☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
American Depositary Shares, each representing five-ninths | SKM | New York Stock Exchange | ||
Common Stock, par value | SKM | New York Stock Exchange* |
Auditor Name: Ernst & Young Han Young | Auditor Location: Seoul, Korea | Auditor Firm ID: 1437 |
TABLE OF CONTENTS
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Item 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | |||||
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Item 7.A. | Major Shareholders | 77 | ||||
Item 7.B. | Related Party Transactions | 78 | ||||
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Item 8.A. | Consolidated Statements and Other Financial Information | |||||
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Item 10. | ADDITIONAL INFORMATION | 82 | ||||
Item 10.A. | Share Capital | 82 | ||||
Item 10.B. | Memorandum and Articles of Association | |||||
(i)
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Item 10.E. | Taxation | 92 | ||||
Item 10.F. | Dividends and Paying Agents | |||||
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Item 12.A. | Debt Securities | 100 | ||||
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Item 12.C. | Other Securities | 100 | ||||
Item 12.D. | American Depositary Shares | 101 | ||||
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Item 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES | |||||
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Item 16B. | CODE OF ETHICS | 103 | ||||
Item 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | |||||
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Item 16G. | CORPORATE GOVERNANCE | 104 | ||||
Item 16H. | MINE SAFETY DISCLOSURE | 105 | ||||
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Item 19. | 107 |
(ii)
CERTAIN DEFINED TERMS AND CONVENTIONS USED IN THIS ANNUAL REPORT
All references to “Korea” contained in this annual report shall mean The Republic of Korea. All references to the “Government” shall mean the government of The Republic of Korea. All references to “we,” “us,” or “our” shall mean SK Telecom Co., Ltd. and, unless the context otherwise requires, its consolidated subsidiaries. References to “SK Telecom” shall mean SK Telecom Co., Ltd., but shall not include its consolidated subsidiaries. All references to “U.S.” shall mean the United States of America.
All references to “MHz” contained in this annual report shall mean megahertz, a unit of frequency denoting one million cycles per second. All references to “GHz” shall mean gigahertz, a unit of frequency denoting one billion cycles per second. All references to “Mbps” shall mean one million bits per second and all references to “Gbps” shall mean one billion bits per second. All references to “GB” shall mean gigabytes, which is one billion bytes. Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding.
All references to “Won,” or “₩” in this annual report are to the currency of Korea and all references to “Dollars,” “U.S. dollar” or “US$” are to the currency of the United States of America.
The Ministry of Science and ICT (the “MSIT”) is charged with regulating information and telecommunications, and the Korea Communications Commission (the “KCC”) is charged with regulating the public interest aspects of and fairness in broadcasting. Subscriber information for the wireless and fixed-line telecommunications industry set forth in this annual report are derived from information published by the MSIT unless expressly stated otherwise.
The consolidated financial statements included in this annual report are prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (the “IASB”). As such, we make an explicit and unreserved statement of compliance with IFRS, as issued by the IASB, with respect to our consolidated financial statements as of December 31, 20212022 and 2020,2021, and for the years ended December 31, 2022, 2021 2020 and 20192020, included in this annual report.
Unless expressly stated otherwise, all financial data included in this annual report are presented on a consolidated basis.
Effective as of November 1, 2021, we conducted a horizontal
As part of the
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FORWARD-LOOKING STATEMENTS
This report contains “forward-looking statements,” as defined in Section 27A of the Securities Act, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are based on our current expectations, assumptions, estimates and projections about our company and our industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “considering,” “depends,” “estimate,” “expect,” “intend,” “plan,” “planning,” “planned,” “project” and similar expressions, or that certain events, actions or results “may,” “might,” “should” or “could” occur, be taken or be achieved.
Forward-looking statements in this annual report include, but are not limited to, statements about the following:
our ability to anticipate and respond to various competitive factors affecting the telecommunications industry, including new services that may be introduced, changes in consumer preferences, economic conditions and discount pricing strategies by competitors;
our continued implementation of fifth generation wireless technology, which we refer to as “5G” technology;
• | our plans for capital expenditures in 2023 for a range of projects, including investments to expand and improve our 5G network, investments to maintain our fourth generation long-term evolution (“LTE”) network and related services, investments to improve and expand our Wi-Fi network, investments to develop our Internet of Things (“IoT”) solutions and platform services business portfolio, including artificial intelligence (“AI”) solutions, investments in data infrastructure, investments in research and development of 5G technology, investments in businesses that can potentially leverage our 5G network, and funding for mid- to long-term research and development projects, as well as other initiatives, primarily related to the development of new growth businesses, as well as initiatives related to our ongoing businesses in the ordinary course; |
our efforts to make significant investments to build, develop and broaden our businesses, including developing our next-generation growth businesses in cloud computing, data centers, smart factories, subscription services, metaverse, media, platform and other innovative products and services, and to actively integrate AI technology into, and create synergies among, our businesses, including through the adaptation of AI technology;various businesses;
our ability to comply with governmental rules and regulations, including the regulations of the Government related to telecommunications providers, the Mobile Device Distribution Improvement Act (“MDDIA”), rules related to our status as a “market-dominating business entity” under the Korean Monopoly Regulation and Fair Trade Act (the “Fair Trade Act”) and the effectiveness of steps we have taken to comply with such regulations;
our ability to effectively manage our bandwidth and to timely and efficiently implement new bandwidth-efficient technologies and our intention to participate in, and acquire additional bandwidth pursuant to, frequency bandwidth auctions held, or other allocations of bandwidth, by the MSIT;
our expectations and estimates related to interconnection fees, rates charged by our competitors, regulatory fees, operating costs and expenditures, working capital requirements, principal repayment obligations with respect to long-term borrowings, bonds and short-term borrowings, and research and development expenditures and other financial estimates;
• | the success of our various joint ventures, investments, strategic alliances and cooperation efforts as well as other corporate restructuring activities, including the Spin-off; |
our ability to successfully attract and retain subscribers of our telecommunications-related businesses and customers of our other businesses; and
the growth of the telecommunications and other industries in which we operate in Korea and other markets and the effect that economic, political or social conditions have on our number of subscribers and customers and results of operations.
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We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be incorrect. Risks and uncertainties associated with our business include, but are not limited to, risks related to changes in the regulatory environment, technology changes, potential litigation and governmental actions, changes in the competitive environment, political changes, foreign exchange currency risks, foreign ownership limitations, credit risks and other risks and uncertainties that are more fully described under the heading “Item 3.D. Risk Factors” and elsewhere in this annual report. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances.
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PART I
Item 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
Item 1.A. | Directors and Senior Management |
Not applicable.
Item 1.B. | Advisers |
Not applicable.
Item 1.C. | Auditors |
Not applicable.
Item 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
Not applicable.
Item 3. | KEY INFORMATION |
Item 3.A. | [Reserved] |
Item 3.B. | Capitalization and Indebtedness |
Not applicable.
Item 3.C. | Reasons for the Offer and Use of Proceeds |
Not applicable.
Item 3.D. | Risk Factors |
Risks Relating to Our Business
Competition may reduce our market share and harm our business, financial condition and results of operations.
We face substantial competition across all of our businesses, including our wireless telecommunications business. We expect competition to intensify as a result of the development of new technologies, products and services. We expect that such trends will continue to put downward pressure on the rates we can charge our subscribers.
Historically, there has been considerable consolidation in the telecommunications industry, resulting in the current competitive landscape comprising three mobile and fixed network operators in the Korean market, us, KT Corporation (“KT”) and LG Uplus Corp. (“LG U+”). Each of our competitors has substantial financial, technical, marketing and other resources to respond to our business offerings. As of December 31, 2021,2022, the collective market share of KT and LG U+ amounted to approximately 55.7%56.8% in terms of number of wireless subscribers (including an aggregate of 11.4%13.8% attributable to mobile virtual network operators (“MVNOs”) that lease KT’s and LG U+’s respective networks).
Our competitors for subscriber activations include MVNOs, including MVNOs that lease our networks. MVNOs generally provide rate plans that are relatively cheaper than similar rate plans of the wireless network providers from which they lease their networks, including us. In recent years, a number of new entrants have entered the MVNO business, including affiliates of leading financial institutions in Korea. Some of these new entrants have engaged in aggressive marketing campaigns and promotional discounts while leveraging the brand
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power of their affiliates as part of their efforts to gain subscribers. In addition, other companies may enter the wireless network services market. While new entries into such market have historically required obtaining requisite licenses from the MSIT, pursuant to an amendment to the Telecommunications Business Act that went into effect in June
We believe that an increase in market share of MVNOs (including through the entrance of new MVNOs, if any) and the entrance of new mobile network operators (including in connection with the potential allocation of 800 MHz of bandwidth in the 28 GHz spectrum to a new mobile network operator, as announced by the MSIT in January 2023), if any, in the wireless telecommunications market may further increase competition in the telecommunications sector, as well as cause downward price pressure on the fees we charge for our services, which, in turn, may have a material adverse effect on our business, financial position and results of operations.
Our fixed-line telephone service competes with KT and LG U+, as well as other providers of voice over Internet protocol (“VoIP”) services. As of December 31, 2021,2022, our market share of the fixed-line telephone and VoIP service market was 15.7%15.6% (including the services provided by SK Broadband Co., Ltd. (“SK Broadband”)) in terms of number of subscribers compared to KT with 56.3%55.0% and LG U+ with 19.0%18.7%. In addition, our broadband Internet access, Internet protocol TV (“IPTV”) and cable TV services provided through SK Broadband compete with other providers of such services, including KT, LG U+ and cable companies. Furthermore, our IPTV and cable TV services are facing an increasing level of competition from global operators of online video streaming platforms, such as YouTube, Netflix, Disney Plus and Amazon Video,Apple TV, leading domestic video streaming platforms such as TVING, WatchaaWavve, Coupang Play and Wavve,Watchaa, and the video services offered by leading domestic online and mobile search and communications platforms including NAVER and Kakao, as such services continue to become increasingly popular to serve as a substitute to traditional television programming. As of December 31, 2021,2022, our market share of the broadband Internet market was 28.7%28.5% in terms of number of subscribers compared to KT with 41.2%41.3% and LG U+ with 20.7%21.0%. As of December 31, 2021,2022, our market share of the pay TV market (which includes IPTV, cable TV and satellite TV) was 25.0%25.6% compared to KT with 36.2%36.6% (including its IPTV, cable TV and satellite TV services) and LG U+ with 25.3%24.8% (including its IPTV and cable TV services), and the collective market share of other pay TV providers was 13.4%13.1%.
Recently, the Korean fixed-line telecommunications industry has been going through significant consolidation involving major pay television service providers. In April 2020, we completed the merger of Tbroad Co., Ltd., a former leading cable television and other fixed-line telecommunications services provider in Korea, and two of its subsidiaries, Tbroad Dongdaemun Broadcasting Co., Ltd. and Korea Digital Cable Media Center Co. Ltd. (collectively, “Tbroad”), with and into SK Broadband. As a result of the merger and the issuance of SK Broadband’s shares to the former shareholders of Tbroad with an aggregate fair value of Won 862.1 billion as of April 30, 2020, we owned approximately 74.3% of SK Broadband’s total outstanding shares as of December 31, 2021. In the same month, SK Telecom acquired a 55.0% equity interest in Broadband Nowon Co., Ltd. (formerly known as Tbroad Nowon Broadcasting Co., Ltd.), another subsidiary of Tbroad Co., Ltd., for a purchase price of Won 10.4 billionwhich was subsequently merged with and into SK Broadband in cash.October 2022. As a result of such transactions (the “Tbroad Merger”), we becameowned approximately 74.4% of SK Broadband’s total outstanding shares as of December 31, 2022 and were the third-largestsecond-largest pay TV provider in Korea in terms of number of subscribers as of December 31, 2021.2022. In December 2019, LG U+ acquired a majority equity stake in CJ Hello Co., Ltd. and changed the acquired company’s name to LG HelloVision Co., Ltd. (“LG HelloVision”) to collectively become the second-largest pay TV provider in Korea in terms of number of subscribers as of December 31, 2021.. In August 2021, KT acquired HCN Co., Ltd. (“HCN”), a major Korean cable TV service provider, through its subsidiary KT Skylife Co., Ltd. (“KT Skylife”).
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Furthermore, the Government has historically enforced regulations on cable TV and IPTV service providers that prohibited them from having a market share of more than
Continued competition from other wireless and fixed-line telecommunications service providers has also resulted in, and may continue to result in, a substantial level of deactivations among our subscribers. Subscriber deactivations, or churn, may significantly harm our business, financial condition and results of operations. In 2021,
As we continue to expand our business into areas beyond the traditional wireless and fixed-line telecommunications businesses, we also face competition from major players in the relevant sectors, such as television shopping
Our ability to compete successfully in all of the businesses in which we operate will depend on our ability to anticipate and respond to various competitive factors affecting the respective industries, including new services that may be introduced, changes in consumer preferences, economic conditions and discount pricing strategies by competitors.
Inability to successfully implement or adapt our network and technology to meet the continuing technological advancements affecting the wireless telecommunications industry will likely have a material adverse effect on our business, financial condition and results of operations.
The telecommunications industry has been characterized by continual improvement and advances in technology, and this trend is expected to continue. We and our competitors have continually implemented technology upgrades from our basic code division multiple access (“CDMA”) network to our wideband code division multiple access (“WCDMA”) network, and subsequently to the currently dominant LTE and 5G technologies. Our business could be harmed if we fail to implement, or adapt to, future technological advancements in the telecommunications sector in a timely manner, such as the continued implementation and enhancement of 5G technology and the eventual development and implementation of a successor technology to 5G technology. We launched wireless service plans using the 5G network in April 2019 following the commencement of sales of the first
In addition to introducing new technologies and offerings, we must phase out outdated and unprofitable technologies and services. For example, as of January 2019, we discontinued our wireless broadband Internet access (“WiBro”) services in January 2019 and we also terminated our second generation CDMA wireless services in July 2020. If we are unable to do sointroduce new technologies and offerings on a cost-effective and timely basis, our business, financial condition and results of operations could be adversely affected.
Implementation of new wireless technology and enhancement of existing wireless technology have required, and may continue to require, significant capital and other expenditures, which we may not recoup.
We have made, and intend to continue to make, capital investments to develop, launch and enhance our wireless service. In 2022, 2021 2020 and 2019,2020, we spent Won 1,837.2 billion, Won 1,850.9 billion Won 1,878.6 billion and 2,514.3Won
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1,878.6 billion, respectively, in capital expenditures to build and enhance our wireless networks. Our continued implementation and expansion of 5G services, which use a higher frequency spectrum than our LTE services, will require additional base stations (which are also commonly referred to as “cell sites”) and other infrastructure, which may result in an increase in our capital expenditures in the future.
Our businesses are subject to various types of Government regulation, and any change in Government policy relating to the telecommunications industry could have an adverse effect on our business, financial condition and results of operations.
Our businesses are generally subject to governmental supervision and various types of regulation.
Rate Regulation.
Technology Standards.
Frequency Allocation.
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See “— Our business, financial condition and results of operations may be adversely affected if we fail to acquire adequate additional frequency usage rights or use our bandwidth efficiently to accommodate subscriber growth and subscriber usage.”
MVNOs.
Interconnection.
Regulatory Action.
We are subject to additional regulations as a result of our dominant market position in the wireless telecommunications sector, which could harm our ability to compete effectively.
The Government endeavors to promote competition in the Korean telecommunications markets through measures designed to prevent a dominant service provider from exercising its market power and deterring the emergence and development of viable competitors. We have been designated by the MSIT as the “dominant network service provider” in respect of our wireless telecommunications business. As such, we are subject to additional regulations to which certain of our competitors are not subject. For example, the MSIT has fifteen days to object to any new rates and terms of service reported by us. See “Item 4.B. Business Overview — Law and Regulation — Rate Regulation.”
We also qualify as a “market-dominating business entity” under the Fair Trade Act, which subjects us to additional regulations and we are prohibited from engaging in any act of abusing our position as a market-dominating entity. See “Item 4.B. Business Overview — Law and Regulation — Competition Regulation.” The additional regulations to which we are subject hashave affected our competitiveness in the past and may materially hurt our profitability and impede our ability to compete effectively against our competitors in the future.
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COVID-19and any possible recurrence of other types of widespread infectious diseases may adversely affect our business, financial condition and results of operations.
“COVID-19,
While we do not believe that the
Other risks associated with a prolonged outbreak of
an increase in unemployment among, and/or a decrease in disposable income of, our customers, who may not be able to meet payment obligations or otherwise choose to decrease their spending levels, which in turn may decrease demand for some of our products and services or cause an increase in delinquent subscriber accounts;
a slowdown in the rate of subscriber migration to our 5G service, which generally entails higher-priced subscription plans and wireless devices;
disruptions in operations, and/or a decrease in the demand for products and services, of our corporate customers, which in turn may decrease such customers’ demand for our services and products;
service disruptions, outages and performance problems due to capacity constraints caused by an overwhelming number of people accessing our services simultaneously;
disruptions in the supply of mobile handsets or telecommunications equipment from our vendors (or components of such mobile handsets and equipment such as semiconductors) as well as in the installation of our network infrastructure;
continued instability in global and Korean financial markets, which may adversely affect our ability to meet capital funding needs on a timely and cost-effective basis;
a decrease in the fair value of our investments in companies that may be adversely affected by the pandemic; and
depreciation of the Won against major foreign currencies, which in turn may increase the cost of imported equipment necessary for expansion and enhancement of our telecommunications infrastructure.
It is not possible to predict the duration or full magnitude of harm from
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We may fail to successfully complete, integrate or realize the anticipated benefits of our new acquisitions, joint ventures or other strategic alternatives or corporate reorganizations, including the
We continue to seek opportunities to develop new businesses that we believe are complementary to our existing product and service portfolio and expand our global business through selective acquisitions. We also continue to seek ways to optimize our corporate structure to maximize the value of our traditional businesses on the one hand and newly developed businesses on the other hand. Accordingly, we are often engaged in evaluating potential transactions and other strategic alternatives as well as corporate reorganizations, some of which may be significant in size.
For example, we completed the Tbroad Merger in April 2020, andpartly as a result of which we became the third-largestsecond-largest pay TV provider in Korea in terms of number of subscribers as of December 31, 2020.2022. In addition, in June 2019, we acquired a 34.6% interest in Incross Co., Ltd. (“Incross”), a digital advertising company, for an aggregate purchase price of Won 53.7 billion, in light of potential synergies with our media and commerce businesses. Furthermore, in order to strengthen our security business and explore potential synergies with our wireless and fixed-line business portfolio, we acquired a 55.0% interest in Life & Security Holdings Co., Ltd. (“LSH”), which owned 100% of ADT CAPS Co., Ltd. (“Former ADT CAPS”), a leading Korean physical security service company, and two sister companies CAPSTEC Co., Ltd. and ADT SECURITY Co., Ltd. (which subsequently merged with and into Former ADT CAPS), for Won 696.7 billion in October 2018;2018, and a 100% interest in SK Infosec Co., Ltd. (“SK Infosec”), Korea’s leading information security company, in a share exchange transaction pursuant to which we issued 1,260,668 treasury shares with an aggregate book value of Won 281.2 billion in exchange for all of the outstanding common shares of SK Infosec in December 2018 from SK Inc., our largest shareholder; and additional shares of id Quantique SA (“id Quantique”), a leading provider of quantum cryptography solutions for data security based in Switzerland,
We have also pursued other strategic alternatives, such as forming a strategic alliance in October 2019 with Kakao Corp. (“Kakao”), a Korean Internet company and the operator of Korea’s most popular mobile messaging application, to collaborate in the ICT sector through the sale of 1,266,620 of our treasury shares to Kakao, representing a 1.6% interest, for approximately Won 300.0 billion and a concurrent issuance by Kakao of 2,177,401 of its shares, representing a 2.5% interest, to us for approximately Won 302.3 billion.
