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Derivatives

12 Months Ended

Dec. 31, 2019

Derivatives [Abstract]

Derivatives

12.

Derivatives

(1)

Derivatives as of December 31, 2018 and 2019 are as follows:


		2018				2019
		Current		Non-current		Current		Non-current
		In millions of won
Derivative assets
Currency forward	￦		2,128		12,606		21		43,931
Currency swap			39,979		43,436		27,597		229,258
Interest rate swap			—		2,342		—		7,592
Others(*1)			—		1,844		—		2,634

	￦		42,107		60,228		27,618		283,415

Derivative liabilities
Currency forward	￦		1,956		—		7,081		—
Currency swap			14,881		233,690		59,327		45,184
Interest rate swap			1,439		58,042		451		50,756
Others(*2,3)			2,155		—		6,205		956

	￦		20,431		291,732		73,064		96,896

(*1)

The Company had a put option to sell shares of DS POWER Co., Ltd. and the fair value of the option is recorded in ‘Others’ in the prior year. The Company sold their shares during the year ended December 31, 2019. As described in Note 16, the Company has a right to purchase the shares of KOSPO Youngnam Power Co., Ltd., a subsidiary of the Company, and the amount is the fair value of the stock option.

(*2)

The Company has an obligation to settle the convertible preferred stock to financial investors pursuant to the settlement contract with Samcheok Eco Materials Co., Ltd., and the fair value of the obligation is recorded in ‘Others’.

(*3)

The Company has granted stock option to Chester Solar IV SpA, a joint venture of the Company, and 4 other third party investors and recognized its fair value as other derivative liabilities.

(2)

Currency forward contracts which are not designated as hedging instruments as of December 31, 2019 are as follows:


