(Mark One) | ||
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
OR | ||
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
OR | ||
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Title of | Name of | |
American Depositary Shares, each representing one-ninth of one shares of Common Stock | New York Stock Exchange | |
Common Stock, par value | New York Stock |
* | Not for trading, but only in connection with the registration of the American Depositary Shares. |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o |
i
ii
1
• | our ability to anticipate and respond to various competitive factors affecting the wireless telecommunications industry, including new services that may be introduced, changes in consumer preferences, economic conditions and discount pricing strategies by competitors; | |
• | our implementation of high-speed downlink packet access, or HSDPA, technology, high-speed uplink packet access, or HSUPA, technology and wireless broadband internet, or WiBro, technology; | |
• | our plans | |
• | our efforts to make significant investments to build, develop and broaden our businesses, including developing and providing wireless data, multimedia, mobile commerce and Internet services; | |
• | our ability to comply with governmental rules and regulations, including the regulations of the KCC, related to telecommunications providers, rules related to our status as a “market-dominating business entity” under the Korean Monopoly Regulation and Fair Trade Act, or the Fair Trade Act, and the effectiveness of steps we have taken to comply with such regulations; | |
• | our ability to manage effectively our bandwidth and to implement timely and efficiently new bandwidth-efficient technologies; | |
• | our expectations and estimates related to interconnection fees; tariffs charged by our competitors; regulatory fees; operating costs and expenditures; working capital requirements; principal repayment obligations with respect to long-term borrowings, bonds and obligations under capital leases; and research and development expenditures and other financial estimates; | |
• | the success of our various joint ventures and investments in other telecommunications service providers; | |
• | our ability to successfully manage our | |
• | the growth of the telecommunications industry in Korea and other markets in which we do business and the effect that economic, political or social conditions have on our number of subscribers, call volumes and results of operations. |
2
Item 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
Item 1.A. | Directors and Senior Management |
Item 1.B. | Advisers |
Item 1.C. | Auditor |
Item 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
Item 3. | KEY INFORMATION |
Item 3.A. | Selected Financial Data |
As of or for the Year Ended December 31, | As of or for the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007 | 2004 | 2005 | 2006 | 2007 | 2008 | 2008 | |||||||||||||||||||||||||||||||||||||
(In billions of Won and millions of dollars, except per share and percentage data) | (In billions of Won and millions of Dollars, except per share and percentage data) | |||||||||||||||||||||||||||||||||||||||||||||||
INCOME STATEMENT DATA | ||||||||||||||||||||||||||||||||||||||||||||||||
Korean GAAP: | ||||||||||||||||||||||||||||||||||||||||||||||||
Total Operating Revenue(1) | 10,272 | .1 | 10,570 | .6 | 10,721 | .8 | 11,028 | .0 | 12,018 | .2 | US$ | 12,842 | .7 | |||||||||||||||||||||||||||||||||||
Cellular Service(1) | 10,091 | .8 | 10,297 | .6 | 10,361 | .9 | 10,515 | .6 | 11,237 | .2 | 12,008 | .1 | ||||||||||||||||||||||||||||||||||||
Other(2) | 180 | .3 | 273 | .0 | 359 | .9 | 512 | .4 | 781 | .0 | 834 | .6 | ||||||||||||||||||||||||||||||||||||
Total Operating Revenue(1) | 10,570.6 | 10,721.8 | 11,028.0 | 11,863.4 | (19) | 14,021.0 | US$ | 11,110.1 | ||||||||||||||||||||||||||||||||||||||||
Cellular Service(1) | 10,297.6 | 10,361.9 | 10,515.6 | 11,016.1 | 11,389.8 | 9,025.2 | ||||||||||||||||||||||||||||||||||||||||||
Broadband Internet and Fixed-line Telephone Service | — | — | — | — | 1,821.8 | 1,443.5 | ||||||||||||||||||||||||||||||||||||||||||
Other(2) | 273.0 | 359.9 | 512.4 | 847.3 | (19) | 809.4 | 641.4 | |||||||||||||||||||||||||||||||||||||||||
Operating Expenses | 7,167 | .0 | 8,130 | .9 | 8,051 | .2 | 8,406 | .9 | 10,207 | .8 | 10,908 | .0 | 8,130.9 | 8,051.2 | 8,406.9 | 9,761.4 | (19) | 12,268.5 | 9,721.5 | |||||||||||||||||||||||||||||
Operating Income | 3,105 | .1 | 2,439 | .7 | 2,670 | .6 | 2,621 | .1 | 1,810 | .4 | 1,934 | .6 | 2,439.7 | 2,670.6 | 2,621.1 | 2,102.0 | (19) | 1,752.5 | 1,388.6 | |||||||||||||||||||||||||||||
Income before Income Taxes and Minority Interest | 2,754 | .3 | 2,123 | .2 | 2,561 | .6 | 2,021 | .6 | 1,985 | .3 | 2,121 | .5 | ||||||||||||||||||||||||||||||||||||
Net Income(3) | 1,965 | .3 | 1,493 | .4 | 1,868 | .3 | 1,449 | .6 | 1,562 | .3 | 1,669 | .4 | ||||||||||||||||||||||||||||||||||||
Net Income per Share of Common Stock(4) | 26,187 | 20,261 | 25,443 | 19,801 | 22,696 | 24 | .25 | |||||||||||||||||||||||||||||||||||||||||
Diluted Net Income per Share of Common Stock(4) | 26,187 | 20,092 | 25,036 | 19,523 | 22,375 | 23 | .91 | |||||||||||||||||||||||||||||||||||||||||
Dividends Declared per Share of Common Stock | 5,500 | 10,300 | 9,000 | 8,000 | 9,400 | 10 | .04 | |||||||||||||||||||||||||||||||||||||||||
Income from Continuing Operation before Income Tax | 2,123.2 | 2,561.6 | 2,021.6 | 2,285.8 | (19) | 1,258.7 | 997.4 | |||||||||||||||||||||||||||||||||||||||||
Net Income(3) | 1,493.4 | 1,868.3 | 1,449.6 | 1,562.3 | 972.3 | 770.4 | ||||||||||||||||||||||||||||||||||||||||||
Net Income per Share(4) | 20,261 | 25,443 | 19,801 | 22,696 | 16,707 | 13.24 | ||||||||||||||||||||||||||||||||||||||||||
Diluted Net Income per Share(4) | 20,092 | 25,036 | 19,523 | 22,375 | 16,559 | 13.12 | ||||||||||||||||||||||||||||||||||||||||||
Dividends Declared per Share | 10,300 | 9,000 | 8,000 | 9,400 | 9,400 | 7.45 | ||||||||||||||||||||||||||||||||||||||||||
Weighted Average Number of Shares | 75,078,219 | 73,614,296 | 73,614,296 | 73,305,026 | 72,650,909 | 72,650,909 | 73,614,296 | 73,614,296 | 73,305,026 | 72,650,909 | 72,765,557 | 72,765,557 | ||||||||||||||||||||||||||||||||||||
U.S. GAAP: | ||||||||||||||||||||||||||||||||||||||||||||||||
Total Operating Revenue | 10,534.6 | 10,701.4 | 10,541.8 | 11,212.4 | 11,157.6 | US$ | 8,841.2 | |||||||||||||||||||||||||||||||||||||||||
Operating Expenses | 8,137.6 | 7,847.7 | 7,720.0 | 9,144.3 | 9,404.0 | 7,451.7 | ||||||||||||||||||||||||||||||||||||||||||
Operating Income | 2,397.0 | 2,853.7 | 2,821.8 | 2,068.1 | 1,753.6 | 1,389.5 | ||||||||||||||||||||||||||||||||||||||||||
Net Income(4) | 1,554.6 | 2,019.6 | 1,878.3 | 1,505.3 | 1,072.9 | 850.2 | ||||||||||||||||||||||||||||||||||||||||||
Net Income per Share(4)(5) | 21,118 | 27,435 | 25,624 | 20,720 | 14,744 | 11.7 | ||||||||||||||||||||||||||||||||||||||||||
Diluted Net Income per Share(4)(5) | 20,939 | 26,983 | 25,207 | 20,730 | 14,606 | 11.6 |
3
As of or for the Year Ended December 31, | |||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007 | ||||||||||||||||||||
(In billions of Won and millions of dollars, except per share and percentage data) | |||||||||||||||||||||||||
U.S. GAAP: | |||||||||||||||||||||||||
Total Operating Revenue | 10,225 | .1 | 10,534 | .6 | 10,701 | .4 | 10,541 | .8 | 11,212 | .4 | US$ | 11,981 | .6 | ||||||||||||
Operating Expenses | 7,044 | .5 | 8,137 | .6 | 7,847 | .7 | 7,720 | .0 | 9,144 | .3 | 9,771 | .6 | |||||||||||||
Operating Income | 3,180 | .6 | 2,397 | .0 | 2,853 | .7 | 2,821 | .8 | 2,068 | .1 | 2,210 | .0 | |||||||||||||
Net Income | 2,062 | .7 | 1,553 | .1 | 2,027 | .6 | 1,880 | .5 | 1,506 | .1 | 1,609 | .4 | |||||||||||||
Net Income per Share of Common Stock(4) | 27,475 | 21,097 | 27,543 | 25,653 | 20,731 | 22 | .15 | ||||||||||||||||||
Diluted Net Income per Share of Common Stock(4) | 27,475 | 20,918 | 27,089 | 25,236 | 20,390 | 21 | .79 | ||||||||||||||||||
BALANCE SHEET DATA | |||||||||||||||||||||||||
Korean GAAP: | |||||||||||||||||||||||||
Working Capital (Deficiency)(5) | (461 | .4 | ) | 1,323 | .8 | 1,735 | .2 | 1,455 | .5 | 1,796 | .2 | US$ | 1,919 | .4 | |||||||||||
Property and Equipment, Net | 4,641 | .5 | 4,703 | .9 | 4,663 | .4 | 4,507 | .3 | 4,969 | .4 | 5,310 | .3 | |||||||||||||
Total Assets | 13,818 | .2 | 14,283 | .4 | 14,704 | .8 | 16,240 | .0 | 19,048 | .9 | 20,355 | .8 | |||||||||||||
Non-current Liabilities(6) | 3,193 | .5 | 4,010 | .7 | 3,513 | .9 | 3,548 | .5 | 4,344 | .4 | 4,642 | .5 | |||||||||||||
Capital Stock | 44 | .6 | 44 | .6 | 44 | .6 | 44 | .6 | 44 | .6 | 47 | .7 | |||||||||||||
Total Shareholders’ Equity | 6,093 | .8 | 7,205 | .7 | 8,327 | .5 | 9,483 | .1 | 11,687 | .6 | 12,489 | .5 | |||||||||||||
U.S. GAAP: | |||||||||||||||||||||||||
Working Capital (Deficiency) | (445 | .5 | ) | 1,311 | .3 | 1,587 | .2 | 1,286 | .2 | 1,751 | .1 | 1,871 | .2 | ||||||||||||
Total Assets | 15,586 | .2 | 15,576 | .8 | 16,351 | .2 | 17,929 | .5 | 20,214 | .9 | 21,601 | .7 | |||||||||||||
Total Shareholders’ Equity | 7,014 | .7 | 8,237 | .0 | 9,472 | .4 | 10,738 | .5 | 12,699 | .11 | 13,570 | .3 | |||||||||||||
OTHER FINANCIAL DATA | |||||||||||||||||||||||||
Korean GAAP: | |||||||||||||||||||||||||
EBITDA(3)(7) | 4,705 | .6 | 4,087 | .7 | 4,429 | .5 | 3,879 | .1 | 4,357 | .7 | US$ | 4,656 | .6 | ||||||||||||
Capital Expenditures(8) | 1,647 | .6 | 1,631 | .9 | 1,416 | .6 | 1,498 | .1 | 1,816 | .0 | 1,940 | .5 | |||||||||||||
R&D Expenses(9) | 300 | .7 | 336 | .1 | 321 | .1 | 279 | .0 | 293 | .1 | 313 | .2 | |||||||||||||
Internal R&D | 235 | .8 | 267 | .1 | 252 | .0 | 212 | .0 | 218 | .7 | 233 | .7 | |||||||||||||
External R&D | 64 | .9 | 69 | .0 | 69 | .1 | 67 | .0 | 74 | .4 | 79 | .5 | |||||||||||||
Depreciation and Amortization | 1,646 | .3 | 1,752 | .5 | 1,675 | .5 | 1,698 | .4 | 2,000 | .7 | 2,138 | .0 | |||||||||||||
Cash Flow from Operating Activities | 3,329 | .4 | 2,527 | .9 | 3,407 | .1 | 3,589 | .8 | 3,710 | .7 | 3,965 | .3 | |||||||||||||
Cash Flow from Investing Activities | (1,415 | .1 | ) | (1,470 | .3) | (1,938 | .2) | (2,535 | .2) | (2,399 | .0) | (2,563 | .6) | ||||||||||||
Cash Flow from Financing Activities | (2,261 | .0 | ) | (968 | .6) | (1,429 | .0) | (952 | .4) | (856 | .0) | (914 | .7) | ||||||||||||
Margins (% of total sales): | |||||||||||||||||||||||||
EBITDA Margin(7) | 45 | .8 | % | 38 | .7% | 41 | .4% | 35 | .2% | 36 | .6% | 36 | .6% | ||||||||||||
Operating Margin | 30 | .2 | 23 | .1 | 24 | .9 | 23 | .8 | 15 | .1 | 15 | .1 | |||||||||||||
Net Margin | 19 | .1 | 14 | .1 | 17 | .5 | 13 | .2 | 13 | .0 | 13 | .0 |
As of or for the Year Ended December 31, | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2008 | |||||||||||||||||||
(In billions of Won and millions of Dollars, except per share and percentage data) | ||||||||||||||||||||||||
BALANCE SHEET DATA | ||||||||||||||||||||||||
Korean GAAP: | ||||||||||||||||||||||||
Working Capital(6) | 1,323.8 | 1,735.2 | 1,455.5 | 1,796.2 | 793.6 | US$ | 628.9 | |||||||||||||||||
Property and Equipment, Net | 4,703.9 | 4,663.4 | 4,507.3 | 4,969.4 | 7,437.7 | 5,893.6 | ||||||||||||||||||
Total Assets | 14,283.4 | 14,704.8 | 16,240.0 | 19,048.9 | 22,473.7 | 17,808.0 | ||||||||||||||||||
Non-current Liabilities(7) | 4,010.7 | 3,513.9 | 3,548.5 | 4,344.4 | 6,020.4 | 4,770.5 | ||||||||||||||||||
Capital Stock | 44.6 | 44.6 | 44.6 | 44.6 | 44.6 | 35.4 | ||||||||||||||||||
Total Shareholders’ Equity | 7,205.7 | 8,327.5 | 9,483.1 | 11,687.6 | 11,824.4 | 9,369.6 | ||||||||||||||||||
U.S. GAAP: | ||||||||||||||||||||||||
Working Capital (Deficiency) | 1,311.3 | 1,587.2 | 1,286.2 | 1,751.1 | 738.0 | US$ | 584.8 | |||||||||||||||||
Total Assets(4) | 15,592.0 | 16,356.5 | 17,909.4 | 20,173.6 | 21,239.2 | 16,829.8 | ||||||||||||||||||
Total Shareholders’ Equity(4) | 8,252.2 | 9,477.7 | 10,718.4 | 12,657.8 | 12,227.1 | 9,688.7 |
As of or for the Year Ended December 31, | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2008 | |||||||||||||||||||
(In billions of Won and millions of Dollars, except per share and percentage data) | ||||||||||||||||||||||||
OTHER FINANCIAL DATA | ||||||||||||||||||||||||
Korean GAAP: | ||||||||||||||||||||||||
EBITDA(3)(8) | 4,087.7 | 4,429.5 | 3,879.1 | 4,366.0 | 4,008.4 | US$ | 3,176.2 | |||||||||||||||||
Capital Expenditures(9) | 1,631.9 | 1,416.6 | 1,498.1 | 1,804.1 | 2,236.9 | 1,772.5 | ||||||||||||||||||
R&D Expenses(10) | 336.1 | 321.1 | 279.0 | 293.1 | 299.7 | 237.5 | ||||||||||||||||||
Internal R&D | 267.1 | 252.0 | 212.0 | 218.7 | 226.7 | 179.7 | ||||||||||||||||||
External R&D | 69.0 | 69.1 | 67.0 | 74.4 | 73.0 | 57.8 | ||||||||||||||||||
Depreciation and Amortization | 1,752.5 | 1,675.5 | 1,698.4 | 1,971.3 | 2,759.3 | 2,186.5 | ||||||||||||||||||
Cash Flow from Operating Activities | 2,527.9 | 3,407.1 | 3,589.8 | 3,721.7 | (20) | 3,296.9 | (20) | 2,612.4 | (20) | |||||||||||||||
Cash Flow from Investing Activities | (1,470.3 | ) | (1,938.2 | ) | (2,535.2 | ) | (2,414.9 | )(20) | (3,875.4 | )(20) | (3,070.8 | )(20) | ||||||||||||
Cash Flow from Financing Activities | (968.6 | ) | (1,429.0 | ) | (952.4 | ) | (1,041.3 | )(20) | 869.4 | (20) | 688.9 | (20) | ||||||||||||
Margins (% of total sales): | ||||||||||||||||||||||||
EBITDA Margin(8)(11) | 38.7 | % | 41.3 | % | 35.2 | % | 36.8 | % | 29.5 | % | 29.5 | % | ||||||||||||
Operating Margin(11) | 23.1 | 24.9 | 23.8 | 17.7 | 12.1 | 12.1 | ||||||||||||||||||
Net Margin(11) | 14.1 | 17.4 | 13.1 | 13.2 | 7.1 | 7.1 | ||||||||||||||||||
U.S. GAAP: | ||||||||||||||||||||||||
EBITDA(4)(8) | 3,971.9 | 4,404.2 | 4,527.4 | 3,960.9 | 3,277.4 | US$ | 2,597.0 | |||||||||||||||||
Capital Expenditures(9) | 1,656.9 | 1,429.3 | 1,538.0 | 1,854.0 | 1,861.0 | 1,474.6 | ||||||||||||||||||
Cash Flow from Operating Activities | 3,237.9 | 3,296.8 | 3,614.8 | 3,284.8 | 2,698.7 | 2,138.4 | ||||||||||||||||||
Cash Flow from Investing Activities | (1,634.1 | ) | (1,816.5 | ) | (2,560.6 | ) | (2,385.2 | ) | (3,926.9 | ) | (3,111.6 | ) | ||||||||||||
Cash Flow from Financing Activities | (1,514.8 | ) | (1,439.3 | ) | (940.6 | ) | (631.3 | ) | 1,118.7 | 886.5 |
4
As of or for the Year Ended December 31, | |||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007 | ||||||||||||||||||||
(In billions of Won and millions of dollars, except per share and percentage data) | |||||||||||||||||||||||||
U.S. GAAP: | |||||||||||||||||||||||||
EBITDA(7) | 4,679 | .1 | 3,970 | .4 | 4,412 | .2 | 4,529 | .6 | 3,961 | .7 | 4,233 | .5 | |||||||||||||
Capital Expenditures(8) | 1,668 | .0 | 1,656 | .9 | 1,429 | .3 | 1,538 | .0 | 1,854 | .0 | 1,981 | .2 | |||||||||||||
Cash Flow from Operating Activities | 3,144 | .3 | 3,237 | .9 | 3,296 | .8 | 3,614 | .8 | 3,284 | .8 | 3,510 | .2 | |||||||||||||
Cash Flow from Investing Activities | (1,285 | .5 | ) | (1,634 | .1) | (1,816 | .5) | (2,560 | .6) | (2,435 | .7) | (2,602 | .8) | ||||||||||||
Cash Flow from Financing Activities | (2,205 | .5 | ) | (1,514 | .8) | (1,439 | .3) | (940 | .6) | (631 | .3) | (674 | .6) |
As of or for the Year Ended December 31, | ||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007 | |||||||||||||||||||
SELECTED OPERATING DATA | ||||||||||||||||||||||||
Population of Korea (millions)(10) | 47 | .9 | 48 | .2 | 48 | .3 | 48 | .3 | 48 | .5 | 48 | .5 | ||||||||||||
Our Wireless Penetration(11) | 38 | .2% | 39 | .0% | 40 | .4% | 42 | .0% | 45 | .3% | 45 | .3% | ||||||||||||
Number of Employees(12) | 6,286 | 7,353 | 6,646 | 7,676 | 9,485 | 9,485 | ||||||||||||||||||
Total Sales per Employee (millions) | 1,634 | .1 | 1,437 | .6 | 1,613 | .3 | 1,436 | .7 | 1,267 | .1 | US$ | 1,354 | .0 | |||||||||||
Wireless Subscribers(13) | 18,313,135 | 18,783,338 | 19,530,117 | 20,271,133 | 21,968,169 | 21,968,169 | ||||||||||||||||||
Average Monthly Outgoing Voice Minutes per Subscriber(14) | 197 | 194 | 197 | 201 | 201 | 201 | ||||||||||||||||||
Average Monthly Revenue per Subscriber(15) | 39,739 | 39,689 | 40,205 | 40,220 | 40,154 | US$ | 42 | .91 | ||||||||||||||||
Average Monthly Churn Rate(16) | 1 | .2% | 1 | .7% | 1 | .8% | 2 | .0% | 2 | .6% | 2 | .6% | ||||||||||||
Digital Cell Sites | 8,310 | 9,458 | 10,142 | 12,515 | 16,099 | 16,099 |
As of or for the Year Ended December 31, | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2008 | |||||||||||||||||||
SELECTED OPERATING DATA | ||||||||||||||||||||||||
Population of Korea (millions)(12) | 48.2 | 48.3 | 48.3 | 48.5 | 48.6 | 48.6 | ||||||||||||||||||
Our Wireless Penetration(13) | 39.0 | % | 40.4 | % | 42.0 | % | 45.3 | % | 47.4 | % | 47.4 | % | ||||||||||||
Number of Employees(14) | 7,353 | 6,646 | 7,676 | 9,485 | 10,626 | 10,626 | ||||||||||||||||||
Total Sales per Employee (in millions of Won and thousands of Dollars) | 1,437.6 | 1,613.3 | 1,436.7 | 1,267.1 | 1,319.5 | US$ | 1,045.6 | |||||||||||||||||
Wireless Subscribers(15) | 18,783,338 | 19,530,117 | 20,271,133 | 21,968,169 | 23,032,045 | 23,032,045 | ||||||||||||||||||
Average Monthly Outgoing Voice Minutes per Subscriber(16) | 194 | 197 | 201 | 201 | 200 | 200 | ||||||||||||||||||
Average Monthly Revenue per Subscriber(17) | 39,689 | 40,205 | 40,220 | 40,154 | 38,526 | US$ | 30.53 | |||||||||||||||||
Average Monthly Churn Rate(18) | 1.7 | % | 1.8 | % | 2.0 | % | 2.6 | % | 2.7 | % | 2.7 | % | ||||||||||||
Digital Cell Sites | 9,458 | 10,142 | 12,515 | 16,099 | 17,213 | 17,213 |
* | The | |
(1) | Includes revenues from SK Teletech Co., Ltd. of Won | |
(2) | For more information about our other revenue, see “Item 5. Operating and Financial Review and Prospects” and “Item 4.B. Business Overview”. | |
(3) | As of January 1, 2007, we adopted Statements of Korean Accounting Standards, or SKAS No. 25. Pursuant to adoption of SKAS No. 25, net income is allocated to equity holders of the parent and minority interest. In addition, when a subsidiary is purchased during the fiscal year, the subsidiary’s statement of income is included in consolidation as though it had been acquired at the beginning of the fiscal year, and pre-acquisition earnings are presented as a separate deduction within the consolidated statements of income. The consolidated statements of income for the years ended December 31, | |
(4) | ||
(5) | Net income per share | |
Working capital means current assets minus current liabilities. | ||
Our monetary assets and liabilities denominated in foreign currencies are valued at the exchange rate of | ||
EBITDA refers to income before interest income, interest expense, taxes, depreciation and amortization. EBITDA is commonly used in the telecommunications industry to analyze companies on the basis of operating |
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expenditures and level of debt and interest expenses may have a significant impact on net income for companies with similar operating results. Therefore, for a telecommunications company such as ourselves, we believe that EBITDA provides a useful reflection of our operating results. We use EBITDA as a measurement of operating performance because it assists us in comparing our performance on a consistent basis as it removes from our operating results the impact of our capital structure, which includes interest expense from our outstanding debt, and our asset base, which includes depreciation and amortization of our property and equipment. However, EBITDA should not be construed as an alternative to operating income or any other measure of performance determined in accordance with Korean GAAP or U.S. GAAP or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities. Other companies may define EBITDA differently than we do. EBITDA under U.S. GAAP is computed using interest income, interest expense, depreciation, amortization and income taxes under U.S. GAAP, which may differ from Korean GAAP for these items. | ||
Consists of investments in property, plant and equipment. Under U.S. GAAP, interest costs incurred during the period required to complete an asset or ready an asset for its intended use are capitalized based on the interest rates a company pays on its outstanding borrowings. Under Korean GAAP, such interest costs are expensed as incurred. | ||
Includes donations to Korean research institutes and educational organizations. See “Item 5.C. Research and Development”. | ||
Operating revenue and operating income used in the calculation of these ratios for 2007 and 2008 include the operating revenue and operating income from the discontinued operation, but exclude the operating revenue and operating income of newly-consolidated subsidiaries prior to the date of consolidation. | ||
(12) | Population estimates based on historical data published by the National Statistical Office of Korea. | |
Wireless penetration is determined by dividing our subscribers by total estimated population, as of the end of the period. | ||
Includes regular employees and temporary employees. See “Item 6.D. Employees”. | ||
Wireless subscribers include those subscribers who are temporarily deactivated, including (1) subscribers who voluntarily deactivate temporarily for a period of up to three months no more than twice a year and (2) subscribers with delinquent accounts who may be involuntarily deactivated up to two months before permanent deactivation, which we determine based on various factors, including prior payment history. | ||
The average monthly outgoing voice minutes per subscriber is derived by dividing the total minutes of outgoing voice usage for the period by the monthly | ||
The average monthly revenue per subscriber excludes interconnection revenue and is derived by dividing the sum of total initial subscription fees, monthly plan-based fees, usage charges for outgoing voice calls, usage charges for wireless data services, value-added service fees and other miscellaneous revenues for the period by the monthly | ||
The average monthly churn rate for a period is the number calculated by dividing the sum of voluntary and involuntary deactivations during the period by the simple average of the number of subscribers at the beginning and end of the period, then dividing that number by the number of months in the period. Churn includes subscribers who upgrade to CDMA lxRTT or CDMA 1xEV/ DO-capable handsets by terminating their service and opening a new subscriber account. | ||
(19) | As a result of our sale of HELIO LLC (“HELIO”) to Virgin Mobile USA, Inc. in August 2008, HELIO’s results of operations have been classified as discontinued operations. Operating revenue, operating expenses, operating income and income before income taxes and minority interest for the year ended December 31, 2007 have been revised to exclude HELIO’s results of operations. | |
(20) | Cash flow activities from discontinued operation for the years ended December 31, 2007 and 2008 have been excluded. |
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As of or for the Year Ended December 31, | As of or for the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007(1) | 2004 | 2005 | 2006 | 2007 | 2008 | 2008(1) | |||||||||||||||||||||||||||||||||||||||||||
(In billions of Won and millions of dollars) | (In billions of Won and millions of Dollars) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income | 2,062 | .7 | 1,553 | .1 | 2,027 | .6 | 1,880 | .5 | 1,506 | .1 | US $ | 1,609 | .4 | |||||||||||||||||||||||||||||||||||||||||
U.S. GAAP: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income(2) | 1,554.6 | 2,019.6 | 1,878.3 | 1,505.3 | 1,072.9 | US$ | 850.2 | |||||||||||||||||||||||||||||||||||||||||||||||
LESS: Interest income | (93 | .9 | ) | (86 | .7 | ) | (62 | .6 | ) | (86 | .8 | ) | (99 | .0 | ) | (105 | .8 | ) | (86.7 | ) | (62.6 | ) | (86.8 | ) | (99.0 | ) | (121.8 | ) | (96.5 | ) | ||||||||||||||||||||||||
ADD: Interest expense | 387 | .1 | 291 | .0 | 226 | .8 | 241 | .7 | 204 | .0 | 218 | .0 | 291.0 | 226.8 | 241.7 | 204.0 | 240.2 | 190.3 | ||||||||||||||||||||||||||||||||||||
Taxes | 811 | .5 | 611 | .1 | 667 | .1 | 686 | .8 | 576 | .9 | 616 | .5 | 611.1 | 667.1 | 686.8 | 576.9 | 161.7 | 128.1 | ||||||||||||||||||||||||||||||||||||
Depreciation and Amortization | 1,511 | .7 | 1,601 | .9 | 1,553 | .3 | 1,807 | .4 | 1,773 | .7 | 1,895 | .4 | 1,601.9 | 1,553.3 | 1,807.4 | 1,773.7 | 1,924.4 | 1,524.9 | ||||||||||||||||||||||||||||||||||||
EBITDA | 4,679 | .1 | 3,970 | .4 | 4,412 | .2 | 4,529 | .6 | 3,961 | .7 | US $ | 4,233 | .5 | 3,971.9 | 4,404.2 | 4,527.4 | 3,960.9 | 3,277.4 | US$ | 2,597.0 | ||||||||||||||||||||||||||||||||||
(1) | The | |
(2) | Adjusted to retroactively reflect our acquisition of an additional 38.7% equity stake in SK Broadband in March 2008, increasing our total equity interest in SK Broadband to 43.4%. |
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As of or for the Year Ended December 31, | As of or for the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007(1) | 2004 | 2005 | 2006 | 2007 | 2008 | 2008(1) | |||||||||||||||||||||||||||||||||||||||||||
(In billions of Won and millions of dollars) | (In billions of Won and millions of Dollars) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Korean GAAP: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income | 1,965 | .3 | 1,493 | .4 | 1,868 | .3 | 1,449 | .6 | 1,562 | .3 | US $ | 1,669 | .4 | 1,493.4 | 1,868.3 | 1,449.6 | 1,562.3 | 972.3 | US$ | 770.4 | ||||||||||||||||||||||||||||||||||
LESS: Interest income | (86 | .5 | ) | (80 | .5 | ) | (61 | .1 | ) | (80 | .0 | ) | (93 | .9 | )(2) | (100 | .4 | )(2) | (80.5 | ) | (61.1 | ) | (80.0 | ) | (93.9 | )(2) | (136.3 | )(2) | (108.0 | ) | ||||||||||||||||||||||||
ADD: Interest expense | 391 | .5 | 303 | .4 | 253 | .5 | 239 | .1 | 235 | .3 | (2) | 251 | .5 | (2) | 303.4 | 253.5 | 239.1 | 235.3 | (2) | 344.6 | (2) | 273.1 | ||||||||||||||||||||||||||||||||
Taxes | 789 | .0 | 629 | .8 | 693 | .3 | 572 | .0 | 686 | .2 | (2) | 733 | .3 | (2) | 629.8 | 693.3 | 572.0 | 694.5 | (2) | 188.9 | (2) | 149.7 | ||||||||||||||||||||||||||||||||
Depreciation and Amortization | 1,646 | .3 | 1,741 | .6 | 1,675 | .5 | 1,698 | .4 | 1,967 | .8 | (2) | 2,102 | .8 | (2) | 1,741.6 | 1,675.5 | 1,698.4 | 1,967.8 | (2) | 2,638.9 | (2) | 2,091.0 | ||||||||||||||||||||||||||||||||
EBITDA | 4,705 | .6 | 4,087 | .7 | 4,429 | .5 | 3,879 | .1 | 4,357 | .7 | US $ | 4,656 | .6 | 4,087.7 | 4,429.5 | 3,879.1 | 4,366.0 | 4,008.4 | US$ | 3,176.2 | ||||||||||||||||||||||||||||||||||
(1) | The | |
(2) | In accordance with |
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At End of Year Ended December 31, | At End of | Average | ||||||||||||||||||||||||||||||
Year Ended December 31, | Period | Rate(1) | High | Low | ||||||||||||||||||||||||||||
Period | Average Rate(1) | High | Low | (Won per US$1.00) | ||||||||||||||||||||||||||||
2003 | 1,192 | 1,193 | 1,262 | 1,146 | ||||||||||||||||||||||||||||
2004 | 1,035 | 1,145 | 1,195 | 1,035 | 1,035.1 | 1,139.3 | 1,195.1 | 1,035.1 | ||||||||||||||||||||||||
2005 | 1,010 | 1,023 | 1,060 | 997 | 1,010.0 | 1,023.7 | 1,059.8 | 997.0 | ||||||||||||||||||||||||
2006 | 930 | 951 | 1,003 | 914 | 930.0 | 950.1 | 1,002.9 | 913.7 | ||||||||||||||||||||||||
2007 | 936 | 928 | 950 | 903 | 935.8 | 928.0 | 950.2 | 903.2 | ||||||||||||||||||||||||
2008 | 1,262.0 | 1,105.8 | 1,507.9 | 935.2 |
Past Six Months | ||||||||
High | Low | |||||||
(Won per US$1.00) | ||||||||
December 2007 | 943 | 919 | ||||||
January 2008 | 953 | 935 | ||||||
February 2008 | 948 | 937 | ||||||
March 2008 | 1,021 | 947 | ||||||
April 2008 | 1,005 | 974 | ||||||
May 2008 | 1,047 | 1,004 | ||||||
June 2008 (through June 27, 2008) | 1,044 | 1,016 |
Past Six Months | ||||||||
High | Low | |||||||
(Won per US$1.00) | ||||||||
December 2008 | 1,479.0 | 1,257.4 | ||||||
January 2009 | 1,391.5 | 1,292.3 | ||||||
February 2009 | 1,532.8 | 1,368.7 | ||||||
March 2009 | 1,570.1 | 1,334.8 | ||||||
April 2009 | 1,378.3 | 1,277.0 | ||||||
May 2009 | 1,277.0 | 1,232.9 | ||||||
June 2009 (through June 19, 2009) | 1,269.0 | 1,232.1 |
(1) | The average rates for the annual periods were calculated based on the average noon buying rate on the last day of each month (or portion thereof) during the period. |
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Item 3.B. | Capitalization and Indebtedness |
Item 3.C. | Reasons for the Offer and Use of Proceeds |
Item 3.D. | Risk Factors |
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• | ||
• | adverse changes or volatility in foreign currency reserve levels, commodity prices (including oil prices), exchange rates (including fluctuation of the U.S. dollar or Japanese yen exchange rates or revaluation of the Chinese renminbi), interest rates | |
• | substantial decreases in the market prices of Korean real estate; | |
• | increasing delinquencies and credit defaults by consumer and small and medium sized enterprise borrowers; | |
• | declines in consumer confidence and a slowdown in consumer spending; | |
• | adverse developments in the economies of countries that are important export markets for Korea, such as the United States, Japan and China, or in emerging market economies in Asia or elsewhere; | |
• | the continued emergence of the Chinese economy, to the extent its benefits (such as increased exports to China) are outweighed by its costs (such as competition in export markets or for foreign investment and the relocation of the manufacturing | |
• | social and labor unrest; | |
• | a 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 that, together, would lead to an increased government budget deficit; | |
• | financial problems or lack of progress in the restructuring of Korean conglomerates, other large troubled companies, their suppliers or the financial sector; |
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• | loss of investor confidence arising from corporate accounting irregularities and corporate governance issues at certain Korean conglomerates; | |
• | the economic impact of any pending or future free trade agreements, including the Free Trade Agreement recently negotiated with the United States; | |
• | ||
geo-political uncertainty and risk of further attacks by terrorist groups around the world; | ||
• | the recurrence of severe acute respiratory syndrome, or SARS, or an outbreak of avian flu in Asia and other parts of the world; | |
• | deterioration in economic or diplomatic relations between Korea and its trading partners or allies, including deterioration resulting from trade disputes or disagreements in foreign policy; | |
• | political uncertainty or increasing strife among or within political parties in Korea; | |
• | hostilities involving oil producing countries in the Middle East and any material disruption in the supply of oil or increase in the price of oil; and | |
• | an increase in the level of tension or an outbreak of hostilities between North Korea and Korea or the United States. |
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• | an increase in the amount of Won required by us to make interest and principal payments on our foreign currency-denominated debt, which accounted for approximately | |
• | an increase, in Won terms, of the costs of equipment that we purchase from overseas sources which we pay for in Dollars or other foreign currencies. |
• | the amounts a registered holder or beneficial owner of ADSs will receive from the ADR depositary in respect of dividends, which will be paid in Won to the ADR depositary and converted by the ADR depositary into Dollars; | |
• | the Dollar value of the proceeds that a holder will receive upon sale in Korea of the common shares; and | |
• | the secondary market price of the ADSs. |
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• | revoke our business license; | |
• | suspend all or part of our business; or | |
• | if the suspension of business is deemed to result in significant inconvenience to our customers or to be detrimental to the public interest, impose a one-time administrative penalty of up to 3% of the average of our annual revenue for the preceding three fiscal years. |
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• | a registration statement filed by us under the | |
• | the offering and sale of those shares is exempt from, or is not subject to, the registration requirements of the |
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Item 4. | INFORMATION ON THE COMPANY |
Item 4.A. | History and Development of the Company |
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As of or for the Year Ended December 31, | As of December 31, | |||||||||||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2004 | 2005 | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||||
(In thousands, except for per population amounts) | (In thousands, except for per population amounts) | |||||||||||||||||||||||||||||||||||||||
Population of Korea(1) | 47,849 | 48,082 | 48,294 | 48,297 | 48,456 | |||||||||||||||||||||||||||||||||||
Wireless Subscribers(2) | 33,592 | 36,586 | 38,342 | 40,197 | 43,498 | |||||||||||||||||||||||||||||||||||
Population of Korea(1) | 48,082 | 48,294 | 48,297 | 48,456 | 48,607 | |||||||||||||||||||||||||||||||||||
Wireless Subscribers(2) | 36,586 | 38,342 | 40,197 | 43,498 | 45,607 | |||||||||||||||||||||||||||||||||||
Wireless Subscribers per 100 Population | 70 | .2 | 76 | .1 | 79 | .4 | 83 | .2 | 89 | .8 | 76.1 | 79.4 | 83.2 | 89.8 | 93.8 | |||||||||||||||||||||||||
Telephone Lines in Service(2) | 22,877 | 22,871 | 22,920 | 23,119 | 23,130 | |||||||||||||||||||||||||||||||||||
Telephone Lines in Service(2) | 22,871 | 22,920 | 23,119 | 23,130 | 22,132 | |||||||||||||||||||||||||||||||||||
Telephone Lines per 100 Population | 47 | .8 | 47 | .6 | 47 | .5 | 47 | .9 | 47 | .7 | 47.6 | 47.5 | 47.9 | 47.7 | 45.5 |
(1) | Source: National Statistical Office of | |
(2) | Source: |
As of December 31, | As of December 31, | ||||||||||||||||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Number of Wireless Internet Enabled Handsets | 31,431 | 35,017 | 37,202 | 38,894 | 41,598 | 35,017 | 37,202 | 38,894 | 41,598 | 42,740 | |||||||||||||||||||||||||||||||||||
Total Number of Wireless Subscribers | 33,592 | 36,586 | 38,342 | 40,197 | 43,498 | 36,586 | 38,342 | 40,197 | 43,498 | 45,607 | |||||||||||||||||||||||||||||||||||
Penetration of Wireless Internet Enabled Handsets | 93 | .6 | % | 95 | .7 | % | 97 | .0 | % | 96 | .8 | % | 95 | .6 | % | 95.7 | % | 97.0 | % | 96.8 | % | 95.6 | % | 93.7 | % |
As of December 31, | As of December 31, | |||||||||||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2004 | 2005 | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Number of Internet Users(1) | 29,220 | 31,580 | 33,010 | 34,120 | 34,820 | |||||||||||||||||||||||||||||||||||
Number of Broadband Subscribers(2) | 11,172 | 11,921 | 12,191 | 14,043 | 14,709 | |||||||||||||||||||||||||||||||||||
Number of Internet Users(1) | 31,580 | 33,010 | 34,120 | 34,820 | 35,360 | |||||||||||||||||||||||||||||||||||
Number of Broadband Subscribers(2) | 11,921 | 12,191 | 14,043 | 14,709 | 15,475 |
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(1) | Source: | |
(2) | Source: |
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Item 4.B. | Business Overview |
• | Cellular voice services. We provide wireless voice transmission services to our subscribers through our backbone cellular networks and also offer wireless global roaming services | |
• | Wireless data services. We also provide wireless data transmission services, including wireless Internet access services, which allow subscribers to access a wide range of online digital contents and services, as well as to send and receive text and multimedia messages, using their mobile phones. | |
• | Broadband Internet and fixed-line telephone services. Through our consolidated subsidiary, SK Broadband, we provide broadband Internet access service and other Internet-related services, includingvideo-on-demand and IP TV services. Through SK Broadband, we also provide local, domestic long-distance and international long-distance fixed-line telephone services to residential and commercial subscribers. We currently own a 43.4% equity interest in SK Broadband following our acquisition of a 38.7% equity stake in the company in March 2008. | |
• | Digital convergence and new businesses. We have pioneered new services that reflect the growing convergence within the telecommunications sector, as well as between the telecommunications sector and other industries, including satellite digital media broadcasting, or satellite DMB, service, which enables satellite broadcasting to mobile devices and “Telematics” service, which makes use of global positioning system, or GPS, technology. |
• | Enhance the technical capabilities of our wireless networks to improve data transmission rates and service quality and to enable us to offer an increased range of services, including in connection with our |
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development of new and advanced wireless technologies. We believe we have the most extensive and advanced wireless telecommunications network in Korea and we are committed to ensuring that our delivery platforms keep pace with the latest technological advancements. In March 2007, we completed the nationwide build-out of our HSDPA-capable WCDMA |
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to provide our subscribers with top-quality service, enable us to more quickly introduce the latest wireless telecommunications products and services and allow us to efficiently implement new wireless technologies as market opportunities arise. |
• | Offer a broad range of new and innovative wireless data contents and services. We plan to improve the service quality and expand the range of our wireless data contents and services, principally through our integrated wireless and fixed-line Internet portal, NATE, with a view to increasing revenues from these services to complement our core cellular revenues. In particular, we believe demand for wireless access to entertainment-related digital contents and services, wireless access to community and social networking platforms and wireless access to financial-related contents and services, or “m-commerce” services, will continue to grow. We continue to actively seek partnerships with, as well as strategic investments in, digital media content providers, financial services providers and wireless application developers to improve the breadth and quality of the wireless data contents and services we offer to our subscribers. | |
• | Leverage our extensive network infrastructure, technical know-how and leading market position to exploit opportunities that arise from an increasingly convergent era in telecommunications and to pioneer new businesses. We believe that increasing convergence among communications technologies, as well as between the telecommunications sector and other industries, creates growth opportunities for incumbent telecommunications service providers, like us, whose existing infrastructure, know-how and extensive subscriber base provide | |
• | Continue global expansion by seeking opportunities in overseas markets.We continue to seek opportunities to expand into various overseas markets. In light of the |
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• | Wireless Entertainment and Community Services:We offer our subscribers a wide range of wireless entertainment-related contents and services, primarily through content-specific portal sites that we operate, including: |
MelOn, | ||
Gaming Services,we offer subscribers various mobile gaming options through our NATE portal. For example, we offer a variety of multi-player, interactive mobile games, as well as anime-based mobile games. In addition, we also offer 3D mobile games that subscribers can download to mobile phones and other wireless devices equipped with a mobile gaming-specific chip; |
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Cizle, | ||
Mobile Cyworld, |
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• | Wireless Financial Services: We also offer our subscribers a range of wireless finance-related contents and m-commerce services. Our wireless financial businesses include: |
Moneta, | ||
M-Banking, | ||
11thStreet, | ||
Gifticon, |
• | Wireless News and Search Services:We offer our subscribers a range of wireless news and search services, including access to domestic and international news content, dictionary resources and real-time weather information. Subscribers can also search for and purchase books, DVDs, CDs and lottery tickets, as well as download discount coupons for use at offline stores. |
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• | Fixed-line NATE portal | |
• | Community Portal |
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As of or for the Year Ended December 31, | As of or for the Year Ended December 31, | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
(In billions of Won) | (In billions of Won) | |||||||||||||||||||||||
Initial Subscription Fees | 232 | .3 | 252 | .4 | 392 | .4 | 252.4 | 387.8 | 400.2 | |||||||||||||||
Monthly Fees | 3,365 | .1 | 3,629 | .5 | 3,949 | .8 | 3,629.5 | 3,949.8 | 4,348.0 | |||||||||||||||
Usage Charges(1) | 5,538 | .8 | 5,565 | .9 | 5,763 | .0 | ||||||||||||||||||
Usage Charges(1) | 5,565.9 | 5,598.4 | 5,473.0 | |||||||||||||||||||||
Interconnection Revenue | 898 | .6 | 1,033 | .4 | 1,062 | .2 | 1,033.4 | 1,062.2 | 1,149.2 | |||||||||||||||
Revenue from Sales of Digital Handsets | 294 | .6 | — | 51 | .7 | — | — | — | ||||||||||||||||
Other Cellular Revenue | 32 | .5 | 34 | .4 | 18 | .1 | 34.4 | 17.9 | 19.4 | |||||||||||||||
Total | 10,361 | .9 | 10,515 | .6 | 11,237 | .2 | 10,515.6 | 11,016.1 | 11,389.8 | |||||||||||||||
Additional Facility Deposits | 3 | .4 | 9 | .0 | 2 | .4 | 9.0 | 2.4 | 2.7 | |||||||||||||||
Refunded Facility Deposits | 11 | .0 | 11 | .7 | 17 | .1 | 11.7 | 17.1 | 4.3 | |||||||||||||||
Facility Deposits at Period End | 23 | .8 | 21 | .1 | 6 | .4 | 21.1 | 6.4 | 4.8 |
(1) | Usage charges principally include revenues from monthly plan-based fees, usage charges for outgoing voice calls, usage charges for wireless data services, value-added-service fees, as well as international charges and interest on overdue subscriber accounts (net of telephone tax). | |
(2) | ||
Other cellular revenue includes revenue from the sale and licensing of Internet platform solutions. |
• | Data Plans, which target subscribers with high usage patterns for wireless data transmission and wireless Internet services. We offer | |
• | Videoconferencing Plans, for subscribers to our 3G services, which we provide primarily using our WCDMA network. The basic monthly fee for our Videoconferencing Plans ranges between Won |
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• | our expansion and technical enhancement of our digital networks, including with high-speed data capabilities; | |
• | increasing consumer awareness of the benefits of wireless telecommunications; |
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• | an effective marketing strategy; | |
• | our focus on customer service; | |
• | the introduction of new, value-added services, such as voicemail services, call-forwarding, Caller ID, three-way calling and wireless Internet services provided by NATE; and | |
• | our acquisition of Shinsegi in January 2002. |
As of or for the Year Ended December 31, | As of or for the Year Ended December 31, | ||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | ||||||||||||||||||||||
Subscribers | 19,530,117 | 20,271,133 | 21,968,169 | 20,271,133 | 21,968,169 | 23,032,045 | |||||||||||||||||||||
Subscribers Growth Rate | 4 | .0 | % | 3 | .8 | % | 8 | .4 | % | 3.8 | % | 8.4 | % | 4.8 | % | ||||||||||||
Activations | 5,057,176 | 5,573,799 | 8,344,784 | 5,573,799 | 8,344,784 | 8,493,340 | |||||||||||||||||||||
Deactivations | 4,310,397 | 4,832,783 | 6,647,748 | 4,832,783 | 6,647,748 | 7,429,464 | |||||||||||||||||||||
Average Monthly Churn Rate(1) | 1 | .8 | % | 2 | .0 | % | 2 | .6 | % | ||||||||||||||||||
Average Monthly Churn Rate(1) | 2.0 | % | 2.6 | % | 2.7 | % |
(1) | Average monthly churn rate for a period is the number calculated by dividing the sum of deactivations during the period by the simple average of the number of subscribers at the beginning and end of the period and dividing the quotient by the number of months in the period. Churn includes subscribers who upgrade to CDMA 1xRTT or CDMA lxEV-DO-capable handsets by terminating their service and opening a new subscriber account. |
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Rate per Minute | Rate per Minute | |||||||||||||||||||||||
Applicable Year | SK Telecom | KTF | LGT | SK Telecom | KTF | LGT | ||||||||||||||||||
2004 | 31 | .81 | 47 | .66 | 58 | .55 | ||||||||||||||||||
2005 | 31 | .19 | 46 | .70 | 54 | .98 | 31.19 | 46.70 | 54.98 | |||||||||||||||
2006 | 33 | .13 | 40 | .06 | 47 | .01 | 33.13 | 40.06 | 47.01 | |||||||||||||||
2007 | 32 | .78 | 39 | .60 | 45 | .13 | 32.78 | 39.60 | 45.13 | |||||||||||||||
2008 | 33.41 | 38.71 | 39.09 | |||||||||||||||||||||
2009 | 32.93 | 37.96 | 38.53 |
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• | Cell sites, | |
• | Switching stations, | |
• | Transmission lines, |
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41
• | POSCO. We currently own a | |
41
• | SK C&C. We currently own a 30.0% equity interest in SK C&C, with a book value as of December 31, |
42
SK C&C in the initial public offering of SK C&C’s common shares on the Korea Exchange, |
• | SKY Property Management. We currently own a 60.0% equity interest in SKY Property Management Ltd., with a book value as of December 31, 2008 of Won 287 billion. SKY Property Management was established in 2008 to manage buildings and real estate developments in China, in which affiliated companies of the SK Group had invested or will invest. | |
• | SK Marketing & Company. We currently own a 50.0% equity interest in SK Marketing & Company Co., Ltd., with a book value as of December 31, 2008 of Won 97 billion. SK Marketing & Company Co., Ltd. provides marketing-related services to corporate and individual clients. | |
• | LG Powercomm. We currently own a 4.6% interest in LG Powercomm Co., Ltd. (formerly Powercomm Corporation), with a book value as of December 31, 2008 of Won 39 billion. LG Powercomm Co., Ltd. is an operator of fixed-line networks that provides wholesale fixed-line network services, such as leased lines, to telecommunications, Internet and cable television service providers in Korea. |
4243
• | entry into the telecommunications industry; | |
• | scope of services provided by telecommunications service providers; | |
• | allocation of radio spectrum; | |
• | setting of technical standards and promotion of technical standardization; | |
• | rates, terms and practices of telecommunications service providers; | |
• | customer complaints; | |
• | interconnection and revenue-sharing between telecommunications service providers; | |
• | disputes between telecommunications service providers; | |
• | research and development budgeting and objectives of telecommunications service providers; and | |
• | competition among telecommunications service providers. |
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44
• | Restriction on debt guarantee among affiliates. Any affiliate within the SK Group may not guarantee the debts of another domestic affiliate, except for certain guarantees prescribed in the Fair Trade Act, such as those relating to the debts of a company acquired for purposes of industrial rationalization, bid deposits for overseas construction work or technology development funds. | |
• | Restriction on cross-investment. A member company of the SK Group may not acquire or hold shares in an affiliate belonging to the SK Group that owns shares in the member company. | |
• | Public notice of board resolution on large-scale transactions with specially related persons. If a member of the SK Group engages in a transaction with a specially related person in the amount of 10% or more of the member’s capital or for Won 10 billion or more, the transaction must be approved by a resolution of the member’s board of directors and the member must publicly disclose the transaction. | |
• | Restrictions on equity investments in other domestic companies. Under the Fair Trade Act, a company that is a member of a large business group as designated by the FTC is generally required to limit its total investments in other domestic companies to 40% of its non-consolidated net assets. Depending on the time frame in which such a company acquired shares in excess of the 40% ceiling, the FTC may issue corrective orders requiring, for example, the disposition of the shares held in excess of the 40% ceiling or imposing limitations on the voting rights for such sharesand/or monetary sanctions. We were subject to such restrictions on equity investments in other domestic companies until July 3, 2007, when the company formerly known as SK Corporation underwent a corporate | |
• | Restrictions on investments by subsidiaries andsub-subsidiaries of holding companies. The Fair Trade Act prohibits subsidiaries |
4445
• | Public notice of the current status of a business group. Pursuant to a recent amendment to the Enforcement Decree of the Fair Trade Act which became effective in June 2009, a member company of the SK Group must publicly disclose the general status of the SK Group, including the name, business scope and financial status of affiliates, information on the officers of affiliates, information on shareholding and cross-investments between member companies in the SK Group and information on transactions with certain related persons on a quarterly basis. |
• | a telecommunications service provider could provide subsidies to subscribers who had maintained their subscription with the same telecommunications service provider for at least 18 months,providedthat no separate subsidy was provided to the same subscriber for two years thereafter; or | |
• | a telecommunications service provider that had provided a particular telecommunications service for less than six years could provide subsidies to subscribers of such service. |
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48
• | revoke our business license; | |
• | suspend all or part of our business; or | |
• | if the suspension of business is deemed to result in significant inconvenience to our customers or to be detrimental to the public interest, impose a one-time administrative penalty of up to 3% of the average of our annual revenue for the preceding three fiscal years. |
• | the acquisition by an entity (and its related parties) of 15% or more of the equity of a network services provider; | |
• | a change in the largest shareholder of a network services provider; | |
