POSCO (PKX) 6-K Consolidated Financial Statements

Exhibit 99.1

POSCO HOLDINGS INC.

and Subsidiaries

Consolidated Financial Statements

December 31, 2023 and 2022

(With Independent Auditors’ Report Thereon)

Table of Contents

	Page
Independent Auditors’ Report		1
Consolidated Financial Statements
Consolidated Statements of Financial Position		6
Consolidated Statements of Comprehensive Income		8
Consolidated Statements of Changes in Equity		9
Consolidated Statements of Cash Flows		11
Notes to the Consolidated Financial Statements		13
Independent Auditors’ Report on Internal Control over Financial Reporting for Consolidation Purposes		123
Report on the Operating Status of Internal Control over Financial Reporting for Consolidation Purposes		125

Independent Auditors’ Report

Based on a report originally issued in Korean

The Board of Directors and Shareholders

POSCO HOLDINGS INC.:

Opinion

We have audited the consolidated financial statements of POSCO HOLDINGS INC. and its subsidiaries (the “Company”), which comprise the consolidated statements of financial position as of December 31, 2023 and 2022, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes, comprising summary of material accounting policy information and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with Korean International Financial Reporting Standards (“K-IFRS”).

We also have audited, in accordance with Korean Standards on Auditing (“KSAs“), the Company’s internal control over financial reporting (“ICFR”) for consolidation purposes as of December 31, 2023 based on the criteria established in Conceptual Framework for Designing and Operating Internal Control over Financial Reporting issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea, and our report dated March 13, 2024 expressed an unmodified opinion on the effectiveness of the Company’s internal control over financial reporting for consolidation purposes.

Basis for Opinion

We conducted our audits in accordance with Korean Standards on Auditing (“KSAs“). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements as of and for the year ended December 31, 2023. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1

(a) POSCO Eco & Challenge CO., LTD (formerly, POSCO ENGINEERING & CONSTRUCTION CO., LTD)—Estimation of percentage-of-completion by the input method As described in notes 3 (“Revenue from contracts with customers”), 29 and 30 to the consolidated financial statements, revenue from construction contract amounted toW8,201,881 million, which was approximately 10.6% of consolidated revenue for the year ended December 31, 2023. Such revenue is primarily related to POSCO Eco & Challenge CO., LTD (formerly, POSCO ENGINEERING & CONSTRUCTION CO., LTD), a subsidiary of the Company. In connection with the Company’s production-to-order revenue transactions, when the outcome of a construction contract can be estimated reliably, the Company recognizes contract revenues and contract costs over time based on the percentage-of-completion method. The percentage-of-completion is calculated based on the ratio of contract costs incurred for work performed to date excluding costs incurred that do not contribute to the progress in satisfying the Company’s performance obligation over the estimated total contract costs.

Construction contracts generally have a long-term duration, and the total contract costs are estimated based on estimated future expenditures for materials, labor, outsourcing costs and others which are expected to be incurred during the construction period. Considering the impact on revenue recognition from the uncertainty in connection with the long-term contracts and changes in estimated costs, we identified estimation of percentage-of-completion by the input method related to POSCO Eco & Challenge CO., LTD (formerly, POSCO ENGINEERING & CONSTRUCTION CO., LTD) as a key audit matter.

The primary procedures we performed to address this key audit matter included the following:

• Testing certain internal controls over the Company’s estimation and review on the estimated total contract costs, and review on cost allocation among projects;

• Inspecting the documents prepared by the person in charge of construction field regarding rationale and reliability of the estimated total contract costs for major construction projects;

• Inquiring and inspecting the documents regarding rationale and reliability of the estimates such as material costs, labor costs and outsourcing costs included in the estimated total contract costs on major new construction projects;

• For contracts with significant changes in total contract costs during the current year, inquiring the person in charge of construction field and inspecting documents as to the cause of such changes;

• Inquiring the person in charge of construction field and inspecting documents as to the cause of significant differences between estimated total cost and the actual total cost for projects completed during the current year; and

• For selected samples, testing the existence of contract costs incurred during the year, and whether they were aggregated or allocated to the corresponding projects for calculating percentage-of-completion through inspection of supporting documentation.

2

(b) Cut-off of export sales

Export sales represent a significant portion of the consolidated revenues for the Company’s products and merchandise which, are shipped to other countries via vessels and other logistics. The timing of revenue recognition for export sales may vary in accordance with the “International Commercial Terms”. Due to the extended period of time between shipment to and arrival of products and merchandise at their destination, there is a high risk of misstatement of the timing of revenue recognition due to fraud.

Considering the inherent risks and significance of export sales of individual subsidiaries to consolidated revenue, we have identified the appropriateness of the recognition period for export sales of POSCO, POSCO International Corporation, and POSCO FUTURE M CO., LTD (formerly, POSCO Chemical CO., LTD) as a key audit matter.

The primary procedures we performed to address this key audit matter included the following:

• Understanding the Company’s policies, processes, and internal controls related to export sales;

• Assessing the Company’s internal controls related to verification of the appropriateness of timing of revenue recognition;

• Inspecting the supporting documentation to assess the adequacy of timing of recognition for each type of transactions based on the terms of trade; and

• For selected samples for sales transactions during the periods close to and after year-end, inspecting the supporting documentation to assess the appropriateness of timing of revenue recognition.

Other Matter

The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with K-IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

3

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with KSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with KSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

• Evaluate the appropriateness of accounting policies used in the preparation of the consolidated financial statements and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

4

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditors’ report is Jae Nam Hwang.

Seoul, Korea

March 13, 2024

This report is effective as of March 13, 2024, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any

5

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Financial Position

As of December 31, 2023 and 2022

(in millions of Won)	Notes		December 31, 2023		December 31, 2022
Assets
Cash and cash equivalents		4,5,23	W	6,670,879		8,053,108
Trade accounts and notes receivable, net		6,17,23,30,38		11,015,303		9,769,553
Other receivables, net		7,23,38		1,947,529		2,112,697
Other short -term financial assets		8,23		11,403,166		10,909,920
Inventories		9		13,825,514		15,472,417
Current income tax assets		36		101,979		243,829
Assets held for sale		10		406,945		12,003
Other current assets		16		840,984		1,075,939
Total current assets				46,212,299		47,649,466
Long-term trade accounts and notes receivable, net		6,23		42,516		24,033
Other receivables, net		7,23,38		1,452,445		1,520,331
Other long-term financial assets		8,23		2,708,325		2,332,538
Investments in associates and joint ventures		11		5,020,264		4,996,551
Investment property, net		13		1,616,294		1,074,031
Property, plant and equipment, net		14		35,206,248		31,781,195
Intangible assets, net		15		4,714,784		4,838,451
Defined benefit assets, net		21		464,758		520,659
Deferred tax assets		36		3,334,266		3,502,152
Other non-current assets		16		173,195		167,374
Total non-current assets				54,733,095		50,757,315
Total assets			W	100,945,394		98,406,781

See accompanying notes to the consolidated financial statements.

6

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Financial Position, Continued

As of December 31, 2023 and 2022

(in millions of Won)	Notes	December 31, 2023			December 31, 2021
Liabilities
Trade accounts and notes payable	23,38	W	5,782,825			5,520,807
Short-term borrowings and current installments of long-term borrowings	4,17,23		10,959,217			11,915,994
Other payables	18,23,38		2,737,478			2,865,868
Other short-term financial liabilities	19,23		163,626			106,527
Current income tax liabilities	36		319,096			502,685
Liabilities directly associated with the assets held for sale			141,890			5
Provisions	20		419,744			515,988
Other current liabilities	22,29		1,337,642			1,760,316
Total current liabilities			21,861,518			23,188,190
Long-term trade accounts and notes payable	23,38		—			15
Long-term borrowings, excluding current installments	4,17,23		15,011,163			12,389,667
Other payables	18,23		873,565			790,402
Other long-term financial liabilities	19,23		153,782			87,052
Defined benefit liabilities, net	21		38,754			37,707
Deferred tax liabilities	36		2,760,234			2,924,552
Long-term provisions	20		468,009			579,918
Other non-current liabilities	22		114,472			151,877
Total non-current liabilities			19,419,979			16,961,190
Total liabilities			41,281,497			40,149,380
Equity
Share capital	24		482,403			482,403
Capital surplus	24,28		1,663,334			1,400,832
Reserves	26		67,256			(443,990	)
Treasury shares	27		(1,889,658	)		(1,892,308	)
Retained earnings			53,857,514			52,965,179
Equity attributable to owners of the controlling company			54,180,849			52,512,116
Non-controlling interests	25		5,483,048			5,745,285
Total equity			59,663,897			58,257,401
Total liabilities and equity		W	100,945,394			98,406,781

See accompanying notes to the consolidated financial statements.

7

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2023 and 2022

(in millions of Won, except per share information)	Notes		2023			2022
Revenue		29,30,38	W	77,127,197			84,750,204
Cost of sales		30,32,35,38		(70,710,293	)		(77,100,912	)
Gross profit				6,416,904			7,649,292
Selling and administrative expenses		31,35
Impairment loss on (reversal of) trade accounts and notes receivable		23		17,785			(24,791	)
Other administrative expenses		28,32		(2,669,687	)		(2,479,966	)
Selling expenses				(233,579	)		(294,482	)
Operating profit				3,531,423			4,850,053
Share of profit of equity-accounted investees, net		11		269,678			676,260
Finance income and costs		23,33
Finance income				3,830,746			4,834,011
Finance costs				(4,202,996	)		(5,804,466	)
Other non-operating income and expenses		34
Impairment loss on other receivables		23		(283,699	)		(9,824	)
Other non-operating income				394,346			592,017
Other non-operating expenses		35		(904,343	)		(1,123,685	)
Profit before income tax				2,635,155			4,014,366
Income tax expense		36		(789,305	)		(453,882	)
Profit				1,845,850			3,560,484
Other comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss:
Capital adjustment arising from investments in equity-accounted investees				28,745			946
Foreign currency translation differences				76,433			(48,702	)
Remeasurements of defined benefit plans		21		(118,548	)		105,769
Net changes in fair value of equity investments at fair value through other comprehensive income		23		257,725			(10,076	)
Items that are or may be reclassified subsequently to profit or loss:
Capital adjustment arising from investments in equity-accounted investees				207,860			132,188
Foreign currency translation differences				34,118			52,726
Gains or losses on valuation of derivatives		23		(1,292	)		1,023
Other comprehensive income, net of tax				485,041			233,874
Total comprehensive income			W	2,330,891			3,794,358
Profit attributable to:
Owners of the controlling company			W	1,698,092			3,144,087
Non-controlling interests				147,758			416,397
Profit			W	1,845,850			3,560,484
Total comprehensive income attributable to :
Owners of the controlling company			W	2,131,737			3,380,649
Non-controlling interests				199,154			413,709
Total comprehensive income			W	2,330,891			3,794,358
Earnings per share (in Won)		37
Basic earnings per share (in Won)				22,382			41,456
Diluted earnings per share (in Won)			W	22,382			39,126

See accompanying notes to the consolidated financial statements.

8

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2023 and 2022

(in millions of Won)	Attributable to owners of the controlling company																				Non-
	Share		Capital			Hybrid						Treasury			Retained						controlling
	capital		surplus			bonds			Reserves			shares			earnings			Subtotal			interests			Total
Balance as of January 1, 2022	W	482,403		1,387,960			199,384			(666,985	)		(2,508,294	)		51,532,887			50,427,355			4,377,588			54,804,943
Comprehensive income:
Profit		—		—			—			—			—			3,144,087			3,144,087			416,397			3,560,484
Other comprehensive income
Remeasurements of defined benefit plans, net of tax		—		—			—			—			—			67,167			67,167			38,602			105,769
Capital adjustment arising from investments in equity-accounted investees, net of tax		—		—			—			126,278			—			—			126,278			6,856			133,134
Net changes in fair value of equity investments at fair value through other comprehensive income, net of tax		—		—			—			49,516			—			(59,576	)		(10,060	)		(16	)		(10,076	)
Foreign currency translation differences, net of tax		—		—			—			52,725			—			—			52,725			(48,701	)		4,024
Gains or losses on valuation of derivatives, net of tax		—		—			—			452			—			—			452			571			1,023
Total comprehensive income		—		—			—			228,971			—			3,151,678			3,380,649			413,709			3,794,358
Transactions with owners of the controlling company, recognized directly in equity:
Year-end dividends		—		—			—			—			—			(378,128	)		(378,128	)		(82,110	)		(460,238	)
Interim dividends		—		—			—			—			—			(758,492	)		(758,492	)		—			(758,492	)
Changes in subsidiaries		—		—			—			—			—			—			—			422,424			422,424
Changes in ownership interest in subsidiaries		—		(7,827	)		—			—			—			—			(7,827	)		425,871			418,044
Interest of hybrid bonds		—		—			—			—			—			(1,487	)		(1,487	)		(15,007	)		(16,494	)
Variation due to split		—		—			(199,384	)		—			—			—			(199,384	)		199,384			—
Disposal of treasury stock		—		9,491			—			—			48,512			—			58,003			—			58,003
Retirement of treasury stock		—		—			—			—			567,474			(583,485	)		(16,011	)		—			(16,011	)
Share-based payment		—		12,115			—			—			—			—			12,115			—			12,115
Others		—		(907	)		—			(5,976	)		—			2,206			(4,677	)		3,426			(1,251	)
Total transactions with owners of the controlling company		—		12,872			(199,384	)		(5,976	)		615,986			(1,719,386	)		(1,295,888	)		953,988			(341,900	)
Balance as of December 31, 2022	W	482,403		1,400,832			—			(443,990	)		(1,892,308	)		52,965,179			52,512,116			5,745,285			58,257,401

See accompanying notes to the consolidated financial statements.

9

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2023 and 2022

(in millions of Won)	Attributable to owners of the controlling company																Non-
	Share		Capital					Treasury			Retained						controlling
	capital		surplus		Reserves			shares			earnings			Subtotal			interests			Total
Balance as of January 1, 2023	W	482,403		1,400,832		(443,990	)		(1,892,308	)		52,965,179			52,512,116			5,745,285			58,257,401
Comprehensive income:
Profit		—		—		—			—			1,698,092			1,698,092			147,758			1,845,850
Other comprehensive income
Remeasurements of defined benefit plans, net of tax		—		—		—			—			(83,148	)		(83,148	)		(35,400	)		(118,548	)
Capital adjustment arising from investments in equity-accounted investees, net of tax		—		—		225,591			—			—			225,591			11,014			236,605
Net changes in fair value of equity investments at fair value through other comprehensive income, net of tax		—		—		257,122			—			603			257,725			—			257,725
Foreign currency translation differences, net of tax		—		—		34,118			—			—			34,118			76,433			110,551
Gains or losses on valuation of derivatives, net of tax		—		—		(641	)		—			—			(641	)		(651	)		(1,292	)
Total comprehensive income		—		—		516,190			—			1,615,547			2,131,737			199,154			2,330,891
Transactions with owners of the controlling company, recognized directly in equity:
Year-end dividends		—		—		—			—			(151,698	)		(151,698	)		(94,690	)		(246,388	)
Interim dividends		—		—		—			—			(569,072	)		(569,072	)		—			(569,072	)
Changes in subsidiaries		—		—		—			—			—			—			5,805			5,805
Changes in ownership interest in subsidiaries		—		250,363		—			—			—			250,363			12,383			262,746
Interest of hybrid bonds		—		—		—			—			—			—			(8,925	)		(8,925	)
Repayment of hybrid bonds		—		—		—			—			—			—			(339,837	)		(339,837	)
Disposal of treasury stock		—		2,880		—			2,650			—			5,530			—			5,530
Share-based payment		—		6,783		—			—			—			6,783			17,324			24,107
Others		—		2,476		(4,944	)		—			(2,442	)		(4,910	)		(53,451	)		(58,361	)
Total transactions with owners of the controlling company		—		262,502		(4,944	)		2,650			(723,212	)		(463,004	)		(461,391	)		(924,395	)
Balance as of December 31, 2023	W	482,403		1,663,334		67,256			(1,889,658	)		53,857,514			54,180,849			5,483,048			59,663,897

See accompanying notes to the consolidated financial statements.

10

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2023 and 2022

(in millions of Won)	Notes		2023			2022
Cash flows from operating activities
Profit			W	1,845,850			3,560,484
Adjustments for:
Depreciation				3,346,461			3,204,744
Amortization				498,193			488,835
Finance income				(1,850,756	)		(1,943,661	)
Finance costs				2,179,233			2,532,735
Income tax expense				789,305			453,883
Impairment loss on property, plant and equipment				275,846			213,183
Gain on disposal of property, plant and equipment				(9,387	)		(18,502	)
Loss on disposal of property, plant and equipment				125,823			111,082
Impairment loss on goodwill and other intangible assets				129,907			370,663
Gain on disposal of investments in subsidiaries, associates and joint ventures				(197,088	)		(13,904	)
Loss on disposal of investments in subsidiaries, associates and joint ventures				18,843			12,400
Share of profit of equity-accounted investees				(269,678	)		(676,260	)
Gain on disposal of assets held for sale				(1,312	)		(55,262	)
Loss on disposal of assets held for sale				103,366			3,964
Expenses related to post-employment benefit				206,614			228,611
Impairment loss on trade and other receivables				265,914			34,615
Loss on valuation of inventories				309,317			259,678
Increase to provisions				160,880			289,915
Gain on insurance claim				(7,682	)		(236,344	)
Others, net				(43,817	)		28,382
				6,029,982			5,288,757
Changes in operating assets and liabilities		40		(1,087,257	)		(335,364	)
Interest received				447,621			249,751
Interest paid				(1,038,005	)		(560,766	)
Dividends received				696,941			757,502
Income taxes paid				(727,437	)		(2,773,599	)
Net cash provided by operating activities			W	6,167,695			6,186,765

See accompanying notes to the consolidated financial statements.

11

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2023 and 2022

(in millions of Won)	Notes		2023			2022
Cash flows from investing activities
Acquisitions of short-term financial instruments			W	(39,830,719	)		(89,327,182	)
Proceeds from disposal of short-term financial instruments				40,174,440			91,539,884
Increase in loans				(1,238,668	)		(1,087,409	)
Collection of loans				1,369,763			1,086,964
Acquisitions of securities				(380,744	)		(493,054	)
Proceeds from disposal of securities				142,791			332,724
Acquisitions of long-term financial instruments				(5,362	)		(21,638	)
Acquisitions of investment in associates and joint ventures				(417,603	)		(518,158	)
Proceeds from disposal of investment in associates and joint ventures				142,316			169,365
Acquisitions of investment property				(56,043	)		(1,561	)
Proceeds from disposal of investment property				707			23,401
Acquisitions of property, plant and equipment				(6,733,289	)		(4,927,586	)
Proceeds from disposal of property, plant and equipment				(11,895	)		864
Acquisitions of intangible assets				(481,882	)		(492,873	)
Proceeds from disposal of intangible assets				30,328			7,748
Proceeds from disposal of assets held for sale				4,850			111,488
Collection of lease receivables				52,657			54,614
Cash outflows due to business combinations, net of cash acquired				(150,201	)		(901,223	)
Cash inflow from insurance claim				7,682			236,344
Others, net				(7,352	)		(12,583	)
Net cash used in investing activities			W	(7,388,224	)		(4,219,871	)
Cash flows from financing activities
Proceeds from borrowings				7,817,217			4,553,746
Repayment of borrowings				(4,461,114	)		(4,138,054	)
Proceeds from (repayment of) short-term borrowings, net				(2,524,077	)		1,764,569
Capital contribution from non-controlling interests				299,342			577,330
Payment of cash dividends				(815,451	)		(1,218,405	)
Repayment of hybrid bonds				(340,000	)		—
Payment of interest of hybrid bonds				(10,043	)		(16,494	)
Repayment of lease liabilities				(222,829	)		(268,082	)
Others, net				78,362			64,798
Net cash provided by (used in) financing activities		40	W	(178,593	)		1,319,408
Effect of exchange rate fluctuation on cash held				16,719			(8,740	)
Net increase(decrease) in cash and cash equivalents				(1,382,403	)		3,277,562
Cash and cash equivalents at beginning of the period		5,10		8,053,282			4,775,720
Cash and cash equivalents at end of the period		5,10	W	6,670,879			8,053,282

See accompanying notes to the consolidated financial statements.

12

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2023 and 2022

1. General Information

General information about POSCO HOLDINGS INC., its 52 domestic subsidiaries including POSCO, 139 foreign subsidiaries including POSCO America Corporation (collectively “the Company”) and its 119 associates and joint ventures are as follows:

(a) The controlling company

POSCO HOLDINGS INC., the controlling company, was established on April 1, 1968, under the Commercial Code of the Republic of Korea. The shares of the Company have been listed on the Korea Exchange since June 10, 1988. The Company operates an investment business that controls and manages through ownership of shares of subsidiaries etc.

On March 2, 2022, the Company established a new subsidiary, POSCO, by a vertical spin-off of its steel business (The surviving company owns 100% of shares) on March 1, 2022, and changed the name of the surviving company to POSCO HOLDINGS INC..

As of December 31, 2023, POSCO HOLDINGS INC.’s shareholders are as follows:

Shareholder’s name	Number of shares		Ownership (%)
National Pension Service		5,393,999		6.38
BlackRock Fund Advisors(*1)		4,206,522		4.97
Nippon Steel Corporation		2,894,712		3.42
Pohang University of Science and Technology		1,981,047		2.34
The Government of Singapore(GIC)		1,759,571		2.08
Others		68,335,379		80.81
		84,571,230		100.00

(*1) Includes shares held by subsidiaries and others.

As of December 31, 2023, the shares of POSCO HOLDINGS INC. are listed on the Korea Exchange, while its ADRs are listed on the New York Stock Exchange.

13

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(b) Consolidated subsidiaries

Details of consolidated subsidiaries as of December 31, 2023 and 2022 are as follows:

		Ownership (% )
		December 31, 2023						December 31, 2022
	Principal operations	POSCO HOLDINGS		Subsidiaries		Total		POSCO HOLDINGS		Subsidiaries		Total		Region
[Domestic]
POSCO	Steel, rolled products and plates		100.00		—		100.00		100.00		—		100.00	Pohang
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	Engineering and construction		52.80		—		52.80		52.80		—		52.80	Pohang
POSCO STEELEON Co., Ltd.	Coated steel manufacturing		—		56.96		56.96		—		56.87		56.87	Pohang
POSCO DX (formerly, POSCO ICT)	Computer hardware and software distribution		65.38		—		65.38		65.38		—		65.38	Pohang
POSCO Research Institute	Economic research and consulting		100.00		—		100.00		100.00		—		100.00	Seoul
POSCO WIDE Co., Ltd. (formerly, POSCO O&M Co., Ltd.)	Business facility maintenance		100.00		—		100.00		47.17		52.83		100.00	Seoul
POSCO A&C	Architecture and consulting		—		100.00		100.00		45.66		54.34		100.00	Seoul
POSCO Venture Capital Co., Ltd.	Investment in venture companies		100.00		—		100.00		95.00		—		95.00	Pohang
eNtoB Corporation	Electronic commerce		—		69.32		69.32		—		69.32		69.32	Seoul
POSCO FUTURE M CO.,LTD. (formerly, POSCO CHEMICAL CO., LTD.)	Refractories, Anode/Cathode materials manufacturing and sales		59.75		—		59.75		59.76		—		59.76	Pohang
POSCO FLOW Co., Ltd.	Transporting and warehousing		100.00		—		100.00		100.00		—		100.00	Gwangyang
POSCO M-TECH	Packing materials manufacturing and sales		—		48.94		48.94		—		48.85		48.85	Pohang
POSCO ENERGY CO., LTD.(* 1)	Generation of electricity		—		—		—		100.00		—		100.00	Seoul
PNR	Steel by product manufacturing and sales		—		70.00		70.00		—		70.00		70.00	Pohang
Future Creation Fund Postech
Early Stage account	Investment in venture companies		—		—		—		—		40.00		40.00	Seoul
POSCO WOMAN’S FUND	Investment in venture companies		—		40.00		40.00		—		40.00		40.00	Seoul
SPH Co., Ltd.	House manufacturing and management		—		—		—		—		100.00		100.00	Incheon
POSCO Group University	Education service and real estate business		100.00		—		100.00		100.00		—		100.00	Incheon
Growth Ladder POSCO K-Growth Global Fund	Investment in venture companies		—		50.00		50.00		—		50.00		50.00	Pohang
POSCO IH (formerly, POSCO Research & Technology)	Intellectual Property Services and consulting		100.00		—		100.00		100.00		—		100.00	Seoul
TANCHEON E&E	Refuse derived fuel and power generation		—		100.00		100.00		—		100.00		100.00	Seoul
POSCO Humans	Business assistance service		—		100.00		100.00		—		100.00		100.00	Pohang
Mapo Hibroad Parking Co., Ltd.	Construction		—		71.00		71.00		—		71.00		71.00	Seoul
Busan E&E Co., Ltd.	Refuse derived fuel and power generation		70.00		—		70.00		70.00		—		70.00	Busan
POSCO INTERNATIONAL Corporation	Trading, power generation, energy & resource development and others		73.21		—		73.21		62.92		—		62.92	Incheon
Pohang Scrap Recycling Distribution Center Co., Ltd.	Steel processing and sales		—		51.00		51.00		—		51.00		51.00	Pohang
Songdo Development PMC (Project Management Company) LLC.	Housing business agency		—		100.00		100.00		—		100.00		100.00	Incheon
Korea Fuel Cell	Fuel cell		—		100.00		100.00		—		100.00		100.00	Pohang
POSCO GEM 1st Fund	Investment in venture companies		98.81		1.19		100.00		98.81		1.19		100.00	Pohang
POSCO MOBILITY SOLUTION	STC, TMC, Plate manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Cheonan
P&O Chemical Co., Ltd.	Chemical production		—		51.00		51.00		—		51.00		51.00	Gwangyang
Posco New Growth	Investment in venture companies		99.86		0.14		100.00		99.67		0.18		99.85	Seoul
IMP Fund I	Investment in venture companies		98.04		—		98.04		98.04		—		98.04	Pohang
POSCO-Pilbara LITHIUM SOLUTION Co., Ltd.	Lithium manufacturing and sales		82.00		—		82.00		82.00		—		82.00	Gwangyang
POSCO-HY Clean Metal Co., Ltd.	Non-ferrous metal smelting		—		65.00		65.00		—		65.00		65.00	Gwangyang
Consus Pf Private Real Estate Fund	REITs		—		66.67		66.67		—		66.67		66.67	—
New Energy Hub	Electricity and gas supply		—		100.00		100.00		50.00		50.00		100.00	Gwangyang
Posco Busan Newdeal Fund	Investment in venture companies		—		32.00		32.00		—		32.00		32.00	Pohang
Shinan Green Energy Co., LTD	Electricity production		—		54.53		54.53		—		54.53		54.53	Shinahn
eSteel4U	Wholesales and retail		—		61.12		61.12		—		61.12		61.12	Seoul
POSCO Social Investment Fund	Investment in venture companies		20.00		50.00		70.00		20.00		50.00		70.00	Pohang
POSCO Silicon Solution Co., Ltd	Other engineering R&D industries		100.00		—		100.00		100.00		—		100.00	Sejong
Consus Pf Private Real Estate Fund No.2	Real estate development		—		66.67		66.67		—		66.67		66.67	—
POSCO GS Eco Materials Co., Ltd	Rechargeable battery		51.00		—		51.00		100.00		—		100.00	Seoul
POSCO Lithium Solution Co., Ltd.	Lithium manufacturing and sales		100.00		—		100.00		100.00		—		100.00	Gwangyang
QSONE Co.,Ltd.(* 3)	Real estate rental		100.00		—		100.00		—		—		—	Seoul
POSCO PS Tech	Maintenance service		—		100.00		100.00		—		—		—	Pohang
POSCO PR Tech	Maintenance service		—		100.00		100.00		—		—		—	Pohang
POSCO PH Solution	Maintenance service		—		100.00		100.00		—		—		—	Pohang
POSCO GYS Tech	Maintenance service		—		100.00		100.00		—		—		—	Gwangyang
POSCO GYR Tech	Maintenance service		—		100.00		100.00		—		—		—	Gwangyang
POSCO GY Solution	Maintenance service		—		100.00		100.00		—		—		—	Gwangyang
PCC Facilities Component Fund	Investment Association		—		60.00		60.00		—		—		—	Pohang
POSCO HOLDINGS CVC 2nd Fund	Investment in new technologies business		98.80		1.20		100.00		—		—		—	Pohang
International Energy Expansion for Technology Innovation Fund	Investment in new technologies business		—		60.00		60.00		—		—		—	Pohang

		Ownership (%)
		December 31, 2023						December 31, 2022
	Principal operations	POSCO HOLDINGS		Subsidiaries		Total		POSCO HOLDINGS		Subsidiaries		Total		Region
[Foreign]
POSCO America Corporation	Research&Consulting		99.45		0.54		99.99		99.45		0.55		100.00	USA
POSCO AUSTRALIA PTY LTD	Raw material sales & mine development		100.00		—		100.00		100.00		—		100.00	Australia
POSCO Canada Ltd.	Coal sales		100.00		—		100.00		100.00		—		100.00	Canada
POSCO Asia Co., Ltd.	Finance		100.00		—		100.00		100.00		—		100.00	China
POSCO-CTPC Co., Ltd.	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	China
POSCO E&C Vietnam Co., Ltd.	Steel structure manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Vietnam
POSCO (Zhangjiagang) Stainless Steel Co.,Ltd.	Stainless steel manufacturing and sales		58.60		23.88		82.48		58.60		23.88		82.48	China
POSCO (Thailand) Company Limited	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Thailand
POSCO-MKPC SDN BHD	Steel manufacturing and sales		—		70.00		70.00		—		70.00		70.00	Malaysia
Qingdao Pohang Stainless Steel Co., Ltd.	Stainless steel manufacturing and sales		70.00		30.00		100.00		70.00		30.00		100.00	China
POSCO(Suzhou) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO-China Qingdao Processing Center Co.Ltd.	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	China
POS-ORE PTY LTD	Iron ore development and sales		—		100.00		100.00		—		100.00		100.00	Australia

14

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

		Ownership (%)
		December 31, 2023						December 31, 2022
	Principal operations	POSCO HOLDINGS		Subsidiaries		Total		POSCO HOLDINGS		Subsidiaries		Total		Region
[Foreign]
POSCO-China Holding Corp.	Holding company		100.00		—		100.00		100.00		—		100.00	China
POSCO JAPAN Co., Ltd.	Steel Marketing, demand development and technology research		100.00		—		100.00		100.00		—		100.00	Japan
POS-CD PTY LTD	Coal sales		—		—		—		—		100.00		100.00	Australia
POS-GC PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-India Private Limited	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	India
POSCO-India Pune Processing Center. Pvt. Ltd.	Steel manufacturing and sales		65.00		—		65.00		65.00		—		65.00	India
POSCO Japan PC CO.,LTD	Steel manufacturing and sales		—		86.12		86.12		—		86.12		86.12	Japan
POSCO-CFPC Co., Ltd.	Steel manufacturing and sales		44.66		55.34		100.00		44.66		55.34		100.00	China
POSCO E&C CHINA Co., Ltd.	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	China
POSCO MPPC S.A. de C.V.	Steel manufacturing and sales		21.02		75.29		96.31		21.02		75.29		96.31	Mexico
Zhangjigang Pohang Port Co., Ltd.	Loading and unloading service		—		100.00		100.00		—		100.00		100.00	China
POSCO-VIETNAM Co., Ltd.	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Vietnam
POSCO MEXICO S.A. DE C.V.	Automotive steel sheet manufacturing and sales		—		98.16		98.16		83.28		14.88		98.16	Mexico
POSCO-Poland Wroclaw Processing Center Sp. z o. o.	Steel manufacturing and sales		—		60.00		60.00		60.00		—		60.00	Poland
POS-NP PTY LTD	Coal sales		—		100.00		100.00		—		100.00		100.00	Australia
DAEWOO INTERNATIONAL SHANGHAI WAIGAOQIAO CO., LTD	Intermediary trade & bonded warehouse operation		—		100.00		100.00		—		100.00		100.00	China
PT. Bio Inti Agrindo	Forest resources development		—		85.00		85.00		—		85.00		85.00	Indonesia
POSCO ENGINEERING AND CONSTRUCTION AUSTRALIA (POSCO E&C AUSTRALIA) PTY LTD	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Australia
POSCO-TISCO (JILIN) PROCESSING CENTER Co., Ltd.	Steel manufacturing and sales		50.00		10.00		60.00		50.00		10.00		60.00	China
POSCO Thainox Public Company Limited	STS cold-rolled steel manufacturing and sales		—		74.56		74.56		—		74.56		74.56	Thailand
HUNCHUN POSCO HMM INTERNATIONAL LOGISTICS CO., LTD.	Logistics		—		81.55		81.55		—		81.55		81.55	China
POSCO INTERNATIONAL VIETNAM CO., LTD	Trading business		—		100.00		100.00		—		100.00		100.00	Vietnam
POSCO(Chongqing) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	China
SUZHOU POSCO-CORE TECHNOLOGY CO., LTD.	Component manufacturing and sales		—		100.00		100.00		—		100.00		100.00	China
PT.KRAKATAU POSCO FUTUREM (formerly, PT.Krakatau Posco Chemical Calcination)	Quicklime manufacturing and sales		—		80.00		80.00		—		80.00		80.00	Indonesia
POSCO AFRICA (PROPRIETARY) LIMITED	Mine development		100.00		—		100.00		100.00		—		100.00	South Africa
POSCO DX BRASIL	IT service and engineering		—		—		—		—		100.00		100.00	Brazil
POSCO Center Beijing	Real estate development, rental and management		—		100.00		100.00		—		100.00		100.00	China
POSCO-Malaysia SDN. BHD.	Steel manufacturing and sales		—		95.42		95.42		—		95.42		95.42	Malaysia
PT KRAKATAU BLUE WATER	Wastewater treatment facilities operation and maintenance		—		67.00		67.00		—		67.00		67.00	Indonesia
POSCO INTERNATIONAL MYANMAR CO.,LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	Myanmar
POSCO-Italy Processing Center	Stainless steel sheet manufacturing and sales		88.89		11.11		100.00		88.89		11.11		100.00	Italy
Myanmar POSCO C&C Company,Limited.	Steel manufacturing and sales		—		70.00		70.00		—		70.00		70.00	Myanmar
POSCO DX VIETNAM	IT service and electric control engineering		—		100.00		100.00		—		100.00		100.00	Vietnam
POSCO INTERNATIONAL GLOBAL DEVELOPMENT PTE.LTD.	Real estate development		—		75.00		75.00		—		75.00		75.00	Singapore
Myanmar POSCO Engineering & Construction Company, Limited.	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Myanmar
POS-Minerals Corporation	Mine development management and sales		—		100.00		100.00		—		100.00		100.00	USA
POSCO(Wuhu) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		68.57		31.43		100.00		68.57		31.43		100.00	China
POSCO Engineering and Construction India Private Limited	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	India
POSCO COATED STEEL (THAILAND) CO., LTD.	Vehicle steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Thailand
POSCO INTERNATIONAL AMARA Co., Ltd.	Real estate development		—		85.00		85.00		—		85.00		85.00	Myanmar
POSCO WIDE-CHINA CO., LTD	Business facility maintenance		—		100.00		100.00		—		100.00		100.00	China
POSCO-Mexico Villagran Wire-rod Processing Center	Steel manufacturing and sales		—		66.75		66.75		56.75		10.00		66.75	Mexico
POSCO ChengDu Processing Center	Steel manufacturing and sales		—		43.00		43.00		—		43.00		43.00	China
POSCO(Suzhou) Steel Processing Center CO., LTD.	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	China
POSCO E&C SMART S DE RL DE CV	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Mexico
POSCO Philippine Manila Processing Center, Inc.	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Philippines
POSCO E&C HOLDINGS CO.,Ltd.	Holding company		—		100.00		100.00		—		100.00		100.00	Thailand
POSCO INTERNATIONAL POWER (PNGLAE) LTD.	Electricity production		—		100.00		100.00		—		100.00		100.00	Papua New Guinea
PT.KRAKATAU POSCO SOCIAL ENTERPRISE SERVICES INDONESIA	Social enterprise		—		99.91		99.91		—		100.00		100.00	Indonesia
Ventanas Philippines Construction Inc	Construction		—		100.00		100.00		—		100.00		100.00	Philippines
SANPU TRADING Co., Ltd.	Raw material trading		—		70.04		70.04		—		70.04		70.04	China
Zhangjiagang BLZ Pohang International Trading	Steel Intermediate trade		—		100.00		100.00		—		100.00		100.00	China
POSCO RU Limited Liability Company	Trade and business development		100.00		—		100.00		100.00		—		100.00	Russia
GOLDEN LACE POSCO INTERNATIONAL CO., LTD.	Rice processing		—		60.00		60.00		—		60.00		60.00	Myanmar
POSCO DX China CO.,LTD	IT service and DVR business		—		100.00		100.00		—		100.00		100.00	China
Pos-Sea Pte Ltd	Steel Intermediate trade		—		100.00		100.00		—		100.00		100.00	Singapore
POSCO Europe Steel Distribution Center	Logistics & Steel sales		—		70.00		70.00		—		70.00		70.00	Slovenia
POSCO ENGINEERING (THAILAND) CO., LTD.	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Thailand
POSCO VST CO., LTD.	Stainless steel sheet manufacturing and sales		95.65		—		95.65		95.65		—		95.65	Vietnam
POSCO INTERNATIONAL UKRAINE, LLC.	Grain sales		—		100.00		100.00		—		100.00		100.00	Ukraine
Zhangjiagang Pohang Refractories Co., Ltd.	Refractory materials sales & furnace maintenance		—		51.00		51.00		—		51.00		51.00	China
POSCO Maharashtra Steel Private Limited	Steel manufacturing and sales		100.00		—		100.00		100.00		—		100.00	India

