POSCO (PKX) 6-K Current report (foreign)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE13a-16 OR15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of February, 2020

Commission File Number:1-13368

POSCO

(Translation of registrant’s name into English)

POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea, 06194

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form20-F or

Form40-F.

Form20-F  ☒            Form40-F   ☐

Indicate by check mark if the registrant is submitting the Form6-K in paper as permitted by RegulationS-T Rule 101(b)(1):  ☐

Note: RegulationS-T Rule 101(b)(1) only permits the submission in paper of a Form6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form6-K in paper as permitted by RegulationS-T Rule 101(b)(7):  ☐

Note: RegulationS-T Rule 101(b)(7) only permits the submission in paper of a Form6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form6-K submission or other Commission filing on EDGAR.

POSCO is furnishing under cover of Form6-K:

Exhibit 99.1: An English-language translation of documents with respect to Notice of the 52^nd Ordinary General Meeting of Shareholders

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	POSCO
	(Registrant)
Date: February 27, 2020	By	/s/ Lim,Seung-Kyu
		(Signature)
		Name: Lim,Seung-Kyu
		Title: Executive Vice President

Exhibit 99.1

To Shareholders

Notice of the 52^nd Ordinary General Meeting of Shareholders

We hereby notify you that the 52^nd Ordinary General Meeting of Shareholders will be held pursuant to Article 362 of the Korean Commercial Act and Article 19 of the Company’s Articles of Incorporation as follows.

1. Date: March 27, 2020 at 9:00 am (KST)

2. Place: Art Hall, 4F West Wing, POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea

3. List of Agenda Items

☒ Agenda 1 : Approval of Financial Statements for the 52^nd FY (2019)

(Year-end dividend per share : KRW 4,000)

  [Description of the Proposal]

Pursuant to Article 449 of the Korean Commercial Act and Article 53 of the Company’s Articles of Incorporation, we request that the Ordinary General Meeting of Shareholders to approve the 52^nd Fiscal Year Financial Statements.

• Consolidated Financial Statements: See Appendix 1

• Separate Financial Statements: See Appendix 2

The audit report from independent auditors of 52nd FY Financial Statements, based on K-IFRS standards, will be uploaded at POSCO website (http://www.posco.co.kr) and will be disclosed at the SEC website (https://www.sec.gov) in the 2nd week of March, 2020.

☒ Agenda 2: Election of Inside Directors

  [Description of the Proposal]

Pursuant to Article 382 of the Korean Commercial Act and Article 28 of the Company’s Articles of Incorporation, we request the Ordinary General Meeting of Shareholders to appoint Inside Directors of the Company as follows.

• Number of Inside Directors to be Elected: 4 Directors

• Candidates

Name/ Agenda	Date of Birth	Professional Experience		Term
	Recommended by	Period	Details
Chang, In-Hwa (2-1)	August 17, 1955 Board of Directors	2018~Present 2017~2018 2016~2017 2015~2016 2014~2015 2011~2014 2009~2011	(Representative Director, President) Head of POSCO Steel Business Unit (Board Member, Senior Executive VP) Head of POSCO Steel Production Div. (Senior Executive VP) Head of POSCO Technology and Investment Div. (Executive VP) POSCO Steel Solution Marketing Dept. (Executive VP) POSCO New Business Development Dept. (Senior VP) POSCO New Business Dept. (President) RIST Steel Structure Div.	1 Year
Chon, Jung-Son (2-2)	August 26, 1962 Board of Directors	2019~Present 2018~2019 2017~2018 2016~2017 2014~2016 2012~2014 2010~2012	(Board Member, Senior Executive VP) Head of Corporate Strategy & Planning Div. (Board Member, Senior Executive VP) Head of Corporate Strategy & Finance Center (President & Representative Director) POSCO C&C (Executive VP) Head of POSCO Corporate Strategy Office (Senior VP) Value Management Div. Senior Corporate Advisor (Senior VP) Head of POSCO Raw Materials Procurement Office (VP) POSCO Raw Materials Investment Group	1 Year
Kim, Hag-Dong (2-3)	May 27, 1959 Board of Directors	2019~Present 2017~2019 2015~2017 2013~2015 2010~2013 2009~2010	(Board Member, Senior Executive VP) Head of POSCO Steel Production Div. (Senior Executive VP) Head of POSCO Gwangyang Works (Senior Executive VP) Head of POSCO Pohang Works (Representative Director, Senior Executive VP) SNNC (Senior VP) Deputy Head of POSCO Gwangyang Works, Iron & Steel Making Head of Quality Control Dept., Pohang Works	1 Year

Jeong, Tak (2-4)   April 5, 1959       Board of Directors 2019~Present   2018~2019 2016~2018 2015~2016   2012~2015 2010~2012 (Board Member, Senior Executive VP) Head of POSCO Marketing Div. (Senior Executive VP) Head of POSCO Steel Business Div. (Executive VP) Head of POSCO Steel Business Strategy Dept. (Executive VP) Head of POSCO Energy and Shipbuilding Materials Marketing Dept. (Senior VP) Overseas Marketing Dept. (Senior VP) Head of Metal/HR Steel Biz Div. Daewoo Corporation 1 Year

* All candidates have no relation with the largest shareholder and no transactions with POSCO for the past three years.