• | agreements by a network service provider or its shareholders with foreign governments or parties regarding important business matters of such network services provider, such as the appointment of officers and directors and transfer of businesses; and | |
• | a change in the shareholder that actually controls a network services provider. |
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Item 4.C. | Organizational Structure |
49
Item 4.D. | Property, Plants And Equipment |
Approximate Area in | |||||||
Location | Primary Use | ||||||
Seoul Metropolitan Area | Corporate Headquarters | 988,455 | |||||
Regional Headquarters | 1,095,992 | ||||||
Customer Service Centers | 384,223 | ||||||
Training Centers | 397,574 | ||||||
Central Research and Development Center | 482,725 | ||||||
Others | 639,791 | ||||||
Busan | Regional Headquarters | 363,272 | |||||
Others | |||||||
Daegu | Regional Headquarters | 153,578 | |||||
Others | 317,440 | ||||||
Cholla and Jeju Provinces | Regional Headquarters | 265,595 | |||||
Others | 359,784 | ||||||
Choongchung Province | Regional Headquarters | ||||||
Others |
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Item 4A. | UNRESOLVED STAFF COMMENTS |
Item 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
50
Item 5.A. | Operating Results |
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Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Outgoing voice minutes (in thousands)(1) | 45,243,761 | 47,980,107 | 51,295,166 | |||||||||||||||||||||
Average monthly outgoing voice minutes per subscriber(2) | 197 | 201 | 201 | |||||||||||||||||||||
Average monthly revenue per subscriber, excluding interconnection revenue(3) | 40,205 | 40,220 | 40,154 | |||||||||||||||||||||
Average monthly revenue per subscriber, including interconnection revenue(4) | 44,167 | 44,599 | 44,416 | |||||||||||||||||||||
Outgoing voice minutes (in thousands)(1) | 47,980,107 | 51,295,166 | 54,080,231 | |||||||||||||||||||||
Average monthly outgoing voice minutes per subscriber(2) | 201 | 201 | 200 | |||||||||||||||||||||
Average monthly revenue per subscriber, excluding interconnection revenue(3) | 40,220 | 40,154 | 38,526 | |||||||||||||||||||||
Average monthly revenue per subscriber, including interconnection revenue(4) | 44,599 | 44,416 | 43,016 |
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(1) | Does not include minutes of incoming calls or minutes of use relating to the use of SMS, MMS and other wireless data services. | |
(2) | The average monthly outgoing voice minutes per subscriber is derived by dividing the total minutes of outgoing voice usage for the period by the monthly | |
(3) | The average monthly revenue per subscriber, excluding interconnection revenue, is derived by dividing the sum of total initial subscription fees, monthly plan-based fees, usage charges for outgoing voice calls, usage charges for wireless data services, value-added service fees and other miscellaneous revenues for the period by the monthly | |
(4) | The average monthly revenue per subscriber, including interconnection revenue, is derived by dividing the sum of total initial subscription fees, monthly plan-based fees, usage charges for outgoing voice and wireless data transmissions, charges for purchases of digital contents, value-added service fees, other miscellaneous revenues and interconnection revenue for the period by the monthly |
52
53
For the Year Ended December 31, | For the Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||||||||||||||||||||||
(In billions of Won, except percentage data) | (In billions of Won, except percentage data) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Revenue | 10,721 | .8 | 100 | .00 | % | 11,028 | .0 | 100 | .0 | % | 12,018 | .2 | 100 | .00 | % | 11,028.0 | 100.0 | % | 11,863.4 | 100.0 | % | 14,021.0 | 100.0 | % | ||||||||||||||||||||||||||||||
Operating Expenses | 8,051 | .2 | 75 | .09 | 8,406 | .9 | 76 | .23 | 10,207 | .8 | 84 | .94 | 8,406.9 | 76.2 | 9,761.4 | 82.3 | 12,268.5 | 87.5 | ||||||||||||||||||||||||||||||||||||
Operating Income | 2,670 | .6 | 24 | .91 | 2,621 | .1 | 23 | .77 | 1,810 | .4 | 15 | .06 | 2,621.1 | 23.8 | 2,102.0 | 17.7 | 1,752.5 | 12.5 | ||||||||||||||||||||||||||||||||||||
Other Income | 392 | .6 | 3 | .66 | 284 | .9 | 2 | .58 | 867 | .2 | 7 | .22 | 284.9 | 2.6 | 861.9 | 7.3 | 1,057.0 | 7.5 | ||||||||||||||||||||||||||||||||||||
Other Expenses | 501 | .6 | 4 | .68 | 884 | .4 | 8 | .02 | 692 | .4 | 5 | .76 | 884.4 | 8.0 | 678.1 | 5.7 | 1,550.8 | 11.1 | ||||||||||||||||||||||||||||||||||||
Income Before Income Taxes and Minority Interest | 2,561 | .6 | 23 | .89 | 2,021 | .6 | 18 | .33 | 1,985 | .3 | 16 | .52 | 2,021.6 | 18.3 | 2,285.8 | 19.3 | 1,258.7 | 9.0 | ||||||||||||||||||||||||||||||||||||
Income Taxes | 693 | .3 | 6 | .47 | 572 | .0 | 5 | .19 | 686 | .2 | 5 | .71 | 572.0 | 5.2 | 694.5 | 5.9 | 298.9 | 2.1 | ||||||||||||||||||||||||||||||||||||
Preacquisition Net Loss of Subsidiaries | — | — | — | — | 263 | .1 | 2 | .2 | — | — | 21.1 | 0.2 | 32.7 | 0.2 | ||||||||||||||||||||||||||||||||||||||||
Loss from Discontinued Operation(1) | — | — | (50.1 | ) | (0.4 | ) | (20.2 | ) | (0.1 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Net Income Attributable to: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Majority Interest | 1,873 | .0 | 17 | .47 | 1,451 | .5 | 13 | .16 | 1,648 | .9 | 13 | .72 | 1,451.5 | 13.2 | 1,648.9 | 13.9 | 1,215.7 | 8.7 | ||||||||||||||||||||||||||||||||||||
Minority Interests | (4 | .7 | ) | (0 | .04 | ) | (1 | .9 | ) | (0 | .02 | ) | (86 | .6 | ) | (0 | .72 | ) | (1.9 | ) | (0.0 | ) | (86.6 | ) | (0.7 | ) | (243.4 | ) | (1.7 | ) | ||||||||||||||||||||||||
Net Income | 1,868 | .3 | 17 | .43 | % | 1,449 | .6 | 13 | .14 | 1,562 | .3 | 13 | .00 | 1,449.6 | 13.1 | % | 1,562.3 | 13.2 | % | 972.3 | 6.9 | % | ||||||||||||||||||||||||||||||||
Depreciation and Amortization(1) | 1,546 | .3 | 14 | .42 | % | 1,553 | .6 | 14 | .09 | % | 1,851 | .8 | 15 | .41 | % | |||||||||||||||||||||||||||||||||||||||
Depreciation and Amortization(2) | 1,553.6 | 14.1 | % | 1,822.0 | 15.4 | % | 2,599.8 | 18.5 | % |
(1) | Relates to results of operations of HELIO, which have been classified as discontinued operations after our sale of HELIO to Virgin Mobile USA, Inc. in August 2008. | |
(2) | Excludes the depreciation and amortization allocated to internal research and development costs and manufacturing costs of Won |
5354
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage | Percentage | Percentage | Percentage | Percentage | Percentage | |||||||||||||||||||||||||||||||||||||||||||||||||||||
of Total | of Total | of Total | of Total | of Total | of Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | Revenue | |||||||||||||||||||||||||||||||||||||||||||||||
(In billions of Won, except percentages) | (In billions of Won, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cellular Revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wireless Services(1) | 9,168 | .7 | 85 | .5 | % | 9,482 | .2 | 86 | .0 | % | 10,123 | .3 | 84 | .2 | % | |||||||||||||||||||||||||||||||||||||||||||
Wireless Services(1) | 9,482.2 | 86.0 | % | 9,953.9 | 83.9 | % | 10,240.6 | 73.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Interconnection | 898 | .6 | 8 | .4 | 1,033 | .4 | 9 | .4 | 1,062 | .2 | 8 | .8 | 1,033.4 | 9.4 | 1,062.2 | 9.0 | 1,149.2 | 8.2 | ||||||||||||||||||||||||||||||||||||||||
Digital Handset Sales(2) | 294 | .6 | 2 | .7 | — | 0 | .0 | 51 | .7 | 0 | .5 | |||||||||||||||||||||||||||||||||||||||||||||||
Total Cellular Revenue | 10,361 | .9 | 96 | .6 | 10,515 | .6 | 95 | .4 | 11,237 | .2 | 93 | .5 | 10,515.6 | 95.4 | 11,016.1 | 92.9 | 11,389.8 | 81.2 | ||||||||||||||||||||||||||||||||||||||||
Broadband Internet and Fixed-line Telephone Service | — | — | — | — | 1,821.8 | 13.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
International Calling Service(3) | 138 | .7 | 1 | .3 | 176 | .4 | 1 | .6 | 211 | .8 | 1 | .8 | ||||||||||||||||||||||||||||||||||||||||||||||
Portal Service(4) | 126 | .9 | 1 | .2 | 165 | .6 | 1 | .5 | 178 | .7 | 1 | .5 | ||||||||||||||||||||||||||||||||||||||||||||||
Miscellaneous(5) | 94 | .3 | 0 | .9 | 170 | .4 | 1 | .5 | 390 | .5 | 3 | .2 | ||||||||||||||||||||||||||||||||||||||||||||||
International Calling Service(2) | 176.4 | 1.6 | 211.8 | 1.8 | 243.1 | 1.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Portal Service(3) | 165.6 | 1.5 | 178.7 | 1.5 | 216.4 | 1.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Miscellaneous(4) | 170.4 | 1.5 | 456.8 | 3.9 | 349.9 | 2.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Other Revenue | 359 | .9 | 3 | .4 | 512 | .4 | 4 | .6 | 781 | .0 | 6 | .5 | 512.4 | 4.6 | 847.3 | 7.1 | 809.4 | 5.8 | ||||||||||||||||||||||||||||||||||||||||
Total Operating Revenue | 10,721 | .8 | 100 | .0 | % | 11,028 | .0 | 100 | .0 | % | 12,018 | .2 | 100 | .0 | % | 11,028.0 | 100.0 | % | 11,863.4 | 100.0 | % | 14,021.0 | 100.0 | % | ||||||||||||||||||||||||||||||||||
Total Operating Revenue Growth | 1 | .4 | % | 2 | .9 | % | 9 | .0 | % | 2.9 | % | 7.6 | % | 18.2 | % |
(1) | Wireless services revenue includes initial subscription fees, monthly plan-based fees, usage charges for outgoing voice calls, usage charges for wireless data services, value-added-service fees and other miscellaneous cellular revenues, including international interconnection charges, interest on overdue subscriber accounts (net of telephone tax) and revenue from the sale and licensing of Internet platform solutions. | |
(2) | ||
Provided by SK Telink Co. See | ||
Portal service revenue attributable to our subsidiaries (including SK Communications, Paxnet Co., Ltd., which operates a financial portal site, andU-Land Company Limited, the Hong Kong-incorporated holding company through which we hold our interest in ViaTech). | ||
Miscellaneous revenue attributable to our subsidiaries (including Commerce Planet Co., Ltd., which operates neotam.com, an online outlet shopping |
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Item 5.B. | Liquidity and Capital Resources |
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Year Ended December 31, | Change | Year Ended December 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2005 to 2006 | 2006 to 2007 | 2006 | 2007 | 2008 | 2006 to 2007 | 2007 to 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(In billions of Won, except percentages) | (In billions of Won, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Cash Flow from Operating Activities | 3,407 | .1 | 3,589 | .8 | 3,710 | .7 | 182 | .7 | 5 | .4% | 120 | .9 | 3 | .4% | 3,589.8 | 3,721.7 | 3,296.9 | 131.9 | 3.7 | % | (424.8 | ) | (11.4 | )% | |||||||||||||||||||||||||||||||||||||
Net Cash Used in Investing Activities | (1,938 | .2 | ) | (2,535 | .1 | ) | (2,399 | .0 | ) | (596 | .9 | ) | (30 | .8) | 136 | .1 | 5 | .4 | (2,535.1 | ) | (2,414.9 | ) | (3,875.4 | ) | 120.3 | (4.7 | ) | (1,460.5 | ) | 60.5 | |||||||||||||||||||||||||||||||
Net Cash Used in Financing Activities | (1,429 | .0 | ) | (952 | .4 | ) | (856 | .0 | ) | 476 | .6 | 33 | .4 | 96 | .4 | 10 | .1 | ||||||||||||||||||||||||||||||||||||||||||||
Net Cash Provided by (Used in) Financing Activities | (952.4 | ) | (1,041.3 | ) | 869.4 | (88.9 | ) | 9.3 | 1,910.7 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents Held in Foreign Currencies | (3 | .0 | ) | (9 | .3 | ) | 2 | .8 | (6 | .3 | ) | 210 | .0 | 12 | .1 | 130 | .1 | (9.3 | ) | 6.1 | 37.4 | 15.4 | N/A | 31.3 | 512.9 | ||||||||||||||||||||||||||||||||||||
Net Cash Flow due to Changes in Consolidated Subsidiaries | (29 | .1 | ) | 14 | .6 | 154 | .2 | 43 | .7 | 150 | .1 | 139 | .6 | 956 | .2 | 14.6 | 102.1 | 36.4 | 87.5 | 600.7 | (65.7 | ) | (64.3 | ) | |||||||||||||||||||||||||||||||||||||
Preacquisition Cash Flows of Subsidiaries(1) | — | — | (263 | .1 | ) | — | N/A | (263 | .1 | ) | N/A | * | |||||||||||||||||||||||||||||||||||||||||||||||||
Net Increase in Cash and Cash Equivalents due to Merger(2) | — | — | 50 | .4 | — | N/A | 50 | .4 | N/A | ** | |||||||||||||||||||||||||||||||||||||||||||||||||||
Preacquisition Cash Flows of Subsidiaries(1) | — | (11.4 | ) | 17.3 | (11.4 | ) | N/A | 28.6 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Increase in Cash and Cash Equivalents due to Merger(2) | — | 50.4 | — | 50.4 | N/A | (50.4 | ) | (100.0 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Flows from Discontinued Operation(3) | — | (12.8 | ) | (256.5 | ) | (12.8 | ) | N/A | (243.7 | ) | 1,907.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | 7 | .8 | 107 | .6 | 400 | .0 | 99 | .8 | 1,279 | .5 | 292 | .4 | 271 | .7 | 107.6 | 400.0 | 125.5 | 292.4 | 271.7 | (274.5 | ) | (68.6 | ) | ||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents at Beginning of Period | 370 | .6 | 378 | .4 | 486 | .0 | 7 | .8 | 2 | .1 | 107 | .6 | 28 | .4 | 378.4 | 486.0 | 886.0 | 107.6 | 28.4 | 400.0 | 82.3 | ||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents at End of Period | 378 | .4 | 486 | .0 | 886 | .0 | 107 | .6 | 28 | .4% | 400 | .0 | 82 | .3% | 486.0 | 886.0 | 1,011.5 | 400.0 | 82.3 | % | 125.5 | 14.2 | % | ||||||||||||||||||||||||||||||||||||||
(1) | In 2007, we adopted SKAS No. 25. Pursuant to SKAS No. 25, when a subsidiary is acquired during the year, such subsidiary’s statement of income is included in consolidation as if it had been acquired at the beginning of the year, and pre-acquisition earnings (losses) are presented as deduction (addition) at the bottom of the consolidated statements of income. In addition, in connection with our adoption of SKAS No. 25, we have also begun to present pre-acquisition cash flows of subsidiaries as a separate deduction (addition) at the bottom of our consolidated statements of cash flows. | |
(2) | Net increase in cash and cash equivalents due to merger for the year ended December 31, 2007 relates to the merger of Empas into SK Communications in November 2007. | |
(3) | Relates to cash flow activities of HELIO, which have been classified as discontinued operations after our sale of HELIO to Virgin Mobile USA, Inc. in August 2008. |
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Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||||||
(In billions of Won) | (In billions of Won) | |||||||||||||||||||||||||||
CDMA Networks(1) | 376 | 280 | 198 | |||||||||||||||||||||||||
CDMA Networks(1) | 280 | 198 | 148 | |||||||||||||||||||||||||
WCDMA Network | 575 | 781 | 1,044 | 781 | 1,044 | 905 | ||||||||||||||||||||||
WiBro(2) | — | 53 | 154 | |||||||||||||||||||||||||
Others(3) | 466 | 384 | 420 | |||||||||||||||||||||||||
WiBro(2) | 53 | 154 | 405 | |||||||||||||||||||||||||
Others(3) | 384 | 408 | 779 | |||||||||||||||||||||||||
Total(4) | 1,417 | 1,498 | 1,816 | |||||||||||||||||||||||||
Total(4) | 1,498 | 1,804 | 2,237 | |||||||||||||||||||||||||
(1) | Includes our basic CDMA, CDMA 1xRTT and CMDA EV-DO networks. | |
(2) | We commenced WiBro service in May 2006. | |
(3) | Includes investments in infrastructure consisting of equipment necessary for the provision of data services and marketing. | |
(4) | Also, see note 7 of the notes to our consolidated financial statements. |
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Year Ending December 31, | Total | Total | ||||||
(In billions of Won) | (In billions of Won) | |||||||
2008 | 526.4 | |||||||
2009 | 630.9 | 796.8 | ||||||
2010 | 435.2 | 727.4 | ||||||
After 2010 | 1,654.8 | |||||||
2011 | 1,674.4 | |||||||
After 2011 | 2,743.9 |
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Payments Due by Period(1) | Payments Due by Period(1) | |||||||||||||||||||||||||||||||||||||||||||
Less Than | After | Less Than | After | |||||||||||||||||||||||||||||||||||||||||
Total | 1 Year | 1-3 Years | 4-5 Years | 5 Years | Total | 1 Year | 1-3 Years | 4-5 Years | 5 Years | |||||||||||||||||||||||||||||||||||
(In billions of Won) | (In billions of Won) | |||||||||||||||||||||||||||||||||||||||||||
Bonds | ||||||||||||||||||||||||||||||||||||||||||||
Principal | 2,920 | .1 | 523 | .3 | 835 | .9 | 585 | .6 | 975 | .3 | 4,876.1 | 737.7 | 1,554.9 | 1,280.5 | 1,303.0 | |||||||||||||||||||||||||||||
Interest | 797 | .3 | 109 | .2 | 162 | .7 | 117 | .8 | 407 | .6 | 1,413.3 | 257.9 | 393.2 | 211.2 | 551.0 | |||||||||||||||||||||||||||||
Long-term borrowings | ||||||||||||||||||||||||||||||||||||||||||||
Principal | 324 | .3 | 0 | .9 | 229 | .5 | 0 | .1 | 93 | .8 | 865.5 | 9.0 | 723.5 | 133.0 | ||||||||||||||||||||||||||||||
Interest | 61 | .2 | 19 | .2 | 28 | .1 | 9 | .3 | 4 | .6 | 104.8 | 39.4 | 60.5 | 4.9 | — | |||||||||||||||||||||||||||||
Capital lease obligations | 2 | .9 | 2 | .2 | 0 | .7 | — | — | ||||||||||||||||||||||||||||||||||||
Principal | 201.1 | 61.8 | 111.9 | 27.4 | — | |||||||||||||||||||||||||||||||||||||||
Interest | 25.7 | 13.0 | 8.4 | 3.6 | 0.7 | |||||||||||||||||||||||||||||||||||||||
Operating leases | 28 | .8 | 7 | .7 | 11 | .6 | 3 | .8 | 5 | .7 | 2.0 | 0.7 | 0.9 | 0.4 | — | |||||||||||||||||||||||||||||
Purchase obligations | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Facility deposits | 14 | .0 | 7 | .6 | — | — | 6 | .4 | 13.1 | 8.3 | — | — | 4.8 | |||||||||||||||||||||||||||||||
Derivatives | 123 | .4 | 12 | .6 | 23 | .1 | 85 | .2 | 2 | .5 | 247.8 | 190.4 | 57.4 | — | — | |||||||||||||||||||||||||||||
Other long-term payables(2) | ||||||||||||||||||||||||||||||||||||||||||||
Credit commitment to Virgin Mobile USA, Inc. | 21.2 | 21.2 | — | — | — | |||||||||||||||||||||||||||||||||||||||
Other long-term payables(2) | ||||||||||||||||||||||||||||||||||||||||||||
Principal | 560 | .0 | 110 | .0 | 280 | .0 | 170 | .0 | — | 450.0 | 130.0 | 320.0 | — | — | ||||||||||||||||||||||||||||||
Interest | 68 | .4 | 25 | .5 | 35 | .1 | 7 | .8 | — | 42.6 | 20.4 | 22.2 | — | — | ||||||||||||||||||||||||||||||
Short-term borrowings | 627.7 | 627.7 | — | — | — | |||||||||||||||||||||||||||||||||||||||
Total contractual cash obligations(3) | 8,890.9 | 2,117.5 | 3,252.9 | 1,661.0 | 1,859.5 | |||||||||||||||||||||||||||||||||||||||
Total contractual cash obligations(3) | 4,900 | .4 | 818 | .2 | 1,606 | .7 | 979 | .6 | 1,495 | .9 | ||||||||||||||||||||||||||||||||||
(1) | We are contractually obligated to make severance payments to eligible employees we have employed for more than one year, upon termination of their employment, regardless of whether such termination is voluntary or involuntary. Accruals for severance indemnities are recorded based on the amount we would be required to pay in the event the employment of all our employees were to terminate at the balance date. However, we have not yet estimated cash flows for future periods. Accordingly, payments due in connection with severance indemnities have been excluded from this table. | |
(2) | Related to acquisition of IMT-2000 license. See note |
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(3) | This amount does not include our future investments in the CDMA market in Vietnam, which we expect to make through our overseas subsidiary SKT Vietnam under a business cooperation contract with Saigon Post & Telecommunication Service Corporation. See “Item 4.B. Business Overview — Global Business — Overseas Operations” and “— Critical Accounting Policies, Estimates And Judgments — Off-Balance Sheet Arrangements”. |
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• | Pursuant to adoption of SKAS No. 21, “Preparation and Presentation of Financial Statements”, certain amounts classified as capital adjustments through 2006 are classified as accumulated other comprehensive income (loss) — such amounts include unrealized gain/loss onavailable-for-sale securities, equity in capital adjustments of affiliates and gain/loss on valuation of derivative instruments. In addition, certain amounts classified as investment assets through 2006 are classified as other non-current assets — such amounts include long-term loans, guarantee deposits, long-term deposits and others. The consolidated balance | |
• | Pursuant to adoption of SKAS No. 25, “Consolidated Financial Statements”, net income is allocated to equity holders of the parent and minority interest. In addition, when a subsidiary is purchased during the year, such subsidiary’s statement of income is included in consolidation as though it had been acquired as of January 1 of the relevant year, and preacquisition earnings are presented as deduction at the bottom of the consolidated statements of income. The accompanying consolidated |
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Item 5.C. | Research and Development |
As of and for the | ||||||||||||||||||||||||
As of and for the Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
(In billions of Won) | (In billions of Won) | |||||||||||||||||||||||
Internal R&D Expenses | 252 | .0 | 212 | .0 | 218 | .7 | 212.0 | 218.7 | 226.7 | |||||||||||||||
External R&D Expenses | 69 | .1 | 67 | .0 | 74 | .4 | 67.0 | 74.4 | 73.0 | |||||||||||||||
Total R&D Expenses | 321 | .1 | 279 | .0 | 293 | .1 | 279.0 | 293.1 | 299.7 | |||||||||||||||
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• | Theaccess technology R&D center, |
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networks, The access technology R&D center is also spearheading our joint development of TD-SCDMA technology with the Chinese government. |
• | Theservice technology R&D center, | |
• | Thetechnology innovation center, |
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Item 5.D. | Trend Information |
Item 5.E. | Off-Balance Sheet Arrangements |
Item 5.F. | Tabular Disclosure of Contractual Obligations |
Item | Safe Harbor |
Item 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Item 6.A. | Directors and Senior Management |
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Other Principal | Other Principal | |||||||||||||||||||||||
Date of | Director | Expiration | Directorships | Date of | Director | Expiration | Directorships | |||||||||||||||||
Name | Birth | Since | of Term | Position | and Positions | Business Experience | Birth | Since | of Term | Position | and Positions | Business Experience | ||||||||||||
Shin Bae Kim | Oct. 15, 1954 | 2002 | 2011 | President, Chief Executive Officer, Chief Officer & Representative Director | Chairman, Korea Association of RFID/USN | Senior Vice President and Head of Strategic Planning Group (SK Telecom); Director, KORMS | ||||||||||||||||||
Man Won Jung | Oct. 5, 1952 | 2009 | 2012 | President, Chief Executive Officer & Representative Director | — | CEO & President, SK Networks; Vice President, Internet Business Divisional Group, SK Telecom; Vice President, Customer Business Development Group, SK Corporation | ||||||||||||||||||
Sung Min Ha | Mar. 24, 1957 | 2004 | 2010 | Head of Mobile Network Operations Business | Head of Strategic Planning Group, SK Telecom; Director, SK Telink; Auditor, SK C&C; Chairman and Representative Director, SKT Vietnam; Auditor, SK Teletech | Mar. 24, 1957 | 2004 | 2010 | Head of Mobile Network Operations Business | — | Head of Strategic Planning Group, SK Telecom; Director, SK Telink; Auditor, SK C&C; Chairman and Representative Director, SKT Vietnam; Auditor, SK Teletech |
Other Principal | Other Principal | |||||||||||||||||||||||
Date of | Director | Expiration | Directorships | Date of | Director | Expiration | Directorships | |||||||||||||||||
Name | Birth | Since | of Term | Position | and Positions | Business Experience | Birth | Since | of Term | Position | and Positions | Business Experience | ||||||||||||
Young Ho Park* | Jul. 31, 1947 | 2008 | 2011 | President & Chief Executive Officer of SK Holdings | President, Executive Vice President, Corporate Management Office, SK Corporation, Senior Vice President, Marketing Support Division, SK Corporation | |||||||||||||||||||
Jae Won Chey | May. 16, 1963 | 2009 | 2012 | Vice Chairman & CEO, SK Gas Vice Chairman & CEO, SK E&S | Director, SK Holdings | Executive Vice President, Head of Corporate Center, SK Telecom; Executive Vice President, Head of Strategic Support Division, SK Telecom | ||||||||||||||||||
Hyun Chin Lim | Apr. 26, 1949 | 2006 | 2009 | Independent Non-executive Director | Dean, College of Social Science, Seoul National University | President, Korea Sociological Association; Dean, Faculty of Liberal Education, Seoul National University; President, Korean Association of NGO Studies | Apr. 26, 1949 | 2009 | 2012 | Independent Non-executive Director | Dean, College of Social Science, Seoul National University | President, Korea Sociological Association; Dean, Faculty of Liberal Education, Seoul National University; President, Korean Association of NGO Studies | ||||||||||||
Dal Sup Shim | Jun. 27, 1950 | 2007 | 2010 | Independent Non-executive Director | Research Fellow, Institute for Global Economics | Auditor, Korea Credit Guarantee Fund; Financial Attaché, Korean Embassy in the United States; Audit Officer, Korea Customs Service; Tax & Customs Office, Ministry of Strategy and Finance (formerly Ministry of Finance and Economy) | Jun. 27, 1950 | 2007 | 2010 | Independent Non-executive Director | Research Fellow, Institute for Global Economics | Auditor, Korea Credit Guarantee Fund; Financial Attaché, Korean Embassy in the United States; Audit Officer, Korea Customs Service; Tax & Customs Office, Ministry of Strategy and Finance (formerly Ministry of Finance and Economy) | ||||||||||||
Rak Young Uhm | Jun. 23, 1948 | 2008 | 2011 | Independent Non-executive Director | Visiting Professor Graduate School of Public Administration, Seoul National University | Independent Non-executive Director, Tong Yang Insurance Co., Ltd., Non-Standing Director KOTRA; President, Korea Development Bank | ||||||||||||||||||
Jay Young Chung | Oct. 15, 1944 | 2008 | 2011 | Independent Non-executive Director | Professor, Graduate School of Business Administration, Sung Kyun Kwan University | Chief, Asia-Pacific Economic Association; Vice President, Sung Kyun Kwan University; Independent Non-executive Director, POSCO | ||||||||||||||||||
Jae Ho Cho | Jan. 18, 1955 | 2008 | 2011 | Independent Non-executive Director | Professor of Finance, College of Business Administration, Seoul National University | Director, Kyung Hee Foundation; Visiting Professor, Graduate School of Economics, University of Tokyo, Advisory Committee Member, Samsung Securities |
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Other Principal | ||||||||||||
Date of | Director | Expiration | Directorships | |||||||||
Name | Birth | Since | of Term | Position | and Positions | Business Experience | ||||||
Rak Young Uhm | Jun. 23, 1948 | 2008 | 2011 | Independent Non-executive Director | Visiting Professor Graduate School of Public Administration, Seoul National University | Independent Non-executive Director, Tong Yang Insurance Co., Ltd., Non-Standing Director KOTRA; President, Korea Development Bank | ||||||
Jay Young Chung | Oct. 15, 1944 | 2008 | 2011 | Independent Non-executive Director | Professor, Graduate School of Business Administration, Sung Kyun Kwan University | Chief, Asia-Pacific Economic Association; Vice President, Sung Kyun Kwan University; Independent Non-executive Director, POSCO | ||||||
Jae Ho Cho | Jan. 18, 1955 | 2008 | 2011 | Independent Non-executive Director | Professor of Finance, College of Business Administration, Seoul National University | Director, Kyung Hee Foundation; Visiting Professor, Graduate School of Economics, University of Tokyo, Advisory Committee Member, Samsung Securities |
Item 6.B. | Compensation |
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Item 6.C. | Board Practices |
• | examine the agenda for the general meeting of shareholders; | |
• | examine financial statements and other reports to be submitted by the board of directors to the general meeting of shareholders; | |
• | review the administration by the board of directors of our affairs; and | |
• | examine the operations and asset status of us and our subsidiaries. |
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Item 6.D. | Employees |
Regular | Temporary | |||||||||||
Employees | Employees | Total | ||||||||||
December 31, 2005 | 5,727 | 919 | 6,646 | |||||||||
December 31, 2006 | 6,178 | 1,498 | 7,676 | |||||||||
December 31, 2007 | 7,524 | 1,961 | 9,485 |
Marketing | Production | Research | Support | New Business | Total | |||||||||||||||||||
Regular Employees | 2,105 | 2,842 | 470 | 1,225 | 882 | 7,524 | ||||||||||||||||||
Temporary Employees | 888 | 662 | 24 | 279 | 108 | 1,961 | ||||||||||||||||||
Total | 2,993 | 3,504 | 494 | 1,504 | 990 | 9,485 | ||||||||||||||||||
Regular | Temporary | |||||||||||
Employees | Employees | Total | ||||||||||
December 31, 2006 | 6,178 | 1,498 | 7,676 | |||||||||
December 31, 2007 | 7,524 | 1,961 | 9,485 | |||||||||
December 31, 2008 | 8,964 | 1,662 | 10,626 |
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Item 6.E. | Share Ownership |
Percentage | Percentage | |||||||||||||||||||||||||||||||
Number of | of Total | Special | Number of | of Total | Special | |||||||||||||||||||||||||||
Shares | Shares | Voting | Shares | Shares | Voting | |||||||||||||||||||||||||||
Name | Position | Owned | Outstanding | Rights | Options | Position | Owned | Outstanding | Rights | Options | ||||||||||||||||||||||
Standing Directors: | ||||||||||||||||||||||||||||||||
Shin Bae Kim | President, Chief Executive Officer and Representative Director | 1,270 | 0 | None | None | |||||||||||||||||||||||||||
Man Won Jung | President, Chief Executive Officer and Representative Director | 100 | 0 | None | None | |||||||||||||||||||||||||||
Sung Min Ha | Head of Mobile Network Operations Business | 738 | 0 | None | None | Head of Mobile Network Operations Business | 738 | 0 | None | None | ||||||||||||||||||||||
Non-Standing Directors: | ||||||||||||||||||||||||||||||||
Jae Won Chey | Independent Non-executive Director | 0 | 0 | None | None | |||||||||||||||||||||||||||
Hyun Chin Lim | Independent Non-executive Director | 0 | 0 | None | None | Independent Non-executive Director | 0 | 0 | None | None | ||||||||||||||||||||||
Dal Sup Shim | Independent Non-executive Director | 0 | 0 | None | None | Independent Non-executive Director | 0 | 0 | None | None | ||||||||||||||||||||||
Rak Young Uhm | Independent Non-executive Director | 0 | 0 | None | None | Independent Non-executive Director | 0 | 0 | None | None | ||||||||||||||||||||||
Jay Young Chung | Independent Non-executive Director | 0 | 0 | None | None | Independent Non-executive Director | 0 | 0 | None | None | ||||||||||||||||||||||
Jae Ho Cho | Independent Non-executive Director | 0 | 0 | None | None | Independent Non-executive Director | 0 | 0 | None | None |
Item 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
Item 7.A. | Major Shareholders |
Percentage | Percentage | Percentage | Percentage | |||||||||||||||||||||||
Number of | Total Shares | Total Shares | Number of | Total Shares | Total Shares | |||||||||||||||||||||
Shareholder/Category | Shares | Issued | Outstanding | Shares | Issued | Outstanding | ||||||||||||||||||||
Domestic Shareholders | ||||||||||||||||||||||||||
SK Group(1) | 18,748,452 | 23 | .09 | % | 25 | .83 | % | |||||||||||||||||||
POSCO | 2,341,569 | 2 | .88 | 3 | .23 | |||||||||||||||||||||
Employees(2) | 311,259 | 0 | .38 | 0 | .43 | |||||||||||||||||||||
Treasury shares(2)(3) | 8,609,034 | 10 | .60 | N/A | ||||||||||||||||||||||
SK Holdings | 18,748,452 | 23.09 | % | 25.85 | % | |||||||||||||||||||||
Employees(1) | 484,105 | 0.60 | 0.67 | |||||||||||||||||||||||
Treasury shares(1)(2) | 8,707,696 | 10.73 | N/A | |||||||||||||||||||||||
Officers and Directors | 2,758 | 0 | * | 0 | * | 10,707 | 0* | 0* | ||||||||||||||||||
Other Domestic Shareholders | 14,012,339 | 17 | .27 | 19 | .30 | 16,331,922 | 20.11 | 19.30 | ||||||||||||||||||
Foreign Shareholders | 37,168,300 | 45 | .78 | 51 | .21 | 34,607,448 | 42.62 | 47.72 | ||||||||||||||||||
Total Issued Shares | 81,193,711 | 100 | .00 | % | 100 | .00 | % | 81,193,711 | 100.00 | % | 100.00 | % | ||||||||||||||
* | Less than 0.00%. | |
(1) |
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Percentage | Percentage | |||||||||||||
Number of | Total Shares | Total Shares | ||||||||||||
SK Group Member(a) | Shares | Issued | Outstanding | |||||||||||
SK Holdings(b) | 17,663,127 | 21 | .75 | % | 24 | .33 | % | |||||||
SK Networks(b) | 1,085,325 | 1 | .34 | 1 | .50 | |||||||||
18,748,452 | 23 | .09 | % | 25 | .83 | % | ||||||||
Represents shares owned by our employee stock ownership association. See “Item 6.D. Employees”. |
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Treasury shares do not have any voting rights; includes |
As of December 31, | |||||||||||||||
Shareholder | 2005 | 2006 | 2007 | ||||||||||||
(As a percentage of | |||||||||||||||
total issued shares)(1) | |||||||||||||||
SK Group | 22 | .79 | % | 23 | .09 | % | 23 | .09 | % | ||||||
SK Holdings(2) | 21 | .47 | 21 | .75 | 21 | .75 | |||||||||
SK Networks(2) | 1 | .32 | 1 | .34 | 1 | .34 | |||||||||
POSCO(3) | 3 | .64 | 2 | .88 | 2 | .88 |
As of December 31, | |||||||||||||||
Shareholder | 2006 | 2007 | 2008 | ||||||||||||
(As a percentage of total issued shares)(1) | |||||||||||||||
SK Group(2) | 22 | .79 | % | 23 | .09 | % | 23 | .09 | % | ||||||
SK Holdings | 21 | .47 | 21 | .75 | 23 | .09 | |||||||||
SK Networks | 1 | .32 | 1 | .34 | 0 | ||||||||||
POSCO(3) | 3 | .64 | 2 | .88 | 2 | .88 |
(1) | Includes | |
(2) | ||
(3) | POSCO acquired these shares in connection with our acquisition of a 27.7% equity interest in Shinsegi. |
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• | revoke our business license; | |
• | suspend all or part of our business; or | |
• | if the suspension of business is deemed to result in significant inconvenience to our customers or to be detrimental to the public interest, impose a one-time administrative penalty of up to 3% of the average of our annual revenue for the preceding three fiscal years. |
Item 7.B. | Related Party Transactions |
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Item 7.C. | Interests of Experts and Counsel |
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Item 8. | FINANCIAL INFORMATION |
Item 8.A. | Consolidated Statements and Other Financial Information |
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Number of | ||||||||||||||||||||||||
Shares | ||||||||||||||||||||||||
Total Amount of | Entitled to | Dividend | Total Amount | Number of Shares | ||||||||||||||||||||
Year Ended December 31, | Dividend per Share | Dividends | Dividend | per Share | of Dividends | Entitled to Dividend | ||||||||||||||||||
(In Won) | (In billions of Won) | (In Won) | (In billions of Won) | |||||||||||||||||||||
2003 | 5,500 | 404.9 | 73,614,308 | |||||||||||||||||||||
2004 | 10,300 | 758.2 | 73,614,296 | 10,300 | 758.2 | 73,614,296 | ||||||||||||||||||
2005 | 9,000 | 662.5 | 73,614,296 | 9,000 | 662.5 | 73,614,296 | ||||||||||||||||||
2006 | 8,000 | 582.4 | 72,667,459 | 8,000 | 582.4 | 72,667,459 | ||||||||||||||||||
2007 | 9,400 | 682.4 | 72,584,677 | 9,400 | 682.4 | 72,584,677 | ||||||||||||||||||
2008 | 9,400 | 682.0 | 72,524,203 |
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Item 8.B. | Significant Changes |
Item 9. | THE OFFER AND LISTING |
Item 9.A. | Offering and Listing Details |
Item 9.B. | Plan of Distribution |
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Item 9.C. | Markets |
Average Daily | ||||||||||||||||
Trading Volume | ||||||||||||||||
(Number of | ||||||||||||||||
Calendar Year | High(1) | Low(1) | Close | Shares) | ||||||||||||
(Won per share) | ||||||||||||||||
2003 | 235,000 | 142,000 | 199,000 | 327,689 | ||||||||||||
First Quarter | 235,000 | 142,000 | 153,000 | 497,115 | ||||||||||||
Second Quarter | 210,000 | 157,500 | 204,000 | 298,346 | ||||||||||||
Third Quarter | 216,000 | 183,000 | 184,000 | 267,821 | ||||||||||||
Fourth Quarter | 212,500 | 185,000 | 199,000 | 247,332 | ||||||||||||
2004 | 238,500 | 154,500 | 197,000 | 179,712 | ||||||||||||
First Quarter | 238,500 | 207,500 | 214,500 | 243,681 | ||||||||||||
Second Quarter | 213,000 | 179,000 | 190,000 | 188,095 | ||||||||||||
Third Quarter | 186,000 | 154,500 | 175,500 | 137,559 | ||||||||||||
Fourth Quarter | 205,000 | 174,500 | 197,000 | 151,903 | ||||||||||||
2005 | 216,500 | 163,500 | 181,000 | 187,053 | ||||||||||||
First Quarter | 200,500 | 171,000 | 171,000 | 203,869 | ||||||||||||
Second Quarter | 192,500 | 163,500 | 182,000 | 137,021 | ||||||||||||
Third Quarter | 216,500 | 178,500 | 202,500 | 156,019 | ||||||||||||
Fourth Quarter | 209,500 | 181,000 | 181,000 | 249,550 | ||||||||||||
2006 | 235,000 | 177,000 | 222,500 | 190,565 | ||||||||||||
First Quarter | 203,500 | 177,000 | 192,500 | 177,491 | ||||||||||||
Second Quarter | 235,000 | 190,000 | 204,000 | 216,607 | ||||||||||||
Third Quarter | 204,500 | 181,000 | 201,500 | 204,167 | ||||||||||||
Fourth Quarter | 233,000 | 195,000 | 222,500 | 163,534 | ||||||||||||
2007 | 274,000 | 188,500 | 249,000 | 244,792 | ||||||||||||
First Quarter | 223,000 | 190,500 | 191,500 | 204,343 | ||||||||||||
Second Quarter | 215,000 | 188,500 | 213,000 | 223,604 | ||||||||||||
Third Quarter | 221,000 | 192,000 | 210,000 | 206,051 | ||||||||||||
Fourth Quarter | 274,000 | 204,500 | 249,000 | 343,354 |
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Average Daily | ||||||||||||||||||||||||||||||||
Trading Volume | ||||||||||||||||||||||||||||||||
(Number of | Prices | Average | ||||||||||||||||||||||||||||||
Calendar Year | High(1) | Low(1) | Close | Shares) | High(1) | Low(1) | Close | Daily Trading Volume | ||||||||||||||||||||||||
(Won per share) | (Won per shares) | (Number of shares) | ||||||||||||||||||||||||||||||
2008 (through June 27) | 232,000 | 178,500 | 191,000 | 295,204 | ||||||||||||||||||||||||||||
2004 | 238,500 | 154,500 | 197,000 | 179,712 | ||||||||||||||||||||||||||||
First Quarter | 238,500 | 207,500 | 214,500 | 245,576 | ||||||||||||||||||||||||||||
Second Quarter | 213,000 | 179,000 | 190,000 | 188,095 | ||||||||||||||||||||||||||||
Third Quarter | 186,000 | 154,500 | 175,500 | 137,559 | ||||||||||||||||||||||||||||
Fourth Quarter | 205,000 | 174,500 | 197,000 | 151,903 | ||||||||||||||||||||||||||||
2005 | 216,500 | 163,500 | 181,000 | 186,239 | ||||||||||||||||||||||||||||
First Quarter | 200,500 | 171,000 | 171,000 | 202,857 | ||||||||||||||||||||||||||||
Second Quarter | 192,500 | 163,500 | 182,000 | 137,021 | ||||||||||||||||||||||||||||
Third Quarter | 216,500 | 178,500 | 202,500 | 156,019 | ||||||||||||||||||||||||||||
Fourth Quarter | 209,500 | 181,000 | 181,000 | 249,550 | ||||||||||||||||||||||||||||
2006 | 235,000 | 177,000 | 222,500 | 190,565 | ||||||||||||||||||||||||||||
First Quarter | 203,500 | 177,000 | 192,500 | 177,491 | ||||||||||||||||||||||||||||
Second Quarter | 235,000 | 190,000 | 204,000 | 216,607 | ||||||||||||||||||||||||||||
Third Quarter | 204,500 | 181,000 | 201,500 | 204,167 | ||||||||||||||||||||||||||||
Fourth Quarter | 233,000 | 195,000 | 222,500 | 163,534 | ||||||||||||||||||||||||||||
2007 | 274,000 | 188,500 | 249,000 | 244,056 | ||||||||||||||||||||||||||||
First Quarter | 223,000 | 190,500 | 191,500 | 206,155 | ||||||||||||||||||||||||||||
Second Quarter | 215,000 | 188,500 | 213,000 | 220,091 | ||||||||||||||||||||||||||||
Third Quarter | 221,000 | 192,000 | 210,000 | 198,816 | ||||||||||||||||||||||||||||
Fourth Quarter | 274,000 | 204,500 | 249,000 | 349,701 | ||||||||||||||||||||||||||||
2008 | 232,000 | 178,000 | 209,000 | 322,706 | ||||||||||||||||||||||||||||
First Quarter | 232,000 | 178,500 | 186,500 | 330,196 | ||||||||||||||||||||||||||||
Second Quarter | 212,000 | 180,000 | 190,500 | 265,973 | ||||||||||||||||||||||||||||
Third Quarter | 210,500 | 178,000 | 205,500 | 317,506 | ||||||||||||||||||||||||||||
Fourth Quarter | 227,500 | 187,500 | 209,000 | 374,768 | ||||||||||||||||||||||||||||
2009 (through June 24) | 218,000 | 170,500 | 173,000 | 378,180 | ||||||||||||||||||||||||||||
First Quarter | 232,000 | 178,500 | 186,500 | 328,984 | 218,000 | 181,500 | 192,000 | 341,322 | ||||||||||||||||||||||||
January | 232,000 | 202,000 | 213,000 | 313,864 | 218,000 | 204,000 | 207,500 | 365,646 | ||||||||||||||||||||||||
February | 208,000 | 189,000 | 192,500 | 416,408 | 204,000 | 187,500 | 187,500 | 326,534 | ||||||||||||||||||||||||
March | 189,000 | 178,500 | 186,500 | 269,289 | 195,000 | 181,500 | 192,000 | 333,758 | ||||||||||||||||||||||||
Second Quarter (through June 27) | 212,000 | 180,000 | 191,000 | 266,310 | ||||||||||||||||||||||||||||
Second Quarter (through June 24) | 192,500 | 170,500 | 173,000 | 416,287 | ||||||||||||||||||||||||||||
April | 203,000 | 182,000 | 203,000 | 335,664 | 192,500 | 183,000 | 183,500 | 405,964 | ||||||||||||||||||||||||
May | 212,000 | 201,500 | 203,500 | 206,251 | 183,500 | 176,000 | 176,000 | 439,608 | ||||||||||||||||||||||||
June (through June 27) | 201,500 | 180,000 | 191,000 | 242,817 | ||||||||||||||||||||||||||||
June (through June 24) | 182,000 | 170,500 | 173,000 | 404,289 |
(1) | Both high and low prices are based on the daily closing prices for the period. |
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Prices(1) | ||||||||||||||||
Average Daily | ||||||||||||||||
Trading Volume | ||||||||||||||||
(Number of | ||||||||||||||||
Calendar Year | High(1) | Low(1) | Close | Shares) | ||||||||||||
(US$ per ADS) | (Number of ADSs) | |||||||||||||||
2003 | 21 | .85 | 12 | .83 | 18 | .65 | 743,316 | |||||||||
First Quarter | 21 | .85 | 12 | .83 | 13 | .62 | 971,259 | |||||||||
Second Quarter | 19 | .40 | 14 | .07 | 18 | .86 | 723,959 | |||||||||
Third Quarter | 20 | .83 | 17 | .71 | 17 | .84 | 724,406 | |||||||||
Fourth Quarter | 19 | .90 | 17 | .46 | 18 | .65 | 564,023 | |||||||||
2004 | 25 | .01 | 17 | .28 | 22 | .25 | 911,823 | |||||||||
First Quarter | 25 | .01 | 19 | .43 | 21 | .30 | 1,331,177 | |||||||||
Second Quarter | 21 | .83 | 19 | .15 | 20 | .99 | 832,175 | |||||||||
Third Quarter | 20 | .76 | 17 | .28 | 19 | .45 | 768,117 | |||||||||
Fourth Quarter | 23 | .10 | 19 | .30 | 22 | .25 | 727,683 | |||||||||
2005 | 23 | .14 | 18 | .96 | 20 | .29 | 882,342 | |||||||||
First Quarter | 22 | .19 | 19 | .41 | 19 | .72 | 798,390 | |||||||||
Second Quarter | 21 | .84 | 18 | .96 | 20 | .40 | 618,870 | |||||||||
Third Quarter | 23 | .14 | 20 | .06 | 21 | .84 | 1,071,227 | |||||||||
Fourth Quarter | 21 | .95 | 19 | .74 | 20 | .29 | 1,039,398 | |||||||||
2006 | 27 | .70 | 20 | .62 | 26 | .48 | 866,527 | |||||||||
First Quarter | 24 | .56 | 20 | .62 | 23 | .59 | 952,819 | |||||||||
Second Quarter | 27 | .70 | 22 | .54 | 23 | .42 | 1,045,503 | |||||||||
Third Quarter | 24 | .16 | 21 | .14 | 23 | .63 | 789,033 | |||||||||
Fourth Quarter | 27 | .42 | 22 | .89 | 26 | .48 | 680,124 |
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Prices(1) | ||||||||||||||||||||||||||||||||
Average Daily | ||||||||||||||||||||||||||||||||
Trading Volume | ||||||||||||||||||||||||||||||||
(Number of | Prices | Average | ||||||||||||||||||||||||||||||
Calendar Year | High(1) | Low(1) | Close | Shares) | High(1) | Low(1) | Close | Daily Trading Volume | ||||||||||||||||||||||||
(US$ per ADS) | (Number of ADSs) | (US$ per ADS) | (Number of ADSs) | |||||||||||||||||||||||||||||
2004 | 25.01 | 17.28 | 22.25 | 915,441 | ||||||||||||||||||||||||||||
First Quarter | 25.01 | 19.43 | 21.30 | 1,331,177 | ||||||||||||||||||||||||||||
Second Quarter | 21.83 | 19.15 | 20.99 | 845,597 | ||||||||||||||||||||||||||||
Third Quarter | 20.76 | 17.28 | 19.45 | 768,117 | ||||||||||||||||||||||||||||
Fourth Quarter | 23.10 | 19.30 | 22.25 | 727,683 | ||||||||||||||||||||||||||||
2005 | 23.14 | 18.96 | 20.29 | 882,342 | ||||||||||||||||||||||||||||
First Quarter | 22.19 | 19.41 | 19.72 | 798,390 | ||||||||||||||||||||||||||||
Second Quarter | 21.84 | 18.96 | 20.40 | 618,870 | ||||||||||||||||||||||||||||
Third Quarter | 23.14 | 20.06 | 21.84 | 1,071,227 | ||||||||||||||||||||||||||||
Fourth Quarter | 21.95 | 19.74 | 20.29 | 1,039,398 | ||||||||||||||||||||||||||||
2006 | 27.70 | 20.62 | 26.48 | 866,527 | ||||||||||||||||||||||||||||
First Quarter | 24.56 | 20.62 | 23.59 | 952,819 | ||||||||||||||||||||||||||||
Second Quarter | 27.70 | 22.54 | 23.42 | 1,045,503 | ||||||||||||||||||||||||||||
Third Quarter | 24.16 | 21.14 | 23.63 | 789,033 | ||||||||||||||||||||||||||||
Fourth Quarter | 27.42 | 22.89 | 26.48 | 680,124 | ||||||||||||||||||||||||||||
2007 | 33 | .33 | 22 | .46 | 29 | .84 | 1,379,370 | 33.33 | 22.46 | 29.84 | 1,379,370 | |||||||||||||||||||||
First Quarter | 26 | .41 | 22 | .46 | 23 | .42 | 1,046,780 | 26.41 | 22.46 | 23.42 | 1,046,780 | |||||||||||||||||||||
Second Quarter | 28 | .02 | 23 | .41 | 27 | .35 | 1,498,295 | 28.02 | 23.41 | 27.35 | 1,498,295 | |||||||||||||||||||||
Third Quarter | 30 | .30 | 26 | .15 | 29 | .70 | 1,498,032 | 30.30 | 26.15 | 29.70 | 1,498,032 | |||||||||||||||||||||
Fourth Quarter | 33 | .33 | 29 | .00 | 29 | .84 | 1,462,495 | 33.33 | 29.00 | 29.84 | 1,462,495 | |||||||||||||||||||||
2008 (through June 26) | 27 | .96 | 19 | .90 | 20 | .86 | 1,556,413 | |||||||||||||||||||||||||
2008 | 27.96 | 14.63 | 18.18 | 1,762,329 | ||||||||||||||||||||||||||||
First Quarter | 27.96 | 19.90 | 21.61 | 1,992,134 | ||||||||||||||||||||||||||||
Second Quarter | 23.47 | 20.67 | 20.77 | 1,106,308 | ||||||||||||||||||||||||||||
Third Quarter | 22.29 | 18.68 | 18.82 | 1,663,854 | ||||||||||||||||||||||||||||
Fourth Quarter | 19.51 | 14.63 | 18.18 | 2,297,794 | ||||||||||||||||||||||||||||
2009 (through June 23) | 18.35 | 12.69 | 15.06 | 1,206,829 | ||||||||||||||||||||||||||||
First Quarter | 27 | .96 | 19 | .90 | 21 | .61 | 1,992,134 | 18.35 | 12.69 | 15.45 | 1,244,030 | |||||||||||||||||||||
January | 27 | .96 | 23 | .63 | 24 | .84 | 2,163,864 | 18.35 | 16.35 | 16.35 | 1,113,119 | |||||||||||||||||||||
February | 24 | .50 | 22 | .40 | 22 | .40 | 2,097,431 | 16.56 | 13.39 | 13.39 | 984,754 | |||||||||||||||||||||
March | 22 | .17 | 19 | .90 | 21 | .61 | 1,697,047 | 16.25 | 12.69 | 15.45 | 1,586,959 | |||||||||||||||||||||
Second Quarter (through June 26) | 23 | .47 | 20 | .72 | 20 | .86 | 1,127,499 | |||||||||||||||||||||||||
Second Quarter (through June 23) | 16.53 | 15.00 | 15.06 | 1,167,759 | ||||||||||||||||||||||||||||
April | 22 | .60 | 21 | .47 | 22 | .57 | 1,327,796 | 16.42 | 15.00 | 15.67 | 1,153,857 | |||||||||||||||||||||
May | 23 | .47 | 22 | .13 | 22 | .72 | 1,074,084 | 16.53 | 15.38 | 15.73 | 1,227,860 | |||||||||||||||||||||
June (through June 26) | 22 | .24 | 20 | .72 | 20 | .86 | 923,479 | |||||||||||||||||||||||||
June (through June 23) | 15.86 | 15.02 | 15.06 | 1,114,224 |
(1) | Both high and low prices are based on the daily closing prices for the period. |
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Period Average | Period Average | |||||||||||||||||||||||||||||||||||||||||||||||
Dividend | Price | Dividend | Price | |||||||||||||||||||||||||||||||||||||||||||||
Yield(1) | Earnings | Yield(1) | Earnings | |||||||||||||||||||||||||||||||||||||||||||||
Year | Opening | High | Low | Closing | (%) | Ratio(2) | Opening | High | Low | Closing | (%) | Ratio(2) | ||||||||||||||||||||||||||||||||||||
1980 | 100 | .00 | 119 | .36 | 100 | .00 | 106 | .87 | 20 | .9 | 2 | .6 | 100.00 | 119.36 | 100.00 | 106.87 | 20.9 | 2.6 | ||||||||||||||||||||||||||||||
1981 | 97 | .95 | 165 | .95 | 93 | .14 | 131 | .37 | 13 | .2 | 3 | .1 | 97.95 | 165.95 | 93.14 | 131.37 | 13.2 | 3.1 | ||||||||||||||||||||||||||||||
1982 | 123 | .60 | 134 | .49 | 106 | .00 | 127 | .31 | 10 | .5 | 3 | .4 | 123.60 | 134.49 | 106.00 | 127.31 | 10.5 | 3.4 | ||||||||||||||||||||||||||||||
1983 | 122 | .52 | 134 | .46 | 115 | .59 | 121 | .21 | 6 | .9 | 3 | .8 | 122.52 | 134.46 | 115.59 | 121.21 | 6.9 | 3.8 | ||||||||||||||||||||||||||||||
1984 | 116 | .73 | 142 | .46 | 114 | .37 | 142 | .46 | 5 | .1 | 4 | .5 | 116.73 | 142.46 | 114.37 | 142.46 | 5.1 | 4.5 | ||||||||||||||||||||||||||||||
1985 | 139 | .53 | 163 | .37 | 131 | .40 | 163 | .37 | 5 | .3 | 5 | .2 | 139.53 | 163.37 | 131.40 | 163.37 | 5.3 | 5.2 | ||||||||||||||||||||||||||||||
1986 | 161 | .40 | 279 | .67 | 153 | .85 | 272 | .61 | 4 | .3 | 7 | .6 | 161.40 | 279.67 | 153.85 | 272.61 | 4.3 | 7.6 | ||||||||||||||||||||||||||||||
1987 | 264 | .82 | 525 | .11 | 264 | .82 | 525 | .11 | 2 | .6 | 10 | .9 | 264.82 | 525.11 | 264.82 | 525.11 | 2.6 | 10.9 | ||||||||||||||||||||||||||||||
1988 | 532 | .04 | 922 | .56 | 527 | .89 | 907 | .20 | 2 | .4 | 11 | .2 | 532.04 | 922.56 | 527.89 | 907.20 | 2.4 | 11.2 | ||||||||||||||||||||||||||||||
1989 | 919 | .61 | 1,007 | .77 | 844 | .75 | 909 | .72 | 2 | .0 | 13 | .9 | 919.61 | 1,007.77 | 844.75 | 909.72 | 2.0 | 13.9 | ||||||||||||||||||||||||||||||
1990 | 908 | .59 | 928 | .77 | 566 | .27 | 696 | .11 | 2 | .2 | 12 | .8 | 908.59 | 928.77 | 566.27 | 696.11 | 2.2 | 12.8 | ||||||||||||||||||||||||||||||
1991 | 679 | .75 | 763 | .10 | 586 | .51 | 610 | .92 | 2 | .6 | 11 | .2 | 679.75 | 763.10 | 586.51 | 610.92 | 2.6 | 11.2 | ||||||||||||||||||||||||||||||
1992 | 624 | .23 | 691 | .48 | 459 | .07 | 678 | .44 | 2 | .2 | 10 | .9 | 624.23 | 691.48 | 459.07 | 678.44 | 2.2 | 10.9 | ||||||||||||||||||||||||||||||
1993 | 697 | .41 | 874 | .10 | 605 | .93 | 866 | .18 | 1 | .6 | 12 | .7 | 697.41 | 874.10 | 605.93 | 866.18 | 1.6 | 12.7 | ||||||||||||||||||||||||||||||
1994 | 879 | .32 | 1,138 | .75 | 860 | .47 | 1,027 | .37 | 1 | .2 | 16 | .2 | 879.32 | 1,138.75 | 860.47 | 1,027.37 | 1.2 | 16.2 | ||||||||||||||||||||||||||||||
1995 | 1,013 | .57 | 1,016 | .77 | 847 | .09 | 882 | .94 | 1 | .2 | 16 | .4 | 1,013.57 | 1,016.77 | 847.09 | 882.94 | 1.2 | 16.4 | ||||||||||||||||||||||||||||||
1996 | 888 | .85 | 986 | .84 | 651 | .22 | 651 | .22 | 1 | .3 | 17 | .8 | 888.85 | 986.84 | 651.22 | 651.22 | 1.3 | 17.8 | ||||||||||||||||||||||||||||||
1997 | 653 | .79 | 792 | .29 | 350 | .68 | 376 | .31 | 1 | .5 | 17 | .0 | 653.79 | 792.29 | 350.68 | 376.31 | 1.5 | 17.0 | ||||||||||||||||||||||||||||||
1998 | 385 | .49 | 579 | .86 | 280 | .00 | 562 | .46 | 1 | .9 | 10 | .8 | 385.49 | 579.86 | 280.00 | 562.46 | 1.9 | 10.8 | ||||||||||||||||||||||||||||||
1999 | 587 | .57 | 1,028 | .07 | 498 | .42 | 1,028 | .07 | 1 | .1 | 13 | .5 | 587.57 | 1,028.07 | 498.42 | 1,028.07 | 1.1 | 13.5 | ||||||||||||||||||||||||||||||
2000 | 1,059 | .04 | 1,059 | .04 | 500 | .60 | 504 | .62 | 2 | .1 | 12 | .9 | 1,059.04 | 1,059.04 | 500.60 | 504.62 | 2.4 | 15.3 | ||||||||||||||||||||||||||||||
2001 | 520 | .95 | 704 | .50 | 468 | .76 | 693 | .70 | 1 | .7 | 16 | .4 | 520.95 | 704.50 | 468.76 | 693.70 | 1.7 | 29.3 | ||||||||||||||||||||||||||||||
2002 | 724 | .95 | 937 | .61 | 584 | .04 | 829 | .44 | 1 | .6 | 15 | .2 | 724.95 | 937.61 | 584.04 | 829.44 | 1.8 | 15.6 | ||||||||||||||||||||||||||||||
2003 | 635 | .17 | 822 | .16 | 515 | .24 | 810 | .71 | 2 | .0 | 11 | .8 | 635.17 | 822.16 | 515.24 | 810.71 | 2.1 | 10.1 | ||||||||||||||||||||||||||||||
2004 | 821 | .26 | 936 | .06 | 719 | .59 | 895 | .92 | 2 | .0 | 13 | .8 | 821.26 | 936.06 | 719.59 | 895.92 | 2.1 | 15.8 | ||||||||||||||||||||||||||||||
2005 | 893 | .71 | 1,379 | .37 | 870 | .84 | 1,379 | .37 | 1 | .8 | 10 | .6 | 893.71 | 1,379.37 | 870.84 | 1,379.37 | 1.7 | 11.0 | ||||||||||||||||||||||||||||||