15

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

		Ownership (%)
		December 31, 2023						December 31, 2022
	Principal operations	POSCO HOLDINGS		Subsidiaries		Total		POSCO HOLDINGS		Subsidiaries		Total		Region
[Foreign]
POSCO INDIA PROCESSING CENTER PRIVATE LIMITED	Steel manufacturing and sales		93.34		1.98		95.32		93.34		1.98		95.32	India
POSCO TNPC Otomotiv Celik San. Ve Tic. A.S	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	Turkiye
POSCO Vietnam Processing Center Joint Stock Company	Steel manufacturing and sales		84.04		15.96		100.00		94.05		5.95		100.00	Vietnam
POSCO(Liaoning) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO-Indonesia Jakarta Processing Center	Steel manufacturing and sales		—		92.20		92.20		70.51		21.69		92.20	Indonesia
PT.MOTTA RESOURCES INDONESIA	Mine development		65.00		—		65.00		65.00		—		65.00	Indonesia
POSCO TMC INDIA PRIVATE LIMITED	Steel manufacturing and sales		—		100.00		100.00		—		100.00		100.00	India
POSCO AMERICA ALABAMA PROCESSING CENTER CO., LTD.	Steel manufacturing and sales		—		97.80		97.80		—		97.80		97.80	USA
POSCO(Yantai) Automotive Processing Center Co., Ltd.	Steel manufacturing and sales		90.00		10.00		100.00		90.00		10.00		100.00	China
POSCO India Steel Distribution Center Private Ltd.	Steel logistics		—		100.00		100.00		—		100.00		100.00	India
POSCO YAMATO VINA STEEL JOINT STOCK COMPANY	Steel manufacturing and sales		—		51.00		51.00		—		51.00		51.00	Vietnam
PT.POSCO DX INDONESIA	IT service and electric control engineering		—		66.99		66.99		—		66.99		66.99	Indonesia
POSCO NCR Coal Ltd.	Coal sales		—		100.00		100.00		—		100.00		100.00	Canada
POSCO WA PTY LTD	Iron ore sales & mine development		100.00		—		100.00		100.00		—		100.00	Australia
POSCO AUSTRALIA GP PTY LIMITED	Resource development		—		100.00		100.00		—		100.00		100.00	Australia
PT. KRAKATAU POSCO ENERGY	Electricity production construction and operation		—		55.00		55.00		—		90.00		90.00	Indonesia
POSCO INTERNATIONAL AMERICA CORP.	Trading business		—		100.00		100.00		—		100.00		100.00	USA
POSCO INTERNATIONAL Deutschland GMBH	Trading business		—		100.00		100.00		—		100.00		100.00	Germany
POSCO INTERNATIONAL JAPAN CORP.	Trading business		—		100.00		100.00		—		100.00		100.00	Japan
POSCO INTERNATIONAL SINGAPORE PTE. LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	Singapore
POSCO INTERNATIONAL ITALIA S.R.L.	Trading business		—		100.00		100.00		—		100.00		100.00	Italy
POSCO INTERNATIONAL (CHINA) CO., LTD	Trading business		—		100.00		100.00		—		100.00		100.00	China
POSCO INTERNATIONAL TEXTILE LLC.	Textile manufacturing		—		100.00		100.00		—		100.00		100.00	Uzbekistan
POSCO INTERNATIONAL AUSTRALIA HOLDINGS PTY. LTD.	Resource development		—		100.00		100.00		—		100.00		100.00	Australia
POSCO MAURITIUS LIMITED	Coal development and sales		—		100.00		100.00		—		100.00		100.00	Mauritius
PT. KRAKATAU POSCO	Steel manufacturing and sales		—		50.00		50.00		50.00		—		50.00	Indonesia
POSCO INTERNATIONAL MEXICO, S.A de C.V	Trading business		—		100.00		100.00		—		100.00		100.00	Mexico
POSCO INTERNATIONAL MALAYSIA SDN BHD	Trading business		—		100.00		100.00		—		100.00		100.00	Malaysia
PT.POSCO INDONESIA INTI	Consulting		100.00		—		100.00		100.00		—		100.00	Indonesia
POSCO INTERNATIONAL SHANGHAI CO., LTD.	Trading business		—		100.00		100.00		—		100.00		100.00	China
PGSF, L.P.	Investment in bio tech Industry		—		—		—		—		100.00		100.00	USA
POSCO INTERNATIONAL INDIA PVT., LTD	Trading business		—		100.00		100.00		—		100.00		100.00	India
POSCO(Dalian) IT Center Development Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	China
PT. POSCO E&C INDONESIA	Civil engineering and construction		—		100.00		100.00		—		100.00		100.00	Indonesia
HUME COAL PTY LTD	Raw material manufacturing		—		100.00		100.00		—		100.00		100.00	Australia
Brazil Sao Paulo Steel Processing Center	Steel manufacturing and sales		—		76.00		76.00		—		76.00		76.00	Brazil
POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA.	Construction		—		100.00		100.00		—		100.00		100.00	Brazil
POSCO ASSAN TST STEEL INDUSTRY Inc	Steel manufacturing and sales		60.00		10.00		70.00		60.00		10.00		70.00	Turkiye
HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd.	Real estate development and investment		—		100.00		100.00		—		100.00		100.00	Hongkong
JB CLARK HILLS	Apartment construction		—		70.00		70.00		—		70.00		70.00	Philippines
POS-LT Pty Ltd	Lithium mining investment		—		100.00		100.00		—		100.00		100.00	Australia
ZHEJIANG POSCO-HUAYOU ESM CO., LTD	Anode material manufacturing		14.67		45.33		60.00		18.70		41.30		60.00	China
POSCO Argentina S.A.U.	Mineral exploration/manufacturing/sales		100.00		—		100.00		100.00		—		100.00	Argentina
GRAIN TERMINAL HOLDING PTE. LTD.	Trading business		—		75.00		75.00		—		75.00		75.00	Singapore
Mykolaiv Milling Works PJSC.	Grain trading		—		100.00		100.00		—		100.00		100.00	Ukraine
Yuzhnaya Stevedoring Company Limited LLC.	Cargo handling		—		100.00		100.00		—		100.00		100.00	Ukraine
Posco International (Thailand) Co., Ltd.	Trade		—		100.00		100.00		—		100.00		100.00	Thailand
PT POSCO INTERNATIONAL INDONESIA	Trade		—		100.00		100.00		—		100.00		100.00	Indonesia
PEC POWERCON SDN. BHD.	Construction and engineering service		—		100.00		100.00		—		100.00		100.00	Malaysia
Poland Legnica Sourcing Center Sp. z o.o	Non-ferrous metal Smetling		100.00		—		100.00		100.00		—		100.00	Poland
POSCO INTERNATIONAL E&P MALAYSIA SDN.
BHD.	Extraction of Crude petroleum and Natural gas		—		100.00		100.00		—		100.00		100.00	Malaysia
AGPA PTE. LTD.	Holding company		—		100.00		100.00		—		100.00		100.00	Singapore
Senex Holdings PTY LTD(*2)	Resource Development		—		50.10		50.10		—		50.10		50.10	Australia
Posco International Mexico e-Mobility S.A DE C.V.	Electric Vehicle Parts Manufacturing		—		100.00		100.00		—		100.00		100.00	Mexico
Posco Future Materials Canada Inc. (formerly, POSCO CHEMICAL CANADA INC)	Holding company		—		100.00		100.00		—		100.00		100.00	Canada
ULTIUM CAM GP INC.	Holding company		—		85.00		85.00		—		85.00		85.00	Canada
ULTIUM CAM LIMITED PARTNERSHIP	Anode material manufacturing		—		85.00		85.00		—		85.00		85.00	Canada
POSCO(Wuhan) Automotive Processing Center Co.,Ltd	Steel manufacturing and sales		68.57		31.43		100.00		68.57		31.43		100.00	China
POSCO BRAZIL LTDA	Office Administration, Management Consulting		—		100.00		100.00		—		100.00		100.00	Brazil
Port Hedland Green Steel Pty Ltd	Iron and steel manufacturing		—		100.00		100.00		—		—		—	Australia
PT AGPA REFINERY COMPLEX	Animal/vegetable oil manufacturing		—		60.00		60.00		—		—		—	Indonesia
POSCO MOBILITY SOLUTION POLAND Sp. z o.o.,	Manufacturing, automobile motor parts		—		100.00		100.00		—		—		—	Poland
PT POSCO INTERNATIONAL ENP INDONESIA	Crude oil and natural gas		—		100.00		100.00		—		—		—	Indonesia
POSCO INTERNATIONAL E&P USA Inc.	Carbon capture and storage, resource development		—		100.00		100.00		—		—		—	USA
POSCO FLOW CANADA INC.	Transporting and warehousing		—		100.00		100.00		—		—		—	Canada
POSCO FLOW (Shanghai) Co.,Ltd	Transporting		—		100.00		100.00		—		—		—	China

(*1) POSCO ENERGY CO., LTD. was merged into POSCO INTERNATIONAL Corporation as of January 1, 2023.

(*2) Senex Holdings PTY LTD includes 22 subsidiaries including Senex Energy Limited.

16

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(*3) During the year ended December 31, 2023, the Company acquired an additional 50% of the shares held by external shareholders of QSONE Co.,Ltd., which was previously classified as investment in associate. Accordingly, the entity was newly included in consolidated subsidiary due to obtaining control of the entity

The controlling company’s interests in the subsidiaries increased byW250,363 million (POSCO INTERNATIONAL Corporation and others) and decreasedW7,827 million (POSCO FUTURE M CO.,LTD. and others) in 2023 and 2022, respectively, as a result of changes in the Company’s ownership investment in subsidiaries that did not result in a loss of control.

POSCO HOLDINGS INC. received dividends ofW441,113 million andW122,838 million from its subsidiaries in aggregate in 2023 and 2022, respectively.

As of December 31, 2023, there are no restrictions on the ability of subsidiaries to transfer funds to the controlling company, such as in the form of cash dividends, repayment of loans or payment of advances.

(c) Summarized financial information of principal subsidiaries as of and for the years ended December 31, 2023 and 2022 are as follows:

1) December 31, 2023

(in millions of Won)
									Net income
Company	Assets		Liabilities		Equity		Sales		(loss)
[Domestic]
POSCO		45,825,529		12,716,600		33,108,929		38,971,567		1,179,665
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)		7,861,704		4,455,205		3,406,499		9,534,592		198,203
POSCO STEELEON Co., Ltd.		529,525		174,724		354,801		1,132,510		32,276
POSCO DX (formerly, POSCO ICT)		871,343		418,446		452,897		1,445,326		88,527
eNtoB Corporation		164,228		97,127		67,101		1,110,222		8,491
POSCO FUTURE M CO.,LTD. (formerly, POSCO CHEMICAL CO., LTD.)		5,756,556		3,327,874		2,428,682		4,457,201		32,140
POSCO M-TECH		154,927		39,170		115,757		341,410		4,868
POSCO INTERNATIONAL Corporation		12,565,027		7,170,143		5,394,884		28,536,917		632,519
POSCO MOBILITY SOLUTION		1,036,342		448,319		588,023		1,432,416		(24,265	)
POSCO-Pilbara LITHIUM SOLUTION Co., Ltd.		898,301		558,449		339,852		4,673		(34,198	)
QSONE Co.,Ltd.(* 1)		232,848		53,646		179,202		18,044		6,037

(in millions of Won)
										Net income
Company	Assets		Liabilities		Equity			Sales		(loss)
[Foreign]
POSCO America Corporation		153,900		7,980		145,920			12,231		16,690
POSCO AUSTRALIA PTY LTD(* 2)		1,322,381		133,612		1,188,769			224,985		152,896
POSCO Asia Co., Ltd.		1,130,637		862,642		267,995			83,539		16,275
POSCO-CTPC Co., Ltd.		113,805		59,166		54,639			250,167		1,093
POSCO (Zhangjiagang) Stainless Steel Co.,Ltd.		936,933		459,269		477,664			3,359,087		(169,873	)
POSCO (Thailand) Company Limited		185,280		82,456		102,824			440,532		(3,621	)
Qingdao Pohang Stainless Steel Co., Ltd.		128,820		23,453		105,367			296,883		(13,362	)
POSCO (Suzhou) Automotive Processing Center Co., Ltd.		371,734		198,451		173,283			729,700		6,364
POSCO-China Holding Corp.		986,501		515,610		470,891			31,329		(22,326	)
POSCO JAPAN Co., Ltd.		201,184		5,300		195,884			16,453		3,705
POSCO-India Pune Processing Center. Pvt. Ltd.		222,439		175,594		46,845			436,248		1,576
POSCO Japan PC CO.,LTD		335,780		254,557		81,223			623,375		9,079
POSCO-CFPC Co., Ltd.		296,489		229,961		66,528			843,934		1,900
POSCO MPPC S.A. de C.V.		521,303		415,819		105,484			934,346		(278	)
POSCO-VIETNAM Co., Ltd.		309,476		299,054		10,422			737,530		(5,594	)
POSCO MEXICO S.A. DE C.V.		726,121		500,597		225,524			846,600		(8,530	)
POSCO Thainox Public Company Limited		433,638		100,506		333,132			551,000		(4,170	)
POSCO Center Beijing		427,898		246,190		181,708			37,028		5,623
POSCO COATED STEEL (THAILAND) CO., LTD.		307,619		220,259		87,360			386,992		1,459
POSCO INTERNATIONAL AMARA Co., Ltd.		306,105		400,124		(94,019	)		33,288		(21,723	)
POSCO VST CO., LTD.		251,525		196,382		55,143			547,889		(36,723	)
POSCO Maharashtra Steel Private Limited		1,319,232		791,431		527,801			1,763,374		58,669
POSCO INDIA PROCESSING CENTER PRIVATE LIMITED		344,678		251,870		92,808			896,860		13,268
POSCO Vietnam Processing Center Joint Stock Company		238,694		127,038		111,656			577,064		7,003
POSCO(Liaoning) Automotive Processing Center Co., Ltd.		99,186		48,858		50,328			229,524		3,718
POSCO YAMATO VINA STEEL JOINT STOCK COMPANY		434,496		127,087		307,409			395,261		8,993
PT. KRAKATAU POSCO ENERGY		263,986		94,202		169,784			34,158		13,895
POSCO INTERNATIONAL AMERICA CORP.		629,533		473,572		155,961			2,282,133		29,445
POSCO INTERNATIONAL Deutschland GMBH		400,762		384,113		16,649			946,974		3,413
POSCO INTERNATIONAL JAPAN CORP.		895,043		744,065		150,978			2,939,318		27,022
POSCO INTERNATIONAL SINGAPORE PTE. LTD.		294,527		280,090		14,437			3,025,822		7,452
POSCO INTERNATIONAL ITALIA S.R.L.		226,148		209,374		16,774			777,756		1,498
PT. KRAKATAU POSCO		3,475,929		2,747,948		727,981			3,130,551		65,827

17

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(in millions of Won)
									Net income
Company	Assets		Liabilities		Equity		Sales		(loss)
[Foreign]
POSCO ASSAN TST STEEL INDUSTRY Inc		471,071		456,913		14,158		416,096		(73,032	)
POSCO AMERICA ALABAMA PROCESSING CENTER CO., LTD.		152,896		135,087		17,809		251,884		(3,025	)
POSCO Argentina S.A.U.		1,658,879		542,525		1,116,354		—		(73,807	)
POSCO-MKPC SDN BHD		132,043		59,916		72,127		244,754		8,770
Senex Holdings PTY LTD(* 2)		1,623,493		802,259		821,234		246,493		14,239

(*1) The sales and net income occurred after the inclusion as a subsidiary.

(*2) Summarized financial information of POSCO AUSTRALIA PTY LTD and Senex Holdings PTY LTD, a subsidiary of POSCO HOLDINGS INC., are based on its consolidated financial information. The financial information of the other entities is based on separate financial statements of each entity.

2) December 31, 2022

(in millions of Won)
									Net income
Company	Assets		Liabilities		Equity		Sales		(loss)
[Domestic]
POSCO		44,644,744		12,148,120		32,496,624		35,152,358		503,076
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)		7,065,745		3,814,041		3,251,704		8,124,502		130,657
POSCO STEELEON Co., Ltd.		531,890		201,053		330,837		1,181,625		17,480
POSCO DX (formerly, POSCO ICT)		795,602		388,531		407,071		1,108,702		43,463
eNtoB Corporation		192,658		128,012		64,646		988,417		10,548
POSCO FUTURE M CO.,LTD. (formerly, POSCO CHEMICAL CO., LTD.)		4,276,626		1,849,501		2,427,125		3,041,287		114,853
POSCO M-TECH		147,012		32,170		114,842		342,176		5,176
POSCO ENERGY CO., LTD.		4,298,692		2,638,807		1,659,885		3,605,965		190,704
POSCO INTERNATIONAL Corporation		9,186,552		5,837,152		3,349,400		32,566,135		289,472
POSCO MOBILITY SOLUTION		966,837		350,253		616,584		1,420,467		19,246
POSCO-Pilbara LITHIUM SOLUTION Co., Ltd.		404,338		30,418		373,920		12,566		(6,737	)

(in millions of Won)
										Net income
Company	Assets		Liabilities		Equity			Sales		(loss)
[Foreign]
POSCO America Corporation		135,502		8,296		127,206			11,380		20,379
POSCO AUSTRALIA PTY LTD(* 1)		1,144,012		145,830		998,182			265,615		216,924
POSCO Asia Co., Ltd.		1,544,639		1,291,250		253,389			41,863		9,904
POSCO-CTPC Co., Ltd.		130,536		76,730		53,806			266,938		657
POSCO (Zhangjiagang) Stainless Steel Co.,Ltd.		1,164,609		518,106		646,503			4,208,952		(77,395	)
POSCO (Thailand) Company Limited		166,117		62,382		103,735			504,806		3,662
Qingdao Pohang Stainless Steel Co., Ltd.		132,871		13,999		118,872			380,792		(13,525	)
POSCO (Suzhou) Automotive Processing Center Co., Ltd.		455,662		288,070		167,592			959,115		514
POSCO-China Holding Corp.		1,094,494		600,058		494,436			38,601		(34,522	)
POSCO JAPAN Co., Ltd.		223,947		27,259		196,688			269,717		24,344
POSCO-India Pune Processing Center. Pvt. Ltd.		161,519		116,774		44,745			521,504		7,354
POSCO Japan PC CO.,LTD		386,553		311,011		75,542			635,651		8,868
POSCO-CFPC Co., Ltd.		328,843		263,965		64,878			1,124,718		14
POSCO MPPC S.A. de C.V.		546,916		442,970		103,946			881,066		8,365
POSCO-VIETNAM Co., Ltd.		321,430		305,758		15,672			885,599		(39,726	)
POSCO MEXICO S.A. DE C.V.		726,081		496,146		229,935			785,821		(8,832	)
POSCO Thainox Public Company Limited		419,425		83,801		335,624			900,653		7,411
POSCO Center Beijing		440,329		263,555		176,774			44,183		8,668
POSCO COATED STEEL (THAILAND) CO., LTD.		319,379		235,672		83,707			458,059		(1,305	)
POSCO INTERNATIONAL AMARA Co., Ltd.		308,643		379,974		(71,331	)		34,000		(12,626	)
POSCO VST CO., LTD.		319,010		229,180		89,830			843,998		17,071
POSCO Maharashtra Steel Private Limited		1,353,120		888,574		464,546			1,901,490		(41,471	)

18

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(in millions of Won)
									Net income
Company	Assets		Liabilities		Equity		Sales		(loss)
[Foreign]
POSCO INDIA PROCESSING CENTER PRIVATE LIMITED		334,723		255,895		78,828		916,943		14,296
POSCO Vietnam Processing Center Joint Stock Company		260,014		168,843		91,171		783,750		4,930
POSCO(Liaoning) Automotive
Processing Center Co., Ltd.		112,033		64,894		47,139		276,169		2,682
POSCO YAMATO VINA STEEL JOINT STOCK COMPANY		446,881		153,467		293,414		461,530		355
PT. KRAKATAU POSCO ENERGY		282,988		114,371		168,617		34,599		16,634
POSCO INTERNATIONAL AMERICA CORP.		536,696		411,978		124,718		2,658,298		31,244
POSCO INTERNATIONAL Deutschland GMBH		403,283		390,779		12,504		979,225		5,398
POSCO INTERNATIONAL JAPAN CORP.		928,656		798,617		130,039		2,921,851		26,410
POSCO INTERNATIONAL SINGAPORE PTE. LTD.		257,492		250,532		6,960		4,955,151		(2,985	)
POSCO INTERNATIONAL ITALIA S.R.L.		221,860		207,405		14,455		930,000		3,539
POSCO INTERNATIONAL (CHINA) CO., LTD		61,065		34,772		26,293		255,863		2,327
PT. KRAKATAU POSCO		3,973,061		3,321,182		651,879		3,006,300		137,787
POSCO INTERNATIONAL MALAYSIA SDN BHD		4,742		1,739		3,003		243,764		248
POSCO ASSAN TST STEEL INDUSTRY Inc		574,280		489,503		84,777		880,462		48,827
POSCO AMERICA ALABAMA PROCESSING CENTER CO., LTD.		158,116		137,677		20,439		238,131		(1,638	)
POSCO Argentina S.A.U.		766,020		15,395		750,625		59		(669	)
POSCO-MKPC SDN BHD		153,081		85,891		67,190		244,967		14,472
POSCO INTERNATIONAL VIETNAM CO.,LTD.		14,283		6,792		7,491		280,690		788
POSCO INTERNATIONAL SHANGHAI CO.,LTD.		49,752		39,951		9,801		228,844		(525	)
Senex Holdings PTY LTD(* 1)		1,386,504		604,124		782,380		186,794		24,621

(*1) Summarized financial information of POSCO AUSTRALIA PTY LTD and Senex Holdings PTY LTD, a subsidiary of POSCO HOLDINGS INC., are based on its consolidated financial information. The financial information of the other entities is based on separate financial statements of each entity.

19

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(d) Details of non-controlling interests by entity as of and for the years ended December 31, 2023 and 2022 are as follows:

1) December 31, 2023

(in millions of Won)	POSCO INTERNATIONAL Corporation			PT. KRAKATAU POSCO			POSCO FUTURE M CO., LTD			POSCO Eco & Challenge CO., LTD.			POSCO DX CO., LTD.			Others			Total
Current assets		5,717,154			810,988			2,049,879			5,577,527			561,725			10,280,517			24,997,790
Non-current assets		5,787,515			2,664,861			3,056,029			2,019,351			184,667			8,086,165			21,798,588
Current liabilities		(4,379,238	)		(1,318,286	)		(1,221,829	)		(3,866,258	)		(328,558	)		(8,445,386	)		(19,559,555	)
Non-current liabilities		(2,938,204	)		(1,429,590	)		(2,228,191	)		(522,622	)		14,841			(2,680,943	)		(9,784,709	)
Equity		4,187,227			727,973			1,655,888			3,207,998			432,675			7,240,353			17,452,114
Non-controlling interests		1,121,823			363,987			666,420			1,514,203			149,812			2,600,462			6,416,707
Sales		28,542,084			3,130,551			4,457,201			9,536,262			1,439,715			29,630,513			76,736,326
Profit (loss) for the period		528,592			72,609			63,024			188,436			88,104			(400,634	)		540,131
Profit (loss) attributable to non-controlling interests		141,618			36,304			25,365			88,943			30,506			(143,784	)		178,952
Cash flows from operating activities		258,910			182,199			(193,324	)		(168,120	)		7,257			95,392			182,314
Cash flows from investing activities		53,876			(13,992	)		(389,075	)		192,970			6,832			(334,276	)		(483,665	)
Cash flows from financing activities (before dividends to non-controlling interest)		(324,134	)		(154,212	)		577,158			63,164			(319	)		330,622			492,279
Dividends to non-controlling interest		(47,765	)		—			(9,344	)		(9,867	)		(3,941	)		(19,963	)		(90,880	)
Effect of exchange rate fluctuation on cash held		651			46			(1	)		260			(63	)		864			1,757
Net increase (decrease) in cash and cash equivalents		(58,462	)		14,041			(14,586	)		78,407			9,766			72,639			101,805

2) December 31, 2022

(in millions of Won)	POSCO INTERNATIONAL Corporation			PT. KRAKATAU POSCO			POSCO FUTURE M CO., LTD			POSCO Eco & Challenge CO., LTD.			POSCO DX CO., LTD.			Others			Total
Current assets		5,289,899			1,125,123			1,832,804			4,732,474			585,766			10,305,149			23,871,215
Non-current assets		3,470,861			3,062,378			2,261,649			2,012,038			226,598			7,264,540			18,298,064
Current liabilities		(3,809,495	)		(2,486,616	)		(920,656	)		(3,125,795	)		(419,452	)		(8,680,121	)		(19,442,135	)
Non-current liabilities		(2,203,923	)		(834,456	)		(938,447	)		(642,951	)		(4,431	)		(2,094,774	)		(6,718,982	)
Equity		2,747,342			866,429			2,235,350			2,975,766			388,481			6,794,794			16,008,162
Non-controlling interests		1,018,764			433,214			899,416			1,404,588			134,484			2,480,625			6,371,091
Sales		32,532,465			3,006,300			3,041,287			8,123,147			1,101,037			34,933,760			82,737,996
Profit for the period		323,749			140,967			114,365			148,588			42,832			269,926			1,040,427
Profit attributable to non-controlling interests		120,052			70,483			46,016			70,135			14,828			106,091			427,605
Cash flows from operating activities		480,927			342,484			(27,009	)		(54,506	)		(594	)		68,906			810,208
Cash flows from investing activities		(389,092	)		(372,345	)		(26,492	)		160,750			3,973			(619,072	)		(1,242,278	)
Cash flows from financing activities (before dividends to non-controlling interest)		136,954			(115,046	)		107,266			154,946			(561	)		614,001			897,560
Dividends to non-controlling interest		(36,585	)		—			(9,360	)		(14,800	)		(2,628	)		(16,921	)		(80,294	)
Effect of exchange rate fluctuation on cash held		853			12,690			(2,469	)		(450	)		(35	)		(1,412	)		9,177
Net increase (decrease) in cash and cash equivalents		193,057			(132,217	)		41,936			245,940			155			45,502			394,373

20

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(e) Details of associates and joint ventures

1) Associates

Details of associates as of December 31, 2023 and 2022 are as follows:

			Ownership (%)
Investee		Category of business	2023		2022		Region
[Domestic]
New Songdo International City Development, LLC		Real estate rental		29.90		29.90	Incheon
Gale International Korea, LLC		Real estate rental		29.90		29.90	Incheon
SNNC		Raw material manufacturing and sales		49.00		49.00	Gw angyang
KONES, Corp.		Technical service		27.41		26.72	Gyeongju
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		Real estate development		29.53		29.53	Chungju
DAEHO GLOBAL MANAGEMENT CO., LTD.		Investment advisory service		35.82		35.82	Pohang
Mokpo Deayang Industrial Corporation(* 3)		Real estate development and rental		—		27.40	Mokpo
Gunggi Green Energy(* 1)		Electricity generation		19.00		19.00	Hw aseong
Pohang Special Welding Co.,Ltd.		Welding material and tools manufacturing and sales		50.00		50.00	Pohang
EQP POSCO Global NO1 Natural Resources Private Equity Fund		Investment in new technologies		27.23		27.23	Seoul
KC Chemicals CORP.(* 1)		Machinery manufacturing		18.76		18.76	Hw aseong
POSTECH Social Enterprise Fund(* 3)		Investment in new technologies		—		9.17	Seoul
QSONE Co.,Ltd.(* 5)		Real estate rental		—		50.00	Seoul
Chun-cheon Energy Co., Ltd		Electricity generation		49.10		49.10	Chuncheon
Noeul Green Energy(* 1)		Electricity generation		10.00		10.00	Seoul
Posco-IDV Grow th Ladder IP Fund(* 1)		Investment in new technologies		17.86		17.86	Seoul
DaeSung SnM Co., Ltd.(* 1) (formerly, Daesung Steel)		Steel sales		17.54		17.54	Busan
Pohang E&E Co., LTD		Investment in w aste energy		30.00		30.00	Pohang
POSCO Energy Valley Fund		Investment in new technologies		22.08		20.00	Pohang
Hyundai Invest Guggenheim CLO Qualified Private Special Asset Trust No.2(* 4)		Investment in new technologies		—		38.57	Seoul
Posco Agri-Food Export Fund		Investment in new technologies		30.00		30.00	Seoul
Posco Culture Contents Fund		Investment in new technologies		31.67		31.67	Seoul
PCC Amberstone Private Equity Fund 1(* 1)		Investment in new technologies		8.80		8.80	Seoul
UITrans LRT Co., Ltd.		Transporting		38.19		38.19	Seoul
POSCO Advanced Technical Staff Fund(* 1)		Investment in new technologies		15.87		15.86	Seoul
POSCO 4th Industrial Revolution Fund(* 1)		Investment in new technologies		19.05		19.05	Seoul
Pureun Tongyeong Enviro Co., Ltd.		Sew erage treatment		20.40		20.40	Tongyeong
Pure Gimpo Co., Ltd.		Construction		28.79		28.79	Gimpo
Posgreen Co., Ltd.(* 1)		Lime and plaster manufacturing		19.00		19.00	Gw angyang
Clean Iksan Co., Ltd.		Construction		23.50		23.50	Iksan
Innovalley Co., Ltd.		Real estate development		29.48		28.77	Yongin
BLUE OCEAN Private Equity Fund		Private equity financial		27.52		27.52	Seoul
Pocheon-Hw ado Highw ay Corp.		Investment in Expressw ay		27.89		27.64	Incheon
INNOPOLIS Job Creation Fund II(* 1)	��	Investment in new technologies		6.13		6.13	Seoul
Samcheok Blue Pow er Co.,Ltd.		Generation of electricity		34.00		34.00	Samcheok
INKOTECH, INC.(* 1)		Electricity generation and sales		10.00		10.00	Seoul
PCC Social Enterprise Fund II(* 1)		Investment in new technologies business		16.67		16.67	Seoul
PCC Amberstone Private Equity Fund II(* 4)		Private equity trust		—		19.91	Seoul
PCC-Conar No.1 Fund(* 1)		Investment in new technologies business		15.49		15.34	Pohang
HYOCHUN Co., Ltd(* 1)		Screen door operation and other		18.00		18.00	Seoul
IBKC-PCC 1st Fund(* 1)		Investment in new technologies business		18.18		18.18	Pohang
2019 PCC Materials and Parts Fund(* 3)		Investment in new technologies business		—		8.70	Pohang
PCC-Woori LP secondary Fund(* 1)		Investment in new technologies business		18.85		18.85	Pohang
CURO CO.,LTD.(* 4)		Manufacturing, construction		—		0.53	Ulsan
Link City PFV Inc.		Contruction, housing construction and sales		44.00		44.00	Uijeongbu
BNH-POSCO Bio Healthcare Fund(* 1)		Investment in new technologies business		18.14		18.14	Pohang
PCC-BM Project Fund(* 1)		Investment in new technologies business		8.77		8.77	Pohang