* All candidates stated and signed that they do not have any legal issue to be qualified for directors.

• Recommendation for candidates by the Board of Directors

Name/ Agenda	Grounds
Chang, In-Hwa (2-1)	As the head of Steel Business Unit, Mr. Chang has contributed to improving technology in the steel mill and cost competitiveness. Especially considering the recent downturn of global steel market, Mr. Chang is recommended as the key person who can stably manage POSCO’s steel business with his comprehensive perspective in production and marketing.
Chon, Jung-Son (2-2)	As the head of Corporate Strategy & Planning Division, Mr. Chon has contributed to the establishment of POSCO Group business strategies and executions. The Board of Directors recommends Mr. Chon as the Inside Director as he has extensive and comprehensive knowledge and experience in POSCO businesses on a group-wide level. Based on this, he is evaluated as a director candidate who can contribute to decision-makings on various issues in a most beneficial way to POSCO group.
Kim, Hag-Dong (2-3)	As the head of Steel Production & Technology Division, Mr. Kim has devoted himself for the competitiveness of steel production and stable operation of steel mills. With his expertise in steel mills, products, and technology, the Board of Directors believes he is capable of operating and managing production and technology efficiently.
Jeong, Tak (2-4)	Mr. Jeong has contributed to expanding the sales volume by establishing steel business strategies and through solution marketing. With his expertise and broad experience in sales and marketing, Mr. Jeong is considered as the key person to enhance profitability of steel business.

☒ Agenda 3: Election of Outside Director

  [Description of the Proposal]

Pursuant to Article 382 of the Korean Commercial Act, Article 28 and 30 of the Company’s Articles of Incorporation, we request the Ordinary General Meeting of Shareholders to appoint Outside Directors of the Company as follows.

• Number of Outside Directors to be Elected: 1 Director

• Candidates

Name	Date of Birth	Professional Experience		Term
	Recommended by	Period	Details
Chang,Seung-Wha	June, 1963	2019~Present 2018~Present 2012~2016 2000 1995~Present	(Chairman) Committee of Korean Trade Commission (Dean) Seoul National University School of Law (Appellate Body Member) The World Trade Organization Arbitrator of International Court of Arbitration (ICC) Seoul National University Law Professor	3 Years
	Director Candidate Recommendation and Management Committee

• Candidate’s plan to fulfil his or her duty as Outside Director

Name

Working Plan

Chang, Seung-Wha

- As an expert in the field of international law, Mr. Chang will contribute to making the decision of the Board of Directors especially in the aspect of a stronger protectionism worldwide. - With transparency and independence along with his insights from legal experiences, he will strive to maintain a system of checks and balances and implement policies to create more sound internal system. - Mr. Chang will fulfil his duty as an Outside Director and work his best to realize POSCO’s philosophy, which is ‘Corporate Citizen: Building a better future together’

• Recommendation for the candidate by the Board of Directors

Name

Grounds

Chang, Seung-Wha

POSCO has a great deal of international transactions worldwide. With his diverse background in the field of both domestic and international law as the dean of Seoul National University School of Law, the arbitrator of International Court of Arbitration (ICC), and the Appellate Body member of World Trade Organization, Mr. Chang offered the great guidance to the Board of Directors in making decisions for the past 3 years. He is expected to improve the future performance of the Board of Directors

* The candidate has no relation with the largest shareholder and no transactions with POSCO for the past three years.

* The candidate stated and signed that they do not have any legal issue to be qualified for directors.

☒ Agenda 4: Election of Audit Committee Member

  [Description of the Proposal]

Pursuant to Article415-2,542-11 and542-12 of the Korean Commercial Act and Article 48 of the Company’s Articles of Incorporation, we request the Ordinary General Meeting of Shareholders to appoint an Audit Committee Member of the Company as follows.

• Number of Audit Committee Member to be elected: 1 Member

• Candidate

Name	Date of Birth	Professional Experience		Term
	Recommended by	Period	Details
Pahk, Heui-Jae	January 27, 1961	2017~Present 2016~2018 2014~Present 2013~2016 1998~2016 1993~Present	(President) Korea Association of Industrial Tech. Security (Chairman) Youth Hope Foundation (Senior Member) National Academy of Engineering Korea (President) Office of Strategic R&D Plan, MOTIE     (Founder and CEO) SNU Precision CO., LTD. Professor at Seoul National University (Mechanical&Aerospace Engineering)	2 Years
	Director Candidate Recommendation and Management Committee

• Recommendation for the candidate by the Board of Directors

Name

Grounds

Pahk, Heui-Jae

Mr. Pahk founded Precision Co. Ltd., the firststart-up company in Seoul National University, and developed the company into a competitive business. He also was the president of the Office of Strategic R&D Plan in the Ministry of Trade, Industry and Energy which is the position also known as the Chief Technology Officer of the nation. With his ample experience and expertise, the Board of Directors believes that he is enable to contribute to the effective audit responsibilities.

