases of components and raw materials resulting from an increase in sales,
(ii) a decrease in inventory and (iii) an increase in income taxes paid, which was attributable primarily to the use of tax loss carryforwards of W111 billion in 2014 compared to no such tax loss carryforwards available in
2015.

The cyclical market conditions that are characteristic of our industry, as well as the regular ramp-up of our new fabrication
facilities and production lines and our cost reduction measures, contribute to the fluctuations in our inventory levels from period to period. In 2014, stocking by our sales subsidiaries in anticipation of future demand contributed to a 42.5%
increase in our inventory levels from year-end 2013. In 2015, steady consumption of our inventories in the fourth quarter of 2015 and changes to our product mix in anticipation of weakening demand in the first half of 2016 contributed to a 14.6%
decrease in our inventory levels from year-end 2014.



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Inventories consisted of the following for the dates indicated:



|                |  |                                          |       |  |      |   |       |      |  |   |         |  |  |     |       | 
|--------------- |  | ---------------------------------------- | ----- |  | ---- | - | ----- | ---- |  | - | ------- |  |  | --- | ----- | 
|                |  | As of December 31,                       |      
|                |  | 2013                                     |       |  | 2014 |   |       | 2015 |  |   | 2015(1) | 
|                |  | (in billions of Won and millions of US$) |      
|Finished goods  |  | W                                        | 734   |  |      | W | 1,201 |      |  | W | 911     |  |  | US$ | 779   | 
|Work in process |  |                                          | 606   |  |      |   | 746   |      |  |   | 720     |  |  |     | 616   | 
|Raw materials   |  |                                          | 262   |  |      |   | 426   |      |  |   | 389     |  |  |     | 333   | 
|Supplies        |  |                                          | 331   |  |      |   | 381   |      |  |   | 331     |  |  |     | 283   | 
|                |  |                                          |       |  |      |   |       |      |  |   |         |  |  |     |       | 
|Total           |  | W                                        | 1,933 |  |      | W | 2,754 |      |  | W | 2,351   |  |  | US$ | 2,011 | 
|                |  |                                          |       |  |      |   |       |      |  |   |         |  |  |     |       | 





|(1) | For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,169.26 to US$1.00, the noon buying rate in effect on December 31, 2015 as certified by the Federal Reserve
Bank of New York for customs purposes. This translation should not be construed as a representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our net cash used in investing activities amounted to W4,504 billion in 2013, W3,451 billion in 2014 and
W2,732 billion (US$2,337 million) in 2015. Net cash used in investing activities primarily reflected the substantial capital expenditures we have made in connection with the expansion and improvement of our production capacity in
recent years, mainly relating to construction of our new, or in certain cases, expansion or conversion of existing, fabrication and module assembly facilities and acquisition of new equipment. These cash outflows from capital expenditures amounted
to W3,473 billion, W2,983 billion and W2,365 billion (US$2,023 million) in 2013, 2014 and 2015, respectively. We intend to fund our capital requirements associated with our expansion and
construction projects with cash flows from operations and financing activities, such as external long-term borrowings.

We currently
expect that, in 2016, our total capital expenditures on a cash out basis will be higher than in 2015, primarily to fund the construction of our P10 fabrication facility in Paju, Korea and expansion of our OLED panel production capacities to respond
to increases in demand for our panels, while maintaining and making improvements to our existing facilities. However, our overall expenditure levels and our allocation among projects are subject to many uncertainties. We review the amount of our
capital expenditures and may make adjustments from time to time based on cash flows from operations, the progress of our expansion plans and market conditions.

Our net cash used in financing activities amounted to W391 billion in 2013 and net cash provided by financing activities
amounted to W405 billion in 2014. In 2015, net cash used in financing activities amounted to W174 billion (US$149 million). The net cash used in financing activities in 2013 reflects primarily the net repayment of
long-term debt and debentures. The net cash provided by financing activities in 2014 reflects primarily the net proceeds from short-term borrowings as well as capital contributions from non-controlling interests. The net cash used in financing
activities in 2015 reflects primarily the repayment of short-term borrowings as well as the payment of dividends.

At our shareholders
meetings in 2013 and 2014, we did not declare a cash dividend to our shareholders. On March 13, 2015, we declared a cash dividend of W179 billion to our shareholders of record as of December 31, 2014 and distributed the
cash dividend to such shareholders on April 8, 2015. On March 11, 2016, we declared a cash dividend of W179 billion to our shareholders of record as of December 31, 2015 and distributed the cash dividend to such
shareholders on April 8, 2016.

We had a total of W21 billion, W224 billion and nil of short-term
borrowings outstanding as of December 31, 2013, 2014 and 2015, respectively. For further information regarding these short-term borrowings, please see Note 14 of the notes to our financial statements.

As of December 31, 2015, we maintained accounts receivable negotiating facilities with several banks for up to an aggregate amount of
US$2,183 million. Our subsidiaries have also entered into various accounts receivable negotiating facilities. For further information regarding these facilities, please see Note 20 of the notes to our financial statements.

As of December 31, 2015, we had outstanding long-term debt including current portion and discounts on debentures in the amount of
W4,228 billion (US$3,616 million), consisting of W2,290 billion of Korean Won denominated debentures, US$1,185 million of U.S. dollar denominated long-term loans, RMB1,964 million of RMB denominated long-term loans,
W200 billion of Korean Won denominated commercial paper, and W4 billion of Korean Won denominated long-term loans.

The terms of some of our long-term debt contain provisions that would trigger a requirement for early payment. The principal and interest
under these obligations may be accelerated if there is a default, including defaults triggered by failure to comply with financial covenants and cross defaults triggered under our other debt obligations. We believe we were in compliance with the
covenants under our debt obligations at December 31, 2015. For further information about our short- and long-term debt obligations as of December 31, 2015, see Note 14 of the notes to our financial statements.



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As of December 31, 2015, we were obligated to guarantee the payment obligation of our
subsidiary LG Display Yantai Co. Ltd. in the amount of US$135 million (W158 billion) under a credit facility that LG Display Yantai Co., Ltd. entered into with Shinhan Bank. Other than the foregoing, we have not entered into any
other financial guarantees or similar commitments to guarantee the payment obligations of our subsidiaries or other third parties as of December 31, 2015.

Set forth below are the aggregate amounts, as of December 31, 2015, of our future contractual financing and licensing obligations under
our existing debt and other contractual arrangements:



|                                                                                                    |  |                        |           |  |                 |   |           |           |  |   |           |  |  |                  |         |  |  |   |        | 
|--------------------------------------------------------------------------------------------------- |  | ---------------------- | --------- |  | --------------- | - | --------- | --------- |  | - | --------- |  |  | ---------------- | ------- |  |  | - | ------ | 
|                                                                                                    |  | Payments Due by Period |          
|Contractual Obligations                                                                             |  | Total                  |           |  | Less than1 year |   |           | 1-3 years |  |   | 3-5 years |  |  | More than5 years |        
|                                                                                                    |  | (in millions of Won)   |          
|Long-Term Debt, including current portion                                                           |  | W                      | 4,228,105 |  |                 | W | 1,416,660 |           |  | W | 2,253,263 |  |  | W                | 478,122 |  |  | W | 80,060 | 
|Fixed License Payment                                                                               |  |                        | 25,901    |  |                 |   | 25,901    |           |  |   |          |  |  |                  |        |  |  |   |       | 
|Long-Term Other Payables                                                                            |  |                        | 9,327     |  |                 |   |          |           |  |   | 9,327     |  |  |                  |        |  |  |   |       | 
|                                                                                                    |  |                        |           |  |                 |   |           |           |  |   |           |  |  |                  |         |  |  |   |        | 
|Total                                                                                               |  | W                      | 4,263,333 |  |                 | W | 1,442,561 |           |  | W | 2,265,590 |  |  | W                | 478,122 |  |  | W | 80,060 | 
|                                                                                                    |  |                        |           |  |                 |   |           |           |  |   |           |  |  |                  |         |  |  |   |        | 
|Estimates of interest payment based on contractual interest rates effective as of
December 31, 2015 |  | W                      | 245,765   |  |                 | W | 108,665   |           |  | W | 118,460   |  |  | W                | 15,354  |  |  | W | 3,286  | 

In addition to fixed license payments listed above that we are obligated to make under certain technology
license agreements, we also have continuing obligations to make cash royalty payments under our technology license agreements, the amount of which are generally determined based on a percentage of sales of our display products.

Expenses relating to our license fees and royalty payments under existing license agreements were W63 billion in 2013,
W69 billion in 2014 and W88 billion (US$75 million) in 2015, representing 3.8% of our research and development related expenditures in 2013, 4.0% in 2014 and 5.7% in 2015. We expect to make additional license fee
payments as we enter into new technology license agreements from time to time with third parties.

Taxation

In 2015, the statutory corporate income tax rate applicable to us was 11.0% (including local income surtax) for the first W200
million of our taxable income, 22.0% (including local income surtax) for our taxable income between W200 million and W20 billion and 24.2% (including local income surtax) for our taxable income in excess of
W20 billion.

Tax Credits

We are entitled to a number of tax credits relating to certain investments in technology and human resources development. For example, under
the Special Tax Treatment Control Law, we are entitled to a tax credit of up to 4% for our capital investments made outside certain areas of Seoul on or before December 31, 2017 provided that there isnt a decrease in the number of our
employees compared to the previous year.

Tax credits not utilized in the fiscal year during which the relevant investment was made may be
carried forward over the next five years in the case of capital investments and five years in the case of investments relating to technology and human resources development. As of December 31, 2015, we had available deferred tax assets related
to these credits of W385 billion (US$329 million), which may be utilized against future income tax liabilities through 2020. In addition, we also had unused tax credit carryforwards of W79 billion (US$67 million) as
of December 31, 2015 for which no deferred tax asset was recognized.



|Item 5.C. | Research and Development, Patents and Licenses, etc.
|--------- | ----------------------------------------------------

Research and Development

The display panel industry is subject to rapid technological changes. We believe that effective research and development is essential to
maintaining our position as one of the industrys leading technology innovators. Our research and development related expenditures amounted to W1,675 billion in 2013, W1,788 billion in 2014 and
W1,547 billion (US$1,323 million) in 2015, representing 6.2% of our revenue in 2013, 6.8% in 2014 and 5.4% in 2015.



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To meet the demands of the future trends, we have formulated a long-term research and development
strategy aimed at enhancing the process, device and design aspects of the existing products and diversifying the use of display panels as new opportunities arise with the development of communication systems and information technology. The following
are examples of products and technologies that have been developed through our research and development activities in recent years:



| |  |  | In 2013, we developed the worlds first 55-inch curved 3D Full HD OLED television panel and a 77-inch curved Ultra HD OLED television panel. In addition, we developed a 105-inch Ultra HD curved TFT-LCD television
panel with a 21:9 screen aspect ratio, which allows for an unprecedented level of viewer immersion. We also collaborated with Intel Corporation, or Intel, and was the first in the world to incorporate Intels Wireless Display, or WiDi,
technology in a display panel with the development of our 23.8-inch TFT-LCD monitor panel. WiDi technology allows viewers to seamlessly stream content from one display device, such as a notebook computer or smartphone, wirelessly to a display device
with WiDi technology without the need for any intermediary device. With respect to smartphones, we developed the worlds first 5.5-inch Quad HD panel, which was also significantly brighter and thinner (only 1.22 mm) compared to conventional
panels. Furthermore, we developed and commenced mass production of a flexible OLED panel for smartphones. The plastic substrates allow the panel to be bendable and virtually shatterproof while being much lighter and thinner compared to panels with
conventional glass substrates.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In 2014, we unveiled a 98-inch Quad Ultra HD television panel, which has four times the resolution (7,680 x 4,320 pixels) of a conventional Ultra HD panel. We also developed an 18-inch transparent OLED panel
(transparency level of 30%) and an 18-inch flexible OLED panel with a radius of curvature of 30 mm. We successfully commercialized a 1.3-inch circular plastic OLED smartwatch panel for LG Electronics G Watch R smartwatch and a 5.5-inch Full HD
plastic OLED smartphone panel for LG Electronics G Flex 2 smartphone. In addition, we successfully commenced mass production of display panels incorporating three state-of-the-art technologies: M+ pixel structure, Ultraviolet Alignment and
Advanced In-cell Touch, or in-TOUCH, technologies. M+ pixel structure technology improves transmittance and reduces power consumption. Ultraviolet Alignment technology utilizes ultraviolet light to more effectively align liquid crystals and improves
contrast ratio and reproduction. In-TOUCH technology reduces the thickness of a touch panel as touch technology is built into the panel cell as opposed to the existing on-cell method, whereby a touch film is added on top of the panel.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In 2015, we developed the worlds first Ultra HD OLED television panels, including 65-inch and 77-inch panels that feature High Dynamic Range functionality with perfect black and improved luminance. In addition, we
unveiled a 55-inch wallpaper OLED television panel which was slim and light enough to attach to the wall simply by using magnets or wires. We were able to achieve this width using an innovative production method whereby the electric
circuits are installed in a separate process. In the commercial space, we developed the worlds first 55-inch double-sided OLED panel for commercial use, which shows different images on each side while achieving a width of only 5.3 mm, as well
as a 139-inch Vertical Tiling OLED display that is made of eight 65-inch OLED panels connected together in a double-sided S-curved pattern. We also successfully commenced mass production of in-TOUCH panels for notebook computers. With respect to
smartphones, we developed the worlds first 5.5-inch Quad HD in-TOUCH panel and the worlds first 5.7-inch free-form Quad HD panel.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As the product life cycle of display panels using certain of the existing TFT-LCD technology is approaching maturity, we plan to further focus
on OLED and other newer display technologies, while also exploring new growth opportunities in the application of display panels, such as in tablet computers, smartphones, smartwatches, public displays and automotive displays.

In order to maintain our position as one of the industrys technology leaders, we believe it is important not only to increase direct
spending on research and development, but also to manage our research and development capability effectively in order to successfully implement our long-term strategy. In connection with our efforts to consolidate our research and development
efforts for next-generation display technologies, we opened the R&D Center in Paju, Korea in April 2012.



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We complement our in-house research and development capability with collaborations with
universities and other third parties. For example, we provide project-based funding to both domestic and overseas universities as a means to recruit promising engineering students and to research and develop new technologies. In July 2012, we
entered into an agreement with Seoul National University to establish the LGD-SNU Cooperation Center within the universitys Research Institute of Advanced Materials to conduct research into display panel technologies, including OLED
technology. We also enter into joint research and development agreements from time to time with third parties for the development of technologies in specific fields. In addition, we belong to several display industry consortia, and we receive annual
government funding to support our research and development efforts. As of December 31, 2015, we employed 4,632 engineers, researchers, designers, technicians and support personnel in connection with our research and development activities.

While we primarily rely on our own capacity for the development of new technologies in the display panel design and manufacturing process, we
rely on third parties for certain key technologies to enhance our technology leadership, as further described in Intellectual Property below.

Intellectual Property

Overview

Our business has benefited from our patent portfolio, which includes patents for display technologies, manufacturing processes,
products and applications related to the production of TFT-LCD and OLED panels. We hold a large number of patents in Korea and in other countries, including in the United States, China, Japan, Germany, France, Great Britain and Taiwan. These patents
will expire at various dates upon the expiration of their respective terms ranging from 2016 to 2035. In March 2014, we formed Unified Innovative Technology, LLC in the United States, a limited liability company solely owned by us for the purpose of
patent portfolio management.

As part of our ongoing efforts to prevent infringements on our intellectual property rights and to keep
abreast of critical technology developments by our competitors, we closely monitor patent applications in Korea, Japan and the United States. We also plan to initiate monitoring activities in China. We intend to continue to file patent applications,
where appropriate, to protect our proprietary technologies. We also enter into confidentiality agreements with each of our employees and consultants upon the commencement of an employment or consulting relationship. These agreements generally
provide that all inventions, ideas, discoveries, improvements and copyrightable material made or conceived by the individual arising out of the employment or consulting relationship and all confidential information developed or made known to the
individual during the term of the relationship are our exclusive property. In addition, we have increased our efforts to safeguard our propriety information by engaging in in-house information protection awareness activities with our employees.

License Agreements

We enter into license or cross-license agreements from time to time with third parties with respect to various device and process technologies
to complement our in-house research and development. We engage in regular discussions with third parties to identify potential areas for additional licensing of key technologies.

Expenses relating to our license fees and royalty payments under existing license agreements were W63 billion in 2013,
W69 billion in 2014 and W88 billion (US$75 million) in 2015, representing 3.8%, 4.0% and 5.7% of our research and development related expenditures in 2013, 2014 and 2015, respectively. We recognized royalty income
in the amount of W23 billion in 2013, W17 billion in 2014 and W19 billion (US$16 million) in 2015. The following are examples of license agreements we have entered into:



| |  |  | We have a license agreement with each of Lemelson Foundation, Columbia University, Penn State University, Honeywell International, Honeywell Intellectual Properties, Plasma Physics Corporation and Fergason Patent
Properties. Each license agreement provides for a non-exclusive license under certain patents relating to TFT-LCD technologies.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We entered into a license agreement with Semiconductor Energy Laboratory which provides for a non-exclusive license under certain patents relating to TFT-LCD and AMOLED technologies. For IPS technologies, we have a
non-exclusive license with Merck & Co.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We entered into a cross-license agreement with each of Hitachi, HannStar and Hydis for a non-exclusive license under certain patents relating to display technologies.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We entered into separate cross-license agreements with each of NEC and AU Optronics in connection with the settlement of certain patent infringement lawsuits. Under the agreements, each party grants the other party a
license under certain patents relating to TFT-LCD technologies.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | We are licensed to use certain patents for our TFT-LCD products pursuant to a cross license agreement between Philips Electronics and Toshiba Corporation.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

In addition to the above, we have also entered into license or cross-license agreements with other third parties in the course of our business operations in
connection with certain patents which such third parties own or control.

As well as licensing key technologies from third parties, we aim
to benefit from our own patents and other intellectual property rights by granting licenses to third parties from time to time in return for royalty payments. For example, we entered into a license agreement with Rockwell Collins Inc. under which we
granted to Rockwell a non-exclusive, non-transferable license under our patents primarily for use in military applications. We have also entered into certain patent purchase and license agreements with third parties, where we receive a portion of
the license payments.



|Item 5.D. | Trend Information
|--------- | -----------------

These matters are discussed under Item 5.A. and
Item 5.B. above where relevant.



|Item 5.E. | Off-Balance Sheet Arrangements
|--------- | ------------------------------

For a discussion of our off-balance sheet
arrangements, please see  Factoring and securitization of accounts receivable,  Letters of credit and  Payment guarantees in Note 20 of the notes to our financial statements.



|Item 5.F. | Tabular Disclosure of Contractual Obligations
|--------- | ---------------------------------------------

Presented in Item 5.B. above.



|Item 5.G. | Safe Harbor
|--------- | -----------

See Forward-Looking Statements.



|Item 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------- | ------------------------------------------



|Item 6.A. | Directors and Senior Management
|--------- | -------------------------------

Board of Directors

Our board of directors has the ultimate responsibility for the management of our business affairs. Our articles of incorporation provide for a
board consisting of between five and seven directors, more than half of whom must be outside directors. Our shareholders elect all directors at a general meeting of shareholders. Under the Korean Commercial Code, a representative director of a
company established in Korea is authorized to represent and act on behalf of such company and has the power to bind such company. Sang Beom Han is currently our sole representative director.

The term of office for our directors shall not exceed the closing of the annual general meeting of shareholders convened in respect of the
last fiscal year within three years after they take office. Our board must meet at least once every quarter, and may meet as often as the chairman of the board of directors or the person designated by the regulation of the board of directors deem
necessary or advisable.

The tables below set forth information regarding our current directors and executive officers. The business
address of all of the directors and executive officers is LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 07336, Korea.



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Our Outside Directors

Our current outside directors are set out in the table below. Each of our outside directors meets the applicable independence standards set
forth under the rules of the Korean Commercial Code and also meets the applicable independence criteria set forth under Rule 10A-3 of the Exchange Act.



|               |  |                   |  |          |  |                         |  |              |  |                                                                         
|-------------- |  | ----------------- |  | -------- |  | ----------------------- |  | ------------ |  | ------------------------------------------------------------------------
|Name           |  | Date of Birth     |  | Position |  | First Elected/Appointed |  | Term Expires |  | Principal Occupation
Outside of LG Display                              
|Jin Jang       |  | November 28, 1954 |  | Director |  | March 2011              |  | March 2017   |  | Chair Professor, Department of Information Display, Kyung Hee University
|               |  |                   |  |          | 
|Joon Park      |  | October 30, 1954  |  | Director |  | March 2013              |  | March 2019   |  | Professor, School of Law, Seoul National University                     
|               |  |                   |  |          | 
|Sung-Sik Hwang |  | July 24, 1956     |  | Director |  | January 2015            |  | March 2018   |  | President, Samchully Co., Ltd.                                          
|               |  |                   |  |          | 
|Kun Tai Han    |  | October 30, 1956  |  | Director |  | March 2016              |  | March 2019   |  | Chief Executive Officer, Hans Consulting                                

Our Non-Outside Directors

Our current non-outside directors are set out in the table below:



|              |  |                  |  |                                                                    |  |                         |  |              |  |                                                
|------------- |  | ---------------- |  | ------------------------------------------------------------------ |  | ----------------------- |  | ------------ |  | -----------------------------------------------
|Name          |  | Date of Birth    |  | Position                                                           |  | First Elected/Appointed |  | Term Expires |  | Principal OccupationOutside of LG Display      
|Sang Beom Han |  | June 18, 1955    |  | Representative Director, Vice Chairman and Chief Executive Officer |  | March 2012              |  | March 2018   |  |                                               
|              |  |                  |  |                                                                    | 
|Sangdon Kim   |  | October 20, 1962 |  | Director, Senior Vice President and Chief Financial Officer        |  | March 2014              |  | March 2017   |  |                                               
|Yu Sig Kang   |  | November 3, 1948 |  | Director                                                           |  | March 2011              |  | March 2017   |  | Vice Chairman, LGManagementDevelopmentInstitute



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Our Non-Director Executive Officers

Our current non-director executive officers are set out in the table below:



|                 |  |                   |  |                                                             |  |                         |  |                    
|---------------- |  | ----------------- |  | ----------------------------------------------------------- |  | ----------------------- |  | -------------------
|Name             |  | Date of Birth     |  | Position                                                    |  | First Elected/Appointed |  | Business Group/Unit
|                 |  |                   |  |                                                            
|Sang Deog Yeo    |  | December 3, 1955  |  | President and Head of OLED Business Unit                    |  | January 2015            |  | OLED Business Unit 
|                 |  |                   |  |                                                            
|Yu Seoung Yin    |  | June 20, 1956     |  | Executive Vice President and Head of China Operation Group  |  | January 2009            |  |                   
|                 |  |                   |  |                                                            
|Cheol Dong Jeong |  | May 11, 1961      |  | Executive Vice President and Chief Production Officer       |  | January 2013            |  |                   
|                 |  |                   |  |                                                            
|Soo Youle Cha    |  | October 21, 1957  |  | Executive Vice President and Head of OLED TV Panel Group    |  | January 2014            |  | OLED Business Unit 
|                 |  |                   |  |                                                            
|Yong Kee Hwang   |  | January 8, 1958   |  | Executive Vice President and Head of TV Business Unit       |  | January 2014            |  | TV Business Unit   
|                 |  |                   |  |                                                            
|Bang Soo Lee     |  | November 19, 1958 |  | Executive Vice President and Head of Business Support Group |  | January 2016            |  |                   
|                 |  |                   |  |                                                            
|Kyong Deuk Jeong |  | January 9, 1963   |  | Executive Vice President and Head of IT Business Unit       |  | January 2016            |  | IT Business Unit   

We and our subsidiaries do not have any service contracts with our directors providing for benefits upon
termination of their employment with us or our subsidiaries.

Sang Beom Hanhas served as vice chairman since January 2016,
representative director since March 2012 and chief executive officer since December 2011. Mr. Han also served as head of the TV Business Division, the Panel Center and as vice-president for our P5 facility and the Manufacturing Technology
Center since joining LG Display in December 2001. Prior to joining LG Display, Mr. Han served as vice president of Hynix Semiconductor Inc. Mr. Han holds a Ph.D. degree in material science from Stevens Institute of Technology.

Sangdon Kimhas served as director since March 2014 and senior vice president and chief financial officer since January 2014. Prior to
joining LG Display, he served as senior vice president and chief financial officer of Serveone. Mr. Kim holds a bachelors degree in business administration from Yonsei University and a masters degree in business administration from
the University of Washington.

Yu Sig Kang has served as director since March 2011. Mr. Kang is currently vice chairman of LG
Management Development Institute. He also served as representative director of LG Corp. and the head of LG Corps Restructuring Office. Mr. Kang holds a bachelors degree in business administration from Seoul National University.

Jin Jang has served as outside director since March 2011. Mr. Jang is currently the chair professor of the Department of
Information Display at Kyung Hee University. Mr. Jang holds a bachelors degree in physics from Seoul National University, and a masters degree and a Ph.D. in physics from the Korea Advanced Institute of Science and Technology.

Joon Park has served as outside director since March 2013. Mr. Park is currently a professor of the School of Law at Seoul
National University. Mr. Park previously practiced law at a Korean law firm. Mr. Park holds a bachelors degree in law from Seoul National University.

Sung-Sik Hwang has served as outside director since January 2015. Mr. Hwang is currently the president of Samchully Co., Ltd.
Previously, Mr. Hwang served as vice-president of Kyobo Life Insurance Co., Ltd. and vice-president of Samil PricewaterhouseCoopers. Mr. Hwang holds bachelors and masters degrees in business administration from Seoul National
University and a Ph.D. from Korea Advanced Institute of Science and Technology.



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Kun Tai Han has served as outside director since March 2016. Mr. Han is currently the
chief executive officer of Hans Consulting. Previously, Mr. Han served as the chief executive officer of Korea Leadership Center Co., Ltd. Mr. Han holds a bachelors degree in textile engineering from Seoul National University, a
masters degree in business administration from the Helsinki School of Economics and Business Administration and a Ph.D. in Polymer Engineering from the University of Akron.

Sang Deog Yeo has served as president since January 2015 and as head of our OLED Business Unit since December 2014. Mr. Yeo
previously served as executive vice president. Prior to joining LG Display, Mr. Yeo served as head of Monitor Product Development at LG Electronics. Mr. Yeo holds a bachelors degree in electronic engineering from Kyungpook National
University.

Yu Seoung Yin has served as executive vice president since January 2009 and head of the China Operation Group since
December 2013. Mr. Yin also served as head of our IT/Mobile Business Division and China Center. Prior to joining LG Display, Mr. Yin served as executive vice president of the Chairmans Office at LG Holdings. Mr. Yin holds a
bachelors degree in mass communication from Chung-Ang University.

Cheol Dong Jeong has served as executive vice president
since January 2013 and chief production officer since December 2011. Mr. Jeong also served as head of Manufacturing Technology Center. Mr. Jeong holds a bachelors degree in electronic engineering from Kyungpook National University
and a masters degree in electronic engineering from Chungbuk National University.

Soo Youle Chahas served as executive vice
president since January 2014 and as head of our OLED TV Panel Group since December 2014. Mr. Cha previously served as head of our OLED Panel Group. Mr. Cha holds a bachelors degree in electronic engineering from Sogang University.

Yong Kee Hwanghas served as executive vice president since January 2014 and as head of our TV Business Unit since May 2012. Mr. Hwang
previously served as chief technology officer. Mr. Hwang holds a bachelors degree in mechanical design engineering from Pusan University.

Bang Soo Lee has served as executive vice president since January 2016 and as head of our Business Support Group since January 2010.
Mr. Lee previously served as head of our General Affairs & Public Relations Division. Mr. Lee holds a bachelors degree in business administration from Hanyang University.

Kyong Deuk Jeong has served as executive vice president since January 2016 and as head of our IT Business Unit since December 2015. Mr.
Jeong previously served as head of our IT/Mobile Business Unit and as head of Panel Center. Mr. Jeong holds a bachelors degree and a masters degree in physics from Kyungpook National University.



|Item 6.B. | Compensation
|--------- | ------------

The aggregate remuneration and benefits-in-kind we paid in
2015 to our executive officers and our directors was W5.3 billion (US$4.5 million). This included W1,177 million (US$1.0 million) in salary and W840 million (US$0.7 million) in bonus paid to Sang
Beom Han, our chief executive officer, and W393 million (US$0.3 million) in salary and W201 million (US$0.2 million) in bonus paid to Sangdon Kim, our chief financial officer. In addition, as of December 31,
2015, our accrued severance and retirement benefits to those officers and directors amounted to W8.6 billion (US$7.4 million).

Our articles of incorporation provide for a stock option plan to aid retention of executives and key staff and to provide an incentive to meet
strategic objectives. All of the stock options we have previously granted have expired and none are currently outstanding. In addition, remuneration for our directors is determined by shareholder resolution, and severance payments to our directors
are made in accordance with our regulations on severance payments adopted by our shareholders. We also maintain a cash-based incentive plan for our executive officers and other key managerial employees adopted by our board of directors. Incentive
payments are determined based on various long-term performance criteria and paid annually, subject to our cash resources and performance in such year. In addition, our executive officers and other key managerial employees are also eligible for
bonuses payable under our employee profit sharing plan if certain performance criteria are met.



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We carry liability insurance for the benefit of our directors and officers against certain
liabilities incurred by them in their official capacities. This insurance covers our directors and officers, as well as those of our subsidiaries, against certain claims, damages, judgments and settlements, including related legal costs, arising
from a covered individuals actual or alleged breaches of duty, neglect or other errors, arising in connection with such individuals performance of his or her official duties. The insurance protection also extends to claims, damages,
judgments and settlements, including related legal costs, arising out of shareholders derivative actions or otherwise relating to our securities. Policy exclusions include, but are not limited to, claims relating to fraud, willful misconduct
or criminal acts, as well as the payment of punitive damages. In 2015, we paid a premium of approximately US$1.6 million in respect of this insurance policy.



|Item 6.C. | Board Practices
|--------- | ---------------

See Item 6.A. Directors and Senior Management
above for information concerning the terms of office and contractual employment arrangements with our directors and executive officers.

Committees of
the Board of Directors

We currently have three committees that serve under our board of directors:



| |  |  | Audit Committee;
| | - |  | ----------------



| |  |  | Outside Director Nomination Committee; and
| | - |  | ------------------------------------------



| |  |  | Management Committee
| | - |  | --------------------

Under our articles of incorporation, our board of directors may
establish other committees if they deem them necessary. Our board of directors appoint each member of these committees except that candidates for the Audit Committee will first be elected by our shareholders at the general meeting of shareholders.

Audit Committee

Under Korean law and our articles of incorporation, we are required to have an Audit Committee. Our Audit Committee is currently comprised of
three outside directors: Jin Jang, Joon Park and Sung-Sik Hwang. The chairman is Joon Park. Members of the Audit Committee are elected by our shareholders at the annual general meeting of shareholders and all members must meet the applicable
independence criteria set forth under the rules and regulations of the Sarbanes-Oxley Act of 2002 and the Korean Commercial Code. The committee reviews all audit and compliance-related matters and makes recommendations to our board of directors. The
Audit Committees primary responsibilities include the following:



| |  |  | engaging or dismissing independent auditors;
| | - |  | --------------------------------------------



| |  |  | approving independent audit fees;
| | - |  | ---------------------------------



| |  |  | approving audit and non-audit services;
| | - |  | ---------------------------------------



| |  |  | reviewing annual and interim financial statements;
| | - |  | --------------------------------------------------



| |  |  | reviewing audit results and reports, including management comments and recommendations;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | reviewing our system of controls and policies, including those covering conflicts of interest and business ethics;
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | assessing compliance with disclosure and filing obligations;
| | - |  | ------------------------------------------------------------



| |  |  | considering significant changes in accounting practices; and
| | - |  | ------------------------------------------------------------



| |  |  | examining improprieties or suspected improprieties.
| | - |  | ---------------------------------------------------

In addition, in connection with general
meetings of shareholders, the committee examines the agenda for, and financial statements and other reports to be submitted by, the board of directors at each general meeting of shareholders. Our external auditor reports directly to the Audit
Committee. Our external auditor is invited to attend meetings of this committee when needed or when matters pertaining to the audit are discussed.

The committee holds regular meetings at least once each quarter, and more frequently as needed.

Outside Director Nomination Committee

Under Korean law and our articles of incorporation, we are required to have an Outside Director Nomination Committee. Our Outside Director
Nomination Committee is comprised of two outside directors, Jin Jang and Sung-Sik Hwang, and one non-outside director, Yu Sig Kang. The chairman is Yu Sig Kang. The Outside Director Nomination Committee reviews the qualifications of potential
candidates for outside directors and proposes nominees to serve on our board of directors.



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The committee holds regular meetings at least once each year, and more frequently as needed.

Management Committee

The Management Committee was created at our annual general meeting of shareholders in March 2012. The Management Committee is comprised of two
non-outside directors, Sang Beom Han and Sangdon Kim. The chairman is Sang Beom Han. The committees primary responsibilities include making recommendations regarding matters relating to our operation and other matters delegated to the
committee by our board of directors.

The committee holds meetings from time to time as needed.



|Item 6.D. | Employees
|--------- | ---------

As of December 31, 2015, we had 49,205 employees, including
16,502 employees in our overseas subsidiaries. The following table provides a breakdown of our employees by function as of December 31, 2013, 2014 and 2015:



|                            |  |                    |        |  |      |  |        |      |  |  |        | 
|--------------------------- |  | ------------------ | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                            |  | As of December 31, |       
|Employees(1)                |  | 2013               |        |  | 2014 |  |        | 2015 | 
|Production                  |  |                    | 40,975 |  |      |  | 39,246 |      |  |  | 38,663 | 
|Technical(2)                |  |                    | 7,809  |  |      |  | 7,733  |      |  |  | 8,007  | 
|Sales & Marketing           |  |                    | 1,436  |  |      |  | 1,468  |      |  |  | 1,527  | 
|Management & Administration |  |                    | 985    |  |      |  | 974    |      |  |  | 1,008  | 
|                            |  |                    |        |  |      |  |        |      |  |  |        | 
|Total                       |  |                    | 51,205 |  |      |  | 49,421 |      |  |  | 49,205 | 
|                            |  |                    |        |  |      |  |        |      |  |  |        | 



|(1) | Includes employees of our subsidiaries.
|--- | ---------------------------------------

|(2) | Includes research and development and engineering personnel.
|--- | ------------------------------------------------------------

To recruit promising engineering
students at leading Korean universities, we work with these universities on research projects where these students can gain exposure to our research and development efforts. We also provide on-the-job training for our new employees and develop
training programs to identify and promote new leaders.

As of December 31, 2015, approximately 69.2% of our employees, including
those of our subsidiaries, were union members, and production employees accounted for substantially all of these members. We have a collective bargaining arrangement with our labor union, which is negotiated once a year. We consider our relationship
with our employees to be good.

The salaries of our employees are reviewed annually. Salaries are adjusted based on individual and team
performance, industry standards and inflation. As an incentive, discretionary bonuses may be paid based on the performance of individuals, and a portion of our profits may be paid to our employees under our profit sharing plan if certain performance
criteria are achieved. We also provide a wide range of benefits to our employees including medical insurance, employment insurance, workers compensation, free medical examinations, child tuition and education fee reimbursements and low-cost housing
for certain employees.

Under the Guarantee of Workers Retirement Benefits Act, employees with one year or more of service are
entitled to receive, upon termination of their employment, a lump-sum severance payment based on the length of their service and their average wage during the last three months of employment. As of December 31, 2015, our recognized liabilities
for defined benefit obligations amounted to W354 billion (US$303 million). See Note 18 of the notes to our financial statements for a discussion on the method of calculating our recognized liabilities for defined benefit
obligations.

As of December 31, 2015, our employee stock ownership association owned approximately 0.001% of our common stock.



|Item 6.E. | Share Ownership
|--------- | ---------------

Common Stock

The persons who are currently our executive officers held, as a group, 25,514 shares of our common stock as of April 28, 2016, the most
recent date for which this information is available. Our executive officers acquired our shares of common stock through our employee stock ownership association and pursuant to open market purchases on the Korea Exchange. Due to Korean law
restrictions, our chief executive officer and chief financial officer do not participate in the employee stock ownership association. Each of our directors and executive officers beneficially owns less than one percent of our common stock on an
individual basis.



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Starting in 2013, where bonus and incentive payments exceed certain thresholds, our executive
officers and certain other key managerial employees are required to use a certain percentage of their bonus and incentive payments to purchase our shares of common stock, which are then required to be held until their resignation or termination.

In addition, our articles of incorporation provide for a stock option plan to aid retention of executives and key staff and to provide an
incentive to meet strategic objectives. All of the stock options we have previously granted have expired and none are currently outstanding.



|Item 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|------- | -------------------------------------------------



|Item 7.A. | Major Shareholders
|--------- | ------------------

The following table sets forth information
regarding beneficial ownership of our common stock by each person or entity known to us as of April 28, 2016 to own beneficially more than 5% of our outstanding shares:



|                         |  |                                 |             |  |            |  |      |  
|------------------------ |  | ------------------------------- | ----------- |  | ---------- |  | ---- | -
|Beneficial Owner         |  | Number of Shares ofCommon Stock |             |  | Percentage | 
|LG Electronics           |  |                                 | 135,625,000 |  |            |  | 37.9 | %
|National Pension Service |  |                                 | 32,813,120  |  |            |  | 9.2  | %

Other than as set forth above, no other person or entity known by us to be acting in concert, directly or
indirectly, jointly or severally, owned more than 5% or more of our outstanding common stock or exercised control or could exercise control over us as of April 28, 2016. None of our major shareholders identified above has voting rights
different from those of our other shareholders.



|Item 7.B. | Related Party Transactions
|--------- | --------------------------

We engage from time to time in a
variety of transactions with related parties, including the sale of our products to, and the purchase of raw materials and components from, such related parties. See Notes 10 and 23 of the notes to our financial statements. We have conducted our
transactions with related parties based on arms length negotiations taking into account such considerations as we would in comparable transactions with a non-related party.

From time to time, we provide payment guarantees for the benefit of certain of our subsidiaries. For a discussion of such payment guarantee
obligations, please see Item 5.B. Liquidity and Capital Resources.

Transactions with Companies in the LG Group

Sales to LG Electronics

We sell display panels, primarily large-sized panels for televisions, notebook computers and desktop monitors and small-sized panels for tablet
computers and mobile and other applications, to LG Electronics and its subsidiaries on a regular basis, as both an end-brand customer and as a systems integrator for use in products they assemble on a contract basis for other end-brand customers.
Pricing and other principal terms of the sales to LG Electronics are negotiated based on then-prevailing market terms and prices as adjusted for LG Electronics requirements such as volume and product specifications and our internal projections
regarding market trends, which are the same considerations that we take into account when negotiating pricing and principal terms of sales to our non-affiliated end-brand customers.

Sales to LG Electronics and its subsidiaries, which include sales to LG Electronics as an end-brand customer and system integrator, amounted
to W5,493 billion (US$4,698 million), or 19.4% of our sales, in 2015.

Sales to LG International

We sell our products to certain subsidiaries of LG International, our affiliated trading company, in regions where doing so is consistent with
local market practices. These subsidiaries of LG International process orders from and distribute products to customers located in their region.



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Sales to LG International and its subsidiaries amounted to W999 billion (US$854
million), or 3.5% of our sales, in 2015. We sell our products to these subsidiaries of LG International at such prices and on terms determined based on then-prevailing market terms and prices as adjusted for LG Internationals requirements such
as volume and our internal projections regarding market trends.

Purchases from LG Electronics

We purchase equipment, printed circuit boards, photo masks, raw materials, components and certain services, such as waste water management and
transportation, warehousing and other related logistics services, from LG Electronics and its subsidiaries. Our purchases from LG Electronics and its subsidiaries amounted to W909 billion (US$777 million), or 5.0% of our total
purchases, in 2015.

Purchases from LG International

We procure a portion of our production materials, supplies and services, from LG International and its subsidiaries. We use LG International
and its subsidiaries in order to take advantage of their relationships with vendors, experience in negotiations and logistics as well as their ability to obtain volume discounts. Purchase prices we pay to these subsidiaries of LG International and
other terms of our transactions with them are negotiated based on then-prevailing market terms and prices as adjusted for our requirements such as volume and specifications and our internal projections regarding market trends. We expect to continue
to utilize LG Internationals overseas subsidiaries for the procurement of a portion of our production materials, supplies and services.

Our purchases, including purchases of materials, supplies and services, from LG International and its subsidiaries, amounted to W895 billion
(US$765 million), or 4.9% of our total purchases, in 2015.

Other Purchases

Under a master purchase agreement, we procure, on an as-needed basis, certain of the raw materials, components and other materials
necessary for our production process from other companies in the LG Group. Our purchases of raw materials, such as polarizers, from LG Chem, an affiliate of LG Corp., amounted to W1,669 billion (US$1,427 million), or 9.2% of our
total purchases, in 2015.

Our total purchases, including purchases of materials, supplies and services, from companies in the LG Group,
excluding LG Electronics, LG International and LG Chem and their respective subsidiaries, amounted to W1,900 billion (US$1,625 million), or 10.5% of our total purchases, in 2015.

Intellectual Property Related Agreements with LG Corp. and LG Electronics

We have entered into successive trademark license agreements with LG Corp., the holding company of the LG Group, for use of the LG
name. Under the terms of the current agreement, we are required to make monthly payments to LG Corp. in the aggregate amount per year of 0.2% of our sales after deducting advertising expenses. As of April 28, 2016, we have made all monthly
payments required to be made to LG Corp. in accordance with the terms of the current agreement.

In addition, we benefit from certain
licenses extended to us from license or cross-license agreements between LG Electronics and third parties. Under the terms of the joint venture agreement establishing LG.Philips LCD Co., Ltd., LG Electronics had assigned most of its patents relating
to the development, manufacture and sale of TFT-LCD products to us and we had agreed to maintain joint ownership of those patents that were not assigned to us. Pursuant to a grantback agreement entered into with LG Electronics in July 2004, in the
event of any intellectual property dispute between LG Electronics and a third party relating to those patents jointly owned by LG Electronics and us, we intend to allow LG Electronics to assert ownership in those patents for all non TFT-LCD
applications and to license or grant other rights in such patents for use by the licensee in non-TFT-LCD applications in order to settle such disputes.

Transactions with Directors and Officers

Certain of our directors and executive officers also serve as executive officers of companies with which we do business. None of our directors
or executive officers has or had any interest in any of our business transactions that are or were unusual in their nature or conditions or significant to our business.



|Item 7.C. | Interests of Experts and Counsel
|--------- | --------------------------------

Not applicable.



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|Item 8. | FINANCIAL INFORMATION
|------- | ---------------------



|Item 8.A. | Consolidated Statements and Other Financial Information
|--------- | -------------------------------------------------------

See
Item 18. Financial Statements and pages F-1 through F-99.

Legal Proceedings

We are involved from time to time in certain routine legal actions incidental to our business. However, except for the ongoing proceedings
described below, we are not currently involved in any material litigation or other proceedings the outcome of which we believe might, individually or taken as a whole, have a material adverse effect on our results of operations or financial
condition. In addition, except as described below, we are not aware of any other material pending or threatened litigation against us.

Intellectual Property

In December 2013, Delaware Display Group LLC and Innovative Display Technologies LLC filed a patent infringement action against LG Display and
LG Display America in the U.S. District Court for the District of Delaware. In December 2015, Delaware Display Group LLC and Innovative Display Technologies LLC filed a new patent infringement action against LG Display and LG Display America in the
U.S. District Court for the District of Delaware with respect to three patents that were dismissed without prejudice from the aforementioned patent infringement action. LG Display is currently defending against their claims.

In March 2014, Surpass Tech Innovation LLC filed a patent infringement action against LG Display and LG Display America in the U.S. District
Court for the District of Delaware. As of November 21, 2014, the case is stayed pending Inter Partes Review.

Antitrust and
Others

In December 2006, LG Display received notices of investigation by the U.S. Department of Justice, the European Commission,
the Korea Fair Trade Commission and the Japan Fair Trade Commission with respect to possible anti-competitive activities in the TFT-LCD industry. Subsequently, the Competition Bureau of Canada, the Secretariat of Economic Law of Brazil, the Taiwan
Fair Trade Commission and the Federal Competition Commission of Mexico announced investigations regarding the same.

In November 2008, LG
Display executed an agreement with the U.S. Department of Justice whereby LG Display and LG Display America pleaded guilty to a Sherman Antitrust Act violation and agreed to pay a single total fine of US$400 million. In December 2008, the U.S.
District Court for the Northern District of California accepted the terms of the plea agreement and entered a judgment against LG Display and LG Display America and ordered the payment of US$400 million, which has since been paid. The agreement
resolved all federal criminal charges against LG Display and LG Display America in the United States in connection with this matter, provided that LG Display continues to cooperate with the U.S. Department of Justice in connection with the ongoing
proceedings.

In December 2010, the European Commission issued a decision finding that LG Display engaged in anti-competitive activities
in the TFT-LCD industry in violation of European Union competition laws, and imposed a fine of 215 million. In February 2011, LG Display filed with the European Union General Court an application for partial annulment and reduction of the fine
imposed by the European Commission. In November 2011, LG Display received a request for information from the European Commission relating to certain alleged anti-competitive activities in the TFT-LCD industry and has responded to the request. In
February 2014, the European Union General Court reduced the fine to 210 million and LG Display paid the fine in full in April 2014. In May 2014, LG Display filed an appeal with the European Court of Justice requesting annulment of the
European Union General Courts judgment and further reduction of the fine imposed by the European Commissions decision, and in April 2015 the European Court of Justice upheld the decision of the European Union General Court.

In November 2009, the Taiwan Fair Trade Commission terminated its investigation without any finding of violations or levying of fines. Also,
in February 2012, the Competition Bureau of Canada terminated its investigation without any finding of violations or levying of fines. In August 2014, the Japan Fair Trade Commission terminated its investigation without any finding of violations or
levying of fines. In August 2014, LG Display executed a settlement agreement with the Brazilian Administrative Council for Economic Defense (CADE), for R$33.9 million, which resolved all administrative charges against LG Display provided that it
continues to cooperate with the ongoing investigation.



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In December 2011, the Korea Fair Trade Commission imposed a fine of W31.4
billion after finding that LG Display and certain of its subsidiaries engaged in anti-competitive activities in violation of Korean fair trade laws. In December 2011, LG Display filed an appeal of the decision with the Seoul High Court. In February
2014, the Seoul High Court annulled the decision of the Korea Fair Trade Commission. In March 2014, the Korea Fair Trade Commission filed an appeal of the Seoul High Court decision with the Supreme Court of Korea. In June 2014, the Supreme Court of
Korea upheld the lower courts decision.

After the commencement of the U.S. Department of Justice investigation, a number of class
action complaints were filed against LG Display, LG Display America and other TFT-LCD panel manufacturers in the United States and Canada alleging violation of respective antitrust laws and related laws. In a series of decisions in 2007 and 2008,
the class action lawsuits in the United States were transferred to the Northern District of California for pretrial proceedings, which we refer to as the MDL Proceedings. In March 2010, the federal district court granted the class certification
motion filed by the indirect purchaser plaintiffs, and granted in part and denied in part the class certification motion filed by the direct purchaser plaintiffs. In January 2011, 78 entities (including groups of affiliated entities) submitted
requests for exclusion from the direct purchaser class. In April 2012, ten entities (including groups of affiliated companies) submitted requests for exclusion from the indirect purchaser class. In addition, since 2010, the attorneys general of
Arkansas, California, Florida, Illinois, Michigan, Mississippi, Missouri, New York, Oklahoma, Oregon, South Carolina, Washington, West Virginia and Wisconsin filed complaints against LG Display, alleging similar antitrust violations as alleged in
the MDL Proceedings.

In June 2011, LG Display reached a settlement with the direct purchaser class, which the federal district court
approved in December 2011. In July 2012, LG Display reached a settlement with the indirect purchaser class plaintiffs and with the state attorneys general of Arkansas, California, Florida, Michigan, Missouri, New York, West Virginia and Wisconsin,
which was approved by the federal district court in April 2013 and, in the case of the state attorneys general actions, by their respective state governments. LG Display has since reached settlement with each of the attorneys general that had filed
action.

In addition, in relation to the MDL Proceedings, in 2009, ATS Claim, LLC (assignee of Ricoh Electronics, Inc.), AT&T Corp.
and its affiliates, Motorola, and Electrograph Technologies Corp. and its subsidiary filed separate claims in the United States, and all of the actions were subsequently consolidated into the MDL Proceedings. In 2010, TracFone Wireless Inc., Best
Buy Co., Inc. and its affiliates, Target Corp., Sears, Roebuck and Co., Kmart Corp., Old Comp Inc., Good Guys, Inc., RadioShack Corp., Newegg Inc., Costco Wholesale Corp., Sony Electronics, Inc. and its affiliate, SB Liquidation Trust and the
trustee of the Circuit City Stores, Inc. Liquidation Trust filed separate claims in the United States. In 2011, the AASI Creditor Liquidating Trust on behalf of All American Semiconductor Inc., CompuCom Systems, Inc., Interbond Corporation of
America, Jaco Electronics, Inc., Office Depot, Inc., P.C. Richard & Son Long Island Corporation, MARTA Cooperative of America, Inc., ABC Appliance, Inc., Schultze Agency Services, LLC on behalf of Tweeter Opco, LLC and its affiliate,
T-Mobile U.S.A., Inc., Tech Data Corporation and its affiliate filed similar claims in the United States. In 2012, ViewSonic Corp., NECO Alliance LLC, Rockwell Automation LLC, Proview Technology Inc. and its affiliates filed similar claims. In
November 2013, Acer America Corporation and its affiliates filed similar claims in the United States. The cases were transferred to the MDL Proceedings for pretrial proceedings. In December 2012, Sony Europe Limited and its affiliate filed similar
claims in the High Court of Justice in the United Kingdom. As of April 28, 2016, LG Display has reached settlement with each of the plaintiffs mentioned above, except as to Motorola and Costco Wholesale Corp.

In July 2013, the Motorola case was remanded to the NDIL Court. In September 2013, LG Display and defendants in the Motorola case submitted a
motion for reconsideration of a summary judgment ruling on the FTAIA to the NDIL Court. In January 2014, the NDIL Court granted defendants motion for reconsideration based on the FTAIA and Motorola appealed to the 7th Circuit Appeals Court. In
November 2014, oral hearing took place before the 7th Circuit Appeals Court for the Motorola case, and the 7th Circuit Appeals Court affirmed the NDIL Courts decision. In March 2015, Motorola filed a Petition for Writ of Certiorari with the
Supreme Court of the United States. In June 2015, the Supreme Court of the United States denied Motorolas Petition for Writ of Certiorari. In July 2015, the NDIL Court dismissed LG Display from the Motorola case.

In July 2013, the Costco case was remanded to the WDWA Court. In September 2014, jury trial for the Costco case commenced in the WDWA Court.
In October 2014, the jury rendered a verdict of approximately US$36.7 million for Costco Wholesale Corp. against LG Display and AU Optronics. In June 2015, the court entered judgment in favor of Costco Wholesale Corp. for US$61.9 million (including
treble damages and offset), and LG Display filed combined motions for (i) judgment as a matter of law; (ii) in the alternative, a new trial; and (iii) amendment of findings in bench trial. In March 2016, the WDWA Court denied LG
Displays combined motions and we filed notice of appeal to the United States Court of Appeals for the 9th Circuit.



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In December 2014, iiyama filed claims in the High Court of Justice in the United Kingdom against
LG Display and other unrelated entities alleging damages arising from the European Commissions finding on December 8, 2010 that the Company engaged in anticompetitive activities in the LCD industry in violation of European competition
laws. In October 2015, we issued an application contesting the jurisdiction of the English courts to hear the claims of iiyama. A hearing of such application is scheduled to take place in May 2016.

In 2007, class action complaints were filed against LG Display and other TFT-LCD manufacturers in Canadian provinces of British Columbia,
Ontario and Quebec. The Ontario Superior Court of Justice certified the class in May 2011. In April 2014, we appealed the class certification decision to the Court of Appeal for Ontario, which upheld the lower courts decision in an order dated
December 2015. LG Display is currently defending against their claims. The actions in Quebec and British Columbia have been held in abeyance.

In December 2013, a class action complaint was filed in the Central District in Israel. In June 2015, we filed a motion to cancel leave to
serve process, which was denied in March 2016. In April 2016, we appealed this decision.

In April 2014, Deyi Investment Limited filed a
complaint against LG Display in the High Court of the Hong Kong Special Administrative Region Court of First Instance alleging breach of contract. In May 2015, we submitted an application to set aside service out of jurisdiction, which was approved
by the court in October 2015. In November 2015, Deyi Investment Limited appealed the approval of our application to the High Court of the Hong Kong Special Administrative Region Court of Appeal. In August 2014, Shenzhenshi Shihang Trading Company
Limited filed a complaint against LG Display in the High Court of the Hong Kong Special Administrative Region Court of First Instance alleging breach of contract. We plan to vigorously defend against the claims asserted by the plaintiffs.

In each of the foregoing matters that are ongoing, we are continually evaluating the merits of the respective claims and vigorously defending
ourselves. Irrespective of the validity or the successful assertion of the claims described above, we may incur significant costs with respect to litigating or settling any or all of the asserted claims. While we continue to vigorously defend the
various proceedings described above, it is possible that one or more proceedings may result in cash outflow to settle or resolve these claims. We have recognized provisions with respect to those legal claims in which our management has concluded
that there is a present or constructive obligation arising from a past event, it is more likely than not that an outflow of resources will result to settle the obligation, and a reliable estimate can be made of the amount of the obligation. However,
the actual outcomes may be materially different from those estimated as of December 31, 2015 and may have a material adverse effect on our operating results or financial condition.

Dividends

Annual dividends must be
approved by the shareholders at the annual general meeting of shareholders and interim dividends must be approved by the board of directors. Cash dividends may be paid out of retained earnings that have not been appropriated to statutory reserves.