21

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

		Ownership (%)
Investee	Category of business	2023		2022		Region
[Domestic]
Energy Innovation Fund I(* 1)	Investment in new technologies business		10.11		10.11		Pohang
Consus PS development Professional Private Real Estate Fund	Real estate development		50.00		50.00		Seoul
POSTECH Holdings 4th Fund	Private Investment Association		40.00		40.00		Pohang
SNU STH IP Fund	Private Investment Association		33.33		33.33		Seoul
PCC-BM Project Fund 2(* 1)	Investment in new technologies business		13.70		13.70		Pohang
G&G Technology Innovation Fund No.1(* 1)	Investment in new technologies business		13.97		13.97		Seongnam
NPX-PCC Edutech Fund(* 3)	Investment in new technologies business		—		19.96		Pohang
C&-PCC I Fund(* 3)	Investment in new technologies business		—		0.68		Pohang
2020 POSCO-MOORIM Bio New Technology Fund(* 3)	Investment in new technologies business		—		5.00		Pohang
PCC-KAI Secondary I Fund(* 1)	Investment in new technologies business		19.12		19.12		Seoul
2021 PCC Bio New Technology Fund(* 1)	Investment in new technologies		5.45		5.45		Pohang
Consus BG Private Real Estate Fund No.2	Real estate development		50.00		50.00		Seoul
Consus OS Private Real Estate Fund(* 3)	Real estate development		—		50.00		Seoul
Consus NewDeal Infra Development Specialized Private Special Asset Investment Trust 1	Investment Association		40.00		40.00		Seoul
Hybrid ESG Secondary Venture No.1(* 1)	Investment Association		18.27		18.27		Pohang
PCC-Bailey Project Fund(* 1)	Investment in new technologies business		7.27		7.27		Pohang
CR Inotech Co., Ltd.(* 1)	Manufacturing		19.00		19.00		Gwangyang
Posco JK Solid Solution Co., ltd.	Material manufacturing for rechargeable battery		40.00		40.00		Yangsan
PCC-Xinova PRE-IPO Fund(* 1)	Investment in new technologies business		9.09		9.09		Pohang
Erae Ams Co.,Ltd.(* 4)	Automotive parts manufacturing		—		16.66		Daegu
Consus OS Private Real Estate Fund 2(* 2)	Real estate development		50.00		—		Seoul

		Ownership (%)
Investee	Category of business	2023		2022		Region
[Foreign]
POSCHROME (PROPRIETARY) LIMITED	Raw material manufacturing and sales		50.00		50.00		South Africa
CAML RESOURCES PTY LTD	Raw material manufacturing and sales		33.34		33.34		Australia
Nickel Mining Company SAS	Raw material manufacturing and sales		49.00		49.00		New Caledonia
PT. Wampu Electric Pow er	Construction and civil engineering		20.00		20.00		Indonesia
POSK(Pinghu) Steel Processing Center Co., Ltd.	Steel processing and sales		20.00		20.00		China
PT.INDONESIA POS CHEMTECH CHOSUN Ref	Refractory manufacturing and sales		30.19		30.19		Indonesia
NS-Thainox Auto Co., Ltd.	Stainless sales and transporting		49.00		49.00		Thailand
PT. Tanggamus Electric Pow er(* 1)	Construction and civil engineering		17.50		17.50		Indonesia
LLP POSUK Titanium	Titanium manufacturing and sales		35.30		35.30		Kazakhstan
IMFA ALLOYS FINLEASE LTD	Raw material manufacturing and sales		24.00		24.00		India
KRAKATAU POS-CHEM DONG-SUH CHEMICAL(* 1)	Chemical by-product manufacturing and sales		19.00		19.00		Indonesia
9404-5515 Quebec Inc.	Investments management		25.85		25.85		Canada
Hamparan Mulya	Resource development		45.00		45.00		Indonesia
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd.	Steel manufacturing and sales		25.00		25.00		China
Eureka Moly LLC	Raw material manufacturing and sales		20.00		20.00		USA
KIRIN VIETNAM CO., LTD(* 1)	Panel manufacturing		19.00		19.00		Vietnam
POSCO SeAH Steel Wire(Nantong) Co., Ltd.	Steel processing and sales		25.00		25.00		China
POS-SeAH Steel Wire (Thailand) Co., Ltd.	Steel manufacturing and sales		25.00		25.00		Thailand
Jupiter Mines Limited(* 1)	Resource development		6.89		6.89		Australia
SAMHWAN VINA CO., LTD(* 1)	Steel manufacturing and sales		17.26		19.00		Vietnam
Saudi-Korean Company for Maintenance Properties Management LLC(* 1)	Building management		19.00		19.00		Saudi Arabia
NCR LLC	Coal sales		22.05		22.05		Canada
AMCI (WA) PTY LTD	Iron ore sales & mine development		49.00		49.00		Australia
SHANGHAI LANSHENG DAEWOO CORP.	Trading		49.00		49.00		China
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO IN’L TRADING CO., LTD.	Trading		49.00		49.00		China
General Medicines Company Ltd.	Medicine manufacturing and sales		33.00		33.00		Sudan
KOREA LNG LTD.	Gas production and sales		20.00		20.00		England
AES-VCM Mong Duong Pow er Company Limited	Electricity generation		30.00		30.00		Vietnam
South-East Asia Gas Pipeline Company Ltd.	Pipeline construction and management		25.04		25.04		Myanmar
GLOBAL KOMSCO Daew oo LLC	Cotton celluloid manufacturing and sales		35.00		35.00		Uzbekistan
POSCO-Poggenamp Electrical Steel Pvt. Ltd.	Steel processing and sales		26.00		26.00		India
Qingdao Pohang DGENX Stainless SteelPipeCo., Ltd	Exhaust meter manufacturing		40.00		40.00		China
SHINPOONG DAEWOO PHARMA VIETNAM CO.,LTD(* 1)	Medicine production		3.42		3.42		Vietnam
ZHEJIANG HUAYOU-POSCO ESM CO., LTD	Anode material Production		40.00		40.00		China
MONG DUONG FINANCE HOLDINGS B.V.	Financial Holdings		30.00		30.00		Netherlands
FQM Australia Holdings Pty Ltd	Non-ferrous metal Mining		24.32		30.00		Australia
Qingdao ZhongShou New Energy Technology Co.,Ltd(* 1)	Artificial Graphite manufacturing		13.00		13.01		China
Black Rock Mining LTD(* 1)	Mining		11.72		12.90		Australia
Inner Mongolia Sinuo New Material Technology Co.,Ltd(* 1)	Artificial Graphite manufacturing		12.85		12.85		China
ZHANGJIAGANG XIAO-SHA COIL SERVICE CENTER CO.,LTD(* 1)	Steel processing and sales		17.50		17.50		China
TMK Gulf International Pipe Industry L.L.C.(* 4)	Manufacturing		—		6.77		Oman

(*1) The Company has determined that it has significant influence even though the Company’s percentage of ownership is less than 20% considering the composition of board of directors.

(*2) During the year ended December 31, 2023, the entity was newly included as an associates.

22

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(*3) During the year ended December 31, 2023 the entities were excluded from associates due to liquidation.

(*4) During the year ended December 31, 2023, the entities were excluded from associates due to sale of interest, etc.

(*5) During the year ended December 31, 2023, the entities were excluded from associates and classified as a subsidiary due to the whole acquisition of external shareholders.

2) Joint ventures

Details of joint ventures as of December 31, 2023 and 2022 are as follows:

	Category of business	Ownership (%)
Investee		2023		2022		Region
[Domestic]
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)	Steel processing and sales		60.00		60.00		Gwangyang
POSCO-KB Shipbuilding Restructuring Fund	Investment in new technologies		18.75		18.75		Seoul
POSCO-NSC Venture Fund	Investment in new technologies		16.67		16.67		Seoul
PoscoPlutus Project 3rd Project fund	Investment in new technologies		5.96		5.96		Seoul
PCC Bio 2nd Fund	Investment in new technologies		19.72		19.72		Seoul
Union PCC Portfolio Fund	Investment in new technologies		14.12		14.12		Seoul
Eco Energy Solution Co., ltd.	Service		50.00		50.00		Seoul
[Foreign]
KOBRASCO	Steel materials manufacturing and sales		50.00		50.00		Brazil
CSP - Compania Siderurgica do Pecem(* 1)	Steel manufacturing and sales		—		20.00		Brazil
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.	Steel processing and sales		25.00		25.00		China
POSCO-SAMSUNG-Slovakia Processing Center	Steel processing and sales		30.00		30.00		Slovakia
YULCHON MEXICO S.A. DE C.V.	Tube for automobile manufacturing		11.85		11.85		Mexico
Hyunson Engineering & Construction HYENCO	Construction		4.89		4.89		Algeria
POSCO E&C Saudi Arabia	Civil engineering and construction		40.00		40.00		Saudi Arabia
Pos-Austem Suzhou Automotive Co., Ltd	Automotive parts manufacturing		19.90		19.90		China
POS-InfraAuto (Suzhou) Co., Ltd	Automotive parts manufacturing		16.20		16.20		China
POS-AUSTEM YANTAI AUTOMOTIVE CO., LTD	Automotive parts manufacturing		11.10		11.10		China
POS-AUSTEM WUHAN AUTOMOTIVE CO., LTD	Automotive parts manufacturing		7.43		7.43		China
DMSA/AMSA	Energy & resource development		3.89		3.89		Madagascar
Roy Hill Holdings Pty Ltd	Energy & resource development		12.50		12.50		Australia
POSCO-NPS Niobium LLC	Mine development		50.00		50.00		USA
HBIS-POSCO Automotive Steel Co., Ltd	Steel manufacturing and sales		50.00		50.00		China
PT NICOLE METAL INDUSTRY(* 2)	Nickel smelting		49.00		—		Indonesia

(*1) During the year ended December 31, 2023, the entity was excluded from joint ventures due to sales of interest.

(*2) During the year ended December 31, 2023, the entity was newly included as a joint venture.

23

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(f) New subsidiaries

Consolidated subsidiaries acquired or newly established during the year ended December 31, 2023 are as follows:

Company	Date of addition	Ownership (%)		Reason
QSONE Co.,Ltd.	March 2023		100.00	Reclassification from associate
POSCO PS Tech	April 2023		100.00	New establishment
POSCO PR Tech	April 2023		100.00	New establishment
POSCO PH Solution	April 2023		100.00	New establishment
POSCO GYS Tech	April 2023		100.00	New establishment
POSCO GYR Tech	April 2023		100.00	New establishment
POSCO GY Solution	April 2023		100.00	New establishment
PT AGPA REFINERY COMPLEX	May 2023		100.00	New establishment
Port Hedland Green Steel Pty Ltd	June 2023		100.00	New establishment
POSCO MOBILITY SOLUTION POLAND Sp. z o.o.,	July 2023		100.00	New establishment
PCC Facilities Component Fund	July 2023		60.00	New establishment
PT POSCO INTERNATIONAL ENP	September 2023		100.00	New establishment
POSCO INTERNATIONAL E&P USA Inc.	October 2023		100.00	New establishment
POSCO FLOW CANADA INC.	November 2023		100.00	New establishment
POSCO FLOW (Shanghai) Co.,Ltd	December 2023		100.00	New establishment
POSCO HOLDINGS CVC 2nd Fund	December 2023		100.00	New establishment
International Energy Expansion for Technology Innovation Fund	December 2023		60.00	New establishment

(g) Loss of control

Subsidiaries for which the Company has lost control during the year ended December 31, 2023 are as follows:

Company	Date of exclusion	Reason
POSCO ENERGY CO., LTD.	January 2023	Merged into POSCO INTERNATIONAL Corporation(* 1)
POS-CD PTY LTD	January 2023	Liquidation
POSCO ICT BRASIL	August 2023	Divestiture
PGSF, L.P.	September 2023	Liquidation
Future Creation Fund Postech Early Stage account	December 2023	Liquidation
Songdo Posco family Housing	December 2023	Liquidation

(*1) As a result of the merger transaction, the ownership of the Company in POSCO INTERNATIONAL Corporation increased from 62.92% to 73.21%.

2. Statement of Compliance

The consolidated financial statements have been prepared in accordance with Korean International Financial Reporting Standards (“K-IFRS”), as prescribed in the Act on External Audit of Stock Companies, etc. in the Republic of Korea.

The consolidated financial statements were authorized for issue by the Board of Directors on January 31, 2024 and will be submitted for approval at the shareholders’ meeting to be held on March 21, 2024.

24

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis, except for the following material items in the statement of financial position, as described in the accounting policy below.

(a) Derivatives instruments measured at fair value

(b) Financial instruments measured at fair value through profit or loss

(c) Financial instruments measured at fair value through other comprehensive income

(d) Defined benefit liabilities measured at the present value of the defined benefit obligation less the fair value of the plan assets

Functional and presentation currency

The financial statements of POSCO HOLDINGS INC. and subsidiaries are prepared in functional currency of the respective operation. These consolidated financial statements are presented in Korean Won, which is POSCO HOLDINGS INC.’s functional currency which is the currency of the primary economic environment in which POSCO HOLDINGS INC. operates.

Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with K-IFRS 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 prospectively.

(a) Judgments

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:

• Note 1 - Subsidiaries, associates and joint ventures

• Note 11 - Investments in associates and joint ventures

• Note 12 - Joint operations

(b) Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next fiscal year is included in the following notes:

• Note 15 - Goodwill and other intangible assets, net

• Note 20 - Provisions

• Note 21 - Employee benefits

• Note 23 - Financial instruments

• Note 30 - Revenue – contract balances

• Note 36 - Income taxes

• Note 39 - Commitments and contingencies

25

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(c) Measurement of fair value

The Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the financial officer.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of K-IFRS including the level in the fair value hierarchy in which such valuation techniques should be classified.

Significant valuation issues are reported to the Company’s Audit Committee.

When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

• Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2 - inputs other than quoted prices included in Level 1 that are observable for the assets or liability, either directly or indirectly.

• Level 3 - inputs for the assets or liability that are not based on observable market data.

If the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Information about the assumptions made in measuring fair values is included in the following note:

• Note 23 - Financial instruments

Changes in Accounting Policies

Except for the standards and amendments applied for the first time for the reporting period commenced January 1, 2023 described below, the accounting policies applied by the Company in these consolidated financial statements are the same as those applied by the Company in its consolidated financial statements as of and for the year ended December 31, 2022.

(a) K-IFRS No. 1012 “Income Tax” – Deferred Tax related to Assets and Liabilities arising from a Single Transaction

From January 1, 2023, the Company has applied the amendments related to deferred tax arising from assets and liabilities in a single transaction under K-IFRS No. 1012 “Income Tax”. The amendments narrow the scope of the initial recognition exemption to exclude transactions that give rise to equal and offsetting temporary differences. The Company recognized deferred tax assets for lease liabilities and deferred tax liabilities for right-of-use assets, respectively, and there is no impact on the statement of financial position as the requirements for offsetting are met in accordance with K-IFRS No. 1012 “Income Tax”.

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POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(b) K-IFRS No. 1001 “Presentation of Financial Statements” – Disclosure of Accounting Policies

Material accounting policy information is defined as information that is expected to influence the decision-making of primary users of financial statements considering with other information included in the financial statements, and is required to be disclosed. Therefore, the Company selectively disclosed material accounting policies in the annual consolidated financial statements for the year ended December 31, 2023. For further information, refer to note 3.

(c) K-IFRS No. 1008 “Accounting Policies, Changes in Accounting Estimates and Errors” – Definition of Accounting Estimates

For accounting estimates defined as monetary amounts in the financial statements, a change in measurement methods or inputs are clarified as changes in accounting estimates unless they result from the correction of prior period errors. The amendment is applied prospectively to the changes in accounting estimates that occur after the effective date. The amendments did not have any impact on the consolidated financial statements.

(d) K-IFRS No. 1012 “Income Tax” – Global Minimum Top-Up Tax

The amendments include a temporary mandatory exception from accounting for deferred tax arising from global minimum top-up tax, and new disclosure requirements of the exposure information of the Company in relation to the Pillar Two taxes in the annual consolidated financial statements. Refer to note 36 for information on the new disclosure requirements provided by revised accounting standards

27

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

3. Summary of Material Accounting Policy Information

The material accounting policy information applied by the Company in preparation of its consolidated financial statements are included below. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, except for those as disclosed in note 2.

Basis of consolidation

(a) Business combinations

The Company accounts for business combinations applying the acquisition method.

(b) Non-controlling interests

Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date.

(c) Subsidiaries

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.

(d) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses 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 Company’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.

(e) Business combination of entities or businesses under common control

In a business combination of entities or businesses under common control, the assets acquired and liabilities acquired are recognized at their carrying amounts in the consolidated financial statements of the Company. The difference between the consideration transferred and the carrying amount of the net assets acquired is adjusted in capital surplus.

Foreign operations

The assets and liabilities of foreign operations, whose functional currency is not the currency of a hyperinflationary economy, are translated to presentation currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to functional currency at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income.

28

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits, and short-term investments in highly liquid securities that are readily convertible to known amounts of cash with maturities of three months or less from the acquisition date and which are subject to an insignificant risk of changes in value. Equity investments are excluded from cash and cash equivalents.

Non-derivative financial assets

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets are initially recognized when the Company becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) is initially measured at fair value plus, for an item not at financial assets measured at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(a) Financial assets measured at amortized cost

Financial assets measured at amortized cost are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, gains and losses on foreign currency translation and impairment losses are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

(b) Equity instruments measured at fair value through other comprehensive income

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an investment-by-investment basis.

Equity instruments measured at fair value through other comprehensive income are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and never reclassified to profit or loss.

(c) Financial assets measured at fair value through profit or loss

All financial assets not classified as measured at amortized cost of fair value through other comprehensive income as described above are measured at fair value through profit or loss. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at fair value through other comprehensive income as at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets measured at fair value through profit or loss are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

29

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(e) Derecognition of financial assets

Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership. If a transfer does not result in derecognition because the Company has retained substantially all the risks and rewards of ownership of the transferred asset, the Company continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received.

Inventories

Inventory costs, except materials-in-transit in which costs are determined by using specific identification method, are determined by using the moving-weighted average method. The cost of inventories comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The allocation of fixed production overheads to the costs of finished goods or work in progress are based on the normal capacity of the production facilities.

Non-current assets held for sale

Non-current assets or disposal groups comprising assets and liabilities that are expected to be recovered primarily through sale rather than through continuing use and are highly probable for immediate sale in their present condition are classified as held for sale.

Investment property

Transaction costs are included in the initial measurement. Subsequently, investment property is carried at depreciated cost less any accumulated impairment losses. Depreciation methods, useful lives and residual values are identical to those applied for property, plant and equipment.

Property, plant and equipment

Property, plant and equipment are initially measured at cost and after initial recognition, are carried at cost less accumulated depreciation and any accumulated impairment losses. The cost of property, plant and equipment includes expenditures arising directly from the construction or acquisition of the asset, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and, when the Company has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

The cost of replacing a part of an item is recognized in the carrying amount of the item of property, plant and equipment, if the following recognition criteria are met:

(a) it is probable that future economic benefits associated with the item will flow to the Company, and

30

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(b) the cost can be measured reliably.

The carrying amount of the replaced part is derecognized at the time the replacement part is recognized. The costs of the day-to-day servicing of the item are recognized in profit or loss as incurred.

Items of property, plant and equipment are depreciated from the date they are available for use or, in respect of self-constructed assets, from the date that the asset is completed and ready for use. Other than land, the costs of an asset less its estimated residual value are depreciated. Depreciation of property, plant and equipment is recognized in profit or loss on a straight-line basis, which most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset, over the estimated useful lives of each component of an item of property, plant and equipment. Land is not depreciated.

The estimated useful lives of property, plant and equipment are as follows:

Buildings	5-50 years
Structures	4-50 years
Machinery and equipment	4-25 years
Vehicles	3-20 years
Tools	3-20 years
Furniture and fixtures	3-20 years
Lease assets	2-45 years
Bearer plants	20 years

Borrowing costs

The Company capitalizes borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. Other borrowing costs are recognized in expense as incurred.

Intangible assets

Intangible assets are measured initially at cost and, subsequently, are carried at cost less accumulated amortization and accumulated impairment losses.

Amortization of intangible assets except for goodwill is calculated on a straight-line basis over the estimated useful lives of intangible assets 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 club memberships are expected to be available for use, this intangible asset is determined as having an indefinite useful life and not amortized.

Intellectual property rights	4-25 years
Development expense	3-5 years
Port facilities usage rights	4-75 years
Other intangible assets	2-15 years

31

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Exploration for and evaluation of mineral resources

POSCO HOLDINGS INC. is engaged in exploration projects for mineral resources through subsidiaries, associates and joint ventures or other contractual arrangements. Expenditures related to the development of mineral resources are recognized as exploration or development intangible assets. The nature of these intangible assets are as follows:

(a) Exploration and evaluation assets

Exploration and evaluation assets consist of expenditures for topographical studies, geophysical studies and trenching. These assets are reclassified as development assets when it is proved that the exploration has identified commercially viable mineral deposit.

(b) Development assets

When proved reserves are determined and development is sanctioned, development expenditures incurred are capitalized. These expenditures include evaluation of oil fields, construction of oil and gas wells, drilling for feasibility and other related activities. Upon completion of development and inception of extraction for commercial production of developed proved reserves, the development assets are reclassified as either property, plant and equipment or as intellectual property rights (mining rights) under intangible assets based on the nature of the capitalized expenditure.

The respective property, plant and equipment and intellectual property (mining rights) are each depreciated and amortized based on proved reserves on a unit of production basis.

Government grants

(a) Grants related to assets

Government grants whose primary condition is that the Company purchase, construct or otherwise acquire long-term assets are deducted from the carrying amount of the assets and recognized in profit or loss on a systematic and rational basis over the life of the depreciable assets.

(b) Grants related to income

Government grants which are intended to compensate the Company for expenses incurred are deducted from the related expenses.

32

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Leases

1) As a lessee

At inception or reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date. Generally, the Company uses its incremental borrowing rate as the discount rate.

The Company determines its incremental borrowing rate by obtaining interest rates from various external sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

The Company presents right-of-use assets in the same line item as is presents underlying assets of the same nature that it owns, and lease liabilities are included in other payables on the consolidated statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

2) As a lessor

When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. The Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

The Company leases out its investment properties. The Company classifies these leases as operating leases. The Company recognize lease payments received under lease agreements as revenue on a straight-line basis over the lease term.

The Company provides subleases certain leased vessels and others.

33

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Impairment for financial assets

The Company recognizes loss allowances for expected credit losses on:

• financial assets measured at amortized cost

• debt instruments measured at fair value through other comprehensive income

• lease receivables, contractual assets, loan commitments, and financial guarantee contracts

(a) Judgments on credit risk

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due. The Company considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realizing security (if any is held). The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to investment grade defined by reliable credit rating agencies

(b) Expected credit losses

Expected credit losses for financial assets measured at amortized cost are recognized in profit or loss. Loss allowances for financial assets measured at amortized cost are deducted from carrying amount of the assets. For debt instruments measured at fair value through other comprehensive income, the loss allowance is charged to profit or loss and is recognized in other comprehensive income.

34

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(c) Credit-impaired financial assets

At each reporting date, the Company assesses whether financial assets measured at amortized cost and debt instrument measured at fair value through other comprehensive income are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Objective evidence that a financial asset or group of financial assets are impaired includes:

• significant financial difficulty of the issuer or borrower

• a breach of contract, such as a default or delinquency in interest or principal payments

• the lender, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the borrower a concession that the lender would not otherwise consider.

• it becoming probable that the borrower will enter bankruptcy or other financial reorganization

• the disappearance of an active market for that financial asset because of financial difficulties

(d) Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in entirety or a portion. The Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery based on continuous payments and extinct prescriptions. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

Impairment for non-financial assets

The carrying amounts of the Company’s non-financial assets, other than assets arising from contract assets, contract assets recognized in accordance with revenue from contracts with customers, employee benefits, inventories, deferred tax assets and non-current assets held for sale, are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. 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, are tested for impairment annually by comparing their recoverable amount to their carrying amount.

Management estimates the recoverable amount of an individual asset. If it is impossible to measure the individual recoverable amount of an asset, then management estimates the recoverable amount of cash-generating unit (“CGU”). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The Company determined that individual operating entities are CGUs.

35

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Derivative financial instruments, including hedge accounting

Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized as describe below.

(a) Hedge accounting

The Company holds forward exchange contracts, currency swaps and commodity future contracts to manage foreign exchange risk and commodity fair value risk. The Company designated derivatives as hedging instruments 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).

① Fair value hedge

Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognized in profit or loss.

② Cash flow hedge

When a derivative is designated to hedge 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, net of tax, and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.

(b) Other derivatives

Changes in the fair value of a derivative that is not designated as a hedging instrument are recognized immediately in profit or loss.

Non-derivative financial liabilities

The Company classifies non-derivative financial liabilities into financial liabilities measured at fair value through profit or loss or financial liabilities measured at amortized cost in accordance with the substance of the contractual arrangement and the definitions of financial liabilities. The Company recognizes financial liabilities in the consolidated statement of financial position when the Company becomes a party to the contractual provisions of the financial liability.

36

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Construction work in progress

The gross amount due from customers for contract work is presented for all contracts in which profits multiply cumulative percentage-of-completion exceed progress billings. If progress billings exceed profits multiply cumulative percentage-of-completion, then the gross amount due to customers for contract work is presented. The amount received from the customer before the construction work is performed is recognized as an advanced received. The amount billed for completed construction work is recognized as accounts receivable (a receivable).

The Company accounts for the remaining rights and performance obligation on the contract with the customers on a net basis. Due from customers for contract work and due to customers for contract work for same contract are offset and presented on a net basis.

Employee benefits

The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods.

Provisions

A Provision for warranties is recognized when the underlying products or services are sold, based on historical warranty data and a weighting of possible outcomes against their associated probabilities.

Regarding provision for construction warranties, warranty period starts from the completion of construction in accordance with construction contracts. If the Company has an obligation for warranties, provision for warranties which are estimated based on historical warranty data are recorded as cost of construction and provision for warranties during the construction period.

If the estimated total contract cost of the construction contract exceeds the total contract revenue, the estimated contract cost exceeding the contract revenue is recognized as a provision for construction losses in the remaining contract for which construction has not proceeded.

A provision for restoration regarding contamination of land is recognized in accordance with the Company’s announced Environment Policy and legal requirement as needed.

37

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Emission Rights

The Company accounts for greenhouse gases emission right and the relevant liability as follows pursuant to the Act on Allocation and Trading of Greenhouse Gas Emission which became effective in Korea in 2015.

(a) Greenhouse Gases Emission Right

Greenhouse Gases Emission Right consists of emission allowances which are allocated from the government free of charge and those purchased from the market. The cost includes any directly attributable costs incurred during the normal course of business.

Emission rights held for the purpose of performing the obligation are classified as intangible asset and initially measured at cost and subsequently carried at cost less accumulated impairment losses.

The Company derecognizes an emission right asset when the emission allowance is unusable, disposed or submitted to government when the future economic benefits are no longer expected to be probable.

(b) Emission liability

Emission liability is a present obligation of submitting emission rights to the government with regard to emission of greenhouse gas. Emission liability is recognized when there is a high possibility of outflows of resources in performing the obligation and the costs required to perform the obligation are reliably estimable. Emission liability is an amount of estimated obligations for emission rights to be submitted to the government for the performing period. The emission liability is measured based on the expected quantity of emission for the performing period in excess of emission allowance in possession and the unit price for such emission rights in the market at the end of the reporting period. The emission liability is derecognized when submitted to the government.

Hybrid Bonds

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of financial liability and an equity instrument. When the Company has an unconditional right to avoid delivering cash or another financial asset to settle a contractual obligation, the instruments are classified as equity instruments.

Revenue from contracts with customers

Revenue is measured based on the consideration promised in the contract with the customer. The Company recognizes revenue when the control over a good or service is transferred to the customer. The following are the revenue recognition policies for performance obligations in the contracts with customers in accordance with K-IFRS No. 1115.

(a) Sale of good

The goods sold by the Company consist mainly of steel products from the steel segment and products such as steel, chemicals, auto parts and machinery in the trade segment.

38

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

For domestic sales, the control of the product is usually transferred to the customer when the product is delivered to the customer, at which point in time revenue is recognized. Invoices are generally due within 10 to 90 days. When a customer makes payment prior to the due date, they are offered a discount at certain percentage of the invoice amount.

For export sales, revenue is recognized at the time when control of the product is transferred to the customer based on the “International Incoterms for Interpretation of Trade Terms” prescribed in the respective contracts, and the Company’s export contract generally transfers control to the customer at the shipping of the product. Invoices are usually issued at the date of bill of lading and revenues are recognized based on the terms of Letter of Credit (L / C), Acceptance Condition (D / A), Payment Condition (D / P), Telegraphic Transfer (T / T) and others.

The Company provides certain discount when the customer prepays according to the payment terms. The Company recognized revenue only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when discount period expires.

(b) Transportation service

For the performance obligation for transportation services included in the Company’s product sales contracts, revenue is recognized over the period when in which the services are provided and the revenue is measured by reference to examining the degree to which the service has been completed so far. The billing date and payment terms for the service charge are the same as the billing date and payment terms for sale of goods.

(c) Construction contracts

In the case of construction contracts where the Company renders construction services for plants, etc., the customer controls the assets as they are being constructed. This is because under those contracts, the Company is able to perform construction or design services to meet the customer’s specifications, and if a contract is terminated by the customer, the Company is entitled to reimbursement of all costs incurred to date, including a reasonable margin. When the contract can be reliably estimated, the Company recognizes the contract revenue and contract cost as revenue and costs based on the progress of the contract activity as of the end of the reporting period. The percentage of completion is determined based on the proportion that contract costs incurred for work performed excluding contract cost incurred that do not reflect the stage of completion to date bear to the estimated total contract costs.

If the outcome of the contract cannot be reliably estimated, the revenue is recognized only to the extent of the contract costs that are probable to be recovered. If the total contract cost is likely to exceed the total contract revenue, expected losses are immediately recognized as a cost.

The Company issues an invoice when the customer has completed a progress confirmation and generally the payment is due within 45 days from the invoice date.

39

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(d) Certain construction contracts for apartments

For certain construction service contracts for apartments where the criterion of an enforceable right to payment for performance is met under K-IFRS No. 1115, even if the legal ownership or physical occupancy of the incomplete construction is not transferred to the customer during the construction period, revenue is recognized based on percentage of completion by considering the terms and conditions described in the relevant law and contracts such as the guarantee for sale policy, government approval on business plan, payment and termination terms. For certain construction contracts for apartments and shopping centers where the criterion of an enforceable right to payment for performance is not met during the construction period, the Company recognizes revenue upon completion of construction when the control of the apartments and shopping centers are transferred to customers.

In the meantime, the billing point and settlement terms of the pre-sale contract differ depending on the contract terms.

Finance income and finance costs

The Company’s finance income and finance costs include:

• interest income;

• interest expense;

• dividend income;

• the foreign currency gain or loss on financial assets and financial liabilities;

• the net gain or loss on financial assets measured at fair value through profit or loss;

• hedge ineffectiveness recognized in profit or loss; and

• the net gain or loss on the disposal of investments in debt securities measured at fair value through other comprehensive income.

Interest income or expense is recognized using the effective interest method. Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

Income taxes

The Company recognizes interest and penalties related to corporate tax as if it is applicable to the income taxes, the Company applies K-IFRS No. 1012 “Income Taxes”, if it is not applicable to the income taxes, the Company applies K-IFRS No. 1037 “Provisions Contingent Liabilities and Contingent Assets”.

Segment Reporting

Information of each operating segment is reported in a manner consistent with the internal business segment reporting provided to the chief operating decision-maker (Note 41). Operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.

40

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Joint arrangements

Joint arrangements in which two or more parties have joint control are classified as joint operations or joint ventures. Participants in a joint operation retain rights and obligations for the joint operation’s assets and liabilities and recognizes its share of the joint operation’s assets and liabilities, income and expenses. Participants in a joint venture have rights to the net assets of the joint venture, and the equity method is applied.

New standards and interpretations not yet adopted

A number of new standards are effective for annual periods beginning after January 1, 2023 and earlier application is permitted but the Company has not early adopted the new or amended standards in preparing these consolidated financial statements.

(a) K-IFRS No. 1001 “Presentation of Financial Statements” – Classification of Liabilities as Current or Non-current

The amendment clarifies that the classification of current and non-current liabilities is determined by the right to defer settlement of the liability for more than 12 months after the end of the reporting period, and in order for the debtor to have the “right to defer settlement of the liability”, the condition of complying with the contract must be met at the end of the reporting period. In addition, the classification of liabilities is not affected by the possibility of exercising the right to defer settlement of the liability for more than 12 months after the end of the reporting period, and the amendment clarifies that settlement of a liability includes transferring a company’s own equity instruments to the counterparty. The amendment is effective for annual periods beginning on or after January 1, 2024. Early application is permitted. The Company does not expect the effect of the amendments to the consolidated financial statements to be significant.

(b) K-IFRS No. 1007 “Statements of Cash Flows”, No. 1107 “Financial Instruments: Disclosure” – Supplier Finance Arrangements

The amendments require disclosure of notes on supplier finance arrangements to inform users of financial statements the impact of supplier finance arrangements on the Company’s liabilities and exposure to cash flow and liquidity risks. The amendments are effective for the fiscal years beginning on or after January 1, 2024. Early application permitted. The Company is analyzing the effect of the amendments to the consolidated financial statements.

41

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

4. Financial risk management

The Company has exposure to the following risks from its use of financial instruments:

• credit risk

• liquidity risk

• market risk

• capital risk

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

(a) Financial risk management

1) Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

2) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities. In addition, credit risk arises from finance guarantees.

The Company implements a credit risk management policy under which the Company only transacts business with counterparties that have a certain level of credit rate evaluated based on financial condition, historical experience, and other factors. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The default risk of a nation or an industry in which a customer operates its business does not have a significant influence on credit risk. The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness.

The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for companies of similar assets in respect of losses that have been incurred.

42

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Credit risk also arises from transactions with financial institutions, and such transactions include transactions of cash and cash equivalents, various deposits, and financial instruments such as derivative contracts. The Company manages its exposure to this credit risk by only entering into transactions with banks that have high international credit ratings. The Company’s treasury department authorizes, manages, and overseas new transactions with financial institutions with whom the Company has no previous relationship.

Furthermore, the Company limits its exposure to credit risk of financial guarantee contracts by strictly evaluating their necessity based on internal decision making processes, such as the approval of the Board of Directors.

3) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’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 Company’s reputation.

The Company’s cash flow from business, borrowing or financing is sufficient to meet the cash requirements for the Company’s strategic investments. Management believes that the Company is capable of raising funds by borrowing or financing if the Company is not able to generate cash flow requirements from its operations. The Company has committed borrowing facilities with various banks.