* The candidate has no relation with the largest shareholder and no transactions with POSCO for the past three years.

* The candidate stated and signed that they do not have any legal issue to be qualified for directors.

☒ Agenda 5: Approval of Ceiling Amount of Total Remuneration for Directors

  [Description of the Proposal]

Pursuant to Article 388 of the Korean Commercial Act and Article 36 of the Company’s Articles of Incorporation, we request the Ordinary General Meeting of Shareholders to approve the ceiling amount of the total remuneration for Directors in the fiscal year 2020.

☐ The ceiling amount (to be approved) of the total remuneration in the FY 2020: KRW 10.0 billion

☐ The ceiling amount (approved) of the total remuneration in the FY 2019: KRW 10.0 billion

POSCO

and Subsidiaries

Condensed Consolidated Financial Statements

December 31, 2019 and 2018

1

Table of Contents

	Page
Consolidated Financial Statements
Consolidated Statements of Financial Position		3
Consolidated Statements of Comprehensive Income		5
Consolidated Statements of Changes in Equity		6
Consolidated Statements of Cash Flows		8

The following Condensed Consolidated Financial Statements based onK-IFRS are provided for reference of investors and are NOT finally reviewed by independent auditors.

The following Condensed Consolidated Financial Statements do NOT contain Notes to the Consolidated Financial Statements.

The audited Condensed Consolidated Financial Statements will be provided to the POSCO homepage(http://www.posco.co.kr) and to the SEC (https://www.sec.gov) in the 2^nd week of March, 2020.

2

POSCO and Subsidiaries

Consolidated Statements of Financial Position

As of December 31, 2019 and 2018

(in millions of Won)	December 31, 2019		December 31, 2018
Assets
Cash and cash equivalents	W	3,514,872		2,643,865
Trade accounts and notes receivable, net		9,078,351		9,282,609
Other receivables, net		1,581,517		1,385,629
Other short-term financial assets		8,996,049		8,081,096
Inventories		10,920,320		11,499,928
Current income tax assets		45,929		51,557
Assets held for sale		74,158		21,854
Other current assets		631,176		684,464
Total current assets		34,842,374		33,651,002
Long-term trade accounts and notes receivable, net		198,785		427,125
Other receivables, net		1,140,879		863,240
Other long-term financial assets		1,669,389		1,647,898
Investments in associates and joint ventures		3,927,755		3,650,003
Investment property, net		878,227		928,615
Property, plant and equipment, net		29,925,973		30,018,273
Goodwill and other Intangible assets, net		4,908,473		5,170,825
Defined benefit assets, net		4,280		1,489
Deferred tax assets		1,237,285		1,381,031
Othernon-current assets		325,241		508,764
Totalnon-current assets		44,216,287		44,597,263
Total assets	W	79,058,661		78,248,265

3

POSCO and Subsidiaries

Consolidated Statements of Financial Position, Continued

As of December 31, 2019 and 2018

(in millions of Won)	December 31, 2019			December 31, 2018
Liabilities
Trade accounts and notes payable	W	3,422,922			4,006,135
Short-term borrowings and current installments of long-term borrowings		8,548,212			10,289,619
Other payables		1,879,508			1,720,097
Other short-term financial liabilities		77,827			77,800
Current income tax liabilities		396,616			948,166
Liabilities directly associated with the assets held for sale		8			—
Provisions		360,495			301,280
Other current liabilities		1,638,102			1,594,888
Total current liabilities		16,323,690			18,937,985
Long-term trade accounts and notes payable		20,067			29,825
Long-term borrowings, excluding current installments		11,893,401			9,919,651
Other payables		585,129			148,868
Other long-term financial liabilities		31,494			64,162
Defined benefit liabilities, net		181,011			140,933
Deferred tax liabilities		1,691,498			1,688,893
Long-term provisions		458,154			431,036
Othernon-current liabilities		79,510			127,361
Totalnon-current liabilities		14,940,264			12,550,729
Total liabilities		31,263,954			31,488,714
Equity
Share capital		482,403			482,403
Capital surplus		1,376,251			1,410,551
Hybrid bonds		199,384			199,384
Reserves		(1,157,980	)		(1,404,368	)
Treasury shares		(1,508,303	)		(1,532,728	)
Retained earnings		45,080,118			44,216,018
Equity attributable to owners of the controlling company		44,471,872			43,371,260
Non-controlling interests		3,322,834			3,388,291
Total equity		47,794,707			46,759,551
Total liabilities and equity	W	79,058,661			78,248,265