At our annual general meeting of shareholders that was held on March 8, 2013 and March 7, 2014 we did not declare a cash
dividend to our shareholders. On March 13, 2015, we declared a cash dividend of W500 per share of common stock, amounting to a total cash dividend of W179 billion, to our shareholders of record as of
December 31, 2014 and distributed the cash dividends to such shareholders on April 8, 2015. On March 11, 2016, we declared a cash dividend of W500 per share of common stock, amounting to a total cash dividend of
W179 billion, to our shareholders of record as of December 31, 2015 and distributed the cash dividends to such shareholders on April 8, 2016.



|Item 8.B. | Significant Changes
|--------- | -------------------

Except as disclosed elsewhere in this annual
report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.



|Item 9. | THE OFFER AND LISTING
|------- | ---------------------



|Item 9.A. | Offer and Listing Details.
|--------- | --------------------------

Market Price Information

The principal trading market for our common stock is the Korea Exchange. Our common stock, which is in registered form and has a par value of
W5,000 per share of common stock, has been listed on the Korea Exchange since July 23, 2004 under the identifying code 034220. As of December 31, 2015, 357,815,700 shares of common stock were outstanding. Our common stock
is also listed on the New York Stock Exchange in the form of ADSs. The ADSs have been issued by Citibank as ADS depositary and have been listed on the New York Stock Exchange under the symbol LPL since July 22, 2004. One ADS
represents one-half of one share of common stock. As of December 31, 2015, 29,554,854 ADSs were outstanding.



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The table below sets forth, for the periods indicated, the high and low closing prices and the
average daily volume of trading activity on the Korea Exchange for our common stock, and their high and low closing prices and the average daily volume of trading activity on the New York Stock Exchange for our ADSs:



|                                  |  |                               |        |  |                             |  |        |                          |      |  |                             |     |  |  |       |  |                       |  |       |  |  |  |       | 
|--------------------------------- |  | ----------------------------- | ------ |  | --------------------------- |  | ------ | ------------------------ | ---- |  | --------------------------- | --- |  |  | ----- |  | --------------------- |  | ----- |  |  |  | ----- | 
|                                  |  | Korea Exchange                |        |  | New York Stock Exchange     | 
|                                  |  | Closing Price PerCommon Stock |        |  | Average DailyTrading Volume |  |        | Closing Price Per ADS    |      |  | Average DailyTrading Volume |    
|                                  |  | High                          |        |  | Low                         |  |        |                          | High |  |                             | Low |  | 
|                                  |  |                               |        |  |                             |  |        | (in thousands of shares) |      |  |                             |     |  |  |       |  | (in thousands of DRs) | 
|2011                              |  |                               | 40,950 |  |                             |  | 17,500 |                          |      |  | 3,250                       |     |  |  | 18.81 |  |                       |  | 7.72  |  |  |  | 1,210 | 
|2012                              |  |                               | 36,200 |  |                             |  | 20,050 |                          |      |  | 2,499                       |     |  |  | 16.79 |  |                       |  | 8.52  |  |  |  | 661   | 
|2013                              |  |                               |        |  |                             |  |        |                          |      |  |                             |     |  |  |       |  |                       |  |       |  |  |  |       | 
|First Quarter                     |  |                               | 33,050 |  |                             |  | 27,450 |                          |      |  | 2,286                       |     |  |  | 14.93 |  |                       |  | 12.68 |  |  |  | 1,008 | 
|Second Quarter                    |  |                               | 31,950 |  |                             |  | 25,950 |                          |      |  | 2,049                       |     |  |  | 14.24 |  |                       |  | 11.22 |  |  |  | 669   | 
|Third Quarter                     |  |                               | 29,650 |  |                             |  | 25,950 |                          |      |  | 1,966                       |     |  |  | 13.47 |  |                       |  | 11.55 |  |  |  | 432   | 
|Fourth Quarter                    |  |                               | 25,850 |  |                             |  | 22,300 |                          |      |  | 2,050                       |     |  |  | 12.14 |  |                       |  | 10.54 |  |  |  | 350   | 
|2014                              |  |                               |        |  |                             |  |        |                          |      |  |                             |     |  |  |       |  |                       |  |       |  |  |  |       | 
|First Quarter                     |  |                               | 26,950 |  |                             |  | 23,100 |                          |      |  | 1,752                       |     |  |  | 12.76 |  |                       |  | 10.69 |  |  |  | 551   | 
|Second Quarter                    |  |                               | 31,800 |  |                             |  | 26,700 |                          |      |  | 1,471                       |     |  |  | 15.77 |  |                       |  | 12.76 |  |  |  | 394   | 
|Third Quarter                     |  |                               | 35,700 |  |                             |  | 31,900 |                          |      |  | 1,203                       |     |  |  | 17.40 |  |                       |  | 15.53 |  |  |  | 214   | 
|Fourth Quarter                    |  |                               | 35,850 |  |                             |  | 29,600 |                          |      |  | 1,172                       |     |  |  | 15.86 |  |                       |  | 14.14 |  |  |  | 401   | 
|2015                              |  |                               |        |  |                             |  |        |                          |      |  |                             |     |  |  |       |  |                       |  |       |  |  |  |       | 
|First Quarter                     |  |                               | 36,900 |  |                             |  | 30,650 |                          |      |  | 1,379                       |     |  |  | 17.08 |  |                       |  | 13.55 |  |  |  | 405   | 
|Second Quarter                    |  |                               | 32,350 |  |                             |  | 25,000 |                          |      |  | 1,737                       |     |  |  | 14.92 |  |                       |  | 11.23 |  |  |  | 549   | 
|Third Quarter                     |  |                               | 25,550 |  |                             |  | 20,800 |                          |      |  | 1,760                       |     |  |  | 11.41 |  |                       |  | 8.64  |  |  |  | 758   | 
|Fourth Quarter                    |  |                               | 25,900 |  |                             |  | 20,600 |                          |      |  | 1,688                       |     |  |  | 10.99 |  |                       |  | 8.86  |  |  |  | 554   | 
|October                           |  |                               | 23,900 |  |                             |  | 21,300 |                          |      |  | 1,442                       |     |  |  | 10.58 |  |                       |  | 9.37  |  |  |  | 605   | 
|November                          |  |                               | 25,700 |  |                             |  | 20,600 |                          |      |  | 1,820                       |     |  |  | 10.93 |  |                       |  | 8.86  |  |  |  | 576   | 
|December                          |  |                               | 25,900 |  |                             |  | 23,900 |                          |      |  | 1,803                       |     |  |  | 10.99 |  |                       |  | 10.09 |  |  |  | 483   | 
|2016                              |  |                               |        |  |                             |  |        |                          |      |  |                             |     |  |  |       |  |                       |  |       |  |  |  |       | 
|First Quarter                     |  |                               |        |  |                             |  |        |                          |      |  |                             |     |  |  |       |  |                       |  |       |  |  |  |       | 
|January                           |  |                               | 23,900 |  |                             |  | 21,200 |                          |      |  | 1,453                       |     |  |  | 10.06 |  |                       |  | 8.69  |  |  |  | 624   | 
|February                          |  |                               | 24,500 |  |                             |  | 20,950 |                          |      |  | 1,763                       |     |  |  | 10.01 |  |                       |  | 8.57  |  |  |  | 327   | 
|March                             |  |                               | 26,950 |  |                             |  | 23,800 |                          |      |  | 1,641                       |     |  |  | 11.61 |  |                       |  | 9.96  |  |  |  | 367   | 
|Second Quarter (through April 28) |  |                               | 27,400 |  |                             |  | 23,850 |                          |      |  | 1,645                       |     |  |  | 12.09 |  |                       |  | 10.22 |  |  |  | 590   | 
|April (through April 28)          |  |                               | 27,400 |  |                             |  | 23,850 |                          |      |  | 1,645                       |     |  |  | 12.09 |  |                       |  | 10.22 |  |  |  | 590   | 



Source: Korea Exchange; New York Stock Exchange.



|Item 9.B. | Plan of Distribution
|--------- | --------------------

Not applicable.



|Item 9.C. | Markets
|--------- | -------

The Korea Exchange

On January 27, 2005, the Korea Exchange was established pursuant to the Korea Securities and Futures Exchange Act by consolidating the
Korea Stock Exchange, the Korea Futures Exchange, the KOSDAQ Stock Market, Inc., or the KOSDAQ, and the KOSDAQ Committee of the Korea Securities Dealers Association, which had formerly managed the KOSDAQ. There are three different markets operated
by the Korea Exchange: the KRX KOSPI Market, the KRX KOSDAQ Market and the KRX Derivatives Market. The Korea Exchange has two trading floors located in Seoul, one for the KRX KOSPI Market and one for the KRX KOSDAQ Market, and one trading floor in
Busan for the KRX Derivatives Market. The Korea Exchange is a limited liability company, the shares of which are held by (i) financial investment companies that were formerly members of the Korea Futures Exchange or the Korea Stock Exchange and
(ii) the stockholders of the KOSDAQ. Currently, the Korea Exchange is the only stock exchange in Korea and is operated by membership, having as its members Korean financial investment companies and some Korean branches of foreign securities
companies.



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As of December 31, 2015, the aggregate market value of equity securities listed on the Korea
Exchange was W1,243 trillion. The average daily trading volume of equity securities for 2015 was 455.3 million shares with an average transaction value of W5,352 billion.

The Korea Exchange has the power in some circumstances to suspend trading in the shares of a given company or to de-list a security pursuant
to the Regulation on Listing on the Korea Exchange. The Korea Exchange also restricts share price movements. All listed companies are required to file accounting reports annually, semi-annually and quarterly and to release immediately all
information that may affect trading in a security.

The Korean government has in the past exerted, and continues to exert, substantial
influence over many aspects of the private sector business community that can have the intention or effect of depressing or boosting the market. In the past, the Korean government has informally both encouraged and restricted the declaration and
payment of dividends, induced mergers to reduce what it considers excess capacity in a particular industry and induced private companies to offer publicly their securities.

The Korea Exchange publishes the KOSPI every ten seconds, which is an index of all equity securities listed on the Korea Exchange. Under the
aggregate value method, the market capitalizations of all listed companies are aggregated, subject to certain adjustments, and this aggregate is expressed as a percentage of the aggregate market capitalization of all listed companies as of the base
date, January 4, 1980.

Movements in KOSPI for the periods indicated are set out in the following table:



|                        |  |         |          |  |      |  |          |     |  |  |          |  |  |  |          | 
|----------------------- |  | ------- | -------- |  | ---- |  | -------- | --- |  |  | -------- |  |  |  | -------- | 
|                        |  | Opening |          |  | High |  |          | Low |  |  | Closing  | 
|1986                    |  |         | 161.40   |  |      |  | 279.67   |     |  |  | 153.85   |  |  |  | 272.61   | 
|1987                    |  |         | 264.82   |  |      |  | 525.11   |     |  |  | 264.82   |  |  |  | 525.11   | 
|1988                    |  |         | 532.04   |  |      |  | 922.56   |     |  |  | 527.89   |  |  |  | 907.20   | 
|1989                    |  |         | 919.61   |  |      |  | 1,007.77 |     |  |  | 844.75   |  |  |  | 909.72   | 
|1990                    |  |         | 908.59   |  |      |  | 928.82   |     |  |  | 566.27   |  |  |  | 696.11   | 
|1991                    |  |         | 679.75   |  |      |  | 763.10   |     |  |  | 586.51   |  |  |  | 610.92   | 
|1992                    |  |         | 624.23   |  |      |  | 691.48   |     |  |  | 459.07   |  |  |  | 678.44   | 
|1993                    |  |         | 697.41   |  |      |  | 874.10   |     |  |  | 605.93   |  |  |  | 866.18   | 
|1994                    |  |         | 879.32   |  |      |  | 1,138.75 |     |  |  | 855.37   |  |  |  | 1,027.37 | 
|1995                    |  |         | 1,013.57 |  |      |  | 1,016.77 |     |  |  | 847.09   |  |  |  | 882.94   | 
|1996                    |  |         | 888.85   |  |      |  | 986.84   |     |  |  | 651.22   |  |  |  | 651.22   | 
|1997                    |  |         | 653.79   |  |      |  | 792.29   |     |  |  | 350.68   |  |  |  | 376.31   | 
|1998                    |  |         | 385.49   |  |      |  | 579.86   |     |  |  | 280.00   |  |  |  | 562.46   | 
|1999                    |  |         | 587.57   |  |      |  | 1,028.07 |     |  |  | 498.42   |  |  |  | 1,028.07 | 
|2000                    |  |         | 1,059.04 |  |      |  | 1,059.04 |     |  |  | 500.60   |  |  |  | 504.62   | 
|2001                    |  |         | 520.95   |  |      |  | 704.50   |     |  |  | 468.76   |  |  |  | 693.70   | 
|2002                    |  |         | 724.95   |  |      |  | 937.61   |     |  |  | 584.04   |  |  |  | 627.55   | 
|2003                    |  |         | 635.17   |  |      |  | 822.16   |     |  |  | 515.24   |  |  |  | 810.71   | 
|2004                    |  |         | 821.26   |  |      |  | 936.06   |     |  |  | 719.59   |  |  |  | 895.92   | 
|2005                    |  |         | 893.71   |  |      |  | 1,379.37 |     |  |  | 870.84   |  |  |  | 1,379.37 | 
|2006                    |  |         | 1,389.27 |  |      |  | 1,464.70 |     |  |  | 1,203.86 |  |  |  | 1,434.46 | 
|2007                    |  |         | 1,435.26 |  |      |  | 2,064.85 |     |  |  | 1,355.79 |  |  |  | 1,897.13 | 
|2008                    |  |         | 1,853.45 |  |      |  | 1,888.88 |     |  |  | 938.75   |  |  |  | 1,124.47 | 
|2009                    |  |         | 1,132.87 |  |      |  | 1,723.17 |     |  |  | 992.69   |  |  |  | 1,682.77 | 
|2010                    |  |         | 1,696.14 |  |      |  | 2,052.97 |     |  |  | 1,532.68 |  |  |  | 2,051.00 | 
|2011                    |  |         | 2,070.08 |  |      |  | 2,228.96 |     |  |  | 1,652.71 |  |  |  | 1,825.12 | 
|2012                    |  |         | 1,826.37 |  |      |  | 2,049.28 |     |  |  | 1,769.31 |  |  |  | 1,997.05 | 
|2013                    |  |         | 2,031.10 |  |      |  | 2,059.58 |     |  |  | 1,780.63 |  |  |  | 2,011.34 | 
|2014                    |  |         | 1,967.19 |  |      |  | 2,082.61 |     |  |  | 1,886.85 |  |  |  | 1,915.59 | 
|2015                    |  |         | 1,926.44 |  |      |  | 2,173.41 |     |  |  | 1,829.81 |  |  |  | 1,961.31 | 
|2016 (through April 28) |  |         | 1,918.76 |  |      |  | 2,022.10 |     |  |  | 1,835.28 |  |  |  | 2,000.93 | 



Source: The Korea Exchange



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Shares are quoted ex-dividend on the first trading day of the relevant companys
accounting period. Since the calendar year is the accounting period for the majority of listed companies, this may account for the drop in KOSPI between its closing level at the end of one calendar year and its opening level at the beginning of the
following calendar year.

With certain exceptions, principally to take account of a share being quoted ex-dividend and
ex-rights, permitted upward and downward movements in share prices of any category of shares on any day are limited under the rules of the Korea Exchange to 15% of the previous days closing price of the shares, rounded down as set
out below:



|                                   |  |                     |       | 
|---------------------------------- |  | ------------------- | ----- | 
|Previous Days Closing Price (Won) |  | Rounded Down to Won |      
|Less than 1,000                    |  |                     | 1     | 
|1,000 to less than 5,000           |  |                     | 5     | 
|5,000 to less than 10,000          |  |                     | 10    | 
|10,000 to less than 50,000         |  |                     | 50    | 
|50,000 to less than 100,000        |  |                     | 100   | 
|100,000 to less than 500,000       |  |                     | 500   | 
|500,000 or more                    |  |                     | 1,000 | 

As a consequence, if a particular closing price is the same as the price set by the fluctuation limit, the
closing price may not reflect the price at which persons would have been prepared, or would be prepared to continue, if so permitted, to buy and sell shares. Orders are executed on an auction system with priority rules to deal with competing bids
and offers.

Due to deregulation of restrictions on brokerage commission rates, the brokerage commission rate on equity securities
transactions may be determined by the parties, subject to commission schedules being filed with the Korea Exchange by the financial investment companies. In addition, a securities transaction tax of 0.15% of the sales price will generally be imposed
on the transfer of shares or certain securities representing rights to subscribe for shares. An agricultural and fishery special surtax of 0.15% of the sales prices will also be imposed on transfer of these shares and securities on the Korea
Exchange. See Item 10.E. TaxationKorean Taxation.

The number of companies listed on the KRX KOSPI Market, the
corresponding total market capitalization at the end of the periods indicated and the average daily trading volume for those periods are set forth in the following table:



|     |                          |                                                     |     |                  |                                     |  |                     |  |  |                    |           |  |                  |  |         |                      |  |  |           |  |  |  |           | 
|---- | ------------------------ | --------------------------------------------------- | --- | ---------------- | ----------------------------------- |  | ------------------- |  |  | ------------------ | --------- |  | ---------------- |  | ------- | -------------------- |  |  | --------- |  |  |  | --------- | 
|Year |                          | Market Capitalization onthe Last Day of Each Period |     |                  | Average Daily Trading Volume, Value | 
|     | Number ofListedCompanies |                                                     |     | (Billionsof Won) |                                     |  | (Millionsof US$)(1) |  |  | Thousandsof Shares |           |  | (Millionsof Won) |  |         | (Thousandsof US$)(1) | 
|1985 |                          |                                                     | 342 |                  |                                     |  | 6,570               |  |  |                    | 7,362     |  |                  |  | 18,925  |                      |  |  | 12,315    |  |  |  | 13,798    | 
|1986 |                          |                                                     | 355 |                  |                                     |  | 11,994              |  |  |                    | 13,863    |  |                  |  | 31,755  |                      |  |  | 32,870    |  |  |  | 37,991    | 
|1987 |                          |                                                     | 389 |                  |                                     |  | 26,172              |  |  |                    | 32,884    |  |                  |  | 20,353  |                      |  |  | 70,185    |  |  |  | 88,183    | 
|1988 |                          |                                                     | 502 |                  |                                     |  | 64,544              |  |  |                    | 93,895    |  |                  |  | 10,367  |                      |  |  | 198,364   |  |  |  | 288,571   | 
|1989 |                          |                                                     | 626 |                  |                                     |  | 95,477              |  |  |                    | 140,119   |  |                  |  | 11,757  |                      |  |  | 280,967   |  |  |  | 412,338   | 
|1990 |                          |                                                     | 669 |                  |                                     |  | 79,020              |  |  |                    | 109,872   |  |                  |  | 10,866  |                      |  |  | 183,692   |  |  |  | 255,412   | 
|1991 |                          |                                                     | 686 |                  |                                     |  | 73,118              |  |  |                    | 95,541    |  |                  |  | 14,022  |                      |  |  | 214,263   |  |  |  | 279,973   | 
|1992 |                          |                                                     | 688 |                  |                                     |  | 84,712              |  |  |                    | 107,027   |  |                  |  | 24,028  |                      |  |  | 308,246   |  |  |  | 389,445   | 
|1993 |                          |                                                     | 693 |                  |                                     |  | 112,665             |  |  |                    | 138,870   |  |                  |  | 35,130  |                      |  |  | 574,048   |  |  |  | 707,566   | 
|1994 |                          |                                                     | 699 |                  |                                     |  | 151,217             |  |  |                    | 190,762   |  |                  |  | 36,862  |                      |  |  | 776,257   |  |  |  | 979,257   | 
|1995 |                          |                                                     | 721 |                  |                                     |  | 141,151             |  |  |                    | 181,943   |  |                  |  | 26,130  |                      |  |  | 487,762   |  |  |  | 628,721   | 
|1996 |                          |                                                     | 760 |                  |                                     |  | 117,370             |  |  |                    | 138,490   |  |                  |  | 26,571  |                      |  |  | 486,834   |  |  |  | 574,435   | 
|1997 |                          |                                                     | 776 |                  |                                     |  | 70,989              |  |  |                    | 41,881    |  |                  |  | 41,525  |                      |  |  | 555,759   |  |  |  | 327,881   | 
|1998 |                          |                                                     | 748 |                  |                                     |  | 137,799             |  |  |                    | 114,261   |  |                  |  | 97,716  |                      |  |  | 660,429   |  |  |  | 547,619   | 
|1999 |                          |                                                     | 725 |                  |                                     |  | 349,504             |  |  |                    | 307,662   |  |                  |  | 278,551 |                      |  |  | 3,481,620 |  |  |  | 3,064,806 | 
|2000 |                          |                                                     | 704 |                  |                                     |  | 188,042             |  |  |                    | 148,415   |  |                  |  | 306,163 |                      |  |  | 2,602,211 |  |  |  | 2,053,837 | 
|2001 |                          |                                                     | 689 |                  |                                     |  | 255,850             |  |  |                    | 194,785   |  |                  |  | 473,241 |                      |  |  | 1,997,420 |  |  |  | 1,520,685 | 
|2002 |                          |                                                     | 683 |                  |                                     |  | 258,681             |  |  |                    | 216,071   |  |                  |  | 857,245 |                      |  |  | 3,041,598 |  |  |  | 2,540,590 | 
|2003 |                          |                                                     | 684 |                  |                                     |  | 355,363             |  |  |                    | 298,624   |  |                  |  | 542,010 |                      |  |  | 2,216,636 |  |  |  | 1,862,719 | 
|2004 |                          |                                                     | 683 |                  |                                     |  | 412,588             |  |  |                    | 398,597   |  |                  |  | 372,895 |                      |  |  | 2,232,109 |  |  |  | 2,156,419 | 
|2005 |                          |                                                     | 702 |                  |                                     |  | 655,075             |  |  |                    | 648,589   |  |                  |  | 467,629 |                      |  |  | 3,157,662 |  |  |  | 3,126,398 | 
|2006 |                          |                                                     | 731 |                  |                                     |  | 704,588             |  |  |                    | 757,622   |  |                  |  | 279,096 |                      |  |  | 3,435,180 |  |  |  | 3,693,742 | 
|2007 |                          |                                                     | 745 |                  |                                     |  | 951,918             |  |  |                    | 1,017,223 |  |                  |  | 363,741 |                      |  |  | 5,540,151 |  |  |  | 5,920,230 | 
|2008 |                          |                                                     | 763 |                  |                                     |  | 576,928             |  |  |                    | 457,152   |  |                  |  | 355,205 |                      |  |  | 5,190,181 |  |  |  | 4,112,663 | 



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|                        |                          |                                                     |     |                  |                                     |  |                     |  |  |                    |           |  |                  |  |         |                      |  |  |           |  |  |  |           | 
|----------------------- | ------------------------ | --------------------------------------------------- | --- | ---------------- | ----------------------------------- |  | ------------------- |  |  | ------------------ | --------- |  | ---------------- |  | ------- | -------------------- |  |  | --------- |  |  |  | --------- | 
|Year                    |                          | Market Capitalization onthe Last Day of Each Period |     |                  | Average Daily Trading Volume, Value | 
|                        | Number ofListedCompanies |                                                     |     | (Billionsof Won) |                                     |  | (Millionsof US$)(1) |  |  | Thousandsof Shares |           |  | (Millionsof Won) |  |         | (Thousandsof US$)(1) | 
|2009                    |                          |                                                     | 770 |                  |                                     |  | 887,935             |  |  |                    | 763,060   |  |                  |  | 485,657 |                      |  |  | 5,795,552 |  |  |  | 4,980,495 | 
|2010                    |                          |                                                     | 766 |                  |                                     |  | 1,141,885           |  |  |                    | 1,009,981 |  |                  |  | 379,171 |                      |  |  | 5,619,768 |  |  |  | 4,970,607 | 
|2011                    |                          |                                                     | 791 |                  |                                     |  | 1,041,999           |  |  |                    | 899,438   |  |                  |  | 353,760 |                      |  |  | 6,863,146 |  |  |  | 5,924,166 | 
|2012                    |                          |                                                     | 784 |                  |                                     |  | 1,154,294           |  |  |                    | 1,085,638 |  |                  |  | 486,480 |                      |  |  | 4,823,643 |  |  |  | 4,536,740 | 
|2013                    |                          |                                                     | 777 |                  |                                     |  | 1,185,974           |  |  |                    | 1,123,880 |  |                  |  | 328,325 |                      |  |  | 3,993,422 |  |  |  | 3,784,337 | 
|2014                    |                          |                                                     | 773 |                  |                                     |  | 1,192,253           |  |  |                    | 1,092,918 |  |                  |  | 278,082 |                      |  |  | 3,983,580 |  |  |  | 3,651,679 | 
|2015                    |                          |                                                     | 770 |                  |                                     |  | 1,242,832           |  |  |                    | 1,062,922 |  |                  |  | 455,256 |                      |  |  | 5,351,734 |  |  |  | 4,577,026 | 
|2016 (through April 28) |                          |                                                     | 769 |                  |                                     |  | 1,266,323           |  |  |                    | 1,103,213 |  |                  |  | 364,690 |                      |  |  | 4,614,981 |  |  |  | 4,020,544 | 



Source: The Korea Exchange

|(1) | Converted at the noon buying rate as certified by the Federal Reserve Bank of New York in effect on the last business day of the year indicated other than for 2016, which is converted at the noon buying rate as
certified by the Federal Reserve Bank of New York in effect on April 22, 2016 (the latest available noon buying rate prior to filing this annual report).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Korean securities markets are principally regulated by the Financial Services Commission and the Financial Investment Services and Capital
Markets Act. The Financial Investment Services and Capital Markets Act imposes restrictions on insider trading and price manipulation, requires specified information to be made available by listed companies to investors and establishes rules
regarding margin trading, proxy solicitation, takeover bids, acquisition of treasury shares and reporting requirements for shareholders holding substantial interests. In addition, it also regulates the securities and derivatives markets in Korea.

Foreign Investors Access to the Korean Securities Market

A stock index futures market was opened on May 3, 1996 and a stock index option market was opened on July 7, 1997, in each case at
the KRX KOSPI Market. Remittance and repatriation of funds in connection with investment in stock index futures and options are subject to regulations similar to those that govern remittance and repatriation in the context of foreign investment in
Korean stocks.

Foreign investors are permitted to invest in warrants representing the right to subscribe for shares of a company listed
on the KRX KOSPI Market or registered on the KRX KOSDAQ Market, subject to certain investment limitations. A foreign investor may not acquire such warrants with respect to shares of a class of a company for which the ceiling on aggregate investment
by foreigners has been reached or exceeded.

Foreign investors are permitted to invest in all types of corporate bonds, bonds issued by
national or local governments and bonds issued in accordance with certain special laws without being subject to any aggregate or individual investment ceiling. The Financial Services Commission sets forth procedural requirements for such
investments. Foreigners are permitted to invest in certificates of deposit and repurchase agreements.

Currently, foreigners are permitted
to invest in securities including shares of all Korean companies that are not listed on the KRX KOSPI Market nor registered on the KRX KOSDAQ Market and in bonds that are not listed.

Protection of Customers Interest in Case of Insolvency of Financial Investment Companies

Under Korean law, the relationship between a customer and a financial investment company with a brokerage license in connection with a
securities sell or buy order is deemed to be a consignment and the securities acquired by a consignment agent (i.e., the financial investment company with a brokerage license) through such sell or buy order are regarded as belonging to the customer
in so far as the customer and the consignment agents creditors are concerned. Therefore, in the event of a bankruptcy or reorganization procedure involving a financial investment company with a brokerage license, the customer of the financial
investment company is entitled to the proceeds of the securities sold by such financial investment company.

When a customer places a sell
order with a financial investment company with a brokerage license that is not a member of the KRX KOSPI Market or the KRX KOSDAQ Market and such financial investment company places a sell order with another financial investment company with a
brokerage license that is a member of the KRX KOSPI Market or the KRX KOSDAQ Market, the customer is still entitled to the proceeds of the securities sold and received by the non-member company from the member company regardless of the bankruptcy or
reorganization of the non-member company.



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Under the Financial Investment Services and Capital Markets Act, the Korea Exchange is obliged to
indemnify any loss or damage incurred by a counterparty as a result of a breach by members of the KRX KOSPI Market or the KRX KOSDAQ Market. If a financial investment company with a brokerage license that is a member of the KRX KOSPI Market or the
KRX KOSDAQ Market breaches its obligation in connection with a buy order, the Korea Exchange is obliged to pay the purchase price on behalf of the breaching member. Therefore, the customer can acquire the securities that have been ordered to be
purchased by the breaching member.

When a customer places a buy order with a non-member company and the non-member company places a buy
order with a member company, the customer has the legal right to the securities received by the non-member company from the member company because the purchased securities are regarded as belonging to the customer in so far as the customer and the
non-member companys creditors are concerned.

As the cash deposited with a financial investment company with a brokerage license is
regarded as belonging to such financial investment company, which is liable to return the same at the request of its customer, the customer cannot take back deposited cash from the financial investment company if a bankruptcy or reorganization
procedure is instituted against such financial investment company and, therefore, can suffer from loss or damage as a result. However, the Depositor Protection Act provides that the Korea Deposit Insurance Corporation will, upon the request of the
investors, pay investors up to W50 million of cash deposited with such financial investment company in case of such financial investment companys bankruptcy, liquidation, cancellation of securities business license or other
insolvency events. Pursuant to the Financial Investment Services and Capital Markets Act, as amended, financial investment companies with a brokerage license are required to deposit the cash received from its customers to the extent the amount is
not covered by the insurance with the Korea Securities Finance Corporation, a special entity established pursuant to the Financial Investment Services and Capital Markets Act. Set-off or attachment of cash deposits by such financial investment
company is prohibited. The premiums related to this insurance are paid by such financial investment company.



|Item 9.D. | Selling Shareholders
|--------- | --------------------

Not applicable.



|Item 9.E. | Dilution
|--------- | --------

Not applicable.



|Item 9.F. | Expenses of the Issue
|--------- | ---------------------

Not applicable.



|Item 10. | ADDITIONAL INFORMATION
|-------- | ----------------------



|Item 10.A. | Share Capital
|---------- | -------------

Not applicable.



|Item 10.B. | Memorandum and Articles of Association
|---------- | --------------------------------------

Description of Capital Stock

This section provides information relating to our capital stock, including brief summaries of material provisions of our current articles of
incorporation, the Financial Investment Services and Capital Markets Act and the Korean Commercial Code. The following summaries are subject to, and are qualified in their entirety by reference to, our articles of incorporation and the applicable
provisions of the Financial Investment Services and Capital Markets Act and the Korean Commercial Code.

General

Under our articles of incorporation, which was last amended in March 2013, the total number of shares authorized to be issued by us is
500,000,000 shares, which consists of shares of common stock and non-voting preferred stock, both with par value of W5,000 per share. We are authorized to issue preferred stock of up to 40,000,000 shares. As of December 31,
2015, 357,815,700 shares of common stock were issued. All of the issued and outstanding shares are fully-paid and non-assessable and are in registered form. We issue share certificates in denominations of 1, 5, 10, 50, 100, 500, 1,000 and 10,000
shares.



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Dividends

We distribute dividends to our shareholders in proportion to the number of shares owned by each shareholder. The shares represented by the ADSs
have the same dividend rights as other outstanding shares.

Holders of preferred shares are entitled to receive dividends in priority to
the holders of common stock. The amount of dividends for preferred shares is determined by our board of directors within a range of 1% to 10% of par value at the time the shares are issued, provided that if the dividend amount on the shares of
common stock exceeds that on the preferred shares, holders of preferred shares will also participate in the distribution of the excess dividend amount in the same proportion as holders of common stock. If the amount available for dividends is less
than the aggregate amount of such minimum dividend, the holders of preferred shares will be entitled to receive the accumulated unpaid dividends in priority to the holders of common stock from the dividends payable in respect of the next fiscal
year.

We declare dividends annually at the annual general meeting of shareholders which is held within three months after the end of the
fiscal year. We pay the annual dividend shortly after the annual general meeting to the shareholders of record as of the end of the preceding fiscal year. We may distribute the annual dividend in cash or in shares. However, a dividend of shares must
be distributed at par value. If the market price of the shares is less than their par value, dividends in shares may not exceed one-half of the annual dividend. We have no obligation to pay any annual dividend unclaimed for five years from the
payment date.

Under the Korean Commercial Code, we may pay an annual dividend only out of the excess of our net assets, on a
non-consolidated basis, over the sum of (1) our stated capital and (2) the total amount of our capital surplus reserve and legal reserve accumulated up to the end of the relevant dividend period. We may not pay an annual dividend unless we
have set aside a legal reserve in an amount equal to at least 10% of the cash portion of the annual dividend or unless we have accumulated a legal reserve of not less than one-half of our stated capital. We may not use legal reserves to pay cash
dividends but may transfer amounts from legal reserves to capital stock or use legal reserves to reduce an accumulated deficit.

Also, we
may pay an interim dividend in accordance with a resolution of the board of directors to our shareholders who are registered in the shareholders register as of July 1 of the relevant fiscal year, and such an interim dividend shall be made
in cash.

Distribution of Free Shares

In addition to paying dividends in shares out of our retained or current earnings, we may also distribute to our shareholders an amount
transferred from our capital surplus or legal reserve to our stated capital in the form of free shares. Free shares are shares newly issued to existing shareholders without consideration, much like stock dividends, except that in the case of free
shares a portion of the reserves, as opposed to earnings, is transferred to capital. We must distribute such free shares to all of our shareholders in proportion to their existing shareholdings. We may distribute free shares when we determine that
our capital surplus or legal reserves are too large relative to our paid-in capital.

Preemptive Rights and Issuance of Additional Shares

We may issue authorized but unissued shares at the times and, unless otherwise provided in the Korean Commercial Code, on the terms our board
of directors may determine. All of our shareholders are generally entitled to subscribe for any newly issued shares in proportion to their existing shareholdings. We must offer new shares on uniform terms to all shareholders who have preemptive
rights and are listed on our shareholders register as of the relevant record date. However, under the Korean Commercial Code, we may vary the specific terms of these preemptive rights for different classes of shares without shareholder
approval. To the extent that such different terms result in placing any particular class of shareholders at a disadvantage relative to other classes, a special resolution by that disadvantaged class of shareholders is necessary.

We must give public notice of the preemptive rights regarding new shares and their transferability at least two weeks before the relevant
record date. Our board of directors may determine how to distribute shares for which preemptive rights have not been exercised or where fractions of shares occur.

Under our articles of incorporation, we may issue new shares pursuant to a board resolution to persons other than existing shareholders, who
however will not have preemptive rights, if the new shares are, among others:



| |  |  | publicly offered pursuant to the Financial Investment Services and Capital Markets Act;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | issued to members of our employee stock ownership association;
| | - |  | --------------------------------------------------------------



| |  |  | represented by depositary receipts;
| | - |  | -----------------------------------



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| |  |  | issued upon exercise of stock options granted to our officers and employees;
| | - |  | ----------------------------------------------------------------------------



| |  |  | issued to corporations, institutional investors or domestic or overseas financial institutions to achieve our operational objectives; or
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | issued for the purpose of drawing foreign investment when we deem it necessary for our business needs;
| | - |  | ------------------------------------------------------------------------------------------------------

provided that the aggregate number of shares so issued do not exceed 20% of the total number of issued and outstanding shares.

In addition, we may issue convertible bonds or bonds with warrants, respectively, up to an aggregate face amount of W2.5
trillion to persons other than existing shareholders. The classes of shares to be issued upon conversion of bonds or exercise of warrants shall be common stock.

Members of our employee stock ownership association, whether or not they are our shareholders, generally have a preemptive right to subscribe
for up to 20% of the shares publicly offered pursuant to the Financial Investment Services and Capital Markets Act. As of December 31, 2015, approximately 0.001% of the outstanding shares were held by our employee stock ownership association.

General Meeting of Shareholders

We
hold the annual general meeting of shareholders within three months after the end of each fiscal year. Subject to a board resolution or court approval, we may hold an extraordinary general meeting of shareholders:



| |  |  | as necessary;
| | - |  | -------------



| |  |  | at the request of holders of an aggregate of 3% or more of our outstanding shares;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | at the request of shareholders holding an aggregate of 1.5% or more of our outstanding shares for at least six consecutive months; or
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | at the request of our audit committee.
| | - |  | --------------------------------------

Holders of preferred shares may request a general
meeting of shareholders only after the preferred shares become entitled to vote or are enfranchised, as described under Voting Rights below.

We must give shareholders written notice setting out the date, place and agenda of the meeting at least two weeks before the date of the
general meeting of shareholders. However, for holders of less than 1% of the total number of issued and outstanding voting shares, we may give notice by placing at least two public notices in at least two daily newspapers or providing such notice in
the electronic notification system of the Financial Supervisory Service or the Korea Exchange at least two weeks in advance of the meeting. We use Maeil Business Newspaper and The Chosun Ilbo, published in Seoul, Korea, for such public
notice purposes. Shareholders not on the shareholders register as of the record date are not entitled to receive notice of the general meeting of shareholders, attend or vote at the meeting. Holders of non-voting preferred shares, unless
enfranchised, are not entitled to receive notice of general meetings of shareholders.

The place of our general meetings of shareholders
is decided by our board of directors, which can be our head office, our Paju Display Cluster or any other place as designated by our board of directors.

Voting Rights

Holders of our common
stock are entitled to one vote for each share of common stock, except that voting rights may not be exercised with respect to shares of common stock held by us or by a corporate shareholder in which we own, directly or indirectly, more than 10% of
its voting stock. The Korean Commercial Code permits cumulative voting, under which voting method each shareholder would have multiple voting rights corresponding to the number of directors to be appointed in the voting and may exercise all voting
rights cumulatively to elect one director. However, our articles of incorporation prohibit cumulative voting.

According to our current
articles of incorporation, our shareholders may adopt resolutions at a general meeting by an affirmative majority vote of the voting shares present or represented at the meeting, where the affirmative votes also represent at least one-fourth of our
total voting shares then issued and outstanding. However, under the Korean Commercial Code and our articles of incorporation, the following matters, among others, require approval by the holders of at least two-thirds of the shares present or
represented at a meeting, where the affirmative votes also represent at least one-third of our total voting shares then issued and outstanding:



| |  |  | amending our articles of incorporation;
| | - |  | ---------------------------------------



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| |  |  | removing a director;
| | - |  | --------------------



| |  |  | effecting any dissolution, merger or consolidation of us;
| | - |  | ---------------------------------------------------------



| |  |  | transferring the whole or any significant part of our business;
| | - |  | ---------------------------------------------------------------



| |  |  | effecting our acquisition of all of the business of any other company;
| | - |  | ----------------------------------------------------------------------



| |  |  | effecting our acquisition of a part of the business of any other company that has a material effect on our business; or
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | issuing any new shares at a price lower than their par value.
| | - |  | -------------------------------------------------------------

In general, holders of
preferred shares are not entitled to vote on any resolution or receive notice of any general meeting of shareholders. However, in the case of amendments to our articles of incorporation, any merger or consolidation involving us, capital reductions
or in certain other cases in which the rights or interests of the preferred shares are affected, approval of the holders of preferred shares is required. We may obtain such approval by a resolution of holders of at least two-thirds of the preferred
shares present or represented at a class meeting of the holders of preferred shares, where the affirmative votes also represent at least one-third of our total issued and outstanding preferred shares. In addition, if we are unable to pay dividends
on preferred shares as provided in our articles of incorporation, the holders of preferred shares will become enfranchised and will be entitled to exercise voting rights until those dividends are paid. The holders of enfranchised preferred shares
have the same rights as holders of common stock to request, receive notice of, attend and vote at a general meeting of shareholders.

Shareholders may exercise their voting rights by proxy.

Holders of ADRs exercise their voting rights through the ADR depositary, an agent of which is the record holder of the underlying shares.
Subject to the provisions of the deposit agreement, ADR holders are entitled to instruct the ADR depositary how to vote the shares underlying their ADSs.

Rights of Dissenting Shareholders

In
some limited circumstances, including the transfer of all or any significant part of our business and our merger or consolidation with another company, dissenting shareholders have the right to require us to purchase their shares. To exercise this
right, shareholders must submit to us a written notice of their intention to dissent before the general meeting of shareholders. Within 20 days after the relevant resolution is passed at such meeting, the dissenting shareholders must make a request
to us in writing to purchase their shares. We are obligated to purchase the shares of dissenting shareholders no later than one month after the end of such 20-day period. The purchase price for the shares is required to be determined through
negotiation between the dissenting shareholders and us. If we cannot agree on a price through negotiation, the purchase price will be the average of (1) the weighted average of the daily closing prices of shares on the Korea Exchange for the
two-month period before the date of the adoption of the relevant board resolution, (2) the weighted average of the daily closing price of shares on the Korea Exchange for the one-month period before the date of the adoption of the relevant
board resolution and (3) the weighted average of the daily closing price of shares on the Korea Exchange for the one-week period before the date of the adoption of the relevant board resolution. If we or the dissenting shareholders that had
requested the purchase of their shares do not accept the purchase price, we or the dissenting shareholders may request a court to determine the purchase price. Holders of ADSs will not be able to exercise dissenters rights unless they have
withdrawn the underlying common stock and become our direct shareholders.

Register of Shareholders and Record Dates

Our transfer agent, Korea Securities Depository, maintains the register of our shareholders at its office in Seoul, Korea. It will register
transfers of shares on the register of shareholders on presentation of the share certificates.

The record date for annual dividends is
December 31. For the purpose of determining the shareholders entitled to annual dividends, the register of shareholders may be closed for the period from January 1 to January 15 of each year. Further, for the purpose of determining
the shareholders entitled to some other rights pertaining to the shares, we may, on at least two weeks public notice, set a record date and/or close the register of shareholders for not more than three months.

Business Report

At least one week before
the annual general meeting of shareholders, we must make our business report and audited consolidated Korean IFRS financial statements available for inspection at our principal office and at all of our branch offices. In addition, copies of business
reports, the audited consolidated Korean IFRS financial statements and any resolutions adopted at the general meeting of shareholders will be available to our shareholders.



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Under the Financial Investment Services and Capital Markets Act, we must file with the Financial
Services Commission and the Korea Exchange (1) a yearly report (including audited non-consolidated financial statements and audited consolidated financial statements) within 90 days after the end of our fiscal year and (2) interim reports
with respect to the three-month period, six-month period and nine-month period from the beginning of each fiscal year within 45 calendar days following the end of each such period. Copies of these reports will be available for public inspection at
the Financial Services Commission and the Korea Exchange.

Transfer of Shares

Under the Korean Commercial Code, the transfer of shares is effected by delivery of share certificates. However, to assert shareholders
rights against us, the transferee must have his name and address registered on our register of shareholders. For this purpose, a shareholder is required to file his name, address and seal with us. A non-Korean shareholder may file a specimen
signature in place of a seal, unless he is a citizen of a country with a sealing system similar to that of Korea. In addition, a non-resident shareholder must appoint an agent authorized to receive notices on his behalf in Korea and file a mailing
address in Korea. The above requirements do not apply to the holders of ADSs.

Under current Korean regulations, the Korea Securities
Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license and internationally recognized custodians may act as agents and provide
related services for foreign shareholders. Certain foreign exchange controls and securities regulations apply to the transfer of shares by non-residents or non-Koreans. See Item 10.D. Exchange Controls.

Acquisition of Shares by Us

Under the
Korean Commercial Code, we may acquire our own shares pursuant to a resolution adopted at a general meeting of shareholders through either (i) purchases on a stock exchange or (ii) with respect to shares other than any redeemable shares as
set forth in Article 345, Paragraph (1) of the Korean Commercial Code, purchases from each shareholder in proportion to such shareholders existing shareholding ratio through the methods set forth in the Presidential Decree, provided that
the aggregate purchase price does not exceed the amount of our profit that may be distributed as dividends in respect of the immediately preceding fiscal year.

In addition, pursuant to the Financial Investment Services and Capital Markets Act, we may acquire shares through purchases on the Korea
Exchange or through a tender offer. We may also acquire interests in our own shares through agreements with trust companies or retrieve our own shares from a trust company upon termination of the trust agreement. The aggregate purchase price for
shares purchased through such means may not exceed the total amount available for distribution of dividends at the end of the preceding fiscal year, subject to certain procedural requirements.

Liquidation Rights

In the event of our
liquidation, after payment of all debts, liquidation expenses and taxes, our remaining assets will be distributed among shareholders in proportion to their shareholdings. Holders of preferred shares have no preference in liquidation.



|Item 10.C. | Material Contracts
|---------- | ------------------

We have not entered into any material contracts
during the two years immediately preceding the date of this annual report, other than in the ordinary course of our business. For information regarding our agreements and transactions with certain related parties, see Item 7.B. Related Party
Transactions. For descriptions of certain agreements related to our capital commitments and obligations and certain agreements related to our joint ventures, which we believe were not material to our results of operations and financial
condition in the periods in which such agreements were entered, see Item 5.B. Liquidity and Capital Resources and Item 4.B. Business OverviewJoint Ventures, respectively.



|Item 10.D. | Exchange Controls
|---------- | -----------------

The Foreign Exchange Transaction Act of Korea
and the Presidential Decree and regulations under that Act and Decree, which we refer to collectively as the Foreign Exchange Transaction Laws, regulate investments in Korean securities by non-residents and issuances of securities outside Korea by
Korean companies. Non-residents may invest in Korean securities pursuant to the Foreign Exchange Transaction Laws. The Financial Services Commission has also adopted, pursuant to its authority under the Financial Investment Services and Capital
Markets Act, regulations that restrict investments by foreigners in Korean securities and regulate issuances of securities outside Korea by Korean companies.



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Subject to certain limitations, the Ministry of Strategy and Finance has the authority to take
the following actions under the Foreign Exchange Transaction Laws:



| |  |  | if the government deems it necessary on account of war, armed conflict, natural disaster or grave and sudden and significant changes in domestic or foreign economic circumstances or similar events or circumstances, the
Ministry of Strategy and Finance may temporarily suspend performance under any or all foreign exchange transactions, in whole or in part, to which the Foreign Exchange Transaction Laws apply (including suspension of payment and receipt of foreign
exchange) or impose an obligation to deposit, safe-keep or sell any means of payment to The Bank of Korea or certain other governmental agencies, foreign exchange equalization funds or financial institutions; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if the government concludes that the international balance of payments and international financial markets are experiencing or are likely to experience significant disruption or that the movement of capital between
Korea and other countries is likely to adversely affect the Korean Won, exchange rates or other macroeconomic policies, the Ministry of Strategy and Finance may take action to require any person who intends to effect a capital transaction to obtain
permission or to require any person who effects a capital transaction to deposit a portion of the means of payment acquired in such transactions with The Bank of Korea, foreign exchange equalization funds or financial institutions.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Government Review of Issuance of ADSs

In order for us to issue ADSs outside Korea, we are required to submit a report to the Ministry of Strategy and Finance or our designated
foreign exchange bank (depending on the aggregate issue amount) with respect to the issuance of the ADSs. No further governmental approval is necessary for the offering and issuance of the ADSs.

Under current Korean laws and regulations and the terms of the deposit agreement, the depositary is required to obtain our consent for the
number of shares of common stock to be deposited in any given proposed deposit that exceeds the difference between:



| | (1) | the aggregate number of shares of our common stock deposited by us for the issuance of our ADSs (including deposits in connection with the initial issuance and all subsequent offerings of our ADSs and stock dividends or
other distributions related to these ADSs); and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | the number of shares of our common stock on deposit with the depositary at the time of such proposed deposit.
| | --- | -------------------------------------------------------------------------------------------------------------

We can give no assurance that we would, subject to governmental authorization, grant our consent, if our consent is required. Therefore, a
holder of ADRs who surrenders ADRs and withdraws shares may not be permitted subsequently to deposit those shares and obtain ADRs.

Reporting
Requirements for Holders of Substantial Interests

Under the Financial Investment Services and Capital Markets Act, any person whose
direct or beneficial ownership of our common stock with voting rights, whether in the form of shares of common stock or ADSs, certificates representing the rights to subscribe for shares and equity-related debt securities including convertible
bonds, bonds with warrants and exchangeable bonds, which we refer to collectively as equity securities, together with the equity securities directly or beneficially owned by certain related persons or by any person acting in concert with the person,
accounts for 5% or more of our total outstanding equity securities, is required to report the status and purpose (in terms of whether the purpose of the shareholding is to participate in the management of the issuer) of the holdings to the Financial
Services Commission and the Korea Exchange within five business days after reaching the 5% ownership interest. In addition, any change (i) in the ownership interest subsequent to the report that equals or exceeds 1% of the total outstanding
equity securities from the previous report or (ii) in the shareholding purpose, is required to be reported to the Financial Services Commission and the Korea Exchange within five business days from the date of the change (or, in the case of a
person with no intent to seek management control or an institutional investor prescribed by the Financial Services Commission, within ten days of the end of the month in which the change occurred).



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Violation of these reporting requirements may subject a person to criminal sanctions such as
fines or imprisonment and/or prohibition on the exercise of voting rights with respect to the ownership of equity securities exceeding the reported number of shares. Furthermore, the Financial Services Commission may order the disposal of the
unreported equity securities.

When a persons shareholding ratio reaches or exceeds ten percent or more of the companys issued
and outstanding shares with voting rights, the person must file a report to the Securities and Futures Commission and to the Korea Exchange within five business days following the date on which the person reached such shareholding limit. In
addition, such person must file a report to the Securities and Futures Commission and to the Korea Exchange regarding any subsequent change in his/her shareholding. These subsequent reports on changes in shareholding are required within five
business days after the relevant change has occurred. Violation of these reporting requirements may subject a person to criminal sanctions such as fines or imprisonment.

Restrictions Applicable to ADSs

No
Korean governmental approval is necessary for the sale and purchase of our ADSs in the secondary market outside Korea or for the withdrawal of shares of our common stock underlying the ADSs and the delivery inside Korea of shares in connection with
the withdrawal, provided, that a foreigner who intends to acquire the shares must obtain an investment registration card from the Financial Supervisory Service as described below. The acquisition of the shares by a foreigner must be immediately
reported to the governor of the Financial Services Commission, either by the foreigner or by his standing proxy in Korea.

Persons who
have acquired shares of our common stock as a result of the withdrawal of shares underlying our ADSs may exercise their preemptive rights for new shares, participate in free distributions and receive dividends on shares without any further Korean
governmental approval.

Restrictions Applicable to Shares

As a result of amendments to the Foreign Exchange Transaction Laws and Financial Services Commission regulations, adopted in connection with
the stock market opening from January 1992, which we refer to collectively as the Investment Rules, after that date, foreigners may invest, with limited exceptions and subject to procedural requirements, in shares of all Korean companies listed on
the KRX KOSPI Market or the KRX KOSDAQ Market unless prohibited by specific laws. Foreign investors may trade shares listed on the KRX KOSPI Market or the KRX KOSDAQ Market only through the KRX KOSPI Market or the KRX KOSDAQ Market, except in
limited circumstances, including:



| |  |  | odd-lot trading of shares;
| | - |  | --------------------------



| |  |  | acquisition of shares, which we refer to as converted shares, by exercise of warrants, conversion rights or exchange rights under bonds with warrants, convertible bonds or exchangeable bonds or withdrawal rights under
depositary receipts issued outside of Korea by a Korean company;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | acquisition of shares as a result of inheritance, donation, bequest or exercise of shareholders rights, including preemptive rights or rights to participate in free distributions and receive dividends;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | over-the-counter transactions between foreigners of a class of shares for which the ceiling on aggregate acquisition by foreigners, as explained below, has been reached or exceeded;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | shares acquired by way of direct investment and/or the disposal of such shares by the investor;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | the disposal of shares pursuant to the exercise of appraisal rights of dissenting shareholders;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | the disposal of shares in connection with a tender offer;
| | - |  | ---------------------------------------------------------



| |  |  | the acquisition of shares by a foreign depositary in connection with the issuance of depositary receipts;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | the acquisition and disposal of shares through an overseas stock exchange market if such shares are simultaneously listed on the KRX KOSPI Market or the KRX KOSDAQ Market and such overseas stock exchange; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | arms-length transactions between foreigners, if all of such foreigners belong to the investment group managed by the same person.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------

For over-the-counter transactions of shares between foreigners outside the KRX KOSPI Market or the KRX KOSDAQ Market for shares with respect
to which the limit on aggregate foreign ownership has been reached or exceeded, a financial investment company with a brokerage license in Korea must act as an intermediary. Odd-lot trading of shares outside the KRX KOSPI Market or the KRX KOSDAQ
Market must involve a financial investment company with a dealing license in Korea as the other party. Foreign investors are prohibited from engaging in margin transactions by borrowing shares from financial investment companies with respect to
shares that are subject to a foreign ownership limit.



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The Investment Rules require a foreign investor who wishes to invest in shares on the KRX KOSPI
Market or the KRX KOSDAQ Market (including converted shares and shares being issued for initial listing on the KRX KOSPI Market or the KRX KOSDAQ Market) to register its identity with the Financial Supervisory Service prior to making any such
investment unless it has previously registered. However, the registration requirement does not apply to foreign investors who acquire converted shares (including upon conversion of ADSs into shares and upon exercise of conversion rights of
convertible bonds) with the intention of selling such converted shares within three months from the date of acquisition of the converted shares. Upon registration, the Financial Supervisory Service will issue to the foreign investor an investment
registration card, which must be presented each time the foreign investor opens a brokerage account with a financial investment company with a brokerage license. Foreigners eligible to obtain an investment registration card include foreign nationals
who have not been residing in Korea for a consecutive period of six months or more, foreign governments, foreign municipal authorities, foreign public institutions, international financial institutions or similar international organizations,
corporations incorporated under foreign laws and any person in any additional category designated by a decree promulgated under the Financial Investment Services and Capital Markets Act. All Korean branch offices of a foreign corporation as a group
are treated as a separate foreigner from the offices of the corporation located outside of Korea for the purpose of investment registration. However, a foreign corporation or depositary issuing depositary receipts may obtain one or more investment
registration cards in its name in certain circumstances as described in the relevant regulations.