	Contract date		Maturity date		Contract amounts						Contract exchange rate (in won)
Counterparty	Contract date		Maturity date			Pay		Receive			Contract exchange rate (in won)
	In millions of won and thousands of foreign currencies except contract exchange rate information
Hana Bank		2014.04.10		2021.07.12	￦		55,120		USD 52,000	￦		1,060.00
Hana Bank		2014.04.28		2021.07.12			50,784		USD 48,000			1,058.00
Bank of America		2014.04.29		2021.07.12			105,400		USD 100,000			1,054.00
Hana Bank		2014.05.09		2021.07.12			104,600		USD 100,000			1,046.00
Hana Bank		2017.12.22		2021.07.12			105,079		USD 100,000			1,050.79
Korea Development Bank		2017.12.27		2021.07.12			104,849		USD 100,000			1,048.49
Citibank		2019.12.30		2020.01.23			12,943		USD 11,167			1,159.10
Standard Chartered		2019.12.17		2020.01.02			73,871		EUR 56,800			1,300.57
Nonghyup Bank		2019.12.02		2020.01.03			9,436		USD 8,000			1,179.55
Mizuho Bank		2019.12.03		2020.01.06			9,482		USD 8,000			1,185.25
Hana Bank		2019.12.04		2020.01.07			8,350		USD 7,000			1,192.82
Kookmin Bank		2019.12.05		2020.01.09			11,895		USD 10,000			1,189.45
CCB		2019.12.05		2020.01.09			11,895		USD 10,000			1,189.50
Standard Chartered		2019.12.06		2020.01.10			11,891		USD 10,000			1,189.05
Credit Agricole		2019.12.09		2020.01.13			11,885		USD 10,000			1,188.47
Hana Bank		2019.12.10		2020.01.14			11,912		USD 10,000			1,191.23
Korea Development Bank		2019.12.11		2020.01.15			11,925		USD 10,000			1,192.50
Nonghyup Bank		2019.12.11		2020.01.15			5,962		USD 5,000			1,192.45
Mizuho Bank		2019.12.11		2020.01.15			5,963		USD 5,000			1,192.50
CCB		2019.12.12		2020.01.16			7,118		USD 6,000			1,186.35
Morgan Stanley		2019.12.16		2020.01.17			5,854		USD 5,000			1,170.85
Woori Bank		2019.12.19		2020.01.22			11,636		USD 10,000			1,163.55
Shinhan Bank		2019.12.19		2020.01.22			11,635		USD 10,000			1,163.45
CCB		2019.12.27		2020.01.31			11,597		USD 10,000			1,159.65
Kookmin Bank		2019.12.30		2020.02.03			5,786		USD 5,000			1,157.20
Shinhan Bank		2019.12.18		2020.01.07			9,901		USD 8,500			1,164.86
Hana Bank		2019.12.13		2020.01.07			4,678		USD 4,000			1,169.45
Hana Bank		2019.12.20		2020.01.07			8,136		USD 7,000			1,162.23
BNP Paribas		2019.12.27		2020.01.13			3,480		USD 3,000			1,160.10
Societe Generale		2019.12.27		2020.01.13			8,701		USD 7,500			1,160.10
Korea Development Bank		2019.12.30		2020.01.23			4,630		USD 4,000			1,157.40
BNP Paribas		2019.12.12		2020.01.16	￦		4,739		USD 4,000	￦		1,184.85
Mizuho Bank		2019.12.12		2020.01.16			3,558		USD 3,000			1,186.00
MUFG		2019.12.17		2020.01.21			5,823		USD 5,000			1,164.60
Nova Scotia		2019.12.17		2020.01.21			5,824		USD 5,000			1,164.70
BNP Paribas		2019.12.20		2020.01.22			2,290		USD 1,975			1,159.48
Nonghyup Bank		2019.12.20		2020.01.22			11,605		USD 10,000			1,160.50
Nova Scotia		2019.12.30		2020.02.03			5,778		USD 5,000			1,155.65
Mizuho Bank		2019.12.30		2020.02.03			5,777		USD 5,000			1,155.30
HSBC		2019.12.13		2020.09.10			46,580		USD 40,000			1,164.50
Nova Scotia		2019.12.13		2020.09.10			34,959		USD 30,000			1,165.30
Nova Scotia		2019.12.16		2020.12.03			11,657		USD 10,000			1,165.70
Nonghyup Bank		2019.12.16		2020.12.03			23,324		USD 20,000			1,166.20
Mizuho Bank		2019.12.17		2020.01.10			10,537		USD 9,000			1,170.80
Mizuho Bank		2019.12.19		2020.01.13			9,314		USD 8,000			1,164.30
Mizuho Bank		2019.12.24		2020.01.04			5,228		USD 4,500			1,161.85
HSBC		2019.12.26		2020.01.23			10,443		USD 9,000			1,160.30
Mizuho Bank		2019.12.30		2020.01.23			4,624		USD 4,000			1,155.90
Standard Chartered		2019.12.03		2020.01.06			315		USD 266			1,186.05
Nova Scotia		2019.12.06		2020.01.10			4,393		USD 3,700			1,187.35
Credit Agricole		2019.12.06		2020.01.10			4,761		USD 4,000			1,190.35
Nova Scotia		2019.12.10		2020.01.13			1,491		USD 1,250			1,192.70
Standard Chartered		2019.12.12		2020.01.16			8,303		USD 7,000			1,186.10
Credit Agricole		2019.12.12		2020.01.16			5,930		USD 5,000			1,185.95
Societe Generale		2019.12.12		2020.01.16			5,931		USD 5,000			1,186.20
Nova Scotia		2019.12.12		2020.01.16			6,525		USD 5,500			1,186.30
Standard Chartered		2019.12.16		2020.01.21			9,367		USD 8,000			1,170.90
Nova Scotia		2019.12.17		2020.01.21			4,648		USD 4,000			1,162.00
Hana Bank		2019.12.19		2020.01.23			6,055		USD 5,200			1,164.40
Woori Bank		2019.12.20		2020.01.28			9,414		USD 8,100			1,162.20
Shinhan Bank		2019.12.20		2020.01.28			4,939		USD 4,250			1,162.15
Shinhan Bank		2019.12.20		2020.01.28			5,806		USD 5,000			1,161.25
Shinhan Bank		2019.12.26		2020.01.30			7,539		USD 6,500			1,159.85
Woori Bank		2019.12.26		2020.01.30			4,060		USD 3,500			1,159.90
Shinhan Bank		2019.12.30		2020.02.03			4,049		USD 3,500			1,156.80
Hana Bank		2019.07.31		2020.07.14			4,993		USD 4,257			1,173.00