4

POSCO and Subsidiaries

Consolidated Statements of Comprehensive Income

As of December 31, 2019 and 2018

(in millions of Won, except per share information)	2019			2018
Revenue	W	64,366,848			64,977,777
Cost of sales		(58,116,495	)		(57,005,396	)
Gross profit		6,250,353			7,972,381
Selling and administrative expenses
Reversal of (impairment loss) on trade accounts and notes receivable		28,105			(74,781	)
Other administrative expenses		(2,041,286	)		(1,985,755	)
Selling expenses		(368,317	)		(369,245	)
Operating profit		3,868,855			5,542,600
Share of profit of equity-accounted investees, net		273,741			112,635
Finance income and costs
Finance income		1,872,143			1,705,970
Finance costs		(2,242,063	)		(2,244,416	)
Othernon-operating income and expenses
Impairment loss on other receivables		(80,322	)		(63,092	)
Othernon-operating income		474,873			523,586
Othernon-operating expenses		(1,113,947	)		(2,014,462	)
Profit before income tax		3,053,278			3,562,821
Income tax expense		(1,070,641	)		(1,670,757	)
Profit		1,982,637			1,892,064
Other comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit plans		(117,152	)		(173,489	)
Net changes in fair value of equity investments at fair value through other comprehensive income		(10,541	)		(149,188	)
Items that are or may be reclassified subsequently to profit or loss:
Capital adjustment arising from investments in equity-accounted investees		66,134			(62,732	)
Foreign currency translation differences		208,116			(42,908	)
Gains or losses on valuation of derivatives		(90	)		(212	)
Other comprehensive income (loss), net of tax		146,468			(428,529	)
Total comprehensive income	W	2,129,105			1,463,535
Profit attributable to:
Owners of the controlling company	W	1,835,087			1,690,612
Non-controlling interests		147,551			201,452
Profit	W	1,982,637			1,892,064
Total comprehensive income attributable to:
Owners of the controlling company	W	1,997,731			1,271,495
Non-controlling interests		131,374			192,040
Total comprehensive income	W	2,129,105			1,463,535
Basic and diluted earnings per share (in Won)		22,823			20,911

5

POSCO and Subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2019 and 2018

(in millions of Won)	Attributable to owners of the controlling company																				Non- controlling interests
	Share capital		Capital surplus			Hybrid bonds			Reserves			Treasury shares			Retained earnings			Subtotal						Total
Balance as of January 1, 2018	W	482,403		1,412,565			996,919			(682,556	)		(1,533,054	)		43,056,600			43,732,877			3,731,131			47,464,008
Adjustment on initial application ofK-IFRS No. 1115, net of tax		—		—			—			—			—			(76,199	)		(76,199	)		(63,708	)		(139,907	)
Adjustment on initial application ofK-IFRS No. 1109, net of tax		—		—			—			(498,517	)		—			447,067			(51,450	)		(34,754	)		(86,204	)
Adjusted balance as of January 1, 2018		482,403		1,412,565			996,919			(1,181,073	)		(1,533,054	)		43,427,468			43,605,228			3,632,669			47,237,897
Comprehensive income:
Profit		—		—			—			—			—			1,690,612			1,690,612			201,452			1,892,064
Other comprehensive income (loss)																						—			—
Remeasurements of defined benefit plans, net of tax		—		—			—			—			—			(145,488	)		(145,488	)		(28,001	)		(173,489	)
Capital adjustment arising from investments in equity-accounted investees, net of tax		—		—			—			(76,587	)		—			—			(76,587	)		13,855			(62,732	)
Net changes in fair value of equity investments at fair value through other comprehensive income, net of tax		—		—			—			(104,293	)		—			(46,883	)		(151,176	)		1,988			(149,188	)
Foreign currency translation differences, net of tax		—		—			—			(45,650	)		—			—			(45,650	)		2,742			(42,908	)
Gain or losses on valuation of derivatives, net of tax		—		—			—			(216	)		—			—			(216	)		4			(212	)
Total comprehensive income		—		—			—			(226,746	)		—			1,498,241			1,271,495			192,040			1,463,535
Transactions with owners of the controlling company, recognized directly in equity:
Year-end dividends		—		—			—			—			—			(279,999	)		(279,999	)		(54,240	)		(334,239	)
Interim dividends		—		—			—			—			—			(400,003	)		(400,003	)		—			(400,003	)
Changes in subsidiaries		—		—			—			—			—			—			—			(2,092	)		(2,092	)
Changes in ownership interests in subsidiaries		—		(1,497	)		—			—			—			—			(1,497	)		(654	)		(2,151	)
Repayment of hybrid bonds		—		(2,769	)		(797,535	)		—			—			—			(800,304	)		(359,018	)		(1,159,322	)
Interest of hybrid bonds		—		—			—			—			—			(24,443	)		(24,443	)		(18,448	)		(42,891	)
Disposal of treasury shares		—		133			—			—			326			—			459			—			459
Others		—		2,119			—			3,451			—			(5,246	)		324			(1,966	)		(1,642	)
Total transactions with owners of the controlling company,		—		(2,014	)		(797,535	)		3,451			326			(709,691	)		(1,505,463	)		(436,418	)		(1,941,881	)
Balance as of December 31, 2018	W	482,403		1,410,551			199,384			(1,404,368	)		(1,532,728	)		44,216,018			43,371,260			3,388,291			46,759,551