Upon a foreign investors purchase
of shares through the KRX KOSPI Market or the KRX KOSDAQ Market, no separate report by the investor is required because the investment registration card system is designed to control and oversee foreign investment through a computer system. However,
a foreign investors acquisition or sale of shares outside the KRX KOSPI Market or the KRX KOSDAQ Market (as discussed above) must be reported by the foreign investor or his standing proxy to the governor of the Financial Supervisory Service at
the time of each such acquisition or sale; provided, however, that a foreign investor must ensure that any acquisition or sale by it of shares outside the KRX KOSPI Market or the KRX KOSDAQ Market in the case of trades in connection with a tender
offer, odd-lot trading of shares or trades of a class of shares for which the aggregate foreign ownership limit has been reached or exceeded, is reported to the governor of the Financial Supervisory Service by the financial investment company
engaged to facilitate such transaction. A foreign investor may appoint a standing proxy from among the Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing,
brokerage or collective investment license and internationally recognized custodians which will act as a standing proxy to exercise shareholders rights or perform any matters related to the foregoing activities if the foreign investor does not
perform these activities itself. Generally, a foreign investor may not permit any person, other than its standing proxy, to exercise rights relating to its shares or perform any tasks related thereto on its behalf. However, a foreign investor may be
exempted from complying with these standing proxy rules with the approval of the governor of the Financial Supervisory Service in cases deemed inevitable by reason of conflict between the laws of Korea and the home country of the foreign investor.

Certificates evidencing shares of Korean companies must be kept in custody with an eligible custodian in Korea. Only the Korea Securities
Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license and internationally recognized custodians are eligible to act as a custodian
of shares for a non-resident or foreign investor; provided, however, that a foreign investor may have the certificate evidencing shares released from such custody when it is necessary to exercise its rights to such shares or to inspect and confirm
the presence of the certificate(s) of such shares. A foreign investor must ensure that its custodian deposits its shares with the Korea Securities Depository. However, a foreign investor may be exempted from complying with this deposit requirement
with the approval of the governor of the Financial Supervisory Service in circumstances where compliance with that requirement is made impracticable, including cases where compliance would contravene the laws of the home country of such foreign
investor.

Under the Investment Rules, with certain exceptions, foreign investors may acquire shares of a Korean company without being
subject to any foreign investment ceiling. As one such exception, unless otherwise stated in their articles of incorporation, designated public corporations are subject to a 40% ceiling on the acquisition of shares by foreigners in the aggregate.
Furthermore, an investment by a foreign investor in 10% or more of the outstanding shares with voting rights of a Korean company is defined as a foreign direct investment under the Foreign Investment Promotion Act of Korea. Generally, a foreign
direct investment must be reported to the foreign exchange bank designated by the Ministry of Trade, Industry & Energy or the Korea Trade-Investment Promotion Agency prior to such investment (within 30 days from the date of such investment,
if the company is listed on the Korea Exchange). The acquisition of shares of a Korean company by a foreign investor may also be subject to certain foreign or other shareholding restrictions in the event that the restrictions are prescribed in a
specific law that regulates the business of the Korean company.



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Under the Foreign Exchange Transaction Laws, a foreign investor who intends to acquire shares
must designate a foreign exchange bank at which he must open a foreign currency account and a Korean Won account exclusively for stock investments. No approval is required for remittance into Korea and deposit of foreign currency funds in the
foreign currency account. Foreign currency funds may be transferred from the foreign currency account at the time required to place a deposit for, or settle the purchase price of, a stock purchase transaction to a Korean Won account opened at a
financial investment company with a securities dealing or brokerage license. Funds in the foreign currency account may be remitted abroad without any Korean governmental approval.

Dividends on shares of Korean companies are paid in Korean Won. No Korean governmental approval is required for foreign investors to receive
dividends on, or the Korean Won proceeds of the sale of, any shares to be paid, received and retained in Korea. Dividends paid on, and the Korean Won proceeds of the sale of, any shares held by a non-resident of Korea must be deposited either in a
Korean Won account with the investors financial investment company or in his Korean Won account. Funds in the investors Korean Won account may be transferred to his foreign currency account or withdrawn for local living expenses,
provided that any withdrawal of local living expenses in excess of a certain amount is reported to the Financial Supervisory Service by the foreign exchange bank at which the Won account is maintained. Funds in the Korean Won account may also be
used for future investment in shares or for payment of the subscription price of new shares obtained through the exercise of preemptive rights.

Financial investment companies with a securities dealing, brokerage or collective investment license are allowed to open foreign currency
accounts with foreign exchange banks exclusively for accommodating foreign investors stock investments in Korea. Through these accounts, such financial investment companies may enter into foreign exchange transactions on a limited basis, such
as conversion of foreign currency funds and Korean Won funds, either as a counterparty to or on behalf of foreign investors, without the investors having to open their own accounts with foreign exchange banks.



|Item 10.E. | Taxation
|---------- | --------

The following summary is based upon the tax laws of the
United States and the Republic of Korea as in effect on the date of this annual report, and is subject to any change in U.S. or Korean law that may come into effect after such date. Investors in the shares of common stock or ADSs are advised to
consult their own tax advisers as to the United States, Korean or other tax consequences of the purchase, ownership and disposition of such securities, including the effect of any national, state or local tax laws.

Korean Taxation

The following summary of
Korean tax considerations applies to you so long as you are not:



| |  |  | a resident of Korea;
| | - |  | --------------------



| |  |  | a corporation having its head office, principal place of business or place of effective management in Korea (i.e., a Korean corporation); or
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | engaged in a trade or business in Korea through a permanent establishment or a fixed base to which the relevant income is attributable or with which the relevant income is effectively connected.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Taxation of Dividends on Shares of Common Stock or ADSs

We will deduct Korean withholding tax from dividends (whether in cash or in shares) paid to you at a rate of 22% (including local income
surtax). If you are a beneficial owner of the dividends and a qualified resident in a country that has entered into a tax treaty with Korea, you may qualify for a reduced rate of Korean withholding tax. See Tax Treaties below for a
discussion of treaty benefits. If we distribute to you free shares representing a transfer of certain capital reserves or asset revaluation reserves into paid-in capital, that distribution may be subject to Korean withholding tax.

Taxation of Capital Gains from Transfer of Shares of Common Stock or ADSs

As a general rule, capital gains earned by non-residents upon transfer of shares of our common stock or ADSs are subject to Korean withholding
tax at the lower of (1) 11% (including local income surtax) of the gross proceeds realized or (2) subject to the production of satisfactory evidence of acquisition costs and certain direct transaction costs of the shares or ADSs, 22%
(including local income surtax) of the net realized gain, unless exempt from Korean income taxation under the applicable Korean tax treaty with the non-residents country of tax residence. See Tax Treaties below for a
discussion on treaty benefits. Even if you do not qualify for an exemption under a tax treaty, you will not be subject to the foregoing withholding tax on capital gains if you qualify under the relevant Korean domestic tax law exemptions discussed
in the following paragraphs.



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With respect to shares of our common stock, you will not be subject to Korean income taxation on
capital gains realized upon the transfer of such shares through the Korea Exchange if you (1) have no permanent establishment in Korea and (2) did not own or have not owned (together with any shares owned by any entity with which you have
a certain special relationship and possibly including the shares represented by the ADSs) 25% or more of our total issued and outstanding shares at any time during the calendar year in which the sale occurs and during the five calendar years prior
to the calendar year in which the sale occurs.

Under the Korean tax laws for capital gains recognized or to be recognized from
disposition of ADSs, ADSs are viewed as shares of stock for capital gains tax purposes. Accordingly, capital gains from sale or disposition of ADSs are taxed (if taxable) as if such gains are from sale or disposition of shares of our common stock.
It should be noted that (i) capital gains earned by you (regardless of whether you have a permanent establishment in Korea) from a transfer of ADSs outside Korea will generally be exempt from Korean income taxation by virtue of the Special Tax
Treatment Control Law of Korea, or the STTCL, provided that the issuance of ADSs is deemed to be an overseas issuance under the STTCL, but (ii) in the case where an owner of the underlying shares of stock transfers ADSs after conversion of the
underlying shares into ADSs, the exemption under the STTCL described in (i) will not apply. In the case where an owner of the underlying shares of stock transfers the ADSs after conversion of the underlying shares of stock into ADSs, such
person is obligated to file corporate income tax returns and pay tax unless a purchaser or a financial investment company with a brokerage license, as applicable, withholds and pays the tax on capital gains derived from transfer of ADSs, as
discussed below.

If you are subject to tax on capital gains with respect to the sale of ADSs, or of shares of common stock which you
acquired as a result of a withdrawal, the purchaser or, in the case of the sale of shares of common stock on the Korea Exchange or through a financial investment company with a brokerage license in Korea, the financial investment company, is
required to withhold Korean tax from the sales price in an amount equal to the lower of (i) 11% (including local income surtax) of the gross realization proceeds and (ii) subject to the production of satisfactory evidence of acquisition
costs and certain direct transaction costs of the shares or ADSs, 22% (including local income surtax) of the net realized gain, and to make payment of these amounts to the Korean tax authority, unless you establish your entitlement to an exemption
under an applicable tax treaty or domestic tax law. See the discussion under Tax Treaties below for an additional explanation of claiming treaty benefits.

Tax Treaties

Korea has entered into a number of income tax treaties with other countries, including the United States, which reduce or exempt Korean
withholding tax on dividend income and capital gains on transfer of shares of common stock or ADSs. For example, under the Korea-U.S. income tax treaty, reduced rates of Korean withholding tax on dividends of 16.5% or 11%, respectively (including
local income surtax), depending on your shareholding ratio, and an exemption from Korean withholding tax on capital gains are available to residents of the United States that are beneficial owners of the relevant dividend income or capital gains.
However, under Article 17 (Investment or Holding Companies) of the Korea-U.S. income tax treaty, such reduced rates and exemption do not apply if (1) you are a U.S. corporation, (2) by reason of any special measures, the tax imposed on you
by the United States with respect to such dividends or capital gains is substantially less than the tax generally imposed by the United States on corporate profits, and (3) 25% or more of your capital is held of record or is otherwise
determined, after consultation between competent authorities of the United States and Korea, to be owned directly or indirectly by one or more persons who are not individual residents of the United States. Also, under Article 16 (Capital Gains) of
the Korea-U.S. income tax treaty, the exemption on capital gains does not apply if you are an individual, and (a) you maintain a fixed base in Korea for a period or periods aggregating 183 days or more during the taxable year and your ADSs or
shares of common stock giving rise to capital gains are effectively connected with such fixed base or (b) you are present in Korea for a period or periods of 183 days or more during the taxable year. You should inquire for yourself whether you
are entitled to the benefit of an income tax treaty with Korea. It is the responsibility of the party claiming the benefits of an income tax treaty in respect of dividend payments or capital gains to submit to us, the purchaser or the financial
investment company, as applicable, a certificate as to his tax residence. In the absence of sufficient proof, we, the purchaser or the financial investment company, as applicable, must withhold tax at the normal rates.

Furthermore, in order for you to claim the benefit of a tax rate reduction or tax exemption on certain Korean source income (e.g., dividends
and capital gains) under an applicable tax treaty, subject to certain exceptions, Korean tax law requires you (or your agent) as the beneficial owner of such Korean source income to submit the relevant application (Application for Entitlement to
Reduced Tax Rate or Application for Tax Exemption, as the case may be) along with a certificate of your tax residency issued by a competent authority of your country of tax residence (BO Application). Such application should be submitted
to the withholding agent prior to the payment date of such Korean source income. Subject to certain exceptions, where the Korean source income is paid to an overseas investment vehicle that is not the beneficial owner of such income
(OIV), a beneficial owner claiming the benefit of an applicable tax treaty with respect to the Korean source income must submit its BO application to such OIV, which must submit an OIV report and a schedule of beneficial owners to the
withholding agent prior to the payment date of such Korean source income. In the case of an application for tax exemption, the withholding agent is required to submit the application (together with the applicable OIV report in the case of income
paid to an OIV) to the relevant district tax office by the ninth day of the month following the date of the payment of such income.



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Inheritance Tax and Gift Tax

If you die while holding an ADS or donate an ADS, it is unclear whether, for Korean inheritance and gift tax purposes, you will be treated as
the owner of the shares of common stock underlying the ADSs. If the tax authority interprets depositary receipts as the underlying share certificates, you may be treated as the owner of the shares of common stock and your heir or the donee (or in
certain circumstances, you as the donor) will be subject to Korean inheritance or gift tax presently at the rate of 10% to 50% based on the value of the ADSs or shares of common stock and the identity of the individual against whom the tax is
assessed.

If you die while holding a share of common stock or donate a share of common stock, your heir or donee (or in certain
circumstances, you as the donor) will be subject to Korean inheritance or gift tax at the same rate as indicated above.

At present, Korea
has not entered into any tax treaty relating to inheritance or gift taxes.

Securities Transaction Tax

If you transfer shares of common stock on the Korea Exchange, you will be subject to securities transaction tax at the rate of 0.15% and an
agriculture and fishery special surtax at the rate of 0.15% of the sale price of the shares of common stock. If your transfer of the shares of common stock is not made on the Korea Exchange, subject to certain exceptions, you will be subject to a
securities transaction tax at the rate of 0.5% and will not be subject to an agriculture and fishery special surtax.

Depositary receipts,
which the ADSs constitute, are included in the scope of securities the transfers of which are subject to securities transaction tax. However, transfer of depositary receipts listed on a foreign securities exchange similar to that of Korea (e.g., the
New York Stock Exchange or the Nasdaq Stock Market) will not be subject to the securities transaction tax.

In principle, the securities
transaction tax, if applicable, must be paid by the transferor of the shares or certain rights including rights to subscribe to each shares. When the transfer is effected through a securities settlement company, such settlement company is generally
required to withhold and pay the tax to the tax authorities. When such transfer is made through a financial investment company only, such financial investment company is required to withhold and pay the tax. Where the transfer is effected by a
non-resident without a permanent establishment in Korea, other than through a securities settlement company or a financial investment company, the transferee is required to withhold the securities transaction tax.

Non-reporting or under-reporting of securities transaction tax will generally result in penalties equal to 20% to 60% of the non-reported tax
amount or 10% to 60% of the under-reported tax amount, respectively. Also, a failure to timely pay securities transaction tax will result in a penalty equal to 10.95% per annum of the due but unpaid tax amount. The penalties are imposed on the
party responsible for paying the securities transaction tax or, if such tax is required to be withheld, on the party that has the obligation to withhold.

United States Taxation

This summary
describes certain material U.S. federal income tax consequences for a U.S. holder (as defined below) of acquiring, owning, and disposing of shares of common stock or ADSs. This summary applies to you only if you hold the shares of common stock or
ADSs as capital assets for tax purposes. This summary does not apply to you if you are a member of a class of holders subject to special rules, such as:



| |  |  | a dealer in securities or currencies;
| | - |  | -------------------------------------



| |  |  | a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | a bank or financial institution;
| | - |  | --------------------------------



| |  |  | a life insurance company;
| | - |  | -------------------------



| |  |  | a tax-exempt organization;
| | - |  | --------------------------



| |  |  | an entity treated as a partnership (and partners therein) or other pass-through entity for U.S. federal income tax purposes;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | a person that holds shares of common stock or ADSs that are a hedge or that are hedged against interest rate or currency risks;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



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| |  |  | a person that holds shares of common stock or ADSs as part of a straddle or conversion transaction for tax purposes;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | a person whose functional currency for tax purposes is not the U.S. dollar; or
| | - |  | ------------------------------------------------------------------------------



| |  |  | a person that owns or is deemed to own 10% or more of any class of our stock.
| | - |  | -----------------------------------------------------------------------------

This summary is
based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly
on a retroactive basis.

In addition, this summary does not discuss the application of the Medicare net investment income tax or the
alternative minimum tax. Please consult your own tax advisers concerning the consequences of purchasing, owning, and disposing of shares of common stock or ADSs in your particular circumstances, including the possible application of state, local,
non-U.S. or other tax laws.

For purposes of this summary, you are a U.S. holder if you are a beneficial owner of a share of
common stock or an ADS and you are:



| |  |  | a citizen or resident of the United States;
| | - |  | -------------------------------------------



| |  |  | a U.S. domestic corporation; or
| | - |  | -------------------------------



| |  |  | otherwise subject to U.S. federal income tax on a net income basis with respect to income from the share of common stock or ADS.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

In general, if you are the beneficial owner of ADSs, you will be treated as the beneficial owner of the common stock represented by those ADSs
for U.S. federal income tax purposes, and no gain or loss will be recognized if you exchange an ADS for the common stock represented by that ADS.

Dividends

The
gross amount of cash dividends that you receive (prior to deduction of Korean taxes) generally will be subject to U.S. federal income taxation as foreign source dividend income. Dividends paid in Korean Won will be included in your income in a U.S.
dollar amount calculated by reference to the exchange rate in effect on the date that you receive the dividend (or the date of the depositarys receipt of the dividend, in the case of ADSs), regardless of whether the payment is in fact
converted into U.S. dollars. If such a dividend is converted into U.S. dollars on the date of receipt, you generally should not be required to recognize foreign currency gain or loss in respect of the dividend income.

Subject to certain exceptions for short-term (60 days or less) and hedged positions, the U.S. dollar amount of qualified dividends
received by an individual U.S. holder in respect of ADSs generally will be subject to taxation at a lower rate than other ordinary income. Dividends paid on the ADSs will be treated as qualified dividends if (i) the ADSs are readily tradable on
an established securities market in the United States and (ii) we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a passive foreign investment company (a
PFIC). The ADSs are listed on the New York Stock Exchange and will qualify as readily tradable on an established securities market in the United States so long as they are so listed. Based on our audited financial statements and relevant
market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our 2015 taxable year. In addition, based on our audited financial statements and our current expectations regarding the
value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for our 2016 taxable year.

Distributions of additional shares in respect of shares of common stock or ADSs that are made as part of a pro-rata distribution to all of our
shareholders generally will not be subject to U.S. federal income tax.

Sale or Other Disposition

For U.S. federal income tax purposes, gain or loss you realize on the sale or other disposition of shares of common stock or ADSs will be
treated as U.S. source capital gain or loss, and will be long-term capital gain or loss if the shares of common stock or ADSs were held for more than one year. Your ability to offset capital losses against ordinary income is limited. Long-term
capital gain recognized by an individual U.S. holder generally is subject to taxation at a reduced rate.



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Foreign Tax Credit Considerations

You should consult your own tax advisers to determine whether you are subject to any special rules that limit your ability to make effective
use of foreign tax credits, including the possible adverse impact of failing to take advantage of benefits under the income tax treaty between the United States and Korea. If no such rules apply, you may claim a credit against your U.S. federal
income tax liability for Korean taxes withheld from cash dividends on the shares of common stock or ADSs, so long as you have owned the shares of common stock or ADSs (and not entered into specified kinds of hedging transactions) for at least a
16-day period that includes the ex-dividend date. Instead of claiming a credit, you may, at your election, deduct such Korean taxes in computing your taxable income, subject to generally applicable limitations under U.S. tax law. Foreign tax credits
will not be allowed for withholding taxes imposed in respect of certain short-term or hedged positions in securities and may not be allowed in respect of arrangements in which a U.S. holders expected economic profit is insubstantial.

Any Korean securities transaction tax or agriculture and fishery special surtax that you pay will not be creditable for foreign tax credit
purposes.

The calculation of foreign tax credits and, in the case of a U.S. holder that elects to deduct foreign taxes, the availability
of deductions involve the application of complex rules that depend on a U.S. holders particular circumstances. You should consult your own tax advisers regarding the creditability or deductibility of such taxes.

U.S. Information Reporting and Backup Withholding Rules

Payments of dividends and sales proceeds that are made within the United States or through certain U.S. related financial intermediaries are
subject to information reporting and may be subject to backup withholding unless the holder (i) is a corporation or other exempt recipient or (ii) provides a taxpayer identification number and certifies that no loss of exemption from
backup withholding has occurred.

Holders that are not U.S. persons generally are not subject to information reporting or backup
withholding. However, such a holder may be required to provide a certification of its non-U.S. status in connection with payments received within the United States or through a U.S. related financial intermediary.



|Item 10.F. | Dividends and Paying Agents
|---------- | ---------------------------

Not applicable.



|Item 10.G. | Statements by Experts
|---------- | ---------------------

Not applicable.



|Item 10.H. | Documents on Display
|---------- | --------------------

We are subject to the information
requirements of the Exchange Act and, in accordance therewith, are required to file reports, including annual reports on Form 20-F, and other information with the SEC. These materials, including this annual report and the exhibits thereto, may be
inspected and copied at the SECs public reference rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. As a foreign private issuer, we
are also required to make filings with the SEC by electronic means. Any filings we make electronically will be available to the public over the Internet at the SECs web site at http://www.sec.gov.



|Item 10.I. | Subsidiary Information
|---------- | ----------------------

Not applicable.



|Item 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------

Overview

Market risk is the risk of loss related to adverse changes in market prices, including interest rates and foreign exchange rates, of financial
instruments. We are exposed to various financial market risks in our ordinary course of business transactions, primarily from changes in interest rates and foreign exchange rates, and we utilize financial derivatives to mitigate these risks. We also
used various derivative instruments, principally forward contracts with maturities of one year or less, to manage our exposure associated with net asset and liability positions and cash flows denominated in foreign currencies. We have used, and
intend to continue to use, these financial derivatives only for hedging purposes and not for speculative purposes.



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Our primary market risk exposures relate to interest rate movements on floating rate borrowings
and exchange rate movements on foreign currency denominated accounts receivable, as well as foreign currency denominated future cash flows from sales, mostly denominated in U.S. dollars and foreign currency denominated accounts payable for purchases
of raw materials and supplies, primarily denominated in U.S. dollars and Japanese Yen. The fair value of our financial instruments has been determined as the price, as of the applicable measurement date, that we would receive when selling an asset
or that we would pay when transferring a liability, in an orderly transaction between market participants. Fair value is based on quoted market prices where available.

For a further discussion of our market risk and fair value of our financial assets and liabilities, see Note 13 to the notes to our financial
statements.

Interest Rate Risks

Our exposure to interest rate risks relates primarily to our long-term debt obligations, which are typically incurred to fund capital
expenditures and repay maturing debt, as well as for working capital and other general corporate purposes. As of December 31, 2015, we had outstanding long-term debt, including current portion, in the amount of W4,224 billion
(US$3,613 million).

From time to time, we may enter into interest rate swap contracts to hedge against the effects of interest rate
fluctuations of certain of our floating rate long-term debt. As of December 31, 2015, W200 billion (US$171 million) of our Korean Won denominated floating rate long-term borrowings were hedged against interest rate fluctuations
using a variable-to-fixed interest rate swap contract that expires in 2018. In connection with such contract, we recognized a loss on derivatives transactions of W85 million (US$73 thousand) in 2015. The table below provides
information about our interest rate swap contracts. The table presents notional amounts used to calculate the contractual payments to be exchanged under such contracts.



|                      |  |                                                            |     |   |                            |  |     |      |  |   |       |   |  |      |   |  |            |  |   |       |  |  |      |  |  |   |       |  |  |   |       | 
|--------------------- |  | ---------------------------------------------------------- | --- | - | -------------------------- |  | --- | ---- |  | - | ----- | - |  | ---- | - |  | ---------- |  | - | ----- |  |  | ---- |  |  | - | ----- |  |  | - | ----- | 
|                      |  | Expected Maturity Dates                                    |     |   | Fair Value at
December 31, | 
|                      |  | 2016                                                       |     |   | 2017                       |  |     | 2018 |  |   | 2019  |   |  | 2020 |   |  | Thereafter |  |   | Total |  |  | 2015 | 
|                      |  | (in billions of Won, except for interest rate percentages) |    
|Interest rate swaps   |  |                                                            |     |   |                            |  |     |      |  |   |       |   |  |      |   |  |            |  |   |       |  |  |      |  |  |   |       |  |  |   |       | 
|Variable to fixed (W) |  |                                                            |    |   |                            |  |    |      |  | W | 200.0 |   |  |      |  |  |            |  |  |       |  |  |     |  |  | W | 200.0 |  |  | W | 200.0 | 
|Average pay rate      |  |                                                            | 1.7 | % |                            |  | 1.7 | %    |  |   | 1.7   | % |  |      |  |  |            |  |  |       |  |  |     |  |  |   |       |  |  |   |       | 
|Average receive rate  |  |                                                            | 1.6 | % |                            |  | 1.6 | %    |  |   | 1.7   | % |  |      |  |  |            |  |  |       |  |  |     |  |  |   |       |  |  |   |       | 

We may be exposed to interest rate risks on additional debt financing that we may periodically undertake to
fund capital expenditures required for our capacity expansion. Upward fluctuations in interest rates increase the cost of new debt. The interest rate that we will be able to obtain in a new debt financing will depend on market conditions at that
time and may differ from the rates we have secured on our current debt.

As of December 31, 2015, we had US$1,185 million aggregate
principal amount of U.S. dollar denominated long-term loans and RMB1,964 million aggregate principal amount of RMB denominated long-term loans. The interest rates on these loans are set based on three-month U.S. dollar LIBOR plus 0.55% to 2.80% and
90% of the rate published by the Peoples Bank of China, as applicable. The table below provides information about our financial instruments that are sensitive to changes in interest rates. The risk associated with fluctuating interest expense
is principally limited to our U.S. dollar denominated and RMB denominated term loans, and we do not believe that a near-term 10% change of the effective interest rate would have a significant impact on our cash flows. We currently do not have any
capital lease obligations.



|                           |  |                                                            |         |   |                            |   |       |      |  |   |       |   |  |      |       |   |            |   |      |       |  |   |      |   |  |   |         |  |  |   |         | 
|-------------------------- |  | ---------------------------------------------------------- | ------- | - | -------------------------- | - | ----- | ---- |  | - | ----- | - |  | ---- | ----- | - | ---------- | - | ---- | ----- |  | - | ---- | - |  | - | ------- |  |  | - | ------- | 
|                           |  | Expected Maturity Dates                                    |         |   | Fair Value at
December 31, |  
|                           |  | 2016                                                       |         |   | 2017                       |   |       | 2018 |  |   | 2019  |   |  | 2020 |       |   | Thereafter |   |      | Total |  |   | 2015 |  
|                           |  | (in billions of Won, except for interest rate percentages) |        
|Long-term debt obligations |  |                                                            |         |   |                            |   |       |      |  |   |       |   |  |      |       |   |            |   |      |       |  |   |      |   |  |   |         |  |  |   |         | 
|Fixed rate (W)             |  | W                                                          | 1.005.1 |   |                            | W | 369.9 |      |  | W | 444.6 |   |  | W    | 319.7 |   |            | W | 70.3 |       |  | W | 79.7 |   |  | W | 2,289.3 |  |  | W | 2,341.1 | 
|Average interest rate      |  |                                                            | 4.2     | % |                            |   | 3.0   | %    |  |   | 2.9   | % |  |      | 2.9   | % |            |   | 2.4  | %     |  |   | 2.7  | % |  |   |         |  |  |   |         | 
|Variable rate (W)          |  | W                                                          | 0.8     |   |                            | W | 0.4   |      |  | W | 200.0 |   |  |      |      |   |            |   |     |       |  |   |     |   |  | W | 201.2   |  |  | W | 201.2   | 
|Average interest rate      |  |                                                            | 1.8     | % |                            |   | 1.8   | %    |  |   | 1.9   | % |  |      |      |   |            |   |     |       |  |   |     |   |  |   |         |  |  |   |         | 
|Variable rate (RMB)        |  |                                                            |        |   |                            |   |      |      |  | W | 350.5 |   |  |      |      |   |            |   |     |       |  |   |     |   |  | W | 350.5   |  |  | W | 350.5   | 
|Average interest rate      |  |                                                            |        |   |                            |   |      |      |  |   | 4.3   | % |  |      |      |   |            |   |     |       |  |   |     |   |  |   |         |  |  |   |         | 
|Variable rate (US$)        |  | W                                                          | 410.2   |   |                            | W | 360.6 |      |  | W | 525.4 |   |  | W    | 86.9  |   |            |   |     |       |  |   |     |   |  | W | 1,383.2 |  |  | W | 1,383.2 | 
|Average interest rate      |  |                                                            | 1.7     | % |                            |   | 2.2   | %    |  |   | 1.8   | % |  |      | 3.1   | % |            |   |     |       |  |   |     |   |  |   |         |  |  |   |         | 



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For a further discussion of our interest rate risk exposures, including a further sensitivity
analysis on our interest rate risk exposures, see Note 13 of the notes to our financial statements.

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 Chinese Renminbi, the Japanese Yen and the Euro. As of December 31, 2015, we had U.S. dollar denominated sales-related trade accounts and notes receivable of US$2,935 million, which represented 83.9% of our trade
accounts and notes receivable, and U.S. dollar denominated sales-related trade accounts payable of US$1,207 million, which represented 51.2% of our trade accounts payable.

As of December 31, 2015, we also had RMB denominated sales-related trade accounts and notes receivable of RMB1,465 million, which
represented 6.4% of our trade accounts and notes receivable, net, and Japanese Yen denominated sales-related trade accounts and notes receivable of ¥12 million. In addition, we had RMB denominated sales-related trade accounts payable of RMB1,267
million and Japanese Yen denominated sales-related trade accounts payable of ¥17,016 million, which represented 8.2% and 6.0% of our trade accounts and notes payable, net, 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 other comprehensive income. As of December 31, 2015, we did not have any outstanding foreign currency forward contracts.

Based on our overall foreign currency exposure as of December 31, 2015, 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.

For a
further discussion of our foreign currency risk exposures, including a sensitivity analysis on our currency risk exposures, see Note 13 of the notes to our financial statements.

Other Risks

We are exposed to credit
risk in the event of non-performance by the counterparties under our foreign currency forward contracts at maturity. In order to minimize this risk, we limit the transaction amount with any one party and continually monitor the credit quality of the
counterparties to these financial instruments. We do not anticipate any material losses from these contracts, and we believe the risk of non-performance by the counterparties under these contracts is remote.

A substantial portion of our sales is attributable to a limited number of our end-brand customers. Our top ten end-brand customers, including
our largest shareholder as an end-brand customer, together accounted for approximately 76% of our sales in 2013, 79% in 2014 and 82% in 2015. While we negotiate directly with our end-brand customers concerning the price and quantity of the sales,
for some sales transactions we invoice the end-brand customers designated system integrators. In addition, a portion of our sales to end-brand customers and their system integrators located in certain regions are sold through LG
Internationals overseas subsidiaries. Although our sales to LG International and its subsidiaries only accounted for 3.5% of our sales in 2015, in the past we have sold a significantly greater amount to these entities. As a result of our
significant dependence on a concentrated group of end-brand customers and their designated system integrators, as well a significant amount of sales we may make to our affiliated trading company, LG International, and its subsidiaries, we are
exposed to credit risks associated with these entities. We have established certain measures, such as factoring arrangements and requirement of credit insurance from customers, to protect us from excessive exposure to such credit risks.



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Our credit policy typically requires payment within 30 to 90 days, and payments on the vast
majority of our sales have typically been collected within 60 days. We manage our accounts receivable and credit exposure to customers by establishing credit limits for each customer to whom we supply products on an open account basis in accordance
with our internal credit guidelines. We assess credit risk through quantitative and qualitative analysis, and based on this analysis, we establish credit limits and determine whether we will seek to use one or more credit support devices, such as
obtaining some form of third-party guaranty or stand-by letter of credit, obtaining credit insurance or through factoring of all or part of accounts receivables. Our credit policy does not require credit limits on accounts receivable created on
letters of credit. To date we have not experienced any material problems relating to customer payments. For a further discussion of our credit risk exposures, see Note 13 to the notes to our financial statements.

According to the Korean Statistical Information Service, the rate of inflation in Korea was 1.3% in 2013, 1.3% in 2014 and 0.7% in 2015.
Inflation has not had a material impact on our results of operations in recent years.



|Item 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|-------- | ------------------------------------------------------

Fees and Charges

Under the terms of the deposit agreement, as a holder of our ADSs, you are required to pay the following service fees to the depositary:



|                                                                                                                                              |  |                               
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------
|Services                                                                                                                                      |  | Fees                          
|Issuance of ADSs                                                                                                                              |  | Up to US$0.05 per ADS issued  
|                                                                                                                                              | 
|Cancellation of ADSs                                                                                                                          |  | Up to US$0.05 per ADS canceled
|                                                                                                                                              | 
|Distribution of cash dividends or other cash distributions                                                                                    |  | Up to US$0.02 per ADS held    
|                                                                                                                                              | 
|Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions or (ii) exercise of rights to purchase additional ADSs |  | Up to US$0.02 per ADS held    
|                                                                                                                                              | 
|Distribution of securities other than ADSs or rights to purchase additional ADSs                                                              |  | Up to US$0.05 per ADS held    
|                                                                                                                                              | 
|Other ADS services                                                                                                                            |  | Up to US$0.02 per ADS held    

As a holder of our ADSs, you are also responsible for paying certain fees and expenses incurred by the
depositary and certain taxes and governmental charges such as the following:



| |  |  | Fees for the transfer and registration of shares charged by the registrar and transfer agent for the shares in Korea (i.e., upon deposit and withdrawal of shares).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Expenses incurred for converting foreign currency into U.S. dollars.
| | - |  | --------------------------------------------------------------------



| |  |  | Expenses for cable, telex and fax transmissions and for delivery of securities.
| | - |  | -------------------------------------------------------------------------------



| |  |  | Taxes and duties upon the transfer of securities (i.e., when shares are deposited or withdrawn from deposit).
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | Fees and expenses incurred in connection with the delivery or servicing of shares on deposit.
| | - |  | ---------------------------------------------------------------------------------------------

Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary by the brokers (on behalf of their
clients) receiving the newly issued ADSs from the depositary and by the brokers (on behalf of their clients) delivering the ADSs to the depositary for cancellation. The brokers in turn charge these fees to their clients. Depositary fees payable in
connection with distributions of cash or securities to ADS holders and the depositary services fee are charged by the depositary to the holders of record of ADSs as of the applicable ADS record date.



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The depositary fees payable for cash distributions are deducted from the cash being distributed.
In the case of distributions other than cash (i.e., stock dividend, rights), the depositary charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor
(whether certificated or uncertificated in direct registration), the depositary sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts (via the Depository Trust Company, or DTC), the
depositary collects its fees through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers and custodians who hold their
clients ADSs in DTC accounts in turn charge their clients accounts the amount of the fees paid to the depositary.

In the
event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to
such holder of ADSs.

Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the
depositary. You will receive prior notice of such changes.

Fees and Payments from the Depositary to Us

In 2015, we received the following payments, after deduction of applicable U.S. taxes, from the depositary:



|                                                                                                                                                                                                                                 |  |     |              | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- | ------------ | 
|Reimbursement of proxy process expenses (printing, postage and distribution)                                                                                                                                                     |  | US$ | 47,035.85    | 
|Contributions towards our investor relations efforts (i.e. non-deal roadshows, investor
conferences and IR agency fees) and legal expenses incurred in connection with the preparation of our Form 20-F for the fiscal year 2014 |  | US$ | 1,370,554.06 | 

PART II



|Item 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|-------- | -----------------------------------------------

Not applicable.



|Item 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|-------- | ----------------------------------------------------------------------------

Not
applicable.



|Item 15. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Disclosure Controls and Procedures

Our management has evaluated, with the participation of our chief executive officer and chief financial officer, the effectiveness of our
disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2015. There are inherent limitations to the effectiveness of any system of disclosure controls and
procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control
objectives. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of such date. Our disclosure controls and procedures are designed to ensure that
information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commissions rules and forms, and that it is
accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.



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Managements Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in
Rules 13a-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the
framework in Internal Control  Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our management concluded that our internal control over financial
reporting was effective as of December 31, 2015. The effectiveness of our internal control over financial reporting as of December 31, 2015 has been audited by our independent registered public accounting firm, as stated in its attestation
report which is included in Item 18 of this Form 20-F.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during 2015 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.



|Item 16. | [RESERVED]
|-------- | ----------



|Item 16A. | AUDIT COMMITTEE FINANCIAL EXPERT
|--------- | --------------------------------

Our board of directors has determined that Sung-Sik
Hwang qualifies as an audit committee financial expert and is independent within the meaning of this Item 16A.



|Item 16B. | CODE OF ETHICS
|--------- | --------------

We have adopted a code of ethics, as defined in Item 16B of Form
20-F under the Exchange Act. Our Code of Ethics applies to our chief executive officer, chief financial officer and persons performing similar functions as well as to our non-executive directors and other officers and employees. Our Code of Ethics
is available on our website at www.lgdisplay.com. If we amend the provisions of our Code of Ethics that apply to our chief executive officer and chief financial officer and persons performing similar functions, or if we grant any waiver of such
provisions, we will disclose such amendment or waiver on our website at the same address.



|Item 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|--------- | --------------------------------------

The following table sets forth the fees billed
to us by our independent registered public accounting firm, KPMG Samjong Accounting Corp., a member firm of KPMG International, and their respective affiliates, which we collectively refer to as KPMG, during the fiscal years ended December 31,
2014 and 2015:



|               |  |                         |       |  |      |   |       | 
|-------------- |  | ----------------------- | ----- |  | ---- | - | ----- | 
|               |  | Year ended December 31, |      
|               |  | 2014                    |       |  | 2015 |  
|               |  | (in millions of Won)    |      
|Audit fees     |  | W                       | 3,510 |  |      | W | 3,641 | 
|Tax fees       |  |                         | 116   |  |      |   | 172   | 
|All other fees |  |                         |      |  |      |   | 38    | 
|               |  |                         |       |  |      |   |       | 
|Total fees     |  | W                       | 3,626 |  |      | W | 3,851 | 
|               |  |                         |       |  |      |   |       | 

Audit fees in the above table are the fees billed by KPMG in connection with the audit of our annual financial
statements and the review of our interim financial statements.

Tax fees in the above table are fees billed by KPMG for tax compliance
services and other tax advice.



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All other fees in the above table are the aggregate fees billed by KPMG for services related to
information security trends of global enterprises and the utilization of such trend information for benchmarking purposes.

Audit Committee
Pre-Approval Policies and Procedures

Our audit committee has not established pre-approval policies and procedures for the engagement
of our independent auditors for services. Our audit committee expressly approves on a case-by-case basis any engagement of our independent auditors for audit and non-audit services provided to our subsidiaries or to us.

The audit committee is permitted to approve certain fees for audit and non-audit services before the completion of the engagement that are
recurring, in the ordinary course of business and otherwise comply with the de minimis exception to the applicable rules of the SEC. In 2015, no fees were approved pursuant to the de minimis exception.



|Item 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|--------- | ----------------------------------------------------------

Not applicable.



|Item 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|--------- | ----------------------------------------------------------------------

Neither we nor
any affiliated purchaser, as defined in Rule 10b-18(a)(3) of the Exchange Act, purchased any of our equity securities during the period covered by this annual report.



|Item 16F. | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
|--------- | --------------------------------------------

Not applicable.



|Item 16G. | CORPORATE GOVERNANCE
|--------- | --------------------

The following is a summary of the significant differences between
the New York Stock Exchanges corporate governance standards and those that we follow under Korean law.



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NYSE Corporate Governance Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | LG Displays Corporate Governance
Practice                                                                                                                                                                                                                                                           
|Director Independence                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Listed companies must have a majority of independent directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | The majority of our board of directors is independent (as defined in accordance with the New York Stock Exchanges standards), as four out of seven directors are outside directors.                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Nomination/Corporate Governance Committee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Listed companies must have a nomination/corporate governance committee composed entirely of independent directors. The committee must have a charter that addresses the purpose, responsibilities (including development of corporate
governance guidelines) and annual performance evaluation of the committee.                                                                                                                                                                                                                                                                                                                                                                                 |  | Although we have not established a separate nomination/corporate governance committee, we maintain an Outside Director Nomination Committee composed of two outside directors and one non-outside director.                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Compensation Committee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Listed companies must have a compensation committee composed entirely of independent directors. The committee must have a charter that addresses the purpose, responsibilities and annual performance evaluation of the committee. The
charter must be made available on the companys website. In addition, in accordance with the U.S. Securities and Exchange Commission rules adopted pursuant to Section 952 of the Dodd-Frank Act, the New York Stock Exchange listing standards were
amended to expand the factors relevant in determining whether a committee member has a relationship with the company that will materially affect that members duties to the compensation committee. |  | Under Korean law, we are not required to establish a compensation committee. Accordingly, we do not currently have a compensation committee, and our board of directors is directly responsible for matters relating to salaries and
incentive compensation for our directors and executive officers.



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|                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Executive Session                                                                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Non-management directors of listed companies must meet in regularly scheduled executive sessions without management. Independent directors should meet alone in an executive session at least once a year.                                                                                                                                                                                       |  | We do not normally hold executive sessions solely attended by non-management directors as that is not required under Korean law but we may elect to do so at the discretion of the directors.                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Audit Committee                                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Listed companies must have an audit committee that satisfies the requirements of Rule 10A-3 under the Exchange Act. All members must be independent. The committee must have a charter addressing the committees purpose, an
annual performance evaluation of the committee, and the duties and responsibilities of the committee. The charter must be made available on the companys website. |  | We maintain an Audit Committee composed of three outside directors who meet the applicable independence criteria set forth under Rule 10A-3 of the Exchange Act.                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Audit Committee Additional Requirements                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Listed companies must have an audit committee that is composed of at least three directors.                                                                                                                                                                                                                                                                                                      |  | Our Audit Committee has three directors, as described above.                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Shareholder Approval of Equity Compensation Plan                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Listed companies must allow its shareholders to exercise their voting rights with respect to any material revision to the companys equity compensation plan.                                                                                                                                                                                                                                    |  | We currently have two equity compensation plans: one providing for the grant of stock options to officers and key employees and an Employee Stock Ownership Plan, or ESOP.                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|                                                                                                                                                                                                                                                                                                                                                                                                 |  | Stock options to officers and key employees may be granted pursuant to a resolution of the shareholders in an amount not to exceed 15% of the total number of our issued and outstanding shares. However, the board of directors may
grant stock options to non-director officers and employees up to 1% of the total number of our issued and outstanding shares, which grant must be approved by a resolution of the subsequent general meeting of shareholders.
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|                                                                                                                                                                                                                                                                                                                                                                                                 |  | All material matters related to the granting of stock options are provided in our articles of incorporation, and any amendments to the articles of incorporation are subject to shareholders approval. Matters related to the ESOP
are not subject to shareholders approval under Korean law.                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Corporate Governance Guidelines                                                                                                                                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Listed companies must adopt and disclose corporate governance guidelines.                                                                                                                                                                                                                                                                                                                        |  | We do not maintain formal corporate governance guidelines. Our board of directors is responsible for overseeing our policies, practices and procedures in the area of corporate governance.                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Code of Business Conduct and Ethics                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                 | 
|Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers.                                                                                                                                                                                         |  | We have adopted a Code of Ethics for all directors, officers and employees. A copy of our Code of Ethics is available on our website at www.lgdisplay.com.                                                                                                                                                                                                                                                                                                        



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|Item 16H. | MINE SAFETY DISCLOSURE
|--------- | ----------------------

Not applicable.



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PART III



|Item 17. | FINANCIAL STATEMENTS
|-------- | --------------------

Not applicable.



|Item 18. | FINANCIAL STATEMENTS
|-------- | --------------------



|                                                                                                             |  |      |      | 
|------------------------------------------------------------------------------------------------------------ |  | ---- | ---- | 
|                                                                                                             |  | Page |     
|Report of Independent Registered Public Accounting Firm                                                      |  |      | F-2  | 
|Consolidated statements of financial position as of December 
31, 2014 and 2015                              |  |      | F-4  | 
|Consolidated statements of comprehensive income (loss) for the years ended December 31,
 2013, 2014 and 2015 |  |      | F-6  | 
|Consolidated statements of changes in equity for the years ended December 31,
 2013, 2014 and 2015           |  |      | F-8  | 
|Consolidated statements of cash flows for the years ended December 
31, 2013, 2014 and 2015                  |  |      | F-10 | 
|Notes to consolidated financial statements                                                                   |  |      | F-13 | 



95



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|Item 19. | EXHIBITS
|-------- | --------



|       |  |                                                                                                                                                                                                                                                                                                               
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Description                                                                                                                                                                                                                                                                                                   
|       | 
|1.1*   |  | Amended and Restated Articles of Incorporation (translation in English) (incorporated by reference to Exhibit 1.1 to the Registrants Annual Report (No. 001-32238) on Form 20-F, filed on April 26, 2013)                                                                                                    
|       | 
|2.1*   |  | Form of Common Stock Certificate (translation in English) (incorporated by reference to Exhibit 4.1 to the Registrants Registration Statement (No. 333-116819) on Form F-1, filed on July 13, 2004)                                                                                                          
|       | 
|2.2*   |  | Deposit Agreement (including Form of American Depositary Receipt) (incorporated by reference to Exhibit (a) to the Registrants Registration Statement (No. 333-147661) on Form F-6, filed on November 28, 2007)                                                                                              
|       | 
|2.3*   |  | Form of Amendment No. 1 to Deposit Agreement (including Form of American Depositary Receipt) (incorporated by reference to Exhibit (a)(i) to the Registration Statement (No. 333-147661) on Post Effective Amendment No. 1 to Form F-6,
filed on July 30, 2014)                                               
|       | 
|2.4*   |  | Letter from Citibank, N.A., as depositary, dated as of November 29, 2007, to the Registrant relating to the direct registration system for the American depositary receipts (incorporated by reference to Exhibit 2.3 to the
Registrants Annual Report (No. 001-32238) on Form 20-F, filed on April 16, 2008)
|       | 
|8.1**  |  | List of subsidiaries of LG Display Co., Ltd.                                                                                                                                                                                                                                                                  
|       | 
|12.1   |  | Section 302 certification of the Chief Executive Officer                                                                                                                                                                                                                                                      
|       | 
|12.2   |  | Section 302 certification of the Chief Financial Officer                                                                                                                                                                                                                                                      
|       | 
|13.1   |  | Section 906 certification of the Chief Executive Officer                                                                                                                                                                                                                                                      
|       | 
|13.2   |  | Section 906 certification of the Chief Financial Officer                                                                                                                                                                                                                                                      



|* | Filed previously.
|- | -----------------

|** | Incorporated by reference to Note 1 of the notes to the consolidated financial statements of LG Display Co., Ltd. included in this annual report.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------



96



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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.



LG DISPLAY CO., LTD.
(Registrant)/s/ SANG BEOM HAN(Signature)Name:

Sang Beom HanTitle:

Representative Director, President and Chief Executive Officer/s/ SANGDON KIM(Signature)Name:

Sangdon KimTitle:

Director, Senior Vice President and Chief Financial Officer


Date: April 29, 2016



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##### Table of Contents

INDEX TO FINANCIAL STATEMENTS



|                                                                                                             |  |  |      | 
|------------------------------------------------------------------------------------------------------------ |  |  | ---- | 
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                                      |  |  | F-2  | 
|                                                                                                             | 
|CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2014 AND 2015                               |  |  | F-4  | 
|                                                                                                             | 
|CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2013,
 2014 AND 2015 |  |  | F-6  | 
|                                                                                                             | 
|CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31,
 2013, 2014 AND 2015           |  |  | F-8  | 
|                                                                                                             | 
|CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2013, 2014
 AND 2015                  |  |  | F-10 | 
|                                                                                                             | 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                                   |  |  | F-13 | 



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

LG
Display Co., Ltd.:

We have audited the accompanying consolidated statements of financial position of LG Display Co., Ltd. and subsidiaries as of
December 31, 2014 and 2015 and the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2015. We also have audited LG Display Co.,
Ltd.s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013). LG Display Co., Ltd.s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over
financial reporting, included in Managements Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on LG Display Co.,
Ltd.s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective
internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial
statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



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In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position of LG Display Co., Ltd. and subsidiaries as of December 31, 2014 and 2015 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2015, in conformity
with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also, in our opinion, LG Display Co., Ltd. maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2015, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013).

/s/ KPMG Samjong Accounting Corp.

Seoul, Korea

April 27, 2016



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Financial Position

As of
December 31, 2014 and 2015



|                                          |  |               |  |                   |            |  |                   |  |            | 
|----------------------------------------- |  | ------------- |  | ----------------- | ---------- |  | ----------------- |  | ---------- | 
|(In millions of won)                      |  | Note          |  | December 31, 2014 |            |  | December 31, 2015 | 
|Assets                                    |  |               |  |                   |            |  |                   |  |            | 
|Cash and cash equivalents                 |  | 6, 13         |  | W                 | 889,839    |  |                   |  | 751,662    | 
|Deposits in banks                         |  | 6, 13         |  |                   | 1,526,482  |  |                   |  | 1,772,337  | 
|Trade accounts and notes receivable, net  |  | 7, 13, 20, 23 |  |                   | 3,444,477  |  |                   |  | 4,097,836  | 
|Other accounts receivable, net            |  | 7, 13         |  |                   | 119,478    |  |                   |  | 105,815    | 
|Other current financial assets            |  | 9, 13         |  |                   | 3,250      |  |                   |  | 4,904      | 
|Inventories                               |  | 8             |  |                   | 2,754,098  |  |                   |  | 2,351,669  | 
|Prepaid income taxes                      |  |               |  |                   | 6,340      |  |                   |  | 3,469      | 
|Other current assets                      |  | 7             |  |                   | 496,665    |  |                   |  | 443,942    | 
|                                          |  |               |  |                   |            |  |                   |  |            | 
|Total current assets                      |  |               |  |                   | 9,240,629  |  |                   |  | 9,531,634  | 
|Deposits in banks                         |  | 6,13          |  |                   | 8,427      |  |                   |  | 13         | 
|Investments in equity accounted investees |  | 10            |  |                   | 407,644    |  |                   |  | 384,755    | 
|Other non-current financial assets        |  | 9, 13         |  |                   | 33,611     |  |                   |  | 49,732     | 
|Property, plant and equipment, net        |  | 11, 24        |  |                   | 11,402,866 |  |                   |  | 10,546,020 | 
|Intangible assets, net                    |  | 12, 24        |  |                   | 576,670    |  |                   |  | 838,730    | 
|Deferred tax assets                       |  | 29            |  |                   | 1,036,507  |  |                   |  | 930,629    | 
|Other non-current assets                  |  | 7             |  |                   | 260,669    |  |                   |  | 295,647    | 
|                                          |  |               |  |                   |            |  |                   |  |            | 
|Total non-current assets                  |  |               |  |                   | 13,726,394 |  |                   |  | 13,045,526 | 
|                                          |  |               |  |                   |            |  |                   |  |            | 
|Total assets                              |  |               |  | W                 | 22,967,023 |  |                   |  | 22,577,160 | 
|                                          |  |               |  |                   |            |  |                   |  |            | 
|Liabilities                               |  |               |  |                   |            |  |                   |  |            | 
|Trade accounts and notes payable          |  | 13, 23        |  | W                 | 3,391,635  |  |                   |  | 2,764,694  | 
|Current financial liabilities             |  | 13, 14        |  |                   | 967,909    |  |                   |  | 1,416,112  | 
|Other accounts payable                    |  | 13            |  |                   | 1,508,158  |  |                   |  | 1,499,722  | 
|Accrued expenses                          |  |               |  |                   | 740,492    |  |                   |  | 633,113    | 
|Income tax payable                        |  |               |  |                   | 227,714    |  |                   |  | 91,726     | 
|Provisions                                |  | 15            |  |                   | 193,884    |  |                   |  | 109,897    | 
|Advances received                         |  |               |  |                   | 488,379    |  |                   |  | 51,127     | 
|Other current liabilities                 |  | 19            |  |                   | 31,385     |  |                   |  | 40,321     | 
|                                          |  |               |  |                   |            |  |                   |  |            | 
|Total current liabilities                 |  |               |  |                   | 7,549,556  |  |                   |  | 6,606,712  | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Financial Position, Continued

As of December 31, 2014 and 2015



|                                                                       |  |        |  |   |                   |   |  |  |                   |  
|---------------------------------------------------------------------- |  | ------ |  | - | ----------------- | - |  |  | ----------------- | -
|(In millions of won)                                                   |  | Note   |  |   | December 31, 2014 |   |  |  | December 31, 2015 |  
|Non-current financial liabilities                                      |  | 13, 14 |  | W | 3,279,477         |   |  |  | 2,808,204         |  
|Non-current provisions                                                 |  | 15     |  |   | 8,014             |   |  |  | 11,817            |  
|Defined benefit liabilities, net                                       |  | 18     |  |   | 324,180           |   |  |  | 353,798           |  
|Deferred tax liabilities                                               |  | 29     |  |   | 245               |   |  |  | 34,663            |  
|Other non-current liabilities                                          |  | 19     |  |   | 22,141            |   |  |  | 57,010            |  
|                                                                       |  |        |  |   |                   |   |  |  |                   |  
|Total non-current liabilities                                          |  |        |  |   | 3,634,057         |   |  |  | 3,265,492         |  
|                                                                       |  |        |  |   |                   |   |  |  |                   |  
|Total liabilities                                                      |  |        |  |   | 11,183,613        |   |  |  | 9,872,204         |  
|                                                                       |  |        |  |   |                   |   |  |  |                   |  
|Equity                                                                 |  |        |  |   |                   |   |  |  |                   |  
|Share capital                                                          |  | 22     |  |   | 1,789,079         |   |  |  | 1,789,079         |  
|Share premium                                                          |  |        |  |   | 2,251,113         |   |  |  | 2,251,113         |  
|Reserves                                                               |  | 22     |  |   | (63,843           | ) |  |  | (5,766            | )
|Retained earnings                                                      |  |        |  |   | 7,455,063         |   |  |  | 8,158,526         |  
|                                                                       |  |        |  |   |                   |   |  |  |                   |  
|Total equity attributable to equity holders of the Controlling Company |  |        |  |   | 11,431,412        |   |  |  | 12,192,952        |  
|                                                                       |  |        |  |   |                   |   |  |  |                   |  
|Non-controlling interests                                              |  |        |  |   | 351,998           |   |  |  | 512,004           |  
|                                                                       |  |        |  |   |                   |   |  |  |                   |  
|Total equity                                                           |  |        |  |   | 11,783,410        |   |  |  | 12,704,956        |  
|                                                                       |  |        |  |   |                   |   |  |  |                   |  
|Total liabilities and equity                                           |  |        |  | W | 22,967,023        |   |  |  | 22,577,160        |  
|                                                                       |  |        |  |   |                   |   |  |  |                   |  

See accompanying notes to the consolidated financial statements.