Furthermore, in December 2020, we spun off our mobility business into a new wholly-owned subsidiary, T map Mobility Co., Ltd. (“T Map Mobility”), in order to enhance its competitiveness and promote its future growth, and we have also formed a strategic partnership with Uber Technologies, Inc. (“Uber”) pursuant to which Uber has invested approximately US$50 million in T Map Mobility and approximately US$100 million in UT LLC, a joint venture formed in April 2021 between T Map Mobility and Uber. In April 2021, we launched through UT LLC a taxi hailing service that integrated our affiliated taxi driver network and mapping and AI technologies with Uber’s ride hailing technology.
In order to pursue enhancement of shareholder value and acceleration of growth of the
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semiconductor and new ICT businesses were transferred to SK Square pursuant to the
More recently, in January 2022, we spun off ourSapeonSAPEON Inc. (“Sapeon”), in which we hold a majority equity interest and each of SK Square and SK Hynix holds a minority equity interest. Through Sapeon, we expect to actively collaborate with SK Square and SK Hynix to target customers in the United States and develop and commercialize next-generation
While we are hoping to benefit from a range of synergies and efficiencies from the
Due to the existing high penetration rate of wireless telecommunications services in Korea, we are unlikely to maintain our subscriber growth rate, which could adversely affect our business, financial condition and results of operations.
According to data published by the MSIT and the historical population data published by the Ministry of the Interior and Safety, the penetration rate for the Korean wireless telecommunications industry as of December 31, 20212022 was approximately 139.3%147.7%, which was relatively high compared to many industrialized countries. Therefore, we expect that the penetration rate for wireless telecommunications service in Korea will remain relatively stable. As a result of the already high penetration rate in Korea for wireless telecommunications services coupled with our leading market share, we expect our subscriber growth rate to decrease.
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Our business, financial condition and results of operations may be adversely affected if we fail to acquire adequate additional frequency usage rights or use our bandwidth efficiently to accommodate subscriber growth and subscriber usage.
One of the principal limitations on a wireless network’s subscriber capacity is the amount of frequency spectrum available for use by the network. We have acquired a number of frequency usage rights to secure bandwidth capacity to provide our broad range of services, for which we typically make an initial payment as well as pay usage fees during the license period. We made frequency usage right fee payments of Won 103.9 billion in 2022, Won 120.8 billion in 2021 and Won 136.6 billion in 2020 and Won 133.1 billion in 2019.2020. For more information regarding the various bandwidths that we use and the usage right fees for such bandwidths, see “Item 4.B. Business Overview — Law and Regulation — Frequency Allocation,” “Item 5.B. Liquidity and Capital Resources — Capital Requirements — Capital Expenditures” and note 17 of the notes to our consolidated financial statements.
The growth of our wireless data businesses has been a significant factor in the increased utilization of our bandwidth, since wireless data applications are generally more bandwidth-intensive than voice services. In particular, the increasing popularity of smartphones and data intensive applications among smartphone users has been a major factor for the high utilization of our bandwidth in recent years. Although such trend has been offset in part by the implementation of new technologies that enable more efficient usage of our bandwidth, we expect that the current trend of increased data transmission use by our subscribers will continue to accelerate in the near future as more subscribers migrate to our 5G network and the volume and sophistication of the multimedia content we offer through our wireless data services continue to grow in the 5G environment.
In November 2020,2021, the MSIT announced plans to reallocatereallocated a total of 310 MHz of frequency bandwidths whose usage terms were due to expire in 2021 to KT, LG U+ and us, 95 MHz (in the 800 MHz, 2.1 GHz and 2.6 GHz spectrums) of which was allocated to us in 2021.
We may be required to pay a substantial amount to acquire additional bandwidth capacity in the future in order to meet increasing bandwidth demand or renew the rights to use our existing bandwidth, and we may not be successful in acquiring the necessary bandwidth to meet such demand at commercially attractive terms or at all, which may adversely affect our business, financial condition and results of operations.
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We rely on key technology professionals and senior management, and the loss of the services of any such personnel or the inability to attract and retain them may negatively affect our business.
Our success depends to a significant extent on the continued service of our research and development and engineering personnel, and our ability to continue to attract, retain and motivate qualified technology professionals including researchers and engineers. In particular, our focus on leading the market in introducing new services has meant that we must aggressively recruit technology professionals with expertise in cutting-edge technologies. Such employees are in high demand, and we devote significant resources to identifying, hiring, training, successfully integrating and retaining these employees. Competition for these individuals could cause us to offer higher compensation and other benefits to attract and retain them. We also depend on the services of experienced key senior management, and if we lose their services, it would be difficult to find and integrate replacement personnel in a timely manner, or at all.
The loss of the services of any of our key technology professionals or senior management without adequate replacement, or the inability to attract new qualified personnel, would have a material adverse effect on our results of operations.
We need to observe certain financial and other covenants under the terms of our debt instruments, the failure to comply with which would put us in default under those instruments.
Certain of our debt instruments contain financial and other covenants with which we are required to comply on an annual and semi-annual basis. The financial covenants with respect to SK Telecom’s debt instruments include, but are not limited to, a maximum net
If we breach our financial or other covenants, our financial condition will be adversely affected to the extent we are not able to cure such breaches or repay the relevant debt.
We may have to make further financing arrangements to meet our capital expenditure requirements and debt payment obligations.
We have had, and expect to continue to have, significant capital expenditure requirements as we continue to build out, maintain and upgrade our networks and invest in businesses that complement our wireless and fixed-line telecommunications businesses. We spent Won 2,915.92,908.3 billion for capital expenditures in 2021.
In particular, we continue to make significant capital investments to expand and upgrade our wireless networks in response to growing bandwidth demand by our subscribers. Bandwidth usage by our subscribers has rapidly increased in recent years primarily due to the increasing number of data intensive mobile applications and use of such applications by smartphone users. If heavy usage of bandwidth-intensive services grows beyond our current expectations, we may need to invest more capital than currently anticipated to expand the bandwidth capacity of our
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networks or our customers may have a suboptimal experience when using our services. Any of these events could adversely affect our competitive position and have a material adverse effect on our business, financial condition and results of operations. For a more detailed discussion of our capital expenditure plans and a discussion of other factors that may affect our future capital expenditures, see “Item 5.B. Liquidity and Capital Resources — Capital Requirements — Capital Expenditures.”
As of December 31, 2021,2022, we had Won 2,461.03,189.3 billion in contractual payment obligations (excluding short-term leases and leases of low-value assets) due in 2022,2023, which mostly involved repayment of debt obligations and payments related to lease liabilities and other short-term leases and leases of
We have not arranged firm financing for all of our current or future capital expenditure plans and contractual payment obligations. We have, in the past, obtained funds for our proposed capital expenditure and payment obligations from various sources, including our cash flow from operations as well as from financings, primarily debt and equity financings. Any material adverse change in our operational or financial condition could impact our ability to fund our capital expenditure plans and contractual payment obligations. Volatile financial market conditions and an increasing interest rate environment may also curtail our ability to obtain adequate funding.funding and/or increase our cost of borrowings, which would have an adverse effect on our liquidity and financial position. Inability to fund such capital expenditure requirements may have a material adverse effect on our business, financial condition and results of operations. In addition, although we currently anticipate that the capital expenditure levels estimated by us will be adequate to meet our business needs, such estimates may need to be adjusted based on developments in technology and markets. Failure to meet any such increased expenditure requirements or to obtain adequate financing for such requirements on terms acceptable to us, or at all, may have a material adverse effect on our business, financial condition and results of operations.
Termination or impairment of our relationship with a small number of key suppliers for network equipment and for leased lines could adversely affect our business, financial condition and results of operations.
We purchase wireless network equipment from a small number of suppliers. To date, we have purchased substantially all of the equipment for our networks from Samsung Electronics Co., Ltd. (“Samsung Electronics”),
We cannot assure you that we will be able to continue to obtain the necessary equipment from one or more of our suppliers. Any discontinuation or interruption in the availability of equipment from our suppliers for any reason could have an adverse effect on our business, financial condition and results of operations. In addition, inability to lease adequate lines at commercially reasonable rates may impact the quality of the services we offer and may also damage our reputation and our business.
Our business relies on technology developed by us, and our business will suffer if we are unable to protect our proprietary rights.
We own numerous patents and trademarks worldwide, and have applications for patents pending in many countries. In addition to active research and development efforts, our success depends in part on our ability to obtain patents and other intellectual property rights covering our services.
We may be required to defend against charges of infringement of patent or other proprietary rights of third parties. Although we have not experienced any significant patent or other intellectual property disputes, we cannot
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Malicious and abusive Internet practices could impair our services and we may be subject to significant legal and financial exposure, damage to our reputation and a loss of confidence of our customers.
Our business involves the storage and transmission of large amounts of confidential information, and cybersecurity breaches expose us to a risk of loss of this information, which may lead to improper use or disclosure of such information, ensuing potential liability and litigation, any of which could harm our reputation and adversely affect our business.
Our cybersecurity measures may also be breached due to employee error, malfeasance or otherwise. Instituting appropriate access controls and safeguards across all of our information technology infrastructure is challenging. Furthermore, outside parties may attempt to fraudulently induce employees to disclose sensitive information in order to gain access to our data or our customers’ data or accounts, or may otherwise obtain access to such data or accounts. Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently and often are not recognized until attacks are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. While we have experienced minor isolated cybersecurity incidents in the past, we do not believe that any such incidents had a material adverse effect on our business, financial condition or results of operations. If an actual or perceived breach of our cybersecurity of a material nature occurs or the market perception of the effectiveness of our cybersecurity measures is materially harmed, we may incur significant legal and financial exposure, including legal claims and regulatory fines and penalties, damage to our reputation and a loss of confidence of our customers, which could have an adverse effect on our business, financial condition and results of operations.
In addition, our wireless and fixed-line subscribers utilize our network to access the Internet and, as a consequence, we or they may become victim to common malicious and abusive Internet activities, such as unsolicited mass advertising (
Labor disputes may disrupt our operations.
Although we have never experienced any significant labor disputes, there can be no assurance that we will not experience labor disputes in the future, including protests and strikes, which could have an adverse effect on our business, financial condition and results of operations.
Every two years, the union and management negotiate and enter into a new collective bargaining agreement that has a
Concerns that radio frequency emissions may be linked to various health concerns could adversely affect our business and we could be subject to litigation relating to these health concerns.
In the past, allegations that serious health risks may result from the use of wireless telecommunications devices or other transmission equipment have adversely affected share prices of some wireless telecommunications companies in the United States. In May 2011, the International Agency for Research on Cancer (the “IARC”), a part of the World Health Organization, announced that it has classified radiofrequency electromagnetic fields associated with wireless phone use as possibly carcinogenic to humans, based on an increased risk for glioma, a malignant type
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adversely affect our business. Several class action and personal injury lawsuits have been filed in the United States against several wireless phone manufacturers and carriers, asserting product liability, breach of warranty and other claims relating to radio transmissions to and from wireless phones. Certain of these lawsuits have been dismissed. We could be subject to liability or incur significant costs defending lawsuits brought by our subscribers or other parties who claim to have been harmed by or as a result of our services. In addition, the actual or perceived risk of wireless telecommunications devices could have an adverse effect on our business by reducing the number of our subscribers or the usage per subscriber.
Our ability to deliver services may be disrupted due to a systems failure, shutdown in our networks or natural disaster.
Our services are currently carried through our wireless and fixed-line networks, which could be vulnerable to damage or interruptions in operations due to fires, floods, earthquakes, power losses, telecommunication failures, network software flaws, unauthorized access, computer viruses and similar events, which may occur from time to time. The occurrence of any of these events could impact our ability to deliver services, we may be liable for damages to our customers caused by such interruptions, our reputation may be damaged and our customers may lose confidence in us, which could have a negative effect on our business, financial condition and results of operations.
Depreciation of the value of the Won against the Dollar and other major foreign currencies may have a material adverse effect on our results of operations and the market value of our common shares and ADSs.
Substantially all of our revenues are denominated in Won. Depreciation of the Won may materially affect our results of operations because, among other things, it causes:
an increase in the amount of Won required by us to make interest and principal payments on our foreign currency-denominated debt; and
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.
Fluctuations in the exchange rate between the Won and the Dollar will affect the Dollar equivalent of the Won price of the our common shares on the KRX KOSPI Market. These fluctuations will also affect:
the amounts a registered holder or beneficial owner of ADSs will receive from the American Depositary Receipt (“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 our common shares; and
the secondary market price of our ADSs.
If SK Inc. causes us to breach the foreign ownership limitations on our common shares by being deemed to be a foreign entity, we may experience a change of control.
The Telecommunications Business Act currently sets a 49.0% limit on the aggregate foreign ownership of our issued shares. Under the Telecommunications Business Act, as amended, a Korean entity, such as SK Inc., is deemed to be a foreign entity if its largest shareholder (determined by aggregating the shareholdings of such shareholder and its related parties) is a foreigner and such shareholder (together with the shareholdings of its related parties) holds 15.0% or more of the issued voting stock of the Korean entity.
Notwithstanding the above, pursuant to a recentan amendment to the Telecommunications Business Act which became effective onin April 20, 2022, a Korean entity, so long as (i) such entity’s largest shareholder (determined by aggregating the shareholdings of such shareholder and its related parties) is a foreign entity specifically designated by the MSIT incorporated in a country that has entered into a bilateral or multilateral free trade agreement with Korea, and (ii) such shareholder (together with the shareholdings of its related parties) owns 15.0% or more of the
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As of December 31, 2021,2022, SK Inc. owned 65,668,397
If our aggregate foreign shareholding limit is exceeded, the MSIT may issue a corrective order to us, the breaching shareholder (including SK Inc. if the breach is caused by an increase in foreign ownership of SK Inc.) and the foreign shareholder which owns in the aggregate 15.0% or more of SK Inc. Furthermore, if SK Inc. is considered a foreign shareholder, it will be prohibited from exercising its voting rights with respect to the shares held in excess of the 49.0% ceiling, which may result in a change in control of us. In addition, the MSIT will be prohibited from granting us licenses or permits necessary for entering into new telecommunications businesses until our aggregate foreign shareholding is reduced to below 49.0%. For a description of further actions that the MSIT could take, see “Item 4.B. Business Overview — Law and Regulation — Foreign Ownership and Investment Restrictions and Requirements.”
Risks Relating to Korea
Unfavorable financial and economic developments in Korea may have an adverse effect on us.
We are incorporated in Korea, and a substantial portion of our operations and assets are located in Korea. As a result, we are subject to political, economic, legal and regulatory risks specific to Korea, and our performance and successful fulfillment of our operational strategies are dependent in large part on the overall Korean economy. The economic indicators in Korea in recent years have shown mixed signsDue to the debilitating effects of growth and uncertainty, and starting in 2020, the overallCOVID-19 pandemic on the Korean economy and the economies of Korea’s major trading partners, the economic indicators in Korea have shown mixed signs of deterioration due toand uncertain recovery since the debilitating effectsoutbreak of the
In recent years, adverse conditions and volatility in the worldwide financial markets, fluctuations in oil and commodity prices, supply chain disruptions and the increasing weakness of the global economy, in particularmainly due to the
Developments that could have an adverse impact on Korea’s economy include:
• | declines in consumer confidence and a slowdown in consumer spending, including as a result of the COVID-19 pandemic; |
adverse changes or volatility in foreign currency reserve levels, commodity prices (including oil prices), exchange rates (including fluctuation of the ongoing globalWon against the U.S. dollar, Euro or Japanese Yen exchange rates or revaluation of the Chinese Renminbi), interest rates, inflation rates or stock markets;
adverse conditions or developments in the economies of countries and regions that are important export markets for Korea, such as China, the United States, Europe and Japan, or in emerging market economies in Asia or elsewhere, including as a result of deteriorating economic and trade relations between the United States and China and increased uncertainties in the global financial markets and industry;
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the occurrence of severe health epidemics in Korea and |
a continuing rise in the level of household debt and increasing delinquencies and credit defaults by retail or small- and medium-sized enterprise borrowers in Korea;
the economic impact of any pending or future free trade agreements or any changes to existing free trade agreements;
shortages of imported raw materials, natural resources, rare earth minerals or component parts, including semiconductors, due to disruptions to the global supply chain;
a deterioration in economic or diplomatic relations between Korea and its trading partners or allies, including deterioration resulting from territorial or trade disputes or disagreements in foreign policy;
increased sovereign default risks in select countries and the resulting adverse effects on the global financial markets;
• | a deterioration in the financial condition or performance of small- and medium-sized enterprises and other companies in Korea due to the Government’s policies to increase minimum wages and limit working hours of employees; |
• | investigations of large Korean conglomerates and their senior management for possible misconduct; |
social and labor unrest;
substantial changes in the market prices of Korean real estate;
• | a substantial decrease in tax revenues and a substantial increase in the Government’s expenditures for fiscal stimulus measures, unemployment compensation and other economic and social programs, in particular in light of the Government’s ongoing efforts to provide emergency relief payments to households and emergency loans to corporations in need of funding in light of the COVID-19 pandemic, which together would likely lead to a national budget deficit as well as an increase in the Government’s debt; |
financial problems or lack of progress in the restructuring of Korean conglomerates, other large troubled companies, their suppliers or the financial sector;
loss of investor confidence arising from corporate accounting irregularities and corporate governance issues concerning certain Korean conglomerates;
increases in social expenditures to support an aging population in Korea or decreases in economic productivity due to the declining population size in Korea;
geopolitical uncertainty and the risk of further attacks by terrorist groups around the world;
political uncertainty or increasing strife among or within political parties in Korea;
hostilities, political or social tensions involving Russia (including the invasion of Ukraine by Russia and ensuing actions that the United States and other countries have taken or may take)take in the future) and the resulting adverse effects on the global supply of oil and other natural resources and the global financial markets;
hostilities or political or social tensions involving oil producing countries in the Middle East (including a potential escalation of hostilities between the United States and Iran) and North Africa and any material disruption in the global supply of oil or sudden increase in the price of oil;
natural or man-made disasters that have a significant adverse economic or other impact on Korea or its major trading partners; and
an increase in the level of tensions or an outbreak of hostilities between North Korea and Korea or the United States.
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Escalations in tensions with North Korea could have an adverse effect on us and the market value of our common shares and ADSs.