4) Market risk

Market risk means that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The goal of market risk management is optimization of profit and controlling the exposure to market risk within acceptable limits.

① Currency risk

The Company’s policy in respect of foreign currency risks is a natural hedge whereby foreign currency income is offset with foreign currency expenditures. The remaining net exposures after the natural hedge have been hedged using derivative contracts such as forward exchange contracts. In addition, the Company’s derivative transactions are limited to hedging actual foreign currency transactions and speculative hedging is not permitted. Based on this policy, the Company has performed currency risk management specific to various characteristics of different segments. The entities in the steel segment reduces the foreign currency exposure by repayment of foreign currency borrowings subjected to investment in overseas when its maturities come. The entities in the engineering and construction segment have hedged foreign currency risks by using forward exchange contracts. Entities in the trading segment have hedged foreign currency risks by using forward exchange contracts when the foreign currencies received and paid are different.

43

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

② Interest rate risk

The Company manages the exposure to interest rate risk by adjusting of borrowing structure ratio between borrowings at fixed interest rate and variable interest rate. The Company monitors interest rate risks regularly in order to avoid exposure to interest rate risk on borrowings at variable interest rate.

③ Interest rate benchmark reform risk

A fundamental reform of major interest rate benchmark is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as “IBOR reform”). The publication of overnight and 1, 3, 6, and 12 months USD LIBOR has ceased on June 30, 2023 and all other LIBOR publication has ceased on December 31, 2021. Meanwhile, as announced by the UK Financial Conduct Authority in early 2023, the publication of 1, 3, and 6 months synthetic USD LIBOR will cease on September 30, 2024. As a result of the reform, Korea Overnight Financing Repo Rate (KOFR) has been selected as the benchmark for the domestic CD rate which has been published by Korea Securities since November 26, 2021. The details of when and how to KOFR are unclear.

As of December 31, 2023, WIBOR and CD floating rate borrowings are exposed to interest rate benchmark reform risk. For all USD LIBOR floating rate financial instruments, the Company completed the modification of contracts by June 30, 2023.

In July, 2019, changes related to the methodologies to determine Euribor were made and Belgium Financial Services and Markets Authority granted the continuity of Euribor usage based on the European Union Benchmark Regulation. The Company did not make a transition from Euribor to alternative benchmark rate, and expects to continue to use Euribor.

The Company manages the alternative benchmark rate transition by modifying the clause, IBOR related to uncompleted interest rate benchmark reform. The progress of transition is managed by comparing the financial instruments with transition not yet completed and financial instruments with modification of clause completed. The Company classifies the financial instruments, with IBOR as the benchmark rate, as transition not yet completed even if the clause in the contract has been modified.

44

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Financial instruments classified as transition not yet completed as of December 31, 2023 are as follows:

(in millions of Won)	WIBOR
Category(* 2)	Transition not yet completed		Modification of clause completed
Non-derivative financial liabilities(* 1)
Borrowings	W	67,943		—

(*1) Based on nominal amount.

(*2) Financial instruments that are not obliged to be transitioned to alternative benchmark rate as of December 31, 2023 are excluded.

The transition to alternative benchmark rate is not needed for the financial instruments above as the WIBOR publishment will continue until their maturity.

④ Other market price risk

Equity price risk arises from fluctuation of market price of listed equity securities. Management of the Company measures regularly the fair value of listed equity securities and the risk of variance in future cash flow caused by market price fluctuations. Significant investments are managed separately and all buy and sell decisions are approved by management of the Company.

45

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(b) Management of capital

The fundamental goal of capital management is the maximization of shareholders’ value by means of the stable dividend policy and the retirement of treasury shares. The capital structure of the Company consists of equity and net borrowings (after deducting cash and cash equivalents) and current financial instruments from borrowings. The Company applied the same capital risk management strategy that was applied in the previous period.

Net borrowing-to-equity ratio as of December 31, 2023 and 2022 is as follows:

(in millions of Won)	2023			2022
Total borrowings	W	25,970,379			24,305,662
Less: Cash and cash equivalents		6,670,879			8,053,108
Net borrowings		19,299,500			16,252,554
Total equity		59,663,897			58,257,401
Net borrowings-to-equity ratio		32.35	%		27.90	%

5. Cash and Cash Equivalents

Cash and cash equivalents as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Cash	W	12,312		7,510
Demand deposits and checking accounts		2,537,545		2,826,227
Time deposits		1,473,081		2,638,838
Other cash equivalents		2,647,941		2,580,533
	W	6,670,879		8,053,108

As of December 31, 2023 and 2022, cash and cash equivalents of subsidiaries of the Company, such as POSCO INTERNATIONAL CO., LTD, amounting toW85,163 million andW36,182 million, respectively, are restricted.

46

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

6. Trade Accounts and Notes Receivable

Trade accounts and notes receivable as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023			2022
Current
Trade accounts and notes receivable	W	9,382,640			8,696,067
Due from customers for contract work		1,916,238			1,407,278
Less: Allowance for doubtful accounts		(283,575	)		(333,792	)
	W	11,015,303			9,769,553
Non-current
Trade accounts and notes receivable	W	89,839			68,342
Less: Allowance for doubtful accounts		(47,323	)		(44,309	)
	W	42,516			24,033

The Company sold trade accounts and notes receivable with recourse to financial institutions. This transaction has a right of recourse because the Company has an obligation to pay the amount to financial institutions if the relevant receivables are not collected at maturity, so the transaction was recognized as secured borrowings. As of December 31, 2023 and December 31, 2022, the carrying amounts of such secured borrowings areW132,942 million andW215,133 million, respectively, which are presented in the statements of financial position as the short-term borrowings.

47

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

7. Other Receivables

(a) The details of other receivables as of December 31, 2023 and 2022, are as follows:

(in millions of Won)	2023			2022
Current
Short-term loans	W	223,011			278,346
Other accounts receivable		1,433,423			1,381,804
Accrued income(* 1)		237,154			334,741
Deposits		125,854			131,468
Others		15,349			23,201
Lease receivables		23,948			46,764
Less: Allow ance for doubtful accounts		(111,210	)		(83,627	)
	W	1,947,529			2,112,697
Non-current
Long-term loans(* 1)	W	1,204,645			1,082,139
Other accounts receivable		186,492			237,161
Accrued income		184,739			121,783
Deposits		308,185			292,722
Lease receivables		78,994			55,312
Less: Allow ance for doubtful accounts		(510,610	)		(268,786	)
	W	1,452,445			1,520,331

(*1) Due to the continuous operating losses and deteriorating business environment of FQM Australia Holdings Pty Ltd, an associate, the Company assessd the recoverability of the related loans and accrued interest and recognized a full allowance for doubtful accounts ofW257,500 million.

(b) The details of lease receivables are as follows:

(in millions of Won)
Customer	Leased items		2023		2022
Pohang University of Science and Technology		Lease contract	W	7,586		7,738
Korea Business Angels Association		Lease contract		2,339		2,621
HEUNG-A SHIPPING CO., LTD., HEUNG-A LINE CO., LTD.		4 Container Ships, 4 Tankers		50,429		88,573
Executive Offshore, PT Wintermar, COHC, Myanma Port Authority		Helicopter, Ship, Jetty		42,588		3,144
			W	102,942		102,076

48

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(c) As of December 31, 2023 and 2022, total lease investment and net lease investment are as follows :

(in millions of Won)	2023			2022
Less than 1 year	W	24,965			48,127
1 year - 3 years		31,840			19,861
3 years - 5 years		20,820			5,371
Over 5 years		63,583			64,811
Undiscounted lease payments		141,208			138,170
Unrealized interest income		(38,266	)		(36,094	)
Present value of minimum lease payment	W	102,942			102,076

8. Other Financial Assets

Other financial assets as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Current
Derivatives assets	W	166,873		223,771
Debt securities		295,619		121,122
Deposit instruments(* 1)		4,400,267		2,558,946
Short-term financial instruments(* 1)		6,540,407		8,006,081
	W	11,403,166		10,909,920
Non-current
Derivatives assets	W	134,269		136,224
Equity securities(* 2)		1,793,531		1,462,088
Debt securities		87,778		78,901
Other securities(* 2)		669,687		632,469
Deposit instruments(* 1)		23,060		22,856
	W	2,708,325		2,332,538

(*1) As of December 31, 2023 and 2022, financial instruments amounting toW101,888 million andW73,192 million, respectively, are restricted in use for financial arrangements, pledge and others.

(*2) As of December 31, 2023 and 2022,W181,617 million andW153,640 million of equity and other securities, respectively, have been provided as collateral for borrowings, construction projects and others.

49

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

9. Inventories

(a) Inventories as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023			2022
Finished goods	W	2,615,009			2,508,370
M erchandise		1,049,467			1,237,203
Semi-finished goods		3,039,516			3,453,150
Raw materials		3,237,691			4,171,049
Fuel and materials		921,742			1,109,100
Construction inventories		256,558			470,790
M aterials-in-transit		2,965,306			2,738,439
Others		87,802			100,873
		14,173,091			15,788,974
Less: Allowance for inventories valuation		(347,577	)		(316,557	)
	W	13,825,514			15,472,417

(b) The changes of allowance for inventories valuation for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Beginning	W	316,557			161,929
Loss on valuation of inventories(* 1)		309,317			259,678
Utilization on sale of inventories		(256,969	)		(97,749	)
Others		(21,328	)		(7,301	)
Ending	W	347,577			316,557

(*1) During the year ended December 31, 2022, in addition to loss on valuation of inventories,W95,278 million of damage caused by the flooding of the Naengcheon stream in Pohang was included in cost of sales.

50

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

10. Assets Held for Sale

Details of assets held for sale as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023(* 1)		2022
Asset
Cash and cash equivalents(* 2)	W	—		174
Account reveivables and other receivables		728		648
Inventories		39,054		—
Other financial assets		119,881		—
Investment in joint ventures(* 3)		—		—
Property, plant and equipment(* 4)		149,612		10,552
Intangible assets		97,372		—
Others		298		629
	W	406,945		12,003
Liability
Other receivables	W	22,180		5
Provisions		119,710		—
	W	141,890		5

(*1) POSCO Canada Ltd., a subsidiary of the Company, made investment in kind the assets and liabilities of Greenhills Mine and the shares of Elkview Mine Limited Partnership, which were classified as joint operation and financial assets at fair values through profit or loss, respectively, to a newly established partnership by Teck Coal Partnership which is the principal operator and majority shareholder. As a result, the Company recognizedW401,804 million of asset held for sale andW141,890 million of liability held for sale.

(*2) Cash and cash equivalents in the statement of cash flows include cash and cash equivalents that are classified as assets held for sale as of December 31, 2022.

(*3) During the year ended December 31, 2022, the Company decided to dispose of CSP - Compania Siderurgica do Pecem and recognized full impairment loss ofW160,415 million, which is the difference between carrying amount and recoverable amount. The Company reclassified the investment to assets held for sale. Meanwhile, during the year ended December 31, 2023, the Company disposed of CSP - Compania Siderurgica do Pecem, and recognizedW103,366 million of loss on disposal of assets held for sale. The loss on disposal of assets held for sale recognized as profit or loss includesW102,470 million, which was reclassified from accumulated other comprehensive loss arising from translating the financial statements of foreign operation.

(*4) During the past period, the Company decided to dispose Synthetic Natural Gas (SNG) facility for which use was discontinued, and classified as assets held for sale forW10,305 million. Meanwhile, during the year ended December 31, 2023, the Company disposed of the assets held for sale forW9,599 million and reclassified the remaining amountW706 million to property, plant and equipment.

51

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

11. Investments in Associates and Joint ventures

(a) Investments in associates and joint ventures as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Investments in associates	W	2,292,253		2,518,906
Investments in joint ventures		2,728,011		2,477,645
	W	5,020,264		4,996,551

(b) Details of investments in associates as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023								2022
Company	Number of shares		Ownership (%)		Acquisition cost		Book value		Book value
[Domestic]
Samcheok Blue Power Co.,Ltd.(*1)		4,507,138		34.00	W	429,904	W	323,521		352,500
SNNC		18,130,000		49.00		90,650		100,692		182,414
Chun-cheon Energy Co., Ltd(*1)		17,308,143		49.10		86,541		15,040		9,513
Pocheon-Hwado Highway Corp.(*1)		7,109,230		27.89		35,546		23,998		27,165
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		1,181,160		29.53		5,906		13,967		14,605
DaeSung SnM Co., Ltd (formerly, Daesung Steel)(*2)		108,038		17.54		14,000		20,296		20,469
PCC Amberstone Private Equity Fund 1(*2)		7,636,948,293		8.80		7,519		8,904		9,326
Others (49 companies)(*1)								122,366		238,086
								628,784		854,078
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		135,219,000		25.04		132,907		287,282		290,318
AES Mong Duong Power Company Limited(*1)		—		30.00		164,303		230,699		209,594
9404-5515 Quebec Inc.		284,463,243		25.85		328,509		346,724		331,261
FQM Australia Holdings Pty Ltd		186,000,030		24.32		109,568		—		98,103
Eureka Moly LLC		—		20.00		240,123		—		14,574
AMCI (WA) PTY LTD		49		49.00		209,664		60,225		57,830
NCR LLC		—		22.10		247,077		253,121		187,372
KOREA LNG LTD.		2,400		20.00		135,205		58,759		29,124
Nickel Mining Company SAS		3,234,698		49.00		157,585		87,967		90,636
ZHEJIANG HUAYOU-POSCO ESM CO., LTD		648,530,000		40.00		120,072		105,300		98,933
PT. Wampu Electric Power(*1)		8,708,400		20.00		10,054		15,632		16,659
POS-SeAH Steel Wire(Nantong) Co., Ltd.		50		25.00		4,723		8,642		8,590
Others (28 companies)(*1)								209,118		231,834
								1,663,469		1,664,828
							W	2,292,253		2,518,906

(*1) As of December 31, 2023 and 2022, investments in associates amounting toW650,116 million andW628,573 million, respectively, are provided as collateral in relation to the associates’ borrowings.

(*2) As of December 31, 2023, it was classified as an associate even though the Company’s ownership percentage is less than 20% since the Company has significant influence over the investee when considering the structure of its Board of Directors and others.

52

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(c) Details of investments in joint ventures as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023								2022
Company	Number of shares		Ownership (%)		Acquisition cost		Book value		Book value
[Domestic]
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)		11,568,000		60.00	W	115,680	W	155,748		161,465
Others (6 companies)								8,323		8,845
								164,071		170,310
[Foreign]
Roy Hill Holdings Pty Ltd(* 1)		13,117,972		12.50		1,528,672		1,400,009		1,418,022
POSCO-NPS Niobium LLC		325,050,000		50.00		364,609		419,192		412,002
KOBRASCO		2,010,719,185		50.00		32,950		99,768		103,044
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		—		25.00		61,961		111,001		111,219
DMSA/AMSA(* 1)		—		3.89		346,880		16,572		23,740
PT NICOLE METAL INDUSTRY(*2)		76,382,353		49.00		292,780		284,351		—
HBIS-POSCO Automotive Steel Co., Ltd		—		50.00		235,251		208,765		216,138
Others (9 companies)								24,282		23,170
								2,563,940		2,307,335
							W	2,728,011		2,477,645

(*1) As of December 31, 2023 and 2022, the investments in joint ventures are provided as collateral in relation to the joint ventures’ borrowings.

(*2) During the year ended December 31, 2023, the Company acquired 49% shares of PT NICOLE METAL INDUSTRY, forW292,780 million and classified as investments in joint ventures.

53

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(d) The movements of investments in associates and joint ventures for the years ended December 31, 2023 and 2022 were as follows:

1) For the year ended December 31, 2023

(in millions of Won) Company	December 31, 2022 Book value		Acquisition		Dividends			Share of profits (losses)			Other increase (decrease)(*1)			December 31, 2023 Book value
[Domestic]
Samcheok Blue Power Co.,Ltd.	W	352,500		—		(10,020	)		(18,802	)		(157	)		323,521
SNNC		182,414		—		—			(81,803	)		81			100,692
QSONE Co.,Ltd.(*2)		86,378		—		—			245			(86,623	)		—
Chun-cheon Energy Co., Ltd		9,513		—		—			4,990			537			15,040
Pocheon-Hwado Highway Corp.		27,165		636		—			(3,803	)		—			23,998
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		14,605		—		—			(638	)		—			13,967
DaeSung SnM Co., Ltd (formerly, Daesung Steel)		20,469		—		—			75			(248	)		20,296
PCC Amberstone Private Equity Fund 1		9,326		—		(622	)		562			(362	)		8,904
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)		161,465		—		(9,000	)		3,176			107			155,748
Others (55 companies)		160,553		16,439		(4,292	)		1,966			(43,977	)		130,689
		1,024,388		17,075		(23,934	)		(94,032	)		(130,642	)		792,855
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		290,318		—		(59,295	)		50,340			5,919			287,282
AES Mong Duong Power Company Limited		209,594		—		(33,839	)		38,782			16,162			230,699
9404-5515 Quebec Inc.(*2)		331,261		—		(14,251	)		16,494			13,220			346,724
FQM Australia Holdings Pty Ltd		98,103		—		—			(111,783	)		13,680			—
Eureka Moly LLC		14,574		—		—			(15,020	)		446			—
AMCI (WA) PTY LTD		57,830		—		—			(503	)		2,898			60,225
NCR LLC		187,372		65,542		—			(6,999	)		7,206			253,121
KOREA LNG LTD.		29,124		—		(21,106	)		21,060			29,681			58,759
Nickel Mining Company SAS		90,636		—		—			(8,358	)		5,689			87,967
ZHEJIANG HUAYOU-POSCO ESM CO., LTD		98,933		15,640		—			(8,435	)		(838	)		105,300
PT. Wampu Electric Power		16,659		—		(1,624	)		1,890			(1,293	)		15,632
POS-SeAH Steel Wire(Nantong) Co., Ltd.		8,590		—		—			98			(46	)		8,642
Roy Hill Holdings Pty Ltd		1,418,022		—		(367,445	)		292,478			56,954			1,400,009
POSCO-NPS Niobium LLC		412,002		—		(35,543	)		35,148			7,585			419,192
KOBRASCO		103,044		—		(36,471	)		21,795			11,400			99,768
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		111,219		—		(12,386	)		12,669			(501	)		111,001
DMSA/AMSA		23,740		—		—			(7,681	)		513			16,572
PT NICOLE METAL INDUSTRY		—		292,780		—			39			(8,468	)		284,351
HBIS-POSCO Automotive Steel Co., Ltd		216,138		—		—			(6,765	)		(608	)		208,765
Others (37 companies)		255,004		—		(52,444	)		38,461			(7,621	)		233,400
		3,972,163		373,962		(634,404	)		363,710			151,978			4,227,409
	W	4,996,551		391,037		(658,338	)		269,678			21,336			5,020,264

(*1) Other increase or decrease represents the changes in investments in associates and joint ventures due to disposals and change in capital adjustments effect from translations of financial statements of foreign investees and others during the year ended December 31, 2023.

(*2) During the year ended December 31, 2023, the Company additionally acquired 50% of the shares held by external shareholders of QSONE Co.,Ltd., which was previously classified as an investment in associate. Accordingly, the entity was newly included in consolidated subsidiary due to obtaining control of the entity.

54

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) For the year ended December 31, 2022

(in millions of Won)
Company	December 31, 2021 Book value		Acquisition		Dividends			Share of profits (losses)			Other increase (decrease)(*1)			December 31, 2022 Book value
[Domestic]
EQP POSCO Global NO1 Natural Resources Private Equity Fund(*3)	W	176,136		—		(143,170	)		145,822			(178,788	)		—
Samcheok Blue Power Co.,Ltd.		382,887		—		(9,992	)		(19,354	)		(1,041	)		352,500
SNNC		171,332		—		(5,348	)		15,484			946			182,414
QSONE Co.,Ltd.		86,058		—		(1,100	)		1,420			—			86,378
Chun-cheon Energy Co., Ltd		9,571		—		—			(802	)		744			9,513
Western Inland highway CO.,LTD.		53,563		—		—			(125	)		(53,438	)		—
Pocheon-Hwado Highway Corp.		28,813		5,519		—			(4,683	)		(2,484	)		27,165
CHUNGJU ENTERPRISE CITY
DEVELOPMENT Co.,Ltd		19,191		—		—			(453	)		(4,133	)		14,605
DaeSung SnM Co., Ltd (formerly, Daesung Steel)		19,073		—		—			1,396			—			20,469
PCC Amberstone Private Equity Fund 1		9,251		—		(652	)		1,104			(377	)		9,326
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)		169,838		—		(24,000	)		15,604			23			161,465
Others (64 companies)		113,711		45,563		(4,368	)		(3,931	)		9,578			160,553
		1,239,424		51,082		(188,630	)		151,482			(228,970	)		1,024,388
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		238,601		—		(14,541	)		50,143			16,115			290,318
AES Mong Duong Power Company Limited		182,639		—		(33,174	)		45,382			14,747			209,594
9404-5515 Quebec Inc.(*2)		135,738		172,316		(31,949	)		25,195			29,961			331,261
FQM Australia Holdings Pty Ltd		91,052		—		—			166			6,885			98,103
Eureka Moly LLC		13,633		—		—			—			941			14,574
AMCI (WA) PTY LTD		67,972		—		—			(3,964	)		(6,178	)		57,830
NCR LLC		102,319		82,798		—			(2,338	)		4,593			187,372
KOREA LNG LTD.		31,340		—		(21,161	)		21,027			(2,082	)		29,124
Nickel Mining Company SAS		48,249		—		—			42,169			218			90,636
ZHEJIANG HUAYOU-POSCO ESM CO., LTD		22,769		82,010		—			(1,302	)		(4,544	)		98,933
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		19,099		—		—			213			(19,312	)		—
PT. Wampu Electric Power		15,851		—		(2,474	)		823			2,459			16,659
POS-SeAH Steel Wire(Nantong) Co., Ltd.		9,140		—		—			(220	)		(330	)		8,590
Roy Hill Holdings Pty Ltd		1,346,712		—		(233,592	)		273,084			31,818			1,418,022
POSCO-NPS Niobium LLC		393,793		—		(34,909	)		25,884			27,234			412,002
KOBRASCO		68,296		—		(21,287	)		48,267			7,768			103,044
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		107,650		—		—			6,527			(2,958	)		111,219
DMSA/AMSA		24,144		—		—			(2,108	)		1,704			23,740
CSP - Compania Siderurgica do Pecem		52,257		—		—			(90,395	)		38,138			—
HBIS-POSCO Automotive Steel Co., Ltd		110,769		126,195		—			(10,515	)		(10,311	)		216,138
Others (37 companies)		193,200		29,975		(56,527	)		96,740			(8,384	)		255,004
		3,275,223		493,294		(449,614	)		524,778			128,482			3,972,163
	W	4,514,647		544,376		(638,244	)		676,260			(100,488	)		4,996,551

(*1) Other increase or decrease represents the changes in investments in associates and joint ventures due to disposals and change in capital adjustments effect from translations of financial statements of foreign investees and others during the year ended December 31, 2022.

(*2) During the year ended December 31, 2022, it was additionally acquired due to the in-kind dividend of EQP POSCO Global NO1 Natural Resources Private Equity Fund, and the Company classify it as other increase or decrease.

(*3) During the year ended December 31, 2022, dividends were declared prior to liquidation. The Company recognized full impairment loss ofW10,065 million considering the low asset quality and assessment of recoverable amount.

55

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(e) Summarized financial information of associates and joint ventures as of and for the years ended December 31, 2023 and 2022 are as follows:

1) December 31, 2023

(in millions of Won)
Company	Assets		Liabilities		Equity (deficit)			Sales		Net income (loss)
[Domestic]
Samcheok Blue Power Co.,Ltd.	W	4,228,568		3,669,074		559,494			14,002		(28,880	)
SNNC		612,992		388,715		224,277			766,011		(168,553	)
Chun-cheon Energy Co., Ltd		571,495		453,390		118,105			502,879		10,453
Pocheon-Hwado Highway Corp.		583,935		462,900		121,035			—		(1,824	)
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		19,995		2,998		16,997			5,595		(2,160	)
DaeSung SnM Co., Ltd (formerly, Daesung Steel)		178,251		93,930		84,321			108,660		430
PCC Amberstone Private Equity Fund 1		105,145		3,923		101,222			12,134		6,391
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)		431,090		170,518		260,572			194,238		2,998
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		1,758,765		611,484		1,147,281			434,358		201,031
AES Mong Duong Power Company Limited		1,612,793		889,424		723,369			449,807		129,274
9404-5515 Quebec Inc.		1,430,295		—		1,430,295			—		63,809
FQM Australia Holdings Pty Ltd		180,931		1,219,922		(1,038,991	)		453,626		(1,480,586	)
KOREA LNG LTD.		94,661		136		94,525			108,081		105,300
Nickel Mining Company SAS		520,209		272,567		247,642			296,130		(26,786	)
ZHEJIANG HUAYOU-POSCO ESM CO., LTD		297,683		33,927		263,756			34,372		(21,081	)
PT. Wampu Electric Power		206,942		131,822		75,120			20,166		9,452
POS-SeAH Steel Wire(Nantong) Co., Ltd.		82,568		48,727		33,841			117,208		522
Roy Hill Holdings Pty Ltd		10,929,518		3,007,919		7,921,599			8,146,546		2,826,424
POSCO-NPS Niobium LLC		838,180		—		838,180			—		64,687
KOBRASCO		224,406		25,475		198,931			63,338		43,591
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		659,704		242,566		417,138			1,647,395		50,675
DMSA/AMSA		3,058,209		2,632,239		425,970			1,106,369		(197,482	)
HBIS-POSCO Automotive Steel Co., Ltd		826,886		398,751		428,135			340,341		(12,584	)
PT NICOLE METAL INDUSTRY		389,077		2,237		386,840			—		79

56

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) December 31, 2022

(in millions of Won)
Company	Assets		Liabilities		Equity (deficit)		Sales		Net income (loss)
[Domestic]
EQP POSCO Global NO1 Natural Resources Private Equity Fund	W	9,471		480		8,991		—		425,366
Samcheok Blue Power Co.,Ltd.		3,515,861		2,885,218		630,643		—		(8,447	)
SNNC		667,440		274,801		392,639		986,557		10,273
QSONE Co.,Ltd.		253,078		80,322		172,756		18,753		2,840
Chun-cheon Energy Co., Ltd		634,842		527,190		107,652		585,610		20,224
Pocheon-Hwado Highway Corp.		366,163		244,455		121,708		—		(1,175	)
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co.,Ltd		24,926		5,769		19,157		17,189		(1,521	)
DaeSung SnM Co., Ltd (formerly, Daesung Steel)		175,429		90,126		85,303		128,401		7,957
PCC Amberstone Private Equity Fund 1		106,024		—		106,024		13,877		12,546
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)		447,604		175,229		272,375		252,246		27,628
[Foreign]
South-East Asia Gas Pipeline Company Ltd.		1,705,670		546,262		1,159,408		447,696		200,246
AES Mong Duong Power Company Limited		1,701,272		1,019,227		682,045		417,021		151,022
9404-5515 Quebec Inc.		1,397,061		—		1,397,061		—		182,708
FQM Australia Holdings Pty Ltd		1,458,318		1,131,628		326,690		493,202		(22,768	)
KOREA LNG LTD.		145,845		225		145,620		107,295		105,135
Nickel Mining Company SAS		539,318		279,291		260,027		379,922		91,008
ZHEJIANG HUAYOU-POSCO ESM CO., LTD		305,740		57,932		247,808		45,771		(3,176	)
PT. Wampu Electric Power		209,815		129,520		80,295		21,760		4,115
POS-SeAH Steel Wire(Nantong) Co., Ltd.		79,116		45,677		33,439		136,663		(992	)
Roy Hill Holdings Pty Ltd		9,859,888		2,152,428		7,707,460		7,706,908		2,542,223
POSCO-NPS Niobium LLC		823,800		—		823,800		—		49,341
KOBRASCO		262,724		57,242		205,482		147,843		96,534
BX STEEL POSCO Cold Rolled Sheet Co., Ltd.		663,509		245,499		418,010		1,881,946		26,106
DMSA/AMSA		3,022,659		2,412,377		610,282		1,368,730		(54,212	)
CSP - Compania Siderurgica do Pecem		4,422,752		3,678,956		743,796		3,101,132		500,082
HBIS-POSCO Automotive Steel Co., Ltd		712,633		270,668		441,965		473,494		(15,515	)

57

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(f) Changes in accumulated losses of equity-accounted investees that were not recognized since the Company discontinues the use of the equity method for the year ended December 31, 2023 were as follows:

(in millions of Won}
Company	Beginning balance		Increase or decrease			Ending balance
New Songdo International City Development. LLC	W	134,495		(17,780	)		116,715
UITrans LRT Co. Ltd.		43,872		2,583			46.455
Clean Lksan Co. Ltd.		703		(217	)		486
HYOCHUN Co,Ltd.		4,396		713			5,1 09
KIRIN VIETNAM CO, LTD		103		(1	)		102
INKOTECH, INC.		540		453			993
POSCO-Poggenamp Electrical Steel Pvt. Ltd.		557		239			796
Gunggi Green Energy		4,296		6,893			11.189
Link City PFV Inc.		5.452		18,396			23,848
Noeul Green Energy Co, Ltd.		1,886		726			2,612
Pohang E& E Co. Ltd.		6,391		5,755			12,146
FOM Australia Holdings Pty Ltd		—		252,727			252,727
	W	202,691		270.487			473,178

12. Joint Operations

Details of significant joint operations that the Company is participating in as a party to a joint arrangement as of December 31, 2023 are as follows:

Joint operations	Operation	Ownership (%)	Location
Myanmar A-1/A-3 mine	Mine development and gas production	51.00	Myanmar
Offshore midstream	Gas transportation facility	51.00	Myanmar
Greenhills Mine(* 1)	Mine development	20.00	Canada
Mt. Thorley J/V	Mine development	20.00	Australia
POSMAC J/V	Mine development	20.00	Australia
Samcheok Thermal Power Plant EPC (Unit 1,2) Construction Work	Construction	49.00	Korea
Sinansan Line Double Track Train Private Investment project construction work	Construction	36.00	Korea
Panama Metro Line 3 Project construction work	Construction	20.00	Panama
2* 600 MW Matarbari Ultra Super Critical Coal-Fired Pow er construction work	Construction	67.00	Bangladesh
Yangsan Sasong 2nd Apartment Project (B5,6,7,9 Block) Construction work	Construction	49.00	Korea
Yongmun 123 Construction work Reconstruction Maintenance Project	Construction	70.00	Korea
Songdo B5 Block office Complex Project Construction work	Construction	80.00	Korea
Particle Accelerator Facility Construction work	Construction	55.00	Korea
Anyang Jinheung Apartment Construction work	Construction	45.00	Korea

(*1) As of December 31, 2023, the joint operation is classified as assets and liablities held for sale.

58

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

13. Investment Property, Net

(a) Investment property as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023							2022
	Acquisition cost		Accumulated depreciation and impairment loss			Book value		Acquisition cost		Accumulated depreciation and impairment loss			Book value
Land	W	804,022		(16,718	)		787,304		325,241		(16,718	)		308,523
Buildings		905,649		(249,863	)		655,786		825,183		(231,678	)		593,505
Structures		3,384		(1,511	)		1,873		3,569		(2,213	)		1,356
Right of use assets		208,036		(36,705	)		171,331		206,166		(35,519	)		170,647
	W	1,921,091		(304,797	)		1,616,294		1,360,159		(286,128	)		1,074,031

As of December 31, 2023, the fair value of investment property isW2,477,766 million.

(b) Changes in the carrying amount of investment property for the years ended December 31, 2023 and 2022 were as follows:

1) For the year ended December 31, 2023

(in millions of Won)	Beginning		Acquisitions		Business Combination(*2)		Disposals			Depreciation			Others(*1)			Ending
Land	W	308,523		54,891		473,301		(60	)		—			(49,351	)		787,304
Buildings		593,505		1,006		83,739		(303	)		(28,902	)		6,741			655,786
Structures		1,356		—		—		—			(1,049	)		1,566			1,873
Right of use assets		170,647		216		—		(78	)		(5,635	)		6,181			171,331
	W	1,074,031		56,113		557,040		(441	)		(35,586	)		(34,863	)		1,616,294

(*1) Includes reclassification resulting from changing purpose of use, adjustment of foreign currency translation difference and others.

(*2) Represents increases in investment property due to business combination upon reclassification of QSONE Co.,Ltd. into a subsidiary during the year ended December 31, 2023.

2) For the year ended December 31, 2022

(in millions of Won)	Beginning		Acquisitions		Disposals			Depreciation			Others(*1)			Ending
Land	W	332,308		—		(2,921	)		—			(20,864	)		308,523
Buildings		584,549		1,661		(34	)		(28,336	)		35,665			593,505
Structures		753		—		—			(797	)		1,400			1,356
Right of use assets		168,467		—		(21,151	)		(6,888	)		30,219			170,647
	W	1,086,077		1,661		(24,106	)		(36,021	)		46,420			1,074,031

(*1) Includes reclassification resulting from changing purpose of use, adjustment of foreign currency translation difference and others.