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the
years ended December 31, 2013, 2014 and 2015



|                                                                |  |        |  |      |             |   |      |  |             |      |  |  |             |  
|--------------------------------------------------------------- |  | ------ |  | ---- | ----------- | - | ---- |  | ----------- | ---- |  |  | ----------- | -
|(In millions of won, except earnings per share)                 |  | Note   |  | 2013 |             |   | 2014 |  |             | 2015 | 
|Revenue                                                         |  | 23, 24 |  | W    | 27,033,035  |   |      |  | 26,455,529  |      |  |  | 28,383,884  |  
|Cost of sales                                                   |  | 8, 23  |  |      | (23,524,851 | ) |      |  | (22,667,134 | )    |  |  | (24,069,572 | )
|                                                                |  |        |  |      |             |   |      |  |             |      |  |  |             |  
|Gross profit                                                    |  |        |  |      | 3,508,184   |   |      |  | 3,788,395   |      |  |  | 4,314,312   |  
|Selling expenses                                                |  | 17     |  |      | (732,199    | ) |      |  | (746,686    | )    |  |  | (878,368    | )
|Administrative expenses                                         |  | 17     |  |      | (517,622    | ) |      |  | (520,160    | )    |  |  | (592,517    | )
|Research and development expenses                               |  |        |  |      | (1,095,727  | ) |      |  | (1,164,294  | )    |  |  | (1,217,929  | )
|Other income                                                    |  | 25     |  |      | 1,109,432   |   |      |  | 1,071,903   |      |  |  | 1,273,901   |  
|Other expenses                                                  |  | 25     |  |      | (1,268,588  | ) |      |  | (1,095,071  | )    |  |  | (1,326,782  | )
|Finance income                                                  |  | 27     |  |      | 185,011     |   |      |  | 105,443     |      |  |  | 158,829     |  
|Finance costs                                                   |  | 27     |  |      | (381,851    | ) |      |  | (215,536    | )    |  |  | (316,229    | )
|Equity in income of equity accounted investees, net             |  |        |  |      | 23,665      |   |      |  | 17,963      |      |  |  | 18,765      |  
|                                                                |  |        |  |      |             |   |      |  |             |      |  |  |             |  
|Profit before income tax                                        |  |        |  |      | 830,305     |   |      |  | 1,241,957   |      |  |  | 1,433,982   |  
|Income tax expense                                              |  | 28     |  |      | (411,332    | ) |      |  | (324,553    | )    |  |  | (410,526    | )
|                                                                |  |        |  |      |             |   |      |  |             |      |  |  |             |  
|Profit for the year                                             |  |        |  |      | 418,973     |   |      |  | 917,404     |      |  |  | 1,023,456   |  
|                                                                |  |        |  |      |             |   |      |  |             |      |  |  |             |  
|Other comprehensive income (loss)                               |  |        |  |      |             |   |      |  |             |      |  |  |             |  
|Items that will never be reclassified to profit or loss         |  |        |  |      |             |   |      |  |             |      |  |  |             |  
|Remeasurements of net defined benefit liabilities               |  | 18,28  |  |      | 998         |   |      |  | (147,633    | )    |  |  | (110,864    | )
|Related income tax                                              |  | 18,28  |  |      | (334        | ) |      |  | 35,773      |      |  |  | 26,682      |  
|                                                                |  |        |  |      |             |   |      |  |             |      |  |  |             |  
|                                                                |  |        |  |      | 664         |   |      |  | (111,860    | )    |  |  | (84,182     | )
|Items that are or may be reclassified to profit or loss         |  |        |  |      |             |   |      |  |             |      |  |  |             |  
|Net change in fair value of available-for-sale financial assets |  | 27,28  |  |      | 826         |   |      |  | 982         |      |  |  | 13,297      |  
|Foreign currency translation differences for foreign operations |  | 27,28  |  |      | (22,100     | ) |      |  | 37,739      |      |  |  | 50,829      |  
|Share of loss from sale of treasury stocks by associates        |  | 28     |  |      | (802        | ) |      |  | (1,360      | )    |  |  | (325        | )
|Related income tax                                              |  | 28     |  |      | (225        | ) |      |  | (119        | )    |  |  | 214         |  
|                                                                |  |        |  |      |             |   |      |  |             |      |  |  |             |  
|                                                                |  |        |  |      | (22,301     | ) |      |  | 37,242      |      |  |  | 64,015      |  
|                                                                |  |        |  |      |             |   |      |  |             |      |  |  |             |  



F-6



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income, Continued

For the years ended December 31, 2013, 2014 and 2015



|                                                         |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|-------------------------------------------------------- |  | ---- |  | ---- | ------- | - | ---- |  | ------- | ---- |  |  | --------- | -
|(In millions of won, except earnings per share)          |  | Note |  | 2013 |         |   | 2014 |  |         | 2015 | 
|Other comprehensive loss for the year, net of income tax |  |      |  |      | (21,637 | ) |      |  | (74,618 | )    |  |  | (20,167   | )
|                                                         |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|Total comprehensive income for the year                  |  |      |  | W    | 397,336 |   |      |  | 842,786 |      |  |  | 1,003,289 |  
|                                                         |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|Profit (loss) attributable to:                           |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|Owners of the Controlling Company                        |  |      |  |      | 426,118 |   |      |  | 904,268 |      |  |  | 966,553   |  
|Non-controlling interests                                |  |      |  |      | (7,145  | ) |      |  | 13,136  |      |  |  | 56,903    |  
|                                                         |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|Profit for the year                                      |  |      |  | W    | 418,973 |   |      |  | 917,404 |      |  |  | 1,023,456 |  
|                                                         |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|Total comprehensive income (loss) attributable to:       |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|Owners of the Controlling Company                        |  |      |  |      | 404,478 |   |      |  | 820,239 |      |  |  | 940,448   |  
|Non-controlling interests                                |  |      |  |      | (7,142  | ) |      |  | 22,547  |      |  |  | 62,841    |  
|                                                         |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|Total comprehensive income for the year                  |  |      |  | W    | 397,336 |   |      |  | 842,786 |      |  |  | 1,003,289 |  
|                                                         |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|Earnings per share (In won)                              |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|Basic earnings per share                                 |  | 30   |  | W    | 1,191   |   |      |  | 2,527   |      |  |  | 2,701     |  
|                                                         |  |      |  |      |         |   |      |  |         |      |  |  |           |  
|Diluted earnings per share                               |  | 30   |  | W    | 1,191   |   |      |  | 2,527   |      |  |  | 2,701     |  
|                                                         |  |      |  |      |         |   |      |  |         |      |  |  |           |  

See accompanying notes to the consolidated financial statements.



F-7



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the
years ended December 31, 2013, 2014 and 2015



|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|-------------------------------------------------------------- |  | ------------------------------------------------- | --------- |  | ------- |  | --------- | --------------------- |  |  | ---------- | - |  | ----------- | ----- | - | -------- |  | ------- | --------------- |  |  | --------- | - |  |  | ------- | - |  |  | ---------- | -
|                                                               |  | Attributable to owners of the Controlling Company |           |  |         |  |           |                       | 
|                                                               |  |                                                   |           |  |         |  |           | Share of gain (loss)  |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |  
|                                                               |  | Share                                             |           |  | Share   |  |           | from sale of treasury |  |  | Fair value |   |  | Translation |       |   | Retained |  |         | Non-controlling |  |  | Total     |  
|(In millions of won)                                           |  | capital                                           |           |  | Premium |  |           | stocks by associates  |  |  | reserve    |   |  | reserve     |       |   | earnings |  |         | interests       |  |  | equity    |  
|Balances at January 1, 2013                                    |  | W                                                 | 1,789,079 |  |         |  | 2,251,113 |                       |  |  | 548        |   |  |             | (66   | ) |          |  | (69,852 | )               |  |  | 6,238,989 |   |  |  | 30,369  |   |  |  | 10,240,180 |  
|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Total comprehensive income (loss) for the year                 |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Profit (loss) for the year                                     |  |                                                   |          |  |         |  |          |                       |  |  |           |   |  |             |      |   |          |  |        |                 |  |  | 426,118   |   |  |  | (7,145  | ) |  |  | 418,973    |  
|Other comprehensive income (loss)                              |  |                                                   |          |  |         |  |          |                       |  |  | (802       | ) |  |             | 638   |   |          |  | (22,140 | )               |  |  | 664       |   |  |  | 3       |   |  |  | (21,637    | )
|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|                                                               |  | W                                                 |          |  |         |  |          |                       |  |  | (802       | ) |  |             | 638   |   |          |  | (22,140 | )               |  |  | 426,782   |   |  |  | (7,142  | ) |  |  | 397,336    |  
|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Transaction with owners, recognized directly in equity         |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Capital contribution from non-controlling interests and others |  |                                                   |          |  |         |  |          |                       |  |  |           |   |  |             |      |   |          |  |        |                 |  |  | (3,116    | ) |  |  | 163,020 |   |  |  | 159,904    |  
|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Balances at December 31, 2013                                  |  | W                                                 | 1,789,079 |  |         |  | 2,251,113 |                       |  |  | (254       | ) |  |             | 572   |   |          |  | (91,992 | )               |  |  | 6,662,655 |   |  |  | 186,247 |   |  |  | 10,797,420 |  
|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Balances at January 1, 2014                                    |  | W                                                 | 1,789,079 |  |         |  | 2,251,113 |                       |  |  | (254       | ) |  |             | 572   |   |          |  | (91,992 | )               |  |  | 6,662,655 |   |  |  | 186,247 |   |  |  | 10,797,420 |  
|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Total comprehensive income (loss) for the year                 |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Profit for the year                                            |  |                                                   |          |  |         |  |          |                       |  |  |           |   |  |             |      |   |          |  |        |                 |  |  | 904,268   |   |  |  | 13,136  |   |  |  | 917,404    |  
|Other comprehensive income (loss)                              |  |                                                   |          |  |         |  |          |                       |  |  | (1,360     | ) |  |             | 796   |   |          |  | 28,395  |                 |  |  | (111,860  | ) |  |  | 9,411   |   |  |  | (74,618    | )
|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|                                                               |  | W                                                 |          |  |         |  |          |                       |  |  | (1,360     | ) |  |             | 796   |   |          |  | 28,395  |                 |  |  | 792,408   |   |  |  | 22,547  |   |  |  | 842,786    |  
|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Transaction with owners, recognized directly in equity         |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Decrease of share interest in non-controlling interests        |  |                                                   |          |  |         |  |          |                       |  |  |           |   |  |             |      |   |          |  |        |                 |  |  |          |   |  |  | (2,955  | ) |  |  | (2,955     | )
|Capital contribution from non-controlling interests            |  |                                                   |          |  |         |  |          |                       |  |  |           |   |  |             |      |   |          |  |        |                 |  |  |          |   |  |  | 146,159 |   |  |  | 146,159    |  
|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Balances at December 31, 2014                                  |  | W                                                 | 1,789,079 |  |         |  | 2,251,113 |                       |  |  | (1,614     | ) |  |             | 1,368 |   |          |  | (63,597 | )               |  |  | 7,455,063 |   |  |  | 351,998 |   |  |  | 11,783,410 |  
|                                                               |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |       |   |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  



F-8



---

##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2013, 2014 and 2015



|                                                       |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |        |  |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|------------------------------------------------------ |  | ------------------------------------------------- | --------- |  | ------- |  | --------- | --------------------- |  |  | ---------- | - |  | ----------- | ------ |  | -------- |  | ------- | --------------- |  |  | --------- | - |  |  | ------- | - |  |  | ---------- | -
|                                                       |  | Attributable to owners of the Controlling Company |           |  |         |  |           |                       | 
|                                                       |  |                                                   |           |  |         |  |           | Share of gain (loss)  |  |  |            |   |  |             |        |  |          |  |         |                 |  |  |           |  
|                                                       |  | Share                                             |           |  | Share   |  |           | from sale of treasury |  |  | Fair value |   |  | Translation |        |  | Retained |  |         | Non-controlling |  |  | Total     |  
|(In millions of won)                                   |  | capital                                           |           |  | Premium |  |           | stocks by associates  |  |  | reserve    |   |  | reserve     |        |  | earnings |  |         | interests       |  |  | equity    |  
|Balances at January 1, 2015                            |  | W                                                 | 1,789,079 |  |         |  | 2,251,113 |                       |  |  | (1,614     | ) |  |             | 1,368  |  |          |  | (63,597 | )               |  |  | 7,455,063 |   |  |  | 351,998 |   |  |  | 11,783,410 |  
|                                                       |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |        |  |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Total comprehensive income (loss) for the year         |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |        |  |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Profit for the year                                    |  |                                                   |          |  |         |  |          |                       |  |  |           |   |  |             |       |  |          |  |        |                 |  |  | 966,553   |   |  |  | 56,903  |   |  |  | 1,023,456  |  
|Other comprehensive income (loss)                      |  |                                                   |          |  |         |  |          |                       |  |  | (325       | ) |  |             | 13,367 |  |          |  | 45,035  |                 |  |  | (84,182   | ) |  |  | 5,938   |   |  |  | (20,167    | )
|                                                       |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |        |  |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|                                                       |  | W                                                 |          |  |         |  |          |                       |  |  | (325       | ) |  |             | 13,367 |  |          |  | 45,035  |                 |  |  | 882,371   |   |  |  | 62,841  |   |  |  | 1,003,289  |  
|                                                       |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |        |  |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Transaction with owners, recognized directly in equity |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |        |  |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Dividends to equity holders                            |  |                                                   |          |  |         |  |          |                       |  |  |           |   |  |             |       |  |          |  |        |                 |  |  | (178,908  | ) |  |  | (5,743  | ) |  |  | (184,651   | )
|Capital contribution from non-controlling interests    |  |                                                   |          |  |         |  |          |                       |  |  |           |   |  |             |       |  |          |  |        |                 |  |  |          |   |  |  | 102,908 |   |  |  | 102,908    |  
|                                                       |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |        |  |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  
|Balances at December 31, 2015                          |  | W                                                 | 1,789,079 |  |         |  | 2,251,113 |                       |  |  | (1,939     | ) |  |             | 14,735 |  |          |  | (18,562 | )               |  |  | 8,158,526 |   |  |  | 512,004 |   |  |  | 12,704,956 |  
|                                                       |  |                                                   |           |  |         |  |           |                       |  |  |            |   |  |             |        |  |          |  |         |                 |  |  |           |   |  |  |         |   |  |  |            |  

See accompanying notes to the consolidated financial statements.



F-9



---

##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended
December 31, 2013, 2014 and 2015



|                                                           |  |        |  |      |            |   |      |  |            |      |  |  |            |  
|---------------------------------------------------------- |  | ------ |  | ---- | ---------- | - | ---- |  | ---------- | ---- |  |  | ---------- | -
|(In millions of won)                                       |  | Note   |  | 2013 |            |   | 2014 |  |            | 2015 | 
|Cash flows from operating activities:                      |  |        |  |      |            |   |      |  |            |      |  |  |            |  
|Profit for the year                                        |  |        |  | W    | 418,973    |   |      |  | 917,404    |      |  |  | 1,023,456  |  
|Adjustments for:                                           |  |        |  |      |            |   |      |  |            |      |  |  |            |  
|Income tax expense                                         |  | 28     |  |      | 411,332    |   |      |  | 324,553    |      |  |  | 410,526    |  
|Depreciation                                               |  | 11, 16 |  |      | 3,598,472  |   |      |  | 3,222,085  |      |  |  | 2,969,394  |  
|Amortization of intangible assets                          |  | 12, 16 |  |      | 236,046    |   |      |  | 270,226    |      |  |  | 406,462    |  
|Gain on foreign currency translation                       |  |        |  |      | (76,111    | ) |      |  | (63,626    | )    |  |  | (73,057    | )
|Loss on foreign currency translation                       |  |        |  |      | 55,870     |   |      |  | 89,453     |      |  |  | 80,084     |  
|Expenses related to defined benefit plans                  |  | 18, 26 |  |      | 159,453    |   |      |  | 196,756    |      |  |  | 199,033    |  
|Gain on disposal of property, plant and equipment          |  |        |  |      | (9,620     | ) |      |  | (8,989     | )    |  |  | (18,179    | )
|Loss on disposal of property, plant and equipment          |  |        |  |      | 1,639      |   |      |  | 2,173      |      |  |  | 4,037      |  
|Impairment loss on property, plant and equipment           |  |        |  |      | 853        |   |      |  | 8,097      |      |  |  | 3,027      |  
|Impairment loss on inventories                             |  |        |  |      | 211,363    |   |      |  | 332,699    |      |  |  | 363,755    |  
|Bad debt expense (reversal)                                |  |        |  |      | (689       | ) |      |  | 495        |      |  |  | 682        |  
|Loss on disposal of intangible assets                      |  |        |  |      | 452        |   |      |  | 672        |      |  |  | 29         |  
|Impairment loss on intangible assets                       |  |        |  |      | 1,661      |   |      |  | 492        |      |  |  | 239        |  
|Reversal of impairment loss on intangible assets           |  |        |  |      | (296       | ) |      |  |           |      |  |  | (80        | )
|Finance income                                             |  |        |  |      | (52,862    | ) |      |  | (55,655    | )    |  |  | (81,572    | )
|Finance costs                                              |  |        |  |      | 163,183    |   |      |  | 148,129    |      |  |  | 222,699    |  
|Equity in income of equity method accounted investees, net |  | 10     |  |      | (23,665    | ) |      |  | (17,963    | )    |  |  | (18,765    | )
|Other income                                               |  |        |  |      | (412       | ) |      |  | (14,508    | )    |  |  | (12,454    | )
|Other expenses                                             |  |        |  |      | 351,953    |   |      |  | 277,128    |      |  |  | 269,995    |  
|                                                           |  |        |  |      |            |   |      |  |            |      |  |  |            |  
|                                                           |  |        |  |      | 5,447,595  |   |      |  | 5,629,621  |      |  |  | 5,749,311  |  
|Change in trade accounts and notes receivable              |  |        |  |      | (251,063   | ) |      |  | (921,928   | )    |  |  | (1,061,400 | )
|Change in other accounts receivable                        |  |        |  |      | 133,734    |   |      |  | (14,195    | )    |  |  | 38,411     |  
|Change in other current assets                             |  |        |  |      | 89,456     |   |      |  | (219,599   | )    |  |  | 87,130     |  
|Change in inventories                                      |  |        |  |      | 245,403    |   |      |  | (1,156,196 | )    |  |  | 41,107     |  
|Change in other non-current assets                         |  |        |  |      | (120,054   | ) |      |  | (93,987    | )    |  |  | (78,859    | )
|Change in trade accounts and notes payable                 |  |        |  |      | (1,110,098 | ) |      |  | 390,046    |      |  |  | (670,565   | )
|Change in other accounts payable                           |  |        |  |      | (289,441   | ) |      |  | (229,679   | )    |  |  | (459,730   | )
|Change in accrued expenses                                 |  |        |  |      | 68,162     |   |      |  | 245,373    |      |  |  | (66,071    | )
|Change in other current liabilities                        |  |        |  |      | (7,846     | ) |      |  | (18,242    | )    |  |  | 14,015     |  
|Change in other non-current liabilities                    |  |        |  |      | 9,808      |   |      |  | 18,248     |      |  |  | 48,240     |  
|Change in provisions                                       |  |        |  |      | (315,266   | ) |      |  | (187,021   | )    |  |  | (143,228   | )
|Change in defined benefit liabilities, net                 |  |        |  |      | (19,627    | ) |      |  | (339,482   | )    |  |  | (279,672   | )
|                                                           |  |        |  |      |            |   |      |  |            |      |  |  |            |  
|                                                           |  |        |  |      | 3,880,763  |   |      |  | 3,102,959  |      |  |  | 3,218,689  |  



F-10



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

For the
years ended December 31, 2013, 2014 and 2015



|                                                                       |  |      |             |   |      |  |            |      |  |  |            |  
|---------------------------------------------------------------------- |  | ---- | ----------- | - | ---- |  | ---------- | ---- |  |  | ---------- | -
|(In millions of won)                                                   |  | 2013 |             |   | 2014 |  |            | 2015 | 
|Income taxes paid                                                      |  | W    | (159,286)   |   |      |  | (110,720   | )    |  |  | (414,007   | )
|Interests received                                                     |  |      | 36,686      |   |      |  | 39,452     |      |  |  | 58,860     |  
|Interests paid                                                         |  |      | (173,390    | ) |      |  | (167,170   | )    |  |  | (136,965   | )
|                                                                       |  |      |             |   |      |  |            |      |  |  |            |  
|Net cash provided by operating activities                              |  | W    | 3,584,773   |   |      |  | 2,864,521  |      |  |  | 2,726,577  |  
|                                                                       |  |      |             |   |      |  |            |      |  |  |            |  
|Cash flows from investing activities:                                  |  |      |             |   |      |  |            |      |  |  |            |  
|Dividends received                                                     |  | W    | 14,582      |   |      |  | 1,340      |      |  |  | 25,577     |  
|Proceeds from withdrawal of deposits in banks                          |  |      | 1,657,082   |   |      |  | 1,651,176  |      |  |  | 2,306,672  |  
|Increase in deposits in banks                                          |  |      | (2,644,204  | ) |      |  | (1,884,533 | )    |  |  | (2,544,114 | )
|Acquisition of investments in equity accounted investees               |  |      | (18,744     | ) |      |  | (324       | )    |  |  | (30,647    | )
|Proceeds from disposal of investments in equity accounted investees    |  |      | 5,023       |   |      |  | 8,832      |      |  |  | 7,263      |  
|Acquisition of property, plant and equipment                           |  |      | (3,473,059  | ) |      |  | (2,982,549 | )    |  |  | (2,364,988 | )
|Proceeds from disposal of property, plant and equipment                |  |      | 39,838      |   |      |  | 39,647     |      |  |  | 447,320    |  
|Acquisition of intangible assets                                       |  |      | (184,754    | ) |      |  | (353,298   | )    |  |  | (294,638   | )
|Proceeds from disposal of intangible assets                            |  |      | 1,902       |   |      |  |           |      |  |  | 1,135      |  
|Government grants received                                             |  |      | 59,629      |   |      |  | 49,424     |      |  |  | 5,017      |  
|Proceeds from collection of short-term loans                           |  |      | 2           |   |      |  | 8          |      |  |  |           |  
|Proceeds from settlement of derivatives                                |  |      |            |   |      |  |           |      |  |  | (35        | )
|Increase in long-term loans                                            |  |      |            |   |      |  |           |      |  |  | (16,516    | )
|Proceeds from disposal of other financial assets                       |  |      |            |   |      |  | 82         |      |  |  | 2,263      |  
|Acquisition of other non-current financial assets                      |  |      | (5,410      | ) |      |  | (5,129     | )    |  |  | (6,145     | )
|Proceeds from disposal of other non-current financial assets           |  |      | 43,792      |   |      |  | 15,500     |      |  |  |           |  
|Net cash inflow from disposal of subsidiaries, net of cash transferred |  |      |            |   |      |  | 8,545      |      |  |  |           |  
|Acquisition of businesses, net of cash acquired                        |  |      |            |   |      |  |           |      |  |  | (270,093   | )
|                                                                       |  |      |             |   |      |  |            |      |  |  |            |  
|Net cash used in investing activities                                  |  | W    | (4,504,321) |   |      |  | (3,451,279 | )    |  |  | (2,731,929 | )
|                                                                       |  |      |             |   |      |  |            |      |  |  |            |  



F-11



---

##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

For the
years ended December 31, 2013, 2014 and 2015



|                                                               |  |      |            |   |      |  |           |      |  |  |          |  
|-------------------------------------------------------------- |  | ---- | ---------- | - | ---- |  | --------- | ---- |  |  | -------- | -
|(In millions of won)                                           |  | 2013 |            |   | 2014 |  |           | 2015 | 
|Cash flows from financing activities:                          |  |      |            |   |      |  |           |      |  |  |          |  
|Proceeds from short-term borrowings                            |  | W    | 1,430,041  |   |      |  | 219,839   |      |  |  |         |  
|Repayments of short-term borrowings                            |  |      | (1,444,717 | ) |      |  | (14,747   | )    |  |  | (223,626 | )
|Proceeds from issuance of debentures                           |  |      | 587,603    |   |      |  | 597,563   |      |  |  | 298,778  |  
|Proceeds from long-term debt                                   |  |      | 372,785    |   |      |  | 846,759   |      |  |  | 901,451  |  
|Repayments of long-term debt                                   |  |      | (301,229   | ) |      |  | (503,618  | )    |  |  | (324,570 | )
|Repayments of current portion of long-term debt and debentures |  |      | (1,195,340 | ) |      |  | (887,296  | )    |  |  | (744,788 | )
|Decrease in non-controlling interests                          |  |      |           |   |      |  |          |      |  |  | (5,743   | )
|Increase in non-controlling interests                          |  |      | 159,873    |   |      |  | 146,159   |      |  |  | 102,908  |  
|Dividends paid                                                 |  |      |           |   |      |  |          |      |  |  | (178,908 | )
|                                                               |  |      |            |   |      |  |           |      |  |  |          |  
|Net cash provided by (used in) financing activities            |  |      | (390,984   | ) |      |  | 404,659   |      |  |  | (174,498 | )
|                                                               |  |      |            |   |      |  |           |      |  |  |          |  
|Net decrease in cash and cash equivalents                      |  |      | (1,310,532 | ) |      |  | (182,099  | )    |  |  | (179,850 | )
|Cash and cash equivalents at January 1                         |  |      | 2,338,661  |   |      |  | 1,021,870 |      |  |  | 889,839  |  
|Effect of exchange rate fluctuations on cash held              |  |      | (6,259     | ) |      |  | 50,068    |      |  |  | 41,673   |  
|                                                               |  |      |            |   |      |  |           |      |  |  |          |  
|Cash and cash equivalents at December 31                       |  | W    | 1,021,870  |   |      |  | 889,839   |      |  |  | 751,662  |  
|                                                               |  |      |            |   |      |  |           |      |  |  |          |  

See accompanying notes to the consolidated financial statements.



F-12



---

##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|1. | Reporting Entity
|-- | ----------------



| | (a) | Description of the Controlling Company
| | --- | --------------------------------------

LG Display Co., Ltd. (the Controlling
Company) was incorporated in February 1985 under its original name of LG Soft, Ltd. as a wholly owned subsidiary of LG Electronics Inc. In 1998, LG Electronics Inc. and LG Semicon Co., Ltd. transferred their respective Thin Film Transistor
Liquid Crystal Display (TFT-LCD) related business to the Controlling Company. The main business of the Controlling Company and its subsidiaries is to manufacture and sell TFT-LCD panels. The Controlling Company is a stock company
(Jusikhoesa) domiciled in the Republic of Korea with its address at 128, Yeouidae-ro, Yeongdeungpo-gu, Seoul, the Republic of Korea. In July 1999, LG Electronics Inc. and Koninklijke Philips Electronics N.V. (Philips) entered
into a joint venture agreement. Pursuant to the agreement, the Controlling Company changed its name to LG.Philips LCD Co., Ltd. However, in February 2008, the Controlling Company changed its name to LG Display Co., Ltd. considering the decrease of
Philipss share interest in the Controlling Company and the possibility of its business expansion to other display products including Organic Light Emitting Diode (OLED) and Flexible Display products. As of December 31, 2015,
LG Electronics Inc. owns 37.9% (135,625,000 shares) of the Controlling Companys common stock.

As of December 31, 2015, the
Controlling Company has TFT-LCD manufacturing plants, an OLED manufacturing plant and a Research & Development Center in Paju and TFT-LCD manufacturing plants in Gumi. The Controlling Company has overseas subsidiaries located in North
America, Europe and Asia.

The Controlling Companys common stock is listed on the Korea Exchange under the identifying code 034220.
As of December 31, 2015, there are 357,815,700 shares of common stock outstanding. The Controlling Companys common stock is also listed on the New York Stock Exchange in the form of American Depository Shares (ADSs) under the
symbol LPL. One ADS represents one-half of one share of common stock. As of December 31, 2015, there are 29,554,854 ADSs outstanding.



F-13



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|1. | Reporting Entity, Continued
|-- | ---------------------------



| | (b) | Consolidated Subsidiaries as of December 31, 2015
| | --- | -------------------------------------------------

(In millions)

|                                        |  |                   |  |                       |  |                 |  |                      |  |                                         |  |               
|--------------------------------------- |  | ----------------- |  | --------------------- |  | --------------- |  | -------------------- |  | --------------------------------------- |  | --------------
|Subsidiaries                            |  | Location          |  | Percentageofownership |  | Fiscal
year end |  | Date ofincorporation |  | Business                                |  | Capital
stocks
|LG Display America, Inc.                |  | San Jose, U.S.A.  |  | 100%                  |  | December 31     |  | September 24, 1999   |  | Sell TFT-LCD products                   |  | USD 411       
|                                        |  |                   |  |                       |  |                
|LG Display Japan Co., Ltd.              |  | Tokyo, Japan      |  | 100%                  |  | December 31     |  | October 12, 1999     |  | Sell TFT-LCD Products                   |  | JPY 95        
|                                        |  |                   |  |                       |  |                
|LG Display Germany GmbH                 |  | Ratingen, Germany |  | 100%                  |  | December 31     |  | November 5, 1999     |  | Sell TFT-LCD products                   |  | EUR 1         
|                                        |  |                   |  |                       |  |                
|LG Display Taiwan Co., Ltd.             |  | Taipei, Taiwan    |  | 100%                  |  | December 31     |  | April 12,
1999       |  | Sell TFT-LCD products                   |  | NTD 116       
|                                        |  |                   |  |                       |  |                
|LG Display Nanjing Co., Ltd.            |  | Nanjing, China    |  | 100%                  |  | December 31     |  | July 15,
2002        |  | Manufacture and sell TFT-LCD products   |  | CNY 2,937     
|                                        |  |                   |  |                       |  |                
|LG Display Shanghai Co., Ltd.           |  | Shanghai,
China   |  | 100%                  |  | December 31     |  | January 16,
2003     |  | Sell TFT-LCD products                   |  | CNY 4         
|                                        |  |                   |  |                       |  |                
|LG Display Poland Sp. z o.o.            |  | Wroclaw, Poland   |  | 100%                  |  | December 31     |  | September 6, 2005    |  | Manufacture and sell TFT-LCD products   |  | PLN 511       
|                                        |  |                   |  |                       |  |                
|LG Display Guangzhou Co., Ltd.          |  | Guangzhou,
China  |  | 100%                  |  | December 31     |  | June 30,
2006        |  | Manufacture and sell TFT-LCD products   |  | CNY 1,655     
|                                        |  |                   |  |                       |  |                
|LG Display Shenzhen Co., Ltd.           |  | Shenzhen,
China   |  | 100%                  |  | December 31     |  | August 28,
2007      |  | Sell TFT-LCD products                   |  | CNY 4         
|                                        |  |                   |  |                       |  |                
|LG Display Singapore Pte. Ltd.          |  | Singapore         |  | 100%                  |  | December 31     |  | January 12,
2009     |  | Sell TFT-LCD products                   |  | SGD 1.4       
|                                        |  |                   |  |                       |  |                
|L&T Display Technology (Fujian) Limited |  | Fujian, China     |  | 51%                   |  | December 31     |  | January 5,
2010      |  | Manufacture LCD module and monitor sets |  | CNY 116       
|                                        |  |                   |  |                       |  |                
|LG Display Yantai Co., Ltd. (*1)        |  | Yantai, China     |  | 100%                  |  | December 31     |  | April 19,
2010       |  | Manufacture and sell TFT-LCD products   |  | CNY 1,008     
|                                        |  |                   |  |                       |  |                
|LG Display U.S.A., Inc. (*2)            |  | McAllen, U.S.A.   |  | 100%                  |  | December 31     |  | October 26, 2011     |  | Manufacture and sell TFT-LCD products   |  | USD 0.2       



F-14



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|1. | Reporting Entity, Continued
|-- | ---------------------------



| | (b) | Consolidated Subsidiaries as of December 31, 2015, Continued
| | --- | ------------------------------------------------------------



(In millions)

|                                            |  |                   |  |                       |  |                 |  |                      |  |                                       |  |               
|------------------------------------------- |  | ----------------- |  | --------------------- |  | --------------- |  | -------------------- |  | ------------------------------------- |  | --------------
|Subsidiaries                                |  | Location          |  | Percentageofownership |  | Fiscal
year end |  | Date ofincorporation |  | Business                              |  | Capital
stocks
|Nanumnuri Co., Ltd.                         |  | Gumi,
South Korea |  | 100%                  |  | December 31     |  | March 21,
2012       |  | Janitorial services                   |  | KRW 800       
|LG Display China Co., Ltd. (*3)             |  | Guangzhou, China  |  | 70%                   |  | December 31     |  | December 10, 2012    |  | Manufacture and sell TFT-LCD products |  | CNY 8,147     
|Unified Innovative Technology, LLC          |  | Wilmington, U.S.A |  | 100%                  |  | December 31     |  | March 12,
2014       |  | Manage intellectual property          |  | USD 9         
|LG Display Guangzhou Trading Co., Ltd. (*4) |  | Guangzhou, China  |  | 100%                  |  | December 31     |  | April 28,
2015       |  | Sell TFT-LCD Products                 |  | CNY 1.2       
|Global OLED Technology, LLC (*5)            |  | Herndon,
U.S.A.   |  | 100%                  |  | December 31     |  | December 18, 2009    |  | Manage OLED intellectual property     |  | USD 138       



|(*1) | In December 2015, the Controlling Company invested in W9,426 million in cash for the capital increase of LG Display Yantai Co., Ltd. (LGDYT). There was no change in the Controlling
Companys ownership percentage in LGDYT as a result of this additional investment.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*2) | As of December 31, 2015, LG Display U.S.A., Inc. is in the process of voluntary liquidation and the Controlling Company received W12,125 million in cash as capital distribution from LG Display
U.S.A., Inc There was no change in the Controlling Companys ownership percentage in LG Display U.S.A., Inc
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*3) | In January 2015, the Controlling Company invested W134,619 million in cash for the capital increase of LG Display (China) Co., Ltd. (LGDCA). In addition, in January and August 2015, LG
Display Guangzhou Co., Ltd. (LGDGZ), a subsidiary of the Controlling Company, invested an aggregate of W118,936 million in cash for the capital increase of LGDCA. In 2015, the Controlling Companys ownership
percentage in LGDCA decreased from 56% to 52% and LGDGZs ownership percentage in LGDCA increased from 14% to 18%.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*4) | In April 2015, the Controlling Company established LG Display Guangzhou Trading Co., Ltd. to sell TFT-LCD products. As of December 31, 2015, the Controlling Company has a 100% equity interest of this subsidiary and
its capital stock amounts to W218 million.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*5) | In May 2015, the Controlling Company acquired 67% ownership in Global OLED Technology LLC from LG Electronics Inc., LG Chem Ltd. and Idemitsu Kosan Co., Ltd. and paid W54,025 million,
W2,990 million and W54,025 million, respectively, in cash. As a result, the Controlling Companys ownership percentage in Global OLED Technology increased from 33% to 100% in 2015 (Note 32).
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In August 2015, L&T Display Technology (Xiamen) Limited, a subsidiary of the Controlling Company, completed liquidation.



F-15



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|1. | Reporting Entity, Continued
|-- | ---------------------------



| | (b) | Consolidated Subsidiaries as of December 31, 2015, Continued
| | --- | ------------------------------------------------------------



W430,534 million and W531,304 million, respectively, are
attributable to the Controlling Company over the distributed dividends from consolidated subsidiaries for the years ended December 31, 2014 and 2015.



| | (c) | Associates and Joint Ventures (Equity Method Investees) as of December 31, 2015
| | --- | -------------------------------------------------------------------------------



|                                              |  |                       |  |                       |  |                 |  |                      |  |               |  |                                                                               |  |             
|--------------------------------------------- |  | --------------------- |  | --------------------- |  | --------------- |  | -------------------- |  | ------------- |  | ----------------------------------------------------------------------------- |  | ------------
|(In millions of won)                          |  |                       |  |                       |  |                 |  |                      |  |               |  |                                                                               |  |             
|                                              |  |                       |  |                       |  |                
|Associates and joint
ventures                 |  | Location              |  | Percentageofownership |  | Fiscal
year end |  | Date ofincorporation |  | Business      |  | Carryingamount                                                               
|                                              |  |                       |  | 2014                  |  | 2015            |  |                      |  |               |  |                                                                               |  |             
|Suzhou Raken Technology Co., Ltd. (*1)        |  | Suzhou,
China         |  | 51%                   |  | 51%             |  | December 31          |  | October
2008  |  | Manufacture and sell LCD modules and LCD TV sets                              |  | W    145,731
|                                              |  |                       |  |                       |  |                 | 
|Paju Electric Glass Co., Ltd.                 |  | Paju, South Korea     |  | 40%                   |  | 40%             |  | December 31          |  | January
2005  |  | Manufacture electric glass for FPDs                                           |  | 58,852      
|                                              |  |                       |  |                       |  |                 | 
|TLI Inc. (*2)                                 |  | Seongnam,
South Korea |  | 10%                   |  | 10%             |  | December 31          |  | October
1998  |  | Manufacture and sell semiconductor parts                                      |  | 5,351       
|                                              |  |                       |  |                       |  |                 | 
|AVACO Co., Ltd. (*2)                          |  | Daegu, South Korea    |  | 16%                   |  | 16%             |  | December 31          |  | January
2001  |  | Manufacture and sell equipment for FPDs                                       |  | 12,758      
|                                              |  |                       |  |                       |  |                 | 
|New Optics Ltd.                               |  | Yangju,
South Korea   |  | 46%                   |  | 46%             |  | December 31          |  | August
2005   |  | Manufacture back light parts for TFT- LCDs                                    |  | 48,491      
|                                              |  |                       |  |                       |  |                 | 
|LIG INVENIA Co, Ltd. (LIG ADP Co., Ltd.) (*2) |  | Seongnam, South Korea |  | 13%                   |  | 13%             |  | December 31          |  | January
2001  |  | Develop and manufacture equipment for FPDs                                    |  | 1,827       
|                                              |  |                       |  |                       |  |                 | 
|WooRee E&L Co., Ltd.                          |  | Ansan, South Korea    |  | 21%                   |  | 21%             |  | December 31          |  | June
2008     |  | Manufacture LED back light unit packages                                      |  | 25,021      
|                                              |  |                       |  |                       |  |                 | 
|LB Gemini New Growth Fund No. 16 (*3)         |  | Seoul, South Korea    |  | 31%                   |  | 31%             |  | December 31          |  | December
2009 |  | Invest in small and middle sized companies and benefit from M&A opportunities |  | 24,268      
|                                              |  |                       |  |                       |  |                 | 
|Can Yang Investments Limited (*2)(*4)         |  | Hong Kong             |  | 9%                    |  | 9%              |  | December 31          |  | January
2010  |  | Develop, manufacture and sell LED parts                                       |  | 7,384       



F-16



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|1. | Reporting Entity, Continued
|-- | ---------------------------



| | (c) | Associates and Joint Ventures (Equity Method Investees) as of December 31, 2015, Continued
| | --- | ------------------------------------------------------------------------------------------



|                              |  |                     |  |                       |  |                 |  |                      |  |               |  |                                                        |  |          
|----------------------------- |  | ------------------- |  | --------------------- |  | --------------- |  | -------------------- |  | ------------- |  | ------------------------------------------------------ |  | ---------
|(In millions of won)          |  |                     |  |                       |  |                 |  |                      |  |               |  |                                                        |  |          
|                              |  |                     |  |                       |  |                
|Associates and joint
ventures |  | Location            |  | Percentageofownership |  | Fiscal
year end |  | Date ofincorporation |  | Business      |  | Carryingamount                                        
|                              |  |                     |  | 2014                  |  | 2015            |  |                      |  |               |  |                                                        |  |          
|                              |  |                     |  |                       |  |                 | 
|YAS Co., Ltd. (*2)(*5)        |  | Paju, South Korea   |  | 19%                   |  | 19%             |  | December 31          |  | April
2002    |  | Develop and manufacture deposition equipment for OLEDs |  | W  10,607
|                              |  |                     |  |                       |  |                 | 
|Narenanotech Corporation      |  | Yongin,
South Korea |  | 23%                   |  | 23%             |  | December 31          |  | December
1995 |  | Manufacture and sell FPD manufacturing equipment       |  | 24,661   
|                              |  |                     |  |                       |  |                 | 
|AVATEC Co., Ltd. (*2)         |  | Daegu,
South Korea  |  | 16%                   |  | 16%             |  | December 31          |  | August
2000   |  | Process and sell glass for FPDs                        |  | 19,804   
|                              |  |                     |  |                       |  |                 | 
|Fuhu, Inc. (*2)(*6)           |  | Los
Angenles USA    |  |                      |  | 10%             |  | March 31             |  | June
2008     |  | Develop and manufacture tablet for kids                |  |         
|                              |  |                     |  |                       |  |                 |  |                      |  |               |  |                                                        |  |          
|                              |  |                     |  |                       |  |                 |  |                      |  |               |  |                                                        |  | 384,755  
|                              |  |                     |  |                       |  |                 |  |                      |  |               |  |                                                        |  |          



|(*1) | Despite its 51% ownership, management concluded that the Controlling Company does not have control of Suzhou Raken Technology Co., Ltd. because the Controlling Company and AmTRAN Technology Co., Ltd., which has a 49%
equity interest of the investee, jointly control the board of directors of the investee through equal voting powers. Accordingly, investment in Suzhou Raken Technology Co., Ltd. was accounted as an equity method investment.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*2) | Although the Controlling Companys share interests in TLI Inc., AVACO Co., Ltd., LIG INVENIA Co., Ltd., Can Yang Investments Limited, YAS Co., Ltd., AVATEC Co., Ltd. and Fuhu, Inc. are below 20%, the Controlling
Company is able to exercise significant influence through its right to appoint a director to the board of directors of each investee and the transactions between the Controlling Company and the investees are significant. Accordingly, the investments
in these investees have been accounted for using the equity method.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*3) | The Controlling Company is a member of limited partnership in the LB Gemini New Growth Fund No.16 (the Fund). In April, July and August 2015, the Controlling Company received W2,490 million,
W2,100 million and W2,175 million, respectively, from the Fund as capital distribution and made an additional cash investment of W360 million in the Fund in March 2015. There was no change in the
Controlling Companys ownership percentage in the Fund and the Controlling Company is committed to making future investments of up to an aggregate of W30,000 million.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*4 | In 2015, the Controlling Company did not participate in capital contribution for Can Yang Investments Limited. Accordingly, the Controlling Companys ownership percentage in Can Yang Investments Limited decreased
from 9.4% as of December 31, 2014 to 8.9% as of December 31, 2015.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*5) | In 2015, the number of outstanding common shares of YAS Co., Ltd. was increased due to the execution of its stock option and the Controlling Companys ownership percentage in YAS Co., Ltd. decreased from 19.2% as
of December 31, 2014 to 18.5% as of December 31, 2015.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*6) | In July 2015, the Controlling Company invested W30,287 million and acquired 500,000 shares of common stock and 1,011,280 shares of preferred stock with voting rights in Fuhu, Inc In December 2015, the
Controlling Company recognized an impairment loss of W26,791 million as finance cost for the difference between the carrying amount and the recoverable amount of investments in Fuhu, Inc As of December 31, 2015, the Controlling
Companys ownership percentage in Fuhu, Inc. is 10% and the Controlling Company has the right to appoint a director to the board of directors of the investee.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|1. | Reporting Entity, Continued
|-- | ---------------------------



| | (c) | Associates and Joint Ventures (Equity Method Investees) as of December 31, 2015, Continued
| | --- | ------------------------------------------------------------------------------------------



| | In December 2015, the Controlling Company disposed of the entire investments in Glonix Co., Ltd., had acquired for manufacturing and selling LCD, for W498 million and recognized a loss on disposal of
W487 million, which is included in finance income.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. | Basis of Presenting Financial Statements
|-- | ----------------------------------------



| | (a) | Statement of Compliance
| | --- | -----------------------

These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board.

The consolidated financial statements were authorized for issuance by the Board of Directors on January 26, 2016.



| | (b) | Basis of Measurement
| | --- | --------------------

The consolidated financial statements have been prepared on the
historical cost basis except for the following material items in the consolidated statements of financial position:



| |  |  | available-for-sale financial assets are measured at fair value, and
| | - |  | -------------------------------------------------------------------



| |  |  | net defined benefit liabilities are recognized as the present value of defined benefit obligations less the fair value of plan assets
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Functional and Presentation Currency
| | --- | ------------------------------------

The consolidated financial statements are
presented in Korean won, which is the Controlling Companys functional currency.



| | (d) | Use of Estimates and Judgments
| | --- | ------------------------------

The preparation of the consolidated financial statements
in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimates are revised and in any future periods affected.

Information about critical judgments in applying accounting
policies that have the most significant effect on the amounts recognized in the consolidated financial statements is included in the following notes:



| |  |  | Classification of financial instruments (note 3.(d))
| | - |  | ----------------------------------------------------



| |  |  | Estimated useful lives of property, plant and equipment (note 3.(e))
| | - |  | --------------------------------------------------------------------



F-18



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|2. | Basis of Presenting Financial Statements, Continued
|-- | ---------------------------------------------------



| | (d) | Use of Estimates and Judgments, Continued
| | --- | -----------------------------------------



Information about assumptions and estimation uncertainties that have a significant risk of
resulting in a material adjustment within the next 12 months is included in the following notes:



| |  |  | Recognition and measurement of provisions (note 3.(j), 15 and 21)
| | - |  | -----------------------------------------------------------------



| |  |  | Net realizable value of inventories (note 8)
| | - |  | --------------------------------------------



| |  |  | Measurement of defined benefit obligations (note 18)
| | - |  | ----------------------------------------------------



| |  |  | Deferred tax assets and liabilities (note 29)
| | - |  | ---------------------------------------------



|3. | Summary of Significant Accounting Policies
|-- | ------------------------------------------

The significant accounting policies followed
by the Group in preparation of its consolidated financial statements are as follows:



| | (a) | Consolidation
| | --- | -------------

(i) Business combinations

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration
transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognized in profit or loss immediately.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities in accordance with IAS 32 and IAS 39. The consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognized in profit or loss.

(ii) Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has right to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until
the date on which control ceases.

(iii) Non-controlling interests

Non-controlling interests (NCI) are measured at their proportionate share of the acquirees identifiable net assets at the
acquisition date.

Changes in the Groups interest in subsidiaries that do not result in a loss of control are accounted for as equity
transactions.



F-19



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (a) | Consolidation, Continued
| | --- | ------------------------



(iv) Loss of Control

If the Controlling Company loses control of subsidiaries, the Controlling Company derecognizes the assets and liabilities of the former
subsidiaries from the consolidated statement of financial position and recognizes the gain or loss associated with the loss of control attributable to the former controlling interest. Meanwhile, the Controlling Company recognizes any investment
retained in the former subsidiaries at its fair value when control is lost.

(v) Associates and joint ventures (equity method
investees)

Associates are those entities in which the Group has significant influence, but not control or joint control, over the
financial and operating policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Investments in associates and joint ventures are initially recognized at cost and subsequently accounted for using the equity method of
accounting. The carrying amount of investments in associates and joint ventures is increased or decreased to recognize the Groups share of the profits or losses and changes in the Groups proportionate interest of the investee after the
date of acquisition. Distributions received from an investee reduce the carrying amount of the investment.

If an associate or joint
ventures uses accounting policies different from those of the Controlling Company for like transactions and events in similar circumstances, appropriate adjustments are made to the consolidated financial statements. As of and during the periods
presented in the consolidated financial statements, no adjustments were made in applying the equity method.

When the Groups share of
losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to nil, and the recognition of further losses is discontinued except to the extent that the Group has
an obligation or has made payments on behalf of the investee.

(vi) Transactions eliminated on consolidation

Intra-group balances and transactions, including income and expenses and any unrealized income and expenses and balance of trade accounts and
notes receivable and payable arising from intra-group transactions, are eliminated. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Groups interest in the
investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.



F-20



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (b) | Foreign Currency Transactions and Translation
| | --- | ---------------------------------------------

Transactions in foreign currencies are
translated to the respective functional currencies of the Group at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency at the exchange rate on
the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was originally determined.
Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on available-for-sale equity instruments and a financial asset and liability designated as a cash flow hedge, which are recognized
in other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the original transaction. Exchange differences arising on the settlement of
monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition are recognized in profit or loss in the period in which they arise. Foreign currency differences arising from assets
and liabilities in relation to the investing and financing activities including loans, bonds and cash and cash equivalents are recognized in finance income (costs) in the consolidated statement of comprehensive income and foreign currency
differences arising from assets and liabilities in relation to activities other than investing and financing activities are recognized in other non-operating income (expense) in the consolidated statement of comprehensive income. Relevant foreign
currency differences are presented in gross amounts in the consolidated statement of comprehensive income.

If the presentation currency of
the Group is different from a foreign operations functional currency, the financial position and financial performance of the foreign operation are translated into the presentation currency using the following methods. The assets and
liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary economy, including goodwill and fair value adjustments arising on acquisition, are translated to the Groups functional currency at exchange
rates at the reporting date. The income and expenses of foreign operations are translated to the Groups functional currency at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive
income. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of in its entirety or
partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group
disposes part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to NCI. When the Group disposes of only part of an associate or joint venture while retaining significant
influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

Any goodwill arising on
the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation is treated as assets and liabilities of the foreign operation. Thus, they
are expressed in the functional currency of the foreign operation and translated at the at each reporting dates exchange rate.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (c) | Inventories
| | --- | -----------

Inventories are measured at the lower of cost and net realizable value. The
cost of inventories is based on the weighted-average method, and includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Net
realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated selling expenses. In the case of manufactured inventories and work-in-process, cost includes an appropriate
share of production overheads based on the actual capacity of production facilities. However, the normal capacity is used for the allocation of fixed production overheads if the actual level of production is lower than the normal capacity.



| | (d) | Financial Instruments
| | --- | ---------------------

(i) Non-derivative financial assets

The Group initially recognizes loans and receivables and deposits on the date they are originated. All other non-derivative financial assets,
including financial assets at fair value through profit or loss (FVTPL), are recognized in the consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to
receive the contractual cash flows of the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained
by the Group is recognized as a separate asset or liability. If a transfer does not result in derecognition because the Group has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to
recognize the transferred asset and recognizes a financial liability for the consideration received. In subsequent periods, the Group recognizes any income on the transferred assets and any expense incurred on the financial liability.

Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only
when, the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

The Group has the following non-derivative financial assets: financial assets at FVTPL, loans and receivables and available-for-sale financial
assets.

Financial assets at fair value through profit or loss

A financial asset is classified at FVTPL if it is classified as held for trading or is designated as such upon initial recognition. If a
contract contains one or more embedded derivatives, the Group designates the entire hybrid (combined) contract as a financial asset at FVTPL unless: the embedded derivative(s) does not significantly modify the cash flows that otherwise would be
required by the contract; or it is clear with little or no analysis when a similar hybrid (combined) instrument is first considered that separation of the embedded derivative(s) is prohibited. Upon initial recognition, attributable transaction costs
are recognized in profit or loss as incurred. Financial assets at FVTPL are measured at fair value, and changes therein are recognized in profit or loss.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (d) | Financial Instruments, Continued
| | --- | --------------------------------



(i) Non-derivative financial assets, Continued



Cash and cash equivalents

Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less
that are readily convertible into known amounts of cash.

Deposits in banks

Deposits in banks are those with maturity of more than three months and less than one year and are held for cash management purposes.

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. When loans and
receivables are recognized initially, the Group measures them at their fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset. Subsequent to initial recognition, loans and receivables are
measured at amortized cost using the effective interest method, less any impairment losses. Loans and receivables comprise trade accounts and notes receivable and other accounts receivable.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or that are not classified as
financial assets at FVTPL, held-to-maturity financial assets or loans and receivables. The Groups investments in equity securities and certain debt securities are classified as available-for-sale financial assets. Subsequent to initial
recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale equity instruments, are recognized in other comprehensive income and presented within equity in the
fair value reserve. When an investment in available-for-sale financial assets is derecognized, the cumulative gain or loss in other comprehensive income is transferred to profit or loss.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured
and whose derivatives are linked to and must be settled by delivery of such unquoted equity instruments are measured at cost.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (d) | Financial Instruments, Continued
| | --- | --------------------------------



(ii) Non-derivative financial liabilities



The Group classifies financial liabilities into two categories, financial liabilities at
FVTPL and other financial liabilities, in accordance with the substance of the contractual arrangement and the definitions of financial liabilities, and recognizes them in the consolidated statement of financial position when the Group becomes a
party to the contractual provisions of the instrument.

Financial liabilities at FVTPL include financial liabilities held for trading or
designated as such upon initial recognition at FVTPL. After initial recognition, financial liabilities at FVTPL are measured at fair value, and changes therein are recognized in profit or loss. Upon initial recognition, transaction costs that are
directly attributable to the issuance of financial liabilities are recognized in profit or loss as incurred.

Non-derivative financial
liabilities other than financial liabilities classified as FVTPL are classified as other financial liabilities and measured initially at fair value minus transaction costs that are directly attributable to the issuance of financial liabilities.
Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method. As of December 31, 2015, non-derivative financial liabilities comprise borrowings, bonds and others.

The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired.

(iii) Share Capital

The
Groups share capital consists solely of common stock Incremental costs directly attributable to the issuance of common shares are recognized as a deduction from equity, net of tax effects. Amounts contributed in excess of par value of the
common stock is classified as share premium.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (d) | Financial Instruments, Continued
| | --- | --------------------------------



(iv) Derivative financial instruments, including hedge accounting



Derivatives are initially recognized at fair value. Subsequent to initial recognition,
derivatives are measured at fair value, and changes therein are recognized in profit or loss except in the case where the derivatives are designated as cash flow hedges and the hedge is determined to be an effective hedge.

If necessary, the Group designates derivatives as hedging items to hedge the risk of changes in the fair value of assets, liabilities or firm
commitments (a fair value hedge) and foreign currency risk of highly probable forecasted transactions or firm commitments (a cash flow hedge).

On initial designation of the hedge, management formally documents the relationship between the hedging instrument(s) and hedged item(s),
including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship. Management makes an assessment, both at the inception of
the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair value or cash flows of the respective hedged items during the period for
which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125 percent. For a cash flow hedge of a forecasted transaction, the transaction should be highly probable to occur and should present an exposure to
variations in cash flows that could ultimately affect reported net income.