6

POSCO and Subsidiaries

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2019 and 2018

(in millions of Won)	Attributable to owners of the controlling company																			Non- controlling interests
	Share capital		Capital surplus			Hybrid bonds		Reserves			Treasury shares			Retained earnings			Subtotal						Total
Balance as of January 1, 2019	W	482,403		1,410,551			199,384		(1,404,368	)		(1,532,728	)		44,216,018			43,371,260			3,388,291			46,759,551
Comprehensive income:
Profit		—		—			—		—			—			1,835,087			1,835,087			147,551			1,982,637
Other comprehensive income (loss)																					—			—
Remeasurements of defined benefit plans, net of tax		—		—			—		—			—			(100,218	)		(100,218	)		(16,933	)		(117,152	)
Capital adjustment arising from investments in equity-accounted investees, net of tax		—		—			—		58,308			—			—			58,308			7,826			66,134
Net changes in fair value of equity investments at fair value through other comprehensive income, net of tax		—		—			—		10,228			—			(20,769	)		(10,541	)		—			(10,541	)
Foreign currency translation differences, net of tax		—		—			—		215,181			—			—			215,181			(7,065	)		208,116
Gain or losses on valuation of derivatives, net of tax		—		—			—		(86	)		—			—			(86	)		(5	)		(90	)
Total comprehensive income		—		—			—		283,631			—			1,714,100			1,997,731			131,374			2,129,105
Transactions with owners of the controlling company, recognized directly in equity:
Year-end dividends		—		—			—		—			—			(400,006	)		(400,006	)		(60,275	)		(460,280	)
Interim dividends		—		—			—		—			—			(480,694	)		(480,694	)		—			(480,694	)
Changes in subsidiaries		—		—			—		—			—			—			—			1,281			1,281
Changes in ownership interests in subsidiaries		—		(48,538	)		—		—			—			—			(48,538	)		(128,587	)		(177,125	)
Interest of hybrid bonds		—		—			—		—			—			(9,200	)		(9,200	)		(7,294	)		(16,494	)
Disposal of treasury shares		—		12,576			—		—			24,425			—			37,001			—			37,001
Others		—		1,662			—		(37,243	)		—			39,900			4,318			(1,956	)		2,362
Total transactions with owners of the controlling company		—		(34,300	)		—		(37,243	)		24,425			(850,000	)		(897,119	)		(196,831	)		(1,093,949	)
Balance as of December 31, 2019	W	482,403		1,376,251			199,384		(1,157,980	)		(1,508,303	)		45,080,118			44,471,872			3,322,834			47,794,707

7

POSCO and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2019 and 2018

(in millions of Won)	2019			2018
Cash flows from operating activities
Profit	W	1,982,637			1,892,064
Adjustments for:
Depreciation		3,029,868			2,911,048
Amortization		431,247			356,581
Finance income		(855,382	)		(737,745	)
Finance costs		1,197,705			1,168,225
Income tax expense		1,070,641			1,670,757
Impairment loss on property, plant and equipment		442,700			1,004,704
Gain on disposal of property, plant and equipment		(49,367	)		(53,139	)
Loss on disposal of property, plant and equipment		120,227			117,614
Impairment loss on goodwill and intangible assets		191,021			337,519
Gain on disposal of intangible assets		(1,896	)		(117,139	)
Gain on disposal of investments in subsidiaries, associates and joint ventures		(27,836	)		(45,241	)
Loss on disposal of investments in subsidiaries, associates and joint ventures		6,539			5,226
Share of profit of equity-accounted investees		(273,741	)		(112,635	)
Impairment loss on assets held for sale		38,328			50,829
Gain on disposal of assets held for sale		(37,461	)		(27,171	)
Expenses related to post-employment benefit		240,425			216,489
Impairment loss on trade and other receivables		52,218			137,873
Loss on valuation of inventories		96,201			141,799
Increase to provisions		76,538			240,146
Others, net		895			77,945
		5,748,869			7,343,685
Changes in operating assets and liabilities		(40,789	)		(2,052,531	)
Interest received		320,336			352,337
Interest paid		(760,175	)		(750,410	)
Dividends received		266,774			224,410
Income taxes paid		(1,512,997	)		(1,139,830	)
Net cash provided by operating activities	W	6,004,655			5,869,725