59

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

14. Property, Plant and Equipment, Net

(a) Property, plant and equipment as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023										2022
	Acquisition cost		Accumulated depreciation and			Government grants			Book value		Acquisition cost		Accumulated depreciation and			Government grants			Book value
Land	W	3,295,768		(5,524	)		—			3,290,244		3,103,218		(53	)		—			3,103,165
Buildings		10,671,833		(6,237,883	)		(6,318	)		4,427,632		10,102,634		(5,922,285	)		(5,455	)		4,174,894
Structures		7,159,034		(4,077,472	)		(38	)		3,081,524		6,989,634		(3,826,658	)		(49	)		3,162,927
Machinery and equipment		54,184,134		(37,630,472	)		(14,470	)		16,539,192		52,198,121		(35,767,810	)		(7,481	)		16,422,830
Vehicles		383,891		(302,246	)		(2,050	)		79,595		337,932		(284,897	)		(904	)		52,131
Tools		557,394		(428,215	)		(314	)		128,865		497,173		(405,844	)		(368	)		90,961
Furniture and fixtures		840,366		(650,424	)		(55	)		189,887		796,405		(622,944	)		(116	)		173,345
Lease assets		1,468,295		(469,990	)		—			998,305		1,299,779		(378,581	)		—			921,198
Bearer plants		186,723		(49,392	)		—			137,331		180,486		(38,766	)		—			141,720
Construction-in-progress		6,421,533		(76,357	)		(11,503	)		6,333,673		3,621,269		(73,267	)		(9,978	)		3,538,024
	W	85,168,971		(49,927,975	)		(34,748	)		35,206,248		79,126,651		(47,321,105	)		(24,351	)		31,781,195

(b) Changes in the carrying amount of property, plant and equipment for the years ended December 31, 2023 and 2022 were as follows:

1) For the year ended December 31, 2023

(in millions of Won)	Beginning			Acquisitions		Business Combination(* 2)		Disposals			Depreciation			Impairment loss(* 3,4)			Others(* 1)			Ending
Land	W	3,103,165			83,489		32,565		(7,502	)		—			(5,471	)		83,998			3,290,244
Buildings		4,174,894			53,344		5,770		(14,619	)		(326,280	)		(28,614	)		563,137			4,427,632
Structures		3,162,927			16,498		3,651		(6,915	)		(261,970	)		(28,483	)		195,816			3,081,524
Machinery and equipment		16,422,830			211,181		—		(63,195	)		(2,401,947	)		(202,885	)		2,573,208			16,539,192
Vehicles		52,131			34,004		—		(782	)		(26,322	)		—			20,564			79,595
Tools		90,961			40,170		—		(607	)		(52,444	)		(77	)		50,862			128,865
Furniture and fixtures		173,345			36,975		655		(1,516	)		(61,947	)		(63	)		42,438			189,887
Lease assets		921,198			243,433		—		(15,095	)		(170,386	)		—			19,155			998,305
Bearer plants		141,720			—		—		—			(9,579	)		—			5,190			137,331
Construction-in-progress		3,538,025			6,388,837		—		(2,269	)		—			(8,420	)		(3,582,500	)		6,333,673
	W	31,781,196			7,107,931		42,641		(112,500	)		(3,310,875	)		(274,013	)		(28,132	)		35,206,248
			��

(*1) Represents assets transferred from construction-in-progress to intangible assets and other property, plant and equipment, reclassifications resulting from changing purpose of use, adjustments of foreign currency translation differences and others.

(*2) Represents increases in property, plant and equipment upon reclassification of QSONE Co.,Ltd., which was previously an associate, into a subsidiary by acquiring additional shares during the year ended December 31, 2023.

(*3) The Company terminated operations of certain portions of the lithium production facilities and others located in Gwangyang and Argentina due to changes in operation plans. The Company estimated the recoverable amount of these assets at the net fair value, and recognized an impairment loss ofW196,207 million since recoverable amounts are less than their carrying amounts.

(*4) The Company identified impairment indications for the hydrogen peroxide production facilities located in Gwangyang due to fluctuations in raw material prices and changes in production plans. The Company estimated the recoverable amount of these assets at the net fair value, and recognized an impairment loss ofW46,535 million since recoverable amounts are less than their carrying amounts.

60

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) For the year ended December 31, 2022

(in millions of Won)	Beginning		Acquisitions		Business Combination(*2)		Disposals			Depreciation			Impairment loss(* 3)			Others(* 1)			Ending
Land	W	2,702,715		89,357		248,858		(1,247	)		—			—			63,482			3,103,165
Buildings		4,204,450		127,837		37,741		(9,957	)		(317,350	)		(11,230	)		143,403			4,174,894
Structures		3,131,795		82,130		38,535		(3,274	)		(253,996	)		(5,084	)		172,821			3,162,927
Machinery and equipment		16,420,156		597,172		1,216		(33,511	)		(2,303,917	)		(184,706	)		1,926,420			16,422,830
Vehicles		46,030		15,592		902		(1,017	)		(18,717	)		(123	)		9,464			52,131
Tools		77,795		32,386		203		(187	)		(37,170	)		(351	)		18,285			90,961
Furniture and fixtures		166,162		33,936		1,963		(1,175	)		(59,359	)		(1,990	)		33,808			173,345
Lease assets		867,746		184,260		193,572		(22,029	)		(168,521	)		—			(133,830	)		921,198
Bearer plants		154,682		—		—		—			(9,691	)		—			(3,271	)		141,720
Construction-in-progress		1,825,167		3,947,703		11,111		(383	)		—			(9,699	)		(2,235,875	)		3,538,024
	W	29,596,698		5,110,373		534,101		(72,780	)		(3,168,721	)		(213,183	)		(5,293	)		31,781,195

(*1) Represents assets transferred from construction-in-progress to intangible assets and other property, plant and equipment, reclassifications resulting from changing purpose of use, adjustments of foreign currency translation differences and others.

(*2) Represents increases in property, plant and equipment due to business combination upon acquisition of Senex Energy Limited during the year ended December 31, 2022.

(*3) The Company estimated the recoverable amount of damaged assets due to the flooding of Naengcheon stream in Pohang at the net fair value, and recognized an impairment loss ofW207,072 million since recoverable amounts are less than their carrying amounts.

(c) Borrowing costs capitalized and the capitalized interest rate for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023		2022
Weighted average expenditure	W	3,585,047		1,657,425
Borrowing costs capitalized		126,260		44,264
Capitalization rate (%)		1.53 ~ 6.91		2.39 ~ 3.85

(d) Property, plant and equipment and investment property pledged as collateral as of December 31, 2023 and 2022 are as follows:

		Book value
(in millions of Won)	Collateral right holder	2023		2022
Land	Korean Development Bank and others	W	1,100,811		1,161,696
Buildings and structures	Korean Development Bank and others		1,410,864		1,449,066
Machinery and equipment	Korean Development Bank and others		2,014,210		2,123,621
		W	4,525,885		4,734,383

As of December 31, 2023, assets pledged as collateral related to the Company’s borrowings and others amounting toW6,643,746 million include investment properties and other assets such as right to use land.

61

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(e) Changes in the carrying amount of right of use assets presented as investment property and property, plant and equipment for the years ended December 31, 2023 and 2022 were as follows:

1) For the year ended December 31, 2023

(in millions of Won)	Beginning		Acquisitions		Depreciation			Others			Ending
Land	W	368,167		10,470		(15,582	)		734			363,789
Buildings and structures		163,648		49,929		(52,697	)		(9,514	)		151,366
Machinery and equipment		319,021		73,761		(55,481	)		18,303			355,604
Vehicles		18,652		38,410		(16,456	)		7,622			48,228
Ships		215,496		28,178		(22,920	)		—			220,754
others		6,862		42,901		(12,885	)		(6,983	)		29,895
	W	1,091,846		243,649		(176,021	)		10,162			1,169,636

2) For the year ended December 31, 2022

(in millions of Won)	Beginning		Acquisitions		Business Combination(*1)		Depreciation			Others			Ending
Land	W	391,446		18,077		—		(16,843	)		(24,513	)		368,167
Buildings and structures		143,854		74,454		6,714		(50,397	)		(10,977	)		163,648
Machinery and equipment		256,205		43,088		175,795		(56,333	)		(99,734	)		319,021
Vehicles		14,753		12,467		98		(12,015	)		3,349			18,652
Ships		210,056		23,793		—		(18,355	)		2			215,496
others		19,899		12,381		10,965		(21,467	)		(14,916	)		6,862
	W	1,036,213		184,260		193,572		(175,410	)		(146,789	)		1,091,846

(*1) Represents increases in right-in-use assets upon acquisition of Senex Energy Limited during the year ended December 31, 2022.

(f) The amount recognized in profit or loss related to leases for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023		2022
Interest on lease liabilities	W	41,109		34,936
Expenses related to short-term leases		52,486		29,931
Expenses related to leases of low -value assets		20,103		17,877
	W	113,698		82,744

62

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

15. Goodwill and Other Intangible Assets, Net,

(a) Goodwill and other intangible assets as of December 31, 2023 and 2022 are as follows:

	2023										2022
(in millions of Won)	Acquisition cost		Accumulated amortization and impairment loss			Government grants			Book value		Acquisition cost		Accumulated amortization and impairment loss			Government grants			Book value
Goodwill	W	1,720,753		(1,317,581	)		—			403,172		1,723,974		(1,281,487	)		—			442,487
Intellectual property rights		5,167,677		(2,138,026	)		—			3,029,651		4,944,973		(1,808,901	)		—			3,136,072
Membership		141,306		(3,122	)		—			138,184		135,905		(2,963	)		—			132,942
Development expense		758,878		(631,974	)		(86	)		126,818		687,437		(571,266	)		—			116,171
Port facilities usage rights		681,530		(499,119	)		—			182,411		681,530		(484,319	)		—			197,211
Exploration and evaluation assets		324,324		(160,878	)		—			163,446		260,548		(159,557	)		—			100,991
Development assets		10,235		—			—			10,235		78,970		—			—			78,970
Customer relationships		865,753		(668,858	)		—			196,895		865,691		(624,380	)		—			241,311
Other intangible assets		1,260,067		(796,052	)		(43	)		463,972		1,175,409		(783,088	)		(25	)		392,296
	W	10,930,523		(6,215,610	)		(129	)		4,714,784		10,554,437		(5,715,961	)		(25	)		4,838,451

(b) The changes in carrying amount of goodwill and other intangible assets for the years ended December 31, 2023 and 2022 were as follows:

1) For the year ended December 31, 2023

(in millions of Won)	Beginning		Acquisitions		Disposals			Amortization			Impairment loss(* 3)			Others(* 2)			Ending
Goodwill	W	442,487		—		—			—			(36,093	)		(3,222	)		403,172
Intellectual property rights		3,136,072		208,874		(5	)		(321,752	)		(89,986	)		96,448			3,029,651
Membership(* 1)		132,942		7,360		(1,920	)		(170	)		11			(39	)		138,184
Development expense		116,171		13,130		(97	)		(73,319	)		—			70,933			126,818
Port facilities usage rights		197,211		—		—			(14,800	)		—			—			182,411
Exploratation and evaluation assets		100,991		67,000		—			—			(1,204	)		(3,341	)		163,446
Development assets		78,970		27,831		—			—			—			(96,566	)		10,235
Customer relationships		241,311		—		—			(44,478	)		—			62			196,895
Other intangible assets		392,296		139,100		(625	)		(43,674	)		(2,055	)		(21,070	)		463,972
	W	4,838,451		463,295		(2,647	)		(498,193	)		(129,327	)		43,205			4,714,784

(*1) Economic useful life of membership is indefinite.

(*2) Represents assets transferred from construction-in-progress to intangible asset and assets transferred from property, plant and equipment, adjustments of foreign currency translation difference and others.

(*3) During the year ended December 31, 2023, POSCO Canada Ltd., a subsidiary, decided to make an investment in kind the Greenhills Mine, which is recognized as a joint operation, to a new partnership established by Teck Coal Partnership, the main operator. POSCO Canada Ltd. estimated the recoverable amount considering the fair value and acquired shares of the new partnership, and recognized an impairment loss ofW88,518 million since recoverable amounts are less than their carrying amounts.

63

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) For the year ended December 31, 2022

(in millions of Won)	Beginning		Acquisitions		Business Combination (* 3,4)		Disposals			Amortization			Impairment loss(* 5)			Others(*2)			Ending
Goodwill	W	735,969		—		66,206		—			—			(369,337	)		9,649			442,487
Intellectual property rights		2,225,808		354,179		912,971		(582	)		(326,494	)		379			(30,189	)		3,136,072
Membership(* 1)		142,370		9,230		—		(2,082	)		(145	)		854			(17,285	)		132,942
Development expense		153,973		1,800		—		(13	)		(67,446	)		(1,046	)		28,903			116,171
Port facilities usage rights		216,021		—		—		—			(14,800	)		—			(4,010	)		197,211
Exploratation and evaluation assets		61,957		24,583		21,266		—			—			—			(6,815	)		100,991
Development assets		—		6,607		76,591		—			—			—			(4,228	)		78,970
Customer relationships		285,720		—		—		—			(44,478	)		—			69			241,311
Other intangible assets		344,491		99,388		26,649		(145	)		(35,472	)		(232	)		(42,383	)		392,296
	W	4,166,309		495,787		1,103,683		(2,822	)		(488,835	)		(369,382	)		(66,289	)		4,838,451

(*1) Economic useful life of membership is indefinite.

(*2) Represents assets transferred from construction-in-progress to intangible assets and assets transferred from property, plant and equipment, adjustments of foreign currency translation difference and others.

(*3) Represents increases in intangible assets upon acquisition of Senex Energy Limited during the year ended December 31, 2022.

(*4) Represents increases in intangible assets upon acquisition of POSCO Silicon Solution Co., Ltd during the year ended December 31, 2022.

(*5) During the year ended December 31, 2022, impairment loss ofW337,953 million on goodwill of POSCO INTERNATIONAL Corporation, a subsidiary included in trading segment of green infrastructure, was recognized as the recoverable amount is less than the carrying amount of the CGU.

(c) For the purpose of impairment testing, goodwill is allocated to individually operating entities each of which is determined to be a CGU. The goodwill amounts as of December 31, 2023 and 2022 are as follows:

(in millions of Won)
		Total number of CGUs
Reporting segments		2023		2022		CGUs	2023		2022
Steel			10		10	POSCO VST CO., LTD.	W	36,955		36,955
						POSCO Center Beijing		173		173
						Others		13,806		13,741
Green infrastructure	Trading		4		4	POSCO INTERNATIONAL Corporation - Global Business Division(* 1)		240,092		240,092
						POSCO INTERNATIONAL Corporation - Energy Division		26,471		26,471
						Others		7,513		7,270
	E&C		2		2	POSCO Eco & Challenge Co., Ltd.		—		24,868
						POSCO WIDE Co., Ltd		32,585		35,728
	Logistics,etc		1		1	Shinan Green Energy Co.,LTD.		9,722		17,804
Green Materials			3		3	POSCO FUTURE M CO., LTD		8,800		8,800
						POSCO Silicon Solution Co., Ltd		26,947		30,477
						Zhangjiagang Pohang Refractories Co., Ltd.		108		108
			20		20		W	403,172		442,487

(*1) The recoverable amount of POSCO INTERNATIONAL Corporation – Global Business Division, a subsidiary in trading segment of the green infrastructure business, is determined based on its value in use. As of December 31, 2023, the value in use is estimated by applying an 7.73% (2022: 8.97%) post-tax discount rate to the future cash flows estimated based on management’s 5-year business plan and terminal growth rate of 1.0% (2022: 1.7%) thereafter. The terminal growth rate does not exceed long-term growth rate of its industry. No impairment loss on goodwill was recognized for the year ended December 31, 2023 as the recoverable amount exceeded the carrying amount of the CGU.

64

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

The Company calculated the value in use by discounting the post-tax cash flows at the post-tax discount rate, which is materially the same as applying pre-tax discount rate of 10.38% (2022: 11.54%) to pre-tax cash flows.

The value in use of the CGU is sensitive to assumptions such as discount rate, terminal growth and estimated revenue used in discount cash flow model. If the discount rate increases by 0.5%, the value in use would have decreased byW304,741 million or 7.96%. If the terminal growth rate decreases by 0.5%, the value in use would have decreased byW106,403 million or 2.78%.

16. Other Assets

Other current assets and other non-current assets as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Current
Advance payments	W	593,300		782,439
Prepaid expenses		226,960		263,536
Firm commitment asset		3,418		9,674
Other current assets		17,306		20,290
	W	840,984		1,075,939
Non-current
Long-term advance payments	W	46,989		23,429
Long-term prepaid expenses		30,232		53,803
Others(* 1)		95,974		90,143
	W	173,195		167,375

(*1) As of December 31, 2023, there is no estimated tax amounts to be refunded as the result of the Company’s appeal in connection with the additional income tax payment in prior years’ tax audits and claim for rectification. As of December 31, 2022, the Company recognized tax assets amounting toW6,764 million, based on the Company’s best estimate of the tax amounts to be refunded when the result of the Company’s appeal in connection with the additional income tax payment in prior years’ tax audits and claim for rectification are finalized.

65

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

17. Borrowings

(a) Short-term borrowings and current portion of long-term borrowings as of December 31, 2023 and 2022 are as follows:

(in millions of Won)
	Lenders	Issuance date		M aturity date		Interest rate (%)		2023			2022
Short-term borrowings
Bank overdrafts	JP Morgan and others		January, 2023~ December, 2023		January, 2024~ December, 2024		3.65 ~ 7.72	W	69,160			197,718
Short-term borrowings	HSBC and others		December, 2022~ December, 2023		January, 2024~ December, 2024		0.22 ~ 49.69		4,890,120			6,635,402
									4,959,280			6,833,120
Current portion of long-term liabilities Current portion of long-term borrowings	Export-Import Bank of Korea and others		September, 2001~ March, 2023		April, 2024~ December, 2024		0.25 ~ 8.69		990,088			2,302,592
Current portion of debentures	KB Securities co.,Ltd. and others		March, 2019~ October, 2021		January, 2024~ October, 2024		1.51 ~ 2.52		3,255,375			2,782,049
Less: Current portion of discount on debentures issued									(2,217	)		(1,767	)
Current portion of exchangable bonds	Foreign currency exchangable bonds		September, 2021		September, 2026				1,756,691			—
									5,999,937			5,082,874
								W	10,959,217			11,915,994

(b) Long-term borrowings, excluding current portion as of December 31, 2023 and 2022 are as follows:

(in millions of Won)
	Lenders	Issuance date	Maturity date	Interest rate (%)		2023			2022
Long-term borrowings	Export-Import Bank of Korea and others	September, 2001~ December, 2023	January, 2025~ March, 2040		0.19 ~ 8.69	W	4,590,541 (9,414	)		2,718,212 (8,951	)
Less: Present value discount Bonds	KB Securities co.,Ltd. and others	July, 2015~ November, 2023	January, 2025~ January, 2033		1.68 ~ 6.85		10,478,394 (48,358	)		8,351,006 (28,894	)
Less: Discount on debentures issued Exchangeable bonds(*1,2)	Foreign currency exchangeable bonds	September, 2021	September, 2026				—			1,358,294
						W	15,011,163			12,389,667

(*1) As of December 31, 2023, exchangeable bonds were reclassified as current liabilities because the bondholders’ put option for redemption is exercisable within 12 months.

66

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(*2) The issuance conditions of the exchangeable bonds issued by the Company are as follows :

	Foreign currency exchangable bonds
Type of bond	Exchangable bonds
Aggregate principal amount	EUR 1,065,900,000
Interest rate	- Coupon rate : -
	- Yield to Maturity : (0.78%)
Maturity date	September 1, 2026
	1) Redemption at Maturity : Outstanding bond principal, which is not repaid early or which call
Redemption	option is not exercised on, is repaid at maturity as a lump sum 2) Prepayment : The issuer has call option and the bondholders have put option
Exchange rate	100%
Exchange price (Won/share)	449,066(*)
Underlying shares exchange	Registered common shares(treasury shares)
Exchange period	From October 12, 2021 to August 22, 2026
	Adjusting the exchange price according to the terms and conditions of the bond in the events of
Adjustments for exchange price	reason for adjusting the exchange price such as, bonus issue, share split, share consolidation, change of share type, issuannce of options or warranties to shareholders, share dividend, cash dividend, issuance of new shares under the market price. - 3 years(September 1, 2024) from the closing date
Put option by bondholders	- In the event of a change of control of the Company - Where the shares issued by the Company are delisted (or suspended for more than 30 consecutive trading days) - Share price(based on closing price) is higher than 130% of exchange price for more than 20 trading days during 30 consecutive trading days in a row, after 3 years (September 1, 2024) from the closing day to 30 business days before the maturity of bonds.
Call option by the Issuer	- When the outstanding balance of outstanding bonds is less than 10% of the total issuance(Clean-Up Call) - Where additional reasons for tax burden arise due to the amendment of relevant laws and regulations, etc.

(*) The exchange value has changed due to cash dividends during the year ended December 31, 2023.

The Company has designated exchangeable bonds listed on the Singapore Stock Exchange as financial liabilities measured at fair value through profit or loss. The quoted transaction price is used in fair value valuation, and changes in fair value are recognized in profit or loss.

(c) Assets pledged as collateral with regard to the borrowings as of December 31, 2023 are as follows:

(in millions of Won)	Lenders	Book value		Pledged amount
Property, plant and equipment and Investment property	Korea Development Bank and others	W	4,391,431		5,925,533
Trade accounts and notes receivable	Korea Development Bank and others		132,942		132,942
Financial instruments	Woori Bank and others		36,018		36,018
		W4,560,391		6,094,493

67

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

18. Other Payables

Other payables as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Current
Accounts payable	W	1,174,097		1,423,402
Accrued expenses		1,046,891		981,609
Dividend payable		3,261		4,371
Lease liabilities		163,952		149,384
Withholdings		349,277		307,102
	W	2,737,478		2,865,868
Non-current
Accounts payable	W	14,143		15,713
Accrued expenses		8,073		8,102
Lease liabilities		760,368		674,098
Long-term withholdings		90,981		92,489
	W	873,565		790,402

19. Other Financial Liabilities

Other financial liabilities as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Current
Derivative liabilities	W	38,631		95,157
Financial guarantee liabilities		5,114		11,370
Others(* 1)		119,881		—
	W	163,626		106,527
Non-current
Derivative liabilities	W	81,291		79,984
Financial guarantee liabilities		7,858		7,068
Others		64,633		—
	W	153,782		87,052

(*1) The Company recognized other financial liabilities in connection with the put option agreement which POSCO FUTURE MATERIALS CANADA INC. (formerly, POSCO CHEMICAL CANADA INC.), a subsidiary, entered into with GM Battery Raw Materials Corporation.

68

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

20. Provisions

(a) Provisions as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023				2022
	Current		Non-current		Current		Non-current
Provision for bonus payments	W	146,277		38,114		136,275		33,157
Provision for construction warranties		50,222		146,536		35,702		170,272
Provision for legal contingencies and claims(* 1)		20,893		52,169		46,823		59,518
Provision for the restoration(* 2,3)		14,567		161,253		6,049		185,097
Others(* 4,5,6)		187,785		69,937		291,139		131,874
	W	419,744		468,009		515,988		579,918

(*1) The Company recognized probable outflow of resources amounting toW45,712 million andW52,530 million as provisions for legal contingencies and asserted claim in relation to lawsuits against the Company as of December 31, 2023 and 2022, respectively.

(*2) Due to contamination of lands near the Company’s magnesium smelting plant located in Gangneung province and others, the Company recognized present values of estimated costs for recovery amounting toW17,005 million as provisions for restoration as of December 31, 2023. In order to determine the estimated costs, the Company has assumed that it would use all of technologies and materials available for now to recover the land. In addition, the Company has applied a discount rate of 3.77%~3.89% to measure present value of these costs.

(*3) During the year ended December 31, 2023, due to contamination of river water quality near Greenhills Mine owned as joint operation by POSCO Canada Ltd., the Company calculated present value of estimated costs for recovery amounting toW119,710 million as provisions for improvement and reclassified as liabilities held for sale as of December 31, 2023.

(*4) As of December 31, 2023 and December 31, 2022, POSCO INTERNATIONAL Corporation and Korea Fuel Cell, recognizedW23,224 million andW97,928 million of provisions for warranties, respectively, for the service contract on fuel cell based on its estimate of probable outflow of resources.

(*5) As of December 31, 2023 and December 31, 2022, the Company has recognized emission liabilities amounting toW9,065 million andW14,178 million respectively, for expected greenhouse gas emissions exceeding the quantity of free quota emission rights.

(*6) According to the Act on the promotion of the development, use and diffusion of new and renewable energy, POSCO INTERNATIONAL Corporation is obliged to supply a certain amount of power generated by new and renewable energy. In accordance with the Act, POSCO INTERNATIONAL Corporation estimated the cost required to fulfill its obligations, such as insufficient supply of power using new and renewable energy to be borne, and as of December 31, 2023 and December 31, 2022, the Company recognizedW64,166 million andW123,073 million, respectively, as provision liabilities.

69

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(b) The following are the key assumptions concerning the future and other key sources of estimation uncertainties at the end of the reporting period.

	Key assumptions for the estimation
Provision for bonus payments	Estimations based on financial performance and service provided
Provision for construction warranties	Estimations based on historical warranty data
Provision for legal contingencies and claims	Estimations based on the degree of probability of an unfavorable outcome and the ability to make a sufficient reliable estimate of the amount of loss

(c) Changes in provisions for the years ended December 31, 2023 and 2022 were as follows:

1) For the year ended December 31, 2023

(in millions of Won)	Beginning		Increase		Utilization			Reversal			Others(* 1)			Ending
Provision for bonus payments	W	169,432		181,221		(158,529	)		(6,063	)		(1,670	)		184,391
Provision for construction warranties		205,974		42,653		(49,117	)		(8,350	)		5,598			196,758
Provision for legal contingencies and claims		106,341		16,327		(48,144	)		(3,599	)		2,137			73,062
Provision for the restoration		191,146		104,227		(9,887	)		(80	)		(109,586	)		175,820
Others		423,013		189,227		(255,001	)		(112,909	)		13,392			257,722
	W	1,095,906		533,655		(520,678	)		(131,001	)		(90,129	)		887,753

(*1) Includes transfer to liabilities held for sale and adjustments of foreign currency translation differences and others.

2) For the year ended December 31, 2022

(in millions of Won)	Beginning		Increase		Utilization			Reversal			Others(* 1)			Ending
Provision for bonus payments	W	138,533		176,677		(137,092	)		(5,813	)		(2,873	)		169,432
Provision for construction warranties		236,660		52,438		(73,853	)		(8,287	)		(984	)		205,974
Provision for legal contingencies and claims		93,491		47,344		(33,175	)		(8,654	)		7,335			106,341
Provision for the restoration		159,531		45,130		(43,168	)		(1,299	)		30,952			191,146
Others		360,861		317,621		(203,985	)		(60,738	)		9,254			423,013
	W	989,076		639,210		(491,273	)		(84,791	)		43,684			1,095,906

(*1) Includes adjustments of foreign currency translation differences and others.

70

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

21. Employee Benefits

(a) Defined contribution plans

The expenses related to post-employment benefit plans under defined contribution plans for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023		2022
Expense related to post-employment benefit plans under defined contribution plans	W	70,394		62,467

(b) Defined benefit plans

1) The amounts recognized in relation to net defined benefit liabilities in the statements of financial position as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023			2022
Present value of funded obligations	W	2,445,797			2,200,127
Fair value of plan assets(*1)		(2,902,714	)		(2,703,639	)
Present value of non-funded obligations		30,912			20,560
Net defined benefit liabilities	W	(426,005	)		(482,952	)

(*1) As of December 31, 2023 and 2022, the Company recognized net defined benefit assets amounting toW464,758 million andW520,659 million, respectively, since there are consolidated entities whose fair value of plan assets exceeded the present value of defined benefit obligations.

2) Changes in present value of defined benefit obligations for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Defined benefit obligations at the beginning of period	W	2,220,687			2,415,031
Current service costs		235,340			235,007
Interest costs		97,660			71,348
Remeasurements :		178,649			(192,339	)
- Loss (gain) from change in financial assumptions		165,919			(381,800	)
- Loss (gain) from change in demographic assumptions		(16,094	)		(621	)
- Loss (gain) from change in others		28,824			190,082
Benefits paid		(263,547	)		(300,353	)
Others		7,920			(8,007	)
Defined benefit obligations at the end of period	W	2,476,709			2,220,687

71

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

3) Changes in fair value of plan assets for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Fair value of plan assets at the beginning of period	W	2,703,639			2,620,046
Interest on plan assets		126,386			77,745
Remeasurement of plan assets		22,400			(57,335	)
Contributions to plan assets		279,225			346,773
Benefits paid		(233,689	)		(287,312	)
Others		4,753			3,722
Fair value of plan assets at the end of period	W	2,902,714			2,703,639

The Company expects to make an estimated contribution ofW281,169 million to the defined benefit plan assets in 2024.

4) The fair value of plan assets as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Equity instruments	W	6,867		5,949
Debt instruments		529,313		758,250
Deposits		2,155,063		1,813,863
Others		211,471		125,577
	W	2,902,714		2,703,639

5) The amounts recognized in consolidated statement of comprehensive income for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Current service costs	W	235,340			235,007
Net interest costs(* 1)		(28,726	)		(6,397	)
	W	206,614			228,610

(*1) The actual return on plan assets amounted toW148,786 million andW20,410 million for the years ended December 31, 2023 and 2022, respectively.

The above expenses by function were as follows:

(in millions of Won)	2023		2022
Cost of sales	W	135,687		156,576
Selling and administrative expenses		70,746		71,060
Others		181		974
	W206,614		228,610

72

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

6) Accumulated actuarial gains (losses), net of tax recognized in other comprehensive income for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Beginning	W	(396,296	)		(502,065	)
Remeasurements of defined benefit plans		(118,548	)		105,769
Ending	W	(514,844	)		(396,296	)

7) The principal actuarial assumptions as of December 31, 2023 and 2022 are as follows:

(%)	2023		2022
Discount rate		0.92 ~ 7.60		2.00 ~ 7.60
Expected future increase in salaries(* 1)		2.30 ~ 28.11		1.50 ~ 12.20

(*1) The expected future increase in salaries is based on the average salary increase rate for the past 5 years.

All assumptions are reviewed at the end of the reporting period. Additionally, the total estimated defined benefit obligation includes actuarial assumptions associated with the long-term characteristics of the defined benefit plan.

8) Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding the other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

(in millions of Won)	1% Increase						1% Decrease
	Amount			Percentage(%)			Amount			Percentage(%)
Discount rate	W	(151,746	)		(6.1	)		172,840			7.0
Expected future increase in salaries		171,615			6.9			(153,433	)		(6.2	)

9) As of December 31, 2023 the maturity of the expected benefit payments are as follows:

(in millions of Won)	Within 1 year		1 years - 5 year		5 years - 10 years		10 years - 20 years		After 20 years		Total
Benefits to be paid	W	305,269		1,000,746		743,159		1,018,133		404,773		3,472,080

The maturity analysis of the defined benefit obligation was nominal amounts of defined benefit obligations using expected remaining period of service of employees.

73

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

22. Other Liabilities

Other liabilities as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Current
Due to customers for contract work	W	624,632		761,393
Advances received		304,441		535,885
Unearned revenue		69,062		62,030
Withholdings		297,442		369,067
Firm commitment liability		20,136		7,566
Others(*1)		21,929		24,375
	W	1,337,642		1,760,316
Non-current
Unearned revenue	W	8,889		22,203
Others(*1)		105,583		129,674
	W	114,472		151,877

(*1) As of December 31, 2023 and December 31, 2022, the Company recognized the acquired liability amounted toW56,325 million andW71,248 million, respectively related to unfavorable terms of a customer contract relative to market-terms upon the acquisition of Senex Energy Limited.

74

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

23. Financial Instruments

(a) Classification and fair value of financial instruments

1) The carrying amount and the fair values of financial assets and financial liabilities by fair value hierarchy as of December 31, 2023 and 2022 are as follows:

① December 31, 2023

(in millions of Won)			Fair value
	Book value		Level 1		Level 2		Level 3		Total
Financial assets
Fair value through profit or loss
Derivative assets	W	291,541		—		291,541		—		291,541
Short-term financial instruments		6,540,407		—		6,540,407		—		6,540,407
Equity securities		99,254		61,665		—		37,589		99,254
Debt securities		88,196		—		75,183		13,013		88,196
Other securities		669,687		—		270		669,417		669,687
Derivative hedging instruments(*2)		9,601		—		9,601		—		9,601
Fair value through other comprehensive income
Equity securities		1,694,277		1,539,205		—		155,072		1,694,277
Financial assets measured at amortized cost(*1)
Cash and cash equivalents		6,670,879		—		—		—		—
Trade accounts and notes receivable		9,155,853		—		—		—		—
Other receivables		2,750,036		—		—		—		—
Debt securities		295,201		—		—		—		—
Deposit instruments		4,423,327		—		—		—		—
	W	32,688,259		1,600,870		6,917,002		875,091		9,392,963
Financial liabilities
Fair value through profit or loss
Derivative liabilities	W	116,748		—		116,748		—		116,748
Borrowings		1,756,691		1,756,691		—		—		1,756,691
Other financial Liabilities		119,258		—		—		119,258		119,258
Derivative hedging instruments(*2)		3,174		—		3,174		—		3,174
Financial liabilities measured at amortized cost(*1)
Trade accounts and notes payable		5,782,825		—		—		—		—
Borrowings		24,213,689		—		24,310,166		—		24,310,166
Financial guarantee liabilities		12,972		—		—		—		—
Others		3,241,459		—		—		—		—
Other financial Liabilities		65,256		—		—		—		—
	W	35,312,072		1,756,691		24,430,088		119,258		26,306,037

(*1) Fair value of financial assets and liabilities measured at amortized cost except borrowings approximates their carrying amounts.

(*2) The Company applies hedge accounting which uses forward contracts as hedging instrument in order to hedge the risk of changes in fair value of product prices regarding firm commitments or purchase commitments. Also, the Company applies cash flow hedge accounting which uses currency swap as hedging instrument in order to hedge the risk of interest rate and foreign exchange rate changes in foreign currency which influences cash flow from borrowings.

75

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

② December 31, 2022

(in millions of Won)			Fair value
	Book value		Level 1		Level 2		Level 3		Total
Financial assets
Fair value through profit or loss
Derivative assets	W	350,149		—		350,149		—		350,149
Short-term financial instruments		8,006,081		—		8,006,081		—		8,006,081
Debt securities		75,876		—		69,926		5,950		75,876
Other securities		632,469		29,687		1,022		601,760		632,469
Other receivables		2,000		—		—		2,000		2,000
Derivative hedging instruments(*2)		9,846		—		9,846		—		9,846
Fair value through other comprehensive income
Equity securities		1,462,088		1,210,124		—		251,964		1,462,088
Financial assets measured at amortized cost(*1)
Cash and Cash Equivalents		8,053,108		—		—		—		—
Trade accounts and notes receivable		8,414,946		—		—		—		—
Other receivables		2,458,227		—		—		—		—
Debt securities		124,147		—		—		—		—
Deposit instruments		2,581,802		—		—		—		—
	W	32,170,739		1,239,811		8,437,024		861,674		10,538,509
Financial liabilities
Fair value through profit or loss
Derivative liabilities	W	157,036		—		157,036		—		157,036
Borrowings		1,358,294		1,358,294		—		—		1,358,294
Derivative hedging instruments		18,105		—		18,105		—		18,105
Financial liabilities measured at amortized cost(*1)
Trade accounts and notes payable		5,520,821		—		—		—		—
Borrowings		22,947,368		—		22,331,771		—		22,331,771
Financial guarantee liabilities		18,438		—		—		—		—
Others		2,789,195		—		—		—		—
	W	32,809,257		1,358,294		22,506,912		—		23,865,206

(*1) Fair value of financial assets and liabilities measured at amortized cost except borrowings approximates their carrying amounts.