2006 | 1,389 | .27 | 1,464 | .70 | 1,192 | .09 | 1,434 | .46 | 1 | .7 | 11 | .4 | 1,389.27 | 1,464.70 | 1,192.09 | 1,434.46 | 1.7 | 11.4 | ||||||||||||||||||||||||||||||
2007 | 1,435 | .26 | 2,064 | .85 | 1,355 | .79 | 1,897 | .13 | 1 | .4 | 16 | .8 | 1,435.26 | 2,064.85 | 1,355.79 | 1,897.13 | 1.4 | 16.8 | ||||||||||||||||||||||||||||||
2008 (through June 26) | 1,853 | .45 | 1,888 | .88 | 1,574 | .44 | 1,717 | .66 | 1 | .6 | 14 | .7 | ||||||||||||||||||||||||||||||||||||
2008 | 1,853.45 | 1,888.88 | 938.75 | 1,124.47 | 2.6 | 9.0 | ||||||||||||||||||||||||||||||||||||||||||
2009 (through June 19) | 1,157.40 | 1,435.70 | 1,018.81 | 1,383.34 | 2.2 | 12.0 |
(1) | Dividend yields are based on daily figures. Before 1983, dividend yields were calculated at the end of each month. Dividend yields after January 3, 1984 include cash dividends only. | |
(2) | The price to earnings ratio is based on figures for companies that record a profit in the preceding year. |
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Previous Day’s Closing Price | Rounded Down to | |||
Less than 5,000 | 5 | |||
5,000 to less than 10,000 | 10 | |||
10,000 to less than 50,000 | 50 | |||
50,000 to less than 100,000 | 100 | |||
100,000 to less than 500,000 | 500 | |||
500,000 or more | 1,000 |
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Market Capitalization on the | Market Capitalization on the | |||||||||||||||||||||||||||||||||||||||||||||||
Last Day of Each Period | Average Trading Volume & Value | Last Day of Each Period | ||||||||||||||||||||||||||||||||||||||||||||||
Number of | | Number of | Average Daily Trading Volume, Value | |||||||||||||||||||||||||||||||||||||||||||||
Listed | (Millions | (Thousands of | Thousands of | (Millions | (Thousands of | Listed | (Billions of | (Millions of | Thousands | (Millions of | (Thousands | |||||||||||||||||||||||||||||||||||||
Year | Companies | of Won) | Dollars)(1) | Shares | of Won) | Dollars)(1) | Companies | Won) | US$)(1) | of Shares | Won) | of US$)(1) | ||||||||||||||||||||||||||||||||||||
1980 | 352 | 2,526,553 | US$ | 3,828,691 | 5,654 | 3,897 | US$ | 5,905 | ||||||||||||||||||||||||||||||||||||||||
1981 | 343 | 2,959,057 | 4,224,207 | 10,565 | 8,708 | 12,433 | 343 | 2,959 | US$ | 4,223 | 10,565 | 8,708 | US$ | 12,427 | ||||||||||||||||||||||||||||||||||
1982 | 334 | 3,000,494 | 4,407,711 | 9,704 | 6,667 | 8,904 | 334 | 3,001 | 4,012 | 9,704 | 6,667 | 8,914 | ||||||||||||||||||||||||||||||||||||
1983 | 328 | 3,489,654 | 4,386,743 | 9,325 | 5,941 | 7,468 | 328 | 3,490 | 4,361 | 9,325 | 5,941 | 7,425 | ||||||||||||||||||||||||||||||||||||
1984 | 336 | 5,148,460 | 6,222,456 | 14,847 | 10,642 | 12,862 | 336 | 5,149 | 6,207 | 14,847 | 10,642 | 12,829 | ||||||||||||||||||||||||||||||||||||
1985 | 342 | 6,570,404 | 7,380,818 | 18,925 | 12,315 | 13,834 | 342 | 6,570 | 7,362 | 18,925 | 12,315 | 13,798 | ||||||||||||||||||||||||||||||||||||
1986 | 355 | 11,994,233 | 13,924,115 | 31,755 | 32,870 | 38,159 | 355 | 11,994 | 13,863 | 31,755 | 32,870 | 37,991 | ||||||||||||||||||||||||||||||||||||
1987 | 389 | 26,172,174 | 33,033,162 | 20,353 | 70,185 | 88,584 | 389 | 26,172 | 32,884 | 20,353 | 70,185 | 88,183 | ||||||||||||||||||||||||||||||||||||
1988 | 502 | 64,543,685 | 94,348,318 | 10,367 | 198,364 | 289,963 | 502 | 64,544 | 93,895 | 10,367 | 198,364 | 288,571 | ||||||||||||||||||||||||||||||||||||
1989 | 626 | 95,476,774 | 140,489,660 | 11,757 | 280,967 | 414,431 | 626 | 95,477 | 140,119 | 11,757 | 280,967 | 412,338 | ||||||||||||||||||||||||||||||||||||
1990 | 669 | 79,019,676 | 110,301,055 | 10,866 | 183,692 | 256,500 | 669 | 79,020 | 109,872 | 10,866 | 183,692 | 255,412 | ||||||||||||||||||||||||||||||||||||
1991 | 686 | 73,117,833 | 96,182,364 | 14,022 | 214,263 | 281,850 | 686 | 73,118 | 95,541 | 14,022 | 214,263 | 279,973 | ||||||||||||||||||||||||||||||||||||
1992 | 688 | 84,711,982 | 107,502,515 | 24,028 | 308,246 | 391,175 | 688 | 84,712 | 107,027 | 24,028 | 308,246 | 389,445 | ||||||||||||||||||||||||||||||||||||
1993 | 693 | 112,665,260 | 139,419,948 | 35,130 | 574,048 | 676,954 | 693 | 112,665 | 138,870 | 35,130 | 574,048 | 707,566 | ||||||||||||||||||||||||||||||||||||
1994 | 699 | 151,217,231 | 191,729,721 | 36,862 | 776,257 | 984,223 | 699 | 151,217 | 190,762 | 36,862 | 776,257 | 979,257 | ||||||||||||||||||||||||||||||||||||
1995 | 721 | 141,151,399 | 182,201,367 | 26,130 | 487,762 | 629,614 | 721 | 141,151 | 181,943 | 26,130 | 487,762 | 628,721 | ||||||||||||||||||||||||||||||||||||
1996 | 760 | 117,369,988 | 139,031,021 | 26,571 | 486,834 | 575,733 | 760 | 117,370 | 138,490 | 26,571 | 486,834 | 928,418 | ||||||||||||||||||||||||||||||||||||
1997 | 776 | 70,988,897 | 50,161,742 | 41,525 | 555,759 | 392,707 | 776 | 70,989 | 41,881 | 41,525 | 555,759 | 327,881 | ||||||||||||||||||||||||||||||||||||
1998 | 748 | 137,798,451 | 114,090,455 | 97,716 | 660,429 | 471,432 | 748 | 137,799 | 114,261 | 97,716 | 660,429 | 547,619 | ||||||||||||||||||||||||||||||||||||
1999 | 725 | 349,503,966 | 305,137,040 | 278,551 | 3,481,620 | 3,039,654 | 725 | 349,504 | 307,662 | 278,551 | 3,481,620 | 3,064,806 | ||||||||||||||||||||||||||||||||||||
2000 | 704 | 188,041,490 | 150,162,898 | 306,163 | 2,602,211 | 2,078,028 | 704 | 188,042 | 148,415 | 306,163 | 2,602,211 | 2,053,837 | ||||||||||||||||||||||||||||||||||||
2001 | 689 | 225,850,076 | 194,784,979 | 473,241 | 1,997,420 | 1,520,685 | 689 | 255,850 | 194,785 | 473,241 | 1,997,420 | 1,520,685 | ||||||||||||||||||||||||||||||||||||
2002 | 683 | 258,680,756 | 218,167,122 | 851,242 | 3,041,592 | 2,414,362 | 683 | 258,681 | 216,071 | 857,245 | 3,041,598 | 2,540,590 | ||||||||||||||||||||||||||||||||||||
2003 | 684 | 355,362,626 | 297,960,530 | 542,010 | 2,216,636 | 1,858,580 | 684 | 355,363 | 298,624 | 542,010 | 2,216,636 | 1,862,719 | ||||||||||||||||||||||||||||||||||||
2004 | 683 | 412,588,138 | 427,069,982 | 372,894 | 2,232,108 | 2,310,455 | 683 | 412,588 | 398,597 | 372,895 | 2,232,109 | 2,156,419 | ||||||||||||||||||||||||||||||||||||
2005 | 702 | 655,074,595 | 648,588,707 | 467,629 | 3,157,662 | 3,126,398 | 702 | 655,075 | 648,589 | 467,629 | 3,157,662 | 3,126,398 | ||||||||||||||||||||||||||||||||||||
2006 | 731 | 704,587,508 | 757,620,976 | 279,096 | 3,435,180 | 3,693,742 | 731 | 704,588 | 757,622 | 279,096 | 3,435,180 | 3,693,742 | ||||||||||||||||||||||||||||||||||||
2007 | 745 | 951,900,447 | 1,017,205,009 | 363,741 | 5,539,653 | 5,919,698 | 745 | 951,900 | 1,017,205 | 363,732 | 5,539,588 | 5,919,697 | ||||||||||||||||||||||||||||||||||||
2008 (through June 26) | 756 | 872,201,691 | 837,608,462 | 302,433 | 5,258,073 | 5,049,528 | ||||||||||||||||||||||||||||||||||||||||||
2008 | 763 | 576,888 | 457,122 | 355,205 | 5,189,644 | 4,112,238 | ||||||||||||||||||||||||||||||||||||||||||
2009 (through June 19) | 757 | 719,468 | 569,109 | 568,914 | 5,915,222 | 4,679,024 |
(1) | Converted at the noon buying rate |
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Item 9.D. | Selling Shareholders |
Item 9.E. | Dilution |
Item 9.F. | Expenses of the Issue |
Item 10. | ADDITIONAL INFORMATION |
Item 10.A. | Share Capital |
Item 10.B. | Memorandum and Articles of |
• | information and communication business; | |
• | sale and lease of subscriber handsets; | |
• | new media business; | |
• | advertising business; | |
• | mail order business; | |
• | business of leasing available and real estate property; | |
• | research and technology development relating to the first four items above; | |
• | overseas and import/export business relating to the first four items above; |
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• | manufacture and distribution business relating to the first four items above; | |
• | tourism |
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• | electronic financial services business; | |
• | film business (production, import, distribution and screening); and | |
• | any business or undertaking incidental or conducive to the attainment of the objectives stated above. |
• | investment by us or any of our subsidiaries in a foreign company or equity or other overseas assets in an amount equal to 5.0% or more of our shareholders’ equity under our most recent balance sheet; and | |
• | contribution of capital, loans or guarantees, acquisition of our subsidiaries’ assets or similar transactions with our affiliated companies in excess of Won 10 billion through one or a series of transactions. |
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96
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• | as necessary; | |
• | at the request of holders of an aggregate of 3.0% or more of our outstanding common shares; | |
• | at the request of shareholders holding an aggregate of 1.5% or more of our outstanding shares and preferred shares for at least six months; or | |
• | at the request of our audit committee. |
9896
• | amending our articles of | |
• | removing a director; | |
• | effecting any dissolution, merger or consolidation of us; | |
• | transferring the whole or any significant part of our business; | |
• | effecting our acquisition of all of the business of any other company or a part of the business of any other company having a material effect on our business; | |
• | reducing our capital; or | |
• | issuing any new shares at a price lower than their par value. |
97
99
98
100
99
101
• | before or at the time of the pre-release, the person to whom the pre-release is being made must represent to the ADR depositary in writing that it or its customer owns the shares of common stock or ADSs to be deposited and show evidence of the ownership to the ADR depositary’s satisfaction; | |
• | before or at the time of such pre-release, the person to whom the pre-release is being made must agree in writing that he will hold the shares of common stock or ADSs in trust for the ADR depositary until their delivery to the ADR depositary or custodian, reflect on his records the ADR depositary as owner of such shares of common stock or ADSs and deliver such shares of common stock upon the ADR depositary’s request; |
102100
• | the pre-release must be fully collateralized with cash or U.S. government securities; | |
• | the ADR depositary must be able to terminate the pre-release on not more than five business day’s notice; and | |
• | the pre-release is subject to further indemnities and credit regulations as the ADR depositary deems appropriate. |
103101
• | any cash dividend or other cash distribution becomes payable; | |
• | any distribution other than cash is made; | |
• | rights are issued with respect to deposited shares of common stock; | |
• | the ADR depositary causes a change in the number of shares of common stock that are represented by each ADS; or | |
• | the ADR depositary receives notice of any shareholders’ meeting. |
• | the information contained in our notice to the ADR depositary including an English translation, or, if requested by us, a summary of the information provided by us; |
104102
• | a statement that the ADR holders as of the close of business on a specified record date will be entitled to instruct the ADR depositary as to how to exercise their voting rights for the number of shares of deposited shares of common stock, subject to the provisions of applicable Korean law and our articles of | |
• | a statement as to the manner in which the ADR holders may give their instructions. |
105103
• | to collect dividends and other distributions pertaining to the deposited shares of common stock; | |
• | to sell property and rights and the conversion of deposited shares of common stock into cash as provided in the deposit agreement; and | |
• | to deliver deposited shares of common stock, together with any dividends or other distributions received with respect to the deposited shares of common stock and the net proceeds of the sale of any rights or other property represented by those ADSs in exchange for surrendered ADRs. |
• | taxes and other governmental charges; | |
• | registration fees applicable to transfers of shares of common stock on our shareholders’ register, or that of any entity acting as registrar for the shares, to the name of the ADR depositary or its nominee, or the Custodian or its nominee, when making deposits or withdrawals under the deposit agreement; | |
• | cable, telex and facsimile transmission expenses that are expressly provided in the deposit agreement; | |
• | expenses incurred by the ADR depositary in the conversion of foreign currency into Dollars under the deposit agreement; |
106104
• | a fee of up to US$5.00 per 100 ADSs, or portion thereof, for execution and delivery of ADSs and the surrender of ADRs under the deposit agreement; and | |
• | a fee of up to US$0.02 per ADS held for cash distributions, a sale or exercise of rights or the taking of any other corporate action involving distributions to shareholders. |
107105
Item 10.C. | Material Contracts |
Item 10.D. | Exchange Controls |
108
• | 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, |
106
the MOSF may 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) or impose an obligation to deposit, safe-keep or | ||
sell any means of payment to The Bank of Korea or certain other governmental agencies or financial institutions; 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 are likely to adversely affect the Won, exchange rate or other macroeconomic policies, the MOSF may take action to require any person who intends to effect or effects a capital | |
transaction to deposit all or a portion of the means of payment acquired in such transactions with The Bank of Korea or certain other governmental agencies or financial institutions. |
• | Under current Korean laws and regulations, the depositary is required to obtain our prior consent for any proposed deposit of common shares if the number of shares to be deposited in such proposed deposit exceeds the number of common shares initially deposited by us for the issuance of ADSs (including deposits in connection with the initial and all subsequent | |
• | ||
109
107
108
• | odd-lot trading of shares; |
110
• | acquisition of shares by a foreign company as a result of a merger; | |
• | acquisition or disposal of shares in connection with a tender offer; | |
• | acquisition of 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 (“Converted Shares”); | |
• | acquisition of shares through exercise of rights under securities issued outside of Korea; | |
• | 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 a class of shares for which the ceiling on aggregate acquisition by foreigners, as explained below, has been reached or exceeded; | |
• | acquisition of shares by direct investment under the Foreign Investment Promotion Law; | |
• | acquisition and disposal of shares on an overseas stock exchange market, if such shares are simultaneously listed on the KRX | |
• | arm’s length transactions between foreigners in the event all such foreigners belong to an investment group managed by the same person. |
109
111
110
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Item 10.E. | Taxation |
• | a dealer in securities or currencies; | |
• | a trader in securities that elects to use amark-to-market method of accounting for securities holdings; | |
• | a bank; | |
• | a life insurance company; | |
• | a tax-exempt organization; | |
• | a person that holds common shares or ADSs that are a hedge or that are hedged against interest rate or currency risks; | |
• | a person that holds common shares 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; or | |
• | a person that owns or is deemed to own 10% or more of any class of our stock. |
• | 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 common share or ADS. |
111
113
112
114
113
115
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Item 10.F. | Dividends and Paying Agents |
Item 10.G. | Statements by Experts |
Item 10.H. | Documents on Display |
Item 10.I. | Subsidiary Information |
Item 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
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115
Maturities | Maturities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | Thereafter | Total | Fair Value | 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total | Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In billions of Won, except for percentage data) | (In billions of Won, except for percentage data) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Local currency: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed rate | 541 | .8 | 360 | .6 | 203 | .5 | 192 | .8 | — | 575 | .7 | 1,874 | .4 | 1,822 | .9 | 792.5 | 470.6 | 537.6 | 5.5 | 441.7 | 769.6 | 3,017.5 | 3,063.7 | |||||||||||||||||||||||||||||||||||||||||||||||
Average weighted rate(1) | 5 | .62 | % | 5 | .30 | % | 4 | .15 | % | 3 | .12 | % | 0 | .00 | % | 4 | .86 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Average weighted rate(1) | 6.33 | % | 5.93 | % | 6.15 | % | 5.91 | % | 5.75 | % | 5.20 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable rate | 3 | .7 | 0 | .3 | 200 | .1 | — | — | — | 204 | .1 | 204 | .1 | 300.3 | 0.1 | 700.0 | — | — | — | 1,000.4 | 1,000.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Average weighted rate(1) | 6 | .70 | % | 3 | .72 | % | 5 | .82 | % | 0 | .00 | % | 0 | .00 | % | 0 | .00 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Average weighted rate(1) | 7.31 | % | 3.25 | % | 4.93 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sub-total | 545 | .5 | 360 | .9 | 403 | .6 | 192 | .8 | — | 575 | .7 | 2,078 | .5 | 2,027 | .0 | 1,092.8 | 470.7 | 1,237.6 | 5.5 | 441.7 | 769.6 | 4,017.9 | 4,064.1 | |||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed rate | 1 | .6 | 265 | .2 | 28 | .3 | 279 | .7 | — | 368 | .4 | 943 | .2 | 981 | .2 | 279.6 | — | 375.6 | 649.9 | — | 494.0 | 1,799.1 | 2,202.5 | |||||||||||||||||||||||||||||||||||||||||||||||
Average weighted rate(1) | 3 | .18 | % | 0 | .00 | % | 9 | .97 | % | 4 | .28 | % | 0 | .00 | % | 6 | .75 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Average weighted rate(1) | 0.00 | % | 0.00 | % | 4.25 | % | 0.00 | % | 0.00 | % | 6.63 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable rate | 0 | .9 | — | — | — | 103 | .7 | 93 | .8 | 198 | .4 | 198 | .4 | — | 187.3 | — | 173.7 | 125.8 | — | 486.8 | 486.7 | |||||||||||||||||||||||||||||||||||||||||||||||||
Average weighted rate(1) | 6 | .86 | % | 0 | .00 | % | 0 | .00 | % | 0 | .00 | % | 1 | .45 | % | 4 | .94 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Average weighted rate(1) | 0.00 | % | 4.51 | % | 0.00 | % | 1.38 | % | 0.00 | % | 0.00 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sub-total | 2 | .5 | 265 | .2 | 28 | .3 | 279 | .7 | 103 | .7 | 462 | .2 | 1,141 | .6 | 1,179 | .6 | 279.6 | 187.3 | 375.6 | 823.6 | 125.8 | 494.0 | 2,285.9 | 2,689.2 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | 548 | .0 | 626 | .1 | 431 | .9 | 472 | .5 | 103 | .7 | 1,037 | .9 | 3,220 | .1 | 3,206 | .6 | 1,372.4 | 658.0 | 1,613.2 | 829.1 | 567.5 | 1,263.6 | 6,303.8 | 6,753.3 | ||||||||||||||||||||||||||||||||||||||||||||||
(1) | Weighted average rates of the portfolio at the period end. |
Item 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
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Item 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
Item 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
Item 15. | CONTROLS AND PROCEDURES |
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Item 16. | RESERVED |
Item 16A. | AUDIT COMMITTEE FINANCIAL EXPERT |
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Item 16B. | CODE OF ETHICS |
Item 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Years Ended December 31, | ||||||||
2006 | 2007 | |||||||
(In millions of Won) | ||||||||
Audit | 1,220 | .5 | 1,401 | .3 | ||||
Audit Related | 81 | .1 | 61 | .3 | ||||
Tax | 277 | .0 | 70 | .8 | ||||
All Other Fees | — | — | ||||||
Total | 1,578 | .6 | 1,533 | .4 |
Years Ended December 31, | ||||||||
2007 | 2008 | |||||||
(In millions of Won) | ||||||||
Audit Fees | 1,220.5 | 1,687.0 | ||||||
Audit-Related Fees | 81.1 | — | ||||||
Tax Fees | 277.0 | 229.7 | ||||||
All Other Fees | — | — | ||||||
Total | 1,578.6 | 1,916.7 |
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Item 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
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Item 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
Maximum Number | Maximum Number | |||||||||||||||||||||||||||||||
Total Number of | of Shares That | Total Number of | of Shares That | |||||||||||||||||||||||||||||
Shares Purchased | May yet Be | Shares Purchased | May yet be | |||||||||||||||||||||||||||||
as Part of Publicly | Purchased Under | as Part of Publicly | Purchased Under | |||||||||||||||||||||||||||||
Total Number of | Average Price Paid per | Announced Plans | the Plans or | Total Number of | Average Price Paid | Announced Plans | the Plans or | |||||||||||||||||||||||||
Period 2007 | Shares Purchased | Share | or Program | Program | ||||||||||||||||||||||||||||
Period 2008 | Shares Purchased | per Share | or Program(2) | Program(2) | ||||||||||||||||||||||||||||
January | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
February | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
March | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
April | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
May | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
June | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
July | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
August | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
September | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
October | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
November | 248,600 | 242,621 | — | — | — | — | — | — | ||||||||||||||||||||||||
December | 222,400 | 261,673 | — | — | 306,988(1 | ) | 206,972 | 306,988 | 141,012 | |||||||||||||||||||||||
Total | 471,000 | 251,617 | — | — | 306,988(1 | ) | 206,972 | 306,988 | 141,012 |
(1) | Purchased through open market transactions. | |
(2) | On October 24, 2008, we announced a plan to repurchase up to 448,000 common shares during the period between October 27, 2008 and January 26, 2009. In January 2009, we completed the repurchase under this plan by purchasing the remaining 141,012 shares. |
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Item 16G. | CORPORATE GOVERNANCE |
NYSE Corporate Governance Standards | Our Corporate Governance Practice | |
Director Independence | ||
Listed companies must have a majority of independent directors. | Of the eight members of our board of directors, five are independent directors. | |
Executive Session | ||
Listed companies must hold meetings solely attended by non-management directors to more effectively check and balance management directors. | Our Audit Committee, which is comprised solely of three independent directors, holds meetings whenever there are matters related to management directors, and such meetings are generally held once every month. | |
Nomination/Corporate Governance Committee | ||
Listed companies must have a nomination/corporate governance committee composed entirely of independent directors. | Although we do not have a separate nomination/ corporate governance committee, we maintain an Independent Director Recommendation Committee composed of independent directors and management directors. | |
Audit Committee | ||
Listed companies must have an audit committee that satisfies the requirements of Rule 10A-3 under the Exchange Act. | We maintain an Audit Committee comprised solely of three independent directors. | |
Audit Committee Additional Requirements | ||
Listed companies must have an audit committee that is composed of more than three directors. | Our Audit Committee has three independent directors. | |
Shareholder Approval of Equity Compensation Plan | ||
Listed companies must allow its shareholders to exercise their voting rights with respect to any material revision to the company’s equity compensation plan. | We currently have two equity compensation plans: a stock option plan for officers and directors and employee stock ownership plan for employees (“ESOP”). We manage such compensation plans in compliance with the applicable laws and our articles of incorporation, provided that, under certain limited circumstances, the grant of stock options or matters relating to ESOP are not subject to shareholders’ approval under Korean law. | |
Corporate Governance Guidelines | ||
Listed companies must adopt and disclose corporate governance guidelines. | Although we do not maintain separate corporate governance guidelines, we are in compliance with the Korean Commercial Code in connection with such matters, including the governance of the board of directors. | |
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 Business Conduct and Ethics for all of our directors, officers and employees, and such code is also available on our website atwww.sktelecom.com. |
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Item 17. | FINANCIAL STATEMENTS |
Item 18. | FINANCIAL STATEMENTS |
Index of Financial Statements | F-1 | |||
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements | F-2 | |||
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting | F-3 | |||
Consolidated balance sheets as of December 31, | F-4 | |||
Consolidated statements of income for the years ended December 31, | F-6 | |||
Consolidated statements of stockholders’ equity for the years ended December 31, | ||||
Consolidated statements of cash flows for the years ended December 31, | ||||
Notes to consolidated financial statements for the years ended December 31, |
Item 19. | EXHIBITS |
Number | Description | |||
1 | .1* | Memorandum and Articles of Association | ||
2 | .1* | Deposit Agreement dated as of May 31, 1996, as amended by Amendment No. 1 dated as of March 15, 1999, Amendment No. 2 dated as of April 24, 2000 and Amendment No. 3 dated as of July 24, 2002, entered into among SK Telecom Co., Ltd., Citibank, N.A., as Depositary, and all Holders and Beneficial Owners of American Depositary Shares | ||
8 | .1 | List of Subsidiaries of SK Telecom Co., Ltd. | ||
12 | .1 | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
12 | .2 | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
13 | .1 | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
13 | .2 | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
15 | .1 | Framework Act on Telecommunications, as amended (English translation) | ||
15 | .2 | Enforcement Decree of the Framework Act on Telecommunications, as amended (English translation) | ||
15 | .3 | Telecommunications Business Act, as amended (English translation) | ||
15 | .4 | Enforcement Decree of the Telecommunications Business Act (English translation) | ||
15 | .5 | Amendment to the Government Organization Act | ||
99 | .1 | Consent of Deloitte Anjin LLC |
Number | Description | |||
1 | .1 | Articles of Incorporation | ||
2 | .1* | Deposit Agreement dated as of May 31, 1996, as amended by Amendment No. 1 dated as of March 15, 1999, Amendment No. 2 dated as of April 24, 2000 and Amendment No. 3 dated as of July 24, 2002, entered into among SK Telecom Co., Ltd., Citibank, N.A., as Depositary, and all Holders and Beneficial Owners of American Depositary Shares | ||
8 | .1 | List of Subsidiaries of SK Telecom Co., Ltd. | ||
12 | .1 | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
12 | .2 | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
13 | .1 | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
13 | .2 | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
15 | .1** | Framework Act on Telecommunications, as amended (English translation) | ||
15 | .2** | Enforcement Decree of the Framework Act on Telecommunications, as amended (English translation) | ||
15 | .3** | Telecommunications Business Act, as amended (English translation) | ||
15 | .4** | Enforcement Decree of the Telecommunications Business Act (English translation) | ||
15 | .5** | Amendment to the Government Organization Act | ||
99 | .1 | Consent of Deloitte Anjin LLC |
* | Filed previously as exhibits to ourForm 20-F filed on June 30, 2006. | |
** | Filed previously as exhibits to ourForm 20-F filed on June 30, 2008. |
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Title: | President, Chief Executive Officer & |
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F-2 | ||||
F-3 | ||||
F-4 | ||||
F-6 | ||||
F-1
F-2
F-3
2005 | 2006 | 2007 | 2007 | |||||||||||||
In millions of Korean won | In thousands | |||||||||||||||
of U.S. dollars | ||||||||||||||||
(Note 2 a) | ||||||||||||||||
ASSETS | ||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||
Cash and cash equivalents (Notes 2, 13 and 30) | 378,426 | 485,972 | 885,847 | $ | 946,620 | |||||||||||
Short-term financial instruments (Notes 22 and 23) | 106,592 | 98,085 | 148,103 | 158,264 | ||||||||||||
Trading securities (Notes 2 and 4) | 777,472 | 665,312 | 635,434 | 679,028 | ||||||||||||
Current portion of long-term investment securities (Notes 2 and 4) | 1 | 335 | 101,209 | 108,152 | ||||||||||||
Accounts receivable — trade, net of allowance for doubtful accounts of | 1,684,119 | 1,800,606 | 1,774,935 | 1,896,703 | ||||||||||||
Short-term loans, net of allowance for doubtful accounts of | 65,539 | 69,745 | 84,570 | 90,372 | ||||||||||||
Accounts receivable — other, net of allowance for doubtful accounts of | 1,369,691 | 1,305,284 | 948,322 | 1,013,381 | ||||||||||||
Inventories, net (Notes 2, 3 and 24) | 7,784 | 19,778 | 47,052 | 50,280 | ||||||||||||
Prepaid expenses | 104,124 | 116,727 | 108,552 | 115,999 | ||||||||||||
Current deferred income tax assets (Notes 2 and 18) | 66,117 | 49,940 | 36,383 | 38,879 | ||||||||||||
Currency swap (Notes 2 and 28) | — | 16,660 | — | — | ||||||||||||
Accrued income and other | 38,715 | 35,518 | 42,665 | 45,592 | ||||||||||||
Total Current Assets | 4,598,580 | 4,663,962 | 4,813,072 | 5,143,270 | ||||||||||||
NON-CURRENT ASSETS: | ||||||||||||||||
Property and equipment, net (Notes 2, 7, 12, 23, 24 and 25) | 4,663,369 | 4,507,335 | 4,969,354 | 5,310,274 | ||||||||||||
Intangible assets, net (Notes 2, 8, 12 and 29) | 3,452,889 | 3,518,411 | 3,433,962 | 3,669,547 | ||||||||||||
Long-term investment securities (Notes 2 and 4) | 1,220,208 | 2,475,418 | 5,058,519 | 5,405,556 | ||||||||||||
Equity securities accounted for using the equity method (Notes 2 and 5) | 471,879 | 750,921 | 350,966 | 375,044 | ||||||||||||
Long-term bank deposits (Note 22) | 1,479 | 10,445 | 15,535 | 16,601 | ||||||||||||
Long-term loans, net of allowance for doubtful accounts of | 18,430 | 18,569 | 84,906 | 90,731 | ||||||||||||
Guarantee deposits (Notes 13 and 25) | 168,559 | 139,619 | 148,987 | 159,208 | ||||||||||||
Long-term currency swap (Notes 2 and 28) | — | — | 13,057 | 13,953 | ||||||||||||
Long-term interest rate swap (Notes 2 and 28) | — | — | 3,170 | 3,387 | ||||||||||||
Non-current deferred income tax assets (Notes 2 and 18) | 1,495 | 2,655 | 7,286 | 7,786 | ||||||||||||
Other | 107,884 | 152,633 | 150,121 | 160,419 | ||||||||||||
Total Non-current Assets | 10,106,192 | 11,576,006 | 14,235,863 | 15,212,506 | ||||||||||||
TOTAL ASSETS | 14,704,772 | 16,239,968 | 19,048,935 | $ | 20,355,776 | |||||||||||
Translation into | ||||||||||||||||
U.S. Dollars | ||||||||||||||||
Korean Won | (Note 2) | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
(In millions) | (In thousands) | |||||||||||||||
ASSETS | ||||||||||||||||
CURRENT ASSETS : | ||||||||||||||||
Cash and cash equivalents, net of government subsidy of nil, | 485,972 | 885,847 | 1,011,340 | $ | 801,379 | |||||||||||
Short-term financial instruments (Notes 21 and 22) | 98,085 | 148,103 | 368,490 | 291,989 | ||||||||||||
Short-term investment securities (Notes 2 and 4) | 665,647 | 736,643 | 372,913 | 295,494 | ||||||||||||
Accounts receivable — trade, net of allowance for doubtful accounts of | 1,800,606 | 1,774,935 | 1,900,002 | 1,505,548 | ||||||||||||
Short-term loans, net of allowance for doubtful accounts of | 69,745 | 84,570 | 119,087 | 94,364 | ||||||||||||
Accounts receivable — other, net of allowance for doubtful accounts of | 1,305,284 | 948,322 | 1,346,056 | 1,066,605 | ||||||||||||
Inventories (Notes 2, 3 and 23) | 19,778 | 47,052 | 34,974 | 27,713 | ||||||||||||
Prepaid expenses | 116,727 | 108,552 | 127,432 | 100,976 | ||||||||||||
Current deferred income tax assets, net (Notes 2 and 17) | 49,940 | 36,383 | 27,786 | 22,017 | ||||||||||||
Currency swap (Notes 2 and 27) | 16,660 | — | 8,236 | 6,526 | ||||||||||||
Advanced payments and other | 35,518 | 42,665 | 106,131 | 84,098 | ||||||||||||
Total Current Assets | 4,663,962 | 4,813,072 | 5,422,447 | 4,296,709 | ||||||||||||
NON-CURRENT ASSETS: | ||||||||||||||||
Property and equipment, net (Notes 2, 7, 12, 22, 23 and 24) | 4,507,335 | 4,969,354 | 7,437,689 | 5,893,573 | ||||||||||||
Intangible assets, net (Notes 2, 8 and 12) | 3,518,411 | 3,433,962 | 3,978,145 | 3,152,254 | ||||||||||||
Long-term financial instruments (Note 21) | 10,445 | 15,535 | 114 | 90 | ||||||||||||
Long-term investment securities (Notes 2 and 4) | 2,475,418 | 5,058,519 | 3,105,295 | 2,460,614 | ||||||||||||
Equity securities accounted for using the equity method (Notes 2 and 5) | 750,921 | 350,966 | 898,512 | 711,975 | ||||||||||||
Long-term loans, net of allowance for doubtful accounts of | 18,569 | 84,906 | 155,360 | 123,106 | ||||||||||||
Long-term accounts receivable — other, net of present value discount of | — | — | 572,139 | 453,359 | ||||||||||||
Guarantee deposits (Notes 13 and 24) | 139,619 | 148,987 | 239,480 | 189,762 | ||||||||||||
Long-term currency swap (Notes 2 and 27) | — | 13,057 | 494,711 | 392,006 | ||||||||||||
Long-term interest rate swap (Notes 2 and 27) | — | 3,170 | — | — | ||||||||||||
Non-current deferred income tax assets (Notes 2 and 17) | 2,655 | 7,286 | 4,948 | 3,921 | ||||||||||||
Other | 152,633 | 150,121 | 164,831 | 130,611 | ||||||||||||
Total Non-Current Assets | 11,576,006 | 14,235,863 | 17,051,224 | 13,511,271 | ||||||||||||
TOTAL ASSETS | 16,239,968 | 19,048,935 | 22,473,671 | $ | 17,807,980 | |||||||||||
F-4
2005 | 2006 | 2007 | 2007 | |||||||||||||
In millions of Korean won | In thousands | |||||||||||||||
of U.S. dollars | ||||||||||||||||
(Note 2 a) | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||
Accounts payable (Notes 13 and 25) | 1,047,779 | 1,221,704 | 1,252,734 | $ | 1,338,677 | |||||||||||
Short-term borrowings (Notes 22 and 23) | 972 | 58,344 | 24,616 | 26,305 | ||||||||||||
Income taxes payable | 370,822 | 336,536 | 319,108 | 341,000 | ||||||||||||
Accrued expenses (Notes 2 and 27) | 364,830 | 375,063 | 436,008 | 465,920 | ||||||||||||
Dividend payable (Note 21) | 298 | 268 | 308 | 329 | ||||||||||||
Withholdings | 216,622 | 339,144 | 226,407 | 241,940 | ||||||||||||
Current portion of long-term debt, net (Notes 9, 10 and 12) | 809,573 | 797,042 | 634,990 | 678,553 | ||||||||||||
Current portion of subscription deposits (Note 11) | 14,875 | 17,576 | 7,564 | 8,083 | ||||||||||||
Current deferred income tax liabilities (Notes 2 and 18) | 44 | — | 4 | 4 | ||||||||||||
Currency swap (Notes 2 and 28) | — | — | 12,646 | 13,514 | ||||||||||||
Advanced receipts and other | 37,558 | 62,739 | 102,489 | 109,520 | ||||||||||||
Total Current Liabilities | 2,863,373 | 3,208,416 | 3,016,874 | 3,223,845 | ||||||||||||
NON-CURRENT LIABILITIES: | ||||||||||||||||
Bonds payable, net (Notes 2, 9 and 23) | 2,314,208 | 1,995,323 | 2,348,661 | 2,509,789 | ||||||||||||
Long-term borrowings (Notes 10 and 23) | 155 | 293,026 | 323,421 | 345,609 | ||||||||||||
Subscription deposits (Note 11) | 23,770 | 21,140 | 6,425 | 6,866 | ||||||||||||
Long-term payables — other, net of present value discount of | 591,587 | 517,539 | 422,114 | 451,073 | ||||||||||||
Obligations under capital leases (Notes 2, 12 and 23) | 10,204 | 1,860 | 712 | 761 | ||||||||||||
Accrued severance indemnities, net (Note 2) | 71,284 | 22,284 | 44,322 | 47,363 | ||||||||||||
Non-current deferred income tax liabilities (Notes 2 and 18) | 401,156 | 532,639 | 1,044,758 | 1,116,433 | ||||||||||||
Long-term currency swap (Notes 2 and 28) | 73,450 | 112,970 | 110,911 | 118,520 | ||||||||||||
Long-term interest rate swap (Notes 2 and 28) | — | 454 | — | — | ||||||||||||
Guarantee deposits received and other (Notes 25 and 27) | 28,045 | 51,229 | 43,104 | 46,061 | ||||||||||||
Total Non-Current Liabilities | 3,513,859 | 3,548,464 | 4,344,428 | 4,642,475 | ||||||||||||
Total Liabilities | 6,377,232 | 6,756,880 | 7,361,302 | 7,866,320 | ||||||||||||
COMMITMENTS AND CONTINGENCIES (Note 23) | ||||||||||||||||
STOCKHOLDERS’ EQUITY : | ||||||||||||||||
Capital stock — | 44,639 | 44,639 | 44,639 | 47,701 | ||||||||||||
Issued and outstanding — 220,000,000 shares authorized; 73,614,296 shares, 72,667,459 shares and 72,584,677 shares at December 31, 2005, 2006 and 2007, respectively (Notes 1 and 14) | ||||||||||||||||
Capital surplus (Notes 2, 14 and 18) | 2,954,840 | 2,950,327 | 2,924,960 | 3,125,625 | ||||||||||||
Capital adjustments: | ||||||||||||||||
Treasury stock (Note 16) | (2,047,105 | ) | (2,014,927 | ) | (2,041,483 | ) | (2,181,538 | ) | ||||||||
Loss on disposal of treasury stock (Notes 16 and 18) | — | (7,887 | ) | (94 | ) | (100 | ) | |||||||||
Stock options (Notes 2, 17 and 26) | 3,480 | 3,246 | — | — | ||||||||||||
Accumulated other comprehensive income (loss) (Note 19): | ||||||||||||||||
Unrealized gain (loss) on valuation of long-term investment securities, net (Notes 2, 4 and 18) | (42,093 | ) | 429,228 | 1,624,613 | 1,736,069 | |||||||||||
Equity in other comprehensive income of affiliates, net (Notes 2, 5 and 18) | 61,368 | 107,324 | 1,727 | 1,845 | ||||||||||||
Loss on valuation of currency swap, net (Notes 2, 18 and 28) | (14,177 | ) | (16,487 | ) | (11,816 | ) | (12,627 | ) | ||||||||
Gain (loss) on valuation of interest rate swap, net (Notes 2, 18 and 28) | — | (329 | ) | 2,298 | 2,456 | |||||||||||
Foreign-based operations’ translation adjustment (Notes 2 and 18) | (9,988 | ) | (29,726 | ) | (25,564 | ) | (27,318 | ) | ||||||||
Retained earnings (Note 15) | 7,267,649 | 7,847,434 | 8,914,970 | 9,526,576 | ||||||||||||
Minority interest in equity of consolidated subsidiaries (Note 2) | 108,927 | 170,246 | 253,383 | 270,767 | ||||||||||||
Total Stockholders’ Equity | 8,327,540 | 9,483,088 | 11,687,633 | 12,489,456 | ||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 14,704,772 | 16,239,968 | 19,048,935 | $ | 20,355,776 | |||||||||||
Translation into | ||||||||||||||||
U.S. Dollars | ||||||||||||||||
Korean Won | (Note 2) | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
(In millions) | (In thousands) | |||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||
Accounts payable (Notes 13 and 24) | 1,221,704 | 1,252,734 | 1,268,750 | $ | 1,005,349 | |||||||||||
Short-term borrowings (Notes 21 and 22) | 58,344 | 24,616 | 627,657 | 497,351 | ||||||||||||
Income taxes payable | 336,536 | 319,108 | 328,403 | 260,224 | ||||||||||||
Dividend payable | 268 | 308 | 227 | 180 | ||||||||||||
Accrued expenses (Notes 2 and 26) | 375,063 | 436,008 | 861,836 | 682,913 | ||||||||||||
Withholdings | 339,144 | 226,407 | 315,537 | 250,029 | ||||||||||||
Current portion of long-term debt, net (Notes 2, 8, 9, 10 and 12) | 797,042 | 634,990 | 936,009 | 741,687 | ||||||||||||
Current portion of subscription deposits (Note 11) | 17,576 | 7,564 | 8,281 | 6,562 | ||||||||||||
Currency swap (Notes 2 and 27) | — | 12,646 | 190,359 | 150,839 | ||||||||||||
Current deferred income tax liabilities (Notes 2 and 17) | — | 4 | — | — | ||||||||||||
Advanced receipts and other | 62,739 | 102,489 | 91,762 | 72,711 | ||||||||||||
Total Current Liabilities | 3,208,416 | 3,016,874 | 4,628,821 | 3,667,845 | ||||||||||||
NON-CURRENT LIABILITIES: | ||||||||||||||||
Bonds payable, net (Notes 2, 9 and 22) | 1,995,323 | 2,348,661 | 4,074,392 | 3,228,520 | ||||||||||||
Long-term borrowings (Notes 10 and 22) | 293,026 | 323,421 | 856,471 | 678,662 | ||||||||||||
Subscription deposits (Note 11) | 21,140 | 6,425 | 4,796 | 3,800 | ||||||||||||
Long-term payables — other, net of present value discount of | 517,539 | 422,114 | 304,584 | 241,350 | ||||||||||||
Obligations under capital lease (Notes 2, 12 and 22) | 1,860 | 712 | 139,273 | 110,359 | ||||||||||||
Accrued severance indemnities, net (Note 2) | 22,284 | 44,322 | 53,815 | 42,643 | ||||||||||||
Non-current deferred income tax liabilities, net (Notes 2 and 17) | 532,639 | 1,044,758 | 408,755 | 323,895 | ||||||||||||
Long-term currency swap (Notes 2 and 27) | 112,970 | 110,911 | 23,947 | 18,975 | ||||||||||||
Long-term interest swap (Notes 2 and 27) | 454 | — | 33,499 | 26,544 | ||||||||||||
Guarantee deposits received and other (Notes 2, 21, 24 and 26) | 51,229 | 43,104 | 120,878 | 95,783 | ||||||||||||
Total Non-Current Liabilities | 3,548,464 | 4,344,428 | 6,020,410 | 4,770,531 | ||||||||||||
Total Liabilities | 6,756,880 | 7,361,302 | 10,649,231 | 8,438,376 | ||||||||||||
STOCKHOLDERS’ EQUITY: | ||||||||||||||||
Capital stock (Notes 1 and 14) | 44,639 | 44,639 | 44,639 | 35,372 | ||||||||||||
Capital surplus (Note 14) | 2,966,399 | 2,956,106 | 2,958,854 | 2,344,575 | ||||||||||||
Capital adjustments: | ||||||||||||||||
Treasury stock (Notes 1 and 16) | (2,014,927 | ) | (2,041,483 | ) | (2,055,620 | ) | (1,628,859 | ) | ||||||||
Loss on disposal of treasury stock (Notes 16 and 17) | (7,887 | ) | (94 | ) | — | — | ||||||||||
Other capital adjustment (Notes 2, 5 and 17) | (12,826 | ) | (31,146 | ) | (103,769 | ) | (82,226 | ) | ||||||||
Accumulated other comprehensive income (loss) (Note 18): | ||||||||||||||||
Unrealized gains on valuation of long-term investment securities, net (Notes 2, 4 and 17) | 429,228 | 1,624,613 | 407,842 | 323,171 | ||||||||||||
Equity in other comprehensive gain (loss) of affiliates, net (Notes 2, 5 and 17) | 107,324 | 1,727 | (68,763 | ) | (54,487 | ) | ||||||||||
Gain (loss) on valuation of currency swap, net (Notes 2, 17 and 27) | (16,487 | ) | (11,816 | ) | 8,544 | 6,770 | ||||||||||
Gain (loss) on valuation of interest swap, net (Notes 2, 17 and 27) | (329 | ) | 2,298 | (26,129 | ) | (20,704 | ) | |||||||||
Foreign-based operations’ translation adjustment (Note 2) | (29,726 | ) | (25,564 | ) | 34,698 | 27,494 | ||||||||||
Retained earnings (Note 15) | 7,847,434 | 8,914,970 | 9,448,185 | 7,486,676 | ||||||||||||
Minority interest in equity of consolidated subsidiaries (Note 2) | 170,246 | 253,383 | 1,175,959 | 931,822 | ||||||||||||
Total Stockholders’ Equity | 9,483,088 | 11,687,633 | 11,824,440 | 9,369,604 | ||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 16,239,968 | 19,048,935 | 22,473,671 | $ | 17,807,980 | |||||||||||
F-5
Translation into | ||||||||||||||||
U.S. Dollars | ||||||||||||||||
Korean Won | (Note 2) | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
(In millions except for per share data) | (In thousands | |||||||||||||||
except for per | ||||||||||||||||
share data) | ||||||||||||||||
OPERATING REVENUE (Notes 2, 24, 30 and 32) | 11,027,977 | 11,863,357 | 14,020,984 | $ | 11,110,130 | |||||||||||
OPERATING EXPENSES (Notes 24 and 30): | ||||||||||||||||
Labor cost | (491,839 | ) | (544,713 | ) | (731,418 | ) | (579,571 | ) | ||||||||
Commissions paid | (3,293,197 | ) | (4,055,147 | ) | (4,884,819 | ) | (3,870,697 | ) | ||||||||
Depreciation and amortization (Notes 7 and 8) | (1,553,635 | ) | (1,821,972 | ) | (2,599,791 | ) | (2,060,056 | ) | ||||||||
Network interconnection | (1,014,913 | ) | (1,078,714 | ) | (1,327,417 | ) | (1,051,836 | ) | ||||||||
Leased line | (412,902 | ) | (410,408 | ) | (521,118 | ) | (412,930 | ) | ||||||||
Advertising | (307,190 | ) | (312,604 | ) | (363,412 | ) | (287,965 | ) | ||||||||
Research and development (Note 2) | (211,961 | ) | (218,652 | ) | (226,714 | ) | (179,647 | ) | ||||||||
Rent | (206,708 | ) | (234,006 | ) | (290,655 | ) | (230,313 | ) | ||||||||
Frequency usage | (158,958 | ) | (166,395 | ) | (163,938 | ) | (129,903 | ) | ||||||||
Repair | (150,848 | ) | (168,633 | ) | (226,858 | ) | (179,761 | ) | ||||||||
Provision for bad debts (Note 2) | (61,457 | ) | (48,835 | ) | (62,973 | ) | (49,899 | ) | ||||||||
Cost of goods sold (Note 2) | (121,381 | ) | (239,146 | ) | (233,200 | ) | (184,786 | ) | ||||||||
Other | (421,856 | ) | (462,177 | ) | (636,203 | ) | (504,123 | ) | ||||||||
Sub-total | (8,406,845 | ) | (9,761,402 | ) | (12,268,516 | ) | (9,721,487 | ) | ||||||||
OPERATING INCOME (Note 31) | 2,621,132 | 2,101,955 | 1,752,468 | 1,388,643 | ||||||||||||
OTHER INCOME: | ||||||||||||||||
Interest income (Note 4) | 79,969 | 93,838 | 136,006 | 107,770 | ||||||||||||
Dividends | 20,351 | 21,119 | 52,477 | 41,582 | ||||||||||||
Rent | — | 17,367 | 19,295 | 15,289 | ||||||||||||
Commissions (Note 24) | 33,226 | 32,196 | 17,148 | 13,588 | ||||||||||||
Reversal of allowance for doubtful accounts | 789 | 614 | 2,084 | 1,651 | ||||||||||||
Foreign exchange and translation gains (Note 2) | 4,412 | 12,091 | 478,394 | 379,076 | ||||||||||||
Equity in earnings of affiliates (Notes 2 and 5) | 45,787 | 247,382 | 24,894 | 19,726 | ||||||||||||
Gain on disposal of investment assets | 27,490 | 3,721 | 17,409 | 13,795 | ||||||||||||
Gain on disposal of property and equipment and intangible assets | 4,507 | 9,776 | 10,000 | 7,924 | ||||||||||||
Gain on transactions and valuation of currency swap (Notes 2 and 27) | 16,660 | 10,799 | 265,142 | 210,097 | ||||||||||||
Gain on transactions and valuation of interest swap (Notes 2 and 27) | — | — | 2 | 2 | ||||||||||||
Gain on conversion of convertible bonds (Note 4) | — | 373,140 | — | — | ||||||||||||
Gain on repayment of bonds | — | 6,160 | — | — | ||||||||||||
Other | 51,667 | 33,681 | 34,233 | 27,126 | ||||||||||||
Sub-total | 284,858 | 861,884 | 1,057,084 | 837,626 | ||||||||||||
F-6
2005 | 2006 | 2007 | 2007 | |||||||||||||
In millions of Korean won, except for | In thousands of | |||||||||||||||
Income per share | U.S. dollars, | |||||||||||||||
except for | ||||||||||||||||
income per share | ||||||||||||||||
(Note 2 a) | ||||||||||||||||
OPERATING REVENUE (Notes 2, 25 and 31) | 10,721,820 | 11,027,977 | 12,018,163 | $ | 12,842,662 | |||||||||||
OPERATING EXPENSES (Notes 2 and 25) | ||||||||||||||||
Labor cost | (464,764 | ) | (491,839 | ) | (593,792 | ) | (634,529 | ) | ||||||||
Commissions paid | (2,859,638 | ) | (3,293,197 | ) | (4,224,510 | ) | (4,514,330 | ) | ||||||||
Depreciation and amortization (Notes 7 and 8) | (1,546,285 | ) | (1,553,635 | ) | (1,851,832 | ) | (1,978,876 | ) | ||||||||
Network interconnection (Note 31) | (989,417 | ) | (1,014,913 | ) | (1,078,714 | ) | (1,152,719 | ) | ||||||||
Leased line | (407,043 | ) | (412,902 | ) | (410,408 | ) | (438,564 | ) | ||||||||
Advertising | (279,390 | ) | (307,190 | ) | (392,031 | ) | (418,926 | ) | ||||||||
Research and development (Note 2) | (252,046 | ) | (211,961 | ) | (218,653 | ) | (233,654 | ) | ||||||||
Rent | (190,134 | ) | (206,708 | ) | (240,742 | ) | (257,258 | ) | ||||||||
Frequency usage | (156,098 | ) | (158,958 | ) | (166,395 | ) | (177,810 | ) | ||||||||
Repair | (131,719 | ) | (150,848 | ) | (171,262 | ) | (183,011 | ) | ||||||||
Provision for bad debts | (112,792 | ) | (61,457 | ) | (71,439 | ) | (76,340 | ) | ||||||||
Cost of goods sold | (240,746 | ) | (121,381 | ) | (311,678 | ) | (333,060 | ) | ||||||||
Other | (421,132 | ) | (421,856 | ) | (476,295 | ) | (508,971 | ) | ||||||||
Sub-total | (8,051,204 | ) | (8,406,845 | ) | (10,207,751 | ) | (10,908,048 | ) | ||||||||
OPERATING INCOME | 2,670,616 | 2,621,132 | 1,810,412 | 1,934,614 | ||||||||||||
OTHER INCOME: | ||||||||||||||||
Interest income (Note 4) | 61,143 | 79,969 | 98,301 | 105,045 | ||||||||||||
Dividends | 26,515 | 20,351 | 21,119 | 22,568 | ||||||||||||
Commissions (Note 25) | 32,738 | 33,226 | 32,196 | 34,405 | ||||||||||||
Equity in earnings of affiliates (Notes 2 and 5) | 20,949 | 45,787 | 247,382 | 264,353 | ||||||||||||
Foreign exchange and translation gains (Note 2) | 4,167 | 4,412 | 12,091 | 12,920 | ||||||||||||
Reversal of allowance for doubtful accounts | 450 | 789 | 614 | 656 | ||||||||||||
Gain on valuation of trading securities (Notes 2 and 4) | 1 | — | 128 | 137 | ||||||||||||
Gain on disposal of investment assets (Note 5) | 24,613 | 27,490 | 3,721 | 3,976 | ||||||||||||
Gain on disposal of consolidated subsidiaries (Note 5) | 178,689 | 1,556 | — | — | ||||||||||||
Gain on disposal of property, equipment and intangible assets | 4,693 | 4,507 | 9,776 | 10,447 | ||||||||||||
Gain on transactions and valuation of currency swap (Notes 2 and 28) | 2,578 | 16,660 | 10,799 | 11,540 | ||||||||||||
Gain on conversion of convertible bonds (Note 4) | — | — | 373,140 | 398,739 | ||||||||||||
Gain on redemption of bonds payable | — | — | 6,160 | 6,583 | ||||||||||||
Other | 36,016 | 50,111 | 51,818 | 55,373 | ||||||||||||
Sub-total | 392,552 | 284,858 | 867,245 | 926,742 | ||||||||||||
OTHER EXPENSES: | ||||||||||||||||
Interest and discounts (Note 2) | (253,472 | ) | (239,138 | ) | (241,863 | ) | (258,456 | ) | ||||||||
Donations | (76,185 | ) | (103,348 | ) | (72,849 | ) | (77,847 | ) | ||||||||
Equity in losses of affiliates (Notes 2 and 5) | (71,825 | ) | (211,464 | ) | (175,474 | ) | (187,512 | ) | ||||||||
Foreign exchange and translation losses (Note 2) | (4,178 | ) | (4,139 | ) | (12,966 | ) | (13,856 | ) | ||||||||
Loss on valuation of trading securities (Notes 2 and 4) | (16 | ) | — | (1,203 | ) | (1,286 | ) | |||||||||
Loss on disposal of investment assets (Note 5) | (4,017 | ) | (6,096 | ) | (1,190 | ) | (1,272 | ) | ||||||||
Loss on disposal of property, equipment and intangible assets | (6,523 | ) | (17,148 | ) | (30,730 | ) | (32,838 | ) | ||||||||
Loss on impairment of investment assets (Notes 2 and 4) | (3,422 | ) | (27,696 | ) | (15,526 | ) | (16,591 | ) | ||||||||
Impairment loss on assets (Note 2) | (260 | ) | (7,030 | ) | (3,484 | ) | (3,723 | ) | ||||||||
Loss on transactions and valuation of currency swap (Notes 2 and 28) | — | (9,258 | ) | (33,876 | ) | (36,200 | ) | |||||||||
Special severance indemnities (Note 2) | — | (144,021 | ) | — | — | |||||||||||
External research and development costs (Note 2) | (69,140 | ) | (67,021 | ) | (74,388 | ) | (79,491 | ) | ||||||||
Other | (12,564 | ) | (48,053 | ) | (28,816 | ) | (30,792 | ) | ||||||||
Sub-total | (501,602 | ) | (884,412 | ) | (692,365 | ) | (739,864 | ) | ||||||||
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST | 2,561,566 | 2,021,578 | 1,985,292 | 2,121,492 | ||||||||||||
INCOME TAXES (Notes 2 and 18) | (693,259 | ) | (572,026 | ) | (686,161 | ) | (733,235 | ) | ||||||||
PREACQUISITION NET LOSS OF SUBSIDIARIES (Note 3) | — | — | 263,134 | 281,186 | ||||||||||||
NET INCOME | 1,868,307 | 1,449,552 | 1,562,265 | $ | 1,669,443 | |||||||||||