Relations between Korea and North Korea have been tense throughout Korea’s modern history. The level of tension between the two Koreas has fluctuated and may increase abruptly as a result of future events. In particular, there have been heightened security concerns in recent years stemming from North Korea’s nuclear weapon and ballistic missile programs as well as its hostile military actions against Korea. Some of the significant incidents in recent years include the following:
• | North Korea renounced its obligations under the Nuclear Non-Proliferation Treaty in January 2003 and has conducted six rounds of nuclear tests since October 2006, including claimed detonations of hydrogen bombs and warheads that can be mounted on ballistic missiles. Over the years, North Korea has continued to conduct a series of missile tests, including ballistic missiles launched from submarines and intercontinental ballistic missiles that it claims can reach the United States mainland. North Korea has increased the frequency of its missile tests in 2022, firing over 60 ballistic missiles, including eight intercontinental ballistic missiles. In response, the Government has repeatedly condemned the provocations and flagrant violations of relevant United Nations Security Council resolutions. In February 2016, the Government also closed the inter-Korea Gaesong Industrial Complex in response to North Korea’s fourth nuclear test in January 2016. Internationally, the United Nations Security Council has passed a series of resolutions condemning North Korea’s actions and significantly expanding the scope of sanctions applicable to North Korea. Over the years, the United States and the European Union have also expanded their sanctions applicable to North Korea. |
In March 2010, a Korean naval vessel was destroyed by an underwater explosion, killing many of the crewmen on board. The Government formally accused North Korea of causing the sinking, while North Korea denied responsibility. Moreover, in November 2010, North Korea fired more than one hundred artillery shells that hit Korea’s Yeonpyeong Island near the Northern Limit Line, which acts as the de facto maritime boundary between Korea and North Korea on the west coast of the Korean peninsula, causing casualties and significant property damage. The Government condemned North Korea for the attack and vowed stern retaliation should there be further provocation.
North Korea’s economy also faces severe challenges, which may further aggravate social and political pressures within North Korea.
Although bilateral summit meetings were held between the two Koreas in April, May and September 2018 and between the United States and North Korea in June 2018, February 2019 and June 2019, there can be no assurance that the level of tensions affecting the Korean peninsula will not escalate in the future. Any increase in tensions, which may occur, for example, if North Korea experiences a leadership crisis, high-level contacts between Korea and North Korea break down or military hostilities occur, could have a material adverse effect on our business, financial condition and results of operations and the market value of our common shares and ADSs.
Korea’s legislation allowing class action suits related to securities transactions may expose us to additional litigation risk.
The Securities-related Class Action Act of Korea enacted in January 2004 allows class action suits to be brought by shareholders of companies (including us) listed on the KRX KOSPI Market for losses incurred in connection with purchases and sales of securities and other securities transactions arising from (1) false or inaccurate statements provided in the registration statements, prospectuses, annual reports, audit reports, and semi-annual or quarterly reports and material fact reports and omissionor omissions of material information in such documents, (2) insider trading, (3) market manipulation and (4) unfair trading. In addition, there are bills currently pending in the National Assembly that would allow for class action suits for losses arising from false or inaccurate statements provided in reports of material facts or omissions of material information in such documents. This law permits 50 or more shareholders who collectively hold 0.01% of the shares of a company to bring a class action suit against, among others, the issuer and its directors and officers. Because of the relatively recent enactment of the act, there is not enough judicial precedent to predict how the courts will apply the law. Litigation can be time-consuming and expensive to resolve, and can divert management time and attention from the operation of a business. We are not aware of any basis upon
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which such suit may be brought against us, nor are any such suits pending or threatened. Any such litigation brought against us could have a material adverse effect on our business, financial condition and results of operations.
There are special risks involved with investing in securities of Korean companies, including the possibility of restrictions being imposed by the Government in emergency circumstances.
As we are a Korean company and operate in a business and cultural environment that is different from that of other countries, there are risks associated with investing in our securities that are not typical for investments in securities of companies in other jurisdictions.
Under the Korean Foreign Exchange Transactions Act, if the Government deems that certain emergency circumstances, including a significant disruption in the international balance of payments and international financial markets or extreme difficulty in carrying out currency, exchange rate or other macroeconomic policies due to the movement of capital between Korea and other countries, are likely to occur, it may impose any necessary restriction such as requiring Korean or foreign investors to obtain prior approval from the Ministry of Economy and Finance (the “MOEF”) for the acquisition of Korean securities or for the repatriation of interest, dividends or sales proceeds arising from Korean securities or from disposition of such securities or other transactions involving foreign exchange. See “Item 10.D. Exchange Controls — Korean Foreign Exchange Controls and Securities Regulations.”
Risks Relating to Securities
Sales of our shares by SK Inc. and/or other large shareholders may adversely affect the market value of our common shares and ADSs.
Sales of substantial amounts of our common shares, or the perception that such sales may occur, could adversely affect the prevailing market value of our common shares or ADSs or our ability to raise capital through an offering of our common shares.
As of December 31, 2021,2022, SK Inc. owned 30.0% of our total issued common shares and has not agreed to any restrictions on its ability to dispose of our shares. See “Item 7.A. Major Shareholders.” We can make no prediction as to the timing or amount of any sales of our common shares. We cannot assure you that future sales of our common shares, or the availability of our common shares for future sale, will not adversely affect the prevailing market value of our common shares or ADSs from time to time.
We believe that we may behave been classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for our taxable year ending December 31, 2021, which could subject U.S. investors in our common shares or ADSs to significant adverse U.S. federal income tax consequences.
Due to fluctuations in our stock price and changes in the value and composition of our assets, including our substantial investment in the stock of SK Hynix prior to the
A
If we are classified as a PFIC in any taxable year, a U.S. holder (as defined in “Item 10.E. Additional Information — Taxation — United States Federal Income Tax Considerations”) may incur significantly increased U.S. federal income tax on gain recognized on the sale or other disposition of the common shares or ADSs and on the receipt of distributions on the common shares or ADSs to the extent such gain or distribution is treated as an “excess distribution” under the U.S. federal income tax rules, and such U.S. holder may be subject to burdensome reporting requirements. The amount of income tax on any excess distributions will be increased by an interest
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charge to compensate for tax deferral, calculated as if the excess distributions were earned ratably over the period that the U.S. holder holds its common shares or ADSs. Further, if we are a PFIC for any year during which a U.S. holder holds our commons shares or ADSs, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. holder holds our common shares or ADSs unless we cease to be a PFIC and the U.S. holder makes a special election.
U.S. holders are strongly urged to consult their own tax advisors regarding our potential classification as a PFIC in 2021 and regarding the U.S. federal income tax consequences of acquiring, holding, and disposing of our common shares or ADSs if we are so classified,during such taxable year, including the advisability of making a
If an investor surrenders his or her ADSs to withdraw the underlying shares, he or she may not be allowed to deposit the shares again to obtain ADSs.
Under the deposit agreement, holders of our common shares may deposit those shares with the ADR depositary’s custodian in Korea and obtain ADSs, and holders of ADSs may surrender ADSs to the ADR depositary and receive our common shares. However, under the terms of the deposit agreement, as amended, the depositary bank is required to obtain our prior consent to any such deposit if, after giving effect to such deposit, the total number of our common shares represented by ADSs, which was 14,653,59813,718,088 shares as of March 31, 2022,2023, exceeds a specified maximum, which was 59,712,21673,861,029 shares as of March 31, 2022,2023, subject to adjustment under certain circumstances.
An investor in our ADSs may not be able to exercise preemptive rights for additional new shares and may suffer dilution of his or her equity interest in us.
The Korean Commercial Code and our articles of incorporation require us, with some exceptions, to offer shareholders the right to subscribe for new shares in proportion to their existing ownership percentage whenever new shares are issued. If we offer a right to subscribe for additional new common shares or any other rights of similar nature, the ADR depositary, after consultation with us, may make the rights available to an ADS holder or use reasonable efforts to dispose of the rights on behalf of the ADS holder and make the net proceeds available to the ADS holder. The ADR depositary, however, is not required to make available to an ADS holder any rights to purchase any additional shares unless it deems that doing so is lawful and feasible and:
a registration statement filed by us under the Securities Act is in effect with respect to those shares; or
the offering and sale of those shares is exempt from, or is not subject to, the registration requirements of the Securities Act.
We are under no obligation to file any registration statement with respect to any ADSs. If a registration statement is required for an ADS holder to exercise preemptive rights but is not filed by us, the ADS holder will not be able to exercise his or her preemptive rights for additional shares. As a result, ADS holders may suffer dilution of their equity interest in us.
Short selling of our ADSs by purchasers of securities convertible or exchangeable into our ADSs could materially adversely affect the market price of our ADSs.
SK Inc., through one or more special purpose vehicles, has engaged and may in the future engage in monetization transactions relating to its ownership interest in us. These transactions have included and may include
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the convertible or exchangeable securities, often through short selling of the underlying equity securities or similar transactions. Since a monetization transaction could involve debt securities linked to a significant number of our ADSs, we expect that a sufficient quantity of ADSs may not be immediately available for borrowing in the market to facilitate settlement of the likely volume of short selling activity that would accompany the commencement of a monetization transaction. This short selling and similar hedging activity could place significant downward pressure on the market price of our ADSs, thereby having a material adverse effect on the market value of ADSs owned by you.
A holder of our ADSs may not be able to enforce a judgment of a foreign court against us.
We are a corporation with limited liability organized under the laws of Korea. Substantially all of our directors and officers and other persons named in this annual report reside in Korea, and all or a significant portion of the assets of our directors and officers and other persons named in this annual report and substantially all of our assets are located in Korea. As a result, it may not be possible for holders of our ADSs to effect service of process within the United States, or to enforce against us any judgments obtained from the United States courts based on the civil liability provisions of the federal securities laws of the United States. There is doubt as to the enforceability in Korea, either in original actions or in actions for enforcement of judgments of United States courts, of civil liabilities predicated on the United States federal securities laws.
We are generally subject to Korean corporate governance and disclosure standards, which may differ from those in other countries.
Companies in Korea, including us, are subject to corporate governance standards applicable to Korean public companies, which may differ in some respects from standards applicable in other countries, including the United States. As a reporting company registered with the SEC and listed on the NYSE,New York Stock Exchange (“NYSE”), we are subject to certain corporate governance standards as mandated by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). However, foreign private issuers, including us, are exempt from certain corporate governance requirements under the Sarbanes-Oxley Act or under the rules of the NYSE. There may also be less publicly available information about Korean companies, such as us, than is regularly made available by public or
Item 4. | INFORMATION ON THE COMPANY |
Item 4.A. | History and Development of the Company |
As Korea’s first wireless telecommunications service provider, we have a recognized history of leadership and innovation in the domestic telecommunications sector. Today, we remain Korea’s leading wireless telecommunications services provider and have continued to pioneer the commercial development and implementation of
In February 2012, we acquired an equity stake in SK Hynix, one of the world’s largest memory-chip makers by revenue, for an aggregate purchase price of Won 3.4 trillion, and became its largest shareholder. In November 2021, we transferred all of our 20.1% equity interest in SK Hynix to SK Square pursuant to the
Effective as of November 1, 2021, we conducted the
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In connection with the
We are a corporation with limited liability organized under the laws of Korea.
The SEC maintains a website (http://www.sec.gov), which contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
Korean Telecommunications Industry
Established in March 1984, we became the first wireless telecommunications service provider in Korea. We remained the sole provider of wireless telecommunications services until April 1996, when Shinsegi commenced cellular service. The Government began to introduce competition into the fixed-line and wireless telecommunications services markets in the early 1990’s. During this period, the Government allowed new competitors to enter the fixed-line sector, sold a controlling stake in us to the SK Group, and granted a cellular license to our first competitor, Shinsegi. In October 1997, three additional companies began providing wireless telecommunications services under Government licenses to provide wireless telecommunications services. In 2000 and 2001, the Korean wireless telecommunications market experienced significant consolidation. In January 2002, Shinsegi was merged into us. Additionally, two of the other wireless telecommunications services providers merged.
There are currently three mobile network operators in Korea: us, KT and LG U+. As of December 31, 2021,2022, the market share of the Korean wireless telecommunications market, in terms of number of subscribers, of KT and LG U+ was approximately 31.0%30.9% and 24.7%25.9%, respectively (compared to our market share of 44.3%43.2%), each including MVNO subscribers leasing the respective networks. As of December 31, 2021,2022, MVNOs had a combined market share of 14.4%16.9%, of which MVNOs leasing our networks represented 3.0%3.1%, MVNOs leasing KT’s networks represented 7.4%8.6% and MVNOs leasing LG U+’s networks represented 3.9%5.1%.
Telecommunications industry growth in Korea has been among the most rapid in the world, with fixed-line penetration being under five lines per 100 population in 1978 and increasing to 47.9 lines per 100 population as of December 31, 2006 before decreasing to 23.622.6 lines per 100 population as of December 31, 2021,2022, and wireless penetration increasing from 7.0 subscribers per 100 population in 1996 to 139.3147.7 subscribers per 100 population as of December 31, 2021.2022. The table below sets forth certain subscription and penetration information regarding the Korean telecommunications industry as of the dates indicated:
As of December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
(In thousands, except for per population amounts) | ||||||||||||
Population of Korea(1) | 51,439 | 51,639 | 51,829 | |||||||||
Wireless Subscribers(2) | 75,958 | 71,920 | 69,542 | |||||||||
Wireless Subscribers per 100 Population | 147.7 | 139.3 | 134.2 | |||||||||
Telephone Lines in Service | 11,621 | 12,212 | 12,859 | |||||||||
Telephone Lines per 100 Population | 22.6 | 23.6 | 24.8 |
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As of December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
(In thousands, except for per population amounts) | ||||||||||||
Population of Korea (1) | 51,639 | 51,829 | 51,850 | |||||||||
Wireless Subscribers (2) | 71,920 | 69,542 | 67,937 | |||||||||
Wireless Subscribers per 100 Population | 139.3 | 134.2 | 131.0 | |||||||||
Telephone Lines in Service | 12,212 | 12,859 | 13,600 | |||||||||
Telephone Lines per 100 Population | 23.6 | 24.8 | 26.2 |
(1) | Source: The Ministry of the Interior and Safety. |
(2) | Includes subscribers of non-mobile phone wireless services, |
Since the introduction of short text messaging in 1998, Korea’s wireless data market has grown rapidly. This growth has been driven, in part, by the rapid development of wireless Internet service since its introduction in 1999 and the implementation of LTE and 5G technologies providing for fast data transmission speeds and large data transmission capacity. As of December 31, 2021,2022, approximately 60.754.2 million Korean wireless subscribers owned Internet-enabled handsets capable of accessing wireless Internet services, including 53.5 million subscribers that own smartphones that had direct access to the Internet using mobile Internet technology.
As of December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
(In thousands, except for percentage data) | ||||||||||||
Number of Wireless Internet-Enabled Handsets | 60,689 | 59,886 | 58,812 | |||||||||
Number of Smartphones | 53,465 | 52,223 | 51,132 | |||||||||
Total Number of Wireless Subscribers (1) | 71,920 | 69,542 | 67,937 | |||||||||
Penetration of Wireless Internet-Enabled Handsets | 84.4 | % | 86.1 | % | 86.6 | % | ||||||
Penetration of Smartphones | 74.3 | % | 75.1 | % | 75.3 | % |
As of December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
(In thousands, except for percentage data) | ||||||||||||
Number of Smartphones | 54,249 | 53,465 | 52,223 | |||||||||
Total Number of Wireless Subscribers(1) | 75,958 | 71,920 | 69,542 | |||||||||
Penetration of Smartphones | 71.4 | % | 74.3 | % | 75.1 | % |
(1) | Includes subscribers of non-mobile phone wireless services, |
The decreases in the penetration rate of smartphones as of December 31, 2022 compared to December 31, 2021, and as of December 31, 2021 compared to December 31, 2020, were primarily due to a faster increase in the number of subscribers of non-mobile phone wireless services, such as tablet computers, wearable devices, IoT devices and others, as compared to the increase in the number of smartphones.
In addition to its well-developed wireless telecommunications sector, Korea has one of the largest Internet markets in the Asia Pacific region. From the end of 2010 to the end of 2021,2022, the number of broadband Internet access subscribers increased from approximately 17.2 million to approximately 22.923.5 million.
As of December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
(In thousands) | ||||||||||||
Number of Broadband Internet Access Subscribers (1) | 22,944 | 22,327 | 21,762 | |||||||||
Number of IPTV Subscribers | 20,628 | 19,364 | 18,021 |
As of December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
(In thousands) | ||||||||||||
Number of Broadband Internet Access Subscribers(1) | 23,537 | 22,944 | 22,327 | |||||||||
Number of IPTV Subscribers | 21,289 | 20,628 | 19,364 |
(1) | Includes subscribers accessing Internet service using digital subscriber line, or xDSL, connections; cable modem connections; local area network, or LAN, connections; fiber-to-the-home, |
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Item 4.B. | Business Overview |
Overview
We are Korea’s leading wireless telecommunications services provider and continue to pioneer the commercial development and implementation of
cellular services, which include wireless voice and data transmission services, sales of wireless devices, IoT solutions, platform services, cloud services, smart factory solutions, subscription services, advertising and curated shopping services, and metaverse platform-based services;
fixed-line telecommunications services, which include fixed-line telephone services, broadband Internet services, advanced media platform services (including IPTV and cable TV services) and business communications services; and
• | other businesses, which include our T-commerce business and certain other miscellaneous businesses. |
Our Business Strategy
We believe that the current trends in the Korean telecommunications industry are characterized by technological change, evolving consumer needs and increasing digital convergence. Against the backdrop of these industry trends, we aim to maintain our leading position in the Korean market for wireless telecommunications services and actively develop our next-generation growth businesses by leveraging our AI and digital infrastructure technologies. In pursuit of such objectives, we plan to further utilize AI technology and our big data analysis capabilities to createdevelop and commercialize new products and services that are tailored to our customers’ evolving needs, as well as incorporate AI capabilities directly into many of the products and services we offer, and offer a variety of subscription-based marketing services and meterverse platform services.offer. In doing so, we plan to actively collaborate with the new ICT businesses operated by the
• | Maintain our leadership in the wireless services business by offering innovative 5G services and customer-oriented products and services. We plan to maintain our leadership in the wireless services business by offering innovative 5G services that provide differentiated subscriber experiences. We also plan to promote the proliferation of 5G services by offering services and content that are specialized for the 5G environment, such as cloud gaming, hands-on experience services, metaverse platform-based services and e-sports. In addition, we will continue to analyze the needs of our subscribers leveraging our AI technology and provide products and services that meet such needs. |
• | Develop our next-generation growth businesses through hyper-collaboration. We believe that we have evolved from being a domestic telecommunications provider in Korea to possessing the fundamental capabilities that enable us to pursue a broad range of collaboration in the field of ICT with both domestic and international partners, including the Spin-off Portfolio Companies. We have formed strategic partnerships with industry leaders to create synergies in various areas, such as 5G cloud gaming, mobile edge computing (“MEC”) and e-sports, and we are continually expanding the areas for collaboration. We aim to create an environment for “hyper-collaboration” to develop and foster our next-generation growth businesses, including media (consisting of broadcast and advertising platform, content and T-commerce businesses), enterprise (consisting of data center, cloud, AIoT and leased line businesses), AIVERSE (consisting of subscription, metaverse and AI agent businesses) and Connected Intelligence (consisting of future technology areas such as UAM and autonomous driving). |
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• | Develop our technological capabilities and new products and services to support our 5G network. We aim to continue developing cutting-edge technologies that will be adopted as the technological standard for 5G services. In addition, we will seek to apply our 5G infrastructure and capabilities to our various other key businesses such as media, enterprise, AIVERSE and Connected Intelligence to create unique new products and services geared to serve evolving customer needs. Furthermore, we aim to collaborate with various partners to identify new business opportunities that can potentially leverage our 5G network. |
• | Pursue sustainable management to seek mutual growth with the broader society. The SK Management System, which is the business philosophy and foundation of the corporate culture of the SK Group, includes as a key component the goal of growing together with the broader society by contributing to its economic growth, creating social value and promoting environmentally friendly technology. In line with the “double bottom line” management policy, which aims to achieve long-term shareholder value while creating social value by leveraging our business capabilities, we strive to contribute to the well-being of all stakeholders and the enhancement of our corporate value in the long-term. |
As part of our ongoing efforts to pursue such strategies, effective as of November 1, 2021, we conducted the
Furthermore, in February 2022, we unveiled our new vision entitled “SKT 2.0,” pursuant to which we announced our plan to reorganize our operations into five major business groups, comprising wireless and fixed-line telecommunications, media, enterprise, AIVERSE and Connected Intelligence. By
We are also expanding our services to not only focus on connecting people through more traditional means of telecommunications but also through “Ifland,” our AI-driven metaverse services which we launched in July 2021, and our planned mobility services (including UAM and autonomous driving, both of which are currently under development). Furthermore, we are building and expanding “AIX,” a new collaborative AI technology framework, through an alliance of leading Korean AI technology companies led by us, which strategy includes pursuing opportunities for acquisitions and investments in companies in business areas that would benefit from our AI and digital transformation capabilities, thereby increasing the enterprise values of such companies that in turn would ultimately increase our enterprise value. In addition, as part of our commitment to pursue sustainable management, we seek to make positive contributions to the society and environment by using AI technology to solve social challenges.
