POSCO (PKX) 20-F 2023 FY Annual report (foreign)

falseFY0000889132American Depositary Shares, each representing one-fourth of one share of common stockKRKRInternational Financial Reporting StandardsM5Refund (additional payment) of income taxes when filing a final corporation tax return is credited (charged) directly to current income taxes.As a result of the merger transaction, the ownership of the Company in POSCO INTERNATIONAL Corporation increased from 62.92% to 73.21%.Includes adjustments of foreign currency translation differences and others.Includes transfer to liabilities held for sale and adjustments of foreign currency translation differences and others.As of December 31, 2022, the Company recognized tax assets amounting to ￦6,764 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. 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 a result of reassessing 50% of the shares previously held by the Company at fair value, a gain on disposal of ￦184,556 million has been recognized as other non-operating income in the consolidated statement of comprehensive income. 0000889132 ifrs-full:ContingentLiabilityForGuaranteesMember currency:INR pkx:POSCOMaharashtraSteelPrivateLimitedMember pkx:GailIndiaAndOthersMember pkx:HSBCAndOthersMember 2023-12-31 0000889132 ifrs-full:ForeignCountriesMember pkx:PoscoAmericaAlabamaProcessingCenterCo.Ltd.Member 2022-01-01 2022-12-31 0000889132 pkx:TwentyTwentyPoscoMoorimBioNewTechnologyFundMember ifrs-full:CountryOfDomicileMember 2023-01-01 2023-12-31

As filed with the Securities and Exchange Commission on April 29, 2024

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form

20-F

(Mark One)

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

OR

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

For the fiscal year ended December 31, 2023

OR

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

OR

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

Date of event requiring this shell company report

   

For the transition period from

   

to

   

Commission file number

1-13368

POSCO HOLDINGS INC.

(Exact name of Registrant as specified in its charter)

POSCO HOLDINGS INC.	The Republic of Korea
(Translation of Registrant’s name into English)	(Jurisdiction of incorporation or organization)

POSCO Center, 440

Teheran-ro,

Gangnam-gu

Seoul,

Republic of Korea

06194

(Address of principal executive offices)

Jang,

Soo-Young

POSCO Center, 440

Teheran-ro,

Gangnam-gu

Seoul,

Republic of Korea

06194

Telephone:

+82-2-3457-0747;

E-mail:

syjang0228@posco-inc.com;

Facsimile:

+82-2-3457-6000

(Name, telephone,

e-mail

and/or facsimile number and address of company contact person)

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

Title of Each Class	Trading symbol	Name of Each Exchange on Which Registered
American Depositary Shares, each representing one-fourth of one share of common stock	PKX	New York Stock Exchange, Inc.
Common Stock, par value Won 5,000 per share *	PKX	New York Stock Exchange, Inc. *

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

None

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

None

As of December 31, 2023, there were 75,876,207 shares of common stock, par value Won 5,000 per share, outstanding

(not including 8,695,023 shares of common stock held by the company as treasury shares)

Indicate by check mark if the registrant is a

well-known

seasoned issuer, as defined in Rule 405 of the Securities Act.

 Yes 

☒

 

 No

 

☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. 

Yes 

☐

 

 No 

☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

Yes 

☒

 

 No 

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 

Yes 

☒

 

 No 

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in

Rule 12b-2

of the Exchange Act. (Check one):

Large accelerated filer 

☒

 

 Accelerated filer

 

☐

 

 Non

-accelerated

filer

 

☐

 

 Emerging growth company 

☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. 

Yes 

☒

 

 No 

☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 Yes 

☐

 

 No 

☒

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to

§240.10D-1(b).

 Yes 

☐

 

 No 

☒

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

U.S.

 GAAP

 

☐

  

IFRS

 

☒

  Other 

☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. 

Item

 17 

☐

 

 Item

 18 

☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). 

Yes

 

☐

   No 

☒

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

TABLE OF CONTENTS

GLOSSARY			1
PART I			2
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGERS AND ADVISERS		2
	Item 1.A.	Directors and Senior Management	2
	Item 1.B.	Advisers	2
	Item 1.C.	Auditor	2
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE		2
	Item 2.A.	Offer Statistics	2
	Item 2.B.	Method and Expected Timetable	2
ITEM 3.	KEY INFORMATION		2
	Item 3.A.	[Reserved]	2
	Item 3.B.	Capitalization and Indebtedness	2
	Item 3.C.	Reasons for Offer and Use of Proceeds	2
	Item 3.D.	Risk Factors	2
ITEM 4.	INFORMATION ON THE COMPANY		25
	Item 4.A.	History and Development of the Company	25
	Item 4.B.	Business Overview	25
	Item 4.C.	Organizational Structure	41
	Item 4.D.	Property, Plants and Equipment	41
	Item 4A.	Unresolved Staff Comments	44
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS		44
	Item 5.A.	Operating Results	44
	Item 5.B.	Liquidity and Capital Resources	62
	Item 5.C.	Research and Development, Patents and Licenses, Etc.	65
	Item 5.D.	Trend Information	65
	Item 5.E.	Critical Accounting Estimates	65
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES		66
	Item 6.A.	Directors and Senior Management	66
	Item 6.B.	Compensation	68
	Item 6.C.	Board Practices	69
	Item 6.D.	Employees	70
	Item 6.E.	Share Ownership	71
	Item 6.F.	Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation	72
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS		72
	Item 7.A.	Major Shareholders	72
	Item 7.B.	Related Party Transactions	72
	Item 7.C.	Interests of Experts and Counsel	72
ITEM 8.	FINANCIAL INFORMATION		72
	Item 8.A.	Consolidated Statements and Other Financial Information	72
	Item 8.B.	Significant Changes	74
ITEM 9.	THE OFFER AND LISTING		74
	Item 9.A.	Offer and Listing Details	74
	Item 9.B.	Plan of Distribution	75

i

	Item 9.C.	Markets	75
	Item 9.D.	Selling Shareholders	75
	Item 9.E.	Dilution	75
	Item 9.F.	Expenses of the Issuer	75
ITEM 10.	ADDITIONAL INFORMATION		75
	Item 10.A.	Share Capital	75
	Item 10.B.	Memorandum and Articles of Association	75
	Item 10.C.	Material Contracts	81
	Item 10.D.	Exchange Controls	81
	Item 10.E.	Taxation	85
	Item 10.F.	Dividends and Paying Agents	92
	Item 10.G.	Statements by Experts	92
	Item 10.H.	Documents on Display	92
	Item 10.I.	Subsidiary Information	92
	Item 10.J.	Annual Report to Security Holders	92
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		92
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES		95
	Item 12.A.	Debt Securities	95
	Item 12.B.	Warrants and Rights	95
	Item 12.C.	Other Securities	95
	Item 12.D.	American Depositary Shares	95
PART II			96
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES		96
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS		96
ITEM 15.	CONTROLS AND PROCEDURES		96
ITEM 16.	[RESERVED]		97
	Item 16.A.	Audit Committee Financial Expert	97
	Item 16.B.	Code of Ethics	98
	Item 16.C.	Principal Accountant Fees and Services	98
	Item 16.D.	Exemptions from the Listing Standards for Audit Committees	99
	Item 16.E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	99
	Item 16.F.	Change in Registrant’s Certifying Accountant	99
	Item 16.G.	Corporate Governance	100
	Item 16.H.	Mine Safety Disclosure	102
	Item 16.I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	102
	Item 16.J.	Insider Trading Policies	102
	Item 16.K.	Cybersecurity	102
PART III			104
ITEM 17.	FINANCIAL STATEMENTS		104
ITEM 18.	FINANCIAL STATEMENTS		105
ITEM 19.	EXHIBITS		105

ii

GLOSSARY

“ADR”	American Depositary Receipt evidencing ADSs.
“ADR depositary”	Citibank, N.A.
“ADS”	American Depositary Share representing one-fourth of one share of Common Stock.
“Commercial Code”	Commercial Code of the Republic of Korea.
“common stock”	Common stock, par value Won 5,000 per share, of POSCO HOLDINGS INC.
“deposit agreement”	Deposit Agreement, dated as of July 19, 2013, among POSCO (currently named POSCO HOLDINGS INC.), the ADR Depositary and all holders and beneficial owners from time to time of ADRs issued thereunder.
“U.S. dollars,” “$” or “US$”	The currency of the United States of America.
“FSCMA”	Financial Investment Services and Capital Markets Act of the Republic of Korea.
“Government”	The government of the Republic of Korea.
“Gwangyang Works”	Gwangyang Steel Works.
“IASB”	International Accounting Standards Board.
“IFRS”	International Financial Reporting Standards.
“Korea”	The Republic of Korea.
“K-IFRS”	Korean International Financial Reporting Standards.
“Pohang Works”	Pohang Steel Works.
“POSCO Group”	POSCO HOLDINGS INC. and its consolidated subsidiaries.
“Securities Act”	The United States Securities Act of 1933, as amended.
“Securities Exchange Act”	The United States Securities Exchange Act of 1934, as amended.
“SEC”	The United States Securities and Exchange Commission.
“tons”	Metric tons (1,000 kilograms), equal to 2,204.6 pounds.
“U.S. GAAP”	Generally accepted accounting principles in the United States of America.
“We”	POSCO HOLDINGS INC. and its consolidated subsidiaries, unless otherwise specified or the context otherwise requires. Accordingly, in the context of discussing our steel operations, “we” refers to the steel-producing operations of the subsidiaries of POSCO HOLDINGS INC., including POSCO, POSCO (Zhang-jiagang), PT. Krakatau POSCO and POSCO YAMATO VINA.
“Won” or “￦”	The currency of the Republic of Korea.
“Yen”	The currency of Japan.
“Yuan”	The currency of the People’s Republic of China.

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

1

PART I

Item 1. Identity of Directors, Senior Managers and Advisers

Item 1.A. Directors and Senior Management

Not applicable

Item 1.B. Advisers

Not applicable

Item 1.C. Auditor

Not applicable

Item 2. Offer Statistics and Expected Timetable

Not applicable

Item 2.A. Offer Statistics

Not applicable

Item 2.B. Method and Expected Timetable

Not applicable

Item 3. Key Information

Item 3.A. [Reserved]

Item 3.B. Capitalization and Indebtedness

Not applicable

Item 3.C. Reasons for Offer and Use of Proceeds

Not applicable

Item 3.D. Risk Factors

You should carefully consider the risks described below.

The global economic downturn may adversely affect our business and performance. The global economic outlook for the near future remains uncertain.

Our business is affected by highly cyclical market demand for our products and services. In particular, POSCO and our other subsidiaries that engage in steel production activities are affected by market demand from a number of industries, including the construction, automotive, shipbuilding and electrical appliances industries as well as downstream steel processors, which are sensitive to general conditions in the global economy. Macroeconomic factors, such as the economic growth rate, employment levels, interest rates, inflation rates, exchange rates, commodity prices, demographic trends and fiscal policies of governments can have a significant effect on such industries. From time to time, these industries have experienced significant and sometimes prolonged downturns, which in turn

2

have negatively impacted our steel business. Global economic conditions have deteriorated in recent years, with global financial and capital markets experiencing substantial volatility. In particular, the COVID-19 pandemic that began in late 2019 and rapid increases in interest rates globally starting in the second half of 2021 to combat inflation have materially and adversely affected the global economy and financial markets. See “— Earthquakes, tsunamis, floods, severe health epidemics (including the global COVID-19 pandemic and any possible occurrences of other types of widespread infectious diseases) and other natural calamities could materially and adversely affect our business, results of operations or financial condition.” Such developments have also been caused by, and continue to be exacerbated by, among other things, the invasion of Ukraine by Russia in February 2022 that has destabilized the global energy sector, the slowdown of economic growth in China and other major emerging market economies, adverse economic and political conditions in Europe and Latin America and continuing geopolitical and social instability in North Korea and various parts of the Middle East, including the escalation of hostilities in the Middle East following the Israel-Hamas war, as well as a deterioration in economic and trade relations between the United States and its major trading partners, particularly China. See “— Korea and the rest of Asia are our most important markets, and our current business and future growth could be materially and adversely affected if economic conditions in the region deteriorate.”

Actual or anticipated further deterioration of global economic conditions may result in a decline in demand for our products. In the case of a prolonged decrease in demand, we may need to rationalize our production capacity and reduce fixed costs, and we will likely face pressure to reduce prices of our products. From time to time, we have adjusted our crude steel production levels and sales prices in response to sluggish demand from our customers in industries adversely impacted by the deteriorating economic conditions. We decreased our production of crude steel from 43.0 million tons in 2021 to 38.6 million tons in 2022 primarily due to a general decrease in global demand for steel products reflecting deterioration in global economic conditions. In 2022, our production level was also negatively impacted by temporary suspension of crude steel production activities following flooding of some of the Pohang Works’ facilities caused by Typhoon Hinnamnor in September 2022. In 2023, our production of crude steel was relatively stable as we incrementally increased our production to 39.9 million tons. The weighted average unit sales price for our semi-finished and finished steel products produced by us and directly sold to external customers increased from Won 1,225,209 per ton in 2021 to Won 1,435,642 per ton in 2022, reflecting strong market conditions in the first half of 2022 in part due to global steel supply chain concerns caused by Russia’s invasion of Ukraine, which market conditions weakened beginning in the second half of 2022 reflecting a decrease in global demand for steel products, as well as depreciation of the Won against the U.S. dollar in 2022 that increased our export prices in Won terms during 2022. Such weighted average unit sales price decreased from Won 1,435,642 per ton in 2022 to Won 1,272,754 per ton in 2023 primarily reflecting general deterioration of the global steel market conditions. Such weakening demand and a general oversupply in the market have negatively impacted our results of operations for 2023. Our revenue decreased by 9.3%, or Won 7,947 billion, from Won 85,004 billion in 2022 to Won 77,057 billion in 2023, and our profit decreased by 48.5%, or Won 1,740 billion, from Won 3,586 billion in 2022 to Won 1,846 billion in 2023.

We expect fluctuation in demand for our steel products and trading services to continue at least in the near future. We may decide to further adjust our future crude steel production or our sales prices on an ongoing basis subject to market demand for our products, the production outlook of the global steel industry and global economic conditions in general. In addition, economic downturns in the Korean and global economies could result in market conditions characterized by weaker demand for steel products from a number of industries as well as falling prices for export and import products and reduced trade levels. Deterioration of market conditions may result in changes in assumptions underlying the carrying value of certain assets, which in turn could result in impairment of such assets, including intangible assets such as goodwill. Our ability to reduce expenditures for production facilities and research and development during an industry downturn is limited because of the need to maintain

3

our competitive position. If we are unable to reduce our expenses sufficiently to offset reductions in price and sales volume, our margins will suffer and our business, financial condition and results of operations may be materially and adversely affected.

We operate in the highly competitive steel, trading, construction and energy industries, and our failure to successfully compete would adversely affect our market position and business.

Steel Segment. Our subsidiaries that produce steel products, including POSCO, our wholly-owned subsidiary, operate in the highly competitive steel industry and face intense global competition. China is the largest steel-producing country in the world by a significant margin, with the balance between its domestic production and demand being an important factor in the determination of global steel prices. In recent years, a slowdown in domestic demand for steel products in China resulting from slowed economic growth as well as the impact from the COVID-19 pandemic, combined with an expansion in steel production capacity, led to production over-capacity in the Chinese steel industry, which in turn led the Chinese government to pursue aggressive consolidation in the Chinese steel industry that has resulted in fewer but larger steel manufacturers that are able to compete more effectively in the global steel industry. Competition from such global steel manufacturers with expanded production capacity as well as competitors from emerging markets, especially from China and India, has resulted in significant price competition and may result in declining margins and reductions in revenue in the future. POSCO’s larger competitors may use their resources, which may be greater than POSCO’s, against POSCO in a variety of ways, including by making additional acquisitions, investing more aggressively in product development and capacity and displacing demand for our export products.

Increased production capacity, combined with decreased demand resulting from a slowdown of the global economy, has from time to time resulted in production over-capacity in the global steel industry which in turn has resulted in downward pressure on global steel prices. Although global demand for steel products increased in 2021 and the first half of 2022, such demand weakened in the second half of 2022. In 2023, global demand for steel products remained weak reflecting general deterioration of the global steel market conditions. Production over-capacity in the global steel industry may further intensify if the global economy slows or demand from developing countries, particularly from China, continues to lag behind the growth in production capacity. Production over-capacity in the global steel industry is likely to:

• reduce export prices in U.S. dollar terms of our principal products, which in turn may lead to decreases in our sales prices in Korea as well;

• increase competition in the Korean market as foreign producers seek to export steel products to Korea as other markets experience a slowdown;

• negatively affect demand for our products abroad and our ability to expand export sales; and

• affect our ability to increase steel production in general.

Steel also competes with other natural and synthetic materials that may be used as steel substitutes, such as aluminum, cement, composites, glass, plastic and wood. Government regulatory initiatives mandating the use of such materials instead of steel, whether for environmental or other reasons, as well as the development of attractive alternative substitutes for steel products, may reduce demand for steel products and increase competition in the global steel industry.

As part of our strategy to compete in this challenging landscape, our steel subsidiaries will continue to invest in developing innovative products that offer the greatest potential returns and enhance the overall quality of our products, as well as make additional investments in the development of new manufacturing technologies. However, there is no assurance that they will be able to continue

4

to compete successfully in this economic environment or that the prolonged slowdown of the global economy or production over-capacity will not have a material adverse effect on our business, results of operations or financial condition.

Trading Segment of the Green Infrastructure Business. POSCO International Corporation (“POSCO International”), our consolidated subsidiary, competes principally with other Korean general trading companies that are affiliated with major domestic business groups, as well as global trading companies based in other countries. In the domestic market, competition for export transactions on behalf of domestic suppliers and import transactions on behalf of domestic purchasers was historically limited, as most affiliated general trading companies of large Korean business groups generally relied on affiliate transactions for the bulk of their trading business. However, many of these Korean general trading companies have reduced their reliance on their affiliated business group and transactions carried out on behalf of their member companies and instead have generally evolved to focus on segments of the import and export markets in which they have a competitive advantage. As a result, competition among Korean general trading companies in the area of traditional trade has become more intense.

The overseas trading markets in which POSCO International operates are also highly competitive. POSCO International’s principal competitors in overseas trading markets include Korean trading companies that operate in various international markets, as well as foreign trading companies, particularly those based in Japan. As POSCO International diversifies into businesses other than traditional trading such as natural resources development, it also increasingly competes with other Korean and international companies involved in these businesses. Some of POSCO International’s competitors may be more experienced and have greater financial resources and pricing flexibility than POSCO International, as well as more extensive global networks and wider access to customers. There is no assurance that POSCO International will be able to continue to compete successfully in this economic environment or that the prolonged slowdown of the global economy will not have a material adverse effect on our business, results of operations or financial condition. We recognized impairment of goodwill of Won 185 billion in 2021 and Won 338 billion in 2022 as a result of a decrease in value-in-use of POSCO International.

On January 1, 2023, POSCO Energy Corporation (“POSCO Energy”), Korea’s largest domestic private power utility company and a provider of alternative environmentally-friendly energy solutions, merged into POSCO International. POSCO International’s power generation business competes principally with private-sector power generation companies in Korea that are affiliated with major domestic business groups, including SK E&S and GS EPS.

Construction Segment of the Green Infrastructure Business. POSCO Eco & Challenge Co., Ltd. (“POSCO E&C” and formerly known as POSCO Engineering & Construction Co., Ltd.), our consolidated subsidiary, operates in the highly competitive construction industry. Competition is based primarily on price, reputation for quality, reliability, punctuality and financial strength of contractors. Intense competition among construction companies may result in, among other things, a decrease in the price POSCO E&C can charge for its services, difficulty in winning bids for construction projects, an increase in construction costs and difficulty in obtaining high-quality contractors and qualified employees.

In Korea, POSCO E&C’s main competition in the construction of residential and non-residential buildings, EPC (or engineering, procurement and construction) projects, urban planning and development projects and civil works projects consists of approximately ten major domestic construction companies, many of which are member companies of other large business groups in Korea and are capable of undertaking larger-scale, higher-value-added projects that offer greater potential returns. A series of measures introduced by the Government over the past several years to regulate housing prices in Korea, as well as increasing popularity of low-bid contracts in civil works project mandates, have contributed to increased competition in the Korean construction industry in recent years.

5

Competition for new project awards in overseas markets is also intense. In these markets, POSCO E&C faces competition from local construction companies and other major Korean construction companies with overseas operations, as well as international construction companies from other countries. Construction companies from other developed countries may be more experienced, have greater financial resources and possess more sophisticated technology than POSCO E&C, while construction companies from developing countries often have the advantage of lower wage costs. Some of these competitors have achieved higher market penetration than POSCO E&C has in specific markets in which it competes, and POSCO E&C may need to accept lower margins in order for it to compete successfully against them. POSCO E&C’s failure to successfully compete in the domestic or overseas construction markets could adversely affect its market position and our results of operations and financial condition.

Logistics and Others Segment of the Green Infrastructure Business. POSCO DX Co., Ltd. (“POSCO DX” and previously named POSCO ICT Co., Ltd.) competes principally with system integration service providers in Korea that are affiliated with major domestic business groups, including Samsung SDS, LG CNS and SK Inc. C&C. POSCO FLOW Co., Ltd. (“POSCO FLOW”) competes principally with logistics service providers in Korea that are affiliated with major domestic business groups, including Hyundai Glovis, Samsung SDS and LX Pantos.

Green Materials and Energy Segment. In the energy materials market, POSCO Future M Co., Ltd. (“POSCO Future M” and previously named POSCO Chemical Co., Ltd.) competes with other global leading manufacturers of cathode and anode materials, including LG Chemical Co., Ltd. and Ecopro BM Co., Ltd. In its legacy business areas of refractories and lime chemicals, POSCO Future M competes principally with Chosun Refractories ENG Co., Ltd. and Korea Refractories Co, Ltd.

Korea and the rest of Asia are our most important markets, and our current business and future growth could be materially and adversely affected if economic conditions in the region deteriorate.

We are a holding company incorporated in Korea, and a substantial portion of our subsidiaries’ operations and assets are located in Korea. Korea is our most important market, and our customers located in Korea accounted for 65.7% of our revenue, prior to basis difference adjustments related to the difference in recognizing revenue and expenses of the Construction Segment of our Green Infrastructure Business, in 2023. See Note 41(d) to the Consolidated Financial Statements. Domestic demand for steel products is affected by the condition of major steel consuming industries, such as construction, shipbuilding, automotive, electrical appliances and downstream steel processors, and the Korean economy in general. In addition, the trading operations of POSCO International are affected by the general level of trade between Korea and other countries, which in turn tends to fluctuate based on general conditions in the Korean and global economies. As a result, we are subject to political, economic, legal and regulatory risks specific to Korea, and our performance and successful fulfillment of our operational strategies are largely dependent on the overall Korean economy.

In recent years, adverse conditions and volatility in the global financial markets, fluctuations in oil and commodity prices, supply chain disruptions and the increasing weakness of the global economy, in particular due to the COVID-19 pandemic, and rapid increases in interest rates globally starting in the second half of 2021 to combat inflation have contributed to the uncertainty of global economic prospects in general and have adversely affected, and may continue to adversely affect, the Korean economy. The value of the Won relative to major foreign currencies has fluctuated significantly and, as a result of uncertain global and Korean economic conditions, there has been significant volatility in the stock prices of Korean companies recently. Future declines in the KOSPI, and large amounts of sales of Korean securities by foreign investors and subsequent repatriation of the proceeds of such sales may adversely affect the value of the Won, the foreign currency reserves held by financial institutions in Korea, and the ability of Korean companies to raise capital. Any future deterioration of the Korean economy could adversely affect our business, financial condition and results of operations and the market price of our ADSs.

6

Developments that could have an adverse impact on Korea’s economy include:

• declines in consumer confidence and a slowdown in consumer spending, including as a result of severe health epidemics;

• hostilities or, political or social tensions involving Russia (including the invasion of Ukraine by Russia and ensuing actions that the United States and other countries have taken and may take in the future) and any resulting adverse effects on the global supply of oil and other natural resources or the global financial markets;

• adverse conditions or developments in the economies of countries and regions that are important export markets for Korea, such as China, the United States, Europe and Japan, or in emerging market economies in Asia or elsewhere, including as a result of the deteriorating economic and trade relations between the United States and China and increased uncertainties in the global financial markets and industry;

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

• the occurrence of severe health epidemics in Korea or other parts of the world, such as the COVID-19 pandemic;

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

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

• deterioration in the financial condition or performance of small- and medium-sized enterprises and other companies in Korea due to the Government’s policies to increase minimum wages and limit working hours of employees;

• investigations of large Korean business groups and their senior management for possible misconduct;

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

• the economic impact of any pending or future free trade agreements or of any changes to existing free trade agreements;

• social and labor unrest;

• substantial changes in the market prices of Korean real estate;

• a substantial decrease in tax revenues and a substantial increase in the Government’s expenditures for fiscal stimulus measures, unemployment compensation and other economic and social programs, in particular in light of the Government’s ongoing efforts to provide emergency relief payments to households and emergency loans to corporations in need of funding in light of COVID-19 as well as interest rate increases, which, together, would likely lead to a national budget deficit as well as an increase in the Government’s debt;

• financial problems or lack of progress in the restructuring of Korean business groups, other large troubled companies, their suppliers or the financial sector;

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• loss of investor confidence arising from corporate accounting irregularities or corporate governance issues concerning certain Korean companies;

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

• geopolitical uncertainty and the risk of further attacks by terrorist groups around the world;

• political uncertainty or increasing strife among or within political parties in Korea;

• hostilities or political or social tensions involving oil-producing countries in the Middle East (including the escalation of hostilities in the Middle East following the Israel-Hamas war) and Northern Africa and any material disruption in the global supply of oil or sudden increase in the price of oil;

• natural or man-made disasters that have a significant adverse economic or other impact on Korea or its major trading partners; and

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

We rely on export sales for a significant portion of our total sales. Adverse economic and financial developments in Asia in the future may have an adverse effect on demand for our products in Asia and increase our foreign exchange risks.

We rely on export sales for a significant portion of our total sales. In particular, the Steel Segment’s export sales and overseas sales to customers abroad accounted for 60.4% of the Steel Segment’s total revenue in 2023. The Steel Segment’s export sales to customers in Asia, including China, Japan, Indonesia, Thailand and Malaysia, accounted for 56.8% of the Steel Segment’s total export sales revenue in 2023, and we expect our sales to these countries to remain important in the future. In particular, the Steel Segment’s export sales to Asia (other than China and Japan) accounted for 24.6% of the Steel Segment’s total export sales revenue in 2023. Accordingly, adverse economic and financial developments in these countries may have an adverse effect on demand for our products. Unfavorable or uncertain economic and market conditions, which can be caused, among others, by difficulties in the financial sector, corporate, political or other scandals that may reduce confidence in the markets, declines in business confidence, increases in inflation, natural disasters or pandemics, outbreaks of hostilities or other geopolitical instability. Deterioration in economic or diplomatic relations between Korea and its trading partners or allies, including deterioration resulting from territorial or trade disputes or disagreements in foreign policy, or a combination of these or other factors, have, in the past adversely affected, and may in the future adversely affect, demand for our products.

Economic weakness in Asia may also adversely affect our sales to the Korean companies that export to the region, especially companies in the construction, shipbuilding, automotive, electrical appliances and downstream steel processing industries. Weaker demand in these countries, combined with an increase in global production capacity, may also reduce export prices in U.S. dollar terms of our principal products sold to customers in Asia. For a discussion of production over-capacity in the global steel industry, see “— We operate in the highly competitive steel, trading, construction and energy industries, and our failure to successfully compete would adversely affect our market position and business.” We attempt to maintain and expand our export sales to generate foreign currency receipts to cover our foreign currency purchases and debt service requirements. Consequently, any decrease in our export sales could also increase our foreign exchange risks.

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Depreciation of the value of the Won against the U.S. dollar and other major foreign currencies may have a material adverse effect on the results of our operations and on the price of the ADSs.

Our consolidated financial statements are prepared from our local currency denominated financial results, assets and liabilities and our subsidiaries around the world, which are then translated into Won. A substantial proportion of our consolidated financial results is accounted for in currencies other than the Won. Accordingly, our consolidated financial results and assets and liabilities may be materially affected by changes in the exchange rates of foreign currencies. In 2023, 60.4% of the Steel Segment’s total revenue was from overseas markets outside of Korea. To the extent that we incur costs in one currency and make sales in another, our profit margins may be affected by changes in the exchange rates between the two currencies. Since the currency in which sales are recognized may not be the same as the currency in which expenses are incurred, foreign exchange rate fluctuations may materially affect our results of operations. Depreciation of the Won may materially affect the results of our operations because, among other things, it causes:

• an increase in the amount of Won required for us to make interest and principal payments on our foreign currency-denominated debt;

• an increase in Won terms in the costs of raw materials and equipment that we purchase from overseas sources and a substantial portion of our freight costs, which are denominated primarily in U.S. dollars; and

• foreign exchange translation losses on foreign currency-denominated liabilities, which lower our earnings for accounting purposes.

Appreciation of the Won against major currencies, on the other hand, causes:

• our export products to be less competitive by raising our prices in U.S. dollar, Yen and Yuan terms; and

• a reduction in net sales and accounts receivables in Won from export sales, which are primarily denominated in U.S. dollars and to a lesser extent in Yen and Yuan.

The overall net impact from fluctuations of the Won against major currencies is difficult to estimate and varies from year to year. We strive to naturally offset our foreign exchange risk by matching foreign currency receivables with our foreign currency payables and our overseas subsidiaries have sought to further mitigate the adverse impact of exchange rate fluctuations by conducting business transactions in the local currency of the respective market in which the transactions occur. In particular, POSCO International’s exposure to fluctuations in exchange rates, including the Won/U.S. dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO International’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in U.S. dollars. Although the impact of exchange rate fluctuations is partially mitigated by such strategies, we and our subsidiaries, particularly POSCO International and POSCO E&C, also periodically enter into derivative contracts, primarily foreign currency swaps and forward exchange contracts, to further hedge some of our foreign exchange risks. However, our results of operations have historically been affected by exchange rate fluctuations and there can be no assurance that such strategies will be sufficient to reduce or eliminate the adverse impact of such fluctuations in the future.

Fluctuations in the exchange rate between the Won and the U.S. dollar will also affect the U.S. dollar equivalent of the Won price of the shares of our common stock on the KRX Korea Composite Stock Price Index (the “KOSPI”) Market and, as a result, will likely affect the market price of the ADSs. These fluctuations will also affect the U.S. dollar conversion by the depositary for the ADRs of cash dividends, if any, paid in Won on shares of common stock represented by the ADSs.

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We are dependent on imported raw materials, and significant increases in market prices of essential raw materials could adversely affect our margins and profits.

We purchase substantially all of the principal raw materials we use from sources outside Korea, including iron ore and coal. POSCO imported approximately 49 million dry metric tons of iron ore and 25 million wet metric tons of coal in 2023. Iron ore is imported primarily from Australia, Brazil and Canada. Coal is imported primarily from Australia, Canada and Mozambique. Although we have not experienced significant unanticipated supply disruptions in the past, supply disruptions, which could be caused by political or other events in the countries from which we import these materials, could adversely affect our operations. In addition, we are particularly exposed to increases in the prices of coal, iron ore and nickel, which represent the largest components of our cost of goods sold. The prices of our key raw materials have fluctuated significantly in recent years. For example, the average market price of iron ore per dry metric ton (Iron Ore 62% Fe, CFR China Index announced by Platts) was US$160 in 2021, US$120 in 2022 and US$120 in 2023. The average market price of coal per wet metric ton (Premium Low Vol Coking Coal, FOB Australia Index announced by Platts) was US$226 in 2021, US$364 in 2022 and US$296 in 2023. Such fluctuations in the price of coal in recent years was in large part attributable to sanctions imposed on Russia, a large exporter of coal, following its invasion of Ukraine in February 2022.

Our long-term supply contracts generally have terms of three to ten years and provide for periodic price adjustments to the then-market prices. We typically adjust the prices on a quarterly basis and maintain approximately one month of inventory of raw materials. Such price adjustments are driven by various factors, including the global economic outlook, global market prices of raw materials and steel products, supply and demand outlook of raw materials and production costs of raw materials. For both coal and iron ore, we typically agree on the purchase price with the suppliers primarily based on the spot market price periodically announced by Platts (Premium Low Vol Coking Coal, FOB Australia Index and Iron Ore 62% Fe, CFR China Index). As of December 31, 2023, 43 million tons of iron ore and 15 million tons of coal remained to be purchased under long-term supply contracts. Future increases in prices of our key raw materials and our inability to pass along such increases to our customers could adversely affect our margins and profits. Increased prices may also cause potential customers to defer purchase of steel products, while rapidly falling prices may increase loss on valuation of raw material inventory purchased when prices were higher, either of which could have an adverse effect on our business, financial condition and results of operations.

Earthquakes, tsunamis, floods, severe health epidemics (including the global COVID-19 pandemic and any possible occurrences of other types of widespread infectious diseases) and other natural calamities could materially and adversely affect our business, results of operations or financial condition.

If earthquakes, tsunamis, floods, severe health epidemics or any other natural calamities were to occur in the future in any area where any of our assets, suppliers or customers are located, our business, results of operations or financial condition could be adversely affected. For example, Typhoon Hinnamnor, a powerful tropical cyclone that landed in South Gyeongsang Province, Korea on September 5, 2022, caused substantial flooding and property damage in cities located near the coastline, including Pohang. The typhoon caused electricity blackouts and flooded some of the Pohang Works’ facilities located adjacent to Youngil Bay on the southeastern coast of Korea, causing disruptions to our downstream production activities, which adversely impacted our sales in the fourth quarter of 2022 following the flood.

A number of suppliers of our raw materials and customers of our products are also located in countries that have historically suffered natural calamities from time to time, such as Australia, China and Japan, as well as Korea. Any occurrence of such natural calamities in countries where our suppliers are located may lead to shortages or delays in the supply of raw materials. In addition, natural calamities in areas where our customers are located, including China, Southeast Asia, Japan,

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Europe, North America and Korea, may cause disruptions in their businesses, which in turn could adversely impact their demand for our products.

Furthermore, COVID-19, an infectious disease caused by severe acute respiratory syndrome coronavirus 2, was declared a “pandemic” by the World Health Organization in March 2020. The global outbreak of COVID-19 had led to global economic and financial disruptions and had adversely affected our business operations.

Risks associated with COVID-19 or other types of widespread infectious diseases include:

• an increase in unemployment among, and/or decrease in disposable income of, consumers who purchase the products manufactured by our customers and a decline in overall consumer confidence and spending levels, which in turn may decrease demand for our products;

• disruption in the normal operations of the businesses of our customers, which in turn may decrease demand for our products;

• disruption in supply of raw materials from our suppliers and vendors;

• disruption in delivery of our products to our customers;

• disruption in the normal operations of our business resulting from contraction of infectious diseases by our employees or quarantine measures imposed by governments, which may necessitate our employees to be quarantined and/or our manufacturing facilities or offices to be temporarily shut down;

• disruption resulting from the necessity for social distancing, including implementation of temporary adjustment of work arrangements requiring employees to work remotely, which may lead to a reduction in labor productivity (for example, from time to time, we implemented staggered remote working arrangements for our employees at our headquarters);

• depreciation of the Won against major foreign currencies, which in turn may increase the cost of imported raw materials;

• unstable global and Korean financial markets, which may adversely affect our ability to meet our funding needs on a timely and cost-effective basis; and

• impairments in the fair value of our investments in companies that may be adversely affected by the pandemic.

In the event that a future recurrence of COVID-19 or an occurrence of other types of widespread infectious diseases cannot be effectively and timely contained, our business, financial condition and results of operations may be materially and adversely affected.

Expansion of our operations abroad is important to our long-term success, and our limited experience in the operation of our business outside Korea increases the risk that our international expansion efforts will not be successful.

We conduct steel, international trading, construction and energy operations abroad, and our business relies on a global trading network comprised of overseas subsidiaries, branches and representative offices. Although many of our subsidiaries and overseas branches are located in developed countries, we also operate in numerous countries with developing economies. In addition, we intend to continue to expand our production operations internationally by carefully seeking out investment opportunities in regions that we believe offer promising growth prospects. We may enter into additional joint ventures with foreign companies that would enable us to rely on these businesses to conduct our operations, establish local networks and coordinate our sales and marketing efforts abroad. To the extent that we enter into these arrangements, our success will depend in part on the willingness of our partner companies to dedicate sufficient resources to their partnership with us.

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In other situations, we may decide to establish manufacturing facilities by ourselves instead of relying on partners. The demand and market acceptance for our products produced abroad are subject to a high level of uncertainty and are substantially dependent upon global market conditions. We cannot assure you that our international expansion plan will be profitable or that we can recoup the costs related to such investments.

Expansion of our operations abroad requires management attention and resources. In addition, we face additional risks associated with our expansion outside Korea, including:

• challenges caused by distance, language and cultural differences;

• higher costs associated with doing business internationally;

• legal and regulatory restrictions, including foreign exchange controls that might prevent us from repatriating cash earned in countries outside Korea;

• longer payment cycles in some countries;

• credit risk and higher levels of payment fraud;

• currency exchange risks;

• potentially adverse tax consequences;

• political and economic instability; and

• seasonal reductions in business activity during the summer months in some countries.

We have limited insurance coverage and may incur significant losses resulting from operating hazards, product liability claims from customers or business interruptions.

The normal operation of our manufacturing facilities may be interrupted by accidents caused by operating hazards, power supply disruptions and equipment failures, as well as natural disasters. For example, we experienced significant losses related to flooding caused by Typhoon Hinnamnor in September 2022. See “— Earthquakes, tsunamis, floods, severe health epidemics (including the global COVID-19 pandemic and any possible occurrences of other types of widespread infectious diseases) and other natural calamities could materially and adversely affect our business, results of operations or financial condition.” As with other industrial companies, our operations involve the use, handling, generation, processing, storage, transportation and disposal of hazardous materials, which may result in fires, explosions, spills and other unexpected or dangerous accidents causing property damage as well as personal injuries or death. We are also exposed to risks associated with product liability claims in the event that the use of the products we sell results in injury. We maintain property insurance for our property, plant and equipment that we believe to be consistent with market practice. However, we may not have adequate resources to satisfy a judgment in excess of our insurance coverage in the event of a successful claim against us. Any occurrence of accidents or other events affecting our operations could result in potentially significant monetary damages, diversion of resources, production disruption and delay in delivery of our products, which may have a material adverse effect on our business, financial condition and results of operations.

Further increases in, or new impositions of, anti-dumping, safeguard or countervailing duty proceedings may have an adverse impact on our export sales.

Our subsidiaries engage in global operations, and we are involved in trade remedy proceedings in markets worldwide, including in the United States. We actively participate in such proceedings to minimize any adverse effects and associated risks. While there has been an increase in the number of trade cases in recent years, and an increased focus on trade issues by government officials, such

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cases have been limited in scope relative to our global sales and operations. We continue to carefully monitor developments with respect to trade remedy policy in all markets in which we participate and, where necessary, vigorously defend our rights through litigation before tribunals such as the U.S. Court of International Trade. Our products that are subject to anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs in the aggregate have not had a material adverse impact on our business and operations in recent years. However, there can be no assurance that increases in, or new impositions of, anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs on our exports of products abroad may not have a material adverse impact on our exports in the future.

We participate in overseas natural resources exploration, development and production projects, which expose us to various risks.

As part of our efforts to diversify our operations, we carefully seek out promising overseas natural resources exploration, development and production opportunities. We also participate in natural resources projects as part of consortia or through acquisitions of minority interests. We may also selectively acquire or invest in companies or businesses that engage in such activities. To the extent that we enter into these arrangements, our success in these endeavors will depend in part on the willingness of our partner companies to dedicate sufficient resources to their partnership with us, as well as our ability to finance such investments.

The demand and market acceptance for such activities abroad are subject to a substantially higher level of uncertainty than our traditional steel business and are substantially dependent upon the market condition of the global natural resources industry as well as the political and social environment of the target countries. The performance of projects in which we participate may be adversely affected by the occurrence of military hostility, political unrest or acts of terrorism. In addition, some of our current exploration, development and production projects involve drilling exploratory wells on properties with no proven amount of natural resource reserves. Although all drilling, whether developmental or exploratory, involves risks, exploratory drilling involves greater risks of dry holes or failure to find commercial quantities of natural resources. Other risks to which such activities are subject include obtaining required regulatory approvals and licenses, securing and maintaining adequate property rights to land and natural resources, and managing local opposition to project development. A decrease in the market price of raw materials may also adversely impact the value of our investments related to natural resources projects, potentially resulting in impairment losses. We have limited experience in this business, and we cannot assure you that our overseas natural resources exploration, development and production projects will be profitable, that we will be able to meet the financing requirements for such projects, or that we can recoup the costs related to such investments, which in turn could materially and adversely affect our business, financial condition and results of operations.

We may encounter problems with joint overseas natural resources exploration, development and production projects and large-scale infrastructure projects, which may materially and adversely affect our business.

We typically pursue our natural resources exploration, development and production projects jointly with consortium partners or through acquisition of minority interests in such projects, and we expect to be involved in other joint projects in the future. We sometimes hold a majority interest in the projects among the consortium partners, but we often lack a controlling interest in the joint projects. Therefore, we may not be able to require that our joint ventures sell assets or return invested capital, make additional capital contributions or take any other action without the vote of at least a majority of our consortium partners. If there are disagreements between our consortium partners and us regarding the business and operations of the joint projects, we cannot assure you that we will be able to resolve them in a manner that will be in our best interests. Certain major decisions, such as selling a stake in the joint project, may require the consent of all other partners. These limitations may adversely affect our ability to obtain the economic and other benefits we seek from participating in these projects.

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In addition, our consortium partners may:

• have economic or business interests or goals that are inconsistent with ours;

• take actions contrary to our instructions, requests, policies or objectives;

• be unable or unwilling to fulfill their obligations;

• have financial difficulties; or

• have disputes with us as to their rights, responsibilities and obligations.

Any of these and other factors may have a material adverse effect on the performance of our joint projects and expose us to a number of risks, including the risk that the partners may be incapable of providing the required financial support to the partnerships and the risk that the partners may not be able to fulfill their other obligations, resulting in disputes not only between our partners and us, but also between the joint ventures and their customers. Such a material adverse effect on the performance of our joint projects may in turn materially and adversely affect our business, results of operations and financial condition.

The Korean electric power industry is heavily regulated by the Government, whose policies may have a material adverse impact on POSCO International’s power generation business.

The Korean electric power industry is heavily regulated by the Government, which seeks to ensure balanced overall electricity supply and demand in Korea at affordable rates to end users while taking into consideration various other factors, including economic conditions, national standard of living, long-term energy supply and demand plans and seasonality. To achieve such objectives, the Government has, from time to time, adopted various policy initiatives to foster efficiency in the Korean electric power industry, and has also adopted policy measures that affect electricity tariff rates in order to ease the burden on certain consumers. In addition, these policy initiatives have not always been fully implemented as originally planned and in some cases have been amended or replaced by new initiatives, among others, due to economic or policy considerations or a change in administration. No assurance can be provided that such policies, as well as changes therein, will not have a material adverse effect on POSCO International’s power generation business, results of operations or financial condition.

Cyclical fluctuations based on macroeconomic factors may adversely affect POSCO E&C’s business and performance.

We engage in engineering and construction activities through POSCO E&C. The Construction Segment of our Green Infrastructure Business is highly cyclical and tends to fluctuate based on macroeconomic factors, such as consumer confidence and income, employment levels, interest rates, inflation rates, demographic trends and policies of the Government. From time to time, the construction industry has experienced significant and sometimes prolonged downturns, and our construction revenues have fluctuated in the past depending on the level of public and private sector construction activities in Korea and abroad. In addition, the performance of POSCO E&C’s domestic residential property business is highly dependent on the general condition of the real estate market in Korea. The overall prospects for Korean construction companies remain uncertain, and a prolonged general downturn in the construction market resulting in weaker demand may adversely affect our business, results of operations or financial condition.

Many of POSCO E&C’s domestic and overseas construction projects are on a fixed-price basis, which could result in losses for us in the event that unforeseen additional expenses arise with respect to the project.

Many of POSCO E&C’s domestic and overseas construction projects are carried out on a fixed-price basis according to a predetermined timetable, pursuant to the terms of a fixed-price

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contract. Under such fixed-price contracts, POSCO E&C retains all cost savings on completed contracts but is also liable for the full amount of all cost overruns and may be required to pay damages for late delivery. The pricing of fixed-price contracts is crucial to POSCO E&C’s profitability, as is its ability to quantify risks to be borne by it and to provide for contingencies in the contract accordingly.

POSCO E&C attempts to anticipate costs of labor, raw materials, parts and components in its bids on fixed-price contracts. However, the costs incurred and gross profits realized on a fixed-price contract may vary from its estimates due to factors such as:

• unanticipated variations in labor and equipment productivity over the term of a contract;

• unanticipated increases in labor, raw material, parts and components, subcontracting and overhead costs, including as a result of bad weather;

• delivery delays and corrective measures for poor workmanship; and

• errors in estimates and bidding.

If unforeseen additional expenses arise over the course of a construction project, such expenses are usually borne by POSCO E&C, and its profit from the project will be correspondingly reduced or eliminated. If POSCO E&C experiences significant unforeseen additional expenses with respect to its fixed price projects, it may incur losses on such projects, which could have a material adverse effect on its financial condition and results of operations.

We may not succeed in implementing our strategy to take advantage of, or fail to realize the anticipated benefits of, our holding company structure and diversification strategy.

We became a holding company on March 2, 2022, and one of our principal strategies is to take advantage of our holding company structure to invest in promising businesses. In part to prepare for the eventual maturation of the Korean steel market, we have made investments in the past decade to secure new growth engines by diversifying into new businesses related to our steel operations that we believe will offer greater potential returns, as well as entering into new businesses not related to our steel operations such as production of cathode and anode materials for rechargeable batteries, development and production of natural resources (particularly for lithium and nickel used in production of rechargeable batteries), hydrogen-related businesses, energy solutions (particularly liquefied natural gas (“LNG”) trading), innovative architectural works and infrastructure projects, and agricultural trading. From time to time, we may selectively acquire or invest in companies to pursue such diversification strategy. The implementation of this strategy may require additional investments of capital, infrastructure, human resources and management attention. This strategy entails certain risks, including the possibility that we may face significant competition from other holding companies and operating companies in particular segments. If our strategy does not succeed, we may incur losses on our investments and our results of operations and financial condition may suffer.

Furthermore, our success under a holding company structure depends on our ability to realize the anticipated synergies, growth opportunities and cost savings from coordinating the businesses of our various subsidiaries. Although we may integrate certain aspects of our subsidiaries’ operations into our holding company structure, our subsidiaries will generally continue to operate as independent entities with separate management and staff, and our ability to direct our subsidiaries’ day-to-day operations may be limited.

We may continue to increase our equity interest in our subsidiaries or investees and may also consider acquiring or merging with other companies to achieve more balanced growth and further diversify our revenue base. The integration of our new subsidiaries’ or investees’ separate businesses and operations, as well as those of any companies we may acquire or merge with in the future, under our holding company structure could require a significant amount of time, financial resources and management attention. Moreover, that process could disrupt our operations, reduce employee morale,

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produce unintended inconsistencies in our standards, controls, procedures or policies, and affect our relationships with customers and our ability to retain key personnel. The realization of the anticipated benefits of our holding company structure and any mergers or acquisitions we decide to pursue may be blocked, delayed or reduced as a result of many factors, some of which may be outside our control. These factors include:

• unforeseen contingent risks, including lack of required capital resources or increased tax liabilities, relating to our holding company structure;

• difficulties in integrating the diverse activities and operations of our subsidiaries or investees or any companies we may merge with or acquire;

• unforeseen contingent risks or latent liabilities relating to the acquisition that may become apparent in the future;

• difficulties in managing a larger business;

• unexpected business disruptions;

• loss of key management personnel or customers; and

• labor unrest.

Accordingly, we may not be able to realize the anticipated benefits of our holding company structure, and our business, results of operations and financial condition may suffer as a result.