(3)

Currency swap contracts which are not designated as hedging instruments as of December 31, 2019 are as follows:


Counterparty	Contract year			Contract amount				Contract interest rate			Contract exchange rate (in won, USD)
Counterparty	Contract year			Pay		Receive		Pay	Receive		Contract exchange rate (in won, USD)
	In millions of won and thousands of foreign currencies except contract exchange rate information
Standard Chartered		2014~2029	￦		102,470		USD 100,000	3.14%	3.57%	￦		1,024.70
Societe Generale		2014~2024			105,017		USD 100,000	4.92%	5.13%			1,050.17
Hana Bank		2015~2024			107,970		USD 100,000	4.75%	5.13%			1,079.70
Credit Agricole		2015~2024			94,219		USD 86,920	4.85%	5.13%			1,083.97
Woori Bank		2019~2027			21,708		USD 19,417	5.04%	6.75%			1,118.00
Woori Bank		2019~2024			296,000		USD 250,000	1.21%	2.50%			1,184.00
Korea Development Bank		2019~2024			177,600		USD 150,000	1.24%	2.50%			1,184.00
Hana Bank		2019~2024			118,400		USD 100,000	1.24%	2.50%			1,184.00
Citibank		2012~2022			112,930		USD 100,000	2.79%	3.00%			1,129.30
JP Morgan		2012~2022			112,930		USD 100,000	2.79%	3.00%			1,129.30
Bank of America		2012~2022			112,930		USD 100,000	2.79%	3.00%			1,129.30
Shinhan Bank		2016~2022			112,930		USD 100,000	2.79%	3.00%			1,129.30
HSBC		2012~2022			111,770		USD 100,000	2.89%	3.00%			1,117.70
Hana Bank		2012~2022			111,770		USD 100,000	2.87%	3.00%			1,117.70
Standard Chartered		2012~2022			111,770		USD 100,000	2.89%	3.00%			1,117.70
Deutsche Bank		2012~2022			55,885		USD 50,000	2.79%	3.00%			1,117.70
Nomura		2015~2025			111,190		USD 100,000	2.60%	3.25%			1,111.90
Korea Development Bank		2015~2025			111,190		USD 100,000	2.62%	3.25%			1,111.90
Woori Bank		2015~2025			55,595		USD 50,000	2.62%	3.25%			1,111.90
Hana Bank		2015~2025			55,595		USD 50,000	2.62%	3.25%			1,111.90
Woori Bank		2017~2027			111,610		USD 100,000	2.25%	3.13%			1,116.10
Korea Development Bank		2017~2027			111,610		USD 100,000	2.31%	3.13%			1,116.10
Hana Bank		2017~2027			111,610		USD 100,000	2.31%	3.13%			1,116.10
Korea Development Bank		2018~2028			108,600		HKD 800,000	2.69%	3.35%			135.75
Shinhan Bank		2018~2028			115,388		HKD 850,000	2.66%	3.35%			135.75
Korea Development Bank		2018~2023			170,280		USD 150,000	2.15%	3.75%			1,135.20
Woori Bank		2018~2023			170,280		USD 150,000	2.18%	3.75%			1,135.20
Hana Bank		2018~2023			113,520		USD 100,000	2.17%	3.75%			1,135.20
Shinhan Bank		2018~2023			227,040		USD 200,000	2.17%	3.75%			1,135.20
Citibank		2019~2024			239,956		CHF 200,000	1.44%	0.00%			1,199.78
Korea Development Bank		2019~2027			119,978		CHF 100,000	1.43%	0.05%			1,199.78
HSBC		2019~2024			USD 205,500		AUD 300,000	3M Libor+0.78%	3M BBSW+0.97%			0.69

