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▶ Sales in the fourth quarter of 2005 increased by 8% to KRW 2,963 billion (USD 2,934 million) from sales of KRW 2,741 billion (USD 2,714 million) in the third quarter of 2005 and increased 53% compared to KRW 1,933 billion (USD 1,914 million) in the fourth quarter of 2004. Fourth quarter sales were led by the continued growth in demand for large and wide LCD TV and notebook panels, which softened the impact of a challenging monitor demand environment.
▶ Operating profit in the fourth quarter of 2005 increased to KRW 334 billion (USD 331 million) from KRW 240 billion (USD 238 million) in the third quarter of 2005, and compared to an operating profit of KRW 2 billion (USD 2 million) in the fourth quarter of 2004.
▶ EBITDA in the fourth quarter of 2005 increased by 21% to KRW 824 billion (USD 816 million) from KRW 681 billion (USD 674 million) in the third quarter of 2005. EBITDA also increased, by 100% from KRW 412 billion (USD 408 million) in the fourth quarter of 2004.
▶ Net income in the fourth quarter of 2005 increased to a net profit of KRW 328 billion (USD 325 million) from KRW 227 billion (USD 225 million) in the third quarter of 2005, and compared to a net profit of KRW 35 billion (USD 34.6 million) in the fourth quarter of 2004.
“During the fourth quarter, LCD TV panel demand was strong as consumers are rapidly recognizing LCD technology as ‘the’ flat TV technology of choice,” said Bon Joon Koo, Vice Chairman and CEO of LG.Philips LCD. “In 2005, LG.Philips LCD was the number one producer of large-area TFT-LCD panels according to DisplaySearch, and in fact, we became the first company in the LCD industry to cumulatively sell more than 10 million, 15” and above, LCD TV panel units. With the strong holiday selling season, we have entered an era of healthy HDTV set demand growth, well-timed with the January ramp up of our Gen. 7 fab, ‘P7.’ Thus, we are well positioned to retain our leadership role in this dynamic industry.”

Fourth Quarter Financial Review

Revenue and Cost
Revenue in the three-month period ended December 31, 2005 increased by 53% to KRW 2,963 billion (USD 2,934 million) from KRW 1,933 billion (USD 1,914 million) in the corresponding period in 2004, due to continued growth in TV and notebook sales. TFT-LCD panels for desktop monitors, TVs, notebook computers and “other applications” accounted for 38%, 34%, 24% and 4%, respectively, on a revenue basis in the fourth quarter of 2005, compared to 45%, 29%, 22% and 4%, respectively, on a revenue basis in the third quarter of 2005.

Overall, the Company shipped a total of 1,343,000 square meters of net display area in the fourth quarter of 2005, a 7.6% sequential quarterly increase, with an average selling price per square meter of net display area of USD 2,112. This represents a decrease in the average selling price per square meter of net display area of approximately 0.5% compared to the average of the third quarter of 2005, and a decrease of 4.1% at the end of the fourth quarter as compared to the end of the third quarter of 2005.

The total cost of goods sold increased to KRW 2,457 billion (USD 2,433 million), or 34% year-on-year and 4% compared to the third quarter of 2005, primarily as a result of increased shipments. The cost of goods sold per square meter of net display area shipped was KRW 1,830,000 (USD 1,812) for the fourth quarter of 2005, down 3.5% from the third quarter of 2005.

"Our financial performance in the fourth quarter reflects the consistent approach we have taken to managing our business,” said Ron Wirahadiraksa, President and CFO of LG.Philips LCD. “We continue to enjoy unit and area demand growth, especially in the LCD TV and notebook panel segments, and are leveraging our extensive portfolio of production facilities to meet the dynamic needs of our customers. We are committed to providing the market with innovative and top quality TFT-LCD panels. Our shipment growth this quarter was slightly lower than expected due to a production shift in our existing facilities to support our strategy of growing the demand of large size TVs, particularly 42” panels, in advance of the P7 ramp-up. This facilitated our sooner than expected P7 ramp up in the first week of January 2006. We anticipate sequential shipment growth in the first quarter of 2006, despite historical industry seasonality.”

Mr. Wirahadiraksa continued “Throughout the year, we have continued to advance our technology leadership, improve operational efficiency and execute on our growth strategy. As a result, LG.Philips LCD’s balance sheet remains one of the strongest in the industry and provides us with the financial flexibility to fund the opportunities we see for future growth.”

Liquidity

As of December 31, 2005, LG.Philips LCD had KRW 1,579 billion (USD 1,563 million) of cash and cash equivalents. Total debt was KRW 3,566 billion (USD 3,531 million), and the net-debt-to-equity ratio was 26% as of December 31, 2005, compared to 20% last quarter.