We depend on limited forms of funding to fund our operations at the holding company level.

We are a holding company with no significant assets other than the shares of our subsidiaries. We expect our primary sources of funding and liquidity to be dividends from our subsidiaries, direct borrowings and issuances of equity or debt securities at the holding company level. Our ability to meet our obligations to our direct creditors and employees and our other liquidity needs and regulatory requirements at the holding company level depends on timely and adequate distributions from our subsidiaries and our ability to sell our securities or obtain credit from our lenders.

The ability of our subsidiaries to pay dividends to us depends on their financial condition and operating results. In the future, our subsidiaries may enter into agreements, such as credit agreements with lenders, that impose restrictions on their ability to make distributions to us, and the terms of future obligations and the operation of Korean law could prevent our subsidiaries from making sufficient distributions to us to allow us to make payments on our outstanding obligations. See “— As a holding company, we depend on receiving dividends from our subsidiaries to pay dividends on our common shares.” Any delay in receipt of or shortfall in payments to us from our subsidiaries could result in our inability to meet our liquidity needs, and may disrupt our operations at the holding company level.

In addition, creditors of our subsidiaries will generally have claims that are prior to any claims of our creditors with respect to their assets. Furthermore, our inability to sell our securities or obtain funds from our lenders on favorable terms, or at all, could also result in our inability to meet our liquidity needs and may disrupt our operations at the holding company level.

As a holding company, we depend on receiving dividends from our subsidiaries to pay dividends on our common shares.

Since our principal assets at the holding company level are the shares of our subsidiaries, our ability to pay dividends on our common shares largely depends on dividend payments from those subsidiaries. Those dividend payments are subject to the Korean Commercial Code and regulatory limitations, generally based on capital levels and retained earnings. For example, under the Korean

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Commercial Code, dividends may only be paid out of distributable income, an amount which is calculated by subtracting the aggregate amount of a company’s paid-in capital and certain mandatory legal reserves as well as certain unrealized profits from its net assets, in each case as of the end of the prior fiscal period.

Our subsidiaries may not continue to meet the applicable legal and regulatory requirements for the payment of dividends in the future. If they fail to do so, they may stop paying or reduce the amount of the dividends they pay to us, which would have an adverse effect on our ability to pay dividends on our common shares.

POSCO HOLDINGS INC. and POSCO remain jointly and severally liable for each other’s liabilities existing prior to the spin-off.

On March 1, 2022, we spun off our domestic steel production and sales business (through a vertical spin-off in accordance with Articles 530-2 through 530-12 of the Korean Commercial Code) to establish a wholly-owned subsidiary, and we converted into a holding company within the meaning of the Monopoly Regulation and Fair Trade Act (the “Spin-off”). The registration of the Spin-off occurred on March 2, 2022. As part of the Spin-off, we amended our name from POSCO to POSCO HOLDINGS INC., and the newly created wholly-owned subsidiary was named POSCO.

Under the relevant provisions of the Commercial Act of Korea relating to spin-offs, both the operating company and the holding company remain jointly and severally liable after the corporate spin-off for all of their liabilities existing prior to the corporate spin-off unless such joint and several liability has been successfully eliminated through a special resolution adopted at a general meeting of shareholders of the splitting company and consents of creditors of the affected debt, including consent by resolutions at bondholders’ meetings, which resolutions are approved by the court. POSCO HOLDINGS INC. and POSCO remain jointly and severally liable for each other’s debts and other liabilities that existed prior to March 1, 2022 that currently remain outstanding. POSCO is the successor-in-title to all the assets and liabilities and rights and obligations that were related to the domestic steel production and sales business transferred in the Spin-off, as well as all authorized licenses, employment relations, contracts and lawsuits that were directly related to such business, and POSCO HOLDINGS INC. remains jointly and severally liable for such liabilities. The remaining assets and liabilities and rights and obligations related to other business areas remain with POSCO HOLDINGS INC., and POSCO is jointly and severally liable for such liabilities. Defaults by POSCO of such liabilities, if significant, could have a material adverse effect on our results of operations and financial condition.

We are subject to environmental regulations, and our operations could expose us to substantial liabilities.

We are subject to national and local environmental laws and regulations, including increasing pressure to reduce emission of carbon dioxide relating to our manufacturing process, and our steel manufacturing and construction operations could expose us to risk of substantial liability relating to environmental or health and safety issues, such as those resulting from discharge of pollutants and carbon dioxide into the environment, the handling, storage and disposal of solid or hazardous materials or wastes and the investigation and remediation of contaminated sites. We may be responsible for the investigation and remediation of environmental conditions at currently and formerly operated manufacturing or construction sites. We may also be subject to associated liabilities, including liabilities for natural resource damage, third party property damage or personal injury resulting from lawsuits brought by the Government or private litigants. In the course of our operations, hazardous wastes may be generated at third party-owned or operated sites, and hazardous wastes may be disposed of or treated at third party-owned or operated disposal sites. If those sites become contaminated, we could also be held responsible for the cost of investigation and remediation of such sites, for any associated natural resource damage, and for civil or criminal fines or penalties.

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Furthermore, heightened global awareness and international and national commitments to reduce greenhouse gas emissions and counteract climate change (including increased activism by non-governmental and political organizations campaigning against fossil fuel extractions) may lead to increased costs for us. Investor preferences and sentiments are also influenced by environmental, social and corporate governance considerations including climate change and the transition to a lower carbon economy. Changes in such preferences and sentiment, including increased scrutiny from market participants, environmental organizations or the press, as well as compliance with such new and more stringent environmental obligations relating to greenhouse gas emissions may require additional capital expenditures or modifications in operating practices, as well as additional reporting obligations.

Significant breaches of information security could lead to legal and financial exposure, damage to our reputation and a loss of confidence by our customers.

Our business relies heavily on mission-critical, complex and interdependent information technology systems that support our business processes. It involves the storage and transmission of confidential information relating to us as well as our customers and suppliers. Any significant breach in our information security could expose us to a risk of loss, improper use or disclosure of such information, and could give rise to significant liability or litigation, any of which could harm our reputation and adversely affect our business.

We believe that there has been no instance of a material breach in our information security to date that resulted in significant disruption of our operations and had a significant adverse effect on our operational results, or on third parties, including our customers and suppliers. However, there can be no assurance that we will be able to continue to prevent security incidents or other breaches in our information security from having a material adverse effect on our business, results of operations, financial viability or reputation. In addition, our information security measures may fail due to external and internal security threats, outages, malicious intrusions and attacks, programming or human errors and malfeasance, or other similar events.

Instituting appropriate access controls and safeguards across our information technology infrastructure is challenging. For a discussion of our cybersecurity risk management and strategy, see “Item 16.K. Cybersecurity.” Furthermore, outside parties may attempt to fraudulently induce employees to divulge sensitive information to gain access to our data or our customers’ data or access credentials. Because the techniques used to obtain unauthorized access, disable or degrade services or sabotage systems change frequently and often are not recognized until attacks are launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. If an actual or perceived breach of our cybersecurity occurs or the market perception of the effectiveness of our information security measures is compromised, this may lead to significant legal and financial exposure, including legal claims and regulatory fines and penalties, reputational harm and a loss of confidence of our customers, which could have an adverse effect on our business, financial condition and results of operations.

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

We believe that developing new steel manufacturing technologies that can be differentiated from those of our competitors, such as FINEX, automotive steel manufacturing technology and high-manganese steel manufacturing technology, is critical to the success of our business. We take active measures to obtain protection of our intellectual property by obtaining patents and undertaking monitoring activities in our major markets. However, we cannot assure you that the measures we take will effectively deter competitors from improper use of our proprietary technologies. Our competitors may misappropriate our intellectual property, disputes as to ownership of intellectual property may

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arise and our intellectual property may otherwise become known or independently developed by our competitors. Any failure to protect our intellectual property could impair our competitiveness and harm our business and future prospects.

We rely on trade secrets and other unpatented proprietary know-how to maintain our competitive position, and unauthorized disclosure of our trade secrets or other unpatented proprietary know-how could negatively affect our business.

We rely on trade secrets and unpatented proprietary know-how and information. We enter into confidentiality agreements with each of our employees and consultants upon the commencement of an employment or consulting relationship. These agreements generally provide that all inventions, ideas, discoveries, improvements and patentable material made or conceived by the individual arising out of the employment or consulting relationship and all confidential information developed or made known to the individual during the term of the relationship is our exclusive property. We cannot assure the enforceability of these types of agreements, or that they will not be breached. We also cannot be certain that we will have adequate remedies for any breach. The disclosure of our trade secrets or other know-how as a result of such a breach could adversely affect our business.

We face the risk of litigation proceedings relating to infringement of intellectual property rights of third parties, which, if determined adversely to us, could cause us to lose significant rights, pay significant damage awards or suspend the sale of certain products.

Our success depends largely on our ability to develop and use our technology and know-how in a proprietary manner without infringing the intellectual property rights of third parties. The validity and scope of claims relating to technology and patents involve complex scientific, legal and factual questions and analysis and, therefore, may be highly uncertain. In addition, because patent applications in many jurisdictions are kept confidential for an extended period before they are published, we may be unaware of other persons’ pending patent applications that relate to our products or manufacturing processes. Accordingly, we face the risk of litigation proceedings relating to infringement of intellectual property rights of third parties.

The plaintiffs in actions relating to infringement of intellectual property rights typically seek injunctions and substantial damages. Although patent and other intellectual property disputes are often settled through licensing or similar arrangements, there can be no assurance that such licenses can be obtained on acceptable terms or at all. Accordingly, regardless of the scope or validity of disputed patents or the merits of any patent infringement claims by potential or actual litigants, we may have to engage in protracted litigation. The defense and prosecution of intellectual property suits, patent opposition proceedings and related legal and administrative proceedings can be both costly and time-consuming and may significantly divert the efforts and resources of our technical and management personnel. An adverse determination in any such litigation or proceedings could subject us to pay substantial damages to third parties, require us to seek licenses from third parties and pay ongoing royalties or redesign certain products, or subject us to injunctions prohibiting the manufacture and sale of our products or the use of technologies in certain jurisdictions. The occurrence of any of the foregoing could have a material adverse effect on our reputation, business, financial condition and results of operations.

Labor laws and a recent Supreme Court decision on contract-based workers dispatched by third-party contractors could restrict flexibility in our labor management and result in an increase in our labor-related costs.

In July 2022, the Supreme Court of Korea held that 59 workers employed by our third-party contractors and dispatched to our production facilities who brought a claim under the Dispatched Worker Protection Act (“DWPA”) of Korea were in a direct employment relationship with us. The DWPA

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limits the maximum period that a worker may be dispatched to a company to two years. Under the DWPA, worker dispatch exceeding such period may result in a company’s obligation to directly hire such dispatched workers in certain situations, including where such workers were directly supervised by the company rather than the third-party contractor. Pursuant to such judgment, we hired 55 of such workers that met our working age criteria as our full-time direct employees. In October 2022, all 59 original plaintiffs collectively filed a complaint at the Gwangju District Court claiming an aggregate amount of Won 3.0 billion as unpaid wages for the three-year period that they should have been recognized as our full-time direct employees. The lawsuit is still in progress, and we intend to vigorously defend against such lawsuit.

In addition to the decision rendered by the Supreme Court in July 2022, fourteen lawsuits brought by a total of approximately 2,671 workers employed by our third-party contractors who worked at our production facilities related to such workers’ employment status with us remain pending as of April 23, 2024. Many of these cases also seek unpaid wages for the period they claim should have been recognized as our full-time direct employees. Eleven of such fourteen lawsuits remain pending at the district courts. With respect to the first of the three remaining lawsuits, which involves eight workers, the district court ruled in our favor but the appellate court ruled against us. We appealed the decision in February 2022, which remains pending at the Supreme Court. With respect to the second of the three remaining lawsuits, which involves 215 workers, both the district court and the appellate court ruled against us. We appealed the appellate court’s decision in February 2022, which remains pending at the Supreme Court. With respect to the last remaining lawsuit, which involves 247 workers, the district court ruled against us. We appealed the district court’s decision in February 2024, which remains pending at the appellate court. We intend to vigorously defend against such lawsuits.

We cannot provide any assurance that there will not be additional lawsuits related to the employment status of workers employed by our third-party contractors who worked at our production facilities, and we have not made any provisions related to any of the pending proceedings. The application of the applicable labor law will be based on the specific facts of the cases, and the general applicability of the July 2022 Supreme Court ruling cannot be determined with certainty at this time. However, if similar judgments were to be rendered against us, they could restrict our ability to manage our labor force flexibly and significantly increase our labor-related costs, which in turn may have a material adverse effect on our results of operations.

We may be exposed to potential claims for unpaid wages and become subject to additional labor costs arising from the Supreme Court of Korea’s interpretation of ordinary wages.

Under the Labor Standards Act, an employee’s “ordinary wage” is used as the basis for calculating various statutory benefits. Prior to the Supreme Court of Korea’s decision described below, we and other companies in Korea had interpreted the previous guidelines issued by the Ministry of Employment and Labor as excluding fixed bonuses that are paid other than on a monthly basis, such as bi monthly, quarterly or biannually paid bonuses, from employees’ ordinary wages.

In December 2013, the Supreme Court of Korea ruled that regularly paid bonuses, including those that are paid other than on a monthly basis, are included in the scope of employees’ ordinary wages if these bonuses are paid (i) “regularly,” (ii) “uniformly” and (iii) on a “fixed basis,” notwithstanding differential amounts based on seniority. Under this decision, any provision of a collective bargaining agreement or other agreements that attempt to exclude such regular bonuses from employees’ ordinary wages will be deemed void for violation of the mandatory provisions of Korean law.

The Supreme Court of Korea’s decision clarified that if payment of a regular bonus is limited only to those working for the employer on a specific date, such bonus is not fixed and thus does not constitute part of an employee’s ordinary wage. The Ministry of Employment and Labor subsequently published guidelines in January 2014 (the “Guidelines”). According to the Guidelines, the Government

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excludes, from ordinary wages, regular bonuses contingent on employment on a specific date. Based on the Supreme Court of Korea’s decision and the Guidelines, we believe that regular bonuses we have paid to our employees are likely not required to be included in their ordinary wages because we have paid regular bonuses only to those working for us on the date of payment calculation, the 15th day of each month. However, if we are nonetheless determined to have underpaid employees by under-calculating their ordinary wages over the past three years or in the future, we may be liable for additional payments reflecting the expanded scope of employees’ ordinary wages. Any such additional payments may have an adverse effect on our financial condition and results of operations.

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

Relations between Korea and North Korea have been tense throughout Korea’s modern history. The level of tension between the two Koreas has fluctuated and may increase abruptly as a result of current and future events. In particular, there have been heightened security concerns in recent years stemming from North Korea’s nuclear weapon, ballistic missile and satellite programs as well as its hostile military actions against Korea. Some of the significant incidents in recent years include the following:

• North Korea renounced its obligations under the Nuclear Non-Proliferation Treaty in January 2003 and has conducted six rounds of nuclear tests since October 2006, including claimed detonations of hydrogen bombs, and warheads that can be mounted on ballistic missiles. Over the years, North Korea has also conducted a series of ballistic missile tests, including missiles launched from submarines and intercontinental ballistic missiles that it claims can reach the United States mainland. North Korea has increased the frequency of such activities since the beginning of 2022, firing numerous ballistic missiles, including intercontinental ballistic missiles, and in November 2023, successfully launched its first spy satellite. In response, the Government has repeatedly condemned the provocations and flagrant violations of relevant United Nations Security Council resolutions. In February 2016, the Government also closed the inter-Korea Gaeseong Industrial Complex in response to North Korea’s fourth nuclear test in January 2016. Internationally, the United Nations Security Council has passed a series of resolutions condemning North Korea’s actions and significantly expanding the scope of sanctions applicable to North Korea. Over the years, the United States and the European Union have also expanded their sanctions applicable to North Korea.

• In March 2010, a Korean naval vessel was destroyed by an underwater explosion, killing many of the crewmen on board. The Government formally accused North Korea of causing the sinking, while North Korea denied responsibility. Moreover, in November 2010, North Korea fired more than 100 artillery shells that hit Korea’s Yeonpyeong Island near the Northern Limit Line, which acts as the de facto maritime boundary between Korea and North Korea on the west coast of the Korean peninsula, causing casualties and significant property damage. The Government condemned North Korea for the attack and vowed stern retaliation should there be further provocation.

North Korea’s economy also faces severe challenges, which may further aggravate social and political pressures within North Korea. Although bilateral summit meetings between Korea and North Korea were held in April, May and September 2018 and between North Korea and the United States in June 2018, February 2019 and June 2019, there can be no assurance that the level of tensions affecting the Korean peninsula will not escalate in the future. Any further increase in tensions, which may occur, for example, if North Korea experiences a leadership crisis, high-level contacts between Korea and North Korea or between the United States and North Korea break down or military hostilities occur, could have a material adverse effect on the Korean economy and on our business, financial condition and results of operations and the market value of our common shares and ADSs.

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If you surrender your ADRs to withdraw shares of our common stock, you may not be allowed to deposit the shares again to obtain ADRs.

Under the deposit agreement, holders of shares of our common stock may deposit those shares with the ADR depositary’s custodian in Korea and obtain ADRs, and holders of ADRs may surrender ADRs to the ADR depositary and receive shares of our common stock. However, under current Korean laws and regulations, the depositary bank is required to obtain our prior consent for the number of shares to be deposited in any given proposed deposit that exceeds the difference between (i) the aggregate number of shares deposited by us for the issuance of ADSs (including deposits in connection with the initial and all subsequent offerings of ADSs and stock dividends or other distributions related to these ADSs) and (ii) the number of shares on deposit with the depositary bank at the time of such proposed deposit. It is possible that we may not give the consent. As a result, if you surrender ADRs and withdraw shares of common stock, you may not be able to deposit the shares again to obtain ADRs. See “Item 10. Additional Information — Item 10.D. Exchange Controls.”

You may not be able to exercise preemptive rights for additional shares of common stock and may suffer dilution of your equity interest in us.

The Commercial Code and our articles of incorporation require us, with some exceptions, to offer shareholders the right to subscribe for new shares in proportion to their existing ownership percentage whenever new shares are issued. If we issue new shares to persons other than our shareholders (See “Item 10.B. Memorandum and Articles of Association — Preemptive Rights and Issuance of Additional Shares”), a holder of our ADSs will experience dilution of such holding. If none of these exceptions is available, we will be required to grant preemptive rights when issuing additional common shares under Korean law. Under the deposit agreement governing the ADSs, if we offer any rights to subscribe for additional shares of our common stock or any rights of any other nature, the ADR depositary, after consultation with us, may make the rights available to you or use reasonable efforts to dispose of the rights on your behalf and make the net proceeds available to you. The ADR depositary, however, is not required to make available to you any rights to purchase any additional shares unless it deems that doing so is lawful and feasible and:

• a registration statement filed by us under the Securities Act is in effect with respect to those shares; or

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

We are under no obligation to file any registration statement under the Securities Act to enable you to exercise preemptive rights in respect of the common shares underlying the ADSs, and we cannot assure you that any registration statement would be filed or that an exemption from the registration requirement under the Securities Act would be available. Accordingly, if a registration statement is required for you to exercise preemptive rights but is not filed by us, you will not be able to exercise your preemptive rights for additional shares and may suffer dilution of your equity interest in us.

U.S. investors may have difficulty enforcing civil liabilities against us and our directors and senior management.

We are incorporated in Korea with our principal executive offices located in Seoul. The majority of our directors and senior management are residents of jurisdictions outside the United States, and the majority of our assets and the assets of such persons are located outside the United States. As a result, U.S. investors may find it difficult to effect service of process within the United States upon us or such persons or to enforce outside the United States judgments obtained against us or such persons in U.S. courts, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for an investor to enforce in U.S. courts judgments obtained against us or such

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persons in courts in jurisdictions outside the United States, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for a U.S. investor to bring an action in a Korean court predicated upon the civil liability provisions of the U.S. federal securities laws against our directors and senior management and non-U.S. experts named in this annual report.

We engage in activities relating to countries targeted by United States, European Union and United Kingdom economic sanctions.

The U.S. Department of the Treasury’s Office of Foreign Assets Control, or “OFAC,” enforces certain laws and regulations (“U.S. Sanctions”) that impose prohibitions or restrictions on U.S. persons and, in some instances, foreign entities owned or controlled by U.S. persons, with respect to activities or transactions with or involving certain countries, governments, entities and individuals that are the subject of U.S. Sanctions, including countries and territories subject to a comprehensive embargo (currently Cuba, Iran, North Korea, Syria, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the non-government controlled areas of the Zaporizhzhia and Kherson and Crimea regions of Ukraine), as well as parties that are subject to, or majority owned by one or more parties subject to, so-called blocking sanctions. U.S. persons are also generally prohibited from facilitating such activities or transactions. Similarly, the European Union enforces certain laws and regulations (“E.U. Sanctions”) that impose restrictions on nationals of E.U. member states, persons located within E.U. member states, entities incorporated or constituted under the law of an E.U. member state, or business conducted in whole or in part in E.U. member states with respect to activities or transactions with certain countries, governments, entities and individuals that are the subject of E.U. Sanctions. E.U. persons are also generally prohibited from activities that promote such activities or transactions. The United Kingdom also enforces certain laws and regulations (“UK Sanctions”) that impose restrictions upon UK persons with respect to activities or transactions with parties that are the subject of UK Sanctions. In light of recent international developments, particularly the ongoing war in Ukraine, the United States, European Union, United Kingdom and other jurisdictions have imposed enhanced sanctions targeting Russia.

We and our subsidiaries engage in limited business activities in Russia and the Crimea region of Ukraine. In particular, we produce and export, typically through our sales subsidiaries, steel products to such countries, including steel materials. In addition, we purchase raw materials from non-Russian third parties that are sourced from mines in Russia. We believe that such activities do not involve any U.S. goods or services and otherwise do not implicate or violate U.S. Sanctions, E.U. Sanctions or UK Sanctions. To our knowledge, none of our business in Russia involves parties subject to U.S. Sanctions. Our activities in Russia and the Crimea region of Ukraine together accounted for approximately 0.19% of our consolidated revenue in 2021, 0.03% in 2022 and 0.03% in 2023. In addition, we did not recognize any revenue from business operations in Iran in 2021, 2022 and 2023, and we currently do not have any plans to engage in business operations in Iran in the foreseeable future, other than collecting outstanding receivables.

POSCO Steeleon Co., Ltd. (“POSCO Steeleon”), a subsidiary of POSCO, holds a 70% interest in Myanmar POSCO C&C Co., Ltd. (“Myanmar POSCO C&C”), a joint venture with Myanmar Economic Holdings Public Company Limited (“MEHL”). MEHL was designated for U.S. Sanctions on March 25, 2021. Myanmar POSCO C&C engages in the production and sale of coated steel roofing sheets in Myanmar, and its sales accounted for approximately 0.02% of our consolidated revenue in 2021, 0.02% in 2022 and 0.03% in 2023. POSCO Steeleon is monitoring changes in Myanmar’s business environment and assessing its shareholding arrangement. U.S. Sanctions that apply to MEHL do not apply to us, POSCO, POSCO Steeleon or Myanmar POSCO C&C.

POSCO International holds a 51.0% interest in a gas field project in Myanmar. Myanma Oil and Gas Enterprise (“MOGE”) holds a 15.0% interest in the project and the remaining interests are held by non-sanctioned persons. On February 21, 2022, MOGE was designated for E.U. Sanctions, and certain managers of MOGE have also been subsequently designated for U.S. Sanctions. Such

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sanctions do not extend to POSCO International, POSCO or, to our knowledge, the gas field project. On October 31, 2023, OFAC issued Burma-related Directive 1 under Executive Order 14014, which prohibits U.S. persons from providing, exporting or re-exporting, directly or indirectly, financial services to, or for the benefit of, MOGE, regardless of the currency in which any prohibited transaction is denominated. POSCO International is operating the Myanmar gas field project in compliance with such directive. Our revenue recognized from the gas field project accounted for approximately 0.59% of our consolidated revenue in 2021, 1.10% in 2022 and 0.80% in 2023.

We expect to continue to engage in business activities and make investments in countries or territories on which comprehensive U.S. Sanctions have been imposed and also plan to continue to engage in business in Russia. Although we believe that U.S. Sanctions, E.U. Sanctions and UK Sanctions under their current terms are not applicable to our current activities, the relevant authorities may take a different view, our reputation may be adversely affected, and some of our investors may be required to divest their investments in us, including under the laws of certain U.S. states or under internal investment policies or may decide for reputational reasons to divest such investments. We are aware of initiatives by U.S. governmental entities and U.S. institutional investors, such as pension funds, to adopt or consider adopting laws, regulations or policies prohibiting transactions with or investment in, or requiring divestment from, entities doing business with countries identified as state sponsors of terrorism. There can be no assurance that the foregoing will not occur, that sanctions regimes around the world will not change in a way that impacts our business, or that such occurrences will not have a material adverse effect on the value of our securities.

U.S. investors could be subject to adverse U.S. federal income tax consequences if we are treated as a passive foreign investment company (“PFIC”) for any taxable year during which they hold our common stock of ADSs.

We will be classified as a PFIC for U.S. federal income tax purposes if, for any taxable year, either (i) 75 percent or more of our gross income for the taxable year is passive income or (ii) at least 50 percent of the value of our assets (generally determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income. The determination of whether we are a PFIC must be made annually based on the facts and circumstances at the relevant time, some of which may be beyond our control, including the valuation of our assets as implied by the market price for our common stock or ADSs. Accordingly, we could be classified as a PFIC in the current or a future taxable year, and that possibility may be increased significantly by market volatility or a decline in the price of our common stock or ADSs.

If we were to be classified as a PFIC in any taxable year during which a U.S. holder (as defined in “Item 10.E. Taxation — United States Taxation”) holds our common stock or ADSs, such U.S. holder could be subject to a special tax at ordinary income rates on “excess distributions,” including certain distributions by us and gain that the U.S. holder recognizes on the sale of our common stock or ADSs. The amount of income tax on any excess distributions would be increased by an interest charge to compensate for tax deferral, calculated as if the excess distributions were earned ratably over the period the U.S. holder held the common stock or ADSs. See “Item 10.E. Taxation — United States Taxation — Shares of Common Stock and ADSs — Passive Foreign Investment Company Rules.”

This annual report contains “forward-looking statements” that are subject to various risks and uncertainties.

This annual report contains “forward-looking statements” that are based on our current expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties. These forward-looking statements include, but are not limited to, those statements using words such as “anticipate,” “believe,” “continues,” “expect,” “estimate,” “intend,” “project,” “aim,” “plan,” “likely to,” “target,” “contemplate,” “predict,” “potential” and similar expressions and future or conditional verbs such as “will,” “would,”

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“should,” “could,” “might,” “can,” “may,” or similar expressions generally intended to identify forward-looking statements. Those statements include, among other things, the discussions of our business strategy and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be incorrect. The uncertainties in this regard include, but are not limited to, those identified in the risk factors discussed above. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances.

Item 4. Information on the Company

Item 4.A. History and Development of the Company

We were established by the Government on April 1, 1968, under the Commercial Code, to manufacture and distribute steel rolled products and plates in the domestic and overseas markets. The Government owned more than 70% of our equity until 1988, when the Government reduced its ownership of our common stock to 35% through a public offering and listing our shares on the KRX KOSPI Market. In December 1998, the Government sold all of our common stock it owned directly, and The Korea Development Bank completed the sale of our shares that it owned in September 2000. The Government no longer holds any direct interest in us, and our outstanding common stock is currently held by individuals and institutions. See “Item 7. Major Shareholders and Related Party Transactions — Item 7A. Major Stockholders.”

On March 1, 2022, we spun off our domestic steel production and sales business (through a vertical spin-off in accordance with Articles 530-2 through 530-12 of the Korean Commercial Code) to establish a wholly-owned subsidiary (POSCO), and we converted into a holding company (POSCO HOLDINGS INC.) within the meaning of the Monopoly Regulation and Fair Trade Act in order to more effectively promote the growth of the group’s businesses, enhance synergies among the group’s businesses and actively explore diversification opportunities in promising business areas. The registration of the Spin-off occurred on March 2, 2022. As part of the Spin-off, we amended our name from POSCO to POSCO HOLDINGS INC., and the newly created wholly-owned subsidiary was named POSCO.

Our legal and commercial name is POSCO HOLDINGS INC. Our principal executive offices are located at POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea 06194, and our telephone number is +82-2-3457-0114. The address of our English website is http://www.posco-inc.com.

The SEC maintains a website (http://www.sec.gov), which contains reports, information statements and other information regarding issuers that file electronically with the SEC.

Item 4.B. Business Overview

The Company

We are a holding company, and we operate through our consolidated subsidiaries including POSCO, one of the largest steel producers in the world. We also engage in businesses that complement our steel manufacturing operations and also carefully seek out promising investment opportunities to diversify our businesses both vertically and horizontally. One of our principal strategies is to take advantage of our holding company structure to invest in promising businesses. We have made investments in the past decade to secure new growth engines by diversifying into new businesses related to our steel operations that we believe will offer greater potential returns, as well as entering into new businesses not related to our steel operations.

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We have six reportable segments as follows:

• Steel Segment. Our Steel Segment includes the production and sale of steel products.

• Green Infrastructure Business. Our Green Infrastructure Business includes our businesses related to provision of infrastructure and related services. Such segment is divided into three operations as follows:

Ø Trading Segment. The Trading Segment of our Green Infrastructure Business consists primarily of the global trading activities, natural resources development activities and power generation activities of POSCO International. POSCO International exports and imports a wide range of steel products that are both obtained from and supplied to POSCO, as well as steel and other products from and to other suppliers and purchasers in Korea and overseas. On January 1, 2023, POSCO Energy, Korea’s largest domestic private power utility company and a provider of alternative environmentally-friendly energy solutions, merged into POSCO International.

Ø Construction Segment. The Construction Segment of our Green Infrastructure Business consists primarily of POSCO E&C’s planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas.

Ø Logistics and Others Segment. The Logistics and Others Segment of our Green Infrastructure Business consists primarily of the information technology and operational technology services of POSCO DX and the integrated logistics services of POSCO FLOW.

• Green Materials and Energy Segment. Our Green Materials and Energy Segment includes (i) the manufacturing and sale of various energy-related and other industrial materials by POSCO Future M, including anode and cathode materials for rechargeable batteries and (ii) investments made by us in production projects relating to other materials such as lithium.

• Others Segment. Our Others Segment includes POSCO HOLDINGS INC. and all other entities which fall below the reporting thresholds. POSCO HOLDINGS INC. actively explores diversification opportunities in promising business areas.

The table below sets out our revenue by segment category for the periods indicated.

	For the Year Ended December 31,
	2021						2022					2023
Segments	Billions of   Won			%			Billions of   Won		%			Billions of   Won			%
Steel Segment	￦	41,093			54.1	%	￦	44,547		52.4	%	￦	40,393			52.4	%
Green Infrastructure Business:
Trading Segment (1)		26,909			35.4			29,518		34.7			24,034			31.2
Construction Segment		6,398			8.4			7,668		9.0			8,301			10.8
Logistics and Others Segment (2)		218			0.3			436		0.5			471			0.6
Green Materials and Energy Segment		1,242			1.6			2,452		2.9			3,816			5.0
Others Segment		472			0.6			129		0.2			113			0.1
Basis difference adjustments (3)		(323	)		(0.4	)		253		0.3			(71	)		(0.1	)
Total	￦	76,009			100.0	%	￦	85,004		100.0	%	￦	77,057			100.0	%

(1) Including POSCO International. POSCO Energy merged into POSCO International on January 1, 2023, and the revenue of the Trading Segment of the Green Infrastructure Business in 2021 and 2022 has been restated to reflect such merger as if it had occurred on January 1, 2021.

(2) Including POSCO DX and POSCO FLOW.

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(3) Basis difference adjustments are related to the difference in recognizing revenue and expenses of the Construction Segment of our Green Infrastructure Business in connection with the development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 41 to the Consolidated Financial Statements.

Environmental, Social and Governance

Our Environmental, Social and Governance (“ESG”) management focuses on eco-friendly leadership, sustainable social communities and governance enhancements that promote tangible value. These principles drive our five comprehensive ESG strategies covering the following key areas.

Green Competency

We strive to respond to global climate change through development of low-carbon processes, energy efficiency and eco-friendly products and services, thereby reducing our environmental impact to create a future in which people and nature co-exist and thrive together. POSCO declared the 2050 Carbon Neutrality Roadmap by setting targets for a 30% carbon emissions reduction by 2035, 50% by 2040, and Net Zero emissions by 2050. Initiatives such as low carbon technology and hydrogen reduction are underway to support these goals.

Responsible Value Chain

We are committed to empowering our business partners to obtain the highest standards in various domains, including low carbon technology, human rights and safety, while promoting sustainability across the value chain.

POSCO procures all tin, tantalum, tungsten and gold minerals from refineries in conflict-affected and high-risk areas that have obtained Responsible Minerals Assurance Process (“RMAP”) certification. POSCO Future M procures tungsten and cobalt for its rechargeable battery business by ensuring sourcing from RMAP-compliant smelters. POSCO Future M plans to assist non-certified smelters within the supply chain in achieving RMAP certification.

Employee Happiness

We prioritize establishing a secure and inclusive work environment that upholds human rights, embraces diversity and empowers creative talents to lead a period of transformation. As United Nations Global Compact members, POSCO HOLDINGS, POSCO, POSCO International and POSCO E&C, advocate for management based on human rights, diversity and inclusion policies. Our human rights policy covers protections for POSCO Group employees and staffs of our suppliers and labor union rights, encompassing human rights, grievance handling and victim relief. Our diversity, equality and inclusion policies prohibit all forms of discrimination, workplace harassment and sexual harassment, with training, reporting, consultation and investigation processes, as well as whistleblower protection measures that are clearly outlined.

Ethics & Integrity

We are committed to making our business decisions based on unwavering ethical principles by upholding the highest standards of ethics and compliance. Our efforts to enhance ethics and compliance levels are complemented by our commitment to promoting fair trade practices. We conduct annual questionnaire surveys targeting employees of our suppliers and our domestic and overseas subsidiaries to assess the risk of unethical behavior, workplace harassment and human rights violations. Additional monitoring and investigation are conducted when risks are identified.

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New Governance for Real Value

We enhance independence, expertise and diversity of the board of directors to promote real value management by safeguarding shareholder rights and ensuring transparent disclosures, with the aim of enhancing the value of the POSCO Group. A group-level ESG risk response system has been established to address internal and external risks effectively, with significant ESG-related decisions made through the board of directors, discussions on key ESG issues by the POSCO Group’s ESG Council led by top management and the ESG Session involving all directors who are our executive officers (“Inside Directors”) and directors who are outside directors (“Outside Directors”).

Steel Segment

POSCO is the largest fully integrated steel producer in Korea, and one of the largest steel producers in the world, based on annual crude steel production. We, through POSCO and our other steel-producing subsidiaries, produced approximately 39.9 million tons of crude steel and stainless steel in 2023, a significant majority of which was produced at Pohang Works and Gwangyang Works. As of December 31, 2023, we had approximately 45.3 million tons of annual crude steel and stainless steel production capacity, including 40.7 million tons of production capacity in Korea. We believe Pohang Works and Gwangyang Works are two of the most technologically-advanced integrated steel facilities in the world. We manufacture and sell a diversified line of steel products, including cold rolled and hot rolled products, stainless steel products, plates, wire rods and silicon steel sheets, and we are able to meet a broad range of customer needs from manufacturing industries that consume steel, including automotive, shipbuilding, home appliance, engineering and machinery industries.

POSCO M-Tech Co., Ltd., which is also included in the Steel Segment, produces aluminum deoxidizers used to remove excess oxygen during the steel manufacturing process to improve durability of steel products, and it also provides integrated steel product packing solutions for steel production facilities.

Korea is our most important market. Domestic sales accounted for 39.6% of the Steel Segment’s total revenue in 2023 and 40.7% in 2022. We believe that POSCO’s steel products constituted approximately 45.5% of the total sales volume of such steel products sold in Korea in 2023 and approximately 48.5% in 2022. The Steel Segment’s export sales and overseas sales to customers abroad accounted for 60.4% of the Steel Segment’s total revenue in 2023 and 59.3% in 2022. The Steel Segment’s major export market is Asia, with Asia other than China and Japan accounting for 24.6%, China accounting for 21.7% and Japan accounting for 10.6% of the Steel Segment’s total steel export revenue in 2023, and China accounting for 24.9%, Asia other than China and Japan accounting for 24.1%, and Japan accounting for 9.9% of the Steel Segment’s total steel export revenue in 2022.

Major Products

We, through POSCO and our other steel-producing subsidiaries, manufacture and sell a broad line of steel products, including the following:

• cold rolled products;

• hot rolled products;

• stainless steel products;

• plates;

• wire rods; and

• silicon steel sheets.

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The table below sets out our revenue of steel products produced by us and directly sold to external customers which are recognized as external revenue of the Steel Segment, by major steel product category for the periods indicated. Such amounts do not include steel products produced by us and sold to our consolidated sales subsidiaries (including POSCO International).

	For the Year Ended December 31,
	2021					2022					2023
Steel Products	Billions of   Won		%			Billions of   Won		%			Billions of   Won		%
Cold rolled products	￦	11,607		28.2	%	￦	12,781		28.7	%	￦	11,908		29.5	%
Hot rolled products		8,452		20.6			8,948		20.1			9,149		22.6
Stainless steel products		8,479		20.6			9,602		21.6			7,848		19.4
Plates		4,751		11.6			5,479		12.3			4,930		12.2
Wire rods		2,132		5.2			1,785		4.0			1,804		4.5
Silicon steel sheets		1,139		2.8			1,175		2.6			1,063		2.6
Sub-total		36,560		89.0			39,769		89.3			36,701		90.9
Others		4,533		11.0			4,778		10.7			3,692		9.1
Total	￦	41,093		100.0	%	￦	44,547		100.0	%	￦	40,393		100.0	%

The table below sets out our sales volume of the principal categories of steel products produced by us and directly sold to external customers, which are recognized as external sales volume of the Steel Segment, by major steel product category for the periods indicated. Such amounts do not include steel products produced by us and sold to our sales consolidated subsidiaries (including POSCO International).

	For the Year Ended December 31,
	2021					2022					2023
Steel Products	Thousands of Tons		%			Thousands of Tons		%			Thousands of Tons		%
Cold rolled products		10,373		34.8	%		10,191		36.8	%		9,780		33.9	%
Hot rolled products		8,862		29.7			8,461		30.5			9,784		33.9
Stainless steel products		2,984		10.0			2,605		9.4			2,459		8.5
Plates		4,823		16.2			4,477		16.2			4,667		16.2
Wire rods		2,063		6.9			1,408		5.1			1,623		5.6
Silicon steel sheets		735		2.5			560		2.0			524		1.8
Total (1)		29,840		100.0	%		27,701		100.0	%		28,837		100.0	%

(1) Not including sales volume of steel products categorized under “others.”

In addition to steel products produced by us and directly sold to external customers, we engage our consolidated sales subsidiaries (including POSCO International) to sell our steel products produced by us. Our revenue from steel products produced by us and sold to our consolidated sales subsidiaries that in turn sold them to their external customers amounted to Won 7,840 billion in 2021, Won 10,429 billion in 2022 and Won 9,414 billion in 2023. Sales of such steel products by our consolidated sales subsidiaries to external customers are recognized as external revenue of the Trading Segment of our Green Infrastructure Business.

Cold Rolled Products

Cold rolled coils and further refined galvanized cold rolled products are used mainly in the automotive industry to produce car body panels. Other users include the household goods, electrical appliances, engineering and metal goods industries.

Our deliveries of cold rolled products produced by us and directly sold to external customers amounted to 9,780 thousand tons in 2023, representing 33.9% of our total sales volume of principal

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steel products produced by us and directly sold to external customers. Cold rolled products constitute our second largest product category in terms of sales volume and the largest product category in terms of revenue from steel products produced by us and directly sold to external customers.

We believe POSCO had a domestic market share for cold rolled products of approximately 58% in 2023.

Hot Rolled Products

Hot rolled coils and sheets have many different industrial applications. They are used to manufacture structural steel used in the construction of buildings, industrial pipes and tanks, and automobile chassis. Hot rolled coil is also manufactured in a wide range of widths and thicknesses as the feedstock for higher value-added products such as cold rolled products and silicon steel sheets. The largest customers of our hot rolled products are downstream steelmakers in Korea which use the products to manufacture pipes and cold rolled products.

Our deliveries of hot rolled products produced by us and directly sold to external customers amounted to 9,784 thousand tons in 2023, representing 33.9% of our total sales volume of principal steel products produced by us and directly sold to external customers. Hot rolled products constitute our largest product category in terms of sales volume and second largest product category in terms of revenue from steel products produced by us and directly sold to external customers.

We believe POSCO had a domestic market share for hot rolled products of approximately 52% in 2023.

Stainless Steel Products

Stainless steel products are used to manufacture household goods and are also used by the chemical industry, paper mills, the aviation industry, the automotive industry, the construction industry and the food processing industry.

Our deliveries of stainless steel products produced by us and directly sold to external customers amounted to 2,459 thousand tons in 2023, representing 8.5% of our total sales volume of principal steel products produced by us and directly sold to external customers. Stainless steel products constitute our third largest product category in terms of revenue from steel products produced by us and directly sold to external customers. Although sales of stainless steel products accounted for only 8.5% of total sales volume of the principal steel products produced by us and directly sold to external customers in 2023, they represented 19.4% of our total revenue from such steel products in 2023.

We believe POSCO had a domestic market share for stainless steel products of approximately 46% in 2023.

Plates

Plates are used in shipbuilding, structural steelwork, offshore oil and gas production, power generation, mining, and the manufacture of earth-moving and mechanical handling equipment, boiler and pressure vessels and other industrial machinery. The Korean shipbuilding industry, which uses plates to manufacture chemical tankers, rigs, bulk carriers and containers, and the construction industry are our largest customers of plates.

Our deliveries of plates produced by us and directly sold to external customers amounted to 4,667 thousand tons in 2023, representing 16.2% of our total sales volume of principal steel products produced by us and directly sold to external customers.

We believe POSCO had a domestic market share for plates of approximately 41% in 2023.

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Wire Rods

Wire rods are used mainly by manufacturers of wire, fasteners, nails, bolts, nuts and welding rods. Wire rods are also used in the manufacture of coil springs, tension bars and tire cords in the automotive industry. The largest customers for our wire rods are manufacturers of wire ropes and fasteners.

Our deliveries of wire rods produced by us and directly sold to external customers amounted to 1,623 thousand tons in 2023, representing 5.6% of our total sales volume of principal steel products produced by us and directly sold to external customers.

We believe POSCO had a domestic market share for wire rods of approximately 50% in 2023.

Silicon Steel Sheets

Silicon steel sheets are used mainly in the manufacture of power transformers and generators, rotating machines and electric motors.

Our deliveries of silicon steel sheets produced by us and directly sold to external customers amounted to 524 thousand tons in 2023, representing 1.8% of our total sales volume of principal steel products produced by us and directly sold to external customers.

We believe POSCO had a domestic market share for silicon steel sheets of approximately 75% in 2023.

Others

Other products include lower value-added semi-finished products such as pig iron, billets, blooms and slab.

Markets

Korea is our most important market. Domestic sales represented 39.6% of the Steel Segment’s total revenue in 2023. The Steel Segment’s export sales and overseas sales to customers abroad represented 60.4% of the Steel Segment’s total revenue in 2023. Our sales strategy has been to devote our production primarily to satisfy domestic demand, while seeking export sales to utilize capacity to the fullest extent and to expand our international market presence.

Domestic Market

We primarily sell in Korea higher value-added and other finished products to end-users and semi-finished products to other steel manufacturers for further processing. Local distribution companies and sales affiliates sell finished steel products to low-volume customers. We provide service technicians for large customers and distributors in each important product area.

The table below sets out our estimate of the market share of our steel products in Korea for the periods indicated based on sales volume.

	For the Year Ended December 31,
Source	2021			2022			2023
POSCO’s sales (1)		52.5	%		48.5	%		45.5	%
Other domestic steel companies’ sales		26.6			28.4			28.2
Imports		20.9			23.0			26.3
Total		100.0	%		100.0	%		100.0	%

(1) POSCO’s sales volume includes steel products produced by POSCO (but not by our other subsidiaries) and sold through our consolidated sales subsidiaries as well as steel products produced by POSCO (but not by our other subsidiaries) and directly sold to external customers.

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Exports

The Steel Segment’s export sales and overseas sales to customers abroad represented 60.4% of the Steel Segment’s total revenue in 2023, 56.8% of which was generated from exports sales and overseas sales to customers in Asian countries. The Steel Segment’s export sales and overseas sales to customers abroad in terms of such revenue decreased by 8.6% from Won 34,653 billion in 2022 to Won 31,658 billion in 2023.

The tables below set out our export sales and overseas sales to customers abroad in terms of revenue from steel products produced and sold by us (including our consolidated sales subsidiaries), by geographical market and by major product category for the periods indicated.

	For the Year Ended December 31,
	2021					2022					2023
Region	Billions of Won		%			Billions of Won		%			Billions of Won		%
Asia (other than China and Japan)	￦	6,365		21.9	%	￦	8,341		24.1	%	￦	7,787		24.6	%
China		8,875		30.6			8,625		24.9			6,859		21.7
Europe		3,114		10.7			4,705		13.6			4,099		12.9
Japan		2,906		10.0			3,431		9.9			3,345		10.6
North America		2,173		7.5			2,667		7.7			2,673		8.4
Middle East		31		0.1			87		0.3			57		0.2
Others		5,558		19.2			6,797		19.6			6,838		21.6
Total	￦	29,022		100.0	%	￦	34,653		100.0	%	￦	31,658		100.0	%

	For the Year Ended December 31,
	2021					2022					2023
Steel Products	Billions of Won		%			Billions of Won		%			Billions of Won		%
Cold rolled products	￦	10,664		36.7	%	￦	12,771		36.9	%	￦	11,505		36.3	%
Hot rolled products		4,229		14.6			5,350		15.4			6,305		19.9
Stainless steel products		6,251		21.5			7,250		20.9			6,055		19.1
Plates		2,501		8.6			3,598		10.4			3,374		10.7
Silicon steel sheets		1,186		4.1			1,262		3.6			1,066		3.4
Wire rods		850		2.9			856		2.5			879		2.8
Others		3,341		11.5			3,567		10.3			2,475		7.8
Total	￦	29,022		100.0	%	￦	34,653		100.0	%	￦	31,658		100.0	%

We distribute our export products mostly through Korean trading companies, including POSCO International, and our overseas sales subsidiaries. Our largest export market in 2023 was Asia (other than China and Japan), which accounted for 24.6% of our export revenue from steel products produced and sold by us. The principal products exported to Asia (other than China and Japan) were cold rolled products, including continuous galvanized products. Our exports to Asia (other than China and Japan) decreased by 6.6% from Won 8,341 billion in 2022 to Won 7,787 billion in 2023 primarily reflecting a general decline in demand from the region.

Our second largest export market in 2023 was China, which accounted for 21.7% of our export revenue from steel products produced and sold by us. The principal products exported to China were cold rolled products, including continuous galvanized products. Our exports to China decreased by 20.5% from Won 8,625 billion in 2022 to Won 6,859 billion in 2023 primarily due to a decrease in demand from the Chinese construction industry reflecting a prolonged slowdown in the Chinese real estate market.

Anti-Dumping, Safeguard and Countervailing Duty Proceedings

From time to time, our exporting activities have become subject to anti-dumping, safeguard and countervailing proceedings. As a steel producer with global sales and operations, we are involved in

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trade remedy proceedings in markets worldwide, including in the United States. We actively participate in such proceedings to minimize any adverse effects and associated risks. While there has been an increase in the number of trade cases in recent years, and an increased focus on trade issues by government officials, such cases have been limited in scope relative to our global sales and operations. We continue to carefully monitor developments with respect to trade remedy policy in all markets in which we participate and, where necessary, vigorously defend our rights through litigation before tribunals such as the U.S. Court of International Trade. Our products that are subject to anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs in the aggregate have not had a material adverse impact on our business and operations in recent years.