(4)

Currency swap contracts which are designated as hedging instruments as of December 31, 2019 are as follows:


Counterparty	Contract year			Contract amount				Contract interest rate			Contract exchange rate (in won, USD)
Counterparty	Contract year			Pay		Receive		Pay	Receive		Contract exchange rate (in won, USD)
	In millions of won and thousands of foreign currencies except contract exchange rate information
HSBC		2014~2020	￦		99,901		AUD 100,000	3.52%	5.75%	￦		999.01
HSBC		2014~2020			100,482		AUD 100,000	3.48%	5.75%			1,004.82
Standard Chartered		2013~2020			USD 117,250		AUD 125,000	3M Libor + 1.25%	5.75%			0.94
Standard Chartered		2014~2020			126,032		USD 117,250	3.55%	3M Libor + 1.25%			1,074.90
Korea Development Bank		2017~2020			114,580		USD 100,000	1.75%	2.38%			1,145.80
Hana Bank		2017~2020			114,580		USD 100,000	1.75%	2.38%			1,145.80
Export-import bank of Korea		2017~2020			114,580		USD 100,000	1.75%	2.38%			1,145.80
Korea Development Bank		2016~2021			121,000		USD 100,000	2.15%	2.50%			1,210.00
Morgan Stanley		2016~2021			121,000		USD 100,000	3M Libor + 2.10%	2.50%			1,210.00
BNP Paribas		2016~2021			121,000		USD 100,000	3M Libor + 2.10%	2.50%			1,210.00
Nomura		2017~2037			52,457		EUR 40,000	2.60%	1.70%			1,311.42
Nomura		2017~2037			59,423		SEK 450,000	2.62%	2.36%			132.05
Korea Development Bank		2019~2022			112,650		USD 100,000	1.80%	3.38%			1,126.50
Kookmin Bank		2019~2022			112,650		USD 100,000	1.80%	3.38%			1,126.50
Woori Bank		2019~2022			112,650		USD 100,000	1.80%	3.38%			1,126.50
Korea Development Bank		2018~2023			320,880		USD 300,000	2.03%	3.75%			1,069.60
BNP Paribas		2019~2024			111,841		CHF 100,000	1.78%	0.13%			1,118.41
Kookmin Bank		2019~2024			111,841		CHF 100,000	1.78%	0.13%			1,118.41
Korea Development Bank		2019~2022			117,340		USD 100,000	1.06%	2.38%			1,173.40
Hana Bank		2019~2022			117,340		USD 100,000	1.06%	2.38%			1,173.40
Kookmin Bank		2019~2022			117,340		USD 100,000	1.06%	2.38%			1,173.40
Hana Bank		2018~2021			212,960		USD 200,000	2.10%	3.00%			1,064.80
Korea Development Bank		2018~2021			212,960		USD 200,000	2.10%	3.00%			1,064.80
Credit Agricole		2014~2020			110,680		USD 100,000	2.29%	2.50%			1,106.80
Societe Generale		2014~2020			55,340		USD 50,000	2.16%	2.50%			1,106.80
Hana Bank		2014~2020			55,340		USD 50,000	2.16%	2.50%			1,106.80
Hana Bank		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
Standard Chartered		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
HSBC		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
Nomura		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
BNP Paribas		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
HSBC		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
Hana Bank		2017~2022			226,600		USD 200,000	1.94%	2.63%			1,133.00
Korea Development Bank		2017~2022			113,300		USD 100,000	1.94%	2.63%			1,133.00
Nomura		2017~2022			113,300		USD 100,000	1.95%	2.63%			1,133.00
Woori Bank		2017~2022			56,650		USD 50,000	1.95%	2.63%			1,133.00
Kookmin Bank		2017~2022			56,650		USD 50,000	1.95%	2.63%			1,133.00
Korea Development Bank		2018~2023	￦		169,335		USD 150,000	2.26%	3.88%	￦		1,128.90
Woori Bank		2018~2023			169,335		USD 150,000	2.26%	3.88%			1,128.90
Credit Agricole		2018~2023			112,890		USD 100,000	2.26%	3.88%			1,128.90
Hana Bank		2018~2023			56,445		USD 50,000	2.26%	3.88%			1,128.90
Kookmin Bank		2018~2023			56,445		USD 50,000	2.26%	3.88%			1,128.90