Cash flow hedges

When a derivative is designated as a hedge of the variability in cash flows attributable to a particular risk associated with a recognized
asset or liability or a highly probable forecasted transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income and presented in the hedging reserve in
equity. The amount recognized in other comprehensive income is removed and included in profit or loss in the same period the hedged cash flows affect profit or loss under the same line item in the consolidated statement of comprehensive income. Any
ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

If the hedging instrument
no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in other
comprehensive income and presented in the hedging reserve in equity remains there until the forecasted transaction affects profit or loss. When the hedged item is a non-financial asset, the amount recognized in other comprehensive income is
transferred to the carrying amount of the asset when the asset is recognized. If the forecasted transaction is no longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit or loss. In other cases
the amount recognized in other comprehensive income is transferred to profit or loss in the same period that the hedged item affects profit or loss.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (d) | Financial Instruments, Continued
| | --- | --------------------------------



(iv) Derivative financial instruments, including hedge accounting, Continued



Embedded derivative

Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host
contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at FVTPL. Changes in the fair
value of separable embedded derivatives are recognized immediately in profit or loss.



| | (e) | Property, Plant and Equipment
| | --- | -----------------------------

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes an
expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any costs directly attributable to bringing the assets to a working condition for their
intended use, the costs of dismantling and removing the items and restoring the site on which they are located and borrowing costs on qualifying assets.

The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net
disposal proceeds, if any, and the carrying amount of the item and recognized in other non-operating income or other non-operating expenses.

(ii) Subsequent costs

Subsequent expenditure on an item of property, plant and equipment is recognized as part of its cost only if it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

(iii) Depreciation

Depreciation is recognized in profit or loss on a straight-line basis method, reflecting the pattern in which the assets future economic
benefits are expected to be consumed by the Group. The residual value of property, plant and equipment is zero. Land is not depreciated.

Estimated useful lives of the assets are as follows:



|                              |  |                     
|----------------------------- |  | --------------------
|                              |  | Useful lives (years)
|Buildings and structures      |  | 20, 40              
|Machinery                     |  | 4, 5                
|Furniture and fixtures        |  | 4                   
|Equipment, tools and vehicles |  | 4, 12               

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate and any changes are accounted for as changes in accounting estimates. There were no such changes for all periods presented.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (f) | Borrowing Costs
| | --- | ---------------

The Group capitalizes borrowing costs, which includes interests and
exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs, directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of
that asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. To the extent that the Group borrows funds specifically for the purpose of obtaining a qualifying asset, the
Group determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings. The Group immediately
recognizes other borrowing costs as an expense.



| | (g) | Government Grants
| | --- | -----------------

In case there is reasonable assurance that the Group will comply with
the conditions attached to a government grant, the government grant is recognized as follows:

(i) Grants related to the purchase or
construction of assets

A government grant related to the purchase or construction of assets is deducted in calculating the carrying
amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense and cash related to grant received is presented in investing activities in the statement of cash flows.

(ii) Grants for compensating the Groups expenses incurred

A government grant that compensates the Group for expenses incurred is recognized in profit or loss as a deduction from relevant expenses on a
systematic basis in the periods in which the expenses are recognized.

(iii) Other government grants

A government grant that becomes receivable for the purpose of giving immediate financial support to the Group with no compensation for expenses
or losses already incurred or no future related costs is recognized as income of the period in which it becomes receivable.



| | (h) | Intangible Assets
| | --- | -----------------

Intangible assets are initially measured at cost. Subsequently,
intangible assets are measured at cost less accumulated amortization and accumulated impairment losses.

(i) Goodwill

Goodwill arising from business combinations is recognized as the excess of the acquisition cost of investments in subsidiaries, associates and
joint ventures over the Groups share of the net fair value of the identifiable assets acquired and liabilities assumed. Any deficit is a bargain purchase that is recognized in profit or loss. Goodwill is measured at cost less accumulated
impairment losses.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (h) | Intangible Assets, Continued
| | --- | ----------------------------



(ii) Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is
recognized in profit or loss as incurred.

Development activities involve a plan or design of the production of new or substantially
improved products and processes. Development expenditure is capitalized only if the Group can demonstrate all of the following:



| |  |  | the technical feasibility of completing the intangible asset so that it will be available for use or sale,
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | its intention to complete the intangible asset and use or sell it,
| | - |  | ------------------------------------------------------------------



| |  |  | its ability to use or sell the intangible asset,
| | - |  | ------------------------------------------------



| |  |  | how the intangible asset will generate probable future economic benefits. Among other things, the Group can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or,
if it is to be used internally, the usefulness of the intangible asset,
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | its ability to measure reliably the expenditure attributable to the intangible asset during its development.
| | - |  | ------------------------------------------------------------------------------------------------------------

The expenditure capitalized includes the cost of materials, direct labor, overhead costs that are directly attributable to preparing the asset
for its intended use, and borrowing costs on qualifying assets.

(iii) Other intangible assets

Other intangible assets include intellectual property rights, software, customer relationships, technology, memberships and others.

(iv) Subsequent costs

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific intangible asset to which it
relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (h) | Intangible Assets, Continued
| | --- | ----------------------------



(v) Amortization

Amortization is calculated on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date
that they are available for use. The residual value of intangible assets is zero. However, as there are no foreseeable limits to the periods over which condominium and golf club memberships are expected to be available for use, these intangible
assets are regarded as having indefinite useful lives and not amortized.



|                                                           |  |                               
|---------------------------------------------------------- |  | ------------------------------
|                                                           |  | Estimated useful lives (years)
|Intellectual property rights                               |  | 5, 10                         
|Rights to use electricity, water and gas supply facilities |  | 10                            
|Software                                                   |  | 4                             
|Customer relationships                                     |  | 7, 10                         
|Technology                                                 |  | 10                            
|Development costs                                          |  | (*)                           
|Condominium and golf club memberships                      |  | Not amortized                 



|(*) | Capitalized development costs are amortized over the useful life considering the life cycle of the developed products. Amortization of capitalized development costs is recognized in research and development expenses in
the consolidated statement of comprehensive income.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Amortization periods and the amortization methods for intangible assets
with finite useful lives are reviewed at each financial year-end. The useful lives of intangible assets that are not being amortized are reviewed each period to determine whether events and circumstances continue to support indefinite useful life
assessments for those assets. If appropriate, the changes are accounted for as changes in accounting estimates.



| | (i) | Impairment
| | --- | ----------

(i) Financial assets

A financial asset not carried at FVTPL is assessed at each reporting date to determine whether there is objective evidence that it is impaired.
A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be
estimated reliably.

Objective evidence that financial assets are impaired can include default or delinquency in interest or principal
payments by an issuer or a debtor, for economic reasons relating to the borrowers financial difficulty, granting to the borrower a concession that the Group would not otherwise consider, or the disappearance of an active market for that
financial asset. In addition, for an investment in an equity security, objective evidence of impairment includes significant financial difficulty of the issuer and a significant or prolonged decline in its fair value below its cost.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (i) | Impairment, Continued
| | --- | ---------------------



(i) Financial assets, Continued



Management considers evidence of impairment for loans and receivables at both a specific
asset and collective level. All individually significant loans and receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment
that has been incurred but not yet identified. Loans and receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics.

In assessing collective impairment the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss
incurred, adjusted for managements judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

If there is objective evidence that an impairment loss has been incurred on financial assets carried at amortized cost, the amount of the
impairment loss is measured as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the assets original effective interest rate. Impairment losses are recognized in profit or loss
and reflected in an allowance account against loans and receivables.

The amount of the impairment loss on financial assets including
equity securities carried at cost is measured as the difference between the carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses
are not reversed.

When a decline in the fair value of an available-for-sale financial asset has been recognized in other comprehensive
income the amount of the cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognized in profit or
loss.

In a subsequent period, for the financial assets recorded at fair value, if the fair value increases and the increase can be
objectively related to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed. The amount of the reversal in financial assets carried at amortized cost and a debt instrument classified as
available for sale is recognized in profit or loss. However, impairment loss recognized for an investment in an equity instrument classified as available-for-sale is reversed through other comprehensive income.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (i) | Impairment, Continued
| | --- | ---------------------



(ii) Non-financial assets

The carrying amounts of the Groups non-financial assets, other than assets arising from employee benefits, inventories and deferred tax
assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable amount is estimated. For goodwill, and intangible assets that have indefinite
useful lives or that are not yet available for use, irrespective of whether there is any indication of impairment, the recoverable amount is estimated each year at the same time.

For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash-generating unit, or CGU). The recoverable amount of an asset or cash-generating unit is
determined as the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. Fair value less costs to sell is based on the best information available to reflect the amount that the Group could obtain from the disposal of the asset in an arms
length transaction between knowledgeable, willing parties, after deducting the costs of disposal.

An impairment loss is recognized if the
carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Goodwill acquired in a business combination is allocated to CGUs that are expected to benefit from the synergies of
the combination. Impairment losses recognized in respect of a CGU are allocated first to reduce the carrying amount of any goodwill allocated to the unit, and then to reduce the carrying amounts of the other assets in the unit on a pro rata basis.

In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does
not exceed the carrying amount that would have been determined, net of accumulated depreciation or amortization, if no impairment loss had been recognized. An impairment loss in respect of goodwill is not reversed.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (j) | Provisions
| | --- | ----------

A provision is recognized if, as a result of a past event, the Group has a
present legal or constructive obligation, and it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation

The risks and uncertainties that inevitably surround events and circumstances are taken into account in reaching the best estimate of a
provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows. The unwinding of the discount is recognized as finance cost.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that
an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

The Group
recognizes a liability for warranty obligations based on the estimated costs expected to be incurred under its basic limited warranty. This warranty covers defective products and is normally applicable for eighteen months from the date of purchase.
These liabilities are accrued when product revenues are recognized. Factors that affect the Groups warranty liability include historical and anticipated rates of warranty claims on those repairs and cost per claim to satisfy the Groups
warranty obligation. Warranty costs primarily include raw materials and labor costs. As these factors are impacted by actual experience and future expectations, management periodically assesses the adequacy of its recorded warranty liabilities and
adjusts the amounts as necessary. Accrued warranty obligations are included in the current and non-current provisions.

Provisions for
claims, assessments, litigation, fines, and penalties and other sources, evaluated each reporting period by management in consultation with legal counsel and are adjusted when appropriate based on the status and development of each matter.



| | (k) | Employee Benefits
| | --- | -----------------

(i) Short-term employee benefits

Short-term employee benefits that are due to be settled within twelve months after the end of the period in which the employees render the
related service are recognized in profit or loss on an undiscounted basis. The expected cost of profit-sharing and bonus plans and others are recognized when the Group has a present legal or constructive obligation to make payments as a result of
past events and a reliable estimate of the obligation can be made.

(ii) Other long-term employee benefits

The Groups net obligation in respect of long-term employee benefits other than pension plans is the amount of future benefit that
employees have earned in return for their service in the current and prior periods.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (k) | Employee Benefits, Continued
| | --- | ----------------------------



(iii) Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will
have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by
employees.

(iv) Defined benefit plan

A defined benefit plan is a post-employment benefit plan other than defined contribution plans. The Groups net obligation in respect of
its defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of
any plan assets is deducted.

The calculation is performed annually by an independent actuary using the projected unit credit method. The
discount rate is the yield at the reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Groups obligations and that are denominated in the same currency in which the benefits are expected to be
paid. The Group recognizes all actuarial gains and losses arising from defined benefit plans in retained earnings immediately.

The Group
determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined
benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Consequently, the net interest on the net defined benefit liability (asset)
now comprises: interest cost on the defined benefit obligation, interest income on plan assets, and interest on the effect on the asset ceiling.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain
or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.



| | (l) | Revenue
| | --- | -------

Revenue from the sale of goods in the course of ordinary activities is measured
at the fair value of the consideration received or receivable, net of estimated returns, earned trade discounts, volume rebates and other cash incentives paid to customers. Revenue is recognized when persuasive evidence exists that the significant
risks and rewards of ownership have been transferred to the buyer, generally on delivery and acceptance at the customers premises, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated
reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognized as
a reduction of revenue when the sales are recognized. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenues in the consolidated statements of
comprehensive income.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (m) | Operating Segments
| | --- | ------------------

An operating segment is a component of the Group that: 1) engages in
business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with other components of the group, 2) whose operating results are reviewed regularly by the Groups chief
operating decision maker (CODM) in order to allocate resources and assess its performance, and 3) for which discrete financial information is available. Management has determined that the CODM of the Group is the Board of Directors. The
CODM does not receive and therefore does not review discrete financial information for any component of the Group. Consequently, no operating segment information is included in these consolidated financial statements. Entity wide disclosures of
geographic and product revenue information are provided in note 24 to these consolidated financial statements.



| | (n) | Finance Income and Finance Costs
| | --- | --------------------------------

Finance income comprises interest income on funds
invested (including available-for-sale financial assets), dividend income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at FVTPL, and gains on hedging instruments that are recognized in
profit or loss. Interest income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that the Groups right to receive payment is established.

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, changes in the fair value of financial assets
at FVTPL, impairment losses recognized on financial assets, and losses on hedging instruments that are recognized in profit or loss. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are
capitalized as part of the cost of that asset.



| | (o) | Income Tax
| | --- | ----------

Income tax expense comprises current and deferred tax. Current tax and
deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

(i) Current tax

Current
tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years. The taxable profit is
different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit (tax loss) of future periods, and non-taxable or
non-deductible items from the accounting profit.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (o) | Income Tax, Continued
| | --- | ---------------------



(ii) Deferred tax

Deferred tax is recognized, using the liability method, in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is
settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. However, deferred tax is not recognized for taxable temporary differences arising on the initial
recognition of goodwill.

The Group recognizes a deferred tax liability for all taxable temporary differences associated with investments
in subsidiaries, associates, and interests in joint ventures, except to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the
foreseeable future. A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that the differences relating to investments in subsidiaries, associates and joint ventures will reverse in the
foreseeable future and taxable profit will be available against which the temporary difference can be utilized.

Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

The Group offsets deferred tax assets and deferred tax liabilities if, and only if the Group has a legally enforceable right to set off current
tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either
to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously.



| | (p) | Earnings Per Share (EPS)
| | --- | --------------------------

Basic EPS is calculated by dividing the profit or
loss attributable to ordinary shareholders of the Controlling Company by the weighted average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and
the weighted average number of common shares outstanding, adjusted for the effects of all dilutive potential common shares, which comprise convertible bonds.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|3. | Summary of Significant Accounting Policies, Continued
|-- | -----------------------------------------------------



| | (q) | Standards Issued but Not Yet Effective
| | --- | --------------------------------------

(i) IFRS 9, Financial Instruments

IFRS 9 provides revised guidance on the classification and measurement of financial instruments and replaces incurred loss model with expected
credit losses model for calculating impairment on financial assets. IFRS 9 also includes new general hedge accounting requirements including hedged items, hedging instruments and risk being hedged in order to expand applicable risk management
strategies being utilized. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. IFRS 9 has not been early adopted in preparing the consolidated financial statements.

Management is currently assessing the potential impact on its consolidated financial statements resulting from the application of new
standards.

(ii) IFRS 15, Revenue from contracts with customers

IFRS 15 establishes a single new revenue recognition standard for contracts with customers and introduces a five-step model for determining
whether, how much and when revenue is recognized. IFRS 15 replaces risk-and-reward based model with control-based model. IFRS 15 is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. IFRS 15 has
not been early adopted in preparing the consolidated financial statements.

Management has initiated an assessment of the potential impact
of this accounting standard. Management is currently assessing the potential impact on its consolidated financial statements resulting from the application of this standard and expecting to complete its assessment in 2016.

(iii) IFRS 16, Leases

IFRS 16, published in January 2016, replaces the existing guidance in IAS 17, Leases. IFRS 16 eliminates the classification of leases as either
operating leases or finance leases for a lessee. Instead all leases are treated in a similar way to finance leases applying IAS 17. Leases are capitalised by recognising the present value of the lease payments and showing them either as lease assets
(right-of-use assets) or together with property, plant and equipment. If lease payments are made over time, a company also recognises a financial liability representing its obligation to make future lease payments. IFRS 16 is effective for annual
reporting periods beginning on or after January 1, 2019, with early adoption permitted for companies that also adopt IFRS 15. IFRS 16 has not been early adopted in preparing the consolidated financial statements.

Management is currently assessing the potential impact on its consolidated financial statements resulting from the application of new
standards.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015





|4. | Determination of Fair Value
|-- | ---------------------------

A number of the Groups accounting policies and
disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further
information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

(a)
Current Financial Assets and Financial Liabilities

The carrying amounts approximate fair value because of the short maturity of
these instruments.

(b) Trade Receivables and Other Receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest
at the reporting date. This fair value is determined for disclosure purposes. The carrying amounts of short-term receivables approximate fair value.

(c) Investments in Equity and Debt Securities

The fair value of marketable available-for-sale financial assets is determined by reference to their quoted closing bid price at the reporting
date. The fair value of non-marketable securities is determined using valuation methods.

(d) Non-derivative Financial Liabilities

Fair value, which is determined for disclosure purposes, except for the liabilities at FVTPL, is calculated based on the present value of
future principal and interest cash flows, discounted at the market rate of interest at the reporting date.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|5. | Risk Management
|-- | ---------------



| | (a) | Financial Risk Management
| | --- | -------------------------

The Group is exposed to credit risk, liquidity risk and
market risks. The Group identifies and analyzes such risks, and controls are implemented under a risk management system to monitor and manage these risks at below a threshold level.

(i) Credit risk

Credit
risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Groups receivables from customers.

The Groups exposure to credit risk of trade and other receivables is influenced mainly by the individual characteristics of each
customer. However, management believes that the demographics of the Groups customer base, including the default risk of the country in which customers operate, do not have a significant influence on credit risk since the majority of the
customers are global electronic appliance manufacturers operating in global markets.

The Group establishes credit limits for each customer
and each new customer is analyzed quantitatively and qualitatively before determining whether to utilize third party guarantees, insurance or factoring as appropriate.

The Group does not establish allowances for receivables under insurance or receivables from customers with a high credit rating. For the rest
of the receivables, the Group establishes an allowance for impairment of trade and other receivables that have been individually or collectively evaluated for impairment and estimated on the basis of historical loss experience for assets.

(ii) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The Groups approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Groups reputation.

The Group has historically
been able to satisfy its cash requirements from cash flows from operations and debt and equity financing. To the extent that the Group does not generate sufficient cash flows from operations to meet its capital requirements, the Group may rely on
other financing activities, such as external long-term borrowings and offerings of debt securities, equity-linked and other debt securities. In addition, the Group maintains a line of credit with various banks.

(iii) Market risk

Market
risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Groups income or the value of its holdings of financial instruments. The objective of market risk management is
to manage and control market risk exposures within acceptable parameters, while optimizing the return.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|5. | Risk Management, Continued
|-- | --------------------------



| | (a) | Financial Risk Management, Continued
| | --- | ------------------------------------



iv) Currency risk

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the functional currency
of the Group, Korean won (KRW). The currencies in which these transactions primarily are denominated are USD, EUR, JPY, etc.

Interest on
borrowings is denominated in the currency of the borrowing. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Group, primarily KRW and USD.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Group adopts policies to ensure that its net
exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

v) Interest rate risk

Interest rate risk arises principally from the Groups debentures and borrowings. The Group establishes and applies its policy to reduce
uncertainty arising from fluctuations in the interest rate and to minimize finance cost and manages interest rate risk by monitoring of trends of fluctuations in interest rate and establishing plan for countermeasures.



| | (b) | Capital Management
| | --- | ------------------

Managements policy is to maintain a capital base so as to
maintain investor, creditor and market confidence and to sustain future development of the business. Liabilities to equity ratio, net borrowings to equity ratio and other financial ratios are used by management to achieve an optimal capital
structure. Management also monitors the return on capital as well as the level of dividends to ordinary shareholders.



|                                    |  |                   |            |   |                   |  |            |  
|----------------------------------- |  | ----------------- | ---------- | - | ----------------- |  | ---------- | -
|(In millions of won)                |  |                   |            |   |                   | 
|                                    |  | December 31, 2014 |            |   | December 31, 2015 | 
|Total liabilities                   |  | W                 | 11,183,613 |   |                   |  | 9,872,204  |  
|Total equity                        |  |                   | 11,783,410 |   |                   |  | 12,704,956 |  
|Cash and deposits in banks (*1)     |  |                   | 2,416,321  |   |                   |  | 2,523,999  |  
|Borrowings (including bonds)        |  |                   | 4,247,386  |   |                   |  | 4,224,231  |  
|Total liabilities to equity ratio   |  |                   | 95         | % |                   |  | 78         | %
|Net borrowings to equity ratio (*2) |  |                   | 16         | % |                   |  | 13         | %



|(*1) | Cash and deposits in banks consist of cash and cash equivalents and current deposit in banks.
|---- | ---------------------------------------------------------------------------------------------

|(*2) | Net borrowings to equity ratio is calculated by dividing total borrowings (including bonds) less cash and current deposits in banks by total equity.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015





|6. | Cash and Cash Equivalents and Deposits in Banks
|-- | -----------------------------------------------

Cash and cash equivalents and deposits
in banks at the reporting date are as follows:





|                          |  |                   |           |  |                   |  |           | 
|------------------------- |  | ----------------- | --------- |  | ----------------- |  | --------- | 
|(In millions of won)      |  |                   |           |  |                   | 
|                          |  | December 31, 2014 |           |  | December 31, 2015 | 
|Current assets            |  |                   |           |  |                   |  |           | 
|Cash and cash equivalents |  |                   |           |  |                   |  |           | 
|Demand deposits           |  | W                 | 889,839   |  |                   |  | 751,662   | 
|                          |  |                   |           |  |                   |  |           | 
|Deposits in banks         |  |                   |           |  |                   |  |           | 
|Time deposits             |  | W                 | 1,453,677 |  |                   |  | 1,701,837 | 
|Restricted cash (*)       |  |                   | 72,805    |  |                   |  | 70,500    | 
|                          |  |                   |           |  |                   |  |           | 
|                          |  | W                 | 1,526,482 |  |                   |  | 1,772,337 | 
|                          |  |                   |           |  |                   |  |           | 
|Non-current assets        |  |                   |           |  |                   |  |           | 
|Deposits in banks         |  |                   |           |  |                   |  |           | 
|Restricted cash (*)       |  |                   | 8,427     |  |                   |  | 13        | 
|                          |  |                   |           |  |                   |  |           | 
|                          |  | W                 | 2,424,748 |  |                   |  | 2,524,012 | 
|                          |  |                   |           |  |                   |  |           | 



|(*) | Restricted cash includes mutual growth fund to aid LG Groups second and third-tier suppliers, and others.
|--- | ----------------------------------------------------------------------------------------------------------



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|7. | Receivables and Other Current Assets
|-- | ------------------------------------



| | (a) | Trade accounts and notes receivable at the reporting date are as follows:
| | --- | -------------------------------------------------------------------------



|                         |  |                   |           |  |                   |  |           | 
|------------------------ |  | ----------------- | --------- |  | ----------------- |  | --------- | 
|(In millions of won)     |  |                   |           |  |                   | 
|                         |  | December 31, 2014 |           |  | December 31, 2015 | 
|Trade, net               |  | W                 | 2,572,880 |  |                   |  | 3,008,123 | 
|Due from related parties |  |                   | 871,597   |  |                   |  | 1,089,713 | 
|                         |  |                   |           |  |                   |  |           | 
|                         |  | W                 | 3,444,477 |  |                   |  | 4,097,836 | 
|                         |  |                   |           |  |                   |  |           | 



| | (b) | Other accounts receivable at the reporting date are as follows:
| | --- | ---------------------------------------------------------------



|                                   |  |                   |         |  |                   |  |         | 
|---------------------------------- |  | ----------------- | ------- |  | ----------------- |  | ------- | 
|(In millions of won)               |  | December 31, 2014 |         |  | December 31, 2015 | 
|Current assets                     |  |                   |         |  |                   |  |         | 
|Non-trade accounts receivable, net |  | W                 | 101,027 |  |                   |  | 89,792  | 
|Accrued income                     |  |                   | 18,451  |  |                   |  | 16,023  | 
|                                   |  |                   |         |  |                   |  |         | 
|                                   |  | W                 | 119,478 |  |                   |  | 105,815 | 
|                                   |  |                   |         |  |                   |  |         | 

Due from related parties included in other accounts receivable, as of December 31, 2014 and 2015 are
W13,694 million and W2,526 million, respectively.



| | (c) | Other assets at the reporting date are as follows:
| | --- | --------------------------------------------------



|                           |  |                   |         |  |                   |  |         | 
|-------------------------- |  | ----------------- | ------- |  | ----------------- |  | ------- | 
|(In millions of won)       |  | December 31, 2014 |         |  | December 31, 2015 | 
|Current assets             |  |                   |         |  |                   |  |         | 
|Advance payments           |  | W                 | 11,960  |  |                   |  | 11,465  | 
|Prepaid expenses           |  |                   | 48,858  |  |                   |  | 59,962  | 
|Value added tax refundable |  |                   | 435,847 |  |                   |  | 372,515 | 
|                           |  |                   |         |  |                   |  |         | 
|                           |  | W                 | 496,665 |  |                   |  | 443,942 | 
|                           |  |                   |         |  |                   |  |         | 
|Non-current assets         |  |                   |         |  |                   |  |         | 
|Long-term prepaid expenses |  | W                 | 257,769 |  |                   |  | 293,847 | 
|Others                     |  |                   | 2,900   |  |                   |  | 1,800   | 
|                           |  |                   |         |  |                   |  |         | 
|                           |  | W                 | 260,669 |  |                   |  | 295,647 | 
|                           |  |                   |         |  |                   |  |         | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|8. | Inventories
|-- | -----------

Inventories at the reporting date are as follows:



|                     |  |                   |           |  |                   |  |           | 
|-------------------- |  | ----------------- | --------- |  | ----------------- |  | --------- | 
|(In millions of won) |  | December 31, 2014 |           |  | December 31, 2015 | 
|Finished goods       |  | W                 | 1,200,592 |  |                   |  | 910,844   | 
|Work-in-process      |  |                   | 745,614   |  |                   |  | 720,221   | 
|Raw materials        |  |                   | 426,380   |  |                   |  | 389,442   | 
|Supplies             |  |                   | 381,512   |  |                   |  | 331,162   | 
|                     |  |                   |           |  |                   |  |           | 
|                     |  | W                 | 2,754,098 |  |                   |  | 2,351,669 | 
|                     |  |                   |           |  |                   |  |           | 

For the years ended December 31, 2013, 2014 and 2015, the amount of inventories recognized as cost of
sales, inventory write-downs and reversal and usage of inventory write-downs included in cost of sales is as follows:



|                                        |  |      |            |  |      |  |            |      |  |  |            | 
|--------------------------------------- |  | ---- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|(In millions of won)                    |  | 2013 |            |  | 2014 |  |            | 2015 | 
|Inventories recognized as cost of sales |  | W    | 23,524,851 |  |      |  | 22,667,134 |      |  |  | 24,069,572 | 
|Including: inventory write-downs        |  |      | 211,363    |  |      |  | 332,699    |      |  |  | 363,755    | 

There were no significant reversals of inventory write-downs recognized during 2013, 2014 and 2015.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|9. | Other Financial Assets
|-- | ----------------------

(a) Other financial assets at the reporting date are as follows:



|                                    |  |                   |        |  |                   |  |        | 
|----------------------------------- |  | ----------------- | ------ |  | ----------------- |  | ------ | 
|(In millions of won)                |  | December 31, 2014 |        |  | December 31, 2015 | 
|Current assets                      |  |                   |        |  |                   |  |        | 
|Deposits                            |  | W                 | 681    |  |                   |  | 1,295  | 
|Available-for-sale financial assets |  |                   | 2,569  |  |                   |  | 558    | 
|Short-term loans                    |  |                   |       |  |                   |  | 3,051  | 
|                                    |  |                   |        |  |                   |  |        | 
|                                    |  | W                 | 3,250  |  |                   |  | 4,904  | 
|                                    |  |                   |        |  |                   |  |        | 
|Non-current assets                  |  |                   |        |  |                   |  |        | 
|Available-for-sale financial assets |  | W                 | 6,831  |  |                   |  | 10,840 | 
|Deposits                            |  |                   | 18,921 |  |                   |  | 20,939 | 
|Long-term other accounts receivable |  |                   | 7,859  |  |                   |  | 5,148  | 
|Long-term loans                     |  |                   |       |  |                   |  | 12,805 | 
|                                    |  |                   |        |  |                   |  |        | 
|                                    |  | W                 | 33,611 |  |                   |  | 49,732 | 
|                                    |  |                   |        |  |                   |  |        | 

Other financial assets of related parties as of December 31, 2015 are W2,683 million.

(b) Available-for-sale financial assets at the reporting date are as follows:



|                             |  |                   |       |  |                   |  |        | 
|---------------------------- |  | ----------------- | ----- |  | ----------------- |  | ------ | 
|(In millions of won)         |  | December 31, 2014 |       |  | December 31, 2015 | 
|Current assets               |  |                   |       |  |                   |  |        | 
|Debt securities              |  |                   |       |  |                   |  |        | 
|Government bonds             |  | W                 | 2,569 |  |                   |  | 558    | 
|                             |  |                   |       |  |                   |  |        | 
|Non-current assets           |  |                   |       |  |                   |  |        | 
|Debt securities              |  |                   |       |  |                   |  |        | 
|Government bonds             |  | W                 | 668   |  |                   |  | 151    | 
|Equity securities            |  |                   |       |  |                   |  |        | 
|Intellectual Discovery, Ltd. |  | W                 | 2,673 |  |                   |  | 2,673  | 
|Kyulux, Inc.                 |  |                   |      |  |                   |  | 3,266  | 
|Henghao Technology Co., Ltd. |  |                   | 3,372 |  |                   |  | 3,372  | 
|ARCH Venture Fund Vill, L.P  |  |                   | 118   |  |                   |  | 1,378  | 
|                             |  |                   |       |  |                   |  |        | 
|                             |  |                   | 6,163 |  |                   |  | 10,689 | 
|                             |  |                   |       |  |                   |  |        | 
|                             |  | W                 | 9,400 |  |                   |  | 11,398 | 
|                             |  |                   |       |  |                   |  |        | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|10. | Investments in Equity Accounted Investees
|--- | -----------------------------------------



| | (a) | Investments in equity accounted investees consist of the following:
| | --- | -------------------------------------------------------------------



|                                              |  |                   |         |  |                   |  |         | 
|--------------------------------------------- |  | ----------------- | ------- |  | ----------------- |  | ------- | 
|(in millions of won)                          |  |                   |        
|                                              |  | Carrying value    |        
|Company                                       |  | December 31, 2014 |         |  | December 31, 2015 | 
|Suzhou Raken Technology Co., Ltd.             |  | W                 | 138,912 |  |                   |  | 145,731 | 
|Global OLED Technology LLC                    |  |                   | 28,733  |  |                   |  |        | 
|Paju Electric Glass Co., Ltd.                 |  |                   | 77,162  |  |                   |  | 58,852  | 
|TLI Inc. (*)                                  |  |                   | 5,400   |  |                   |  | 5,351   | 
|AVACO Co., Ltd. (*)                           |  |                   | 11,680  |  |                   |  | 12,758  | 
|New Optics Ltd.                               |  |                   | 41,199  |  |                   |  | 48,491  | 
|LIG INVENIA Co., Ltd. (LIG ADP Co., Ltd.) (*) |  |                   | 2,094   |  |                   |  | 1,827   | 
|WooRee E&L Co. Ltd. (*)                       |  |                   | 23,111  |  |                   |  | 25,021  | 
|LB Gemini New Growth Fund No.16               |  |                   | 14,396  |  |                   |  | 24,268  | 
|Can Yang Investments Limited                  |  |                   | 9,467   |  |                   |  | 7,384   | 
|YAS Co., Ltd.                                 |  |                   | 11,019  |  |                   |  | 10,607  | 
|Narenanotech Corporation                      |  |                   | 25,503  |  |                   |  | 24,661  | 
|AVATEC Co., Ltd.(*)                           |  |                   | 18,773  |  |                   |  | 19,804  | 
|Glonix Co., Ltd.                              |  |                   | 195     |  |                   |  |        | 
|                                              |  |                   |         |  |                   |  |         | 
|                                              |  | W                 | 407,644 |  |                   |  | 384,755 | 
|                                              |  |                   |         |  |                   |  |         | 



|(*) | Based on quoted market prices at December 31, 2015, the fair values of the investments in TLI Inc., AVACO Co., Ltd., LIG INVENIA Co., Ltd., WooRee E&L Co.Ltd. and AVATEC Co., Ltd., which are listed companies on
the Korea Securities Dealers Automated Quotations, are W7,425 million, W12,598 million, W11,520 million, W9,928 million and W17,702 million, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dividends received from equity accounted investees for the years ended December 31, 2013, 2014 and 2015 amounted to
W14,276 million, W1,058 million and W25,577 million, respectively.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|10. | Investments in Equity Accounted Investees, Continued
|--- | ----------------------------------------------------



| | (b) | Summary of financial information of significant joint ventures as of December 31, 2014 and 2015 and for the years ended December 31, 2013, 2014 and 2015 are as follows:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(i) Summary of financial information



| |  |  | Suzhou Raken Technology Co., Ltd.
| | - |  | ---------------------------------



|                     |  |                   |         |  |                   |  |         | 
|-------------------- |  | ----------------- | ------- |  | ----------------- |  | ------- | 
|(In millions of won) |  | December 31, 2014 |         |  | December 31, 2015 | 
|Total assets         |  | W                 | 473,486 |  |                   |  | 540,241 | 
|Current assets       |  |                   | 373,640 |  |                   |  | 442,130 | 
|Non-current assets   |  |                   | 99,846  |  |                   |  | 98,111  | 
|Total liabilities    |  |                   | 199,313 |  |                   |  | 250,318 | 
|Current liabilities  |  |                   | 199,313 |  |                   |  | 250,318 | 



|                           |  |      |           |  |      |  |           |      |  |  |         | 
|-------------------------- |  | ---- | --------- |  | ---- |  | --------- | ---- |  |  | ------- | 
|(In millions of won)       |  | 2013 |           |  | 2014 |  |           | 2015 | 
|Revenue                    |  | W    | 1,789,364 |  |      |  | 1,177,261 |      |  |  | 993,298 | 
|Profit for the year        |  |      | 8,077     |  |      |  | 5,452     |      |  |  | 10,682  | 
|Other comprehensive income |  |      | 3,024     |  |      |  | 4,321     |      |  |  | 2,533   | 
|Total comprehensive income |  |      | 11,101    |  |      |  | 9,773     |      |  |  | 13,215  | 

(ii) Additional financial information



| |  |  | Suzhou Raken Technology Co., Ltd.
| | - |  | ---------------------------------



|                          |  |                   |        |  |                   |  |        | 
|------------------------- |  | ----------------- | ------ |  | ----------------- |  | ------ | 
|(In millions of won)      |  | December 31, 2014 |        |  | December 31, 2015 | 
|Cash and cash equivalents |  | W                 | 18,648 |  |                   |  | 44,376 | 



|                     |  |      |        |  |      |  |       |      |  |  |       | 
|-------------------- |  | ---- | ------ |  | ---- |  | ----- | ---- |  |  | ----- | 
|(In millions of won) |  | 2013 |        |  | 2014 |  |       | 2015 | 
|Depreciation         |  | W    | 11,607 |  |      |  | 9,611 |      |  |  | 7,858 | 
|Amortization         |  |      | 619    |  |      |  | 531   |      |  |  | 527   | 
|Interest income      |  |      | 2,323  |  |      |  | 4,043 |      |  |  | 1,010 | 
|Interest expense     |  |      | 307    |  |      |  | 17    |      |  |  | 17    | 
|Income tax expense   |  |      | 2,070  |  |      |  | 2,704 |      |  |  | 3,608 | 



F-45



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|10. | Investments in Equity Accounted Investees, Continued
|--- | ----------------------------------------------------



| | (c) | Reconciliation from financial information of significant joint venture to their carrying value in the consolidated financial statements as of December 31, 2014 and 2015 are as follows:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(i) As of December 31, 2014





|                                  |  |           |         |  |                   |  |    |                                      |  |  |                        |  |  |           |      |   |  |  |         | 
|--------------------------------- |  | --------- | ------- |  | ----------------- |  | -- | ------------------------------------ |  |  | ---------------------- |  |  | --------- | ---- | - |  |  | ------- | 
|(In millions of won)              |  |           |         |  |                   |  |    |                                      |  |  |                        |  |  |           |     
|Company                           |  | Net asset |         |  | Ownershipinterest |  |    | Net asset(applyingownershipinterest) |  |  | Intra-grouptransaction |  |  | Bookvalue |     
|Suzhou Raken Technology Co., Ltd. |  | W         | 274,173 |  |                   |  | 51 | %                                    |  |  | 139,828                |  |  |           | (916 | ) |  |  | 138,912 | 

(ii) As of December 31, 2015



|                                  |  |           |         |  |                   |  |    |                                      |  |  |                        |  |  |           |        |   |  |  |         | 
|--------------------------------- |  | --------- | ------- |  | ----------------- |  | -- | ------------------------------------ |  |  | ---------------------- |  |  | --------- | ------ | - |  |  | ------- | 
|(In millions of won)              |  |           |         |  |                   |  |    |                                      |  |  |                        |  |  |           |       
|Company                           |  | Net asset |         |  | Ownershipinterest |  |    | Net asset(applyingownershipinterest) |  |  | Intra-grouptransaction |  |  | Bookvalue |       
|Suzhou Raken Technology Co., Ltd. |  | W         | 289,923 |  |                   |  | 51 | %                                    |  |  | 147,861                |  |  |           | (2,130 | ) |  |  | 145,731 | 



F-46



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|10. | Investments in Equity Accounted Investees, Continued
|--- | ----------------------------------------------------



| | (d) | Book value of individually non-significant joint ventures and associates in aggregate is as follows:
| | --- | ----------------------------------------------------------------------------------------------------

(i) As of December 31, 2013



|                                            |  |                           |         |  |                                                                                 |  |        |                                 |  |  |         |   |  |  |        |  
|------------------------------------------- |  | ------------------------- | ------- |  | ------------------------------------------------------------------------------- |  | ------ | ------------------------------- |  |  | ------- | - |  |  | ------ | -
|(In millions of won)                        |  |                           |         |  |                                                                                 |  |        |                                 |  |  |         |  
|                                            |  | Book value                |         |  | Net profit (loss) of joint ventures and associates(applying ownership interest) | 
|                                            |  | Profit (loss)for the year |         |  | Othercomprehensive loss                                                         |  |        | Totalcomprehensiveincome (loss) | 
|Individually non-significant joint ventures |  | W                         | 31,162  |  |                                                                                 |  | (4,388 | )                               |  |  | (554    | ) |  |  | (4,942 | )
|Individually non-significant associates     |  |                           | 240,866 |  |                                                                                 |  | 22,952 |                                 |  |  | (20,773 | ) |  |  | 2,179  |  
|                                            |  |                           |         | 
|(ii) As of December 31, 2014                |  |                           |         |  |                                                                                 |  |        |                                 |  |  |         |   |  |  |        |  
|                                            |  |                           |         | 
|(In millions of won)                        |  |                           |         |  |                                                                                 |  |        |                                 |  |  |         |  
|                                            |  | Book value                |         |  | Net profit (loss) of joint ventures and associates(applying ownership interest) | 
|                                            |  | Profit (loss)for the year |         |  | Othercomprehensiveincome (loss)                                                 |  |        | Totalcomprehensiveincome (loss) | 
|Individually non-significant joint ventures |  | W                         | 28,733  |  |                                                                                 |  | (3,461 | )                               |  |  | 1,032   |   |  |  | (2,429 | )
|Individually non-significant associates     |  |                           | 239,999 |  |                                                                                 |  | 19,224 |                                 |  |  | (10,369 | ) |  |  | 8,855  |  
|                                            |  |                           |         | 
|(iii) As of December 31, 2015               |  |                           |         |  |                                                                                 |  |        |                                 |  |  |         |   |  |  |        |  
|                                            |  |                           |         | 
|(In millions of won)                        |  |                           |         |  |                                                                                 |  |        |                                 |  |  |         |  
|                                            |  | Book value                |         |  | Net profit (loss) of joint ventures and associates(applying ownership interest) | 
|                                            |  | Profit (loss)for the year |         |  | Othercomprehensiveincome                                                        |  |        | Totalcomprehensiveincome        | 
|Individually non-significant joint ventures |  | W                         |        |  |                                                                                 |  | (991   | )                               |  |  | 3,948   |   |  |  | 2,957  |  
|Individually non-significant associates     |  |                           | 239,024 |  |                                                                                 |  | 14,229 |                                 |  |  | 13,329  |   |  |  | 27,558 |  



F-47



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|10. | Investments in Equity Accounted Investees, Continued
|--- | ----------------------------------------------------



| | (e) | Changes in investments in equity accounted investees for the years ended December 31, 2014 and 2015 are as follows:
| | --- | -------------------------------------------------------------------------------------------------------------------



|                     |  |                                             |         |      |                      |  |        |                   |         |   |                                   |   |         |                                 |        |  |           |   |        |             |         |   |         |   |         |   |         |  |         | 
|-------------------- |  | ------------------------------------------- | ------- | ---- | -------------------- |  | ------ | ----------------- | ------- | - | --------------------------------- | - | ------- | ------------------------------- | ------ |  | --------- | - | ------ | ----------- | ------- | - | ------- | - | ------- | - | ------- |  | ------- | 
|(In millions of won) | 
|                     |  |                                             |         | 2014 |                     
|Company              |  | January 1                                   |         |      | Acquisition/Disposal |  |        | Dividendsreceived |         |   | Equity income(loss) oninvestments |   |         | Othercomprehensiveincome (loss) |        |  | Othergain |   |        | December 31 |        
|Joint venture        |  | Suzhou Raken Technology Co., Ltd.           |         | W    | 134,508              |  |        |                   |        |   |                                   |   |        |                                 |        |  | 2,200     |   |        |             | 2,204   |   |         |   |        |   |         |  | 138,912 | 
|Associates           |  | Individually non-significant joint ventures |         |      | 31,162               |  |        |                   |        |   |                                   |   |        |                                 |        |  | (3,461    | ) |        |             | 1,032   |   |         |   |        |   |         |  | 28,733  | 
|                     |  | Individually non-significant associates     |         |      | 240,866              |  |        |                   | (8,664  | ) |                                   |   | (1,058  | )                               |        |  | 19,224    |   |        |             | (10,369 | ) |         |   |        |   |         |  | 239,999 | 
|                     |  |                                             |         |      |                      |  |        |                   |         |   |                                   |   |         |                                 |        |  |           |   |        |             |         |   |         |   |         |   |         |  |         | 
|                     |  | W                                           | 406,536 |      |                      |  | (8,664 | )                 |         |   | (1,058                            | ) |         |                                 | 17,963 |  |           |   | (7,133 | )           |         |   |        |   |         |   | 407,644 | 
|                     |  |                                             |         |      |                      |  |        |                   |         |   |                                   |   |         |                                 |        |  |           |   |        |             |         |   |         |   |         |   |         |  |         | 
|                     |  |                                             |         |      |                      |  |        |                  
|                     |  |                                             |         |      |                      |  |        |                   |         |   |                                   |   |         |                                 |        |  |           |   |        |             |         |   |         |   |         |   |         |  |         | 
|(In millions of won) | 
|                     |  |                                             |         | 2015 |                     
|Company              |  | January 1                                   |         |      | Acquisition/Disposal |  |        | Dividendsreceived |         |   | Equity income(loss) oninvestments |   |         | Othercomprehensiveincome (loss) |        |  | Othergain |   |        | December 31 |        
|Joint venture        |  | Suzhou Raken Technology Co., Ltd.           |         | W    | 138,912              |  |        |                   |        |   |                                   |   |        |                                 |        |  | 5,527     |   |        |             | 1,292   |   |         |   |        |   |         |  | 145,731 | 
|                     |  | Individually non-significant joint ventures |         |      | 28,733               |  |        |                   | (31,690 | ) |                                   |   |        |                                 |        |  | (991      | ) |        |             | 3,948   |   |         |   |        |   |         |  |        | 
|Associates           |  | Individually non-significant associates     |         |      | 239,999              |  |        |                   | 23,835  |   |                                   |   | (25,577 | )                               |        |  | 14,229    |   |        |             | 13,329  |   |         |   | (26,791 | ) |         |  | 239,024 | 
|                     |  |                                             |         |      |                      |  |        |                   |         |   |                                   |   |         |                                 |        |  |           |   |        |             |         |   |         |   |         |   |         |  |         | 
|                     |  | W                                           | 407,644 |      |                      |  | (7,855 | )                 |         |   | (25,577                           | ) |         |                                 | 18,765 |  |           |   | 18,569 |             |         |   | (26,791 | ) |         |   | 384,755 | 
|                     |  |                                             |         |      |                      |  |        |                   |         |   |                                   |   |         |                                 |        |  |           |   |        |             |         |   |         |   |         |   |         |  |         | 



F-48



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|11. | Property, Plant and Equipment
|--- | -----------------------------

Changes in property, plant and equipment for the year
ended December 31, 2014 are as follows:



|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|--------------------------------------------------- |  | ---- | ------- | - | ---------------------- |  | ---------- | --------------------- |  |  | -------------------- | - |  | ---------------------------- | -------- | - | ------ |  | ---------- | ----- |  |  | -------- | - |  |  | ----------- | -
|(In millions of won)                                |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       | 
|                                                    |  | Land |         |   | Buildingsandstructures |  |            | Machineryandequipment |  |  | Furnitureandfixtures |   |  | Construction-in-progress(*1) |          |   | Others |  |            | Total | 
|Acquisition cost as of January 1, 2014              |  | W    | 438,375 |   |                        |  | 5,620,915  |                       |  |  | 31,533,365           |   |  |                              | 785,971  |   |        |  | 2,745,587  |       |  |  | 269,320  |   |  |  | 41,393,533  |  
|Accumulated depreciation as of January 1, 2014      |  |      |        |   |                        |  | (1,570,196 | )                     |  |  | (27,108,971          | ) |  |                              | (686,312 | ) |        |  |           |       |  |  | (218,867 | ) |  |  | (29,584,346 | )
|Accumulated impairment loss as of January 1, 2014   |  |      |        |   |                        |  |           |                       |  |  | (839                 | ) |  |                              | (1       | ) |        |  |           |       |  |  | (13      | ) |  |  | (853        | )
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|Book value as of January 1, 2014                    |  | W    | 438,375 |   |                        |  | 4,050,719  |                       |  |  | 4,423,555            |   |  |                              | 99,658   |   |        |  | 2,745,587  |       |  |  | 50,440   |   |  |  | 11,808,334  |  
|Additions                                           |  |      |        |   |                        |  |           |                       |  |  |                     |   |  |                              |         |   |        |  | 2,868,331  |       |  |  |         |   |  |  | 2,868,331   |  
|Depreciation                                        |  |      |        |   |                        |  | (269,049   | )                     |  |  | (2,878,246           | ) |  |                              | (55,090  | ) |        |  |           |       |  |  | (19,700  | ) |  |  | (3,222,085  | )
|Impairment loss                                     |  |      |        |   |                        |  |           |                       |  |  | (8,097               | ) |  |                              |         |   |        |  |           |       |  |  |         |   |  |  | (8,097      | )
|Disposals                                           |  |      | (3,778  | ) |                        |  | (9,507     | )                     |  |  | (14,786              | ) |  |                              | (124     | ) |        |  | (4,414     | )     |  |  | (222     | ) |  |  | (32,831     | )
|Change due to disposal of a subsidiary              |  |      |        |   |                        |  |           |                       |  |  | (3,280               | ) |  |                              | (2,453   | ) |        |  |           |       |  |  | (782     | ) |  |  | (6,515      | )
|Others (*2)                                         |  |      | 4       |   |                        |  | 336,522    |                       |  |  | 4,052,158            |   |  |                              | 66,809   |   |        |  | (4,477,903 | )     |  |  | 22,410   |   |  |  |            |  
|Effect of movements in exchange rates               |  |      |        |   |                        |  | 5,814      |                       |  |  | 47,454               |   |  |                              | 317      |   |        |  | (8,852     | )     |  |  | 420      |   |  |  | 45,153      |  
|Government grants received                          |  |      |        |   |                        |  |           |                       |  |  | (49,424              | ) |  |                              |         |   |        |  |           |       |  |  |         |   |  |  | (49,424     | )
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|Book value as of December 31, 2014                  |  | W    | 434,601 |   |                        |  | 4,114,499  |                       |  |  | 5,569,334            |   |  |                              | 109,117  |   |        |  | 1,122,749  |       |  |  | 52,566   |   |  |  | 11,402,866  |  
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|Acquisition cost as of December 31, 2014            |  | W    | 434,601 |   |                        |  | 5,952,542  |                       |  |  | 35,359,577           |   |  |                              | 833,458  |   |        |  | 1,122,749  |       |  |  | 236,323  |   |  |  | 43,939,250  |  
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|Accumulated depreciation as of December 31, 2014    |  | W    |        |   |                        |  | (1,838,043 | )                     |  |  | (29,782,076          | ) |  |                              | (724,340 | ) |        |  |           |       |  |  | (183,744 | ) |  |  | (32,528,203 | )
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|Accumulated impairment loss as of December 31, 2014 |  | W    |        |   |                        |  |           |                       |  |  | (8,167               | ) |  |                              | (1       | ) |        |  |           |       |  |  | (13      | ) |  |  | (8,181      | )
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  



|(*1) | As of December 31, 2014, construction-in-progress relates to construction of manufacturing facilities.
|---- | ------------------------------------------------------------------------------------------------------

|(*2) | Others are mainly amounts transferred from construction-in-progress.
|---- | --------------------------------------------------------------------



F-49



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|11. | Property, Plant and Equipment, Continued
|--- | ----------------------------------------



Changes in property, plant and equipment for the year ended December 31, 2015 are as
follows:



|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|--------------------------------------------------- |  | ---- | ------- | - | ---------------------- |  | ---------- | --------------------- |  |  | -------------------- | - |  | ---------------------------- | -------- | - | ------ |  | ---------- | ----- |  |  | -------- | - |  |  | ----------- | -
|(In millions of won)                                |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       | 
|                                                    |  | Land |         |   | Buildingsandstructures |  |            | Machineryandequipment |  |  | Furnitureandfixtures |   |  | Construction-in-progress(*1) |          |   | Others |  |            | Total | 
|Acquisition cost as of January 1, 2015              |  | W    | 434,601 |   |                        |  | 5,952,542  |                       |  |  | 35,359,577           |   |  |                              | 833,458  |   |        |  | 1,122,749  |       |  |  | 236,323  |   |  |  | 43,939,250  |  
|Accumulated depreciation as of January 1, 2015      |  |      |        |   |                        |  | (1,838,043 | )                     |  |  | (29,782,076          | ) |  |                              | (724,340 | ) |        |  |           |       |  |  | (183,744 | ) |  |  | (32,528,203 | )
|Accumulated impairment loss as of January 1, 2015   |  |      |        |   |                        |  |           |                       |  |  | (8,167               | ) |  |                              | (1       | ) |        |  |           |       |  |  | (13      | ) |  |  | (8,181      | )
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|Book value as of January 1, 2015                    |  | W    | 434,601 |   |                        |  | 4,114,499  |                       |  |  | 5,569,334            |   |  |                              | 109,117  |   |        |  | 1,122,749  |       |  |  | 52,566   |   |  |  | 11,402,866  |  
|Additions                                           |  |      |        |   |                        |  |           |                       |  |  |                     |   |  |                              |         |   |        |  | 2,561,108  |       |  |  |         |   |  |  | 2,561,108   |  
|Business combinations (*2)                          |  |      |        |   |                        |  |           |                       |  |  | 24,466               |   |  |                              | 490      |   |        |  |           |       |  |  | 2,054    |   |  |  | 27,010      |  
|Depreciation                                        |  |      |        |   |                        |  | (278,225   | )                     |  |  | (2,618,820           | ) |  |                              | (56,353  | ) |        |  |           |       |  |  | (15,996  | ) |  |  | (2,969,394  | )
|Impairment loss                                     |  |      |        |   |                        |  |           |                       |  |  | (3,027               | ) |  |                              |         |   |        |  |           |       |  |  |         |   |  |  | (3,027      | )
|Disposals                                           |  |      | (2,092  | ) |                        |  | (5,651     | )                     |  |  | (437,515             | ) |  |                              | (913     | ) |        |  |           |       |  |  | (9,992   | ) |  |  | (456,163    | )
|Others (*3)                                         |  |      | 30,210  |   |                        |  | 48,824     |                       |  |  | 2,232,756            |   |  |                              | 79,910   |   |        |  | (2,415,227 | )     |  |  | 23,527   |   |  |  |            |  
|Effect of movements in exchange rates               |  |      | 68      |   |                        |  | 986        |                       |  |  | (11,673              | ) |  |                              | (688     | ) |        |  | 316        |       |  |  | (372     | ) |  |  | (11,363     | )
|Government grants received                          |  |      |        |   |                        |  |           |                       |  |  | (5,017               | ) |  |                              |         |   |        |  |           |       |  |  |         |   |  |  | (5,017      | )
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|Book value as of December 31, 2015                  |  | W    | 462,787 |   |                        |  | 3,880,433  |                       |  |  | 4,750,504            |   |  |                              | 131,563  |   |        |  | 1,268,946  |       |  |  | 51,787   |   |  |  | 10,546,020  |  
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|Acquisition cost as of December 31, 2015            |  | W    | 462,787 |   |                        |  | 5,998,384  |                       |  |  | 36,450,747           |   |  |                              | 794,894  |   |        |  | 1,268,946  |       |  |  | 216,044  |   |  |  | 45,191,802  |  
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|Accumulated depreciation as of December 31, 2015    |  | W    |        |   |                        |  | (2,117,951 | )                     |  |  | (31.694.483          | ) |  |                              | (663,331 | ) |        |  |           |       |  |  | (164,257 | ) |  |  | (34,640,022 | )
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  
|Accumulated impairment loss as of December 31, 2015 |  | W    |        |   |                        |  |           |                       |  |  | (5,760               | ) |  |                              |         |   |        |  |           |       |  |  |         |   |  |  | (5,760      | )
|                                                    |  |      |         |   |                        |  |            |                       |  |  |                      |   |  |                              |          |   |        |  |            |       |  |  |          |   |  |  |             |  



|(*1) | As of December 31, 2015, construction-in-progress relates to construction of manufacturing facilities.
|---- | ------------------------------------------------------------------------------------------------------

|(*2) | Business combinations include property, plant and equipment related to OLED Lighting business and Global OLED Technology LLC as the Controlling Company acquired OLED Lighting business from LG Chem Ltd. and made
additional investment in Global OLED Technology and its control was transferred.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*3) | Others are mainly amounts transferred from construction-in-progress.
|---- | --------------------------------------------------------------------