Pricing Policy

We determine the pricing of our products based on market conditions, taking into consideration production outlook of the global steel industry and global economic conditions in general. In setting prices, we take into account our costs, including those of raw materials, supply and demand in the Korean market, exchange rates, and conditions in the international steel market. Our prices can fluctuate considerably over time, depending on market conditions and other factors. The prices of our higher value-added steel products in the largest markets are determined considering the prices of similar products charged by our competitors.

Raw Materials

Steel Production

The principal raw materials used in producing steel through the basic oxygen steelmaking method are iron ore and coal. We import all of the coal and virtually all of the iron ore that we use. In 2023, POSCO imported approximately 49 million dry metric tons of iron ore and 25 million wet metric tons of coal. Iron ore is imported primarily from Australia, Brazil and Canada. Coal is imported primarily from Australia, Canada and Mozambique.

We purchase a substantial portion of our iron ore and coal imports pursuant to long-term contracts. Our long-term supply contracts generally have terms of three to ten years and provide for periodic price adjustments to the then-market prices. We typically adjust the prices on a quarterly basis and maintain approximately one month of inventory of raw materials. Such price adjustments are driven by various factors, including the global economic outlook, global market prices of raw materials and steel products, supply and demand outlook of raw materials and production costs of raw materials. For both coal and iron ore, we typically agree on the purchase price with the suppliers primarily based on the spot market price periodically announced by Platts (Premium Low Vol Coking Coal, FOB Australia Index and Iron Ore 62% Fe, CFR China Index). We or the suppliers may cancel the long-term contracts only if performance under the contracts is prevented by causes beyond our or their control and these causes continue for a specified period.

We also engage in exploration and production projects abroad to enhance our ability to meet the requirements for high-quality raw materials, by acquiring mining rights of raw materials or by investing in projects either as part of a consortium or through an acquisition of a minority interest. In 2023, we purchased approximately 37% of our iron ore imports and 21% of our coal imports from foreign mines in which we have made investments. Our major investments to procure supplies of coal, iron ore and nickel are primarily located in Australia, Canada, Brazil and New Caledonia. We will continue to selectively seek opportunities to enter into additional strategic relationships that would enhance our ability to meet the requirements for principal raw materials.

The average market price of coal per wet metric ton (Premium Low Vol Coking Coal, FOB Australia Index announced by Platts) was US$226 in 2021, US$364 in 2022 and US$296 in 2023. The average market price of iron ore per dry metric ton (Iron Ore 62% Fe, CFR China Index announced by

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Platts) was US$160 in 2021, US$120 in 2022 and US$120 in 2023. We currently do not depend on any single country or supplier for our coal or iron ore.

Stainless Steel Production

The principal raw materials for the production of stainless steel are ferronickel, ferrochrome and stainless steel scrap. We purchase a majority of our ferronickel primarily from suppliers in Korea that procure nickel ore from New Caledonia, and the remainder primarily from leading suppliers in Philippines and Guatemala. Our primary suppliers of ferrochrome are located in South Africa, India and Kazakhstan. Our stainless steel scraps are primarily supplied by domestic and overseas suppliers in Japan and Southeast Asia. Revert scraps from the Pohang Steelworks and our overseas subsidiaries are also used for our stainless steel production. The average market price of nickel per ton on the London Metal Exchange was US$18,448 in 2021, US$25,605 in 2022 and US$21,474 in 2023.

Transportation

In order to meet our transportation needs for iron ore and coal, we have entered into long-term contracts with shipping companies. Such contracts are performed by a fleet of dedicated vessels on a consecutive voyage basis with fully loaded cargo for each voyage. These vessels under long-term contracts transported approximately 57% of the total requirements in 2023, and the remaining approximately 43% was transported by vessels sourced through short- to medium-term contracts, depending on market conditions. We plan to continue to optimize the fleet of dedicated vessels that we use in order to cope with changes in the global shipping environment, as well as upgrade some of the existing vessels with energy-saving and eco-friendly technologies.

The Steelmaking Process

POSCO’s major production facilities, Pohang Works and Gwangyang Works, produce steel by the basic oxygen steelmaking method. The stainless steel plant at Pohang Works produces stainless steel by the electric arc furnace method. Continuous casting improves product quality by imparting a homogenous structure to the steel. Pohang Works and Gwangyang Works produce all of their products through the continuous casting.

Steel — Basic Oxygen Steelmaking Method

First, molten pig iron is produced in a blast furnace from iron ore, which is the basic raw material used in steelmaking. Molten pig iron is then refined into molten steel in converters by blowing pure oxygen at high pressure to remove impurities. Different desired steel properties may also be obtained by regulating the chemical contents.

At this point, molten steel is made into semi-finished products such as slabs, blooms or billets at the continuous casting machine. Slabs, blooms and billets are produced at different standardized sizes and shapes. Slabs, blooms and billets are semi-finished lower-margin products that we either use to produce our further processed products or sell to other steelmakers that produce further processed steel products.

Slabs are processed to produce hot rolled coil products at hot strip mills or to produce plates at plate mills. Hot rolled coils are an intermediate-stage product that may either be sold to our customers as various finished products or be further processed by us or our customers into higher value-added products, such as cold rolled sheets and silicon steel sheets. Blooms and billets are processed into wire rods at wire rod mills.

Stainless Steel — Electric Arc Furnace Method

Stainless steel is produced from stainless steel scrap, chrome, nickel and steel scrap using an electric arc furnace. Stainless steel is then processed into higher value-added products by methods

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similar to those used for steel production. Stainless steel slabs are produced at a continuous casting mill. The slabs are processed at hot rolling mills into stainless steel hot coil, which can be further processed at cold strip mills to produce stainless cold rolled steel products.

Steel Making Operations Located Outside Korea

In order to effectively implement our strategic initiatives and to solidify our leadership position in the global steel industry, we have established various subsidiaries and joint ventures in Korea and elsewhere around the world that engage in steel production activities.

China. We entered into an agreement with Sagang Group Co. to establish POSCO (Zhangjiagang) Stainless Steel Co., Ltd. (“POSCO (Zhangjiagang)”), a joint venture company in China for the manufacture and sale of stainless cold rolled steel products. POSCO HOLDINGS INC. has an 82.5% interest in the joint venture (including 23.9% interest held by POSCO China Holding Corporation). POSCO (Zhangjiagang) commenced production of stainless cold rolled steel products in December 1998. In 2023, POSCO (Zhangjiagang) had an annual production capacity of 1,100 thousand tons of stainless steel products. See “Item 4D. Property, Plants and Equipment — Production Facilities Abroad — POSCO (Zhangjiagang).”

Indonesia. We entered into an agreement with PT. Krakatau Steel (Persero) Tbk. to establish PT. Krakatau POSCO Co., Ltd. (“PT. Krakatau POSCO”), a joint venture company in Indonesia for the manufacture and sale of plates and slabs. POSCO holds a 50.0% interest in the joint venture. We completed the construction of a steel manufacturing plant in December 2013. In 2023, PT. Krakatau POSCO had an annual production capacity of 3,000 thousand tons of slabs, plates and hot rolled coils. See “Item 4D. Property, Plants and Equipment — Production Facilities Abroad — PT. Krakatau POSCO.”

Vietnam. We established POSCO YAMATO VINA STEEL JOINT STOCK COMPANY (“POSCO YAMATO VINA” and formerly known as POSCO SS VINA JOINT STOCK COMPANY), a subsidiary engaged in the manufacture and sale of shape steel and steel reinforcement products. POSCO holds a 51.0% interest in POSCO YAMATO VINA, and the plant became operational in June 2015. In 2023, POSCO YAMATO VINA had an annual production capacity of 550 thousand tons of shape steel products. See “Item 4D. Property, Plants and Equipment — Production Facilities Abroad — POSCO YAMATO VINA.”

Competition

Domestic Market

POSCO is the largest fully integrated steel producer in Korea. In hot rolled products, where we believe POSCO had a domestic market share of approximately 52% in 2023, we face competition from Hyundai Steel Co., Ltd. and from various foreign producers, primarily from China and Japan. In cold rolled products and stainless steel products, where we believe POSCO had domestic market shares of approximately 58% and 46%, respectively, in 2023, we compete with Hyundai Steel Co., Ltd., smaller specialized domestic manufacturers and various foreign producers, primarily from China and Japan. For a discussion of domestic market shares, see “— Markets — Domestic Market.”

The Government does not impose quotas on or provide subsidies to local steel producers. As a World Trade Organization signatory, Korea has also removed all steel tariffs.

Export Markets

The competitors in our export markets include all the leading steel manufacturers of the world. In the past decade, there has been a trend toward industry consolidation among our competitors, and smaller competitors in the global steel market today may become larger competitors in the future. In

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recent years, a slowdown in domestic demand for steel products in China resulting from slowed economic growth, combined with an expansion in steel production capacity, has led to production over-capacity in the Chinese steel industry, which in turn has led the Chinese government to pursue aggressive consolidation in the Chinese steel industry that has resulted in fewer but larger steel manufacturers that are able to compete more effectively in the global steel industry. Competition from global steel manufacturers with significant production capacity such as ArcelorMittal S.A. and Nippon Steel & Sumitomo Metal Corporation, as well as competitors from emerging markets, especially from China and India, could result in a significant increase in competition. Major competitive factors include range of products offered, quality, price, delivery performance and customer service. Our larger competitors may use their resources, which may be greater than ours, against us in a variety of ways, including by making additional acquisitions, investing more aggressively in product development and capacity and displacing demand for our export products.

Various export markets currently impose tariffs on different types of steel products. However, we do not believe that tariffs significantly affect our ability to compete in these markets.

Green Infrastructure Business

Trading Segment

Our trading activities consist primarily of trading activities of POSCO International. POSCO International is a global trading company that primarily engages in trading of steel and raw materials, investing in energy and mineral development projects and operating power generation facilities. It also trades textiles, agricultural commodities and other goods. POSCO International’s sales consist of third-country trading sales, export trading sales and domestic trading sales. On January 1, 2023, POSCO Energy, Korea’s largest domestic private power utility company and a provider of alternative environmentally-friendly energy solutions, merged into POSCO International.

The following table sets forth a breakdown of POSCO International’s total consolidated sales by export sales, domestic sales and third-country trades for the periods indicated:

	For the Year Ended December 31,
Sales Category	2021					2022					2023(1)
	(in billions of Won, except percentages)
Export trading sales	￦	10,715		31.6	%	￦	14,143		37.2	%	￦	12,577		38.0	%
Domestic trading sales		5,546		16.3			5,632		14.8			7,287		22.0
Third-country trades		27,224		80.2			30,010		79.0			23,393		70.6
Total sales prior to consolidation adjustments		43,484		128.1			49,784		131.1			43,256		130.6
Consolidation adjustments		(9,543	)	(28.1	)		(11,806	)	(31.1	)		(10,136	)	(30.6	)
Total sales	￦	33,942		100.0	%	￦	37,979		100.0	%	￦	33,121		100.0	%

(1) Including sales from the power generation business of POSCO Energy, which merged into POSCO International on January 1, 2023.

Trading Activities. POSCO International’s trading activities consist of exporting and importing a wide variety of products and commodities, including iron and steel, raw materials for steel production, non-ferrous metals, chemicals, automotive parts, machinery and plant equipment, electronics products, agricultural commodities and textiles. POSCO International is also engaged in third-country trade that does not involve exports from or imports to Korea. The products are obtained from and supplied to numerous suppliers and purchasers in Korea and overseas, which are procured through a global trading network comprised of overseas trading subsidiaries, branches and representative offices. Such subsidiaries and offices support POSCO International’s trading activities by locating suitable local suppliers and purchasers on behalf of customers, identifying business opportunities and providing information regarding local market conditions.

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In most cases, POSCO International enters into trading transactions after the underlying sale and purchase contracts have been matched, which mitigates inventory and price risks to POSCO International. POSCO International typically enters into trading transactions as a principal, and in limited cases as an import or export agent. When acting as a principal or an agent, POSCO International derives its gross trading profit from the margin between the selling price of the products and the purchase price it pays for such products. In the case of principal transactions, the selling price is recognized as sales and the purchase price is recognized as cost of sales, while only the margin is recognized as sales in the case of agency transactions in which POSCO International does not assume the risks and rewards of ownership of the goods. In the instances in which it acts as an arranger for a third country transaction, POSCO International derives its gross trading profit from, and recognizes as sales, the commission paid to it by the customer. The sizes of margins and commissions for POSCO International’s trading activities vary depending on a number of factors, including prevailing supply and demand conditions for the product involved, the cost of financing, insurance, storage and transport and the creditworthiness of the customer, and tends to decline as the product or market matures.

In connection with its export and import transactions, POSCO International has accounts receivable and payable in a number of currencies, but principally in U.S. dollars. POSCO International’s exposure to fluctuations in exchange rates, including the Won/U.S. dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO International’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in U.S. dollars. Although the impact of exchange rate fluctuations is substantially mitigated by such strategies, POSCO International also periodically enters into derivative contracts, primarily currency forward contracts, to further hedge its foreign exchange risks.

In connection with its trading activities, POSCO International arranges insurance and product transport at the request of customers, the costs of which generally become reflected in the sales price of the relevant products, and also provides financing services to its purchasers and suppliers as necessary. In the case of trading transactions involving large-scale industrial or construction projects, POSCO International also provides necessary project planning and organizing services to its customers.

Natural Resources Development Activities. POSCO International also invests in energy and mineral development projects throughout the world. In particular, POSCO International holds a 51.0% interest in a gas field project in Myanmar, where production of gas commenced in July 2013. POSCO International recognized revenues of approximately Won 449 billion in 2021, Won 634 billion in 2022 and Won 615 billion in 2023 from the Myanmar gas field project. Natural resources development projects, while entailing higher risks than the traditional trading business, offer higher potential returns. POSCO International intends to continue to expand its operations by carefully seeking out promising energy development projects abroad.

Power Generation Activities. POSCO International acquired the power generation business of POSCO Energy through its merger into POSCO International on January 1, 2023. POSCO International operates power generation facilities in Korea and Southeast Asia, including LNG combined cycle power plants. As of December 31, 2023, POSCO International’s total power generation capacity of its LNG combined cycle power plants was approximately 3,414 megawatts. As of such date, POSCO International’s total power generation capacity of its renewable solar energy facilities was approximately 15 megawatts and its onshore wind power energy facilities was approximately 63 megawatts.

POSCO International also operates an LNG receiving terminal with an aggregate capacity to process approximately 6.0 million tons of LNG annually in Gwangyang as of December 31, 2023. In addition, POSCO International participates in LNG trading, LNG tank rental services and LNG ship trial operations in order to achieve maximum operational efficiency of our LNG terminal.

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POSCO International also engages in fuel cell facility installation and operation services, as well as selectively seeks opportunities to expand into solar, wind and other renewable energy businesses in order to become an integrated provider of energy solutions.

Competition

POSCO International competes principally with other Korean general trading companies that are affiliated with major domestic business groups, as well as global trading companies based in other countries. In the domestic market, competition for export transactions on behalf of domestic suppliers and import transactions on behalf of domestic purchasers was limited, as most affiliated general trading companies of large Korean business groups generally relied on affiliate transactions for the bulk of their trading business. However, in recent years, many of these Korean general trading companies have reduced their reliance on their affiliated business group and transactions carried out on behalf of their member companies and instead have generally evolved to focus on segments of the import and export markets in which they have a competitive advantage. As a result, competition among Korean general trading companies in the area of traditional trade has become more intense. POSCO International’s principal competitors in the overseas trading markets include Korean trading companies that operate in various international markets, as well as foreign trading companies, particularly those based in Japan. As POSCO International diversifies into businesses other than traditional trading such as natural resources development, it also increasingly competes with other Korean and international companies involved in these businesses. POSCO International’s power generation business competes principally with private-sector power generation companies in Korea that are affiliated with major domestic business groups, including SK E&S and GS EPS.

Construction Segment

POSCO E&C is one of the leading engineering and construction companies in Korea, primarily engaged in the planning, design and construction of industrial plants and architectural works and civil engineering projects. In particular, POSCO E&C has established itself as one of the premier engineering and construction companies in Korea through:

• its strong and stable customer base; and

• its cutting-edge technological expertise obtained from construction of advanced integrated steel plants, as well as participation in numerous modernization and rationalization projects at our Pohang Works and Gwangyang Works.

Leveraging its technical know-how and track record of building some of the leading industrial complexes in Korea, POSCO E&C has also focused on diversifying its operations into construction of high-end apartment complexes and participating in a wider range of architectural works and civil engineering projects, as well as engaging in urban planning and development projects and expanding its operations abroad. In September 2015, we completed the sale of a 38.0% interest in POSCO E&C to Public Investment Fund, a sovereign wealth fund in Saudi Arabia, for US$1.05 billion. In connection with the sale, POSCO E&C and PIF agreed to jointly explore additional business opportunities in Saudi Arabia, including participating in various infrastructure projects sponsored by the Saudi Arabian government.

POSCO E&C also has substantial experience in the energy field obtained from the construction of various power plants for member companies of the POSCO Group, specializing primarily in engineering and construction of LNG-fired thermal power plants. In response to increasing demand from the energy industry, POSCO E&C plans to continue to target opportunities in power plant construction, especially in Asia and Africa, which it believes offers significant growth potential.

Competition

Competition in the construction industry is based primarily on price, reputation for quality, reliability, punctuality and financial strength of contractors. In Korea, POSCO E&C’s main competition

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in the construction of residential and non-residential buildings, EPC projects, urban planning and development projects and civil works projects consists of approximately ten major domestic construction companies, all of which are member companies of other large business groups in Korea and are capable of undertaking larger-scale, higher-value-added projects that offer greater potential returns. A series of measures introduced by the Government over the past few years to regulate housing prices in Korea, as well as an increasing popularity of low-bid contracts in civil works project mandates, have contributed to increased competition in the Korean construction industry in recent years. In the overseas markets, POSCO E&C faces competition from local construction companies and other major Korean construction companies with overseas operations, as well as international construction companies from other countries.

Logistics and Others Segment

POSCO DX. POSCO DX provides a wide range of information technology and operational technology services. In particular, POSCO DX has expertise in providing services to address the evolving needs of manufacturing companies arising from the convergence of information technology and operational technology.

POSCO DX’s information technology services primarily consist of buildout and management of information technology infrastructure, including manufacturing execution systems, supply chain management systems, and enterprise resource planning systems. POSCO DX also serves as a managed service provider for the operation of cloud data centers on behalf of its clients, and provides other smart technology services including smart CCTV and smart home solutions.

POSCO DX’s operational technology services primarily relate to automation of factory equipment and manufacturing processes and provision of energy efficiency solutions. POSCO DX also provides system engineering services targeting specific areas of operational processes, including automation of logistical operations and buildout and management of pollutant monitoring systems and intelligent transportation systems. In addition, POSCO DX has developed PosFrame, an information technology platform designed to enhance the overall operations of POSCO’s steel works. PosFrame enables POSCO to implement its production quality management and other smart factory solutions for the member companies of the POSCO Group located in Korea and abroad.

POSCO FLOW. POSCO FLOW provides a wide range of integrated logistics services. It engages in the operation of central terminal systems for transportation, storage and processing of coal and other raw materials primarily used by power generation and cement companies in Korea and abroad. POSCO FLOW also offers optimized logistics solutions for a wide range of products including steel products, industrial parts, grains, natural gas and construction equipment and materials.

Competition. POSCO DX competes principally with system integration service providers in Korea that are affiliated with major domestic business groups, including Samsung SDS, LG CNS and SK Inc. C&C. POSCO FLOW competes principally with logistics service providers in Korea that are affiliated with major domestic business groups, including Hyundai Glovis, Samsung SDS and LX Pantos.

Green Materials and Energy Segment

POSCO Future M

POSCO Future M manufactures anode and cathode materials, which are two of the main components of rechargeable batteries. POSCO Future M sells such materials primarily to Korea’s leading electric vehicle battery manufacturers such as LG Energy Solution, Samsung SDI and SK On, as well as to their joint ventures with global automotive manufacturers.

POSCO Future M also manufactures quicklime and refractories used in steel manufacturing processes and other industrial applications as well as a wide range of chemical products such as coal

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tar and light oil. Quicklime is a widely used chemical component in a variety of industries. In the steel industry, a major use of quicklime is to remove impurities in the basic oxygen steelmaking process. Refractories are materials that are resistant to high temperature, used predominantly as furnace linings for elevated temperature materials processing and other applications in which thermomechanical properties are critical.

The following table sets forth a breakdown of POSCO Future M’s total consolidated sales by major product categories for the periods indicated:

	For the Year Ended December 31,
Products	2021				2022				2023
	(in billions of Won, except percentages)
Energy materials (including battery materials)	￦	852	42.8	%	￦	1,938	58.7	%	￦	3,362	70.6	%
Quicklime and other chemical products		675	33.9			812	24.6			857	18.0
Refractories		463	23.3			552	16.7			541	11.4
Total sales	￦	1,990	100.0	%	￦	3,302	100.0	%	￦	4,760	100.0	%

Competition. In the energy materials market, POSCO Future M competes with other global leading manufacturers of cathode and anode materials, including LG Chemical Co., Ltd. and Ecopro BM Co., Ltd. In its legacy business areas of refractories and lime chemicals, POSCO Future M competes principally with Chosun Refractories ENG Co., Ltd. and Korea Refractories Co, Ltd.

Investments in Lithium Hydroxide and Lithium Carbonate Production Projects

Through investments made by POSCO HOLDINGS INC., we engage in natural resources development and production projects for lithium hydroxide and lithium carbonate, which are key materials for the production of cathode materials.

POSCO Argentina. In 2018, POSCO Argentina SAU (“POSCO Argentina”), a wholly owned subsidiary of POSCO HOLDINGS INC., acquired a salt lake located in Salta and Catamarca provinces of Argentina. In April 2024, POSCO Argentina completed stage one of its construction of a commercialization plant adjacent to the lake for the production of lithium hydroxide.

As of December 31, 2023, the construction schedule and related costs of the project were as follows:

Project	Expected Completion Date	Total Cost of Project		Estimated Remaining Cost of Completion as of December 31, 2023
		(In billions of Won)
Construction of salt water lithium commercialization plant — stage one	April 2024		1,301		219
Construction of salt water lithium commercialization plant — stage two	June 2025		1,246		1,102

Upon completion of both stages, the commercialization plant is expected to have an annual production capacity of 25 thousand tons of lithium hydroxide and 23 thousand tons of lithium carbonate.

POSCO Pilbara Lithium Solution. In 2018, we acquired a 2.74% stake in Pilbara Minerals Limited (“Pilbara Minerals”) and secured off-taking of spodumene mineral from the Pilgangoora Project, which is located 120 kilometers from Port Hedland in Western Australia’s resource-rich Pilbara region. POSCO Pilbara Lithium Solution Co., Ltd., a joint venture with Pilbara Minerals in which POSCO HOLDINGS INC. holds a 82% interest, is currently constructing a commercialization plant in Yulchon industrial complex in Gwangyang for the production of lithium hydroxide.

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As of December 31, 2023, the construction schedule and related costs of the project were as follows:

Project	Expected Completion Date	Total Cost of Project		Estimated Remaining Cost of Completion as of December 31, 2023
		(In billions of Won)
Construction of lithium ore commercialization plant	September 2024		1,098		849

Upon completion, the commercialization plant is expected to have an annual production capacity of 43 thousand tons of lithium hydroxide.

Others Segment

Our Others Segment includes POSCO HOLDINGS INC. and all other entities which fall below the reporting thresholds. POSCO HOLDINGS INC. actively explores diversification opportunities in promising business areas.

Insurance

We maintain property insurance for our property, plant and equipment that we believe to be consistent with market practice in Korea.

Government Regulations

Pursuant to the Monopoly Regulation and Fair Trade Act of Korea, we, as a non-financial holding company, are required to maintain the shareholding ratio of our subsidiaries above a certain threshold (i.e., 20% in case of a public company and 40% in case of a private company) and are also required to maintain our liabilities-to-equity ratio below 200%. In addition, we may not own the shares of any Korean companies that are not our affiliates in excess of 5% of the total outstanding shares of such company (except under certain exempted cases) nor control any Korean financial institutions or insurance companies. We are also required to annually report to the Korea Fair Trade Commission whether we have complied with such restrictive requirements. In the event we breach such obligations, we will be subject to administrative penalty.

Item 4.C. Organizational Structure

The following table sets out the jurisdiction of incorporation and our ownership interests of our significant subsidiaries as of December 31, 2023:

Name	Jurisdiction of Incorporation	Percentage of Ownership
POSCO	Korea		100.0	%
POSCO International Corporation	Korea		70.7	%
POSCO Eco & Challenge Co., Ltd	Korea		52.8	%
POSCO DX Co, Ltd.	Korea		65.4	%
POSCO Future M Co., Ltd.	Korea		59.7	%
POSCO (Zhangjiagang) Stainless Steel Co., Ltd. (1)	China		82.5	%

(1) POSCO HOLDINGS INC. holds a 58.6% interest and POSCO-China holds a 23.9% interest.

Item 4.D.  Property, Plants and Equipment

Overview

Our consolidated subsidiaries operate various production facilities in Korea and abroad. We may increase our production capacity in the future when we increase our capacity as part of our

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facilities expansion or as a result of continued modernization and rationalization of our existing facilities. For a discussion of major items of our capital expenditures currently in progress, see “Item 5. Operating and Financial Review and Prospects — Item 5.B. Liquidity and Capital Resources — Liquidity — Capital Expenditures and Capital Expansion.”

We are vigorous in our efforts to engage in environmentally responsible management of, and to protect the environment from damage resulting from, our operations. Our levels of pollution control are higher than those mandated by Government standards. We established an online environmental monitoring system with real-time feedback on pollutant levels and a forecast system of pollutant concentration in surrounding areas. We also undergo periodic environmental inspections by both internal and external inspectors in accordance with ISO 14001 standards to monitor execution and maintenance of our environmental management plan. We also operate a certification program targeting our suppliers and outsourcing partners, pursuant to which they are encouraged to establish environmental management systems of their own.

Steel Segment

POSCO’s principal properties are Pohang Works, which is located at Youngil Bay on the southeastern coast of Korea, and Gwangyang Works, which is located in Gwangyang in the southwestern region of Korea. POSCO also maintains and operate production properties abroad, including plants operated by PT. Krakatau POSCO in Indonesia and POSCO YAMATO VINA in Vietnam. POSCO (Zhangjiagang), our consolidated subsidiary, also operates production properties in Zhangjiagang, China for the production of stainless steel products. For a discussion of such operations, see “Item 4. Information on the Company — Item 4.B. Business Overview — Subsidiaries and Joint Ventures.” 

Green Infrastructure Business

POSCO International’s principal properties are LNG combined cycle power generation facilities located in Incheon and LNG terminal facilities located in Gwangyang.

Green Materials and Energy Segment

POSCO Future M’s principal properties are (i) plants for the production of cathode materials located in Korea (Gwangyang, Pohang and Gumi), Quebec, Canada and Tongxiang, China, (ii) plants for the production of anode materials located in Sejong and Pohang, (iii) plants for the production of quicklime located in Korea (Gwangyang and Pohang) and Banten, Indonesia, and (iv) plants for the production of refractories located in Pohang, Korea and Jiangsu Province, China.

Steel Production Facilities in Korea

Pohang Works

Construction of Pohang Works began in 1970 and ended in 1983. Pohang Works produces a wide variety of steel products. Products produced at Pohang Works include hot rolled sheets, plates, wire rods and cold rolled sheets, as well as specialty steel products such as stainless steel sheets and silicon steel sheets. These products can also be customized to meet the specifications of our customers. 

Situated on a site of 8.9 million square meters at Youngil Bay on the southeastern coast of Korea, Pohang Works consists of iron-making, crude steelmaking and continuous casting and other rolling facilities. Pohang Works also has docking facilities capable of accommodating large ships for unloading raw materials, storage areas for raw materials and separate docking facilities for ships carrying products for export. Pohang Works is equipped with a highly advanced computerized production-management system allowing constant monitoring and control of the production process.

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Gwangyang Works

Construction of Gwangyang Works began in 1985 and ended in 1992. Gwangyang Works specializes in high-volume production of a limited number of steel products. Products manufactured at Gwangyang Works include both hot and cold rolled types.

Situated on a site of 13.7 million square meters reclaimed from the sea in Gwangyang in the southwestern region of Korea, Gwangyang Works is comprised of iron-making plants, steelmaking plants, continuous casting plants, hot strip mills and thin-slab hot rolling plants. The site also features docking and unloading facilities for raw materials capable of accommodating large ships for unloading raw materials, storage areas for raw materials and separate docking facilities for ships carrying products for export.

We believe Gwangyang Works is one of the most technologically-advanced integrated steel facilities in the world. Gwangyang Works has a completely automated, linear production system that enables the whole production process, from iron-making to finished products, to take place without interruption. This advanced system reduces the production time for hot rolled products to only four hours. Like Pohang Works, Gwangyang Works is equipped with a highly advanced computerized production-management system allowing constant monitoring and control of the production process.

Capacity Utilization Rates

The following table sets out the aggregate capacity utilization rates of Pohang Works and Gwangyang Works for the periods indicated.

	As of or for the Year Ended December 31,
	2021			2022			2023
Crude steel and stainless steel production capacity for the year (million tons per year)		40.68			40.68			40.68
Actual crude steel and stainless steel output (million tons)		38.26			34.22			35.68
Capacity utilization rate (%) (1)		94.1	%		84.1	%		87.7	%

(1) Calculated by dividing actual crude steel and stainless steel output by the actual crude steel and stainless steel production capacity for the relevant period as determined by us.

Steel Production Facilities Abroad

PT. Krakatau POSCO

The following table sets out PT. Krakatau POSCO’s capacity utilization rates for the periods indicated.

	As of or for the Year Ended December 31,
	2021			2022			2023
Crude steel production capacity for the year (million tons per year)		3.00			3.00			3.00
Actual crude steel output (million tons)		3.14			3.03			3.01
Capacity utilization rate (%) (1)		104.5	%		101.0	%		100.2	%

(1) Calculated by dividing actual crude steel output by the actual crude steel production capacity for the relevant period as determined by us.

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POSCO (Zhangjiagang)

The following table sets out POSCO (Zhangjiagang)’s capacity utilization rates for the periods indicated.

	As of or for the Year Ended December 31,
	2021			2022			2023
Crude steel and stainless steel production capacity for the year (million tons per year)		1.10			1.10			1.10
Actual crude steel and stainless steel output (million tons)		0.99			0.99			0.84
Capacity utilization rate (%) (1)		89.9	%		89.9	%		76.3	%

(1) Calculated by dividing actual crude steel and stainless steel output by the actual crude steel and stainless steel production capacity for the relevant period as determined by us.

POSCO YAMATO VINA

The following table sets out POSCO YAMATO VINA’s capacity utilization rates for the periods indicated.

	As of or for the Year Ended December 31,
	2021			2022			2023
Crude steel production capacity for the year (million tons per year)		0.55			0.55			0.55
Actual crude steel output (million tons)		0.58			0.40			0.42
Capacity utilization rate (%) (1)		104.9	%		72.2	%		75.5	%

(1) Calculated by dividing actual crude steel output by the actual crude steel production capacity for the relevant period as determined by us.

Item 4A. Unresolved Staff Comments

We do not have any unresolved comments from the Securities and Exchange Commission staff regarding our periodic reports under the Exchange Act of 1934.

Item 5.  Operating and Financial Review and Prospects

Item 5.A.  Operating Results

The following discussion and analysis is based on our consolidated financial statements, which have been prepared in accordance with IFRS, as issued by the IASB. Unless otherwise noted, the amounts included in Item 5.A. are presented on a consolidated basis.

Overview

We are a holding company, and we operate through our consolidated subsidiaries including POSCO, one of the largest steel producers in the world. We also engage in businesses that complement our steel manufacturing operations and also carefully seek out promising investment opportunities to diversify our businesses both vertically and horizontally. One of our principal strategies is to take advantage of our holding company structure to invest in promising businesses. We have made investments in the past decade to secure new growth engines by diversifying into new businesses related to our steel operations that we believe will offer greater potential returns, as well as entering into new businesses not related to our steel operations.

We have six reportable segments as follows:

• Steel Segment. Our Steel Segment includes the production and sale of steel products.

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• Green Infrastructure Business. Our Green Infrastructure Business includes our businesses related to provision of infrastructure and related services. Such segment is divided into three operations as follows:

Ø Trading Segment. The Trading Segment of our Green Infrastructure Business consists primarily of the global trading activities, natural resources development activities and power generation activities of POSCO International. POSCO International exports and imports a wide range of steel products that are both obtained from and supplied to POSCO, as well as steel and other products from and to other suppliers and purchasers in Korea and overseas.

Ø Construction Segment. The Construction Segment of our Green Infrastructure Business consists primarily of POSCO E&C’s planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas.

Ø Logistics and Others Segment. The Logistics and Others Segment of our Green Infrastructure Business consists primarily of the information technology and operational technology services of POSCO DX and the integrated logistics services of POSCO FLOW.

• Green Materials and Energy Segment. Our Green Materials and Energy Segment includes (i) the manufacturing and sale of various energy-related and other industrial materials by POSCO Future M, including anode and cathode materials for rechargeable batteries and (ii) investments made by us in production projects relating to other materials such as lithium.

• Others Segment. Our Others Segment includes POSCO HOLDINGS INC. and all other entities which fall below the reporting thresholds. POSCO HOLDINGS INC. actively explores diversification opportunities in promising business areas.

One of the major factors contributing to our historical performance has been the growth of the Korean economy, and our future performance will depend at least in part on Korea’s general economic growth and prospects. For a description of recent developments that have had and may continue to have an adverse effect on our results of operations and financial condition, see “Item 3. Key Information — Item 3.D. Risk Factors — Korea is our most important market, and our current business and future growth could be materially and adversely affected if economic conditions in Korea deteriorate.” A number of other factors have had or are expected to have a material impact on our results of operations, financial condition and capital expenditures. These factors include:

• our sales volume, unit prices and product mix for steel products;

• costs and production efficiency; and

• exchange rate fluctuations.

As a result of these factors, our financial results in the past may not be indicative of future results or trends in those results.

Sales Volume, Prices and Product Mix for Steel Products

In recent years, our net sales have been affected by the following factors relating to our steel business:

• the demand for our products in the Korean market and our capacity to meet that demand;

• our ability to compete for sales in the export market;

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• price levels; and

• our ability to improve our product mix.

Domestic demand for our products is affected by the condition of major steel-consuming industries, such as construction, shipbuilding, automotive, electrical appliances and downstream steel processors, and the Korean economy in general.

In 2022, the unit sales price in Won for each of our principal product lines of steel products increased compared to 2021, reflecting continuation of strong market conditions in the first half of 2022 in part due to global steel supply chain concerns caused by Russia’s invasion of Ukraine, which market conditions weakened beginning in the second half of 2022 reflecting a decrease in global demand for steel products, as well as depreciation of the Won against the U.S. dollar in 2022 that increased our export prices in Won terms during 2022. However, weaker demand beginning in the second half of 2022 has adversely impacted steel prices. General increases in the prices of key raw materials in recent years have also contributed to increases in the prices of our steel products during 2021 and 2022. The weighted average unit price for our principal product lines of steel products increased by 17.2% from 2021 to 2022, which impact was enhanced by the depreciation in the average value of the Won against the U.S. dollar in 2022 compared to 2021 that increased our export prices in Won terms. The Market Average Exchange Rate depreciated from an average of Won 1,144.4 to US$1.00 in 2021 to an average of Won 1,292.0 to US$1.00 in 2022.

The unit sales price of silicon steel sheets, which accounted for 2.0% of total sales volume of such products, increased by 35.4% in 2022 compared to 2021. The unit sales price of stainless steel products, which accounted for 9.4% of total sales volume of such products, increased by 29.7% in 2022 compared to 2021. The unit sales price of plates, which accounted for 16.2% of total sales volume of such products, increased by 24.2% in 2022 compared to 2021. The unit sales price of wire rods, which accounted for 5.1% of total sales volume of such products, increased by 22.6% in 2022 compared to 2021. The unit sales price of cold rolled products, which accounted for 36.8% of total sales volume of such products, increased by 12.1% in 2022 compared to 2021. The unit sales price of hot rolled products, which accounted for 30.5% of total sales volume of the principal steel products, increased by 10.9% in 2022 compared to 2021.

In 2023, the unit sales price in Won for each of our principal product lines of steel products decreased compared to 2022 primarily due to a general decrease in global demand for steel products reflecting deterioration in global economic conditions. The weighted average unit price for our principal product lines of steel products decreased by 11.3% from 2022 to 2023, the impact of which was offset in part by the depreciation in the average value of the Won against the U.S. dollar in 2023 compared to 2022 that increased our export prices in Won terms. The Market Average Exchange Rate depreciated from an average of Won 1,292.0 to US$1.00 in 2022 to an average of Won ￦1,305.4 to US$1.00 in 2023.

The unit sales price of plates, which accounted for 16.2% of total sales volume of such products, decreased by 13.7% in 2023 compared to 2022. The unit sales price of stainless steel products, which accounted for 8.5% of total sales volume of our principal steel products, decreased by 13.4% in 2023 compared to 2022. The unit sales price of wire rods, which accounted for 5.6% of total sales volume of such products, decreased by 12.3% in 2023 compared to 2022. The unit sales price of hot rolled products, which accounted for 33.9% of total sales volume of such products, decreased by 11.6% in 2023 compared to 2022. The unit sales price of silicon steel sheets, which accounted for 1.8% of total sales volume of such products, decreased by 3.3% in 2023 compared to 2022. The unit sales price of cold rolled products, which accounted for 33.9% of total sales volume of such products, decreased by 2.9% in 2023 compared to 2022.

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The table below sets out the average unit sales prices for our semi-finished and finished steel products produced by us and directly sold to external customers for the periods indicated.

	For the Year Ended December 31,
Products	2021		2022		2023
	(In thousands of Won per ton)
Cold rolled products	￦	1,118	￦	1,254	￦	1,218
Hot rolled products		954		1,058		935
Stainless steel products		2,842		3,686		3,192
Plates		985		1,224		1,056
Wire rods		1,033		1,267		1,112
Silicon steel sheets		1,550		2,099		2,030
Average (1)	￦	1,225	￦	1,436	￦	1,273

(1) “Average” prices are based on the weighted average, by sales volume, of our sales for the listed principal products produced by us and directly sold to external customers. See “Item 4. Information on the Company — Item 4.B. Business Overview — Major Products.” The average unit sales price calculation does not include sales results of steel products categorized as “others.”

Costs and Production Efficiency

Our major costs and operating expenses are raw material purchases, depreciation, labor and other purchases. The table below sets out our cost of sales and selling and administrative expenses as a percentage of our revenue as well as gross profit margin and operating profit margin for the periods indicated.

	For the Year Ended December 31,
	2021			2022			2023
	(Percentage of net sales)
Cost of sales		84.4	%		91.0	%		91.7	%
Selling and administrative expenses		3.5			3.3			3.7
Gross margin		15.6			9.0			8.3
Operating profit margin		11.5			5.1			3.5

We are closely monitoring changes in market conditions and we implemented the following measures in recent years to improve our profit margins:

• pursuing cost reduction through enhancing product designs, improving productivity and reducing fixed costs;

• focusing on marketing activities to increase the sales of higher margin, higher value-added products and to strengthen our domestic market position;

• pursuing synergies among member companies of the POSCO Group through corporate restructurings; and

• establishing a special sales committee to more effectively respond to changes in market trends and preparing responses to various scenarios of future sales.

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Production capacity represents our maximum production capacity that can be achieved with an optimal level of operations of our facilities. The table below sets out certain information regarding our production capacity and efficiency in the production of steel products for the periods indicated.

	For the Year Ended December 31,
	2021			2022			2023
Crude steel and stainless steel production capacity (million tons per year)		45.3			45.3			45.3
POSCO		40.7			40.7			40.7
PT. Krakatau POSCO		3.0			3.0			3.0
POSCO (Zhangjiagang).		1.1			1.1			1.1
POSCO YAMATO VINA		0.6			0.6			0.6
Actual crude steel and stainless steel output (million tons)		43.0			38.6			39.9
POSCO		38.3			34.2			35.7
PT. Krakatau POSCO		3.1			3.0			3.0
POSCO (Zhangjiagang).		1.0			1.0			0.8
POSCO YAMATO VINA		0.6			0.4			0.4
Capacity utilization rate (%)		94.8	%		85.2	%		88.1	%
POSCO		94.1	%		84.1	%		87.7	%
PT. Krakatau POSCO		104.5	%		101.0	%		100.2	%
POSCO (Zhangjiagang).		89.9	%		89.9	%		76.3	%
POSCO YAMATO VINA		104.9	%		72.2	%		75.5	%

Exchange Rate Fluctuations

Our consolidated financial statements are prepared from our local currency denominated financial results, assets and liabilities and our subsidiaries around the world, which are then translated into Won. A substantial proportion of our consolidated financial results is accounted for in currencies other than the Won. Accordingly, our consolidated financial results and assets and liabilities may be materially affected by changes in the exchange rates of foreign currencies. In 2023, 60.4% of the Steel Segment’s total revenue was in overseas markets outside of Korea. To the extent that we incur costs in one currency and make sales in another, our profit margins may be affected by changes in the exchange rates between the two currencies. Since the currency in which sales are recognized may not be the same as the currency in which expenses are incurred, foreign exchange rate fluctuations may materially affect our results of operations. Depreciation of the Won may materially affect the results of our operations because, among other things, it causes:

• an increase in the amount of Won required for us to make interest and principal payments on our foreign currency-denominated debt;

• an increase in Won terms in the costs of raw materials and equipment that we purchase from overseas sources and a substantial portion of our freight costs, which are denominated primarily in U.S. dollars; and

• foreign exchange translation losses on foreign currency-denominated liabilities, which lower our earnings for accounting purposes.

Appreciation of the Won against major currencies, on the other hand, causes:

• our export products to be less competitive by raising our prices in U.S. dollar, Yen and Yuan terms; and

• a reduction in net sales and accounts receivables in Won from export sales, which are primarily denominated in U.S. dollars and to a lesser extent in Yen and Yuan.

The overall net impact from fluctuations of the Won against major currencies is difficult to estimate and varies from year to year. We strive to naturally offset our foreign exchange risk by matching foreign currency receivables with our foreign currency payables and our overseas

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subsidiaries have sought to further mitigate the adverse impact of exchange rate fluctuations by conducting business transactions in the local currency of the respective market in which the transactions occur. In particular, POSCO International’s exposure to fluctuations in exchange rates, including the Won/U.S. dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO International’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in U.S. dollars. Although the impact of exchange rate fluctuations is partially mitigated by such strategies, we and our subsidiaries, particularly POSCO International and POSCO E&C, also periodically enter into derivative contracts, primarily foreign currency swaps and forward exchange contracts, to further hedge some of our foreign exchange risks. However, our results of operations have historically been affected by exchange rate fluctuations and there can be no assurance that such strategies will be sufficient to reduce or eliminate the adverse impact of such fluctuations in the future.

Recent Accounting Changes

For a discussion of new standards, interpretations and amendments to existing standards that have been published, see Note 2 to the Consolidated Financial Statements.

Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS

In addition to preparing financial statements in accordance with IFRS as issued by the IASB included in this annual report, we also prepare financial statements in accordance with K-IFRS as adopted by the KASB, which we are required to file with the Financial Services Commission and the Korea Exchange under the FSCMA.

K-IFRS differs in certain respects from IFRS as issued by the IASB in the presentation of operating profit. In addition, under K-IFRS, revenue from the development and sale of real estate is recognized using the percentage of completion method. However, under IFRS as issued by the IASB, revenue from the development and sale of certain real estate is recognized when an individual unit of residential real estate is delivered to the buyer. As a result, our consolidated statements of comprehensive income and our consolidated statements of financial position prepared in accordance with IFRS as issued by the IASB included in this annual report differ from our consolidated statements of comprehensive income and consolidated statements of financial position prepared in accordance with K-IFRS.

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The table below sets forth a reconciliation of our operating profit and net income or loss as presented in our consolidated statements of comprehensive income prepared in accordance with IFRS as issued by the IASB for each of the years ended December 31, 2021, 2022 and 2023 to our operating profit and net income or loss in our consolidated statements of comprehensive income prepared in accordance with K-IFRS, for each of the corresponding years, taking into account such differences:

	For the Year Ended December 31,
	2021			2022			2023
	(In billions of Won)
Operating profit under IFRS as issued by the IASB	￦	8,775		￦	4,342		￦	2,738
Additions:
Loss on disposals of assets held for sale		—			4			103
Loss on disposals of investments in subsidiaries, associates and joint ventures		13			12			19
Loss on disposals of property, plant and equipment		96			111			126
Impairment loss on property, plant and equipment		312			213			276
Impairment loss on intangible assets		224			371			130
Loss on valuation of firm commitment		112			156			47
Idle tangible asset expenses		24			18			4
Increase to provisions		38			89			38
Donations		101			81			67
Miscellaneous losses		70			64			93
Others		38			5			1
Subtotal		1,027			1,124			904
Other bad debt expenses		20			15			291
Deductions:
Gain on disposals of assets held for sale		(60	)		(55	)		(1	)
Gain on disposals of investment in subsidiaries, associates and joint ventures		(86	)		(14	)		(197	)
Gain on disposals of property, plant and equipment		(12	)		(19	)		(9	)
Gain on valuation of firm commitment		(169	)		(182	)		(11	)
Reversal of other provisions		(34	)		(5	)		(9	)
Premium income		(38	)		(238	)		(13	)
Gain on bargain purchases		—			—			(41	)
Gain on disposal of emission rights		(1	)		(5	)		(26	)
Miscellaneous income		(158	)		(64	)		(78	)
Others		(20	)		(10	)		(8	)
Subtotal		(578	)		(592	)		(394	)
Recovery of allowance for other bad debt accounts		(33	)		(5	)		(8	)
Revenue recognition related to development and sale of real estate		323			(253	)		71
Cost of sales recognition related to development and sale of real estate		(297	)		220			(71	)
Operating profit under K-IFRS	￦	9,238		￦	4,850		￦	3,531
Net profit under IFRS as issued by the IASB	￦	7,176		￦	3,586		￦	1,846
Adjustments related to development and sale of real estate:
Revenue		323			(253	)		71
Cost of sales		(297	)		220			(71	)
Income tax		(6	)		8			(0	)
Net profit under K-IFRS	￦	7,196		￦	3,560		￦	1,846

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Operating Results – 2022 Compared to 2023

The following table presents our statement of comprehensive income information and changes therein for 2022 and 2023.

						Changes
	For the Year Ended December 31,					2022 versus 2023
	2022		2023			Amount			%
	(In billions of Won)
Revenue	￦	85,004	￦	77,057		￦	(7,947	)		(9.3	)
Cost of sales		77,321		70,639			(6,682	)		(8.6	)
Gross profit		7,682		6,417			(1,265	)		(16.5	)
Selling and administrative expenses:
Impairment loss (reversal of impairment loss) on trade accounts and notes receivable		25		(18	)		(43	)		N.A.	(1)
Other administrative expenses		2,480		2,670			190			7.7
Selling expenses		294		234			(61	)		(20.7	)
Other operating income and expenses:
Impairment loss on other receivables		10		284			274			2,787.9
Other operating income		592		394			(198	)		(33.4	)
Other operating expenses		1,124		904			(219	)		(19.5	)
Operating profit		4,342		2,738			(1,604	)		(36.9	)
Share of profit of equity-accounted investees, net		676		270			(407	)		(60.1	)
Finance income		4,834		3,831			(1,003	)		(20.8	)
Finance costs		5,804		4,203			(1,601	)		(27.6	)
Profit before income tax		4,047		2,635			(1,412	)		(34.9	)
Income tax expense		462		789			328			71.0
Profit		3,586		1,846			(1,740	)		(48.5	)
Profit for the period attributable to owners of the controlling company		3,158		1,698			(1,459	)		(46.2	)
Profit for the period attributable to non-controlling interests		428		148			(281	)		(65.5	)

(1) N.A. means not applicable.