Cellular Services
We offer wireless voice and data transmission services, sell wireless devices and provide IoT solutions and innovative platform services through our cellular services segment. Our wireless voice and data transmission services are offered through our backbone networks that collectively can be accessed by approximately 99.0% of the Korean population. We had 31.932.8 million wireless subscribers, including MVNO subscribers leasing our
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networks, as of December 31, 2021,2022, representing a market share of 44.3%43.2%, the largest market share among Korean wireless telecommunications service providers. We launched our wireless services using our 5G network in April 2019, and we are continually expanding our 5G network coverage and enhancing service quality. The table below sets forth the number of subscribers, including subscribers of MVNOs that lease our wireless networks, using our various digital wireless networks as of the dates indicated:
As of December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
(in thousands) | ||||||||||||
Network | ||||||||||||
5G | 9,911 | 5,476 | 2,084 | |||||||||
LTE | 20,198 | 22,848 | 25,022 | |||||||||
WCDMA | 1,660 | 2,920 | 3,986 | |||||||||
CDMA (1) | 115 | 139 | 443 | |||||||||
Total | 31,884 | 31,384 | 31,535 |
As of December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
(in thousands) | ||||||||||||
Network | ||||||||||||
5G | 13,466 | 9,911 | 5,476 | |||||||||
LTE | 18,084 | 20,198 | 22,848 | |||||||||
WCDMA | 1,285 | 1,660 | 2,920 | |||||||||
CDMA(1) | — | 115 | 139 | |||||||||
|
|
|
|
|
| |||||||
Total | 32,836 | 31,884 | 31,384 |
(1) | In July 2020, we terminated our second generation wireless services using our CDMA network. CDMA subscribers as of December 31, 2021 and 2020 consist of subscribers who |
In 2022, 2021 2020 and 2019,2020, our cellular services segment revenue was Won 12,942.3 billion, Won 12,718.5 billion and Won 12,348.0 billion, and Won 12,223.8 billion, respectively, representing 75.9%74.8%, 76.8%75.9% and 79.3%76.8%, respectively, of our consolidated revenue from continuing operations.
Wireless Services
We offer wireless voice transmission and data transmission services to our subscribers through our backbone networks. Our wireless telecommunications services are available to our subscribers receiving service under the SK Telecom brand. In addition, customers can obtain wireless telecommunications services that operate on our network from MVNOs that lease our wireless networks. We derive revenues from our wireless telecommunications service principally through monthly plan-based fees as described in “— Rate Plans” below.
We provide a
Through service agreements with various foreign wireless telecommunications service providers, we offer cellular global roaming services, branded as our
Through our subsidiary SK Telink Co., Ltd. (“SK Telink”), we also operate our MVNO business under the brand “SK 7Mobile,” which we believe offers excellent quality at reasonable rates utilizing SK Telecom’s wireless networks. SK Telink is focused on developing
In addition, we provide interconnection service to connect our networks to domestic and international fixed-line and other wireless networks. See “— Interconnection” below.
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Wireless Device Sales
We offer several categories of wireless devices, including smartphones and basic phones, tablets and other Internet access devices and wearable devices that are sold through an extensive distribution network, which consists of authorized exclusive dealers and independent retailers, as well as branch offices and stores directly operated by us through our wholly-owned subsidiary, PS&Marketing Co., Ltd. (“PS&Marketing”).&Marketing. As of December 31, 2021,2022, approximately 24.524.3 million, or 76.9%74.1%, of our subscribers (including MVNO subscribers leasing our networks) owned smartphones that have direct access to the Internet compared to approximately 23.924.5 million, subscribers, or 76.3%76.9%, as of December 31, 2020.2021, which decrease was primarily due to a faster increase in the number of non-mobile phone wireless devices, such as tablet computers, wearable devices, IoT devices and others, as compared to the increase in the number of smartphones. We purchase a substantial majority of our wireless devices from Samsung Electronics and Apple.
Smartphones and Basic Phones
Tablets and Other InternetWearable Devices.
IoT Solutions
Through our IoT solutions business, we provide network access and enhanced services to support telemetry-type applications, which are characterized by massive machine-type communication (“mMTC”) wireless connections, to business customers. In order to promote the growth of our IoT solutions business, we deployed networks nationwide that are designed to support IoT devices, namely our high-speed
We provide network access and customized IoT solutions to our business customers. Our IoT services support devices that are used in a variety of market segments, including retail, utilities, security, automotive, agriculture and data analytics. For example, our Cloud Energy Management Solution (“Cloud EMS”) business provides a
Platform Services
Through our platform services business, we seek to provide innovative AI products and services that meet our customers’ evolving needs in an increasingly connected world. In September 2016, we launched NUGU, the first intelligent AI service launched in Korea with Korean language capabilities based on advanced voice recognition technologies. Through cloud-based deep-learning technology, NUGU is designed to evolve on its own as it collects more data about its users over time.
We offer a variety of smart devices based on NUGU such as the NUGU Candle series, an AI speaker which offers NUGU-based services, “NUGU nemo,” a smart speaker with a touchscreen, “NUGU CHIPS,” a wireless charging dock compatible with certain Samsung Galaxy smartphones that automatically converts the smartphone being charged into a NUGU-capable device, and “albert AI,” an educational device that teaches children how to code.
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Other New Businesses
In recent periods, we have launched a variety of new businesses leveraging our capabilities in telecommunications technology and ICT, and we are continuing to invest in these and other emerging new business areas, including the following:
• | Cloud services. We provide comprehensively managed cloud services in Korea, which entail ongoing and regular support and active administration services ranging from those relating to network, application, infrastructure and security, leveraging our advanced 5G MEC technology and platform. Customers that subscribe to our cloud services primarily include businesses that require secure and ultra-low latency communications, focusing on the game, media, logistics, healthcare, finance and manufacturing industries. We completed the construction of MEC infrastructure at four strategic locations during 2020 and we launched our first MEC-based cloud service, “5GX Edge Cloud,” in collaboration with Amazon Web Services in December 2020. In March 2022, in collaboration with Dell Technologies Inc. (“Dell”), we launched a MEC platform that combines our 5G MEC solution and Dell’s servers and began offering cloud services to global telecommunications companies. We have also entered into strategic partnerships with a number of other leading cloud service providers to pursue further collaboration in the 5GX Edge Cloud business. |
• | Smart Factory Solutions. We provide tailored smart factory solutions that leverage our 5G and other wireless technology infrastructure as well as our capabilities in AIoT technology and big data analysis to cater primarily to businesses in high-tech industries. Our smart factory solutions, which are typically provided on a subscription basis, cater to the various needs of our customers including those related to manufacturing process, quality control, equipment management, industrial safety and logistics. |
• | Subscription service. In August 2021, we launched a subscription-based membership service under our “T Universe” brand name. T Universe currently offers several types of subscription packages, and a subscriber can choose from a variety of available benefits including free shipping and discount coupons on merchandise purchases made on the Amazon Global Store (which operates on Eleven Street’s 11st e-commerce platform), access to a cloud storage service, and discounts and/or coupons from various participating food and beverage store chains and delivery service providers, online video streaming and music services. Customers can also choose to subscribe to specific products or services. In order to continue expanding our T Universe membership base, we plan to pursue additional business partnerships with popular consumer brands and service providers to increase the number and appeal of the businesses that participate in the T Universe subscription program. We also plan to continue to invest in improving our customers’ user experience and strengthen the use of AI and digital technologies in our marketing efforts to promote to grow and evolve T Universe into an “AI-based subscription commerce platform.” |
• | Metaverse. In July 2021, we launched a metaverse community platform called “Ifland.” Ifland, which is available as a mobile application on the Google Android and the Apple iOS operating systems, allows users to create personal avatars and communicate with other users by joining one or more of Ifland’s thousands of active virtual communities. Users can also create their own communities. In addition, businesses and public institutions have been actively promoting their services, products and events on the Ifland platform. Since its initial launch in Korea, our Ifland mobile application has been able to quickly increase its user base, and during the fourth quarter of 2022, we launched Ifland in 49 other countries. As of December 31, 2022, Ifland had over 21 million cumulative downloads globally. We plan to further enhance our customers’ user experience by increasing the media and game contents available on the platform through collaboration with |
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third-party content creators and strategic partners. We have also begun supporting economic transactions on the Ifland platform by introducing virtual points that may be monetized into cash, and we plan to further enhance the level of economic activities on the platform through the introduction of in-app purchases and the use of non-fungible token technologies. |
• | Advertising and curated shopping services. We offer advertising services to businesses by leveraging our wireless telecommunications services platform. Our advertising services primarily consist of display advertising on our proprietary mobile applications for smartphones, including “T Phone” (which manages our wireless customers’ voice calls) and “T Membership” (which manages our customer loyalty program under the same name). In addition, we offer a text message-based curated shopping service under our “T Deal” brand. Our customers who have consented to the T Deal service receive a daily text message on their smartphones with a link to a broad range of merchandise with significant discounts that are specially curated to maximize customer interest by utilizing AI technology and big data. |
Rate Plans
We offer our wireless telecommunications services on both a postpaid and prepaid basis. Substantially all of our subscribers received our wireless telecommunications services on a postpaid basis as of December 31, 2021.2022. Postpaid accounts primarily represent retail subscribers under contract with SK Telecom pursuant to which a subscriber is billed in advance a monthly fixed service fee in return for a monthly network service allowance and usage for outgoing voice calls and wireless data services beyond the allowance is billed in arrears, where payment of the total amount of the bill is due at the end of the month. The standard contract period for our rate plans is 24 months, although our subscribers have the option to enter into shorter term contracts or no fixed-term contract at all. We provide various subsidies and discounts, including handset subsidies, depending on the length of the contract and the subscriber’s chosen rate plan. Our prepaid service enables individuals to obtain wireless telecommunications services without a fixed-term contract by paying for all services in advance according to expected usage. We do not charge our customers for incoming calls, although we do receive interconnection charges from KT and other companies for calls from the fixed-line network terminating on our networks and interconnection revenues from other wireless network operators. See “— Interconnection” below.
We also charge our customers a 10.0% value-added tax, which is included in the price of all of our rate plans. We can offset the value-added tax we collect from our customers against value-added tax refundable to us by the Korean tax authorities. We remit taxes we collect from our customers to the Korean tax authorities. We record revenues in our financial statements net of such taxes.
Basic Rate Plans.
In addition, we provide a variety of differentiated rate plans for our customer segments such as our “0” plans for smartphone users who are 24 years old or younger tailored for younger demographics, our “0 Teen” plans for teenagers who are 18 years old or younger, our “ZEM” plans for children who are 12 years old or younger, our “T Senior” LTE and 5G plans for users who are 65 years or older, our “5G Happiness (
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With respect to the tablet and smart watches we offer, we provide a monthly 5G data transmission allowance of 4GB (with reduced speeds after 4GB of usage) for Won 26,000 per month in the case of tablets and a fixed monthly data transmission allowance of 10GB250MB and 50 minutes of voice calling for Won 16,500 per month and 20GB for Won 24,750 per month.
We also offer bundled rate discount plans combining multiple wireless devices as well as those combining our wireless services with our fixed-line communications services and/or SK shieldus’ physical security services. In addition, we offer bundled rate plans that provide discounts for family members or co-inhabitants of the same household.
Data
Roaming Plans.
Digital Wireless Network
We offer wireless voice and data transmission services throughout Korea using digital wireless networks, primarily consisting of our 5G network, LTE network, WCDMA network,
5G Network.
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penetration, which represents the number of our 5G subscribers as a percentage of our total number of subscribers, in each case including MVNO subscribers leasing our networks, was 41.6%41.0% as of December 31, 2021.2022. We have also deployed our 5G network for mMTC connections relating to our IoT solutions.
We believe that our 5G technology and network infrastructure enable us to provide the fastest 5G data transmission network nationwide. In December 2021,2022, the MSIT announced that our 5G network provided the fastest upload and download speeds among the three mobile network operators, KT, LG U+ and us. The nationwide average download speed of our 5G network was 9301,002 Mbps compared to 763921 Mbps for KT’s 5G network and 712765 Mbps for LG U+’s 5G network.
LTE Network.
We believe that our advanced LTE technology and dense network infrastructure enable us to provide the fastest LTE data transmission network nationwide. In December 2021,2022, the MSIT announced that our LTE network
Wi-Fi
LoRa Networks
Network Infrastructure
The principal components of our wireless networks are:
• | base stations (or cell sites), which are physical locations equipped with transmitters, receivers and other equipment that communicate by radio signals with wireless handsets within range of the cell (typically a 3 to 40 kilometer radius); |
• | switching stations, which switch voice and data transmissions to their proper destinations, which may be, for instance, a mobile phone of one of our subscribers (for which transmissions would originate and terminate on our wireless networks), a mobile phone of a KT or LG U+ subscriber (for which transmissions would be routed to KT’s or LG U+’s wireless networks, as applicable), a fixed-line telephone number (for which calls would be routed to the public switched telephone network of a fixed-line network operator), an international number (for which calls would be routed to the network of a long distance service provider) or an Internet site; and |
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• | transmission lines, which link base stations to switching stations and switching stations with other switching stations. |
As of December 31, 2021,2022, our 5G, LTE and WCDMA networks had an aggregate of 58,385
We have purchased substantially all of the equipment for our networks from Samsung Electronics, Ericsson–LGEricsson-LG and Nokia. Most of the transmission lines we use, including virtually all of the lines linking switching stations, as well as a portion of the lines linking base stations to switching stations, comprise optical fiber lines that we own
We use a wireless network surveillance system. This system oversees the operation of base stations and allows us to monitor our main equipment located throughout the country from one monitoring station. The automatic inspection and testing provided to the base stations lets the system immediately rebalance to the most suitable setting, and the surveillance system provides for automatic dispatch of repair teams and quick recovery in emergency situations.
Marketing, Distribution and Customer Service
Marketing.
We have implemented certain information technology improvements in connection with our marketing strategy, including customer management systems, as well as more effective information security controls. We believe these upgrades have enhanced our ability to process and utilize marketing- and subscriber-related data, which, in turn, has helped us to develop more effective and targeted marketing strategies. We currently operate a customer information system designed to provide us with an extensive customer database. Our customer information system includes a billing system that provides us with comprehensive account information for internal purposes and enables us to efficiently respond to customer requests. Our customers can also change their rate plans, verify the charges accrued on their accounts, receive their bills online and send text messages to our other subscribers through our website at www.tworld.co.kr and through our “T world” mobile application.
We strive to improve subscriber retention through our T Membership program, which is a membership service available to our wireless subscribers. Our T Membership program provides various membership benefits to its members such as discounts with our membership partners for dining, shopping, entertainment and travel, membership points accumulation, access to our online membership shopping mall and invitations to various promotional events. Although our competitors also have similar membership programs, we believe that our T Membership program has a competitive advantage over our competitors’ membership programs due to our large subscriber base and breadth of membership benefits.
Distribution.
As part of our initiative to provide a differentiated customer service experience, we operate T Premium Stores that allow our potential and existing subscribers to receive detailed information on our subscription services and “T Factory” stores to further experience certain of our services such as our services that are available through our IoT solutions and platform services. In October 2020, we opened the first T Factory, a facility that offers a wide range of experiences with wireless devices as well as our subscription services and also includes an unmanned store that is open seven days a week and 24 hours a day.
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In addition, we operate an online distribution channel, “T Direct Shop,” through which subscribers can conveniently purchase wireless devices and subscribe to our services online. We also operate a dedicated online shop on 11st, our former subsidiary Eleven Street’s
Currently, authorized dealers are entitled to an initial commission for each new subscriber registered by the dealer, as well as an average ongoing commission calculated as a percentage of that subscriber’s monthly plan-based rate for the first five years. In order to strengthen our relationships with our exclusive dealers, we offer a dealer financing plan, pursuant to which we provide to each authorized dealer a loan of up to Won 4.0 billion with a repayment period of up to three years. As of December 31, 2021,2022, we had an aggregate of Won 63.670.9 billion outstanding in loans to authorized dealers.
Customer Service.