The capitalized
borrowing costs and capitalization rate for the years ended December 31, 2013, 2014 and 2015 are as follows:



|                            |  |      |        |   |      |  |        |      |  |  |        |  
|--------------------------- |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|(In millions of won)        |  |      |        |   |      |  |        |      | 
|                            |  | 2013 |        |   | 2014 |  |        | 2015 | 
|Capitalized borrowing costs |  | W    | 26,144 |   |      |  | 35,771 |      |  |  | 13,696 |  
|Capitalization rate         |  |      | 4.56   | % |      |  | 4.23   | %    |  |  | 3.73   | %



F-50



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|12. | Intangible Assets
|--- | -----------------

Changes in intangible assets for the year ended December 31,
2014 are as follows:



|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |          |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |        |  |  |  |         |   |  |  |            |  
|--------------------------------------------------- |  | -------------------------- | -------- | - | -------- |  | -------- | ------------ |  |  | ---------------- | - |  | ---------------------------------- | -------- | - | --------------------- |  | ------- | ---------- |  |  | --------- | - |  | ---------- | ------ | - | ----- |  | ------ |  |  |  | ------- | - |  |  | ---------- | -
|(In millions of won)                                |  | Intellectualpropertyrights |          |   | Software |  |          | Member-ships |  |  | Developmentcosts |   |  | Construction-in-progress(software) |          |   | Customerrelationships |  |         | Technology |  |  | Good-will |   |  | Others(*2) |        |   | Total | 
|Acquisition cost as of January 1, 2014              |  | W                          | 561,400  |   |          |  | 524,759  |              |  |  | 50,258           |   |  |                                    | 617,355  |   |                       |  | 10,704  |            |  |  | 24,011    |   |  |            | 11,074 |   |       |  | 14,593 |  |  |  | 13,089  |   |  |  | 1,827,243  |  
|Accumulated amortization as of January 1, 2014      |  |                            | (467,707 | ) |          |  | (398,752 | )            |  |  |                 |   |  |                                    | (454,112 | ) |                       |  |        |            |  |  | (12,591   | ) |  |            | (4,065 | ) |       |  |       |  |  |  | (12,581 | ) |  |  | (1,349,808 | )
|Accumulated impairment loss as of January 1, 2014   |  |                            |         |   |          |  |         |              |  |  | (9,250           | ) |  |                                    |         |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |       |  |  |  |        |   |  |  | (9,250     | )
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |          |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |        |  |  |  |         |   |  |  |            |  
|Book value as of January 1, 2014                    |  | W                          | 93,693   |   |          |  | 126,007  |              |  |  | 41,008           |   |  |                                    | 163,243  |   |                       |  | 10,704  |            |  |  | 11,420    |   |  |            | 7,009  |   |       |  | 14,593 |  |  |  | 508     |   |  |  | 468,185    |  
|Additions-internally developed                      |  |                            |         |   |          |  |         |              |  |  |                 |   |  |                                    | 267,081  |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |       |  |  |  |        |   |  |  | 267,081    |  
|Additions-external purchases                        |  |                            | 26,160   |   |          |  |         |              |  |  |                 |   |  |                                    |         |   |                       |  | 84,797  |            |  |  |          |   |  |            |       |   |       |  |       |  |  |  |        |   |  |  | 110,957    |  
|Amortization (*1)                                   |  |                            | (17,754  | ) |          |  | (70,802  | )            |  |  |                 |   |  |                                    | (176,700 | ) |                       |  |        |            |  |  | (3,428    | ) |  |            | (1,106 | ) |       |  |       |  |  |  | (436    | ) |  |  | (270,226   | )
|Disposals                                           |  |                            | (672     | ) |          |  |         |              |  |  |                 |   |  |                                    |         |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |       |  |  |  |        |   |  |  | (672       | )
|Change due to disposal of a subsidiary              |  |                            |         |   |          |  | (514     | )            |  |  |                 |   |  |                                    |         |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |       |  |  |  |        |   |  |  | (514       | )
|Impairment loss                                     |  |                            |         |   |          |  |         |              |  |  | (492             | ) |  |                                    |         |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |       |  |  |  |        |   |  |  | (492       | )
|Transfer from construction-in-progress              |  |                            |         |   |          |  | 90,274   |              |  |  |                 |   |  |                                    |         |   |                       |  | (90,274 | )          |  |  |          |   |  |            |       |   |       |  |       |  |  |  |        |   |  |  |           |  
|Effect of movements in exchange rates               |  |                            |         |   |          |  | 2,331    |              |  |  |                 |   |  |                                    |         |   |                       |  | 20      |            |  |  |          |   |  |            |       |   |       |  |       |  |  |  |        |   |  |  | 2,351      |  
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |          |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |        |  |  |  |         |   |  |  |            |  
|Book value as of December 31, 2014                  |  | W                          | 101,427  |   |          |  | 147,296  |              |  |  | 40,516           |   |  |                                    | 253,624  |   |                       |  | 5,247   |            |  |  | 7,992     |   |  |            | 5,903  |   |       |  | 14,593 |  |  |  | 72      |   |  |  | 576,670    |  
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |          |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |        |  |  |  |         |   |  |  |            |  
|Acquisition cost as of December 31, 2014            |  | W                          | 587,068  |   |          |  | 611,149  |              |  |  | 50,258           |   |  |                                    | 884,436  |   |                       |  | 5,247   |            |  |  | 24,011    |   |  |            | 11,074 |   |       |  | 14,593 |  |  |  | 13,089  |   |  |  | 2,200,925  |  
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |          |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |        |  |  |  |         |   |  |  |            |  
|Accumulated amortization as of December 31, 2014    |  | W                          | (485,641 | ) |          |  | (463,853 | )            |  |  |                 |   |  |                                    | (630,812 | ) |                       |  |        |            |  |  | (16,019   | ) |  |            | (5,171 | ) |       |  |       |  |  |  | (13,017 | ) |  |  | (1,614,513 | )
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |          |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |        |  |  |  |         |   |  |  |            |  
|Accumulated impairment loss as of December 31, 2014 |  | W                          |         |   |          |  |         |              |  |  | (9,742           | ) |  |                                    |         |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |       |  |  |  |        |   |  |  | (9,742     | )
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |          |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |        |  |  |  |         |   |  |  |            |  



|(*1) | The Group has classified the amortization as manufacturing overhead costs, selling expenses, administrative expenses and research and development expenses.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|(*2) | Others mainly consist of rights to use of electricity and gas supply facilities.
|---- | --------------------------------------------------------------------------------



F-51



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|12. | Intangible Assets, Continued
|--- | ----------------------------



Changes in intangible assets for the year ended December 31, 2015 are as follows:



|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |           |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |         |  |  |  |         |   |  |  |            |  
|--------------------------------------------------- |  | -------------------------- | -------- | - | -------- |  | -------- | ------------ |  |  | ---------------- | - |  | ---------------------------------- | --------- | - | --------------------- |  | ------- | ---------- |  |  | --------- | - |  | ---------- | ------ | - | ----- |  | ------- |  |  |  | ------- | - |  |  | ---------- | -
|(In millions of won)                                |  | Intellectualpropertyrights |          |   | Software |  |          | Member-ships |  |  | Developmentcosts |   |  | Construction-in-progress(software) |           |   | Customerrelationships |  |         | Technology |  |  | Good-will |   |  | Others(*3) |        |   | Total | 
|Acquisition cost as of January 1, 2015              |  | W                          | 587,068  |   |          |  | 611,149  |              |  |  | 50,258           |   |  |                                    | 884,436   |   |                       |  | 5,247   |            |  |  | 24,011    |   |  |            | 11,074 |   |       |  | 14,593  |  |  |  | 13,089  |   |  |  | 2,200,925  |  
|Accumulated amortization as of January 1, 2015      |  |                            | (485,641 | ) |          |  | (463,853 | )            |  |  |                 |   |  |                                    | (630,812  | ) |                       |  |        |            |  |  | (16,019   | ) |  |            | (5,171 | ) |       |  |        |  |  |  | (13,017 | ) |  |  | (1,614,513 | )
|Accumulated impairment loss as of January 1, 2015   |  |                            |         |   |          |  |         |              |  |  | (9,742           | ) |  |                                    |          |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |        |  |  |  |        |   |  |  | (9,742     | )
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |           |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |         |  |  |  |         |   |  |  |            |  
|Book value as of January 1, 2015                    |  | W                          | 101,427  |   |          |  | 147,296  |              |  |  | 40,516           |   |  |                                    | 253,624   |   |                       |  | 5,247   |            |  |  | 7,992     |   |  |            | 5,903  |   |       |  | 14,593  |  |  |  | 72      |   |  |  | 576,670    |  
|Additions-internally developed                      |  |                            |         |   |          |  |         |              |  |  |                 |   |  |                                    | 227,067   |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |        |  |  |  |        |   |  |  | 227,067    |  
|Additions-external purchases                        |  |                            | 28,504   |   |          |  |         |              |  |  | 1,930            |   |  |                                    |          |   |                       |  | 73,098  |            |  |  |          |   |  |            |       |   |       |  |        |  |  |  |        |   |  |  | 103,532    |  
|Business combinations (*1)                          |  |                            | 197,454  |   |          |  | 144      |              |  |  |                 |   |  |                                    |          |   |                       |  |        |            |  |  | 35,165    |   |  |            |       |   |       |  | 88,932  |  |  |  |        |   |  |  | 321,695    |  
|Amortization (*2)                                   |  |                            | (30,780  | ) |          |  | (77,359  | )            |  |  |                 |   |  |                                    | (293,461  | ) |                       |  |        |            |  |  | (3,712    | ) |  |            | (1,104 | ) |       |  |        |  |  |  | (46     | ) |  |  | (406,462   | )
|Disposals                                           |  |                            |         |   |          |  | (11      | )            |  |  | (1,153           | ) |  |                                    |          |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |        |  |  |  |        |   |  |  | (1,164     | )
|Impairment loss                                     |  |                            |         |   |          |  |         |              |  |  | (239             | ) |  |                                    |          |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |        |  |  |  |        |   |  |  | (239       | )
|Reversal of impairment loss                         |  |                            |         |   |          |  |         |              |  |  | 80               |   |  |                                    |          |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |        |  |  |  |        |   |  |  | 80         |  
|Transfer from construction-in-progress              |  |                            |         |   |          |  | 75,401   |              |  |  |                 |   |  |                                    |          |   |                       |  | (75,401 | )          |  |  |          |   |  |            |       |   |       |  |        |  |  |  |        |   |  |  |           |  
|Effect of movements in exchange rates               |  |                            | 4,333    |   |          |  | 12,161   |              |  |  | 85               |   |  |                                    |          |   |                       |  | 42      |            |  |  |          |   |  |            |       |   |       |  | 930     |  |  |  |        |   |  |  | 17,551     |  
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |           |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |         |  |  |  |         |   |  |  |            |  
|Book value as of December 31, 2015                  |  | W                          | 300,938  |   |          |  | 157,632  |              |  |  | 41,219           |   |  |                                    | 187,230   |   |                       |  | 2,986   |            |  |  | 39,445    |   |  |            | 4,799  |   |       |  | 104,455 |  |  |  | 26      |   |  |  | 838,730    |  
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |           |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |         |  |  |  |         |   |  |  |            |  
|Acquisition cost as of December 31, 2015            |  | W                          | 817,359  |   |          |  | 698,844  |              |  |  | 51,092           |   |  |                                    | 1,111,503 |   |                       |  | 2,986   |            |  |  | 59,176    |   |  |            | 11,074 |   |       |  | 104,455 |  |  |  | 13,089  |   |  |  | 2,869,578  |  
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |           |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |         |  |  |  |         |   |  |  |            |  
|Accumulated amortization as of December 31, 2015    |  | W                          | (516,421 | ) |          |  | (541,212 | )            |  |  |                 |   |  |                                    | (924,273  | ) |                       |  |        |            |  |  | (19,731   | ) |  |            | (6,275 | ) |       |  |        |  |  |  | (13,063 | ) |  |  | (2,020,975 | )
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |           |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |         |  |  |  |         |   |  |  |            |  
|Accumulated impairment loss as of December 31, 2015 |  | W                          |         |   |          |  |         |              |  |  | (9,873           | ) |  |                                    |          |   |                       |  |        |            |  |  |          |   |  |            |       |   |       |  |        |  |  |  |        |   |  |  | (9,873     | )
|                                                    |  |                            |          |   |          |  |          |              |  |  |                  |   |  |                                    |           |   |                       |  |         |            |  |  |           |   |  |            |        |   |       |  |         |  |  |  |         |   |  |  |            |  



F-52



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|12. | Intangible Assets, Continued
|--- | ----------------------------



|(*1) | Business combinations include intangible assets related to OLED Lighting business and Global OLED Technology LLC as the Controlling Company acquired OLED business from LG Chem Ltd. and made additional investment in
Global OLED Technology and its control was transferred.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*2) | The Group has classified the amortization as manufacturing overhead costs, selling expenses, administrative expenses and research and development expenses.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|(*3) | Others mainly consist of rights to use of electricity and gas supply facilities.
|---- | --------------------------------------------------------------------------------



F-53



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|13. | Financial Instruments
|--- | ---------------------



| | (a) | Credit Risk
| | --- | -----------

(i) Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is as
follows:



|                                         |  |                   |           |  |                   |  |           | 
|---------------------------------------- |  | ----------------- | --------- |  | ----------------- |  | --------- | 
|(In millions of won)                     |  |                   |           |  |                   | 
|                                         |  | December 31, 2014 |           |  | December 31, 2015 | 
|Cash and cash equivalents                |  | W                 | 889,839   |  |                   |  | 751,662   | 
|Deposits in banks                        |  |                   | 1,534,909 |  |                   |  | 1,772,350 | 
|Trade accounts and notes receivable, net |  |                   | 3,444,477 |  |                   |  | 4,097,836 | 
|Other accounts receivable, net           |  |                   | 119,478   |  |                   |  | 105,815   | 
|Available-for-sale financial assets      |  |                   | 3,237     |  |                   |  | 709       | 
|Loans                                    |  |                   |          |  |                   |  | 15,856    | 
|Other non-current financial assets       |  |                   | 7,859     |  |                   |  | 5,148     | 
|Deposits                                 |  |                   | 19,602    |  |                   |  | 22,234    | 
|                                         |  |                   |           |  |                   |  |           | 
|                                         |  | W                 | 6,019,401 |  |                   |  | 6,771,610 | 
|                                         |  |                   |           |  |                   |  |           | 

The maximum exposure to credit risk for trade accounts and notes receivable at the reporting date by
geographic region is as follows:



|                     |  |                   |           |  |                   |  |           | 
|-------------------- |  | ----------------- | --------- |  | ----------------- |  | --------- | 
|(In millions of won) |  |                   |           |  |                   | 
|                     |  | December 31, 2014 |           |  | December 31, 2015 | 
|Domestic             |  | W                 | 406,163   |  |                   |  | 425,635   | 
|Euro-zone countries  |  |                   | 309,296   |  |                   |  | 382,326   | 
|Japan                |  |                   | 135,972   |  |                   |  | 156,746   | 
|United States        |  |                   | 1,300,700 |  |                   |  | 1,211,518 | 
|China                |  |                   | 746,111   |  |                   |  | 961,425   | 
|Taiwan               |  |                   | 378,272   |  |                   |  | 654,257   | 
|Others               |  |                   | 167,963   |  |                   |  | 305,929   | 
|                     |  |                   |           |  |                   |  |           | 
|                     |  | W                 | 3,444,477 |  |                   |  | 4,097,836 | 
|                     |  |                   |           |  |                   |  |           | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|13. | Financial Instruments, Continued
|--- | --------------------------------



(ii) Impairment loss

The aging of trade accounts and notes receivable at the reporting date is as follows:



|                           |  |                   |           |  |                   |  |      |           |  |  |                |  |  |  |        |  
|-------------------------- |  | ----------------- | --------- |  | ----------------- |  | ---- | --------- |  |  | -------------- |  |  |  | ------ | -
|(In millions of won)       |  |                   |           |  |                   |  |      |           |  |  |                | 
|                           |  | December 31, 2014 |           |  | December 31, 2015 | 
|                           |  | Bookvalue         |           |  | Impairmentloss    |  |      | Bookvalue |  |  | Impairmentloss | 
|Not past due               |  | W                 | 3,412,933 |  |                   |  | (762 | )         |  |  | 4,076,022      |  |  |  | (1,338 | )
|Past due 1-15 days         |  |                   | 26,220    |  |                   |  | (30  | )         |  |  | 6,555          |  |  |  | (3     | )
|Past due 16-30 days        |  |                   | 4,130     |  |                   |  | (13  | )         |  |  | 201            |  |  |  |       |  
|Past due 31-60 days        |  |                   | 1,830     |  |                   |  | (18  | )         |  |  |               |  |  |  |       |  
|Past due more than 60 days |  |                   | 189       |  |                   |  | (2   | )         |  |  | 16,565         |  |  |  | (166   | )
|                           |  |                   |           |  |                   |  |      |           |  |  |                |  |  |  |        |  
|                           |  | W                 | 3,445,302 |  |                   |  | (825 | )         |  |  | 4,099,343      |  |  |  | (1,507 | )
|                           |  |                   |           |  |                   |  |      |           |  |  |                |  |  |  |        |  

The movement in the allowance for impairment in respect of receivables for the years ended December 31,
2013, 2014 and 2015 is as follows:



|                                     |  |      |       |   |      |  |     |      |  |  |       | 
|------------------------------------ |  | ---- | ----- | - | ---- |  | --- | ---- |  |  | ----- | 
|(In millions of won)                 |  |      |       |   |      |  |     |      | 
|                                     |  | 2013 |       |   | 2014 |  |     | 2015 | 
|Balance at the beginning of the year |  | W    | 1,019 |   |      |  | 330 |      |  |  | 825   | 
|(Reversal of) Bad debt expense       |  |      | (689  | ) |      |  | 495 |      |  |  | 682   | 
|                                     |  |      |       |   |      |  |     |      |  |  |       | 
|Balance at the end of the year       |  | W    | 330   |   |      |  | 825 |      |  |  | 1,507 | 
|                                     |  |      |       |   |      |  |     |      |  |  |       | 

There were no receivables written-off for the years ended December 31, 2013, 2014 and 2015.



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|13. | Financial Instruments, Continued
|--- | --------------------------------



| | (b) | Liquidity Risk
| | --- | --------------



| |  | The following are the contractual maturities of financial liabilities, including estimated interest payments, as of December 31, 2015.
| |  | --------------------------------------------------------------------------------------------------------------------------------------



|                                             |  |                |           |  |                        |  |           |                 |  |  |            |  |  |          |         |  |           |  |         |                  |  |  |           |   |  |  |        | 
|-------------------------------------------- |  | -------------- | --------- |  | ---------------------- |  | --------- | --------------- |  |  | ---------- |  |  | -------- | ------- |  | --------- |  | ------- | ---------------- |  |  | --------- | - |  |  | ------ | 
|(In millions of won)                         |  |                |           |  | Contractual cash flows | 
|                                             |  | Carryingamount |           |  | Total                  |  |           | 6 monthsor less |  |  | 6-12months |  |  | 1-2years |         |  | 2-5 years |  |         | More than5 years | 
|Non-derivative financial liabilities         |  |                |           |  |                        |  |           |                 |  |  |            |  |  |          |         |  |           |  |         |                  |  |  |           |   |  |  |        | 
|Secured bank loan                            |  | W              | 698,192   |  |                        |  | 770,750   |                 |  |  | 13,037     |  |  |          | 14,234  |  |           |  | 114,611 |                  |  |  | 628,868   |   |  |  |       | 
|Unsecured bank loans                         |  |                | 1,239,914 |  |                        |  | 1,277,900 |                 |  |  | 185,835    |  |  |          | 244,525 |  |           |  | 287,240 |                  |  |  | 560,240   |   |  |  | 60     | 
|Unsecured bond issues                        |  |                | 2,286,125 |  |                        |  | 2,425,220 |                 |  |  | 445,222    |  |  |          | 622,472 |  |           |  | 404,477 |                  |  |  | 869,763   |   |  |  | 83,286 | 
|Trade accounts and notes payable             |  |                | 2,764,694 |  |                        |  | 2,764,694 |                 |  |  | 2,764,694  |  |  |          |        |  |           |  |        |                  |  |  |          |   |  |  |       | 
|Other accounts payable                       |  |                | 1,499,722 |  |                        |  | 1,500,007 |                 |  |  | 1,497,347  |  |  |          | 2,660   |  |           |  |        |                  |  |  |          |   |  |  |       | 
|Other non-current liabilities                |  |                | 8,401     |  |                        |  | 9,327     |                 |  |  |           |  |  |          |        |  |           |  | 5,337   |                  |  |  | 3,990     |   |  |  |       | 
|Derivative financial liabilities             |  |                |           |  |                        |  |           |                 |  |  |            |  |  |          |         |  |           |  |         |                  |  |  |           |   |  |  |        | 
|Interest rate swap not qualified for hedging |  |                | 85        |  |                        |  | 83        |                 |  |  | 5          |  |  |          | 97      |  |           |  | 89      |                  |  |  | (108      | ) |  |  |       | 
|                                             |  |                |           |  |                        |  |           |                 |  |  |            |  |  |          |         |  |           |  |         |                  |  |  |           |   |  |  |        | 
|                                             |  | W              | 8,497,133 |  |                        |  | 8,747,981 |                 |  |  | 4,906,140  |  |  |          | 883,988 |  |           |  | 811,754 |                  |  |  | 2,062,753 |   |  |  | 83,346 | 
|                                             |  |                |           |  |                        |  |           |                 |  |  |            |  |  |          |         |  |           |  |         |                  |  |  |           |   |  |  |        | 

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or
at significantly different amounts.



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|13. | Financial Instruments, Continued
|--- | --------------------------------



| | (c) | Currency Risk
| | --- | -------------

(i) Exposure to currency risk

The Groups exposure to foreign currency risk based on notional amounts at the reporting date is as follows:



|                                               |  |                   |        |   |     |  |         |     |  |  |        |   |  |     |      |   |     |  |     |     |  |  |     |   |  |  |     |  
|---------------------------------------------- |  | ----------------- | ------ | - | --- |  | ------- | --- |  |  | ------ | - |  | --- | ---- | - | --- |  | --- | --- |  |  | --- | - |  |  | --- | -
|(In millions)                                  |  | December 31, 2014 |       
|                                               |  | USD               |        |   | JPY |  |         | CNY |  |  | TWD    |   |  | EUR |      |   | PLN |  |     | BRL | 
|Cash and cash equivalents                      |  |                   | 507    |   |     |  | 1,221   |     |  |  | 1,565  |   |  |     | 146  |   |     |  | 1   |     |  |  | 79  |   |  |  |    |  
|Trade accounts and notes receivable            |  |                   | 2,737  |   |     |  | 682     |     |  |  | 962    |   |  |     |     |   |     |  |    |     |  |  |    |   |  |  |    |  
|Other accounts receivable                      |  |                   | 13     |   |     |  |        |     |  |  | 205    |   |  |     | 1    |   |     |  | 21  |     |  |  |    |   |  |  |    |  
|Long-term other accounts receivable            |  |                   | 6      |   |     |  |        |     |  |  |       |   |  |     |     |   |     |  |    |     |  |  |    |   |  |  |    |  
|Other assets denominated in foreign currencies |  |                   | 1      |   |     |  | 255     |     |  |  | 18     |   |  |     | 7    |   |     |  |    |     |  |  |    |   |  |  |    |  
|Trade accounts and notes payable               |  |                   | (1,750 | ) |     |  | (21,468 | )   |  |  | (1,233 | ) |  |     |     |   |     |  |    |     |  |  |    |   |  |  |    |  
|Other accounts payable                         |  |                   | (268   | ) |     |  | (6,056  | )   |  |  | (1,522 | ) |  |     | (128 | ) |     |  | (20 | )   |  |  | (11 | ) |  |  | (34 | )
|Long-term other accounts payable               |  |                   |       |   |     |  |        |     |  |  | (1     | ) |  |     |     |   |     |  |    |     |  |  |    |   |  |  |    |  
|Debt                                           |  |                   | (1,508 | ) |     |  |        |     |  |  |       |   |  |     |     |   |     |  |    |     |  |  |    |   |  |  |    |  
|                                               |  |                   |        |   |     |  |         |     |  |  |        |   |  |     |      |   |     |  |     |     |  |  |     |   |  |  |     |  
|Net exposure                                   |  |                   | (262   | ) |     |  | (25,366 | )   |  |  | (6     | ) |  |     | 26   |   |     |  | 2   |     |  |  | 68  |   |  |  | (34 | )
|                                               |  |                   |        |   |     |  |         |     |  |  |        |   |  |     |      |   |     |  |     |     |  |  |     |   |  |  |     |  



|                                               |  |                   |        |   |     |  |         |     |  |  |        |   |  |     |    |   |     |  |    |   |  |  |     |  
|---------------------------------------------- |  | ----------------- | ------ | - | --- |  | ------- | --- |  |  | ------ | - |  | --- | -- | - | --- |  | -- | - |  |  | --- | -
|(In millions)                                  |  | December 31, 2015 |       
|                                               |  | USD               |        |   | JPY |  |         | CNY |  |  | TWD    |   |  | EUR |    |   | PLN | 
|Cash and cash equivalents                      |  |                   | 578    |   |     |  | 1,005   |     |  |  | 866    |   |  |     | 12 |   |     |  |   |   |  |  | 45  |  
|Deposits in banks                              |  |                   |       |   |     |  |        |     |  |  | 1,200  |   |  |     |   |   |     |  |   |   |  |  |    |  
|Trade accounts and notes receivable            |  |                   | 2,935  |   |     |  | 12      |     |  |  | 1,465  |   |  |     |   |   |     |  |   |   |  |  |    |  
|Other accounts receivable                      |  |                   | 20     |   |     |  | 2       |     |  |  | 101    |   |  |     | 13 |   |     |  |   |   |  |  |    |  
|Long-term other accounts receivable            |  |                   | 4      |   |     |  |        |     |  |  |       |   |  |     |   |   |     |  |   |   |  |  |    |  
|Other assets denominated in foreign currencies |  |                   | 1      |   |     |  | 254     |     |  |  | 27     |   |  |     | 6  |   |     |  |   |   |  |  |    |  
|Trade accounts and notes payable               |  |                   | (1,207 | ) |     |  | (17,016 | )   |  |  | (1,267 | ) |  |     |   |   |     |  |   |   |  |  |    |  
|Other accounts payable                         |  |                   | (541   | ) |     |  | (13,821 | )   |  |  | (1,352 | ) |  |     | (7 | ) |     |  | (2 | ) |  |  | (11 | )
|Debt                                           |  |                   | (1,185 | ) |     |  |        |     |  |  | (1,964 | ) |  |     |   |   |     |  |   |   |  |  |    |  
|                                               |  |                   |        |   |     |  |         |     |  |  |        |   |  |     |    |   |     |  |    |   |  |  |     |  
|Net exposure                                   |  |                   | 605    |   |     |  | (29,564 | )   |  |  | (924   | ) |  |     | 24 |   |     |  | (2 | ) |  |  | 34  |  
|                                               |  |                   |        |   |     |  |         |     |  |  |        |   |  |     |    |   |     |  |    |   |  |  |     |  



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|13. | Financial Instruments, Continued
|--- | --------------------------------



Significant exchange rates applied during the reporting periods are as follows:



|         |  |              |          |  |                          |  |          |      |  |  |                  |  |  |                  |          |  |  |  |          | 
|-------- |  | ------------ | -------- |  | ------------------------ |  | -------- | ---- |  |  | ---------------- |  |  | ---------------- | -------- |  |  |  | -------- | 
|(In won) |  | Average rate |          |  | Reporting date spot rate | 
|         |  | 2013         |          |  | 2014                     |  |          | 2015 |  |  | December 31,2014 |  |  | December 31,2015 |         
|USD      |  | W            | 1,094.79 |  |                          |  | 1,052.70 |      |  |  | 1,131.30         |  |  | W                | 1,099.20 |  |  |  | 1,172.00 | 
|JPY      |  |              | 11.23    |  |                          |  | 9.96     |      |  |  | 9.35             |  |  |                  | 9.20     |  |  |  | 9.72     | 
|CNY      |  |              | 178.06   |  |                          |  | 170.83   |      |  |  | 179.47           |  |  |                  | 176.81   |  |  |  | 178.48   | 
|TWD      |  |              | 36.89    |  |                          |  | 34.73    |      |  |  | 35.64            |  |  |                  | 34.69    |  |  |  | 35.51    | 
|EUR      |  |              | 1,453.39 |  |                          |  | 1,398.37 |      |  |  | 1,256.17         |  |  |                  | 1,336.52 |  |  |  | 1,280.53 | 
|PLN      |  |              | 346.39   |  |                          |  | 334.20   |      |  |  | 300.22           |  |  |                  | 312.49   |  |  |  | 300.79   | 
|BRL      |  |              | 509.26   |  |                          |  | 448.16   |      |  |  | 344.70           |  |  |                  | 413.62   |  |  |  | 295.90   | 

(ii) Sensitivity analysis

A weaker won, as indicated below, against the following currencies which comprise the Groups assets or liabilities denominated in a
foreign currency as of December 31, 2014 and 2015, would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considers to be
reasonably possible as of the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, would remain constant. The changes in equity and profit or loss would have been as follows:



|                          |  |                   |         |   |                   |  |        |        |  |  |               |   |  |  |        |  
|------------------------- |  | ----------------- | ------- | - | ----------------- |  | ------ | ------ |  |  | ------------- | - |  |  | ------ | -
|(In millions of won)      |  | December 31, 2014 |         |   | December 31, 2015 | 
|                          |  | Equity            |         |   | Profit orloss     |  |        | Equity |  |  | Profit orloss |  
|USD (5 percent weakening) |  | W                 | (15,674 | ) |                   |  | 3,829  |        |  |  | 24,838        |   |  |  | 33,152 |  
|JPY (5 percent weakening) |  |                   | (9,701  | ) |                   |  | (6,169 | )      |  |  | (11,340       | ) |  |  | (9,486 | )
|CNY (5 percent weakening) |  |                   | 197     |   |                   |  | (757   | )      |  |  | (8,582        | ) |  |  | 1,069  |  
|TWD (5 percent weakening) |  |                   | 46      |   |                   |  |       |        |  |  | 42            |   |  |  |       |  
|EUR (5 percent weakening) |  |                   | (360    | ) |                   |  | 1,511  |        |  |  | (214          | ) |  |  | 270    |  
|PLN (5 percent weakening) |  |                   | 981     |   |                   |  | 242    |        |  |  | 575           |   |  |  | (208   | )
|BRL (5 percent weakening) |  |                   | (533    | ) |                   |  | (533   | )      |  |  |              |   |  |  |       |  

A stronger won against the above currencies as of December 31, 2014 and 2015 would have had the equal but
opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|13. | Financial Instruments, Continued
|--- | --------------------------------



| | (d) | Interest Rate Risk
| | --- | ------------------

(i) Profile

The interest rate profile of the Groups interest-bearing financial instruments at the reporting date is as follows:



|                          |  |                   |            |   |                   |  |            |  
|------------------------- |  | ----------------- | ---------- | - | ----------------- |  | ---------- | -
|(In millions of won)      |  |                   |            |   |                   | 
|                          |  | December 31, 2014 |            |   | December 31, 2015 | 
|Fixed rate instruments    |  |                   |            |   |                   |  |            |  
|Financial assets          |  | W                 | 2,427,972  |   |                   |  | 2,524,708  |  
|Financial liabilities     |  |                   | (2,822,170 | ) |                   |  | (2,289,336 | )
|                          |  |                   |            |   |                   |  |            |  
|                          |  | W                 | (394,198   | ) |                   |  | 235,372    |  
|                          |  |                   |            |   |                   |  |            |  
|Variable rate instruments |  |                   |            |   |                   |  |            |  
|Financial liabilities     |  | W                 | (1,425,216 | ) |                   |  | (1,934,895 | )
|                          |  |                   |            |   |                   |  |            |  

(ii) Equity and profit or loss sensitivity analysis for variable rate instruments

For the years ended December 31, 2014 and 2015 a change of 100 basis points in interest rates at the reporting date would have increased
(decreased) equity and profit or loss by the amounts shown below for the respective following years. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.



|                          |  |            |         |   |                |  |        |            |  |  |            |   |  |  |        | 
|------------------------- |  | ---------- | ------- | - | -------------- |  | ------ | ---------- |  |  | ---------- | - |  |  | ------ | 
|(In millions of won)      |  | Equity     |         |   | Profit or loss | 
|                          |  | 1%increase |         |   | 1%decrease     |  |        | 1%increase |  |  | 1%decrease |  
|December 31, 2014         |  |            |         |   |                |  |        |            |  |  |            |   |  |  |        | 
|Variable rate instruments |  | W          | (10,803 | ) |                |  | 10,803 |            |  |  | (10,803    | ) |  |  | 10,803 | 
|December 31, 2015         |  |            |         |   |                |  |        |            |  |  |            |   |  |  |        | 
|Variable rate instruments |  | W          | (14,667 | ) |                |  | 14,667 |            |  |  | (14,667    | ) |  |  | 14,667 | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|13. | Financial Instruments, Continued
|--- | --------------------------------



| | (e) | Fair Values
| | --- | -----------

(i) Fair values versus carrying amounts

The fair values of financial assets and liabilities, together with the carrying amounts shown in the consolidated statement of financial
position, are as follows:



|                                      |  |                   |           |  |                   |  |           |                 |  |  |            |  |  |  |           | 
|------------------------------------- |  | ----------------- | --------- |  | ----------------- |  | --------- | --------------- |  |  | ---------- |  |  |  | --------- | 
|(In millions of won)                  |  | December 31, 2014 |           |  | December 31, 2015 | 
|                                      |  | Carryingamounts   |           |  | Fairvalues        |  |           | Carryingamounts |  |  | Fairvalues | 
|Assets carried at fair value          |  |                   |           |  |                   |  |           |                 |  |  |            |  |  |  |           | 
|Available-for-sale financial assets   |  | W                 | 3,237     |  |                   |  | 3,237     |                 |  |  | 709        |  |  |  | 709       | 
|Assets carried at amortized cost      |  |                   |           |  |                   |  |           |                 |  |  |            |  |  |  |           | 
|Cash and cash equivalents             |  | W                 | 889,839   |  |                   |  | (*)       |                 |  |  | 751,662    |  |  |  | (*)       | 
|Deposits in banks                     |  |                   | 1,534,909 |  |                   |  | (*)       |                 |  |  | 1,772,350  |  |  |  | (*)       | 
|Trade accounts and notes receivable   |  |                   | 3,444,477 |  |                   |  | (*)       |                 |  |  | 4,097,836  |  |  |  | (*)       | 
|Other accounts receivable             |  |                   | 119,478   |  |                   |  | (*)       |                 |  |  | 105,815    |  |  |  | (*)       | 
|Deposits                              |  |                   | 19,602    |  |                   |  | (*)       |                 |  |  | 22,234     |  |  |  | (*)       | 
|Loans                                 |  |                   |          |  |                   |  | (*)       |                 |  |  | 15,856     |  |  |  | (*)       | 
|Other non-current financial assets    |  |                   | 7,859     |  |                   |  | (*)       |                 |  |  | 5,148      |  |  |  | (*)       | 
|Liabilities carried at fair value     |  |                   |           |  |                   |  |           |                 |  |  |            |  |  |  |           | 
|Derivative instruments                |  | W                 |          |  |                   |  |          |                 |  |  | 85         |  |  |  | 85        | 
|Liabilities carried at amortized cost |  |                   |           |  |                   |  |           |                 |  |  |            |  |  |  |           | 
|Secured bank loans                    |  | W                 | 649,140   |  |                   |  | 649,140   |                 |  |  | 698,192    |  |  |  | 698,192   | 
|Unsecured bank loans                  |  |                   | 1,003,563 |  |                   |  | 1,003,590 |                 |  |  | 1,239,914  |  |  |  | 1,239,969 | 
|Unsecured bond issues                 |  |                   | 2,594,683 |  |                   |  | 2,667,092 |                 |  |  | 2,286,125  |  |  |  | 2,337,835 | 
|Trade accounts and notes payable      |  |                   | 3,391,635 |  |                   |  | (*)       |                 |  |  | 2,764,694  |  |  |  | (*)       | 
|Other accounts payable                |  |                   | 1,494,095 |  |                   |  | 1,493,869 |                 |  |  | 1,499,722  |  |  |  | 1,499,963 | 
|Other non-current liabilities         |  |                   | 12,924    |  |                   |  | 13,376    |                 |  |  | 8,402      |  |  |  | 9,005     | 

(*) Excluded from disclosures as the carrying amount approximates fair value.

The basis for determining fair values is disclosed in note 4.



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|13. | Financial Instruments, Continued
|--- | --------------------------------



| | (e) | Fair Values, Continued
| | --- | ----------------------



(ii) Financial Instruments measured at cost

Available-for-sale financial assets measured at cost as of December 31, 2014 and 2015 are as follows:



|                                 |  |                   |       |  |                   |  |        | 
|-------------------------------- |  | ----------------- | ----- |  | ----------------- |  | ------ | 
|(In millions of won)             |  |                   |       |  |                   | 
|                                 |  | December 31, 2014 |       |  | December 31, 2015 | 
|Intellectual Discovery Co., Ltd. |  | W                 | 2,673 |  |                   |  | 2,673  | 
|ARCH Venture Fund Vill, L.P.     |  |                   | 118   |  |                   |  | 1,378  | 
|Henghao Technology Co., Ltd.     |  |                   | 3,372 |  |                   |  | 3,372  | 
|Kyulux, Inc.                     |  |                   |      |  |                   |  | 3,266  | 
|                                 |  |                   |       |  |                   |  |        | 
|                                 |  | W                 | 6,163 |  |                   |  | 10,689 | 
|                                 |  |                   |       |  |                   |  |        | 

(iii) Fair values of financial assets and liabilities

i) Fair value hierarchy

The
table below analyzes financial instruments carried at fair value based on the input variables used in the valuation method to measure fair value of assets and liabilities. The different levels have been defined as follows:



| |  |  | Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3: inputs for the asset or liability that are not based on observable market data ii) Financial instruments measured at fair value
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------

Fair value hierarchy classifications of the financial instruments that are measured at fair value as of December 31, 2014 and
December 31, 2015 are as follows:



|                                    |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|----------------------------------- |  | ------- | ----- |  | ------- |  | - | ------- |  |  | ----- |  |  |  | ----- | 
|(In millions of won)                |  |         |       |  |         |  |   |         |  |  |       | 
|                                    |  | Level 1 |       |  | Level 2 |  |   | Level 3 |  |  | Total | 
|December 31, 2014                   |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Assets                              |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Available-for-sale financial assets |  | W       | 3,237 |  |         |  |  |         |  |  |      |  |  |  | 3,237 | 



|                                    |  |         |     |  |         |  |   |         |  |  |       |  |  |  |     | 
|----------------------------------- |  | ------- | --- |  | ------- |  | - | ------- |  |  | ----- |  |  |  | --- | 
|(In millions of won)                |  |         |     |  |         |  |   |         |  |  |       | 
|                                    |  | Level 1 |     |  | Level 2 |  |   | Level 3 |  |  | Total | 
|December 31, 2015                   |  |         |     |  |         |  |   |         |  |  |       |  |  |  |     | 
|Assets                              |  |         |     |  |         |  |   |         |  |  |       |  |  |  |     | 
|Available-for-sale financial assets |  | W       | 709 |  |         |  |  |         |  |  |      |  |  |  | 709 | 
|Liabilities                         |  |         |     |  |         |  |   |         |  |  |       |  |  |  |     | 
|Derivative instruments              |  | W       |    |  |         |  |  |         |  |  | 85    |  |  |  | 85  | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|13. | Financial Instruments, Continued
|--- | --------------------------------



| | (e) | Fair Values, Continued
| | --- | ----------------------



iii) Financial instruments not measured at fair value but for which the fair value is
disclosed

Fair value hierarchy classifications, valuation technique and inputs for fair value measurements of the financial instruments
not measured at fair value but for which the fair value is disclosed as of December 31, 2014 and December 31, 2015 are as follows:



|                              |  |                   |   |  |                     |  |       |         |  |  |           |  |  |                      |  |              
|----------------------------- |  | ----------------- | - |  | ------------------- |  | ----- | ------- |  |  | --------- |  |  | -------------------- |  | -------------
|(In millions of won)          |  | December 31, 2014 |   |  | Valuation
technique |  | Input
|Classification                |  | Level 1           |   |  | Level 2             |  |       | Level 3 |  |  |          
|Liabilities                   |  |                   |   |  |                     |  |       |         |  |  |           |  |  |                      |  |              
|Secured bank loan             |  | W                 |  |  |                     |  |      |         |  |  | 649,140   |  |  | Discounted cash flow |  | Discount rate
|Unsecured bank loans          |  |                   |  |  |                     |  |      |         |  |  | 1,003,590 |  |  | Discounted cash flow |  | Discount rate
|Unsecured bond issues         |  |                   |  |  |                     |  |      |         |  |  | 2,667,092 |  |  | Discounted cash flow |  | Discount rate
|Other accounts payable        |  |                   |  |  |                     |  |      |         |  |  | 1,493,869 |  |  | Discounted cash flow |  | Discount rate
|Other non-current liabilities |  |                   |  |  |                     |  |      |         |  |  | 13,376    |  |  | Discounted cash flow |  | Discount rate



|                              |  |                   |   |  |                     |  |       |         |  |  |           |  |  |                      |  |              
|----------------------------- |  | ----------------- | - |  | ------------------- |  | ----- | ------- |  |  | --------- |  |  | -------------------- |  | -------------
|(In millions of won)          |  | December 31, 2015 |   |  | Valuation
technique |  | Input
|Classification                |  | Level 1           |   |  | Level 2             |  |       | Level 3 |  |  |          
|Liabilities                   |  |                   |   |  |                     |  |       |         |  |  |           |  |  |                      |  |              
|Secured bank loan             |  | W                 |  |  |                     |  |      |         |  |  | 698,192   |  |  | Discounted cash flow |  | Discount rate
|Unsecured bank loans          |  |                   |  |  |                     |  |      |         |  |  | 1,239,969 |  |  | Discounted cash flow |  | Discount rate
|Unsecured bond issues         |  |                   |  |  |                     |  |      |         |  |  | 2,337,835 |  |  | Discounted cash flow |  | Discount rate
|Other accounts payable        |  |                   |  |  |                     |  |      |         |  |  | 1,499,963 |  |  | Discounted cash flow |  | Discount rate
|Other non-current liabilities |  |                   |  |  |                     |  |      |         |  |  | 9,005     |  |  | Discounted cash flow |  | Discount rate

The significant interest rates applied for determination of the above fair value at the reporting date are as
follows:



|                             |  |                   |  |                  
|---------------------------- |  | ----------------- |  | -----------------
|                             |  | December 31, 2014 |  | December 31, 2015
|Debentures, loans and others |  | 2.23~2.60%        |  | 1.75~2.48%       



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|14. | Financial Liabilities
|--- | ---------------------



| | (a) | Financial liabilities at the reporting date are as follows:
| | --- | -----------------------------------------------------------



|                                        |  |                   |           |  |                   |  |           | 
|--------------------------------------- |  | ----------------- | --------- |  | ----------------- |  | --------- | 
|(In millions of won)                    |  |                   |           |  |                   | 
|                                        |  | December 31, 2014 |           |  | December 31, 2015 | 
|Current                                 |  |                   |           |  |                   |  |           | 
|Short-term borrowings                   |  | W                 | 223,626   |  |                   |  |          | 
|Current portion of long-term debt       |  |                   | 744,283   |  |                   |  | 1,416,112 | 
|                                        |  |                   |           |  |                   |  |           | 
|                                        |  | W                 | 967,909   |  |                   |  | 1,416,112 | 
|                                        |  |                   |           |  |                   |  |           | 
|Non-current                             |  |                   |           |  |                   |  |           | 
|Won denominated borrowings              |  | W                 | 4,452     |  |                   |  | 202,992   | 
|Foreign currency denominated borrowings |  |                   | 1,289,837 |  |                   |  | 1,323,454 | 
|Bonds                                   |  |                   | 1,985,188 |  |                   |  | 1,281,673 | 
|Derivative instruments                  |  |                   |          |  |                   |  | 85        | 
|                                        |  |                   |           |  |                   |  |           | 
|                                        |  | W                 | 3,279,477 |  |                   |  | 2,808,204 | 
|                                        |  |                   |           |  |                   |  |           | 



| | (b) | Short-term borrowings as of December 31, 2014 and 2015 are as follows:
| | --- | ----------------------------------------------------------------------



|                                                   |  |                                                |  |                   |         |  |                   |  |   | 
|-------------------------------------------------- |  | ---------------------------------------------- |  | ----------------- | ------- |  | ----------------- |  | - | 
|(In millions of won, USD and CNY)                  |  |                                                |  |                   |         |  |                   | 
|Lender                                             |  | Annual interest rateas ofDecember 31, 2015 (%) |  | December 31, 2014 |         |  | December 31, 2015 | 
|Korea Development Bank and others (*)              |  |                                               |  | W                 | 219,839 |  |                   |  |  | 
|Industrial and Commercial Bank of China and others |  |                                               |  |                   | 3,787   |  |                   |  |  | 
|Foreign currency equivalent                        |  |                                                |  | USD               | 203     |  |                   |  |  | 



|(*) | The Group recognized W3,083 million as interest expense in relation to the above short-term borrowings for the year ended December 31, 2015.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|14. | Financial Liabilities, Continued
|--- | --------------------------------



| | (c) | Won denominated long-term debt at the reporting date is as follows:
| | --- | -------------------------------------------------------------------



|                                       |  |                                                  |  |                  |        |   |                  |  |         |  
|-------------------------------------- |  | ------------------------------------------------ |  | ---------------- | ------ | - | ---------------- |  | ------- | -
|(In millions of won)
Lender            |  | Annual interest rate
as of December 31, 2015
(%) |  | December 31,2014 |        |   | December 31,2015 | 
|Woori Bank and others                  |  | 3-year Korean Treasury Bond rate - 1.25, 2.75    |  | W                | 7,336  |   |                  |  | 4,452   |  
|Shinhan Bank                           |  | CD rate (91days) + 0.3                           |  |                  |       |   |                  |  | 200,000 |  
|Less current portion of long-term debt |  |                                                  |  |                  | (2,884 | ) |                  |  | (1,460  | )
|                                       |  |                                                  |  |                  |        |   |                  |  |         |  
|                                       |  |                                                  |  | W                | 4,452  |   |                  |  | 202,992 |  
|                                       |  |                                                  |  |                  |        |   |                  |  |         |  



| | (d) | Foreign currency denominated long-term debt at the reporting date is as follows:
| | --- | --------------------------------------------------------------------------------



|                                       |  |                                                     |  |                  |           |   |                  |     |           |  
|-------------------------------------- |  | --------------------------------------------------- |  | ---------------- | --------- | - | ---------------- | --- | --------- | -
|(Inmillions of won and USD) 
Lender    |  | Annual interest rate
as of
December 31, 2015 (%)(*) |  | December 31,2014 |           |   | December 31,2015 |    
|China Construction Bank and others     |  | USD: 3ML+0.90~2.80 CNY: 4.28                        |  | W                | 1,421,741 |   |                  |     | 1,733,654 |  
|                                       |  |                                                     |  |                  |           |   |                  |     |           |  
|Foreign currency equivalent            |  |                                                     |  | USD              | 1,305     |   |                  | USD | 1,185     |  
|                                       |  |                                                     |  |                  |          |   |                  | CNY | 1,964     |  
|Less current portion of long-term debt |  |                                                     |  | W                | (131,904  | ) |                  |     | (410,200  | )
|                                       |  |                                                     |  |                  |           |   |                  |     |           |  
|                                       |  |                                                     |  | W                | 1,289,837 |   |                  |     | 1,323,454 |  
|                                       |  |                                                     |  |                  |           |   |                  |     |           |  



|(*) | ML represents Month LIBOR (London Inter-Bank Offered Rates).
|--- | ------------------------------------------------------------



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|14. | Financial Liabilities, Continued
|--- | --------------------------------



| | (e) | Details of bonds issued and outstanding at the reporting date are as follows:
| | --- | -----------------------------------------------------------------------------



|                          |  |                         |  |                                                |           |  |                  |   |           |                  |  |  |            |  
|------------------------- |  | ----------------------- |  | ---------------------------------------------- | --------- |  | ---------------- | - | --------- | ---------------- |  |  | ---------- | -
|(In millions of won)      |  | Maturity                |  | Annual interest rateas ofDecember 31, 2015 (%) |           |  | December 31,2014 |   |           | December 31,2015 | 
|Won denominated bonds (*) |  |                         |  |                                                |           |  |                  |   |           |                  |  |  |            |  
|Publicly issued bonds     |  | February 2016~
May 2022 |  |                                                | 2.12~4.95 |  |                  | W | 2,600,000 |                  |  |  | 2,290,000  |  
|Less discount on bonds    |  |                         |  |                                                |           |  |                  |   | (5,317    | )                |  |  | (3,875     | )
|Less current portion      |  |                         |  |                                                |           |  |                  |   | (609,495  | )                |  |  | (1,004,452 | )
|                          |  |                         |  |                                                |           |  |                  |   |           |                  |  |  |            |  
|                          |  |                         |  |                                                |           |  |                  | W | 1,985,188 |                  |  |  | 1,281,673  |  
|                          |  |                         |  |                                                |           |  |                  |   |           |                  |  |  |            |  



|(*) | Principal of the won denominated bonds is to be repaid at maturity and interests are paid quarterly in arrears.
|--- | ---------------------------------------------------------------------------------------------------------------



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|15. | Provisions
|--- | ----------

Changes in provisions for the year ended December 31, 2014 are as
follows:



|                             |  |                          |         |   |                |  |          |        |  |  |       |   |  |  |          |  
|---------------------------- |  | ------------------------ | ------- | - | -------------- |  | -------- | ------ |  |  | ----- | - |  |  | -------- | -
|(In millions of won)         |  |                          |         |   |                |  |          |        |  |  |       |  
|                             |  | Litigationand claims(*1) |         |   | Warranties(*2) |  |          | Others |  |  | Total |  
|Balance of January 1, 2014   |  | W                        | 156,557 |   |                |  | 47,336   |        |  |  | 1,843 |   |  |  | 205,736  |  
|Additions                    |  |                          | 46,681  |   |                |  | 187,771  |        |  |  |      |   |  |  | 234,452  |  
|Usage and reclassification   |  |                          | (54,935 | ) |                |  | (183,143 | )      |  |  | (212  | ) |  |  | (238,290 | )
|                             |  |                          |         |   |                |  |          |        |  |  |       |   |  |  |          |  
|Balance at December 31, 2014 |  | W                        | 148,303 |   |                |  | 51,964   |        |  |  | 1,631 |   |  |  | 201,898  |  
|                             |  |                          |         |   |                |  |          |        |  |  |       |   |  |  |          |  
|Current                      |  | W                        | 148,303 |   |                |  | 43,950   |        |  |  | 1,631 |   |  |  | 193,884  |  
|Non-current                  |  | W                        |        |   |                |  | 8,014    |        |  |  |      |   |  |  | 8,014    |  

Changes in provisions for the year ended December 31, 2015 are as follows:



|                             |  |                          |          |   |                |  |          |        |  |  |       |   |  |  |          |  
|---------------------------- |  | ------------------------ | -------- | - | -------------- |  | -------- | ------ |  |  | ----- | - |  |  | -------- | -
|(In millions of won)         |  |                          |          |   |                |  |          |        |  |  |       |  
|                             |  | Litigationand claims(*1) |          |   | Warranties(*2) |  |          | Others |  |  | Total |  
|Balance of January 1, 2015   |  | W                        | 148,303  |   |                |  | 51,964   |        |  |  | 1,631 |   |  |  | 201,898  |  
|Additions                    |  |                          | 110,181  |   |                |  | 146,829  |        |  |  | 3,248 |   |  |  | 260,258  |  
|Usage and reclassification   |  |                          | (197,239 | ) |                |  | (142,364 | )      |  |  | (839  | ) |  |  | (340,442 | )
|                             |  |                          |          |   |                |  |          |        |  |  |       |   |  |  |          |  
|Balance at December 31, 2015 |  | W                        | 61,245   |   |                |  | 56,429   |        |  |  | 4,040 |   |  |  | 121,714  |  
|                             |  |                          |          |   |                |  |          |        |  |  |       |   |  |  |          |  
|Current                      |  | W                        | 61,245   |   |                |  | 47,860   |        |  |  | 792   |   |  |  | 109,897  |  
|Non-current                  |  | W                        |         |   |                |  | 8,569    |        |  |  | 3,248 |   |  |  | 11,817   |  



|(*1) | The Group expects that the provision for litigation and claims will be utilized in the next year. Provisions for litigation and claims primarily pertain to certain anti-trust matters. See Note 21(b) for further details.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(*2) | The provision for warranties covers defective products and is normally applicable for eighteen months from the date of purchase. The warranty liability is calculated by using historical and anticipated rates of warranty
claims, and costs per claim to satisfy the Groups warranty obligation.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|16. | The Nature of Expenses and Others
|--- | ---------------------------------

The classification of expenses by nature for the
years ended December 31, 2013, 2014 and 2015 are as follows:



|                                                   |  |      |            |  |      |  |            |      |  |  |            | 
|-------------------------------------------------- |  | ---- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|(In millions of won)                               |  |      |            |  |      |  |            |      | 
|                                                   |  | 2013 |            |  | 2014 |  |            | 2015 | 
|Changes in inventories                             |  | W    | 456,766    |  |      |  | (820,857   | )    |  |  | 402,429    | 
|Purchases of raw materials, merchandise and others |  |      | 14,293,048 |  |      |  | 14,384,289 |      |  |  | 14,705,757 | 
|Depreciation and amortization                      |  |      | 3,834,518  |  |      |  | 3,492,311  |      |  |  | 3,375,856  | 
|Labor cost                                         |  |      | 2,618,910  |  |      |  | 2,924,573  |      |  |  | 3,104,043  | 
|Supplies and others                                |  |      | 1,025,938  |  |      |  | 1,021,469  |      |  |  | 1,062,820  | 
|Outsourcing fees                                   |  |      | 736,744    |  |      |  | 1,084,460  |      |  |  | 1,011,084  | 
|Shipping costs                                     |  |      | 271,570    |  |      |  | 245,217    |      |  |  | 231,830    | 
|Utility                                            |  |      | 730,174    |  |      |  | 785,129    |      |  |  | 836,600    | 
|Fees and commissions                               |  |      | 465,902    |  |      |  | 498,192    |      |  |  | 580,235    | 
|Warranty expenses                                  |  |      | 116,766    |  |      |  | 187,771    |      |  |  | 146,829    | 
|Advertising                                        |  |      | 144,847    |  |      |  | 106,509    |      |  |  | 265,755    | 
|Taxes and dues                                     |  |      | 75,983     |  |      |  | 70,523     |      |  |  | 76,640     | 
|Travel                                             |  |      | 59,946     |  |      |  | 74,968     |      |  |  | 71,457     | 
|Others                                             |  |      | 1,303,143  |  |      |  | 1,176,098  |      |  |  | 1,036,131  | 
|                                                   |  |      |            |  |      |  |            |      |  |  |            | 
|(*)                                                |  | W    | 26,134,255 |  |      |  | 25,230,652 |      |  |  | 26,907,466 | 
|                                                   |  |      |            |  |      |  |            |      |  |  |            | 



|(*) | Total expenses consist of cost of sales, selling, administrative, research and development expenses and other non-operating expenses, excluding foreign exchange differences.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|17. | Selling and Administrative Expenses
|--- | -----------------------------------

Details of selling and administrative expenses for
the years ended December 31, 2013, 2014 and 2015 are as follows:



|                                          |  |      |           |  |      |  |           |      |  |  |           | 
|----------------------------------------- |  | ---- | --------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|(In millions of won)                      |  |      |           |  |      |  |           |      | 
|                                          |  | 2013 |           |  | 2014 |  |           | 2015 | 
|Salaries                                  |  | W    | 232,362   |  |      |  | 256,869   |      |  |  | 268,182   | 
|Expenses related to defined benefit plans |  |      | 22,037    |  |      |  | 27,618    |      |  |  | 26,967    | 
|Other employee benefits                   |  |      | 70,254    |  |      |  | 68,826    |      |  |  | 88,191    | 
|Shipping costs                            |  |      | 215,017   |  |      |  | 199,853   |      |  |  | 199,774   | 
|Fees and commissions                      |  |      | 197,237   |  |      |  | 182,548   |      |  |  | 191,106   | 
|Depreciation                              |  |      | 96,115    |  |      |  | 90,180    |      |  |  | 118,719   | 
|Taxes and dues                            |  |      | 33,998    |  |      |  | 25,370    |      |  |  | 30,958    | 
|Advertising                               |  |      | 144,847   |  |      |  | 106,509   |      |  |  | 265,755   | 
|Warranty expenses                         |  |      | 116,766   |  |      |  | 187,771   |      |  |  | 146,829   | 
|Rent                                      |  |      | 23,299    |  |      |  | 22,048    |      |  |  | 24,184    | 
|Insurance                                 |  |      | 11,887    |  |      |  | 11,518    |      |  |  | 10,826    | 
|Travel                                    |  |      | 22,564    |  |      |  | 23,772    |      |  |  | 24,411    | 
|Training                                  |  |      | 12,080    |  |      |  | 12,572    |      |  |  | 15,515    | 
|Others                                    |  |      | 51,358    |  |      |  | 51,392    |      |  |  | 59,468    | 
|                                          |  |      |           |  |      |  |           |      |  |  |           | 
|                                          |  | W    | 1,249,821 |  |      |  | 1,266,846 |      |  |  | 1,470,885 | 
|                                          |  |      |           |  |      |  |           |      |  |  |           | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|18. | Employee Benefits
|--- | -----------------

The Controlling Company and certain subsidiaries defined
benefit plans provide a lump-sum payment to an employee based on final salary rates and length of service at the time the employee leaves the Controlling Company.