(*2) The Company applies hedge accounting which uses forward contracts as hedging instrument in order to hedge the risk of changes in fair value of product prices regarding firm commitments or purchase commitments. Also, the Company applies cash flow hedge accounting which uses currency swap as hedging instrument in order to hedge the risk of interest rate and foreign exchange rate changes in foreign currency which influences cash flow from borrowings.

2) Financial assets and financial liabilities classified as fair value hierarchy Level 2

Fair values of derivatives are measured using the derivatives instrument valuation models such as discounted cash flow method. Inputs of the financial instrument valuation model include forward rate, interest rate and others. The fair value of derivatives may change depending on the type of derivatives and the nature of the underlying assets.

3) Financial assets classified as fair value hierarchy Level 3

① Value measurement method and significant but not observable inputs for the financial assets classified as fair value hierarchy Level 3 as of December 31, 2023 are as follows:

(in millions of Won)	Fair value		Valuation technique	Inputs	Range of inputs	Effect on fair value assessment with unobservable input
Financial assets at fair value	W	104,529	Discounted cash flows	Growth rate	0% ~ 1.00%	As growth rate increases, fair value increases
				Discount rate	9.64% ~ 26.60%	As discount rate increases, fair value decreases
		113,626	Proxy firm valuation method	Price multiples	0.695 ~ 3.343	As price multiples increases, fair value increases
		656,936	Asset value approach	—	—	—

76

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

② Sensitivity analysis of financial assets classified as Level 3 of fair value hierarchy

If other inputs remain constant as of December 31, 2023 and one of the significant but not observable input is changed, the effect on fair value measurement is as follows:

(in millions of Won)	Input variable	Favorable changes		Unfavorable changes
Financial assets at fair value	Fluctuation 0.5% of growth rate	W	1,511		(1,308	)
	Fluctuation 0.5% of discount rate		2,125		(1,938	)

③ Changes in fair value of financial assets classified as Level 3 for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)
	2023			2022
Beginning	W	861,674			620,914
Acquisition		100,442			182,217
Gain (loss) on valuations of financial assets		39,621			24,613
Other comprehensive income (loss)		22,526			126,510
Disposal and others		(149,172	)		(92,580	)
Ending	W	875,091			861,674

77

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

4) Finance income and costs by category of financial instrument for the years ended December 31, 2023 and 2022 were as follows:

① For the year ended December 31, 2023

(in millions of Won)	Finance income and costs
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Others			Total			Other comprehensive income (loss)
Financial assets at fair value through profit or loss	W	—			520,884			—			190,531			560			711,975			—
Derivative assets		—			167,997			—			289,423			—			457,420			—
Financial assets at fair value through other comprehensive income		—			—			—			—			49,586			49,586			257,725
Financial assets measured at amortized cost		502,147			—			211,077			(84,649	)		(6,347	)		622,228			—
Financial liabilities at fair value		—			(305,562	)		(92,835	)		—			—			(398,397	)		—
Derivative liabilities		—			(44,323	)		—			(276,600	)		—			(320,923	)		(1,292	)
Financial liabilities measured at amortized cost		(1,001,290	)		—			(466,244	)		11			(26,616	)		(1,494,139	)		—
	W	(499,143	)		338,996			(348,002	)		118,716			17,183			(372,250	)		256,433

② For the year ended December 31, 2022

(in millions of Won)	Finance income and costs
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Others			Total			Other comprehensive income (loss)
Financial assets at fair value through profit or loss	W	20,421			(599,777	)		—			237,771			545			(341,040	)		—
Derivative assets		—			232,246			—			797,211			—			1,029,457			—
Financial assets at fair value through other comprehensive income		—			—			—			—			38,837			38,837			(10,076	)
Financial assets measured at amortized cost		226,584			—			414,944			(64,244	)		(42,433	)		534,851			—
Financial liabilities at fair value		—			85,790			(8,891	)		—			—			76,899			—
Derivative liabilities		—			(162,649	)		—			(647,418	)		—			(810,067	)		1,023
Financial liabilities measured at amortized cost		(607,458	)		—			(893,377	)		—			1,443			(1,499,392	)		—
	W	(360,453	)		(444,390	)		(487,324	)		323,320			(1,608	)		(970,455	)		(9,053	)

78

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(b) Credit risk

1) Credit risk exposure

The carrying amount of financial assets represents the Company’s maximum exposure to credit risk. The maximum exposure to credit risk as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Cash and cash equivalents	W	6,670,879		8,053,108
Derivative assets		301,142		359,995
Short-term financial instrument		6,540,407		8,006,082
Debt securities		383,397		200,023
Other securities		669,687		632,469
Other receivables		2,750,036		2,460,227
Trade accounts and notes receivable		11,057,819		9,822,224
Deposit instruments		4,423,327		2,581,802
	W	32,796,694		32,115,930

The Company provided financial guarantee for the repayment of loans of associates, joint ventures and third parties. As of December 31, 2023 and 2022, the maximum exposure to credit risk related to the financial guarantee amounted toW3,939,463 million andW3,982,288 million, respectively.

2) Impairment losses on financial assets and contract assets

The Company assesses expected credit losses by estimating the default rate based on the credit loss experience of prior periods and overdue conditions and considers the credit default swap (CDS) premium to reflect changes in credit risk by sector. For credit-impaired assets and significant receivables where the credit risk is significantly increased, credit losses are individually assessed.

① Allowance for doubtful accounts as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Trade accounts and notes receivable	W	330,898		378,100
Other accounts receivable		185,987		178,264
Loans		417,725		165,051
Others		18,119		9,098
	W	952,729		730,513

79

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

② Impairment losses on financial assets for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Bad debt expenses	W	(17,785	)		24,791
Other bad debt expenses(*1)		291,340			14,968
Less: Recovery of allowance for other bad debt accounts		(7,641	)		(5,144	)
	W	265,914			34,615

(*1) Other bad debt expenses are mainly related to loans and other accounts receivable.

③ The aging and allowance for doubtful accounts of trade accounts and notes receivable as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023				2022
	Trade accounts and notes receivable		Allowance for doubtful accounts		Trade accounts and notes receivable		Allowance for doubtful accounts
Not due	W	9,886,572		13,155		7,955,929		20,752
Over due less than 1 month		681,782		5,448		864,391		63,311
1 month - 3 months		131,267		3,521		388,151		10,337
3 months - 12 months		291,774		27,248		517,171		12,645
Over 12 months		397,322		281,526		446,045		271,055
	W	11,388,717		330,898		10,171,687		378,100

④ The aging and allowance for doubtful accounts of other receivables as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023				2022
	Loans and other account receivable		Allowance for doubtful accounts		Loans and other account receivable		Allowance for doubtful accounts
Not due	W	2,948,838		347,108		2,049,908		53,070
Over due less than 1 month		29,653		40		141,718		2,987
1 month - 3 months		56,574		1,812		108,152		16,408
3 months - 12 months		133,081		91,621		24,912		930
Over 12 months		203,712		181,240		487,950		279,018
	W	3,371,858		621,821		2,812,640		352,413

80

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

⑤ Changes in the allowance for doubtful accounts for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Beginning	W	730,513			717,365
Bad debt expenses		(17,785	)		24,791
Other bad debt expenses		283,699			9,824
Others(*1)		(43,708	)		(21,467	)
Ending	W	952,719			730,513

(*1) Others for the years ended December 31, 2023 and 2022, included decreases mainly due to write-off amounting toW51,831 million andW20,855 million, respectively.

(c) Liquidity risk

1) Contractual maturities for non-derivative financial liabilities are as follows:

(in millions of Won)	Book value		Contractual cash flow		Within 1 year		1 year - 5 years		After 5 years
Trade accounts and notes payable	W	5,782,825		5,782,825		5,782,825		—		—
Borrowings(*1)		25,970,379		28,112,630		11,535,464		14,940,495		1,636,671
Financial guarantee liabilities(*2)		12,972		3,939,463		3,939,463		—		—
Lease liabilities		924,320		1,107,761		163,952		506,381		437,428
Other financial liabilities		2,317,139		2,317,510		2,204,034		113,476		—
	W	35,007,635		41,260,189		23,625,738		15,560,352		2,074,099

(*1) For exchangeable bonds, cash flow is allocated to the period in which the investor’s right to claim early redemption could be exercised.

(*2) For issued financial guarantee contracts, the maximum amount of the guarantee is allocated to the earliest period in which the guarantee could be called.

2) Contractual maturities for derivative financial liabilities are as follows:

(in millions of Won)	Within 1 year		1 year - 5 years		After 5 years		Total
Currency forward	W	33,367		4,984		—		38,351
Currency swap		1,983		5,074		10,651		17,708
Interest rate swap		—		16,278		—		16,278
Others		3,281		44,304		—		47,585
	W	38,631		70,640		10,651		119,922

81

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(d) Currency risk

1) The Company has exposure to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in foreign exchange rates. The exposure to currency risk as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023				2022
	Assets		Liabilities		Assets		Liabilities
USD	W	4,979,817		11,146,695		5,553,742		8,996,494
EUR		538,330		2,882,376		574,739		2,438,031
JPY		343,321		264,563		525,815		384,535
Others		1,108,650		461,634		1,614,928		807,876

2) As of December 31, 2023 and 2022, provided that functional currency against foreign currencies other than functional currency hypothetically strengthens or weakens by 10%, the changes in gain or loss for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023						2022
	10% increase			10% decrease			10% increase			10% decrease
USD	W	(616,688	)		616,688			(344,275	)		344,275
EUR		(234,405	)		234,405			(186,329	)		186,329
JPY		7,876			(7,876	)		14,128			(14,128	)

(e) Interest rate risk

1) The carrying amount of interest-bearing financial instruments as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023			2022
Fixed rate
Financial assets	W	19,118,092			21,394,764
Financial liabilities		(19,237,434	)		(16,932,079	)
		(119,342	)		4,462,685
Variable rate
Financial liabilities	W	(7,657,266	)		(8,197,066	)

82

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) Sensitivity analysis on the cash flows of financial instruments with variable interest rate

The Company’s interest rate risk mainly arises from borrowings with variable interest rate. As of December 31, 2023 and 2022, provided that other factors remain the same and the interest rate of borrowings with floating rates increases or decreases by 1%, the changes in interest expense for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023					2022
	1% increase			1% decrease		1% increase			1% decrease
Variable rate financial instruments	W	(76,573	)		76,573		(81,971	)		81,971

24. Share Capital and Capital Surplus

(a) Share capital as of December 31, 2023 and 2022 are as follows:

(Share, in Won)	2023		2022
Authorized shares		200,000,000		200,000,000
Par value	W	5,000		5,000
Issued shares(*1)		84,571,230		84,571,230
Shared capital(*2)	W	482,403,125,000		482,403,125,000

(*1) As of December 31, 2023, total number of ADRs of 20,430,296 outstanding in overseas stock market are equivalent to 5,107,574 shares of common stock.

(*2) As of December 31, 2023, the difference between the ending balance of common stock and the aggregate par value of issued common stock isW59,547 million due to retirement of 11,909,395 treasury stocks.

(b) The changes in issued common stock for the years ended December 31, 2023 and 2022 were as follows:

(share)	2023							2022
	Issued shares		Treasury shares			Number of outstanding shares		Issued shares			Treasury shares			Number of outstanding shares
Beginning		84,571,230		(8,722,053	)		75,849,177		87,186,835			(11,561,263	)		75,625,572
Disposal of treasury shares		—		27,030			27,030		—			223,605			223,605
Retirement of treasury shares		—		—			—		(2,615,605	)		2,615,605			—
Ending		84,571,230		(8,695,023	)		75,876,207		84,571,230			(8,722,053	)		75,849,177

83

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(c) Capital surplus as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Share premium	W	463,825		463,825
Gain on disposal of treasury shares		808,994		806,114
Other capital surplus		390,515		130,893
	W	1,663,334		1,400,832

25. Hybrid Bonds

(a) As of December 31, 2022, POSCO, a subsidiary of the Company, held hybrid bonds, which were classified as non-controlling interests in the consolidated financial statements. During the year ended December 31, 2023, the call option on the hybrid bonds was exercised and redeemed. Hybrid bonds as of December 31, 2023 and December 31, 2022 are as follows:

(in millions of Won)	Date of issue		Date of maturity		Interest rate (%)		2023		2022
Hybrid bond 1-2(*1,2)		2013-06-13		2043-06-13		4.60	W	—		200,000
Issuance cost								—		(616	)
							W	—		199,384

(*1) During the year ended December 31, 2023, call option on the hybrid bonds was exercised and redeemed by POSCO, a subsidiary of the Company.

(*2) Details of issuance of hybrid bonds are as follows.

	Hybrid bond 1-2
Maturity date	30 years (The issuer has a right to extend the maturity date)
Interest rate	Issue date ~ 2023-06-12 : 4.60%
	Reset every 10 years as follows;
	• After 10 years : return on government bond of Republic of Korea (10 years) + 1.40%
	• After 10 years : additionally +0.25% according to Step-up clauses
	• After 30 years : additionally +0.75%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to the Company)
Others	The issuer can call the hybrid bond at year 10th anniversary of issuance and interest payment date afterwards

84

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(b) As of December 31, 2022, POSCO INTERNATIONAL Corporation, a subsidiary of the Company, held hybrid bonds, which were classified as non-controlling interests in the consolidated financial statements. During the year ended December 31, 2023, the call option on the hybrid bonds was exercised and redeemed. POSCO ENERGY CO., LTD., which issued hybrid bonds, was merged with POSCO INTERNATIONAL Corporation during the year ended December 31, 2023. Hybrid bonds as of December 31, 2023 and December 31, 2022 are as follows:

(in millions of Won)	Date of issue		Date of maturity		Interest rate (%)		2023		2022
Hybrid bond 1-4(*1,2)		2013-08-29		2043-08-29		5.21	W	—		140,000
Issuance cost								—		(429	)
							W	—		139,571

(*1) During the year ended December 31, 2023, call option on the hybrid bonds was exercised and redeemed by POSCO INTERNATIONAL Corporation, a subsidiary of the Company.

(*2) Details of issuance of hybrid bonds are as follows:

	Hybrid bond 1-4
Maturity date	30 years (The issuer has a right to extend the maturity date)
Interest rate	Issue date ~ 2023-08-29 : 5.21%
	Reset every 10 years as follows;
	•  After 10 years : return on government bond of Republic of Korea (10 years) + 1.55%
	•  After 10 years : additionally +0.25% according to Step-up clauses
	•  After 30 years : additionally +0.75%
Interest payments condition	Quarterly (Optional deferral of interest payment is available to the Company)
Others	The issuer can call the hybrid bond at year 10th anniversary of issuance and interest payment date afterwards

85

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

26. Reserves

(a) Reserves as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023			2022
Accumulated comprehensive loss of investments in associates and joint ventures	W	(180,964	)		(406,555	)
Changes in fair value of equity investments at fair value through other comprehensive income		153,279			(103,843	)
Foreign currency translation differences		94,605			60,487
Gains or losses on valuation of derivatives		(644	)		(3	)
Others		980			5,924
	W	67,256			(443,990	)

(b) Changes in fair value of equity investments at fair value through other comprehensive income for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Beginning balance	W	(103,843	)		(153,359	)
Changes in unrealized fair value of equity investments		260,603			37,068
Reclassification upon disposal		—			20,729
Others		(3,481	)		(8,281	)
Ending balance	W	153,279			(103,843	)

86

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

27. Treasury Shares

Based on the Board of Directors’ resolution, the Company holds treasury shares for business purposes including price stabilization. The changes in treasury shares for the years ended December 31, 2023 and 2022 were as follows:

(shares, in millions of Won)	2023						2022
	Number of shares			Amount			Number of shares			Amount
Beginning		8,722,053		W	1,892,308			11,561,263		W	2,508,294
Disposal of treasury shares		(27,030	)		(2,650	)		(223,605	)		(48,513	)
Retirement of treasury shares		—			—			(2,615,605	)		(567,473	)
Ending		8,695,023		W	1,889,658			8,722,053		W	1,892,308

28. Share-Based Payments

The Company is operating a share-based payment program, under which the Company will pay treasury shares to executives of the Company and its subsidiaries based on performance evaluation. Total quantity of treasury shares to be paid in 2024, based on performance evaluation of 2023, is 19,288 shares for executives of POSCO HOLDINGS INC., and 41,378 shares for executives of subsidiaries including POSCO. As of December 31, 2023, the Company recognizedW18,898 million as other capital surplus.

Subsidiaries of the Company including POSCO INTERNATIONAL Corporation is operating a share-based payment program, under which the Company will pay treasury shares of the subsidiaries to executives and employees based on performance evaluation. Total quantity of treasury shares to be paid in 2024, based on performance evaluation of 2023, is 385,542 shares. As of December 31, 2023, the Company recognizedW17,324 million as non-controlling interests.

The fair value of the treasury shares expected to be paid to the Company’s executives and employees as of the date of pay is accounted for as other administrative expenses. Meanwhile, the shares to be paid by the controlling company was accounted for as other capital surplus, and the shares to be paid by subsidiaries including POSCO INTERNATIONAL Corporation, was accounted for as non-controlling interests. The actual quantity of treasury shares to be paid will be determined after the board of director’s resolution and performance evaluation.

87

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

29. Revenue

(a) Disaggregation of revenue

Details of revenue disaggregated by types of revenue and timing of revenue recognition for the years ended December 31, 2023 and 2022 were as follows:

① For the year ended December 31, 2023

(in millions of Won)			Green Infrastructure
	Steel		Trading		Construction		Logistics and others		Green Materials and Energy		Others		Total
Types of revenue
Revenue from sales of goods	W	39,435,236		20,973,059		—		17,923		3,775,215		—		64,201,433
Revenue from services		807,142		3,056,272		142,902		397,421		4,415		13,082		4,421,234
Revenue from construction contract		—		—		8,140,768		—		36,404		—		8,177,172
Others		150,895		4,175		17,460		55,269		8		99,551		327,358
	W	40,393,273		24,033,506		8,301,130		470,613		3,816,042		112,633		77,127,197
Timing of revenue recognition
Revenue recognized at a point in time	W	39,586,131		20,977,234		99,249		73,192		3,775,223		99,551		64,610,580
Revenue recognized over time		807,142		3,056,272		8,201,881		397,421		40,819		13,082		12,516,617
	W	40,393,273		24,033,506		8,301,130		470,613		3,816,042		112,633		77,127,197

② For the year ended December 31, 2022

(in millions of Won)			Green Infrastructure
	Steel		Trading		Construction		Logistics and others		Green Materials and Energy		Others		Total
Types of revenue
Revenue from sales of goods	W	43,508,308		24,824,117		—		84,168		2,418,796		—		70,835,389
Revenue from services		919,391		586,047		142,708		3,849,390		4,501		8,017		5,510,054
Revenue from construction contract		—		—		7,516,451		—		28,488		—		7,544,939
Others		119,267		545,294		8,537		65,401		—		121,323		859,822
	W	44,546,966		25,955,458		7,667,696		3,998,959		2,451,785		129,340		84,750,204
Timing of revenue recognition
Revenue recognized at a point in time	W	43,627,575		25,369,411		122,188		149,569		2,418,796		121,323		71,808,862
Revenue recognized over time		919,391		586,047		7,545,508		3,849,390		32,989		8,017		12,941,342
	W	44,546,966		25,955,458		7,667,696		3,998,959		2,451,785		129,340		84,750,204

(b) Details of contract assets and liabilities from contracts with customers as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Receivables
Account receivables	W	9,155,853		8,414,946
Contract assets
Due from customers for contract work		1,901,966		1,378,640
Contract liabilities
Advance received		309,441		547,874
Due to customers for contract work		624,632		761,393
Unearned revenue		77,908		84,195

88

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

30. Revenue – Contract Balances

(a) Details of outstanding contracts as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023						2022
	Construction segment			Others			Construction segment			Others
Accumulated cost	W	28,663,723			272,321			30,239,570			110,414
Accumulated contract profit		2,499,061			36,954			2,664,024			17,916
Accumulated contract loss		(688,962	)		(8,916	)		(879,882	)		(5,266	)
Accumulated contract revenue		30,473,822			300,359			32,023,712			123,064

(b) Details of due from customers for contract work and due to customers for contract work as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023						2022
	Construction segment			Others			Construction segment			Others
Due from customers for contract	W	1,873,681			42,557			1,321,160			86,118
Due to customers for contract work		(608,339	)		(16,293	)		(674,697	)		(86,696	)
	W	1,265,342			26,264			646,463			(578	)

(c) Details of the provisions of construction loss as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Construction segment	W	48,825		66,124
Others		1,749		11,342
	W	50,574		77,466

(d) During the year ended December 31, 2023, the total contract revenues and the estimated total contract costs have changed. The impact of these changes on profit before income tax for the year ended December 31, 2023 and future periods are as follows:

(in millions of Won)					Changes in profit (loss) of contract
	Changes in total contract revenue		Changes in estimated total contract costs		Net income			Future income (loss)			Total
Construction segment	W	1,342,143		1,428,171		(119,442	)		33,414			(86,028	)
Others		22,631		16,329		6,654			(352	)		6,302
	W	1,364,774		1,444,500		(112,788	)		33,062			(79,726	)

The effect on current and future profit is calculated based on the total estimated contract costs based on situations that occurred from the commencement date of the contract to December 31, 2023 and the total contract revenue as of December 31, 2023.

89

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(e) As of December 31, 2023, revenue expected to be recognized in the future in relation to performance obligations that have not been fulfilled (or partially fulfilled) is as follows:

(in millions of Won)	2024		2025		2026		After 2027		Total
Construction segment	W	6,763,571		4,587,532		2,625,985		1,051,981		15,029,069
Others		54,102		24,960		15,758		29,857		124,677
	W	6,817,673		4,612,492		2,641,743		1,081,838		15,153,746

(f) Uncertainty of estimates

1) Total contract revenues

Total contract revenues are measured based on contractual amount initially agreed. However, the contract revenues can increase due to additional contract work, claims and incentive payments, or decrease due to penalty when the completion of contract is delayed due to the Company’s fault. Therefore, this measurement of contract revenues is affected by the uncertainty of the occurrence of future events.

2) Total contract costs

Contract revenues are recognized based on the percentage of completion, which is measured on the basis of the gross cost amount incurred to date. Total contract costs are estimated based on estimates of future material costs, labor costs, outsourcing costs and others. There is uncertainty in estimates on future contract costs due to various internal and external factors such as fluctuation of market, the risk of business partner and the experience of project performance and others. The significant assumptions including uncertainty of the estimate of total contract costs are as follows:

	Method of significant assumption
Material cost	Assumption based on recent purchasing price and quoted market price
Labor cost	Assumption based on standard monthly and daily labor cost
Outsourcing cost	Assumption based on the past experience rate of similar project and market price

Management reviews the assumptions used in estimated contract costs at each reporting period end and adjusts them, if necessary.

90

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

31. Selling and Administrative Expenses

(a) Other administrative expenses

Other administrative expenses for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023		2022
Wages and salaries	W	1,156,456		1,075,873
Expenses related to post-employment benefits		92,667		84,582
Other employee benefits		273,482		230,909
Travel		47,945		39,661
Depreciation		159,836		148,639
Amortization		96,004		90,069
Communication		11,956		10,890
Electricity		12,242		9,563
Taxes and public dues		100,639		95,976
Rental		48,243		36,732
Repairs		17,787		17,343
Entertainment		15,490		13,741
Advertising		107,223		103,551
Research & development		175,167		179,714
Service fees		234,815		225,072
Vehicles maintenance		7,660		7,102
Industry association fee		11,096		11,624
Conference		19,876		20,259
Others		81,103		78,667
	W	2,669,687		2,479,967

(b) Selling expenses

Selling expenses for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023		2022
Freight and custody expenses	W	55,531		77,427
Operating expenses for distribution center		4,534		2,507
Sales commissions		68,138		75,012
Sales advertising		4,083		5,782
Sales promotion		9,503		19,388
Sample		2,234		2,052
Sales insurance premium		31,622		39,018
Contract cost		46,140		57,661
Others		11,794		15,635
	W	233,579		294,482

91

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

32. Research and Development Expenditures Recognized as Expenses

Research and development expenditures recognized as expenses for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023		2022
Administrative expenses	W	175,167		179,714
Cost of sales		343,242		356,560
	W	518,409		536,274

33. Finance Income and Costs

Details of other finance income and costs for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023		2022
Finance income
Interest income(*1)	W	502,147		247,005
Dividend income		50,146		39,383
Gain on foreign currency transactions		1,660,713		2,284,126
Gain on foreign currency translations		292,581		703,627
Gain on derivatives transactions		333,197		840,265
Gain on valuations of derivatives		201,133		262,723
Gain on disposals of financial assets at fair value through profit of loss		203,795		256,016
Gain on valuations of financial assets at fair value through profit or loss		572,154		98,359
Gain on valuations of financial liabilities at fair value through profit or loss		—		85,790
Others		14,880		16,717
	W	3,830,746		4,834,011
Finance costs
Interest expenses	W	1,001,290		607,458
Loss on foreign currency transactions		1,595,430		2,505,862
Loss on foreign currency translations		705,866		969,215
Loss on derivatives transactions		320,374		690,471
Loss on valuation of derivatives		77,459		193,127
Loss on disposal of trade accounts and notes receivable		84,649		64,244
Loss on disposals of financial assets at fair value through profit or loss		13,264		18,245
Loss on valuations of financial assets at fair value through profit or loss		51,270		698,136
Loss on valuations of financial liabilities at fair value through profit or loss		305,562		—
Others		47,832		57,708
	W	4,202,996		5,804,466

(*1) Interest income calculated using the effective interest method for the years ended December 31, 2023 and 2022 wereW502,147 million andW226,584 million, respectively.

92

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

34. Other Non-Operating Income and Expenses

Details of other non-operating income and expenses for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023		2022
Other non-operating income
Gain on disposals of assets held for sale	W	1,312		55,262
Gain on disposals of investment in subsidiaries, associates and joint ventures(*1)		197,088		13,904
Gain on disposals of property, plant and equipment		9,387		18,502
Gain on valuation of firm commitment		11,499		181,645
Reversal of other provisions		8,578		5,245
Premium income		13,117		237,565
Gain on bargain purchase(*1)		41,072		—
Gain on disposals of emission rights		25,998		5,181
Others		86,295		74,713
	W	394,346		592,017
Other non-operating expenses
Loss on disposals of assets held for sale(*2)	W	103,366		3,964
Loss on disposals of investments in subsidiaries, associates and joint ventures		18,843		12,400
Loss on disposals of property, plant and equipment		125,823		111,082
Impairment loss on property, plant and equipment		275,846		213,183
Impairment loss on intangible assets		129,907		370,663
Loss on valuation of firm commitment		47,448		156,183
Idle tangible asset expenses		3,703		18,184
Increase to provisions		38,395		88,857
Donations		67,393		80,558
Others		93,619		68,611
	W	904,343		1,123,685

(*1) During the year ended December 31, 2023, QSONE Co.,Ltd., which had been previously classified as an investment in associates was reclassified as consolidated subsidiaries. As a result, the Company recognizedW184,556 million of gain on disposals of investment in associates andW41,072 million of gain on bargain purchase.

(*2) During the year ended December 31, 2023, the Company dispose of CSP—Compania Siderurgica do Pecem, which was classified as assets held for sale during the year ended December 31, 2022, and recognizedW103,366 million of loss on disposals of assets held for sale. The loss on disposal of assets held for sale recognized as profit or loss includesW102,470 million, which was reclassified from accumulated other comprehensive loss arising from translating the financial statements of foreign operation.

93

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

35. Expenses by Nature

Expenses that are recorded by nature as cost of sales, selling and administrative expenses, impairment loss on other receivables and other non-operating expenses in the statements of comprehensive income for the years ended December 31, 2023 and 2022 were as follows (excluding finance costs and income tax expense):

(in millions of Won)	2023		2022
Raw material used, changes in inventories and others	W	46,249,994		54,450,080
Employee benefits expenses(*2)		4,660,771		4,330,946
Outsourced processing cost		10,377,087		8,641,448
Electricity and water expenses		1,099,970		936,360
Depreciation(*1)		3,325,088		3,204,744
Amortization		498,193		488,835
Freight and custody expenses		2,297,544		3,077,044
Sales commissions		68,138		75,012
Loss on disposal of property, plant and equipment		125,823		111,082
Impairment loss on property, plant and equipment		275,846		213,183
Impairment loss on intangible assets		129,907		370,663
Donations		67,393		80,558
Other expenses		5,615,703		5,058,849
	W	74,791,457		81,038,804

(*1) Includes depreciation expense of investment property.

(*2) The details of employee benefits expenses for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023		2022
Wages and salaries	W	4,375,123		4,024,805
Expenses related to post-employment benefits		285,648		306,141
	W	4,660,771		4,330,946

94

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

36. Income Taxes

(a) Income tax expense for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Current income taxes(*1)	W	802,998			932,085
Deferred income tax due to temporary differences		3,568			(415,609	)
Items credited directly to equity		(17,261	)		(62,593	)
Income tax expense	W	789,305			453,883

(*1) Refund (additional payment) of income taxes as a result of a final corporation tax return, tax audits and others credited (charged) directly to current income taxes.

(b) The income taxes credited (charged) directly to equity for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Net changes in fair value of equity investments at fair value through other comprehensive income(*1)	W	(71,600	)		(37,431	)
Remeasurements of defined benefit plans(*1)		34,406			(16,971	)
Others		19,933			(8,191	)
	W	(17,261	)		(62,593	)

(*1) Those amounts were recognized in other comprehensive income.

95

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(c) The following table reconciles the calculated income tax expense based on POSCO’s statutory rate (26.4%) to the actual amount of taxes recorded by the Company for the years ended December 31, 2023, and 2022.

(in millions of Won)	2023			2022
Profit before income tax expense	W	2,635,154			4,014,366
Income tax expense computed at statutory rate		685,319			1,093,589
Adjustments:
Tax credit		(82,233	)		(133,727	)
Additional income tax expense for prior years		152,656			22,929
Investment in subsidiaries, associates and joint ventures(*1)		146,498			(413,349	)
Tax effect due to permanent differences		(3,011	)		19,350
Carryforward of unused tax losses		(126,110	)		(3,167	)
Effect of tax rate change		4,998			(180,533	)
Others		11,188			48,791
		103,986			(639,706	)
Income tax expense	W	789,305			453,883
Effective tax rate (%)		29.95	%		11.30	%

(*1) During the year ended December 31, 2022, POSCO HOLDINGS INC. sold certain of its subsidiaries and associates to POSCO, a subsidiary of POSCO Holdings, and classified CSP-Compania Siderurgica do Pecem, an investment in joint venture as assets held for sale. This amount includesW451,352 million related to recognition of deferred tax assets which were previously not recognized.

96

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(d) The movements in deferred tax assets (liabilities) for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023									2022
	Beginning			Increase (decrease)			Ending			Beginning			Increase (decrease)			Ending
Deferred income tax due to temporary differences
Allowance for doubtful account	W	130,501			26,107			156,608			143,358			(12,857	)		130,501
PP&E and Intangible asset		382,838			(143,136	)		239,702			(1,118,806	)		1,501,644			382,838
Share of profit or loss of equity-accounted investees		269,638			21,281			290,919			224,566			45,072			269,638
Allowance for inventories valuation		47,565			15,622			63,187			22,983			24,582			47,565
Prepaid expenses		16,923			(3,370	)		13,553			19,530			(2,607	)		16,923
Gain or loss on foreign currency translation		(13,706	)		156,945			143,239			(1,105	)		(12,601	)		(13,706	)
Defined benefit liabilities		(40,417	)		36,883			(3,534	)		(148,341	)		107,924			(40,417	)
Provision for construction losses		17,949			(6,280	)		11,669			10,190			7,759			17,949
Provision for construction warranty		70,271			(24,548	)		45,723			74,360			(4,089	)		70,271
Accured income		(39,762	)		18,491			(21,271	)		(50,452	)		10,690			(39,762	)
Provision for accelerated depreciation		(2,736,674	)		75,944			(2,660,730	)		(8,510	)		(2,728,164	)		(2,736,674	)
Spin-off		1,543,628			(7,451	)		1,536,177			—			1,543,628			1,543,628
Others		604,484			(328,655	)		275,829			468,129			136,355			604,484
		253,238			(162,167	)		91,071			(364,098	)		617,336			253,238
Deferred income taxes recognized directly to equity
Net changes in fair value of equity investments at fair value through other comprehensive income		36,028			(71,600	)		(35,572	)		73,459			(37,431	)		36,028
Others		(7,051	)		54,339			47,288			134,737			(141,788	)		(7,051	)
		28,977			(17,261	)		11,716			208,196			(179,219	)		28,977
Deferred tax from tax credit
Tax credit carry-forward and others		71,364			182,195			253,559			72,864			(1,500	)		71,364
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures		224,021			(6,335	)		217,686			245,029			(21,008	)		224,021
	W	577,600			(3,568	)		574,032			161,991			415,609			577,600

97

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(e) Deferred tax assets and liabilities for the years ended December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023								2022
	Asset		Liabilities			Net			Asset		Liabilities			Net
Deferred income tax due to temporary differences
Allowance for doubtful account		156,681		(73	)		156,608			130,700		(199	)		130,501
PP&E and Intangible asset		337,094		(97,392	)		239,702			437,245		(54,407	)		382,838
Share of profit or loss of equity-accounted investees		304,225		(13,306	)		290,919			284,568		(14,930	)		269,638
Allowance for inventories valuation		63,187		—			63,187			47,565		—			47,565
Prepaid expenses		13,659		(106	)		13,553			17,003		(80	)		16,923
Gain or loss on foreign currency translation		205,170		(61,931	)		143,239			75,235		(88,941	)		(13,706	)
Defined benefit liabilities		598,177		(601,711	)		(3,534	)		550,140		(590,557	)		(40,417	)
Provision for construction losses		11,669		—			11,669			17,949		—			17,949
Provision for construction warranty		45,723		—			45,723			70,271		—			70,271
Accured income		—		(21,271	)		(21,271	)		—		(39,762	)		(39,762	)
Provision for accelerated depreciation		—		(2,660,730	)		(2,660,730	)		—		(2,736,674	)		(2,736,674	)
Spin-off		1,536,177		—			1,536,177			1,543,628		—			1,543,628
Others		310,560		(34,731	)		275,829			664,229		(59,745	)		604,484
		3,582,322		(3,491,251	)		91,071			3,838,533		(3,585,295	)		253,238
Deferred income taxes recognized directly to equity
Net changes in fair value of equity investments at fair value through other comprehensive income		50,134		(85,706	)		(35,572	)		105,125		(69,097	)		36,028
Others		76,604		(29,316	)		47,288			30,370		(37,421	)		(7,051	)
		126,738		(115,022	)		11,716			135,495		(106,518	)		28,977
Deferred tax from tax credit
Tax credit carry-forward and others		253,559		—			253,559			71,364		—			71,364
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures		499,326		(281,640	)		217,686			463,133		(239,112	)		224,021
		4,461,945		(3,887,913	)		574,032			4,508,525		(3,930,925	)		577,600

(f) As of December 31, 2023, deductible temporary differences ofW6,282,636 million and taxable temporary differences ofW11,603,746 million related to investments in subsidiaries and associates were not recognized as deferred tax assets or liabilities, because it is not probable they will reverse in the foreseeable future.