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Revenue

The following table presents our revenue by segment and changes therein for 2022 and 2023.

							Changes
	For the Year Ended December 31,						2022 versus 2023
	2022			2023			Amount			%
	(In billions of Won)
Steel Segment:
External revenue	￦	44,547		￦	40,393		￦	(4,154	)		(9.3	)
Internal revenue		26,103			23,145			(2,957	)		(11.3	)
Sub-total		70,650			63,539			(7,111	)		(10.1	)
Green Infrastructure Business — Trading Segment
External revenue		29,518			24,034			(5,484	)		(18.6	)
Internal revenue		23,678			18,910			(4,768	)		(20.1	)
Sub-total		53,196			42,944			(10,252	)		(19.3	)
Green Infrastructure Business — Construction Segment
External revenue		7,668			8,301			633			8.3
Internal revenue		1,218			1,966			749			61.5
Sub-total		8,885			10,268			1,382			15.6
Green Infrastructure Business — Logistics and Others Segment
External revenue		436			471			35			8.0
Internal revenue		3,383			3,475			92			2.7
Sub-total		3,820			3,946			126			3.3
Green Materials and Energy Segment
External revenue		2,452			3,816			1,364			55.6
Internal revenue		937			1,006			69			7.4
Sub-total		3,389			4,822			1,433			42.3
Others Segment:
External revenue		129			113			(16	)		(12.4	)
Internal revenue		1,040			1,450			409			39.4
Sub-total		1,170			1,562			393			33.6
Total revenue prior to consolidation adjustments		141,109			127,080			(14,029	)		(9.9	)
Consolidation adjustments		(56,358	)		(49,953	)		6,406			(11.4	)
Basis difference adjustments (1)		253			(71	)		(324	)		N.A.	(2)
Revenue	￦	85,004		￦	77,057			(7,947	)		(9.3	)

(1) Basis difference adjustments are related to the difference in recognizing revenue and expenses of the Construction Segment in connection with the development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 41 to the Consolidated Financial Statements.

(2) N.A. means not applicable.

Our revenue decreased by 9.3%, or Won 7,947 billion, from Won 85,004 billion in 2022 to Won 77,057 billion in 2023 primarily due to decreases in external revenues of the Trading Segment of the Green Infrastructure Business and the Steel Segment, the impact of which was offset by increases in external revenue of the Green Materials and Energy Segment, the Construction Segment of the Green Infrastructure Business and the Logistics and Others Segment of the Green Infrastructure Business. Specifically:

Steel Segment. External revenue from the Steel Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 9.3%, or Won 4,154 billion, from Won 44,547 billion in 2022 to Won 40,393 billion in 2023 due to a decrease

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in the average unit sales price per ton of our principal steel products, which was offset in part by an increase in the sales volume of our principal steel products. The weighted average unit sales price per ton of the principal steel products produced by us and directly sold to external customers decreased by 11.3% from Won 1,435,642 per ton in 2022 to Won 1,272,754 per ton in 2023 primarily due to a general decrease in global demand for steel products reflecting deterioration in global economic conditions, which impact was offset in part by depreciation of the Won against the U.S. dollar in 2023 that increased our export prices in Won terms during 2023. On the other hand, the overall sales volume of our principal steel products increased by 4.0%, from 27.7 million tons in 2022 to 28.8 million tons in 2023 following normalization of our production and sales operations in 2023 after recovery from the September 2022 Typhoon Hinnamnor that adversely impacted our sales in the fourth quarter of 2022. Such factors were principally attributable to the following:

• The unit sales price in Won of each of our principal product lines decreased from 2022 to 2023. The unit sales prices in Won of plates, stainless steel products, wire rods, hot rolled products, silicon steel sheets and cold rolled products decreased by 13.7%, 13.4%, 12.3%, 11.6%, 3.3% and 2.9%, respectively, from 2022 to 2023. For a discussion of changes in the unit sales prices of each of our principal product lines, see “— Overview — Sales Volume, Prices and Product Mix” above.

• The sales volume of hot rolled products, wire rods and plates increased by 15.6%, 15.2% and 4.2%, respectively, from 2022 to 2023. On the other hand, the sales volume of silicon steel sheets, stainless steel products and cold rolled products decreased by 6.4%, 5.6% and 4.0%, respectively, from 2022 to 2023. For a discussion of changes in the sales volume of each of our principal product lines, see “Item 4.B. Business Overview — Major Products.”

Total revenue from the Steel Segment, which includes internal revenue from inter-company transactions, decreased by 10.1%, or Won 7,111 billion, from Won 70,650 billion in 2022 to Won 63,539 billion in 2023 as internal revenue from inter-company transactions decreased by 11.3%, or Won 2,957 billion, from Won 26,103 billion in 2022 to Won 23,145 billion in 2023 primarily due to a decrease in the sale prices of steel products sold through trading subsidiaries, particularly POSCO International.

Trading Segment of the Green Infrastructure Business. External revenue from the Trading Segment of the Green Infrastructure Business, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 18.6%, or Won 5,484 billion, from Won 29,518 billion in 2022 to Won 24,034 billion in 2023 primarily due to decreases in the prices of steel products traded by POSCO International and the trading volume of non-steel products traded by POSCO International reflecting deterioration in global economic conditions, the aggregate impact of which was offset in part by (i) increase in the sales volume of steel products traded by POSCO International and (ii) depreciation of the Won against the U.S. dollar in 2023 that increased our export prices in Won terms during 2023.

Total revenue from the Trading Segment of the Green Infrastructure Business, which includes internal revenue from inter-company transactions, decreased by 19.3%, or Won 10,252 billion, from Won 53,196 billion in 2022 to Won 42,944 billion in 2023 as internal revenue from inter-company transactions decreased by 20.1%, or Won 4,768 billion, from Won 23,678 billion in 2022 to Won 18,910 billion in 2023 primarily due to decreases in prices of steel products and raw materials traded as inter-company transactions.

Construction Segment of the Green Infrastructure Business. External revenue from the Construction Segment of the Green Infrastructure Business, which does not include internal revenue from inter-company transactions that are eliminated during consolidation and basis difference adjustments, increased by 8.3%, or Won 633 billion, from Won 7,668 billion in 2022 to Won 8,301 billion in 2023 primarily due to increases in external revenues from plant construction projects and architectural works projects.

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Total revenue from the Construction Segment of the Green Infrastructure Business, which includes internal revenue from inter-company transactions, increased by 15.6%, or Won 1,382 billion, from Won 8,885 billion in 2022 to Won 10,268 billion in 2023 as internal revenue from inter-company transactions increased by 61.5%, or Won 749 billion, from Won 1,218 billion in 2022 to Won 1,966 billion in 2023. Such increase in internal revenue reflected an increase in the construction activities for member companies of the POSCO Group from 2022 to 2023.

Logistics and Others Segment of the Green Infrastructure Business. External revenue from the Logistics and Others Segment of the Green Infrastructure Business, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, increased by 8.0%, or Won 35 billion, from Won 436 billion in 2022 to Won 471 billion in 2023, primarily due to an increase in revenue from logistics services provided by POSCO FLOW to its external customers.

Total revenue from the Logistics and Others Segment of the Green Infrastructure Business, which includes internal revenue from inter-company transactions, increased by 3.3%, or Won 126 billion, from Won 3,820 billion in 2022 to Won 3,946 billion in 2023 as internal revenue from inter-company transactions increased by 2.7%, or Won 92 billion, from Won 3,383 billion in 2022 to Won 3,475 billion in 2023, primarily due to an increase in buildout of information technology infrastructure by POSCO DX for our subsidiaries in the Green Materials and Energy Segment. 

Green Materials and Energy Segment. External revenue from the Green Materials and Energy Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, increased by 55.6%, or Won 1,364 billion, from Won 2,452 billion in 2022 to Won 3,816 billion in 2023, primarily due to an increase in sales of anode and cathode materials used, among others, in the production of electric batteries.

Total revenue from the Green Materials and Energy Segment, which includes internal revenue from inter-company transactions, increased by 42.3%, or Won 1,433 billion, from Won 3,389 billion in 2022 to Won 4,822 billion in 2023 as internal revenue from inter-company transactions increased by 7.4%, or Won 69 billion, from Won 937 billion in 2022 to Won 1,006 billion in 2023 primarily due to an increase in POSCO Future M’s revenue from sales of cathode materials to member companies of the POSCO group from 2022 to 2023.

Others Segment. External revenue from the Others Segment, which does not include internal revenue from inter-company transactions that are eliminated during consolidation, decreased by 12.4%, or Won 16 billion, from Won 129 billion in 2022 to Won 113 billion in 2023, primarily due to a decrease in dividend income related to our investments in technology companies.

Total revenue from the Others Segment, which includes internal revenue from inter-company transactions, increased by 33.6%, or Won 393 billion, from Won 1,170 billion in 2022 to Won 1,562 billion in 2023 as internal revenue from inter-company transactions increased by 39.4%, or Won 409 billion, from Won 1,040 billion in 2022 to Won 1,450 billion in 2023 primarily due an increase in dividend payments from our subsidiaries.

Cost of Sales

Our cost of sales decreased by 8.6%, or Won 6,682 billion, from Won 77,321 billion in 2022 to Won 70,639 billion in 2023 primarily due to decreases in the average prices in Won terms of some of our key raw materials for POSCO, the impact of which was partially offset by (i) an increase in the production volume of finished steel products sold by us, (ii) an increase in the cost of sales of POSCO Future M reflecting an increase in the volume of raw materials used for the production and sales of anode and cathode materials, among others, in the production of electric batteries and (iii) depreciation of the Won against the U.S. dollar, which increased the price of our imported raw materials in Won terms. With respect to the principal raw materials for our steel products, the average market price of coal per wet metric ton (Premium Low Vol Coking Coal, FOB Australia Index announced by Platts)

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decreased from US$364 in 2022 to US$296 in 2023. In addition, the average market price of iron ore per dry metric ton (Iron Ore 62% Fe, CFR China Index announced by Platts) remained the same at US$120 in 2022 and 2023.

Gross Profit

Our gross profit decreased by 16.5%, or Won 1,265 billion, from Won 7,682 billion in 2022 to Won 6,417 billion in 2023 primarily due to (i) a decrease in the average unit sales price in Won terms of the steel products sold by us that outpaced a decrease in the average prices in Won terms of the principal raw materials used to manufacture such products, (ii) a decrease in POSCO E&C’s participation in higher margin plant and architectural works construction projects in 2023, (iii) a decrease in gross profit from POSCO Future M reflecting a slowdown in demand for anode materials and (iv) a decrease in gross profit from POSCO International’s steel products trading activities. Partially offsetting such impact, expenses related to flooding caused by Typhoon Hinnamnor in September 2022 included in cost of sales, which had negatively impacted gross profit in 2022, were not repeated in 2023. Our gross margin, which is gross profit as a percentage of total revenue, decreased from 9.0% in 2022 to 8.3% in 2023.

Selling and Administrative Expenses

The following table presents a breakdown of our selling and administrative expenses and changes therein for 2022 and 2023.

						Changes
	For the Year Ended December 31,					2022 versus 2023
	2022		2023			Amount			%
	(In billions of Won)
Impairment loss on (reversal of impairment loss on) trade accounts and notes receivable	￦	25	￦	(18	)	￦	(43	)		N.A.	(1)
Freight and custody expenses	￦	77	￦	56			(22	)		(28.3	)
Sales commissions		75		68			(7	)		(9.2	)
Sales promotion		19		10			(10	)		(51.0	)
Sales insurance premium		39		32			(7	)		(19.0	)
Contract cost		58		46			(12	)		(20.0	)
Others		26		23			(3	)		(12.8	)
Total selling expenses	￦	294	￦	234			(61	)		(20.7	)
Wages and salaries	￦	1,076	￦	1,156		￦	81			7.5
Expenses related to post-employment benefits		85		93			8			9.6
Other employee benefits		231		273			43			18.4
Travel		40		48			8			20.9
Depreciation		149		160			11			7.5
Amortization		90		96			6			6.6
Taxes and public dues		96		101			5			4.9
Rental		37		48			12			31.3
Advertising		104		107			4			3.5
Research and development		180		175			(5	)		(2.5	)
Service fees		225		235			10			4.3
Others		167		177			10			6.0
Total other administrative expenses	￦	2,480	￦	2,670			190			7.7
Total selling and administrative expenses	￦	2,799	￦	2,885			86			3.1

(1) N.A. means not applicable.

Our selling and administrative expenses increased by 3.1%, or Won 86 billion, from Won 2,799 billion in 2022 to Won 2,885 billion in 2023 primarily due to increases in wages and

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salaries, other employee benefits, rental expenses and depreciation expenses, the impact of which was partially offset by recognition of reversal of impairment loss on trade accounts and notes receivable as well as decreases in freight and custody expenses. Such factors were principally attributable to the following:

• Our wages and salaries increased by 7.5%, or Won 81 billion, from Won 1,076 billion in 2022 to Won 1,156 billion in 2023 primarily due to increases in bonus payments and wage levels.

• Our other employee benefits increased by 18.4%, or Won 43 billion, from Won 231 billion in 2022 to Won 273 billion in 2023 primarily due to an expansion of our employee welfare program.

• Our rental expenses increased by 31.3%, or Won 12 billion, from Won 37 billion in 2022 to Won 48 billion in 2023 primarily due to an increase in our leased properties reflecting growth in our business areas.

• Depreciation expenses increased by 7.5%, or Won 11 billion, from Won 149 billion in 2022 to Won 160 billion in 2023 primarily reflecting an increase in depreciable assets.

• We recognized impairment loss on trade accounts and notes receivable of Won 25 billion in 2022 compared to reversal of impairment loss on trade accounts and notes receivable of Won 18 billion in 2023. In 2022, we recognized such impairment loss primarily related to trading activities of POSCO International. In 2023, we recognized reversal of a substantial portion of such impairment loss.

• Our freight and custody expenses decreased by 28.3%, or Won 22 billion, from Won 77 billion in 2022 to Won 56 billion in 2023 primarily due to a general decrease in freight unit shipping prices.

Other Operating Income and Expenses

The following table presents our impairment loss on other receivables and changes therein for 2022 and 2023.

					Changes
	For the Year Ended December 31,				2022 versus 2023
	2022		2023		Amount		%
	(In billions of Won)
Impairment loss on other receivables	￦	10	￦	284	￦	274		2,787.9

Our impairment loss on other receivables increased significantly by Won 274 billion, from Won 10 billion in 2022 to Won 284 billion in 2023. In 2022, our impairment loss on other receivables of Won 10 billion related primarily to projects of POSCO E&C and its subsidiary in Vietnam and POSCO DX. In 2023, our impairment loss on other receivables of Won 284 billion related primarily to projects of FQM Australia Nickel. 

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The following table presents a breakdown of our other operating income and changes therein for 2022 and 2023.

					Changes
	For the Year Ended December 31,				2022 versus 2023
	2022		2023		Amount			%
	(In billions of Won)
Gain on disposal of assets held for sale	￦	55	￦	1	￦	(54	)		(97.6	)
Gain on disposal of investments in subsidiaries, associates and joint ventures		14		197		183			1,317.5
Gain on disposal of property, plant and equipment		19		9		(9	)		(49.3	)
Gain on valuation of firm commitment		182		11		(170	)		(93.7	)
Reversal of other provisions		5		9		3			63.5
Premium income		238		13		(224	)		(94.5	)
Gain on bargain purchases		—		41		41			N.A.	(1)
Gain on disposal of emission rights		5		26		21			401.8
Miscellaneous income		64		78		14			21.3
Others		10		8		(2	)		(20.3	)
Total other operating income	￦	592	￦	394		(198	)		(33.4	)

(1) N.A. means not applicable.

Our other operating income decreased by 33.4%, or Won 198 billion, from Won 592 billion in 2022 to Won 394 billion in 2023 primarily due to decreases in premium income and gain on valuation of firm commitment, the impact of which was partially offset by an increase in gain on disposal of investments in subsidiaries, associates and joint ventures. Such factors were principally attributable to the following:

• Our premium income decreased by 94.5%, or Won 224 billion, from Won 238 billion in 2022 to Won 13 billion in 2023 primarily due to significant insurance payments received in relation to damages caused by Typhoon Hinnamnor in September 2022 compared to no such payments in 2023.

• Our gain on valuation of firm commitment decreased by 93.7%, or Won 170 billion, from Won 182 billion in 2022 to Won 11 billion in 2023 primarily due to a decrease in firm commitment contracts entered into by POSCO International.

• Our gain on disposal of investments in subsidiaries, associates and joint ventures increased significantly by Won 183 billion, from Won 14 billion in 2022 to Won 197 billion in 2023. In 2022, such gain related primarily to sales of certain steel-related subsidiaries and associates. In 2023, such gain related primarily to our recognition of Won 185 billion of gain on disposal of investments in associates related to reclassification of QSONE Co., Ltd. as a consolidated subsidiary following our acquisition of the remaining 50% of its shares, which had been previously classified as an investment in associates.

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The following table presents a breakdown of our other operating expenses and changes therein for 2022 and 2023.

					Changes
	For the Year Ended December 31,				2022 versus 2023
	2022		2023		Amount			%
	(In billions of Won)
Loss on disposal of assets held for sale	￦	4	￦	103	￦	99			2,507.6
Loss on disposals of investments in subsidiaries, associates and joint ventures		12		19		6			52.0
Loss on disposals of property, plant and equipment		111		126		15			13.3
Impairment loss on property, plant and equipment		213		276		63			29.4
Impairment loss on intangible assets		371		130		(241	)		(65.0	)
Loss on valuation of firm commitment		156		47		(109	)		(69.6	)
Idle tangible asset expenses		18		4		(14	)		(79.6	)
Increase to provisions		89		38		(50	)		(56.8	)
Donations		81		67		(13	)		(16.3	)
Miscellaneous losses		64		93		29			45.5
Others		5		1		(4	)		(84.4	)
Total other operating expenses	￦	1,124	￦	904		(219	)		(19.5	)

Our other operating expenses decreased by 19.5%, or Won 219 billion, Won 1,124 billion in 2022 to Won 904 billion in 2023, primarily due to decreases in impairment loss on intangible assets and loss on valuation of firm commitment, the impact of which was partially offset by increases in loss on disposal of assets held for sale and impairment loss on property, plant and equipment. Such factors were principally attributable to the following:

• Our impairment loss on intangible assets decreased by 65.0%, or Won 241 billion, from Won 371 billion in 2022 to Won 130 billion in 2023. In 2022, we recognized impairment loss on goodwill of Won 369 billion, Won 338 billion of which related to the recoverable amount of POSCO International. In 2023, POSCO Canada Ltd. recognized impairment loss on intellectual property rights of Won 89 billion related to its investment-in-kind of the assets and liabilities of Greenhills Mine Unincorporated Joint Venture to a new partnership established by Teck Coal Partnership.

• Our loss on valuation of firm commitment decreased by 69.6%, or Won 109 billion, from Won 156 billion in 2022 to Won 47 billion in 2023 primarily reflecting relatively more stable market prices of key raw materials under our firm commitment contracts in 2023 compared to 2022.

• Our loss on disposal of assets held for sale increased significantly by Won 99 billion, from Won 4 billion in 2022 to Won 103 billion in 2023 primarily due to our disposal of CSP — Compania Siderurgica do Pecem in 2023.

• Our impairment loss on property, plant and equipment increased by 29.4%, or Won 63 billion, from Won 213 billion in 2022 to Won 276 billion in 2023. In 2022, we recognized impairment loss of Won 207 billion related to assets damaged from flooding caused by Typhoon Hinnamnor in September 2022. In 2023, we recognized impairment loss of Won 276 billion primarily related to termination of operations of certain lithium production facilities located in Gwangyang and Argentina.

Operating Profit

Due to the factors described above, our operating profit decreased by 36.9%, or Won 1,604 billion, from Won 4,342 billion in 2022 to Won 2,738 billion in 2023. Our operating margin decreased from 5.1% in 2022 to 3.6% in 2023.

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Share of Profit of Equity-Accounted Investees

Our share of profit of equity-accounted investees decreased by 60.1%, or Won 407 billion, from Won 676 billion in 2022 to Won 270 billion in 2023.

In 2022, we recognized a net gain from our proportionate share of equity-accounted investees of Won 676 billion primarily due to our share of gains of Won 273 billion from Roy Hill Holdings Pty Ltd., Won 146 billion from EQP POSCO Global No. 1 Natural Resources Private Equity Fund, Won 50 billion from South-East Asia Gas Pipeline Company Ltd., Won 48 billion from KOBRASCO, Won 45 billion from AES Mong Duong Power Company Limited and Won 42 billion from Nickel Mining Company SAS, the aggregate impact of which was partially offset by our share of loss of Won 90 billion of CSP — Compania Siderurgica do Pecem. See Note 11 to the Consolidated Financial Statements.

In 2023, we recognized a net gain from our proportionate share of equity-accounted investees of Won 270 billion primarily due to our share of gains of Won 292 billion from Roy Hill Holdings Pty Ltd., Won 50 billion from South-East Asia Gas Pipeline Company Ltd., Won 39 billion from AES Mong Duong Power Company Limited and Won 35 billion from POSCO-NPS Niobium LLC, the aggregate impact of which was partially offset by our share of loss of Won 112 billion of FQM Australia Holdings Pty Ltd. and Won 82 billion of SNNC. See Note 11 to the Consolidated Financial Statements.

Finance Income and Finance Costs

The following table presents a breakdown of our finance income and costs and changes therein for 2022 and 2023.

					Changes
	For the Year Ended December 31,				2022 versus 2023
	2022		2023		Amount			%
	(In billions of Won)
Interest income	￦	247	￦	502	￦	255			103.3
Dividend income		39		50		11			28.2
Gain on foreign currency transactions		2,284		1,661		(623	)		(27.3	)
Gain on foreign currency translations		704		293		(411	)		(58.4	)
Gain on derivatives transactions		840		333		(507	)		(60.3	)
Gain on valuations of derivatives		263		201		(62	)		(23.5	)
Gain on disposals of financial assets at fair value through profit or loss		256		204		(52	)		(20.3	)
Gain on valuations of financial assets at fair value through profit or loss		98		572		474			483.6
Gain on valuations of financial liabilities at fair value through profit or loss		86		—		(86	)		(100.0	)
Others		17		15		(2	)		(11.8	)
Total finance income	￦	4,834	￦	3,831		(1,003	)		(20.8	)
Interest expenses	￦	607	￦	1,001		394			64.9
Loss on foreign currency transactions		2,506		1,595		(911	)		(36.3	)
Loss on foreign currency translations		969		706		(263	)		(27.4	)
Loss on derivatives transactions		690		320		(370	)		(53.6	)
Loss on valuations of derivatives		193		77		(116	)		(60.1	)
Loss on disposal of trade accounts and notes receivable		64		85		21			32.8
Loss on disposal of financial assets at fair value through profit or loss		18		13		(5	)		(27.8	)
Loss on valuations of financial assets at fair value through profit or loss		698		51		(647	)		(92.7	)
Loss on valuations of financial liabilities at fair value through profit or loss		—		306		306			N.A.	(1)
Others		58		48		(10	)		(17.2	)
Total finance costs	￦	5,804	￦	4,203		(1,601	)		(27.6	)

(1) N.A. means not applicable.

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We recognized net loss on valuation of financial assets at fair value through profit or loss of Won 600 billion in 2022 compared to net gain on valuation of financial assets at fair value through profit or loss of Won 521 billion in 2023. In 2022, we recognized such net loss primarily due to a temporary increase in volatility of the money markets in Korea in 2022 that resulted in a decrease in the valuation of our short-term financial assets. In 2023, we recognized such net gain as interest rates stabilized.

Our interest income increased by 103.3%, or Won 502 billion, from Won 247 billion in 2022 to Won 502 billion in 2023 primarily due to a general increase in interest rates in Korea and abroad as well as an increase in our average balance of interest-earning financial assets.

Our net loss on foreign currency translation increased by 55.2%, or Won 147 billion, from Won 266 billion in 2022 to Won 413 billion in 2023, as the Won depreciated against the U.S. dollar at year-end in 2022 and further depreciated (to a lesser extent) at year-end in 2023. In terms of the Market Average Exchange Rate, the Won depreciated against the U.S. dollar from Won 1,185.5 to US$1.00 as of December 31, 2021 to Won 1,267.3 to US$1.00 as of December 31, 2022, and further depreciated to Won 1,289.4 to US$1.00 as of December 31, 2023. In addition, we recognized net loss on foreign currency transactions of Won 222 billion in 2022 compared to net gain on foreign currency transactions of Won 66 billion in 2023, as the average value of the Won against the U.S. dollar depreciated in 2022 and further depreciated (to a lesser extent) in 2023. The Market Average Exchange Rate, which was Won 1,144.4 to US$1.00 as of December 31, 2021, depreciated during 2022 to an average of Won 1,292.0 to US$1.00 in 2022 and further depreciated during 2023 to an average of Won 1,305.4 to US$1.00 in 2023. Against such fluctuations, our net gain on valuation of derivatives increased by 77.1%, or Won 54 billion, from Won 70 billion in 2022 to Won 124 billion in 2023, and our net gain on transactions of derivatives decreased by 91.4%, or Won 137 billion, from Won 150 billion in 2022 to Won 13 billion in 2023.

Our interest expenses increased by 64.9%, or Won 394 billion, from Won 607 billion in 2022 to Won 1,001 billion in 2023 primarily due to a general increase in interest rates in Korea and abroad as well as an increase in our average balance of interest-bearing financial liabilities.

We recognized net gain on valuation of financial liabilities at fair value through profit or loss of Won 86 billion in 2022 compared to net loss on valuation of financial liabilities at fair value through profit or loss of Won 306 billion in 2023. In 2022, we recognized such net gain as interest rates in Korea steadily increased throughout the year, which in turn resulted in a gain on valuation of financial liabilities. In 2023, we recognized such net loss as interest rates stabilized.

Profit before Income Taxes

Due to the factors described above, our profit before income taxes decreased by 34.9%, or Won 1,412 billion, from Won 4,047 billion in 2022 to Won 2,635 billion in 2023.

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The following table presents our profit and loss by segment, prior to adjusting for goodwill and corporate fair value adjustments, elimination of inter-segment losses (profits), income tax expense and basis difference, and changes therein for 2022 and 2023.

							Changes
	For the Year Ended December 31,						2022 versus 2023
	2022			2023			Amount			%
	(In billions of Won)
Steel Segment	￦	1,712		￦	1,241		￦	(471	)		(27.5	)
Green Infrastructure Business — Trading Segment		716			724			8			1.1
Green Infrastructure Business — Construction Segment		138			183			45			33.0
Green Infrastructure Business — Logistics and Others Segment		103			171			68			66.0
Green Materials and Energy Segment		109			(236	)		(345	)		N.A.	(2)
Others Segment		(1,087	)		827			1,914			N.A.	(2)
Goodwill and corporate fair value adjustments		(69	)		172			241			N.A.	(2)
Elimination of inter-segment losses (profits)		1,938			(1,238	)		(3,176	)		N.A.	(2)
Income tax expense		454			789			335			73.9
Basis difference adjustments (1)		33			0			(33	)		(99.2	)
Profit before income taxes	￦	4,047		￦	2,635			(1,412	)		(34.9	)

(1) Basis difference adjustments are related to the difference in recognizing revenue and expenses of the Construction Segment in connection with the development and sale of certain residential real estate between the report reviewed by the chief executive officer and the consolidated financial statements. See Notes 3 and 41 to the Consolidated Financial Statements.

(2) N.A. means not applicable.

Income Tax Expense

Our income tax expense increased by 71.0%, or Won 328 billion, from Won 462 billion in 2022 to Won 789 billion in 2023, despite a decrease in profit before income tax. Our effective tax rate increased from 11.4% in 2022 to 30.0% in 2023. See Note 36 to the Consolidated Financial Statements.

In 2022, our effective tax rate of 11.4% was lower than the statutory rate of 26.4% primarily due to: (i) an increase in income tax benefit related to investments in subsidiaries, associates and joint ventures from Won 112 billion in 2021 to Won 413 billion in 2022 (that resulted in a decrease in effective tax rate of 9.0%) in connection with recognition of deferred tax assets that were previously not recognized due to disposal of certain subsidiaries and associates and (ii) the effect of tax rate change of Won 181 billion in 2022 (that resulted in a decrease in effective tax rate of 4.5%) due to a revision of tax law. In 2023, our effective tax rate of 30.0% was higher than the statutory rate of 26.4% primarily due to Won 151 billion of income tax expense resulting from tax audits of us and our subsidiaries.

Profit

Due to the factors described above, our profit decreased by 48.5%, or Won 1,740 billion, from Won 3,586 billion in 2022 to Won 1,846 billion in 2023. Our profit margin decreased from 4.2% in 2022 to 2.4% in 2023.

Operating Results — 2021 Compared to 2022

For a discussion of our operating results of 2021 compared to 2022, please see “Item 5.A. Operating Results — Operating Results — 2021 Compared to 2022” of our Form 20-F for the fiscal year ended December 31, 2022, which we filed with the Securities and Exchange Commission on April 28, 2023.

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Item 5.B.  Liquidity and Capital Resources

The following table sets forth the summary of our cash flows for the periods indicated.

	For the Year Ended December 31,
	2021			2022			2023
	(In billions of Won)
Net cash provided by operating activities	￦	6,259		￦	6,187		￦	6,168
Net cash used in investing activities		(5,584	)		(4,220	)		(7,388	)
Net cash provided by (used in) financing activities		(769	)		1,319			(179	)
Effect of exchange rate fluctuation on cash held		113			(9	)		17
Net increase in cash and cash equivalents		20			3,278			(1,382	)
Cash and cash equivalents at beginning of the period		4,756			4,776			8,053
Cash and cash equivalents at end of the period		4,776			8,053			6,671

Capital Requirements

Historically, uses of cash consisted principally of purchases of property, plant and equipment and other assets and repayments of outstanding debt and payments of dividends. From time to time, we also use cash for repurchases of our shares as well as investments related to our diversification efforts.

Net cash used in investing activities was Won 5,584 billion in 2021, Won 4,220 billion in 2022 and Won 7,388 billion in 2023. Our cash outflows for acquisition of property, plant and equipment were Won 3,069 billion in 2021, Won 4,928 billion in 2022 and Won 6,733 billion in 2023. We currently expect our cash outflows for acquisition of property, plant and equipment and investments in joint ventures and associates to be approximately Won 10.8 trillion in 2024, which we may adjust on an on-going basis subject to market demand for our products, the production outlook of the global steel industry and global economic conditions in general. We may delay or not implement some of our current capital expenditure plans based on our assessment of such market conditions. We had net acquisitions of short-term financial instruments of Won 1,461 billion in 2021, and we had net proceeds from disposal of short-term financial instruments of Won 2,213 billion in 2022 and Won 344 billion in 2023.

In our financing activities, we used cash of Won 3,720 billion in 2021, Won 4,138 billion in 2022 and Won 4,461 billion in 2023 for repayments of borrowings. We used cash of Won 1,311 billion in 2021, Won 1,218 billion in 2022 and Won 815 billion in 2023 for payments of cash dividends. In 2023, we also used Won 340 billion for repayment of hybrid bonds. In April 2020, we entered into a trust contract to engage in repurchases of our shares until April 2021 for up to Won 1.0 trillion. The trust contract was terminated in April 2021, and we used cash of Won 117 billion in the first quarter of 2021 for acquisition of treasury shares prior to such termination. We did not acquire any treasury shares in 2022 and 2023.

In recent years, we have also selectively considered various opportunities to acquire or invest in companies that may complement our businesses, as well as invest in overseas resources development projects. We may require additional capital for such acquisitions or entering into other strategic relationships. Other than capital required for such activities, we anticipate that capital expenditures, repayments of outstanding debt and payments of cash dividends will represent the most significant uses of funds for the next several years.

Payments of contractual obligations and commitments will also require considerable resources. In our ordinary course of business, we routinely enter into commercial commitments for various aspects of our operations, including raw materials purchase obligations and long-term shipping service contracts, as well as issue guarantees for indebtedness of our related parties and others. For our contingent liabilities on outstanding guarantees provided by us, see Note 39 to the Consolidated Financial Statements. Our purchase obligations include supply contracts to purchase iron ore, coal,

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nickel, LNG and other raw materials. These contracts generally have terms of one to ten years and the long-term contracts provide for periodic price adjustments according to the market prices. As of December 31, 2023, 43 million tons of iron ore and 15 million tons of coal remained to be purchased under long-term contracts.

In addition, POSCO entered into an agreement with Tangguh LNG Consortium in Indonesia to purchase 550 thousand tons of LNG annually for 20 years commencing in August 2005. In order to compensate for a decrease in purchase volume in 2023, POSCO has agreed to purchase 190 thousand tons of LNG after completion of such 20-year term, from September 2025 to December 2026. The purchase price under the agreement with Tangguh LNG Consortium is variable based on the monthly standard oil price (as represented by the Japan Customs cleared Crude Price), subject to a ceiling.

POSCO International Singapore Pte Ltd. (“POSCO International Singapore”) entered into a purchase agreement with Cheniere Marketing, LLC to purchase 370 thousand tons of LNG annually for 15 years commencing in November 2026, with an option to extend the agreement for five years. The purchase price is subject to adjustments based on the U.S. Henry Hub Natural Gas Spot Price. POSCO entered into an agreement to purchase such LNG from POSCO International Singapore.

Capital Resources

We have traditionally met our working capital and other capital requirements principally from cash provided by operations, while raising the remainder of our requirements primarily through long-term debt and short-term borrowings. We expect that these sources will continue to be our principal sources of cash in the future. From time to time, we may also generate cash through issuance of hybrid bonds and sale of treasury shares and our holdings in available-for-sale securities.

Our net cash provided by operating activities decreased by 1.2%, or Won 72 billion, from Won 6,259 billion in 2021 to Won 6,187 billion in 2022. Our profit decreased from Won 7,176 billion in 2021 to Won 3,586 billion in 2022. In addition, our cash used for income tax payments increased from Won 589 billion in 2021 to Won 2,774 billion in 2022. However, our cash outflow related to build up of our inventories decreased from Won 6,347 billion in 2021 to Won 195 billion in 2022, which in turn positively impacted our net cash provided by operating activities and significantly offset the negative impacts on cash flows described above.

Our net cash provided by operating activities decreased by 0.3%, or Won 19 billion, from Won 6,187 billion in 2022 to Won 6,168 billion in 2023. Our profit decreased from Won 3,586 billion in 2022 to Won 1,846 billion in 2023. In addition, we recognized (i) cash inflow related to decrease in trade accounts and notes receivable of Won 532 billion in 2022 compared to cash outflow related to increase in trade accounts and notes receivable of Won 983 billion in 2023 and (ii) cash inflow related to increase in other payables of Won 612 billion in 2022 compared to cash outflow related to decrease in other payables of Won 302 billion in 2023. However, our cash used for income tax payments decreased significantly from Won 2,774 billion in 2022 to Won 727 billion in 2023, and we recognized cash outflow related to build up of our inventories of Won 195 billion in 2022 compared to cash inflow related to reduction of our inventories of Won 1,313 billion in 2023, which in turn positively impacted our net cash provided by operating activities and significantly offset the negative impacts on cash flows described above.

We had net proceeds from borrowings, after adjusting for repayments of borrowings, of Won 639 billion in 2021, Won 416 billion in 2022 and Won 3,356 billion in 2023. We had net repayment of short-term borrowings, after deducting for proceeds of short-term borrowings, of Won 330 billion in 2021, net proceeds from short-term borrowings, after adjusting for repayment of short-term borrowings, of Won 1,765 billion in 2022 and net repayment of short-term borrowings, after adjusting for proceeds of short-term borrowings, of Won 2,524 billion in 2023. Long-term borrowings, excluding current installments, were Won 12,911 billion as of December 31, 2021, Won 12,390 billion as of

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December 31, 2022 and Won 15,011 billion as of December 31, 2023. Total short-term borrowings and current installments of long-term borrowings were Won 8,830 billion as of December 31, 2021, Won 11,916 billion as of December 31, 2022 and Won 10,959 billion as of December 31, 2023.

We periodically increase our short-term borrowings and adjust our long-term borrowings depending on changes in our capital requirements. For the maturity profile of our borrowings, their currency denomination and interest rates, see Notes 17 and 23 to the Consolidated Financial Statements. We continually take into consideration various factors when meeting our financial requirements, including financial market conditions, specific funding needs at a given time, and hedging requirements to address our market risks such as exchange rate risk and interest rate risk. From time to time, we also generate cash from the sale of our treasury shares. Our net borrowings-to-equity ratio, which is calculated by deducting cash and cash equivalents from total borrowings and dividing the net amount by our total equity, was 31.01% as of December 31, 2021, 27.93% as of December 31, 2022 and 32.38% as of December 31, 2023.

We believe that we have sufficient working capital for our current requirements and that we have a variety of alternatives available to us to satisfy our liquidity requirements to the extent that they are not met by funds generated by operations, including the issuance of debt and equity securities and bank borrowings denominated in Won and various foreign currencies. However, our ability to rely on some of these alternatives could be affected by factors such as the liquidity of the Korean and the global financial markets, prevailing interest rates, our credit rating and the Government’s policies regarding Won currency and foreign currency borrowings. For a discussion of our use of financial instruments for hedging purposes, see “Item 11. Quantitative and Qualitative Disclosures about Market Risk.

Liquidity

We had working capital (current assets minus current liabilities) of Won 26,148 billion as of December 31, 2021, Won 24,808 billion as of December 31, 2022 and Won 24,264 billion as of December 31, 2023. Our holdings of cash and cash equivalents (which do not include cash and cash equivalents categorized under “assets held for sale”) were Won 4,775 billion as of December 31, 2021, Won 8,053 billion as of December 31, 2022 and Won 6,671 billion as of December 31, 2023. As of December 31, 2023, we held approximately 60% of such cash and cash equivalents denominated in Won and the remainder denominated in foreign currencies. Our holdings of other receivables and other short-term financial assets were Won 15,552 billion as of December 31, 2021, Won 13,023 billion as of December 31, 2022 and Won 13,351 billion as of December 31, 2023. As of December 31, 2023, approximately 18% of our cash and cash equivalents, other receivables and other short-term financial assets were held outside of Korea, which we expect to use in our operations abroad, including capital expenditure activities. In the event that such assets are needed for our operations in Korea, such amounts are typically not restricted under local laws from being used in Korea. In addition, we believe that there are no material tax implications in the event our foreign subsidiaries elect to grant cash dividends to us. POSCO had total available credit lines of Won 4,000 billion as of December 31, 2023, Won 34 billion of which was used as of such date. We have not had, and do not believe that we will have, difficulty gaining access to short-term financing sufficient to meet our current requirements.

Our liquidity is affected by exchange rate fluctuations. See “— Overview — Exchange Rate Fluctuations.”

Capital Expenditures and Capacity Expansion

Our cash outflows for acquisition of property, plant and equipment were Won 3,069 billion in 2021, Won 4,928 billion in 2022 and Won 6,733 billion in 2023. We currently expect our cash outflows for acquisition of property, plant and equipment and investments in joint ventures and associates to be approximately Won 10.8 trillion in 2024, which we may adjust on an on-going basis subject to market

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demand for our products, the production outlook of the global steel industry and global economic conditions in general. We may delay or not implement some of our current capital expenditure plans based on our assessment of such market conditions.

Our current plan for capital investment in production facilities emphasizes capacity rationalization, increased production of higher value-added products, improvements in the efficiency of older facilities in order to reduce operating costs and construction and expansion of facilities related to our non-steel businesses. The following table sets out the major items of our capital expenditures as of December 31, 2023:

Project	Expected Completion Date	Total Cost of Project		Estimated Remaining Cost of Completion as of December 31, 2023
		(In billions of Won)
Sealing of raw material yards and other rationalization projects	August 2027	￦	3,390	￦	2,488
Construction of salt water lithium commercialization plant — stages one and two	June 2025		2,547		1,321
Construction of no. 6 coke plant at Pohang Works	August 2025		1,538		176
Construction of lithium ore commercialization plant	September 2024		1,098		249
Construction of cathode material plant in Canada — stage two	May 2027		1,001		932
Construction of cathode material plant in Canada — stage one	March 2025		919		432
Construction of electric steel production facilities at Gwangyang Works	December 2025		909		198
Construction of Gwangyang LNG terminal	July 2026		867		753

Item 5.C.  Research and Development, Patents and Licenses, Etc.

We maintain research and development programs to carry out basic research and applied technology development activities. As of December 31, 2023, POSCO Technical Research Laboratories, which engages in research and development efforts primarily in the areas of advanced steel manufacturing technologies, employed 881 personnel, including 473 researchers. In 2022, we also launched our New Experience of Technology Hub that focuses on research and development relating to (i) artificial intelligence, (ii) raw materials for rechargeable batteries and (iii) hydrogen and other environmentally-friendly energy solutions. As of December 31, 2023, our New Experience of Technology Hub employed 303 personnel, including 157 researchers.

Our technology development department also works closely with the Pohang University of Science & Technology, Korea’s first research-oriented college founded by us in 1986, and the Research Institute of Industrial Science and Technology, Korea’s first private comprehensive research institute founded by us in 1987. We also established POSCO Research Institute (POSRI) in 1994, which engages in research activities and consulting services.

Our research and development program has filed 47,347 industrial rights applications relating to steel-making technology, 11,394 of which were registered as of December 31, 2023, and has successfully applied many of these to the improvement of our manufacturing process. In addition, our research and development program has filed 2,224 industrial rights applications relating to green materials technology, 1,388 of which were registered as of December 31, 2023.    

Item 5.D.  Trend Information

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

Item 5.E.  Critical Accounting Estimates

Our financial statements are prepared in accordance with IFRS as issued by IASB. See Note 2 to the Consolidated Financial Statements for a discussion of our critical accounting estimates.

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Item 6.  Directors, Senior Management and Employees

Item 6.A.  Directors and Senior Management

Board of Directors

Our board of directors has the ultimate responsibility for the management of our business affairs. Our board consists of four Inside Directors and six Outside Directors. Our shareholders elect both the Inside Directors and Outside Directors at a general meeting of shareholders. Candidates for Inside Directors are recommended to shareholders by the board of directors after the board reviews such candidates’ qualifications, and candidates for Outside Directors are recommended to the shareholders by a separate board committee consisting of three Outside Directors and one Inside Director (“Director Candidate Recommendation Committee”) after the committee reviews such candidates’ qualifications. Pursuant to the Korean Commercial Act and our articles of incorporation, any shareholder holding our outstanding shares with voting rights may suggest candidates for Outside Directors to the Director Candidate Recommendation Committee.

Our board of directors maintains the following special committees:

• the ESG Committee;

• the CEO Candidate Pool Management Committee;

• the Director Candidate Recommendation Committee;

• the Evaluation and Compensation Committee;

• the Finance Committee; and

• the Audit Committee.

Our board committees are described in greater detail below under “— Item 6.C. Board Practices.”

Under the Commercial Code and our articles of incorporation, one Chairman should be elected among the Outside Directors and several Representative Directors may be elected among the Inside Directors by our board of directors’ resolution.

Inside Directors

As of March 31, 2024, our Inside Directors are as follows:

Name	Position	Responsibilities and Division	Years as Director		Age		Expiration of Term of Office
Chang, In-Hwa	Chief Executive Officer and Representative Director	—		—		68	March 2027
Jeong, Ki-Seop	Representative Director and President	Chief Strategy Officer, POSCO HOLDINGS INC.		1		62	March 2025
Kim, Jun-Hyung	Senior Executive Vice President	Head of Green Materials and Energy Business Office, POSCO HOLDINGS INC.		—		61	March 2025
Kim, Ki-Soo	Senior Executive Vice President	Head of POSCO N.EX.T Hub and Chief Technology Officer, POSCO HOLDINGS INC.		—		58	March 2025

All Inside Directors are engaged in our business on a full-time basis.

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Outside Directors

Each of our Outside Directors meets the applicable independence standards set forth under the rules of the FSCMA. As of March 31, 2024, our Outside Directors are as follows:

Name	Position	Principal Occupation	Years as Director		Age		Expiration of Term of Office
Yoo, Young-Sook	Chairperson	Former Minister, Ministry of Environment		3		68		March 2027
Kwon, Tae-Kyun	Director	Former Korean Ambassador to the United Arab Emirates		3		68		March 2027
Yoo, Jin-Nyoung	Director	Chief Executive Officer, Angel 6+		2		66		March 2025
Sohn, Sung-Kyu	Director	Professor, Yonsei University School of Business		2		64		March 2025
Kim, Joon-Gi	Director	Professor, Yonsei University Law School		1		58		March 2026
Park, Sung-Wook	Director	Chairman, National Academy of Engineering of Korea		—		66		March 2027

The term of office of the Director elected in March 2024 is up to three years. Each Director’s term expires at the close of the ordinary general meeting of shareholders convened in respect of the fiscal year that is the last one to end during such Director’s tenure.

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Senior Management

In addition to the Inside Directors who are also our executive officers, we have the following executive officers as of April 3, 2024:

Name	Position	Responsibility and Division	Age
Lee, Ju-Tae	Executive Officer	Head of Corporate Strategy Team		60
Yoon, Young-Ju	Executive Officer	Chief of Battery Materials Business Management Team		55
Choi, Tae-Hwan	Executive Officer	Chief of Infrastructure Business Management Team		53
Chun, Sung-Lae	Executive Officer	Head of Carbon Neutral Team		60
Kim, Hee	Executive Officer	Chief of Carbon Neutral Strategy Team		56
Lee, Won-Chul	Executive Officer	Chief of Steel Business Management Team		57
Kim, Seung-Jun	Executive Officer	Head of Finance Investor Relations Team		56
Kim, Young-Kyu	Executive Officer	Chief of Finance Team		56
Han, Young-Ah	Executive Officer	Chief of Investor Relations Team		52
Lee, Sung-Wook	Executive Officer	Head of Corporate Compliance and Ethics Team		59
Shin, Kun-Chul	Executive Officer	Chief of Corporate Audit Team		57
Kim, Kyung-Han	Executive Officer	Head of Communication Team		58
Han, Mi-Hyang	Executive Officer	Chief of Public Relations Team		56
Song, Jong-Chan	Executive Officer	Chief of Business Cooperation Team		57
Lee, Jae-Wan	Executive Officer	Chief of Global Relations Team		56
Lee, Yu-Kyung	Executive Officer	Head of Corporate Management Team		56
Park, Byoung-Jik	Executive Officer	Chief of Top Talents Management Team		55
Lee, Sung-Won	Executive Officer	Head of Lithium Business Team		57
Lee Jae-Young	Executive Officer	Head of Ni & Next Generation Business Team		53
Hwang, Chang-Hwan	Executive Officer	Head of Investment Planning & Engineering Team		55
Um, Kyung-Keun	Executive Officer	Head of POSCO Group Technology Strategy Team		53
Kim, Keun-Hwan	Executive Officer	Head of New Technology Business Team		54
Kim, Yong-Soo	Executive Officer	Head of AI & Robotics Convergence R&D Laboratories		54
Hong, Young-Jun	Executive Officer	Head of LiB Materials R&D Laboratories		58
Kim, Jung-Young	Executive Officer	Head of N.EX.T Hub Construction TF Team		62
Kim, Kyeong-Chan	Executive Officer	President, POSCO-America		55
Kim, Kwang-Bok	Executive Officer	President, POSCO-Argentina		60
Lee, Sang-Ryong	Executive Officer	Head of CP1 Construction Office, POSCO-Argentina		58
Lee, Sang-Min	Executive Officer	Head of CP2 Project Argentina, POSCO-Argentina		59
Oh, Jae-Hoon	Executive Officer	Head of Production & Technology Office, POSCO-Argentina		57
Kim, Sung-Tae	Executive Officer	Head of Corporate Planning Office, POSCO-Argentina		50
Ha, Dae-Ryong	Executive Officer	President, POSCO-Europe		60
Na, Seung-Min	Executive Officer	Dispatch to the World Steel Association, POSCO-Europe		50
Song, Kyung-Hwa	Executive Officer	Director, PT. Nicole Metal Industry		62
Kim, Ji-Yong	Executive Officer	Senior Corporate Advisor		62

Item 6.B. Compensation

Compensation of Directors and Officers

Salaries and bonuses for Inside Directors and salaries for Outside Directors are paid in accordance with standards decided by the board of directors within the limitation of directors remuneration approved by the annual general meeting of shareholders. In addition, executive officers’

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compensation is paid in accordance with standards decided by the board of directors. In 2023, the aggregate compensation paid and accrued to our Directors and executive officers was approximately Won 28.0 billion and the aggregate amount set aside or accrued by us to provide pension and retirement benefits to such persons was Won 5.8 billion.