The defined benefit plans expose the Group actuarial risks, such as the risk associated with expected periods of service, interest rate risk,
market (investment) risk, and others with the defined benefit plan.



| | (a) | Recognized net defined benefit liabilities at the reporting date are as follows:
| | --- | --------------------------------------------------------------------------------



|                                                              |  |                   |           |   |                   |  |            |  
|------------------------------------------------------------- |  | ----------------- | --------- | - | ----------------- |  | ---------- | -
|(In millions of won)                                          |  |                   |           |   |                   | 
|                                                              |  | December 31, 2014 |           |   | December 31, 2015 | 
|Present value of partially funded defined benefit obligations |  | W                 | 1,114,689 |   |                   |  | 1,381,648  |  
|Fair value of plan assets                                     |  |                   | (790,509  | ) |                   |  | (1,027,850 | )
|                                                              |  |                   |           |   |                   |  |            |  
|                                                              |  | W                 | 324,180   |   |                   |  | 353,798    |  
|                                                              |  |                   |           |   |                   |  |            |  



| | (b) | Changes in the present value of the defined benefit obligations for the years ended December 31, 2014 and 2015 are as follows:
| | --- | ------------------------------------------------------------------------------------------------------------------------------



|                                    |  |      |           |   |      |  |           |  
|----------------------------------- |  | ---- | --------- | - | ---- |  | --------- | -
|(In millions of won)                |  |      |           |   |      | 
|                                    |  | 2014 |           |   | 2015 | 
|Opening defined benefit obligations |  | W    | 807,738   |   |      |  | 1,114,689 |  
|Current service cost                |  |      | 159,239   |   |      |  | 187,768   |  
|Past service cost                   |  |      | 21,990    |   |      |  |          |  
|Interest cost                       |  |      | 34,596    |   |      |  | 38,776    |  
|Remeasurements (before tax)         |  |      | 144,100   |   |      |  | 104,817   |  
|Benefit payments                    |  |      | (54,555   | ) |      |  | (66,755   | )
|Transfers from related parties      |  |      | 1,584     |   |      |  | 2,353     |  
|Disposal of a subsidiary            |  |      | (3        | ) |      |  |          |  
|                                    |  |      |           |   |      |  |           |  
|Closing defined benefit obligations |  | W    | 1,114,689 |   |      |  | 1,381,648 |  
|                                    |  |      |           |   |      |  |           |  

Weighted average remaining maturity of defined benefit obligations as of December 31, 2014 and 2015 are
13.7 years and 14.5 years, respectively.



| | (c) | Changes in fair value of plan assets for the years ended December 31, 2014 and 2015 are as follows:
| | --- | ---------------------------------------------------------------------------------------------------



|                                                  |  |      |         |   |      |  |           |  
|------------------------------------------------- |  | ---- | ------- | - | ---- |  | --------- | -
|(In millions of won)                              |  |      |         |   |      | 
|                                                  |  | 2014 |         |   | 2015 | 
|Opening fair value of plan assets                 |  | W    | 488,651 |   |      |  | 790,509   |  
|Expected return on plan assets                    |  |      | 19,069  |   |      |  | 27,511    |  
|Remeasurements (before tax)                       |  |      | (3,722  | ) |      |  | (5,440    | )
|Contributions by employer directly to plan assets |  |      | 330,000 |   |      |  | 270,000   |  
|Benefit payments                                  |  |      | (43,489 | ) |      |  | (54,809   | )
|Transfers from related parties                    |  |      |        |   |      |  | 79        |  
|                                                  |  |      |         |   |      |  |           |  
|Closing fair value of plan assets                 |  | W    | 790,509 |   |      |  | 1,027,850 |  
|                                                  |  |      |         |   |      |  |           |  



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|18. | Employee Benefits, Continued
|--- | ----------------------------



| | (d) | Plan assets at the reporting date are as follows:
| | --- | -------------------------------------------------



|                             |  |                   |         |  |                   |  |           | 
|---------------------------- |  | ----------------- | ------- |  | ----------------- |  | --------- | 
|(In millions of won)         |  |                   |         |  |                   | 
|                             |  | December 31, 2014 |         |  | December 31, 2015 | 
|Guaranteed deposits in banks |  | W                 | 790,509 |  |                   |  | 1,027,850 | 

As of December 31, 2015, the Controlling Company maintains the plan assets with Mirae Asset Securities
Co., Ltd., Shinhan Bank, etc.

The Controlling Companys estimated contribution to the plan assets for the year ending
December 31, 2016 is W235,000 million under the assumption that the Controlling Company continues to maintain the plan assets at 80% of the amount payable and all the employees of the Controlling Company would leave the
Controlling Company on December 31, 2016.



| | (e) | Expenses recognized in profit or loss for the years ended December 31, 2013, 2014 and 2015 are as follows:
| | --- | ----------------------------------------------------------------------------------------------------------



|                     |  |      |         |  |      |  |         |      |  |  |         | 
|-------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|(In millions of won) |  | 2013 |         |  | 2014 |  |         | 2015 | 
|Current service cost |  | W    | 149,979 |  |      |  | 159,239 |      |  |  | 187,768 | 
|Past service cost    |  |      |        |  |      |  | 21,990  |      |  |  |        | 
|Net interest cost    |  |      | 9,474   |  |      |  | 15,527  |      |  |  | 11,265  | 
|                     |  |      |         |  |      |  |         |      |  |  |         | 
|                     |  | W    | 159,453 |  |      |  | 196,756 |      |  |  | 199,033 | 
|                     |  |      |         |  |      |  |         |      |  |  |         | 

Expenses are recognized in the following line items in the consolidated statements of comprehensive income:



|                                  |  |      |         |  |      |  |         |      |  |  |         | 
|--------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|(In millions of won)              |  | 2013 |         |  | 2014 |  |         | 2015 | 
|Cost of sales                     |  | W    | 126,716 |  |      |  | 157,324 |      |  |  | 159,348 | 
|Selling expenses                  |  |      | 10,478  |  |      |  | 11,872  |      |  |  | 11,567  | 
|Administrative expenses           |  |      | 11,559  |  |      |  | 15,252  |      |  |  | 14,809  | 
|Research and development expenses |  |      | 10,700  |  |      |  | 12,308  |      |  |  | 13,309  | 
|                                  |  |      |         |  |      |  |         |      |  |  |         | 
|                                  |  | W    | 159,453 |  |      |  | 196,756 |      |  |  | 199,033 | 
|                                  |  |      |         |  |      |  |         |      |  |  |         | 



| | (f) | Remeasurements of net defined benefit liabilities (assets) included in other comprehensive income for the years ended December 31, 2013, 2014 and 2015 are as follows:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                             |  |      |         |   |      |  |          |      |  |  |          |  
|-------------------------------------------- |  | ---- | ------- | - | ---- |  | -------- | ---- |  |  | -------- | -
|(In millions of won)                         |  | 2013 |         |   | 2014 |  |          | 2015 | 
|Balance at January 1                         |  | W    | (86,524 | ) |      |  | (85,860  | )    |  |  | (197,720 | )
|Remeasurements                               |  |      |         |   |      |  |          |      |  |  |          |  
|Actuarial profit or loss arising from:       |  |      |         |   |      |  |          |      |  |  |          |  
|Experience adjustment                        |  |      | (33,447 | ) |      |  | (24,399  | )    |  |  | 15,567   |  
|Demographic assumptions                      |  |      | (3,791  | ) |      |  | 7,016    |      |  |  | (22,267  | )
|Financial assumptions                        |  |      | 38,611  |   |      |  | (126,717 | )    |  |  | (98,117  | )
|Return on plan assets                        |  |      | 6       |   |      |  | (3,722   | )    |  |  | (5,440   | )
|Share of associates regarding remeasurements |  |      | (381    | ) |      |  | 189      |      |  |  | (607     | )
|                                             |  |      |         |   |      |  |          |      |  |  |          |  
|                                             |  |      | 998     |   |      |  | (147,633 | )    |  |  | (110,864 | )
|                                             |  |      |         |   |      |  |          |      |  |  |          |  
|Income tax                                   |  |      | (334    | ) |      |  | 35,773   |      |  |  | 26,682   |  
|                                             |  |      |         |   |      |  |          |      |  |  |          |  
|Balance at December 31                       |  | W    | (85,860 | ) |      |  | (197,720 | )    |  |  | (281,902 | )
|                                             |  |      |         |   |      |  |          |      |  |  |          |  



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|18. | Employee Benefits, Continued
|--- | ----------------------------



| | (g) | Principal actuarial assumptions at the reporting date (expressed as weighted averages) are as follows:
| | --- | ------------------------------------------------------------------------------------------------------



|                                              |  |      |     |   |      |  |     |      |  |  |     |  
|--------------------------------------------- |  | ---- | --- | - | ---- |  | --- | ---- |  |  | --- | -
|                                              |  | 2013 |     |   | 2014 |  |     | 2015 | 
|Expected rate of salary increase              |  |      | 5.1 | % |      |  | 5.1 | %    |  |  | 5.1 | %
|Discount rate for defined benefit obligations |  |      | 4.4 | % |      |  | 3.5 | %    |  |  | 2.9 | %

Assumptions regarding future mortality are based on published statistics and mortality tables. The current
mortality underlying the values of the liabilities in the defined benefit plans are as follows:



|         |  |  |                   |  |  |                   |      |   |  |  |      |  
|-------- |  |  | ----------------- |  |  | ----------------- | ---- | - |  |  | ---- | -
|         |  |  | December 31, 2014 |  |  | December 31, 2015 |     
|Teens    |  |  | Males             |  |  |                   | 0.01 | % |  |  | 0.01 | %
|         |  |  | Females           |  |  |                   | 0.00 | % |  |  | 0.00 | %
|Twenties |  |  | Males             |  |  |                   | 0.01 | % |  |  | 0.01 | %
|         |  |  | Females           |  |  |                   | 0.00 | % |  |  | 0.00 | %
|Thirties |  |  | Males             |  |  |                   | 0.01 | % |  |  | 0.01 | %
|         |  |  | Females           |  |  |                   | 0.01 | % |  |  | 0.01 | %
|Forties  |  |  | Males             |  |  |                   | 0.03 | % |  |  | 0.03 | %
|         |  |  | Females           |  |  |                   | 0.01 | % |  |  | 0.02 | %
|Fifties  |  |  | Males             |  |  |                   | 0.06 | % |  |  | 0.05 | %
|         |  |  | Females           |  |  |                   | 0.03 | % |  |  | 0.02 | %



| | (h) | Reasonably possible changes to respective relevant actuarial assumptions would have affected the defined benefit obligations by the amounts as of December 31, 2015 are as follows:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                              |  |                            |            |  |             |  |          |  
|--------------------------------------------- |  | -------------------------- | ---------- |  | ----------- |  | -------- | -
|                                              |  | Defined benefit obligation |           
|                                              |  | 1% increase                |            |  | 1% decrease | 
|Discount rate for defined benefit obligations |  |                            | W(174,511) |  |             |  | 212,842  |  
|Expected rate of salary increase              |  |                            | 206,384    |  |             |  | (173,120 | )



|19. | Other Liabilities
|--- | -----------------

Other liabilities at the reporting date are as follows:



|                                 |  |                   |        |  |                   |  |        | 
|-------------------------------- |  | ----------------- | ------ |  | ----------------- |  | ------ | 
|(In millions of won)             |  |                   |        |  |                   | 
|                                 |  | December 31, 2014 |        |  | December 31, 2015 | 
|Current liabilities              |  |                   |        |  |                   |  |        | 
|Withholdings                     |  | W                 | 18,991 |  |                   |  | 30,477 | 
|Unearned revenues                |  |                   | 12,394 |  |                   |  | 9,844  | 
|                                 |  |                   |        |  |                   |  |        | 
|                                 |  | W                 | 31,385 |  |                   |  | 40,321 | 
|                                 |  |                   |        |  |                   |  |        | 
|Non-current liabilities          |  |                   |        |  |                   |  |        | 
|Long-term accrued expenses       |  | W                 | 594    |  |                   |  | 48,609 | 
|Long-term other accounts payable |  |                   | 12,924 |  |                   |  | 8,401  | 
|Long-term unearned revenues      |  |                   | 8,623  |  |                   |  |       | 
|                                 |  |                   |        |  |                   |  |        | 
|                                 |  | W                 | 22,141 |  |                   |  | 57,010 | 
|                                 |  |                   |        |  |                   |  |        | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|20. | Commitments
|--- | -----------



Factoring and securitization of accounts receivable

The Controlling Company has agreements with Korea Development Bank and several other banks for accounts receivable sales negotiating facilities
of up to an aggregate of USD 2,183 million (W2,558,476 million) in connection with the Controlling Companys export sales transactions with its subsidiaries. As of December 31, 2015, no accounts and notes receivable
were sold but are not past due. In connection with all of the contracts in this paragraph, the Controlling Company has sold its accounts receivable with recourse.

The Controlling Company and oversea subsidiaries entered into agreements with financial institutions for accounts receivables sales negotiating
facilities. Respective maximum amount of accounts receivables sales and the amount of sold accounts receivables before maturity by contract are as follows:



|                                 |  |                                     |  |                   |         |  |               |  |           |        |  |     |               |  |  |  |         | 
|-------------------------------- |  | ----------------------------------- |  | ----------------- | ------- |  | ------------- |  | --------- | ------ |  | --- | ------------- |  |  |  | ------- | 
|(In millions of USD and KRW)     |  |                                     |  |                   |         | 
|Classification                   |  | Financial institutions              |  | Maximum           |         |  | Not yet due   | 
|                                 |  |                                     |  | Contractualamount |         |  | KRWequivalent |  |           | Amount |  |     | KRWequivalent | 
|Controlling Company Subsidiaries |  | Shinhan Bank                        |  | KRW               | 100,000 |  |               |  | 100,000   |        |  |     |              |  |  |  |        | 
|LG Display Singapore Pte. Ltd.   |  | Standard Chartered Bank             |  | USD               | 300     |  |               |  | 351,600   |        |  | USD | 115           |  |  |  | 134,615 | 
|LG Display Taiwan Co., Ltd.      |  | BNP Paribas                         |  | USD               | 105     |  |               |  | 123,060   |        |  |     |              |  |  |  |        | 
|                                 |  | Hongkong & Shanghai Banking Corp.   |  | USD               | 150     |  |               |  | 175,800   |        |  |     |              |  |  |  |        | 
|                                 |  | Sumitomo Mitsui Banking Corporation |  | USD               | 200     |  |               |  | 234,400   |        |  |     |              |  |  |  |        | 
|LG Display Shanghai Co., Ltd.    |  | BNP Paribas                         |  | USD               | 125     |  |               |  | 146,500   |        |  |     |              |  |  |  |        | 
|LG Display Germany GmbH          |  | Citibank                            |  | USD               | 160     |  |               |  | 187,520   |        |  |     |              |  |  |  |        | 
|                                 |  | BNP Paribas                         |  | USD               | 107     |  |               |  | 125,404   |        |  |     |              |  |  |  |        | 
|LG Display America, Inc.         |  | Hongkong & Shanghai Banking Corp.   |  | USD               | 800     |  |               |  | 937,600   |        |  | USD | 133           |  |  |  | 155,929 | 
|                                 |  | Sumitomo Mitsui Banking Corporation |  | USD               | 250     |  |               |  | 293,000   |        |  |     |              |  |  |  |        | 
|LG Display Japan Co., Ltd.       |  | Sumitomo Mitsui Banking Corporation |  | USD               | 90      |  |               |  | 105,480   |        |  |     |              |  |  |  |        | 
|                                 |  |                                     |  |                   |         |  |               |  |           |        |  |     |               |  |  |  |         | 
|                                 |  |                                     |  | USD               | 2,287   |  |               |  | 2,680,364 |        |  | USD | 248           |  |  |  | 290,544 | 
|                                 |  |                                     |  |                   |         |  |               |  |           |        |  |     |               |  |  |  |         | 
|                                 |  |                                     |  | USD               | 2,287   |  |               |  |           |        |  | USD | 248           |  |  |  |         | 
|                                 |  |                                     |  |                   |         |  |               |  |           |        |  |     |               |  |  |  |         | 
|                                 |  |                                     |  | KRW               | 100,000 |  |               |  | 2,780,364 |        |  |     |              |  |  |  | 290,544 | 
|                                 |  |                                     |  |                   |         |  |               |  |           |        |  |     |               |  |  |  |         | 

In connection with all of the contracts in the above table, the Controlling Company has sold its accounts
receivable without recourse.



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|20. | Commitments, Continued
|--- | ----------------------



Letters of credit

As of December 31, 2015, the Controlling Company has agreements with KEB Hana Bank in relation to the opening of letters of credit up to
USD 45 million (W52,740 million), USD 15 million (W17,580 million) with China Construction Bank, USD 80 million (W93,760 million) with Bank of China and USD 50 million
(W58,600 million) with Sumitomo Mitsui Banking Corporation.

Payment guarantees

The Controlling Company obtained payment guarantees amounting to USD 200 million (W234,400 million) from Korea Exchange
Bank for borrowings, USD 8.5 million (W9,962 million) from Shinhan bank for value added tax payments in Poland and USD 75 million (W87,900 million) from Westchester Fire Insurance Company for ongoing legal
proceeding.

LG Display Japan Co., Ltd. and other subsidiaries are provided with payment guarantees from the Bank of Tokyo-Mitsubishi UFJ
and other various banks amounting to JPY 700 million (W6,804 million), CNY 3,878 million (W692,145 million), TWD 14 million (W497 million), EUR 2.5 million
(W3,201 million) and PLN 0.2 million (W60 million), respectively, for their local tax payments.

Credit facility agreements

LG Display Japan Co., Ltd. and other subsidiaries have entered into short-term credit facility agreements of up to USD 35 million
(W41,020 million) and JPY 8,000 million (W77,761 million) in total, with Mizuho Corporate Bank and other various banks.

License agreements

As of December 31, 2015, in relation to its TFT-LCD business, the Group has technical license agreements with Hitachi Display, Ltd. and
others and has a trademark license agreement with LG Corp.

Pledged Assets

Regarding the secured bank loan amounting to USD 300 million (W347,693 million) and CNY 1,964 million
(W350,499 million) from China Construction Bank, as of December 31, 2015, the Group provided its property, plant and equipment and others with carrying amount of W1,495,983 million as pledged assets.



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|21. | Legal Proceedings
|--- | -----------------



| | (a) | Patent infringements
| | --- | --------------------

Delaware Display Group LLC and Innovative Display Technologies LLC
(DDG and IDT)

In December 2013, Delaware Display Group LLC and Innovative Display Technologies LLC filed a
patent infringement case (First Case) against the Controlling Company and LG Display America, Inc. in the United States District Court for the District of Delaware. In December 2015, DDG and IDT filed a new patent
infringement case against the Controlling Company and LG Display America, Inc. over the three patents that were dismissed without prejudice from the First Case. The Controlling Company does not have a present obligation for these matters and has not
recognized any provision at December 31, 2015. It is not possible to reasonably estimate an amount of potential loss, if any, because the plaintiffs have not provided any information regarding damages.

Surpass Tech Innovation LLC

In March 2014, Surpass Tech Innovation LLC filed a complaint in the United States District Court for the District of Delaware against the
Controlling Company and LG Display America, Inc. for alleged patent infringement. In November 2014, the case has been stayed by the United States District Court for the District of Delaware pending Inter Partes Review. The Controlling Company does
not have a present obligation for this matter and has not recognized any provision at December 31, 2015. It is not possible to reasonably estimate an amount of potential loss, if any, because the plaintiffs have not provided any information
regarding damages.



| | (b) | Anti-trust litigation
| | --- | ---------------------

Certain individual plaintiffs filed complaints in various state or
federal courts in the United States alleging violation of the respective antitrust laws and related laws by various LCD panel manufacturers. As of December 31, 2015, the Controlling Company is currently defending against Costco Wholesale Corp..
The timing and amounts of outflows are uncertain and the outcomes depend upon the various court proceedings.

In Canada, class action
complaints alleging violations of Canada competition laws were filed in 2007 against the Company and other TFT-LCD manufacturers in Ontario, British Columbia and Quebec. The Ontario Superior Court of Justice certified the class action complaints
filed by the direct and indirect purchasers in May 2011. In April 2014, the Controlling Company filed an appeal of the class certification decision and the Ontario Divisional Court dismissed the Controlling Companys appeal of the class
certification in December 2015. The actions in Quebec and British Columbia are in abeyance. The timing and amount of outflows are uncertain and the outcome depends upon the court proceedings.

While the Group continues its vigorous defense of the various pending proceedings described above, managements assessment of the facts
and circumstances could change based upon new information, intervening events and the final outcome of the cases. Consequently, the actual results could be materially different from managements current estimates.



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|22. | Capital and Reserves
|--- | --------------------



| | (a) | Share capital
| | --- | -------------

The Controlling Company is authorized to issue 500,000,000 shares of capital
stock (par value W5,000), and as of December 31, 2014 and December 31, 2015, the number of issued common shares is 357,815,700. There have been no changes in the capital stock from January 1, 2013 to December 31,
2015.



| | (b) | Reserves
| | --- | --------

Reserves consist mainly of the following:

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign
operations.

Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investments are
derecognized or impaired.



| | (c) | Dividends
| | --- | ---------

On March 11, 2016, the Controlling Company declared a cash dividend of
W178,908 million (W500 won per share) to shareholders of record as of December 31, 2015 and distributed the cash dividend to such shareholders on April 8, 2016.



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties
|--- | ---------------



| | (a) | Related parties
| | --- | ---------------

Related parties for the year ended December 31, 2015 are as follows:



|                                                                                       |  |                                             
|-------------------------------------------------------------------------------------- |  | --------------------------------------------
|Classification                                                                         |  | Description                                 
|Associates and joint ventures(*)                                                       |  | Suzhou Raken Technology Co., Ltd. and others
|Subsidiaries of Associates                                                             |  | ADP System Co., Ltd. and others             
|Entity that has significant influence over the Controlling Company                     |  | LG Electronics Inc.                         
|Subsidiaries of the entity that has significant influence over the Controlling Company |  | Subsidiaries of LG Electronics Inc.         



|(*) | Details of associates and joint ventures are described in note 1 and 10.
|--- | ------------------------------------------------------------------------

Related parties
other than associates and joint ventures that have transactions such as sales or balance of trade accounts and notes receivable and payable with the Group for the years ended December 31, 2014 and 2015 are as follows:



|                                                                   |  |                                                   |  |                                                  
|------------------------------------------------------------------ |  | ------------------------------------------------- |  | -------------------------------------------------
|Classification                                                     |  | December 31, 2014                                 |  | December 31, 2015                                
|Subsidiaries of associates                                         |  | ADP System Co., Ltd.                              |  | ADP System Co., Ltd.                             
|                                                                   |  | Shinbo Electric Co., Ltd.                         |  | Shinbo Electric Co., Ltd.                        
|                                                                   |  | AVATEC Electronics Yantai Co., Ltd.               |  | AVATEC Electronics Yantai Co., Ltd.              
|                                                                   |  |                                                  |  | New Optics USA, Inc.                             
|                                                                   |  |                                                  
|Entity that has significant influence over the Controlling Company |  | LG Electronics Inc.                               |  | LG Electronics Inc.                              
|                                                                   |  |                                                  
|Subsidiaries of the                                                |  | Hi Business Logistics Co., Ltd.                   |  | Hi Business Logistics Co., Ltd.                  
|entity that has                                                    |  | Hiplaza Co., Ltd.                                 |  | Hiplaza Co., Ltd.                                
|significant influence                                              |  | Hi Entech Co., Ltd.                               |  | Hi Entech Co., Ltd.                              
|over the Controlling                                               |  | LG Hitachi Water Solutions Co., Ltd.              |  | LG Hitachi Water Solutions Co., Ltd.             
|Company                                                            |  | LG Innotek Co., Ltd.                              |  | LG Innotek Co., Ltd.                             
|                                                                   |  | Hanuri Co., Ltd.                                  |  | Hanuri Co., Ltd.                                 
|                                                                   |  | Qingdao LG Inspur Digital Communication Co., Ltd. |  | Qingdao LG Inspur Digital Communication Co., Ltd.
|                                                                   |  | LG Innotek Poland Sp. z o.o.                      |  |                                                 
|                                                                   |  | LG Innotek (Guangzhou) Co., Ltd.                  |  |                                                 
|                                                                   |  | LG Innotek Huizhou Co., Ltd                       |  |                                                 
|                                                                   |  | LG Innotek USA, Inc.                              |  | LG Innotek USA, Inc.                             
|                                                                   |  | LG Electronics Wroclaw Sp. z o.o.                 |  | LG Electronics Wroclaw Sp. z o.o.                
|                                                                   |  | LG Electronics Vietnam Co., Ltd.                  |  |                                                 
|                                                                   |  | LG Electronics Reynosa, S.A. DE C.V.              |  | LG Electronics Reynosa, S.A. DE C.V.             
|                                                                   |  | LG Electronics Thailand Co., Ltd.                 |  | LG Electronics Thailand Co., Ltd.                



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------



|               |  |                                                      |  |                                                     
|-------------- |  | ---------------------------------------------------- |  | ----------------------------------------------------
|Classification |  | December 31, 2014                                    |  | December 31, 2015                                   
|               |  | LG Electronics Taiwan Taipei Co., Ltd.               |  | LG Electronics Taiwan Taipei Co., Ltd.              
|               |  | LG Electronics Shenyang Inc.                         |  | LG Electronics Shenyang Inc.                        
|               |  | LG Electronics RUS, LLC                              |  | LG Electronics RUS, LLC                             
|               |  | LG Electronics Nanjing Display Co., Ltd.             |  | LG Electronics Nanjing Display Co., Ltd.            
|               |  | LG Electronics Mlawa Sp. z o.o.                      |  | LG Electronics Mlawa Sp. z o.o.                     
|               |  | LG Electronics Mexicali, S.A. DE C.V.                |  | LG Electronics Mexicali, S.A. DE C.V.               
|               |  | LG Electronics India Pvt. Ltd.                       |  | LG Electronics India Pvt. Ltd.                      
|               |  | LG Electronics do Brasil Ltda.                       |  | LG Electronics do Brasil Ltda.                      
|               |  | LG Electronics Air-Conditioning (Shandong) Co., Ltd. |  | LG Electronics Air-Conditioning (Shandong) Co., Ltd.
|               |  |                                                     |  | LG Electronics Kazakhstan                           
|               |  |                                                     |  | LG Electronics S.A. (Pty) Ltd                       
|               |  | LG Electronics (Kunshan) Computer Co., Ltd.          |  | LG Electronics (Kunshan) Computer Co., Ltd.         
|               |  | LG Electronics (Hangzhou) Co., Ltd.                  |  |                                                    
|               |  | LG Electronics Polska Sp. z o.o.                     |  |                                                    
|               |  | LG Electronics Philippines Inc.                      |  |                                                    
|               |  | LG Electronics Singapore Pte. Ltd.                   |  | LG Electronics Singapore Pte. Ltd.                  
|               |  | Inspur LG Digital Mobile Communications Co., Ltd.    |  | Inspur LG Digital Mobile Communications Co., Ltd.   
|               |  | Hi Logistics Europe B.V.                             |  | Hi Logistics Europe B.V.                            
|               |  | Hi Logistics (China) Co., Ltd.                       |  | Hi Logistics (China) Co., Ltd.                      
|               |  | LG Electronics Alabama Inc.                          |  |                                                    
|               |  | LG Electronics Japan, Inc.                           |  | LG Electronics Japan, Inc.                          
|               |  | LG Electronics U.S.A., Inc.                          |  | LG Electronics U.S.A., Inc.                         
|               |  | LG Electronics Vietnam Haiphong Co., Ltd.            |  | LG Electronics Vietnam Haiphong Co., Ltd.           
|               |  | P.T. LG Electronics Indonesia                        |  | P.T. LG Electronics Indonesia                       
|               |  | Hientech (Tianjin) Co., Ltd.                         |  | Hientech (Tianjin) Co., Ltd.                        
|               |  | Hi M Solutek                                         |  | Hi M Solutek                                        
|               |  |                                                     |  | LG Electronics Deutschland GmbH                     



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------



| | (b) | Key management personnel compensation
| | --- | -------------------------------------

Compensation costs of key management for the years ended
December 31, 2013, 2014 and 2015 are as follows:



|                                             |  |      |       |  |      |  |       |      |  |  |       | 
|-------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|(In millions of won)                         |  |      |       |  |      |  |       |      | 
|                                             |  | 2013 |       |  | 2014 |  |       | 2015 | 
|Short-term benefits                          |  | W    | 2,591 |  |      |  | 2,607 |      |  |  | 2,940 | 
|Expenses related to the defined benefit plan |  |      | 1,139 |  |      |  | 355   |      |  |  | 378   | 
|                                             |  |      |       |  |      |  |       |      |  |  |       | 
|                                             |  | W    | 3,730 |  |      |  | 2,962 |      |  |  | 3,318 | 
|                                             |  |      |       |  |      |  |       |      |  |  |       | 

Key management refers to the registered directors who have significant control and responsibilities over the
Controlling Companys operations and business.



| | (c) | Significant transactions such as sales of goods and purchases of raw material and outsourcing service and others, which occurred in the normal course of business with related parties for the years ended
December 31, 2013, 2014 and 2015 are as follows:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                  |  |                 |         |  |                |  |        |                                   |  |  |                                            |  |  |                 |        |  |             |  |         |  |  |  |       | 
|--------------------------------- |  | --------------- | ------- |  | -------------- |  | ------ | --------------------------------- |  |  | ------------------------------------------ |  |  | --------------- | ------ |  | ----------- |  | ------- |  |  |  | ----- | 
|(In millions of won)              |  | 2013            |        
|                                  |  |                 |         |  |                |  |        | Purchase and others               | 
|                                  |  | Sales andothers |         |  | Dividendincome |  |        | Purchase of rawmaterial andothers |  |  | Acquisition ofproperty, plantand equipment |  |  | Outsourcingfees |        |  | Other costs | 
|Joint ventures                    |  |                 |         |  |                |  |        |                                   |  |  |                                            |  |  |                 |        |  |             |  |         |  |  |  |       | 
|Suzhou Raken Technology Co., Ltd. |  | W               | 480,897 |  |                |  | 12,804 |                                   |  |  |                                           |  |  |                 |       |  |             |  | 166,571 |  |  |  | 2     | 
|Associates and their subsidiaries |  |                 |         |  |                |  |        |                                   |  |  |                                            |  |  |                 |        |  |             |  |         |  |  |  |       | 
|New Optics Ltd.                   |  | W               |        |  |                |  |       |                                   |  |  | 76,929                                     |  |  |                 |       |  |             |  | 2,470   |  |  |  | 6,315 | 
|LIG ADP Co., Ltd.                 |  |                 |        |  |                |  |       |                                   |  |  | 666                                        |  |  |                 | 8,743  |  |             |  |        |  |  |  | 3,102 | 
|TLI Inc.                          |  |                 |        |  |                |  |       |                                   |  |  | 58,881                                     |  |  |                 |       |  |             |  |        |  |  |  | 1,473 | 
|AVACO Co., Ltd.                   |  |                 |        |  |                |  |       |                                   |  |  | 665                                        |  |  |                 | 45,067 |  |             |  |        |  |  |  | 4,762 | 
|AVATEC Co., Ltd.                  |  |                 |        |  |                |  | 292    |                                   |  |  | 23                                         |  |  |                 |       |  |             |  | 61,738  |  |  |  | 3,897 | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------





|                                                                                       |  |                 |           |  |                |  |       |                                    |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |        | 
|-------------------------------------------------------------------------------------- |  | --------------- | --------- |  | -------------- |  | ----- | ---------------------------------- |  |  | ------------------------------------------ |  |  | --------------- | ------- |  | ----------- |  | ------- |  |  |  | ------ | 
|(In millions of won)                                                                   |  | 2013            |          
|                                                                                       |  |                 |           |  |                |  |       | Purchase and others                | 
|                                                                                       |  | Salesand others |           |  | Dividendincome |  |       | Purchase of rawmaterial and others |  |  | Acquisition ofproperty, plant andequipment |  |  | Outsourcingfees |         |  | Other costs | 
|AVATEC Electronics Yantai Co., Ltd.                                                    |  | W               |          |  |                |  |      |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 265    | 
|Paju Electric Glass Co., Ltd.                                                          |  |                 |          |  |                |  |      |                                    |  |  | 734,714                                    |  |  |                 |        |  |             |  |        |  |  |  | 4,713  | 
|LB Gemini New Growth Fund No. 16                                                       |  |                 |          |  |                |  | 880   |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |       | 
|Shinbo Electric Co., Ltd.                                                              |  |                 | 11,931    |  |                |  |      |                                    |  |  | 730,010                                    |  |  |                 |        |  |             |  | 64,022  |  |  |  | 59     | 
|Narenanotech Corporation                                                               |  |                 |          |  |                |  | 300   |                                    |  |  | 328                                        |  |  |                 | 2,061   |  |             |  |        |  |  |  | 412    | 
|Glonix Co., Ltd.                                                                       |  |                 |          |  |                |  |      |                                    |  |  | 5,209                                      |  |  |                 |        |  |             |  |        |  |  |  | 115    | 
|ADP System Co., Ltd.                                                                   |  |                 |          |  |                |  |      |                                    |  |  | 924                                        |  |  |                 | 1,524   |  |             |  |        |  |  |  | 692    | 
|YAS Co., Ltd.                                                                          |  |                 |          |  |                |  |      |                                    |  |  | 1,941                                      |  |  |                 | 82,483  |  |             |  |        |  |  |  | 855    | 
|                                                                                       |  |                 |           |  |                |  |       |                                    |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |        | 
|                                                                                       |  | W               | 11,931    |  |                |  | 1,472 |                                    |  |  | 1,610,290                                  |  |  |                 | 139,878 |  |             |  | 128,230 |  |  |  | 26,660 | 
|                                                                                       |  |                 |           |  |                |  |       |                                    |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |        | 
|Entity that has significant influence over the Controlling Company                     |  |                 |           |  |                |  |       |                                    |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |        | 
|LG Electronics Inc.                                                                    |  | W               | 1,971,781 |  |                |  |      |                                    |  |  | 39,237                                     |  |  |                 | 208,531 |  |             |  |        |  |  |  | 38,450 | 
|Subsidiaries of the entity that has significant influence over the Controlling
Company |  |                 |           |  |                |  |       |                                    |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |        | 
|LG Electronics India Pvt. Ltd.                                                         |  | W               | 108,084   |  |                |  |      |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 77     | 
|LG Electronics Vietnam Co., Ltd.                                                       |  |                 | 42,366    |  |                |  |      |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |       | 
|LG Electronics Thailand Co., Ltd.                                                      |  |                 | 69,674    |  |                |  |      |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |       | 
|LG Electronics Nanjing Display Co., Ltd.                                               |  |                 | 437,771   |  |                |  |      |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |       | 
|LG Electronics RUS, LLC                                                                |  |                 | 632,009   |  |                |  |      |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |       | 
|LG Electronics do Brasil Ltda.                                                         |  |                 | 308,432   |  |                |  |      |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |       | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------





|                                                 |  |                 |           |  |                |  |        |                                    |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|------------------------------------------------ |  | --------------- | --------- |  | -------------- |  | ------ | ---------------------------------- |  |  | ------------------------------------------ |  |  | --------------- | ------- |  | ----------- |  | ------- |  |  |  | ------- | 
|(In millions of won)                             |  | 2013            |          
|                                                 |  |                 |           |  |                |  |        | Purchase and others                | 
|                                                 |  | Salesand others |           |  | Dividendincome |  |        | Purchase of rawmaterial and others |  |  | Acquisition ofproperty, plant andequipment |  |  | Outsourcingfees |         |  | Other costs | 
|Hi Business Logistics Co., Ltd.                  |  | W               | 41        |  |                |  |       |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 30,611  | 
|Hi Logistics Europe B.V.                         |  |                 |          |  |                |  |       |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 5,488   | 
|LG Innotek Co., Ltd.                             |  |                 | 6,139     |  |                |  |       |                                    |  |  | 448,794                                    |  |  |                 |        |  |             |  |        |  |  |  | 5,109   | 
|LG Innotek Poland Sp. z o.o.                     |  |                 |          |  |                |  |       |                                    |  |  | 6,442                                      |  |  |                 |        |  |             |  |        |  |  |  | 161     | 
|LG Innotek (Guangzhou) Co., Ltd.                 |  |                 |          |  |                |  |       |                                    |  |  | 5,937                                      |  |  |                 |        |  |             |  |         |  |  |  | 151     | 
|LG Hitachi Water Solutions Co., Ltd.             |  |                 |          |  |                |  |       |                                    |  |  |                                           |  |  |                 | 29,344  |  |             |  |        |  |  |  | 406     | 
|Qingdao LG Inspur DigitalCommunication Co., Ltd. |  |                 | 32,585    |  |                |  |       |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|Inspur LG Digital MobileCommunications Co., Ltd. |  |                 | 59,715    |  |                |  |       |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Mexicali, S.A. DE C.V.            |  |                 | 289,670   |  |                |  |       |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Mlawa Sp. z o.o.                  |  |                 | 365,054   |  |                |  |       |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Shenyang Inc.                     |  |                 | 156,577   |  |                |  |       |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Taiwan Taipei Co., Ltd.           |  |                 | 34,139    |  |                |  |       |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Reynosa S.A. DE C.V.              |  |                 | 795,326   |  |                |  |       |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 300     | 
|LG Electronics Wroclaw Sp. z o.o.                |  |                 | 872,763   |  |                |  |       |                                    |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 104     | 
|Others                                           |  |                 | 132       |  |                |  |       |                                    |  |  | 2,229                                      |  |  |                 |        |  |             |  |        |  |  |  | 3,703   | 
|                                                 |  |                 |           |  |                |  |        |                                    |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|                                                 |  | W               | 4,210,477 |  |                |  |       |                                    |  |  | 463,402                                    |  |  |                 | 29,344  |  |             |  |        |  |  |  | 46,110  | 
|                                                 |  |                 |           |  |                |  |        |                                    |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|                                                 |  | W               | 6,675,086 |  |                |  | 14,276 |                                    |  |  | 2,112,929                                  |  |  |                 | 377,753 |  |             |  | 294,801 |  |  |  | 111,222 | 
|                                                 |  |                 |           |  |                |  |        |                                    |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------



|                                    |  |                 |         |  |                |  |       |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |        | 
|----------------------------------- |  | --------------- | ------- |  | -------------- |  | ----- | --------------------------------- |  |  | ------------------------------------------ |  |  | --------------- | ------- |  | ----------- |  | ------- |  |  |  | ------ | 
|(In millions of won)                |  | 2014            |        
|                                    |  |                 |         |  |                |  |       | Purchase and others               | 
|                                    |  | Salesand others |         |  | Dividendincome |  |       | Purchase ofraw materialand others |  |  | Acquisition ofproperty, plantand equipment |  |  | Outsourcingfees |         |  | Other costs | 
|Joint ventures                      |  |                 |         |  |                |  |       |                                   |  |  |                                            |  |  |                 |         | 
|Suzhou Raken Technology Co., Ltd.   |  | W               | 190,780 |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  | 101,830 |  |  |  |       | 
|Global OLED Technology LLC          |  |                 |        |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 2,045  | 
|                                    |  |                 |         |  |                |  |       |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |        | 
|                                    |  | W               | 190,780 |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  | 101,830 |  |  |  | 2,045  | 
|                                    |  |                 |         |  |                |  |       |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |        | 
|Associates and their subsidiaries   |  |                 |         |  |                |  |       |                                   |  |  |                                            |  |  |                 |         | 
|New Optics Ltd.                     |  | W               | 579     |  |                |  |      |                                   |  |  | 56,412                                     |  |  |                 |        |  |             |  | 11,057  |  |  |  | 2,015  | 
|LIG ADP Co., Ltd.                   |  |                 |        |  |                |  |      |                                   |  |  | 413                                        |  |  |                 | 16,647  |  |             |  |        |  |  |  | 722    | 
|TLI Inc.                            |  |                 |        |  |                |  |      |                                   |  |  | 76,047                                     |  |  |                 |        |  |             |  |        |  |  |  | 2,753  | 
|AVACO Co., Ltd.                     |  |                 | 41      |  |                |  |      |                                   |  |  | 1,520                                      |  |  |                 | 202,915 |  |             |  |        |  |  |  | 3,754  | 
|AVATEC Co., Ltd.                    |  |                 |        |  |                |  | 265   |                                   |  |  | 143                                        |  |  |                 |        |  |             |  | 92,353  |  |  |  | 360    | 
|AVATEC Electronics Yantai Co., Ltd. |  |                 |        |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 4,951  | 
|Paju Electric Glass Co., Ltd.       |  |                 |        |  |                |  |      |                                   |  |  | 600,655                                    |  |  |                 |        |  |             |  |        |  |  |  | 3,097  | 
|LB Gemini New Growth Fund No. 16    |  |                 |        |  |                |  | 613   |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |       | 
|Shinbo Electric Co., Ltd.           |  |                 | 103,091 |  |                |  |      |                                   |  |  | 686,100                                    |  |  |                 |        |  |             |  | 106,311 |  |  |  | 55     | 
|Narenanotech Corporation            |  |                 |        |  |                |  | 180   |                                   |  |  | 519                                        |  |  |                 | 8,873   |  |             |  |        |  |  |  | 1,403  | 
|Glonix Co., Ltd.                    |  |                 |        |  |                |  |      |                                   |  |  | 21,344                                     |  |  |                 |        |  |             |  |        |  |  |  | 315    | 
|ADP System Co., Ltd.                |  |                 |        |  |                |  |      |                                   |  |  | 1,810                                      |  |  |                 | 4,418   |  |             |  |        |  |  |  | 497    | 
|YAS Co., Ltd.                       |  |                 |        |  |                |  |      |                                   |  |  | 734                                        |  |  |                 | 21,614  |  |             |  |        |  |  |  | 460    | 
|                                    |  |                 |         |  |                |  |       |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |        | 
|                                    |  | W               | 103,711 |  |                |  | 1,058 |                                   |  |  | 1,445,697                                  |  |  |                 | 254,467 |  |             |  | 209,721 |  |  |  | 20,382 | 
|                                    |  |                 |         |  |                |  |       |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |        | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------





|                                                                                       |  |                 |           |  |                |  |   |                                   |  |  |                                            |  |  |                 |         |  |             |  |   |  |  |  |        | 
|-------------------------------------------------------------------------------------- |  | --------------- | --------- |  | -------------- |  | - | --------------------------------- |  |  | ------------------------------------------ |  |  | --------------- | ------- |  | ----------- |  | - |  |  |  | ------ | 
|(In millions of won)                                                                   |  | 2014            |          
|                                                                                       |  |                 |           |  |                |  |   | Purchase and others               | 
|                                                                                       |  | Salesand others |           |  | Dividendincome |  |   | Purchase ofraw materialand others |  |  | Acquisition ofproperty, plantand equipment |  |  | Outsourcingfees |         |  | Other costs | 
|Entity that has significant influence over the Controlling Company                     |  |                 |           |  |                |  |   |                                   |  |  |                                            |  |  |                 |         |  |             |  |   |  |  |  |        | 
|LG Electronics Inc.                                                                    |  | W               | 2,157,472 |  |                |  |  |                                   |  |  | 60,002                                     |  |  |                 | 267,212 |  |             |  |  |  |  |  | 73,255 | 
|Subsidiaries of the entity that has significant influence over the Controlling
Company |  |                 |           |  |                |  |   |                                   |  |  |                                            |  |  |                 |         |  |             |  |   |  |  |  |        | 
|LG Electronics India Pvt. Ltd.                                                         |  | W               | 117,075   |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  |       | 
|LG Electronics Vietnam Co., Ltd.                                                       |  |                 | 36,204    |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  | 2      | 
|LG Electronics Thailand Co., Ltd.                                                      |  |                 | 68,212    |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  |       | 
|LG Electronics Nanjing Display Co., Ltd.                                               |  |                 | 342,474   |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  | 1,719  | 
|LG Electronics RUS, LLC                                                                |  |                 | 530,121   |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  |       | 
|LG Electronics do Brasil Ltda.                                                         |  |                 | 363,092   |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  | 502    | 
|LG Electronics (Kunshan) Computer Co., Ltd.                                            |  |                 | 15,968    |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  |       | 
|LG Innotek Co., Ltd.                                                                   |  |                 | 3,514     |  |                |  |  |                                   |  |  | 509,352                                    |  |  |                 |        |  |             |  |  |  |  |  | 13,082 | 
|LG Electronics Vietnam Haiphong Co., Ltd.                                              |  |                 | 19,476    |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  |       | 
|LG Hitachi Water Solutions Co., Ltd.                                                   |  |                 |          |  |                |  |  |                                   |  |  |                                           |  |  |                 | 29,993  |  |             |  |  |  |  |  |       | 
|Qingdao LG Inspur Digital Communication Co., Ltd.                                      |  |                 | 188,993   |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  |       | 
|Inspur LG Digital Mobile Communications Co., Ltd.                                      |  |                 | 114,458   |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  |       | 
|LG Electronics Mexicali, S.A. DE C.V.                                                  |  |                 | 193,246   |  |                |  |  |                                   |  |  |                                           |  |  |                 |        |  |             |  |  |  |  |  |       | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------



|                                          |  |                 |           |  |                |  |       |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|----------------------------------------- |  | --------------- | --------- |  | -------------- |  | ----- | --------------------------------- |  |  | ------------------------------------------ |  |  | --------------- | ------- |  | ----------- |  | ------- |  |  |  | ------- | 
|(In millions of won)                      |  | 2014            |          
|                                          |  |                 |           |  |                |  |       | Purchase and others               | 
|                                          |  | Salesand others |           |  | Dividendincome |  |       | Purchase ofraw materialand others |  |  | Acquisition ofproperty, plantand equipment |  |  | Outsourcingfees |         |  | Other costs | 
|LG Electronics Mlawa Sp. z o.o.           |  | W               | 571,252   |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Shenyang Inc.              |  |                 | 175,424   |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Taiwan Taipei Co., Ltd.    |  |                 | 28,177    |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Reynosa, S.A. DE C.V.      |  |                 | 960,523   |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 1,065   | 
|LG Electronics Wroclaw Sp. z o.o.         |  |                 | 719,543   |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 62      | 
|Others                                    |  |                 | 50        |  |                |  |      |                                   |  |  | 810                                        |  |  |                 |        |  |             |  |        |  |  |  | 67,149  | 
|                                          |  |                 |           |  |                |  |       |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|                                          |  | W               | 4,447,802 |  |                |  |      |                                   |  |  | 510,162                                    |  |  |                 | 29,993  |  |             |  |        |  |  |  | 83,581  | 
|                                          |  |                 |           |  |                |  |       |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|                                          |  | W               | 6,899,765 |  |                |  | 1,058 |                                   |  |  | 2,015,861                                  |  |  |                 | 551,672 |  |             |  | 311,551 |  |  |  | 179,263 | 
|                                          |  |                 |           |  |                |  |       |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|                                          | 
|(In millions of won)                      |  | 2015            |          
|                                          |  |                 |           |  |                |  |       | Purchase and others               | 
|                                          |  | Salesand others |           |  | Dividendincome |  |       | Purchase ofraw materialand others |  |  | Acquisition ofproperty, plantand equipment |  |  | Outsourcingfees |         |  | Other costs | 
|Joint Venture                             |  |                 |           |  |                |  |       |                                   |  |  |                                            |  |  |                 |         | 
|Suzhou Raken Technology Co., Ltd.         |  | W               | 143,125   |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 361     | 
|Associates and their subsidiaries         |  |                 |           |  |                |  |       |                                   |  |  |                                            |  |  |                 |         | 
|New Optics Ltd.                           |  | W               | 92        |  |                |  |      |                                   |  |  | 47,404                                     |  |  |                 |        |  |             |  | 5,880   |  |  |  | 441     | 
|New Optics USA, Inc.                      |  |                 |          |  |                |  |      |                                   |  |  |                                           |  |  |                 |        |  |             |  | 29,475  |  |  |  |        | 
|LIG INVENIA Co., Ltd. (LIG ADP Co., Ltd.) |  |                 | 9         |  |                |  |      |                                   |  |  | 49                                         |  |  |                 | 42,007  |  |             |  |        |  |  |  | 122     | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------