8

POSCO and Subsidiaries

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2019 and 2018

(in millions of Won)	2019			2018
Cash flows from investing activities
Acquisitions of short-term financial instruments	W	(36,063,406	)		(32,173,134	)
Proceeds from disposal of short-term financial instruments		35,415,822			31,105,544
Increase in loans		(450,638	)		(627,783	)
Collection of loans		398,838			941,962
Acquisitions of securities		(296,827	)		(321,916	)
Proceeds from disposal of securities		62,492			221,646
Acquisitions of investment in associates and joint ventures		(160,404	)		(47,355	)
Proceeds from disposal of investment in associates and joint ventures		16,458			88,852
Acquisitions of investment property		(19,344	)		(44,106	)
Proceeds from disposal of investment property		12,057			70,817
Acquisitions of property, plant and equipment		(2,519,219	)		(2,135,550	)
Proceeds from disposal of property, plant and equipment		51,800			90,412
Acquisitions of intangible assets		(299,587	)		(447,616	)
Proceeds from disposal of intangible assets		24,161			77,654
Proceeds from disposal of assets held for sale		67,246			93,338
Payment for acquisition of business, net of cash acquired		(37,345	)		—
Cash received from disposal of business, net of cash transferred		45,360			447,917
Collection of lease receivables		56,889			—
Others, net		12,788			11,348
Net cash used in investing activities		(3,682,859	)		(2,647,970	)
Cash flows from financing activities
Proceeds from borrowings		5,646,977			2,762,446
Repayment of borrowings		(3,746,845	)		(3,136,308	)
Repayment of short-term borrowings, net		(2,194,727	)		(854,554	)
Capital contribution fromnon-controlling interests		29,475			5,808
Payment of cash dividends		(946,218	)		(723,934	)
Payment of interest of hybrid bonds		(16,494	)		(46,166	)
Repayment of hybrid bonds		—			(1,160,000	)
Repayment of lease liabilities		(167,427	)		(30,481	)
Others, net		(116,920	)		(11,859	)
Net cash used in financing activities		(1,512,179	)		(3,195,048	)
Effect of exchange rate fluctuation on cash held		61,764			4,628
Net increase in cash and cash equivalents		871,381			31,335
Cash and cash equivalents at beginning of the period		2,643,865			2,612,530
Cash and cash equivalents at end of the period	W	3,515,246			2,643,865

9

POSCO

Separate Financial Statements

December 31, 2019 and 2018

Table of Contents

	Page
Separate Financial Statements
Separate Statements of Financial Position		3
Separate Statements of Comprehensive Income		5
Separate Statements of Changes in Equity		6
Separate Statements of Cash Flows		7
Separate Statements of Appropriation of Retained Earnings		9

The following Separate Financial Statements based on K-IFRS are provided for reference of investors and are NOT finally reviewed by independent auditors. The following Separate Financial Statements do NOT contain Notes to the Separate Financial Statements.

The audited Separate Financial Statements will be provided to the POSCO homepage (http://www.posco.co.kr) and to the SEC (https://www.sec.gov) in the 2nd week of March, 2020.

POSCO

Separate Statements of Financial Position

As of December 31, 2019 and 2018

(in millions of Won)	December 31, 2019		December 31, 2018
Assets
Cash and cash equivalents	W	978,139		259,219
Trade accounts and notes receivable, net		3,987,041		3,968,372
Other receivables, net		321,352		206,432
Other short-term financial assets		7,858,979		7,025,143
Inventories		4,988,530		5,288,009
Assets held for sale		53,924		25,683
Other current assets		28,101		23,542
Total current assets		18,216,066		16,796,400
Long-term trade accounts and notes receivable, net		6,014		7,673
Other receivables, net		56,468		57,767
Other long-term financial assets		1,257,896		1,176,757
Investments in subsidiaries, associates and joint ventures		15,069,857		15,121,339
Investment property, net		158,077		108,215
Property, plant and equipment, net		20,132,199		20,154,334
Intangible assets, net		708,915		645,222
Othernon-current assets		105,274		58,273
Totalnon-current assets		37,494,700		37,329,580
Total assets	W	55,710,766		54,125,980

3

POSCO

Separate Statements of Financial Position, Continued

As of December 31, 2019 and 2018

(in millions of Won)	December 31, 2019			December 31, 2018
Liabilities
Trade accounts and notes payable	W	667,551			1,106,226
Short-term borrowings and current installments of long-term borrowings		1,146,476			826,862
Other payables		1,113,003			1,072,733
Other short-term financial liabilities		10,969			12,638
Current income tax liabilities		237,293			803,543
Provisions		21,007			19,165
Other current liabilities		135,147			54,806
Total current liabilities		3,331,446			3,895,973
Long-term borrowings, excluding current installments		5,191,537			3,444,108
Other payables		222,802			144,343
Other long-term financial liabilities		46,925			79,936
Defined benefit liabilities, net		54,146			863
Deferred tax liabilities		1,190,553			1,179,672
Long-term provisions		53,942			93,719
Othernon-current liabilities		5,230			15,264
Totalnon-current liabilities		6,765,135			4,957,905
Total liabilities		10,096,581			8,853,878
Equity
Share capital		482,403			482,403
Capital surplus		1,252,220			1,154,775
Hybrid bonds		199,384			199,384
Reserves		(183,930	)		(207,191	)
Treasury shares		(1,508,303	)		(1,532,728	)
Retained earnings		45,372,411			45,175,459
Total equity		45,614,185			45,272,102
Total liabilities and equity	W	55,710,766			54,125,980