Fixed-line Telecommunications Services
We offer fixed-line telephone, broadband Internet and advanced media platform services (including IPTV and cable TV services) and business communications services through our fixed-line telecommunications services segment. Our fixed-line telecommunications services are provided by our subsidiary, SK Broadband. The following table sets forth historical information about our subscriber base for our fixed-line telecommunications services for the periods indicated:
As of December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
(in thousands) | ||||||||||||
Fixed-Line Telephone (including VoIP) (1) | 3,634 | 3,753 | 3,913 | |||||||||
Broadband Internet (2) | 6,581 | 6,476 | 5,469 | |||||||||
IPTV (3) | 6,137 | 5,657 | 5,193 | |||||||||
Cable TV | 2,863 | 2,929 | — |
As of December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
(in thousands) | ||||||||||||
Fixed-Line Telephone (including VoIP)(1) | 3,559 | 3,634 | 3,753 | |||||||||
Broadband Internet(2) | 6,704 | 6,581 | 6,476 | |||||||||
IPTV(3) | 6,504 | 6,137 | 5,657 | |||||||||
Cable TV | 2,819 | 2,863 | 2,929 |
(1) | Includes subscribers to VoIP services of SK Broadband and, in the cases of |
(2) | Excludes dedicated broadband Internet lines for Internet cafes. |
(3) | Includes subscribers to SK Broadband’s B tv service and video-on-demand |
In 2022, 2021 2020 and 2019,2020, our fixed-line telecommunications services segment revenue was Won 3,677.73,813.0 billion, Won 3,432.23,677.7 billion and Won 2,959.33,432.2 billion, respectively, representing 22.0%, 21.3%22.0% and 19.2%21.3%, respectively, of our consolidated revenue from continuing operations.
As part of our efforts to enhance our capabilities and increase our market share in the fixed-line business, we completed the Tbroad Merger in April 2020. We currently own approximately 74.3%74.4% of SK Broadband’s total outstanding shares. See “Item 3.D. Risk Factors — Risks Relating to Our Business — We may fail to successfully complete, integrate or realize the anticipated benefits of our new acquisitions, joint ventures or other strategic alternatives or corporate reorganizations, including the
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Fixed-line Telephone Services
Our fixed-line telephone services comprise local, domestic long distance, international long distance and VoIP services. VoIP is a technology that transmits voice data through an Internet Protocol network. As of December 31,
Broadband Internet Access Services
Our broadband Internet access network covered more than 86%87% of households in Korea as of December 31, 2021.2022. As of December 31, 2021,2022, we had approximately 6.56.7 million broadband Internet access subscribers. We offer broadband Internet access products with various throughput speeds, ranging from “Giga Premium,” which is up to 10 times faster than data transmission speeds on networks utilizing FTTH technology and allows for data transmission at a maximum speed of 1 Gbps, to “Giga Premium×10,” which provides data transmission speeds of up to 10 Gbps.
Advanced Media Platform (including IPTV and Cable TV Services)
As part of our initiative to be the leading next-generation platform provider, we provide an advanced media platform with various media content and service offerings.
We have offered
In November 2021, we launched our “Apple TV 4K” set top box in collaboration with Apple, which offers a convenient solution for customers to experience our high definition IPTV services as well as other types of Apple
Following the Tbroad Merger, we also offer cable TV services under the “B tv Cable” brand with access to as many as 220224 channels. As of December 31, 2021,2022, we had approximately 2.92.8 million cable TV subscribers.
In January 2021, in order to strengthen our content generation capabilities, we established a new subsidiary, Media S Co., Ltd. (“Media S”), which currently operates two TV channels, “Channel S,” which primarily broadcasts entertainment contents, and “Channel S
We also offer advertising services on our advanced media platform, primarily consisting of advertisements on video-on-demand and streaming contents and our TV channels.
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We continue to expand the scope of our media services and content offerings to provide our subscribers with a vast library of high-quality content that can be accessed through our wireless networks and our fixed-line network.
Business Communications Services
We offer other business communications services to our business customers, including corporations and government entities. Our business communications services include leased line solutions, Internet data center solutions and network solution services.
Our leased line solutions are exclusive lines that allow
Rate Plans
For our residential customers, we offer both bundled rate plans for a combination of our fixed-line service offerings as well as individual rate plans for each separate service offering. Bundled rate plans are offered at a discount compared to subscribing to the same services through individual rate plans. Approximately 86%85% of subscribers to our broadband Internet services subscribe to two or more of our services through our bundled rate plans. Bundled rate plans for a combination of fixed-line telephone, broadband Internet access and IPTV or cable TV services, which are subject to a contract of one to three years, range from Won 30,80019,800 to Won 67,650 per month, depending on the services included and the length of the contract. We also offer bundled rate plans combining our fixed-line communication services with our wireless services and physical security services, respectively.
Our “5,000 minute” plan for subscribers to our fixed-line telephone service features 5,000 voice minutes for domestic
With respect to our business communications services, we offer rates that are tailored to the specific needs of our business customers. We also charge certain installation fees and equipment rental fees as well as other ancillary fees with respect to certain of our fixed-line telecommunications services.
Marketing, Distribution and Customer Service
We focus on bringing our fixed-line telephone, broadband Internet and advanced media platform services (including IPTV and cable TV services) to residential users, and various business communications services to corporate users. We market our fixed-line telecommunications products and services under the “B” brand. Our “B” brand signifies the centrality of “Broadband” to our business and also seeks to emphasize our commitment to providing the “Best” quality products and services to our customers that go “Beyond” expectations, leading to a “Bravo” response. Our “B” brand also strengthens our shared identity with our wireless service’s “T” brand.
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We currently outsource a significant portion of our retail sales force needs. We market our services and provide after-sales service support to customers through more than 60our customer centers and aan extensive network of more than 310 authorized exclusive dealers located throughout Korea. In addition, SK Telecom’s direct retail stores and authorized dealers for wireless telecommunications services also market our fixed-line telephone, broadband Internet and advanced media platform services (including IPTV and cable TV services), which we believe has
Sales to business subscribers are handled through our
Other Businesses
We strive to continually diversify our products and services and develop new businesses that we believe are complementary to our existing products and services, which we include in our other businesses segment. In 2022, 2021 2020 and 2019,2020, the revenue of our other businesses segment, which primarily consisted of our
T-Commerce
We operate a
Portal Service
We offer a portal service under our “Nate” brand name through SK Communications. Nate can be accessed through its website, www.nate.com, or through its mobile application. Nate offers a wide variety of content and services, including Nate Search, an Internet search engine, Nate News, which provides a library of articles about current events, sports, entertainment and culture, and Nate Pann, a user-generated content service as well as access to free
Online Employee Benefits Management and Training Services
In February 2022, we indirectly re-acquired a 100.0% equity interest in SK M&Service, which provides online corporate employee benefits management and training services to Korean businesses and public institutions,
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through our wholly-owned subsidiary PS&Marketing, for Won 72.9 billion from SK Planet. We believe that such acquisition will strengthen our online distribution capabilities and create opportunities for synergies with our other businesses in the ICT sector.
Interconnection
Our wireless and fixed-line networks interconnect with the public switched telephone networks operated by KT and SK Broadband and, through their networks, with the international gateways of KT and LG U+, as well as the networks of the other wireless telecommunications service providers in Korea. These connections enable our subscribers to make and receive calls from telephones outside our networks. Under Korean law, certain service providers, including us, are required to permit other service providers to interconnect to their networks. If a new service provider desires interconnection with the networks of an existing service provider but the parties are unable to reach an agreement within 90 days, the new service provider can appeal to the KCC.
Domestic Calls
Guidelines issued by the MSIT require that all interconnection charges levied by a regulated carrier take into account (i) the actual costs to that carrier of carrying a call or (ii) imputed costs. The MSIT determines
Wireless-to-Fixed-line.
Fixed-line-to-Wireless.
Wireless-to-Wireless.
Our revenues from the
International Calls and International Roaming Arrangements
With respect to international calls, if a call is initiated by our wireless subscribers, we bill the wireless subscriber for the international charges of KT, LG U+ or SK Broadband, and we receive interconnection charges from such operators. If an international call is received by our subscriber, KT, LG U+ or SK Broadband pays interconnection charges to us based on our imputed costs.
To complement the services we provide to our subscribers in Korea, we offer international voice and data roaming services. We charge our subscribers usage fees for global roaming service and, in turn, pay foreign wireless network operators fees for the corresponding usage of their network. For a more detailed discussion of our global roaming services, see “— Wireless Services” above.
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Competition
We operate in highly saturated and competitive markets, and we believe that our subscriber growth is affected by many factors, including the expansion and technical enhancement of our networks, the development and deployment of new technologies, the effectiveness of our marketing and distribution strategy, the quality of our customer service, the introduction of new products and services, competitive pricing of our rate plans, new market entrants and regulatory changes.
Historically, there has been considerable consolidation in the telecommunications industry, resulting in the current competitive landscape comprising three mobile and fixed network operators in the Korean market, KT, LG U+ and us. Each of our competitors has substantial financial, technical, marketing and other resources to respond to our business offerings.
The following table shows the market share information, based on number of subscribers, as of December 31, 2021,2022, for the following markets.
Market Share (%) | ||||||||||||||||
SK Telecom | KT | LG U+ | Others | |||||||||||||
Wireless Service (1) | 44.3 | % | 31.0 | % | 24.7 | % | — | % | ||||||||
LTE Service (1) | 42.1 | 30.4 | 27.6 | — | ||||||||||||
5G Service (1) | 50.7 | 25.6 | 23.7 | — | ||||||||||||
Fixed-Line Telephone (including VoIP) | 15.7 | 56.3 | 19.0 | 9.1 | ||||||||||||
Broadband Internet | 28.7 | 41.2 | 20.7 | 9.4 | ||||||||||||
Pay TV (2) | 25.0 | (3) | 36.2 | (4) | 25.3 | (5) | 13.4 |
Market Share (%) | ||||||||||||||||
SK Telecom | KT | LG U+ | Others | |||||||||||||
Wireless Service(1) | 43.2 | % | 30.9 | % | 25.9 | % | — | % | ||||||||
Fixed-Line Telephone (including VoIP) | 15.6 | 55.0 | 18.7 | 10.7 | ||||||||||||
Broadband Internet | 28.5 | 41.3 | 21.0 | 9.2 | ||||||||||||
Pay TV(2) | 25.6 | (3) | 36.6 | (4) | 24.8 | (5) | 13.1 |
(1) | Includes MVNO subscribers that lease the wireless networks of the respective mobile network operator. |
(2) | Includes video-on-demand |
(3) | Consists of |
(4) | Consists of |
(5) | Consists of |
Cellular Services
As of December 31, 2021,2022, we had 31.932.8 million subscribers, representing a market share of approximately 44.3%43.2%, including MVNO subscribers leasing our networks. As of December 31, 2021,2022, KT and LG U+ had 22.323.5 million and 17.719.6 million subscribers, respectively, representing approximately 31.0%30.9% and 24.7%25.9%, respectively, of the total number of wireless subscribers in Korea on such date, each including MVNO subscribers leasing its networks. As of December 31, 2021,
In 2022, we had 9.9 million 5G subscribers and KT and LG U+ had 5.0 million and 4.6 million 5G subscribers, respectively, each including MVNO subscribers leasing its networks. As of December 31, 2021, we had 20.2 million LTE subscribers and KT and LG U+ had 14.7 million and 13.3 million LTE subscribers, respectively, each including MVNO subscribers leasing its networks.
Our competitors for subscriber activations include MVNOs, including MVNOs that lease our networks. MVNOs generally provide rate plans that are relatively cheaper than similar rate plans of the wireless network providers from which they lease their networks, including us. Currently, 1314 MVNOs provide wireless telecommunications services using the networks leased from us. As of December 31, 2021,2022, MVNOs had a combined market share of 14.4%16.9%, of which MVNOs leasing our networks represented 3.0%3.1%, MVNOs leasing KT’s networks represented 7.4%8.6% and MVNOs leasing LG U+’s networks represented 3.9%5.1%.
In recent years, a number of new entrants have entered the MVNO business, including affiliates of leading financial institutions in Korea. Some of these new entrants have engaged in aggressive marketing campaigns and promotional discounts while leveraging the brand power of their affiliates as part of their efforts to gain subscribers.
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In addition, other companies may enter the wireless network services market.market, including in connection with the potential allocation of 800 MHz of bandwidth in the 28 GHz spectrum to a new mobile network operator, as announced by the MSIT in January 2023. See “— Law and Regulation — Frequency Allocation” and “Item 3.D. Risk Factors — Risks Relating to Our Business — Our businesses are subject to various types of Government regulation, and any change in Government policy relating to the telecommunications industry could have an adverse effect on our business, financial condition and results of operations.” New entries in such market have historically required obtaining requisite licenses from the MSIT. However, pursuant to an amendment to the Telecommunications Business Act that went into effect in June 2019, companies meeting certain regulatory criteria may become a network service provider by registering with the MSIT without a separate license requirement, which may have the effect of encouraging new entries into the Korean wireless network services market in the future. For a description of the risks associated with the competitive environment in which we operate, see “Item 3.D. Risk Factors — Risks Relating to Our Business — Competition may reduce our market share and harm our business, financial condition and results of operations.”
Historically, competition in the wireless telecommunications business had caused us to significantly increase our marketing and advertising expenses from time to time depending on the prevailing competitive landscape, with
We face competition from KT and LG U+ as well as other platform service providers in our other cellular service businesses. For example, our Smart Home service competes with KT’s Giga IoT Home service and LG U+’s IoT@Home service.
Fixed-Line Telecommunications Services
Our fixed-line telephone service competes with KT and LG U+ as well as providers of other VoIP services. As of December 31, 2021,2022, our market share of the fixed-line telephone and VoIP service market was 15.7%15.6% (including the services provided by SK Broadband) in terms of number of subscribers compared to KT with 56.3%55.0% and LG U+ with 19.0%18.7%.
We are the second largest provider of broadband Internet access services in Korea in terms of both revenue and subscribers, and our network covered more than 86%87% of households in Korea as of December 31, 2020.2022. As of December 31, 2021,2022, our market share of the broadband Internet market was 28.7%28.5% in terms of number of subscribers compared to KT with 41.2%41.3% and LG U+ with 20.7%21.0%.
Our IPTV and cable TV services compete with other providers of pay TV services, including KT, LG U+ and cable companies. As of December 31, 2021,2022, our market share of the pay TV market (which includes IPTV, cable TV and satellite TV) in terms of number of subscribers was 25.0%25.6% compared to KT with 36.2%36.6% (including its IPTV, cable TV and satellite TV services) and LG U+ with 25.3%24.8% (including its IPTV and cable TV services), and the collective market share of other pay TV providers was 13.4%13.1%. Furthermore, our IPTV and cable TV services are facing an increasing level of competition from global operators of online video streaming platforms, such as YouTube, Netflix, Disney Plus and Amazon Video,Apple TV, leading domestic video streaming platforms such as TVING, WatchaaWavve, Coupang Play and Wavve,Watchaa, and the video services offered by leading domestic online and mobile search and communications platforms including NAVER and Kakao, as such services continue to become increasingly popular to serve as a substitute to traditional television programming.
Recently, the Korean fixed-line telecommunications industry has been going through significant consolidation involving major pay television service providers. We completed the Tbroad Merger in April 2020, partly as a result of which we have become the third-largest pay TV provider in Korea in terms of number of subscribers as of December 31, 2020. In December 2019, LG U+ acquired a majority equity stake in LG HelloVision to become the second-largest pay TV provider in Korea in terms of number of subscribers as of December 31, 2021. 2022. In December 2019, LG U+ acquired a majority equity stake in LG HelloVision.In August 2021, KT acquired HCN, a major Korean cable TV service provider, through its subsidiary KT Skylife. Such transactions, as well as further consolidation in the fixed-line telecommunications industry, may result in increased
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competition, as the entities emerging from such consolidation and other remaining players in the industry may actively pursue expanding or protecting their respective market shares.
Furthermore, the Government has historically enforced regulations on cable TV and IPTV service providers that prohibited them from having a market share of more than
Other Investments and Relationships
We have investments in several other businesses and companies and have entered into various business arrangements with other companies. We formed a strategic alliance in October 2019 with Kakao, a Korean Internet company and the operator of Korea’s most popular mobile messaging application, to collaborate in the ICT sector through the sale of 1,266,620 of our treasury shares to Kakao, representing a 1.6% interest, for Won 300.0 billion and a concurrent issuance by Kakao of 2,177,401 of its shares, representing a 2.5% interest, to us for Won 302.3 billion.In addition, in July 2022, we entered into a strategic alliance with Hana Financial Group, a leading financial holding company in Korea with subsidiaries having significant presences in commercial banking, credit card business, securities brokerage and insurance, among others, to seek synergies through convergence between finance and ICT technology. As part of December 31, 2021, our principal investments includedsuch strategic alliance, we transferred the entirety of our 15.0% equity interest in KEB HanaCard Co., Ltd. (“KEB HanaCard”),for Won 330.0 billion in July 2022 and acquired 8,630,949 shares of Hana Financial Group (representing a leading credit card company in Korea. KEB2.9% interest) for Won 330.0 billion between July and November 2022, and HanaCard offers certain credit card products that provideacquired 1,307,471 common shares of us (representing a 0.6% interest) for discounts on some of our wireless network servicesWon 68.4 billion between July and integrate T Membership benefits, among other features.
Law and Regulation
Overview
Korea’s telecommunications industry is subject to comprehensive regulation by the MSIT, which is responsible for information and telecommunications policies. The MSIT regulates and supervises a broad range of communications issues, including:
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;
interconnection and revenue-sharing between telecommunications service providers;
research and development of policy formulation for information and telecommunications; and
competition among telecommunications service providers.
The MSIT is charged with regulating information and telecommunications and the KCC is charged with regulating the public interest aspects of and fairness in broadcasting.
Telecommunications service providers are currently classified into two categories: network service providers and value-added service providers. We are classified as a network service provider because we provide telecommunications services with our own telecommunications networks and related facilities. As a network service provider, we were previously required to obtain a license from the MSIT for the services we provide. However, an amendment to the Telecommunications Business Act, pursuant to which companies meeting certain regulatory criteria may become a network service provider without a separate license requirement, went into effect in June 2019. Our licenses permit us to provide cellular services, third generation wireless telecommunications services using WCDMA and WiBro technologies, fourth generation wireless telecommunications services using LTE technology and fifth generation wireless telecommunications services using 5G technology.
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The MSIT may revoke our licenses or suspend any of our businesses if we fail to comply with its rules, regulations and corrective orders, including the rules restricting beneficial ownership and control and corrective orders issued in connection with any violation of rules restricting beneficial ownership and control or any violation of the conditions of our licenses. Alternatively, in lieu of suspension of our business, the MSIT or, depending on the subject matter of the violation, the KCC may levy a monetary penalty of up to 3.0% of the average of our annual revenue for the preceding three fiscal years. A network service provider that wants to cease its business or dissolve must notify its users 60 days prior to the scheduled date of cessation or dissolution and obtain MSIT approval.
In the past, the Government has stated that its policy was to promote competition in the Korean telecommunications market through measures designed to prevent the dominant service provider in any such market from exercising its market power in such a way as to prevent the emergence and development of viable competitors. While all network service providers are subject to MSIT regulation, we are subject to increased regulation because of our position as the dominant wireless telecommunications services provider in Korea.
Competition Regulation
The KCC is charged with ensuring that network service providers engage in fair competition and has broad powers to carry out this goal. If a network service provider is found to be in violation of the fair competition requirement, the KCC may take corrective measures it deems necessary, including, but not limited to, prohibiting further violations, requiring amendments to the articles of incorporation or to service contracts with customers, requiring the execution or performance of, or amendments to, interconnection agreements with other network service providers and prohibiting advertisements to solicit new subscribers. The KCC is required to notify the Minister of the MSIT upon ordering certain corrective measures.