Capital Spending

Capital expenditures in the fourth quarter of 2005 increased to KRW 1,396 billion (USD 1,382 million) from KRW 473 billion (USD 468 million) in the fourth quarter of 2004. Capital expenditures for the fourth quarter of 2005 were mainly used for investments in P7 and future production facilities.

Utilization and Capacity

Total input capacity on an area basis increased approximately 6% in the fourth quarter compared to the third quarter, due mainly to P6 exceeding its initial design capacity of 90,000 input sheets per month to 112,000 sheets per month.

Outlook

The following expectations are based on current information as of January 12, 2006. The Company does not expect to update its expectations until next quarter’s earnings release. However, the Company may update its full business outlook, or any portion thereof, at any time for any reason.

“We are looking forward to 2006, as the recent start of mass production of our P7 facility, which is optimized for large and wide 42” and 47” LCD TV panels, reinforces our already strong position in the TFT-LCD industry,” Mr. Wirahadiraksa commented. “We also see an exciting growth opportunity for LG.Philips LCD in notebooks, particularly for the large and wide product segments. We have a leadership position in this segment and expect to maintain and grow this lead in the future.”

“For the first quarter of 2006, which is usually seasonally weak, we anticipate our area shipments will increase by a mid-single digit percentage quarter-on-quarter fueled by continued growth in the rapidly expanding LCD TV segment,” continued Mr. Wirahadiraksa. “We expect our average selling price per square meter of net display area shipped at the end of the first quarter of 2006 to decrease by a mid-single digit percentage, as compared to the end of the fourth quarter of 2005, largely due to weaker pricing for the monitor and notebook segments. Our EBITDA margin for the first quarter is expected to be a high teens percentage. Overall, we anticipate growth in sales and EBITDA for the year. However, we also expect an increase in depreciation costs primarily due to P7, which will impact our EBIT and net income.”

“Our capital expenditure guidance for 2006 is KRW 4.2 trillion, which will be used mainly for ongoing investment in P7 and future production facilities. As part of these future production facilities, our Board of Directors has today approved KRW 453 billion, to be utilized for the construction of a clean room and utilities for P8, ” concluded Mr. Wirahadiraksa.


Earnings Conference and Conference Call

LG.Philips LCD will hold a Korean language earnings conference on January 12, 2006 at
4:30 p.m. Korea Standard Time on the 1st floor, in the International Conference Room of the Korea Exchange Building (KRX). An English language conference call will follow at 10:00 p.m. Korea Standard Time, 8:00 a.m. EST and 1:00 p.m. GMT. The call-in number is 031-810-3001 for callers in Korea and +82-2-6677-2256 for callers outside of Korea. The confirmation number is 3777. Corresponding slides will be available at the Investor Relations section of the LG.Philips LCD website: http://www.lgphilips-lcd.com

Investors can listen to the conference call via the Internet at http://www.lgphilips-lcd.com.
To listen to the live call, please go to the Investor Relations section of the website at least 15 minutes prior to the call to register and install any necessary audio software.

For those who are unable to participate in the call, a replay will be available for 30 days after the call. The call-in number is 1566-2258 for callers in Korea and +82-31-810-3100 for callers outside of Korea. The confirmation number for the replay is 41868#.

About LG.Philips LCD

LG.Philips LCD [NYSE: LPL, KRX: 034220] is a leading manufacturer and supplier of thin film transistor liquid crystal display (TFT-LCD) panels. The Company manufactures TFT-LCD panels in a wide range of sizes and specifications primarily for use in notebook computers, desktop monitors and televisions. Headquartered in Seoul, South Korea, LG.Philips LCD currently operates seven fabrication facilities in Korea and has approximately 19,000 employees in locations around the world.

For more information about the Company, please visit http://www.lgphilips-lcd.com.
LG.Philips LCD makes "Technology you can see!"


Forward-Looking Statement Disclaimer

This press release contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Additional information as to factors that may cause actual results to differ materially from our forward-looking statements can be found in our filings with the United States Securities and Exchange Commission.

Investor Relations Contacts:
Jay Hong [Korea]
LG.Philips LCD
Tel: +822-3777-1010
Email: jay.hong@lgphilips-lcd.com

Monica Huang [USA]
Sloane & Company
Tel: +1-212-446-1874
Email: Mhuang@sloanepr.com

Media Contacts:
Elliot Sloane [USA]
Sloane & Company
Tel: +1-212-446-1860
Email: ESloane@sloanepr.com

Sue Kim [Korea]
LG.Philips LCD
Tel: +822-3777-0970
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