4

POSCO

Separate Statements of Comprehensive Income

As of December 31, 2019 and 2018

(in millions of Won, except per share information)		2019			2018
Revenue		W	30,373,511			30,659,425
Cost of sales			(26,700,874	)		(25,728,293	)
Gross profit			3,672,637			4,931,132
Selling and administrative expenses
Reversal of (impairment loss) on trade accounts and notes receivable			4,535			(6,586	)
Other administrative expenses			(851,140	)		(881,163	)
Selling expenses			(239,673	)		(234,007	)
Operating profit			2,586,359			3,809,376
Finance income and costs
Finance income			868,682			629,940
Finance costs			(508,242	)		(458,326	)
Othernon-operating income and expenses
Reversal of (Impairment loss) on other receivables			(286	)		2,925
Othernon-operating income			238,210			306,543
Othernon-operating expenses			(1,353,474	)		(2,055,559	)
Profit before income tax			1,831,249			2,234,899
Income tax expense			(655,537	)		(1,162,307	)
Profit			1,175,712			1,072,592
Other comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit plans	��		(80,554	)		(106,057	)
Net changes in fair value of equity investments at fair value through other comprehensive income			14,955			(131,646	)
Items that are or may be reclassified subsequently to profit or loss:
Net changes in unrealized fair value ofavailable-for-sale investments, net of tax			—			—
Total comprehensive income		W	1,110,113			834,889
Basic and diluted earnings per share (in Won)		W	14,592			13,186

5

POSCO

Separate Statements of Changes in Equity

As of December 31, 2019 and 2018

(in millions of Won)	Share capital		Capital surplus			Hybrid bonds			Reserves			Treasury shares			Retained earnings			Total
Balance as of January 1, 2018	W	482,403		1,156,429			996,919			233,390			(1,533,054	)		44,605,368			45,941,455
Adjustment on initial application ofK-IFRS No. 1115, net of tax-				—			—			—			—			(883	)		(883	)
Adjustment on initial application ofK-IFRS No. 1109, net of tax-				—			—			(321,654	)		—			321,603			(51	)
Adjusted balance as of January 1, 2018		482,403		1,156,429			996,919			(88,264	)		(1,533,054	)		44,926,087			45,940,521
Comprehensive income:
Profit		—		—			—			—			—			1,072,592			1,072,592
Other comprehensive income (loss)
Remeasurements of defined benefit plans, net of tax		—		—			—			—			—			(106,057	)		(106,057	)
Net changes in fair value of equity investments at fair value through other comprehensive income, net of tax		—		—			—			(118,927	)		—			(12,719	)		(131,646	)
Transactions with owners of the Company, recognized directly in equity:
Year-end dividends		—		—			—			—			—			(279,999	)		(279,999	)
Interim dividends		—		—			—			—			—			(400,003	)		(400,003	)
Repayment of hybrid bonds		—		(1,787	)		(797,535	)		—			—			—			(799,322	)
Interest of hybrid bonds		—		—			—			—			—			(24,443	)		(24,443	)
Disposal of treasury shares		—		133			—			—			326			—			459
Balance as of December 31, 2018	W	482,403		1,154,775			199,384			(207,191	)		(1,532,728	)		45,175,459			45,272,102
Balance as of January 1, 2019	W	482,403		1,154,775			199,384			(207,191	)		(1,532,728	)		45,175,459			45,272,102
Comprehensive income:
Profit		—		—			—			—			—			1,175,712			1,175,712
Other comprehensive income (loss)
Remeasurements of defined benefit plans, net of tax		—		—			—			—			—			(80,555	)		(80,555	)
Net changes in fair value of equity investments at fair value through other comprehensive income, net of tax		—		—			—			23,261			—			(8,306	)		14,955
Transactions with owners of the Company, recognized directly in equity:
Year-end dividends		—		—			—			—			—			(400,006	)		(400,006	)
Interim dividends		—		—			—			—			—			(480,694	)		(480,694	)
Interest of hybrid bonds		—		—			—			—			—			(9,200	)		(9,200	)
Disposal of treasury shares		—		12,576			—			—			24,425			—			37,001
Business combination(Note 39)		—		84,869			—			—			—			—			84,869
Balance as of December 31, 2019	W	482,403		1,252,220			199,384			(183,930	)		(1,508,303	)		45,372,411			45,614,185