In addition, we qualify as a “market-dominating business entity” under the Fair Trade Act. Accordingly, we are prohibited from engaging in any act of abusing our position as a market-dominating entity, such as unreasonably determining, maintaining or altering service rates, unreasonably controlling the rendering of services, unreasonably interfering with business activities of other business entities, hindering unfairly the entry of newcomers or substantially restricting competition to the detriment of the interests of consumers.
Because we are a member company of the SK Group, which is a large business group as designated by the FTC,Korea Fair Trade Commission (the “KFTC”), we are subject to the following restrictions under the Fair Trade Act:
• | 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. |
• | Restrictions on circular investments. A member company of the SK Group may not acquire or hold shares which would constitute “circular investments” in an affiliate company which also forms part of the SK Group where “circular investments” refer to a cross-affiliate shareholding relationship under which three or more affiliate companies become connected through cross affiliate shareholdings by owning shares in other affiliates or by becoming an entity whose shares are owned by other affiliates. |
• | Public notice of board resolution on large-scale transactions with specially related persons. If a member company of the SK Group engages in a transaction with a specially related person in the amount of 5.0% or more of the member company’s capital or paid-in capital or for Won 5.0 billion or more, the transaction must be approved by a resolution of the member company’s board of directors and the member company must publicly disclose the transaction. |
• | Restrictions on investments by subsidiaries and sub-subsidiaries of holding companies. The Fair Trade Act prohibits subsidiaries of holding companies from investing in, or holding shares of common stock of, domestic affiliates that belong to the same large business group, unless such domestic affiliates are their own subsidiaries. Furthermore, any subsidiaries of a holding company’s subsidiaries (“sub-subsidiaries”) are |
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prohibited from investing in, or holding shares of common stock of, domestic affiliates that belong to the same large business group, unless all shares issued by the affiliates are held by the sub-subsidiary. Therefore, we and other subsidiaries of SK Inc. may not invest in any domestic affiliate that is also a member company of the SK Group, except in the case where we invest in our own subsidiary or where another subsidiary of SK Inc. invests in its own subsidiary. |
• | Public notice of the current status of a business group. Under the Fair Trade Act and the Enforcement Decree thereof, 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 of the SK Group, information on transactions with certain related persons and, if a member company engages in a transaction with an affiliated company in the amount of 5.0% or more of the member company’s quarterly sales or Won 5.0 billion or more, information on transactions with such affiliated company on a quarterly basis. |
Rate Regulation
Network service providers whose sales proceeds exceed the amount prescribed by law must report to the MSIT the rates and contractual terms for each type of service they provide. Prior to December 2020, as the dominant network service provider for specific services (based on having the largest market share in terms of number of subscribers and meeting certain revenue thresholds), we had to obtain prior approval of the MSIT on our rates and terms of service; provided, however, that such
Furthermore, in 2007, the Government announced a “road map” highlighting revisions in regulations to promote deregulation of the telecommunications industry. In accordance with the road map and pursuant to the Combined Sales Regulation, promulgated in May 2007, telecommunications service providers are now permitted to bundle their services, such as wireless data transmission service, wireless voice transmission service, broadband Internet access service, fixed-line telephone service and IPTV service, at a discounted rate; provided, however, that we and KT, as market-dominating business entities under the Telecommunications Business Act, allow other competitors to employ the services provided by us and KT, respectively, so that such competitors can provide similar discounted package services. In September 2007, the regulations and provisions under the Telecommunications Business Act were amended to permit licensed transmission service providers to offer local, domestic long-distance and international telephone services, as well as broadband Internet access and Internet phone services, without additional business licenses.
Moreover, an MVNO system under which the MSIT may designate and obligate certain wireless telecommunications services providers to allow an MVNO, at such MVNO’s request, to use their telecommunications network facilities at a rate mutually agreed upon that complies with the standards set by the MSIT became effective on March 14, 2017 under the amended Telecommunications Business Act. We were designated as the only wireless telecommunications services provider obligated to allow the other wireless telecommunications services provider to use our telecommunications network facilities. The expiration of such system has beenwas extended to September 22, 2022 pursuant to an amendment to the Telecommunications Business Act. While such regulatory requirement has expired, we have continued to comply with such requirement pending future regulatory development, which may either extend or eliminate such requirement. Currently, 1314 MVNOs provide wireless telecommunications services using the networks leased from us.
On October 1, 2014, the MDDIA, enacted for the purpose of establishing a transparent and fair mobile distribution practice, became effective. The MDDIA limits the amount of subsidies a wireless telecommunications service provider can provide to subscribers in order to prevent excessive competition among wireless telecommunications service providers. Pursuant to the MDDIA, wireless telecommunications service providers are prohibited from (i) unfairly providing discriminatory subsidies based on criteria such as type of subscription, subscription plan and characteristics of the subscriber and (ii) entering into a separate agreement with subscribers imposing obligations to use a specific subscription plan as a condition for providing subsidies. See “Item 5.A. Operating Results — Overview — Rate Regulations.”
In addition, under the MDDIA, wireless telecommunications service providers are obliged to provide certain benefits, such as discounted rates, to subscribers who subscribe to their service without receiving subsidies. In June
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2017, the State Affairs Planning Advisory Committee of Korea announced that it would encourage wireless telecommunications service providers, including us, to increase the applicable discount rate offered to subscribers from 20% to 25%, which we adopted in September 2017, and to offer additional discounts to low income customers, including those on government welfare programs and senior citizen recipients of the basic pension, which we implemented in December 2017 and July 2018, respectively. We cannot provide assurance that we will not provide other rate discounts or lower-priced subscription plans in the future to comply with the Government’s public policy guidelines or suggestions.
Interconnection
Dominant network service providers such as ourselves that own essential infrastructure facilities or possess a certain market share are required to provide interconnection of their telecommunications network facilities to other service providers upon request. The MSIT sets and announces the standards for determining the scope, procedures, compensation and other terms and conditions of such provision, interconnection or
Frequency Allocation
The MSIT has the discretion to allocate and adjust the frequency bandwidths for each type of service and may auction off the rights to certain frequency bandwidths. Upon allocation of new frequency bandwidths or adjustment of frequency bandwidths, the MSIT is required to give a public notice. The MSIT also regulates the frequency to be used by each radio station, including the transmission frequency used by equipment in our base stations. All of our frequency allocations are for a definite term. We pay fees to the MSIT for our frequency usage that are determined based upon our number of subscribers, frequency usage by our networks and other factors. For 2022, 2021 2020 and 2019,2020, the fee amounted to Won 103.9 billion, Won 120.8 billion and Won 136.6 billion, and Won 133.1 billion, respectively.
We currently use 10 MHz of bandwidth in the 2.1 GHz spectrum for our WCDMA services, 30 MHz of bandwidth in the 2.1 GHz spectrum, 20 MHz of bandwidth in the 800 MHz spectrum, 35 MHz of bandwidth in the 1.8 GHz spectrum and 60 MHz of bandwidth in the 2.6 GHz spectrum for our LTE services, as well as 100 MHz of bandwidth in the 3.5 GHz spectrum and 800 MHz of bandwidth in the 28 GHz spectrum for our 5G services. In 2020, we recognized an impairment loss of Won 186.0 billion in connection with the frequency usage rights for the 800 MHz of bandwidth in the 28 GHz spectrum as the carrying amount exceeded the recoverable amount. In December 2022, citing the lack of progress made to date with respect to the implementation of 5G infrastructure for our use of the 28 GHz spectrum (800 MHz of bandwidth which was allocated to us in December 2018 for a period of five years until November 2023), the MSIT reduced the duration of our license for the use of such bandwidth by six months and asked us to install 15,000 base stations that use the 28 GHz spectrum by the end of May 2023. Furthermore, in December 2022, the Government cancelled the allocations of bandwidth in the 28 GHz spectrum that had been provided to KT and LG U+, also citing the lack of progress made by these companies, and, in January 2023, announced that it plans to seek re-allocation of one of these cancelled allocations to a potential new wireless telecommunications service provider. Although no official notice of such process has yet been issued, the Government has also indicated that the terms of such re-allocation will include additional policy benefits and concessions in order to encourage participation by potential new wireless telecommunications service providers. For more information regarding the license fees for the various bandwidths that we use, see “Item 5.B. Liquidity and Capital Resources — Capital Requirements — Capital Expenditures” and note 17 of the notes to our consolidated financial statements.
In November 2020,2021, the MSIT announced plans to reallocatereallocated a total of 310 MHz of frequency bandwidths whose usage terms were due to expire in 2021 to KT, LG U+ and us, 95 MHz (in the 800 MHz, 2.1 GHz and 2.6 GHz spectrums) of which was allocated to us in 2021. us.See “Item 5.B. Liquidity and Capital Resources — Capital Requirements.”
For risks relating to the maintenance of adequate bandwidth capacity, see “Item 3.D. Risk Factors — Risks Relating to Our Business — Our business, financial condition and results of operations may be adversely affected if we fail to acquire adequate additional frequency usage rights or use our bandwidth efficiently to accommodate subscriber growth and subscriber usage.”
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Mandatory Contributions and Obligations
All telecommunications service providers other than (i) value-added service providers and regional paging service providers or (ii) any telecommunications service providers whose net annual revenue is less than an amount determined by the MSIT (currently set at Won 30.0 billion) are required to provide “universal” telecommunications services including local telephone services, local public telephone services, telecommunications services for remote islands and wireless communication services for ships and telephone services for handicapped and
In addition to such universal services for handicapped and
Foreign Ownership and Investment Restrictions and Requirements
Because we are a network service provider, and the exception for the foreign shareholding limit under the amended Telecommunications Business Act, which became effective on August 13, 2013, does not apply to us, foreign governments, individuals, and entities (including Korean entities that are deemed foreigners, as discussed below) are prohibited from owning more than 49.0% of our voting stock. Korean entities whose largest shareholder is a foreign government or a foreigner (together with any of its related parties) that owns 15.0% or more of the outstanding voting stock of such Korean entities are also deemed foreigners. If this 49.0% ownership limitation is violated, certain of our foreign shareholders will not be permitted to exercise voting rights in excess of the limitation, and the MSIT may require other corrective action.
Notwithstanding the above, pursuant to a recentan amendment to the Telecommunications Business Act which became effective onin April 20, 2022, a Korean entity, so long as (i) such entity’s largest shareholder (determined by aggregating the shareholdings of such shareholder and its related parties) is a foreign entity specifically designated by the MSIT incorporated in a country that has entered into a bilateral or multilateral free trade agreement with Korea, and (ii) such shareholder (together with the shareholdings of its related parties) owns 15.0% or more of the issued voting stock of such entity, may own more than 49.0% of our issued shares but may not exercise its voting rights with respect to the shares held in excess of the 49.0% ceiling until the end of the MSIT’s Public Interest Review.
As of December 31, 2021,2022, SK Inc. owned 65,668,397shares of our common stock, or 30.0%, of our issued shares. As of December 31, 2021,2022, the two largest foreign shareholders of SK Inc. each held a 3.3% stake therein. If such foreign shareholders increase their shareholdings in SK Inc. to 15% or more and any such foreign shareholder constitutes the largest shareholder of SK Inc., SK Inc. will be considered a foreign shareholder, and its shareholding in us would be included in the calculation of our aggregate foreign shareholding. If SK Inc.’s shareholding in us is included in the calculation of our aggregate foreign shareholding, then our aggregate foreign shareholding, assuming the foreign ownership level as of December 31, 20212022 (which we believe was 43.6%45.6%), would reach 73.6%75.6%, exceeding the 49.0% ceiling on foreign shareholding.
If our aggregate foreign shareholding limit is exceeded, the MSIT may issue a corrective order to us, the breaching shareholder (including SK Inc. if the breach is caused by an increase in foreign ownership of SK Inc.) and the foreign shareholder which owns in the aggregate 15.0% or more of SK Inc. Furthermore, SK Inc. will be prohibited from exercising its voting rights with respect to the shares held in excess of the 49.0% ceiling, which may result in a change in control of us. In addition, the MSIT will be prohibited from granting us licenses or permits necessary for entering into new telecommunications businesses until our aggregate foreign shareholding is reduced
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to below 49.0%. If a corrective order is issued to us by the MSIT arising from the violation of the foregoing foreign ownership limit, and we do not comply within the prescribed period under such corrective order, the MSIT may:
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 3.0% of the average of our annual revenue for the preceding three fiscal years. |
Additionally, the Telecommunications Business Act also authorizes the MSIT to assess monetary penalties of up to 0.3% of the purchase price of the shares for each day the corrective order is not complied with, as well as a prison term of up to three years or a penalty of Won 150 million. See “Item 3.D. Risk Factors — Risks Relating to Our Business — If SK Inc. causes us to breach the foreign ownership limitations on our common shares, we may experience a change of control.”
We are required under the Foreign Exchange Transaction Act to file a report with a designated foreign exchange bank or with the MOEF, in connection with any issue of foreign currency denominated securities by us in
The Telecommunications Business Act provides for the creation of a Public Interest Review Committee under the MSIT to review investments in or changes in the control of network service providers. The following events would be subject to review by the Public Interest Review Committee:
the acquisition by an entity (and its related parties) of 15.0% or more of the equity of a network service provider;
a change in the largest shareholder of a network service provider;
agreements by a network service provider or its shareholders with foreign governments or parties regarding important business matters of such network service provider, such as the appointment of officers and directors and transfer of businesses;
a deemed foreigner (as discussed above) from a country whose government has entered into a bilateral or multilateral free trade agreement designated by the MSIT with the Government owning in excess of 49.0% of the outstanding voting stock of a network service provider (which became effective on April 20, 2022); and
a change in the shareholder that actually controls a network service provider.
If the Public Interest Review Committee determines that any of the foregoing transactions or events would be detrimental to the public interest, then the MSIT may issue orders to stop the transaction, amend any agreements, suspend voting rights, or divest the shares of the relevant network service provider. Additionally, if a dominant network service provider (which would currently include us and KT), together with its specially related persons (as defined under the FSCMA), holds more than 5.0% of the equity of another dominant network service provider, the voting rights on the shares held in excess of the 5.0% limit may not be exercised.
Patents and Licensed Technology
Access to the latest relevant technology is critical to our ability to offer the most advanced wireless telecommunications services and to design and manufacture competitive products. In addition to active internal and external research and development efforts as described in “Item 5.C. Research and Development, Patents and Licenses, etc.,” our success depends in part on our ability to obtain patents, licenses and other intellectual property rights covering our products. We own numerous patents and trademarks worldwide, and have applications for patents pending in many countries. Our patents are mainly related to LTE,wireless (LTE, 5G and
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We are not currently involved in any material litigation regarding patent infringement. For a description of the risks associated with our reliance on intellectual property, see “Item 3.D. Risk Factors — Risks Relating to Our Business — Our business relies on technology developed by us, and our business will suffer if we are unable to protect our proprietary rights.”
Seasonality of the Business
Our business is not affected by seasonality.
Item 4.C. | Organizational Structure |
Organizational Structure
We are a member of the SK Group, based on the definition of “group” under the Fair Trade Act. As of December 31, 2021,2022, SK Group members owned in aggregate 30.0% of the shares of our issued common stock.
Significant Subsidiaries
For information regarding our subsidiaries, see note 1(2) of the notes to our consolidated financial statements.
Item 4.D. | Property, Plants and Equipment |
The following table sets forth certain information concerning our principal properties as of December 31, 2021:
Location | Primary Use | Approximate Area in Square Feet | ||||
Seoul Metropolitan Area | Corporate Headquarters | 921,727 | (1) | |||
Regional Headquarters | 608,670 | |||||
Customer Service Centers | 107,277 | |||||
Training Centers | 279,372 | |||||
Central Research and Development Center | 319,789 | |||||
Others | ||||||
Gyeongsang Provinces | Regional Headquarters | 384,399 | ||||
Others | ||||||
Jeolla and Jeju Provinces | Regional Headquarters | 265,614 | ||||
Others | ||||||
Chungcheong Province | Regional Headquarters | 566,386 | ||||
Others |
(1) | Represents our 93.25% ownership of SK T-Tower. |
(2) | Includes base stations. |
Our registered office and corporate headquarters are located at SK
We maintain a range of insurance policies to cover our assets and employees, including our directors and officers. We are insured against business interruption, fire, lightning, flooding, theft, vandalism, public liability and certain other risks that may affect our assets and employees. We believe that the types and amounts of our insurance coverage are in accordance with general business practices in Korea.
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Item 4A. | UNRESOLVED STAFF COMMENTS |
We do not have any unresolved comments from the SEC staff regarding our periodic reports under the Exchange Act.
Item 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
You should read the following discussion together with our consolidated financial statements and the related notes thereto which appear elsewhere in this annual report. We prepare our consolidated financial statements in accordance with IFRS as issued by the IASB. In addition, you should read carefully notes 2(4) and 3 of the notes to our consolidated financial statements which provide summaries of certain critical accounting estimates that require our management to make difficult, complex or subjective judgments relating to matters which are highly uncertain and that may have a material impact on our financial conditions and results of operations.
Item 5.A. | Operating Results |
Unless otherwise indicated, the amounts set forth below in this Item 5.A. exclude the results of operations of our former businesses comprising the
Overview
Our operations are reported in three segments: (1) cellular services, which include wireless voice and data transmission services, sales of wireless devices, IoT solutions and platform services as well as certain other new growth businesses and other miscellaneous cellular services,
In our cellular services segment, we earn revenue principally from our wireless voice and data transmission services through monthly
In our
In our others segment, we principally earn revenue from the
Pursuant to the
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and a substantial majority of the businesses that were formerly part of our others segment for the yearsyear ended December 31, 2019 and 2020, and such businesses have been accounted for as discontinued operations in our consolidated financial statements as of and for the year ended December 31, 2021 included in this annual report. Similarly, our consolidated statements of income for the yearsyear ended December 31, 2019 and 2020 included in this annual report have been restated to present such businesses as discontinued operations. See “Certain Defined Terms and Conventions Used in this Annual Report.” As a result, our former security services segment and commerce services segment were eliminated from our operating segments, and SK Stoa’s
Our cellular service revenue and
Among other factors, management uses operating profit of each reportable segment presented in accordance with
A number of recent developments have had or are expected to have a material impact on our results of operations, financial condition and capital expenditures. These developments include:
Rate Regulations
These Government measures have adversely affected our revenues and results of operations as more subscribers elected to receive the 25% rate discount in recent years. On the other hand, this has also led to a reduction of, or partially offset increases in, our marketing expenses as the number of subscribers who have elected to receive handset subsidies has generally declined in recent years, and has contributed to maintaining a stable churn rate.
Failure to comply with the MDDIA may lead to suspension of our business or imposition of monetary penalties. For more information about the MDDIA and the penalties imposed for violating Government regulations, see “Item 4.B. Business Overview — Law and Regulation — Rate Regulation” and “Item 8.A. Consolidated Statements and Other Financial Information — Legal Proceedings — KCC Proceedings.”