(g) The Company recognized current tax payable or receivable at the amount expected to be paid or received that reflects uncertainty related to income taxes.

(h) Global minimum top-up tax is a system in which multinational corporations with annual revenue of the consolidated financial statements over €750 million in at least two of the preceding four fiscal years. If the effective tax rate of the multinational corporation is less than 15%, the corresponding amount needs to be paid to the tax authorities of the country where the controlling company that meets specific requirement is located.

In 2023, the corporate income tax law related to the global minimum top-up tax in the Republic of Korea was amended and will be effective for fiscal years starting on or after January 1, 2024.

The Company expects to be subject to global minimum top-up tax, however, since the related corporate income tax law in the Republic of Korea will be effective on January 1, 2024, there is no impact on the Company’s income tax expense for the year ended December 31, 2023. Furthermore, as K-IFRS No. 1012 “Income Tax” temporarily exempts the Company from accounting for deferred income taxes related to global minimum top-up tax, the Company did not recognize deferred tax assets and liabilities related to the global minimum top-up tax and does not disclose information related to deferred income tax.

98

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

The Company is closely monitoring the financial impact of the global minimum top-up tax. Considering transitional exemption provisions (Transitional CbCR SafeHarbour), even if it is assumed that Pillar Two corporate income tax law was applied to Republic of Korea in 2023, the Company does not expect the impact of the global minimum top-up tax on the Company’s current income tax would be significant.

37. Earnings Per Share

(a) Basic earnings per share for the years ended December 31, 2023 and 2022 were as follows:

(in Won except per share information)	2023		2022
Profit attributable to controlling interest	W	1,698,092,001,648		3,144,086,508,618
Interests of hybrid bonds, net of tax		—		(1,078,164,383	)
Weighted-average number of common shares outstanding(*1)		75,869,542		75,814,870
Basic earnings per share	W	22,382		41,456

(*1) The weighted-average number of common shares used to calculate basic earnings per share are as follows:

(shares)	2023			2022
Total number of common shares issued		84,571,230			84,571,230
Weighted-average number of treasury shares		(8,701,688	)		(8,756,360	)
Weighted-average number of common shares outstanding		75,869,542			75,814,870

(b) Diluted earnings per share for the year ended December 31, 2022 are as follows:

(in Won, except share information)
	2022
Profit attributable to controlling interest	W	3,144,086,508,618
Interests of hybrid bonds, net of tax		(1,078,164,383	)
Gain from exchange rate on and revaluation of exchangeable bonds		(55,751,463,819	)
Adjusted weighted-average number of common shares(*1)		78,906,375
Diluted earnings per share	W	39,126

(*1) The weighted-average number of common shares used to calculate basic earnings per share are as follows:

(shares)	2022
Weighted-average number of common shares outstanding		75,814,870
Weighted-average number of potential common shares		3,091,505
Adjusted weighted-average number of common shares		78,906,375

The Company has potentially issuable common shares due to its exchangeable bonds and Share-based Payment Program as of December 31, 2023 and 2022. Diluted earnings per share is equal to basic earnings per share for the year ended December 31, 2023 due to anti-dilutive effect. Meanwhile, the effect from the Share-based Payment Program was excluded from the calculation of diluted earnings per share for year ended December 31, 2022 due to anti-dilutive effect.

99

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

38. Related Party Transactions

(a) Significant transactions between the controlling company and related companies for the years ended December 31, 2023 and 2022 were as follows:

1) For the year ended December 31, 2023

(in millions of Won)	Sales and others(*1)						Purchase and others
	Sales		Dividends		Others		Purchase of fixed assets		Others
Subsidiaries(*2)
POSCO	W	146,745		325,043		—		—		15,440
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)		9,354		11,037		440		23,007		5,875
POSCO STEELEON CO., Ltd		1,772		—		—		—		105
POSCO DX(formerly, POSCO ICT)		3,040		7,455		—		4,017		9,037
eNtoB Corporation		—		—		40		158		3,326
POSCO FUTURE M CO., LTD. (formerly, POSCO CHEMICAL CO., LTD)		8,902		13,878		—		—		—
POSCO Mobility Solution Corporation		1,035		—		55		—		—
POSCO INTERNATIONAL Corporation		9,278		77,616		—		—		48
POSCO Maharashtra Steel Private Limited		692		—		353		—		—
POSCO ASSAN TST STEEL INDUSTRY Inc.		17		—		430		—		—
Others		12,021		6,084		5,347		9,634		46,596
		192,856		441,113		6,665		36,816		80,427
Associates and joint ventures(*2)
SNNC		629		—		55		—		—
Roy Hill Holdings Pty Ltd		—		293,956		—		—		—
Others		240		92,149		11,617		—		158
		869		386,105		11,672		—		158
	W	193,725		827,218		18,337		36,816		80,585

(*1) Sales and others mainly consist of trademark usage income, rental income and dividend income to subsidiaries, associates and joint ventures.

(*2) As of December 31, 2023, the Company provided guarantees to related parties (Note 39)

100

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) For the year ended December 31, 2022

(in millions of Won)	Sales and others(*1)						Purchase and others(*2)
	Sales		Dividends		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
Subsidiaries
POSCO	W	87,165		—		2		—		—		—		10,446
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)		7,502		16,555		7		—		80,306		—		13,086
POSCO STEELEON CO., Ltd		133,743		—		215		—		—		7,656		18
POSCO DX(formerly, POSCO ICT)(*3)		1,760		4,970		18		—		39,932		10,190		34,724
eNtoB Corporation		3		24		—		60,649		9,706		32		3,453
POSCO FUTURE M CO., LTD. (formerly, POSCO CHEMICAL CO., LTD)		89,535		13,878		44		84,301		4,757		56,325		908
POSCO Mobility Solution Corporation		176,534		—		—		—		—		8,802		28
POSCO INTERNATIONAL Corporation		2,102,356		62,093		—		244,230		—		768		1,049
POSCO Thainox Public Company Limited		49,359		22,867		—		—		—		—		1
POSCO Canada Ltd.		—		—		—		77,225		—		—		—
Qingdao Pohang Stainless Steel Co., Ltd.		32,584		—		—		—		—		—		—
POSCO JAPAN Co., Ltd.		28,790		—		—		835		—		—		16
POSCO-VIETNAM Co., Ltd.		44,840		—		513		—		—		—		—
POSCO MEXICO S.A. DE C.V.		102,776		—		562		—		—		—		—
POSCO Maharashtra Steel Private Limited		171,806		—		1,130		—		—		—		120
POSCO(Suzhou) Automotive Processing Center Co., Ltd.		42,320		—		—		—		—		—		15
POSCO VST CO., LTD.		28,475		—		—		—		—		—		—
POSCO INTERNATIONAL SINGAPORE PTE LTD.		—		—		179		379,823		—		—		—
POSCO ASSAN TST STEEL INDUSTRY Inc.		47,335		—		537		—		—		—		8
Others		208,200		2,452		6,574		68,139		18,844		53,139		227,147
		3,355,083		122,839		9,781		915,202		153,545		136,912		291,019
Associates and joint ventures(*3)
SNNC		3,242		5,348		8		148,239		—		—		—
POSCO-SAMSUNG-Slovakia Processing Center		25,614		—		—		—		—		—		—
Roy Hill Holdings Pty Ltd		—		186,813		—		210,455		—		—		—
Others		78,048		209,457		14,704		14,015		—		—		197
		106,904		401,618		14,712		372,709		—		—		197
	W	3,461,987		524,457		24,493		1,287,911		153,545		136,912		291,216

(*1) Sales and others mainly consist of sales of steel products (before spin-off), trademark usage income, rental income and dividend income to subsidiaries, associates and joint ventures.

(*2) Purchase and others mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

101

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(*3) Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

(b) The related account balances of significant transactions between the controlling company and related companies as of December 31, 2023 and 2022 are as follows:

1) December 31, 2023

(in millions of Won)	Receivables						Payables
	Trade accounts and notes receivable		Others		Total		Accounts payable		Others		Total
Subsidiaries
POSCO	W	110,913		19,666		130,579		3,937		32,901		36,838
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)		9,262		1,714		10,976		—		170		170
POSCO STEELEON CO., Ltd		1,063		—		1,063		—		—		—
POSCO DX(formerly, POSCO ICT)		1,574		—		1,574		1,434		423		1,857
eNtoB Corporation		—		—		—		1,391		3		1,394
POSCO FUTURE M CO., LTD. (formerly, POSCO CHEMICAL CO., LTD)		14,299		463		14,762		—		31		31
POSCO Mobility Solution Corporation		981		—		981		—		—		—
POSCO INTERNATIONAL Corporation		6,449		25		6,474		—		163		163
PT. KRAKATAU POSCO		—		3,582		3,582		—		—		—
Others		3,345		11,152		14,497		9,022		151		9,173
		147,886		36,602		184,488		15,784		33,842		49,626
Associates and joint ventures
SNNC		334		—		334		—		—		—
Roy Hill Holdings Pty Ltd		—		88,008		88,008		—		—		—
FQM Australia Holdings Pty Ltd(*1)		—		218,900		218,900		—		—		—
Others		195		560		755		—		—		—
		529		307,468		307,997		—		—		—
	W	148,415		344,070		492,485		15,784		33,842		49,626

(*1) FQM Australia Holdings Pty Ltd’s other receivable consists of long-term loans and accrued interest. During the year ended December 31, 2023, the Company provided additional loan to its associates byW6,448 million. Meanwhile, the Company has recognized allowance for doubtful accounts for all of other receivables amounting toW218,900 million during the year ended December 31, 2023.

102

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) December 31, 2022

(in millions of Won)	Receivables						Payables
	Trade accounts and notes receivable		Others		Total		Accounts payable		Others		Total
Subsidiaries
POSCO	W	75,343		6,600		81,943		5,678		14,663		20,341
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)		3,808		660		4,468		—		—		—
POSCO STEELEON CO., Ltd		818		—		818		—		—		—
POSCO DX(formerly, POSCO ICT)		687		—		687		859		705		1,564
POSCO FUTURE M CO., LTD. (formerly, POSCO CHEMICAL CO., LTD)		8,550		—		8,550		—		5,086		5,086
POSCO Mobility Solution Corporation		489		—		489		—		—		—
POSCO INTERNATIONAL Corporation		2,002		—		2,002		—		502		502
Qingdao Pohang Stainless Steel Co., Ltd.		—		—		—		122		—		122
POSCO Maharashtra Steel Private Limited		—		466		466		486		—		486
POSCO ASSAN TST STEEL INDUSTRY Inc.		—		513		513		104		—		104
PT. KRAKATAU POSCO		—		8,967		8,967		391		—		391
Others		5,318		6,080		11,398		11,874		4,928		16,802
		97,015		23,286		120,301		19,514		25,884		45,398
Associates and joint ventures
SNNC		94		—		94		—		—		—
Roy Hill Holdings Pty Ltd		23,400		—		23,400		—		—		—
FQM Australia Holdings Pty Ltd(*1)		—		202,562		202,562		—		—		—
Others		190		761		951		74		—		74
		23,684		203,323		227,007		74		—		74
	W	120,699		226,609		347,308		19,588		25,884		45,472

(*1) FQM Australia Holdings Pty Ltd’s other receivable consists of long-term loans. During the year ended December 31, 2022, the Company provided additional loan to its associates byW12,116 million.

(c) Significant transactions between the Company, excluding the controlling company, and related companies for the years ended December 31, 2023 and 2022 were as follows:

1) For the year ended December 31, 2023

(in millions of Won)	Sales and others							Purchase and others
	Sales		Dividends			Others		Purchase of material		Others
Associates and joint ventures
New Songdo International City Development, LLC	W	208,536		—			1,484		—		279
SNNC		164,198		—			32		637,638		1,749
Noeul Green Energy Co., Ltd.		6,499		—			28		—		10,320
POS-SEAH STEEL WIRE(TIANJIN)CO.,Ltd		14,477		—			—		—		—
POS SeAH Steel Wire(Nantong) Co., Ltd.		43,811		—			—		73		—
South-East Asia Gas Pipeline Company Ltd.		—		59,295			—		—		—
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)		113,542		9,000	��		—		6,861		1,564
Samcheok Blue Power Co., Ltd.		503,283		10,020			—		—		—
Pocheon-Hwado Highway Corp.		160,233		—			—		—		—
Roy Hill Holdings Pty Ltd		—		73,489			—		1,611,073		—
UITrans LRT Co., Ltd.		554		—			—		—		—
Others		474,052		120,429			3,353		590,717		101,909
	W	1,689,185		272,233			4,897		2,846,362		115,821

103

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) For the year ended December 31, 2022

(in millions of Won)	Sales and others						Purchase and others
	Sales		Dividends		Others		Purchase of material		Others
Associates and joint ventures
New Songdo International City Development, LLC	W	270,465		—		—		—		148
SNNC		161,565		—		412		613,514		1,755
Noeul Green Energy Co., Ltd.		5,531		—		—		—		1,716
CSP - Compania Siderurgica do Pecem(*1)		7,173		—		—		126,123		22,663
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd(*2)		17,824		—		—		24,190		—
POS-SEAH STEEL WIRE(TIANJIN)CO.,Ltd		14,863		—		—		—		—
POS-SeAH Steel Wire(Nantong) Co., Ltd.		32,007		—		—		357		—
South-East Asia Gas Pipeline Company Ltd.		—		14,541		2,974		—		—
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)		134,498		24,000		—		5,446		—
Samcheok Blue Power Co., Ltd.		502,259		9,992		26		—		—
Pocheon-Hwado Highway Corp.		93,428		—		—		—		—
Roy Hill Holdings Pty Ltd		—		46,780		—		1,463,383		—
Others		547,627		137,733		3,026		507,705		122,092
	W	1,787,240		233,046		6,438		2,740,718		148,374

(*1) CSP - Compania Siderurgica do Pecem was excluded from the subsidiaries due to the sale of its shares during the year ended December 31, 2023.

(*2) Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd was excluded from the association due to the sale of its shares during the year ended December 31, 2022.

(d) The related account balances of significant transactions between the Company, excluding the controlling company, and related companies as of December 31, 2023 and 2022 are as follows:

1) December 31, 2023

(in millions of Won)	Receivables(*1)								Payables
	Trade accounts and notes receivable		Loans		Others		Total		Trade accounts and notes payable		Others		Total
Associates and joint ventures
New Songdo International City Development, LLC	W	15,260		—		1,497		16,757		—		39,089		39,089
Samcheok Blue Power Co., Ltd.		162,759		—		213		162,972		—		9,605		9,605
Nickel Mining Company SAS		—		64,197		34		64,231		—		358		358
POS-SeAH Steel Wire(Nantong) Co., Ltd.		14,162		—		—		14,162		—		—		—
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)		13,641		—		82		13,723		1,156		—		1,156
Pocheon-Hwado Highway Corp.		33,944		—		—		33,944		—		7,712		7,712
UITrans LRT Co., Ltd.		—		46,335		8,395		54,730		—		2,398		2,398
Roy Hill Holdings Pty Ltd		—		—		22,002		22,002		263,440		—		263,440
SNNC		14,738		—		60		14,798		25,482		1,731		27,213
POSCO(Guangdong) Automotive Steel Co., Ltd.		59,913		—		—		59,913		52,961		—		52,961
Others		54,211		167,368		134,795		356,374		6,642		14,585		21,227
	W	368,628		277,900		167,078		813,606		349,681		75,478		425,159

(*1) As of December 31, 2023, the Company recognizes bad-debt allowance for receivables amounting toW185,972 million.

104

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) December 31, 2022

(in millions of Won)	Receivables(*1)								Payables
	Trade accounts and notes receivable		Loans		Others		Total		Trade accounts and notes receivable		Others		Total
Associates and joint ventures
New Songdo International City Development, LLC	W	63,413		—		16,858		80,271		—		39,664		39,664
Chuncheon Energy Co., Ltd.		—		—		—		—		—		50		50
Samcheok Blue Power Co., Ltd.		107,119		—		—		107,119		—		18,224		18,224
Nickel Mining Company SAS		—		63,024		263		63,287		—		358		358
CSP - Compania Siderurgica do Pecem		3		—		—		3		—		—		—
POS-SeAH Steel Wire(Nantong) Co., Ltd.		7,096		—		—		7,096		—		—		—
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)		12,589		—		52		12,641		1,198		4		1,202
Pocheon-Hwado Highway Corp.		16,297		—		—		16,297		—		—		—
UITrans LRT Co., Ltd.		—		36,510		—		36,510		—		1,999		1,999
Roy Hill Holdings Pty Ltd		—		—		7,110		7,110		571,084		—		571,084
SNNC		7,827		—		51		7,878		44,124		198		44,322
POSCO(Guangdong) Automotive Steel Co., Ltd.		—		35,131		—		35,131		—		—		—
Others		98,920		185,022		112,538		396,480		54,708		25,241		79,949
	W	313,264		319,687		136,872		769,823		671,114		85,738		756,852

(*1) As of December 31, 2022, the Company recognizes bad-debt allowance for receivables amounting toW131,588 million.

(e) Significant financial transactions between the Company, excluding the controlling company, and related companies for the years ended December 31, 2023 and 2022 were as follows:

1) December 31, 2023

(in millions of Won)	Beginning		Lend		Collect			Others(*1)		Ending
Associates and joint ventures
UITrans LRT Co., Ltd.	W	36,510		9,825		—			—		46,335
PT. Tanggamus Electric Power		5,014		—		(270	)		82		4,826
PT. Wampu Electric Power		3,988		—		(4,063	)		75		—
Nickel Mining Company SAS		63,024		—		(2,322	)		3,495		64,197
KRAKATAU POS-CHEM DONG-SUH CHEMICAL		3,802		—		(1,323	)		100		2,579
POS-SeAH Steel Wire (Thailand) Co., Ltd.		7,604		—		(7,828	)		224		—
AMCI (WA) PTY LTD		104,281		6,620		—			1,276		112,177
POS-AUSTEM WUHAN AUTOMOTIVE CO.,LTD		10,138		—		(5,321	)		341		5,158
Hyo-chun Co., Ltd.		2,382		—		—			—		2,382
POS-AUSTEM Suzhou Automotive Co., Ltd		12,673		—		(13,219	)		546		—
FQM Australia Holdings Pty Ltd		35,040		2,637		—			923		38,600
POHANG E&E Co. , LTD		100		1,546		—			—		1,646
POSCO(Guangdong) Automotive Steel Co., Ltd.		35,131		—		(35,131	)		—		—
	W	319,687		20,628		(69,477	)		7,062		277,900

(*1) Includes adjustments of foreign currency translation differences and others.

105

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) December 31, 2022

(in millions of Won)	Beginning		Lend		Collect			Others(*1)			Ending
Associates and jointventures
UITrans LRT Co., Ltd.	W	29,099		7,460		(5	)		(44	)		36,510
South-East Asia Gas Pipeline Company Ltd.		47,423		—		(45,639	)		(1,784	)		—
PT. Tanggamus Electric Power		4,690		—		—			324			5,014
PT. Wampu Electric Power		5,651		—		(1,876	)		213			3,988
PT. POSMI Steel Indonesia		2,371		—		(2,371	)		—			—
Nickel Mining Company SAS		62,611		—		—			413			63,024
KRAKATAU POS-CHEM DONG-SUH CHEMICAL		4,742		—		(1,264	)		324			3,802
POS-SeAH Steel Wire (Thailand) Co., Ltd.		7,113		—		—			491			7,604
AMCI (WA) PTY LTD		91,665		6,975		—			5,641			104,281
POS-AUSTEM YANTAI AUTOMOTIVE CO.,LTD		5,928		—		(6,548	)		620			—
POS-AUSTEM WUHAN AUTOMOTIVE CO.,LTD		9,484		—		—			654			10,138
Hyo-chun Co., Ltd.		2,382		—		—			—			2,382
POS-AUSTEM Suzhou Automotive Co., Ltd		17,783		—		(6,069	)		959			12,673
FQM Australia Holdings Pty Ltd		27,227		7,935		—			(122	)		35,040
POHANG E&E Co. , LTD		—		100		—			—			100
POSCO(Guangdong) Automotive Steel Co., Ltd.		—		35,131		—			—			35,131
	W	318,169		57,601		(63,772	)		7,689			319,687

(*1) Includes adjustments of foreign currency translation differences and others.

(f) For the years ended December 31, 2023 and 2022, details of compensation to key management officers were as follows:

(in millions of Won)	2023		2022
Short-term benefits	W	199,608		174,629
Long-term benefits		9,641		9,182
Retirement benefits		38,934		22,106
	W	248,183		205,917

Key management officers include directors (including non-standing directors), executive officials and fellow officials who have significant influences and responsibilities in the Company’s business and operations.

39. Commitments and Contingencies

(a) Contingent liabilities

Contingent liabilities may develop in a way not initially expected. Therefore, management continuously assesses contingent liabilities to determine whether an outflow of resources embodying economic benefits has become probable. If it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability, a provision is recognized in the consolidated financial statements of the period in which the change in probability occurs (except in the extremely rare circumstances where no reliable estimate can be made).

Management makes estimates and assumptions that affect disclosures of commitments and contingencies. All estimates and assumptions are based on the evaluation of current circumstances and appraisals with the supports of internal specialists or external consultants.

Management regularly analyzes current information about these matters and provides for probable contingent losses including the estimate of legal expense to resolve the matters. Internal and external lawyers are used for these assessments. In making the decision regarding the need for a provision, management considers whether the Company has an obligation as a result of a past event, whether it is probable that an outflow or cash or other resources embodying economic benefits will be required to settle the obligation and the ability to make a reliable estimate of the amount of the obligation.

106

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(b) Details of guarantees

1) Contingent liabilities on outstanding guarantees and others provided by the Company as of December 31, 2023 are as follows:

(in millions of Won)			Guarantee limit				Guarantee amount
Guarantor	Guarantee beneficiary	Financial institution	Foreign currency		Won equivalent		Foreign currency		Won equivalent
[The Company]
POSCO HOLDINGS INC.	POSCO Asia Co., Ltd.	Credit Agricole and others	USD	205,000,000		264,327		—		—
	POSCO Argentina S.A.U	HSBC and others	USD	411,900,000		531,104		319,895,483		412,472
POSCO	POSCO MEXICO S.A. DE C.V.	BOA and others	USD	60,000,000		77,364		60,000,000		77,364
	POSCO-VIETNAM Co., Ltd.	SMBC and others	USD	110,000,000		141,834		80,000,000		103,152
	PT. KRAKATAU POSCO	Export-Import Bank of Korea and others	USD	2,060,300,000		2,656,550		1,023,496,118		1,319,696
	POSCO COATED STEEL (THAILAND) CO., LTD.	SMBC and others	THB	4,800,000,000		180,576		3,936,000,000		148,072
	POSCO Maharashtra Steel Private Limited	SMBC and others	USD	40,000,000		51,576		40,000,000		51,576
	POSCO ASSAN TST STEEL INDUSTRY Inc	SOCIETE GENERALE and others	USD	122,850,000		158,403		122,850,000		158,403
POSCO INTERNATIONAL Corporation	POSCO INTERNATIONAL GLOBAL DEVELOPMENT PTE. LTD.	POSCO Asia Co., Ltd.	USD	180,000,000		232,092		150,000,000		193,410
	POSCO INTERNATIONAL POWER (PNGLAE) LIMITED	KDB bank	USD	20,880,000		26,923		13,400,000		17,278
	GOLDEN LACE POSCO INTERNATIONAL CO., LTD.	POSCO Asia Co., Ltd.	USD	13,200,000		17,020		11,000,000		14,183
	PT. Bio Inti Agrindo	BTPN and others	IDR	1,232,000,000,000		102,995		1,160,000,000,000		96,976
	POSCO ASSAN TST STEEL INDUSTRY Inc	ING	USD	13,700,000		17,665		13,700,000		17,665
	POSCO INTERNATIONAL Deutschland GmbH	Bank Mendes Gans Amsterdam	USD	50,000,000		64,470		20,005,200		25,795
	POSCO INTERNATIONAL AMERICA Corp.							—		—
	POSCO INTERNATIONAL JAPAN Corp.							7,106,727		9,163
	POSCO INTERNATIONAL SINGAPORE PTE. LTD.							—		—
	POSCO INTERNATIONAL Malaysia SDN BHD							—		—
	POSCO INTERNATIONAL Italia S.R.L.							—		—
	POSCO INTERNATIONAL MEXICO S.A. de C.V.							17,250,570		22,243
	GRAIN TERMINAL HOLDING PTE. LTD.	Export-Import Bank of Korea and others	USD	27,000,000		34,814		27,000,000		34,814
	POSCO INTERNATIONAL E&P MALAYSIA SDN. BHD.	SC MALAYSIA	USD	6,000,000		7,736		6,000,000		7,736
	PT. KRAKATAU POSCO ENERGY	POSCO Asia Co., Ltd. and others	USD	88,903,407		114,632		53,201,703		68,598
	Posco International Mexico e-Mobility S.A DE C.V.	Export-Import Bank of Korea and others	USD	27,000,000		34,814		27,000,000		34,814
	PT POSCO INTERNATIONAL ENP INDONESIA	PT Bank Negara Indonesia	USD	750,000		967		750,000		967
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	POSCO E&C Vietnam Co., Ltd.	POSCO Asia Co., Ltd. and others	USD	36,000,000		46,418		31,000,000		39,971
	PT. POSCO E&C INDONESIA	POSCO Asia Co., Ltd. and others	USD	25,900,000		33,395		25,900,000		33,395
POSCO STEELEON CO.,LTD.	Myanmar POSCO C&C Company, Limited.	POSCO Asia Co., Ltd.	USD	13,986,947		18,035		11,952,170		15,411
POSCO FUTURE M CO., LTD. (formerly, POSCO CHEMICAL CO., LTD)	ULTIUM CAM GP INC.	Investissement Quebec, Strategic Innovation Fund	CAD	299,562,500		291,966		—		—
[Associates and joint ventures]
POSCO HOLDINGS INC.	Nickel Mining Company SAS	SMBC	EUR	46,000,000		65,623		46,000,000		65,623
POSCO	LLP POSUK Titanium	SMBC	USD	13,250,000		17,085		13,250,000		17,085
POSCO INTERNATIONAL Corporation	GLOBAL KOMSCO Daewoo LLC	Hana Bank	USD	6,650,000		8,575		6,300,000		8,123
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)(*1)	Chun-cheon Energy Co., Ltd	Kookmin Bank and others	KRW	149,200		149,200		137,500		137,500
[Others]
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)(*2)	Subcontractors for maintenance projects, etc.	Kookmin Bank and others	KRW	1,535,263		1,535,263		674,016		674,016
POSCO DX(formerly, POSCO ICT)(*1)	Busan Sanseong Tunnel	Kookmin Bank	KRW	7,621		7,621		6,394		6,394
POSCO WIDE Co., Ltd. (formerly, POSCO O&M Co., Ltd.)	Korea Electric Power Corporation and others	Seoul Guarantee Insurance	KRW	4,527		4,527		4,527		4,527
POSCO AUSTRALIA PTY LTD	Department of Trade and Investment (NSW Government) and others	Woori Bank and others	AUD	16,754,695		14,745		16,754,695		14,745
PT. Bio lnti Agrindo	KSU Mandob	Bank Muamalat	IDR	80,000,000,000		6,688		80,000,000,000		6,688
POSCO Maharashtra Steel Private Limited	Gail India and others	HSBC and others	INR	808,823,105		12,537		808,823,105		12,537
			USD	3,533,270,354		4,555,799		2,081,057,971		2,683,314
			KRW	1,696,611		1,696,611		822,437		822,437
			IDR	1,312,000,000,000		109,683		1,240,000,000,000		103,664
			INR	808,823,105		12,537		808,823,105		12,537
			THB	4,800,000,000		180,576		3,936,000,000		148,072
			EUR	46,000,000		65,623		46,000,000		65,623
			AUD	16,754,695		14,745		16,754,695		14,745
			CAD	299,562,500		291,966		—		—

(*1) The contingencies include PF contracts, which provide credit enhancement through payment guarantee in relation to the SOC projects as of December 31, 2023.

(*2) The contingencies include PF contracts, which guarantee the subcontractors progress payment loans in relation to the maintenance projects and others, as of December 31, 2023

107

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) The details of credit enhancements by types of the Company’s PF business as of December 31, 2023 are as follows:

① Maintenance projects and others

a. PF credit enhancements such as debt assumption, supplemental funding agreement etc., maturity of the related loans are as follows:

(in millions of Won)									Balance of the loans
Provider	Projects(*1)	Borrower	Type	Credit enhancement measures	Agreed amount		Executed amount		Total		Within 3 months		3~6 months		6 months ~1 year		1 year ~2 years		2 years ~3 years		After 3 years
[The Company]
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	Other projects	JB CLARK HILLS	Main PF	Debt assumption	W	42,550		35,459		35,459		—		—		—		35,459		—		—
[Associates and joint ventures]
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	Other projects	New Songdo International City Development, LLC	Mortgage loan	Debt assumption		676,000		520,000		467,500		—		446,000		21,500		—		—		—
[Others]
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	Maintenance projects	Bangbae Shindonga Apartment Reconstruction and Maintenance Project Association, etc.	Main PF	Debt assumption		922,476		730,020		404,799		—		38,354		134,861		121,945		13,100		96,539
	Other projects	Mastern 123 Yeoju Samgyo PFV co., Ltd.	Main PF	Debt assumption		175,500		135,000		133,700		45,000		—		49,000		—		39,700		—
	Other projects	Civic Center PFV	Bridge loan	Debt assumption		45,000		45,000		45,000		—		—		—		45,000		—		—
POSCO DX (formerly, POSCO ICT)	Other projects	Jeonnong schoo keeper co. and others	Main PF	Supplemental funding agreement		1,122,320		123,309		474,888		—		—		—		—		—		474,888
						2,265,296		1,033,329		1,058,387		45,000		38,354		183,861		166,945		52,800		571,427
					W	2,983,846		1,588,788		1,561,346		45,000		484,354		205,361		202,404		52,800		571,427

(*1) The maintenance project mainly consists of reconstruction and condominium construction projects, and other projects such as office buildings, retail spaces, warehouses, and educational facilities.

b. The details of conditional debt assumption and principal and interest repayment contingencies in the event of non-compliance of responsibility completion as of December 31, 2023 are as follows:

(in millions of Won)	Number of constructions		Contract amount		Contingency amount(*1)(*2)		Balance of loans
Maintenance projects		23	W	6,327,707		3,478,950		1,834,196
Other projects		1		110,341		35,000		22,523
		24	W	6,438,048		3,513,950		1,856,719

(*1) The overlapping amount with other credit enhancement measures such as the agreed debt assumption upon loan origination amounts toW132,300 million for the maintenance projects.

(*2) In the case of joint subcontracting projects, the total joint guarantee amount of the project participants has been disclosed. However, the final execution amount of completion guarantee may vary depending on factors such as the reasons attributable to the project participants upon actual execution of the responsibility completion.

108

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

c. The details of contingencies of claim for damages in the event of non-compliance of responsibility completion as of December 31, 2023 are as follows:

(in millions of Won)	Number of constructions		Contract amount		Contingency amount(*1)(*2)		Balance of loans
Maintenance projects		2	W	463,742		324,000		77,138
Other projects		53		10,797,925		8,648,087		6,270,750
		55	W	11,261,667		8,972,087		6,347,888

(*1) The overlapping amount with other credit enhancement measures such as the agreed debt assumption upon loan origination amounts toW122,200 million for the maintenance projects.

(*2) In the case of joint subcontracting projects, the total joint guarantee amount of the project participants has been disclosed. However, the final execution amount of completion guarantee may vary depending on factors such as the reasons attributable to the project participants upon actual execution of the responsibility completion.

② SOC projects

(in millions of Won)
Provider	Recipient	Credit enhancement measures	Number of constructions		Approved amount		Remaining balance after repayment
[Associates and joint ventures]
POSCO DX	UITrans LRT Co., Ltd(*1)	Providing funds and debt assumption		1	W	81,883		32,952
	Pocheon-Hwado Highway Corp.(*2)	Providing funds		1		24,923		16,941
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	UITrans LRT Co., Ltd(*1)	Providing funds and debt assumption		1		205,051		165,045
	Pocheon-Hwado Highway Corp.(*2)	Providing funds		1		319,526		217,171
	POHANG E&E Co., LTD(*3)	Providing funds and supplemental funding agreement		1		71,930		50,946
	Pureun Tongyeong Enviro Co., Ltd.(*3)	Providing funds		1		22,714		12,251
	Pure Gimpo.Co.,Ltd(*3)	Providing funds		1		51,559		25,189
	Clean Iksan Co.,Ltd(*3)	Providing funds		1		44,054		` 25,650
				8		821,640		546,145
[Others]
POSCO DX	Western Inland highway CO.,LTD.	Providing funds		1		47,348		15,678
	SK Solar Energy Co., Ltd.	Debt assumption		1		5,850		3,114
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	Western Seoul highway CO.,LTD. and others	Supplemental funding agreement		11		62,720		30,646
	Western Inland highway CO.,LTD. and others	Providing funds		44		2,884,686		1,266,872
	Pohang Youngil Bay New Port	Debt assumption		1		2,250		1,440
	Busan Sanseong Tunnel	Refinancing		1		35,296		26,750
				59		3,038,150		1344500
				59		3,038,150		1,344,500
				67	W	3,859,790		1,890,645

(*1) The Company provides a funding obligation agreement ofW153,260 million (including other shares:W385,000 million) equivalent to the Company’s share of the loan balance for the private investment project.

(*2) The Company provides a funding obligation agreement ofW344,449 million (including other shares:W623,079 million) equivalent to the Company’s share of the loan balance for the private investment project.