ATTRIBUTABLE TO: | ||||||||||||||||
Majority interests (Note 20) | 1,872,978 | 1,451,491 | 1,648,876 | $ | 1,761,996 | |||||||||||
Minority interests | (4,671 | ) | (1,939 | ) | (86,611 | ) | (92,553 | ) | ||||||||
1,868,307 | 1,449,552 | 1,562,265 | $ | 1,669,443 | ||||||||||||
NET INCOME PER SHARE OF MAJORITY INTERESTS (Notes 2 and 20) (In Korean won and U.S. dollars) | 25,443 | 19,801 | 22,696 | $ | 24.25 | |||||||||||
DILUTED NET INCOME PER SHARE OF MAJORITY INTERESTS (Notes 2 and 20) (In Korean won and U.S. dollars) | 25,036 | 19,523 | 22,375 | $ | 23.91 | |||||||||||
Translation into | ||||||||||||||||
U.S. Dollars | ||||||||||||||||
Korean Won | (Note 2) | |||||||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
(In millions except for per share data) | (In thousands | |||||||||||||||
except for per | ||||||||||||||||
share data) | ||||||||||||||||
OTHER EXPENSES: | ||||||||||||||||
Interest and discounts | (239,138 | ) | (238,958 | ) | (366,022 | ) | (290,033 | ) | ||||||||
Donations | (103,348 | ) | (72,849 | ) | (100,224 | ) | (79,417 | ) | ||||||||
Foreign exchange and translation losses (Note 2) | (4,139 | ) | (12,966 | ) | (161,788 | ) | (128,200 | ) | ||||||||
Loss on valuation of short-term investment securities (Notes 2 and 4) | — | (1,203 | ) | (8,358 | ) | (6,623 | ) | |||||||||
Equity in losses of affiliates (Notes 2 and 5) | (211,464 | ) | (175,474 | ) | (54,268 | ) | (43,002 | ) | ||||||||
Impairment loss on investment securities (Notes 2 and 4) | (27,696 | ) | (5,466 | ) | (223,207 | ) | (176,868 | ) | ||||||||
Loss on disposal of investment assets | (6,096 | ) | (1,190 | ) | (12,148 | ) | (9,626 | ) | ||||||||
Loss on disposal of property, equipment and intangible assets | (17,148 | ) | (30,680 | ) | (70,314 | ) | (55,716 | ) | ||||||||
Impairment loss on assets (Note 2) | (7,030 | ) | (10,634 | ) | (14,754 | ) | (11,691 | ) | ||||||||
Loss on transactions and valuation of currency swap (Notes 2 and 27) | (9,258 | ) | (33,876 | ) | (441,207 | ) | (349,609 | ) | ||||||||
Loss on transactions and valuation of interest swap (Notes 2 and 27) | — | — | (48 | ) | (38 | ) | ||||||||||
External research and development cost (Note 2) | (67,021 | ) | (74,388 | ) | (72,993 | ) | (57,839 | ) | ||||||||
Special severance indemnities (Note 2) | (144,021 | ) | — | — | — | |||||||||||
Other | (48,053 | ) | (20,390 | ) | (25,488 | ) | (20,196 | ) | ||||||||
Sub-total | (884,412 | ) | (678,074 | ) | (1,550,819 | ) | (1,228,858 | ) | ||||||||
INCOME FROM CONTINUING OPERATION BEFORE INCOME TAX | 2,021,578 | 2,285,765 | 1,258,733 | 997,411 | ||||||||||||
INCOME TAX FOR CONTINUING OPERATION (Notes 2 and 17) | 572,026 | 694,487 | 298,850 | 236,807 | ||||||||||||
PREACQUISITION NET LOSS OF SUBSIDIARIES | — | 21,088 | 32,664 | 25,883 | ||||||||||||
LOSS FROM DISCONTINUED OPERATION (Note 2) | — | (50,101 | ) | (20,209 | ) | (16,013 | ) | |||||||||
NET INCOME | 1,449,552 | 1,562,265 | 972,338 | $ | 770,474 | |||||||||||
ATTRIBUTABLE TO: | ||||||||||||||||
Majority interests | 1,451,491 | 1,648,876 | 1,215,719 | $ | 963,327 | |||||||||||
Minority interests | (1,939 | ) | (86,611 | ) | (243,381 | ) | (192,853 | ) | ||||||||
1,449,552 | 1,562,265 | 972,338 | $ | 770,474 | ||||||||||||
NET INCOME PER SHARE FROM CONTINUING OPERATION (In Korean won and U.S. dollars) (Notes 2 and 19) | 19,801 | 23,143 | 16,453 | $ | 13.04 | |||||||||||
NET INCOME PER SHARE (In Korean won and U.S. dollars) (Notes 2 and 19) | 19,801 | 22,696 | 16,707 | $ | 13.24 | |||||||||||
DILUTED NET INCOME PER SHARE FROM CONTINUING OPERATION (In Korean won and U.S. dollars) (Notes 2 and 19) | 19,523 | 22,813 | 16,309 | $ | 12.92 | |||||||||||
DILUTED NET INCOME PER SHARE (In Korean won and U.S. dollars) (Notes 2 and 19) | 19,523 | 22,375 | 16,559 | $ | 13.12 | |||||||||||
F-6F-7
Accumulated | ||||||||||||||||||||||||||||
Other | Total | |||||||||||||||||||||||||||
Common | Capital | Capital | Comprehensive | Retained | Minority | Stockholders’ | ||||||||||||||||||||||
Stock | Surplus | Adjustments | Income | Earnings | Interest | Equity | ||||||||||||||||||||||
(In millions of Korean won) | ||||||||||||||||||||||||||||
Balance, January 1, 2005 | 44,639 | 2,968,301 | (2,042,272 | ) | (16,020 | ) | 6,152,898 | 98,198 | 7,205,744 | |||||||||||||||||||
Cash dividends paid (Note 21) | — | — | — | — | (684,613 | ) | — | (684,613 | ) | |||||||||||||||||||
Interim cash dividends paid (Note 21) | — | — | — | — | (73,614 | ) | — | (73,614 | ) | |||||||||||||||||||
Net income | — | — | — | — | 1,872,978 | (4,671 | ) | 1,868,307 | ||||||||||||||||||||
Deferred tax effect of temporary differences related to conversion rights (Note 14) | — | (18,502 | ) | — | — | — | — | (18,502 | ) | |||||||||||||||||||
Transfer of stock option from capital adjustments to capital surplus (Notes 2, 14 and 17) | — | 1,533 | (1,533 | ) | — | — | — | — | ||||||||||||||||||||
Equity in capital surplus and other comprehensive income of affiliates (Notes 2, 5, 14 and 19) | — | 3,508 | — | (73,008 | ) | — | — | (69,500 | ) | |||||||||||||||||||
Stock compensation plans (Notes 2 and 17) | — | — | 180 | — | — | — | 180 | |||||||||||||||||||||
Unrealized gain on valuation of long-term investment securities (Notes 2, 4 and 19) | — | — | — | 50,882 | — | — | 50,882 | |||||||||||||||||||||
Gain on valuation of currency swap (Notes 2, 19 and 28) | — | — | — | 35,276 | — | — | 35,276 | |||||||||||||||||||||
Foreign-based operations’ translation adjustment (Notes 2 and 19) | — | — | — | (2,020 | ) | — | — | (2,020 | ) | |||||||||||||||||||
Increase in minority interest in equity of consolidated subsidiaries | — | — | — | — | — | 15,400 | 15,400 | |||||||||||||||||||||
Balance, December 31, 2005 | 44,639 | 2,954,840 | (2,043,625 | ) | (4,890 | ) | 7,267,649 | 108,927 | 8,327,540 | |||||||||||||||||||
Cash dividends paid (Note 21) | — | — | — | — | (588,914 | ) | — | (588,914 | ) | |||||||||||||||||||
Interim cash dividends paid (Note 21) | — | — | — | — | (73,714 | ) | — | (73,714 | ) | |||||||||||||||||||
Net income | — | — | — | — | 1,451,491 | (1,939 | ) | 1,449,552 | ||||||||||||||||||||
Conversion of convertible bonds (Notes 9 and 14) | — | (3,733 | ) | — | — | — | — | (3,733 | ) | |||||||||||||||||||
Transfer of stock option from capital adjustments to capital surplus (Notes 2, 14 and 17) | — | 234 | (234 | ) | — | — | — | — | ||||||||||||||||||||
Equity in capital surplus of affiliates (Notes 2, 5 and 14) | — | (1,014 | ) | — | — | — | — | (1,014 | ) | |||||||||||||||||||
Treasury stock (Note 16) | — | — | 32,178 | — | — | — | 32,178 | |||||||||||||||||||||
Loss on disposal of treasury stock (Notes 16 and 18) | — | — | (7,887 | ) | — | — | — | (7,887 | ) | |||||||||||||||||||
Unrealized gain on valuation of long-term investment securities, net (Notes 2, 4 and 19) | — | — | — | 471,321 | — | — | 471,321 | |||||||||||||||||||||
Equity in other comprehensive income changes of affiliates, net (Notes 2, 5 and 19) | — | — | — | 45,956 | — | — | 45,956 | |||||||||||||||||||||
Foreign-based operations’ translation adjustment (Notes 2 and 19) | — | — | — | (19,737 | ) | — | — | (19,737 | ) | |||||||||||||||||||
Gain (loss) on valuation of currency swap, net (Notes 2, 19 and 28) | — | — | — | (2,311 | ) | — | — | (2,311 | ) | |||||||||||||||||||
Loss on valuation of interest swap, net (Notes 2, 19 and 28) | — | — | — | (329 | ) | — | — | (329 | ) | |||||||||||||||||||
Acquisition and retirement of treasury stock (Note 16) | — | — | — | — | (209,078 | ) | — | (209,078 | ) | |||||||||||||||||||
Increase in minority interest in equity of consolidated subsidiaries | — | — | — | — | — | 63,258 | 63,258 | |||||||||||||||||||||
Balance, December 31, 2006 | 44,639 | 2,950,327 | (2,019,568 | ) | 490,010 | 7,847,434 | 170,246 | 9,483,088 | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Other | Total | |||||||||||||||||||||||||||
Common | Capital | Capital | Comprehensive | Retained | Minority | Stockholders’ | ||||||||||||||||||||||
Stock | Surplus | Adjustments | Income | Earnings | Interest | Equity | ||||||||||||||||||||||
(In millions of Korean won) | ||||||||||||||||||||||||||||
Balance, January 1, 2006 | 44,639 | 2,954,840 | (2,043,625 | ) | (4,890 | ) | 7,267,649 | 108,927 | 8,327,540 | |||||||||||||||||||
Cumulative effect of change in accounting policies (Note 2) | — | 15,025 | (15,025 | ) | — | — | — | — | ||||||||||||||||||||
Adjusted balance, January 1, 2006 | 44,639 | 2,969,865 | (2,058,650 | ) | (4,890 | ) | 7,267,649 | 108,927 | 8,327,540 | |||||||||||||||||||
Cash dividends (Note 20) | — | — | — | — | (588,914 | ) | — | (588,914 | ) | |||||||||||||||||||
Interim dividends (Note 20) | — | — | — | — | (73,714 | ) | — | (73,714 | ) | |||||||||||||||||||
Net income | — | — | — | — | 1,451,491 | (1,939 | ) | 1,449,552 | ||||||||||||||||||||
Conversion of convertible bonds (Notes 9 and 16) | — | (3,733 | ) | — | — | — | — | (3,733 | ) | |||||||||||||||||||
Transfer of stock option from capital adjustments to capital surplus (Notes 2 and 14) | — | 234 | (234 | ) | — | — | — | — | ||||||||||||||||||||
Difference between the acquisition cost and the net book value incurred from the capital transactions between companies under common control (Note 2) | — | — | (1,095 | ) | — | — | — | (1,095 | ) | |||||||||||||||||||
Equity in capital surplus changes of affiliates | — | 33 | — | — | — | — | 33 | |||||||||||||||||||||
Equity in other capital adjustment changes of affiliates | — | — | 48 | — | — | — | 48 | |||||||||||||||||||||
Treasury stock (Note 16) | — | — | 32,178 | — | — | — | 32,178 | |||||||||||||||||||||
Loss on disposal of treasury stock (Notes 16 and 17) | — | — | (7,887 | ) | — | — | — | (7,887 | ) | |||||||||||||||||||
Unrealized gain on valuation of long-term investment securities (Notes 2 and 4) | — | — | — | 471,321 | — | — | 471,321 | |||||||||||||||||||||
Equity in other comprehensive income changes of affiliates, net (Notes 2 and 5) | — | — | — | 45,956 | — | — | 45,956 | |||||||||||||||||||||
Foreign-based operations’ translation adjustment (Note 2) | — | — | — | (19,737 | ) | — | — | (19,737 | ) | |||||||||||||||||||
Gain on valuation of currency swap (Notes 2 and 27) | — | — | — | (2,311 | ) | — | — | (2,311 | ) | |||||||||||||||||||
Gain on valuation of interest rate swap (Notes 2 and 27) | — | — | — | (329 | ) | — | — | (329 | ) | |||||||||||||||||||
Acquisition and retirement of treasury stock | — | — | — | — | (209,078 | ) | — | (209,078 | ) | |||||||||||||||||||
Increase in minority interest in equity of consolidated subsidiaries | — | — | — | — | — | 63,258 | 63,258 | |||||||||||||||||||||
Balance, December 31, 2006 | 44,639 | 2,966,399 | (2,035,640 | ) | 490,010 | 7,847,434 | 170,246 | 9,483,088 | ||||||||||||||||||||
Balance, January 1, 2007 | 44,639 | 2,950,327 | (2,019,568 | ) | 490,010 | 7,847,434 | 170,246 | 9,483,088 | ||||||||||||||||||||
Cumulative effect of change in accounting policies (Note 2) | — | 16,072 | (16,072 | ) | — | — | — | — | ||||||||||||||||||||
Adjusted balance, January 1, 2007 | 44,639 | 2,966,399 | (2,035,640 | ) | 490,010 | 7,847,434 | 170,246 | 9,483,088 | ||||||||||||||||||||
Cash dividends (Note 20) | — | — | — | — | (508,672 | ) | — | (508,672 | ) | |||||||||||||||||||
Interim dividends (Note 20) | — | — | — | — | (72,668 | ) | — | (72,668 | ) | |||||||||||||||||||
Net income | — | — | — | — | 1,648,876 | (86,611 | ) | 1,562,265 | ||||||||||||||||||||
Conversion of convertible bonds (Notes 9 and 16) | — | (11,116 | ) | — | — | — | — | (11,116 | ) | |||||||||||||||||||
Transfer of stock option from capital adjustments to capital surplus (Notes 2 and 14) | — | 3,247 | (3,247 | ) | — | — | — | — | ||||||||||||||||||||
Difference between the acquisition cost and the net book value incurred from the capital transactions between companies under common control (Note 2) | — | — | (30,086 | ) | — | — | — | (30,086 | ) | |||||||||||||||||||
Equity in capital surplus changes of affiliates | — | (2,424 | ) | — | — | — | — | (2,424 | ) | |||||||||||||||||||
Equity in other capital adjustment changes of affiliates | 15,013 | 15,013 | ||||||||||||||||||||||||||
Treasury stock (Note 16) | — | — | (26,556 | ) | — | — | — | (26,556 | ) |
F-7F-8
Accumulated | ||||||||||||||||||||||||||||
Other | Total | |||||||||||||||||||||||||||
Common | Capital | Capital | Comprehensive | Retained | Minority | Stockholders’ | ||||||||||||||||||||||
Stock | Surplus | Adjustments | Income | Earnings | Interest | Equity | ||||||||||||||||||||||
(In millions of Korean won) | ||||||||||||||||||||||||||||
Balance, January 1, 2007 | 44,639 | 2,950,327 | (2,019,568 | ) | 490,010 | 7,847,434 | 170,246 | 9,483,088 | ||||||||||||||||||||
Cash dividends paid (Note 21) | — | — | — | — | (508,672 | ) | — | (508,672 | ) | |||||||||||||||||||
Interim cash dividends paid (Note 21) | — | — | — | — | (72,668 | ) | — | (72,668 | ) | |||||||||||||||||||
Net income | — | — | — | — | 1,648,876 | (86,611 | ) | 1,562,265 | ||||||||||||||||||||
Conversion of convertible bonds (Notes 9 and 14) | — | (11,116 | ) | — | — | — | — | (11,116 | ) | |||||||||||||||||||
Transfer of stock option from capital adjustments to capital surplus (Notes 2, 14 and 17) | — | 3,246 | (3,246 | ) | — | — | — | — | ||||||||||||||||||||
Difference between the acquisition cost and the net book value incurred from the capital transactions between companies under common control (Note 14) | — | (9,696 | ) | — | — | — | — | (9,696 | ) | |||||||||||||||||||
Equity in capital surplus and other comprehensive income of affiliates (Notes 2, 5 and 14) | — | (7,801 | ) | — | — | — | — | (7,801 | ) | |||||||||||||||||||
Treasury stock (Note 16) | — | — | (26,556 | ) | — | — | — | (26,556 | ) | |||||||||||||||||||
Loss on disposal of treasury stock (Notes 16 and 18) | — | — | 7,793 | — | — | — | 7,793 | |||||||||||||||||||||
Unrealized gain on valuation of long-term investment securities (Notes 2, 4 and 19) | — | — | — | 1,195,385 | — | — | 1,195,385 | |||||||||||||||||||||
Equity in other comprehensive income changes of affiliates, net (Notes 2, 5 and 19) | — | — | — | (105,597 | ) | — | — | (105,597 | ) | |||||||||||||||||||
Foreign-based operations’ translation adjustment (Notes 2 and 19) | — | — | — | 4,162 | — | — | 4,162 | |||||||||||||||||||||
Gain on valuation of currency swap (Notes 2, 19 and 28) | — | — | — | 4,671 | — | — | 4,671 | |||||||||||||||||||||
Gain on valuation of interest rate swap (Notes 2, 19 and 28) | — | — | — | 2,627 | — | — | 2,627 | |||||||||||||||||||||
Increase in minority interest in equity of consolidated subsidiaries | — | — | — | — | — | 169,748 | 169,748 | |||||||||||||||||||||
Balance, December 31, 2007 | 44,639 | 2,924,960 | (2,041,577 | ) | 1,591,258 | 8,914,970 | 253,383 | 11,687,633 | ||||||||||||||||||||
(In thousands of U.S. dollars) (Note 2 a) | ||||||||||||||||||||||||||||
Balance, January 1, 2007 | $ | 47,701 | $ | 3,152,732 | $ | (2,158,119 | ) | $ | 523,627 | $ | 8,385,803 | $ | 181,926 | $ | 10,133,670 | |||||||||||||
Cash dividends paid (Note 21) | — | — | — | — | (543,569 | ) | — | (543,569 | ) | |||||||||||||||||||
Interim cash dividends paid (Note 21) | — | — | — | — | (77,654 | ) | — | (77,654 | ) | |||||||||||||||||||
Net income | — | — | — | — | 1,761,996 | (92,553 | ) | 1,669,443 | ||||||||||||||||||||
Conversion of convertible bonds (Notes 9 and 14) | — | (11,879 | ) | — | — | — | — | (11,879 | ) | |||||||||||||||||||
Transfer of stock option from capital adjustments to capital surplus (Notes 2, 14 and 17) | — | 3,469 | (3,469 | ) | — | — | — | — | ||||||||||||||||||||
Difference between the acquisition cost and the net book value incurred from the capital transactions between companies under common control (Note 14) | — | (10,361 | ) | — | — | — | — | (10,361 | ) | |||||||||||||||||||
Equity in capital surplus and other comprehensive income of affiliates (notes 2, 5 and 14) | — | (8,336 | ) | — | — | — | — | (8,336 | ) | |||||||||||||||||||
Treasury stock (Note 16) | — | — | (28,378 | ) | — | — | — | (28,378 | ) | |||||||||||||||||||
Loss on disposal of treasury stock (Notes 16 and 18) | — | — | 8,328 | — | — | — | 8,328 | |||||||||||||||||||||
Unrealized gain on valuation of long-term investment securities (Notes 2, 4 and 19) | — | — | — | 1,277,393 | — | — | 1,277,393 | |||||||||||||||||||||
Equity in other comprehensive income changes of affiliates, net (Notes 2, 5 and 19) | — | — | — | (112,841 | ) | — | — | (112,841 | ) | |||||||||||||||||||
Foreign-based operations’ translation adjustment (Notes 2 and 19) | — | — | — | 4,448 | — | — | 4,448 | |||||||||||||||||||||
Gain on valuation of currency swap (Notes 2, 19 and 28) | — | — | — | 4,991 | — | — | 4,991 | |||||||||||||||||||||
Gain on valuation of interest rate swap (Notes 2, 19 and 28) | — | — | — | 2,807 | — | — | 2,807 | |||||||||||||||||||||
Increase in minority interest in equity of consolidated subsidiaries | — | — | — | — | — | 181,394 | 181,394 | |||||||||||||||||||||
Balance, December 31, 2007 | $ | 47,701 | $ | 3,125,625 | $ | (2,181,638 | ) | $ | 1,700,425 | $ | 9,526,576 | $ | 270,767 | $ | 12,489,456 | |||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Other | Total | |||||||||||||||||||||||||||
Common | Capital | Capital | Comprehensive | Retained | Minority | Stockholders’ | ||||||||||||||||||||||
Stock | Surplus | Adjustments | Income | Earnings | Interest | Equity | ||||||||||||||||||||||
Loss on disposal of treasury stock (Notes 16 and 17) | — | — | 7,793 | — | — | — | 7,793 | |||||||||||||||||||||
Unrealized gain on valuation of long-term investment securities (Notes 2 and 4) | — | — | — | 1,195,385 | — | — | 1,195,385 | |||||||||||||||||||||
Equity in other comprehensive income changes of affiliates, net (Notes 2 and 5) | — | — | — | (105,597 | ) | — | — | (105,597 | ) | |||||||||||||||||||
Foreign-based operations’ translation adjustment (Note 2) | — | — | — | 4,162 | — | — | 4,162 | |||||||||||||||||||||
Gain on valuation of currency swap (Notes 2 and 27) | — | — | — | 4,671 | — | — | 4,671 | |||||||||||||||||||||
Gain on valuation of interest rate swap (Notes 2 and 27) | — | — | — | 2,627 | — | — | 2,627 | |||||||||||||||||||||
Increase in minority interest in equity of consolidated subsidiaries | — | — | — | — | — | 169,748 | 169,748 | |||||||||||||||||||||
Balance, December 31, 2007 | 44,639 | 2,956,106 | (2,072,723 | ) | 1,591,258 | 8,914,970 | 253,383 | 11,687,633 | ||||||||||||||||||||
Balance, January 1, 2008 | 44,639 | 2,924,960 | (2,041,577 | ) | 1,591,258 | 8,914,970 | 253,383 | 11,687,633 | ||||||||||||||||||||
Cumulative effect of change in accounting policies (Note 2) | — | 31,146 | (31,146 | ) | — | — | — | — | ||||||||||||||||||||
Adjusted balance, January 1, 2008 | 44,639 | 2,956,106 | (2,072,723 | ) | 1,591,258 | 8,914,970 | 253,383 | 11,687,633 | ||||||||||||||||||||
Cash dividends (Note 20) | — | — | — | — | (609,711 | ) | — | (609,711 | ) | |||||||||||||||||||
Interim dividends (Note 20) | — | — | — | — | (72,793 | ) | — | (72,793 | ) | |||||||||||||||||||
Net income | — | — | — | — | 1,215,719 | (243,381 | ) | 972,338 | ||||||||||||||||||||
Conversion of convertible bonds (Notes 9 and 16) | — | 1,544 | — | — | — | — | 1,544 | |||||||||||||||||||||
Difference between the acquisition cost and the net book value incurred from the capital transactions between companies under common control (Note 2) | — | — | (75,329 | ) | — | — | — | (75,329 | ) | |||||||||||||||||||
Equity in capital surplus changes of affiliates | — | 481 | — | — | — | — | 481 | |||||||||||||||||||||
Equity in other capital adjustment changes of affiliates | — | — | 2,706 | — | — | — | 2,706 | |||||||||||||||||||||
Treasury stock (Note 16) | — | 723 | (14,137 | ) | — | — | — | (13,414 | ) | |||||||||||||||||||
Loss on disposal of treasury stock (Notes 16 and 17) | — | — | 94 | — | — | — | 94 | |||||||||||||||||||||
Unrealized loss on valuation of long-term investment securities (Notes 2 and 4) | — | — | — | (1,216,771 | ) | — | — | (1,216,771 | ) | |||||||||||||||||||
Equity in other comprehensive income changes of affiliates, net (Notes 2 and 5) | — | — | — | (70,490 | ) | — | — | (70,490 | ) | |||||||||||||||||||
Foreign-based operations’ translation adjustment (Note 2) | — | — | — | 60,262 | — | — | 60,262 | |||||||||||||||||||||
Gain on valuation of currency swap (Notes 2 and 27) | — | — | — | 20,360 | — | — | 20,360 | |||||||||||||||||||||
Gain on valuation of interest rate swap (Notes 2 and 27) | — | — | — | (28,427 | ) | — | — | (28,427 | ) | |||||||||||||||||||
Increase in minority interest in equity of consolidated subsidiaries | — | — | — | — | — | 1,165,957 | 1,165,957 | |||||||||||||||||||||
Balance, December 31, 2008 | 44,639 | 2,958,854 | (2,159,389 | ) | 356,192 | 9,448,185 | 1,175,959 | 11,824,440 | ||||||||||||||||||||
F-8F-9
Accumulated | ||||||||||||||||||||||||||||
Other | Total | |||||||||||||||||||||||||||
Common | Capital | Capital | Comprehensive | Retained | Minority | Stockholders’ | ||||||||||||||||||||||
Stock | Surplus | Adjustments | Income | Earnings | Interest | Equity | ||||||||||||||||||||||
(In thousands of U.S. dollars) (Note 2 a) | ||||||||||||||||||||||||||||
Balance, January 1, 2008 | $ | 35,372 | $ | 2,317,718 | ( $ | 1,617,731 | ) | $ | 1,260,902 | $ | 7,064,160 | $ | 200,778 | $ | 9,261,199 | |||||||||||||
Cumulative effect of change in accounting policies (Note 2) | — | 24,680 | (24,680 | ) | — | — | — | — | ||||||||||||||||||||
Adjusted balance, January 1, 2008 | 35,372 | 2,342,398 | (1,642,411 | ) | 1,260,902 | 7,064,160 | 200,778 | 9,261,199 | ||||||||||||||||||||
Cash dividends (Note 20) | — | — | — | — | (483,131 | ) | — | (483,131 | ) | |||||||||||||||||||
Interim dividends (Note 20) | — | — | — | — | (57,680 | ) | — | (57,680 | ) | |||||||||||||||||||
Net income | — | — | — | — | 963,327 | (192,853 | ) | 770,474 | ||||||||||||||||||||
Conversion of convertible bonds (Notes 9 and 16) | — | 1,223 | — | — | — | — | 1,223 | |||||||||||||||||||||
Difference between the acquisition cost and the net book value incurred from the capital transactions between companies under common control (Note 2) | — | — | (59,690 | ) | — | — | — | (59,690 | ) | |||||||||||||||||||
Equity in capital surplus changes of affiliates | — | 381 | — | — | — | — | 381 | |||||||||||||||||||||
Equity in other capital adjustment changes of affiliates | — | — | 2,143 | — | — | — | 2,143 | |||||||||||||||||||||
Treasury stock (Note 16) | — | 573 | (11,201 | ) | — | — | — | (10,628 | ) | |||||||||||||||||||
Loss on disposal of treasury stock (Notes 16 and 17) | — | — | 74 | — | — | — | 74 | |||||||||||||||||||||
Unrealized loss on valuation of long-term investment securities (Notes 2 and 4) | — | — | — | (964,161 | ) | — | — | (964,161 | ) | |||||||||||||||||||
Equity in other comprehensive income changes of affiliates, net (Notes 2 and 5) | — | — | — | (55,856 | ) | — | — | (55,856 | ) | |||||||||||||||||||
Foreign-based operations’ translation adjustment (Note 2) | — | — | — | 47,751 | — | — | 47,751 | |||||||||||||||||||||
Gain on valuation of currency swap (Notes 2 and 27) | — | — | — | 16,133 | — | — | 16,133 | |||||||||||||||||||||
Gain on valuation of interest rate swap (Notes 2 and 27) | — | — | — | (22,525 | ) | — | — | (22,525 | ) | |||||||||||||||||||
Increase in minority interest in equity of consolidated subsidiaries | — | — | — | — | — | 923,897 | 923,897 | |||||||||||||||||||||
Balance, December 31, 2008 | $ | 35,372 | $ | 2,344,575 | ( $ | 1,711,085 | ) | $ | 282,244 | $ | 7,486,676 | $ | 931,822 | $ | 9,369,604 | |||||||||||||
F-10
2005 | 2006 | 2007 | 2007 | 2006 | 2007 | 2008 | 2008 | |||||||||||||||||||||||||
In millions of Korean won | In thousands | In millions of Korean Won | In thousands of | |||||||||||||||||||||||||||||
of U.S. dollars | U.S. Dollars | |||||||||||||||||||||||||||||||
(Note 2 a) | (Note 2a) | |||||||||||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||||||||||||
Net income | 1,868,307 | 1,449,552 | 1,562,265 | $ | 1,669,443 | |||||||||||||||||||||||||||
Net Income: | 1,449,552 | 1,562,265 | 972,338 | $ | 770,474 | |||||||||||||||||||||||||||
Expenses not involving cash payments: | ||||||||||||||||||||||||||||||||
Provision for severance indemnities | 47,073 | 47,370 | 44,233 | 47,268 | 47,370 | 44,233 | 93,094 | 73,767 | ||||||||||||||||||||||||
Depreciation and amortization | 1,675,528 | 1,698,364 | 2,000,701 | 2,137,958 | 1,698,364 | 1,971,327 | 2,759,276 | 2,186,431 | ||||||||||||||||||||||||
Provision for bad debts | 115,731 | 86,321 | 80,876 | 86,424 | ||||||||||||||||||||||||||||
Allowance for doubtful accounts | 86,321 | 58,272 | 73,325 | 58,102 | ||||||||||||||||||||||||||||
Foreign currency translation loss | 981 | 1,106 | 9,411 | 10,057 | 1,106 | 9,411 | 132,162 | 104,724 | ||||||||||||||||||||||||
Loss on valuation of trading securities | 16 | — | 1,203 | 1,286 | ||||||||||||||||||||||||||||
Loss on valuation of short-term investment securities | — | 1,203 | 8,358 | 6,623 | ||||||||||||||||||||||||||||
Equity in losses of affiliates | 71,825 | 211,464 | 175,474 | 187,512 | 211,464 | 175,474 | 54,268 | 43,002 | ||||||||||||||||||||||||
Loss on impairment of investment assets | 3,422 | 27,696 | 15,526 | 16,591 | ||||||||||||||||||||||||||||
Impairment loss on investment securities | 27,696 | 5,466 | 223,207 | 176,868 | ||||||||||||||||||||||||||||
Loss on disposal of investment assets | 4,017 | 6,096 | 1,190 | 1,272 | 6,096 | 1,190 | 12,148 | 9,626 | ||||||||||||||||||||||||
Loss on disposal of property, equipment and intangible assets | 6,523 | 17,148 | 30,730 | 32,838 | 17,148 | 30,680 | 70,314 | 55,716 | ||||||||||||||||||||||||
Loss on disposal of consolidated subsidiaries | — | — | 724 | 574 | ||||||||||||||||||||||||||||
Impairment loss on assets | 260 | 7,030 | 3,484 | 3,723 | 7,030 | 10,634 | 14,754 | 11,691 | ||||||||||||||||||||||||
Loss on transaction and valuation of currency swap | — | 9,258 | 33,876 | 36,200 | 9,258 | 33,876 | 441,207 | 349,609 | ||||||||||||||||||||||||
Loss on transaction of interest rate swap | — | — | 48 | 38 | ||||||||||||||||||||||||||||
Amortization of discounts on bonds and other | 51,846 | 51,077 | 49,345 | 52,730 | 51,077 | 47,640 | 46,586 | 36,915 | ||||||||||||||||||||||||
Loss from discontinued operation | — | 50,101 | 20,209 | 16,013 | ||||||||||||||||||||||||||||
Sub-total | 1,977,222 | 2,162,930 | 2,446,049 | 2,613,859 | 2,162,930 | 2,439,507 | 3,949,680 | 3,129,699 | ||||||||||||||||||||||||
Income not involving cash receipts: | ||||||||||||||||||||||||||||||||
Foreign translation gain | 924 | 5,373 | 428,575 | 339,600 | ||||||||||||||||||||||||||||
Reversal of allowance for doubtful accounts | (450 | ) | (789 | ) | (614 | ) | (656 | ) | 789 | 614 | 2,084 | 1,651 | ||||||||||||||||||||
Foreign currency translation gain | (658 | ) | (924 | ) | (5,373 | ) | (5,742 | ) | ||||||||||||||||||||||||
Equity in earnings of affiliates | 45,787 | 247,382 | 24,894 | 19,726 | ||||||||||||||||||||||||||||
Gain on valuation of trading securities | (1 | ) | — | (128 | ) | (137 | ) | — | 128 | — | — | |||||||||||||||||||||
Gain on disposal of investment assets | (24,613 | ) | (27,490 | ) | (3,721 | ) | (3,976 | ) | 27,490 | �� | 3,721 | 17,409 | 13,795 | |||||||||||||||||||
Equity in earnings of affiliates | (20,949 | ) | (45,787 | ) | (247,382 | ) | (264,353 | ) | ||||||||||||||||||||||||
Gain on disposal of consolidated subsidiaries | (178,689 | ) | (1,556 | ) | — | — | 1,556 | — | — | — | ||||||||||||||||||||||
Gain on disposal of property, equipment and intangible assets | (4,693 | ) | (4,507 | ) | (9,776 | ) | (10,447 | ) | 4,507 | 9,776 | 10,000 | 7,924 | ||||||||||||||||||||
Gain on transactions and valuation of currency swap | (2,545 | ) | (16,660 | ) | (10,799 | ) | (11,540 | ) | 16,660 | 10,799 | 265,142 | 210,097 | ||||||||||||||||||||
Gain on transactions of interest rate swap | — | — | 2 | 2 | ||||||||||||||||||||||||||||
Gain on conversion of convertible bond | — | — | (373,140 | ) | (398,739 | ) | — | 373,140 | — | — | ||||||||||||||||||||||
Gain on redemption of bonds payable | — | — | (6,160 | ) | (6,583 | ) | ||||||||||||||||||||||||||
Gain on repayment of bonds | — | 6,160 | — | — | ||||||||||||||||||||||||||||
Gain on disposal of other non-current assets and other | (765 | ) | (3,075 | ) | (13,623 | ) | (14,557 | ) | 3,075 | 13,623 | 6,036 | 4,782 | ||||||||||||||||||||
Sub-total | (233,363 | ) | (100,788 | ) | (670,716 | ) | (716,730 | ) | 100,788 | 670,716 | 754,142 | 597,577 | ||||||||||||||||||||
Changes in assets and liabilities related to operating activities: | ||||||||||||||||||||||||||||||||
Changes in assets and liabilities related to operating activities : | ||||||||||||||||||||||||||||||||
Accounts receivable — trade | (210,957 | ) | (161,914 | ) | 2,738 | 2,926 | (161,914 | ) | 43,020 | 72,097 | 57,129 | |||||||||||||||||||||
Accounts receivable — other | 22,284 | 57,253 | 372,778 | 398,352 | 57,253 | 372,778 | (383,668 | ) | (304,016 | ) | ||||||||||||||||||||||
Inventories | 8,297 | (9,145 | ) | (20,049 | ) | (21,424 | ) | (9,145 | ) | (8,895 | ) | (66,166 | ) | (52,429 | ) | |||||||||||||||||
Prepaid expenses | 9,016 | 61,148 | 76,293 | 81,527 | 61,148 | 67,669 | 8,841 | 7,006 | ||||||||||||||||||||||||
Accrued income and other | (24,938 | ) | 5,865 | (16,225 | ) | (17,338 | ) | |||||||||||||||||||||||||
Advanced payments and other | 5,865 | (16,248 | ) | (59,552 | ) | (47,189 | ) | |||||||||||||||||||||||||
Long-term accounts receivables — other | — | — | 514 | 407 | ||||||||||||||||||||||||||||
Accounts payable | (34,441 | ) | 161,611 | (17,587 | ) | (18,794 | ) | 161,611 | (33,475 | ) | (104,300 | ) | (82,647 | ) | ||||||||||||||||||
Income taxes payable | 88,477 | (44,637 | ) | (21,791 | ) | (23,286 | ) | (44,637 | ) | (21,791 | ) | 118,011 | 93,511 | |||||||||||||||||||
Accrued expenses | (12,944 | ) | 37,985 | (4,101 | ) | (4,382 | ) | 37,985 | (9,723 | ) | 405,084 | 320,986 | ||||||||||||||||||||
Withholdings | 19,717 | 123,003 | (111,918 | ) | (119,596 | ) | 123,003 | (111,918 | ) | 70,400 | 55,784 | |||||||||||||||||||||
Current portion of subscription deposits | 1,495 | 885 | (8,220 | ) | (8,784 | ) | 885 | (8,220 | ) | (1,113 | ) | (882 | ) | |||||||||||||||||||
Advance receipts and other | (22,221 | ) | 21,585 | 25,585 | 27,340 | 21,585 | 21,832 | (20,367 | ) | (16,138 | ) | |||||||||||||||||||||
Deferred income taxes | 7,640 | (76,423 | ) | 121,681 | 130,029 | (76,423 | ) | 121,681 | (194,865 | ) | (154,410 | ) | ||||||||||||||||||||
Dividends received from affiliates | 785 | 1,318 | 2,184 | 2,334 | 1,318 | 2,184 | 1,214 | 962 | ||||||||||||||||||||||||
Severance indemnity payments | (24,365 | ) | (262,948 | ) | (13,732 | ) | (14,674 | ) | (262,948 | ) | (13,732 | ) | (107,037 | ) | (84,815 | ) | ||||||||||||||||
Deposits for group severance indemnities and other deposits | (32,869 | ) | 162,545 | (14,530 | ) | (15,527 | ) | |||||||||||||||||||||||||
Deposits for group severance indemnities and other | 162,545 | (14,518 | ) | (610,031 | ) | (483,384 | ) | |||||||||||||||||||||||||
Sub-total | (205,024 | ) | 78,131 | 373,106 | 398,703 | 78,131 | 390,644 | (870,938 | ) | (690,125 | ) | |||||||||||||||||||||
Net Cash Provided by Operating Activities | 3,407,142 | 3,589,825 | 3,710,704 | 3,965,275 | 3,589,825 | 3,721,700 | 3,296,938 | 2,612,471 | ||||||||||||||||||||||||
(Continued) |
F-9F-11
2005 | 2006 | 2007 | 2007 | |||||||||||||
In millions of Korean won | In thousands | |||||||||||||||
of U.S. dollars | ||||||||||||||||
(Note 2 a) | ||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES : | ||||||||||||||||
Decrease (increase) in short-term financial instruments | (75,261 | ) | 4,470 | (6,974 | ) | $ | (7,452 | ) | ||||||||
Decrease in long-term financial instruments | 2 | 2 | 2,118 | 2,263 | ||||||||||||
Decrease (increase) in trading securities | (122,710 | ) | 80,060 | 28,696 | 30,664 | |||||||||||
Decrease in current portion of long-term investment securities | 53,608 | — | 156 | 167 | ||||||||||||
Collection of short-term loans | 60,530 | 96,892 | 119,608 | 127,814 | ||||||||||||
Collection of long-term loans | 57 | 654 | 3,652 | 3,903 | ||||||||||||
Proceeds from disposal of long-term investment securities | 40,889 | 305,953 | 76,879 | 82,153 | ||||||||||||
Proceeds from disposal of equity securities accounted for using the equity method | 7,539 | 80,014 | 20,258 | 21,648 | ||||||||||||
Proceeds from disposal of consolidated subsidiary | 290,966 | 39,062 | — | — | ||||||||||||
Decrease in guarantee deposits | 142,131 | 71,164 | 32,594 | 34,830 | ||||||||||||
Decrease in other non-current assets | 36,110 | 19,940 | 30,444 | 32,533 | ||||||||||||
Proceeds from disposal of property and equipment | 34,179 | 14,353 | 31,290 | 33,437 | ||||||||||||
Proceeds from disposal of intangible assets | 107 | 1,630 | 6,739 | 7,201 | ||||||||||||
Cash inflows from transaction of currency swap | — | — | 8,473 | 9,054 | ||||||||||||
Increase in short-term loans | (59,008 | ) | (92,753 | ) | (104,674 | ) | (111,855 | ) | ||||||||
Increase in long-term loans | (5,766 | ) | (12,623 | ) | (100,006 | ) | (106,867 | ) | ||||||||
Increase in long-term financial instruments | (1,140 | ) | (10,091 | ) | (652 | ) | (697 | ) | ||||||||
Acquisition of long-term investment securities | (319,061 | ) | (1,127,396 | ) | (417,528 | ) | (446,172 | ) | ||||||||
Acquisition of equity securities accounted for using the equity method | (231,793 | ) | (244,333 | ) | (76,629 | ) | (81,886 | ) | ||||||||
Increase in guarantee deposits | (75,295 | ) | (30,290 | ) | (31,056 | ) | (33,187 | ) | ||||||||
Increase in other non-current assets | (86,803 | ) | (132,349 | ) | (78,853 | ) | (84,263 | ) | ||||||||
Acquisition of property and equipment | (1,416,622 | ) | (1,498,142 | ) | (1,815,966 | ) | (1,940,549 | ) | ||||||||
Acquisition of intangible assets | (199,494 | ) | (73,964 | ) | (115,102 | ) | (122,999 | ) | ||||||||
Acquisition of minority interest | (11,352 | ) | (27,406 | ) | (12,514 | ) | (13,372 | ) | ||||||||
Net Cash Used in Investing Activities | (1,938,187 | ) | (2,535,153 | ) | (2,399,047 | ) | (2,563,632 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Increase in short-term borrowings | — | 51,230 | 35,946 | 38,412 | ||||||||||||
Issuance of bonds payable | 193,683 | 384,990 | 761,117 | 813,333 | ||||||||||||
Proceeds from long-term borrowings | — | 294,800 | 28,271 | 30,211 | ||||||||||||
Repayment of short-term borrowings | (376,929 | ) | — | (86,561 | ) | (92,499 | ) | |||||||||
Repayment of current portion of long-term debt | (500,033 | ) | (815,287 | ) | (907,176 | ) | (969,412 | ) | ||||||||
Repayment of bonds payable | — | (1,230 | ) | (61,306 | ) | (65,512 | ) | |||||||||
Payment of dividends | (758,192 | ) | (662,815 | ) | (581,309 | ) | (621,189 | ) | ||||||||
Decrease in facility deposits | (7,670 | ) | (2,630 | ) | (14,714 | ) | (15,723 | ) | ||||||||
Cash outflows from transaction of currency swap | — | — | (8,936 | ) | (9,549 | ) | ||||||||||
Acquisition and retirement of treasury stock | — | (209,078 | ) | (118,512 | ) | (126,642 | ) | |||||||||
Disposal of treasury stock | — | — | 45,133 | 48,229 | ||||||||||||
Increase in minority interest in equity of consolidated subsidiaries | 21,243 | 19,050 | 62,564 | 66,856 | ||||||||||||
Other | (1,140 | ) | (11,407 | ) | (10,624 | ) | (11,355 | ) | ||||||||
Net Cash Used in Financing Activities | (1,429,038 | ) | (952,377 | ) | (856,107 | ) | (914,840 | ) | ||||||||
THE EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES (Note 2) | (3,036 | ) | (9,317 | ) | 2,783 | 2,974 | ||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS DUE TO CHANGES IN CONSOLIDATED SUBSIDIARIES | (29,085 | ) | 14,568 | 154,227 | 164,808 | |||||||||||
PREACQUISITION CASH FLOWS OF SUBSIDIARIES | — | — | (263,133 | ) | (281,186 | ) | ||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS DUE TO MERGER | — | — | 50,448 | 53,909 | ||||||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 7,796 | 107,546 | 399,875 | 427,308 | ||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR | 370,630 | 378,426 | 485,972 | 519,312 | ||||||||||||
CASH AND CASH EQUIVALENTS AT END OF THE YEAR | 378,426 | 485,972 | 885,847 | $ | 946,620 | |||||||||||
2006 | 2007 | 2008 | 2008 | |||||||||||||
In millions of Korean Won | In thousands of | |||||||||||||||
U.S. Dollars | ||||||||||||||||
(Note 2a) | ||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Cash inflows from investing activities: | ||||||||||||||||
Decrease in short-term investment securities, net | 80,061 | 28,852 | — | $ | — | |||||||||||
Decrease in short-term financial instruments, net | 4,470 | — | 174,441 | 138,226 | ||||||||||||
Collection of short-term loans | 69,892 | 119,608 | 215,074 | 170,423 | ||||||||||||
Decrease in long-term financial instruments | 2 | 2,118 | 16,159 | 12,804 | ||||||||||||
Collection of long-term loans | 654 | 3,652 | 10,646 | 8,436 | ||||||||||||
Proceeds from sales of long-term investment securities | 305,953 | 4,804 | 386,740 | 306,450 | ||||||||||||
Proceeds from sales of equity securities accounted for using the equity method | 80,014 | 20,258 | 8,292 | 6,571 | ||||||||||||
Proceeds from disposal of consolidated subsidiary | 39,062 | — | — | — | ||||||||||||
Decrease in guarantee deposits | 71,164 | 32,594 | 26,361 | 20,888 | ||||||||||||
Decrease in other non-current assets | 19,940 | 30,444 | 40,913 | 32,419 | ||||||||||||
Proceeds from disposal of property and equipment | 14,353 | 30,429 | 45,533 | 36,080 | ||||||||||||
Proceeds from disposal of intangible assets | 1,630 | 6,739 | 9,496 | 7,525 | ||||||||||||
Cash inflows from transaction of currency swap | — | 17,242 | 727 | 576 | ||||||||||||
Sub-total | 714,195 | 296,740 | 934,382 | 740,398 | ||||||||||||
Cash outflows from investing activities: | ||||||||||||||||
Increase in short-term financial instruments, net | 10,091 | 7,822 | — | $ | — | |||||||||||
Increase in short-term investment securities, net | — | — | 40 | 32 | ||||||||||||
Increase in short-term loans | 92,753 | 104,674 | 239,414 | 189,710 | ||||||||||||
Increase in long-term financial instruments | 652 | 6,086 | 4,823 | |||||||||||||
Acquisition of long-term investment securities | 1,127,396 | 371,394 | 31,420 | 24,897 | ||||||||||||
Increase in long-term loans | 12,623 | 100,006 | 35,290 | 27,964 | ||||||||||||
Acquisition of equity securities accounted for using the equity method | 244,333 | 76,629 | 601,066 | 476,281 | ||||||||||||
Increase in equity of consolidated subsidiaries | 27,406 | 12,514 | 1,093,104 | 866,168 | ||||||||||||
Increase in guarantee deposits | 30,290 | 31,056 | 57,287 | 45,394 | ||||||||||||
Increase in other non-current assets | 132,349 | 78,853 | 96,303 | 76,308 | ||||||||||||
Acquisition of property and equipment | 1,498,142 | 1,804,148 | 2,236,930 | 1,772,528 | ||||||||||||
Acquisition of intangible assets | 73,964 | 115,102 | 149,341 | 118,337 | ||||||||||||
Cash outflows from transaction of currency swap | — | 8,769 | 263,495 | 208,792 | ||||||||||||
Sub-total | 3,249,347 | 2,711,619 | 4,809,776 | 3,811,234 | ||||||||||||
Net Cash Used in Investing Activities | (2,535,152 | ) | (2,414,879 | ) | (3,875,394 | ) | (3,070,836 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Cash inflows from financing activities: | ||||||||||||||||
Issuance of bonds payable | 384,990 | 761,117 | 1,307,679 | $ | 1,036,196 | |||||||||||
Proceeds from short-term borrowings | 51,230 | 35,946 | 472,958 | 374,769 | ||||||||||||
Proceeds from long-term borrowings | 294,800 | — | 510,577 | 404,578 | ||||||||||||
Increase in guarantee deposits received and other | 3,370 | 2,327 | 4,532 | 3,591 | ||||||||||||
Proceeds from disposal of treasury stock | — | 45,133 | 42,246 | 33,475 | ||||||||||||
Cash inflows from transaction of currency swap | — | 2,901 | — | — | ||||||||||||
Increase in equity of consolidated subsidiaries | 19,050 | 4,677 | 64,402 | 51,032 | ||||||||||||
Sub-total | 753,440 | 852,101 | 2,402,394 | 1,903,641 | ||||||||||||
Cash outflows from financing activities: | ||||||||||||||||
Repayment of current portion of long-term debt | 815,287 | 907,176 | 558,107 | 442,240 | ||||||||||||
Repayment of short-term borrowings | — | 86,561 | — | — | ||||||||||||
Repayment of long-term borrowings | 404 | 93,336 | 193,400 | 153,250 | ||||||||||||
Repayment of bonds payable | 1,230 | 61,306 | — | — | ||||||||||||
Payment of dividends | 662,815 | 581,309 | 682,504 | 540,811 | ||||||||||||
Decrease in subscription deposits | 2,630 | 14,714 | — | — | ||||||||||||
Cash outflows from transaction of currency swap | — | 11,838 | — | — | ||||||||||||
Acquisition and retirement of treasury stock | 209,078 | 118,512 | 63,538 | 50,347 |
F-10
F-12
2006 | 2007 | 2008 | 2008 | |||||||||||||
In millions of Korean Won | In thousands of | |||||||||||||||
U.S. Dollars | ||||||||||||||||
(Note 2a) | ||||||||||||||||
Decrease in equity of consolidated subsidiaries | — | 6,607 | 24,863 | 19,701 | ||||||||||||
Other | 14,374 | 11,997 | 10,567 | 8,374 | ||||||||||||
Sub-total | 1,705,818 | 1,893,356 | 1,532,979 | 1,214,723 | ||||||||||||
Net Cash Provided by (Used in) Financing Activities | (952,378 | ) | (1,041,255 | ) | 869,415 | 688,918 | ||||||||||
THE EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES (Note 2) | (9,317 | ) | 6,097 | 37,371 | 29,613 | |||||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS DUE TO CHANGES IN CONSOLIDATED SUBSIDIARIES | 14,568 | 102,079 | 36,413 | 28,853 | ||||||||||||
PRE ACQUISITION CASH FLOWS OF SUBSIDIARIES | — | (11,396 | ) | 17,250 | 13,669 | |||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS DUE TO MERGER | — | 50,448 | — | — | ||||||||||||
CASH FLOWS FROM DISCONTINUED OPERATION (Note 2) | — | (12,777 | ) | (256,515 | ) | (203,261 | ) | |||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 107,546 | 400,017 | 125,478 | 99,427 | ||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR (Note 29) | 378,426 | 485,972 | 885,989 | 702,052 | ||||||||||||
CASH AND CASH EQUIVALENTS AT END OF THE YEAR (Note 29) | 485,972 | 885,989 | 1,011,467 | $ | 801,479 | |||||||||||
F-13
1. | GENERAL |
Percentage of | Percentage of | |||||||||||||||
Number of | Total Shares | Number of | Total Shares | |||||||||||||
Shares | Issued (%) | Shares | Issued (%) | |||||||||||||
SK Group | 18,748,452 | 23.09 | 18,748,452 | 23.09 | ||||||||||||
POSCO | 2,341,569 | 2.88 | 2,341,569 | 2.88 | ||||||||||||
Institutional investors and other minority stockholders | 51,494,656 | 63.43 | 51,395,994 | 63.30 | ||||||||||||
Treasury stock | 8,609,034 | 10.60 | 8,707,696 | 10.73 | ||||||||||||
81,193,711 | 100.00 | 81,193,711 | 100.00 | |||||||||||||
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F-11F-14
Year of | Ownership Percentage (%) | Year of | Ownership Percentage (%) | |||||||||||||||||||||||||||||||
Subsidiary | Establishment | Primary Business | 2005 | 2006 | 2007 | Establishment | Primary Business | 2006 | 2007 | 2008 | ||||||||||||||||||||||||
SK Capital Co., Ltd. | 1995 | Finance | 100 | .00 | — | — | ||||||||||||||||||||||||||||
SK Broadband Co., Ltd. (formerly hanarotelecom incorporated) | 1997 | Telecommunication services | 4.8 | 4.8 | 43.42 | |||||||||||||||||||||||||||||
SK Communications Co., Ltd. | 1999 | Internet website services | 87.08 | 65.71 | 65.71 | |||||||||||||||||||||||||||||
SK Telink Co., Ltd. | 1998 | Telecommunication services | 90 | .77 | 90 | .77 | 90 | .77 | 1998 | Telecommunication services | 90.77 | 90.77 | 90.77 | |||||||||||||||||||||
SK Communications Co., Ltd. | 1999 | Internet website services | 92 | .37 | 87 | .08 | 65 | .71 | ||||||||||||||||||||||||||
SK Wyverns Baseball Club Co., Ltd. | 2000 | Business related sports | 99 | .99 | 99 | .99 | 99 | .99 | 2000 | Business related sports | 99.99 | 99.99 | 99.99 | |||||||||||||||||||||
Centurion IT Investment Association | 2001 | Investment association | 37 | .50 | 37 | .50 | — | |||||||||||||||||||||||||||
Global Credit & information Corp. | 1998 | Credit and collection services | 50 | .00 | 50 | .00 | 50 | .00 | ||||||||||||||||||||||||||
PAXNet Co., Ltd. | 1999 | Internet website services | 67 | .10 | 59 | .74 | 59 | .74 | 1999 | Internet website services | 59.74 | 59.74 | 59.74 | |||||||||||||||||||||
F&U Credit information Co., Ltd. (formerly Global Credit & information Corp) | 1998 | Credit and collection services | 50.00 | 50.00 | 50.00 | |||||||||||||||||||||||||||||
Loen Entertainment, Inc. (formerly Seoul Records, Inc.) | 1982 | Release of music disc | 60 | .00 | 60 | .00 | 60 | .00 | 1982 | Release of music disc | 60.00 | 60.00 | 63.48 | |||||||||||||||||||||
TU Media Corp. | 2003 | Satellite broadcasting services | 29.58 | 32.70 | 44.15 | |||||||||||||||||||||||||||||
IHQ, Inc. | 1962 | Business related entertainment | 21 | .60 | 34 | .08 | 37 | .09 | 1962 | Business related entertainment | 34.08 | 37.09 | 37.09 | |||||||||||||||||||||
TU Media Corp. | 2003 | Satellite broadcasting services | 29 | .58 | 29 | .58 | 32 | .70 | ||||||||||||||||||||||||||
AirCross Co., Ltd. | 2000 | Advertising agency | 38 | .10 | 38 | .10 | 100 | .00 | ||||||||||||||||||||||||||
Ntreev Soft Co., Ltd. | 2003 | Game software | 51 | .00 | 51 | .00 | 66 | .70 | 2003 | Game software | 51.00 | 66.70 | 63.70 | |||||||||||||||||||||
Commerce Planet Co., Ltd.(formerly Philio Co., Ltd.) | 1997 | Cosmetic wholesale | — | — | 100 | .00 | ||||||||||||||||||||||||||||
Commerce Planet Co., Ltd. | 1997 | Online shopping mall operation agency | — | 100.00 | 100.00 | |||||||||||||||||||||||||||||
The First Music Investment Fund ofSK-PVC | 2005 | Investment association | 99 | .00 | 99 | .00 | 99 | .00 | 2005 | Investment association | 99.00 | 99.00 | 99.00 | |||||||||||||||||||||
The Second Music Investment Fund of SK-PVC | 2005 | Investment association | 99 | .00 | 99 | .00 | 99 | .00 | 2005 | Investment association | 99.00 | 99.00 | 99.00 | |||||||||||||||||||||
SK-KTB Music Investment Fund | 2005 | Investment association | 99 | .00 | 99 | .00 | 99 | .00 | 2005 | Investment association | 99.00 | 99.00 | 99.00 | |||||||||||||||||||||
IMM Cinema Fund | 2005 | Investment association | 48 | .39 | 60 | .84 | 72 | .24 | 2005 | Investment association | 60.84 | 72.24 | 72.24 | |||||||||||||||||||||
Michigan Global Cinema Fund | 2006 | Investment association | — | 36 | .36 | 45 | .45 | 2006 | Investment association | 36.36 | 45.45 | 45.45 | ||||||||||||||||||||||
SK i-media Co., Ltd. | 2006 | Game software | — | 60 | .00 | 60 | .00 | 2006 | Game software | 60.00 | 60.00 | 100.00 | ||||||||||||||||||||||
YTN Media, Inc | 2000 | Broadcasting services | — | 51 | .42 | 51 | .42 | |||||||||||||||||||||||||||
CU Media, Inc. (formerly YTN Media, Inc) | 2000 | Broadcasting services | 51.42 | 51.42 | 52.52 | |||||||||||||||||||||||||||||
Konan Technology | 1999 | Multimedia contents | — | 7 | .51 | 29 | .49 | 1999 | Multimedia contents | 7.51 | 29.49 | 29.49 | ||||||||||||||||||||||
Broadband Media Co., Ltd. (formerly hanaromedia incorporated) | 1997 | Multimedia contents | — | — | 100.00 | |||||||||||||||||||||||||||||
HanaroDream Incorporated | 2001 | Internet website services | — | — | 36.03 | |||||||||||||||||||||||||||||
Broadband D&M Co., Ltd. (formerly hanaro Realty Development & Management Co., Ltd.) | 1998 | Facilities Maintenance | — | — | 100.00 | |||||||||||||||||||||||||||||
Broadband CS Co., Ltd. (formerly hanaro Customer Service, Inc.) | 1998 | Telemarketing Service | — | — | 100.00 | |||||||||||||||||||||||||||||
Etoos Co., Ltd. | 2008 | Internet Education Service | — | — | 100.00 | |||||||||||||||||||||||||||||
K-net Culture and Contents Venture Fund | 2008 | Investment association | — | — | 59.00 | |||||||||||||||||||||||||||||
Benex Digital Cultural Contents Fund | 2008 | Investment association | — | — | 39.84 | |||||||||||||||||||||||||||||
Benex Focus Limited Partnership II | 2008 | Investment association | — | — | 66.67 | |||||||||||||||||||||||||||||
Open Innovation Fund | 2008 | Investment association | — | — | 98.52 | |||||||||||||||||||||||||||||
SK Telecom China Co., Ltd. | 2002 | Telecommunication services | 100 | .00 | 100 | .00 | 100 | .00 | 2002 | Telecommunication services | 100.00 | 100.00 | 100.00 | |||||||||||||||||||||
ULand Company Ltd. | 2004 | Telecommunication services | 100 | .00 | 100 | .00 | 100 | .00 | 2004 | Telecommunication services | 100.00 | 100.00 | 100.00 | |||||||||||||||||||||
SKT Vietnam PTE Ltd. (formerly SLD Telecom PTE Ltd.) | 2000 | Telecommunication services | 55 | .10 | 73 | .32 | 73 | .32 | ||||||||||||||||||||||||||
SKT Vietnam PTE., Ltd. | 2000 | Telecommunication services | 73.32 | 73.32 | 73.32 | |||||||||||||||||||||||||||||
SKT Americas, Inc. (formerly SK Telecom International Inc.) | 1995 | Internet website services | 100.00 | 100.00 | 100.00 | |||||||||||||||||||||||||||||
SK Telecom Advanced Tech & Service Center | 2006 | Mobile handset services | 100.00 | 100.00 | 100.00 | |||||||||||||||||||||||||||||
Cyworld China Holdings Limited | 2006 | Internet website services | — | 100.00 | 100.00 | |||||||||||||||||||||||||||||
SK Telecom China Holdings Co., Ltd. | 2007 | Internet website services | — | 100.00 | 100.00 | |||||||||||||||||||||||||||||
Centurion IT Investment Association | 2001 | Investment association | 37.50 | — | — | |||||||||||||||||||||||||||||
SK Telecom USA Holdings, Inc. | 2005 | Telecommunication services | 100 | .00 | 100 | .00 | 100 | .00 | 2005 | Telecommunication services | 100.00 | 100.00 | — | |||||||||||||||||||||
Helio, Inc. & Helio, LLC | 2005 | Mobile handset services | 50 | .00 | 48 | .08 | 64 | .86 | ||||||||||||||||||||||||||
SK Telecom International Inc. | 1995 | Internet website services | 100 | .00 | 100 | .00 | 100 | .00 | ||||||||||||||||||||||||||
Helio, Inc & LLC | 2005 | Mobile handset services | 48.08 | 64.86 | — | |||||||||||||||||||||||||||||
AirCross Co., Ltd. | 2000 | Advertising agency | 38.10 | 100.00 | — | |||||||||||||||||||||||||||||
SK Cyberpass, Inc. | 2001 | International telephone call services | 70 | .54 | 70 | .54 | 70 | .54 | 2001 | International telephone call services | 70.54 | 70.54 | — |
F-12F-15
F-16
F-13
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Beginning balance | 71,090 | 133,499 | 106,737 | 133,499 | 106,737 | 93,551 | ||||||||||||||||||
Write-offs | (49,181 | ) | (90,780 | ) | (90,475 | ) | (90,780 | ) | (90,475 | ) | (50,065 | ) | ||||||||||||
Net | 21,909 | 42,719 | 16,262 | 42,719 | 16,262 | 43,486 | ||||||||||||||||||
Provision for doubtful accounts receivable-trade | 112,792 | 61,457 | 71,439 | 61,457 | 48,835 | 62,973 | ||||||||||||||||||
Provision for doubtful accounts receivable-trade for the discontinued operation | — | 22,604 | — | |||||||||||||||||||||
Increase (decrease) due to the changes in consolidated subsidiaries | (1,202 | ) | 2,561 | 5,850 | 2,561 | 5,850 | 43,861 | |||||||||||||||||
End of year | 133,499 | 106,737 | 93,551 | 106,737 | 93,551 | 150,320 | ||||||||||||||||||
Assets | Methods | |