Decrease in Interconnection Fees
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interconnection affect our revenues and operating results. The MSIT determines the basic framework for interconnection arrangements, including policies relating to interconnection rates in Korea. Under our interconnection agreements, we are required to make payments in respect of calls which originate from our networks and terminate in the networks of other Korean telecommunications operators, and the other operators are required to make payments to us in respect of calls which originate in their networks and terminate in our network. The MSIT has continued to gradually decrease the interconnection rates in Korea, which has led to an overall decrease in our interconnection revenue as well as interconnection expenses from 2012 to 20212022 and any further reduction in interconnection rates by the MSIT may continue to impact our results of operations. Beginning in 2017, a single interconnection rate paid by fixed-line network service providers for fixed-line to wireless calls applies to all wireless telecommunications service providers. For more information about our interconnection revenue and expenses, see “Item 4.B. Business Overview — Interconnection.”
Increase in Monthly Revenue per Subscriber
Our ARPU increased by 0.7%0.1% to Won 30,546 in 2022 from Won 30,517 in 2021, which represented an increase of 0.7% from Won 30,314 in 2020, which represented a decrease of 1.0% from Won 30,630 in 2019.2020. Our ARPU including MVNO increased by 2.1%0.3% to Won 28,582 in 2022 from Won 28,485 in 2021, from Won 27,895 in 2020, which represented an increase of 1.8%2.1% from Won 27,41227,895 in 2019. The decrease in ARPU in 2020 was primarily due to an increase in subscriptions for IoT solutions by corporate customers, from which we derive lower revenue per subscriber. Such decreases were offset in part by an increase in subscribers that subscribe to our higher-priced unlimited data usage plans and 5G plans. The increase in ARPU including MVNO in 2020 was primarily attributable to the decrease in the proportion of MVNO subscribers, from whom we derive lower revenue per subscriber.2020. The increases in our ARPU and our ARPU including MVNO in both 2022 and 2021 were primarily due to an increase in the number of subscribers who subscribe to our higher-priced 5G plans.
Effects of
Explanatory Note Regarding Presentation of Certain Financial Information under
In addition to preparing consolidated financial statements in accordance with IFRS as issued by the IASB included in this annual report, we also prepare financial statements in accordance with
50
K-IFRS
For the Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
(In billions of Won) | ||||||||||||
Operating profit pursuant to IFRS as issued by the IASB | ₩ | 1,432.4 | ₩ | 1,035.0 | ₩ | 987.1 | ||||||
Differences: | ||||||||||||
Other income pursuant to IFRS that are classified as other non-operating income pursuant toK-IFRS: | ||||||||||||
Gain on disposal of property and equipment and intangible assets | (39.1 | ) | (34.6 | ) | (7.8 | ) | ||||||
Others | (76.6 | ) | (61.1 | ) | (87.8 | ) | ||||||
(115.8 | ) | (95.8 | ) | (95.6 | ) | |||||||
Other operating expenses pursuant to IFRS that are classified as other non-operating expenses pursuant toK-IFRS: | ||||||||||||
Loss on impairment of property and equipment and intangible assets | 3.1 | 200.7 | 42.8 | |||||||||
Loss on disposal of property and equipment and intangible assets | 28.2 | 25.6 | 23.8 | |||||||||
Donations | 12.8 | 16.1 | 16.8 | |||||||||
Bad debt for accounts receivable ( other | 4.0 | 6.6 | 3.6 | |||||||||
Others | 22.5 | 60.3 | 60.2 | |||||||||
70.6 | 309.3 | 147.2 | ||||||||||
Operating profit pursuant to K-IFRS | ₩ | 1,387.2 | ₩ | 1,248.6 | ₩ | 1,038.7 | ||||||
For the Year Ended December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
(In billions of Won) | ||||||||||||
Operating profit pursuant to IFRS as issued by the IASB | ₩ | 1,594.3 | ₩ | 1,432.4 | ₩ | 1,035.0 | ||||||
Differences: | ||||||||||||
Other income pursuant to IFRS that are classified as other non-operating income pursuant to K-IFRS: | ||||||||||||
Gain on disposal of property and equipment and intangible assets | (16.0 | ) | (39.1 | ) | (34.6 | ) | ||||||
Others | (40.3 | ) | (76.6 | ) | (61.1 | ) | ||||||
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(56.3 | ) | (115.8 | ) | (95.8 | ) | |||||||
Other operating expenses pursuant to IFRS that are classified as other non-operating expenses pursuant to K-IFRS: | ||||||||||||
Impairment loss on property and equipment and intangible assets | 17.0 | 3.1 | 200.7 | |||||||||
Loss on disposal of property and equipment and intangible assets | 20.5 | 28.2 | 25.6 | |||||||||
Donations | 13.1 | 12.8 | 16.1 | |||||||||
Bad debt for accounts receivable — other | 3.0 | 4.0 | 6.6 | |||||||||
Others | 20.4 | 22.5 | 60.3 | |||||||||
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74.0 | 70.6 | 309.3 | ||||||||||
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Operating profit pursuant to K-IFRS | ₩ | 1,612.1 | ₩ | 1,387.2 | ₩ | 1,248.6 | ||||||
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See note 4(2) of the notes to our consolidated financial statements. However, there is no impact on profit for the year or earnings per share for each of the three years ended December 31, 2022, 2021 2020 and 2019.
Operating Results
The following table sets forth summary consolidated income statement information, including that expressed as a percentage of operating revenue and other income, for the periods indicated:
For the year ended December 31, | ||||||||||||||||||||||||
2021 (1) | 2020 (1) | 2019 (1) | ||||||||||||||||||||||
(In billions of Won, except percentages) | ||||||||||||||||||||||||
From continuing operations: | ||||||||||||||||||||||||
Operating revenue and other income | ₩ | 16,864.3 | 100.0 | % | ₩ | 16,183.5 | 100.0 | % | ₩ | 15,512.0 | 100.0 | % | ||||||||||||
Revenue | 16,748.6 | 99.3 | 16,087.7 | 99.4 | 15,416.4 | 99.4 | ||||||||||||||||||
Other income | 115.8 | 0.7 | 95.8 | 0.6 | 95.6 | 0.6 | ||||||||||||||||||
Operating expenses | 15,432.0 | 91.5 | 15,148.5 | 93.6 | 14,525.0 | 93.6 | ||||||||||||||||||
Operating profit | 1,432.4 | 8.5 | 1,035.0 | 6.4 | 987.1 | 6.4 | ||||||||||||||||||
Profit before income tax | 1,718.2 | 10.2 | 905.2 | 5.6 | 807.0 | 5.2 | ||||||||||||||||||
Income tax expense | 446.8 | 2.6 | 221.3 | 1.4 | 262.9 | 1.7 | ||||||||||||||||||
Profit from continuing operations | 1,271.4 | 7.5 | 684.0 | 4.2 | 544.1 | 3.5 | ||||||||||||||||||
Profit from discontinued operations | 1,147.6 | 6.8 | 816.6 | 5.0 | 316.6 | 2.0 | ||||||||||||||||||
Profit for the year | 2,419.0 | 14.3 | 1,500.5 | 9.3 | 860.7 | 5.5 | ||||||||||||||||||
Attributable to: | ||||||||||||||||||||||||
Owners of the Parent Company | 2,407.5 | 14.3 | 1,504.4 | 9.3 | 888.7 | 5.7 | ||||||||||||||||||
Non-controlling interests | 11.5 | 0.1 | (3.8 | ) | (0.0 | ) | (28.0 | ) | (0.2 | ) |
For the year ended December 31, | ||||||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||||||
(In billions of Won, except percentages) | ||||||||||||||||||||||||
From continuing operations: | ||||||||||||||||||||||||
Operating revenue and other income | ₩ | 17,361.2 | 100.0 | % | ₩ | 16,864.3 | 100.0 | % | ₩ | 16,183.5 | 100.0 | % | ||||||||||||
Revenue | 17,305.0 | 99.7 | 16,748.6 | 99.3 | 16,087.7 | 99.4 | ||||||||||||||||||
Other income | 56.3 | 0.3 | 115.8 | 0.7 | 95.8 | 0.6 | ||||||||||||||||||
Operating expenses | 15,766.9 | 90.8 | 15,432.0 | 91.5 | 15,148.5 | 93.6 | ||||||||||||||||||
Operating profit | 1,594.3 | 9.2 | 1,432.4 | 8.5 | 1,035.0 | 6.4 | ||||||||||||||||||
Profit before income tax | 1,236.2 | 7.1 | 1,718.2 | 10.2 | 905.2 | 5.6 | ||||||||||||||||||
Income tax expense | 288.3 | 1.7 | 446.8 | 2.6 | 221.3 | 1.4 | ||||||||||||||||||
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Profit from continuing operations | 947.8 | 5.5 | 1,271.4 | 7.5 | 684.0 | 4.2 | ||||||||||||||||||
Profit from discontinued operations(1) | — | — | 1,147.6 | 6.8 | 816.6 | 5.0 | ||||||||||||||||||
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Profit for the year | 947.8 | 5.5 | 2,419.0 | 14.3 | 1,500.5 | 9.3 | ||||||||||||||||||
Attributable to: | ||||||||||||||||||||||||
Owners of the Parent Company | 912.4 | 5.3 | 2,407.5 | 14.3 | 1,504.4 | 9.3 | ||||||||||||||||||
Non-controlling interests | 35.4 | 0.2 | 11.5 | 0.1 | (3.8 | ) | (0.0 | ) |
(1) | Pursuant to the Spin-off, the Spin-off Businesses were transferred to SK Square, and such businesses have been accounted for as discontinued operations in our consolidated statement of income for the |
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The following table sets forth additional information about our operations with respect to our reportable segments during the periods indicated:
For the year ended December 31, | ||||||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||||||
Amount | Percentage of Total Revenue | Amount | Percentage of Total Revenue | Amount | Percentage of Total Revenue | |||||||||||||||||||
(In billions of Won, except percentages) | ||||||||||||||||||||||||
Cellular Services Revenue | ||||||||||||||||||||||||
Wireless Service(1) | ₩ | 10,253.2 | 59.2 | % | ₩ | 10,100.4 | 60.3 | % | ₩ | 9,806.7 | 61.0 | % | ||||||||||||
Cellular Interconnection | 471.2 | 2.7 | 493.8 | 2.9 | 472.2 | 2.9 | ||||||||||||||||||
Wireless Device Sales | 969.0 | 5.6 | 959.9 | 5.7 | 983.4 | 6.1 | ||||||||||||||||||
Miscellaneous(2) | 1,248.9 | 7.2 | 1,164.4 | 7.0 | 1,085.7 | 6.7 | ||||||||||||||||||
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Total Cellular Services Revenue | 12,942.3 | 74.8 | 12,718.5 | 75.9 | 12,348.0 | 76.8 | ||||||||||||||||||
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Fixed-line Telecommunication Services Revenue | ||||||||||||||||||||||||
Fixed-line Telephone Service | 156.7 | 0.9 | 217.0 | 1.3 | 230.4 | 1.4 | ||||||||||||||||||
Fixed-line Interconnection | 21.2 | 0.1 | 69.8 | 0.4 | 83.8 | 0.5 | ||||||||||||||||||
Broadband Internet Service and Advanced Media Platform Service(3) | 2,452.5 | 14.2 | 2,443.9 | 14.6 | 2,210.7 | 13.7 | ||||||||||||||||||
International Calling Service | 180.7 | 1.0 | 162.4 | 1.0 | 160.3 | 1.0 | ||||||||||||||||||
Miscellaneous(4) | 1,001.9 | 5.8 | 784.6 | 4.7 | 747.0 | 4.6 | ||||||||||||||||||
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Total Fixed-line Telecommunication Services Revenue | 3,813.0 | 22.0 | 3,677.7 | 22.0 | 3,432.2 | 21.3 | ||||||||||||||||||
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Others Revenue | ||||||||||||||||||||||||
T-commerce(5) | 329.2 | 1.9 | 316.2 | 1.9 | 268.5 | 1.7 | ||||||||||||||||||
Portal Service(6) | 24.7 | 0.1 | 27.0 | 0.2 | 30.7 | 0.2 | ||||||||||||||||||
Miscellaneous(7) | 195.7 | 1.1 | 9.2 | 0.1 | 8.3 | 0.1 | ||||||||||||||||||
Total Other Revenue | 549.7 | 3.2 | 352.4 | 2.1 | 307.6 | 1.9 | ||||||||||||||||||
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Total Revenue | 17,305.0 | 100.0 | 16,748.6 | 100.0 | 16,087.7 | 100.0 | ||||||||||||||||||
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Segment Operating Expenses(8) | ||||||||||||||||||||||||
Cellular Services | 11,646.2 | 67.3 | 11,643.4 | 69.5 | 11,341.2 | 70.5 | ||||||||||||||||||
Fixed-line Telecommunication Services | 3,494.2 | 20.2 | 3,380.2 | 20.2 | 3,189.3 | 19.8 | ||||||||||||||||||
Others | 552.5 | 3.2 | 337.8 | 2.0 | 308.6 | 1.9 | ||||||||||||||||||
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Total Segment Operating Expenses | 15,692.9 | 90.7 | 15,361.4 | 91.7 | 14,839.1 | 92.2 | ||||||||||||||||||
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Segment Operating Profit (Loss)(9) | ||||||||||||||||||||||||
Cellular Services | 1,296.1 | 7.5 | 1,075.1 | 6.4 | 1,006.8 | 6.3 | ||||||||||||||||||
Fixed-line Telecommunication Services | 318.8 | 1.8 | 297.5 | 1.8 | 242.9 | 1.5 | ||||||||||||||||||
Others | (2.8 | ) | (0.0 | ) | 14.6 | 0.1 | (1.1 | ) | (0.0 | ) | ||||||||||||||
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Total Segment Operating Profit | ₩ | 1,612.1 | 9.3 | % | ₩ | 1,387.2 | 8.3 | % | ₩ | 1,248.6 | 7.8 | % | ||||||||||||
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For the year ended December 31, | ||||||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||||||
Amount | Percentage of Total Revenue | Amount | Percentage of Total Revenue | Amount | Percentage of Total Revenue | |||||||||||||||||||
(In billions of Won, except percentages) | ||||||||||||||||||||||||
Cellular Services Revenue | ||||||||||||||||||||||||
Wireless Service (1) | ₩ | 10,100.4 | 60.3 | % | ₩ | 9,806.7 | 61.0 | % | ₩ | 9,538.2 | 61.9 | % | ||||||||||||
Cellular Interconnection | 493.8 | 2.9 | 472.2 | 2.9 | 494.3 | 3.2 | ||||||||||||||||||
Wireless Device Sales | 959.9 | 5.7 | 983.4 | 6.1 | 1,151.2 | 7.5 | ||||||||||||||||||
Miscellaneous (2) | 1,164.4 | 7.0 | 1,085.7 | 6.7 | 1,040.1 | 6.7 | ||||||||||||||||||
Total Cellular Services Revenue | 12,718.5 | 75.9 | 12,348.0 | 76.8 | 12,223.8 | 79.3 | ||||||||||||||||||
Fixed-line Telecommunication Services Revenue | ||||||||||||||||||||||||
Fixed-line Telephone Service | 217.0 | 1.3 | 230.4 | 1.4 | 225.6 | 1.5 | ||||||||||||||||||
Fixed-line Interconnection | 69.8 | 0.4 | 83.8 | 0.5 | 92.4 | 0.6 | ||||||||||||||||||
Broadband Internet Service and Advanced Media Platform Service (3) | 2,443.9 | 14.6 | 2,210.7 | 13.7 | 1,822.4 | 11.8 | ||||||||||||||||||
International Calling Service | 162.4 | 1.0 | 160.3 | 1.0 | 137.9 | 0.9 | ||||||||||||||||||
Miscellaneous (4) | 784.6 | 4.7 | 747.0 | 4.6 | 681.0 | 4.4 | ||||||||||||||||||
Total Fixed-line Telecommunication Services Revenue | 3,677.7 | 22.0 | 3,432.2 | 21.3 | 2,959.3 | 19.2 | ||||||||||||||||||
Others Revenue | ||||||||||||||||||||||||
T-commerce (5) | 316.2 | 1.9 | 268.5 | 1.7 | 191.5 | 1.2 | ||||||||||||||||||
Portal Service (6) | 27.0 | 0.2 | 30.7 | 0.2 | 36.1 | 0.2 | ||||||||||||||||||
Miscellaneous | 9.2 | 0.1 | 8.3 | 0.1 | 5.7 | 0.0 | ||||||||||||||||||
Total Other Revenue | 352.4 | 2.1 | 307.6 | 1.9 | 233.3 | 1.5 | ||||||||||||||||||
Total Revenue | 16,748.6 | 100.0 | 16,087.7 | 100.0 | 15,416.4 | 100.0 | ||||||||||||||||||
Segment Operating Expenses (7) | ||||||||||||||||||||||||
Cellular Services | 11,643.4 | 69.5 | 11,341.2 | 70.5 | 11,327.7 | 73.5 | ||||||||||||||||||
Fixed-line Telecommunication Services | 3,380.2 | 20.2 | 3,189.3 | 19.8 | 2,802.0 | 18.2 | ||||||||||||||||||
Others | 337.8 | 2.0 | 308.6 | 1.9 | 248.0 | 1.6 | ||||||||||||||||||
Total Segment Operating Expenses | 15,361.4 | 91.7 | 14,839.1 | 92.2 | 14,377.7 | 93.3 | ||||||||||||||||||
Segment Operating Profit (Loss) (8) | ||||||||||||||||||||||||
Cellular Services | 1,075.1 | 6.4 | 1,006.8 | 6.3 | 896.1 | 5.8 | ||||||||||||||||||
Fixed-line Telecommunication Services | 297.5 | 1.8 | 242.9 | 1.5 | 157.3 | 1.0 | ||||||||||||||||||
Others | 14.6 | 0.1 | (1.1 | ) | (0.0 | ) | (14.7 | ) | (0.1 | ) | ||||||||||||||
Total Segment Operating Profit | ₩ | 1,387.2 | 8.3 | % | ₩ | 1,248.6 | 7.8 | % | ₩ | 1,038.7 | 6.7 | % | ||||||||||||
(1) | Wireless service revenue includes revenue from wireless voice and data transmission services principally derived through monthly plan-based fees, usage charges for outgoing voice calls, usage charges for wireless data services andvalue-added service fees such as fees for our cloud services and T Universe subscription program paid by wireless subscribers. |
(2) | Miscellaneous cellular services revenue includes revenue from our IoT and other solutions as well as other miscellaneous cellular services. |
(3) | Broadband internet service and advanced media platform service revenue includes revenues from our broadband Internet services as well as IPTV and cable TV services. |
(4) | Miscellaneous fixed-line telecommunication services revenue includes revenues from business communications services (other thanfixed-line telephone service) provided by SK Broadband. |
(5) | T-commerce |
(6) | Portal service revenue includes revenues from Nate, our online portal service operated by SK Communications. |
(7) | Miscellaneous revenue includes revenues from SK M&Service and other minor miscellaneous revenue items. |
(8) | “Segment operating expenses” mean operating expenses for each reportable segment presented in accordance with K-IFRS and therefore does not include certain expenses that are classified as othernon-operating expenses underK-IFRS. For more information on the differences between our consolidated operating expenses pursuant toK-IFRS and pursuant to IFRS as issued by the IASB, see “— Explanatory Note Regarding Presentation of Certain Financial Information underK-IFRS.” |
Segment operating profit (loss) for each of the segments above is presented net of consolidation adjustments. Accordingly, they do not reconcile with the segment operating profit (loss) for each of such segments set forth in |
2022 Compared to 2020
Operating Revenue and Other Income. Our consolidated operating revenue and other income increased by 2.9% to Won 17,361.2 billion in 2022 from Won 16,864.3 billion in 2021 due to increases in operating revenue and other income, as discussed below.