(*3) The Company provides a funding obligation agreement ofW183,756 million (including other shares:W354,092 million) equivalent to the Company’s share of the loan balance for the private investment project.

109

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

3) Other guarantees

① As of December 31, 2023, the payment guarantees that the Company provides to clients, such as contract performance guarantees, installment guarantees, and defect guarantees, by subscribing to insurance policies with guarantee insurance companies or issuing guarantee certificates are as follows:

(in millions of Won)
Provider of credit enhancement	Recipient of credit enhancement	Types of guarantees	Agreed amount		Executed amount		Guarantor
[Subsidiaries]
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	Ventanas Philippines Construction Inc	Guarantee on performance for contracts and others	W	14,601		14,601	Credit Agricole and others
	PT POSCO E&C INDONESIA	Guarantee on defects		1,805		1,805	Woori Bank and others
				16,406		16,406
[Associates and joint ventures]
POSCO Eco & Challenge Co., Ltd.	PT.Tanggamus Electric Power	Letter of credit		2,615		2,615	Hana Bank
(formerly, POSCO ENGINEERING &	PT. Wampu Electric Power	Letter of credit		2,837		2,837	Hana Bank
CONSTRUCTION CO.,LTD.)	Pocheon-Hwado Highway Corp. (formerly, Metropolitan Outer Ring Expressway co., ltd.)	Guarantee on performance for projects		23,315		23,315	Construction Guarantee Cooperative
				28,767		28,767
[Others]
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	DAEWOO ENGINEERING & CONSTRUCTION Co., Ltd	Guarantee on performance for construction		8,381,876		6,686,305	Construction Guarantee Cooperative
			W	8,427,049		6,731,478

② As of December 31, 2023, the primary payment guarantees, etc. that the Company provided from the guarantee institution are as follows:

(in millions of Won)
Provider	Types of guarantees	Agreed amount		Executed amount
Construction Guarantee Cooperative	Subcontractor Payment Guarantee and others	W	6,806,423		6,793,235
Engineering guarantee insurance	Guarantee on performance for EPC contracts and others		896,888		540,075
Seoul Guarantee Insurance	Construction performance guarantee and others		571,775		571,775
Korea Housing & Urban Guarantee Corporation	Housing Guarantee and others		4,933,080		4,927,830
Korea software financial cooperative	Guarantee on performance for contracts
Woori Bank and others	Foreign currency guarantee		2,042,804		786,129
		W	15,358,838		13,724,120

110

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(c) Other commitments

Details of other commitments of the Company as of December 31, 2023 are as follows:

Company	Description
POSCO HOLDINGS INC.	As of December 31, 2023, POSCO HOLDINGS INC. entered into a commitment with KOREA ENERGY AGENCY for long-term foreign currency borrowings, which are limited up to the amount of USD 1.05 million. The borrowing is related to the exploration of gas hydrates in Western Fergana-Chinabad. The repayment of the borrowings depends on the success of the projects. POSCO HOLDINGS INC. is not liable for the repayment of full or part of the amount borrowed if the respective projects fail. POSCO HOLDINGS INC. has agreed to pay a certain portion of its profits under certain conditions, as defined by the borrowing agreements. As of December 31, 2023, the ending balance of the borrowing amounts to USD 1.02 million.
	POSCO HOLDINGS INC. has deposited 3,211,795 treasury shares for exchange with the Korea Securities Depository in relation to foreign currency exchangeable bonds as of December 31, 2023.
POSCO	POSCO entered into long-term contracts to purchase iron ore, coal, nickel and others. The long-term purchase contract period is more than two years for iron ore, three years for coal, and one year for nickel. These contracts provide for periodic price adjustments based on the market price. As of December 31, 2023, 43 million tons of iron ore and 15 million tons of coal remained to be purchased under such long-term contracts.
	POSCO entered into an agreement with Tangguh Liquefied Natural Gas (LNG) Consortium in Indonesia to purchase 550 thousand tons of LNG annually for 20 years commencing in August 2005. Due to decrease of purchase volume in 2023, the purchase volume will be 190 thousand tons from September 2025 to December 2026. The purchase price is subject to change, based on changes of the monthly standard oil price (JCC) and with a price ceiling.
	POSCO has a long-term service contract for the transportation of raw material. As of December 31, 2023, there are 36 vessels under contract, and the average remaining contract period is about 7 years.
	POSCO entered into an agreement (LNG SPA) with POSCO INTERNATIONAL SINGAPORE PTE LTD. to purchase 370 thousand tons of LNG annually for 15 years commencing in November 2026. The purchase price is subject to change based on changes of U.S. Henry Hub Natural Gas Spot Price. POSCO has extension option of extending the purchase contract by five years. Meanwhile, POSCO INTERNATIONAL Corporation has signed an LNG SPA with Cheniere Marketing, LLC for the purpose of supplying LNG to POSCO. As an actual buyer of LNG, POSCO provides performance guarantee for POSCO INTERNATIONAL Corporation’s SPA to producer, Cheniere Marketing, LLC. The performance guarantee contract period is from September 30, 2022 to the date of expiration of SPA contract which is September 30, 2046, or the date of termination of payment obligation under the guarantee contract.
POSCO INTERNATIONAL Corporation	POSCO INTERNATIONAL Corporation operates a ship-to-ship business in which ships are chartered from ship’s owners and leased out to shippers. The Company has entered into a ship purchase agreement with the ship owners and the shippers, which obliges the shippers to pay the agreed amount either at the end of the contract terms or at the agreed termination and to take over the ownership of the vessel from the ship owners. Only if the shipper fails to fulfill its obligation including payment obligation for the purchase of the vessel, the Company is obliged to take over the ship based on the condition that the shipper’s contractual obligations and rights are transferred to the Company. As of December 31, 2023, the amount which is exposed to the ship purchase agreements entered into is USD 31 million.
	The Company invested in the Ambatovy Nickel Project (DMSA/AMSA) in Madagascar through the Korea Ambatovy Consortium (KAC) formed with Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) and STX Corporation. SHERRITT INTERNATIONAL CORP., the operator, transferred a portion of the project’s interests to Sumitomo and AHL (Ambatovy Holdings Limited) in November 2017, and transferred the remaining interests of the project to Sumitomo and AHL2 (Ambatovy Holdings II Limited) in August 2020. KAC has the rights and obligations to the 15.33% stake held by AHL and AHL2.
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	As of December 31, 2023, according to the investor agreement for the construction of Samcheok Thermal Power Plant, POSCO Eco & Challenge Co., Ltd. is obligated to make contributions for core capital, unqualified investment, excess expenses occurred for business, and acceleration of payment. Among them, the remaining amount of the core capital investment obligation isW43,189 million. Meanwhile, the Company investedW25,700 million in January, 2024 and plans to investW17,489 million in March, 2024.

111

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

Company

Description

POSCO FUTURE MATERIALS CANADA INC. (formerly, POSCO CHEMICAL CANADA INC.)

In accordance with the GP Shareholders Agreement between POSCO FUTURE MATERIALS CANADA INC. and GM Battery Raw Materials Corporation (hereinafter referred to as GM), if, POSCO FUTURE M Co., LTD. (POSCO FUTURE MATERIALS CANADA INC’s shareholders) fails to obtain approval for the export of national core technology under the ‘Act On Prevention Of Divulgence And Protection Of Industrial Technology’ in Korea within two years from the date of signing the agreement, GM may sell its shares of ULTIUM CAM GP INC. and ULTIUM CAM LIMITED PARTNERSHIP held by Posco Future Materials Canada Inc.. GM has the right to exercise this put option until the 27th month from the date of signing the agreement. When GM exercises the put option, Posco Future Materials Canada Inc. is required to immediately purchase GM’s shares at a price of the fair market value of GM’s shares or 125% of the total amount of capital contributions made by GM before the closing of the sale, whichever amount is greater. As of December 31, 2023, the Company recognizedW119,258 million as other financial liabilities related to the terms of this agreement.

(d) Litigation in progress

As of December 31, 2023, litigations in progress that POSCO HOLDINGS INC. and certain subsidiaries are defendants in legal actions arising from the normal course of business are as follows:

(in millions of Won, in thousands of foreign currencies)
Company	Legal actions	Claim amount			Won equivalent		Description
POSCO HOLDINGS INC.	4		KRW	9,945		9,945	Lawsuit on claim for damages and others
POSCO	35		KRW	205,234		205,234	Lawsuit on claim for employee right and others
POSCO INTERNATIONAL Corporation	2		INR	4,469,396		69,276	Lawsuit on claim for payment on guarantees and others(*1)
	6		KRW	75,458		75,458	Lawsuit on claim for damages and others
	1		PKR	124,775		570	Lawsuit on claim for damages
	6		USD	75,389		97,207	Lawsuit on claim for damages and others(*1)
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	106		KRW	428,767		428,767	Lawsuit on claim for damages and others(*1)
POSCO DX(formerly, POSCO ICT)	1		BRL	14,819		3,938	Lawsuit on claim for damages
	11		KRW	6,789		6,789	Lawsuit on claim for damages and others
POSCO FUTURE M CO., LTD. (formerly, POSCO CHEMICAL CO., LTD)	3		KRW	5,789		5,789	Lawsuit on claim for damages and others
POSCO M-TECH	1		KRW	67		67	Lawsuit on claim for damages
POSCO A&C	3		KRW	2,181		2,181	Lawsuit on claim for payment on construction and others(*1)
POSCO WIDE Co., Ltd.	2		KRW	563		563	Lawsuit on claim for damages and others
eNtoB Corporation	1		KRW	14		14	Lawsuit on claim for damages
POSCO ASIA COMPANY LIMITED	1		USD	80		103	Lawsuit on claim for damages(*1)
POSCO-China Holding Corp.	1		USD	1,290		1,663	Lawsuit on claim for damages
POSCO-INDIA STEEL DISTRIBUTION CENTER PRIVATE LIMITED	1		INR	525,000		8,138	Lawsuit on claim for damages
POSCO(Suzhou) Automotive Processing Center Co., LTD.	2		CNY	31		6	Lawsuit on claim for invalidation of dismissal
Shinan Green Energy Co., LTD	1		KRW	—		—	Lawsuit on claim for land delivery
POSCO INTERNATIONAL TEXTILE LLC.	1		USD	2,389		3,081	Lawsuit on claim for payment on contract(*1)
Qingdao Pohang Stainless Steel Co., Ltd.	1		CNY	13,260		2,398	Lawsuit on claim for contract termination
POSCO Center Beijing	1		CNY	80		15	Lawsuit on claim for contract termination
POSCO Engineering and Construction India Private Limited	2		INR	493,968		7,657	Lawsuit on claim for payment and others(*1)
POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA.	78		BRL	185,366		49,257	Lawsuit on claim for payment on construction and others(*1)
POSCO INDIA PROCESSING CENTER PRIVATE LIMITED	1		INR	54,420		844	Lawsuit on claim for damages

112

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(in millions of Won, in thousands of foreign currencies)
Company	Legal actions	Claim amount			Won equivalent		Description
POSCO E&C CHINA Co., Ltd.	1		CNY	765		138	Lawsuit over contract dispute
Pos-Sea Pte Ltd	1		USD	3,200		4,126	Lawsuit over contract dispute
Brazil Sao Paulo Steel Processing Center	7		BRL	6,729		1,788	Lawsuit on claim for labor and others
POSCO Thainox Public Company Limited	1		THB	3,000		113	Lawsuit on invalidation of a check
POSCO ASSAN TST STEEL INDUSTRY Inc	13		USD	80		103	Lawsuit on claim for labor and others(*1)
POSCO TNPC Otomotiv Celik San. Ve Tic. A.S	4		TRY	1,132		49	Lawsuit over industrial accidents and others(*1)
POSCO-India Private Limited	1		INR	2,466		38	Lawsuit on claim for wages

(*1) The Company made a reliable estimate in 66 lawsuits by considering the possibility and amount of expected outflow of resources and recognizedW45,712 million as provision for legal contingencies and claims.

For all the other lawsuits and claims, management does not believe the Company has any present obligations and therefore, the Company has not recognized any provisions as of December 31, 2023 for the matters.

(e) Other contingent circumstances

Other major contingencies for the Company as of December 31, 2023 are as follows:

Company	Description
POSCO HOLDINGS INC.	POSCO HOLDINGS INC. has provided 3 blank checks to Korea Energy Agency as collateral for long-term foreign currency borrowings. The Company has a joint obligation with the company newly established through spin-off, POSCO, to discharge all liabilities (including financial guarantee contracts) incurred prior to the spin-off date.
POSCO INTERNATIONAL Corporation	As of December 31, 2023, POSCO INTERNATIONAL Corporation has provided 29 blank promissory notes and 18 blank checks to Korea Energy Agency and others as collateral for the guarantee on performance for contracts and others.
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	As of December 31, 2023, POSCO Eco & Challenge Co., Ltd. has provided 41 blank checks and 4 blank promissory notes as collateral for agreements and outstanding loans.
POSCO DX (formerly, POSCO ICT)	As of December 31, 2023, POSCO DX has provided 7 blank checks to financial institutions as collateral for the guarantee on performance for contracts and others.

40. Statements of Cash Flows

(a) Changes in operating assets and liabilities for the years ended December 31, 2023 and 2022 were as follows:

(in millions of Won)	2023			2022
Trade accounts and notes receivable	W	(1,127,629	)		547,480
Other receivables		32,827			(96,141	)
Inventories		1,383,720			(415,596	)
Other current assets		265,296			(230,084	)
Other non-current assets		(214,331	)		42,767
Trade accounts and notes payable		(118,796	)		141,925
Other payables		(301,561	)		611,932
Other current liabilities		(344,490	)		(272,505	)
Provisions		(318,955	)		(295,624	)
Payments of severance benefits		(263,548	)		(300,353	)
Plan assets		(45,535	)		(59,461	)
Other non-current liabilities		(34,255	)		(9,704	)
	W	(1,087,257	)		(335,364	)

113

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(b) Changes in liabilities arising from financial activities for the year ended December 31, 2023 and 2022 were as follows:

1) December 31, 2023

(in millions of Won)	Liabilities												Derivatives that hedge borrowings
	Short-term borrowings			Long-term borrowings			Dividend payable			Finance lease liabilities
Beginning	W	6,833,120			17,472,542			4,371			823,482			(191,497	)
Changes from financing cash flows		(2,524,077	)		3,356,103			(825,495	)		(222,829	)		102,707
The effect of changes in foreign exchange rates		650,237			(139,863	)		—			38,909			—
Changes in fair values		—			305,562			—			—			(41,201	)
Other changes:
Decrease in retained earnings		—			—			720,770			—			—
Decrease in non-controlling interest		—			—			103,615			—			—
Interest expenses		—			16,755			—			41,109			—
Increase in lease assets		—			—			—			243,649			—
Ending	W	4,959,280			21,011,099			3,261			924,320			(129,991	)

2) December 31, 2022

(in millions of Won)	Liabilities												Derivatives that hedge borrowings
	Short-term borrowings			Long-term borrowings			Dividend payable			Finance lease liabilities
Beginning	W	5,110,424			16,630,792			4,046			778,014			(107,982	)
Changes from financing cash flows		1,764,569			415,692			(1,234,899	)		(268,082	)		102,973
Changes arising from obtaining or losing control of subsidiaries or other business		—			142,290			—			193,572			—
The effect of changes in foreign exchange rates		(41,873	)		355,540			—			(96,771	)		—
Changes in fair values		—			(85,790	)		—			—			(186,488	)
Other changes:
Decrease in retained earnings		—			—			1,138,107			—			—
Decrease in non-controlling interest		—			—			97,117			—			—
Interest expenses		—			14,018			—			34,935			—
Increase in lease assets		—			—			—			181,814			—
Ending	W	6,833,120			17,472,542			4,371			823,482			(191,497	)

114

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

41. Operating Segments and Geographic Information

(a) The Company’s operating businesses are organized based on the nature of markets and customers. During the year ended December 31, 2023, the Company changed the internal organization and internal reporting structures. As a result, operating segments were recategorized according to the revised reporting materials provided to the management for decision-making. The Company restated the reportable segment information for the year ended December 31, 2022 to conform to the 2023 segment classifications.

Segment assets, liabilities and profit (loss) are generally measured based on separate financial statements in accordance with K-IFRS of the subsidiaries that constitute reportable operating segments.

Meanwhile, the Company has classified the business segment and the subsidiaries in each segment as follows:

Operating segments		Main Business
Steel		Manufacture and sales of steel products
Green infrastructure	Trading	Supply and purchase transactions between domestic and foreign companies, power generation, and resource development
	Construction	Design, production and construction of steel mills and their facilities, commercial and residential facilities, etc.
	Logistics and others	Logistics, network and system integration business
Green Materials and energy		EV battery materials such as lithium, nickel, negative/cathode materials, and hydrogen business
Others		POSCO HOLDINGS. INC., Controlling company and Investment business

(b) The segment profit or loss does not reflect the consolidation adjustments allocated to each entity and is determined in the same way as the consolidated net income determined by K-IFRS. Segment assets and liabilities are determined based on separate financial statements. There are various transactions of transactions between reporting segments, including disposal of property, plant and equipment and provision of construction services.

(c) Information about reportable segments as of and for the years ended December 31, 2023 and 2022 were as follows:

1) As of and for the year ended December 31, 2023

				Green infrastructure									Green materials and Energy
(in millions of Won)	Steel			Trading			Construction			Logistics and others						Others			Total
External revenues	W	40,393,273			24,033,506			8,301,130			470,613			3,816,042			112,633			77,127,197
Internal revenues		23,145,425			18,910,246			1,966,373			3,475,340			1,005,844			1,449,581			49,952,809
Inter segment revenues		15,293,780			8,906,571			1,864,723			3,431,594			972,511			1,422,313			31,891,492
Total revenues		63,538,698			42,943,752			10,267,503			3,945,953			4,821,886			1,562,214			127,080,006
Interest income		281,530			66,398			100,682			15,837			39,339			73,550			577,336
Interest expenses		(718,937	)		(284,056	)		(105,102	)		(14,091	)		(57,638	)		(272	)	��	(1,180,096	)
Depreciation and amortization		(3,044,565	)		(508,161	)		(66,854	)		(54,219	)		(155,567	)		(16,126	)		(3,845,492	)
Impairment loss on property, plant and equipment and others		(305,437	)		(9,826	)		(28,031	)		—			(55,601	)		(10,657	)		(409,552	)
Share of income (loss) of equity-accounted investees, net		(182,668	)		(37,368	)		13,632			—			(67,248	)		(109,568	)		(383,220	)
Income tax expense		(595,457	)		(239,164	)		(95,364	)		(39,250	)		13,281			113,895			(842,059	)
Segment profits (losses)		1,241,211			723,929			183,453			170,959			(235,603	)		827,298			2,911,247
Segment total assets		66,224,069			19,650,557			9,631,691			2,476,842			10,909,515			51,957,529			160,850,203
Investment in subsidiaries, associates and joint ventures		3,855,038			2,933,140			481,672			9,999			1,550,524			45,084,972			53,915,345
Acquisition of non-current assets		3,748,163			553,955			119,438			137,237			2,795,447			162,639			7,516,879
Segment total liabilities		24,154,043			11,842,508			5,589,827			993,071			4,972,568			4,301,310			51,853,327

115

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) As of and for the year ended December 31, 2022

① The segment results as previously disclosed are as follows:

				Green infrastructure									Green materials and Energy
(in millions of Won)	Steel			Trading			Construction			Energy and Others						Others			Total
External revenues	W	44,546,966			25,955,458			7,667,696			3,998,959			2,451,785			129,340			84,750,204
Internal revenues		26,102,681			23,634,302			1,217,795			3,426,549			936,975			1,040,196			56,358,498
Inter segment revenues		18,226,727			11,853,034			1,074,088			3,442,447			923,552			1,818,578			37,338,426
Total revenues		70,649,647			49,589,760			8,885,491			7,425,508			3,388,760			1,169,536			141,108,702
Interest income		141,047			37,603			68,774			23,928			22,708			(13,319	)		280,741
Interest expenses		(446,058	)		(156,663	)		(44,309	)		(56,799	)		(11,770	)		(84	)		(715,683	)
Depreciation and amortization		(3,036,041	)		(392,969	)		(64,813	)		(149,754	)		(94,416	)		(20,811	)		(3,758,804	)
Impairment loss on property, plant and equipment and others		(234,904	)		(23,035	)		(32	)		(292	)		(1,053	)		—			(259,316	)
Share of loss of equity-accounted investees, net		(6,239	)		(29,541	)		(2,792	)		(8,552	)		—			(263,264	)		(310,388	)
Income tax expense		(565,353	)		(189,535	)		(92,715	)		(93,210	)		(14,120	)		(1,785,487	)		(2,740,420	)
Segment profits (losses)		1,711,940			525,500			137,911			293,859			109,209			(1,087,428	)		1,690,991
Segment total assets		66,143,103			15,693,605			8,878,530			6,612,825			6,652,469			51,421,190			155,401,722
Investment in subsidiaries, associates and joint ventures		2,659,443			1,821,243			565,873			957,168			600,277			44,951,810			51,555,814
Acquisition of non-current assets		3,287,878			622,678			53,708			125,942			1,169,725			370,837			5,630,768
Segment total liabilities		25,111,665			10,097,503			4,937,907			3,683,068			2,127,424			4,156,863			50,114,430

② The restated segment results due to the change of operating segments are as follows:

				Green infrastructure									Green materials and Energy
(in millions of Won)	Steel			Trading			Construction			Logistics and others						Others			Total
External revenues	W	44,546,966			29,517,938			7,667,696			436,479			2,451,785			129,340			84,750,204
Internal revenues		26,102,681			23,677,786			1,217,795			3,383,065			936,975			1,040,196			56,358,498
Inter segment revenues		18,226,727			11,148,030			1,074,088			3,414,385			923,552			1,818,578			36,605,360
Total revenues		70,649,647			53,195,724			8,885,491			3,819,544			3,388,760			1,169,536			141,108,702
Interest income		141,047			51,869			68,774			9,662			22,708			(13,319	)		280,741
Interest expenses		(446,058	)		(202,000	)		(44,309	)		(11,462	)		(11,770	)		(84	)		(715,683	)
Depreciation and amortization		(3,036,041	)		(495,524	)		(64,813	)		(47,199	)		(94,416	)		(20,811	)		(3,758,804	)
Impairment loss on property, plant and equipment and others		(234,904	)		(23,096	)		(32	)		(231	)		(1,053	)		—			(259,316	)
Share of loss of equity-accounted investees, net		(6,239	)		(38,093	)		(2,792	)		—			—			(263,264	)		(310,388	)
Income tax expense		(565,353	)		(249,395	)		(92,715	)		(33,350	)		(14,120	)		(1,785,487	)		(2,740,420	)
Segment profits (losses)		1,711,940			716,204			137,911			103,155			109,209			(1,087,428	)		1,690,991
Segment total assets		66,143,103			20,014,447			8,878,530			2,291,983			6,652,469			51,421,190			155,401,722
Investment in subsidiaries, associates and joint ventures		2,659,443			2,771,602			565,873			6,809			600,277			44,951,810			51,555,814
Acquisition of non-current assets		3,287,878			700,425			53,708			48,195			1,169,725			370,837			5,630,768
Segment total liabilities		25,111,665			12,736,310			4,937,907			1,044,261			2,127,424			4,156,863			50,114,430

(d) Reconciliations of total segment revenues, profit or loss, assets and liabilities, and other significant items to their respective consolidated financial statement line items are as follows:

1) Revenues

(in millions of Won)	2023			2022
Total revenue for reportable segments	W	127,080,006			141,108,702
Elimination of inter-segment revenue		(49,952,809	)		(56,358,498	)
	W	77,127,197			84,750,204

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POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

2) Profit

(in millions of Won)	2023			2022
Total profit for reportable segments	W	2,911,247			1,690,991
Goodwill and corporate FV adjustments		172,493			(68,771	)
Elimination of inter-segment profit		(1,237,891	)		1,938,263
Income tax expense		789,305			453,883
Profit before income tax expense	W	2,635,154			4,014,366

3) Assets

(in millions of Won)	2023			2022
Total assets for reportable segments	W	160,850,203			155,401,722
Investment in subsidiaries, associates and joint ventures		(48,895,081	)		(46,559,264	)
Goodwill and corporate FV adjustments		2,630,009			2,366,408
Elimination of inter-segment assets		(13,639,737	)		(12,802,085	)
	W	100,945,394			98,406,781

4) Liabilities

(in millions of Won)	2023			2022
Total liabilities for reportable segments	W	51,853,327			50,114,430
Goodwill and corporate FV adjustments		242,251			215,760
Elimination of inter-segment liabilities		(10,814,081	)		(10,180,810	)
	W	41,281,497			40,149,380

5) Other significant items

a) December 31, 2023

(in millions of Won)	Total segment			Goodwill and corporate FV adjustments			Elimination of inter-segment transactions			Consolidated
Interest income	W	577,336			—			(75,189	)		502,147
Interest expenses		(1,180,096	)		—			178,807			(1,001,289	)
Depreciation and amortization		(3,845,492	)		(99,347	)		121,559			(3,823,280	)
Share of profit of equity-accounted investees, net		(383,220	)		—			652,898			269,678
Income tax expense		(842,059	)		46,116			6,638			(789,305	)
Impairment loss on property, plant and equipment and others		(409,552	)		—			3,799			(405,753	)

b) December 31, 2022

(in millions of Won)	Total segment			Goodwill and corporate FV adjustments			Elimination of inter-segment transactions			Consolidated
Interest income	W	280,741			—			(33,736	)		247,005
Interest expenses		(715,683	)		—			108,225			(607,458	)
Depreciation and amortization		(3,758,804	)		(95,195	)		166,378			(3,687,621	)
Share of profit of equity-accounted investees, net		(310,388	)		—			986,648			676,260
Income tax expense		(2,740,420	)		25,803			2,260,734			(453,883	)
Impairment loss on property, plant and equipment and others		(259,316	)		—			(324,529	)		(583,845	)

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POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(e) Revenue by geographic area for the years ended December 31, 2023 and 2022 was as follows:

(in millions of Won)	2023		2022
Domestic	W	50,658,510		54,519,647
Japan		2,691,788		2,651,584
China		6,152,191		7,430,619
Indonesia		3,422,647		3,282,888
Asia-other		7,287,382		9,331,724
North America		2,095,705		2,413,054
Europe		2,468,508		2,811,444
Others		2,350,466		2,309,244
	W	77,127,197		84,750,204

(f) Non-current assets by geographic area as of December 31, 2023 and 2022 are as follows:

(in millions of Won)	2023		2022
Domestic	W	31,585,233		28,623,582
Japan		132,229		139,636
China		1,222,358		1,199,461
Indonesia		2,859,375		3,025,737
Asia-other		1,662,482		1,742,673
North America		526,654		323,543
Europe		268,787		282,170
Others		3,280,208		2,356,875
	W	41,537,326		37,693,677

Non-current assets by geographic area include investment property, property, plant and equipment, goodwill and other intangible assets.

(g) There are no customers whose revenue is 10% or more of the consolidated revenue.

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POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

42. Business Combination

(a) General Information

As of March 30, 2023, the Company acquired 50% of the remaining shares of QSONE Co.,Ltd. which had previously been classified as an associate, and classified the entity as a wholy owned subsidiary. QSONE Co.,Ltd. owns POSCO Tower Yeoksam, located in Seoul, South Korea, and operates in the business of real estate rental and facility management. With QSONE Co.,Ltd.’s inclusion as a subsidiary, the Company plans to reallocate some of consolidated entities which are dispersed due to space limitation, and expects that the Company will ultimately be able to promote collaboration and improve work efficiency.

Had QSONE Co.,Ltd. been acquired on January 1, 2023, the Company’s revenue and profit would have beenW77,130,652 million andW1,846,904 million. In addition, revenue and profit based on separate financial statements of QSONE Co.,Ltd. after the acquisition areW18,044 million andW6,307 million.

(b) Consideration transferred

As of the acquisition date, the fair values of the major categories of the consideration transferred in the acquisition are as follows:

(in millions of Won)	March 30, 2023
Cash	W	152,749
Investments in associates(*1)		268,951

(*1) As a result of reassessing 50% of the shares previously held by the Company at fair value, a gain on disposal ofW184,556 million has been recognized as other non-operating income in the consolidated statement of comprehensive income.

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POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(c) Identifiable assets acquired and liabilities assumed

The fair value of the identifiable assets acquired and liabilities assumed as of the date of acquisition is as follows:

(in millions of Won)	March 30, 2023
Assets
Cash and cash equivalents	W	2,220
Trade accounts, notes receivable and other receivables, net		205
Other financial assets		12,000
Other current assets		132
Total current assets		14,557
Other receivables, net		41
Investment property, net		557,040
Property, plant and equipment, net		42,641
Deferred tax assets		10
Total non-current assets		599,732
Total assets	W	614,289
Liabilities
Short-term borrowings	W	10,000
Other payables		5,612
Current income tax liabilities		401
Other current liabilities		812
Total current liabilities		16,825
Long-term borrowings		48,000
Other payables		6,546
Other non-current liabilities		967
Deferred tax liabilities		77,019
Total non-current liabilities		132,532
Total liabilities	W	149,357
Net assets	W	464,932

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POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2023 and 2022

(d) Gain on bargain purchase

The acquisition cost for the remaining 50% shares held by the seller was determined by comprehensively considering factors based on the sales contract, such as the fair value increase of POSCO Tower Yeoksam during the seller’s investment period, target earnings which is calculated by deducting amounts paid by QSONE Co.,Ltd. to the seller as a right of shareholder and creditor, from the seller’s initial investment. Therefore, gain on bargain purchase from this business combination isW41,072 million which the Company recognized as other non-operating income.

(e) Costs related to business combination

During the year ended December 31, 2023 expenses related to the business combination, including evaluation fees wereW179 million, which the Company recognized as other administrative expenses in the consolidated statements of comprehensive income.

43. Events after the reporting period

On January 23, 2024, POSCO, a subsidiary, issued non-guaranteed senior dollar bonds (issued amount $500 million, nominal interest rate 4.875%). The maturity of the bonds is January 23, 2027.

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Notice to Readers

This report is annexed in relation to the audit of the consolidated financial statements as of December 31, 2023 and the audit of internal accounting control system for consolidation purposes pursuant to Article 8-7 of the Act on External Audit for Joint-stock Companies of the Republic of Korea.

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Independent Auditors’ Report on Internal Control over Financial Reporting for Consolidation Purposes

English Translation of a Report Originally Issued in Korean

To the Shareholders and Board of Directors of

POSCO HOLDINGS INC.:

Opinion on Internal Control over Financial Reporting for Consolidation Purposes

We have audited POSCO HOLDINGS INC. and its subsidiaries’ (the “Company”) internal control over financial reporting (“ICFR”) for consolidation purposes as of December 31, 2023 based on the criteria established in the Conceptual Framework for Designing and Operating ICFR (“ICFR Design and Operation Framework”) issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea (the “ICFR Committee”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on ICFR Design and Operation Framework.

We also have audited, in accordance with Korean Standards on Auditing (“KSAs”), the consolidated financial statements of the Company, which comprise the consolidated statements of financial position as of December 31, 2023 and 2022, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes, comprising summary of material accounting policy information and other explanatory information, and our report dated March 13, 2024 expressed an unmodified opinion on those consolidated financial statements.

Basis for Opinion on internal Control over Financial Reporting for Consolidation Purposes

We conducted our audit in accordance with KSAs. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Internal Control over Financial Reporting consolidation purposes section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the internal control over financial reporting in Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Internal Control over Financial Reporting for Consolidation Purposes

The Company’s management is responsible for designing, operating and maintaining effective internal control over financial reporting for consolidation purposes and for its assessment of the effectiveness of internal control over financial reporting for consolidation purposes, included in the accompanying Report on Operating Status of Internal Control over Financial Reporting for Consolidation Purposes,

Those charged with governance are responsible for overseeing the Company’s internal control over financial reporting for consolidation purposes.

Auditors’ Responsibilities for the Audit of the Internal Control over Financial Reporting for Consolidation Purposes

Our responsibility is to express an opinion on the Company’s internal control over financial reporting for consolidation purposes based on our audit. We conducted our audit in accordance with KSAs. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting for consolidation purposes was maintained in all material respects.

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Our audit of internal control over financial reporting for consolidation purposes included obtaining an understanding of internal control over financial reporting for consolidation purposes, 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.

Definition and Limitations of Internal Control over Financial Reporting for Consolidation Purposes

A company’s internal control over financial reporting for consolidation purposes is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with Korean International Financial Reporting Standards (“K-IFRS”). A company’s internal control over financial reporting for consolidation purposes 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 consolidated financial statements in accordance with K-IFRS, 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 consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting for consolidation purposes may not prevent or detect material misstatements in the consolidated financial statements. 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.

The engagement partner on the audit resulting in this independent auditors’ report is Jae Nam Hwang.

Seoul, Korea

March 13, 2024

This report is effective as of March 13, 2024, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the internal control over financial reporting. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

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Report on Operating Status of Internal Control over Financial Reporting

for Consolidation Purposes

English Translation of a Report Originally Issued in Korean

To the Shareholders, Board of Directors and Audit Committee of POSCO HOLDINGS INC.

We, as the Chief Executive Officer and the Internal Control Officer of POSCO HOLDINGS INC. and its subsidiaries(the “Company”), assessed operating status of the Company’s Internal Control over Financial Reporting(“ICFR”) for Consolidation Purposes as of December 31, 2023.

Design and operation of ICFR for Consolidation Purposes is the responsibility of the Company’s management, including the Chief Executive Officer and the Internal Control Officer (collectively, “We”).

We evaluated whether the Company effectively designed and operated its ICFR for Consolidation Purposes to prevent and detect errors or frauds which may cause a misstatement in consolidated financial statements to ensure preparation and disclosure of reliable financial information.

We used the ‘Guidelines for Internal Control over Financial Reporting’ for evaluating design and operation of the Company’s ICFR for Consolidation Purposes, established by the Operating Committee of Internal Control over Financial Reporting in Korea (the “ICFR Committee”).

Based on our assessment, we concluded that the Company’s ICFR for Consolidation Purposes is designed and operated effectively as of December 31, 2023, in all material respects, in accordance with the ‘Guidelines for Internal Control over Financial Reporting’.

We certify that this report does not contain any untrue statement of a fact, or omit to state a fact necessary to be presented herein. We also certify that this report does not contain or present any statements which might cause material misunderstandings of the readers, and we have reviewed and verified this report with sufficient care.

January 26, 2024

/s/ Jeong, Ki-Seop, Chief Executive Officer

/s/ Kim, Seung-Jun, Internal Control Officer

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