(5)

Interest rate swap contracts which are not designated as hedging instruments as of December 31, 2019 are as follows:

Counterparty

Contract
year

Contract
amount

Contract interest rate per annum

Pay

Receive

In millions of
won and
thousands of
USD

Hana Bank

2017~2022

￦

100,000

2.01%

3M CD + 0.24%

Hana Bank

2017~2022

100,000

2.06%

3M CD + 0.27%

Nomura(*1)

2017~2037

30,000

2.05%

3.08%

Hana Bank

2017~2021

200,000

2.45%

3M CD + 0.32%

Nomura(*2)

2018~2038

30,000

2.56%

3.75%

Hana Bank

2018~2023

200,000

2.15%

3M CD + 0.19%

Hana Bank

2018~2023

200,000

2.17%

3M CD + 0.19%

Hana Bank

2018~2023

150,000

2.03%

3M CD + 0.21%

Hana Bank

2019~2024

200,000

1.87%

3M CD + 0.13%

Societe Generale

2017~2022

200,000

3M Libor + 3.44%

3.77%

Nomura

2017~2027

52,457

3M Libor + 2.25%

2.60%

Nomura

2017~2027

59,423

3M Libor + 2.27%

2.62%

Export-Import Bank of Korea

2015~2031

USD 15,893

2.67%

6M USD Libor

ING Bank

2015~2031

USD 7,861

2.67%

6M USD Libor

BNP Paribas

2015~2031

USD 7,861

2.67%

6M USD Libor

(*1)

2.05% of the contract paying interest rate is applied for five years from the date of issuance, and 3M CD + 0.10% is applied thereafter. Depending on exercise of counterparty’s right, it can be reimbursed before the due on the same day of every year starting from September 18, 2022.

(*2)

2.56% of the contract paying interest rate is applied for five years from the date of issuance, and 3M CD + 0.10% is applied thereafter. Depending on exercise of counterparty’s right, it can be reimbursed before the due on the same day of every year starting from June 15, 2023.

(6)

Interest rate swap contracts which are designated as hedging instruments as of December 31, 2019 are as follows:

Counterparty

Contract
year

Contract
amount

Contract interest rate per annum

Pay

Receive

In millions of
won and
thousands of
USD

BNP Paribas

2009~2027

USD 92,120

4.16%

6M USD Libor

KFW

2009~2027

USD 92,120

4.16%

6M USD Libor

Export-Import Bank of Korea

2016~2036

USD 80,514

3.00%

6M USD Libor

(7)

Gain and loss on valuation and transaction of derivatives for the years ended December 31, 2017, 2018 and 2019 are as follows and included in finance income and expenses in the consolidated statements of comprehensive income (loss):


		Net income effects of valuation gain (loss)									Net income effects of transaction gain (loss)									Other comprehensive income (loss)(*)
		2017			2018			2019			2017			2018			2019			2017		2018			2019
		In millions of won
Currency forward	￦		(41,889	)		12,632			24,265			(28,223	)		23,991			12,488			—		—			—
Currency swap			(843,747	)		145,088			310,732			(137,376	)		123,670			110,813			26,810		(12,516	)		38,802
Interest rate swap			6,909			(2,949	)		(16,231	)		(3,362	)		(364	)		(36,886	)		5,074		6,087			(3,075	)
Other derivatives			4,060			(1,568	)		(1,416	)		—			—			—			—		—			—

	￦		(874,667	)		153,203			317,350			(168,961	)		147,297			86,415			31,884		(6,429	)		35,727

(*)

For the year ended December 31, 2019, the net gain on valuation of derivatives designated as cash flow hedge of ￦19,242 million, net of tax, is included in other comprehensive income or loss.