|                                                                                       |  |                 |           |  |                |  |        |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|-------------------------------------------------------------------------------------- |  | --------------- | --------- |  | -------------- |  | ------ | --------------------------------- |  |  | ------------------------------------------ |  |  | --------------- | ------- |  | ----------- |  | ------- |  |  |  | ------- | 
|(In millions of won)                                                                   |  | 2015            |          
|                                                                                       |  |                 |           |  |                |  |        | Purchase and others               | 
|                                                                                       |  | Salesand others |           |  | Dividendincome |  |        | Purchase ofraw materialand others |  |  | Acquisition ofproperty, plantand equipment |  |  | Outsourcingfees |         |  | Other costs | 
|TLI Inc.                                                                               |  | W               |          |  |                |  | 101    |                                   |  |  | 84,732                                     |  |  |                 |        |  |             |  |        |  |  |  | 929     | 
|AVACO Co., Ltd.                                                                        |  |                 |          |  |                |  | 128    |                                   |  |  | 1,826                                      |  |  |                 | 82,797  |  |             |  |        |  |  |  | 6,223   | 
|AVATEC Co., Ltd.                                                                       |  |                 |          |  |                |  | 530    |                                   |  |  | 278                                        |  |  |                 |        |  |             |  | 52,097  |  |  |  | 1,599   | 
|AVATEC Electronics Yantai Co., Ltd.                                                    |  |                 |          |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 761     | 
|Paju Electric Glass Co., Ltd.                                                          |  |                 |          |  |                |  | 24,058 |                                   |  |  | 425,314                                    |  |  |                 |        |  |             |  |        |  |  |  | 2,772   | 
|Shinbo Electric Co., Ltd.                                                              |  |                 | 284,255   |  |                |  |       |                                   |  |  | 473,484                                    |  |  |                 |        |  |             |  | 97,736  |  |  |  | 83      | 
|Narenanotech Corporation                                                               |  |                 | 3         |  |                |  |       |                                   |  |  | 634                                        |  |  |                 | 20,515  |  |             |  |        |  |  |  | 643     | 
|Glonix Co., Ltd.                                                                       |  |                 | 8         |  |                |  |       |                                   |  |  | 4,581                                      |  |  |                 |        |  |             |  |        |  |  |  | 227     | 
|ADP System Co., Ltd.                                                                   |  |                 |          |  |                |  |       |                                   |  |  | 2,465                                      |  |  |                 | 2,853   |  |             |  |        |  |  |  | 629     | 
|YAS Co., Ltd.                                                                          |  |                 | 9         |  |                |  |       |                                   |  |  | 810                                        |  |  |                 | 20,324  |  |             |  |        |  |  |  | 974     | 
|LB Gemini New Growth Fund No. 16                                                       |  |                 |          |  |                |  | 760    |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|                                                                                       |  |                 |           |  |                |  |        |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|                                                                                       |  | W               | 284,376   |  |                |  | 25,577 |                                   |  |  | 1,041,577                                  |  |  |                 | 168,496 |  |             |  | 185,188 |  |  |  | 15,403  | 
|                                                                                       |  |                 |           |  |                |  |        |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|Entity that has significant influence over the Controlling Company                     |  |                 |           |  |                |  |        |                                   |  |  |                                            |  |  |                 |         | 
|LG Electronics Inc.                                                                    |  | W               | 1,694,039 |  |                |  |       |                                   |  |  | 39,791                                     |  |  |                 | 255,046 |  |             |  |        |  |  |  | 133,536 | 
|Subsidiaries of the entity that has significant influence over the Controlling
Company |  |                 |           |  |                |  |        |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|LG Electronics India Pvt. Ltd.                                                         |  | W               | 156,428   |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 131     | 
|LG Electronics Vietnam Haiphong Co., Ltd.                                              |  |                 | 95,626    |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Thailand Co., Ltd.                                                      |  |                 | 12,902    |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 188     | 
|LG Electronics Nanjing Display Co., Ltd.                                               |  |                 | 182,302   |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 2,200   | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------





|                                                 |  |                 |           |  |                |  |        |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|------------------------------------------------ |  | --------------- | --------- |  | -------------- |  | ------ | --------------------------------- |  |  | ------------------------------------------ |  |  | --------------- | ------- |  | ----------- |  | ------- |  |  |  | ------- | 
|(In millions of won)                             |  | 2015            |          
|                                                 |  |                 |           |  |                |  |        | Purchase and others               | 
|                                                 |  | Salesand others |           |  | Dividendincome |  |        | Purchase ofraw materialand others |  |  | Acquisition ofproperty, plantand equipment |  |  | Outsourcingfees |         |  | Other costs | 
|LG Electronics RUS, LLC                          |  | W               | 198,897   |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 420     | 
|LG Electronics do Brasil Ltda.                   |  |                 | 298,679   |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 490     | 
|LG Electronics (Kunshan) Computer Co., Ltd.      |  |                 | 9,282     |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Innotek Co., Ltd.                             |  |                 | 5,647     |  |                |  |       |                                   |  |  | 299,033                                    |  |  |                 |        |  |             |  |        |  |  |  | 44,691  | 
|Qingdao LG Inspur DigitalCommunication Co., Ltd. |  |                 | 271,405   |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|Inspur LG Digital MobileCommunications Co., Ltd. |  |                 | 286,420   |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Mexicali, S.A. DE C.V.            |  |                 | 160,842   |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Mlawa Sp. z o.o.                  |  |                 | 448,468   |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 1,371   | 
|LG Electronics Shenyang Inc.                     |  |                 | 109,844   |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 4       | 
|LG Electronics Taiwan Taipei Co., Ltd.           |  |                 | 13,050    |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  |        | 
|LG Electronics Wroclaw Sp. z o.o.                |  |                 | 523,623   |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 298     | 
|LG Hitachi Water Solutions Co., Ltd.             |  |                 |          |  |                |  |       |                                   |  |  |                                           |  |  |                 | 40,436  |  |             |  |        |  |  |  | 5,664   | 
|LG Electronics Reynosa, S.A. DE C.V.             |  |                 | 1,020,471 |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 9       | 
|Hi Entech Co., Ltd.                              |  |                 |          |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 24,963  | 
|Hi Business Logistics Co., Ltd.                  |  |                 | 34        |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 24,832  | 
|Hi Logistics (China) Co., Ltd.                   |  |                 |          |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 7,183   | 
|Hientech (Tianjin) Co., Ltd.                     |  |                 |          |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 19,149  | 
|LG Electronics U.S.A., Inc.                      |  |                 | 5,305     |  |                |  |       |                                   |  |  |                                           |  |  |                 |        |  |             |  |        |  |  |  | 868     | 
|Others                                           |  |                 | 12        |  |                |  |       |                                   |  |  | 2                                          |  |  |                 |        |  |             |  |        |  |  |  | 8,567   | 
|                                                 |  |                 |           |  |                |  |        |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|                                                 |  | W               | 3,799,237 |  |                |  |       |                                   |  |  | 299,035                                    |  |  |                 | 40,436  |  |             |  |        |  |  |  | 141,028 | 
|                                                 |  |                 |           |  |                |  |        |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 
|                                                 |  | W               | 5,920,777 |  |                |  | 25,577 |                                   |  |  | 1,380,403                                  |  |  |                 | 463,978 |  |             |  | 185,188 |  |  |  | 290,328 | 
|                                                 |  |                 |           |  |                |  |        |                                   |  |  |                                            |  |  |                 |         |  |             |  |         |  |  |  |         | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------



| | (d) | Trade accounts and notes receivable and payable as of December 31, 2014 and 2015 are as follows:
| | --- | ------------------------------------------------------------------------------------------------



|                                                                   |  |                                               |         |  |                                            |  |         |                   |  |  |                   |  |  |  |         | 
|------------------------------------------------------------------ |  | --------------------------------------------- | ------- |  | ------------------------------------------ |  | ------- | ----------------- |  |  | ----------------- |  |  |  | ------- | 
|(In millions of won)                                               |  |                                               |        
|                                                                   |  | Trade accounts and notes receivableand others |         |  | Trade accounts and notes payableand others | 
|                                                                   |  | December 31, 2014                             |         |  | December 31, 2015                          |  |         | December 31, 2014 |  |  | December 31, 2015 | 
|Joint ventures                                                     |  |                                               |         |  |                                            |  |         |                   |  |  |                   |  |  |  |         | 
|Suzhou Raken Technology Co., Ltd.                                  |  | W                                             | 27,750  |  |                                            |  | 14,657  |                   |  |  |                  |  |  |  | 182     | 
|Global OLED Technology LLC (*)                                     |  |                                               |        |  |                                            |  |        |                   |  |  | 505               |  |  |  |        | 
|                                                                   |  |                                               |         |  |                                            |  |         |                   |  |  |                   |  |  |  |         | 
|                                                                   |  | W                                             | 27,750  |  |                                            |  | 14,657  |                   |  |  | 505               |  |  |  | 182     | 
|                                                                   |  |                                               |         |  |                                            |  |         |                   |  |  |                   |  |  |  |         | 
|Associates and their subsidiaries                                  |  |                                               |         |  |                                            |  |         |                   |  |  |                   |  |  |  |         | 
|New Optics Ltd.                                                    |  | W                                             | 440     |  |                                            |  |        |                   |  |  | 14,785            |  |  |  | 8,584   | 
|New Optics USA, Inc                                                |  |                                               |        |  |                                            |  |        |                   |  |  |                  |  |  |  | 5,313   | 
|(LIG INVENIA Co., Ltd.) LIG ADP Co., Ltd.                          |  |                                               |        |  |                                            |  | 956     |                   |  |  | 2,471             |  |  |  | 6,349   | 
|TLI Inc.                                                           |  |                                               |        |  |                                            |  |        |                   |  |  | 14,086            |  |  |  | 15,232  | 
|AVACO Co., Ltd.                                                    |  |                                               |        |  |                                            |  |        |                   |  |  | 14,236            |  |  |  | 20,064  | 
|AVATEC Co., Ltd.                                                   |  |                                               |        |  |                                            |  |        |                   |  |  | 10,645            |  |  |  | 5,493   | 
|AVATEC Electronics Yantai Co., Ltd.                                |  |                                               |        |  |                                            |  |        |                   |  |  | 247               |  |  |  |        | 
|Paju Electric Glass Co., Ltd.                                      |  |                                               |        |  |                                            |  |        |                   |  |  | 82,792            |  |  |  | 68,066  | 
|Shinbo Electric Co., Ltd.                                          |  |                                               | 58,207  |  |                                            |  | 73,549  |                   |  |  | 113,660           |  |  |  | 71,231  | 
|Narenanotech Corporation                                           |  |                                               |        |  |                                            |  | 283     |                   |  |  | 1,532             |  |  |  | 2,242   | 
|Glonix Co., Ltd.                                                   |  |                                               |        |  |                                            |  |        |                   |  |  | 1,752             |  |  |  |        | 
|ADP System Co., Ltd.                                               |  |                                               |        |  |                                            |  |        |                   |  |  | 1,941             |  |  |  | 615     | 
|YAS Co., Ltd.                                                      |  |                                               |        |  |                                            |  | 956     |                   |  |  | 7,300             |  |  |  | 5,248   | 
|                                                                   |  |                                               |         |  |                                            |  |         |                   |  |  |                   |  |  |  |         | 
|                                                                   |  | W                                             | 58,647  |  |                                            |  | 75,744  |                   |  |  | 265,447           |  |  |  | 208,437 | 
|                                                                   |  |                                               |         |  |                                            |  |         |                   |  |  |                   |  |  |  |         | 
|Entity that has significant influence over the Controlling Company |  |                                               |         |  |                                            |  |         |                   |  |  |                   |  |  |  |         | 
|LG Electronics Inc.                                                |  | W                                             | 385,403 |  |                                            |  | 407,498 |                   |  |  | 114,291           |  |  |  | 118,073 | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------



|                                                                                       |  |                                               |         |  |                                            |  |           |                   |  |  |                   |  |  |  |         | 
|-------------------------------------------------------------------------------------- |  | --------------------------------------------- | ------- |  | ------------------------------------------ |  | --------- | ----------------- |  |  | ----------------- |  |  |  | ------- | 
|(In millions of won)                                                                   |  |                                               |        
|                                                                                       |  | Trade accounts and notes receivableand others |         |  | Trade accounts and notes payableand others | 
|                                                                                       |  | December 31, 2014                             |         |  | December 31, 2015                          |  |           | December 31, 2014 |  |  | December 31, 2015 | 
|Subsidiaries of the entity that has significant influence over the Controlling
Company |  |                                               |         |  |                                            |  |           |                   |  |  |                   |  |  |  |         | 
|LG Electronics India Pvt. Ltd.                                                         |  | W                                             | 13,825  |  |                                            |  | 12,736    |                   |  |  |                  |  |  |  |        | 
|LG Electronics do Brasil Ltda.                                                         |  |                                               | 12,011  |  |                                            |  | 5,835     |                   |  |  | 97                |  |  |  |        | 
|LG Electronics Thailand Co., Ltd.                                                      |  |                                               | 17,792  |  |                                            |  |          |                   |  |  |                  |  |  |  |        | 
|LG Electronics RUS, LLC                                                                |  |                                               | 71,912  |  |                                            |  | 43,342    |                   |  |  |                  |  |  |  |        | 
|LG Innotek Co., Ltd.                                                                   |  |                                               | 4       |  |                                            |  | 311       |                   |  |  | 88,661            |  |  |  | 76,240  | 
|Qingdao LG Inspur Digital Communication Co., Ltd.                                      |  |                                               | 68,754  |  |                                            |  | 30,038    |                   |  |  |                  |  |  |  |        | 
|Inspur LG Digital Mobile Communications Co., Ltd.                                      |  |                                               | 44,872  |  |                                            |  | 107,450   |                   |  |  |                  |  |  |  |        | 
|LG Electronics Mexicali, S.A. DE C.V.                                                  |  |                                               | 5,389   |  |                                            |  | 14,626    |                   |  |  |                  |  |  |  |        | 
|LG Electronics Mlawa Sp. z o.o.                                                        |  |                                               | 68,397  |  |                                            |  | 69,879    |                   |  |  |                  |  |  |  |        | 
|LG Electronics Nanjing Display Co., Ltd.                                               |  |                                               | 23,342  |  |                                            |  | 25,195    |                   |  |  | 575               |  |  |  | 87      | 
|LG Electronics Shenyang Inc.                                                           |  |                                               | 15,659  |  |                                            |  | 14,149    |                   |  |  |                  |  |  |  |        | 
|LG Electronics Taiwan Taipei Co., Ltd.                                                 |  |                                               | 5,394   |  |                                            |  | 847       |                   |  |  |                  |  |  |  |        | 
|LG Electronics Reynosa, S.A. DE C.V.                                                   |  |                                               | 34,668  |  |                                            |  | 120,940   |                   |  |  | 94                |  |  |  |        | 
|LG Electronics Wroclaw Sp. z o.o.                                                      |  |                                               | 13,742  |  |                                            |  | 126,898   |                   |  |  | 14                |  |  |  | 4       | 
|LG Electronics Vietnam Haiphong Co., Ltd.                                              |  |                                               | 13,491  |  |                                            |  | 20,296    |                   |  |  |                  |  |  |  |        | 
|LG Electronics (Kunshan) Computer Co., Ltd.                                            |  |                                               | 3,776   |  |                                            |  |          |                   |  |  |                  |  |  |  |        | 
|LG Hitachi Water Solutions Co., Ltd.                                                   |  |                                               |        |  |                                            |  |          |                   |  |  | 7,079             |  |  |  | 13,811  | 
|HiEntech Co., Ltd.                                                                     |  |                                               |        |  |                                            |  |          |                   |  |  | 5,954             |  |  |  | 3,695   | 
|Others                                                                                 |  |                                               | 463     |  |                                            |  | 4,481     |                   |  |  | 5,526             |  |  |  | 3,695   | 
|                                                                                       |  |                                               |         |  |                                            |  |           |                   |  |  |                   |  |  |  |         | 
|                                                                                       |  | W                                             | 413,491 |  |                                            |  | 597,023   |                   |  |  | 108,000           |  |  |  | 97,532  | 
|                                                                                       |  |                                               |         |  |                                            |  |           |                   |  |  |                   |  |  |  |         | 
|                                                                                       |  | W                                             | 885,291 |  |                                            |  | 1,094,922 |                   |  |  | 488,243           |  |  |  | 424,224 | 
|                                                                                       |  |                                               |         |  |                                            |  |           |                   |  |  |                   |  |  |  |         | 



|(*) | The Controlling Company acquired additional ownership in Global OLED Technology and classified it as subsidiaries as of December 31, 2015.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------



F-87



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|23. | Related Parties, Continued
|--- | --------------------------



| | (e) | Details of significant cash transactions such as loans and collection of loans, which occurred in the normal course of business with related parties for the nine-month period ended December 31, 2015 are as follows:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                          |  |           |       | 
|----------------------------------------- |  | --------- | ----- | 
|(In millions of won)                      |  |           |      
|Associates                                |  | Loans (*) |      
|LIG INVENIA Co., Ltd. (LIG ADP Co., Ltd.) |  | W         | 1,000 | 
|Narenanotech Corporation                  |  |           | 300   | 
|YAS Co., Ltd.                             |  |           | 1,000 | 
|                                          |  |           |       | 
|                                          |  | W         | 2,300 | 
|                                          |  |           |       | 



|(*) | Loans are presented based on nominal prices.
|--- | --------------------------------------------



|24. | Geographic and Other Information
|--- | --------------------------------

The following is a summary of sales by region based on
the location of the customers for the years ended December 31, 2013, 2014 and 2015.



| | (a) | Revenue by geography
| | --- | --------------------



|                          |  |      |            |  |      |  |            |      |  |  |            | 
|------------------------- |  | ---- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|(In millions of won)      |  |      |           
|Region                    |  | 2013 |            |  | 2014 |  |            | 2015 | 
|Domestic                  |  | W    | 2,691,826  |  |      |  | 2,608,344  |      |  |  | 2,217,516  | 
|Foreign                   |  |      |            |  |      |  |            |      |  |  |            | 
|China                     |  |      | 15,229,822 |  |      |  | 15,773,847 |      |  |  | 19,375,401 | 
|Asia (excluding China)    |  |      | 3,039,652  |  |      |  | 3,050,652  |      |  |  | 2,605,753  | 
|United States             |  |      | 2,446,128  |  |      |  | 2,025,978  |      |  |  | 1,981,021  | 
|Europe (excluding Poland) |  |      | 2,211,073  |  |      |  | 1,527,003  |      |  |  | 1,064,122  | 
|Poland                    |  |      | 1,414,534  |  |      |  | 1,469,705  |      |  |  | 1,140,071  | 
|                          |  |      |            |  |      |  |            |      |  |  |            | 
|                          |  |      | 24,341,209 |  |      |  | 23,847,185 |      |  |  | 26,166,368 | 
|                          |  |      |            |  |      |  |            |      |  |  |            | 
|                          |  | W    | 27,033,035 |  |      |  | 26,455,529 |      |  |  | 28,383,884 | 
|                          |  |      |            |  |      |  |            |      |  |  |            | 

Sales to Company A and Company B constituted KRW 9,900,220 million: 35% and KRW 6,682,226 million: 24% of total
revenue, respectively, for the year ended December 31, 2015 (2013: KRW 6,289,624 million: 23% and KRW 6,996,282 million: 26%, 2014: KRW 7,364,226 million: 28% and KRW 7,152,079 million: 27%). The Groups top ten end-brand customers
together accounted for 82% of sales for the year ended December 31, 2015 (2013: 76%, 2014: 79%)



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|24. | Geographic and Other Information, Continued
|--- | -------------------------------------------



| | (b) | Non-current assets by geography
| | --- | -------------------------------



|                     |  |                              |            |  |                  |  |         | 
|-------------------- |  | ---------------------------- | ---------- |  | ---------------- |  | ------- | 
|(In millions of Won) | 
|                     |  | December 31, 2014            |           
|Region               |  | Property, plant andequipment |            |  | Intangibleassets | 
|Domestic             |  | W                            | 8,699,862  |  |                  |  | 548,086 | 
|Foreign              |  |                              |            |  |                  |  |         | 
|China                |  |                              | 2,588,511  |  |                  |  | 20,954  | 
|Others               |  |                              | 114,493    |  |                  |  | 7,630   | 
|                     |  |                              |            |  |                  |  |         | 
|Sub total            |  | W                            | 2,703,004  |  |                  |  | 28,584  | 
|                     |  |                              |            |  |                  |  |         | 
|Total                |  | W                            | 11,402,866 |  |                  |  | 576,670 | 
|                     |  |                              |            |  |                  |  |         | 
|                    
|(In millions of Won) | 
|                     |  | December 31, 2015            |           
|Region               |  | Property, plant andequipment |            |  | Intangibleassets | 
|Domestic             |  | W                            | 7,719,079  |  |                  |  | 607,402 | 
|Foreign              |  |                              |            |  |                  |  |         | 
|China                |  |                              | 2,728,047  |  |                  |  | 19,946  | 
|Others               |  |                              | 98,894     |  |                  |  | 211,382 | 
|                     |  |                              |            |  |                  |  |         | 
|Sub total            |  | W                            | 2,826,941  |  |                  |  | 231,328 | 
|                     |  |                              |            |  |                  |  |         | 
|Total                |  | W                            | 10,546,020 |  |                  |  | 838,730 | 
|                     |  |                              |            |  |                  |  |         | 



| | (c) | Revenue by product and services
| | --- | -------------------------------



|                     |  |      |            |  |      |  |            |      |  |  |            | 
|-------------------- |  | ---- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|(In millions of Won) |  |      |            |  |      |  |            |      | 
|Product              |  | 2013 |            |  | 2014 |  |            | 2015 | 
|Panels for:          |  |      |            |  |      |  |            |      |  |  |            | 
|Televisions          |  | W    | 11,795,225 |  |      |  | 10,539,917 |      |  |  | 10,853,598 | 
|Desktop monitors     |  |      | 5,255,564  |  |      |  | 4,660,151  |      |  |  | 4,553,138  | 
|Tablet products      |  |      | 3,574,812  |  |      |  | 3,541,607  |      |  |  | 2,509,911  | 
|Notebook computers   |  |      | 2,818,572  |  |      |  | 2,668,806  |      |  |  | 2,508,878  | 
|Mobile and others    |  |      | 3,588,862  |  |      |  | 5,045,048  |      |  |  | 7,958,359  | 
|                     |  |      |            |  |      |  |            |      |  |  |            | 
|                     |  | W    | 27,033,035 |  |      |  | 26,455,529 |      |  |  | 28,383,884 | 
|                     |  |      |            |  |      |  |            |      |  |  |            | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|25. | Other Income and Other Expenses
|--- | -------------------------------



| | (a) | Details of other income for the years ended December 31, 2013, 2014 and 2015 are as follows:
| | --- | --------------------------------------------------------------------------------------------



|                                                  |  |      |           |  |      |  |           |      |  |  |           | 
|------------------------------------------------- |  | ---- | --------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|(In millions of Won)                              |  |      |           |  |      |  |           |      | 
|                                                  |  | 2013 |           |  | 2014 |  |           | 2015 | 
|Rental income                                     |  | W    | 10,373    |  |      |  | 6,549     |      |  |  | 4,858     | 
|Foreign currency gain                             |  |      | 1,068,646 |  |      |  | 988,366   |      |  |  | 1,221,066 | 
|Gain on disposal of property, plant and equipment |  |      | 9,620     |  |      |  | 8,989     |      |  |  | 18,179    | 
|Reversal of impairment loss on intangible assets  |  |      | 296       |  |      |  |          |      |  |  | 80        | 
|Reversal of allowance for doubtful accounts       |  |      | 1,090     |  |      |  |          |      |  |  | 320       | 
|Commission earned                                 |  |      | 3,589     |  |      |  | 2,486     |      |  |  | 1,834     | 
|Others (*)                                        |  |      | 15,818    |  |      |  | 65,513    |      |  |  | 27,564    | 
|                                                  |  |      |           |  |      |  |           |      |  |  |           | 
|                                                  |  | W    | 1,109,432 |  |      |  | 1,071,903 |      |  |  | 1,273,901 | 
|                                                  |  |      |           |  |      |  |           |      |  |  |           | 



|(*) | A gain amounting to W34,804 million as a result of the Controlling Companys success in its appeal against the fining decision of the Korea Fair Trade Commission is included in 2014.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Details of other expenses for the years ended December 31, 2013, 2014 and 2015 are as follows:
| | --- | ----------------------------------------------------------------------------------------------



|                                                           |  |      |           |  |      |  |           |      |  |  |           | 
|---------------------------------------------------------- |  | ---- | --------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|(In millions of Won)                                       |  |      |           |  |      |  |           |      | 
|                                                           |  | 2013 |           |  | 2014 |  |           | 2015 | 
|Other bad debt expense                                     |  | W    |          |  |      |  | 531       |      |  |  |          | 
|Foreign currency loss                                      |  |      | 987,868   |  |      |  | 962,693   |      |  |  | 1,177,634 | 
|Loss on disposal of property, plant and equipment          |  |      | 1,639     |  |      |  | 2,173     |      |  |  | 4,037     | 
|Impairment loss on property, plant and equipment           |  |      | 853       |  |      |  | 8,097     |      |  |  | 3,027     | 
|Loss on disposal of intangible assets                      |  |      | 452       |  |      |  | 672       |      |  |  | 29        | 
|Impairment loss on intangible assets                       |  |      | 1,661     |  |      |  | 492       |      |  |  | 239       | 
|Donations                                                  |  |      | 16,514    |  |      |  | 11,901    |      |  |  | 14,114    | 
|Expenses related to legal proceedings or claims and others |  |      | 259,601   |  |      |  | 108,512   |      |  |  | 127,702   | 
|                                                           |  |      |           |  |      |  |           |      |  |  |           | 
|                                                           |  | W    | 1,268,588 |  |      |  | 1,095,071 |      |  |  | 1,326,782 | 
|                                                           |  |      |           |  |      |  |           |      |  |  |           | 



|26. | Personnel Expenses
|--- | ------------------

Details of personnel expenses for the years ended December 31,
2013, 2014 and 2015 are as follows:



|                                         |  |      |           |  |      |  |           |      |  |  |           | 
|---------------------------------------- |  | ---- | --------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|(In millions of Won)                     |  |      |           |  |      |  |           |      | 
|                                         |  | 2013 |           |  | 2014 |  |           | 2015 | 
|Salaries and Wages                       |  | W    | 2,084,579 |  |      |  | 2,351,306 |      |  |  | 2,487,767 | 
|Other employee benefits                  |  |      | 410,253   |  |      |  | 408,073   |      |  |  | 450,651   | 
|Contributions to National Pension plan   |  |      | 61,788    |  |      |  | 64,078    |      |  |  | 66,191    | 
|Expenses related to defined benefit plan |  |      | 159,453   |  |      |  | 196,756   |      |  |  | 199,033   | 
|                                         |  |      |           |  |      |  |           |      |  |  |           | 
|                                         |  | W    | 2,716,073 |  |      |  | 3,020,213 |      |  |  | 3,184,642 | 
|                                         |  |      |           |  |      |  |           |      |  |  |           | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|27. | Finance Income and Finance Costs
|--- | --------------------------------



| | (a) | Finance income and costs recognized in profit or loss for the years ended December 31, 2013, 2014 and 2015 are as follows:
| | --- | --------------------------------------------------------------------------------------------------------------------------



|                                                                                   |  |      |         |  |      |  |         |      |  |  |         | 
|---------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|(In millions of won)                                                               |  |      |         |  |      |  |         |      | 
|                                                                                   |  | 2013 |         |  | 2014 |  |         | 2015 | 
|Finance income                                                                     |  |      |         |  |      |  |         |      |  |  |         | 
|Interest income                                                                    |  | W    | 39,441  |  |      |  | 49,105  |      |  |  | 57,080  | 
|Dividend income                                                                    |  |      | 306     |  |      |  | 282     |      |  |  |        | 
|Foreign currency gain                                                              |  |      | 141,975 |  |      |  | 55,000  |      |  |  | 77,879  | 
|Gain on disposal of available-for-sale financial assets                            |  |      |        |  |      |  | 780     |      |  |  |        | 
|Gain on disposal of investment in a subsidiary                                     |  |      |        |  |      |  | 276     |      |  |  |        | 
|Gain on disposal or change in control of investments in equity accounted investees |  |      | 3,289   |  |      |  |        |      |  |  | 23,268  | 
|Gain on derivatives transactions                                                   |  |      |        |  |      |  |        |      |  |  | 602     | 
|                                                                                   |  |      |         |  |      |  |         |      |  |  |         | 
|                                                                                   |  | W    | 185,011 |  |      |  | 105,443 |      |  |  | 158,829 | 
|                                                                                   |  |      |         |  |      |  |         |      |  |  |         | 
|Finance costs                                                                      |  |      |         |  |      |  |         |      |  |  |         | 
|Interest expense                                                                   |  | W    | 158,818 |  |      |  | 109,776 |      |  |  | 127,598 | 
|Foreign currency loss                                                              |  |      | 198,980 |  |      |  | 84,649  |      |  |  | 155,728 | 
|Loss on disposal of investment in a subsidiary                                     |  |      |        |  |      |  | 4,157   |      |  |  |        | 
|Loss on early redemption of debt                                                   |  |      | 2,179   |  |      |  | 6,986   |      |  |  |        | 
|Loss on sale of trade accounts and notes receivable                                |  |      | 19,463  |  |      |  | 9,812   |      |  |  | 4,909   | 
|Loss on disposal of investments in equity accounted investees                      |  |      | 2,411   |  |      |  | 156     |      |  |  | 481     | 
|Loss on impairment of investments                                                  |  |      |        |  |      |  |        |      |  |  | 26,791  | 
|Loss on derivatives transactions                                                   |  |      |        |  |      |  |        |      |  |  | 722     | 
|                                                                                   |  |      |         |  |      |  |         |      |  |  |         | 
|                                                                                   |  | W    | 381,851 |  |      |  | 215,536 |      |  |  | 316,229 | 
|                                                                                   |  |      |         |  |      |  |         |      |  |  |         | 



| | (b) | Finance income and costs recognized in other comprehensive income or loss for the years ended December 31, 2013, 2014 and 2015 are as follows:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                 |  |      |         |   |      |  |        |      |  |  |        | 
|-------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- |  | ------ | ---- |  |  | ------ | 
|(In millions of won)                                                             |  |      |        
|                                                                                 |  | 2013 |         |   | 2014 |  |        | 2015 | 
|Foreign currency translation differences for foreign operations                  |  | W    | (22,100 | ) |      |  | 37,739 |      |  |  | 50,829 | 
|Net change in fair value of available-for-sale financial assets                  |  |      | 826     |   |      |  | 982    |      |  |  | 13,297 | 
|Tax effect                                                                       |  |      | (225    | ) |      |  | (119   | )    |  |  | 214    | 
|                                                                                 |  |      |         |   |      |  |        |      |  |  |        | 
|Finance income (costs) recognized in other comprehensive income (loss) after tax |  | W    | (21,499 | ) |      |  | 38,602 |      |  |  | 64,340 | 
|                                                                                 |  |      |         |   |      |  |        |      |  |  |        | 



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|28. | Income Taxes
|--- | ------------



| | (a) | Details of income tax expense (benefit) recognized in profit for the year for the years ended December 31, 2013, 2014 and 2015 are as follows:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------



|                                                  |  |      |         |  |      |  |         |      |  |  |         | 
|------------------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|(In millions of won)                              |  | 2013 |         |  | 2014 |  |         | 2015 | 
|Current tax expense                               |  |      |         |  |      |  |         |      |  |  |         | 
|Current year                                      |  | W    | 122,150 |  |      |  | 288,280 |      |  |  | 277,264 | 
|Adjustment for prior years                        |  |      | 31,809  |  |      |  |        |      |  |  |        | 
|                                                  |  |      |         |  |      |  |         |      |  |  |         | 
|                                                  |  |      | 153,959 |  |      |  | 288,280 |      |  |  | 277,264 | 
|Deferred tax expense (benefit)                    |  |      |         |  |      |  |         |      |  |  |         | 
|Origination and reversal of temporary differences |  |      | 42,004  |  |      |  | (55,976 | )    |  |  | 123,458 | 
|Change in unrecognized deferred tax assets        |  |      | 215,369 |  |      |  | 92,249  |      |  |  | 9,804   | 
|                                                  |  |      |         |  |      |  |         |      |  |  |         | 
|                                                  |  |      | 257,373 |  |      |  | 36,273  |      |  |  | 133,262 | 
|                                                  |  |      |         |  |      |  |         |      |  |  |         | 
|Income tax expense                                |  | W    | 411,332 |  |      |  | 324,553 |      |  |  | 410,526 | 
|                                                  |  |      |         |  |      |  |         |      |  |  |         | 



| | (b) | Income taxes recognized directly in other comprehensive income for the years ended December 31, 2013, 2014 and 2015 are as follows:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------



|                                                                |  |            |         |   |             |  |      |            |  |  |         |  
|--------------------------------------------------------------- |  | ---------- | ------- | - | ----------- |  | ---- | ---------- |  |  | ------- | -
|(In millions of won)                                            |  | 2013       |        
|                                                                |  | Before tax |         |   | Tax expense |  |      | Net of tax | 
|Net change in fair value of available-for-sale financial assets |  | W          | 826     |   |             |  | (188 | )          |  |  | 638     |  
|Remeasurements of net defined benefit liabilities (assets)      |  |            | 998     |   |             |  | (334 | )          |  |  | 664     |  
|Foreign currency translation differences for foreign operations |  |            | (22,100 | ) |             |  | (37  | )          |  |  | (22,137 | )
|Share of loss from sale of treasury stocks by associates        |  |            | (802    | ) |             |  |     |            |  |  | (802    | )
|                                                                |  |            |         |   |             |  |      |            |  |  |         |  
|                                                                |  | W          | (21,078 | ) |             |  | (559 | )          |  |  | (21,637 | )
|                                                                |  |            |         |   |             |  |      |            |  |  |         |  



|                                                                |  |            |          |   |                      |  |        |            |  |  |          |  
|--------------------------------------------------------------- |  | ---------- | -------- | - | -------------------- |  | ------ | ---------- |  |  | -------- | -
|(In millions of won)                                            |  | 2014       |         
|                                                                |  | Before tax |          |   | Tax benefit(expense) |  |        | Net of tax | 
|Net change in fair value of available-for-sale financial assets |  | W          | 982      |   |                      |  | (186   | )          |  |  | 796      |  
|Remeasurements of net defined benefit liabilities (assets)      |  |            | (147,633 | ) |                      |  | 35,773 |            |  |  | (111,860 | )
|Foreign currency translation differences for foreign operations |  |            | 37,739   |   |                      |  | 67     |            |  |  | 37,806   |  
|Share of loss from sale of treasury stocks by associates        |  |            | (1,360   | ) |                      |  |       |            |  |  | (1,360   | )
|                                                                |  |            |          |   |                      |  |        |            |  |  |          |  
|                                                                |  | W          | (110,272 | ) |                      |  | 35,654 |            |  |  | (74,618  | )
|                                                                |  |            |          |   |                      |  |        |            |  |  |          |  



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|28. | Income Taxes, Continued
|--- | -----------------------



|                                                                |  |            |          |   |             |  |        |            |  |  |         |  
|--------------------------------------------------------------- |  | ---------- | -------- | - | ----------- |  | ------ | ---------- |  |  | ------- | -
|(In millions of won)                                            |  | 2015       |         
|                                                                |  | Before tax |          |   | Tax benefit |  |        | Net of tax | 
|Net change in fair value of available-for-sale financial assets |  | W          | 13,297   |   |             |  | 70     |            |  |  | 13,367  |  
|Remeasurements of net defined benefit liabilities (assets)      |  |            | (110,864 | ) |             |  | 26,682 |            |  |  | (84,182 | )
|Foreign currency translation differences for foreign operations |  |            | 50,829   |   |             |  | 144    |            |  |  | 50,973  |  
|Share of loss from sale of treasury stocks by associates        |  |            | (325     | ) |             |  |       |            |  |  | (325    | )
|                                                                |  |            |          |   |             |  |        |            |  |  |         |  
|                                                                |  | W          | (47,063  | ) |             |  | 26,896 |            |  |  | (20,167 | )
|                                                                |  |            |          |   |             |  |        |            |  |  |         |  



| | (c) | Reconciliation of the actual effective tax rate for the years ended December 31, 2013, 2014 and 2015 is as follows:
| | --- | -------------------------------------------------------------------------------------------------------------------



|                                                        |  |      |       |    |      |  |         |      |  |  |        |    |  |  |           |   |  |  |       |    |  |  |           |  
|------------------------------------------------------- |  | ---- | ----- | -- | ---- |  | ------- | ---- |  |  | ------ | -- |  |  | --------- | - |  |  | ----- | -- |  |  | --------- | -
|(In millions of won)                                    |  | 2013 |       |    | 2014 |  |         | 2015 | 
|Profit before income taxes                              |  | W    |       |    |      |  | 830,305 |      |  |  |        |    |  |  | 1,241,957 |   |  |  |       |    |  |  | 1,433,982 |  
|                                                        |  |      |       |    |      |  |         |      |  |  |        |    |  |  |           |   |  |  |       |    |  |  |           |  
|Income tax using the statutory tax rate of each country |  |      | 24.47 | %  |      |  | 203,182 |      |  |  | 32.96  | %  |  |  | 409,341   |   |  |  | 32.56 | %  |  |  | 466,848   |  
|Non-deductible expenses (non-taxable benefits), net     |  |      | 1.87  | %  |      |  | 15,517  |      |  |  | (2.22  | %) |  |  | (27,537   | ) |  |  | 2.66  | %  |  |  | 38,208    |  
|Tax credits                                             |  |      | (6.05 | %) |      |  | (50,214 | )    |  |  | (10.39 | %) |  |  | (129,026  | ) |  |  | (8.12 | %) |  |  | (116,439  | )
|Change in unrecognized deferred tax assets              |  |      | 25.94 | %  |      |  | 215,369 |      |  |  | 7.43   | %  |  |  | 92,249    |   |  |  | 0.68  | %  |  |  | 9,804     |  
|Adjustment for prior years                              |  |      | 2.03  | %  |      |  | 16,877  |      |  |  |       |    |  |  |          |   |  |  |      |    |  |  |          |  
|Others                                                  |  |      | 1.28  | %  |      |  | 10,601  |      |  |  | (1.65  | %) |  |  | (20,474   | ) |  |  | 0.84  | %  |  |  | 12,105    |  
|                                                        |  |      |       |    |      |  |         |      |  |  |        |    |  |  |           |   |  |  |       |    |  |  |           |  
|Actual income tax expense                               |  | W    |       |    |      |  | 411,332 |      |  |  |        |    |  |  | 324,553   |   |  |  |       |    |  |  | 410,526   |  
|                                                        |  |      |       |    |      |  |         |      |  |  |        |    |  |  |           |   |  |  |       |    |  |  |           |  
|Actual effective tax rate                               |  |      |       |    |      |  | 49.54   | %    |  |  |        |    |  |  | 26.13     | % |  |  |       |    |  |  | 28.63     | %



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LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|29. | Deferred Tax Assets and Liabilities
|--- | -----------------------------------



| | (a) | Unrecognized deferred tax liabilities
| | --- | -------------------------------------

As of December 31, 2014 and 2015, in relation to
the temporary differences on investments in subsidiaries amounting to W188,298 million and W213,479 million, the Controlling Company did not recognize deferred tax liabilities since the Controlling Company is able
to control the timing of the reversal of the temporary difference and it is probable that the temporary differences will not reverse in the foreseeable future.



| | (b) | Unused tax credit carryforwards for which no deferred tax asset is recognized
| | --- | -----------------------------------------------------------------------------

Realization of
deferred tax assets related to tax credit carryforwards is dependent on whether sufficient taxable income will be generated prior to their expiration. As of December 31, 2015, the Controlling Company recognized deferred tax assets of
W385,107 million, in relation to tax credit carryforwards, to the extent that management believes the realization is probable. The amount of unused tax credit carryforwards for which no deferred tax asset is recognized and their
expiration dates are as follows:



|                         |  |                   |        | 
|------------------------ |  | ----------------- | ------ | 
|(In millions of won)     |  |                   |       
|                         |  | December 31, 2016 |       
|Tax credit carryforwards |  | W                 | 78,656 | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|29. | Deferred Tax Assets and Liabilities, Continued
|--- | ----------------------------------------------



| | (c) | Deferred tax assets and liabilities are attributable to the following:
| | --- | ----------------------------------------------------------------------



|                                                           |  |                   |           |  |                   |  |         |                   |  |  |                   |   |  |                   |         |   |                   |  |           |   |  |  |         |  
|---------------------------------------------------------- |  | ----------------- | --------- |  | ----------------- |  | ------- | ----------------- |  |  | ----------------- | - |  | ----------------- | ------- | - | ----------------- |  | --------- | - |  |  | ------- | -
|(In millions of won)                                       |  | Assets            |           |  | Liabilities       |  |         | Total             | 
|                                                           |  | December,31, 2014 |           |  | December,31, 2015 |  |         | December,31, 2014 |  |  | December,31, 2015 |   |  | December,31, 2014 |         |   | December,31, 2015 | 
|Other accounts receivable, net                             |  | W                 |          |  |                   |  |        |                   |  |  | (3,440            | ) |  |                   | (2,388  | ) |                   |  | (3,440    | ) |  |  | (2,388  | )
|Inventories, net                                           |  |                   | 46,377    |  |                   |  | 46,449  |                   |  |  |                  |   |  |                   |        |   |                   |  | 46,377    |   |  |  | 46,449  |  
|Available-for-sale financial assets                        |  |                   |          |  |                   |  |        |                   |  |  | (88               | ) |  |                   | (19     | ) |                   |  | (88       | ) |  |  | (19     | )
|Defined benefit liabilities, net                           |  |                   | 112,213   |  |                   |  | 58,962  |                   |  |  |                  |   |  |                   |        |   |                   |  | 112,213   |   |  |  | 58,962  |  
|Investments in equity accounted investees and subsidiaries |  |                   | 29,839    |  |                   |  | 9,121   |                   |  |  |                  |   |  |                   |        |   |                   |  | 29,839    |   |  |  | 9,121   |  
|Accrued expenses                                           |  |                   | 177,163   |  |                   |  | 122,002 |                   |  |  |                  |   |  |                   |        |   |                   |  | 177,163   |   |  |  | 122,002 |  
|Property, plant and equipment                              |  |                   | 236,848   |  |                   |  | 271,252 |                   |  |  |                  |   |  |                   |        |   |                   |  | 236,848   |   |  |  | 271,252 |  
|Intangible assets                                          |  |                   | 1,423     |  |                   |  | 817     |                   |  |  |                  |   |  |                   | (34,663 | ) |                   |  | 1,423     |   |  |  | (33,846 | )
|Provisions                                                 |  |                   | 12,710    |  |                   |  | 14,152  |                   |  |  |                  |   |  |                   |        |   |                   |  | 12,710    |   |  |  | 14,152  |  
|Gain or loss on foreign currency translation, net          |  |                   | 169       |  |                   |  | 11      |                   |  |  | (1                | ) |  |                   |        |   |                   |  | 168       |   |  |  | 11      |  
|Others                                                     |  |                   | 26,212    |  |                   |  | 25,253  |                   |  |  | (268              | ) |  |                   |        |   |                   |  | 25,944    |   |  |  | 25,253  |  
|Tax credit carryforwards                                   |  |                   | 397,105   |  |                   |  | 385,017 |                   |  |  |                  |   |  |                   |        |   |                   |  | 397,105   |   |  |  | 385,017 |  
|                                                           |  |                   |           |  |                   |  |         |                   |  |  |                   |   |  |                   |         |   |                   |  |           |   |  |  |         |  
|Deferred tax assets (liabilities)                          |  | W                 | 1,040,059 |  |                   |  | 933,036 |                   |  |  | (3,797            | ) |  |                   | (37,070 | ) |                   |  | 1,036,262 |   |  |  | 895,966 |  
|                                                           |  |                   |           |  |                   |  |         |                   |  |  |                   |   |  |                   |         |   |                   |  |           |   |  |  |         |  



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|29. | Deferred Tax Assets and Liabilities, Continued
|--- | ----------------------------------------------



| | (d) | Changes in deferred tax assets and liabilities for the years ended December 31, 2014 and 2015 are as follows:
| | --- | -------------------------------------------------------------------------------------------------------------



|                                                  |  |                |           |   |               |  |          |                           |  |  |                  |   |  |               |           |   |                           |  |          |                      |  |  |                  |  |  |  |         |   |  |  |         |  
|------------------------------------------------- |  | -------------- | --------- | - | ------------- |  | -------- | ------------------------- |  |  | ---------------- | - |  | ------------- | --------- | - | ------------------------- |  | -------- | -------------------- |  |  | ---------------- |  |  |  | ------- | - |  |  | ------- | -
|(In millions of won)                              |  |                |           |   |               |  |          |                           |  |  |                  |   |  |               |           |   |                           |  |          |                      |  |  |                  |  |  |  |         |   |  |  |         |  
|                                                  |  | January1, 2014 |           |   | Profitor loss |  |          | Othercompre-hensiveincome |  |  | December31, 2014 |   |  | Profit orloss |           |   | Othercompre-hensiveincome |  |          | Businesscombi-nation |  |  | December31, 2015 | 
|Other accounts receivable, net                    |  | W              | (2,476    | ) |               |  | (964     | )                         |  |  |                 |   |  |               | (3,440    | ) |                           |  | 1,052    |                      |  |  |                 |  |  |  |        |   |  |  | (2,388  | )
|Inventories, net                                  |  |                | 18,866    |   |               |  | 27,511   |                           |  |  |                 |   |  |               | 46,377    |   |                           |  | 72       |                      |  |  |                 |  |  |  |        |   |  |  | 46,449  |  
|Available-for-sale financial assets               |  |                | 98        |   |               |  |         |                           |  |  | (186             | ) |  |               | (88       | ) |                           |  | (1       | )                    |  |  | 70               |  |  |  |        |   |  |  | (19     | )
|Defined benefit liabilities, net                  |  |                | 72,709    |   |               |  | 3,731    |                           |  |  | 35,773           |   |  |               | 112,213   |   |                           |  | (79,933  | )                    |  |  | 26,682           |  |  |  |        |   |  |  | 58,962  |  
|Investments in equity accounted investees         |  |                | 2,972     |   |               |  | 26,867   |                           |  |  |                 |   |  |               | 29,839    |   |                           |  | (20,718  | )                    |  |  |                 |  |  |  |        |   |  |  | 9,121   |  
|Accrued expenses                                  |  |                | 83,571    |   |               |  | 93,592   |                           |  |  |                 |   |  |               | 177,163   |   |                           |  | (55,161  | )                    |  |  |                 |  |  |  |        |   |  |  | 122,002 |  
|Property, plant and equipment                     |  |                | 189,422   |   |               |  | 47,426   |                           |  |  |                 |   |  |               | 236,848   |   |                           |  | 34,404   |                      |  |  |                 |  |  |  |        |   |  |  | 271,252 |  
|Intangible assets                                 |  |                | (1,207    | ) |               |  | 2,630    |                           |  |  |                 |   |  |               | 1,423     |   |                           |  | (1,339   | )                    |  |  |                 |  |  |  | (33,930 | ) |  |  | (33,846 | )
|Provisions                                        |  |                | 11,460    |   |               |  | 1,250    |                           |  |  |                 |   |  |               | 12,710    |   |                           |  | 1,442    |                      |  |  |                 |  |  |  |        |   |  |  | 14,152  |  
|Gain or loss on foreign currency translation, net |  |                | (675      | ) |               |  | 843      |                           |  |  |                 |   |  |               | 168       |   |                           |  | (157     | )                    |  |  |                 |  |  |  |        |   |  |  | 11      |  
|Others                                            |  |                | 13,302    |   |               |  | 12,575   |                           |  |  | 67               |   |  |               | 25,944    |   |                           |  | (835     | )                    |  |  | 144              |  |  |  |        |   |  |  | 25,253  |  
|Tax losses carryforwards                          |  |                | 110,550   |   |               |  | (110,550 | )                         |  |  |                 |   |  |               |          |   |                           |  |         |                      |  |  |                 |  |  |  |        |   |  |  |        |  
|Tax credit carryforwards                          |  |                | 538,289   |   |               |  | (141,184 | )                         |  |  |                 |   |  |               | 397,105   |   |                           |  | (12,088  | )                    |  |  |                 |  |  |  |        |   |  |  | 385,017 |  
|                                                  |  |                |           |   |               |  |          |                           |  |  |                  |   |  |               |           |   |                           |  |          |                      |  |  |                  |  |  |  |         |   |  |  |         |  
|Deferred tax assets (liabilities)                 |  | W              | 1,036,881 |   |               |  | (36,273  | )                         |  |  | 35,654           |   |  |               | 1,036,262 |   |                           |  | (133,262 | )                    |  |  | 26,896           |  |  |  | (33,930 | ) |  |  | 895,966 |  
|                                                  |  |                |           |   |               |  |          |                           |  |  |                  |   |  |               |           |   |                           |  |          |                      |  |  |                  |  |  |  |         |   |  |  |         |  

Statutory tax rate applicable to the Controlling Company to calculate tax base and deferred tax expense is
24.2% for the year ended December 31, 2015.



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|30. | Earnings per Share
|--- | ------------------



| | (a) | Basic earnings per share for the years ended December 31, 2013, 2014 and 2015 are as follows:
| | --- | ---------------------------------------------------------------------------------------------



|                                                         |  |      |                 |  |      |  |                 |      |  |  |                 | 
|-------------------------------------------------------- |  | ---- | --------------- |  | ---- |  | --------------- | ---- |  |  | --------------- | 
|(In won and No. of shares)                               |  |      |                 |  |      |  |                 |      | 
|                                                         |  | 2013 |                 |  | 2014 |  |                 | 2015 | 
|Profit attributable to owners of the Controlling Company |  | W    | 426,118,222,180 |  |      |  | 904,267,992,399 |      |  |  | 966,553,061,333 | 
|Weighted-average number of common stocks outstanding     |  |      | 357,815,700     |  |      |  | 357,815,700     |      |  |  | 357,815,700     | 
|                                                         |  |      |                 |  |      |  |                 |      |  |  |                 | 
|Earnings per share                                       |  | W    | 1,191           |  |      |  | 2,527           |      |  |  | 2,701           | 
|                                                         |  |      |                 |  |      |  |                 |      |  |  |                 | 

For the years ended December 31, 2013, 2014 and 2015, there were no events or transactions that resulted
in changes in the number of common stocks used for calculating earnings per share.



| | (b) | Diluted earnings per share are not calculated since there was no potential common stock for the years ended December 31, 2014 and 2015.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------



|31. | Supplemental Cash Flow Information
|--- | ----------------------------------

Supplemental cash flow information for the years
ended December 31, 2013, 2014 and 2015 is as follows:



|                                                                                             |  |      |            |   |      |  |          |      |  |  |         | 
|-------------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- |  | -------- | ---- |  |  | ------- | 
|(In millions of won)                                                                         |  |      |            |   |      |  |          |      | 
|                                                                                             |  | 2013 |            |   | 2014 |  |          | 2015 | 
|Non-cash investing and financing activities:                                                 |  |      |            |   |      |  |          |      |  |  |         | 
|Changes in other accounts payable arising from the purchase of property, plant and
equipment |  | W    | (1,108,944 | ) |      |  | (149,989 | )    |  |  | 182,424 | 



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|32. | Business Combinations
|--- | ---------------------



| | (1) | The Controlling Company acquired 67% ownership with the additional investment amounting to W111,040 million from Global OLED Technology LLC in order to expand OLED IP Portfolio. In 2015, the Controlling
Companys ownership percentage increased from 33% to 100% and control was transferred to the Controlling Company. The Controlling Company measured the identifiable assets acquired and the liabilities assumed at their acquisition-date fair
value. The entire consideration transferred for the acquisition was paid in cash.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The fair value of the consideration
transferred, assets acquired and liabilities assumed are as follows:



|                                                      |  |        |         |  
|----------------------------------------------------- |  | ------ | ------- | -
|(In millions of won)                                  |  | Amount |        
|Consideration transferred                             |  | W      | 111,040 |  
|Fair value of previously held ownership               |  |        | 54,025  |  
|Identifiable assets acquired and liabilities assumed: |  |        |         |  
|Cash and cash equivalents                             |  |        | 947     |  
|Other current assets                                  |  |        | 478     |  
|Intangible assets (*1)                                |  |        | 168,301 |  
|Other non-current assets                              |  |        | 104     |  
|Current liabilities                                   |  |        | (1,768  | )
|Non-current liabilities                               |  |        | (4      | )
|Deferred tax liabilities                              |  |        | (33,930 | )
|Identifiable net asset                                |  |        | 134,128 |  
|Goodwill (*2)                                         |  |        | 30,937  |  



| | (*1) | Intangible assets are measured at fair value using the income approach and considering the present value of expected net cash flow from patents.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------

| | (*2) | Goodwill amounting to W30,937 million arose from the acquired work force with specialized knowledge and experience.
| | ---- | -------------------------------------------------------------------------------------------------------------------

The pro-forma consolidated revenue and pro-forma consolidated net profit for the year ended December 31, 2015, based on the assumption
that Glogal OLED Technology LLC had been acquired at the beginning of 2005, is estimated to be W28,387,302 million and W1,019,221 million, respectively. The actual amount of the revenue and net loss of Global OLED
Technology LLC included in the consolidated statement of comprehensive income for the year ended December 31, 2015 was W2,891 million and W3,306 million, respectively. In addition, acquisition-related costs,
such as legal consulting and accounting valuation fees amounting to W28 million are recognized as administrative expenses.

The Controlling Company recognized a gain of W22,336 million, which is included in finance income, for the difference between
the carrying value and the fair value the previously held 33% equity interest in Global OLED Technology.



| | (2) | In December 2015, the Controlling Company acquired OLED Lighting business with the investment amounting to W160,000 million from LG Chem Ltd. in order to maximize synergy and strengthen competitiveness
in OLED Lighting business. The Controlling Company measured the identifiable assets acquired and the liabilities assumed at their acquisition-date fair value. The entire consideration transferred for the acquisition was paid in cash.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

LG DISPLAY CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2013, 2014 and 2015



|32. | Business Combinations, Continued
|--- | --------------------------------



The fair value of the consideration transferred, assets acquired and liabilities assumed are
as follows:



|                                                      |  |        |         |  
|----------------------------------------------------- |  | ------ | ------- | -
|(In millions of won)                                  |  | Amount |        
|Consideration transferred                             |  | W      | 160,000 |  
|Identifiable assets acquired and liabilities assumed: |  |        |         |  
|Trade accounts and notes receivable                   |  |        | 616     |  
|Inventories                                           |  |        | 2,432   |  
|Other current assets                                  |  |        | 580     |  
|Property, plant and equipment                         |  |        | 26,967  |  
|Intangible assets (*1)                                |  |        | 64,462  |  
|Other non-current assets                              |  |        | 7,808   |  
|Current liabilities                                   |  |        | (860    | )
|Identifiable net asset                                |  |        | 102,005 |  
|Goodwill (*2)                                         |  |        | 57,995  |  



| | (*1) | Patents amounting to W29,139 million are measured at fair value using the income approach and considering the present value of expected net cash flow from patents and customer relationships amounting to
W35,165 million are measured considering the present value of future economic benefits expected to be received arising from relationship with customers.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (*2) | Goodwill amounting to W57,995 million arose from the acquired work force with specialized knowledge and experience.
| | ---- | -------------------------------------------------------------------------------------------------------------------

The pro-forma consolidated revenue and pro-forma consolidated net profit for the year ended December 31, 2015, based on the assumption
that the OLED Lighting business had been acquired at the beginning of 2005, is estimated to be W28,388,425 million and W1,002,113 million, respectively. The actual amount of the revenue and net loss of OLED Lighting
business included in the consolidated statement of comprehensive income for the year ended December 31, 2015 was W52 million and W1,473 million, respectively. In addition, acquisition-related costs, such as
legal consulting and accounting valuation fees amounting to W65 million are recognized as administrative expenses.



F-99