Among those who received total annual compensation exceeding Won 500 million in 2023, the highest-paid five individuals were as follows:

Name	Position	Total Compensation in 2023
		(In millions of Won)
Choi, Jeong-Woo	Former Chief Executive Officer and Representative Director	￦	3,441
Chon, Jung-Son	Former Representative Director and President		2,413
Chung, Chang-Hwa	Former Senior Executive Vice President		2,387
Yoo, Byeong-Og	Former Senior Executive Vice President; Chief Executive Officer, POSCO Future M		1,430
Oh, Seok-Keun	Former Senior Executive Vice President		1,150

Item 6.C. Board Practices

ESG Committee

The ESG Committee is composed of three Outside Directors, Kwon, Tae-Kyun; Yoo, Young-Sook; and Yoo, Jin-Nyoung; and one Inside Director, Kim, Jun-Hyung. The ESG Committee oversees decisions with respect to our ESG policies, including policies related to environment, climate change, low carbon and governance. It also reviews operational matters of our board of directors and special committees, reviews plans related to safety and health, and manages and monitors ESG activities.

CEO Candidate Pool Management Committee

The CEO Candidate Pool Management Committee is composed of all of our six Outside Directors, Yoo, Young-Sook; Kwon, Tae-Kyun; Yoo, Jin-Nyoung; Sohn, Sung-Kyu; Kim Joon-Gi; and Park, Sung-Wook. The CEO Candidate Pool Management Committee reviews qualifications of the CEO candidates recommended by our board of directors and executive search firm, approves candidate pooling outcomes and talent development program for prospective candidates and assesses the results of prospective candidate development program.

Director Candidate Recommendation Committee

The Director Candidate Recommendation Committee is composed of three Outside Directors, Yoo, Jin-Nyoung; Sohn, Sung-Kyu; and Park, Sung-Wook. The Director Candidate Recommendation Committee reviews the qualifications of potential candidates and proposes nominees to serve on our board of directors as an Outside Director. Any shareholder holding our outstanding shares with voting rights may suggest candidates for Outside Directors to the Director Candidate Recommendation Committee.

Evaluation and Compensation Committee

The Evaluation and Compensation Committee is composed of four Outside Directors, Kim Joon-Gi; Yoo, Young-Sook; Kwon, Tae-Kyun; and Sohn, Sung-Kyu. The Evaluation and Compensation Committee’s primary responsibilities include establishing evaluation procedures and compensation plans for executive officers and taking necessary measures to execute such plans.

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Finance Committee

The Finance Committee is composed of three Outside Directors; Kim Joon-Gi; Kwon, Tae-Kyun; Sohn, Sung-Kyu; and one Inside Director, Jeong, Ki-Seop. This committee is an operational committee that oversees decisions with respect to finance and operational matters, including making assessments with respect to potential capital investments and evaluating prospective capital-raising activities.

Audit Committee

Under Korean law and our articles of incorporation, we are required to have an Audit Committee. The Audit Committee may be composed of three or more directors; all members of the Audit Committee must be Outside Directors. Audit Committee members must also meet the applicable independence criteria set forth under the rules and regulations of the Sarbanes-Oxley Act of 2002. Members of the Audit Committee are elected by the shareholders at the ordinary general meeting of shareholders. We currently have an Audit Committee composed of three Outside Directors. Members of our Audit Committee are Sohn, Sung-Kyu; Yoo, Jin-Nyoung; and Park, Sung-Wook.

The duties of the Audit Committee include:

• engaging independent auditors;

• approving independent audit fees;

• approving audit and non-audit services;

• reviewing annual financial statements;

• reviewing audit results and reports, including management comments and recommendations;

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

• examining improprieties or suspected improprieties.

In addition, in connection with general meetings of stockholders, the committee examines the agenda for, and financial statements and other reports to be submitted by, the board of directors at each general meeting of stockholders. Our internal and external auditors report directly to the Audit Committee. The committee holds regular meetings at least once each quarter, and more frequently as needed.

Item 6.D.  Employees

As of December 31, 2023, we had 44,501 employees, including 43,804 persons employed by our subsidiaries, as reported to the Korea Fair Trade Commission pursuant to its guidelines for such year. Of the total number of employees, approximately 75% are technicians and skilled laborers and 25% are administrative staff. We use subcontractors for maintenance, cleaning and transport activities. We had 38,333 employees as of December 31, 2022 and 36,096 employees as of December 31, 2021, as reported to the Korea Fair Trade Commission pursuant to its guidelines for such years.

We consider our relations with our work force to be satisfactory. We have never experienced a work stoppage or strike. Wages of our employees are among the highest of manufacturing companies in Korea. In addition to a base monthly wage, employees receive periodic bonuses and allowances. Base wages are determined annually following negotiations between the management and the majority labor union. A limited number of our employees are members of the Federation of Korean Metal Workers’ Trade Unions or the Korean Metal Workers’ Union. The Federation of Korean Metal Workers’ Trade Unions currently negotiates the terms of employment with the management.

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In accordance with the National Pension Act of Korea, we contribute an amount equal to 4.5% of an employee’s standard monthly wages, and each employee contributes 4.5% of his or her standard monthly wages, into his or her personal pension account. Our employees, including executive officers as well as non-executive employees, are subject to a pension insurance system, under which we make monthly contributions to the pension accounts of the employees, and upon retirement, such employees are paid from their pension accounts. Prior to 2011, our executive and non-executive employees were subject to a lump-sum severance payment system, under which they were entitled to receive a lump-sum severance payment upon termination of their employment, based on their length of service and salary level at the time of termination. Starting in 2011, in accordance with the Korean Employee Retirement Income Security Act, we replaced such lump-sum severance payment system with our current pension insurance system in the form of either a defined benefit plan or a defined contribution plan. Our employees have the option of choosing either the defined benefit plan or the defined contribution plan. See Note 21 to the Consolidated Financial Statements. Lump-sum severance amounts previously accrued prior to our adoption of the current pension insurance system continue to remain payable. We also provide a wide range of fringe benefits to our employees, including housing, housing loans, company-provided hospitals and schools, a company-sponsored pension program, an employee welfare fund, industrial disaster insurance and cultural and athletic facilities.

As of December 31, 2023, our employees owned, through our employee stock ownership association, approximately 1.62% of our common stock in their employee accounts.

Item 6.E. Share Ownership

The persons who are currently our Directors or executive officers held, as a group, 10,840 common shares as of April 10, 2024. The table below shows the ownership of our common shares by our Directors and executive officers.

Name	Number of Common Shares
Chang, In-Hwa		630
Jeong, Ki-Seop		410
Kim, Jun-Hyung		149
Kim, Ki-Soo		569
Lee, Ju-Tae		1,527
Lee, Sung-Wook		402
Chun, Sung-Lae		410
Ha, Dae-Ryong		485
Kim, Kyung-Han		169
Kim, Kwang-Bok		155
Choi, Tae-Hwan		28
Kim, Hee		564
Lee, Won-Chul		434
Kim, Seung-Jun		131
Han, young-Ah		587
Lee, Jae-Wan		132
Shin, Kun-Chul		170
Lee, Yu-Kyung		596
Lee, Sung-Won		24
Lee Jae-Young		335
Kim, Keun-Hwan		383
Kim, Jung-Young		169
Kim, Kyeong-Chan		131
Lee, Sang-Min		221
Lee, Sang-Ryong		50
Kim, Sung-Tae		43
Na, Seung-Min		10
Song, Kyung-Hwa		297
Kim, Ji-Yong		1,629
Total		10,840

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Item 6.F.  Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation

Not applicable

Item 7.  Major Shareholders and Related Party Transactions

Item 7.A.  Major Shareholders

The following table sets forth certain information relating to the shareholders of our common stock issued as of December 31, 2023.

Shareholders	Number of Shares Owned		Percentage
National Pension Service		5,393,999		6.38	%
BlackRock Fund Advisors (1) (2) (3)		4,206,522		4.97
Nippon Steel Corporation (1)		2,894,712		3.42
Pohang University of Science and Technology		1,981,047		2.34
The Government of Singapore (4)		1,759,571		2.08
Treasury shares		8,695,023		10.28
Others		59,640,356		70.53
Total issued shares of common stock		84,571,230		100.00	%

(1) Includes ADRs.

(2) Includes shares held by subsidiaries and others.

(3) The number of shares owned by the shareholder is based on the status report of large-scale shareholders filed with the Korea Exchange.

(4) Includes shares held by GIC Private Limited.

As of December 31, 2023, there were 5,107,574 shares of common stock outstanding in the form of ADRs, representing 6.04% of the total issued shares of common stock.

Item 7.B. Related Party Transactions

We have issued guarantees in favor of affiliated and related companies, and we have also engaged in various transactions with our subsidiaries and affiliated companies. See Notes 38 and 39 to the Consolidated Financial Statements.

As of December 31, 2021, 2022 and 2023, we had no loans outstanding to our executive officers and Directors.

Item 7.C. Interests of Experts and Counsel

Not applicable

Item 8.  Financial Information

Item 8.A. Consolidated Statements and Other Financial Information

See “Item 18. Financial Statements” and pages F 1 through F-141.

Legal Proceedings

Trade Remedy Proceedings

As a steel producer with global sales and operations, we are involved in trade remedy proceedings in markets worldwide, including in the United States. We proactively participate in and

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plan for such proceedings to minimize any adverse effects and associated risks. While there has been an increase in the number of trade cases in recent years, and an increased focus on trade issues by government officials, all such cases have been product and market-specific, and thus have been limited in scope relative to our global sales and operations. We continue to carefully monitor developments with respect to trade remedy policy in all markets in which we participate and, where necessary, vigorously defend our rights through litigation before tribunals such as the U.S. Court of International Trade. Our products that are subject to anti-dumping, safeguard or countervailing duty proceedings in the aggregate currently do not account for a material portion of our total sales, and such proceedings have not had a material adverse impact on our business and operations in recent years. However, there can be no assurance that increases in, or new impositions of, anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs on our exports of products abroad may not have a material adverse impact on our exports in the future. See “Item 4. Information on the Company — Item 4.B. Business Overview — Markets — Exports.”

Loans to Daewoo Motors India Guaranteed by Predecessor of POSCO International

In May 2002, Industrial Development Bank of India brought a suit against Daewoo International Corporation (currently, POSCO International), Daewoo Motors India Ltd., Daewoo Corporation and Daewoo Construction & Engineering Co., Ltd. in the India Delhi Mumbai Court, regarding its loans to Daewoo Motors India Ltd. guaranteed by Daewoo Co., Ltd. (predecessor of POSCO International). The total claim amount is 4.46 billion Indian Rupees, and POSCO International recognized provision of Won 4.2 billion relating to its portion of the guarantee alleged by Industrial Development Bank of India. Daewoo International Corporation challenged the jurisdiction of the court in 2003. The outcome of such lawsuits remains uncertain and POSCO International’s provision is classified as a non-current liability as of December 31, 2023.

Legal Proceedings Related to the Songdo Project

In March 2019, affiliates of Gale Investments Company, LLC, a former joint venture partner of POSCO E&C in the urban planning and development project in Songdo International City in Incheon (the “Songdo Project”), filed a claim in the United States District Court for the Southern District of New York and filed a request for arbitration pursuant to the rules of the International Court of Arbitration of the International Chamber of Commerce (“ICA”) against POSCO E&C, claiming POSCO E&C wrongfully seized and sold certain properties of the claimants. In December 2013, POSCO E&C and one of the claimants entered into a series of loan facility agreements with several lenders to finance the Songdo Project, with their respective stakes in the joint venture pledged as collateral. The loan facility agreements entitled POSCO E&C to certain subrogation rights related to guaranteeing the obligations of the claimant to repay the principal amounts of the loans. In 2017, upon default of certain series of the loans, POSCO E&C exercised such subrogation rights, claimed the pledged assets of the claimant and sold such assets. The claimants claimed damages of approximately US$2.3 billion allegedly resulting from POSCO E&C’s purported wrongful seizure and sale of such properties as well as alleged overcharges made by POSCO E&C while serving as the construction contractor for the Songdo Project. The claim in the United States District Court for the Southern District of New York was dismissed in November 2020, and the ICA dismissed all claims against POSCO E&C in October 2022.

In September 2023, however, one of the claimants filed a claim against POSCO E&C in the Seoul Central District Court, claiming that it is entitled to damages of Won 20 billion. The basis of the claim is substantially similar to those made in the ICA arbitration proceeding described above. POSCO E&C intends to vigorously defend against such lawsuit.

Legal Proceedings Related to Contract-based Workers Dispatched by Third-party Contractors

For a description of our legal proceedings related to contract-based workers dispatched by third-party contractors, see “Item 3.D. Risk Factors — Labor laws and a recent Supreme Court decision on

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contract-based workers dispatched by third-party contractors could restrict flexibility in our labor management and result in an increase in our labor-related costs.”

Dividends

The amount of dividends paid on our common stock is subject to approval at the annual general meeting of shareholders, which is typically held in February or March of the following year. In addition to our annual dividends, our board of directors is authorized to declare and distribute quarterly dividends under our articles of incorporation. If we decide to pay quarterly dividends, our articles of incorporation authorize us to pay them in cash to the shareholders of record as of the end of March, June and September of the relevant fiscal year. We may pay cash dividends out of retained earnings that have not been appropriated to statutory reserves.

The table below sets out the annual dividends declared on the outstanding common stock to shareholders of record on December 31 of the years indicated and the interim dividends (including quarterly dividends), declared on the outstanding common stock to applicable shareholders of record of the years indicated. A total of 84,571,230 shares of common stock were issued as of December 31, 2023. Of these shares and as of such date, 75,876,207 shares were outstanding and 8,695,023 shares were held by us in treasury. The annual dividends set out for each of the years below were paid in the immediately following year.

Year	Annual Dividend per Common Stock to Public		Interim Dividend per Common Stock		Average Total Dividend per Common Stock
	(In Won)
2019		4,000		6,000		10,000
2020		4,500		3,500		8,000
2021		5,000		12,000		17,000
2022		2,000		10,000		12,000
2023		2,500		7,500		10,000

Owners of the ADSs are entitled to receive any dividends payable in respect of the underlying shares of common stock.

Historically, we have paid to holders of record of our common stock an annual dividend. However, we can give no assurance that we will continue to declare and pay any dividends in the future.

Item 8.B. Significant Changes

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our Consolidated Financial Statements included in this annual report.

Item 9. The Offer and Listing

Item 9.A. Offer and Listing Details

Notes

Not applicable

Common Stock

The principal trading market for our common stock is the KRX KOSPI Market. Our common stock, which is in registered form and has a par value of Won 5,000 per share, has been listed on the KRX KOSPI Market since June 1988 under the identifying code 005490.

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ADSs

Our common stock is also listed on the New York Stock Exchange in the form of ADSs. The ADSs have been issued by Citibank, N.A. as ADR depositary and are listed on the New York Stock Exchange under the symbol “PKX.” One ADS represents one-fourth of one share of common stock. As of December 31, 2023, there were 5,107,574 shares of common stock outstanding in the form of ADSs, representing 6.04% of the total issued shares of common stock.

Item 9.B. Plan of Distribution

Not applicable

Item 9.C. Markets

See “Item 9.A. Offering and Listing Details.”

Item 9.D. Selling Shareholders

Not applicable

Item 9.E. Dilution

Not applicable

Item 9.F. Expenses of the Issuer

Not applicable

Item 10. Additional Information

Item 10.A. Share Capital

Currently, our authorized share capital is 200,000,000 shares, which consists of shares of common stock, par value Won 5,000 per share (“Common Shares”) and shares of non-voting stock, par value Won 5,000 per share (“Non-Voting Preferred Shares”). Our Non-Voting Preferred Shares have a preferential right to dividend payments. Common Shares and Non-Voting Preferred Shares together are referred to as “Shares.” Under our articles of incorporation, we are authorized to issue Non-Voting Preferred Shares up to the limit prescribed by applicable law, the aggregate of which currently is one-quarter of our total issued and outstanding capital stock. As of December 31, 2023, 84,571,230 Common Shares were issued, of which 8,695,023 shares were held by us in treasury. We have never issued any Non-Voting Preferred Shares. All of the issued and outstanding Common Shares are fully-paid and non-assessable and are in registered form. We issue share certificates in denominations of 1, 5, 10, 50, 100, 500, 1,000 and 10,000 shares.

Item 10.B. Memorandum and Articles of Association

Under Article 2 of our articles of incorporation, the primary purpose of POSCO HOLDINGS INC. is to engage in, among others: controlling the businesses of, and guiding, organizing and improving the management of, subsidiaries by acquiring and owning the shares or ownership interests in subsidiaries (including sub-subsidiaries and companies controlled by such sub-subsidiaries, collectively “subsidiaries”); the management and licensing of intellectual property rights including brands and trademarks; investments related to start-up assistance and new technology; market research, management advisory and consulting services; technology research and commissioned services; matters entrusted by subsidiaries to assist the subsidiaries’ businesses; the supply of gas such as

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hydrogen and resources development business; the leasing of real estate and distribution businesses; and any other activities that are related, directly or indirectly, to the attainment and continuation of the foregoing purposes.

The following provides information relating to our capital stock, including brief summaries of material provisions of our articles of incorporation, the FSCMA, the Commercial Code and related laws, all as currently in effect. The following summaries are subject to, and are qualified in their entirety by reference to, our articles of incorporation and the applicable provisions of the FSCMA and the Commercial Code. We have filed copies of our articles of incorporation and these laws (except for the newly enacted the FSCMA) as exhibits to registration statements under the Securities Act or the Securities Exchange Act previously filed by us.

Board of Directors

Under our articles of incorporation and the Commercial Code, any director who has a special interest in a proposal or a resolution is prohibited from voting on such proposal or resolution at the meeting of the board of directors. Any resolution of the board of directors must be approved by an affirmative majority vote of the directors present at the meeting of the board of directors. The compensation for directors, including severance benefits, is paid within the limitation approved by the annual general meeting of shareholders.

Dividends

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

Holders of Non-Voting Preferred Shares are entitled to receive dividends in priority to the holders of Common Shares in an amount not less than 9% of the par value of the Non-Voting Preferred Shares as determined by the board of directors at the time of their issuance. If the amount available for dividends is less than the aggregate amount of such minimum dividend, we do not have to declare dividends on the Non-Voting Preferred Shares.

We may declare dividends annually at the annual general meeting of shareholders which is held within three months after the end of the fiscal year. We pay the annual dividend shortly after the annual general meeting to the shareholders of record as of the record date as determined by a board resolution. In addition, we may declare quarterly dividends pursuant to a board resolution each fiscal year to the eligible shareholders recorded as of the end of March, June and September of the relevant fiscal year. We may distribute the annual dividend in cash, Shares or other form of property. However, we may distribute the quarterly dividend only in cash. A dividend of Shares must be distributed at par value and may not exceed 100% of the dividends declared each fiscal year in the aggregate; provided, however, that such dividend is required to be limited to half of the aggregate dividend amount if the market price of the Common Shares is lower than the par value of the Common Share. We have no obligation to pay any dividend unclaimed for five years from the payment date.

Under the Commercial Code, we may pay dividends only to the extent the net asset amount in our balance sheets exceeds the sum of the following: (i) our stated capital, (ii) the total amount of our capital surplus reserve and earned surplus reserve accumulated up to the end of the relevant dividend period, (iii) the legal reserve to be set aside for dividends, and (iv) unrealized profits determined in the Presidential Decree to the Commercial Code. We may not pay dividends unless we have set aside as earned surplus reserve an amount equal to at least 10% of the cash portion of dividends ; provided, however, that we may pay dividends if the total amount of the earned surplus reserve is accumulated up to one-half of our stated capital. We may not use legal reserve to pay cash dividends but may transfer amounts from legal reserve to capital stock or use legal reserve to reduce an accumulated deficit.

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Distribution of Free Shares

In addition to paying dividends in Shares out of our retained or current earnings, we may also distribute to our shareholders an amount transferred from our capital surplus or legal reserve to our stated capital in the form of free shares. We must distribute such free shares to all our shareholders in proportion to their existing shareholdings.

Preemptive Rights and Issuance of Additional Shares

We may issue authorized but unissued shares at times and, unless otherwise provided in the Commercial Code or our articles of incorporation, on the terms our board of directors may determine. All our shareholders are generally entitled to subscribe for any newly issued Shares in proportion to their existing shareholdings. We must offer new Shares on uniform terms to all shareholders who have preemptive rights and are listed on our shareholders’ register as of the relevant record date. Under the Commercial Code, we may vary, without shareholders’ approval, the terms of these preemptive rights for different classes of shares. We must give public notice of the preemptive rights regarding new Shares and their transferability at least two weeks before the relevant record date. If certain shareholders do not exercise their preemptive rights, we are required to cancel the proposed issuances of such unsubscribed portion of new Shares, unless otherwise permitted by the FSCMA.

Under our articles of incorporation, we may issue new Shares pursuant to a board resolution to persons other than existing shareholders, who in these circumstances will not have preemptive rights, if the new Shares are:

• offered publicly or to underwriters for underwriting pursuant to the FSCMA and other applicable regulations;

• issued to members of our employee stock ownership association pursuant to the FSCMA and other applicable regulations;

• represented by depositary receipts pursuant to the FSCMA and other applicable regulations;

• issued in a general public offering pursuant to a board resolution in accordance with the FSCMA and other applicable regulations, the amount of which is no more than 10% of the outstanding Shares;

• issued to our creditors pursuant to a debt-equity swap;

• issued to domestic or foreign entities pursuant to a joint venture agreement, strategic coalition or technology license or transfer agreement when deemed necessary for management purposes; or

• issued to domestic or foreign financial institutions when necessary for raising funds in emergency cases.

In addition, we may issue convertible bonds or bonds with warrants, each up to an aggregate principal amount of Won 2 trillion, to persons other than existing shareholders.

Members of our employee stock ownership association, whether or not they are our shareholders, generally have a preemptive right to subscribe for up to 20% of the Shares publicly offered pursuant to the FSCMA. This right is exercisable only to the extent that the total number of Shares so acquired and held by members of our employee stock ownership association does not exceed 20% of the total number of Shares then issued. As of December 31, 2023, our employees owned, through our employee stock ownership association, approximately 1.62% of our common stock in their employee accounts.

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General Meeting of Shareholders

We hold the annual general meeting of shareholders within three months after the end of each fiscal year. The record date of the register of shareholders is December 31 of each year, and such shareholders listed on the register of shareholder as of the record date are entitled to exercise their right at the general meeting of shareholders. Subject to a board resolution, court approval or other applicable laws and regulations, we may hold an extraordinary general meeting of shareholders:

• as necessary;

• at the request of holders of an aggregate of 3% or more of our outstanding Shares;

• at the request of shareholders holding an aggregate of 1.5% or more of our outstanding Shares for at least six months; or

• at the request of our Audit Committee.

Holders of Non-Voting Preferred Shares may request a general meeting of shareholders only after the Non-Voting Preferred Shares become entitled to vote or “enfranchised,” as described under “— Voting Rights” below.

We must give shareholders written notice or electronic document setting out the date, place and agenda of the meeting at least two weeks before the date of the general meeting of shareholders. However, for holders of 1% or less of the total number of issued and outstanding voting Shares, we may give notice by placing at least two public notices in at least two daily newspapers or by notices to be posted on the electronic disclosure database system maintained by the Financial Supervisory Service or the Korea Exchange at least two weeks in advance of the meeting. Currently, we use The Seoul Shinmun published in Seoul, The Maeil Shinmun published in Taegu and The Kwangju Ilbo published in Kwangju for this purpose. Shareholders not on the shareholders’ register as of the record date are not entitled to receive notice of the general meeting of shareholders or attend or vote at the meeting. Holders of Non-Voting Preferred Shares, unless enfranchised, are not entitled to receive notice of general meetings of shareholders, but may attend such meetings. Our general meetings of shareholders are held either in Seoul, Pohang, where our registered main office is located, or at a near-by place if necessary.

Voting Rights

Holders of our Common Shares are entitled to one vote for each Common Share, except that voting rights of Common Shares held by us, or by a corporate shareholder that is 10% (or more) owned by us either directly or indirectly, may not be exercised. The Commercial Code permitted cumulative voting, under which voting method each shareholder would have multiple voting rights corresponding to the number of directors to be appointed in the voting and may exercise all voting rights cumulatively to elect one director.

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

• amending our articles of incorporation;

• removing a director;

• effecting any dissolution, merger or consolidation of us;

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• transferring the whole or any significant part of our business;

• acquisition of all or a part of the business of any other company that may have a material impact on our business;

• issuing any new Shares at a price lower than their par value; or

• approving matters required to be approved at a general meeting of shareholders, which have material effects on our assets, as determined by the board of directors.

In general, holders of Non-Voting Preferred Shares are not entitled to vote on any resolution or receive notice of any general meeting of shareholders. However, in the case of amendments to our articles of incorporation, or any merger or consolidation of us, or in some other cases that affect the rights or interests of the Non-Voting Preferred Shares, approval of the holders of Non-Voting Preferred Shares is required. We may obtain the approval by a resolution of holders of at least two-thirds of the Non-Voting Preferred Shares present or represented at a class meeting of the holders of Non-Voting Preferred Shares, where the affirmative votes also represent at least one-third of our total issued and outstanding Non-Voting Preferred Shares.

Shareholders may exercise their voting rights by proxy. When a shareholder is a corporate entity, such shareholder may give proxies to its officers or directors.

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

Rights of Dissenting Shareholders

In some limited circumstances, including the transfer of the whole or any significant part of our business and our merger or consolidation with another company, dissenting shareholders have the right to require us to purchase their Shares. Only the shareholders who have executed a share purchase agreement evidencing their acquisition of the relevant Shares on or prior to the day immediately following the public disclosure of the board resolutions approving any of the aforementioned transactions have the rights to require us to purchase their Shares. To exercise this right, shareholders, including holders of Non-Voting Preferred Shares, must submit to us a written notice of their intention to dissent before the general meeting of shareholders. Within 20 days after the relevant resolution is passed at a meeting, the dissenting shareholders must request us in writing to purchase their Shares. We are obligated to purchase the Shares of dissenting shareholders within one month after the expiration of the 20-day period. The purchase price for the Shares is required to be determined through negotiation between the dissenting shareholders and us. If we cannot agree on a price through negotiation, the purchase price will be the average of (1) the weighted average of the daily Share prices on the Korea Exchange for the two-month period before the date of the adoption of the relevant board resolution, (2) the weighted average of the daily Share price on the Korea Exchange for the one month period before the date of the adoption of the relevant resolution and (3) the weighted average of the daily Share price on the Korea Exchange for the one week period before such date of the adoption of the relevant resolution. However, the court may determine this price if we or dissenting shareholders do not accept the purchase price. Holders of ADSs will not be able to exercise dissenter’s rights unless they have withdrawn the underlying common stock and become our direct shareholders.

Register of Shareholders and Record Dates

We maintain the register of our shareholders electronically through Kookmin Bank, our transfer agent. Kookmin Bank performs electronic registration of our Shares, manages the electronic register of our shareholders and oversees other matters related to our Shares.

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The record date for annual dividends is determined by a board resolution. For the purpose of determining the shareholders entitled to annual dividends, the register of shareholders may be closed for the period from January 1 to January 15 of each year. Further, for the purpose of determining the shareholders entitled to some other rights pertaining to the Shares, we may, on at least two weeks’ public notice, set a record date and/or close the register of shareholders for not more than three months. The trading of Shares may continue while the register of shareholders is closed. However, pursuant to the Act on Electronic Registration of Stocks, Bonds, etc., which became effective on September 16, 2019, the closure of the register of shareholders is not required in order to determine the shareholders entitled to certain shareholder rights. Instead, we may set the record date by a board resolution and determine the shareholders of record as of such record date without closing the register of shareholders.

Annual Report

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

Under the FSCMA, we must file with the Financial Services Commission and the Korea Exchange (1) an annual business report within 90 days after the end of our fiscal year, (2) a half-year report within 45 days after the end of the first six months of our fiscal year, and (3) quarterly reports within 45 days after the end of the third month and the ninth month of our fiscal year. Copies of these reports are or will be available for public inspection at the electronic disclosure database system maintained by the Financial Supervisory Service and the Korea Exchange.

Transfer of Shares

Under the Commercial Code, the transfer of Shares is effected by electronic registration of such transfer. Once the transfer of Shares is electronically registered, the transferee is entitled to the shareholders’ rights.

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

Our transfer agent is Kookmin Bank, located at 26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul, Korea.

Acquisition of Shares by Us

We may acquire our own Shares, subject to the approval by the general meeting of shareholders. In addition, we may acquire Shares through purchases on the Korea Exchange or through a tender offer or by acquiring the interests in a trust account holding our own Shares through agreements with trust companies and asset management companies. The aggregate purchase price for the Shares may not exceed the total amount available for distribution of dividends available at the end of the preceding fiscal year less the amount of dividends and mandatory reserves required to be set aside for that fiscal year, subject to certain procedural requirements.

In accordance with the Commercial Code, we may resell or transfer any Shares acquired by us to a third party, subject to the approval by the board of directors. In general, corporate entities in which

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we own more than 50% equity interest may not acquire our Shares, unless otherwise permitted by the Korean Commercial Code. Under the FSCMA, we are subject to certain selling restrictions for the Shares acquired by us.

Liquidation Rights

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

Item 10.C.  Material Contracts

None.

Item 10.D.  Exchange Controls

Shares and ADSs

The Foreign Exchange Transaction Act and the Presidential Decree and regulations under that Act and Decree (collectively, “Foreign Exchange Transaction Laws”) and the Foreign Investment Promotion Law regulate investment in Korean securities by non-residents and issuance of securities outside Korea by Korean companies. Under the Foreign Exchange Transaction Laws, non-residents may invest in Korean securities subject to procedural requirements in accordance with these laws. The Financial Services Commission has also adopted, pursuant to its authority under the FSCMA, regulations that restrict investment by foreigners in Korean securities.

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

• if the Government deems it necessary on account of war, armed conflict, natural disaster or grave and sudden and significant changes in domestic or foreign economic circumstances or similar events or circumstances, the Ministry of Economy and Finance may (i) temporarily suspend performance under any or all foreign exchange transactions, in whole or in part, to which the Foreign Exchange Transaction Laws apply (including suspension of payment and receipt of foreign exchange), (ii) impose an obligation to deposit, safe-keep or sell precious metal or any other means of payment to The Bank of Korea, a foreign exchange stabilization fund or certain other governmental agencies or financial companies or (iii) require Korean creditors to collect debts owned by non-Korean debtors and deposit them in their bank accounts in Korea; and

• if the Government concludes that the international balance of payments and international financial markets are experiencing or are likely to experience significant disruption or that the movement of capital between Korea and other countries is likely to adversely affect its currency policies, exchange rate policies or other macroeconomic policies, the Ministry of Economy and Finance may take action to require any person who intends to effect a capital transaction to obtain permission or to require any person who effects a capital transaction to deposit a portion of the means of payment acquired in such transactions with The Bank of Korea, a foreign exchange stabilization fund or certain other governmental agencies or financial companies.

Government Review of Issuance of ADSs

In order for us to issue shares represented by ADSs, we are required to file a prior report of the issuance with our designated foreign exchange bank or the Ministry of Economy and Finance, depending on the issuance amount. No further Korean governmental approval is necessary for the initial offering and issuance of the ADSs.

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Under current Korean laws and regulations, the depositary bank is required to obtain our prior consent for the number of shares to be deposited in any given proposed deposit which exceeds the difference between (1) the aggregate number of shares deposited by us for the issuance of ADSs (including deposits in connection with the initial and all subsequent offerings of ADSs and stock dividends or other distributions related to these ADSs) and (2) the number of shares on deposit with the depositary bank at the time of such proposed deposit. We can give no assurance that we would grant our consent, if our consent is required.

Reporting Requirements for Holders of Substantial Interests

Under the FSCMA, any person whose direct or beneficial ownership of a listed company’s shares with voting rights, whether in the form of shares or ADSs, certificates representing the rights to subscribe for Shares and equity-related debt securities including convertible bonds and bonds with warrants (collectively, “Equity Securities”) together with the Equity Securities beneficially owned by certain related persons or by any person acting in concert with the person accounts for 5% or more of the total outstanding Equity Securities of such listed company is required to report the status and the purpose (whether or not to exert an influence on management control over the issuer) of the holdings to the Financial Services Commission and the Korea Exchange within five business days after reaching the 5% ownership interest. In addition, any change in the purpose of holding such ownership interest or a change in the ownership interest subsequent to the report which equals or exceeds 1% of the total outstanding Equity Securities is required to be reported to the Financial Services Commission and the Korea Exchange within five business days from the date of the change. However, the reporting deadline of such reporting requirement is extended (1) for certain professional investors, as specified by the Presidential Decrees under the FSCMA, (i) to the tenth day of the month immediately following the month of such change in their shareholding if the shares are held with the intention of actively exercising shareholder rights as provided by the applicable laws, but without the intention of exercising management control or (ii) to the tenth day of the month immediately following the quarter of such change in their shareholding if the shares are held for portfolio investment purposes; and (2) for persons other than such professional investors, (i) to the tenth business day of the date of such change in their shareholding if the shares are held with the intention of exercising the statutory rights of shareholders as provided by the applicable laws, but without the intention of exercising management control or (ii) to the tenth day of the month immediately following the month of such change in their shareholding if the shares are held for portfolio investment purposes. Those who report the purpose of shareholding as management control of the issuer are prohibited from exercising their voting rights and acquiring additional shares for five days subsequent to their report under the FSCMA.

Violation of these reporting requirements may subject a person to criminal sanctions such as fines or imprisonment and may result in a loss of voting rights with respect to the ownership of Equity Securities exceeding 5%. Furthermore, the Financial Services Commission may issue an order to dispose of Equity Securities for which the reporting requirements were violated.

In addition to the reporting requirements described above, any person whose direct or beneficial ownership of a listed company’s voting stock accounts for 10% or more of the total issued and outstanding voting stock (a “major stockholder”) must report the status of his or her shareholding to the Securities and Futures Commission and the Korea Exchange within five business days after he or she becomes a major stockholder. In addition, any change in his or her ownership interest subsequent to the report must be reported to the Securities and Futures Commission and the Korea Exchange within five business days. However, the reporting deadline of such reporting requirement is extended (i) to the tenth day of the month immediately following the month of such change in their shareholding for certain professional investors, as specified by the Presidential Decree under the FSCMA, who hold shares with the intention of actively exercising shareholder rights as provided by the applicable laws, but without the intention of exercising management control or (ii) to the tenth day of the month immediately following the quarter of such change in their shareholding if the shares are held for portfolio investment

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purposes. Violation of these reporting requirements may subject a person to criminal sanctions such as fines or imprisonment.

Under the KRX regulations, if a company listed on the KRX KOSPI Market has submitted public disclosure of material matters to a foreign financial investment supervisory authority pursuant to the laws of the foreign jurisdiction, then it must submit a copy of the public disclosure and a Korean translation thereof to the Korea Exchange. In addition, if a company listed on the KRX KOSPI Market is approved for listing on a foreign stock exchange or determined to be de-listed from the foreign stock exchange or actually lists on, or de-lists from, a foreign stock exchange, then it must submit to the Korea Exchange a copy, together with a Korean translation thereof, of all documents submitted to, or received from, the relevant foreign government, supervisory authority or stock exchange.

Restrictions Applicable to ADSs

No Korean governmental approval is necessary for the sale and purchase of ADSs in the secondary market outside Korea or for the withdrawal of shares underlying ADSs and the delivery inside Korea of shares in connection with the withdrawal. The acquisition of the shares by a foreigner must be immediately reported by the foreigner or his standing proxy in Korea to the Governor of the Financial Supervisory Service (“Governor”).

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

In addition, under the Financial Services Commission regulations, effective as of November 30, 2006, we are required to file a securities registration statement with the Financial Services Commission and such securities registration statement has to become effective pursuant to the FSCMA in order for us to issue shares represented by ADSs, except in certain limited circumstances.

Restrictions Applicable to Shares

Under the Foreign Exchange Transaction Laws and the Financial Services Commission regulations (together, the “Investment Rules”), foreigners may invest, with limited exceptions and subject to procedural requirements, in all shares of Korean companies, whether listed on the KRX KOSPI Market or the KRX KOSDAQ Market, unless prohibited by specific laws. Foreign investors may trade shares listed on the KRX KOSPI Market or the KRX KOSDAQ Market only through the KRX KOSPI Market or the KRX KOSDAQ Market, except in limited circumstances, including, among others:

• odd-lot trading of shares;

• acquisition of shares (“Converted Shares”) by exercise of warrant, conversion right under convertible bonds, exchange right under exchangeable bonds or withdrawal right under depositary receipts issued outside of Korea by a Korean company;

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

• over-the-counter transactions between foreigners of shares of a public service corporation for which the ceiling on aggregate acquisition by foreigners, as explained below, has been reached or exceeded with certain exceptions;

• acquisition of shares by direct investment as defined in the Foreign Investment Promotion Law or disposal of such shares;

• disposal of shares pursuant to the exercise of appraisal rights of dissenting shareholders;

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• acquisition or disposal of shares in connection with a tender offer;

• acquisition of underlying shares by a foreign depositary in connection with the issuance of depositary receipts;

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

• arm’s length transactions between foreigners, if all of such foreigners belong to an investment group managed by the same person.

For over-the-counter transactions between foreign investors outside the KRX KOSPI Market or the KRX KOSDAQ Market involving shares of a public service corporation for which the limit on aggregate foreign ownership has been reached or exceeded, an investment broker licensed in Korea must act as an intermediary. Odd-lot trading of shares outside the KRX KOSPI Market or the KRX KOSDAQ Market must involve an investment dealer licensed in Korea. Foreign investors are prohibited from engaging in margin trading by borrowing shares from investment brokers or investment dealers with respect to shares that are subject to foreign ownership limitation.

Acquisition or sale of shares outside the Korea Exchange by a foreign investor must be reported by the foreign investor or his standing proxy to the Governor at the time of each such acquisition or sale; provided, however, that a foreign investor must ensure that any acquisition or sale by it of shares outside the Korea Exchange in the case of trades in connection with a tender offer, odd-lot trading of shares or trades of shares of certain public service corporations for which the aggregate foreign ownership limit has been reached or exceeded, is reported to the Governor by the Korea Securities Depository, financial investment companies with a dealing or brokerage license or securities finance companies engaged to facilitate such transaction. A foreign investor must appoint one or more standing proxies from among the Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license (including domestic branches of foreign financial investment companies) and internationally recognized custodians which will act as a standing proxy to exercise shareholders’ rights or perform any matters related to the foregoing activities if the foreign investor does not perform these activities himself. However, a foreign investor may be exempted from complying with these standing proxy rules with the approval of the Governor in cases deemed inevitable by reason of conflict between laws of Korea and those of the home country of the foreign investor.

Certificates evidencing shares of Korean companies owned by a foreign investor must be kept in custody with an eligible custodian in Korea. Only foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license (including domestic branches of foreign financial investment companies), the Korea Securities Depository and internationally recognized custodians are eligible to act as a custodian of shares for a non-resident or foreign investor. A foreign investor must ensure that his custodian deposits its shares with the Korea Securities Depository. However, a foreign investor may be exempted from complying with this deposit requirement with the approval of the Governor in circumstances where compliance with that requirement is made impracticable, including cases where compliance would contravene the laws of the home country of such foreign investor.

Under the Investment Rules, with certain exceptions, foreign investors may acquire shares of a Korean company without being subject to any foreign investment ceiling. As one such exception, designated public service corporations are subject to a 40% ceiling on the acquisition of shares by foreigners in the aggregate. Designated public service corporations may set a ceiling on the acquisition of shares by a single foreign investor according to its articles of incorporation. Furthermore, an investment by a foreign investor of not less than 10% of the outstanding shares with voting rights and in the amount of not less than Won 10 million of a Korean company is defined as a foreign direct

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investment under the Foreign Investment Promotion Law, which is, in general, subject to report to, and acceptance by, the Ministry of Trade, Industry & Energy. The acquisition of shares of a Korean company by a foreign investor may also be subject to certain foreign shareholding restrictions in the event that the restrictions are prescribed in each specific law which regulates the business of the Korean company. Changes in ownership of a Korean company by a foreign direct investor, as well as changes in certain aspects of the foreign direct investment (including changes in the foreign direct investor’s name, address or business), are also subject to reporting requirements.

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

Dividends on Shares are paid in Won. No governmental approval is required for foreign investors to receive dividends on, or the Won proceeds of the sale of, any shares to be paid, received and retained in Korea. Dividends paid on, and the Won proceeds of the sale of, any shares held by a non-resident of Korea must be deposited either in a Won account with the investor’s financial investment company with a dealing, brokerage or collective investment license or his Won Account. Funds in the investor’s Won Account may be transferred to his foreign currency account or withdrawn for local living expenses up to certain limitations. Funds in the Won Account may also be used for future investment in shares or for payment of the subscription price of new shares obtained through the exercise of preemptive rights.

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

Item 10.E.  Taxation

The following summary is based upon tax laws of the United States and Korea as in effect on the date of this annual report on Form 20-F, and is subject to any change in United States or Korean law that may come into effect after such date. Investors in the shares of common stock or ADSs are advised to consult their own tax advisers as to the United States, Korean or other tax consequences of the purchase, ownership and disposition of such securities, including the effect of any foreign, state or local tax laws.

Korean Taxation

The following is a summary of the principal Korean tax consequences to owners of the common shares or ADSs, as the case may be, who are non-resident individuals or non-Korean corporations without a permanent establishment in Korea to which the relevant income is attributable or with which the relevant income is effectively connected (“Non-resident Holders”). The statements regarding Korean tax laws set forth below are based on the laws in force and as interpreted by the Korean taxation authorities as of the date hereof. This summary is not exhaustive of all possible tax considerations which may apply to a particular investor and potential investors are advised to satisfy themselves as to the overall tax consequences of the acquisition, ownership and disposition of the common shares or ADSs, including specifically the tax consequences under Korean law, the laws of

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the jurisdiction of which they are resident, and any tax treaty between Korea and their country of residence, by consulting their own tax advisers.

Tax on Dividends

Dividends on the common shares or ADSs paid (whether in cash or in shares) to a Non-resident Holder will be subject to Korean withholding taxes at the rate of 22% (including local income tax) or such lower rate as is applicable under a treaty between Korea and such Non-resident Holder’s country of tax residence. Free distributions of shares representing a capitalization of certain capital surplus reserves may be subject to Korean withholding taxes.

The tax is withheld by the payer of the dividend. While it is the payer which is required to withhold the tax, Korean law generally entitles the person who was subject to the withholding of Korean tax to recover from the Government any part of the Korean tax withheld, upon providing evidence that it was entitled to have tax withheld at a lower rate, if certain conditions are met.

Tax on Capital Gains

As a general rule, capital gains earned by Non-resident Holders upon transfer of the common shares or ADSs are subject to Korean withholding tax at the lower of (i) 11% (including local income tax) of the gross proceeds realized or (ii) 22% (including local income tax) of the net realized gains (subject to the production of satisfactory evidence of the acquisition costs and certain direct transaction costs), unless exempt from Korean income taxation under the effective Korean tax treaty with the Non-resident Holder’s country of tax residence or Korean tax law.

However, a Non-resident Holder will not be subject to Korean income taxation on capital gains realized upon the sale of the common shares through the KRX KOSPI Market if the Non-resident Holder (i) has no permanent establishment in Korea and (ii) did not or has not owned (together with any shares owned by any entity with a specified special relationship with such Non-resident Holder) 25% or more of the total issued and outstanding shares of us at any time during the calendar year in which the sale occurs and during the five calendar years prior to the calendar year in which the sale occurs.

It should be noted that capital gains earned by you (regardless of whether you have a permanent establishment in Korea) from a transfer of ADSs outside Korea will generally be exempt from Korean income taxation, provided that the ADSs are deemed to have been issued overseas. If and when an owner of the underlying common shares transfers the ADSs following the conversion of the underlying shares for ADSs, such person will not be exempt from Korean income taxation.

Inheritance Tax and Gift Tax

Korean inheritance tax is imposed upon (1) all assets (wherever located) of the deceased if at the time of his death he was a tax resident of Korea and (2) all property located in Korea which passes on death (irrespective of the domicile of the deceased). Gift tax is imposed in similar circumstances to the above. The taxes are imposed if the value of the relevant property is above a certain limit and the rate varies from 10% to 50% depending on the value of the property.

Under Korean inheritance and gift tax laws, securities issued by a Korean corporation are deemed to be located in Korea irrespective of where they are physically located or by whom they are owned and consequently, the Korea inheritance and gift taxes will be imposed on transfers of the securities by inheritance or gift.

Securities Transaction Tax

Securities transaction tax is imposed on the transfer of shares issued by a Korean corporation or the right to subscribe for such shares generally at the rate of 0.35% of the sales price. In the case of

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the transfer of shares listed on the KRX KOSPI Market (such as the common shares), the securities transaction tax is imposed generally at the rate of (i) 0.18% of the sales price of such shares (including agricultural and fishery special surtax thereon) if traded on the KRX KOSPI Market or (ii) subject to certain exceptions, 0.35% of the sales price of such shares if traded outside the KRX KOSPI Market.

Securities transaction tax or the agricultural and fishery special surtax is not applicable if (i) the shares or rights to subscribe for shares are listed on a designated foreign stock exchange and (ii) the sale of the shares takes place on such exchange.

Securities transaction tax, if applicable, must be paid by the transferor of the shares or rights, in principle. When the transfer is effected through a securities settlement company, such settlement company is generally required to withhold and pay (to the tax authority) the tax, and when such transfer is made through a financial investment company with a brokerage license only, such company is required to withhold and pay the tax. Where the transfer is effected by a Non-resident Holder without a permanent establishment in Korea, other than through a securities settlement company or a financial investment company with a brokerage license, the transferee is required to withhold the securities transaction tax. Failure to do so will result in the imposition of penalties equal to the sum of (i) between 10% to 40% of the tax amount due, depending on the nature of the improper reporting, and (ii) 8.03% per annum on the tax amount due for the default period.

Tax Treaties

Currently, Korea has income tax treaties with a number of countries, including, inter alia, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Luxembourg, Ireland, the Netherlands, New Zealand, Norway, Singapore, Sweden, Switzerland, the United Kingdom and the United States of America, under which the rate of withholding tax on dividend and interest is reduced, generally to between 5% and 16.5% (including local income tax), and the tax on capital gains derived by a non-resident from the transfer of securities issued by a Korean company is often eliminated.

Each Non-resident Holder of common shares should inquire for itself whether it is entitled to the benefits of a tax treaty with Korea. It is the responsibility of the party claiming the benefits of a tax treaty in respect of interest, dividend, capital gains or “other income” to submit to us (or our agent), the purchaser or the financial investment company with a brokerage license, as the case may be, prior to or at the time of payment, such evidence of tax residence of the party claiming the treaty benefit as the Korean tax authorities may require in support of its claim for treaty protection. In the absence of sufficient proof, we (or our agent), the purchaser or the financial investment company with a brokerage license, as the case may be, must withhold tax at the normal rates.

In order for a Non-resident Holder to obtain the benefit of a tax exemption on certain Korean source income (e.g., interest and capital gains) under an applicable tax treaty, Korean tax law requires such Non-resident Holder (or its agent) to submit to the payer of such Korean source income an application for tax exemption under a tax treaty along with a certificate of tax residency of such Non-resident Holder issued by a competent authority of the non-resident’s country of tax residence, subject to certain exceptions. The payer of such Korean source income, in turn, is required to submit such application to the relevant district tax office by the ninth day of the month following the date of the first payment of such income. However, this requirement does not apply to exemptions under Korean tax law.