E-commerce inventories | Moving average method | |
Replacement units for wireless telecommunication facilities and supplies for sales promotion | Moving average method | |
Wireless device | FIFO | |
Books and CDs | FIFO |
F-17
F-14
F-18
F-15
Assets | Depreciation Method | Useful Lives (Years) | ||||
Buildings and structures | Declining balance method (straight-line method) | 15 | ||||
Machinery | Declining balance method | 3 | ||||
Other | Declining balance method | 3 |
F-19
F-16
• | Possible obligations related to past events, for which the existence of a liability can only be confirmed upon occurrence of uncertain future event or events outside the control of the Company. | |
• | Present obligations arising from past events or transactions, for which i) a disbursement of economic resources to fulfill such obligations is not probable or ii) a disbursement of economic resources is probable, but the related amount cannot be reasonably estimated. |
F-20
F-17
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Beginning net balance | 80,984 | 71,284 | 22,284 | 71,284 | 22,284 | 44,322 | ||||||||||||||||||
Provision | 47,073 | 47,370 | 44,233 | 47,370 | 44,233 | 93,094 | ||||||||||||||||||
Payments to employees | (24,365 | ) | (262,948 | ) | (13,732 | ) | (262,948 | ) | (13,732 | ) | (107,037 | ) | ||||||||||||
Net increase due to the changes in consolidated subsidiaries | 594 | 4,010 | 6,291 | 4,010 | 6,291 | 44,718 | ||||||||||||||||||
Changes in deposits for severance indemnities | (33,002 | ) | 162,568 | (14,754 | ) | 162,568 | (14,754 | ) | (21,282 | ) | ||||||||||||||
Ending net balance | 71,284 | 22,284 | 44,322 | 22,284 | 44,322 | 53,815 | ||||||||||||||||||
Ending balance : | ||||||||||||||||||||||||
Accrued severance indemnities | 267,855 | 51,243 | 90,286 | 51,243 | 90,286 | 122,401 | ||||||||||||||||||
Deposits with insurance companies | (191,354 | ) | (28,868 | ) | (45,878 | ) | (28,868 | ) | (45,878 | ) | (68,559 | ) | ||||||||||||
National Pension Fund | (5,217 | ) | (91 | ) | (86 | ) | (91 | ) | (86 | ) | (27 | ) | ||||||||||||
Net balance | 71,284 | 22,284 | 44,322 | 22,284 | 44,322 | 53,815 | ||||||||||||||||||
F-18F-21
• | The lease transfers ownership of the asset to the lessee by the end of the lease term; | |
• | The lessee has the option to purchase the asset at a bargain price and it is certain that the option will be exercised; | |
• | The lease term is for the major part (75% or more) of the economic life of the asset even if title is not transferred; | |
• | At the date of lease commencement, the present value of the minimum lease payments amounts to at least substantially all (90% or more) of the fair value of the leased asset; or | |
• | The leased assets are of such a specialized nature that only the lessee can use them without major modifications. |
F-19F-22
F-20F-23
• | Pursuant to adoption of SKAS No. 21, “Preparation and Presentation of Financial Statements”, certain amounts classified as capital adjustments through 2006 are classified as accumulated other comprehensive income (loss); such amounts include unrealized gain/loss on available-for-sale securities, equity in capital adjustments of affiliates and gain/loss on valuation of derivative instruments. In addition, certain amounts |
F-21
classified as investment assets through 2006 are classified as other non-current assets; such amounts include long-term loans, guarantee deposits, long-term deposits and others. The accompanying consolidated balance sheets as of December 31, 2005 and 2006, which are comparatively presented, were reclassified in accordance with SKAS No. 21. |
• | Pursuant to adoption of SKAS No. 25, “Consolidated Financial Statements”, net income is allocated to majority interest and minority interest. In addition, when a subsidiary is purchased during the year, statement of income of the subsidiary is included in the consolidation as though it had been acquired at the beginning of the year, and pre-acquisition earnings are presented as deduction at the bottom of the consolidated statements of income. The accompanying consolidated statements of income for the years ended December 31, 2005 and 2006, which are comparatively presented, were reclassified in accordance with SKAS No. 25. In addition, in connection with the Company’s adoption of SKAS No. 25, the Company also begun to present pre-acquisition cash flows of subsidiaries as a separate deduction (addition) at the bottom of the Company’s consolidated statements of cash flows. | |
• | There is no significant change due to the adoption of SKAS No. 11, No. 22 and No. 23. |
2005 | 2006 | 2007 | ||||||||||
Merchandise | 863 | 1,167 | 42,787 | |||||||||
Finished goods | 766 | 2,282 | 4,054 | |||||||||
Semi-finished goods | — | 41 | 706 | |||||||||
Raw materials | 493 | 313 | 165 | |||||||||
Supplies | 6,301 | 16,782 | 3,733 | |||||||||
Total | 8,423 | 20,585 | 51,445 | |||||||||
Less allowance for valuation loss | (639 | ) | (807 | ) | (4,393 | ) | ||||||
Net | 7,784 | 19,778 | 47,052 | |||||||||
Acquisition | ||||||||||||||||||||
Cost at | Fair Value at | |||||||||||||||||||
December 31, | December 31, | Carrying Amount | ||||||||||||||||||
2007 | 2007 | 2005 | 2006 | 2007 | ||||||||||||||||
(Note a) | ||||||||||||||||||||
Stocks | — | — | 12 | 12 | — | |||||||||||||||
Beneficiary certificates | 636,509 | 635,434 | 777,460 | 665,300 | 635,434 | |||||||||||||||
Total | 636,509 | 635,434 | 777,472 | 665,312 | 635,434 | |||||||||||||||
F-22F-24
2006 | 2007 | 2008 | ||||||||||
Revenue | — | 154,805 | 116,607 | |||||||||
Operating Expense | — | (446,348 | ) | (230,478 | ) | |||||||
Other Income (expense) | — | (603 | ) | (15,917 | ) | |||||||
Income tax benefit | — | — | 109,579 | |||||||||
Preacquisition net loss for subsidiary | — | 242,045 | — | |||||||||
Net loss | — | (50,101 | ) | (20,209 | ) | |||||||
2006 | 2007 | 2008 | ||||||||||
Operating Activities | — | (38,749 | ) | (213,899 | ) | |||||||
Investing Activities | — | (1,832 | ) | (51,631 | ) | |||||||
Financing Activities | — | 27,804 | 9,015 | |||||||||
Net | — | (12,777 | ) | (256,515 | ) | |||||||
F-25
2006 | 2007 | 2008 | ||||||||||
Merchandise | 1,167 | 42,787 | 17,032 | |||||||||
Finished goods | 2,282 | 4,054 | 4,079 | |||||||||
Semi-finished goods | 41 | 706 | 509 | |||||||||
Raw materials | 313 | 165 | 13 | |||||||||
Supplies | 16,782 | 3,733 | 14,105 | |||||||||
Total | 20,585 | 51,445 | 35,738 | |||||||||
Less allowance for valuation loss | (807 | ) | (4,393 | ) | (764 | ) | ||||||
Net | 19,778 | 47,052 | 34,974 | |||||||||
4. | INVESTMENT SECURITIES |
2005 | 2006 | 2007 | ||||||||||
Available-for-sale equity securities | 923,821 | 1,011,971 | 4,689,905 | |||||||||
Available-for-sale debt securities | 296,273 | 1,463,636 | 469,729 | |||||||||
Held-to-maturity securities | 115 | 146 | 94 | |||||||||
Total | 1,220,209 | 2,475,753 | 5,159,728 | |||||||||
Less current portion | (1 | ) | (335 | ) | (101,209 | ) | ||||||
Long-term portion | 1,220,208 | 2,475,418 | 5,058,519 | |||||||||
Acquisition Cost | Fair Value | |||||||||||||||||||
at December 31, | at December 31, | Carrying Amount | ||||||||||||||||||
2008 | 2008 | 2006 | 2007 | 2008 | ||||||||||||||||
Trading securities(Note) | 376,563 | 367,001 | 665,312 | 635,434 | 367,001 | |||||||||||||||
Current portion of long-term investment securities | 7,545 | 5,912 | 335 | 101,209 | 5,912 | |||||||||||||||
Total | 384,108 | 372,913 | 665,647 | 736,643 | 372,913 | |||||||||||||||
The Company’s trading securities are all beneficiary certificates as of December 31, 2008, and the difference between the fair value and acquisition cost was recorded in other expenses as loss on valuation of short-term investment securities. |
December 31, 2007 | Carrying Amount | |||||||||||||||||||||||||||
Ownership | ||||||||||||||||||||||||||||
Number of | Percentage | Acquisition | Fair | |||||||||||||||||||||||||
Shares | (%) | Cost | Value | 2005 | 2006 | 2007 | ||||||||||||||||||||||
(Investments in listed companies) | ||||||||||||||||||||||||||||
Digital Chosunilbo Co., Ltd. | 2,890,630 | 7 | .8 | 5,781 | 8,629 | 5,796 | 5,897 | 8,629 | ||||||||||||||||||||
hanarotelecom incorporated | 11,045,000 | 4 | .8 | 121,677 | 116,525 | 56,440 | 88,581 | 116,525 | ||||||||||||||||||||
KRTnet Corporation | 234,150 | 4 | .4 | 1,171 | 2,470 | 2,646 | 2,517 | 2,470 | ||||||||||||||||||||
POSCO | 2,481,310 | 2 | .8 | 332,662 | 1,426,753 | 501,225 | 766,725 | 1,426,753 | ||||||||||||||||||||
DAEA TI Co., Ltd. (Formerly Comas Interactive Co., Ltd.) | 99,120 | 0 | .2 | 1,695 | 228 | 83 | 83 | 228 | ||||||||||||||||||||
eXtended Computing Environment Co., Ltd. (note a) | 133,333 | 3 | .3 | 10 | 905 | 10 | 876 | 905 | ||||||||||||||||||||
nTels Co., Ltd. (note b) | 205,200 | 8 | .2 | 34 | 1,525 | 34 | 34 | 1,525 | ||||||||||||||||||||
Qualcomm Inc. | 55,805 | 0 | .1 | 2,756 | 2,060 | — | — | 2,060 | ||||||||||||||||||||
China Unicom Ltd. (note c) | 899,745,075 | 6 | .6 | 1,333,009 | 1,936,840 | — | — | 1,936,840 | ||||||||||||||||||||
ZeroOne Interactive Co., Ltd. | 2,472,999 | 7 | .2 | 4,500 | 2,770 | — | 3,845 | 2,770 | ||||||||||||||||||||
T-Entertainment Co., Ltd. | 1,026,695 | 6 | .2 | 2,500 | 1,817 | — | — | 1,817 | ||||||||||||||||||||
HB Entertainment Co., Ltd. | — | — | — | — | 2,408 | 1,137 | — | |||||||||||||||||||||
sub-total | 1,805,795 | 3,500,522 | 568,642 | 869,695 | 3,500,522 | |||||||||||||||||||||||
(Investments in non-listed companies) | ||||||||||||||||||||||||||||
LG Powercomm Co., Ltd. (Formerly Powercomm Co., Ltd.) (note d) | 7,500,000 | 5 | .0 | 240,243 | 89,422 | 77,130 | 80,370 | 89,422 | ||||||||||||||||||||
SK C&C Co., Ltd. (note e) | 6,000,000 | 30 | .0 | 501,652 | 1,037,604 | — | — | 1,037,604 | ||||||||||||||||||||
Japan MBCO (note f) | 54,000 | 7 | .3 | 27,332 | — | 27,332 | — | — | ||||||||||||||||||||
Eonex Technologies Inc. (note g) | 144,000 | 12 | .3 | 3,600 | (note g | ) | 4,593 | 4,593 | 4,593 | |||||||||||||||||||
The Korea Economic Daily | 2,585,069 | 13 | .8 | 13,964 | (note��g | ) | 13,964 | 13,964 | 13,964 | |||||||||||||||||||
Cheongsol | 4,328 | 7 | .7 | 5,000 | (note g | ) | — | 5,000 | 5,000 | |||||||||||||||||||
Other (note h) | 132,244 | (note g | ) | 32,168 | 34,333 | 20,611 | ||||||||||||||||||||||
sub-total | 924,035 | 155,187 | 138,260 | 1,171,194 | ||||||||||||||||||||||||
(Investments in funds) | ||||||||||||||||||||||||||||
Korea IT Fund (note i) | — | 190,000 | — | — | ||||||||||||||||||||||||
Others (note j) | 18,313 | 9,992 | 4,016 | 18,189 | ||||||||||||||||||||||||
sub-total | 18,313 | 199,992 | 4,016 | 18,189 | ||||||||||||||||||||||||
Total | 2,748,143 | 923,821 | 1,011,971 | 4,689,905 | ||||||||||||||||||||||||
2006 | 2007 | 2008 | ||||||||||
Available-for-sale equity securities | 1,011,971 | 4,689,905 | 3,102,833 | |||||||||
Available-for-sale debt securities | 1,463,636 | 469,729 | 8,261 | |||||||||
Held-to-maturity securities | 146 | 94 | 113 | |||||||||
Total | 2,475,753 | 5,159,728 | 3,111,207 | |||||||||
Less current portion | (335 | ) | (101,209 | ) | (5,912 | ) | ||||||
Long-term portion | 2,475,418 | 5,058,519 | 3,105,295 | |||||||||
F-23F-26
December 31, 2008 | Carrying Amount | |||||||||||||||||||||||||||
Ownership | ||||||||||||||||||||||||||||
Number | Percentage | Acquisition | ||||||||||||||||||||||||||
of Shares | (%) | Cost | Fair Value | 2006 | 2007 | 2008 | ||||||||||||||||||||||
(Investments in listed companies) | ||||||||||||||||||||||||||||
Digital Chosunilbo Co., Ltd. | 2,890,630 | 7.8 | 5,781 | 5,636 | 5,897 | 8,629 | 5,636 | |||||||||||||||||||||
SK Broadband Co., Ltd. (formerly hanarotelecom incorporated) | — | — | — | (note a | ) | 88,581 | 116,525 | — | ||||||||||||||||||||
KRTnet Corporation | 234,150 | 4.4 | 1,171 | 1,098 | 2,517 | 2,470 | 1,098 | |||||||||||||||||||||
POSCO | 2,481,310 | 2.8 | 332,662 | 942,898 | 766,725 | 1,426,753 | 942,898 | |||||||||||||||||||||
DAEA TI Co., Ltd. (formerly Comas Interactive Co., Ltd.) | 99,120 | 0.2 | 1,695 | 89 | 83 | 228 | 89 | |||||||||||||||||||||
Extended Computing Environment Co., Ltd. | 133,333 | 3.0 | 10 | 40 | 876 | 905 | 40 | |||||||||||||||||||||
nTels Co., Ltd. | 205,200 | 6.2 | 34 | 504 | 34 | 1,525 | 504 | |||||||||||||||||||||
Qualcomm Inc. | 55,805 | 0.1 | 2,756 | 2,514 | — | 2,060 | 2,514 | |||||||||||||||||||||
China Unicom Ltd. (note b) | 899,745,075 | 3.8 | 1,333,009 | 1,357,648 | — | 1,936,840 | 1,357,648 | |||||||||||||||||||||
LG Powercomm Co., Ltd. (note c) | 6,066,666 | 4.6 | 241,243 | 39,433 | 80,370 | 89,422 | 39,433 | |||||||||||||||||||||
ZeroOne Interactive Co.,Ltd.(note d) | — | — | — | — | 3,845 | 2,770 | — | |||||||||||||||||||||
T-Entertainment Co., Ltd. | 1,026,695 | 6.2 | 2,500 | 1,355 | — | 1,817 | 1,355 | |||||||||||||||||||||
HB Entertainment Co., Ltd. | — | — | — | — | 1,137 | — | — | |||||||||||||||||||||
De Chocolate E&TF Co., Ltd. | 709,219 | 2.7 | 1,000 | 660 | — | — | 660 | |||||||||||||||||||||
C.C.S. Inc. | 29,696 | 0.6 | 414 | 249 | — | — | 249 | |||||||||||||||||||||
Medifron DBT Co., Ltd. | 170,525 | 0.9 | 328 | 246 | — | — | 246 | |||||||||||||||||||||
sub-total | 1,922,603 | 2,352,370 | 950,065 | 3,589,944 | 2,352,370 | |||||||||||||||||||||||
(Investments in non-listed companies) | ||||||||||||||||||||||||||||
SK C&C Co., Ltd. (note e) | 6,000,000 | 30.0 | 501,652 | 676,716 | — | 1,037,604 | 676,716 | |||||||||||||||||||||
Eonex Technologies Inc. | 144,000 | 12.3 | 3,600 | (note f | ) | 4,593 | 4,593 | — | ||||||||||||||||||||
The Korea Economic Daily | 2,585,069 | 13.8 | 13,964 | (note g | ) | 13,964 | 13,964 | 13,964 | ||||||||||||||||||||
Dreamline Corp. | 1,520,373 | 8.9 | 16,160 | (note h | ) | — | — | 8,519 | ||||||||||||||||||||
Cheongsol | 216,400 | 7.1 | 4,494 | (note g | ) | 5,000 | 5,000 | 4,494 | ||||||||||||||||||||
Other | 148,928 | (note f, g | ) | 34,333 | 20,611 | 24,329 | ||||||||||||||||||||||
sub-total | 688,798 | 57,890 | 1,081,772 | 728,022 | ||||||||||||||||||||||||
(Investments in funds) | ||||||||||||||||||||||||||||
Others | 22,441 | (note f | ) | 4,016 | 18,189 | 22,441 | ||||||||||||||||||||||
sub-total | 22,441 | 4,016 | 18,189 | 22,441 | ||||||||||||||||||||||||
Total | 2,633,842 | 1,011,971 | 4,689,905 | 3,102,833 | ||||||||||||||||||||||||
(note a) | the first quarter of 2008, the Company acquired additional 91,406,249 shares of SK Broadband Co., Ltd. (formerly hanarotelecom incorporated) common stock which increased the Company’s ownership from 4.6% to 43.4%. As the Company’s ownership in such investees increased to more than 20% and the Company can exercise significant influence, the investment in common stock of SK Broadband Co., Ltd. was included in the consolidation of accompanying financial statement. | |||
(note b) | ||||
In accordance with the resolution of the Company’s board of directors | ||||
(note |
F-27
investments is material and the market value is significantly less than the acquisition cost over the long-term period, the Company recorded |
(note d) | During the year ended December 31, 2008, SK-KTB Music Investment Fund, a subsidiary of the Company, sold 2,472,999 common shares of ZeroOne Interactive Co.,Ltd. | ||
(note e) | The investment in common stock of SK C&C Co., Ltd. was reclassified to available-for-sale securities from equity securities accounted for using the equity method during the |
(note f) | Due to the impairment of the |
(note g) | As a reasonable estimate of fair value could not be made, the investment is stated at acquisition cost. | |||
(note h) | The Company recorded its investment in common stock of | |||
Acquisition | ||||||||||||||||||
Cost at | ||||||||||||||||||
December 31, | Carrying Amount | |||||||||||||||||
Maturity | 2008 | 2006 | 2007 | 2008 | ||||||||||||||
Public bonds | (note a) | 1,260 | 51,313 | 51,353 | 1,260 | |||||||||||||
Currency stabilization bonds | (note b) | — | 49,894 | 49,713 | — | |||||||||||||
Closed beneficiary certificates | Oct. 20, 2009 | 3,501 | — | 4,788 | 3,551 | |||||||||||||
Bond-type beneficiary certificates | (note c) | 3,000 | 5,072 | 360,641 | 1,868 | |||||||||||||
Convertible bonds of China Unicom Ltd. | Jul. 5, 2009 | — | 1,276,703 | — | — | |||||||||||||
Convertible bonds of Eonex Technologies, Inc. | Oct. 11, 2008 | — | 1,000 | 1,000 | — | |||||||||||||
Convertible bonds of Empas Corp. | Oct. 18, 2009 | — | 78,670 | — | — | |||||||||||||
Others | 2,134 | 984 | 2,234 | 1,582 | ||||||||||||||
Total | 9,895 | 1,463,636 | 469,729 | 8,261 | ||||||||||||||
Less current portion of available-for-sale debt securities | (7,544 | ) | (256 | ) | (101,209 | ) | (5,911 | ) | ||||||||||
Long-term available-for-sale debt securities | 2,351 | 1,463,380 | 368,520 | 2,350 | ||||||||||||||
F-24F-28
Acquisition | ||||||||||||||||||
Cost | ||||||||||||||||||
at December 31, | Carrying Amount | |||||||||||||||||
Maturity | 2007 | 2005 | 2006 | 2007 | ||||||||||||||
Public bonds | (note a) | 51,558 | 1,599 | 51,313 | 51,353 | |||||||||||||
Currency stabilization bonds | (note b) | 49,948 | 294,674 | 49,894 | 49,713 | |||||||||||||
Closed beneficiary certificates | Oct. 20, 2009 | 4,750 | — | — | 4,788 | |||||||||||||
Bond-type beneficiary certificates | (note c) | 351,385 | — | 5,072 | 360,641 | |||||||||||||
Convertible bonds of Real Telecom Co., Ltd. (note d) | Mar. 29, 2007 | 10,656 | — | — | — | |||||||||||||
Convertible bonds of China Unicom Ltd. (note e) | Jul. 5, 2009 | — | — | 1,276,703 | — | |||||||||||||
Convertible bonds of Eonex Technologies, Inc. (note f) | Oct. 11, 2008 | 1,000 | — | 1,000 | 1,000 | |||||||||||||
Convertible bonds of Empas Corp. (note g) | Oct. 18, 2009 | — | — | 78,670 | — | |||||||||||||
Others | 2,234 | — | 984 | 2,234 | ||||||||||||||
Total | 471,531 | 296,273 | 1,463,636 | 469,729 | ||||||||||||||
Less current portion of available-for-sale debt securities | (101,789 | ) | — | (256 | ) | (101,209 | ) | |||||||||||
Long-term available-for-sale debt securities | 369,742 | 296,273 | 1,463,380 | 368,520 | ||||||||||||||
(note a) | The maturities of public bonds as of December 31, | |||
(note b) | ||||
(note c) | The maturities of bond-type beneficiary certificates as of December 31, 2008 are within 1 year. |
Acquisition Cost at | ||||||||||||||||||||
December 31, | Carrying Amount | |||||||||||||||||||
Maturity | 2008 | 2006 | 2007 | 2008 | ||||||||||||||||
Public bonds | (note a | ) | 113 | 146 | 94 | 113 | ||||||||||||||
Less current portion of held-to-maturity securities | (79 | ) | — | (1 | ) | |||||||||||||||
Long-term held-to-maturity securities | 67 | 94 | 112 | |||||||||||||||||
(note a) | The maturities of public bonds as of December 31, 2008 are within 1 year for | |||
F-25F-29
Acquisition Cost | ||||||||||||||||||||
at December 31, | Carrying Amount | |||||||||||||||||||
Maturity | 2007 | 2005 | 2006 | 2007 | ||||||||||||||||
Public bonds | (note a | ) | 94 | 115 | 146 | 94 | ||||||||||||||
Less current portion of held-to-maturity securities | (1 | ) | (79 | ) | — | |||||||||||||||
Long-term held-to-maturity securities | 114 | 67 | 94 | |||||||||||||||||
For the Year Ended December 31, 2005 | For the Year Ended December 31, 2006 | |||||||||||||||||||||||||||||||||||||||
Minority Interest | Minority | |||||||||||||||||||||||||||||||||||||||
Transferred | in Equity of | Transferred | Interest in Equity | |||||||||||||||||||||||||||||||||||||
Beginning | Increase/ | to Realized | Consolidated | Ending | Beginning | Increase/ | to Realized | of Consolidated | Ending | |||||||||||||||||||||||||||||||
Balance | (Decrease) | Gain (Loss) | Subsidiaries | Balance | Balance | (Decrease) | Gain (Loss) | Subsidiaries | Balance | |||||||||||||||||||||||||||||||
Digital Chosunilbo Co., Ltd. | (3,758 | ) | 3,772 | — | — | 14 | 14 | 102 | — | — | 116 | |||||||||||||||||||||||||||||
hanarotelecom incorporated | (50,657 | ) | (14,580 | ) | — | — | (65,237 | ) | ||||||||||||||||||||||||||||||||
SK Broadband Co., Ltd. (formerly hanarotelecom incorporated) | (65,237 | ) | 32,141 | — | — | (33,096 | ) | |||||||||||||||||||||||||||||||||
KRTnet Corporation | 1,007 | 468 | — | — | 1,475 | 1,475 | (129 | ) | — | — | 1,346 | |||||||||||||||||||||||||||||
POSCO | 131,343 | 37,220 | — | — | 168,563 | 168,563 | 265,500 | — | — | 434,063 | ||||||||||||||||||||||||||||||
Comas Interactive Co., Ltd. (Formerly INNOTG Co., Ltd.) | (1,543 | ) | (68 | ) | — | — | (1,611 | ) | (1,611 | ) | — | — | — | (1,611 | ) | |||||||||||||||||||||||||
Extended Computing Environment Co., Ltd. | — | 866 | — | — | 866 | |||||||||||||||||||||||||||||||||||
ZeroOne Interactive Co., Ltd. | — | (655 | ) | — | 71 | (584 | ) | |||||||||||||||||||||||||||||||||
HB Entertainment Co., Ltd. | — | 150 | — | (94 | ) | 56 | 56 | (1,272 | ) | — | 795 | (421 | ) | |||||||||||||||||||||||||||
SK Securities Co., Ltd. | (3,133 | ) | 3,610 | (477 | ) | — | — | |||||||||||||||||||||||||||||||||
SINJISOFT Corporation | 460 | — | (460 | ) | — | — | ||||||||||||||||||||||||||||||||||
Cowon Systems, Inc. | — | 585 | (585 | ) | — | — | ||||||||||||||||||||||||||||||||||
LG Powercomm Co., Ltd. (Formerly Powercomm Co., Ltd.) | (168,678 | ) | 5,565 | — | — | (163,113 | ) | |||||||||||||||||||||||||||||||||
LG Powercomm Co., Ltd. | (163,113 | ) | 3,240 | — | — | (159,873 | ) | |||||||||||||||||||||||||||||||||
Eonex Technologies Inc. | 2,011 | — | — | — | 2,011 | 2,011 | — | — | — | 2,011 | ||||||||||||||||||||||||||||||
WiderThan Co., Ltd. | (27 | ) | 27 | — | — | — | ||||||||||||||||||||||||||||||||||
Public bonds | — | (4 | ) | — | — | (4 | ) | |||||||||||||||||||||||||||||||||
Currency stabilization bonds | — | (217 | ) | — | — | (217 | ) | (217 | ) | 906 | (677 | ) | — | 12 | ||||||||||||||||||||||||||
Convertible bonds of China Unicom Ltd. | — | 319,648 | — | — | 319,648 | |||||||||||||||||||||||||||||||||||
Convertible bonds of Empas Corp. | — | 33,820 | — | (4,218 | ) | 29,602 | ||||||||||||||||||||||||||||||||||
Sub-total | (92,975 | ) | 36,532 | (1,522 | ) | (94 | ) | (58,059 | ) | (58,059 | ) | 654,163 | (677 | ) | (3,352 | ) | 592,075 | |||||||||||||||||||||||
Less tax effect (note a) | 25,568 | (10,046 | ) | 418 | 26 | 15,966 | 15,966 | (179,894 | ) | 186 | 895 | (162,847 | ) | |||||||||||||||||||||||||||
Total | (67,407 | ) | 26,486 | (1,104 | ) | (68 | ) | (42,093 | ) | (42,093 | ) | 474,269 | (491 | ) | (2,457 | ) | 429,228 | |||||||||||||||||||||||
F-26F-30
For the Year Ended December 31, 2006 | For the Year Ended December 31, 2007 | |||||||||||||||||||||||||||||||||||||||
Minority Interest | Minority | |||||||||||||||||||||||||||||||||||||||
Transferred | in Equity of | Transferred | Interest in Equity | |||||||||||||||||||||||||||||||||||||
Beginning | Increase/ | to Realized | Consolidated | Ending | Beginning | Increase/ | to Realized | of Consolidated | Ending | |||||||||||||||||||||||||||||||
Balance | (Decrease) | Gain (Loss) | Subsidiaries | Balance | Balance | (Decrease) | Gain (Loss) | Subsidiaries | Balance | |||||||||||||||||||||||||||||||
Digital Chosunilbo Co., Ltd. | 14 | 102 | — | — | 116 | 116 | 2,731 | — | — | 2,847 | ||||||||||||||||||||||||||||||
hanarotelecom incorporated | (65,237 | ) | 32,141 | — | — | (33,096 | ) | |||||||||||||||||||||||||||||||||
SK Broadband Co., Ltd. (formerly hanarotelecom incorporated) | (33,096 | ) | 27,944 | — | — | (5,152 | ) | |||||||||||||||||||||||||||||||||
KRTnet Corporation | 1,475 | (129 | ) | — | — | 1,346 | 1,346 | (46 | ) | — | — | 1,300 | ||||||||||||||||||||||||||||
POSCO | 168,563 | 265,500 | — | — | 434,063 | 434,063 | 660,028 | — | — | 1,094,091 | ||||||||||||||||||||||||||||||
Comas Interactive Co., Ltd. (Formerly INNOTG Co., Ltd.) | (1,611 | ) | — | — | — | (1,611 | ) | |||||||||||||||||||||||||||||||||
eXtended Computing Environment Co., Ltd. | — | 866 | — | — | 866 | |||||||||||||||||||||||||||||||||||
ZeroOne Interactive Co.,Ltd. | — | (655 | ) | — | 71 | (584 | ) | |||||||||||||||||||||||||||||||||
DAEA TI Co., Ltd. (Formerly Comas Interactive Co., Ltd.) | (1,611 | ) | 145 | — | — | (1,466 | ) | |||||||||||||||||||||||||||||||||
Extended Computing Environment Co., Ltd. | 866 | 29 | — | — | 895 | |||||||||||||||||||||||||||||||||||
nTels Co., Ltd. | — | 1,490 | — | — | 1,490 | |||||||||||||||||||||||||||||||||||
Qualcomm Inc. Ltd. | — | (696 | ) | — | — | (696 | ) | |||||||||||||||||||||||||||||||||
China Unicom Ltd. | — | 599,012 | — | — | 599,012 | |||||||||||||||||||||||||||||||||||
ZeroOne Interactive Co., Ltd. | (584 | ) | (1,147 | ) | — | 189 | (1,542 | ) | ||||||||||||||||||||||||||||||||
T-Entertainment Co., Ltd. | — | (682 | ) | 74 | (608 | ) | ||||||||||||||||||||||||||||||||||
HB Entertainment Co., Ltd. | 56 | (1,272 | ) | — | 795 | (421 | ) | (421 | ) | 421 | — | — | — | |||||||||||||||||||||||||||
LG Powercomm Co., Ltd. | (159,873 | ) | 9,053 | — | — | (150,820 | ) | |||||||||||||||||||||||||||||||||
(Formerly Powercomm Co., Ltd.) | (163,113 | ) | 3,240 | — | — | (159,873 | ) | |||||||||||||||||||||||||||||||||
SK C&C Co., Ltd. | — | 691,248 | — | — | 691,248 | |||||||||||||||||||||||||||||||||||
Eonex Technologies Inc. | 2,011 | — | — | — | 2,011 | 2,011 | — | — | — | 2,011 | ||||||||||||||||||||||||||||||
Public bonds | — | (4 | ) | — | — | (4 | ) | (4 | ) | (201 | ) | — | — | (205 | ) | |||||||||||||||||||||||||
Currency stabilization bonds | (217 | ) | 906 | (677 | ) | — | 12 | 12 | (247 | ) | — | — | (235 | ) | ||||||||||||||||||||||||||
Convertible bonds of China Unicom Ltd. | — | 319,648 | — | — | 319,648 | 319,648 | 208,095 | (527,743 | ) | — | — | |||||||||||||||||||||||||||||
Convertible bonds of Empas Corp. | — | 33,820 | — | (4,218 | ) | 29,602 | 29,602 | — | (29,602 | ) | 137 | 137 | ||||||||||||||||||||||||||||
Beneficiary certificates | — | 9,256 | — | 46 | 9,302 | |||||||||||||||||||||||||||||||||||
Sub-total | (58,059 | ) | 654,163 | (677 | ) | (3,352 | ) | 592,075 | 592,075 | 2,206,433 | (557,345 | ) | 446 | 2,241,609 | ||||||||||||||||||||||||||
Less tax effect (note a) | 15,966 | (179,894 | ) | 186 | 895 | (162,847 | ) | (162,847 | ) | (607,406 | ) | 153,270 | (13 | ) | (616,996 | ) | ||||||||||||||||||||||||
Total | (42,093 | ) | 474,269 | (491 | ) | (2,457 | ) | 429,228 | 429,228 | 1,599,027 | (404,075 | ) | 433 | 1,624,613 | ||||||||||||||||||||||||||
F-27F-31
For the Year Ended December 31, 2007 | For the Year Ended December 31, 2008 | |||||||||||||||||||||||||||||||||||||||
Minority Interest | Minority | |||||||||||||||||||||||||||||||||||||||
Transferred | in Equity of | Transferred | Interest in Equity | |||||||||||||||||||||||||||||||||||||
Beginning | Increase/ | to Realized | Consolidated | Ending | Beginning | Increase/ | to Realized | of Consolidated | Ending | |||||||||||||||||||||||||||||||
Balance | (Decrease) | Gain (Loss) | Subsidiaries | Balance | Balance | (Decrease) | Gain (Loss) | Subsidiaries | Balance | |||||||||||||||||||||||||||||||
Available-for-sales securities: | ||||||||||||||||||||||||||||||||||||||||
Digital Chosunilbo Co., Ltd. | 116 | 2,731 | — | — | 2,847 | 2,847 | (2,992 | ) | — | — | (145 | ) | ||||||||||||||||||||||||||||
hanarotelecom incorporated | (33,096 | ) | 27,944 | — | — | (5,152 | ) | |||||||||||||||||||||||||||||||||
SK Broadband Co., Ltd. (formerly hanarotelecom incorporated) | (5,152 | ) | — | 5,152 | — | — | ||||||||||||||||||||||||||||||||||
KRTnet Corporation | 1,346 | (46 | ) | — | — | 1,300 | 1,300 | (1,373 | ) | — | — | (73 | ) | |||||||||||||||||||||||||||
POSCO | 434,063 | 660,028 | — | — | 1,094,091 | 1,094,091 | (483,855 | ) | — | — | 610,236 | |||||||||||||||||||||||||||||
DAEA TI Co., Ltd. (Formerly Comas Interactive Co., Ltd.) | (1,611 | ) | 145 | — | — | (1,466 | ) | (1,466 | ) | (140 | ) | — | — | (1,606 | ) | |||||||||||||||||||||||||
eXtended Computing Environment Co., Ltd. | 866 | 29 | — | — | 895 | |||||||||||||||||||||||||||||||||||
Extended Computing Environment Co., Ltd. | 895 | (865 | ) | — | — | 30 | ||||||||||||||||||||||||||||||||||
nTels Co., Ltd. | — | 1,490 | — | — | 1,490 | 1,490 | (1,020 | ) | — | — | 470 | |||||||||||||||||||||||||||||
Qualcomm Inc. Ltd. | — | (696 | ) | — | — | (696 | ) | (696 | ) | 454 | — | — | (242 | ) | ||||||||||||||||||||||||||
China Unicom Ltd. | — | 599,012 | — | — | 599,012 | 599,012 | (998,891 | ) | — | — | (399,879 | ) | ||||||||||||||||||||||||||||
LG Powercomm Co., Ltd. | (150,820 | ) | 150,459 | — | 204 | (157 | ) | |||||||||||||||||||||||||||||||||
ZeroOne Interactive Co., Ltd. | (584 | ) | (1,147 | ) | — | 189 | (1,542 | ) | (1,542 | ) | — | 1,730 | (188 | ) | — | |||||||||||||||||||||||||
T-Entertainment Co., Ltd. | — | (682 | ) | — | 74 | (608 | ) | (608 | ) | (462 | ) | — | 50 | (1,020 | ) | |||||||||||||||||||||||||
HB Entertainment Co., Ltd. | (421 | ) | 421 | — | — | — | ||||||||||||||||||||||||||||||||||
LG Powercomm Co., Ltd. (Formerly Powercomm Co., Ltd.) | (159,873 | ) | 9,053 | — | — | (150,820 | ) | |||||||||||||||||||||||||||||||||
De Chocolate E&TF Co., Ltd. | — | (341 | ) | — | 214 | (127 | ) | |||||||||||||||||||||||||||||||||
C.C.S. Inc. | — | (44 | ) | — | 25 | (19 | ) | |||||||||||||||||||||||||||||||||
Medifron DBT Co., Ltd. | — | (83 | ) | — | 47 | (36 | ) | |||||||||||||||||||||||||||||||||
Dreamline Corp. | — | (9,162 | ) | — | 5,184 | (3,978 | ) | |||||||||||||||||||||||||||||||||
Saeronet Broadcasting Co., Ltd. | — | (81 | ) | — | �� | 46 | (35 | ) | ||||||||||||||||||||||||||||||||
SK C&C Co., Ltd. | — | 691,248 | — | — | 691,248 | 691,248 | (360,888 | ) | — | — | 330,360 | |||||||||||||||||||||||||||||
Eonex Technologies Inc. | 2,011 | — | — | — | 2,011 | 2,011 | (2,011 | ) | — | — | — | |||||||||||||||||||||||||||||
Public bonds | (4 | ) | (201 | ) | — | — | (205 | ) | (205 | ) | 205 | — | — | — | ||||||||||||||||||||||||||
Currency stabilization bonds | 12 | (247 | ) | — | — | (235 | ) | (235 | ) | 235 | — | — | — | |||||||||||||||||||||||||||
Convertible bonds of China Unicom Ltd. | 319,648 | 208,095 | (527,743 | ) | — | — | ||||||||||||||||||||||||||||||||||
Convertible bonds of Empas Corp. | 29,602 | — | (29,602 | ) | 137 | 137 | 137 | — | — | — | 137 | |||||||||||||||||||||||||||||
Beneficiary certificates | — | 9,256 | — | 46 | 9,302 | 9,302 | (10,656 | ) | 133 | 985 | (236 | ) | ||||||||||||||||||||||||||||
Sub-total | 592,075 | 2,206,433 | (557,345 | ) | 446 | 2,241,609 | 2,241,609 | (1,721,511 | ) | 7,015 | 6,567 | 533,680 | ||||||||||||||||||||||||||||
Less tax effect (note a) | (162,847 | ) | (607,406 | ) | 153,270 | (13 | ) | (616,996 | ) | (616,996 | ) | 492,830 | (1,453 | ) | (219 | ) | (125,838 | ) | ||||||||||||||||||||||
Total | 429,228 | 1,599,027 | (404,075 | ) | 433 | 1,624,613 | 1,624,613 | (1,228,681 | ) | 5,562 | 6,348 | 407,842 | ||||||||||||||||||||||||||||
(note a) | Represents adjustments to reflect the tax effect of temporary differences directly charged or credited to unrealized gains (losses) on valuation of long-term investment securities, which are other comprehensive income (loss) items, in accordance with SKAS No. 16 “Income Taxes”, which is effective January 1, 2005. |
F-28F-32
5. | EQUITY SECURITIES ACCOUNTED FOR USING THE EQUITY METHOD |
December 31, 2007 | Carrying Amount | December 31, 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership | Number | Ownership | Acquisition | Net Asset | Carrying Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Percentage | Acquisition | Net asset | of Shares | Percentage (%) | Cost | Value | 2006 | 2007 | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||
of Shares | (%) | Cost | Value | 2005 | 2006 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pantech Co., Ltd. (Formerly SK Teletech Co., Ltd.) | — | — | — | — | (note a) | 55,732 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
SK Marketing & Company Co., Ltd. | 5,000,000 | 50.0 | 190,000 | 96,798 | (note n | ) | — | — | 96,798 | |||||||||||||||||||||||||||||||||||||||||||||||||||
AirCross Co., Ltd. | 1,575,000 | 100.0 | 2,440 | 7,289 | (note d | ) | 1,477 | — | 7,289 | |||||||||||||||||||||||||||||||||||||||||||||||||||
SK C&C Co., Ltd. | — | — | — | — | (note b) | 168,244 | 268,278 | — | — | — | — | — | (note a | ) | 268,278 | — | — | |||||||||||||||||||||||||||||||||||||||||||
STIC Ventures Co., Ltd. | — | — | — | — | (note c) | 8,379 | 8,611 | — | — | — | — | — | (note b | ) | 8,611 | — | — | |||||||||||||||||||||||||||||||||||||||||||
TU Media Corp. | — | — | — | — | (note d) | 32,343 | 7,214 | — | — | — | — | — | (note c | ) | 7,214 | — | — | |||||||||||||||||||||||||||||||||||||||||||
AirCross Co., Ltd. | — | — | — | — | (note e) | 966 | 1,477 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Harex Info Tech, Inc. | 225,000 | 21.2 | 3,375 | 417 | 2,530 | 1,805 | 1,118 | 225,000 | 21.2 | 3,375 | 245 | 1,805 | 1,118 | 596 | ||||||||||||||||||||||||||||||||||||||||||||||
SK Mobile | — | 42.5 | 10,322 | 3,273 | (note f) | — | 4,666 | 3,273 | — | 20.0 | 4,930 | 2,110 | (note e | ) | 4,666 | 3,273 | 2,111 | |||||||||||||||||||||||||||||||||||||||||||
Skytel Co., Ltd. | 1,756,400 | 26.4 | 2,159 | 7,743 | 4,786 | 5,823 | 7,743 | 1,951,777 | 29.3 | 2,159 | 13,858 | 5,823 | 7,743 | 13,858 | ||||||||||||||||||||||||||||||||||||||||||||||
SK China Company Ltd. | 28,160 | 20.7 | 3,195 | 1,222 | 485 | — | 137 | 94,960 | 29.7 | 6,159 | 4,556 | — | 137 | 3,577 | ||||||||||||||||||||||||||||||||||||||||||||||
Helio, LLC & Helio, Inc. | — | — | — | — | (note g) | 102,272 | 80,130 | — | — | — | — | — | (note f | ) | 80,130 | — | — | |||||||||||||||||||||||||||||||||||||||||||
TR Entertainment | 13,542,553 | 42.2 | 10,953 | 2,770 | (note o | ) | — | — | 9,626 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Virgin Mobile USA, Inc. | — | 16.6 | 72,496 | (57,084 | ) | (note p | ) | — | — | 62,096 | ||||||||||||||||||||||||||||||||||||||||||||||||||
SK Telecom China Holding Co., Ltd. | — | — | — | — | (note u | ) | — | 19,070 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
SK USA, Inc. | 49 | 49.0 | 3,184 | 3,141 | 3,279 | 3,016 | 3,141 | 49 | 49.0 | 3,184 | 5,249 | 3,016 | 3,141 | 5,249 | ||||||||||||||||||||||||||||||||||||||||||||||
Korea IT Fund | 190 | 14.3 | 190,000 | 210,568 | (note h) | — | 193,061 | 210,568 | 190 | 63.3 | 190,000 | 210,735 | (note g | ) | 193,061 | 210,568 | 210,735 | |||||||||||||||||||||||||||||||||||||||||||
Michigan Global Cinema Fund | — | — | — | (note i) | 4,000 | 3,773 | — | — | — | — | — | (note h | ) | 3,773 | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Centurion IT Investment Association | — | — | — | — | (note i | ) | — | 2,463 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
3rd Fund of Isu Entertainment | 31.3 | 3,000 | 2,028 | 2,500 | 2,419 | 2,028 | 25 | 31.3 | 2,500 | 1,882 | 2,419 | 2,028 | 1,882 | |||||||||||||||||||||||||||||||||||||||||||||||
Centurion IT Investment Association | 53.2 | 1,930 | 2,463 | (note j) | — | — | 2,463 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Magic Tech Network | 4,500 | 30.0 | 8,494 | 2,162 | (note g | ) | — | — | 7,725 | |||||||||||||||||||||||||||||||||||||||||||||||||||
SK Telecom Global Investment B.V. | 18,000 | 100.0 | 26,044 | 31,807 | (note r | ) | — | — | 31,807 | |||||||||||||||||||||||||||||||||||||||||||||||||||
SKY Property Mgmt. Ltd. | 22,980 | 60.0 | 283,368 | 287,006 | (note s | ) | — | — | 287,006 | |||||||||||||||||||||||||||||||||||||||||||||||||||
CDMA Mobile Phone Center | 50.0 | 147,627 | 66,001 | 40,810 | 84,689 | 66,001 | — | 50.0 | 161,256 | 67,139 | 84,689 | 66,001 | 67,139 | |||||||||||||||||||||||||||||||||||||||||||||||
Wave City Development Co., Ltd. | 380,000 | 19.0 | 1,967 | 1,908 | (note t | ) | — | — | 1,908 | |||||||||||||||||||||||||||||||||||||||||||||||||||
SK Cyberpass, Inc. | 33,196 | 84.9 | 6,372 | 3,809 | (note m | ) | 1,780 | — | 4,068 | |||||||||||||||||||||||||||||||||||||||||||||||||||
E-Eye High Tech | — | 65.5 | 20,952 | 11,121 | (note u | ) | — | — | 19,801 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Cyworld Japan Co., Ltd. | 1,250,000 | 100.0 | 10,584 | 1,169 | 4,362 | 4,091 | 3,690 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cyworld Incorporated | 9,500,000 | 100.0 | 9,071 | — | 3,592 | 2,672 | 2,672 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Prmaxsoftware tech.Co.,Ltd. | — | 89.3 | 7,128 | 7,127 | (note v | ) | — | — | 7,127 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Mobile Money Ventures, LLC | — | 50.0 | 8,821 | 5,283 | (note w | ) | — | — | 5,283 | |||||||||||||||||||||||||||||||||||||||||||||||||||
SK Telecom Holdings America, Inc. | 100 | 100.0 | 12,990 | 12,990 | — | 4,050 | 12,990 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Benex Movie Expert Fund | 810 | 46.6 | 8,100 | 8,045 | (note x | ) | — | — | 8,045 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Empas Corp. | — | — | — | — | (note k) | — | 36,474 | — | — | — | — | — | (note j | ) | 36,474 | — | — | |||||||||||||||||||||||||||||||||||||||||||
SK i-media Co., Ltd. | — | — | — | — | (note l) | — | 11,312 | — | — | — | — | — | (note k | ) | 11,312 | — | — | |||||||||||||||||||||||||||||||||||||||||||
Cyworld Japan Co., Ltd. | 1,250,000 | 100.0 | 10,584 | 1,943 | (note m) | 726 | 4,362 | 4,091 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cyworld Incorporated | 9,500,000 | 100.0 | 9,071 | — | (note m) | 524 | 3,592 | 2,672 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
SK Telecom China Holding Co., Ltd | — | 100.0 | 19,070 | 19,070 | (note m) | — | — | 19,070 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Ntreev Soft Co., Ltd. | — | — | — | — | (note l) | — | 4,800 | — | — | — | — | — | (note k | ) | 4,800 | — | — | |||||||||||||||||||||||||||||||||||||||||||
Konan Technology | — | — | — | — | (note l) | — | 4,037 | — | — | — | — | — | (note k | ) | 4,037 | — | — | |||||||||||||||||||||||||||||||||||||||||||
SK Cyberpass, Inc. | — | — | — | — | (note l) | 1,949 | 1,780 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cyworld Europe GmbH | — | 50.2 | 4,208 | 1,321 | (note m) | — | 512 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cyworld China (Holdings) Ltd. | 9,000,100 | 100.0 | 8,467 | — | (note m) | — | 12 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
WiderThan Co., Ltd. | — | — | — | — | 11,503 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
IHQ, Inc. | — | — | — | — | 14,755 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SKT-HP Ventures, LLC. | — | — | — | — | 5,290 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Etoos Group Inc. | — | — | — | — | 2,586 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other investment in affiliates | — | — | 35,601 | — | 8,220 | 19,090 | 28,661 | 44,183 | 19,602 | 24,611 | 25,434 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total | 451,793 | 471,879 | 750,921 | 350,966 | 1,097,526 | 750,921 | 350,966 | 898,512 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
F-29F-33
(note | For the year ended December 31, 2007, the Company’s shares of SK C&C Co., Ltd. were increased to 6,000,000 shares from 300,000 shares as a result of SK C&C Co., Ltd.’s 20 to 1 stock split. In addition, the investment in common stock of SK C&C Co., Ltd. was reclassified toavailable-for-sale equity securities, as SK C&C Co., Ltd. became the ultimate parent company of the Company by increasing its ownership interest in SK Holdings Co., Ltd., a split-off company from SK Corporation Co., Ltd. to 25.42% as of December 31, 2007. | |
(note | For the year ended December 31, 2007, the Company disposed all of its 1,600,000 shares of STIC Ventures Co., Ltd. | |
(note | TU Media Corp. was newly included in consolidation effective April 1, 2007 as the Company’s ownership interest increased to 32.7% and is the largest stockholder of TU Media Corp. | |
(note | For the year ended December 31, 2007, the Company acquired additional 975,000 shares of AirCross Co., Ltd. from WiderThan Co., Ltd. and others, which increased the Company’s ownership interest from 38.1% to 100.0% | |
(note | On March 31, 2006, the Company acquired 42.5% interests of common stock of SK Mobile from Pantech Co., Ltd. and others. | |
(note | In the first quarter of 2005, the Company incorporated SK Telecom USA Holdings, Inc. with an initial investment of US$83 million in order to invest and manage Helio, LLC, a joint venture company in the United States of America, which was established in order to provide wireless telecommunication service in the United States of America. Through December 31, 2007, the Company additionally invested in Helio, LLC and the Company’s ownership interest increased to 64.9%. As a result, Helio, LLC became subsidiary and included in consolidation effective November 1, 2007. | |
(note | The investment in Korea IT Fund was reclassified to equity securities accounted for using the equity method for the year ended December 31, 2006 as the Company has ability to exercise significant influence on the investee. In accordance with the Agreement of Korea IT Fund, the Company has voting rights of 14.3%, while the Company invested 63.3% of total capital contribution and has profit sharing rights of 63.3%. | |
(note | As TU Media Corp. became a subsidiary of the Company during the year ended December 31, 2007, TU Media Corp.’s ownership interest in Michigan Global Cinema Fund added to the Company’s ownership interest in Michigan Global Fund for the calculation of controlling ownership interest. As a result, Michigan Global Cinema Fund was newly included in consolidation effective April 1, 2007. | |
(note | Centurion IT Investment Association was deconsolidated as it was dissolved on February 2008; instead, it was accounted for using the equity method for the year ended December 31, 2007. | |
(note | Empas Corp. was merged into SK Communications Co., Ltd. during the year ended December 31, 2007. | |
(note | Through the year ended December 31, 2006, these investees were excluded from consolidation and accounted for using the equity method even though the Company’s ownership interest is over majority because their total assets at the beginning of the fiscal year were less than | |
(note | Even though the Company’s ownership interest is over majority, these investees are excluded from the consolidation and accounted for using the equity method as their total assets at the beginning of the fiscal year were less than | |
(note m) | Through the year ended December 31, 2006, SK Cyberpass, Inc. was excluded from consolidation and accounted for using the equity method even though the Company’s ownership interest is over majority because its total assets at the beginning of the fiscal year were less than |
F-34
(note n) | For the year ended December 31, 2008, the Company acquired 5,000,000 shares of SK Marketing & Company Co., Ltd. As a result, the Company holds 50.0% ownership in SK Marketing & Company Co. Ltd. | |
(note o) | For the year ended December 31, 2008, the Company acquired 13,542,553 shares of TR Entertainment. As a result, the Company holds 42.2% ownership in TR Entertainment. | |
(note p) | For the year ended December 31, 2008, the Company acquired 16.6% ownership in Virgin Mobile USA Inc. The company is expected to exercise significant influence to Virgin Mobile USA Inc. as the Company has the right to nominate the director for the Virgin Mobile USA Inc. even though its ownership percentage is below 20.0% | |
(note q) | For the year ended December 31, 2008, the Company acquired 4,500 shares of Magic Tech Network. As a result, the Company holds 30.0% ownership in Magic Tech Network. | |
(note r) | For the year ended December 31, 2008, the Company established in SKT Global Investment B.V. and holds 100% ownership for the investee. However, SKT Global Investment B.V. is accounted for using the equity method as its capital stock as of incorporation is less | |
(note s) | For the year ended December 31, 2008, the Company acquired 22,980 shares of SKY Property Mgmt Ltd. As a result, the Company holds 60.0% ownership for the investee. However, SKT Global Investment B.V. is included in the equity securities accounted for using the equity method as its capital as of incorporation is less | |
(note t) | For the year ended December 31, 2008, the Company acquired 380,000 shares of Wave City Development Co., Ltd. As a result, the Company holds 19.0% ownership for the investee. The Company is expected to exercise significant influence to Wave City Development Co., Ltd. as the Company have the right to nominate the director for the Wave City Development Co., Ltd. even though its ownership percentage is less than 20.0%. | |
(note u) | E-Eye High Tech whose total assets are less | |
(note v) | For the year ended December 31, 2008, the Company acquired 89.3% of equity interest in Prmaxsoftware tech.Co.,Ltd. which is accounted for using the equity method as their total assets at the beginning of the fiscal year were less than | |
(note w) | SKT America, Inc. (formerly SK Telecom International Inc.), a wholly-owned subsidiary of the Company, acquired 50.0% of equity interest in Mobile Money Ventures, LLC for the year ended December 31, 2008. | |
(note x) | For the year ended December 31, 2008, the Company acquired 810 shares of Benex Movie Expert Fund. As a result, the Company holds 46.6% ownership for the investee. |
F-30
F-35
For the Year Ended December 31, 2005 | ||||||||||||||||||||||||||||||||
Equity in Capital | ||||||||||||||||||||||||||||||||
Equity in | Surplus and Other | Other | ||||||||||||||||||||||||||||||
Beginning | Earnings | Comprehensive | Dividend | Increase | Ending | |||||||||||||||||||||||||||
Balance | Acquisition | (Losses) | Income | Received | (Decrease) | Balance | ||||||||||||||||||||||||||
Pantech Co., Ltd. | (note a | ) | — | — | 93 | (183 | ) | — | 55,822 | 55,732 | ||||||||||||||||||||||
SK C&C Co., Ltd. | (note b | ) | 201,484 | — | 18,102 | (50,742 | ) | (600 | ) | — | 168,244 | |||||||||||||||||||||
STIC Ventures Co., Ltd. | (note c | ) | 7,477 | — | (779 | ) | 317 | — | 1,364 | 8,379 | ||||||||||||||||||||||
TU Media Corp. | 34,592 | 25,611 | (27,852 | ) | (8 | ) | — | — | 32,343 | |||||||||||||||||||||||
AirCross Co., Ltd. | 940 | — | 26 | — | — | — | 966 | |||||||||||||||||||||||||
WiderThan Co., Ltd. | (note d | ) | — | — | 868 | 7 | — | 10,628 | 11,503 | |||||||||||||||||||||||
IHQ, Inc. | (note c | ) | — | 14,440 | (197 | ) | 410 | — | 102 | 14,755 | ||||||||||||||||||||||
Harex Info Tech, Inc. | (note e | ) | 3,375 | — | (845 | ) | — | — | — | 2,530 | ||||||||||||||||||||||
Skytel Co., Ltd. | (note b | ) | 3,713 | — | 1,377 | (120 | ) | (184 | ) | — | 4,786 | |||||||||||||||||||||
SK China Company Ltd. | 830 | — | (295 | ) | (50 | ) | — | — | 485 | |||||||||||||||||||||||
Helio, LLC & Helio, Inc. | (note f | ) | — | 123,586 | (21,550 | ) | — | — | 236 | 102,272 | ||||||||||||||||||||||
SK USA, Inc. | 3,056 | — | 316 | (93 | ) | — | — | 3,279 | ||||||||||||||||||||||||
SKT-QC Wireless Development Fund | (note g | ) | 5,146 | — | — | — | — | (5,146 | ) | — | ||||||||||||||||||||||
SKT-HP Ventures, LLC | 5,281 | — | 167 | (158 | ) | — | — | 5,290 | ||||||||||||||||||||||||
CDMA Mobile Phone Center | (note h | ) | 25,116 | 33,950 | (13,376 | ) | — | — | (4,880 | ) | 40,810 | |||||||||||||||||||||
SK Mobile | (note i | ) | 1,151 | 14,213 | (2,566 | ) | (22 | ) | — | (12,776 | ) | — | ||||||||||||||||||||
Cyworld Japan Co., Ltd. | — | 4,466 | (3,867 | ) | 127 | — | — | 726 | ||||||||||||||||||||||||
Etoos Group Inc. | — | 3,095 | (498 | ) | (11 | ) | — | — | 2,586 | |||||||||||||||||||||||
Other investment in affiliates | 11,867 | 12,432 | — | — | — | (7,106 | ) | 17,193 | ||||||||||||||||||||||||
304,028 | 231,793 | (50,876 | ) | (50,526 | ) | (784 | ) | 38,244 | 471,879 | |||||||||||||||||||||||
F-31
For the Year Ended December 31, 2006 | For the Year Ended December 31, 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity in | Equity in | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Surplus | Capital | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity in | and Other | Other | Surplus and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning | Earnings | Comprehensive | Dividend | Increase | Ending | Equity in | Other | Other | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance | Acquisition | (Losses) | Income | Received | (Decrease) | Balance | Beginning | Earnings | Comprehensive | Dividend | Increase | Ending | ||||||||||||||||||||||||||||||||||||||||||||||
Balance | Acquisition | (Losses) | Income | Received | (Decrease) | Balance | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Pantech Co., Ltd. (note a) | 55,732 | — | (55,902 | ) | 170 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
SK C&C Co., Ltd. (note b) | 168,244 | — | 37,825 | 63,199 | (990 | ) | — | 268,278 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pantech Co., Ltd. | (note a) | 55,732 | — | (55,902 | ) | 170 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
SK C&C Co., Ltd. | (note b) | 168,244 | — | 37,825 | 63,199 | (990 | ) | — | 268,278 | |||||||||||||||||||||||||||||||||||||||||||||||||
STIC Ventures Co., Ltd. | 8,379 | — | 845 | (613 | ) | — | — | 8,611 | 8,379 | — | 845 | (613 | ) | — | — | 8,611 | ||||||||||||||||||||||||||||||||||||||||||
TU Media Corp. | 32,343 | — | (25,129 | ) | — | — | — | 7,214 | 32,343 | — | (25,129 | ) | — | — | — | 7,214 | ||||||||||||||||||||||||||||||||||||||||||
AirCross Co., Ltd. | 966 | — | 511 | — | — | — | 1,477 | 966 | — | 511 | — | — | — | 1,477 | ||||||||||||||||||||||||||||||||||||||||||||
WiderThan Co., Ltd. (note c) | 11,503 | — | — | — | — | (11,503 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
WiderThan Co., Ltd. | (note c) | 11,503 | — | — | — | — | (11,503 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
IHQ, Inc. | 14,755 | — | (1,346 | ) | 84 | — | (13,493 | ) | — | 14,755 | — | (1,346 | ) | 84 | — | (13,493 | ) | — | ||||||||||||||||||||||||||||||||||||||||
Harex Info Tech, Inc. | 2,530 | — | (725 | ) | — | — | — | 1,805 | 2,530 | — | (725 | ) | — | — | — | 1,805 | ||||||||||||||||||||||||||||||||||||||||||
SK Mobile | — | 10,322 | (5,520 | ) | (136 | ) | — | — | 4,666 | — | 10,322 | (5,520 | ) | (136 | ) | — | — | 4,666 | ||||||||||||||||||||||||||||||||||||||||
Skytel Co., Ltd. (note b) | 4,786 | — | 1,970 | (605 | ) | (328 | ) | — | 5,823 | |||||||||||||||||||||||||||||||||||||||||||||||||
Skytel Co., Ltd. | (note b) | 4,786 | — | 1,970 | (605 | ) | (328 | ) | — | 5,823 | ||||||||||||||||||||||||||||||||||||||||||||||||
SK China Company Ltd. | 485 | — | (380 | ) | (105 | ) | — | — | — | 485 | — | (380 | ) | (105 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Helio, LLC & Helio, Inc. (note d) | 102,272 | 76,933 | (88,309 | ) | — | — | (10,766 | ) | 80,130 | |||||||||||||||||||||||||||||||||||||||||||||||||
Helio, LLC & Helio, Inc. | (note d) | 102,272 | 76,933 | (88,309 | ) | — | — | (10,766 | ) | 80,130 | ||||||||||||||||||||||||||||||||||||||||||||||||
SK USA, Inc. | 3,279 | — | 7 | (270 | ) | — | — | 3,016 | 3,279 | — | 7 | (270 | ) | — | — | 3,016 | ||||||||||||||||||||||||||||||||||||||||||