6

POSCO

Separate Statements of Cash Flows

As of December 31, 2019 and 2018

(in millions of Won)	2019			2018
Cash flows from operating activities
Profit	W	1,175,712			1,072,592
Adjustments for :
Expenses related to post-employment benefit		119,177			111,034
Depreciation		2,160,124			2,111,870
Amortization		77,190			69,101
Reversal of impairment loss on trade and other receivable		(4,248	)		3,661
Finance income		(598,303	)		(443,952	)
Finance costs		284,334			235,892
Loss on valuation of inventories		7,677			12,169
Gain on disposal of property, plant and equipment		(25,583	)		(47,941	)
Loss on disposal of property, plant and equipment		114,874			120,570
Impairment losses on property, plant and equipment		222,036			940,595
Gain on disposal of intangible assets		(1,013	)		(99,378	)
Impairment losses on intangible assets		—			1,293
Impairment losses on investments in subsidiaries, associates and joint ventures		865,769			787,999
Recovery of Impairment losses on investments in subsidiaries, associates and joint venture		—			(56,420	)
Gain on disposal of assets held for sale		(30,262	)		(13	)
Impairment loss on assets held for sale		8,021			7,788
Gain on disposal of emissions right		(6,122	)		—
Gain on valuation of emissions rights		(25,440	)		—
Increase to provisions		(10,398	)		53,477
Income tax expense		655,536			1,162,307
Others		321			1,067
Changes in operating assets and liabilities		(438,041	)		(813,429	)
Interest received		147,683			154,529
Interest paid		(160,950	)		(148,129	)
Dividends received		284,648			228,296
Income taxes paid		(1,221,790	)		(689,008	)
Net cash provided by operating activities	W	3,600,955			4,775,971

7

POSCO

Separate Statements of Cash Flows, Continued

As of December 31, 2019 and 2018

(in millions of Won)	Notes		2019			2018
Cash flows from investing activities
Decrease in deposits			W	2,747,010			2,821,831
Collect of short-term loans				62			—
Proceeds from disposal of debt securities				—			130,000
Proceeds from disposal of short-term financial instruments				32,210,156			27,992,468
Proceeds from disposal of debt securities				54			855
Proceeds from disposal of equity securities				24,890			45,445
Proceeds from disposal of other securities				4,522			2,658
Proceeds from disposal of stock warrants				—			130
Proceeds from disposal of investments in subsidiaries, associates and joint ventures				14,278			101,294
Proceeds from disposal of property, plant and equipment				—			4,551
Proceeds from disposal of intangible assets				5,587			26,954
Proceeds from disposal of assets held for sale				523,128			231
Proceeds from disposal of emissions rights				12,693			—
Proceeds from business combination				2,171			—
Increase in deposits				(2,792,820	)		(3,404,466	)
Acquisition of short-term financial investments				(32,670,040	)		(28,613,172	)
Increase in short-term loans				—			(2,950	)
Increase in long-term loans				(5,697	)		(261	)
Acquisition of debt securities				(290,102	)		(130,238	)
Acquisition of equity securities				(11,144	)		(1,443	)
Acquisition of other securities				(1,710	)		(464	)
Acquisition of investment in subsidiaries, associates and joint ventures				(491,175	)		(855,602	)
Acquisition of property, plant and equipment				(1,903,966	)		(1,677,962	)
Proceeds from disposal of property, plant and equipment				(41,003	)		—
Acquisition of intangible assets				(132,661	)		(58,808	)
Payment for acquisition of business, net of cash acquired				(1,156,953	)		—
Net cash used in investing activities			W	(3,952,722	)		(3,618,949	)
Cash flows from financing activities		38
Proceeds from borrowings				2,950,068			1,743,353
Increase in long-term financial liabilities				3,287			1,162
Receipt of government grants				3,273			86
Proceeds from disposals of derivatives				9,682			—
Repayment of borrowings				(959,404	)		(1,452,359	)
Decrease in long-term financial liabilities				(40,781	)		(16,099	)
Payment of cash dividends				(881,169	)		(679,998	)
Payment of interest of hybrid bonds				(9,200	)		(26,353	)
Repayment of hybrid bonds				—			(800,000	)
Net cash used in financing activities			W	1,075,756			(1,230,208	)
Effect of exchange rate fluctuation on cash held				(5,069	)		—
Net increase(decrease) in cash and cash equivalents				718,920			(73,186	)
Cash and cash equivalents at beginning of the period		5		259,219			332,405
Cash and cash equivalents at end of the period		5	W	978,139			259,219

8

POSCO

Separate Statements Appropriation of Retained Earnings

As of December 31, 2019 and 2018

(in millions of Won)	2019			2018
Retained earnings before appropriation
Unappropriated retained earnings
carried over from prior year	W	593,208			574,596
Cumulative effect of accounting changes		—			320,720
Remeasurements of defined benefit plans		(80,554	)		(106,057	)
Loss on disposal of equity securities		(8,306	)		(12,719	)
Interests of hybrid bonds		(9,200	)		(24,443	)
Interim dividends
(Dividends (ratio) per share W6,000 (120%) in 2019 W5,000 (100%) in 2018)		(480,694	)		(400,003	)
Profit for the period		1,175,712			1,072,592
		1,190,166			1,424,686
Transfer from discretionary reserve
Reserve for research and manpower development		—			136,667
Appropriated retained earnings for dividends		412,243			531,861
		412,243			668,528
Appropriation of retained earnings
Dividends
(Dividends (ratio) per share W4,000 (80%) in 2019 W5,000 (100%) in 2018)		320,463			400,006
Appropriated retained earnings for business expansion		700,000			1,100,000
		1,020,463			1,500,006
Unappropriated retained earnings carried forward to subsequent year	W	581,946			593,208

9