For a non-resident of Korea to obtain the benefits of treaty-reduced tax rates on certain Korean source income (e.g., capital gains and interest) under an applicable tax treaty, Korean tax law requires such non-resident (or its agents) to submit to the payer of such Korean source income an application for treaty-reduced tax rates prior to receipt of such Korean source income; provided, however, that an owner of ADSs who is a non-resident of Korea is not required to submit such application, if the Korean source income on the ADSs is paid through an account opened at the Korea Securities Depository by

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a foreign depository. The payer of such Korean source income, in turn, is required to submit such application to the relevant district tax office by the ninth day of the month following the date of the first payment of such income.

If Korean source income is paid to a non-resident through an overseas investment vehicle, such investment vehicle must obtain an application for tax exemption or reduced tax rates from each non-resident, who is the beneficial owner of such investment vehicle and submit to the payer of such Korean source incomes an overseas investment vehicle report, together with the applications for tax exemptions or reduced tax rates prepared by the non-resident beneficial owner. An overseas investment vehicle means an organization established outside of Korea that manages funds collected through investment solicitation by way of acquiring, disposing, or otherwise investing in investment targets and then distributes the outcome of such management to investors. An application for tax exemption or reduced tax rates submitted by the non-resident remains effective for three years from submission, and if any material changes occur with respect to information provided in the application, an application reflecting such change must be newly submitted.

At present, Korea has not entered into any tax treaty relating to inheritance or gift tax.

United States Taxation

This summary describes the material U.S. federal income tax consequences for a U.S. holder (as defined below) of owning our shares of common stock or ADSs. This summary applies to you only if you hold shares of common stock or ADSs as capital assets for tax purposes. This summary does not apply to you if you are a member of a class of holders subject to special rules, such as:

• a dealer in securities or currencies;

• a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings;

• a bank;

• a life insurance company;

• a tax-exempt organization;

• a person that holds shares of common stock or ADSs that are a hedge or that are hedged against interest rate or currency risks;

• a person that holds shares of common stock or ADSs as part of a straddle or conversion transaction for tax purposes;

• a person whose functional currency for tax purposes is not the U.S. dollar;

• a person that owns or is deemed to own 10% or more of any class of our stock or 10% or more of the combined voting power or value of all of our classes of stock; or

• an entity treated as a partnership for U.S. federal income tax purposes that holds shares of common stock or ADSs, or an investor therein.

This summary is based on laws, treaties and regulatory interpretations in effect on the date hereof, all of which are subject to change, possibly on a retroactive basis.

Please consult your own tax advisers concerning the U.S. federal, state, local and other foreign tax consequences of purchasing, owning and disposing of shares of common stock or ADSs in your particular circumstances.

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For purposes of this summary, a “U.S. holder” is a beneficial owner of a share of common stock or ADS that is:

• a citizen or resident of the United States;

• a U.S. domestic corporation; or

• otherwise subject to U.S. federal income tax on a net income basis with respect to income from the shares of common stock or ADS.

Shares of Common Stock and ADSs

In general, if you are the beneficial owner of ADSs, you will be treated as the beneficial owner of the shares of common stock represented by those ADSs for U.S. federal income tax purposes, and no gain or loss will be recognized if you exchange an ADS for the shares of common stock represented by that ADS.

Passive Foreign Investment Company Rules

Special U.S. tax rules apply to companies that are considered to be PFICs. We will be classified as a PFIC in a particular taxable year if either

• 75 percent or more of our gross income for the taxable year is passive income; or

• at least 50 percent of the value of our assets (generally determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income.

For this purpose, passive income generally includes dividends, interest, gains from certain commodities transactions, rents, royalties and the excess of gains over losses from the disposition of assets that produce passive income.

Based on our financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our 2022 or 2023 taxable years. In addition, based on our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not expect to be a PFIC for our 2024 taxable year or in the foreseeable future. However, the determination of whether we are a PFIC must be made annually based on the facts and circumstances at that time, some of which may be beyond our control, including the valuation of our assets as implied by the market price for our common stock or ADSs. Accordingly, we could be classified as a PFIC in the current or a future taxable year, and that possibility may be increased significantly by market volatility or a decline in the price of our common stock or ADSs.

If we are classified as a PFIC in any taxable year during which you hold our common stock or ADSs, you could be subject to a special tax at ordinary income rates on “excess distributions,” including certain distributions by us and gain that you recognize on the sale of your common stock or ADSs. The amount of income tax on any excess distributions will be increased by an interest charge to compensate for tax deferral, calculated as if the excess distributions were earned ratably over the period you held the common stock or ADSs. Classification as a PFIC may also have other adverse consequences, including, in the case of individuals, the denial of a step-up in the basis of your common stock or ADSs at death. Except where otherwise noted, the remainder of this summary assumes that we were not a PFIC for our 2023 taxable year and that we will not become a PFIC in the current or any future year.

You should consult your own tax advisers as to our status as a PFIC and the tax consequences to you of such status.

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Dividends

The gross amount of cash dividends that you receive (prior to deduction of Korean taxes) generally will be subject to U.S. federal income taxation as foreign source dividend income. Dividends paid in Won will be included in your income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date of your (or, in the case of ADSs, the depositary’s) receipt of the dividend, regardless of whether the payment is in fact converted into U.S. dollars. If such a dividend is converted into U.S. dollars on the date of receipt, you generally should not be required to recognize foreign currency gain or loss in respect of the dividend income. U.S. holders should consult their own tax advisers regarding the treatment of any foreign currency gain or loss on any Won received by U.S. holders that are converted into U.S. dollars on a date subsequent to receipt.

The U.S. dollar amount of dividends received by an individual U.S. holder with respect to the ADSs and common stock will be subject to taxation at a preferential rate applicable to long-term capital gains if the dividends are “qualified dividends.” Subject to certain exceptions for short-term and hedged positions, dividends paid on the ADSs and common stock will be treated as qualified dividends if (i) we are eligible for the benefits of a comprehensive income tax treaty with the United States that the Internal Revenue Service has approved for the purposes of the qualified dividend rules and (ii) we were not, in the year prior to the year in which the dividend is paid, and are not, in the year in which the dividend is paid, a passive foreign investment company (“PFIC”). The income tax treaty between Korea and the United States (“Treaty”) has been approved for the purposes of the qualified dividend rules, and we believe we are eligible for benefits under the Treaty. Based on our audited financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for U.S. federal income tax purposes with respect to our 2022 or 2023 taxable years. In addition, based on our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not expect to be a PFIC for our 2024 taxable year. You should consult your own tax advisers regarding the availability of the reduced dividend tax rate in the light of your own particular circumstances.

Distributions of additional shares in respect of shares of common stock or ADSs that are made as part of a pro-rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax.

Sales and Other Dispositions

For U.S. federal income tax purposes, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of common stock or ADSs equal to the difference, if any, between the amount realized on the sale or exchange and your adjusted tax basis in the common stock or ADSs. Any gain realized by a U.S. holder on the sale or other disposition of common stock or ADSs generally will be treated as U.S. source income for U.S. foreign tax credit purposes. Subject to the discussion above under “Passive Foreign Investment Company Rules,” this gain or loss will be capital gain or loss, and will be long-term capital gain or loss to the extent that the shares of common stock or ADSs sold or disposed of were held for more than one year. Your ability to offset capital losses against ordinary income is limited. Long-term capital gain recognized by an individual U.S. holder generally is subject to taxation at a reduced rate.

Foreign Tax Credit Considerations

Subject to generally applicable limitations and conditions, Korean dividend or capital gains withholding tax paid at the appropriate rate applicable to you may be eligible for a credit against your U.S. federal income tax liability. These generally applicable limitations and conditions include new requirements recently adopted by the U.S. Internal Revenue Service (“IRS”) in regulations promulgated in December 2021 and any Korean tax will need to satisfy these requirements in order to be eligible to be a creditable tax for a U.S. holder. In the case of a U.S. holder that consistently elects to apply a

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modified version of these rules under recently issued temporary guidance and complies with specific requirements set forth in such guidance, the Korean tax on dividends or gains will be treated as meeting the new requirements and therefore as a creditable tax. In the case of all other U.S. holders, the application of these requirements to the Korean tax on dividends or gains is uncertain and we have not determined whether these requirements are met, including requirements applicable to the Treaty. If the Korean dividend or capital gains tax is not a creditable tax for a U.S. holder or you do not elect to claim a foreign tax credit for any foreign income taxes paid or accrued in the same taxable year, you may be able to deduct the Korean tax in computing your taxable income for U.S. federal income tax purposes.

Dividends will constitute income from sources without the United States and, if the withholding tax is a creditable tax for a U.S. holder that elects to claim foreign tax credits, generally will constitute “passive category income” for foreign tax credit purposes. Capital gain or loss recognized by a U.S. holder on the sale or other disposition of the shares of common stock or ADSs generally will be U.S. source gain or loss for U.S. foreign tax credit purposes. Consequently, even if any withholding tax on gains qualifies as a creditable tax, you may not be able to credit the tax against your U.S. federal income tax liability unless such credit can be applied (subject to generally applicable conditions and limitations) against tax due on other income treated as derived from foreign sources. If the Korean tax is not a creditable tax, the tax would reduce the amount realized on the sale or other disposition of the shares of common stock or ADSs even if you have elected to claim a foreign tax credit for other taxes in the same year.

Any Korean securities transaction tax or agriculture and fishery special tax that you pay will not be creditable for foreign tax credit purposes.

The availability and calculation of foreign tax credits and deductions for foreign taxes depend upon a U.S. holder’s particular circumstances and involve the application of complex rules to those circumstances. The temporary guidance discussed above also indicates that the Treasury and the IRS are considering proposing amendments to the December 2021 regulations and that the temporary guidance can be relied upon until additional guidance is issued that withdraws the temporary guidance. You should consult your own tax advisors regarding the application of these rules to your particular situation.

Specified Foreign Financial Assets

Certain U.S. holders that own “specified foreign financial assets” with an aggregate value in excess of US$50,000 on the last day of the taxable year or US$75,000 at any time during the taxable year are generally required to file an information statement along with their tax returns, currently on Form 8938, with respect to such assets. “Specified foreign financial assets” include any financial accounts held at a non-U.S. financial institution, as well as securities issued by a non-U.S. issuer (which would include the common stock or ADSs) that are not held in accounts maintained by financial institutions. Higher reporting thresholds apply to certain individuals living abroad and to certain married individuals. Regulations extend this reporting requirement to certain entities that are treated as formed or availed of to hold direct or indirect interests in specified foreign financial assets based on certain objective criteria. U.S. holders who fail to report the required information could be subject to substantial penalties. In addition, the statute of limitations for assessment of tax would be suspended, in whole or part. Prospective investors should consult their own tax advisors concerning the application of these rules to their investment in the common stock or ADSs, including the application of the rules to their particular circumstances.

U.S. Information Reporting and Backup Withholding Rules

Payments in respect of shares of common stock or ADSs that are made within the United States or through certain U.S.-related financial intermediaries are subject to information reporting and may be

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subject to backup withholding unless you provide an accurate taxpayer identification number and make any other required certification or otherwise establish an exemption. Holders that are not “United States persons” (as defined in the Internal Revenue Code of 1986, as amended) generally are not subject to information reporting or backup withholding. However, such a holder may be required to provide a certification of its non-U.S. status in connection with payments received within the United States or through a U.S.-related financial intermediary.

Item 10.F. Dividends and Paying Agents

See “Item 8.A. Consolidated Statements and Other Financial Information — Dividends” above for information concerning our dividend policies and our payment of dividends. See “Item 10.B. Memorandum and Articles of Association — Dividends” for a discussion of the process by which dividends are paid on shares of our common stock. The paying agent for payment of our dividends on ADSs in the United States is the Citibank, N.A.

Item 10.G. Statements by Experts

Not applicable

Item 10.H. Documents on Display

We file reports, including annual reports on Form 20-F, and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. You may read and copy any materials filed with the SEC at the Public Reference Rooms in Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Any filings we make electronically will be available to the public over the Internet at the SEC’s website at http://www.sec.gov.

Item 10.I. Subsidiary Information

Not applicable

Item 10.J. Annual Report to Security Holders

Not applicable

Item 11. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to foreign exchange rate and interest rate risk primarily associated with underlying liabilities, and to changes in the commodity prices of principal raw materials. Following evaluation of these positions, we selectively enter into derivative financial instruments to manage the related risk exposures, primarily with respect to foreign exchange rate and interest rate risks, which are entered into with major financial institutions in order to minimize the risk of credit loss. Our market risk management policy determines the market risk tolerance level, measuring period, controlling responsibilities, management procedures, hedging period and hedging ratio very specifically. We also prohibit all speculative hedging transactions and evaluate and manage foreign exchange exposures to receivables and payables.

None of our loss exposures related to derivative contracts are unlimited, and we do not believe that our net derivative positions could result in a material loss to our profit before income tax or total equity due to significant fluctuations of major currencies against the Korean Won. Due to the nature of our derivative contracts primarily as hedging instruments that manage foreign exchange risks, net gain or net loss on derivatives transactions and valuation of derivatives are typically offset by net loss or net

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gain on foreign currency transaction and translation. We recognized net gain on valuation of derivatives of Won 270 billion and net loss on derivatives transactions of Won 95 billion in 2021, net gain on derivatives transactions of Won 150 billion and net gain on valuation of derivatives of Won 70 billion in 2022, and net gain on valuation of derivatives of Won 124 billion and net gain on derivatives transactions of Won 13 billion in 2023.

Exchange Rate Risk

Korea is our most important market and, therefore, a substantial portion of our cash flow is denominated in Won. Most of our exports are denominated in U.S. dollars. Japan is also an important market for us, and we derive significant cash flow denominated in Yen. We are exposed to foreign exchange risk related to foreign currency-denominated liabilities and anticipated foreign exchange payments. Anticipated foreign exchange payments, which represent a substantial sum and are mostly denominated in U.S. dollars, relate primarily to imported raw material costs and freight costs. Foreign currency-denominated liabilities relate primarily to foreign currency-denominated debt.

We strive to naturally offset our foreign exchange risk by matching foreign currency receivables with our foreign currency payables and our overseas subsidiaries have sought to further mitigate the adverse impact of exchange rate fluctuations by conducting business transactions in the local currency of the respective market in which the transactions occur. In particular, POSCO International’s exposure to fluctuations in exchange rates, including the Won/U.S. dollar exchange rate, is limited because trading transactions typically involve matched purchase and sale contracts, which result in limited settlement exposure, and because POSCO International’s contracts with domestic suppliers of products for export and with domestic purchasers of imported products are generally denominated in U.S. dollars. Although the impact of exchange rate fluctuations is partially mitigated by such strategies, we and our subsidiaries, particularly POSCO International and POSCO E&C, also periodically enter into derivative contracts, primarily foreign currency swaps and forward exchange contracts, to further hedge some of our foreign exchange risks.

Our foreign currency exposure and changes in gain or loss resulting from a 10% foreign exchange rate change against the Korean Won are as follows:

	For the Years Ended December 31,
	2021					2022						2023
	Increase			Decrease		Increase			Decrease			Increase			Decrease
	(In billions of Won)
U.S. dollars	￦	(264	)	￦	264	￦	(344	)	￦	344		￦	(617	)	￦	617
Euro		(200	)		200		(186	)		186			(234	)		234
Japanese Yen		(39	)		39		14			(14	)		8			(8	)

See Note 23 to the Consolidated Financial Statements.

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Interest Rate Risk

We are also subject to market risk exposure arising from changing interest rates. In particular, we are exposed to interest rate risk on our existing floating rate borrowings and on additional debt financings that we may periodically undertake for various reasons, including capital expenditures and refinancing of our existing borrowings. A rise in interest rates will increase the cost of our existing variable rate borrowings. If interest rates on borrowings with floating rates had been 1% higher or lower with all other variables held constant, the impact on the gain or loss of the applicable period would be as follows:

For the Years Ended December 31,

2021

2022

2023

Increase

Decrease

Increase

Decrease

Increase

Decrease

(In billions of Won)

Increase or decrease in annual profit and net equity

￦

(64)

￦

64

￦

(82)

￦

82

￦

(77)

￦

77

See Note 23 to the Consolidated Financial Statements.

A reduction of interest rates also increases the fair value of our debt portfolio, which is primarily of a fixed interest nature. From time to time, we use, to a limited extent, interest rate swaps to reduce interest rate volatility on some of our debt and manage our interest expense by achieving a balanced mixture of floating and fixed rate debt.

The following table summarizes the carrying amounts, fair values, principal cash flows by maturity date and weighted average interest rates of our short-term and long-term liabilities as of December 31, 2023 which are sensitive to exchange rates and/or interest rates. The information is presented in Won, which is our reporting currency.

	Maturities
																			December 31, 2023
	2024			2025			2026			2027			2028			Thereafter			Total			Fair Value
	(In billions of Won except rates)
Local currency:
Fixed rate	￦	2,359		￦	1,761		￦	2,066		￦	379		￦	825		￦	869		￦	8,259		￦	8,246
Average weighted rate (1) .		2.25	%		3.71	%		3.46	%		3.41	%		4.08	%		3.28	%		3.26	%
Variable rate		1,021			70			38			82			—			271			1,482			1,482
Average weighted rate (1)		5.33	%		5.57	%		5.39	%		3.86	%		—			5.32	%		5.26	%
Sub-total		3,380			1,831			2,104			461			825			1,140			9,741			9,728
Foreign currency, principally U.S. dollars and Yen:
Fixed rate	￦	3,360		￦	1,976		￦	2,691		￦	561		￦	1,121		￦	385		￦	10,094		￦	10,028
Average weighted rate (1)		1.65	%		3.89	%		1.97	%		3.72	%		5.81	%		5.91	%		3.03	%
Variable rate		2,585			2,147			641			123			—			657			6,153			6,151
Average weighted rate (1)		6.93	%		2.46	%		0.20	%		0.03	%		—			0.36	%		3.83	%
Sub-total		5,945			4,123			3,332			684			1,121			1,042			16,247			16,179
Total	￦	9,325		￦	5,954		￦	5,436		￦	1,145		￦	1,946		￦	2,182		￦	25,988		￦	25,907

(1) Weighted average rates of the portfolio at the period end.

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Item 12. Description of Securities Other than Equity Securities

Not applicable

Item 12.A. Debt Securities

Not applicable

Item 12.B. Warrants and Rights

Not applicable

Item 12.C. Other Securities

Not applicable

Item 12.D. American Depositary Shares

Fees and Charges

We switched our depositary from The Bank of New York Mellon to Citibank, N.A. in July 2013. Holders of our ADSs are required to pay the following service fees to the depositary:

Services	Fees
Issuance of ADSs upon deposit of shares	Up to $5.00 per 100 ADSs issued
Delivery of deposited shares against surrender of ADSs	Up to $5.00 per 100 ADSs surrendered
Distributions of cash dividends or other cash distributions	Up to $5.00 per 100 ADSs held
Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs	Up to $5.00 per 100 ADSs held
Distribution of securities other than ADSs or rights to purchase additional ADSs	Up to $5.00 per 100 ADSs held
General depositary services	Up to $5.00 per 100 ADSs held

Holders of our ADSs are also responsible for paying certain fees and expenses incurred by the depositary such as:

• fees for the transfer and registration of shares charged by the registrar and transfer agent for the shares in Korea (i.e., upon deposit and withdrawal of shares);

• expenses incurred for converting foreign currency into U.S. dollars;

• expenses for cable, telex and fax transmissions and for delivery of securities;

• taxes (including applicable interest and penalties) and other governmental charges;

• fees and expenses incurred in connection with compliance with exchange control regulations and other regulatory requirements; and

• fees and expenses incurred in connection with the delivery or servicing of shares on deposit.

Depositary fees payable upon the issuance and surrender of ADSs are typically paid to the depositary by the brokers (on behalf of their clients) receiving the newly issued ADSs from the depositary and by the brokers (on behalf of their clients) delivering the ADSs to the depositary for surrender. The brokers in turn charge these fees to their clients. Depositary fees payable in connection with distributions of cash or securities to ADS holders and the depositary services fee are charged by the depositary to the holders of record of ADSs as of the applicable ADS record date.

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The depositary fees payable for cash distributions are generally deducted from the cash being distributed. In the case of distributions other than cash (i.e., stock dividend, rights), the depositary charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or uncertificated in direct registration), the depositary sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts (via the Korea Securities Depositary, or KSD), the depositary generally collects its fees through the systems provided by KSD (whose nominee is the registered holder of the ADSs held in KSD) from the brokers and custodians holding ADSs in their KSD accounts. The brokers and custodians who hold their clients’ ADSs in KSD accounts in turn charge their clients’ accounts the amount of the fees paid to the depositary.

In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to such holder of ADSs.

The fees and charges that holders of our ADSs may be required to pay may vary over time and may be changed by us and by the depositary. Holders of our ADSs will receive prior notice of such changes.

Fees and Payments from the Depositary to Us

In 2023, we received approximately $2.0 million from the depositary for reimbursement of various costs, including preparation of SEC filing and submission, listing fees, proxy process expenses (printing, postage and distribution), legal fees and contributions for our investor relations activities.

In addition, as part of its service to us, the depositary waives its fees for the standard costs associated with the administration of the ADS facility, associated operating expenses, investor relations advice and access to an internet-based tool used in our investor relations activities.

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

Not applicable

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

Not applicable

Item 15. Controls and Procedures

a. Disclosure Controls and Procedures

Our management has evaluated, with the participation of our chief executive officer and chief financial officer, the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2023. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the

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Commission’s rules and forms, and that it is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

b. Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed by, and under the supervision of, our principal executive, principal operating and principal financial officers, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management has completed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023 based on criteria in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2023.

c. Report of the Independent Registered Public Accounting Firm

The report of our independent registered public accounting firm, KPMG Samjong Accounting Corp., on the effectiveness of our internal control over financial reporting as of December 31, 2023 is included in Item 18 of this Form 20-F.

d. Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the year covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our adoption of Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission did not have, and is not reasonably likely to have, any material effect on our internal control over financial reporting.

Item 16. [Reserved]

Item 16.A. Audit Committee Financial Expert

The board of directors has determined that Sohn, Sung-Kyu is an audit committee financial expert and is independent within the meaning of applicable SEC rules.

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Item 16.B. Code of Ethics

We have adopted a code of business conduct and ethics, as defined in Item 16B. of Form 20-F under the Securities Exchange Act of 1934, as amended. Our code of business conduct and ethics, called Code of Ethics, applies to our chief executive officer and chief financial officer, as well as to our directors, other officers and employees. Our Code of Ethics is available on our website at http://www.posco-inc.com. If we amend the provisions of our Code of Ethics that apply to our chief executive officer or chief financial officer and persons performing similar functions, or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our website at the same address.

Item 16.C.  Principal Accountant Fees and Services

Our independent registered public accounting firm is KPMG Samjong Accounting Corp. The auditor location is Seoul, Republic of Korea, and the auditor firm ID is 1357.

Audit and Non-Audit Fees

The following table sets forth the fees billed to us by our independent registered public accounting firm, KPMG Samjong Accounting Corp., a member firm of KPMG International, and their respective affiliates, which we collectively refer to as KPMG, during the fiscal years ended December 31, 2022 and 2023:

	For the Year Ended December 31,
	2022		2023
	(In millions of Won)
Audit fees	￦	8,916	￦	12,221
Audit-related fees		1,358		341
Tax fees		1,408		1,684
Other fees		2,079		3,149
Total fees	￦	13,761	￦	17,395

Audit fees in 2022 and 2023 as set forth in the above table are the aggregate fees billed by KPMG in connection with the audit of our annual financial statements and the annual financial statements of other related companies and review of interim financial statements.

Audit-related fees in 2022 and 2023 as set forth in the above table are fees billed by KPMG for audits and reviews of carveout and combined financial statements, issuing comfort letters in connection with our securities offering and agreed-upon procedures related to the vertical spin-off of POSCO.

Tax fees in 2022 and 2023 as set forth in the above table are fees billed by KPMG for our tax compliance and tax planning, as well as compliance related to transfer pricing.

Other fees in 2022 and 2023 as set forth in the above table are fees billed by KPMG in connection with statutory audits unrelated to the audit of our annual financial statements.

Audit Committee Pre-Approval Policies and Procedures

Under our Audit Committee’s pre-approval policies and procedures, all audit and non-audit services to be provided to us by an independent registered public accounting firm must be pre-approved by our Audit Committee. Our Audit Committee does not pre-approve any audit and non-audit services that are prohibited from being provided to us by an independent registered public accounting firm under the rules of SEC and applicable law.

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Item 16.D.  Exemptions from the Listing Standards for Audit Committees

Not applicable

Item 16.E.  Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table sets forth the repurchases of common shares by us or any affiliated purchasers during 2023:

Period	Total Number of Shares Purchased		Average Price Paid Per Share (In Won)		Total Number of Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Shares that May Yet Be Purchased Under the Plans
January 1 to January 31		—		—		—		—
February 1 to February 29		—		—		—		—
March 1 to March 31		—		—		—		—
April 1 to April 30		—		—		—		—
May 1 to May 31		—		—		—		—
June 1 to June 30		—		—		—		—
July 1 to July 31		—		—		—		—
August 1 to August 31		—		—		—		—
September 1 to September 30		—		—		—		—
October 1 to October 31		—		—		—		—
November 1 to November 30		—		—		—		—
December 1 to December 31		—		—		—		—
Total		—		—		—		—

Item 16.F.  Change in Registrant’s Certifying Accountant

On December 19, 2023, our Audit Committee approved the appointment of Ernst & Young Han Young as our principal accountant to audit our consolidated financial statements prepared in accordance with IFRS as issued by the IASB for the fiscal years ending December 31, 2024, 2025 and 2026, subject to the completion of the consolidated financial statements for the fiscal year ending December 31, 2023, and, in effect, dismissed KPMG Samjong Accounting Corp., our former principal accountant (including for the fiscal years ended December 31, 2021, 2022 and 2023). Pursuant to such approval, Ernst & Young Han Young was engaged on January 11, 2024 as our principal accountant to audit our consolidated financial statements prepared in accordance with IFRS as issued by the IASB. KPMG Samjong Accounting Corp. will be dismissed effective upon completion of its audit of our financial statements as of and for the year ended December 31, 2023 and the issuance of its report thereon.

The decision of our Audit Committee to dismiss KPMG Samjong Accounting Corp., and to appoint Ernst & Young Han Young, as our principal accountant to audit our financial statements prepared in accordance with IFRS, as issued by the IASB, was largely driven by the Securities and Futures Commission’s designation of Ernst & Young Han Young as our external auditor in November 2023 pursuant to the requirement of the amended Act on External Audit of Stock Companies, which became effective in November 2018. The Act on External Audit of Stock Companies, as amended, requires that a publicly listed Korean company that has been audited by an external auditor of its choice for six consecutive years change its external auditor to one designated by the Securities and Futures Commission for a period of three consecutive years.

KPMG Samjong Accounting Corp.’s reports on our consolidated financial statements for each of the two most recent fiscal years ended December 31, 2023 and 2022 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or

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accounting principles. During the two most recent fiscal years ended December 31, 2023 and 2022 and the subsequent interim period through April 29, 2024, there were: (i) no disagreements between us and KPMG Samjong Accounting Corp. on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KPMG Samjong Accounting Corp., would have caused KPMG Samjong Accounting Corp. to make reference to the subject matter of the disagreements in its reports on our consolidated financial statements; and (ii) no “reportable events” as defined in Item 16F(a)(1)(v) of Form 20-F.

During the two most recent fiscal years ended December 31, 2023 and 2022 and the subsequent interim period through April 29, 2024, neither we nor anyone on our behalf consulted Ernst & Young Han Young regarding either (i) the application of IFRS as issued by the IASB to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements (and neither a written report nor oral advice was provided to us that Ernst & Young Han Young concluded was an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issue under IFRS, as issued by the IASB) or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 16F(a)(1)(iv) of Form 20-F and the related instructions to Item 16F) or a “reportable event” (as described in Item 16F(a)(1)(v) of Form 20-F).

We provided a copy of the disclosure in this Item 16F to KPMG Samjong Accounting Corp. and requested that KPMG Samjong Accounting Corp. furnish us with a letter addressed to the Securities and Exchange Commission stating whether it agrees with such disclosure, and if it does not agree, stating the respects in which it does not agree. A copy of KPMG Samjong Accounting Corp.’s letter dated April 29, 2024 is filed as Exhibit 15.1 to this annual report for the fiscal year ended December 31, 2023.

Item 16.G.  Corporate Governance

Pursuant to the rules of the New York Stock Exchange applicable to foreign private issuers like us that are listed on the New York Stock Exchange, we are required to disclose significant differences between the New York Stock Exchange’s corporate governance standards and those that we follow under Korean law and in accordance with our own internal procedures. The following is a summary of such significant differences.

NYSE Corporate Governance Standards	POSCO HOLDINGS INC.’s Corporate Governance Practice
Director Independence
Listed companies must have a majority of independent directors	Our articles of incorporation provide that our board of directors must comprise no less than a majority of Outside Directors. Our Outside Directors must meet the criteria for outside directorship set forth under the Korean Securities and Exchange Act. The majority of our board of directors is independent (as defined in accordance with the New York Stock Exchange’s standards), and six out of 10 directors are Outside Directors. Under our articles of incorporation, we may have up to five Inside Directors and eight Outside Directors.
Nomination/Corporate Governance Committee
A nomination/corporate governance committee of independent directors is required. The committee must have a charter that addresses the purpose, responsibilities (including development of corporate governance guidelines) and annual performance evaluation of the committee.	We have not established a separate nomination corporate governance committee. However, we maintain (i) a CEO Candidate Pool Management Committee composed of all of our six Outside Directors and (ii) a Director Candidate Recommendation Committee composed of three Outside Directors.

100

NYSE Corporate Governance Standards	POSCO HOLDINGS INC.’s Corporate Governance Practice
Compensation Committee
A compensation committee of independent directors is required. The committee must have a charter that addresses the purpose, responsibilities and annual performance evaluation of the committee. The charter must be made available on the company’s website. In addition, in accordance with the U.S. Securities and Exchange Commission rules adopted pursuant to Section 952 of the Dodd-Frank Act, the New York Stock Exchange listing standards were amended to expand the factors relevant in determining whether a committee member has a relationship with the company that will materially affect that member’s duties to the compensation committee. Additionally, the committee may obtain or retain the advice of a compensation adviser only after taking into consideration all factors relevant to determining that adviser’s independence from management.	We maintain an Evaluation and Compensation Committee composed of four Outside Directors.
Executive Session
Non-management directors must meet in regularly scheduled executive sessions without management. Independent directors should meet alone in an executive session at least once a year.	Our Outside Directors hold meetings solely attended by Outside Directors in accordance with operation guidelines of our board of directors.
Audit Committee
Listed companies must have an audit committee that satisfies the independence and other requirements of Rule 10A-3 under the Exchange Act. All members must be independent. The committee must have a charter addressing the committee’s purpose, an annual performance evaluation of the committee, and the duties and responsibilities of the committee. The charter must be made available on the company’s website.	We maintain an Audit Committee comprised of three Outside Directors who meet the applicable independence criteria set forth under Rule 10A-3 under the Exchange Act.
Audit Committee Additional Requirements
Listed companies must have an audit committee that is composed of at least three directors.	Our Audit Committee has three members, as described above.
Shareholder Approval of Equity Compensation Plan
Listed companies must allow their shareholders to exercise their voting rights with respect to any material revision to the company’s equity compensation plan.	We currently have an Employee Stock Ownership Program. Matters related to the Employee Stock Ownership Program are not subject to shareholders’ approval under Korean law.
Shareholder Approval of Equity Offerings
Listed companies must allow its shareholders to exercise their voting rights with respect to equity offerings that do not qualify as public offerings for cash, and offerings of equity of related parties.	Our board of directors is generally authorized to issue new shares, subject to certain limitations as provided by our articles of incorporation.
Corporate Governance Guidelines
Listed companies must adopt and disclose corporate governance guidelines.	We have adopted a Corporate Governance Charter setting forth our practices with respect to relevant corporate governance matters. Our Corporate Governance Charter is in compliance with Korean law but does not meet all requirements established by the New York Stock Exchange for U.S. companies listed on the exchange. A copy of our Corporate Governance Charter is available on our website at http://www.posco-inc.com.
Code of Business Conduct and Ethics
Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers.	We have adopted a Code of Ethics for all directors, officers and employees. A copy of our Code of Ethics is available on our website at http://www.posco-inc.com.

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Item 16.H.  Mine Safety Disclosure

Not applicable

Item 16.I.  Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable

Item 16.J.  Insider Trading Policies

Not applicable

Item 16.K.  Cybersecurity

Risk Management and Strategy

We maintain a comprehensive process for assessing, identifying and managing material risks from cybersecurity threats as part of our overall enterprise risk management system and processes. Our enterprise risk management program considers cybersecurity risks alongside other company risks, and our enterprise risk professionals consult with company subject matter experts to gather information necessary to identify cybersecurity risks, and evaluate their nature and severity, as well as identify mitigations and assess the impact of those mitigations on residual risk. Our cybersecurity risk management practices include development, implementation, and improvement of policies and procedures to safeguard information and ensure availability of critical data and systems.

We understand the importance of preserving trust and protecting personal information. To assist us, we have a cybersecurity governance framework in place, which is designed to protect information and information systems from unauthorized access, use, disclosure, disruption, modification or destruction. The program is built upon a foundation of advanced security technology and overseen by an experienced and trained team of experts with substantial knowledge of cybersecurity best practices. Our cybersecurity program consists of controls designed to identify, protect against, detect, respond to and recover from information and cybersecurity incidents. Our framework leverages International Organization for Standardizations (ISO) 27001 standards for general information technology controls. Key components of our cybersecurity risk management processes include the following:

• Asset analysis: Identify information assets, including information and information systems related to our business, and evaluate their value by considering the impact that loss of confidentiality, integrity and availability of the assets may have on the company.

• Threat analysis: Identify threats to assets and measure the likelihood of occurrence through interviews and due diligence.

• Vulnerability analysis: Analyze the extent to which assets are vulnerable to identified threats through interviews or due diligence.

• Risk assessment: Assess the risk level based on identified assets, threats and vulnerabilities and identify existing protection measures. Evaluate risk by categorizing threats, vulnerabilities and risk levels for each identified asset.

• Risk treatment: Based on the risk assessment results, implement measures to mitigate risks to an acceptable level.

We maintain an in-house IT service management system, and we conduct technical security review during the designing stage of our system development. We utilize policies, software, training programs and hardware solutions to protect and monitor our environment, including multifactor authentication on all critical systems, firewalls, intrusion detection and prevention systems, vulnerability

102

and penetration testing and identity management systems. Our platform includes a host of encryption, antivirus, multi-factor authentication, firewall and patch-management technologies designed to protect and maintain the systems and computers across our business.

Our cybersecurity team regularly tests our controls through penetration testing, vulnerability scanning and attack simulation. We conduct risk assessments periodically to identify threats and vulnerabilities, and then determine the likelihood and impact for each risk using a qualitative risk assessment methodology. Risks are identified from various sources, including vulnerability scans, penetration tests, vendors risk assessments, product and services audits, internal compliance assessments and threat-hunting operations. We monitor our infrastructure and applications to identify evolving cyber threats, scan for vulnerabilities and mitigate risks. We also operate an integrated security control room through a third-party company, through which we detect and defend against hacking attacks from outside in real time.

We also maintain a robust cybersecurity incident response plan, which provides a framework for handling cybersecurity incidents based on the severity of the incident and facilitates cross-functional coordination across the company. Our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.

We value collaboration with external evaluators, consultants, auditors and other third parties to strengthen and continually improve our cybersecurity risk management processes. In connection with our cybersecurity risk management processes, we engage:

• External evaluators and consultants: We engage external consultants from security companies to assist in the design and implementation of our cybersecurity risk assessment and management processes. In particular, they provide the expertise necessary to (i) identify and analyze new cybersecurity threats, (ii) identify and improve vulnerabilities through mock hacking and (iii) analyze and respond to new threats in real time through integrated security control.

• Auditors: Our program includes review and assessment by external, independent third-parties, who assess and report on our internal incident response preparedness and help identify areas for continued focus and improvement. We engage in regular external audits to maintain our ISO 27001 certification, which are performed by certified auditors.

• Third-party organizations: We collaborate with the Korea Internet & Security Agency, the National Intelligence Service and the Korea Industrial Technology Security Association, which develop and maintain cybersecurity-related standards in Korea. Guidelines and best practices from such organizations assist us in improving our cybersecurity strategies and processes.

Our cybersecurity risk management processes extend to the oversight and identification of threats associated with our use of third-party service providers. We have a third-party risk management program that assesses risks from service providers. Our cybersecurity risk management program includes due diligence of service providers’ information security programs. We review our service providers’ cybersecurity practices before we enter into business transactions with them, and we seek to contractually obligate them to operate their environments in accordance with strict cybersecurity standards. We also develop contingency plans for business continuity in case our service providers are subject to a cyberattack that impacts our use of their systems.

Our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of previous cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks and any future material incidents. See “Item 3.D. Risk Factors — Significant breaches of information

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security could lead to legal and financial exposure, damage to our reputation and a loss of confidence by our customers” for more information on risks from cybersecurity threats that are reasonably likely to materially affect our business strategy, results of operations and financial condition.

Governance

Management

The cybersecurity risk management processes described above are managed by the Head of Technology, who is the Chief Technology Officer of the POSCO Group and reports to our Chief Executive Officer. The Head of Technology works with our Chief Information Security Officer and chairs the Information Security Committee, which discusses the latest trends in cybersecurity, changes in expectations of our stakeholders, risks identified, security measures implemented, and effectiveness of security protocols. The Information Security Committee annually reviews and approves our cybersecurity risk management processes, including updates to our internal regulations and guidelines. Our Chief Information Security Officer is supported by the company at the highest levels and regularly engages with cross-functional teams, including Communications, Digital Technology, Human Resources and Strategic Technology.

Board of Directors

Our board of directors is committed to mitigating data privacy and cybersecurity risks and recognizes the importance of these issues as part of our risk management framework. While the board of directors maintains ultimate responsibility for the oversight of our data privacy and cybersecurity program and risks, it has delegated certain responsibilities to the ESG Committee of the board of directors. This committee-level focus on data privacy and cybersecurity allows the board to further enhance its understanding of these issues. The ESG Committee assists the board of directors in its oversight of our data privacy and cybersecurity needs by staying apprised of our data privacy and information security programs, strategy, policies, standards, architecture, processes and material risks, and overseeing responses to security and data incidents.

Our board of directors and the ESG Committee’s principal role is one of oversight, recognizing that management is responsible for the design, implementation and maintenance of an effective program for protecting against and mitigating data privacy and cybersecurity risks. The Head of Technology, as the chair of the Information Security Committee, provides updates to the ESG Committee on an annual basis and, as necessary, to the board of directors. These regular reports include detailed updates on our performance preparing for, preventing, detecting, responding to and recovering from cyber incidents. The Head of Technology also promptly informs and updates the ESG Committee about any information security incidents that may pose significant risk to the POSCO Group. Members of the board of directors stay apprised of the rapidly evolving cyber threat landscape and provide guidance to management as appropriate in order to address the effectiveness of our overall data privacy and cybersecurity program.

PART III

Item 17. Financial Statements

Not applicable

104

Item 18. Financial Statements

	Page
Report of Independent Registered Public Accounting Firm, KPMG Samjong Accounting Corp., on Consolidated Financial Statements		F-2
Report of Independent Registered Public Accounting Firm, KPMG Samjong Accounting Corp., on Internal Control over Financial Reporting		F-4
Consolidated Statements of Financial Position as of December 31, 2022 and 2023		F-6
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2021, 2022 and 2023		F-8
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2021, 2022 and 2023		F-9
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2022 and 2023		F-12
Notes to the Consolidated Financial Statements		F-14

Item 19.  Exhibits

1.1	—	Articles of Incorporation of POSCO HOLDINGS INC. (English translation)
2.1	—	Form of Common Stock Certificate (including English translation) (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement No. 33-81554)* (P)
2.2	—	Form of Deposit Agreement (including Form of American Depositary Receipts) (incorporated by reference to the Registrant’s Registration Statement (File No. 333-189473) on Form F-6)*
2.3	—	Description of common stock (see Item 10.B. Memorandum and Articles of Association)
2.4	—	Description of American Depositary Shares (incorporated by reference to Exhibit 2.4 to the Registrant’s Annual Report on Form 20-F filed on April 28, 2022)*
8.1	—	List of consolidated subsidiaries
12.1	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2	—	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1	—	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1	—	Letter of KPMG Samjong Accounting Corp. dated April 29, 2024
97.1	—	Policy for the Recovery of Erroneously Awarded Compensation
101.INS	—	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	—	Inline XBRL Taxonomy Extension Schema Document
101.CAL	—	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	—	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	—	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	—	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	—	The cover page for the Company’s Annual Report on Form 20-F for the year ended December 31, 2023, has been formatted in Inline XBRL

* Filed previously

(P) Paper filing

105

Table of Contents

	Page
Report of Independent Registered Public Accounting Firm (KPMG Samjong Accounting Corp., Seoul, Republic of Korea, Auditor Firm ID 1357)		F-2
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting		F-4
Consolidated Financial Statements
Consolidated Statements of Financial Position		F-6
Consolidated Statements of Comprehensive Income		F-8
Consolidated Statements of Changes in Equity		F-9
Consolidated Statements of Cash Flows		F-12
Notes to the Consolidated Financial Statements		F-14

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

POSCO HOLDINGS INC.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of POSCO HOLDINGS INC. and subsidiaries (the Company) as of December 31, 2022 and 2023, the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2023 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April 29, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

F-2

Estimated total contract costs at completion for construction contract revenue recognition related to POSCO Eco & Challenge CO., LTD (formerly, POSCO ENGINEERING & CONSTRUCTION CO., LTD)

As discussed in Notes 3(“Revenue from contracts with customers”), 29 and 30 to the consolidated financial statements, the Company recognized revenue of

￦

7,855,364 million from construction contracts for the year ended December 31, 2023, for which revenue is recognized over time. Such revenue amount included revenue related to POSCO Eco & Challenge CO., LTD (formerly, POSCO ENGINEERING & CONSTRUCTION CO., LTD), a subsidiary of the Company. When contract revenue and contract cost can be reliably estimated, the Company recognizes contract revenue over time based on the percentage of completion. The percentage of completion is determined based on the proportion of contract costs incurred to date, excluding contract costs incurred that do not reflect the stage of completion, to the estimated total contract costs at completion.

We identified the estimated total contract costs at completion for construction contract revenue recognition as a critical audit matter. It requires subjective and complex auditor judgments in evaluating the underlying assumptions, including estimated material costs, labor costs and outsourcing costs, for construction contracts. Changes in these assumptions may have a significant impact on the amount of revenue recognized during a specific period.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the estimation of total contract costs at completion for construction contracts, including controls related to the assumptions used to develop the estimated total contract costs at completion. We evaluated the estimated total contract costs at completion by:

- inspecting the supporting documentation prepared by the person in charge of construction field regarding rationale and reliability of the estimated total contract costs at completion including estimated material costs, labor costs and outsourcing costs for a selection of projects;

- questioning the person in charge of construction field, and inspecting supporting documentation to test estimated material costs, labor costs and outsourcing costs for a selection of projects commenced in 2023;

- questioning the Company’s finance manager and the person in charge of construction field, and inspecting documents as to the cause of any changes in estimated total contract costs at completion made during 2023 for a selection of projects; and

- assessing the Company’s ability to accurately forecast estimated total contract costs at completion by comparing the actual total contract costs for a selection of construction contracts completed during 2023 against the estimated total contract costs at completion in prior year.

/s/ KPMG Samjong Accounting Corp.

We have served as the Company’s auditor since 2008.

Seoul, Korea

April 29, 2024

F-3

Report of Independent Registered Public Accounting Firm

on Internal Control over Financial Reporting

To the Shareholders and Board of Directors

POSCO HOLDINGS INC.:

Opinion on Internal Control over Financial Reporting

We have audited POSCO HOLDINGS INC. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the PCAOB), the consolidated statements of financial position of the Company as of December 31, 2022 and 2023, the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated April 29, 2024 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made

F-4

only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG Samjong Accounting Corp.

Seoul, Korea

April 29, 2024

F-5

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Financial Position

As of December 31, 2022 and 2023

(in millions of Won)	Notes		December 31, 2022		December 31, 2023
Assets
Cash and cash equivalents		4,5,23	￦	8,053,108		6,670,879
Trade accounts and notes receivable, net		6,17,23,29,30,38		9,702,142		10,802,989
Other receivables, net		7,23,38		2,112,697		1,947,529
Other short-term financial assets		8, 17, 23		10,909,920		11,403,166
Inventories		9		16,133,403		14,557,419
Current income tax assets		36		243,829		101,979
Assets held for sale		10		12,003		406,945
Other current assets		16		1,075,939		840,984
Total current assets				48,243,041		46,731,890
Long-term trade accounts and notes receivable, net		6,23		24,033		42,516
Other receivables, net		7,23,38		1,520,331		1,452,445
Other long-term financial assets		8, 17, 23		2,332,538		2,708,325
Investments in associates and joint ventures		11		4,996,551		5,020,264
Investment property, net		13 ,17		1,074,031		1,616,294
Property, plant and equipment, net		14 ,17		31,781,196		35,206,248
Intangible assets, net		15		4,838,451		4,714,784
Defined benefit assets, net		21		520,659		464,758
Deferred tax assets		36		3,523,546		3,355,597
Other non-current assets		16		167,373		173,195
Total non-current assets				50,778,709		54,754,426
Total assets			￦	99,021,750		101,486,316

See accompanying notes to the consolidated financial statements.

F-

6

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Financial Position, Continued

As of December 31, 2022 and 2023

(in millions of Won)	Notes		December 31, 2022			December 31, 2023
Liabilities
Trade accounts and notes payable		23,38	￦	5,520,807			5,782,825
Short-term borrowings and current installments of long-term borrowings		4,17,23		11,915,994			10,959,217
Other payables		18,23,38		2,865,868			2,737,478
Other short-term financial liabilities		19,23		106,527			163,626
Current income tax liabilities		36		502,685			319,096
Liabilities directly associated with the assets held for sale		10		5			141,890
Provisions		20		515,988			419,744
Other current liabilities		22,29 ,30		2,006,831			1,943,860
Total current liabilities				23,434,705			22,467,736
Long-term trade accounts and notes payable		23,38		15			—
Long-term borrowings, excluding current installments		4,17,23		12,389,668			15,011,162
Other payables		18,23		790,402			873,565
Other long-term financial liabilities		19,23		87,052			153,782
Defined benefit liabilities, net		21		37,707			38,754
Deferred tax liabilities		36		2,924,552			2,760,234
Long-term provisions		20		579,918			468,009
Other non-current liabilities		22		585,834			114,474
Total non-current liabilities				17,395,148			19,419,980
Total liabilities				40,829,853			41,887,716
Equity
Share capital		24		482,403			482,403
Capital surplus		24,28		1,410,288			1,672,790
Reserves		26		(443,990	)		67,256
Treasury shares		27		(1,892,308	)		(1,889,658	)
Retained earnings				52,921,137			53,813,583
Equity attributable to owners of the controlling company				52,477,530			54,146,374
Non-controlling interests		25		5,714,367			5,452,226
Total equity				58,191,897			59,598,600
Total liabilities and equity			￦	99,021,750			101,486,316

See accompanying notes to the consolidated financial statements.