Korea IT Fund (note e) | — | — | 2,339 | 722 | — | 190,000 | 193,061 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Korea IT Fund | (note e) | — | — | 2,339 | 722 | — | 190,000 | 193,061 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Michigan Global Cinema Fund | 4,000 | — | (227 | ) | — | — | — | 3,773 | 4,000 | — | (227 | ) | — | — | — | 3,773 | ||||||||||||||||||||||||||||||||||||||||||
3rd Fund of Isu Entertainment | 2,500 | — | (81 | ) | — | — | — | 2,419 | 2,500 | — | (81 | ) | — | — | — | 2,419 | ||||||||||||||||||||||||||||||||||||||||||
SKT-HP Ventures, LLC (note f) | 5,290 | — | — | — | — | (5,290 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
CDMA Mobile Phone Center (note g) | 40,810 | 76,039 | (21,474 | ) | — | — | (10,686 | ) | 84,689 | |||||||||||||||||||||||||||||||||||||||||||||||||
SKT-HP Ventures, LLC | (note f) | 5,290 | — | — | — | — | (5,290 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
CDMA Mobile Phone Center | (note g) | 40,810 | 76,039 | (21,474 | ) | — | — | (10,686 | ) | 84,689 | ||||||||||||||||||||||||||||||||||||||||||||||||
Empas Corp. | — | 37,092 | (1,369 | ) | 751 | — | — | 36,474 | — | 37,092 | (1,369 | ) | 751 | — | — | 36,474 | ||||||||||||||||||||||||||||||||||||||||||
SK i-media Co., Ltd. | — | 12,000 | (636 | ) | (52 | ) | — | — | 11,312 | — | 12,000 | (636 | ) | (52 | ) | — | — | 11,312 | ||||||||||||||||||||||||||||||||||||||||
Cyworld Japan Co., Ltd. | 726 | 6,118 | (2,549 | ) | 67 | — | — | 4,362 | 726 | 6,118 | (2,549 | ) | 67 | — | — | 4,362 | ||||||||||||||||||||||||||||||||||||||||||
Etoos Group Inc. (note h) | 2,586 | — | (259 | ) | — | — | (2,327 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Etoos Group Inc. | (note h) | 2,586 | — | (259 | ) | — | — | (2,327 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Cyworld Incorporated | 524 | 8,547 | (5,358 | ) | (121 | ) | — | — | 3,592 | 524 | 8,547 | (5,358 | ) | (121 | ) | — | — | 3,592 | ||||||||||||||||||||||||||||||||||||||||
Other investments in affiliates | 10,169 | 17,282 | 90 | (640 | ) | — | 3,318 | 30,219 | 10,169 | 17,282 | 90 | (640 | ) | — | 3,318 | 30,219 | ||||||||||||||||||||||||||||||||||||||||||
471,879 | 244,333 | (165,677 | ) | 62,451 | (1,318 | ) | 139,253 | 750,921 | 471,879 | 244,333 | (77,368 | ) | 62,451 | (1,318 | ) | 139,253 | 750,921 | |||||||||||||||||||||||||||||||||||||||||
(note a) | Pantech Co., Ltd. suffered a significant loss due to deterioration of its liquidity during the fourth quarter of 2006, which resulted in the Company’s investments in Pantech Co., Ltd. to be reduced to zero. Equity in losses of affiliates that exceeded the carrying amount was | |
(note b) | The Company received dividends from SK C&C Co., Ltd. and Skytel Co., Ltd. and the corresponding amount was deducted from its equity method securities. | |
(note c) | The Company sold all of investments in equity securities of WiderThan Co., Ltd. for the year ended December 31, 2006 and recognized gains on disposal of investment in equity securities of | |
(note d) | Other decrease in investments in equity securities of Helio, Inc. represents losses from disposal of investments in equity securities of Helio, Inc. amounting to |
F-36
(note e) | Other increase in investments in Korea IT Fund is the carrying amount transferred fromavailable-for-sale equity securities. | |
(note f) | Investment was fully liquidated due to dissolution of SKT-HP Ventures, LLC for the year ended December 31, 2006. | |
(note g) | For the year ended December 31, 2006, SLD received a cash distribution of | |
(note h) | For the year ended December 31, 2006, Etoos Group Inc. was merged into SK Communications Co., Ltd., the Company’s subsidiary. |
F-32F-37
For the Year Ended December 31, 2007 | ||||||||||||||||||||||||||||
Equity in | ||||||||||||||||||||||||||||
Capital Surplus | ||||||||||||||||||||||||||||
Equity in | and Other | Other | ||||||||||||||||||||||||||
Beginning | Earnings | Comprehensive | Dividend | Increase | Ending | |||||||||||||||||||||||
Balance | Acquisition | (Losses) | Income | Received | (Decrease) | Balance | ||||||||||||||||||||||
SK C&C Co., Ltd. (notes a and d) | 268,278 | — | 230,252 | 4,381 | (1,260 | ) | (501,651 | ) | — | |||||||||||||||||||
STIC Ventures Co., Ltd. | 8,611 | — | — | (238 | ) | — | (8,373 | ) | — | |||||||||||||||||||
TU Media Corp. (note b) | 7,214 | — | (5,879 | ) | — | — | (1,335 | ) | — | |||||||||||||||||||
AirCross Co., Ltd. (note c) | 1,477 | — | (95 | ) | — | — | (1,382 | ) | — | |||||||||||||||||||
Harex Info Tech, Inc. | 1,805 | — | (687 | ) | — | — | — | 1,118 | ||||||||||||||||||||
SK Mobile | 4,666 | — | (1,678 | ) | 285 | — | — | 3,273 | ||||||||||||||||||||
Skytel Co., Ltd. (note d) | 5,823 | — | 2,562 | 12 | (654 | ) | — | 7,743 | ||||||||||||||||||||
SK China Company Ltd. | — | — | 54 | 83 | — | — | 137 | |||||||||||||||||||||
Helio, Inc. & Helio, LLC (note e) | 80,130 | 18,527 | (116,725 | ) | (38 | ) | — | 18,106 | — | |||||||||||||||||||
SK USA, Inc. | 3,016 | — | 96 | 29 | — | — | 3,141 | |||||||||||||||||||||
Korea IT Fund | 193,061 | — | 14,383 | 3,124 | — | — | 210,568 | |||||||||||||||||||||
Michigan Global Cinema Fund (note f) | 3,773 | — | — | — | — | (3,773 | ) | — | ||||||||||||||||||||
3rd Fund of Isu Entertainment (note g) | 2,419 | — | (891 | ) | — | — | 500 | 2,028 | ||||||||||||||||||||
Centurion IT Investment Association | — | — | 35 | 777 | — | 1,651 | 2,463 | |||||||||||||||||||||
CDMA Mobile Phone Center (note h) | 84,689 | 12,094 | (20,651 | ) | — | — | (10,131 | ) | 66,001 | |||||||||||||||||||
Empas Corp. (note i) | 36,474 | — | (6,397 | ) | 24 | — | (30,101 | ) | — | |||||||||||||||||||
SK i-media Co., Ltd. (note j) | 11,312 | — | — | — | — | (11,312 | ) | — | ||||||||||||||||||||
Cyworld Japan Co., Ltd. | 4,362 | — | (391 | ) | 120 | — | — | 4,091 | ||||||||||||||||||||
Cyworld Incorporated (note k) | 3,592 | — | (4,052 | ) | — | — | — | 2,672 | ||||||||||||||||||||
SK Telecom China Holding Co., Ltd. | — | 19,070 | — | — | — | — | 19,070 | |||||||||||||||||||||
Ntreev Soft Co., Ltd. (note j) | 4,800 | — | — | — | — | (4,800 | ) | — | ||||||||||||||||||||
Konan Technology (note l) | 4,037 | — | (109 | ) | 8 | — | (3,936 | ) | — | |||||||||||||||||||
SK Cyberpass, Inc. (note j) | 1,780 | — | — | — | — | (1,780 | ) | — | ||||||||||||||||||||
Cyworld Europe GmbH (note m) | 512 | 3,696 | (4,208 | ) | ��� | — | — | — | ||||||||||||||||||||
Cyworld China (Holdings) Ltd. (note m) | — | 8,467 | (8,467 | ) | — | — | — | — | ||||||||||||||||||||
Other investment in affiliates (note m) | 19,090 | 14,775 | (5,244 | ) | 176 | (268 | ) | 132 | 28,661 | |||||||||||||||||||
750,921 | 76,629 | 71,908 | 8,744 | (2,182 | ) | (558,185 | ) | 350,966 | ||||||||||||||||||||
For the Year Ended December 31, 2007 | ||||||||||||||||||||||||||||||
Equity in | ||||||||||||||||||||||||||||||
Capital | ||||||||||||||||||||||||||||||
Surplus and | ||||||||||||||||||||||||||||||
Equity in | Other | Other | ||||||||||||||||||||||||||||
Beginning | Earnings | Comprehensive | Dividend | Increase | Ending | |||||||||||||||||||||||||
Balance | Acquisition | (Losses) | Income | Received | (Decrease) | Balance | ||||||||||||||||||||||||
SK C&C Co., Ltd. | (notes a and d) | 268,278 | — | 230,252 | 4,381 | (1,260 | ) | ( | 501,651 | ) | — | |||||||||||||||||||
STIC Ventures Co., Ltd. | 8,611 | — | — | (238 | ) | — | (8,373 | ) | — | |||||||||||||||||||||
TU Media Corp. | (note b) | 7,214 | — | (5,879 | ) | — | — | (1,335 | ) | — | ||||||||||||||||||||
AirCross Co., Ltd. | (note c) | 1,477 | — | (95 | ) | — | — | (1,382 | ) | — | ||||||||||||||||||||
Harex Info Tech, Inc. | 1,805 | — | (687 | ) | — | — | — | 1,118 | ||||||||||||||||||||||
SK Mobile | 4,666 | — | (1,678 | ) | 285 | — | — | 3,273 | ||||||||||||||||||||||
Skytel Co., Ltd. | (note d) | 5,823 | — | 2,562 | 12 | (654 | ) | — | 7,743 | |||||||||||||||||||||
SK China Company Ltd. | — | — | 54 | 83 | — | — | 137 | |||||||||||||||||||||||
Helio, Inc. & Helio, LLC | (note e) | 80,130 | 18,527 | (116,725 | ) | (38 | ) | — | 18,106 | — | ||||||||||||||||||||
SK USA, Inc. | 3,016 | — | 96 | 29 | — | — | 3,141 | |||||||||||||||||||||||
Korea IT Fund | 193,061 | — | 14,383 | 3,124 | — | — | 210,568 | |||||||||||||||||||||||
Michigan Global Cinema Fund | (note f) | 3,773 | — | — | — | — | (3,773 | ) | — | |||||||||||||||||||||
3rd Fund of Isu Entertainment | (note g) | 2,419 | — | (891 | ) | — | — | 500 | 2,028 | |||||||||||||||||||||
Centurion IT Investment Association | — | — | 35 | 777 | — | 1,651 | 2,463 | |||||||||||||||||||||||
CDMA Mobile Phone Center | (note h) | 84,689 | 12,094 | (20,651 | ) | — | — | (10,131 | ) | 66,001 | ||||||||||||||||||||
Empas Corp. | (note i) | 36,474 | — | (6,397 | ) | 24 | — | (30,101 | ) | — | ||||||||||||||||||||
SK i-media Co., Ltd. | (note j) | 11,312 | — | — | — | — | (11,312 | ) | — | |||||||||||||||||||||
Cyworld Japan Co., Ltd. | 4,362 | — | (391 | ) | 120 | — | — | 4,091 | ||||||||||||||||||||||
Cyworld Incorporated | (note k) | 3,592 | — | (4,052 | ) | — | — | — | 2,672 | |||||||||||||||||||||
SK Telecom China Holding Co., Ltd. | — | 19,070 | — | — | — | — | 19,070 | |||||||||||||||||||||||
Ntreev Soft Co., Ltd. | (note j) | 4,800 | — | — | — | — | (4,800 | ) | — | |||||||||||||||||||||
Konan Technology | (note l) | 4,037 | — | (109 | ) | 8 | — | (3,936 | ) | — | ||||||||||||||||||||
SK Cyberpass, Inc. | (note j) | 1,780 | — | — | — | — | (1,780 | ) | — | |||||||||||||||||||||
Cyworld Europe GmbH | (note m) | 512 | 3,696 | (4,208 | ) | — | — | — | — | |||||||||||||||||||||
Cyworld China (Holdings) Ltd. | (note m) | — | 8,467 | (8,467 | ) | — | — | — | — | |||||||||||||||||||||
Other investment in affiliates | (note m) | 19,090 | 14,775 | (5,244 | ) | 176 | (268 | ) | 132 | 28,661 | ||||||||||||||||||||
750,921 | 76,629 | 71,908 | 8,744 | (2,182 | ) | (558,185 | ) | 350,966 | ||||||||||||||||||||||
(note a) | The investment in SK C&C Co., Ltd. was reclassified toavailable-for-sale security during the fourth quarter of 2007 as it became the ultimate parent company of the Company. | |
(note b) | TU Media Corp. was included in the consolidation of accompanying consolidated financial statements effective April 1, 2007, as the Company acquired additional equity of TU Media Corp. in February 2007. |
F-38
(note c) | AirCross Co., Ltd. was included in the consolidation of accompanying consolidated financial statements effective April 1, 2007, as the Company acquired additional equity of AirCross Co., Ltd. in March 2007. | |
(note d) | The Company received dividends from SK C&C Co., Ltd. and Skytel Co., Ltd.; the corresponding amount was deducted from its equity method securities. | |
(note e) | Helio, Inc. & Helio LLC was included in the consolidation of accompanying consolidated financial statements effective November 2007, as the Company acquired additional equity of Helio, LLC during the fourth quarter of 2007. | |
(note f) | As TU Media Corp. who had certain ownership interest of Michigan Global Cinema Fund became a subsidiary of the Company in February 2007, the Company became the largest stockholder owning more than 30% of total outstanding common stock of Michigan Global Cinema Fund and included Michigan Global Cinema Fund in the consolidation of accompanying consolidated financial statements effective April 1, 2007. | |
(note g) | Other increase in investments in equity securities of 3rd Fund of Isu Entertainment resulted from additional investment by TU Media | |
(note h) | For the year ended December 31, 2007, SKT Vietnam PTE Ltd. (formerly SLD Telecom PTE Ltd.) received a cash distribution of | |
(note i) | Other decrease in investments in equity securities of Empas Corp. resulted from the merger between Empas Corp. and SK Communications Co., Ltd. | |
(note j) | SK i-media Co., Ltd., Ntreev Soft Co., Ltd. and SK Cyberpass, Inc. were newly included in the consolidation of the accompanying financial statements as their total assets at the beginning of 2007 increased to more than | |
(note k) | Equity in losses of affiliates amounting to |
F-33
(note l) | Konan Technology which was a subsidiary of Empas Corp. was included in the consolidation of accompanying consolidated financial statements as SK Communications Co., Ltd. merged with Empas Corp. for the year ended December 31, 2007. | |
(note m) | As carrying amounts of equity securities accounted for using the equity method of Cyworld Europe GmbH, Cyworld China (Holdings) Ltd. and Cyworld Vietnam became nil, the equity method accounting was discontinued. Unrecognized losses because of the discontinuance of the equity method were |
F-39
For the Year Ended December 31, 2008 | ||||||||||||||||||||||||||||||
Equity in | ||||||||||||||||||||||||||||||
Capital | ||||||||||||||||||||||||||||||
Surplus and | ||||||||||||||||||||||||||||||
Equity in | Other | Other | ||||||||||||||||||||||||||||
Beginning | Earnings | Comprehensive | Dividend | Increase | Ending | |||||||||||||||||||||||||
Balance | Acquisition | (Losses) | Income | Received | (Decrease) | Balance | ||||||||||||||||||||||||
SK Marketing & Company Co., Ltd. | — | 190,000 | 7,410 | (100,612 | ) | — | — | 96,798 | ||||||||||||||||||||||
AirCross Co., Ltd. | (Note a) | — | — | 2,261 | — | — | 5,028 | 7,289 | ||||||||||||||||||||||
Harex Info Tech, Inc. | 1,118 | — | (522 | ) | — | — | — | 596 | ||||||||||||||||||||||
SK Mobile | (Note c) | 3,273 | 2,004 | — | — | — | (3,166 | ) | 2,111 | |||||||||||||||||||||
Skytel Co., Ltd. | 7,743 | — | 5,189 | 2,140 | (1,214 | ) | — | 13,858 | ||||||||||||||||||||||
SK China Company Ltd. | 137 | 2,963 | 164 | 313 | — | — | 3,577 | |||||||||||||||||||||||
TR Entertainment | — | 10,953 | (2,108 | ) | 781 | — | — | 9,626 | ||||||||||||||||||||||
Virgin Mobile USA Inc. | — | 29,693 | (8,896 | ) | (1,504 | ) | — | 42,803 | 62,096 | |||||||||||||||||||||
SK Telecom China Holding Co., Ltd. | (Note d) | 19,070 | — | — | — | — | (19,070 | ) | — | |||||||||||||||||||||
SK USA, Inc. | 3,141 | — | 911 | 1,197 | — | — | 5,249 | |||||||||||||||||||||||
Korea IT Fund | 210,568 | — | 4,771 | (4,604 | ) | — | — | 210,735 | ||||||||||||||||||||||
Centurion IT Investment Association | (Note e) | 2,463 | — | — | — | — | (2,463 | ) | — | |||||||||||||||||||||
3rd Fund of Isu Entertainment | 2,028 | — | (146 | ) | — | — | — | 1,882 | ||||||||||||||||||||||
Magic Tech Network | — | 8,494 | (1,233 | ) | 464 | — | — | 7,725 | ||||||||||||||||||||||
SK Telecom Global Investment B.V. | — | 26,044 | 125 | 5,638 | — | — | 31,807 | |||||||||||||||||||||||
SKY Property Mgmt. Ltd. | — | 283,368 | (1,998 | ) | 5,636 | — | — | 287,006 | ||||||||||||||||||||||
CDMA Mobile Phone Center | (Note f) | 66,001 | 13,629 | (25,766 | ) | — | — | 13,275 | 67,139 | |||||||||||||||||||||
Wave City Development Co., Ltd. | — | 1,967 | (59 | ) | — | — | — | 1,908 | ||||||||||||||||||||||
SK Cyberpass, Inc. | (Note b) | — | 3,444 | (1,584 | ) | 980 | — | 1,228 | 4,068 | |||||||||||||||||||||
ShenzhenE-Eye High Tech | — | — | (1,151 | ) | — | — | 20,952 | 19,801 | ||||||||||||||||||||||
Cyworld Japan Co., Ltd. | 4,091 | — | (539 | ) | 138 | — | — | 3,690 | ||||||||||||||||||||||
Cyworld Incorporated | 2,672 | — | — | — | — | — | 2,672 | |||||||||||||||||||||||
Prmaxsoftware tech.Co., Ltd. | — | 7,127 | — | — | — | — | 7,127 | |||||||||||||||||||||||
Mobile Money Ventures, LLC | (Note g) | — | 8,821 | (4,189 | ) | — | — | 651 | 5,283 | |||||||||||||||||||||
SK Telecom Holdings America, Inc. | 4,050 | 8,940 | — | — | — | — | 12,990 | |||||||||||||||||||||||
Benex Movie Expert Fund | — | 8,100 | (55 | ) | — | — | — | 8,045 | ||||||||||||||||||||||
Other investment in affiliates | 24,611 | 7,010 | (1,959 | ) | 1,112 | — | (5,340 | ) | 25,434 | |||||||||||||||||||||
350,966 | 612,557 | (29,374 | ) | (88,321 | ) | (1,214 | ) | 53,898 | 898,512 | |||||||||||||||||||||
(note a) | Aircross Co., Ltd. was included in the equity securities accounted for using equity method as it was fully liquidated in March 2009. | |
(note b) | SK Cyberpass, Inc was included in the equity securities accounted for using equity method as its total assets at the beginning of 2008 decreased to less than | |
(note c) | Other decrease in investments in equity securities of SK Mobile represent disposal of part of the equity shares. | |
(note d) | Other decreases in investments in equity securities of SK Telecom China Holding Co., Ltd. resulted from the fact that SK Telecom China Holding Co., Ltd. is included in consolidation for the year ended December 31, 2008. | |
(note e) | Other decrease in investments in Centurion IT Investment Association represents the collection of the Company’s investment from the full liquidation of Centurion IT Investment Association. |
F-40
(note f) | Translation gain of | |
(note g) | The amount represent translation gain of |
For the Year Ended December 31, 2005 | ||||||||||||||||
Beginning | Ending | |||||||||||||||
Balance | Increase | Amortization | Balance | |||||||||||||
Pantech Co., Ltd. | — | 820 | (27 | ) | 793 | |||||||||||
SK C&C Co., Ltd. | 5,276 | — | (406 | ) | 4,870 | |||||||||||
TU Media Corp. | — | 1,045 | (52 | ) | 993 | |||||||||||
IHQ, Inc. | — | 7,377 | (1,110 | ) | 6,267 | |||||||||||
Harex Info Tech, Inc. | — | 1,752 | (350 | ) | 1,402 | |||||||||||
Etoos Group Inc. | — | 1,914 | (333 | ) | 1,581 | |||||||||||
Total | 5,276 | 12,908 | (2,278 | ) | 15,906 | |||||||||||
For the Year Ended December 31, 2006 | ||||||||||||||||
Beginning | Ending | |||||||||||||||
Balance | In(De)crease | Amortization | Balance | |||||||||||||
Pantech Co., Ltd. | 793 | — | (793 | ) | — | |||||||||||
SK C&C Co., Ltd. | 4,870 | — | (406 | ) | 4,464 | |||||||||||
TU Media Corp. | 993 | — | (209 | ) | 784 | |||||||||||
IHQ, Inc. | 6,267 | (5,533 | ) | (734 | ) | — | ||||||||||
Harex Info Tech, Inc. | 1,402 | — | (351 | ) | 1,051 | |||||||||||
SK Mobile | — | 3,192 | (3,192 | ) | — | |||||||||||
Helio, Inc. | — | 38 | — | 38 | ||||||||||||
Empas Corp. | — | 24,159 | (1,208 | ) | 22,951 | |||||||||||
Etoos Group Inc. | 1,581 | (1,553 | ) | (28 | ) | — | ||||||||||
Other investments in affiliates | — | 12,531 | (1,086 | ) | 11,445 | |||||||||||
Total | 15,906 | 32,834 | (8,007 | ) | 40,733 | |||||||||||
For the Year Ended December 31, 2007 | ||||||||||||||||
Beginning | Ending | |||||||||||||||
Balance | In(De)crease | Amortization | Balance | |||||||||||||
SK C&C Co., Ltd. | 4,464 | (4,160 | ) | (304 | ) | — | ||||||||||
TU Media Corp. | 784 | (732 | ) | (52 | ) | — | ||||||||||
IHQ, Inc. | — | — | — | — | ||||||||||||
Harex Info Tech, Inc. | 1,051 | — | (350 | ) | 701 | |||||||||||
SK Mobile | — | — | — | — | ||||||||||||
Helio, Inc. | 38 | — | (38 | ) | — | |||||||||||
Empas Corp. | 22,951 | (18,924 | ) | (4,027 | ) | — | ||||||||||
Etoos Group Inc. | — | — | — | — | ||||||||||||
Ntreev Soft Co., Ltd. | 1,785 | (1,785 | ) | — | — | |||||||||||
Konan Technology | 3,859 | (3,859 | ) | — | — | |||||||||||
Other investments in affiliates | 5,801 | 2,899 | (1,770 | ) | 6,930 | |||||||||||
Total | 40,733 | (26,561 | ) | (6,541 | ) | 7,631 | ||||||||||
F-34F-41
For the Year Ended December 31, 2007 | ||||||||||||||||
Beginning | Ending | |||||||||||||||
Balance | In(de)crease | Amortization | Balance | |||||||||||||
SK C&C Co., Ltd. | 4,464 | (4,160 | ) | (304 | ) | — | ||||||||||
TU Media Corp. | 784 | (732 | ) | (52 | ) | — | ||||||||||
IHQ, Inc. | — | — | — | — | ||||||||||||
Harex Info Tech, Inc. | 1,051 | — | (350 | ) | 701 | |||||||||||
SK Mobile | — | — | — | — | ||||||||||||
Helio, Inc. | 38 | — | (38 | ) | — | |||||||||||
Empas Corp. | 22,951 | (18,924 | ) | (4,027 | ) | — | ||||||||||
Etoos Group Inc. | — | — | — | — | ||||||||||||
Ntreev Soft Co., Ltd. | 1,785 | (1,785 | ) | — | — | |||||||||||
Konan Technology | 3,859 | (3,859 | ) | — | — | |||||||||||
Other investments in affiliates | 5,801 | 2,899 | (1,770 | ) | 6,930 | |||||||||||
Total | 40,733 | (26,561 | ) | (6,541 | ) | 7,631 | ||||||||||
For the Year Ended December 31, 2008 | ||||||||||||||||
Beginning | Ending | |||||||||||||||
Balance | In(De)crease | Amortization | Balance | |||||||||||||
Harex Info Tech, Inc. | 701 | — | (351 | ) | 350 | |||||||||||
TR Entertainment | — | 8,066 | (1,210 | ) | 6,856 | |||||||||||
Virgin Mobile USA Inc. | — | 126,363 | (7,183 | ) | 119,180 | |||||||||||
Skytel Co., Ltd. | — | (1,387 | ) | 1,387 | — | |||||||||||
SK China Company Ltd. | — | 107 | — | 107 | ||||||||||||
Magic Tech Network | — | 6,181 | (618 | ) | 5,563 | |||||||||||
SK Cyberpass Inc. | — | 304 | (46 | ) | 258 | |||||||||||
ShenzhenE-Eye High Tech | — | 10,851 | (2,171 | ) | 8,680 | |||||||||||
Other investments in affiliates | 6,930 | (1,893 | ) | (1,601 | ) | 3,436 | ||||||||||
Total | 7,631 | 148,592 | (11,793 | ) | 144,430 | |||||||||||
For the Year Ended December 31, 2005 | ||||||||||||||||
Beginning | Ending | |||||||||||||||
Balance | Increase | Decrease | Balance | |||||||||||||
SK China Company Ltd. | 1,086 | — | — | 1,086 | ||||||||||||
Cyworld Japan Co., Ltd. | — | 2,569 | (43 | ) | 2,526 | |||||||||||
Total | 1,086 | 2,569 | (43 | ) | 3,612 | |||||||||||
For the Year Ended December 31, 2006 | ||||||||||||||||
Beginning | Ending | |||||||||||||||
Balance | Increase | Decrease | Balance | |||||||||||||
Pantech Co., Ltd. | — | 271 | (271 | ) | — | |||||||||||
SK China Company Ltd. | 1,086 | — | — | 1,086 | ||||||||||||
Cyworld Japan Co., Ltd. | 2,526 | 681 | (570 | ) | 2,637 | |||||||||||
Cyworld Incorporated | — | 1,888 | (94 | ) | 1,794 | |||||||||||
Other investments in affiliates | — | 892 | (104 | ) | 788 | |||||||||||
Total | 3,612 | 3,732 | (1,039 | ) | 6,305 | |||||||||||
For the Year Ended December 31, 2007 | ||||||||||||||||
Beginning | Ending | |||||||||||||||
Balance | Increase | Decrease | Balance | |||||||||||||
SK China Company Ltd. | 1,086 | — | — | 1,086 | ||||||||||||
Cyworld Japan Co., Ltd. | 2,637 | — | (2,227 | ) | 410 | |||||||||||
Cyworld Incorporated | 1,794 | — | (378 | ) | 1,416 | |||||||||||
Other investments in affiliates | 788 | 2,552 | (385 | ) | 2,955 | |||||||||||
Total | 6,305 | 2,552 | (2,990 | ) | 5,867 | |||||||||||
For the Year Ended December 31, 2008 | ||||||||||||||||
Beginning | Ending | |||||||||||||||
Balance | Increase | Decrease | Balance | |||||||||||||
SK China Company Ltd. | 1,086 | — | — | 1,086 | ||||||||||||
Cyworld Japan Co., Ltd. | 410 | — | (410 | ) | — | |||||||||||
Cyworld Incorporated | 1,416 | — | — | 1,416 | ||||||||||||
Other investments in affiliates | 2,955 | 57 | (192 | ) | 2,820 | |||||||||||
Total | 5,867 | 57 | (602 | ) | 5,322 | |||||||||||
F-35F-42
Net | Total | Total | Net | |||||||||||||||||||||||||||||
Total | Total | Income | Assets | Liabilities | Revenue | Income (Loss) | ||||||||||||||||||||||||||
Assets | Liabilities | Revenue | (Loss) | |||||||||||||||||||||||||||||
SK Marketing & Company Co., Ltd. | 593,884 | 400,287 | 133,271 | 14,823 | ||||||||||||||||||||||||||||
AirCross Co., Ltd. | 7,402 | 114 | 24,352 | 2,261 | ||||||||||||||||||||||||||||
Harex Info Tech, Inc. | 3,544 | 1,573 | 5,626 | (1,589 | ) | 2,241 | 1,082 | 2,798 | (812 | ) | ||||||||||||||||||||||
SK Mobile | 8,777 | 1,077 | 2,367 | (3,949 | ) | |||||||||||||||||||||||||||
Skytel Co., Ltd. | 32,934 | 3,610 | 26,309 | 9,703 | 50,653 | 3,448 | 39,815 | 14,409 | ||||||||||||||||||||||||
SK China Company Ltd. | 7,601 | 1,697 | — | 307 | 16,449 | 1,101 | 11,632 | (1,222 | ) | |||||||||||||||||||||||
TR Entertainment | 7,521 | 956 | 6,383 | (2,129 | ) | |||||||||||||||||||||||||||
SK USA, Inc. | 7,454 | 1,045 | 7,712 | 196 | 12,028 | 1,316 | 9,710 | 1,860 | ||||||||||||||||||||||||
Korea IT Fund | 332,476 | — | 33,644 | 22,710 | 332,724 | — | 19,742 | 7,534 | ||||||||||||||||||||||||
3rd Fund of Isu Entertainment | 5,408 | — | 234 | (2,332 | ) | 6,012 | — | 305 | (390 | ) | ||||||||||||||||||||||
Centurion IT Investment Association | 4,630 | 1 | 107 | 93 | ||||||||||||||||||||||||||||
Magic Tech Network | 10,194 | 2,986 | 556 | (2,049 | ) | |||||||||||||||||||||||||||
SK Telecom Global Investment B.V. | 31,845 | 39 | 286 | 125 | ||||||||||||||||||||||||||||
SKY Property Mgmt. Ltd. | 656,923 | 178,581 | 9,448 | (3,330 | ) | |||||||||||||||||||||||||||
CDMA Mobile Phone Center | 346,789 | 214,786 | 55,023 | (41,303 | ) | 451,998 | 317,719 | 73,803 | (51,532 | ) | ||||||||||||||||||||||
Wave City Development Co., Ltd. | 27,413 | 17,371 | 523 | (311 | ) | |||||||||||||||||||||||||||
SK Cyberpass, Inc. | 8,850 | 4,361 | 22,031 | (2,454 | ) | |||||||||||||||||||||||||||
ShenzhenE-Eye High Tech | 17,557 | 579 | 5,965 | 1,462 | ||||||||||||||||||||||||||||
Cyworld Japan Co., Ltd. | 2,177 | 234 | 114 | (3,741 | ) | 1,931 | 221 | 194 | (868 | ) | ||||||||||||||||||||||
Cyworld Incorporated | 3,365 | 6,571 | 55 | (6,534 | ) | 2,737 | 13,673 | 57 | (5,821 | ) | ||||||||||||||||||||||
SK Telecom (China) Holding Co., Ltd. | 19,070 | — | — | — | ||||||||||||||||||||||||||||
Cyworld Europe GmbH | 2,712 | 81 | 127 | (5,125 | ) | |||||||||||||||||||||||||||
Cyworld China (Holdings) Ltd. | 8,608 | 9,287 | 420 | (8,912 | ) | |||||||||||||||||||||||||||
Money Mobile USA, Inc. | 12,404 | 1,838 | — | (8,378 | ) | |||||||||||||||||||||||||||
Virgin Mobile USA Inc. | 480,661 | 825,373 | 479,739 | (10,345 | ) | |||||||||||||||||||||||||||
Benex Movie Expert Fund | 17,428 | 146 | 82 | (119 | ) |
6. | LOANS TO EMPLOYEES |
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Loans to employees’ stock ownership association | 14,586 | 7,526 | 34,817 | 7,526 | 34,817 | 74,878 | ||||||||||||||||||
Loans to employees for housing and other | 4,799 | 4,580 | 15,231 | 4,580 | 15,231 | 15,488 | ||||||||||||||||||
19,385 | 12,106 | 50,048 | 12,106 | 50,048 | 90,366 | |||||||||||||||||||
F-36F-43
7. | PROPERTY AND EQUIPMENT |
Useful | ||||||||||||||||||||||||||||
Lives | Useful Lives | |||||||||||||||||||||||||||
(Years) | 2005 | 2006 | 2007 | (Years) | 2006 | 2007 | 2008 | |||||||||||||||||||||
Land | 466,562 | 473,109 | 454,916 | 473,109 | 454,916 | 756,348 | ||||||||||||||||||||||
Buildings and structures | 15-50 | 1,484,360 | 1,502,755 | 1,510,199 | 15-50 | 1,502,755 | 1,510,199 | 1,925,563 | ||||||||||||||||||||
Machinery | 3-9 | 10,510,486 | 11,380,257 | 12,909,629 | 3-9 | 11,380,257 | 12,909,629 | 18,572,546 | ||||||||||||||||||||
Other | 3-5 | 846,813 | 1,004,196 | 1,028,442 | 3-5 | 1,004,196 | 1,028,442 | 1,135,325 | ||||||||||||||||||||
Construction in progress | 264,309 | 132,831 | 308,955 | 132,831 | 308,955 | 356,150 | ||||||||||||||||||||||
Total | 13,572,530 | 14,493,148 | 16,212,141 | 14,493,148 | 16,212,141 | 22,745,932 | ||||||||||||||||||||||
Less accumulated depreciation | (8,909,161 | ) | (9,985,813 | ) | (11,242,431 | ) | (9,985,813 | ) | (11,242,431 | ) | (15,305,773 | ) | ||||||||||||||||
Accumulated impairment | — | — | (2,197 | ) | ||||||||||||||||||||||||
Government subsidy | — | — | (356 | ) | — | (356 | ) | (273 | ) | |||||||||||||||||||
Property and equipment, net | 4,663,369 | 4,507,335 | 4,969,354 | 4,507,335 | 4,969,354 | 7,437,689 | ||||||||||||||||||||||
For the Year Ended December 31, 2005 | For the Year Ended December 31, 2006 | |||||||||||||||||||||||||||||||||||||||||||||||
Beginning | Ending | Beginning | Ending | |||||||||||||||||||||||||||||||||||||||||||||
Balance | Acquisition | Disposal | Transfer | Depreciation | Balance | Balance | Acquisition | Disposal | Transfer | Depreciation | Balance | |||||||||||||||||||||||||||||||||||||
Land | 466,460 | 723 | (4,698 | ) | 4,077 | — | 466,562 | 466,562 | 115 | (645 | ) | 7,077 | — | 473,109 | ||||||||||||||||||||||||||||||||||
Buildings and structures | 1,166,542 | 12,581 | (8,095 | ) | 35,472 | (55,406 | ) | 1,151,094 | 1,151,094 | 4,664 | (849 | ) | 14,262 | (55,947 | ) | 1,113,224 | ||||||||||||||||||||||||||||||||
Machinery | 2,643,107 | 54,681 | (18,990 | ) | 983,489 | (1,182,664 | ) | 2,479,623 | 2,479,623 | 65,819 | (8,571 | ) | 1,014,646 | (1,152,632 | ) | 2,398,885 | ||||||||||||||||||||||||||||||||
Other | 289,811 | 768,328 | (3,991 | ) | (657,560 | ) | (94,807 | ) | 301,781 | 301,781 | 839,284 | (17,308 | ) | (636,866 | ) | (97,605 | ) | 389,286 | ||||||||||||||||||||||||||||||
Construction in progress | 138,002 | 580,309 | — | (454,002 | ) | — | 264,309 | 264,309 | 588,260 | — | (719,738 | ) | — | 132,831 | ||||||||||||||||||||||||||||||||||
Total | 4,703,922 | 1,416,622 | (35,774 | ) | (88,524 | ) | (1,332,877 | ) | 4,663,369 | |||||||||||||||||||||||||||||||||||||||
4,663,369 | 1,498,142 | (27,373 | ) | (320,619 | ) | (1,306,184 | ) | 4,507,335 | ||||||||||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2006 | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning | Ending | Beginning | Increase | Ending | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance | Acquisition | Disposal | Transfer | Depreciation | Balance | Balance | (Decrease) | Acquisition | Disposal | Transfer | Depreciation | Balance | ||||||||||||||||||||||||||||||||||||||||
Land | 466,562 | 115 | (645 | ) | 7,077 | — | 473,109 | 473,109 | — | 471 | (20,362 | ) | 1,698 | — | 454,916 | |||||||||||||||||||||||||||||||||||||
Buildings and structures | 1,151,094 | 4,664 | (849 | ) | 14,262 | (55,947 | ) | 1,113,224 | 1,113,224 | 5 | 4,998 | (3,488 | ) | 7,779 | (56,438 | ) | 1,066,080 | |||||||||||||||||||||||||||||||||||
Machinery | 2,479,623 | 65,819 | (8,571 | ) | 1,014,646 | (1,152,632 | ) | 2,398,885 | 2,398,885 | 282,925 | 106,524 | (8,420 | ) | 1,333,354 | (1,312,840 | ) | 2,800,428 | |||||||||||||||||||||||||||||||||||
Other | 301,781 | 839,284 | (17,308 | ) | (636,866 | ) | (97,605 | ) | 389,286 | 389,286 | 19,008 | 1,034,181 | (14,273 | ) | (964,200 | ) | (125,027 | ) | 338,975 | |||||||||||||||||||||||||||||||||
Construction in progress | 264,309 | 588,260 | — | (719,738 | ) | — | 132,831 | 132,831 | 5,941 | 669,793 | (893 | ) | (498,717 | ) | — | 308,955 | ||||||||||||||||||||||||||||||||||||
Total | 4,663,369 | 1,498,142 | (27,373 | ) | (320,619 | ) | (1,306,184 | ) | 4,507,335 | 4,507,335 | 307,879 | 1,815,967 | (47,436 | ) | (120,086 | ) | (1,494,305 | ) | 4,969,354 | |||||||||||||||||||||||||||||||||
F-37F-44
For the Year Ended December 31, 2007 | For the Year Ended December 31, 2008 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning | Increase | Ending | Beginning | Increase | Ending | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance | (Decrease) | Acquisition | Disposal | Transfer | Depreciation | Balance | Balance | (Decrease) | Acquisition | Disposal | Transfer | Depreciation | Balance | |||||||||||||||||||||||||||||||||||||||||||
Land | 473,109 | — | 471 | (20,362 | ) | 1,698 | — | 454,916 | 454,916 | 294,629 | 141 | (3,394 | ) | 10,056 | — | 756,348 | ||||||||||||||||||||||||||||||||||||||||
Buildings and structures | 1,113,224 | 5 | 4,998 | (3,488 | ) | 7,779 | (56,438 | ) | 1,066,080 | 1,066,080 | 319,266 | 10,984 | (2,900 | ) | 28,692 | (67,310 | ) | 1,354,812 | ||||||||||||||||||||||||||||||||||||||
Machinery | 2,398,885 | 282,925 | 106,524 | (8,420 | ) | 1,333,354 | (1,312,840 | ) | 2,800,428 | 2,800,428 | 1,675,918 | 358,052 | (55,090 | ) | 1,600,116 | (1,804,916 | ) | 4,574,508 | ||||||||||||||||||||||||||||||||||||||
Other | 389,286 | 19,008 | 1,034,181 | (14,273 | ) | (964,200 | ) | (125,027 | ) | 338,975 | 338,975 | (950 | ) | 1,138,814 | (29,633 | ) | (928,313 | ) | (123,022 | ) | 395,871 | |||||||||||||||||||||||||||||||||||
Construction in progress | 132,831 | 5,941 | 669,793 | (893 | ) | (498,717 | ) | — | 308,955 | 308,955 | 61,155 | 728,939 | (13,461 | ) | (729,438 | ) | — | 356,150 | ||||||||||||||||||||||||||||||||||||||
Total | 4,507,335 | 307,879 | 1,815,967 | (47,436 | ) | (120,086 | ) | (1,494,305 | ) | 4,969,354 | 4,969,354 | 2,350,018 | 2,236,930 | (104,478 | ) | (18,887 | ) | (1,995,248 | ) | 7,437,689 | ||||||||||||||||||||||||||||||||||||
8. | INTANGIBLE ASSETS |
December 31, 2007 | Carrying Amounts | December 31, 2008 | Carrying Amounts | |||||||||||||||||||||||||||||||||||||||||||||
Accumulated | Accumulated | Acquisition | Accumulated | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||
Acquisition Cost | Amortization | Impairment | 2005 | 2006 | 2007 | Cost | Amortization | Impairment | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||||||||||
Goodwill | 2,521,640 | (837,233 | ) | (50 | ) | 1,868,932 | 1,775,695 | 1,684,357 | 2,998,512 | (1,093,395 | ) | (5,378 | ) | 1,775,695 | 1,684,357 | 1,899,739 | ||||||||||||||||||||||||||||||||
Frequency use rights | 1,385,120 | (424,818 | ) | — | 1,184,292 | 1,076,833 | 960,302 | 1,385,120 | (541,349 | ) | — | 1,076,833 | 960,302 | 843,771 | ||||||||||||||||||||||||||||||||||
Software development costs | 243,345 | (222,940 | ) | (568 | ) | 65,991 | 45,653 | 19,837 | 270,638 | (232,872 | ) | (3,193 | ) | 45,653 | 19,837 | 34,573 | ||||||||||||||||||||||||||||||||
Customer relationships | 504,156 | (68,621 | ) | — | — | 25,139 | 435,535 | |||||||||||||||||||||||||||||||||||||||||
Other | 1,377,334 | (606,181 | ) | (1,687 | ) | 333,674 | 620,230 | 769,466 | 1,628,458 | (861,947 | ) | (1,984 | ) | 620,230 | 744,327 | 764,527 | ||||||||||||||||||||||||||||||||
5,527,439 | (2,091,172 | ) | (2,305 | ) | 3,452,889 | 3,518,411 | 3,433,962 | 6,786,884 | (2,798,184 | ) | (10,555 | ) | 3,518,411 | 3,433,962 | 3,978,145 | |||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2005 | ||||||||||||||||||||||||||||
Beginning | Ending | |||||||||||||||||||||||||||
Balance | Acquisition | Disposal | Transfer | Amortization | Impairment | Balance | ||||||||||||||||||||||
Goodwill | 1,994,339 | — | — | 9,223 | (134,630 | ) | — | 1,868,932 | ||||||||||||||||||||
Frequency use rights | 1,163,319 | 117,380 | — | — | (96,407 | ) | — | 1,184,292 | ||||||||||||||||||||
Software development costs | 105,955 | 1,472 | — | — | (41,436 | ) | — | 65,991 | ||||||||||||||||||||
Other | 259,290 | 80,642 | (342 | ) | 64,522 | (70,178 | ) | (260 | ) | 333,674 | ||||||||||||||||||
3,522,903 | 199,494 | (342 | ) | 73,745 | (342,651 | ) | (260 | ) | 3,452,889 | |||||||||||||||||||
For the Year Ended December 31, 2006 | ||||||||||||||||||||||||||||
Beginning | Ending | |||||||||||||||||||||||||||
Balance | Acquisition | Disposal | Transfer | Amortization | Impairment | Balance | ||||||||||||||||||||||
Goodwill | 1,868,932 | 1,672 | — | 44,947 | (139,806 | ) | (50 | ) | 1,775,695 | |||||||||||||||||||
Frequency use rights | 1,184,292 | 687 | — | — | (108,146 | ) | — | 1,076,833 | ||||||||||||||||||||
Software development costs | 65,991 | 1,946 | — | 9,340 | (31,624 | ) | — | 45,653 | ||||||||||||||||||||
Other | 333,674 | 69,659 | (1,250 | ) | 330,866 | (112,604 | ) | (115 | ) | 620,230 | ||||||||||||||||||
3,452,889 | 73,964 | (1,250 | ) | 385,153 | (392,180 | ) | (165 | ) | 3,518,411 | |||||||||||||||||||
F-38F-45
For the Year Ended December 31, 2007 | For the Year Ended December 31, 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning | Increase | Ending | Beginning | Increase | Ending | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance | (Decrease) | Acquisition | Disposal | Transfer | Amortization | Impairment | Balance | Balance | (Decrease) | Acquisition | Disposal | Transfer | Amortization | Impairment | Balance | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | 1,775,695 | 59,460 | 958 | (124 | ) | 6,092 | (157,724 | ) | (— | ) | 1,684,357 | 1,775,695 | 59,460 | 958 | (124 | ) | 6,092 | (157,724 | ) | (— | ) | 1,684,357 | ||||||||||||||||||||||||||||||||||||||||||||||
Frequency use rights | 1,076,833 | — | — | — | — | (116,531 | ) | — | 960,302 | 1,076,833 | — | — | — | — | (116,531 | ) | — | 960,302 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Software development costs | 45,653 | 1,881 | 3,294 | (5,673 | ) | 1,679 | (26,930 | ) | (67 | ) | 19,837 | 45,653 | 1,881 | 3,294 | (5,673 | ) | 1,679 | (26,930 | ) | (67 | ) | 19,837 | ||||||||||||||||||||||||||||||||||||||||||||||
Customer relationships | — | 33,152 | — | — | 629 | (8,642 | ) | — | 25,139 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 620,230 | 119,135 | 110,850 | (5,750 | ) | 130,358 | (205,211 | ) | (146 | ) | 769,466 | 620,230 | 85,983 | 110,850 | (5,750 | ) | 129,729 | (196,569 | ) | (146 | ) | 744,327 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | 3,518,411 | 180,476 | 115,102 | (11,547 | ) | 138,129 | (506,396 | ) | (213 | ) | 3,433,962 | 3,518,411 | 180,476 | 115,102 | (11,547 | ) | 138,129 | (506,396 | ) | (213 | ) | 3,433,962 | ||||||||||||||||||||||||||||||||||||||||||||||
For the Year Ended December 31, 2008 | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Beginning | Increase | Ending | ||||||||||||||||||||||||||||||
Balance | (Decrease) | Acquisition | Disposal | Transfer | Amortization | Impairment | Balance | |||||||||||||||||||||||||
Goodwill | 1,684,357 | 481,106 | 1,305 | (55 | ) | 1,197 | (267,078 | ) | (1,093 | ) | 1,899,739 | |||||||||||||||||||||
Frequency use rights | 960,302 | — | — | — | — | (116,531 | ) | — | 843,771 | |||||||||||||||||||||||
Software development costs | 19,837 | 4,950 | 16,356 | (1 | ) | 10,769 | (14,713 | ) | (2,625 | ) | 34,573 | |||||||||||||||||||||
Customer relationships | 25,139 | 479,017 | — | — | — | (68,621 | ) | — | 435,535 | |||||||||||||||||||||||
Other | 744,327 | 16,255 | 131,680 | (10,809 | ) | 180,673 | (297,085 | ) | (514 | ) | 764,527 | |||||||||||||||||||||
Total | 3,433,962 | 981,328 | 149,341 | (10,865 | ) | 192,639 | (764,028 | ) | (4,232 | ) | 3,978,145 | |||||||||||||||||||||
Amount | Description | Residual Useful Lives | ||||||
Goodwill | Goodwill related to merger of Shinsegi Telecomm, Inc. | |||||||
Goodwill related to merger of Empas Corp. | ||||||||
″ | 378,084 | Goodwill related to acquire of SK Broadband Co., Ltd. | 19 years and 3 months | |||||
IMT license | Frequency use rights relating to W-CDMA service | (note a) | ||||||
WiBro license | WiBro service | (note b) | ||||||
DMB license | DMB service | |||||||
Customer relationships | 435,535 | Customer relationships related to acquisition of SK Broadband Co., Ltd. | 4 years and 9 months |
(note a) | With its application for a license to provide IMT services, the Company has a commitment to pay |
F-46
at present value) as an intangible asset. Amortization of the IMT license commenced when the Company started its commercial IMT service in December 2003, using the straight-line method over the estimated useful life (13 years) of the IMT license which expires in December 2016. The Company determined the IMT license has a finite life, considering that renewal cost is expected to be substantial. As of December 31, | ||
(note b) | The Company purchased the WiBro license from MIC on March 30, 2005. The license period is seven years from the purchase date. Amortization of the WiBro license commenced when the Company started its commercial WiBro services on June 30, 2006 using the straight line method over the remaining useful life. |
F-39F-47
9. | BONDS PAYABLE |
Annual | ||||||||||||||||||
Maturity | Interest | |||||||||||||||||
Year | Rate (%) | 2005 | 2006 | 2007 | ||||||||||||||
Domestic general bonds | 2006 | 5.0-6.0 | 800,000 | — | — | |||||||||||||
² | 2007 | 5.0-6.0 | 700,000 | 700,000 | — | |||||||||||||
² | 2008 | 5.0 | 300,000 | 300,000 | 300,000 | |||||||||||||
² | 2009 | 5.0 | 300,000 | 300,000 | 300,000 | |||||||||||||
² | 2010 | 4.0 | 200,000 | 200,000 | 200,000 | |||||||||||||
² | 2011 | 3.0 | 200,000 | 200,000 | 200,000 | |||||||||||||
² (note a) | 2012 | 3 month Euro Yen | — | — | 104,166 | |||||||||||||
Libor+0.55 | ||||||||||||||||||
² | 2013 | 4.0 | — | 200,000 | 200,000 | |||||||||||||
² | 2014 | 5.0 | — | — | 200,000 | |||||||||||||
² | 2016 | 5.0 | — | 200,000 | 200,000 | |||||||||||||
Unsecured private bonds (note c) | 2008 | 6.07-6.14 | — | — | 30,000 | |||||||||||||
² (notes b and c) | 2009 | 6.51-7.48 | — | — | 34,584 | |||||||||||||
² (note c) | 2009 | 6.45 | — | — | 30,000 | |||||||||||||
² (note c) | 2010 | 6.50-7.07 | — | — | 36,250 | |||||||||||||
Unsecured public bonds (note c) | 2008 | 5.50 | — | — | 50,000 | |||||||||||||
² (note c) | 2010 | 6.30-6.81 | — | — | 110,000 | |||||||||||||
Dollar denominated bonds (US$300,000) | 2011 | 4.25 | 303,900 | 278,880 | 281,460 | |||||||||||||
Dollar denominated bonds (US$400,000) | 2027 | 6.63 | — | — | 375,280 | |||||||||||||
Private bonds (¥125,000) | 2007 | 4.65 | — | 684 | — | |||||||||||||
Convertible bonds (SK Telecom) (note d) | 2009 | — | 385,885 | 356,356 | 268,415 | |||||||||||||
Convertible bonds (IHQ, Inc.) | 2008 | — | — | 18,356 | — | |||||||||||||
Convertible bonds (YTN Media, Inc.) | 2007 | 1.0 | — | 1,000 | — | |||||||||||||
Bond with stock purchase warrant | ||||||||||||||||||
(SK Communications Co., Ltd.) | 2007 | 4.65 | — | 684 | — | |||||||||||||
Sub total | 3,189,785 | 2,755,960 | 2,920,155 | |||||||||||||||
Less discounts on bonds | (40,016 | ) | (39,422 | ) | (46,557 | ) | ||||||||||||
Less conversion right adjustments | (65,218 | ) | (46,079 | ) | (19,665 | ) | ||||||||||||
Less warrant right adjustments | — | (23 | ) | — | ||||||||||||||
Add long-term accrued interest | 24,808 | 23,854 | 17,256 | |||||||||||||||
Net | 3,109,359 | 2,694,290 | 2,871,189 | |||||||||||||||
Less portion due within one year | (795,151 | ) | (698,967 | ) | (522,528 | ) | ||||||||||||
Long-term portion | 2,314,208 | 1,995,323 | 2,348,661 | |||||||||||||||
Annual | ||||||||||||||||
Maturity | Interest | |||||||||||||||
Year | Rate (%) | 2006 | 2007 | 2008 | ||||||||||||
Domestic general bonds | 2007 | 5.0-6.0 | 700,000 | — | — | |||||||||||
″ | 2008 | 5.0 | 300,000 | 300,000 | — | |||||||||||
″ | 2009 | 5.0 | 300,000 | 300,000 | 300,000 | |||||||||||
″ | 2010 | 4.0~ 6.77 | 200,000 | 200,000 | 250,000 | |||||||||||
″ | 2011 | 3.0 | 200,000 | 200,000 | 200,000 | |||||||||||
3 month Euro Yen | ||||||||||||||||
″ (note a) | 2012 | Libor+0.55 | — | 104,166 | 174,236 | |||||||||||
″ | 2013 | 4.0~ 6.92 | 200,000 | 200,000 | 450,000 | |||||||||||
″ | 2014 | 5.0 | — | 200,000 | 200,000 | |||||||||||
″ | 2015 | 5.0 | — | — | 200,000 | |||||||||||
″ | 2016 | 5.0 | 200,000 | 200,000 | 200,000 | |||||||||||
″ | 2018 | 5.0 | — | — | 200,000 | |||||||||||
Unsecured private bonds | 2008 | 6.07-6.14 | — | 30,000 | — | |||||||||||
″ (note b) | 2009 | 6.51-7.48 | — | 34,584 | 23,205 | |||||||||||
″ | 2009 | 6.45 | — | 30,000 | 30,000 | |||||||||||
″ (note b) | 2010 | 6.50-7.07 | — | 36,250 | 28,182 | |||||||||||
Unsecured public bonds | 2008 | 5.50 | — | 50,000 | — | |||||||||||
″ | 2010 | 6.30-6.81 | — | 110,000 | 110,000 | |||||||||||
″ | 2011 | 9.08 | — | — | 25,000 | |||||||||||
Debentures (notes c and e) | 2009 | 6.08 | — | — | 96,172 | |||||||||||
″ (notes c and f) | 2010 | 8.75~ 9.25 | — | — | 80,000 | |||||||||||
″ (notes c and f) | 2011 | 6.65~ 9.20 | — | — | 315,718 | |||||||||||
Dollar denominated bonds (US$300,000) | 2011 | 4.25 | 278,880 | 281,460 | 377,250 | |||||||||||
Dollar denominated bonds (US$500,000) (notes c and g) | 2012 | 7.0 | — | — | 656,251 | |||||||||||
Dollar denominated bonds (US$400,000) | 2027 | 6.63 | — | 375,280 | 503,000 | |||||||||||
Floating rate notes | 3-month | |||||||||||||||
(US$150,000) (note a) | 2010 | LIBOR rate +3.05 | — | — | 188,625 | |||||||||||
Private bonds (¥125,000) | 2007 | 4.65 | 684 | — | — | |||||||||||
Convertible bonds (SK Telecom) (note d) | 2009 | — | 356,356 | 268,415 | 268,415 | |||||||||||
Convertible bonds (IHQ, Inc.) | 2008 | — | 18,356 | — | — | |||||||||||
Convertible bonds (YTN Media, Inc.) | 2007 | 1.0 | 1,000 | — | — | |||||||||||
Bond with stock purchase warrant (SK Communications Co., Ltd.) | 2007 | 4.65 | 684 | — | — | |||||||||||
Sub total | 2,755,960 | 2,920,155 | 4,876,054 | |||||||||||||
Less discounts on bonds | (39,422 | ) | (46,557 | ) | (77,182 | ) | ||||||||||
Less conversion right adjustments | (46,079 | ) | (19,665 | ) | (5,733 | ) | ||||||||||
Less warrant right adjustments | (23 | ) | — | — | ||||||||||||
Add long-term accrued interest | 23,854 | 17,256 | 17,256 | |||||||||||||
Net | 2,694,290 | 2,871,189 | 4,810,395 | |||||||||||||
Less portion due within one year | (698,967 | ) | (522,528 | ) | (736,003 | ) | ||||||||||
Long-term portion | 1,995,323 | 2,348,661 | 4,074,392 | |||||||||||||
F-48
(note a) | ||
(note b) | These bonds are scheduled to repay in 3 years with a two-year grace period. | |
(note c) | These bonds are | |
(note d) | The principal amount of these convertible bonds denominated in U.S. dollar as of December 31, | |
(note e) | SK Broadband Co., Ltd. is required to keep the debt ratio lower than 400% and prohibited from disposing or leasing of its property and equipment more than | |
(note f) | SK Broadband Co., Ltd. is required to keep the debt ratio lower than 1,000% and prohibited from disposing or leasing of its property and equipment more than 20 times of its stockholders’ equity in each fiscal year in accordance with covenant provision of related borrowings. | |
(note g) | SK Broadband Co., Ltd. is required to propose tender offer to purchase its outstanding bonds at 101% of principal if investors other than foreign majority shareholders acquire more than 45% equity interest in SK Broadband Co., Ltd., and its credit rating is down-graded by designated credit rating agency (S&P, Moody’s) due to such change in management right. |
F-40
F-49
F-41F-50
10. | LONG-TERM BORROWINGS |
Final | Annual Interest | |||||||||||||||||||||||||||||||
Final | Annual Interest | Maturity | Rate (%) | |||||||||||||||||||||||||||||
Lender | Maturity Year | Rate (%) | 2005 | 2006 | 2007 | Year | (Note a) | 2006 | 2007 | 2008 | ||||||||||||||||||||||
(Note a) | ||||||||||||||||||||||||||||||||
Shinhan Bank (note b) | 2010 | 91 days CD yield + 0.25 | — | 200,000 | 200,000 | 2011 | 91 days CD yield + 0.25 | 200,000 | 200,000 | 200,000 | ||||||||||||||||||||||
² | 2011 | 3.58 | — | — | 762 | |||||||||||||||||||||||||||
Korea Development Bank | 2011 | 91 days CD yield + 1.02 | — | — | 100,000 | |||||||||||||||||||||||||||
Citibank | 2011 | 91 days CD yield + 1.20 | — | — | 100,000 | |||||||||||||||||||||||||||
Nonghyup | 2011 | 91 days CD yield + 1.30 | — | — | 100,000 | |||||||||||||||||||||||||||
Hana Bank | 2011 | 91 days CD yield + 1.50 | — | — | 150,000 | |||||||||||||||||||||||||||
Nonghyup | 2011 | 91 days CD yield + 1.50 | — | — | 50,000 | |||||||||||||||||||||||||||
Shinhan Bank | 2011 | 4.36 | — | 762 | 635 | |||||||||||||||||||||||||||
Korea Development Bank | 2011 | 5.79 | — | — | 16,253 | |||||||||||||||||||||||||||
Kookmin Bank | 2012 | 5.91 | — | — | 11,860 | |||||||||||||||||||||||||||
Korea Development Bank | 2013 | 5.91 | — | — | 10,577 | |||||||||||||||||||||||||||
Small Business Corporation | 2009 | 5.25 | — | — | 156 | 2009 | 5.25 | — | 156 | 31 | ||||||||||||||||||||||
Calyon Bank | 2013 | 6M Libor + 0.29 | US$ | — | US$ | 50,000 | US$ | 50,000 | 2013 | 6M Libor + 0.29 | US$ | 50,000 | US$ | 50,000 | US$ | 50,000 | ||||||||||||||||
DBS Bank | ² | ² | — | US$ | 25,000 | US$ | 25,000 | ″ | ″ | US$ | 25,000 | US$ | 25,000 | US$ | 25,000 | |||||||||||||||||
SMBC | ² | ² | — | US$ | 25,000 | US$ | 25,000 | ″ | ″ | US$ | 25,000 | US$ | 25,000 | US$ | 25,000 | |||||||||||||||||
Earthlink, Inc. | 2010 | 10 | — | — | US$ | 30,000 | 2010 | 10 | — | US$ | 30,000 | — | ||||||||||||||||||||
Industrial Bank of Korea | 2008 | 3.50 ~ 3.90 | ¥ | 14,802 | ¥ | 8,880 | ¥ | — | 2008 | 3.50~ 3.90 | ¥ | 8,880 | — | — | ||||||||||||||||||
² | 2009 | 3.11 | ¥ | 12,800 | ¥ | 9,100 | — | |||||||||||||||||||||||||
² | 2010 | 3.47 ~ 3.97 | — | — | 641 | |||||||||||||||||||||||||||
″ | 2009 | 3.11 | ¥ | 9,100 | — | — | ||||||||||||||||||||||||||
″ | 2010 | 2.50~ 4.00 | — | 641 | 384 | |||||||||||||||||||||||||||
Resona Bank | 2010 | 1.85 | ¥ | — | ¥ | — | ¥ | 98,573 | 2010 | 1.85 | — | ¥ | 98,573 | — | ||||||||||||||||||
Total | — | 200,000 | 201,559 | 200,000 | 201,559 | 739,740 | ||||||||||||||||||||||||||
US$ | — | US$ | 100,000 | US$ | 130,000 | US$ | 100,000 | US$ | 130,000 | US$ | 100,000 | |||||||||||||||||||||
¥ | 27,602 | ¥ | 17,980 | ¥ | 98,573 | ¥ | 17,980 | ¥ | 98,573 | — | ||||||||||||||||||||||
Equivalent in Korean won | 237 | 293,101 | 324,346 | 293,101 | 324,346 | 865,490 | ||||||||||||||||||||||||||
Less portion due within one year | (82 | ) | (75 | ) | (925 | ) | (75 | ) | (925 | ) | (9,019 | ) | ||||||||||||||||||||
Long-term portion | 155 | 293,026 | 323,421 | 293,026 | 323,421 | 856,471 | ||||||||||||||||||||||||||
(note a) | At December 31, | |||
(note b) | This long-term a borrowings is classified as long-term borrowing as the borrowing is to be rolled-over exceeding 1 year from December 31, |
Long-Term Borrowing | ||||||||||||||||
Long-Term | in Foreign Currencies | |||||||||||||||
Borrowing in | Foreign | Korean Won | ||||||||||||||
Year Ending December 31, | Korean Won | Currencies | Equivalent | Total | ||||||||||||
2008 | 508 | ¥ | 50,067 | 417 | 925 | |||||||||||
2009 | 541 | ¥ | 33,258 | 278 | 819 | |||||||||||
¥ | 15,248 | |||||||||||||||
2010 | 200,382 | US$ | 30,000 | 28,273 | 228,655 | |||||||||||
2011 | 127 | — | — | 127 | ||||||||||||
2012 and thereafter | — | US$ | 100,000 | 93,820 | 93,820 | |||||||||||
Total | ¥ | 98,573 | ||||||||||||||
201,558 | US$ | 130,000 | 122,788 | 324,346 | ||||||||||||
F-42F-51
Long-Term Borrowing | ||||||||||||||||
in Foreign Currencies | ||||||||||||||||
Long-Term Borrowing | Foreign | Korean Won | ||||||||||||||
Year Ending December 31, | in Korean Won | Currencies | Equivalent | Total | ||||||||||||
2009 | 9,019 | — | — | 9,019 | ||||||||||||
2010 | 12,599 | — | — | 12,599 | ||||||||||||
2011 | 710,856 | — | — | 710,856 | ||||||||||||
2012 | 5,503 | — | — | 5,503 | ||||||||||||
2013 and thereafter | 1,763 | US$ | 100,000 | 125,750 | 127,513 | |||||||||||
Total | 739,740 | US$ | 100,000 | 125,750 | 865,490 | |||||||||||
11. | SUBSCRIPTION DEPOSITS |
Deposit per | Deposit per | |||||||||||||||||||||||||||||||
Service Type | Subscriber | 2005 | 2006 | 2007 | Subscriber | 2006 | 2007 | 2008 | ||||||||||||||||||||||||
Cellular | 200,000 | 23,770 | 21,140 | 6,425 | 200,000 | 21,140 | 6,425 | 4,796 | ||||||||||||||||||||||||
F-52
12. | LEASES |
Annual Lease | Annual Lease | |||||||||||||||||||||||
Year Ending December 31, | Payments | Interest | Principal | Payments | Interest | Principal | ||||||||||||||||||
2008 | 2,306 | 89 | 2,217 | |||||||||||||||||||||
2009 | 425 | 36 | 389 | 74,741 | 12,951 | 61,791 | ||||||||||||||||||
2010 | 333 | 10 | 323 | 74,650 | 8,401 | 66,249 | ||||||||||||||||||
2011 | 49,260 | 3,625 | 45,635 | |||||||||||||||||||||
2012 | 28,147 | 758 | 27,388 | |||||||||||||||||||||
Total | 3,064 | 135 | 2,929 | 226,798 | 25,735 | 201,063 | ||||||||||||||||||
Less portion due within one year | (2,217 | ) | (61,790 | ) | ||||||||||||||||||||
Finance lease liabilities | 712 | 139,273 | ||||||||||||||||||||||
Minimum Lease | ||||
Year Ending December 31, | Payments | |||
2009 | 672,837 | |||
2010 | 460,046 | |||
2011 | 436,425 | |||
2012 | 410,590 | |||
2013 and thereafter | — | |||
Total | 1,979,898 | |||
F-43F-53
Minimum Lease | ||||
Year Ending December 31, | Payments | |||
2008 | 7,704 | |||
2009 | 6,723 | |||
2010 | 4,833 | |||
2011 | 1,922 | |||
2012 and thereafter | 7,545 | |||
Total | 28,727 | |||
13. | ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES |
Foreign Currencies | Korean Won Equivalent | Foreign Currencies | Korean Won Equivalent | |||||||||||||||||||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2005 | 2006 | 2007 | 2006 | 2007 | 2008 | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | US$ | 11,826 | US$ | 1,330 | US$ | 357,413 | 11,980 | 1,236 | 335,325 | US$ | 1,330 | US$ | 357,413 | US$ | 7,269 | 1,236 | 335,325 | 9,140 | ||||||||||||||||||||||||||||||
² | EUR | 3 | EUR | 2 | EUR | 117 | 3 | 2 | 162 | EUR2 | EUR117 | EUR85 | 2 | 162 | 152 | |||||||||||||||||||||||||||||||||
² | VND | 902,819 | — | — | 58 | — | — | — | — | JPY1,313 | — | — | 18 | |||||||||||||||||||||||||||||||||||
Accounts receivable — trade | US$ | 30,849 | US$ | 26,818 | US$ | 35,837 | 28,677 | 25,161 | 45,066 | |||||||||||||||||||||||||||||||||||||||
² | SG | $30 | — | — | 18 | — | — | ¥800 | ¥41,307 | — | 6 | 344 | — | |||||||||||||||||||||||||||||||||||
US$ | 31,334 | US$ | 30,849 | US$ | 26,818 | 31,741 | 28,677 | 25,161 | ||||||||||||||||||||||||||||||||||||||||
Accounts receivable — trade | — | ¥ | 800 | ¥ | 41,307 | — | 6 | 344 | ||||||||||||||||||||||||||||||||||||||||
² | EUR | 248 | EUR | 248 | EUR | 248 | 298 | 303 | 343 | EUR248 | EUR248 | EUR187 | 303 | 343 | 332 | |||||||||||||||||||||||||||||||||
² | — | — | CNY | 5,620 | — | — | 722 | — | CNY5,620 | CNY5,620 | — | 722 | 1,035 | |||||||||||||||||||||||||||||||||||
Short-term loans | — | — | US$ | 2,419 | — | — | 2,270 | — | US$ | 2,419 | US$ | 2,168 | — | 2,270 | 2,726 | |||||||||||||||||||||||||||||||||
Accounts receivable — other | US$ | 3,364 | US$ | 1,657 | US$ | 965 | 3,408 | 1,541 | 905 | US$ | 1,657 | US$ | 965 | US$ | 2 | 1,541 | 905 | 3 | ||||||||||||||||||||||||||||||
² | VND | 6,173,479 | — | — | 394 | — | — | — | — | CNY7,888 | — | — | 1,452 | |||||||||||||||||||||||||||||||||||
Guarantee deposits | — | US$ | 17 | US$ | 12 | — | 16 | 11 | US$ | 17 | US$ | 12 | US$ | 8 | 16 | 11 | 9 | |||||||||||||||||||||||||||||||
² | ¥ | 16,156 | ¥ | 21,536 | ¥ | 16,912 | 139 | 168 | 141 | ¥21,536 | ¥16,912 | ¥17,397 | 168 | 141 | 242 | |||||||||||||||||||||||||||||||||
Total assets | 48,039 | 31,949 | 365,384 | 31,949 | 365,384 | 60,175 | ||||||||||||||||||||||||||||||||||||||||||
Foreign Currencies | Korean Won Equivalent | |||||||||||||||||||||||
2006 | 2007 | 2008 | 2006 | 2007 | 2008 | |||||||||||||||||||
Accounts payable — trade | — | US$ | 27,904 | US$ | 22,295 | — | 26,179 | 28,036 | ||||||||||||||||
² | — | ¥1,251 | ¥1,251 | — | 10 | 17 | ||||||||||||||||||
² | — | — | FRF11,474 | — | — | 3 | ||||||||||||||||||
Accounts payable — other | US$ | 36,373 | US$ | 22,596 | US$ | 31,605 | 33,812 | 21,199 | 39,744 | |||||||||||||||
² | ¥19,956 | ¥16,954 | ¥112,370 | 156 | 141 | 1,566 | ||||||||||||||||||
² | HK$ | 190 | HK$ | 248 | HK$ | 41 | 23 | 30 | 7 | |||||||||||||||
² | GBP48 | GBP931 | GBP38 | 88 | 1,745 | 70 | ||||||||||||||||||
² | SG$ | 6 | SG$ | 27 | SG$ | 1 | 4 | 18 | 1 | |||||||||||||||
² | EUR 813 | EUR 588 | EUR 1,116 | 993 | 812 | 1,983 | ||||||||||||||||||
² | CHF250 | CHF250 | — | 190 | 208 | — | ||||||||||||||||||
² | CA$ | 2 | — | — | 1 | — | — | |||||||||||||||||
² | FRF11 | FRF11 | — | 2 | 2 | — | ||||||||||||||||||
Total liabilities | 35,269 | 50,344 | 71,427 | |||||||||||||||||||||
F-44F-54
Foreign Currencies | Korean Won Equivalent | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2005 | 2006 | 2007 | |||||||||||||||||||
Accounts payable — trade | US$ | 28,360 | — | US$ | 27,904 | 28,728 | — | 26,179 | ||||||||||||||||
² | — | — | ¥ | 1,251 | — | — | 10 | |||||||||||||||||
Accounts payable — other | US$ | 15,737 | US$ | 36,373 | US$ | 22,596 | 15,942 | 33,812 | 21,199 | |||||||||||||||
² | ¥ | 8,498 | ¥ | 19,956 | ¥ | 16,954 | 73 | 156 | 141 | |||||||||||||||
² | HK$ | 254 | HK$ | 190 | HK$ | 248 | 33 | 23 | 30 | |||||||||||||||
² | — | CNY | 2 | CNY | 2 | — | — | — | ||||||||||||||||
² | GBP | 453 | GBP | 48 | GBP | 931 | 791 | 88 | 1,745 | |||||||||||||||
² | SG$ | 22 | SG$ | 6 | SG$ | 27 | 13 | 4 | 18 | |||||||||||||||
² | EUR | 504 | EUR | 813 | EUR | 588 | 604 | 993 | 812 | |||||||||||||||
² | CHF | 19 | CHF | 250 | CHF | 250 | 15 | 190 | 208 | |||||||||||||||
² | CA$ | 2 | CA$ | 2 | CA$ | — | 2 | 1 | — | |||||||||||||||
² | VND | 11,823,640 | — | — | 755 | — | — | |||||||||||||||||
² | — | FRF | 11 | FRF | 11 | — | 2 | 2 | ||||||||||||||||
Total liabilities | 46,956 | 35,269 | 50,344 | |||||||||||||||||||||
14. | CAPITAL STOCK AND CAPITAL SURPLUS |
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Authorized shares | 220,000,000 | 220,000,000 | 220,000,000 | 220,000,000 | 220,000,000 | 220,000,000 | ||||||||||||||||||
Issued shares | 82,276,711 | 81,193,711 | 81,193,711 | 81,193,711 | 81,193,711 | 81,193,711 | ||||||||||||||||||
Outstanding shares, net of treasury stock | 73,614,296 | 72,667,459 | 72,584,677 | 72,667,459 | 72,584,677 | 72,486,015 |
F-45
Number of | Capital | Number of | Capital | |||||||||||||||||||||
Shares Issued | Common Stock | Surplus | Shares Issued | Common Stock | Surplus | |||||||||||||||||||
At January 1, 2005 | 82,276,711 | 44,639 | 2,968,301 | |||||||||||||||||||||
Deferred tax effect of temporary difference related to conversion rights (note a) | — | — | (18,502 | ) | ||||||||||||||||||||
Transfer of stock option from capital adjustment (note b) | — | — | 1,533 | |||||||||||||||||||||
At December 31, 2005 | 82,276,711 | 44,639 | 2,969,865 | |||||||||||||||||||||
Retirement of treasury stock (note a) | (1,083,000 | ) | — | — | ||||||||||||||||||||
Conversion of convertible bonds (note b) | — | — | (3,733 | ) | ||||||||||||||||||||
Transfer of stock options from capital adjustment (note c) | — | — | 234 | |||||||||||||||||||||
Equity in capital surplus changes of affiliates | — | — | 3,508 | — | — | 33 | ||||||||||||||||||
At December 31, 2005 | 82,276,711 | 44,639 | 2,954,840 | |||||||||||||||||||||
Retirement of treasury stock (note c) | (1,083,000 | ) | — | — | ||||||||||||||||||||
At December 31, 2006 | 81,193,711 | 44,639 | 2,966,399 | |||||||||||||||||||||
Conversion of convertible bonds (note d) | — | — | (3,733 | ) | — | — | (11,116 | ) | ||||||||||||||||
Transfer of stock options from capital adjustment (note e) | — | — | 234 | — | — | 3,246 | ||||||||||||||||||
Equity in capital surplus changes of affiliates | — | — | (1,014 | ) | — | — | (2,423 | ) | ||||||||||||||||
At December 31, 2006 | 81,193,711 | 44,639 | 2,950,327 | |||||||||||||||||||||
Conversion of convertible bonds (note f) | (11,116 | ) | ||||||||||||||||||||||
Transfer of stock options from capital adjustment (note g) | 3,246 | |||||||||||||||||||||||
Difference between the acquisition cost and the net book value incurred from the capital transaction between companies under common control (note h) | (9,696 | ) | ||||||||||||||||||||||
At December 31, 2007 | 81,193,711 | 44,639 | 2,956,106 | |||||||||||||||||||||
Decrease of conversion of convertible bonds due to change in statutory tax rates | — | — | 1,544 | |||||||||||||||||||||
Gain on disposal of treasury stock (note f) | — | — | 722 | |||||||||||||||||||||
Equity in capital surplus changes of affiliates | (7,801 | ) | — | — | 482 | |||||||||||||||||||
At December 31, 2007 | 81,193,711 | 44,639 | 2,924,960 | |||||||||||||||||||||
At December 31, 2008 | 81,193,711 | 44,639 | 2,958,854 | |||||||||||||||||||||
(note a) | ||||
The Company retired 491,000 shares and 592,000 shares of treasury stock on August 17, 2006 and September 29, 2006, respectively, and reduced retained earnings before appropriation in accordance with Korean Commercial Code. | ||||
(note | b) | For the year ended December 31, 2006, the convertible bonds with principal amount of US$25,210,000 were converted into 136,163 shares of the Company’s common stock. Such conversion was settled by the Company by using its treasury | ||
(note | c) | For the year ended December 31, 2006, the exercisable period for the stock options representing 43,390 shares, of which recognized compensation costs were | ||
(note | d) | For the year ended December 31, 2007, the convertible bonds with principal amount of US$38,820,000 were converted into 216,347 shares of the Company’s common stock. Such conversion was settled by the |
F-55
Company by using its treasury stocks (see note 16). Related to this conversion transaction, the capital surplus amount decreased by |
(note | e) | For the year ended December 31, 2007, the exercisable period for the stock options representing 65,730 shares, for which the Company recognized compensation costs of |
(note |
F-46
15. | RETAINED EARNINGS |
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Appropriated | 5,470,701 | 6,679,235 | 7,335,037 | 6,679,235 | 7,335,037 | 8,295,037 | ||||||||||||||||||
Unappropriated | 1,796,948 | 1,168,199 | 1,579,933 | 1,168,199 | 1,579,933 | 1,153,148 | ||||||||||||||||||
7,267,649 | 7,847,434 | 8,914,970 | 7,847,434 | 8,914,970 | 9,448,185 | |||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Legal reserve | 22,320 | 22,320 | 22,320 | 22,320 | 22,320 | 22,320 | ||||||||||||||||||
Reserve for improvement of financial structure | 33,000 | 33,000 | 33,000 | 33,000 | 33,000 | — | ||||||||||||||||||
Reserve for loss on disposal of treasury stock | 477,182 | 477,182 | 255,984 | 477,182 | 255,984 | 255,984 | ||||||||||||||||||
Reserve for research and manpower development | 822,061 | 880,595 | 872,595 | 880,595 | 872,595 | 872,595 | ||||||||||||||||||
Reserve for business expansion | 4,116,138 | 5,266,138 | 6,151,138 | 5,266,138 | 6,151,138 | 6,344,138 | ||||||||||||||||||
Reserve for technology development | — | — | 800,000 | |||||||||||||||||||||
5,470,701 | 6,679,235 | 7,335,037 | 6,679,235 | 7,335,037 | 8,295,037 | |||||||||||||||||||
F-56
16. | TREASURY STOCK |
F-47
17. |
F-48
Total | Recognized | Compensation | Stock Option in | |||||||||||||||||||||||||||||
Compensation | Compensation Cost | Cost to be | Capital Adjustment | |||||||||||||||||||||||||||||
Grant Date | Cost | 2005 | 2006 | 2007 | Recognized | 2005 | 2006 | 2007 | ||||||||||||||||||||||||
March 17, 2000 (note a) | 1,533 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
March 16, 2001 (note b) | 234 | — | — | — | — | 234 | — | — | ||||||||||||||||||||||||
March 8, 2002 (note c) | 3,246 | 180 | — | — | — | 3,246 | 3,246 | — | ||||||||||||||||||||||||
5,013 | 180 | — | — | — | 3,480 | 3,246 | — | |||||||||||||||||||||||||
INCOME TAXES |
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Currently | 685,541 | 615,959 | 564,480 | 615,959 | 572,806 | 493,714 | ||||||||||||||||||
Changes in net deferred tax liabilities | 7,718 | (43,933 | ) | 121,681 | (43,933 | ) | 121,681 | (194,864 | ) | |||||||||||||||
Income tax expenses | 693,259 | 572,026 | 686,161 | 572,026 | 694,487 | 298,850 | ||||||||||||||||||
F-49F-57
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | ||||||||||||||||||||||
Income taxes at statutory income tax rate of 25% in 2005, 2006 and 2007 | 640,391 | 505,394 | 496,323 | ||||||||||||||||||||||||
Income taxes at statutory income tax rate of 25% in 2006, 2007 and 2008 | 505,394 | 571,441 | 314,683 | ||||||||||||||||||||||||
Resident surtax payable | 64,039 | 50,539 | 49,632 | 50,539 | 57,144 | 31,468 | |||||||||||||||||||||
Tax credit for investments, technology and human resource development and others | (100,160 | ) | (110,785 | ) | (112,235 | ) | |||||||||||||||||||||
Special surtax for agriculture and fishery industries and other | 18,838 | 20,183 | 18,370 | ||||||||||||||||||||||||
Tax credit for investments, technology and human resource development | (110,785 | ) | (105,819 | ) | (98,551 | ) | |||||||||||||||||||||
Special surtax for agriculture and fishery industries | 20,183 | 17,855 | 17,528 | ||||||||||||||||||||||||
Additional income tax (tax refund) for prior periods | — | 8,148 | (60,130 | ) | |||||||||||||||||||||||
Goodwill amortization not deductible for tax purpose | 37,023 | 38,447 | 35,382 | 38,447 | 35,382 | 35,382 | |||||||||||||||||||||
Undistributed earnings (unrecognized deficit) of subsidiaries | 4,846 | 1,496 | 5,326 | ||||||||||||||||||||||||
Undistributed earnings of subsidiaries | 1,496 | 5,326 | 3,196 | ||||||||||||||||||||||||
Other permanent differences | 11,332 | 24,717 | 9,181 | 24,717 | 3,664 | 18,045 | |||||||||||||||||||||
Increase (decrease) in valuation allowance | 16,950 | 42,035 | 184,182 | ||||||||||||||||||||||||
Change in valuation allowance | 42,035 | 101,346 | 37,229 | ||||||||||||||||||||||||
Recorded income taxes | 693,259 | 572,026 | 686,161 | 572,026 | 694,487 | 298,850 | |||||||||||||||||||||
Effective tax rate | 27 | .06 | % | 28 | .30 | % | 34 | .56 | % | 28.30 | % | 30.38 | % | 23.74 | % | ||||||||||||
F-50F-58
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Current : | ||||||||||||||||||||||||
Current: | ||||||||||||||||||||||||
Allowance for doubtful accounts | 39,334 | 21,701 | 17,289 | 21,701 | 17,289 | 33,073 | ||||||||||||||||||
Write-off of doubtful accounts | 9,239 | — | — | |||||||||||||||||||||
Accrued interest income | (1,229 | ) | (1,605 | ) | (2,073 | ) | (1,605 | ) | (2,073 | ) | (2,902 | ) | ||||||||||||
Accrued interest expense | — | — | 21,856 | |||||||||||||||||||||
Net operating loss carryforwards | 17 | 1,121 | 5,406 | 1,121 | 5,406 | 7,606 | ||||||||||||||||||
Tax credit carryforwards | 89 | 19 | — | 19 | — | 570 | ||||||||||||||||||
Other | 18,623 | 28,704 | 15,756 | 28,704 | 15,756 | (32,417 | ) | |||||||||||||||||
Net deferred tax assets — current | 66,073 | 49,940 | 36,378 | 49,940 | 36,378 | 27,786 | ||||||||||||||||||
Non-Current : | ||||||||||||||||||||||||
Non-Current: | ||||||||||||||||||||||||
Depreciation | (47,472 | ) | (51,437 | ) | (42,671 | ) | (51,437 | ) | (42,671 | ) | (9,491 | ) | ||||||||||||
Loss on impairment of investment securities | 32,959 | 33,269 | 41,105 | 33,269 | 41,105 | 99,149 | ||||||||||||||||||
Equity in losses (gains) of affiliates, net | (10,244 | ) | 3,968 | (52,313 | ) | 3,968 | (52,313 | ) | (3,458 | ) | ||||||||||||||
Unrecognized deficit (undistributed earnings) of subsidiaries | 13,732 | 34,005 | 86,497 | 34,005 | 86,497 | (59,826 | ) | |||||||||||||||||
Tax free reserve for research and manpower development | (211,208 | ) | (211,215 | ) | (151,259 | ) | (211,215 | ) | (151,259 | ) | (80,707 | ) | ||||||||||||
Tax free reserve for loss on disposal of treasury stock | (130,372 | ) | (70,395 | ) | (70,396 | ) | (70,395 | ) | (70,396 | ) | — | |||||||||||||
Loss on valuation of foreign currency swap | 3,642 | 6,188 | 6,188 | 6,188 | 6,188 | (36,332 | ) | |||||||||||||||||
Loss on valuation of interest swap | — | 125 | (871 | ) | 125 | (871 | ) | 7,370 | ||||||||||||||||
Loss on valuation of derivatives (accumulated other comprehensive income) | 5,377 | 6,668 | 6,668 | |||||||||||||||||||||
Loss on valuation of foreign currency swap (accumulated other comprehensive income) | 6,668 | 6,668 | (1,490 | ) | ||||||||||||||||||||
Gain on conversion of convertible bond | — | — | (102,613 | ) | — | (102,613 | ) | (82,091 | ) | |||||||||||||||
Consideration for conversion right | (18,502 | ) | (17,086 | ) | (12,870 | ) | (17,086 | ) | (12,870 | ) | (11,325 | ) | ||||||||||||
Equity in capital adjustments of affiliates | (21,967 | ) | (34,077 | ) | 7,879 | |||||||||||||||||||
Unrealized loss(gain) on valuation of long-term investment securities (accumulated other comprehensive income) | 15,966 | (163,992 | ) | (617,020 | ) | |||||||||||||||||||
Equity in other comprehensive income of affiliates, net | (34,077 | ) | 7,879 | 22,960 | ||||||||||||||||||||
Unrealized loss (gain) on valuation of long-term investment securities (accumulated other comprehensive income) | (163,992 | ) | (617,020 | ) | (123,636 | ) | ||||||||||||||||||
Loss (Gain) on foreign currency translation | — | — | (34,773 | ) | ||||||||||||||||||||
Net operating loss carryforwards | 24,108 | 66,319 | 183,053 | 66,319 | 183,053 | 137,348 | ||||||||||||||||||
Tax credit carryforwards | — | 48 | 35,399 | 48 | 35,399 | 39,345 | ||||||||||||||||||
Other | (875 | ) | 8,801 | 28,864 | 8,801 | 28,864 | 86,061 | |||||||||||||||||
Total deferred tax liabilities | (344,856 | ) | (388,811 | ) | (654,360 | ) | (388,811 | ) | (654,360 | ) | (50,896 | ) | ||||||||||||
Valuation allowance for: | ||||||||||||||||||||||||
Depreciation | (6,022 | ) | 183 | 236 | 183 | 236 | (11,686 | ) | ||||||||||||||||
Net operating loss carryforwards | (23,523 | ) | (60,142 | ) | (182,726 | ) | (60,142 | ) | (182,726 | ) | (137,348 | ) | ||||||||||||
Equity in losses of affiliates and unrecognized deficit of subsidiaries | (17,631 | ) | (73,082 | ) | (161,081 | ) | (73,082 | ) | (161,081 | ) | (87,314 | ) | ||||||||||||
Loss (Gain) on foreign currency translation | — | — | (34,773 | ) | ||||||||||||||||||||
Loss on impairment of investment securities | — | — | (18,387 | ) | ||||||||||||||||||||
Other | (7,629 | ) | (8,132 | ) | (39,541 | ) | (8,132 | ) | (39,541 | ) | (63,403 | ) | ||||||||||||
Net deferred tax liabilities — non-current | (399,661 | ) | (529,984 | ) | (1,037,472 | ) | (529,984 | ) | (1,037,472 | ) | (403,807 | ) | ||||||||||||
F-51F-59
Net Operating Loss | Tax Credit | Net Operating Loss | Tax Credit | |||||||||||||
Year Ending December 31, | Carryforwards | Carryforwards | Carryforwards | Carryforwards | ||||||||||||
2008 | 7,584 | — | ||||||||||||||
2009 | — | 20 | 4 | 570 | ||||||||||||
2010 | 568 | 4 | — | 514 | ||||||||||||
2011 | — | — | — | 328 | ||||||||||||
2012 | 622 | — | — | 223 | ||||||||||||
Total | 8,774 | 24 | 4 | 1,635 | ||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Consideration for conversion right | (18,502 | ) | (17,086 | ) | (12,870 | ) | (17,086 | ) | (12,870 | ) | (11,325 | ) | ||||||||||||
Loss on disposal of treasury stock | — | (38,341 | ) | (36,339 | ) | |||||||||||||||||||
Gain on disposal of treasury stock | (38,341 | ) | (36,339 | ) | (28,368 | ) | ||||||||||||||||||
Equity in capital adjustments of affiliates | — | — | 4,677 | |||||||||||||||||||||
Stock option | — | — | (99 | ) | — | (99 | ) | — | ||||||||||||||||
Unrealized loss (gain) on valuation of long-term investment securities, net | 15,966 | (162,847 | ) | (616,996 | ) | (162,847 | ) | (616,996 | ) | (125,620 | ) | |||||||||||||
Equity in other comprehensive income of affiliates, net | (24,119 | ) | (41,403 | ) | (716 | ) | (41,403 | ) | (716 | ) | (12,438 | ) | ||||||||||||
Loss on valuation of currency swap | 5,377 | 6,668 | 6,668 | |||||||||||||||||||||
Loss on valuation of foreign currency swap | 6,668 | 6,668 | 4,032 | |||||||||||||||||||||
Loss (gain) on valuation of interest rate swap | — | 125 | (871 | ) | 125 | (871 | ) | 7,370 | ||||||||||||||||
Foreign-based operations’ translation adjustment | 2 | (22 | ) | (32 | ) | (22 | ) | (32 | ) | 193 | ||||||||||||||
Retained Earnings | — | — | 30 | — | 30 | 30 | ||||||||||||||||||
Total | (21,276 | ) | (252,906 | ) | (661,225 | ) | (252,906 | ) | (661,225 | ) | (161,449 | ) | ||||||||||||
F-52F-60
COMPREHENSIVE INCOME |
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||||||||||||||||
Profit and | Profit and | Profit and | Profit and | Profit and | Profit and | |||||||||||||||||||||||||||||||||||||||||||
Loss Effect | Tax Effect | Loss Effect | Tax Effect | Loss Effect | Tax Effect | Loss Effect | Tax Effect | Loss Effect | Tax Effect | Loss Effect | Tax Effect | |||||||||||||||||||||||||||||||||||||
Net income | 1,868,307 | 1,449,552 | 1,562,265 | 1,449,552 | 1,562,265 | 972,338 | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on valuation of long-term investment securities, net | 50,882 | (179,973 | ) | 471,321 | (178,814 | ) | 1,195,385 | (454,149 | ) | 471,321 | (178,814 | ) | 1,195,385 | (454,149 | ) | (1,216,771 | ) | 491,376 | ||||||||||||||||||||||||||||||
Equity in other comprehensive income change of affiliates, net | (73,008 | ) | (17,284 | ) | 45,956 | (17,282 | ) | (105,597 | ) | 40,687 | ||||||||||||||||||||||||||||||||||||||
Equity in other comprehensive income of affiliates, net | 45,956 | (17,282 | ) | (105,597 | ) | 40,687 | (70,490 | ) | (11,722 | ) | ||||||||||||||||||||||||||||||||||||||
Foreign-based operations translation adjustment | (2,020 | ) | 2 | (19,737 | ) | (24 | ) | 4,162 | (10 | ) | (19,737 | ) | (24 | ) | 4,162 | (10 | ) | 60,262 | 226 | |||||||||||||||||||||||||||||
Gain (loss) on valuation of currency swap, net | 35,276 | 1,291 | (2,311 | ) | 1,291 | 4,671 | — | (2,311 | ) | 1,291 | 4,671 | — | 20,360 | (2,636 | ) | |||||||||||||||||||||||||||||||||
Gain (loss) on valuation of interest rate swap, net | — | 125 | (329 | ) | 125 | 2,627 | (996 | ) | (329 | ) | 125 | 2,627 | (996 | ) | (28,427 | ) | 8,241 | |||||||||||||||||||||||||||||||
Sub-total | 11,130 | (195,839 | ) | 494,900 | (194,704 | ) | 1,101,248 | (414,468 | ) | 494,900 | (194,704 | ) | 1,101,248 | (414,468 | ) | (1,235,066 | ) | 485,485 | ||||||||||||||||||||||||||||||
Comprehensive income | 1,879,437 | 1,944,452 | 2,663,513 | 1,944,452 | 2,663,513 | (262,728 | ) | |||||||||||||||||||||||||||||||||||||||||
Attributable to: | ||||||||||||||||||||||||||||||||||||||||||||||||
Majority interests | 1,884,108 | 1,946,391 | 2,750,124 | 1,946,391 | 2,750,124 | (19,347 | ) | |||||||||||||||||||||||||||||||||||||||||
Minority interests | (4,671 | ) | (1,939 | ) | (86,611 | ) | (1,939 | ) | (86,611 | ) | (243,381 | ) | ||||||||||||||||||||||||||||||||||||
1,879,437 | 1,944,452 | 2,663,513 | 1,944,452 | 2,663,513 | (262,728 | ) | ||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER SHARE |
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Net income attributable to the majority interests | 1,872,978 | 1,451,491 | 1,648,876 | |||||||||||||||||||||
Net income from continuing operation attributable to the majority interests | 1,451,491 | 1,681,369 | 1,197,182 | |||||||||||||||||||||
Weighted average number of common shares outstanding | 73,614,296 | 73,305,026 | 72,650,909 | 73,305,026 | 72,650,909 | 72,765,557 | ||||||||||||||||||
Net income per share | 25,443 | 19,801 | 22,696 | 19,801 | 23,143 | 16,453 | ||||||||||||||||||
F-53F-61
2006 | 2007 | 2008 | ||||||||||
Net income attributable to the majority interests | 1,451,491 | 1,648,876 | 1,215,719 | |||||||||
The majority interests’ portion of net loss(income) from discontinued operation attributable to the majority interests | — | 32,493 | (18,537 | ) | ||||||||
Net income from continuing operation attributable to the majority interests | 1,451,491 | 1,681,369 | 1,197,182 | |||||||||
2006 | 2007 | 2008 | ||||||||||
Net income attributable to the majority interests | 1,451,491 | 1,648,876 | 1,215,719 | |||||||||
Weighted average number of common shares outstanding | 73,305,026 | 72,650,909 | 72,765,557 | |||||||||
Net income per share | 19,801 | 22,696 | 16,707 | |||||||||
Weighted | Weighted | Weighted | Weighted | |||||||||||||||||||||||||
Number of | Number of | Number | Number of | Number of | Number | |||||||||||||||||||||||
Date | Shares | Days | of Shares | Date | Shares | Days | of Shares | |||||||||||||||||||||
For 2005 : | ||||||||||||||||||||||||||||
At January 1, 2005 | — | 82,276,711 | 365/365 | 82,276,711 | ||||||||||||||||||||||||
Treasury stock, at the beginning of the year | — | (8,662,415 | ) | 365/365 | (8,662,415 | ) | ||||||||||||||||||||||
Total | 73,614,296 | 73,614,296 | ||||||||||||||||||||||||||
For 2006 : | ||||||||||||||||||||||||||||
For 2006: | ||||||||||||||||||||||||||||
At January 1, 2006 | — | 82,276,711 | 365/365 | 82,276,711 | — | 82,276,711 | 365/365 | 82,276,711 | ||||||||||||||||||||
Treasury stock, at the beginning of the year | — | (8,662,415 | ) | 365/365 | (8,662,415 | ) | — | (8,662,415 | ) | 365/365 | (8,662,415 | ) | ||||||||||||||||
Retirement of treasury stock | (note a | ) | (1,083,000 | ) | — | (373,546 | ) | (note a) | (1,083,000 | ) | — | (373,546 | ) | |||||||||||||||
Conversion of convertible bonds | (note b | ) | 136,163 | — | 64,276 | (note b) | 136,163 | — | 64,276 | |||||||||||||||||||
Total | 72,667,459 | 73,305,026 | 72,667,459 | 73,305,026 | ||||||||||||||||||||||||
For 2007 : | ||||||||||||||||||||||||||||
For 2007: | ||||||||||||||||||||||||||||
At January 1, 2007 | — | 81,193,711 | 365/365 | 81,193,711 | — | 81,193,711 | 365/365 | 81,193,711 | ||||||||||||||||||||
Treasury stock, at the beginning of the year | — | (8,526,252 | ) | 365/365 | (8,526,252 | ) | — | (8,526,252 | ) | 365/365 | (8,526,252 | ) | ||||||||||||||||
Acquisition of treasury stock | (note c | ) | (471,000 | ) | 28/365 | (36,337 | ) | (note c) | (471,000 | ) | 28/365 | (36,337 | ) | |||||||||||||||
Conversion of convertible bonds | (note d | ) | 216,347 | 29/365 | 16,962 | (note d) | 216,347 | 29/365 | 16,962 | |||||||||||||||||||
Disposal of treasury stock | 171,871 | 6/365 | 2,825 | 171,871 | 6/365 | 2,825 | ||||||||||||||||||||||
Total | 72,584,677 | 72,650,909 | 72,584,677 | 72,650,909 | ||||||||||||||||||||||||
For 2008: | ||||||||||||||||||||||||||||
At January 1, 2008 | 81,193,711 | 366/366 | 81,193,711 | |||||||||||||||||||||||||
Treasury stock, at the beginning of the year | (8,609,034 | ) | 366/366 | (8,609,034 | ) | |||||||||||||||||||||||
Acquisition of treasury stock | (note c) | (306,988 | ) | — | (14,924 | ) | ||||||||||||||||||||||
Disposal of treasury stock | 208,326 | 344/366 | 195,804 | |||||||||||||||||||||||||
Total | 72,486,015 | 72,765,557 | ||||||||||||||||||||||||||
F-62
(note a) | The Company retired treasury stocks which were acquired on two different dates during the year ended December 31, 2006, and weighted number of shares was calculated considering each transaction date. | |
(note b) | Treasury stocks were used to settle the conversion of the convertible bonds on several different dates during the year ended December 31, 2006, and weighted number of shares was calculated considering each transaction date. | |
(note c) | The Company acquired treasury stocks on many different dates | |
(note d) | Treasury stocks were used to settle the conversion of the convertible bonds on several different dates during the year ended December 31, 2007, and weighted number of shares was calculated considering each transaction date. |
2005 | 2006 | 2007 | ||||||||||
Adjusted net income attributable to the majority interest | 1,886,033 | 1,464,768 | 1,661,678 | |||||||||
Adjusted weighted average number of common shares outstanding | 75,332,996 | 75,025,926 | 74,263,655 | |||||||||
Diluted net income per share | 25,036 | 19,523 | 22,375 | |||||||||
2006 | 2007 | 2008 | ||||||||||
Adjusted net income from continuing operation attributable to the majority interests | 1,464,768 | 1,694,171 | 1,208,332 | |||||||||
Adjusted weighted average number of common shares outstanding | 75,025,926 | 74,263,655 | 74,090,301 | |||||||||
Net income per share | 19,523 | 22,813 | 16,309 | |||||||||
2006 | 2007 | 2008 | ||||||||||
Adjusted net income attributable to the majority interest | 1,464,768 | 1,661,678 | 1,226,869 | |||||||||
Adjusted weighted average number of common shares outstanding | 75,025,926 | 74,263,655 | 74,090,301 | |||||||||
Diluted net income per share | 19,523 | 22,375 | 16,559 | |||||||||
F-54F-63
Average Weighted | Per-share | Average Weighted | ||||||||||||||||||||||
Net Income | Number of Shares | Amount | Net Income | Number of Shares | Per-Share Amount | |||||||||||||||||||
(In millions of | (In Korean won) | (In Millions of | (in Korean Won) | |||||||||||||||||||||
Korean won) | Korean Won) | |||||||||||||||||||||||
For 2005 | ||||||||||||||||||||||||
Basic net income per share | 1,872,978 | 73,614,296 | 25,443 | |||||||||||||||||||||
Effect of stock option (note a) | — | — | ||||||||||||||||||||||
Effect of convertible bonds (note b) | 13,055 | 1,718,700 | ||||||||||||||||||||||
Diluted net income per share | 1,886,033 | 75,332,996 | 25,036 | |||||||||||||||||||||
For 2006 | ||||||||||||||||||||||||
Basic net income per share | 1,451,491 | 73,305,026 | 19,801 | 1,451,491 | 73,305,026 | 19,801 | ||||||||||||||||||
Effect of stock option (note a) | — | — | — | — | ||||||||||||||||||||
Effect of convertible bonds (note b) | 13,277 | 1,720,900 | 13,277 | 1,720,900 | ||||||||||||||||||||
Diluted net income per share | 1,464,768 | 75,025,926 | 19,523 | 1,464,768 | 75,025,926 | 19,523 | ||||||||||||||||||
For 2007 | ||||||||||||||||||||||||
Basic net income per share | 1,648,876 | 72,650,909 | 22,696 | 1,648,876 | 72,650,909 | 22,696 | ||||||||||||||||||
Effect of stock option (note a) | — | — | — | — | ||||||||||||||||||||
Effect of convertible bonds (note b) | 12,802 | 1,612,746 | 12,802 | 1,612,746 | ||||||||||||||||||||
Diluted net income per share | 1,661,678 | 74,263,655 | 22,375 | 1,661,678 | 74,263,655 | 22,375 | ||||||||||||||||||
For 2008 | ||||||||||||||||||||||||
Basic net income per share | 1,215,719 | 72,765,557 | 16,707 | |||||||||||||||||||||
Effect of stock option (note a) | — | — | ||||||||||||||||||||||
Effect of convertible bonds (note b) | 11,150 | 1,324,744 | ||||||||||||||||||||||
Diluted net income per share | 1,226,869 | 74,090,301 | 16,559 | |||||||||||||||||||||
(note a) | For the years ended December 31, | |
(note b) | The effect of convertible bonds is increase in net income related to interest expenses that would not have incurred, and increase in the weighted average number of common shares outstanding related to common shares that would have been issued, assuming that the conversion of convertible bonds were made at the beginning of the period. |
2006 | 2007 | 2008 | ||||||||||
Net income(loss) attributable to the majority interest | — | (447 | ) | 254 | ||||||||
F-55F-64
DIVIDEND DISCLOSURE |
Fiscal | Number of Shares | Dividend | ||||||||||||||||
Year | Dividend Type | Outstanding | Face Value | Ratio | Dividends | |||||||||||||
2005 | Cash dividends (interim) | 73,614,296 | 500 | 200 | % | 73,614 | ||||||||||||
Cash dividends (year-end) | 73,614,296 | 500 | 1,600 | % | 588,914 | |||||||||||||
Total | 662,528 | |||||||||||||||||
2006 | Cash dividends (interim) | 73,713,657 | 500 | 200 | % | 73,714 | ||||||||||||
Cash dividends (year-end) | 72,667,459 | 500 | 1,400 | % | 508,672 | |||||||||||||
Total | 582,386 | |||||||||||||||||
2007 | Cash dividends (interim) | 72,667,459 | 500 | 200 | % | 72,668 | ||||||||||||
Cash dividends (year-end) | 72,584,677 | 500 | 1,680 | % | 609,711 | |||||||||||||
Total | 682,379 | |||||||||||||||||
Fiscal | Number of Shares | Face | Dividend | |||||||||||||||||
Year | Dividend Type | Outstanding | Value | Ratio | Dividends | |||||||||||||||
2006 | Cash dividends (interim) | 73,713,657 | 500 | 200 | % | 73,714 | ||||||||||||||
Cash dividends (year-end) | 72,667,459 | 500 | 1,400 | % | 508,672 | |||||||||||||||
Total | 582,386 | |||||||||||||||||||
2007 | Cash dividends (interim) | 72,667,459 | 500 | 200 | % | 72,668 | ||||||||||||||
Cash dividends (year-end) | 72,584,677 | 500 | 1,680 | % | 609,711 | |||||||||||||||
Total | 682,379 | |||||||||||||||||||
2008 | Cash dividends (interim) | 72,793,003 | 500 | 200 | % | 72,793 | ||||||||||||||
Cash dividends (year-end) | 72,524,203 | 500 | 1,680 | % | 609,203 | |||||||||||||||
Total | 681,996 | |||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | ||||||||||||||||||||||
Dividends | 662,528 | 582,386 | 682,379 | 582,386 | 682,379 | 681,996 | |||||||||||||||||||||
Net income attributable to the majority interest | 1,872,978 | 1,451,491 | 1,648,876 | 1,451,491 | 1,648,876 | 1,215,719 | |||||||||||||||||||||
Dividends payout ratio | 35 | .37 | % | 40 | .12 | % | 41 | .38 | % | 40.12 | % | 41.38 | % | 56.10 | % | ||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | ||||||||||||||||||||||
Dividend per share | 9,000 | 8,000 | 9,400 | 8,000 | 9,400 | 9,400 | |||||||||||||||||||||
Stock price at the year-end | 181,000 | 222,500 | 249,000 | 222,500 | 249,000 | 209,000 | |||||||||||||||||||||
Dividends yield ratio | 4 | .97 | % | 3 | .60 | % | 3 | .78 | % | 3.60 | % | 3.78 | % | 4.49 | % | ||||||||||||
RESTRICTED DEPOSITS |
22. | COMMITMENTS AND CONTINGENCIES |
F-56F-65
F-66
23. |
Asset | Risk | Book Value | Coverage | |||||||
Inventories and | US$ | 56,115 | ||||||||
property and equipment | Fire and comprehensive liability | 5,647,251 | 9,502,686 | |||||||
24. | TRANSACTIONS WITH AFFILIATED COMPANIES |
Description | 2006 | 2007 | 2008 | |||||||||
Transactions | ||||||||||||
SK Corporation: | ||||||||||||
Purchases of property and equipment | 2,158 | — | — | |||||||||
Commissions paid and other expense | 40,694 | — | 177 | |||||||||
Commission income and other income | 13,877 | 829 | 313 | |||||||||
SK Energy Co., Ltd.: | ||||||||||||
Purchases of property and equipment | — | — | 3,001 | |||||||||
Commissions paid and other expense | — | 30,281 | 17,895 | |||||||||
Commission income and other income | — | 17,250 | 8,898 | |||||||||
SK Engineering & Construction Co., Ltd.: | ||||||||||||
Purchases of property and equipment | 235,872 | 307,702 | 256,548 | |||||||||
Commissions paid and other expense | 7,086 | 16,147 | 17,025 | |||||||||
Commission income and other income | 2,385 | 2,908 | 2,705 | |||||||||
SK Networks Co., Ltd.: | ||||||||||||
Purchases of property and equipment | 9,249 | 39,415 | 28,972 | |||||||||
Commissions paid, leased line and other expense | 490,437 | 710,228 | 753,036 | |||||||||
Sales of handsets and other income | 11,897 | 15,754 | 32,052 | |||||||||
SK Telesys Co., Ltd.: | ||||||||||||
Purchases of property and equipment | 231,233 | 264,150 | 270,133 | |||||||||
Commissions paid and other expenses | 6,567 | 13,027 | 9,078 | |||||||||
Commission income and other income | 2,170 | 2,687 | 1,967 | |||||||||
SKC: | ||||||||||||
Commissions paid and other expenses | 21 | 21 | 26 | |||||||||
Commission income and other income | 1,155 | 1,135 | 1,005 | |||||||||
Innoace Co., Ltd.: | ||||||||||||
Purchases of property and equipment | 23,986 | 23,694 | 27,153 | |||||||||
Commissions paid and other expenses | 7,447 | 9,839 | 9,389 | |||||||||
Commission income and other income | 218 | 242 | 269 |
F-67
Description | 2006 | 2007 | 2008 | |||||||||
SK C&C Co., Ltd.: | ||||||||||||
Purchases of property and equipment | 215,820 | 205,677 | 232,238 | |||||||||
Commissions paid and other expenses | 287,647 | 251,401 | 273,279 | |||||||||
Commission income and other income | 8,795 | 9,470 | 12,681 | |||||||||
SK Networks Service: | ||||||||||||
Commissions paid and other expenses | — | — | 20,599 | |||||||||
WALKERHILL Inc.: | ||||||||||||
Commissions paid and other expenses | — | — | 17,881 | |||||||||
Commission income and other income | — | — | 983 | |||||||||
OK Cashbag Service Co., Ltd.: | ||||||||||||
Purchases of property and equipment | — | — | 1,906 | |||||||||
Commissions paid and other expenses | — | — | 9,978 | |||||||||
Commission income and other income | — | — | 417 | |||||||||
SK Mobile Energy., Ltd.: | ||||||||||||
Purchases of property and equipment | — | — | 4,167 | |||||||||
Commission income and other income | — | — | 23 | |||||||||
Infosec Co., Ltd.: | ||||||||||||
Purchases of property and equipment | — | — | 1,270 | |||||||||
Commissions paid and other expenses | — | — | 3,076 | |||||||||
Commission income and other income | — | — | 11 | |||||||||
TU Media Corp. (note a): | ||||||||||||
Purchases of property and equipment | 573 | — | — | |||||||||
Commissions paid and other expenses | 1,798 | — | — | |||||||||
Commission income and other income | 57,866 | — | — | |||||||||
AirCross Co., Ltd.: | ||||||||||||
Commissions paid and other expenses | 19,494 | — | 9,158 | |||||||||
Commission income and other income | 616 | — | 375 | |||||||||
Pantech Co., Ltd.: | ||||||||||||
Commissions paid and other expenses | 400 | — | — | |||||||||
Commission income and other income | 16,605 | — | — | |||||||||
Helio, Inc. & Helio, LLC: | ||||||||||||
Commissions paid and other expenses | 1,087 | — | — | |||||||||
Commission income and other income | 18,243 | — | — | |||||||||
SK Marketing & Company Co., Ltd.: | ||||||||||||
Commissions paid and other expenses | — | — | 49,826 | |||||||||
Commission income and other income | — | — | 6,769 | |||||||||
JYP Entertainment Corp.: | ||||||||||||
Commissions paid and other expenses | 1,010 | 1,248 | 3,655 | |||||||||
Commission income and other income | 108 | — | 84 |
F-68
Description | 2006 | 2007 | 2008 | |||||||||
SK China Company Ltd.: | ||||||||||||
Commissions paid and other expenses | — | — | 5,826 | |||||||||
SK Telecom China Holdings Co., Ltd.: | ||||||||||||
Commissions paid and other expenses | — | 7,655 | — | |||||||||
SK USA, Inc.: | ||||||||||||
Commissions paid and other expenses | 2,303 | 2,617 | 3,032 | |||||||||
CDMA Mobile Phone Center: | ||||||||||||
Commission income and other income | 7,643 | 16,564 | 20,627 | |||||||||
WS Entertainment: | ||||||||||||
Commissions paid and other expenses | 295 | 1,081 | — | |||||||||
Commission income and other income | 6 | — | — | |||||||||
Others: | ||||||||||||
Commissions paid and other expenses | — | 4,444 | 896 | |||||||||
Commission income and other income | 1,006 | — | 468 | |||||||||
Balances | ||||||||||||
SK Engineering & Construction Co., Ltd.: | ||||||||||||
Accounts receivable — trade and other | 258 | 310 | 203 | |||||||||
Accounts payable | 1,635 | 8,870 | 1,164 | |||||||||
Guarantee deposits received | 942 | 1,135 | 1,076 | |||||||||
SK Networks Co., Ltd.: | ||||||||||||
Accounts receivable — trade and other | 780 | 2,182 | 1,069 | |||||||||
Guarantee deposits | 113 | 113 | 330 | |||||||||
Accounts payable | 71,160 | 71,311 | 71,795 | |||||||||
Guarantee deposits received | 3,123 | 3,432 | 3,963 | |||||||||
SK Corporation: | ||||||||||||
Accounts receivable — trade and other | 5,058 | 775 | 46 | |||||||||
Guarantee deposits | 291 | — | — | |||||||||
Accounts payable | 7,999 | — | — | |||||||||
Guarantee deposits received | 6,465 | — | — | |||||||||
SK Energy Co., Ltd.: | ||||||||||||
Accounts receivable — trade and other | — | 2,959 | 109 | |||||||||
Guarantee deposits | — | 134 | — | |||||||||
Accounts payable | — | 4,404 | 3,548 | |||||||||
Guarantee deposits received | — | 248 | — | |||||||||
SK Telesys Co., Ltd.: | ||||||||||||
Accounts receivable — trade and other | 34 | 31 | 486 | |||||||||
Accounts payable | 51,663 | 30,205 | 20,533 | |||||||||
SKC: | ||||||||||||
Accounts receivable — trade and other | 121 | 71 | 81 |
F-69
Description | 2006 | 2007 | 2008 | |||||||||
Innoace Co., Ltd.: | ||||||||||||
Accounts receivable — trade and other | — | 26 | 10 | |||||||||
Accounts payable | 13,574 | 7,223 | 4,315 | |||||||||
Guarantee deposits received | 2,291 | 2,291 | 2,444 | |||||||||
SK C&C Co., Ltd.: | ||||||||||||
Accounts receivable — trade and other | — | 411 | 2,477 | |||||||||
Guarantee deposits | — | — | 140 | |||||||||
Accounts payable | 88,056 | 135,297 | 93,680 | |||||||||
Guarantee deposits received | 346 | 346 | 24 | |||||||||
WALKERHILL Inc.: | ||||||||||||
Accounts receivable — trade and other | — | — | 529 | |||||||||
Guarantee deposits | — | — | 900 | |||||||||
Accounts payable | — | — | 4,011 | |||||||||
TU Media Corp. (note a): | ||||||||||||
Accounts payable | 886 | — | — | |||||||||
Guarantee deposits received | 3,016 | — | — | |||||||||
AirCross Co., Ltd.: | ||||||||||||
Accounts receivable — trade and other | — | — | 57 | |||||||||
Accounts payable | 3,513 | — | 397 | |||||||||
Guarantee deposits received | 226 | — | 276 | |||||||||
Pantech Co., Ltd.: | ||||||||||||
Accounts payable | 440 | — | — | |||||||||
ifilm Co., Ltd.: | ||||||||||||
Accounts receivable — trade and other | — | 5,724 | — | |||||||||
SK China Company Ltd.: | ||||||||||||
Accounts payable | — | — | 1,428 | |||||||||
CDMA Mobile Phone Center: | ||||||||||||
Accounts receivable — trade and other | 27,063 | 38,756 | 80,734 | |||||||||
Accounts payable | 67 | 65 | 87 | |||||||||
SK Marketing & Company Co., Ltd.: | ||||||||||||
Accounts receivable — trade and other | — | — | 1,704 | |||||||||
Accounts payable | — | — | 22,866 | |||||||||
Guarantee deposits received | — | — | 248 | |||||||||
Others: | ||||||||||||
Accounts receivable — trade and other | — | 1,255 | 830 | |||||||||
Accounts payable | 588 | 413 | 774 | |||||||||
Guarantee deposits received | — | — | 133 |
(note a) | These companies were included in the consolidation from the year ended December 31, 2007 or 2008, accordingly transactions and balances with the Company are eliminated. |
F-57F-70
25. |
Description | 2005 | 2006 | 2007 | |||||||||
Transactions | ||||||||||||
SK Corporation : | ||||||||||||
Purchases of property and equipment | 1,302 | 2,158 | — | |||||||||
Commissions paid and other expense | 48,266 | 40,694 | — | |||||||||
Commission income and other income | 9,243 | 13,877 | 829 | |||||||||
SK Energy Co., Ltd.: | ||||||||||||
Commissions paid and other expense | — | — | 30,281 | |||||||||
Commission income and other income | — | — | 17,250 | |||||||||
SK Engineering & Construction Co., Ltd. : | ||||||||||||
Purchases of property and equipment | 257,823 | 235,872 | 307,702 | |||||||||
Commissions paid and other expense | 6,593 | 7,086 | 16,147 | |||||||||
Commission income and other income | 2,580 | 2,385 | 2,908 | |||||||||
SK Networks Co., Ltd. : | ||||||||||||
Purchases of property and equipment | 10,020 | 9,249 | 39,415 | |||||||||
Commissions paid, leased line and other expense | 432,967 | 490,437 | 710,228 | |||||||||
Sales of handsets and other income | 279,197 | 11,897 | 15,754 |
F-58
Description | 2005 | 2006 | 2007 | |||||||||
SK Telesys Co., Ltd. : | ||||||||||||
Purchases of property and equipment | 294,829 | 231,233 | 264,150 | |||||||||
Commissions paid and other expenses | 7,410 | 6,567 | 13,027 | |||||||||
Commission income and other income | 575 | 2,170 | 2,687 | |||||||||
SKC : | ||||||||||||
Purchases of property and equipment | 219,767 | — | — | |||||||||
Commissions paid and other expenses | 13,316 | 21 | 21 | |||||||||
Commission income and other income | 32 | 1,155 | 1,135 | |||||||||
Innoace Co., Ltd. : | ||||||||||||
Purchases of property and equipment | 13,652 | 23,986 | 23,694 | |||||||||
Commissions paid and other expenses | 2,109 | 7,447 | 9,839 | |||||||||
Commission income and other income | 218 | 218 | 242 | |||||||||
SK C&C Co., Ltd. : | ||||||||||||
Purchases of property and equipment | 249,633 | 215,820 | 205,677 | |||||||||
Commissions paid and other expenses | 322,856 | 287,647 | 251,401 | |||||||||
Commission income and other income | 7,853 | 8,795 | 9,470 | |||||||||
TU Media Corp. (note a) : | ||||||||||||
Purchases of property and equipment | — | 573 | — | |||||||||
Commissions paid and other expenses | 1,950 | 1,798 | — | |||||||||
Commission income and other income | 22,381 | 57,866 | — | |||||||||
AirCross Co., Ltd. (note a) : | ||||||||||||
Purchases of property and equipment | — | — | — | |||||||||
Commissions paid and other expenses | 13,062 | 19,494 | — | |||||||||
Commission income and other income | 165 | 616 | — | |||||||||
Pantech Co., Ltd. : | ||||||||||||
Purchases of property and equipment | — | — | — | |||||||||
Commissions paid and other expenses | 737 | 400 | — | |||||||||
Commission income and other income | — | 16,605 | — | |||||||||
Helio, Inc. & Helio, LLC (note a) : | ||||||||||||
Commissions paid and other expenses | 876 | 1,087 | — | |||||||||
Commission income and other income | 11,914 | 18,243 | — | |||||||||
Balances | ||||||||||||
SK Engineering & Construction Co., Ltd. : | ||||||||||||
Accounts receivable — trade and other | 97 | 258 | 310 | |||||||||
Accounts payable | 21,326 | 1,635 | 8,870 | |||||||||
Guarantee deposits received | 942 | 942 | 1,135 | |||||||||
SK Networks Co., Ltd. : | ||||||||||||
Accounts receivable — trade and other | 1,787 | 780 | 2,182 | |||||||||
Guarantee deposits | 113 | 113 | 113 | |||||||||
Accounts payable | 22,237 | 71,160 | 71,311 | |||||||||
Guarantee deposits received | 2,700 | 3,123 | 3,432 | |||||||||
SK Corporation : | ||||||||||||
Accounts receivable — trade and other | 1,643 | 5,058 | 775 | |||||||||
Guarantee deposits | 37,703 | 291 | — | |||||||||
Accounts payable | 6,914 | 7,999 | — | |||||||||
Guarantee deposits received | 6,174 | 6,465 | — |
F-59
Description | 2005 | 2006 | 2007 | |||||||||
SK Energy Co., Ltd. | ||||||||||||
Accounts receivable — trade and other | — | — | 2,959 | |||||||||
Guarantee deposits | — | — | 134 | |||||||||
Accounts payable | — | — | 4,404 | |||||||||
Guarantee deposits received | — | — | 248 | |||||||||
SK Telesys Co., Ltd. : | ||||||||||||
Accounts receivable — trade and other | 3 | 34 | 31 | |||||||||
Accounts payable | 65,819 | 51,663 | 30,205 | |||||||||
SKC : | ||||||||||||
Accounts receivable — trade and other | — | 121 | 71 | |||||||||
Guarantee deposits | — | — | — | |||||||||
Accounts payable | — | — | — | |||||||||
Innoace Co., Ltd. : | ||||||||||||
Accounts receivable — trade and other | — | — | 26 | |||||||||
Accounts payable | 6,100 | 13,574 | 7,223 | |||||||||
Guarantee deposits received | 2,138 | 2,291 | 2,291 | |||||||||
SK C&C Co., Ltd. : | ||||||||||||
Accounts receivable — trade and other | 91 | — | 411 | |||||||||
Accounts payable | 174,884 | 88,056 | 135,297 | |||||||||
Guarantee deposits received | 346 | 346 | 346 | |||||||||
TU Media Corp. (note a) : | ||||||||||||
Accounts payable | 5,299 | 886 | — | |||||||||
Guarantee deposits received | 3,016 | 3,016 | — | |||||||||
AirCross Co., Ltd. (note a) : | ||||||||||||
Accounts receivable — trade and other | 3,497 | — | — | |||||||||
Accounts payable | 3,866 | 3,513 | — | |||||||||
Guarantee deposits received | 226 | 226 | — | |||||||||
Pantech Co., Ltd. : | ||||||||||||
Accounts payable | — | 440 | — |
COMPENSATION FOR THE KEY MANAGEMENT |
For the Year Ended December 31, 2007 | ||||||||||||
Severance | ||||||||||||
Payee | Payroll | Indemnities | Total | |||||||||
12 registered directors (including outside directors) | 4,786 | 722 | 5,508 | |||||||||
2006 | 2007 | 2008 | ||||||||||
Payee (including outside directors) | 12 registered directors | 8 registered directors | 7 registered directors | |||||||||
Payroll | 4,472 | 4,786 | 4,405 | |||||||||
Severance indemnities | 935 | 722 | 556 | |||||||||
Total | 5,407 | 5,508 | 4,961 | |||||||||
F-60
PROVISION |
a. | Provision for point program |
2005 | 2006 | 2007 | ||||||||||
Beginning balance | 61,596 | 52,172 | 52,593 | |||||||||
Present value discount (note a) | (7,415 | ) | — | — | ||||||||
Increase (provision) | 7,265 | 10,757 | 15,137 | |||||||||
Decrease (used and reversal) | (9,274 | ) | (10,336 | ) | (40,062 | ) | ||||||
Ending Balance | 52,172 | 52,593 | 27,668 | |||||||||
2006 | 2007 | 2008 | ||||||||||
Beginning balance | 52,172 | 52,593 | 27,668 | |||||||||
Increase (provision) | 10,757 | 15,137 | 12,430 | |||||||||
Decrease (used and reversal) | (10,336 | ) | (40,062 | ) | (15,209 | ) | ||||||
Ending Balance | 52,593 | 27,668 | 24,889 | |||||||||
Expected Year | Estimated Amount to be Paid | |||||||||||||||
of the Usage (Note a) | in Nominal Value (Note a) | Current Value | ||||||||||||||
Estimated Amount | ||||||||||||||||
to be Paid | ||||||||||||||||
Expected Usage for the Year Ended December 31, | in Nominal Value | Present Value | ||||||||||||||
(Note b) | (Note b) | |||||||||||||||
2008 | 12,203 | 11,432 | ||||||||||||||
2009 | 8,117 | 7,125 | 11,185 | 10,502 | ||||||||||||
2010 | 5,443 | 4,476 | 7,307 | 6,442 | ||||||||||||
2011 | 3,676 | 2,831 | 4,791 | 3,967 | ||||||||||||
2012 | 2,500 | 1,804 | 3,156 | 2,453 | ||||||||||||
2013 | 2,089 | 1,525 | ||||||||||||||
Ending balance | 31,939 | 27,668 | 28,528 | 24,889 | ||||||||||||
F-61F-71
(note a) | The above expected year of the usage and the current value of the estimated amount to be paid are estimated based on the historical usage experience. |
2008 | ||||
Beginning balance | — | |||
Increase (Provision) | 433,276 | |||
Decrease (subsidy payment) | (93,580 | ) | ||
Ending balance | 339,696 | |||
Expected Payment | Estimated Amount to be Paid | |||||||
for the Year Ended December 31, | in Nominal Value | Current Value | ||||||
2009 | 294,937 | 286,441 | ||||||
2010 | 57,272 | 53,255 | ||||||
Ending balance | 352,209 | 339,696 | ||||||
27. | DERIVATIVE INSTRUMENTS |
F-72
F-73
Fair Value | ||||||||||||||||||||||||
Designated | Designated | |||||||||||||||||||||||
Duration | as Cash | as Fair | Not | |||||||||||||||||||||
Type | Hedged Item | Amount | of Contract | Flow Hedge | Value Hedge | Designated | Total | |||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Fix-to-fixed cross currency swap | U.S. dollar denominated convertible bond | US$ | 100,000 | May 27, 2004 ~ May 27, 2009 | — | — | 8,236 | 8,236 | ||||||||||||||||
Non-current assets: | ||||||||||||||||||||||||
Fix-to-fixed cross currency swap | U.S. dollar denominated bonds | US$ | 300,000 | Mar. 23, 2004 ~ Apr. 1, 2011 | 19,576 | — | — | 19,576 | ||||||||||||||||
Fix-to-fixed cross currency swap | U.S. dollar denominated bonds | US$ | 400,000 | Jul. 20, 2007 ~Jul. 20, 2017 | — | — | 240,372 | 240,372 | ||||||||||||||||
Floating-to-fixed cross currency interest rate swap | Japanese yen denominated bonds | JPY | 12,500,000 | Nov. 13, 2007 ~ Nov. 13, 2012 | 69,981 | �� | — | — | 69,981 | |||||||||||||||
Floating-to-fixed cross currency interest rate swap | U.S. dollar denominated long-term borrowings | US$ | 100,000 | Oct. 10, 2006 ~ Oct. 10, 2013 | 26,886 | — | — | 26,886 | ||||||||||||||||
Fix-to-fixed cross currency swap | U.S. dollar denominated bonds | US$ | 500,000 | Feb. 1, 2005 ~Feb. 1, 2012 | 137,896 | — | — | 137,896 | ||||||||||||||||
Total assets | 254,339 | — | 248,608 | 502,947 | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Fix-to-fixed cross currency swap | U.S. dollar denominated China Unicom Equity Securities | HK$ | 10,940,900 | Sep. 11, 2008 ~ Sep. 16, 2009 | — | 190,359 | — | 190,359 | ||||||||||||||||
Non-current liabilities: | ||||||||||||||||||||||||
Fix-to-fixed cross currency swap | U.S. dollar denominated bonds | US$ | 150,000 | Nov 20, 2008 ~ Nov 20, 2010 | 23,947 | — | — | 23,947 | ||||||||||||||||
Floating-to-fixed cross currency interest rate swap | Long-term borrowings | 500,000 | July 28, 2008 ~ August 13, 2009 | 28,774 | — | — | 28,774 | |||||||||||||||||
Floating-to-fixed | Long-term floating rate | Jun. 29, 2006 | ||||||||||||||||||||||
Interest rate swap | discounted bill | 200,000 | ~ Jun. 29, 2010 | 4,725 | — | — | 4,725 | |||||||||||||||||
Total liabilities | 57,446 | 190,359 | — | 247,805 | ||||||||||||||||||||
F-62F-74
Fair Value | ||||||||||||||||||||||||||
Designated | Designated | |||||||||||||||||||||||||
Hedged | Duration of | as Cash | as Fair | Not | ||||||||||||||||||||||
Type | Hedged Item | Amount | Contract | Flow Hedge | Value Hedge | Designated | Total | |||||||||||||||||||
Non-current assets: | ||||||||||||||||||||||||||