F-

7

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2021, 2022 and 2023

(in millions of Won, except per share information)	Notes		2021			2022			2023
Revenue		29,30,38	￦	76,009,201			85,003,616			77,056,549
Cost of sales		30,32,35,38		(64,154,339	)		(77,321,199	)		(70,639,373	)
Gross profit				11,854,862			7,682,417			6,417,176
Selling and administrative expenses		31,35
Reversal of (Impairment loss) on trade accounts and notes receivable		23		(40,153	)		(24,791	)		17,785
Other administrative expenses		28,32		(2,209,809	)		(2,479,966	)		(2,669,687	)
Selling expenses				(393,075	)		(294,482	)		(233,579	)
Other operating income and expenses		34
Reversal of (Impairment loss) on other receivables		23		12,975			(9,824	)		(283,699	)
Other operating income				577,997			592,017			394,345
Other operating expenses		35		(1,027,492	)		(1,123,685	)		(904,343	)
Operating profit				8,775,305			4,341,686			2,737,998
Share of profit of equity-accounted investees, net		11		649,569			676,260			269,678
Finance income and costs		23,33
Finance income				2,730,110			4,834,011			3,830,746
Finance costs				(2,765,175	)		(5,804,466	)		(4,202,996	)
Profit before income taxes				9,389,809			4,047,491			2,635,426
Income tax expense		36		(2,213,827	)		(461,534	)		(789,367	)
Profit				7,175,982			3,585,957			1,846,059
Other comprehensive income (loss)
Items that will not be reclassified subsequently to profit or loss :
Capital adjustment arising from investments in equity-accounted investees				(17,886	)		946			28,745
Foreign currency translation differences				38,672			(48,701	)		76,433
Remeasurements of defined benefit plans		21		51,155			105,769			(118,548	)
Net changes in fair value of equity investments at fair value through other comprehensive income		23		214,888			(10,076	)		257,725
Items that are or may be reclassified subsequently to profit or loss :
Capital adjustment arising from investments in equity-accounted investees				182,992			132,188			207,860
Foreign currency translation differences				347,469			52,725			34,118
Gain or losses on valuation of derivatives		23		309			1,023			(1,292	)
Other comprehensive income, net of tax				817,599			233,874			485,041
Total comprehensive income			￦	7,993,581			3,819,831			2,331,100
Profit attributable to :
Owners of the controlling company			￦	6,606,728			3,157,536			1,698,202
Non-controlling interests				569,254			428,421			147,857
Profit			￦	7,175,982			3,585,957			1,846,059
Total comprehensive income attributable to :
Owners of the controlling company			￦	7,374,060			3,394,098			2,131,847
Non-controlling interests				619,521			425,733			199,253
Total comprehensive income			￦	7,993,581			3,819,831			2,331,100
Earnings per share (in Won)
Basic earnings per share (in Won)		37		87,191			41,634			22,383
Diluted earnings per share (in Won)			￦	85,240			39,296			22,383

See accompanying notes to the consolidated financial statements.

F-

8

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2021, 2022 and 2023

	Attributable to owners of the controlling company																			Non- controlling interests			Total
(in millions of Won)	Share capital		Capital surplus			Hybrid bonds		Reserves			Treasury shares			Retained earnings			Subtotal
Balance as of January 1, 2021	￦	482,403		1,320,003			199,384		(1,380,918	)		(2,391,523	)		46,064,477			44,293,826			3,309,697			47,603,523
Comprehensive income:
Profit		—		—			—		—			—			6,606,728			6,606,728			569,254			7,175,982
Other comprehensive income (loss)
Remeasurements of defined benefit plans, net of tax		—		—			—		—			—			44,405			44,405			6,750			51,155
Capital adjustment arising from investments in equity-accounted investees, net of tax		—		—			—		160,343			—			—			160,343			4,763			165,106
Net changes in fair value of equity investments at fair value through other comprehensive income, net of tax		—		—			—		205,924			—			8,948			214,872			16			214,888
Foreign currency translation differences, net of tax		—		—			—		347,469			—			—			347,469			38,672			386,141
Gain or losses on valuation of derivatives, net of tax		—		—			—		243			—			—			243			66			309
Total comprehensive income		—		—			—		713,979			—			6,660,081			7,374,060			619,521			7,993,581
Transactions with owners of the controlling company, recognized directly in equity:
Year-end dividends		—		—			—		—			—			(342,565	)		(342,565	)		(62,230	)		(404,795	)
Interim dividends		—		—			—		—			—			(907,507	)		(907,507	)		—			(907,507	)
Changes in subsidiaries		—		—			—		—			—			—			—			15,034			15,034
Changes in ownership interests in subsidiaries		—		83,547			—		—			—			—			83,547			459,917			543,464
Interest of hybrid bonds		—		—			—		—			—			(9,200	)		(9,200	)		(7,254	)		(16,454	)
Acquisition of treasury shares		—		—			—		—			(116,771	)		—			(116,771	)		—			(116,771	)
Others		—		(6,134	)		—		(46	)		—			10,110			3,930			(39	)		3,891
Total transactions with owners of the controlling company		—		77,413			—		(46	)		(116,771	)		(1,249,162	)		(1,288,566	)		405,428			(883,138	)
Balance as of December 31, 2021	￦	482,403		1,397,416			199,384		(666,985	)		(2,508,294	)		51,475,396			50,379,320			4,334,646			54,713,966

See accompanying notes to the consolidated financial statements.

F-

9

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2021, 2022 and 2023

	Attributable to owners of the controlling company																				Non- controlling interests			Total
(in millions of Won)	Share capital		Capital surplus			Hybrid bonds			Reserves			Treasury shares			Retained earnings			Subtotal
Balance as of January 1, 2022	￦	482,403		1,397,416			199,384			(666,985	)		(2,508,294	)		51,475,396			50,379,320			4,334,646			54,713,966
Comprehensive income:
Profit		—		—			—			—			—			3,157,536			3,157,536			428,421			3,585,957
Other comprehensive income (loss)
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
Gain or losses on valuation of derivatives, net of tax		—		—			—			452			—			—			452			571			1,023
Total comprehensive income		—		—			—			228,971			—			3,165,127			3,394,098			425,733			3,819,831
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 interests 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 shares		—		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	￦	482,403		1,410,288			—			(443,990	)		(1,892,308	)		52,921,137			52,477,530			5,714,367			58,191,897

See accompanying notes to the consolidated financial statements.

F-1

0

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2021, 2022 and 2023

	Attributable to owners of the controlling company																		Non- controlling interests			Total
(in millions of Won)	Share capital		Capital surplus		Hybrid bonds		Reserves			Treasury shares			Retained earnings			Subtotal
Balance as of January 1, 2023	￦	482,403		1,410,288		—		(443,990	)		(1,892,308	)		52,921,137			52,477,530			5,714,367			58,191,897
Comprehensive income:
Profit		—		—		—		—			—			1,698,202			1,698,202			147,857			1,846,059
Other comprehensive income (loss)
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
Gain or losses on valuation of derivatives, net of tax		—		—		—		(641	)		—			—			(641	)		(651	)		(1,292	)
Total comprehensive income		—		—		—		516,190			—			1,615,657			2,131,847			199,253			2,331,100
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 interests 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 shares		—		2,880		—		—			2,650			—			5,530			—			5,530
Share-based payment		—		6,783		—		—			—			—			6,783			17,324			24,107
Others		—		2,476		—		(4,944	)		—			(2,441	)		(4,909	)		(53,454	)		(58,363	)
Total transactions with owners of the controlling company		—		262,502		—		(4,944	)		2,650			(723,211	)		(463,003	)		(461,394	)		(924,397	)
Balance as of December 31, 2023	￦	482,403		1,672,790		—		67,256			(1,889,658	)		53,813,583			54,146,374			5,452,226			59,598,600

See accompanying notes to the consolidated financial statements.

F-1

1

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2021, 2022 and 2023

(in millions of Won)	Notes		2021			2022			2023
Cash flows from operating activities
Profit			￦	7,175,982			3,585,957			1,846,059
Adjustments for:
Depreciation				3,135,345			3,204,744			3,346,461
Amortization				444,100			488,835			498,193
Finance income				(1,270,044	)		(1,943,661	)		(1,850,756	)
Finance costs				1,257,112			2,532,735			2,179,233
Income tax expense				2,213,827			461,534			789,367
Gain on disposal of property, plant and equipment				(12,016	)		(18,502	)		(9,387	)
Loss on disposal of property, plant and equipment				95,720			111,082			125,823
Impairment losses on property, plant and equipment				311,520			213,183			275,846
Gain on disposal of intangible assets				(273	)		(291	)		(401	)
Gain on disposal of investments in subsidiaries, associates and joint ventures				(85,981	)		(13,904	)		(197,088	)
Loss on disposal of investments in subsidiaries, associates and joint ventures				12,882			12,400			18,843
Share of profit of equity-accounted investees				(649,569	)		(676,260	)		(269,678	)
Expenses related to post-employment benefits				243,567			228,611			206,614
Increase to provisions				159,592			289,915			160,880
Impairment loss on trade and other receivables				27,178			34,615			265,914
Loss on valuation of inventories				78,783			259,678			309,317
Impairment loss on goodwill and intangible assets				224,328			370,663			129,907
Gain on disposals of assets held for sale				(60,208	)		(55,262	)		(1,312	)
Loss on disposal of assets held for sale				—			3,964			103,366
Compensation for insured losses				(15,558	)		(236,344	)		(7,682	)
Others, net				(21,456	)		28,674			(43,415	)
				6,088,849			5,296,409			6,030,045
Changes in operating assets and liabilities		40		(7,044,310	)		(368,489	)		(1,087,529	)
Interest received				279,554			249,751			447,621
Interest paid				(433,794	)		(560,766	)		(1,038,005	)
Dividends received				782,053			757,502			696,941
Income taxes paid				(588,969	)		(2,773,599	)		(727,437	)
Net cash provided by operating activities			￦	6,259,365			6,186,765			6,167,695

See accompanying notes to the consolidated financial statements.

F-1

2

POSCO HOLDINGS INC. and Subsidiaries

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2021, 2022 and 2023

(in millions of Won)	Notes	2021			2022			2023
Cash flows from investing activities
Acquisitions of short-term financial instruments		￦	(41,797,503	)		(89,327,182	)		(39,830,719	)
Proceeds from disposal of short-term financial instruments			40,336,417			91,539,884			40,174,440
Acquisitions of long-term financial instruments			(289,612	)		(21,638	)		(5,362	)
Increase in loans			(526,643	)		(1,087,409	)		(1,238,668	)
Collection of loans			568,536			1,086,964			1,369,763
Acquisitions of securities			(300,807	)		(493,054	)		(380,744	)
Proceeds from disposal of securities			273,935			332,724			142,791
Acquisitions of investment in associates and joint ventures			(492,435	)		(518,158	)		(417,603	)
Proceeds from disposal of investment in associates and joint ventures			61,013			169,365			142,316
Acquisitions of property, plant and equipment			(3,068,591	)		(4,927,586	)		(6,733,289	)
Proceeds from (payment for) disposal of property, plant and equipment			(11,117	)		864			(11,895	)
Acquisitions of investment property			(91,880	)		(1,561	)		(56,043	)
Proceeds from disposal of investment property			3,809			23,401			707
Acquisitions of intangible assets			(431,122	)		(492,873	)		(481,882	)
Proceeds from disposal of intangible assets			9,485			7,748			30,328
Proceeds from disposal of assets held for sale			67,293			111,488			4,850
Increase in cash from acquisition of business, net of cash acquired			5,472			—			—
Collection of lease receivables			97,701			54,614			52,657
Cash outflows due to business combinations			—			(901,223	)		(150,201	)
Cash received as compensation for insured losses			—			236,344			7,682
Others, net			2,542			(12,583	)		(7,352	)
Net cash used in investing activities			(5,583,507	)		(4,219,871	)		(7,388,224	)
Cash flows from financing activities
Proceeds from borrowings			4,358,955			4,553,746			7,817,217
Repayment of borrowings			(3,719,542	)		(4,138,054	)		(4,461,114	)
Proceeds from (repayment of) short-term borrowings, net			(329,897	)		1,764,569			(2,524,077	)
Payment of cash dividends			(1,310,920	)		(1,218,405	)		(815,451	)
Repayment of hybrid bonds			—			—			(340,000	)
Payment of interest of hybrid bonds			(16,493	)		(16,494	)		(10,043	)
Capital contribution from non-controlling interests and proceeds from disposal of subsidiary while maintaining control			660,488			577,330			299,342
Capital deduction from non-controlling interests and additional acquisition of interests in subsidiaries			(16,138	)		(16,336	)		(9,721	)
Repayment of lease liabilities			(281,288	)		(268,082	)		(222,829	)
Acquisition of treasury shares			(116,771	)		—			—
Others, net			2,940			81,134			88,083
Net cash provided by (used in) financing activities	40		(768,666	)		1,319,408			(178,593	)
Effect of exchange rate fluctuation on cash held			112,950			(8,740	)		16,719
Net increase in cash and cash equivalents			20,142			3,277,562			(1,382,403	)
Cash and cash equivalents at beginning of the period	5,10		4,755,578			4,775,720			8,053,282
Cash and cash equivalents at end of the period	5,10	￦	4,775,720			8,053,282			6,670,879

See accompanying notes to the consolidated financial statements.

F-1

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements

As of December 31, 2022 and 2023

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.

F-1

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(b) Consolidated subsidiaries

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

	Principal operations	Ownership (%)
		December 31, 2022						December 31, 2023
		POSCO HOLDINGS INC.		Subsidiaries		Total		POSCO HOLDINGS INC.		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		—		56.87		56.87		—		56.96		56.96		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		47.17		52.83		100.00		100.00		—		100.00		Seoul
POSCO A&C	Architecture and consulting		45.66		54.34		100.00		—		100.00		100.00		Seoul
POSCO Venture Capital Co., Ltd.	Investment in venture companies		95.00		—		95.00		100.00		—		100.00		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		59.76		—		59.76		59.75		—		59.75		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		—		48.85		48.85		—		48.94		48.94		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

F-1

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

	Principal operations	Ownership (%)
		December 31, 2022						December 31, 2023
		POSCO HOLDINGS INC.		Subsidiaries		Total		POSCO HOLDINGS INC.		Subsidiaries		Total		Region
[Domestic]
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		62.92		—		62.92		73.21		—		73.21		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 1 st 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		99.67		0.18		99.85		99.86		0.14		100.00		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		—

F-1

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

	Principal operations	Ownership (%)
		December 31, 2022						December 31, 2023
		POSCO HOLDINGS INC.		Subsidiaries		Total		POSCO HOLDINGS INC.		Subsidiaries		Total		Region
[Domestic]
New Energy Hub	Electricity and gas supply		50.00		50.00		100.00		—		100.00		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		100.00		—		100.00		51.00		—		51.00		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

F-1

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and

2023

	Principal operations	Ownership (%)												Region
		December 31, 2022						December 31, 2023
		POSCO HOLDINGS INC.		Subsidiaries		Total		POSCO HOLDINGS INC.		Subsidiaries		Total
[Foreign]
POSCO America Corporation	Research&Consulting		99.45		0.55		100.00		99.45		0.54		99.99	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
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

F-1

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

	Principal operations	Ownership (%)												Region
		December 31, 2022						December 31, 2023
		POSCO HOLDINGS INC.		Subsidiaries		Total		POSCO HOLDINGS INC.		Subsidiaries		Total
[Foreign]
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		83.28		14.88		98.16		—		98.16		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

F-

19

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

	Principal operations	Ownership (%)												Region
		December 31, 2022						December 31, 2023
		POSCO HOLDINGS INC.		Subsidiaries		Total		POSCO HOLDINGS INC.		Subsidiaries		Total
[Foreign]
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		56.75		10.00		66.75		—		66.75		66.75	Mexico
POSCO ChengDu Processing Center	Steel manufacturing and sales		—		43.00		43.00		—		43.00		43.00	China

F-

2

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

	Principal operations	Ownership (%)												Region
		December 31, 2022						December 31, 2023
		POSCO HOLDINGS INC.		Subsidiaries		Total		POSCO HOLDINGS INC.		Subsidiaries		Total
[Foreign]
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		—		100.00		100.00		—		99.91		99.91	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
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

F-

2

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

	Principal operations	Ownership (%)												Region
		December 31, 2022						December 31, 2023
		POSCO HOLDINGS INC.		Subsidiaries		Total		POSCO HOLDINGS INC.		Subsidiaries		Total
[Foreign]
POSCO Vietnam Processing Center Joint Stock Company	Steel manufacturing and sales		94.05		5.95		100.00		84.04		15.96		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		70.51		21.69		92.20		—		92.20		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		—		90.00		90.00		—		55.00		55.00	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

F-2

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

	Principal operations	Ownership (%)												Region
		December 31, 2022						December 31, 2023
		POSCO HOLDINGS INC.		Subsidiaries		Total		POSCO HOLDINGS INC.		Subsidiaries		Total
[Foreign]
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		18.70		41.30		60.00		14.67		45.33		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

F-2

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

	Principal operations	Ownership (%)												Region
		December 31, 2022						December 31, 2023
		POSCO HOLDINGS INC.		Subsidiaries		Total		POSCO HOLDINGS INC.		Subsidiaries		Total
[Foreign]
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

F-2

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*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.

(*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 decreased by

￦

7,827 million (POSCO FUTURE M CO.,LTD. and others) and increased

￦

250,363 

million (POSCO INTERNATIONAL Corporation and others) in 2022 and 2023, 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 of

￦

122,838 million and

￦

441,113 million from its subsidiaries in aggregate in 2022 and 2023, 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.

F-2

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(c) Details of non-controlling interest as of and for the years ended December 31, 2021, 2022 and 2023 are as follows:

1) December 31, 2021

(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	￦	5,952,771			968,129			2,071,307			5,221,691			423,422			9,496,214			24,133,534
Non-current assets		3,322,590			2,388,139			1,708,558			1,929,362			185,508			4,772,409			14,306,566
Current liabilities		(4,537,785	)		(1,155,003	)		(604,333	)		(3,100,971	)		(263,794	)		(7,918,852	)		(17,580,738	)
Non-current liabilities		(1,666,455	)		(1,778,668	)		(835,222	)		(1,306,648	)		(10,051	)		(1,706,779	)		(7,303,823	)
Equity		3,071,121			422,597			2,340,310			2,743,434			335,085			4,642,992			13,555,539
Non-controlling interests		1,138,360			126,779			942,660			1,294,925			116,000			1,542,960			5,161,684
Sales		30,545,740			2,694,601			1,939,524			6,693,933			832,127			28,538,963			71,244,888
Profit (loss) for the period		223,845			500,801			128,960			266,821			(18,802	)		690,197			1,791,822
Profit (loss) attributable to non-controlling interests		82,972			150,240			51,944			125,942			(6,509	)		189,590			594,179
Cash flows from operating activities		(235,359	)		151,393			36,745			113,021			(18,494	)		130,828			178,134
Cash flows from investing activities		(91,619	)		(4,022	)		(639,965	)		(243,463	)		(17,309	)		(86,585	)		(1,082,963	)
Cash flows from financing activities (before dividends to non-controlling interest)		279,529			(81,187	)		595,521			36,359			(226	)		9,604			839,600
Dividend to non-controlling interest		(32,004	)		—			(7,370	)		(9,867	)		(2,628	)		(7,671	)		(59,540	)
Effect of exchange rate fluctuation on cash held		1,937			3,916			6			3,048			3			6,216			15,126
Net increase (decrease) in cash and cash equivalents		(77,516	)		70,100			(15,063	)		(100,902	)		(38,654	)		52,392			(109,643	)

F-2

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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			5,326,049			585,766			10,305,149			24,464,790
Non-current assets		3,470,861			3,062,378			2,261,649			2,033,432			226,598			7,264,540			18,319,458
Current liabilities		(3,809,495	)		(2,486,616	)		(920,656	)		(3,372,310	)		(419,452	)		(8,680,121	)		(19,688,650	)
Non-current liabilities		(2,203,923	)		(834,456	)		(938,447	)		(1,076,909	)		(4,431	)		(2,094,774	)		(7,152,940	)
Equity		2,747,342			866,429			2,235,350			2,910,262			388,481			6,794,794			15,942,658
Non-controlling interests		1,018,764			433,214			899,416			1,373,670			134,484			2,480,625			6,340,173
Sales		32,532,465			3,006,300			3,041,287			8,376,559			1,101,037			34,933,760			82,991,408
Profit (loss) for the period		323,749			140,967			114,365			174,061			42,832			269,926			1,065,900
Profit (loss) attributable to non-controlling interests		120,052			70,483			46,016			82,158			14,828			106,091			439,628
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
Dividend 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

F-2

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

3) 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			6,097,118			561,725			10,280,517			25,517,381
Non-current assets		5,787,515			2,664,861			3,056,029			2,040,682			184,667			8,086,165			21,819,919
Current liabilities		(4,379,238	)		(1,318,286	)		(1,221,829	)		(4,742,476	)		(328,558	)		(8,445,386	)		(20,165,773	)
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			3,142,702			432,675			7,240,353			17,386,818
Non-controlling interests		1,121,823			363,987			666,420			1,483,382			149,812			2,600,462			6,385,886
Sales		28,542,084			3,130,551			4,457,201			9,465,614			1,439,715			29,630,513			76,665,678
Profit (loss) for the period		528,592			72,609			63,024			188,645			88,104			(400,634	)		540,340
Profit (loss) attributable to non-controlling interests		141,618			36,304			25,365			89,042			30,506			(143,784	)		179,051
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
Dividend 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

F-

2

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(d) Details of associates and joint ventures

1) Associates

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

		Ownership (%)				Region
Investee	Category of business	2022		2023
[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	Gwangyang
KONES, Corp.	Technical service		26.72		27.41	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	Hwaseong
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	Hwaseong
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 Growth 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 waste energy		30.00		30.00	Pohang
POSCO Energy Valley Fund	Investment in new technologies		20.00		22.08	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		15.86		15.87	Seoul
POSCO 4th Industrial Revolution Fund(*1)	Investment in new technologies		19.05		19.05	Seoul
Pureun Tongyeong Enviro Co., Ltd.	Sewerage 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	Gwangyang
Clean Iksan Co., Ltd.	Construction		23.50		23.50	Iksan
Innovalley Co., Ltd.	Real estate development		28.77		29.48	Yongin
BLUE OCEAN Private Equity Fund	Private equity financial		27.52		27.52	Seoul
Pocheon-Hwado Highway Corp.	Investment in Expressway		27.64		27.89	Incheon
INNOPOLIS Job Creation Fund II(*1)	Investment in new technologies		6.13		6.13	Seoul
Samcheok Blue Power 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		15.34		15.49	Pohang

F-

29

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

		Ownership (%)				Region
Investee	Category of business	2022		2023
[Domestic]
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
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
[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 Power	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 Power(*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

F-3

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As

of

December 31, 2022 and 2023

		Ownership (%)				Region
Investee	Category of business	2022		2023
[Foreign]
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		19.00		17.26	Vietnam
Saudi-Korean Company for Maintenance Properties Management LLC(*1)	Building management		19.00		19.00	Saudi Arabia
NCR LLC	Coal sales		22.10		22.10	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 Mong Duong Power 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 Daewoo 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		30.00		24.32	Australia
Qingdao ZhongShou New Energy Technology Co.,Ltd(*1)	Artificial Graphite manufacturing		13.01		13.00	China
Black Rock Mining LTD(*1)	Mining		12.90		11.72	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 associate.

(*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.

F-3

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

2) Joint ventures

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

		Ownership (%)
Investee	Category of business	2022		2023		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.

F-3

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(e) Newly included 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 INDONESIA	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

(f) 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 International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board.

The consolidated financial statements were authorized for issuance by management on April

29

, 2024.

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

F-3

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(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 each operation. These consolidated financial statements are presented in Korean Won, the 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 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 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 for revenue recognized over time

• Note 36 - Income taxes

• Note 39 - Commitments and contingencies

F-3

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(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 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 beginning on January 1, 2023 described below, the Company has consistently applied accounting policies in these consolidated financial statements for all periods presented.

(a) IAS No. 12 “Income Taxes”—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 IAS No. 12 “Income Taxes”. 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

F-3

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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 IAS No. 12 “Income Taxes”.

(b) IAS No. 1 “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) IAS No. 8 “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) IAS No. 12 “Income Taxes”—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.

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 the changes in accounting policies 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.

F-3

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(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.

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.

F-3

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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.

(d) 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 comprises 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.

F-3

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

(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

F-

39

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

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.

F-

4

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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.

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.

F-4

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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.

(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.

F-4

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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 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.

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.

F-4

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(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.

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

p

rovision 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.

F-4

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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 IFRS No. 15.

F-4

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(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.

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.

F-4

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(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 IFRS No. 15, 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 IAS No. 12 “Income Taxes”, if it is not applicable to the income taxes, the Company applies IAS No. 37 “Provisions Contingent Liabilities and Contingent Assets”.

Operating segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenditures, including revenues and expenses that relate to transactions with any of the Company’s other components, whose operating results are regularly reviewed by the Company’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial

F-4

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

information is available. Management has determined that the CODM of the Company is the CEO. Segment results that are reported to the CEO include items directly attributable to a segment and items allocated on a reasonable basis.

Profit or loss is the measure of segment profitability used by the CODM to assess performance and allocate resources of the segments.

With regard to Construction segment of the Green Infrastructure business, segment profit and loss is determined in accordance with IFRS except that revenues and expenses from the development and sale of certain residential real estates are determined by reference to the stage of completion, while in the consolidated financial statements, they are recognized when the title to the real estates is transferred to the buyer.

For the other segments, segment profit and loss is determined in accordance with IFRS without any allocation of corporate expenses.

The accounting policies used in reporting segment information are consistent with the accounting policies used in the preparation of the consolidated financial statements except the assets and liabilities related to certain real estate contract revenue of the construction segment explained above which are determined by reference to the stage of completion of the contract activity at the end of each period. Corporate expenses are not allocated to segments in determining segment profit and loss. In addition, segment assets and liabilities, are not allocated to segments either. The assets and liabilities of each segment presented in Note 41 are based on the separate financial statements of the entities belong to each segment.

In addition, there are a variety of transactions amongst the reportable segments. These transactions include sales and purchase of products, materials and property, plant and equipment, and rendering of construction service and so on.

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) IAS No. 1 “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

F-4

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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) IAS No. 7 “Statements of Cash Flows”, IFRS No. 7 “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.

(c) IFRS No. 18 “Presentation and Disclosure in Financial Statements”

On April 9, 2024, the International Accounting Standards Board published IFRS No. 18 “Presentation and Disclosure in Financial Statements”. The new standard, which replaces IAS No. 1 “Presentation of Financial Statements”, introduces new disclosure requirements regarding the required presentation of operating profit, management performance measures and improvement on grouping information within the financial statements. IFRS No. 18 is effective for annual reporting periods beginning on or after January 1, 2027. Early application is permitted.

The Company is in the progress of assessing the effect of the new disclosure requirements to the consolidated financial statements.

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

F-

49

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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.

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.

F-5

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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 construction segment of the green infrastructure business have hedged foreign currency risks by using forward exchange contracts. Entities in the trading segment of the green infrastructure business have hedged foreign currency risks by using forward exchange contracts when the foreign currencies received and paid are different.

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 transition to KOFR are unclear.

F-5

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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 monitors the progress of transition from IBOR to new benchmark rates for those arrangements that have not yet transitioned to an alternative benchmark rate by including an appropriate fallback clause. 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.

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	￦	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.

(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.

F-52

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

Net

borrowing-to-equity

ratio as of December 31, 2022 and 2023 is as follows:

(in millions of Won)	202 2			202 3
Total borrowings	￦	24,305,662			25,970,379
Less: Cash and cash equivalents		8,053,108			6,670,879
Net borrowings		16,252,554			19,299,500
Total equity		58,191,897			59,598,600
Net borrowings-to-equity ratio		27.93	%		32.38	%

5. Cash and Cash Equivalents

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

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

As of December 31, 2022 and 2023, cash and cash equivalents amounting to

￦

36,182 million and

￦

85,163 million, respectively, are restricted.

6. Trade Accounts and Notes Receivable

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

(in millions of Won)	2022			2023
Current
Trade accounts and notes receivable	￦	8,695,788			9,382,308
Unbilled due from customers for contract work		1,340,146			1,704,256
Less: Allowance for doubtful accounts		(333,792	)		(283,575	)
	￦	9,702,142			10,802,989
Non-current
Trade accounts and notes receivable	￦	68,342			89,839
Less: Allowance for doubtful accounts		(44,309	)		(47,323	)
	￦	24,033			42,516

The Company sold trade accounts and notes receivable with recourse to financial institutions. These trade accounts and notes receivable have not been derecognized from the statements of financial position because the Company retains substantially all of the risks and rewards associated with the transferred assets. As of December 31, 2022 and December 31, 2023, the carrying amounts of such secured borrowings

are

￦

215,133 million and

￦

132,942 million, respectively, which are presented in the statements of financial position as short-term borrowings.

F-5

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

7. Other Receivables

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

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

(*1) Due to the continuous operating losses and deteriorating business environment of FQM Australia Holdings Pty Ltd, an associate, the Company assessed the recoverability of the related loans and accrued interest and recognized a full allowance for doubtful accounts of ￦ 257,500 million.

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

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

F-5

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(c) As of December 31, 2022 and 2023, total and net lease investments in the leases are as follows:

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

8. Other Financial Assets

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

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

(*1) As of December 31, 2022 and 2023, financial instruments amounting to ￦ 73,192 million and ￦ 101,888 million, respectively, are restricted in use for financial arrangements, pledge and others.

(*2) As of December 31, 2022 and 2023, ￦ 153,640 million and ￦ 181,617 million of equity and other securities, respectively, have been provided as collateral for borrowings, construction projects and others.

F-5

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

9. Inventories

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

(in millions of Won)	2022			2023
Finished goods	￦	2,508,370			2,615,009
Merchandise		1,237,203			1,049,467
Semi-finished goods		3,453,150			3,039,516
Raw materials		4,171,049			3,237,691
Fuel and materials		1,109,100			921,742
Construction inventories		1,131,776			988,463
Materials-in-transit		2,738,439			2,965,306
Others		100,873			87,802
		16,449,960			14,904,996
Less: Allowance for inventories valuation		(316,557	)		(347,577	)
	￦	16,133,403			14,557,419

(b) The changes in allowance for inventories valuation for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021			2022			2023
Beginning	￦	131,642			161,929			316,557
Loss on valuation of inventories		78,783			259,678			309,317
Realization  on sale of inventories		(49,528	)		(97,749	)		(256,969	)
Others		1,032			(7,301	)		(21,328	)
Ending	￦	161,929			316,557			347,577

10. Assets Held for Sale

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

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

F-

56

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*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 recognized ￦ 401,804 million of asset held for sale and ￦ 141,890 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 of ￦ 160,415 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 recognized ￦ 103,366 million of loss on disposal of assets held for sale. The loss on disposal of assets held for sale recognized as profit or loss includes ￦ 102,470 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 for ￦ 10,305 million. Meanwhile, during the year ended December 31, 2023, the Company disposed of the assets held for sale for ￦ 9,599 million and reclassified the remaining amount ￦ 706 million to property, plant and equipment.

11. Investments in Associates and Joint ventures

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

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

F-5

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

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

(*1) As of December 31, 2022 and 2023, investments in associates amounting to ￦ 628,573 million and ￦ 650,116 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.

F-5

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

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

(*1) As of December 31, 2022 and 2023, 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, for ￦ 292,780 million and classified as investments in joint ventures.

F-

59

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

1) 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)	￦	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
	￦	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.

F-6

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*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 of ￦ 10,065 million considering the low asset quality and assessment of recoverable amount.

2) 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.	￦	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
	￦	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.

F-6

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

1) December 31, 2022

(in millions of Won)
Company	Assets		Liabilities		Equity		Sales		Net income (loss)
[Domestic]
EQP POSCO Global NO1 Natural Resources Private Equity Fund	￦	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	)

F-6

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

2) December 31, 2023

(in millions of Won)
Company	Assets		Liabilities		Equity (deficit)			Sales		Net income (loss)
[Domestic]
Samcheok Blue Power Co.,Ltd.	￦	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

F-6

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

(in millions of Won)
Company	Beginning balance		Increase (decrease)			Ending balance
New Songdo International City Development, LLC	￦	134,495		(17,780	)		116,715
UITrans LRT Co., Ltd.		43,872		2,583			46,455
Clean Iksan Co., Ltd.		703		(217	)		486
HYOCHUN Co.,Ltd.		4,396		713			5,109
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
FQM Australia Holdings Pty Ltd		—		252,727			252,727
	￦	202,691		270,487			473,178

F-6

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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 Power 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.

13. Investment Property, Net

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

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

As of December 31, 2023, the fair value of investment property is

W

2,477,766 million.

F-6

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

1) For the year ended December 31, 2022

(in millions of Won)	Beginning		Acquisitions		Disposals			Depreciation			Others(*1)			Ending
Land	￦	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
	￦	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.

2) For the year ended December 31, 2023

(in millions of Won)	Beginning		Acquisitions		Business Combination(*2)		Disposals			Depreciation			Others(*1)			Ending
Land	￦	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
	￦	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.

F-6

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

14. Property, Plant and Equipment, Net

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

(in millions of Won)	2022										2023
	Acquisition cost		Accumulated depreciation and impairment loss			Government grants			Book value		Acquisition cost		Accumulated depreciation and impairment loss			Government grants			Book value
Land	￦	3,103,218		(53	)		—			3,103,165		3,295,768		(5,524	)		—			3,290,244
Buildings		10,102,634		(5,922,285	)		(5,455	)		4,174,894		10,671,833		(6,237,883	)		(6,318	)		4,427,632
Structures		6,989,634		(3,826,658	)		(49	)		3,162,927		7,159,034		(4,077,472	)		(38	)		3,081,524
Machinery and equipment		52,198,121		(35,767,810	)		(7,481	)		16,422,830		54,184,134		(37,630,472	)		(14,470	)		16,539,192
Vehicles		337,932		(284,897	)		(904	)		52,131		383,891		(302,246	)		(2,050	)		79,595
Tools		497,173		(405,844	)		(368	)		90,961		557,394		(428,215	)		(314	)		128,865
Furniture and fixtures		796,405		(622,944	)		(116	)		173,345		840,366		(650,424	)		(55	)		189,887
Lease assets		1,299,779		(378,581	)		—			921,198		1,468,295		(469,990	)		—			998,305
Bearer plants		180,486		(38,766	)		—			141,720		186,723		(49,392	)		—			137,331
Construction-in- progress		3,621,269		(73,266	)		(9,978	)		3,538,025		6,421,533		(76,357	)		(11,503	)		6,333,673
	￦	79,126,651		(47,321,104	)		(24,351	)		31,781,196		85,168,971		(49,927,975	)		(34,748	)		35,206,248

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

1) 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	￦	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	)		(2,235,874	)		3,538,025
	￦	29,596,698		5,110,373		534,101		(72,780)			(3,168,721	)		(213,183	)		(5,292	)		31,781,196

(*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.

F-6

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*3) The Company estimated the recoverable amounts (net fair value) of damaged assets due the flooding of Naengcheon stream in Pohang, and recognized an impairment loss of W 207,072 million since recoverable amounts are less than their carrying amounts.

2) 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	￦	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
	￦	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 of ￦ 196,207 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 of ￦ 46,535 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, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021		2022		2023
Weighted average expenditure	￦	1,230,145		1,657,425		3,585,047
Borrowing costs capitalized		31,295		44,264		126,260
Capitalization rate (%)		2.25 ~ 3.16		2.39 ~ 3.85		1.53 ~ 6.91

F-6

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

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

As of December 31, 2023, assets pledged as collateral related to the Company’s borrowings and others amounting to

W

6,643,746 million include investment properties and other assets such as right to use land.

(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, 2022 and 2023 were as follows:

1) For the year ended December 31, 2022

(in millions of Won)	Beginning		Acquisitions		Business Combination(*1)		Depreciation			Others			Ending
Land	￦	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
	￦	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.

2) For the year ended December 31, 2023

(in millions of Won)	Beginning		Acquisitions		Depreciation			Others			Ending
Land	￦	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
	￦	1,091,846		243,649		(176,021	)		10,162			1,169,636

F-

69

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(f) The amount recognized in profit or loss related to leases for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021		2022		2023
Interest on lease liabilities	￦	32,331		34,936		41,109
Expenses related to short-term leases		20,885		29,931		52,486
Expenses related to leases of low-value assets		18,577		17,877		20,103
	￦	71,793		82,744		113,698

15. Goodwill and Other Intangible Assets, Net

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

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

F-7

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

1) 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	￦	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
	￦	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 of W 337,953 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.

F-7

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

2) For the year ended December 31, 2023

(in millions of Won)	Beginning		Acquisitions		Disposals			Amortization			Impairment loss(*3)			Others(*2)			Ending
Goodwill	￦	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
	￦	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 in Greenhills Mine, which was accounted for as a joint operation, to a new partnership established by Teck Coal Partnership, the main operator. POSCO Canada Ltd. estimated the recoverable amount of the contributed assets of the joint operation considering the fair value of acquired shares of the new partnership, and recognized an impairment loss   of W 88,518 million since recoverable amounts are less than their carrying amounts.

F-7

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

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

(*1) The recoverable amount of the Global Business Division of POSCO INTERNATIONAL Corporation, 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.

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 by

￦

304,741 million or 7.96%. If the terminal growth rate decreases by 0.5%, the value in use would have decreased by

￦

106,403 million or 2.78%.

The Company believes that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the carrying amount to exceed the recoverable amount of the CGU.

F-7

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

16. Other Assets

Other current assets and other

non-current

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

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

(*1) As of December 31, 2022, the Company recognized tax assets amounting to ￦ 6,764 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. 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.

F-7

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

17. Borrowings

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

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

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

(in millions of Won)	Bank	Issuance date	Maturity date	Interest rate (%)		2022			2023
Long-term borrowings	Export-Import Bank of Korea and others	September, 2001~ December, 2023	January, 2025~ March, 2040		0.19~8.69	￦	2,718,212			4,590,541
Less: Present value discount							(8,951	)		(9,414	)
Bonds	KB Securities co.,Ltd. and others	July, 2015~ November, 2023	January, 2025~ January, 2033		1.68~6.85		8,351,006			10,478,394
Less: Discount on debentures issued							(28,893	)		(48,359	)
Exchangeable bonds(*1,2)	Foreign currency exchangeable bonds	September, 2021	September, 2026				1,358,294			—
						￦	12,389,668			15,011,162

(*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.

F-7

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*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
Redemption	1) Redemption at Maturity : Outstanding bond principal, which is not repaid early or which call 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
Adjustments for exchange price	Adjusting the exchange price according to the terms and conditions of the bond in the events of 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.
Put option by bondholders	- 3 years (September 1, 2024) from the closing date - 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)
Call option by the Issuer	- 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. - 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 price has changed due to cash dividends during the year ended December 31, 2023.

F-7

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 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 measurement, 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)	Bank	Book value		Pledged amount
Property, plant and equipment and Investment property	Korea Development Bank and others	￦	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
		￦	4,560,391		6,094,493

18. Other Payables

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

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

F-7

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

19. Other Financial Liabilities

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

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

(*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.

20. Provisions

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

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

(*1) The Company recognized probable outflow of resources amounting to ￦ 52,530 million and ￦ 45,712 million as provisions for legal contingencies and asserted claim in relation to lawsuits against the Company as of December 31, 2022 and 2023, 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 to ￦ 17,005 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 to ￦ 119,710 million as provisions for improvement and reclassified as liabilities held for sale as of December 31, 2023.

F-7

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*4) As of December 31, 2022 and December 31, 2023, POSCO INTERNATIONAL Corporation and Korea Fuel Cell, recognized ￦ 97,928 million and ￦ 23,224 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, 2022 and December 31, 2023, the Company has recognized emission liabilities amounting to ￦ 14,178 million and ￦ 9,065 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, 2022 and December 31, 2023, the Company recognized ￦ 123,073 million and ￦ 64,166 million, respectively, as provision liabilities.

(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 working service rendered
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, 2022 and 2023 were as follows:

1) For the year ended December 31, 2022

(in millions of Won)	Beginning		Increase		Utilization			Reversal			Others(*1)			Ending
Provision for bonus payments	￦	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
	￦	989,076		639,210		(491,273	)		(84,791	)		43,684			1,095,906

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

F-

79

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

2) For the year ended December 31, 2023

(in millions of Won)	Beginning		Increase		Utilization			Reversal			Others(*1)			Ending
Provision for bonus payments	￦	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
	￦	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.

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, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021		2022		2023
Expense related to post-employment benefit plans under defined contribution plans	￦	54,527		62,467		70,394

(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, 2022 and 2023 are as follows:

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

(*1) As of December 31, 2022 and 2023, the Company recognized net defined benefit assets amounting to ￦ 520,659 million and ￦ 464,758 million, respectively, since there are consolidated entities whose fair value of plan assets exceeded the present value of defined benefit obligations.

F-8

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

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

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

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

The Company expects to make an estimated contribution of

￦

281,169 million to the defined benefit plan assets in 2024.

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

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

F-8

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

5) The amounts recognized in consolidated statement of comprehensive income for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021		2022			2023
Current service costs	￦	243,029		235,007			235,340
Net interest costs(*1)		538		(6,397	)		(28,726	)
	￦	243,567		228,610			206,614

(*1) The actual return on plan assets amounted to ￦ 42,051 million, ￦ 20,410 million and ￦ 148,786 million for the years ended December 31, 2021, 2022 and 2023, respectively.

The expenses by function were as follows:

(in millions of Won)	2021		2022		2023
Cost of sales	￦	166,734		156,576		135,687
Selling and administrative expenses		76,265		71,060		70,746
Others		568		974		181
	￦	243,567		228,610		206,614

6) Accumulated actuarial gains (losses), net of tax recognized in other comprehensive income for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021			2022			2023
Beginning	￦	(553,221	)		(502,066	)		(396,297	)
Current actuarial gains (losses)		51,155			105,769			(118,548	)
Ending	￦	(502,066	)		(396,297	)		(514,845	)

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

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

(*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.

F-8

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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	￦	(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 year - 5 years		5 years - 10 years		10 years - 20 years		After 20 years		Total
Benefits to be paid	￦	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.

22. Other Liabilities

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

(in millions of Won)	2022		2023
Current
Due to customers for contract work	￦	756,316		624,632
Advances received		787,477		910,659
Unearned revenue		62,030		69,062
Withholdings		369,067		297,442
Firm commitment liability		7,566		20,136
Others(*1)		24,375		21,929
	￦	2,006,831		1,943,860
Non-current
Advances received	￦	433,958		2
Unearned revenue		22,203		8,889
Others(*1)		129,673		105,583
	￦	585,834		114,474

(*1) As of December 31, 2022 and   2023, the Company recognized the liabilities assumed amounted to ￦ 71,248 million and ￦ 56,325 million, respectively , related to unfavorable terms of a customer contract relative to market-terms upon the acquisition of Senex Energy Limited.

F-8

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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, 2022 and 2023 are as follows:

①

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	￦	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		8,414,667		—		—		—		—
Other receivables		2,458,227		—		—		—		—
Debt securities		124,147		—		—		—		—
Deposit instruments		2,581,802		—		—		—		—
	￦	32,170,460		1,239,811		8,437,024		861,674		10,538,509
Financial liabilities
Fair value through profit or loss
Derivative liabilities	￦	157,036		—		157,036		—		157,036
Borrowings		1,358,294		1,358,294		—		—		1,358,294
Derivative hedging instruments(*2)		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		—		—		—		—
	￦	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.

F-8

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*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

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	￦	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		9,155,521		—		—		—		—
Other receivables		2,750,036		—		—		—		—
Debt securities		295,201		—		—		—		—
Deposit instruments		4,423,327		—		—		—		—
	￦	32,687,927		1,600,870		6,917,002		875,091		9,392,963
Financial liabilities
Fair value through profit or loss
Derivative liabilities	￦	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		—		—		—		—
	￦	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.

F-8

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*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	￦	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	—	—	—

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	￦	1,511		(1,308	)
	Fluctuation 0.5% of discount rate		2,125		(1,938	)

F-8

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

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

4) Finance income and costs by category of financial instrument for the years ended December 31, 2021, 2022 and 2023 were as follows:

① For the year ended December 31, 2021

	Finance income and costs																		Other comprehensive income (loss)
(in millions of Won)	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Others			Total
Financial assets at fair value through profit or loss	￦	158,121			(12,093	)		—			12,119			26,170			184,317			—
Derivative assets		—			213,724			—			370,547			—			584,271			—
Financial assets at fair value through other comprehensive income		—			—			—			—			48,281			48,281			214,888
Financial assets measured at amortized cost		134,122			—			651,435			(17,769	)		(7,149	)		760,639			—
Financial liabilities at fair value		—			54,057			33,069			—			(15,876	)		71,250			—
Derivative liabilities		—			55,858			—			(465,174	)		—			(409,316	)		309
Financial liabilities measured at amortized cost		(439,826	)		—			(846,202	)		(16	)		11,537			(1,274,507	)		—
	￦	(147,583	)		311,546			(161,698	)		(100,293	)		62,963			(35,065	)		215,197

F-8

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

② For the year ended December 31, 2022

	Finance income and costs																		Other comprehensive income (loss)
(in millions of Won)	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Others			Total
Financial assets at fair value through profit or loss	￦	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	)		—
	￦	(360,453	)		(444,390	)		(487,324	)		323,320			(1,608	)		(970,455	)		(9,053	)

③ For the year ended December 31, 2023

(in millions of Won)	Finance income and costs																		Other comprehensive income (loss)
	Interest income (expense)			Gain and loss on valuation			Gain and loss on foreign currency			Gain and loss on disposal			Others			Total
Financial assets at fair value through profit or loss	￦	—			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	)		—
	￦	(499,143	)		338,996			(348,002	)		118,716			17,183			(372,250	)		256,433

F-8

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(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, 2022 and 2023 are as follows:

(in millions of Won)	2022		2023
Cash and cash equivalents	￦	8,053,108		6,670,879
Derivative assets		359,995		301,142
Short-term financial instrument		8,006,082		6,540,407
Debt securities		200,023		383,397
Other securities		632,469		669,687
Other receivables		2,460,227		2,750,036
Trade accounts and notes receivable		9,754,813		10,845,505
Deposit instruments		2,581,802		4,423,327
	￦	32,048,519		32,584,380

The Company provided financial guarantee for the repayment of loans of associates, joint ventures and third parties. As of December 31, 2022 and 2023, the maximum exposure to credit risk related to the financial guarantee amounted to

￦

3,982,288 million and

￦

3,939,463 million, respectively.

2) Impairment losses on financial assets

The Company assesses expected credit losses by estimating the default rate based on the credit loss experience of prior periods and current 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, 2022 and 2023 are as follows:

(in millions of Won)	2022		2023
Trade accounts and notes receivable	￦	378,100		330,898
Other accounts receivable		178,264		185,987
Loans		165,051		417,725
Other assets		9,098		18,109
	￦	730,513		952,719

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

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

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

F-

8

9

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

	2022				2023
(in millions of Won)	Trade accounts and notes receivable		Impairment		Trade accounts and notes receivable		Impairment
Current (not past due)	￦	7,888,518		20,752		9,674,258		13,155
Over due less than 1 month		864,391		63,311		681,782		5,448
1 month - 3 months		388,151		10,337		131,267		3,521
3 months - 12 months		517,171		12,645		291,774		27,248
Over 12 months		446,045		271,055		397,322		281,526
	￦	10,104,276		378,100		11,176,403		330,898

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

	2022				2023
(in millions of Won)	Loans and other   account receivable		Impairment		Loans and other   account receivable		Impairment
Current (not past due)	￦	2,049,908		53,070		2,948,837		347,108
Over due less than 1 month		141,718		2,987		29,653		40
1 month - 3 months		108,152		16,408		56,574		1,812
3 months - 12 months		24,912		930		133,081		91,621
over 12 months		487,950		279,018		203,712		181,240
	￦	2,812,640		352,413		3,371,857		621,821

⑤ Changes in the allowance for doubtful accounts for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021			2022			2023
Beginning	￦	753,693			717,365			730,513
Bad debt expenses(reversal)		40,153			24,791			(17,785	)
Other bad debt expenses		(12,975	)		9,824			283,699
Others(*1)		(63,506	)		(21,467	)		(43,708	)
Ending	￦	717,365			730,513			952,719

(*1) Others for the years ended December 31, 2021, 2022 and 2023, included decreases mainly due to write-off amounting to ￦ 86,111  million, ￦ 20,855  million and ￦ 51,831  million, respectively.