Fixed-to-fixed cross currency swap | U.S. dollar denominated bonds | US$ | 400,000 | ~ | Jul. 20, 2007 Jul. 20, 2017 | — | — | 7,316 | 7,316 | |||||||||||||||||
Floating-to-fixed cross currency interest rate swap | Japanese yen denominated bonds | JPY | 12,500,000 | ~ | Nov. 13, 2007 Nov. 13, 2012 | 5,741 | — | — | 5,741 | |||||||||||||||||
Floating-to-fixed interest rate swap | Long-term floating rate discounted bill | 200,000 | ~ | Jun. 29, 2006 Jun. 29, 2010 | 3,170 | — | — | 3,170 | ||||||||||||||||||
Total assets | 8,911 | — | 7,316 | 16,227 | ||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||
Fixed-to-fixed cross currency swap | U.S. dollar denominated China Unicom equity securities | HK$ | 10,940,900 | ~ | Sep. 11, 2007 Sep. 16, 2008 | — | 12,646 | — | 12,646 | |||||||||||||||||
Non-current liabilities: | ||||||||||||||||||||||||||
Fixed-to-fixed cross currency swap | U.S. dollar denominated bonds | US$ | 300,000 | ~ | Mar. 23, 2004 Apr. 1, 2011 | 85,239 | — | — | 85,239 | |||||||||||||||||
Fixed-to-fixed cross currency swap | U.S. dollar denominated convertible bond | US$ | 100,000 | ~ | May 27, 2004 May 27, 2009 | — | — | 23,125 | 23,125 | |||||||||||||||||
Floating-to-fixed cross currency interest rate swap | U.S. dollar denominated long-term borrowings | US$ | 100,000 | ~ | Oct. 10, 2006 Oct. 10, 2013 | 2,547 | — | — | 2,547 | |||||||||||||||||
87,786 | — | 23,125 | 110,911 | |||||||||||||||||||||||
Total liabilities | 87,786 | 12,646 | 23,125 | 123,557 | ||||||||||||||||||||||
MERGERS AND ACQUISITIONS |
F-63
F-64
Description | In Millions of Korean Won | |||
Fair value of acquired assets | 101,613 | |||
Fair value of assumed liabilities | (56,872 | ) | ||
Convertible bond issued by the acquirer | 44,850 | |||
Deferred tax asset on temporary differences | 3,991 | |||
Fair value of net assets | 93,582 | |||
Consideration for merger | ||||
Fair value of stock issued | 57,703 | |||
Carrying amount of equity method securities purchased prior to merger | 30,101 | |||
Convertible bond issued by the acquirer prior to merger | 44,850 | |||
Total | 132,654 | |||
Goodwill | 39,072 | |||
F-75
CONSOLIDATED STATEMENTS OF CASH FLOWS |
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Conversion of convertible bonds | — | 29,528 | 45,470 | 29,528 | 5,654 | — | ||||||||||||||||||
Retirement of treasury stocks | — | 209,077 | — | 209,077 | — | — | ||||||||||||||||||
Write-offs of accounts receivable | 49,181 | 90,780 | 90,475 | 90,780 | 67,313 | 37,079 | ||||||||||||||||||
Transfer from advanced payments to construction in progress | — | — | 12,714 | |||||||||||||||||||||
Acquisition of property and equipment asset through financial lease contract | — | — | 76,364 | |||||||||||||||||||||
Transfer from inventory to property and equipment tangible assets | — | — | 46,749 | |||||||||||||||||||||
Acquisition of machinery by accounts payable | — | — | 39,640 | |||||||||||||||||||||
Increase in assets due to merger | — | 10,196 | 101,613 | 10,196 | 101,613 | — | ||||||||||||||||||
Increase in liabilities due to merger | — | 9,851 | 56,872 | 9,851 | 56,872 | — | ||||||||||||||||||
Increase(Decrease) in assets due to the change in consolidated subsidiaries | (597,143 | ) | 93,581 | 541,809 | ||||||||||||||||||||
Increase(Decrease) in liabilities due to the change in consolidated subsidiaries | (554,888 | ) | 33,904 | 489,288 | ||||||||||||||||||||
Increase in assets due to the change in consolidated subsidiaries | 93,581 | 541,809 | 2,923,398 | |||||||||||||||||||||
Increase in liabilities due to the change in consolidated subsidiaries | 33,904 | 489,288 | 1,543,098 |
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Cash and cash equivalents | 378,426 | 485,972 | 885,988 | 485,972 | 885,989 | 1,011,467 | ||||||||||||||||||
Government subsidy | — | — | (141 | ) | — | (142 | ) | (127 | ) | |||||||||||||||
378,426 | 485,972 | 885,847 | 485,972 | 885,847 | 1,011,340 | |||||||||||||||||||
NETWORK INTERCONNECTION CHARGES |
F-65
SUBSEQUENT EVENT |
F-66F-76
32. | SEGMENT INFORMATION |
F-77
Cellular | Fixed-line | |||||||||||||||||||||||
Telephone | Telecomm- | |||||||||||||||||||||||
Telecommuni- | unication | Consolidating | Consolidated | |||||||||||||||||||||
cation Service | Service | Other | Sub-total | Adjustments | Amount | |||||||||||||||||||
Total sales | 11,674,662 | 2,132,455 | 847,397 | 14,654,514 | (633,530 | ) | 14,020,984 | |||||||||||||||||
Internal sales | 127,301 | 59,753 | 446,476 | 633,530 | (633,530 | ) | — | |||||||||||||||||
Net sales | 11,547,361 | 2,072,702 | 400,921 | 14,020,984 | — | 14,020,984 | ||||||||||||||||||
Operating income | 2,256,613 | 99,359 | (603,504 | ) | 1,752,468 | — | 1,752,468 | |||||||||||||||||
Property and equipment and intangible assets | 7,639,806 | 3,148,683 | 627,345 | 11,415,834 | — | 11,415,834 | ||||||||||||||||||
Depreciation | 1,943,422 | 535,169 | 280,685 | 2,759,276 | — | 2,759,276 |
33. | RECONCILIATION TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES |
a. |
F-78
F-67
F-79
F-68
F-80
F-69
F-70F-81
F-71F-82
F-72
F-83
Presentation of Minority Interest as a Component of Shareholders’ Equity |
F-73
Net | ||||||||||||||||||||||||||||||||
Total | Total | Net | Total | Total | Income | |||||||||||||||||||||||||||
Assets | Liabilities | Revenue | Income (Loss) | Assets | Liabilities | Revenue | (Loss) | |||||||||||||||||||||||||
IHQ, Inc. | 69,216 | 12,860 | 41,395 | 3,330 | 55,980 | 20,005 | 44,828 | ( | 16,671 | ) | ||||||||||||||||||||||
TU Media Corp. | 350,042 | 344,537 | 113,310 | (78,500 | ) | 301,026 | 266,175 | 127,591 | (30,859 | ) | ||||||||||||||||||||||
YTN Media, Inc. | 30,808 | 12,297 | 26,161 | (111 | ) | |||||||||||||||||||||||||||
CU Media, Inc. | 32,031 | 13,174 | 27,312 | (4,921 | ) | |||||||||||||||||||||||||||
Benex Digital Culture Contents Fund | 25,444 | 4 | 659 | 340 | ||||||||||||||||||||||||||||
IMM Cinema Fund | 19,928 | 7 | 1,866 | (4,459 | ) | 17,884 | 7 | 918 | (2,043 | ) | ||||||||||||||||||||||
Michigan Global Cinema Fund | 9,742 | — | 1,070 | (634 | ) | 9,838 | — | 522 | 97 | |||||||||||||||||||||||
SK Broadband Co., Ltd. | 3,400,357 | 2,198,465 | 1,367,881 | (223,653 | ) |
2005 | 2006 | 2007 | ||||||||||
Current assets | 470,428 | 400,994 | 663,791 | |||||||||
Non-Current assets | 1,074,552 | 1,505,237 | 3,052,281 | |||||||||
Total | 1,544,980 | 1,906,231 | 3,716,072 | |||||||||
Current liabilities | 489,191 | 542,917 | 810,141 | |||||||||
Non-Current liabilities | 511,209 | 483,934 | 904,821 | |||||||||
Stockholders’ equity | 544,580 | 879,380 | 2,001,110 | |||||||||
Total | 1,544,980 | 1,906,231 | 3,716,072 | |||||||||
F-74F-84
2005 | 2006 | 2007 | ||||||||||
Operating revenue | 1,002,667 | 1,107,910 | 1,160,946 | |||||||||
Operating expenses | (908,485 | ) | (994,556 | ) | (1,081,361 | ) | ||||||
Operating income | 94,182 | 113,354 | 79,585 | |||||||||
Other income (expenses), net | (11,587 | ) | 8,929 | 1,381,694 | ||||||||
Provision for income taxes | (20,902 | ) | (34,959 | ) | (405,709 | ) | ||||||
Net income | 61,693 | 87,324 | 1,055,570 | |||||||||
2006 | 2007 | 2008 | ||||||||||
Current assets | 400,994 | 663,791 | 890,816 | |||||||||
Non-Current assets | 1,505,237 | 3,052,281 | 3,548,816 | |||||||||
Total | 1,906,231 | 3,716,072 | 4,439,632 | |||||||||
Current liabilities | 542,917 | 810,141 | 1,199,621 | |||||||||
Non-Current liabilities | 483,934 | 904,821 | 1,021,529 | |||||||||
Share holder’s equity | 879,380 | 2,001,110 | 2,218,482 | |||||||||
Total | 1,906,231 | 3,716,072 | 4,439,632 | |||||||||
2006 | 2007 | 2008 | ||||||||||
Operating revenue | 1,107,910 | 1,160,946 | 1,275,185 | |||||||||
Operating expenses | (994,556 | ) | (1,081,361 | ) | (1,185,971 | ) | ||||||
Operating income | 113,354 | 79,585 | 89,214 | |||||||||
Other income (expenses), net | 8,929 | 1,381,694 | 60,859 | |||||||||
Provision for income taxes | (34,959 | ) | (405,709 | ) | 11,747 | |||||||
Net income | 87,324 | 1,055,570 | 161,820 | |||||||||
F-75
F-85
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Net income based on Korean GAAP | 1,868,307 | 1,449,552 | 1,562,265 | 1,449,552 | 1,562,265 | 972,338 | ||||||||||||||||||
Adjustments : | ||||||||||||||||||||||||
Net income attributed to Minority interests | 4,671 | 1,939 | 86,611 | |||||||||||||||||||||
Deferred income tax adjustments due to difference in accounting principles | 30,857 | — | — | |||||||||||||||||||||
Net income attributed to minority interests | 1,939 | 86,611 | 243,381 | |||||||||||||||||||||
Deferred charges | (2,037 | ) | 2,037 | — | 2,037 | — | — | |||||||||||||||||
Capital leases | (695 | ) | (847 | ) | — | (847 | ) | — | — | |||||||||||||||
Loss on impairment of investment securities | (421 | ) | (2,238 | ) | 172,532 | |||||||||||||||||||
Intangible assets | (16,046 | ) | (260 | ) | (4,180 | ) | (260 | ) | (4,180 | ) | (8,086 | ) | ||||||||||||
Reversal of amortization of goodwill | 137,389 | 128,327 | 145,772 | |||||||||||||||||||||
Reversal of amortization of goodwill and goodwill impairment | 128,327 | 145,772 | 107,934 | |||||||||||||||||||||
Capitalization of foreign exchange losses and interest expenses related to tangible assets | 3,231 | 9,266 | 954 | 9,266 | 954 | 4,356 | ||||||||||||||||||
Capitalization of interest expenses related to purchases of intangible assets | 5,272 | 5,272 | 5,272 | 5,272 | 5,272 | 5,272 | ||||||||||||||||||
Nonrefundable activation fees | (34, 681 | ) | (16,139 | ) | (50,325 | ) | (16,139 | ) | (50,325 | ) | (21,991 | ) | ||||||||||||
Loss on impairment of investment securities | 3,065 | (421 | ) | (2,238 | ) | |||||||||||||||||||
Loss on valuation of currency and interest rate swap | 29,898 | (4,056 | ) | 8,295 | ||||||||||||||||||||
Stock option compensation plan | (144 | ) | — | — | ||||||||||||||||||||
Convertible bonds payable | 14,044 | 48,118 | (19,340 | ) | 48,118 | (19,340 | ) | (30,407 | ) | |||||||||||||||
Foreign currency translation | (2,458 | ) | — | — | ||||||||||||||||||||
Currency and interest rate swap | (4,056 | ) | 8,295 | (478,874 | ) | |||||||||||||||||||
Sales of stock by the equity method investee | (8,637 | ) | 7,440 | (6,392 | ) | 7,440 | (6,392 | ) | — | |||||||||||||||
Consolidation of variable interest entity | 38 | (38 | ) | — | (38 | ) | — | — | ||||||||||||||||
Stock option compensation plan | 49 | (144 | ) | — | ||||||||||||||||||||
Convertible notes receivable | — | 365,751 | (412,383 | ) | 365,751 | (412,383 | ) | — | ||||||||||||||||
Reclassification of SK C&C investment | — | — | 83,785 | — | 83,785 | 47,645 | ||||||||||||||||||
Retroactive application of equity method of accounting on SKBB investment | (2,168 | ) | (797 | ) | (21,025 | ) | ||||||||||||||||||
FIN 48 effect | — | (1,320 | ) | 2,778 | ||||||||||||||||||||
Tax effect of the reconciling items | (4,717 | ) | (115,268 | ) | 109,368 | (115,268 | ) | 109,368 | 46,947 | |||||||||||||||
FIN 48 effect | — | — | (1,320 | ) | ||||||||||||||||||||
Effect of changes in tax law | — | — | 30,066 | |||||||||||||||||||||
Net income based on U.S. GAAP | 2,027,550 | 1,880,529 | 1,506,144 | 1,878,361 | 1,505,347 | 1,072,866 | ||||||||||||||||||
Weighted average number of common shares outstanding | 73,614,296 | 73,305,026 | 72,650,909 | 73,305,026 | 72,650,909 | 72,765,557 | ||||||||||||||||||
Earnings per share based on U.S. GAAP: | ||||||||||||||||||||||||
Basic earnings per share | 27, 543 | 25,653 | 20,731 | 25,624 | 20,720 | 14,744 | ||||||||||||||||||
Diluted earnings per share | 27,089 | 25,236 | 20,390 | 25,207 | 20,379 | 14,606 | ||||||||||||||||||
F-76F-86
December 31, | December 31, | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Shareholders’ equity based on Korean GAAP | 8,327,540 | 9,483,088 | 11,687,633 | |||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Deferred charges | (2,037 | ) | — | — | ||||||||||||||||||||
Capital leases | 847 | — | — | |||||||||||||||||||||
Shareholders’ equity based on Korean GAAP Adjustments : | 9,483,088 | 11,687,633 | 11,824,440 | |||||||||||||||||||||
Investment securities without readily determinable fair value | — | (21,015 | ) | — | ||||||||||||||||||||
Intangible assets | 993,547 | 993,802 | 1,096,547 | 993,802 | 1,096,547 | 1,151,974 | ||||||||||||||||||
Reversal of amortization of goodwill | 547,681 | 676,008 | 821,780 | |||||||||||||||||||||
Reversal of amortization of goodwill and goodwill impairment | 676,008 | 821,780 | 929,714 | |||||||||||||||||||||
Capitalization of foreign exchange losses and interest expenses related to tangible assets | 47,522 | 56,788 | 57,742 | 56,788 | 57,742 | 62,098 | ||||||||||||||||||
Capitalization of interest expenses related to purchase of intangible assets | (58,388 | ) | (53,116 | ) | (47,844 | ) | (53,116 | ) | (47,844 | ) | (42,572 | ) | ||||||||||||
Nonrefundable activation fees | (309,903 | ) | (326,042 | ) | (376,367 | ) | (326,042 | ) | (376,367 | ) | (398,358 | ) | ||||||||||||
Loans issued to employees’ stock ownership association | (14,586 | ) | (7,526 | ) | (34,816 | ) | ||||||||||||||||||
Loans receivable for stock issued to employees | (7,526 | ) | (34,816 | ) | (60,908 | ) | ||||||||||||||||||
Convertible bonds payable | (52,220 | ) | (1,347 | ) | (12,642 | ) | (1,347 | ) | (12,642 | ) | (43,049 | ) | ||||||||||||
Investment securities without readily determinable fair value | — | — | (21,015 | ) | ||||||||||||||||||||
Currency and interest rate swap | — | — | (45,503 | ) | ||||||||||||||||||||
Consolidation of variable interest entity | 228 | 1,396 | 932 | 1,396 | 932 | 5,430 | ||||||||||||||||||
Reclassification of SK C&C investment | — | — | (433,213 | ) | — | (433,213 | ) | (7,114 | ) | |||||||||||||||
Retroactive application of equity method of accounting on SKBB investment | (20,140 | ) | (41,296 | ) | (62,382 | ) | ||||||||||||||||||
Minority interest in equity of consolidated affiliates | (108,927 | ) | (170,246 | ) | (253,383 | ) | (170,246 | ) | (253,383 | ) | (1,175,959 | ) | ||||||||||||
FIN 48 effect | — | (13,173 | ) | (10,440 | ) | |||||||||||||||||||
Tax effect of the reconciling items | 101,130 | 85,674 | 226,877 | 85,674 | 226,877 | 87,821 | ||||||||||||||||||
FIN 48 effect | — | — | (13,173 | ) | ||||||||||||||||||||
Shareholders’ equity based on U.S. GAAP | 9,472,434 | 10,738,479 | 12,699,058 | 10,718,339 | 12,657,762 | 12,215,192 | ||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Balance, beginning of the year | 8,236,997 | 9,472,434 | 10,738,479 | 9,477,689 | 10,718,339 | 12,657,762 | ||||||||||||||||||
Net income for the year | 2,027,550 | 1,880,529 | 1,506,144 | 1,878,361 | 1,505,347 | 1,072,866 | ||||||||||||||||||
Accumulated effect of FIN 48 adoption through 2006 | — | — | (11,853 | ) | — | (11,853 | ) | — | ||||||||||||||||
Dividends | (758,227 | ) | (662,628 | ) | (581,340 | ) | (662,628 | ) | (581,340 | ) | (682,504 | ) | ||||||||||||
Unrealized gains on valuation of securities, net of tax | 23,042 | 206,457 | 937,006 | |||||||||||||||||||||
Unrealized gain (loss) on valuation of securities, net of tax | 183,155 | 959,452 | (786,408 | ) | ||||||||||||||||||||
Equity in capital surplus, retained earnings and other comprehensive income of affiliates (note a) | (63,370 | ) | 38,651 | 158,760 | 38,726 | 115,955 | (64,825 | ) | ||||||||||||||||
Conversion of convertible bonds payable | — | 23,624 | 2,010 | 23,624 | 2,010 | (6,277 | ) | |||||||||||||||||
Treasury stock transactions | — | (209,078 | ) | (26,556 | ) | (209,078 | ) | (26,556 | ) | (14,137 | ) | |||||||||||||
Foreign-based operations’ translation adjustments | (1,792 | ) | (18,570 | ) | 3,698 | (18,570 | ) | 3,698 | 64,807 | |||||||||||||||
Stock compensation plan | 274 | — | — | |||||||||||||||||||||
Decrease(Increase) in loans receivable for stock issued to employees’ investor association | 7,960 | 7,060 | (27,290 | ) | ||||||||||||||||||||
Decrease (Increase) in loans receivable for stock issued to employees | 7,060 | (27,290 | ) | (26,092 | ) | |||||||||||||||||||
Balance, end of the year | 9,472,434 | 10,738,479 | 12,699,058 | 10,718,339 | 12,657,762 | 12,215,192 | ||||||||||||||||||
(note a) | This line item consists of the adjustments to the carrying amount of equity method investments based on the Company’s proportionate pickup in affiliates using the equity method of accounting, which are directly adjusted to stockholders’ equity of affiliates, such as unrealized gains or losses on valuation ofavailable-for-sale securities, foreign-based operations’ translation adjustments in affiliates and stock transactions by affiliates. |
F-77F-87
December 31, | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Current assets : | ||||||||||||
As reported | 4,598,580 | 4,663,962 | 4,813,072 | |||||||||
U.S. GAAP adjustments : | ||||||||||||
— loans receivable for stock issued to employees investor association | (3,249 | ) | (2,208 | ) | (1,522 | ) | ||||||
— tax effect of the reconciling items | 31,381 | 39,241 | 46,979 | |||||||||
— consolidation of variable interest entity | (4,889 | ) | (8,809 | ) | (16,077 | ) | ||||||
— scope of consolidation | — | (40,189 | ) | (150,617 | ) | |||||||
Current assets based on U.S. GAAP | 4,621,823 | 4,651,997 | 4,691,835 | |||||||||
Non-current assets : | ||||||||||||
As reported | 10,106,192 | 11,576,006 | 14,235,863 | |||||||||
U.S. GAAP adjustments : | ||||||||||||
— loans receivable for stock issued to employees’ investor association | (11,337 | ) | (5,318 | ) | (33,294 | ) | ||||||
— intangible assets | 988,763 | 989,595 | 1,140,555 | |||||||||
— reverse of amortization of goodwill | 547,681 | 677,371 | 828,960 | |||||||||
— nonrefundable activation fees | 8,571 | 8,108 | 6,167 | |||||||||
— capital lease | 847 | (576 | ) | (576 | ) | |||||||
— capitalization of foreign exchange losses and interest expense related to tangible assets | 47,522 | 56,788 | 57,742 | |||||||||
— capitalization of interest expenses related to purchase of intangible assets | (58,388 | ) | (53,116 | ) | (47,844 | ) | ||||||
— deferred charges | 7,933 | 7,812 | 8,577 | |||||||||
— subscription payable | 40,014 | — | — | |||||||||
— equity instrument to be received in conjunction with providing services | (2,055 | ) | — | — | ||||||||
— consolidation of variable interest entity | 53,626 | 54,731 | 54,890 | |||||||||
— convertible bonds payable | — | (1,133 | ) | 281 | ||||||||
— Investment securities without readily determinable fair value | — | — | (21,015 | ) | ||||||||
— Reclassification of SK C&C investment | — | — | (433,213 | ) | ||||||||
— scope of consolidation | — | (32,735 | ) | (275,780 | ) | |||||||
— Tax effect of the reconciling items | 1,375 | |||||||||||
— FIN 48 effect | — | — | 374 | |||||||||
Non-current assets based on U.S. GAAP | 11,729,369 | 13,277,533 | 15,523,062 | |||||||||
Total assets based on U.S. GAAP | 16,351,192 | 17,929,530 | 20,214,897 | |||||||||
December 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
Current assets: | ||||||||||||
As reported | 4,663,962 | 4,813,072 | 5,422,447 | |||||||||
U.S. GAAP adjustments : | ||||||||||||
— Deferred charges | — | — | 406 | |||||||||
— Loans receivable for stock issued to employees | (2,208 | ) | (1,522 | ) | (1,252 | ) | ||||||
— Consolidation of variable interest entity | (8,809 | ) | (16,077 | ) | (55,967 | ) | ||||||
— Scope of consolidation | (40,189 | ) | (150,617 | ) | (836,324 | ) | ||||||
— Tax effect of the reconciling items | 39,241 | 46,979 | 53,055 | |||||||||
Current assets based on U.S. GAAP | 4,651,997 | 4,691,835 | 4,582,365 | |||||||||
Non-current assets: | ||||||||||||
As reported | 11,576,006 | 14,235,863 | 17,051,224 | |||||||||
U.S. GAAP adjustments: | ||||||||||||
— Deferred charges | 7,812 | 8,577 | 11,423 | |||||||||
— Capital lease | (576 | ) | (576 | ) | (576 | ) | ||||||
— Investment securities without readily determinable fair value | — | (21,015 | ) | — | ||||||||
— Intangible assets | 989,595 | 1,140,555 | 1,145,269 | |||||||||
— Reverse of amortization of goodwill and goodwill impairment | 677,371 | 828,960 | 909,106 | |||||||||
— Capitalization of foreign exchange losses and interest expense related to tangible assets | 56,788 | 57,742 | 62,098 | |||||||||
— Capitalization of interest expenses related to purchase of intangible assets | (53,116 | ) | (47,844 | ) | (42,572 | ) | ||||||
— Nonrefundable activation fees | 8,108 | 6,167 | 8,099 | |||||||||
— Loans receivable for stock issued to employees | (5,318 | ) | (33,294 | ) | (59,656 | ) | ||||||
— Convertible bonds payable | (1,133 | ) | 281 | 281 | ||||||||
— Currency and interest rate swap | — | — | (51,121 | ) | ||||||||
— Consolidation of variable interest entity | 54,731 | 54,890 | 76,022 | |||||||||
— Scope of consolidation | (32,735 | ) | (275,780 | ) | (2,386,994 | ) | ||||||
— Reclassification of SK C&C investment | — | (433,213 | ) | (7,114 | ) | |||||||
— Retroactive application of equity method of accounting on SKBB investment | (20,140 | ) | (41,296 | ) | (62,382 | ) | ||||||
— FIN 48 effect | — | 374 | (1,621 | ) | ||||||||
— Tax effect of the reconciling items | — | 1,375 | 5,332 | |||||||||
Non-current assets based on U.S. GAAP | 13,257,393 | 15,481,766 | 16,656,818 | |||||||||
Total assets based on U.S. GAAP | 17,909,390 | 20,173,601 | 21,239,183 | |||||||||
F-78F-88
December, 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Current liabilities : | ||||||||||||
As reported | 2,863,373 | 3,208,416 | 3,016,874 | |||||||||
U.S. GAAP adjustments : | ||||||||||||
— nonrefundable activation fees | 114,111 | 142,697 | 170,761 | |||||||||
— subscription payable | 40,014 | — | — | |||||||||
— equity instrument to be received in conjunction with providing services | (525 | ) | — | — | ||||||||
— consolidation of variable interest entity | 17,671 | 32,078 | 38,773 | |||||||||
— scope of consolidation | — | (17,389 | ) | (285,677 | ) | |||||||
Current liabilities based on U.S. GAAP | 3,034,644 | 3,365,802 | 2,940,731 | |||||||||
Non-current liabilities : | ||||||||||||
As reported | 3,513,859 | 3,548,464 | 4,344,428 | |||||||||
U.S. GAAP adjustments : | ||||||||||||
— deferred charges | 9,970 | 7,812 | 8,577 | |||||||||
— nonrefundable activation fees | 204,363 | 191,453 | 211,773 | |||||||||
— tax effect of the reconciling items | (74,532 | ) | (51,216 | ) | (183,709 | ) | ||||||
— convertible bonds payable | 52,220 | 214 | 12,923 | |||||||||
— equity instrument to be received in conjunction with providing services | (1,530 | ) | — | — | ||||||||
— consolidation of variable interest entity | 631 | 227 | 296 | |||||||||
— scope of consolidation | — | (19,563 | ) | (73,015 | ) | |||||||
— FIN 48 effect | — | — | 13,950 | |||||||||
Non-current liabilities based on U.S. GAAP | 3,704,981 | 3,677,391 | 4,335,223 | |||||||||
Total liabilities based on U.S. GAAP | 6,739,625 | 7,043,193 | 7,275,954 | |||||||||
Minority interests : | ||||||||||||
As reported | 108,927 | 170,246 | 253,383 | |||||||||
U.S. GAAP adjustments : | ||||||||||||
— consolidation of variable interest entity | 30,206 | 12,221 | (1,188 | ) | ||||||||
— reversal of amortization of goodwill | — | 1,363 | 7,180 | |||||||||
— intangible assets | — | — | 47,604 | |||||||||
— scope of consolidation | — | (35,972 | ) | (67,094 | ) | |||||||
Total minority interests based on U.S. GAAP | 139,133 | 147,858 | 239,885 | |||||||||
December, 31 | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
Current liabilities: | ||||||||||||
As reported | 3,208,416 | 3,016,874 | 4,628,821 | |||||||||
U.S. GAAP adjustments: | ||||||||||||
— Deferred charges | — | — | 406 | |||||||||
— Considerations for conversion right | — | — | 26,577 | |||||||||
— Nonrefundable activation fees | 142,697 | 170,761 | 218,284 | |||||||||
— Consolidation of variable interest entity | 32,078 | 38,773 | 52,031 | |||||||||
— Scope of consolidation | (17,389 | ) | (285,677 | ) | (1,081,778 | ) | ||||||
Current liabilities based on U.S. GAAP | 3,365,802 | 2,940,731 | 3,844,341 | |||||||||
Non-current liabilities: | ||||||||||||
As reported | 3,548,464 | 4,344,428 | 6,020,410 | |||||||||
U.S. GAAP adjustments : | ||||||||||||
— Deferred charges | 7,812 | 8,577 | 11,423 | |||||||||
— Considerations for conversion right | 214 | 12,923 | 16,753 | |||||||||
— Nonrefundable activation fees | 191,453 | 211,773 | 188,173 | |||||||||
— Currency and interest rate swap | — | — | (5,618 | ) | ||||||||
— Consolidation of variable interest entity | 227 | 296 | 698 | |||||||||
— Scope of consolidation | (19,563 | ) | (73,015 | ) | (1,373,619 | ) | ||||||
— FIN 48 effect | — | 13,950 | 9,049 | |||||||||
— Tax effect of the reconciling items | (51,216 | ) | (183,709 | ) | (34,446 | ) | ||||||
Non-current liabilities based on U.S. GAAP | 3,677,391 | 4,335,223 | 4,832,823 | |||||||||
Total liabilities based on U.S. GAAP | 7,043,193 | 7,275,954 | 8,677,164 | |||||||||
Minority interests: | ||||||||||||
As reported | 170,246 | 253,383 | 1,175,959 | |||||||||
U.S. GAAP adjustments : | ||||||||||||
— Intangible assets | — | 47,604 | 31,704 | |||||||||
— Reversal of amortization of goodwill and goodwill impairment | 1,363 | 7,180 | (21,317 | ) | ||||||||
— Consolidation of variable interest entity | 12,221 | (1,188 | ) | (38,106 | ) | |||||||
— Scope of consolidation | (35,972 | ) | (67,094 | ) | (801,413 | ) | ||||||
Total minority interests based on U.S. GAAP | 147,858 | 239,885 | 346,827 | |||||||||
F-79F-89
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Cash flows from operating activities based on Korean GAAP | 3,407,142 | 3,589,825 | 3,710,704 | 3,589,825 | 3,721,700 | 3,296,938 | ||||||||||||||||||
Adjustments : | ||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Trading security cash flows | (122,710 | ) | 80,061 | 28,696 | 80,061 | 28,696 | (40 | ) | ||||||||||||||||
Consolidation of variable interest entity | 12,444 | (48,721 | ) | 35,777 | (48,721 | ) | 35,777 | 7,010 | ||||||||||||||||
Scope of consolidation | — | (6,384 | ) | 11,363 | (6,384 | ) | 11,363 | (391,271 | ) | |||||||||||||||
Pre-acquisition cash flows of subsidiaries | — | — | (501,788 | ) | — | (36,372 | ) | — | ||||||||||||||||
Discontinued operation (Note a) | — | (476,412 | ) | (213,899 | ) | |||||||||||||||||||
Cash flows from operating activities based on U.S. GAAP | 3,296,876 | 3,614,781 | 3,284,752 | 3,614,781 | 3,284,752 | 2,698,738 | ||||||||||||||||||
Cash flows from investing activities based on Korean GAAP | (1,938,187 | ) | (2,535,153 | ) | (2,399,047 | ) | (2,535,153 | ) | (2,414,879 | ) | (3,875,394 | ) | ||||||||||||
Adjustments : | ||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Trading security cash flows | 122,710 | (80,061 | ) | (28,696 | ) | (80,061 | ) | (28,696 | ) | 40 | ||||||||||||||
Increase in cash and cash equivalent due to merger | — | 50,448 | — | |||||||||||||||||||||
Consolidation of variable interest entity | (1,004 | ) | 37,611 | (39,389 | ) | 37,611 | (39,389 | ) | (11,006 | ) | ||||||||||||||
Scope of consolidation | — | 17,035 | 15,559 | 17,035 | 15,559 | 11,036 | ||||||||||||||||||
Pre-acquisition cash flows of subsidiaries | — | — | 15,880 | — | (1,784 | ) | — | |||||||||||||||||
Discontinued operation (Note a) | — | 33,496 | (51,631 | ) | ||||||||||||||||||||
Cash flows from investing activities based on U.S. GAAP | (1,816,481 | ) | (2,560,568 | ) | (2,435,693 | ) | (2,560,568 | ) | (2,385,245 | ) | (3,926,955 | ) | ||||||||||||
Cash flows from financing activities based on Korean GAAP | (1,429,038 | ) | (952,377 | ) | (856,107 | ) | (952,378 | ) | (1,041,255 | ) | 869,415 | |||||||||||||
Adjustments : | ||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Consolidation of variable interest entity | (10,243 | ) | 17,716 | 5,016 | 17,716 | 5,016 | 1,126 | |||||||||||||||||
Scope of consolidation | — | (5,946 | ) | (2,475 | ) | (5,946 | ) | (2,475 | ) | 239,147 | ||||||||||||||
Pre-acquisition cash flows of subsidiaries | — | — | 222,161 | — | 64,674 | — | ||||||||||||||||||
Discontinued Operation (Note a) | — | 342,777 | 9,015 | |||||||||||||||||||||
Cash flows from financing activities based on U.S. GAAP | (1,439,281 | ) | (940,607 | ) | (631,405 | ) | (940,608 | ) | (631,263 | ) | 1,118,703 | |||||||||||||
The effect of exchange rate changes on cash and cash equivalents held in foreign currencies based on Korean GAAP | (3,036 | ) | (9,317 | ) | 2,783 | (9,317 | ) | 6,097 | 37,371 | |||||||||||||||
Adjustments : | ||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Consolidation of variable interest entity | — | (5,302 | ) | 37 | (5,302 | ) | 37 | 938 | ||||||||||||||||
Pre-acquisition cash flows of subsidiaries | — | — | (1,657 | ) | ||||||||||||||||||||
Scope of consolidation | — | — | (4,129 | ) | ||||||||||||||||||||
Discontinued Operation (Note a) | — | (4,971 | ) | — | ||||||||||||||||||||
The effect of exchange rate changes on cash and cash equivalents held in foreign currencies based on U.S. GAAP | (3,036 | ) | (14,619 | ) | 1,163 | (14,619 | ) | 1,163 | 34,180 | |||||||||||||||
Net increase (decrease) in cash and cash equivalents due to changes in consolidated subsidiaries based on Korean GAAP | (29,085 | ) | 14,568 | 154,227 |
F-80F-90
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Adjustments : | ||||||||||||||||||||||||
Net increase in cash and cash equivalents due to changes in consolidated subsidiaries based on Korean GAAP | 14,568 | 102,079 | 36,413 | |||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Scope of consolidation | — | (14,246 | ) | (81,218 | ) | (14,246 | ) | (81,218 | ) | (77,346 | ) | |||||||||||||
Pre-acquisition cash flows of subsidiaries | — | — | 2,271 | |||||||||||||||||||||
Discontinued operation (Note a) | — | 54,419 | — | |||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents due to changes in consolidated subsidiaries based on U.S. GAAP | (29,085 | ) | 322 | 75,280 | 322 | 75,280 | (40,933 | ) | ||||||||||||||||
Pre-acquisition cash flows of subsidiaries based on Korean GAAP | — | — | (263,133 | ) | — | (11,396 | ) | 17,250 | ||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Scope of consolidation | — | — | (17,250 | ) | ||||||||||||||||||||
Pre-acquisition cash flows of subsidiaries | — | — | 263,133 | — | (26,518 | ) | — | |||||||||||||||||
Discontinued operation (Note a) | — | 37,914 | — | |||||||||||||||||||||
Pre-acquisition cash flows of subsidiaries based U.S. GAAP | — | — | — | |||||||||||||||||||||
Pre-acquisition cash flows of subsidiaries based on U.S. GAAP | — | — | — | |||||||||||||||||||||
Increases in cash and cash equivalents due to merger based on Korea GAAP | — | — | 50,448 | — | 50,448 | — | ||||||||||||||||||
Adjustments | — | — | — | |||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Increase in cash and cash equivalents due to merger | — | (50,448 | ) | — | ||||||||||||||||||||
Increase in cash and cash equivalents due to merger based on U.S. GAAP | — | — | 50,448 | — | — | — | ||||||||||||||||||
Cash flows from discontinued operation based on Korean GAAP | — | (12,777 | ) | (256,515 | ) | |||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Discontinued operation (Note a) | 12,777 | 256,515 | ||||||||||||||||||||||
Cash flows from discontinued operation based on U.S. GAAP | — | — | — | |||||||||||||||||||||
Cash and cash equivalents at beginning of the year based on Korean GAAP | 370,630 | 378,426 | 485,972 | 378,426 | 485,972 | 885,989 | ||||||||||||||||||
Adjustments : | ||||||||||||||||||||||||
Adjustment: | ||||||||||||||||||||||||
Consolidation of variable interest entity | — | 1,197 | 2,501 | 1,197 | 2,501 | 3,942 | ||||||||||||||||||
Scope of consolidation | — | — | (9,541 | ) | — | (9,541 | ) | (66,312 | ) | |||||||||||||||
Cash and cash equivalents at beginning of the year based on U.S. GAAP | 370,630 | 379,623 | 478,932 | 379,623 | 478,932 | 823,619 | ||||||||||||||||||
Cash and cash equivalents at end of the year based on Korean GAAP | 378,426 | 485,972 | 885,847 | 485,972 | 885,989 | 1,011,467 | ||||||||||||||||||
Adjustments : | ||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||
Consolidation of variable interest entity | 1,197 | 2,501 | 3,942 | 2,501 | 3,942 | 2,010 | ||||||||||||||||||
Scope of consolidation | — | (9,541 | ) | (66,312 | ) | (9,541 | ) | (66,312 | ) | (306,125 | ) | |||||||||||||
Cash and cash equivalents at end of the year based on U.S. GAAP | 379,623 | 478,932 | 823,477 | |||||||||||||||||||||
Cash and cash equivalents at end of the year based on U.S GAAP | 478,932 | 823,619 | 707,352 | |||||||||||||||||||||
Year Ended December 31, | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Currently payable | 685,541 | 615,959 | 564,480 | |||||||||
Deferred | (18,422 | ) | 70,871 | 12,456 | ||||||||
667,119 | 686,830 | 576,936 | ||||||||||
F-81F-91
34. | ADDITIONAL DISCLOSURES REQUIRED BY U.S. GAAP |
Year Ended December 31, | ||||||||||||
2006 | 2007 | 2008 | ||||||||||
Currently payable | 615,959 | 564,480 | 493,714 | |||||||||
Deferred | 70,871 | 12,456 | (332,034 | ) | ||||||||
686,830 | 576,936 | 161,680 | ||||||||||
Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | ||||||||||||||||||||||
Income taxes at statutory income tax rate of 25% in 2005, 2006 and 2007 | 670,776 | 641,840 | 507,200 | ||||||||||||||||||||||||
Income taxes at statutory income tax rate of 25% in 2006, 2007 and 2008 | 641,840 | 507,200 | 278,354 | ||||||||||||||||||||||||
Resident surtax payable | 67,078 | 64,184 | 50,720 | 64,184 | 50,720 | 27,835 | |||||||||||||||||||||
Tax credit for investments, technology, human resource development and others | (100,160 | ) | (110,785 | ) | (112,235 | ) | (110,785 | ) | (112,235 | ) | (158,681 | ) | |||||||||||||||
Special surtax for agriculture and fishery industries and other | 18,850 | 20,183 | 18,370 | 20,183 | 18,370 | 23,296 | |||||||||||||||||||||
Tax effect from statutory tax rate change | — | — | (58,672 | ) | |||||||||||||||||||||||
Undistributed earnings of subsidiaries | 4,846 | 1,777 | 5,326 | 1,777 | 5,326 | 110 | |||||||||||||||||||||
Other permanent differences | 19,637 | 27,602 | 10,670 | 27,602 | 10,670 | 13,158 | |||||||||||||||||||||
Change in valuation allowance | (13,908 | ) | 42,029 | 96,885 | 42,029 | 96,885 | 36,280 | ||||||||||||||||||||
Recorded income taxes | 667,119 | 686,830 | 576,936 | 686,830 | 576,936 | 161,680 | |||||||||||||||||||||
Effective tax rate | 24 | .86 | % | 26 | .75 | % | 28 | .44 | % | 27.00 | % | 28.45 | % | 14.52 | % | ||||||||||||
F-82F-92
December 31, | December 31, | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Current : | ||||||||||||||||||||||||
Current: | ||||||||||||||||||||||||
Allowance for doubtful accounts | 39,334 | 21,251 | 16,391 | 21,251 | 16,391 | 14,530 | ||||||||||||||||||
Write-off of doubtful accounts | 9,239 | — | — | |||||||||||||||||||||
Accrued interest income | (1,229 | ) | (1,544 | ) | (1,971 | ) | (1,544 | ) | (1,971 | ) | (1,594 | ) | ||||||||||||
Net operating loss carryforwards | 17 | 1,121 | 2,081 | 1,121 | 2,081 | 1 | ||||||||||||||||||
Tax credit carryforwards | 89 | 19 | — | 19 | — | 570 | ||||||||||||||||||
Accrued expenses and other | 50,004 | 68,264 | 66,857 | 68,264 | 66,857 | 66,868 | ||||||||||||||||||
97,454 | 89,111 | 83,358 | 89,111 | 83,358 | 80,375 | |||||||||||||||||||
Non-current : | ||||||||||||||||||||||||
Non-current: | ||||||||||||||||||||||||
Depreciation | (58,745 | ) | (64,915 | ) | (56,359 | ) | (64,915 | ) | (56,359 | ) | (33,262 | ) | ||||||||||||
Loss on impairment of investment securities | 32,959 | 33,018 | 46,818 | 33,018 | 46,818 | 80,750 | ||||||||||||||||||
Equity in losses (earnings) of affiliates | (7,471 | ) | (28,232 | ) | (121,855 | ) | (28,232 | ) | (121,855 | ) | (20,151 | ) | ||||||||||||
Undistributed deficit of subsidiaries | 13,732 | (17,179 | ) | (23,464 | ) | |||||||||||||||||||
Undistributed earnings of subsidiaries | (17,179 | ) | (23,464 | ) | (59,122 | ) | ||||||||||||||||||
Tax free reserve for technology development | (211,208 | ) | (211,215 | ) | (151,259 | ) | (211,215 | ) | (151,259 | ) | (80,707 | ) | ||||||||||||
Tax free reserve for loss on disposal of treasury stock | (130,372 | ) | (70,396 | ) | (70,396 | ) | (70,396 | ) | (70,396 | ) | — | |||||||||||||
Unrealized gain (loss) on valuation of long-term investment securities (accumulated other comprehensive income) | 15,996 | (163,992 | ) | (523,761 | ) | |||||||||||||||||||
Unrealized loss (gain) on valuation of long-term investment securities (accumulated other comprehensive income) | (163,992 | ) | (523,761 | ) | (77,738 | ) | ||||||||||||||||||
Tax credit carryforwards | — | 24 | 24 | 24 | 24 | 1,066 | ||||||||||||||||||
Net operating loss carryforwards | 24,108 | 6,178 | 327 | 6,178 | 327 | — | ||||||||||||||||||
Deferred charges and other | (4,129 | ) | 37,147 | 34,617 | 37,147 | 34,617 | (55,013 | ) | ||||||||||||||||
(325,130 | ) | (479,562 | ) | (865,308 | ) | (479,562 | ) | (865,308 | ) | (244,177 | ) | |||||||||||||
Total deferred tax liabilities | (227,676 | ) | (390,451 | ) | (781,950 | ) | (390,451 | ) | (781,950 | ) | (163,802 | ) | ||||||||||||
F-83F-93
2007 | 2008 | |||||||
Beginning of period | 9,565 | 9,989 | ||||||
Gross increases for tax position of prior years | 501 | 186 | ||||||
Gross decreases for tax position of prior years | (15 | ) | (2,629 | ) | ||||
Lapses of statues of limitations | — | (474 | ) | |||||
Gross increases for tax position of current year | — | 2,233 | ||||||
Gross decreases for tax position of current year | (62 | ) | — | |||||
Ending of period | 9,989 | 9,305 | ||||||
F-84F-94
Gross | Gross | Gross | Gross | |||||||||||||||||||||||||||||||||||||
Cost | Unrealized | Unrealized | Impairment | Fair | Cost | Unrealized | Unrealized | Impairment | Fair | |||||||||||||||||||||||||||||||
(Amortized Cost) | Gains | Losses | Losses | Value | (Amortized Cost) | Gains | Losses | Losses | Value | |||||||||||||||||||||||||||||||
At December 31, 2005 : | ||||||||||||||||||||||||||||||||||||||||
At December 31, 2006: | ||||||||||||||||||||||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||||||||||
Equity securities | 465,244 | 173,960 | (9,768 | ) | (60,838 | ) | 568,598 | 348,077 | 440,148 | — | (7,145 | ) | 781,080 | |||||||||||||||||||||||||||
Debt securities | 307,375 | — | (217 | ) | (10,885 | ) | 296,273 | 1,083,914 | 33,903 | (46,107 | ) | (10,656 | ) | 1,061,054 | ||||||||||||||||||||||||||
Held-to-maturity Securities | 115 | — | — | — | 115 | |||||||||||||||||||||||||||||||||||
Held-to-maturity securities | 134 | — | — | — | 134 | |||||||||||||||||||||||||||||||||||
772,734 | 173,960 | (9,985 | ) | (71,723 | ) | 864,986 | 1,432,125 | 474,051 | (46,107 | ) | (17,801 | ) | 1,842,268 | |||||||||||||||||||||||||||
At December 31, 2006 : | ||||||||||||||||||||||||||||||||||||||||
At December 31, 2007: | ||||||||||||||||||||||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||||||||||
Equity securities | 469,754 | 462,521 | — | (62,614 | ) | 869,661 | 1,642,306 | 1,750,170 | (683 | ) | (7,796 | ) | 3,383,997 | |||||||||||||||||||||||||||
Debt securities | 1,083,914 | 33,903 | (46,107 | ) | (10,656 | ) | 1,061,054 | 470,280 | 9,293 | (439 | ) | (10,656 | ) | 468,478 | ||||||||||||||||||||||||||
Held-to-maturity Securities | 134 | — | — | — | 134 | |||||||||||||||||||||||||||||||||||
Held-to-maturity securities | 94 | — | — | — | 94 | |||||||||||||||||||||||||||||||||||
1,553,802 | 496,424 | (46,107 | ) | (73,270 | ) | 1,930,849 | 2,112,680 | 1,759,436 | (1,122 | ) | (18,452 | ) | 3,852,569 | |||||||||||||||||||||||||||
At December 31, 2007 : | ||||||||||||||||||||||||||||||||||||||||
At December 31, 2008: | ||||||||||||||||||||||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||||||||||
Equity securities | 1,805,795 | 1,758,674 | (683 | ) | (63,264 | ) | 3,500,522 | 1,878,049 | 681,260 | (73 | ) | (208,453 | ) | 2,350,783 | ||||||||||||||||||||||||||
Debt securities | 470,280 | 9,293 | (439 | ) | (10,656 | ) | 468,478 | 5,696 | — | — | (552 | ) | 5,144 | |||||||||||||||||||||||||||
Held-to-maturity Securities | 94 | — | — | — | 94 | |||||||||||||||||||||||||||||||||||
Held-to-maturity securities | 112 | — | — | — | 112 | |||||||||||||||||||||||||||||||||||
2,276,169 | 1,767,967 | (1,122 | ) | (73,920 | ) | 3,969,094 | 1,883,857 | 681,260 | (73 | ) | (209,005 | ) | 2,356,039 | |||||||||||||||||||||||||||
F-95
F-85
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | Carrying | Carrying | Carrying | ||||||||||||||||||||||||||||||||||||||||
Amount | Value | Amount | Value | Amount | Value | Amount | Fair | Amount | Fair | Amount | Fair | |||||||||||||||||||||||||||||||||||||
(Note a) | (Note a) | (Note a) | (Note a) | Value | (Note a) | Value | (Note a) | Value | ||||||||||||||||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents and short-term financial instruments | 486,215 | 486,215 | 576,017 | 576,017 | 956,441 | 956,441 | 576,017 | 576,017 | 956,441 | 956,441 | 914,228 | 914,228 | ||||||||||||||||||||||||||||||||||||
Trading securities | 777,472 | 777,472 | 665,312 | 665,312 | 635,434 | 635,434 | 665,312 | 665,312 | 635,434 | 635,434 | 367,002 | 367,002 | ||||||||||||||||||||||||||||||||||||
Accounts receivable (trade and other) | 3,038,936 | 3,038,936 | 3,065,481 | 3,065,481 | 2,642,195 | 2,642,195 | 3,065,481 | 3,065,481 | 2,642,195 | 2,642,195 | 2,893,283 | 2,893,283 | ||||||||||||||||||||||||||||||||||||
Short-term loans | 62,290 | 62,290 | 60,440 | 60,440 | 74,603 | 74,603 | 60,440 | 60,440 | 74,603 | 74,603 | 106,013 | 106,013 | ||||||||||||||||||||||||||||||||||||
Investment securities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Listed equity and debts | 864,986 | 864,986 | 1,930,849 | 1,930,849 | 3,969,094 | 3,969,094 | 1,842,268 | 1,842,268 | 3,852,569 | 3,852,569 | 2,356,039 | 2,356,039 | ||||||||||||||||||||||||||||||||||||
Non - listed equity | 353,168 | N/A | 141,138 | N/A | 127,718 | N/A | ||||||||||||||||||||||||||||||||||||||||||
Non-listed equity and debts | 141,138 | N/A | 128,718 | N/A | 75,028 | N/A | ||||||||||||||||||||||||||||||||||||||||||
Derivative instruments assets | 16,660 | 16,660 | 16,227 | 16,227 | 318,373 | 318,373 | ||||||||||||||||||||||||||||||||||||||||||
Long-term bank deposits | 1,479 | 1,479 | 10,430 | 10,430 | 15,512 | 15,512 | 10,430 | 10,430 | 15,512 | 15,512 | 75 | 75 | ||||||||||||||||||||||||||||||||||||
Long-term loans | 7,093 | 5,320 | 13,250 | 9,938 | 45,524 | 34,143 | 13,250 | 9,938 | 45,524 | 34,143 | 85,975 | 82,996 | ||||||||||||||||||||||||||||||||||||
5,591,639 | 6,462,917 | 8,466,521 | 6,390,996 | 8,367,223 | 7,116,016 | |||||||||||||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable | 1,094,855 | 1,094,855 | 1,224,536 | 1,224,536 | 1,241,935 | 1,241,935 | 1,224,536 | 1,224,536 | 1,241,935 | 1,241,935 | 1,107,202 | 1,107,202 | ||||||||||||||||||||||||||||||||||||
Short-term borrowings | 4,614 | 4,614 | 63,612 | 63,612 | 11,737 | 11,737 | 63,612 | 63,612 | 11,737 | 11,737 | 180,827 | 180,827 | ||||||||||||||||||||||||||||||||||||
Derivative instruments liabilities | 113,424 | 113,424 | 123,557 | 123,557 | 242,186 | 242,186 | ||||||||||||||||||||||||||||||||||||||||||
Bonds payable, long-term borrowings, convertible bonds, long-term payables — other and obligation under capital leases, including current portion | 3,763,135 | 3,825,813 | 3,595,880 | 3,667,748 | 3,460,939 | 3,508,681 | 3,595,880 | 3,667,748 | 3,460,939 | 3,508,681 | 4,943,630 | 4,855,897 | ||||||||||||||||||||||||||||||||||||
4,862,604 | 4,884,028 | 4,714,611 | 4,997,452 | 4,838,168 | 6,473,845 | |||||||||||||||||||||||||||||||||||||||||||
(note a) | These carrying amounts represent the amounts determined under U.S. GAAP. |
F-86F-96
December, 31, | ||||||||||||||||
2008 | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Trading securities | 367,002 | — | 367,002 | — | ||||||||||||
Available for sale securities: | ||||||||||||||||
Equity securities | 2,350,783 | 2,350,783 | — | — | ||||||||||||
Debt securities | 5,144 | — | 5,144 | — | ||||||||||||
Held-to-maturity securities | 112 | — | 112 | — | ||||||||||||
Derivatives: | ||||||||||||||||
Currency swap | 318,373 | — | 318,373 | — | ||||||||||||
3,041,414 | 2,350,783 | 690,631 | — | |||||||||||||
Liabilities: | ||||||||||||||||
Derivatives: | ||||||||||||||||
Currency swap | 210,468 | — | 210,468 | — | ||||||||||||
Interest rate swap | 31,718 | — | 31,718 | — | ||||||||||||
242,186 | — | 242,186 | — | |||||||||||||
F-97
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Net income | 2,027,550 | 1,880,529 | 1,506,414 | 1,878,361 | 1,505,347 | 1,072,866 | ||||||||||||||||||
Other comprehensive income : | ||||||||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||||||||
Unrealized gain on investment securities | 34,915 | 284,359 | 1,914,596 | |||||||||||||||||||||
Less impact of realized losses(gains) | (3,065 | ) | 446 | (557,346 | ) | |||||||||||||||||||
Unrealized gain (loss) on investment securities | 252,218 | 1,358,908 | (1,080,978 | ) | ||||||||||||||||||||
Less impact of realized losses (gains) | 446 | (29,603 | ) | 1,730 | ||||||||||||||||||||
Tax effect | (8,808 | ) | (78,348 | ) | (420,244 | ) | (69,509 | ) | (369,853 | ) | 292,840 | |||||||||||||
Net change from available-for-sale securities | 23,042 | 206,457 | 937,006 | 183,155 | 959,452 | (786,408 | ) | |||||||||||||||||
Foreign-based operations’ translation adjustments | (1,792 | ) | (18,570 | ) | 3,698 | (18,570 | ) | 3,698 | 64,807 | |||||||||||||||
Total other comprehensive income | 21,250 | 187,887 | 940,704 | 164,585 | 963,150 | (721,601 | ) | |||||||||||||||||
Comprehensive income | 2,048,800 | 2,068,416 | 2,447,118 | 2,042,946 | 2,468,497 | 351,265 | ||||||||||||||||||
F-98
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Beginning of period | 3,408,989 | 3,418,212 | 3,419,114 | 3,418,212 | 3,419,114 | 3,599,135 | ||||||||||||||||||
Goodwill increase due to acquisition and subsidiary change during the period | 9,223 | 13,426 | 180,145 | 13,426 | 180,145 | 923 | ||||||||||||||||||
Goodwill impairment losses | — | (12,524 | ) | — | (12,524 | ) | — | (107,138 | ) | |||||||||||||||
Goodwill disposed of during the period | — | — | (124 | ) | — | (124 | ) | (55 | ) | |||||||||||||||
Ending of period | 3,418,212 | 3,419,114 | 3,599,135 | 3,419,114 | 3,599,135 | 3,492,865 | ||||||||||||||||||
F-87
December 31, 2005 | December 31, 2006 | December 31, 2007 | December 31, 2006 | December 31, 2007 | December 31, 2008 | |||||||||||||||||||||||||||||||||||||||||||
Accumulated | Accumulated | Accumulated | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||
Gross | Gross | Amortization | Gross | Amortization | Gross | Gross | Amortization | Gross | Amortization | |||||||||||||||||||||||||||||||||||||||
Carrying | Accumulated | Carrying | and | Carrying | and | Carrying | Accumulated | Carrying | and | Carrying | and | |||||||||||||||||||||||||||||||||||||
Amount | Amortization | Amount | Impairment | Amount | Impairment | Amount | Amortization | Amount | Impairment | Amount | Impairment | |||||||||||||||||||||||||||||||||||||
Amortized intangible assets : | ||||||||||||||||||||||||||||||||||||||||||||||||
IMT license (13 years) | 1,188,547 | (188,193 | ) | 1,188,547 | (278,521 | ) | 1,188,547 | (368,849 | ) | 1,188,547 | (278,521 | ) | 1,188,547 | (368,849 | ) | 1,188,547 | (459,178 | ) | ||||||||||||||||||||||||||||||
Customer lists (4 years) | 99,783 | (99,783 | ) | 99,783 | (99,783 | ) | 106,783 | (99,783 | ) | |||||||||||||||||||||||||||||||||||||||
Customer relationship (4 years) | 99,783 | (99,783 | ) | 106,783 | (99,783 | ) | 106,783 | (100,671 | ) | |||||||||||||||||||||||||||||||||||||||
Software purchased (5 years) | 496,373 | (215,529 | ) | 883,004 | (310,184 | ) | 1,083,552 | (478,849 | ) | 883,004 | (310,184 | ) | 1,083,552 | (478,849 | ) | 1,216,273 | (604,412 | ) | ||||||||||||||||||||||||||||||
Software development cost (5 years) | 230,439 | (164,448 | ) | 242,164 | (196,510 | ) | 240,629 | (223,508 | ) | 242,164 | (196,510 | ) | 240,629 | (223,508 | ) | 207,294 | (188,028 | ) | ||||||||||||||||||||||||||||||
Other (2 to 20 years) | 309,353 | (75,528 | ) | 308,747 | (98,035 | ) | 455,910 | (134,349 | ) | 308,747 | (98,035 | ) | 455,910 | (134,349 | ) | 377,121 | (164,433 | ) | ||||||||||||||||||||||||||||||
Total | 2,324,495 | (743,481 | ) | 2,722,245 | (983,033 | ) | 3,075,421 | (1,305,338 | ) | 2,722,245 | (983,033 | ) | 3,075,421 | (1,305,338 | ) | 3,096,018 | (1,516,722 | ) | ||||||||||||||||||||||||||||||
2005 | 2006 | 2007 | ||||||||||
Operating revenue: | ||||||||||||
Wireless services | 9,148,363 | 9,025,209 | 9,531,488 | |||||||||
Interconnection | 898,621 | 1,033,390 | 1,062,195 | |||||||||
Digital handset sales | 294,557 | — | 51,714 | |||||||||
Other | 359,911 | 483,203 | 566,989 | |||||||||
Total operating revenue | 10,701,452 | 10,541,802 | 11,212,386 | |||||||||
Total operating expenses | (7,847,705 | ) | (7,720,028 | ) | (9,144,306 | ) | ||||||
Operating income | 2,853,747 | 2,821,774 | 2,068,080 | |||||||||
Other income (expenses), net | (125,898 | ) | (135,726 | ) | (197,428 | ) | ||||||
Income before income taxes and appropriate item below | 2,727,849 | 2,686,048 | 1,870,652 | |||||||||
Provision for income taxes | (665,209 | ) | (673,330 | ) | (483,963 | ) | ||||||
Minority interests in losses of consolidated subsidiaries | 11,109 | 21,752 | 54,281 | |||||||||
Equity in earnings of unconsolidated businesses | (46,199 | ) | (153,941 | ) | 65,174 | |||||||
Net income | 2,027,550 | 1,880,529 | 1,506,144 | |||||||||
F-88F-99
2006 | 2007 | 2008 | ||||||||||
Operating revenue: | ||||||||||||
Wireless services | 9,025,209 | 9,531,488 | 9,553,556 | |||||||||
Interconnection | 1,033,390 | 1,062,195 | 1,149,196 | |||||||||
Digital handset sales | — | 51,714 | 16,425 | |||||||||
Other | 483,203 | 566,989 | 438,375 | |||||||||
Total operating revenue | 10,541,802 | 11,212,386 | 11,157,552 | |||||||||
Total operating expenses | (7,720,028 | ) | (9,144,306 | ) | (9,403,974 | ) | ||||||
Operating income | 2,821,774 | 2,068,080 | 1,753,578 | |||||||||
Other income (expenses), net | (135,742 | ) | (197,428 | ) | (556,072 | ) | ||||||
Income before income taxes and appropriate item below | 2,686,032 | 1,870,652 | 1,197,506 | |||||||||
Provision for income taxes | (673,330 | ) | (483,963 | ) | (132,494 | ) | ||||||
Minority interests in losses of consolidated subsidiaries | 21,752 | 54,281 | 121,129 | |||||||||
Equity in earnings (loss) of unconsolidated businesses, net of income tax | (156,093 | ) | 64,538 | (113,275 | ) | |||||||
Net income | 1,878,361 | 1,505,347 | 1,072,866 | |||||||||
2005 | 2006 | 2007 | 2006 | 2007 | 2008 | |||||||||||||||||||
Cash paid for interest (net of amounts capitalized) | 203,259 | 226,442 | 169,311 | 226,442 | 169,311 | 243,319 | ||||||||||||||||||
Cash paid for income taxes | 588,296 | 660,188 | 591,672 | 660,188 | 591,672 | 422,506 |
F-100
Year Ending December 31, | ||||||||
2008 | 3,353 | |||||||
2009 | 653 | 1,492 | ||||||
2010 | 1,483 | 870 | ||||||
2011 | 1,026 | 1,890 | ||||||
2012 | 3,963 | 2,055 | ||||||
2013 ~ 2017 | 28,907 | |||||||
2013 | 1,373 | |||||||
2014~ 2018 | 28,468 | |||||||
Total | 39,385 | 36,148 | ||||||
F-89
F-101
F-90F-102
F-103