F-

90

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(c) Liquidity risk

1) Contractual maturities of 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	￦	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		—
	￦	35,007,635		41,260,189		23,625,738		15,560,352		2,074,099

(*1) For exchangeable bonds, c ash 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 of derivative financial liabilities are as follows:

(in millions of Won)	Within 1 year		1 year -  5 years		After 5 years		Total
Currency forward	￦	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
	￦	38,631		70,640		10,651		119,922

(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, 2022 and 2023 is as follows:

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

F-9

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

2) As of December 31, 2022 and 2023, 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, 2022 and 2023 were as follows:

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

(e) Interest rate risk

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

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

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, 2022 and 2023, 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, 2022 and 2023 were as follows:

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

24. Share Capital and Capital Surplus

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

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

F-9

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*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 is ￦ 59,547 million due to retirement of 11,909,395 treasury stocks.

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

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

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

(in millions of Won)	2022		2023
Share premium	￦	463,825		463,825
Gain on disposal of treasury shares		806,114		808,994
Other capital surplus		140,349		399,971
	￦	1,410,288		1,672,790

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, 202 2  and December 31, 202 3  are as follows:

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

F-9

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*2) Details of issuance of hybrid bonds as of December 31, 2023 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 the 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

(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, 2022 and December 31, 2023 are as follows:

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

F-9

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

26. Reserves

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

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

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

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

27. Treasury Shares

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

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

F-9

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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 recognized

￦

18,898 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 recognized

￦

17,324 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.

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, 2021, 2022 and 2023 were as follows:

1) For the year ended December 31, 2021

(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	￦	40,305,393		24,233,531		—		7,751		1,210,874		219,425		65,976,974
Revenue from services		680,513		547,369		58,807		2,027,133		3,150		102,881		3,419,853
Revenue from construction contract		—		—		6,014,050		—		27,933		34		6,042,017
Others		107,499		284,708		2,365		26,393		—		149,392		570,357
	￦	41,093,405		25,065,608		6,075,222		2,061,277		1,241,957		471,732		76,009,201
Timing of revenue recognition
Revenue recognized at a point in time	￦	40,412,892		24,518,239		491,313		34,144		1,210,874		368,817		67,036,279
Revenue recognized over time		680,513		547,369		5,583,909		2,027,133		31,083		102,915		8,972,922
	￦	41,093,405		25,065,608		6,075,222		2,061,277		1,241,957		471,732		76,009,201

F-9

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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	￦	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		—		—		7,769,863		—		28,488		—		7,798,351
Others		119,267		545,294		8,537		65,401		—		121,323		859,822
	￦	44,546,966		25,955,458		7,921,108		3,998,959		2,451,785		129,340		85,003,616
Timing of revenue recognition
Revenue recognized at a point in time	￦	43,627,575		25,369,411		837,363		149,569		2,418,796		121,323		72,524,037
Revenue recognized over time		919,391		586,047		7,083,745		3,849,390		32,989		8,017		12,479,579
	￦	44,546,966		25,955,458		7,921,108		3,998,959		2,451,785		129,340		85,003,616

3) 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	￦	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		—		—		8,070,120		—		36,404		—		8,106,524
Others		150,895		4,175		17,460		55,269		8		99,551		327,358
	￦	40,393,273		24,033,506		8,230,482		470,613		3,816,042		112,633		77,056,549
Timing of revenue recognition
Revenue recognized at a point in time	￦	39,586,131		20,977,234		375,118		73,192		3,775,223		99,551		64,886,449
Revenue recognized over time		807,142		3,056,272		7,855,364		397,421		40,819		13,082		12,170,100
	￦	40,393,273		24,033,506		8,230,482		470,613		3,816,042		112,633		77,056,549

F-9

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

(in millions of Won)	2022		2023
Receivables
Account receivables	￦	8,414,667		9,155,521
Contract assets
Due from customers for contract work		1,311,508		1,689,984
Contract liabilities
Advance received		1,233,424		915,659
Due to customers for contract work		756,316		624,632
Unearned revenue		84,195		77,908

30. Revenue – Contract Balances

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

(in millions of Won)	2022			2023
Accumulated cost	￦	27,940,760			26,101,964
Accumulated contract profit		1,759,843			1,752,184
Accumulated contract loss		(885,148	)		(697,878	)
Accumulated contract revenue		28,815,455			27,156,270

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

(in millions of Won)	2022			2023
Unbilled due from customers for contract Work	￦	1,340,146			1,704,256
Due to customers for contract work		(756,316	)		(624,632	)
	￦	583,830			1,079,624

(c) During the years ended December 31, 2022 and 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 years ended December 31, 2022 and 2023 and future periods are as follows:

(in millions of Won)	2022			2023
Changes in total contract revenues	￦	1,222,558			1,362,828
Changes in estimated total contract costs		1,622,429			1,419,726
Changes in profit before income taxes of construction contract :
- Current period		(165,623	)		(91,397	)
- Future periods		(234,248	)		34,499

F-9

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

The effect on the current and future profit is estimated based on the circumstances that have occurred from the commencement date of the contract to the end of reporting period. The estimation is evaluated for the total contract costs and expected total contract revenue as of the end of the reporting period. Also, it may change during future periods.

(d) 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, the 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 cost 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.

(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
Expected Revenue	￦	6,625,315		4,612,492		2,577,621		1,081,838		14,897,266

F-

99

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

31. Selling and Administrative Expenses

(a) Other administrative expenses

Other administrative expenses for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021		2022		2023
Wages and salaries	￦	941,824		1,075,873		1,156,456
Expenses related to post-employment benefit s		142,606		84,582		92,667
Other employee benefits		207,074		230,909		273,482
Travel		18,916		39,661		47,945
Depreciation		144,037		148,639		159,836
Amortization		87,232		90,069		96,004
Communication		9,898		10,890		11,956
Electricity		7,398		9,563		12,242
Taxes and public dues		85,808		95,976		100,639
Rental		28,682		36,732		48,243
Repairs		12,604		17,343		17,787
Entertainment		10,186		13,741		15,490
Advertising		89,218		103,551		107,223
Research & development		123,092		179,714		175,167
Service fees		187,271		225,072		234,815
Vehicles maintenance		5,336		7,102		7,660
Industry association fee		9,691		11,624		11,096
Conference		14,479		20,259		19,876
Others		84,457		78,666		81,103
	￦	2,209,809		2,479,966		2,669,687

(b) Selling expenses

Selling expenses for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021		2022		2023
Freight and custody	￦	192,973		77,427		55,531
Operating expenses for distribution center		7,382		2,507		4,534
Sales commissions		65,404		75,012		68,138
Sales advertising		3,620		5,782		4,083
Sales promotion		6,264		19,388		9,503
Sample		2,164		2,052		2,234
Sales insurance premium		41,069		39,018		31,622
Contract cost		61,450		57,661		46,140
Others		12,749		15,635		11,794
	￦	393,075		294,482		233,579

F-10

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

32. Research and Development Expenditures Recognized as Expenses

Research and development expenditures recognized as expenses for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021		2022		2023
Administrative expenses	￦	123,092		179,714		175,167
Cost of sales		345,457		356,560		343,242
	￦	468,549		536,274		518,409

33. Finance Income and Costs

Details of finance income and costs for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021			2022			2023
Finance income
Interest income(*1)	￦	292,243			247,005			502,147
Dividend income		74,451			39,383			50,146
Gain on foreign currency transactions		1,079,939			2,284,126			1,660,713
Gain on foreign currency translations		298,452			703,627			292,581
Gain on derivatives transactions		402,171			840,265			333,197
Gain on valuations of derivatives		370,780			262,723			201,133
Gain on disposals of financial assets at fair value through profit of loss		20,070			256,016			203,795
Gain on valuations of financial assets at fair value through profit or loss		101,717			98,359			572,154
Gain on valuations of financial liabilities at fair value through profit or loss		54,057			85,790			—
Others		36,230			16,717			14,880
	￦	2,730,110			4,834,011			3,830,746
Finance costs
Interest expenses	￦	(439,826)			(607,458	)		(1,001,290)
Loss on foreign currency transactions		(985,179	)		(2,505,862)			(1,595,430)
Loss on foreign currency translations		(554,910	)		(969,215	)		(705,866	)
Loss on derivatives transactions		(496,798	)		(690,471	)		(320,374	)
Loss on valuations of derivatives		(101,198	)		(193,127	)		(77,459	)
Loss on disposals of trade accounts and notes receivable		(17,769	)		(64,244	)		(84,649	)
Loss on disposals of financial assets at fair value through profit or loss		(7,951	)		(18,245	)		(13,264	)
Loss on valuations of financial assets at fair value through profit or loss		(113,810	)		(698,136	)		(51,270	)
Loss on valuations of financial liabilities at fair value through profit or loss		—			—			(305,562	)
Others		(47,734	)		(57,708	)		(47,832	)
	￦	(2,765,175)			(5,804,466)			(4,202,996)

(*1) Interest income calculated using the effective interest method for the years ended December 31, 2021, 2022 and 2023 were ￦ 134,121 million, ￦ 226,584 million and ￦ 502,147 million, respectively.

F-10

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

34. Other Operating Income and Expenses

Details of other operating income and expenses for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021			2022			2023
Other operating income
Gain on disposals of assets held for sale	￦	60,208			55,262			1,312
Gain on disposals of investment in subsidiaries, associates and joint ventures		85,981			13,904			197,088
Gain on disposals of property, plant and equipment		12,016			18,502			9,387
Gain on valuation of firm commitment		169,485			181,645			11,499
Reversal of other provisions		33,887			5,245			8,578
Compensation for insured losses(*1)		38,115			237,565			13,117
Gain on bargain purchase(* 2 )		—			—			41,072
Gain on disposals of emission rights		567			5,181			25,998
Miscellaneous Income(*3)		157,703			64,235			77,946
Others		20,035			10,478			8,348
	￦	577,997			592,017			394,345
Other operating expenses
Loss on disposals of assets held for sale(* 4 )	￦	—			(3,964	)		(103,366	)
Loss on disposals of investments in subsidiaries, associates and joint ventures		(12,882	)		(12,400	)		(18,843	)
Loss on disposals of property, plant and equipment		(95,720	)		(111,082	)		(125,823	)
Impairment loss on property, plant and equipment		(311,520	)		(213,183	)		(275,846	)
Impairment loss on intangible assets		(224,328	)		(370,663	)		(129,907	)
Loss on valuation of firm commitment		(111,542	)		(156,183	)		(47,448	)
Idle tangible asset expenses		(23,843	)		(18,184	)		(3,703	)
Increase to provisions		(37,962	)		(88,857	)		(38,395	)
Donations		(101,258	)		(80,558	)		(67,393	)
Miscellaneous losses		(69,972	)		(63,812	)		(92,870	)
Others		(38,465	)		(4,799	)		(749	)
	￦	(1,027,492	)		(1,123,685	)		(904,343	)

(*1) During the year ended December 31, 2022, POSCO, a subsidiary, received insurance payments of ￦ 234,000 million related to damage due to the flooding of the Naengcheon stream in Pohang, and additional compensation is under discussion with the insurance company.

(*2) 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 recognized ￦ 184,556 million of gain on disposals of investment in associates and ￦ 41,072 million of gain on bargain purchase.

F-10

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*3) During the year ended December 31, 2021, the Company recognized ￦ 46,283 million of other operating income for refund of other than corporate tax as a result of administrative litigation for tax audits.

(*4) 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 recognized ￦ 103,366 million of loss on disposals of assets held for sale. The loss on disposal of assets held for sale recognized as profit or loss includes ￦ 102,470 million, which was reclassified from accumulated other comprehensive loss arising from translating the financial statements of foreign operation.

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 operating expenses in the statements of comprehensive income for the years ended December 31, 2021, 2022 and 2023 were as follows (excluding finance costs and income tax expense):

(in millions of Won)	2021		2022		2023
Raw material used, changes in inventories and others	￦	44,466,766		54,670,367		46,179,075
Employee benefits (*2)		4,023,167		4,330,946		4,660,771
Outsourced processing cost		7,690,334		8,641,448		10,377,087
Electricity expenses		744,207		936,360		1,099,970
Depreciation(*1)		3,135,345		3,204,744		3,325,088
Amortization		444,100		488,835		498,193
Freight and custody expenses		1,580,200		3,077,044		2,297,544
Sales commissions		65,404		75,012		68,138
Loss on disposal of property, plant and equipment		95,720		111,082		125,823
Impairment loss on property, plant and equipment		311,520		213,183		275,846
Impairment loss on goodwill and intangible assets		224,328		370,663		129,907
Donations		101,258		80,558		67,393
Other		4,962,224		5,058,849		5,615,703
	￦	67,844,573		81,259,091		74,720,538

(*1) Includes depreciation of investment property.

(*2) The details of employee benefits expenses for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021		2022		2023
Wages and salaries	￦	3,684,894		4,024,805		4,375,123
Expenses related to post-employment benefits		338,273		306,141		285,648
	￦	4,023,167		4,330,946		4,660,771

F-10

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

36. Income Taxes

(a) Income tax expense for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021			2022			2023
Current income taxes(*1)	￦	2,470,416			932,085			802,997
Deferred income tax due to temporary differences		(153,919	)		(407,958	)		3,631
Items recognized directly in equity		(102,670	)		(62,593	)		(17,261	)
Income tax expense	￦	2,213,827			461,534			789,367

(*1) Refund (additional payment) of income taxes when filing a final corporation tax return is credited (charged) directly to current income taxes.

(b) The income taxes credited (charged) directly to equity for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021			2022			2023
Net changes in fair value of equity investments at fair value through other comprehensive income	￦	(83,532	)		(37,431	)		(71,600	)
Remeasurements of defined benefit plans		(17,685	)		(16,971	)		34,406
Others		(1,453	)		(8,191)			19,933
	￦	(102,670	)		(62,593)			(17,261	)

F-10

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(c) The following table reconciles the calculated income tax expense based on POSCO’s statutory rate (27.5% for 2021, and 26.4% for 2022 and 2023) to the actual amount of taxes recorded by the Company for the years ended December 31, 2021, 2022 and 2023.

(in millions of Won)	2021			2022			2023
Profit before income tax expense	￦	9,389,809			4,047,491			2,635,426
Income tax expense computed at statutory rate		2,572,702			1,101,240			685,381
Adjustments:
Tax credits		(313,205	)		(133,727	)		(82,233	)
Additional income tax expense for prior years (Refund of taxes for prior years)		(42,667	)		22,929			152,656
Investment in subsidiaries, associates and joint ventures(*1)		(111,938	)		(413,349	)		146,498
Tax effects due to permanent differences		17,811			19,350			(3,011	)
Carryforward of unused tax losses(*2)		(3,770	)		(3,167	)		(126,110	)
Effect of tax rate change		—			(180,533	)		4,998
Others		94,894			48,791			11,188
		(358,875	)		(639,706)			103,986
Income tax expense	￦	2,213,827			461,534			789,367
Effective tax rate (%)		23.58	%		11.40	%		29,95	%

(*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 includes ￦ 451,352 million related to recognition of deferred tax assets which were previously not recognized.

(*2) During the year ended December 31, 2023, POSCO HOLDINGS INC. recognized tax benefits of ￦ 122,922 million from utilizing tax losses carryforwards of a joint venture upon disposal of the joint venture.

F-10

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

(in millions of Won)	2022									2023
	Beginning			Inc. (Dec.)			Ending			Beginning			Inc. (Dec.)			Ending
Deferred income tax due to temporary differences
Allowance for doubtful accounts	￦	143,358			(12,857	)		130,501			130,501			26,107			156,608
PP&E and Intangible asset		(1,118,806	)		1,501,644			382,838			382,838			(143,136	)		239,702
Share of profit or loss of equity-accounted investees		224,566			45,072			269,638			269,638			21,281			290,919
Allowance for inventories valuation		22,983			24,582			47,565			47,565			15,622			63,187
Prepaid expenses		19,530			(2,607	)		16,923			16,923			(3,370	)		13,553
Gain or loss on foreign currency translation		(1,105	)		(12,601	)		(13,706	)		(13,706	)		156,945			143,239
Defined benefit liabilities		(148,341	)		107,924			(40,417	)		(40,417	)		36,883			(3,534	)
Provision for construction losses		10,190			7,759			17,949			17,949			(6,280	)		11,669
Provision for construction warranty		74,360			(4,089	)		70,271			70,271			(24,548	)		45,723
Accrued income		(50,452	)		10,690			(39,762	)		(39,762	)		18,491			(21,271	)
Provision for accelerated depreciation		(8,510	)		(2,728,164	)		(2,736,674	)		(2,736,674	)		75,944			(2,660,730	)
Spin-off		—			1,543,628			1,543,628			1,543,628			(7,451	)		1,536,177
Impairment loss on AFS		118,149			(23,607	)		94,542			94,542			(225	)		94,317
Difference in acquisition costs of treasury shares		69,408			(25,516	)		43,892			43,892			(151	)		43,741
Others		309,618			177,826			487,444			487,444			(328,342	)		159,102
		(335,052	)		609,684			274,632			274,632			(162,230	)		112,402
Deferred income taxes recognized directly to equity
Net changes in fair value of equity investments at fair value through other comprehensive income		73,459			(37,431	)		36,028			36,028			(71,600	)		(35,572	)
Others		134,737			(141,788	)		(7,051	)		(7,051	)		54,339			47,288
		208,196			(179,219	)		28,977			28,977			(17,261	)		11,716
Deferred tax from tax credit
Tax credit carry-forward and others		72,864			(1,500	)		71,364			71,364			182,195			253,559
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures		245,029			(21,008	)		224,021			224,021			(6,335	)		217,686
	￦	191,037			407,957			598,994			598,994			(3,631	)		595,363

F-10

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(e) Deferred tax assets and liabilities as of December 31, 2022 and 2023 are as follows:

(in millions of Won)	2022								2023
	Assets		Liabilities			Net			Assets		Liabilities			Net
Deferred income tax due to temporary differences
Allowance for doubtful accounts	￦	130,700		(199	)		130,501			156,681		(73	)		156,608
PP&E and Intangible asset		437,245		(54,407	)		382,838			337,094		(97,392	)		239,702
Share of profit or loss of equity-accounted investees		284,568		(14,930	)		269,638			304,225		(13,306	)		290,919
Allowance for inventories valuation		47,565		—			47,565			63,187		—			63,187
Prepaid expenses		17,003		(80	)		16,923			13,659		(106	)		13,553
Gain or loss on foreign currency translation		75,235		(88,941	)		(13,706	)		205,170		(61,931	)		143,239
Defined benefit liabilities		550,140		(590,557	)		(40,417	)		598,177		(601,711	)		(3,534	)
Provision for construction losses		17,949		—			17,949			11,669		—			11,669
Provision for construction warranty		70,271		—			70,271			45,723		—			45,723
Accrued income		—		(39,762	)		(39,762	)		—		(21,271	)		(21,271	)
Provision for accelerated depreciation		—		(2,736,674	)		(2,736,674	)		—		(2,660,730	)		(2,660,730	)
Spin-off		1,543,628		—			1,543,628			1,536,177		—			1,536,177
Impairment loss on AFS		94,542		—			94,542			94,317		—			94,317
Difference in acquisition costs of treasury shares		43,892		—			43,892			43,741		—			43,741
Others		547,189		(59,745	)		487,444			193,833		(34,731	)		159,102
		3,859,927		(3,585,295	)		274,632			3,603,653		(3,491,251	)		112,402
Deferred income taxes recognized directly to equity
Net changes in fair value of equity investments at fair value through other comprehensive income		105,125		(69,097	)		36,028			50,134		(85,706	)		(35,572	)
Others		30,370		(37,421	)		(7,051	)		76,604		(29,316	)		47,288
		135,495		(106,518	)		28,977			126,738		(115,022	)		11,716
Deferred tax from tax credit
Tax credit carry-forward and others		71,364		—			71,364			253,559		—			253,559
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures		463,133		(239,112	)		224,021			499,326		(281,640	)		217,686
	￦	4,529,919		(3,930,925	)		598,994			4,483,276		(3,887,913	)		595,363

(f) As of December 31, 2023, deductible temporary differences of ￦ 6,282,636 million and taxable temporary differences of ￦ 11,603,746 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.

F-10

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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 IAS No. 12 ‘Income Taxes’ 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 as of December 31, 2023.

The Company is closely monitoring the financial impact of the global minimum

top-up

tax. Considering transitional exemption provisions (Transitional CbCR Safe Harbor), even when assuming the Pillar Two corporate income tax law were 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, 2021, 2022 and 2023 were as follows:

(in Won, except share information)	2021		2022			2023
Profit attribute to controlling interest		￦  6,606,727,454,113		3,157,536,155,264			1,698,202,436,726
Interests of hybrid bonds, net of tax		(6,669,999,999)		(1,078,164,383	)		—
Weighted-average number of common shares outstanding(*1)		75,696,150		75,814,870			75,869,542
Basic earnings per share		￦             87,191		41,634			22,383

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

(shares)	2021			2022			2023
Total number of common shares issued		87,186,835			84,571,230			84,571,230
Weighted-average number of treasury shares		(11,490,685	)		(8,756,360	)		(8,701,688	)
Weighted-average number of common shares outstanding		75,696,150			75,814,870			75,869,542

F-10

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(b) Diluted earnings per share for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in Won, except share information)	2021			2022			2023
Profit attribute to controlling interest	￦	6,606,727,454,113			3,157,536,155,264			1,698,202,436,726
Interests of hybrid bonds, net of tax		(6,669,999,999	)		(1,078,164,383	)		—
Gain or loss from exchange rate on and revaluation of exchangeable bonds		(63,166,690,813	)		(55,751,463,819	)		—
Adjusted weighted-average number of common shares(*1)		76,688,340			78,906,375			75,869,542
Diluted earnings per share	￦	85,240			39,296			22,383

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

(shares)	2021		2022		2023
Weighted-average number of common shares outstanding		75,696,150		75,814,870		75,869,542
Weighted-average number of potential common share		992,190		3,091,505		—
Adjusted weighted-average number of common shares		76,688,340		78,906,375		75,869,542

The Company has potentially issuable common shares due to its exchangeable bonds as of December 31, 2021, 2022 and 2023 and Share-based Payment Program as of December 31, 2022 and 2023. 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.    Meanwhile, diluted earnings per share is equal to basic earnings per share for the year ended December 31, 2023 due to anti-dilutive effect.

F-1

09

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

38. Related Party Transactions

(a) Significant transactions between the controlling company and related companies for the years ended December 31, 2021, 2022 and 2023 were as follows:

1) For the year ended December 31, 2021

(in millions of Won)	Sales and others(*1)				Purchase and others(*2)
	Sales		Others		Purchase of material		Purchase of fixed assets		Outsourced processing cost		Others
Subsidiaries(*3)
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	￦	5,859		11,113		—		491,624		158		32,328
POSCO STEELEON Co., Ltd.		695,451		2,602		—		—		39,014		627
POSCO DX(formerly, POSCO ICT)(*4)		1,605		4,996		—		324,275		46,037		181,221
eNtoB Corporation		14		—		381,633		65,254		115		25,242
POSCO FUTURE M CO., LTD. (formerly, POSCO CHEMICAL CO., LTD)		318,808		31,917		462,013		14,358		298,431		3,724
POSCO ENERGY CO., LTD.		5,207		1,450		11,271		—		—		26,137
POSCO MOBILITY SOLUTION		807,925		—		—		—		45,758		914
POSCO INTERNATIONAL Corporation		9,750,636		54,331		1,299,561		—		988		8,968
POSCO Thainox Public Company Limited		309,295		—		—		—		—		69
POSCO Canada Ltd.		—		1,372		202,523		—		—		—
POSCO Asia Co., Ltd.		19,142		426		417		—		—		1,648
Qingdao Pohang Stainless Steel Co., Ltd.		188,470		8		—		—		—		83
POSCO JAPAN Co., Ltd.		1,613,634		1		27,937		1,726		—		4,894
POSCO-VIETNAM Co., Ltd.		441,758		975		—		—		—		46
POSCO MEXICO S.A. DE C.V.		460,773		548		—		—		—		1,494
POSCO Maharashtra Steel Private Limited		899,675		903		—		—		—		229
POSCO(Suzhou) Automotive Processing Center Co., Ltd.		161,808		—		—		—		—		2
POSCO VST CO., LTD.		201,517		—		—		—		—		20
POSCO INTERNATIONAL SINGAPORE PTE LTD.		—		1,453		1,704,193		—		—		—
POSCO ASSAN TST STEEL INDUSTRY Inc.		278,749		734		8		—		—		24
Others		1,337,458		56,161		220,000		63,116		276,202		153,677
		17,497,784		168,990		4,309,556		960,353		706,703		441,347
Associates and joint ventures(*3)
SNNC		72,797		2,514		736,441		—		—		107
POSCO-SAMSUNG-Slovakia Processing Center		72,342		—		—		—		—		—
Roy Hill Holdings Pty Ltd		—		418,044		2,338,625		—		—		—
Others		37,410		63,298		107,637		—		—		49,741
		182,549		483,856		3,182,703		—		—		49,848
	￦	17,680,333		652,846		7,492,259		960,353		706,703		491,195

(*1) Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures.

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

(*3) As of December 31, 2021, the company provided guarantees to related parties.

F-11

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

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(*3)
POSCO	￦	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)(*4)		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 ENERGY CO., LTD.		4,331		—		—		6,682		—		—		3,925
POSCO MOBILITY SOLUTION		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		203,869		2,452		6,574		61,457		18,844		53,139		223,222
		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
	￦	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 to subsidiaries, associates and joint ventures.

F-11

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

(*3) As of December 31, 2022, the company provided guarantees to related parties.

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

3) 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	￦	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
	￦	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) .

F-11

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

1) December 31, 2022

(in millions of Won)	Receivables						Payables
	Trade accounts and notes receivable		Others		Total		Accounts payable		Others		Total
Subsidiaries
POSCO	￦	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
eNtoB Corporation		—		—		—		—		—		—
POSCO FUTURE M CO., LTD. (formerly, POSCO CHEMCAL CO., LTD)		8,550		—		8,550		—		5,086		5,086
POSCO ENERGY CO., LTD.		3,400		462		3,862		—		1,593		1,593
POSCO MOBILITY SOLUTION		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		1,918		5,618		7,536		11,874		3,335		15,209
		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
	￦	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 ￦ 12,166 million to FQM Australia Holdings Pty Ltd.

F-11

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

2) December 31, 2023

(in millions of Won)	Receivables						Payables
	Trade accounts and notes receivable		Others		Total		Accounts payable		Others		Total
Subsidiaries
POSCO	￦	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		—		—		—
	￦	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 by ￦ 6,448 million. Meanwhile, the Company has recognized allowance for doubtful accounts for all of other receivables amounting to ￦ 218,900 million during the year ended December 31, 2023.

F-11

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(c) Significant transactions between the Company, excluding the controlling company, and related companies for the years ended December 31, 2021, 2022 and 2023 were as follows:

1) For the year ended December 31, 2021

(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	￦	286,731		—		266		—		165
SNNC		75,129		—		743		19,720		40,090
Noeul Green Energy Co., Ltd.		6,127		—		—		—		1,896
CSP - Compania Siderurgica do Pecem		4,660		—		—		96,179		—
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd		46,323		—		—		33,316		5,686
POS-SEAH STEEL WIRE (TIANJIN) CO., Ltd.		14,673		—		—		—		—
POSCO SeAH Steel Wire (Nantong) Co., Ltd.		39,887		—		—		164		—
DMSA/AMSA		—		—		—		9,875		—
South-East Asia Gas Pipeline Company Ltd.		—		27,828		7,564		—		—
POSCO MC MATERIALS (formerly, POSCO MITSUBISHI CARBON TECHNOLOGY)		65,746		—		10		4,347		180
Samcheok Blue Power Co., Ltd.		263,730		405		—		—		4
TK CHEMICAL CORPORATION		14,906		—		—		2,292		—
Pocheon-Hwado Highway Corp.		62,829		—		—		—		—
UITrans LRT Co., Ltd.		10,736		—		—		—		—
Roy Hill Holdings Pty Ltd		—		104,903		—		—		—
Others		184,606		49,031		15,449		31,379		18,505
	￦	1,076,083		182,167		24,032		197,272		66,526

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	￦	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		—		—		—		—
POSCO 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		—		—		—		—
UITrans LRT Co., Ltd.		—		—		—		—		—
Roy Hill Holdings Pty Ltd		—		46,780		—		1,463,383		—
Others		547,627		137,733		3,026		507,705		122,092
	￦	1,787,240		233,046		6,438		2,740,718		148,374

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

F-11

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 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.

3) 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	￦	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
	￦	1,689,185		272,233		4,897		2,846,362		115,821

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

1) December 31, 202 2

(in millions of Won)	Receivables(*1)								Payables
	Trade accounts and notes receivable		Loan		Others		Total		Trade accounts and notes payable		Others		Total
Associates and joint ventures
New Songdo International City Development, LLC	￦	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		—		—		—
POSCO 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
	￦	313,264		319,687		136,872		769,823		671,114		85,738		756,852

(*1) As of December 31, 2022, the Company recognizes allowance for credit losses related to receivables amounting to ￦ 131,588 million.

F-11

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

2) December 31, 2023

(in millions of Won)	Receivables(*1)								Payables
	Trade accounts and notes receivable		Loan		Others		Total		Trade accounts and notes payable		Others		Total
Associates and joint ventures
New Songdo International City Development, LLC	￦	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
	￦	368,628		277,900		167,078		813,606		349,681		75,478		425,159

(*1) As of December 31, 2023, the Company recognizes allowance for credit losses related to receivables amounting  to ￦ 185,972 million.

F-11

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

1) December 31, 2022

(in millions of Won)	Beginning		Lend		Collect			Others(*1)			Ending
Associates and joint ventures
UITrans LRT Co., Ltd.	￦	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 Coi., LTD		—		100		—			—			100
POSCO(Guangdong) Automotive Steel Co., Ltd.		—		35,131		—			—			35,131
	￦	318,169		57,601		(63,772	)		7,689			319,687

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

F-1

1

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

2) December 31, 2023

(in millions of Won)	Beginning		Lend		Collect			Others(*1)		Ending
Associates and joint ventures
UITrans LRT Co., Ltd.	￦	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	)		—		—
	￦	319,687		20,628		(69,477	)		7,062		277,900

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

(f) For the years ended December 31, 2021, 2022 and 2023, details of compensation to key management officers were as follows:

(in millions of Won)	2021		2022		2023
Short-term benefits	￦	111,900		174,629		199,608
Long-term benefits		18,115		9,182		9,641
Retirement benefits		22,239		22,106		38,934
	￦	152,254		205,917		248,183

Key management officers include directors (including non-standing directors), executive officers and fellow officers 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,

F-1

19

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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.

(b) Details of guarantees

1) Contingent liabilities on outstanding guarantees 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

F-1

20

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(in millions of Won)			Guarantee limit				Guarantee amount
Guarantor	Guarantee beneficiary	Financial institution	Foreign currency		Won equivalent		Foreign currency		Won equivalent
	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

F-12

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(in millions of Won)			Guarantee limit				Guarantee amount
Guarantor	Guarantee beneficiary	Financial institution	Foreign currency		Won equivalent		Foreign currency		Won equivalent
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 Project Financing (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

F-12

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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. Details of PF credit enhancements including debt assumption and supplemental funding agreement and maturity of the related loans as follows:

(in millions of Won)
Provider	Borrower	Credit enhancement measures	Agreed amount		Executed amount		Balance of loans
[The Company]
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	JB CLARK HILLS	Debt assumption	￦	42,550		35,459		35,459
[Associates and joint ventures]
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	New Songdo International City Development, LLC	Debt assumption		676,000		520,000		467,500
[Others]
POSCO Eco & Challenge Co., Ltd. (formerly, POSCO ENGINEERING & CONSTRUCTION CO.,LTD.)	Bangbae Shindonga Apartment Reconstruction and Maintenance Project Association, etc.	Debt assumption		922,476		730,020		404,799
	Mastern 123 Yeoju Samgyo PFV co., Ltd.	Debt assumption		175,500		135,000		133,700
	Civic Center PFV	Debt assumption		45,000		45,000		45,000
POSCO DX (formerly, POSCO ICT)	Jeonnong school keeper co. and others	Supplemental funding agreement		1,122,320		123,309		474,888
				2,265,296		1,033,329		1,058,387
			￦	2,983,846		1,588,788		1,561,346

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

b. The details of conditional debt assumption and principal repayment contracts in the event of construction default as of December 31, 2023 are as follows:

(in millions of Won)	Contract amount		Contingency amount(*1,2)		Balance of loans
Maintenance projects and Other projects		W 6,438,048		3,513,950		1,856,719

(*1) The overlapping amount with other credit enhancements such as the debt assumption agreement at the time of loan origination amounted to ￦ 132,300 million for maintenance projects.

(*2) In the case of joint subcontracting projects, the total joint guarantee amount of the project participants is disclosed. The final execution amount of completion may vary depending on reasons attributable to project participants upon actual completion.

F-12

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

c. The details of contingencies of claim for damages in the event of construction default as of December 31, 2023 are as follows:

(in millions of Won)	Contract amount		Contingency amount(*1,2)		Balance of loans
Maintenance projects and Other projects		W 11,261,667		8,972,087		6,347,888

(*1) The overlapping amount with other credit enhancements such as the debt assumption agreement at the time of loan amounted to ￦ 122,200 million for the maintenance projects.

(*2) In the case of joint subcontracting projects, the total joint guarantee amount of the project participants is disclosed. The final execution amount of completion may vary depending on reasons attributable to the project participants upon actual completion.

② SOC projects

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

(*1) The Company provides a funding obligation agreement of ￦ 153,260 million (including other shares: ￦ 385,000 million) equivalent to the Company’s share of the loan balance for the private investment project.

(*2) The Company provides a funding obligation agreement of ￦ 344,449 million (including other shares: ￦ 623,079 million) equivalent to the Company’s share of the loan balance for the private investment project.

F-12

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*3) The Company provides a funding obligation agreement of ￦ 183,756 million (including other shares: ￦ 354,092 million) equivalent to the Company’s share of the loan balance for the private investment project.

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 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 &	Ventanas Philippines Construction Inc	Guarantee on performance for contracts and others	￦	14,601		14,601	Credit Agricole and others
CONSTRUCTION CO.,LTD.)	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.	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
			￦ 8,427,049		6,731,478

② As of December 31, 2023, the primary payment guarantees and others, that the Company were 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	￦	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		107,868		105,076
Woori Bank and others	Foreign currency guarantee		2,042,804		786,129
		￦ 15,358,838		13,724,120

F-12

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(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.

F-12

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

Company	Description
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 is ￦ 43,189 million. Meanwhile, the Company invested ￦ 25,700 million in January, 2024 and plans to invest ￦ 17,489 million in March, 2024.
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 recognized ￦ 119,258 million as other financial liabilities related to the terms of this agreement.

F-1

2

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(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
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 recognized ￦ 45,712 million as provision for legal contingencies and claims.

F-1

2

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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. Additional Information of Statement of Cash Flows

(a) Changes in operating assets and liabilities for the years ended December 31, 2021, 2022 and 2023 were as follows:

(in millions of Won)	2021			2022			2023
Trade accounts and notes receivable	￦	(1,492,664	)		531,848			(982,726	)
Other receivables		(441,412	)		(96,141	)		32,827
Inventories		(6,346,717	)		(195,309	)		1,312,800
Other current assets		(210,614	)		(230,084	)		265,296
Other non-current assets		(246,066	)		42,767			(214,331	)
Trade accounts and notes payable		1,401,942			141,925			(118,796	)
Other payables		170,209			611,932			(301,561	)
Other current liabilities		241,998			(213,738	)		15,213
Provisions		(154,471	)		(295,624	)		(318,955	)
Payments of severance benefits		(253,207	)		(300,353	)		(263,548	)
Plan assets		(186,548	)		(59,461	)		(45,535	)
Other non-current liabilities		473,240			(306,251	)		(468,213	)
	￦	(7,044,310	)		(368,489	)		(1,087,529	)

F-1

29

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

1) December 31, 2022

(in millions of Won)	Liabilities												Derivatives that hedge borrowings
	Short-term borrowings			Long-term borrowings			Dividend payable			Finance lease liabilities
Beginning	￦	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	￦	6,833,120			17,472,542			4,371			823,482			(191,497	)

2) December 31, 2023

(in millions of Won)	Liabilities												Derivatives that hedge borrowings
	Short-term borrowings			Long-term borrowings			Dividend payable			Finance lease liabilities
Beginning	￦	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	￦	4,959,280			21,011,099			3,261			924,320			(129,991	)

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 its internal organization and internal reporting structures. As a result, operating segments were re-categorized according to the revised reporting materials provided to the management for decision-making. The Company restated the reportable segment information as of December 31, 2022 and for the years ended December 31, 2021 and 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 IFRS of the subsidiaries that constitute reportable operating segments.

F-13

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

Meanwhile the revised operating segments and their main businesses are 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, anode/cathode materials, and hydrogen business
Others		POSCO HOLDINGS. INC., Controlling company and Investment business

(b) Information about reportable segments as of and for the years ended December 31, 2021, 2022 and 2023 were as follows:

1) As of and for the year ended December 31, 2021

① The segment results as previously disclosed are as follows :

				Green infrastructure
(in millions of Won)	Steel			Trading			Construction			Energy and Others			Green materials and Energy			Others			Total
External revenues	￦	41,093,405			25,065,608			6,398,366			2,061,277			1,241,957			471,732			76,332,345
Internal revenues		22,455,511			20,224,841			1,014,148			854,982			847,205			1,310,730			46,707,417
Including inter segment revenue		14,940,813			10,653,742			940,408			828,635			843,576			1,284,320			29,491,494
Total revenues		63,548,916			45,290,449			7,412,514			2,916,259			2,089,162			1,782,462			123,039,762
Interest income		179,841			30,265			72,830			12,905			19,073			3,327			318,241
Interest expenses		(313,769	)		(100,419	)		(39,134	)		(47,827	)		(9,373	)		(3,952	)		(514,474	)
Depreciation and amortization		(3,000,179	)		(343,489	)		(69,777	)		(142,426	)		(84,390	)		(45,082	)		(3,685,343	)
Impairment loss on property, plant and equipment and others		(249,645	)		(66,157	)		(10	)		(25,270	)		(11,504	)		—			(352,586	)
Share of loss of equity-accounted investees, net		(261,363	)		(70,321	)		(45,778	)		(11,874	)		—			—			(389,336	)
Income tax expense		(2,045,079	)		(101,622	)		(116,799	)		(37,970	)		(10,698	)		(18,259	)		(2,330,427	)
Segment profit		6,587,903			324,888			164,276			182,739			111,756			66,388			7,437,950
Segment total assets		80,953,507			16,373,409			8,136,549			5,459,441			4,692,597			1,771,702			117,387,205
Investment in subsidiaries, associates and joint ventures		16,567,555			2,066,688			538,484			886,318			188,532			120,750			20,368,327
Acquisition of non-current assets		2,194,346			478,278			10,233			152,445			661,376			115,126			3,611,804
Segment liabilities		25,714,577			11,049,017			4,451,055			3,124,777			1,519,026			735,407			46,593,859

F-13

1

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

				Green infrastructure
(in millions of Won)	Steel			Trading			Construction			Logistics and others			Green materials and Energy			Others			Total
External revenues	￦	41,093,405			26,909,221			6,398,366			217,664			1,241,957			471,732			76,332,345
Internal revenues		22,455,511			20,276,805			1,014,148			803,018			847,205			1,310,730			46,707,417
Including inter segment revenue		14,940,813			10,359,407			940,408			791,873			843,576			1,284,320			29,160,397
Total revenues		63,548,916			47,186,026			7,412,514			1,020,682			2,089,162			1,782,462			123,039,762
Interest income		179,841			38,454			72,830			4,716			19,073			3,327			318,241
Interest expenses		(313,769	)		(144,470	)		(39,134	)		(3,776	)		(9,373	)		(3,952	)		(514,474	)
Depreciation and amortization		(3,000,179	)		(450,962	)		(69,777	)		(34,953	)		(84,390	)		(45,082	)		(3,685,343	)
Impairment loss on property, plant and equipment and others		(249,645	)		(80,318	)		(10	)		(11,109	)		(11,504	)		—			(352,586	)
Share of loss of equity-accounted investees, net		(261,363	)		(70,321	)		(45,778	)		(11,874	)		—			—			(389,336	)
Income tax expense		(2,045,079	)		(131,534	)		(116,799	)		(8,058	)		(10,698	)		(18,259	)		(2,330,427	)
Segment profit		6,587,903			497,384			164,276			10,243			111,756			66,388			7,437,950
Segment total assets		80,953,507			20,307,856			8,136,549			1,524,994			4,692,597			1,771,702			117,387,205
Investment in subsidiaries, associates and joint ventures		16,567,555			2,950,751			538,484			2,255			188,532			120,750			20,368,327
Acquisition of non-current assets		2,194,346			613,472			10,233			17,251			661,376			115,126			3,611,804
Segment liabilities		25,714,577			13,524,868			4,451,055			648,926			1,519,026			735,407			46,593,859

F-13

2

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

① The segment results as previously disclosed are as follows :

				Green infrastructure
(in millions of Won)	Steel			Trading			Construction			Energy and Others			Green materials and Energy			Others			Total
External revenues	￦	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
Including inter segment revenue		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 profit (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 liabilities		25,111,665			10,097,503			4,937,907			3,683,068			2,127,424			4,156,863			50,114,430

F-13

3

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

				Green infrastructure
(in millions of Won)	Steel			Trading			Construction			Logistics and others			Green materials and Energy			Others			Total
External revenues	￦	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
Including inter segment revenue		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 profit (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 liabilities		25,111,665			12,736,310			4,937,907			1,044,261			2,127,424			4,156,863			50,114,430

F-13

4

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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

				Green infrastructure
(in millions of Won)	Steel			Trading			Construction			Logistics and others			Green materials and Energy			Others			Total
External revenues	￦	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

(c) 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)	2021			2022			2023
Total revenue for reportable segments	￦	123,039,762			141,108,702			127,080,006
Elimination of inter-segment revenue		(46,707,417	)		(56,358,498	)		(49,952,809	)
Basis difference(*2)		(323,144	)		253,412			(70,648	)
	￦	76,009,201			85,003,616			77,056,549

F-13

5

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

2) Profit

(in millions of Won)	2021			2022			2023
Total profit for reportable segments	￦	7,437,950			1,690,991			2,911,247
Goodwill and corporate FV adjustments		(62,500	)		(68,771	)		172,493
Elimination of inter-segment losses (profits)		(179,560	)		1,938,263			(1,237,891	)
Income tax expense		2,220,183			453,883			789,305
Basis difference(*2)		(26,264	)		33,125			272
Profit before income tax expense	￦	9,389,809			4,047,491			2,635,426

3) Assets

(in millions of Won)	2022			2023
Total assets for reportable segments(*1)	￦	155,401,722			160,850,203
Equity-accounted investees		(46,559,264	)		(48,895,081	)
Goodwill and corporate FV adjustments		2,366,408			2,630,009
Elimination of inter-segment assets		(12,802,085	)		(13,639,737	)
Basis difference(*2)		614,969			540,922
	￦	99,021,750			101,486,316

(*1) As segment assets and liabilities are determined based on separate financial statements, the carrying amount of assets of subsidiaries, which are in a different segment from that of their immediate parent company, in the separate financial statements the immediate parent company is eliminated upon consolidation. In addition, the amount of investment in associates and joint ventures are adjusted from the amount reflected in segment assets to that determined using equity method in consolidated financial statements .

4) Liabilities

(in millions of Won)	2022			2023
Total liabilities for reportable segments	￦	50,114,430			51,853,327
Corporate FV adjustments		215,760			242,251
Elimination of inter-segment liabilities		(10,180,810	)		(10,814,081	)
Basis difference(*2)		680,473			606,219
	￦	40,829,853			41,887,716

F-13

6

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

5) Other significant items

a) December 31, 2021

(in millions of Won)	Total segment			Goodwill and corporate FV adjustments			Elimination of inter-segment transactions			Basis difference(*2)			Consolidated
Interest income	￦	318,241			—			(25,998	)		—			292,243
Interest expenses		(514,474	)		605			74,043			—			(439,826	)
Depreciation and amortization		(3,685,343	)		(88,927	)		194,824			—			(3,579,446	)
Share of profit of equity-accounted investees, net		(389,336	)		—			1,038,905			—			649,569
Income tax expense		(2,330,427	)		25,719			84,525			6,356			(2,213,827	)
Impairment loss on property, plant and equipment and others		(352,586	)		—			(183,262	)		—			(535,848	)
	￦	(6,953,925	)		(62,603	)		1,183,037			6,356			(5,827,135	)

b) December 31, 2022

(in millions of Won)	Total segment			Goodwill and corporate FV adjustments			Elimination of inter-segment transactions			Basis difference(*2)			Consolidated
Interest income	￦	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			(7,651	)		(461,534	)
Impairment loss on property, plant and equipment and others		(259,316	)		—			(324,529	)		—			(583,845	)
	￦	(7,503,870	)		(69,392	)		3,163,720			(7,651	)		(4,417,193	)

c) December 31, 2023

(in millions of Won)	Total segment			Goodwill and corporate FV adjustments			Elimination of inter-segment transactions			Basis difference(*2)			Consolidated
Interest income	￦	577,336			—			(75,189	)		—			502,147
Interest expenses		(1,180,096	)		—			178,806			—			(1,001,290	)
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			(62	)		(789,367	)
Impairment loss on property, plant and equipment and others		(409,552	)		—			3,799			—			(405,753	)
	￦	(6,083,083	)		(53,231	)		888,511			(62	)		(5,247,865	)

F-1

3

7

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(*2) Basis difference is related to the differences in recorded revenue and expenses for development and sale of certain residential real estates between the report reviewed by management and the consolidated financial statements.

(d) Revenue by geographic area for the years ended December 31, 2021, 2022 and 2023 was as follows:

(in millions of Won)	2021			2022		2023
Domestic	￦	49,732,699			54,519,647		50,658,510
Japan		2,200,855			2,651,584		2,691,788
China		7,146,695			7,430,619		6,152,191
Asia-other		11,425,513			12,614,612		10,710,029
North America		2,083,309			2,413,054		2,095,705
Others		3,743,274			5,120,688		4,818,974
		76,332,345			84,750,204		77,127,197
Basis difference		(323,144	)		253,412		(70,648	)
		￦  76,009,201			85,003,616		77,056,549

The information on geography, segment revenue is presented based on the geographical location of customers.

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

(in millions of Won)	2022		2023
Domestic	￦	28,623,582		31,585,233
Japan		139,636		132,229
China		1,199,461		1,222,358
Asia-other		4,768,410		4,521,857
North America		323,543		526,654
Others		2,639,045		3,548,995
	￦	37,693,677		41,537,326

Non-current

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

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

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 wholly 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 

F-1

3

8

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

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 been

￦

77,130,652 million and

￦

1,846,904 million. In addition, revenue and profit based on separate financial statements of QSONE Co.,Ltd. after the acquisition are

￦

18,044 million and

￦

6,307 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	￦	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 of

￦

184,556 million has been recognized as other

non-operating

income in the consolidated statement of comprehensive income.

F-1

39

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(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	￦	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	￦	614,289
Liabilities
Short-term borrowings	￦	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	￦	149,357
Net assets	￦	464,932

(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 is

￦

41,072 million which the Company recognized as other

non-operating

income.

F-14

0

POSCO HOLDINGS INC. and Subsidiaries

Notes to the Consolidated Financial Statements, Continued

As of December 31, 2022 and 2023

(e) Costs related to business combination

During the year ended December 31, 2023 expenses related to the business combination, including evaluation fees were

￦

179 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.

F-14

1

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

POSCO HOLDINGS INC.
(Registrant)
/s/ Chang, In-Hwa
Name:	Chang, In-Hwa
Title:	Chief Executive Officer and Representative Director
Date:	April 29, 2024