Our consolidated operating revenue increased by 3.3% to Won 17,305.0 billion in 2022 from Won 16,748.6 billion in 2021, primarily due to increases in cellular services revenue, others revenue and fixed-line telecommunications services revenue.
Our consolidated other income decreased by 51.4% to Won 56.3 billion in 2022 from Won 115.8 billion in 2021, primarily due to the one-time effect of the difference in the previously estimated and actual amounts of certain regulatory fees recognized in 2021.
The following sets forth additional information about our operating revenues with respect to each of our reportable segments.
Cellular services: The revenue of our cellular services segment, which is composed of revenues from wireless service, cellular interconnection, wireless device sales and miscellaneous cellular services, increased by 1.8% to Won 12,942.3 billion in 2022 from Won 12,718.5 billion in 2021. The increase in our cellular services revenue was due to increases in wireless service revenue, miscellaneous cellular services revenue and wireless device sales revenue, partially offset by a decrease in cellular interconnection revenue.
• | Wireless service revenue increased by 1.5% to Won 10,253.2 billion in 2022 from Won 10,100.4 billion in 2021, primarily attributable to the continued increase in the number of subscribers who subscribe to our higher-priced 5G plans and an increase in the usage of our roaming services in light of the substantial lifting of travel restrictions imposed by governments in response to the COVID-19 pandemic. |
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Miscellaneous cellular services revenue increased by 7.3% to Won 1,248.9 billion in 2022 from Won 1,164.4 billion in 2021, primarily due to increases in revenue from our cloud services, IoT solutions and other new businesses.
• | Wireless device sales revenue slightly increased by 0.9% to Won 969.0 billion in 2022 from Won 959.9 billion in 2021, primarily due to an increase in the sale of 5G-compatible devices that generally command higher prices. |
Cellular interconnection revenue decreased by 4.6% to Won 471.2 billion in 2022 from Won 493.8 billion in 2021. The decrease was primarily attributable to a decrease in interconnection rates, partially offset by an increase in the volume of mobile to mobile calls.
• | Fixed-line telecommunications services: The revenue of our fixed-line telecommunication services segment, which is composed of revenues from broadband Internet service and advanced media platform service (including IPTV and cable TV services), fixed-line telephone service, international calling service, fixed-line interconnection and miscellaneous fixed-line telecommunication services, increased by 3.7% to Won 3,813.0 billion in 2022 from Won 3,677.7 billion in 2021, primarily due to an increase in miscellaneous fixed-line telecommunication services revenue, partially offset by decreases in fixed-line telephone service revenue and fixed-line interconnection revenue. |
Miscellaneous fixed-line telecommunication services revenue increased by 27.7% to Won 1,001.9 billion in 2022 from Won 784.6 billion in 2021, primarily due to an increase in revenue from our business communications services, including our data center services.
Fixed-line telephone service revenue decreased by 27.8% to Won 156.7 billion in 2022 from Won 217.0 billion in 2021, primarily due to decreases in the residential calling volume as a result of a continued shift in consumer preference toward wireless communication and the number of fixed-line telephone subscribers to 3.56 million as of December 31, 2022 from 3.63 million as of December 31, 2021.
Fixed-line interconnection revenue decreased by 69.6% to Won 21.2 billion in 2022 from Won 69.8 billion in 2021, primarily due to a decrease in interconnection rates, as well as decreases in the residential calling volume and the number of fixed-line telephone subscribers as described above.
• | Others: The revenue of our others segment increased by 56.0% to Won 549.7 billion in 2022 from Won 352.4 billion in 2021, primarily due to our acquisition of SK M&Service in February 2022 as well as a 4.1% increase in revenue of SK Stoa’s T-commerce business to Won 329.3 billion in 2022 from Won 316.2 billion in 2021, which mainly reflected an increase in the volume of merchandise sold. |
Operating Expenses. Our consolidated operating expenses increased by 2.2% to Won 15,766.9 billion in 2022 from Won 15,432.0 billion in 2021, primarily due to a 6.5% increase in labor costs to Won 2,449.8 billion in 2022 from Won 2,300.8 billion in 2021, a 8.6% increase in cost of goods sold to Won 1,268.1 billion in 2022 from Won 1,167.4 billion in 2021, a 6.8% increase in other operating expenses to Won 1,529.0 billion in 2022 from Won 1,431.6 billion in 2021 and a 1.7% increase in commissions to Won 5,518.8 billion in 2022 from Won 5,426.1 billion in 2021.
The increase in labor costs was primarily due to a general increase in the base salary of our employees.
The increase in cost of goods sold was primarily due to an increase in sales of miscellaneous telecommunications equipment to our corporate customers.
The increase in other operating expenses was primarily due to an increase in utilities, mainly reflecting increases in the number of base stations and electricity prices.
The increase in commissions was primarily due to increases in fees paid to third party service and contents providers relating to our new businesses and the sales of IPTV service subscriptions through our authorized dealers and independent retailers.
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The following sets forth additional information about our segment operating expenses with respect to each of our reportable segments, which do not include certain expenses that are classified as other non-operating expenses under K-IFRS. For more information on the difference between our consolidated operating expenses pursuant to K-IFRS and pursuant to IFRS as issued by the IASB, see “— Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS” and note 4(2) of the notes to our consolidated financial statements.
Cellular services: The segment operating expenses for our cellular services segment remained relatively constant at Won 11,646.2 billion in 2022 compared to Won 11,643.4 billion in 2021, as increases in SK Telecom’s labor costs as described above as well as fees paid to third party service and contents providers and advertising fees relating to SK Telecom’s new businesses were substantially offset by decreases in commissions paid to SK Telecom’s authorized dealers and independent retailers, as the market for new 5G subscribers began to stabilize, and depreciation and amortization expenses, primarily reflecting the expiration of the applicable amortization period for certain of our software assets and a decrease in the amortization expenses for our frequency usage rights.
• | Fixed-line telecommunication services: The segment operating expenses for our fixed-line telecommunication services segment increased by 3.4% to Won 3,494.2 billion in 2022 from Won 3,380.2 billion in 2021, primarily due to an increase in SK Broadband’s marketing expenses and commissions, primarily reflecting an increase in the sale of IPTV service subscriptions. |
• | Others: The segment operating expenses for our others segment increased by 63.6% to Won 552.5 billion in 2022 from Won 337.8 billion in 2021, primarily due to our acquisition of SK M&Service in February 2022 and an increase in the operating expenses of SK Stoa, which mainly reflected a corresponding increase in the revenue generated by SK Stoa’s T-commerce business. |
Operating Profit. Our consolidated operating profit increased by 11.3% to Won 1,594.3 billion in 2022 from Won 1,432.4 billion in 2021, as the increase in operating revenue and other income outpaced the increase in operating expenses in 2022.
The following sets forth additional information about our segment operating profit (loss) with respect to each of our reportable segments. Our segment operating profit (loss) with respect to each of our reportable segments is based on K-IFRS and the sum of segment operating profit for all three reportable segments differs from our consolidated operating profit presented in accordance with IFRS as issued by the IASB. For a reconciliation of operating profit presented in accordance with IFRS as issued by the IASB and operating profit presented in accordance with K-IFRS, see “— Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS” and note 4(2) of the notes to our consolidated financial statements.
Cellular services: The segment operating profit of our cellular services segment increased by 20.6% to Won 1,296.1 billion in 2022 from Won 1,075.1 billion in 2021, due to the greater increase in segment operating revenue as compared to the increase in segment operating expenses, for the various reasons described above. The segment operating margin (which, with respect to each reportable segment, is segment operating profit (loss) divided by revenue from such segment, expressed as a percentage) of our cellular services segment increased to 10.0% in 2022 from 8.5% in 2021.
• | Fixed-line telecommunication services: The segment operating profit of our fixed-line telecommunication services segment increased by 7.2% to Won 318.8 billion in 2022 from Won 297.5 billion in 2021, due to the greater increase in segment operating revenue as compared to the increase in segment operating expenses, for the reasons described above. The segment operating margin of our fixed-line telecommunication services segment increased to 8.4% in 2022 from 8.1% in 2021. |
Others: Our others segment recorded operating loss of Won 2.8 billion in 2022 compared to operating profit of Won 14.6 billion in 2021, due to the greater increase in segment operating expenses as compared to the increase in segment operating revenue as described above. As a result, the segment operating margin of our others segment declined to (0.5)% in 2022 from 4.1% in 2021.
Finance Income and Finance Costs. Our finance income increased by 15.9% to Won 179.8 billion in 2022 from Won 155.1 billion in 2021, primarily due to a 56.8% increase in gain relating to financial instruments at fair
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value through profit or loss to Won 94.4 billion in 2022 from Won 60.2 billion in 2021, primarily relating to a decrease in the fair value of long-term derivative financial liability recognized with respect to our rights and obligations under the shareholders agreement with the former shareholders of Tbroad, which we had entered into in connection with the Tbroad Merger in April 2020,as well as a 59.4% increase in interest income to Won 58.5 billion in 2022 from Won 36.7 billion in 2021, which primarily reflected higher market interest rates. The impact of such increases was partially offset by a decrease in gain on sale of accounts receivable — other related to our sale of accounts receivable for handset installment payments to Won 1.0 billion in 2022 from Won 27.7 billion in 2021.
Our finance costs increased by 44.6% to Won 456.3 billion in 2022 from Won 315.6 billion in 2021, primarily due to a loss on sale of accounts receivable — other related to our sale of accounts receivable for handset installment payments of Won 61.8 billion in 2022 compared to nil in 2021, as well as a 17.4% increase in in interest expense to Won 328.3 billion in 2022 from Won 279.7 billion in 2021, which primarily reflected higher market interest rates.
Gains (Losses) Related to Investments in Associates and Joint Ventures. We recorded net losses related to investments in associates and joint ventures of Won 81.7 billion in 2022, primarily due to loss of Won 48.6 billion from disposal of our equity interest in HanaCard in 2022, compared to net gains related to investments in associates and joint ventures of Won 446.3 billion in 2021, primarily due to an increase of Won 270.3 billion in our share of profits of SK China Company Ltd., as well as gain of Won 100.0 billion from disposal of our equity interest in SK Wyverns Co., Ltd.
Income Tax. Income tax expense decreased by 35.5% to Won 288.3 billion in 2022 from Won 446.8 billion in 2021 primarily due to a 28.1% decrease in profit before income tax to Won 1,236.2 billion in 2022 from Won 1,718.2 billion in 2021. Our effective tax rate in 2022 decreased to 23.3% from 26.0% in 2021. Our effective tax rates in 2022 and 2021 were lower than the maximum statutory tax rate of 27.5% for both years, primarily due to, in the case of 2022, a decrease in net deferred tax liability due to an expected decrease in the corporate income tax rate in Korea beginning in 2023, as well as changes in unrecognized deferred taxes and tax credits and tax reductions, and in the case of 2021, changes in unrecognized deferred taxes and tax credits and tax reductions.
Profit from Continuing Operations. Principally as a result of the factors discussed above, our profit from continuing operations decreased by 25.5% to Won 947.8 billion in 2022 from Won 1,271.4 billion in 2021.
Profit from Discontinued Operations. We did not recognize any profit from discontinued operations in 2022. Our profit from discontinued operations, net of taxes, was Won 1,147.6 billion in 2021, primarily reflecting our share of profits of SK Hynix, our equity interest in which was transferred to SK Square as of November 1, 2021 pursuant to the Spin-off.
Profit for the Year. Principally as a result of the factors discussed above, our profit for the year decreased by 60.8% to Won 947.8 billion in 2022 from Won 2,419.0 billion in 2021. Profit for the year as a percentage of operating revenue and other income was 5.5% in 2022 compared to 14.3% in 2021.
2021 Compared to 2020
Operating Revenue and Other Income.Our consolidated operating revenue and other income increased by 4.2% to Won 16,864.3 billion in 2021 from Won 16,183.5 billion in 2020 due to increases in operating revenue and other income, as discussed below.
Our consolidated operating revenue increased by 4.1% to Won 16,748.6 billion in 2021 from Won 16,087.7 billion in 2020, primarily due to increases in cellular services revenue and fixed-line telecommunications services revenue, and to a smaller extent, an increase in others revenue.
Our consolidated other income increased by 20.9% to Won 115.8 billion in 2021 from Won 95.8 billion in 2020, primarily due to the difference in the previously estimated and actual amounts of certain regulatory fines.
The following sets forth additional information about our operating revenues with respect to each of our reportable segments.
Cellular services: The revenue of our cellular services segment, which is composed of revenues from wireless service, cellular interconnection, wireless device sales and miscellaneous cellular services, increased by 3.0% to Won 12,718.5 billion in 2021 from Won 12,348.0 billion in 2020. The increase in our cellular services revenue was due to increases in wireless service revenue, miscellaneous cellular services revenue and cellular interconnection revenue, partially offset by a decrease in wireless device sales revenue.
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increased by 3.0% to Won 12,718.5 billion in 2021 from Won 12,348.0 billion in 2020. The increase in our cellular services revenue was due to increases in wireless service revenue, miscellaneous cellular services revenue and cellular interconnection revenue, partially offset by a decrease in wireless device sales revenue. |
• | Wireless service revenue increased by 3.0% to Won 10,100.4 billion in 2021 from Won 9,806.7 billion in 2020, primarily attributable to the continued increase in the number of subscribers who subscribe to our higher-priced 5G plans.The impact of such increase was partially offset by an increase in the cumulative percentage of wireless service subscribers who elected to receive discounted rates in lieu of receiving handset subsidies pursuant to the MDDIA as well as a continued decrease in the usage of our roaming services, mainly reflecting the continued negative impact of the ongoing COVID-19 pandemic on outbound international travel from Korea. |
Miscellaneous cellular services revenue increased by 7.2% to Won 1,164.4 billion in 2021 from Won 1,085.7 billion in 2020, primarily due to an increase in revenue from our IoT solutions, platform services and other new businesses as well as revenue from leasing our network to MVNO service providers.
Cellular interconnection revenue increased by 4.6% to Won 493.8 billion in 2021 from Won 472.2 billion in 2020. The increase was primarily attributable to an increase in the volume of mobile to mobile calls, partially offset by a decrease in interconnection rates.
Wireless device sales revenue decreased by 2.4% to Won 959.9 billion in 2021 from Won 983.4 billion in 2020, primarily due to a decrease in sales of handsets as a result of a limited supply of new flagship devices of the leading device manufacturers being available in 2021 as a whole.
• | Fixed-line telecommunications services: The revenue of our fixed-line telecommunication services segment, which is composed of revenues from broadband Internet service and advanced media platform service (including IPTV and cable TV services), fixed-line telephone service, international calling service, fixed-line interconnection and miscellaneous fixed-line telecommunication services, increased by 7.2% to Won 3,677.7 billion in 2021 from Won 3,432.2 billion in 2020, primarily due to increases in our broadband Internet service and advanced media platform service revenue and miscellaneous fixed-line telecommunication services revenue, partially offset by decreases in fixed-line interconnection revenue and fixed-line telephone service revenue. |
Revenue from our broadband Internet service and advanced media platform service (including our IPTV and cable TV services) increased by 10.5% to Won 2,443.9 billion in 2021 from Won 2,210.7 billion in 2020, primarily due to increases in the number of IPTV subscribers to 6.1 million subscribers as of December 31, 2021 from 5.7 million subscribers as of December 31, 2020 and the number of subscribers who subscribe to our higher-priced plans.
• | Miscellaneous fixed-line telecommunication services revenue increased by 5.0% to Won 784.6 billion in 2021 from Won 747.0 billion in 2020, primarily due to an increase in revenue from our business communications services. |
• | Fixed-line interconnection revenue decreased by 16.7% to Won 69.8 billion in 2021 from Won 83.8 billion in 2020, primarily due to a decrease in interconnection rates, as well as decreases in the number of fixed-line telephone subscribers and residential calling volume as described above. |
• | Fixed-line telephone service revenue decreased by 5.8% to Won 217.0 billion in 2021 from Won 230.4 billion in 2020, primarily due to decreases in the number of fixed-line telephone subscribers (including subscribers to VoIP services of SK Broadband, which in turn included such services formerly provided by SK Telink that were acquired by SK Broadband in April 2021) to 3.63 million as of December 31, 2021 from 3.75 million as of December 31, 2020 and residential calling volume as a result of a continued shift in consumer preference toward wireless communication. |
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• | Others: The revenue of our others segment increased by 14.6% to Won 352.4 billion in 2021 from Won 307.6 billion in 2020, primarily due to a 17.8% increase in revenue of SK Stoa’s T-commerce business to Won 316.2 billion in 2021 from Won 268.5 billion in 2020, which mainly reflected an increase in the volume of merchandise sold. |
Operating Expenses.
The increase in commissions was primarily due to increases in the sales of our 5G wireless service and IPTV service subscriptions through our authorized dealers and independent retailers.
The increase in labor costs was primarily due to the transfer of our treasury shares to certain of our officers and employees as bonus payments in 2021, the fair value of which was recognized as part of our labor costs.
The increase in cost of goods sold was primarily due to an increase in the volume of merchandise sold by SK Stoa’s
The decrease in other operating expenses was primarily due to a significant decrease in impairment loss on property and equipment and intangible assets to Won 3.1 billion in 2021 from Won 200.7 billion in 2020, which mainly reflected impairment losses we recognized on frequency usage rights in 2020.
The following sets forth additional information about our segment operating expenses with respect to each of our reportable segments, which do not include certain expenses that are classified as other
Cellular services: The segment operating expenses for our cellular services segment increased by 2.7% to Won 11,643.4 billion in 2021 from Won 11,341.2 billion in 2020, mainly attributable to the transfer of our treasury shares to certain of our officers and employees as bonus payments in 2021, the fair value of which was recognized as part of labor costs for this segment, and an increase in commissions, primarily reflecting an increase in the sale of our 5G wireless service subscriptions through our authorized dealers and independent retailers.
• | Fixed-line telecommunication services: The segment operating expenses for our fixed-line telecommunication services segment increased by 6.0% to Won 3,380.2 billion in 2021 from Won 3,189.3 billion in 2020, primarily due to an increase in SK Broadband’s marketing expenses and commissions, primarily reflecting an increase in the sale of IPTV service subscriptions, and the transfer of SK Broadband’s treasury shares to certain of SK Broadband’s officers and employees as bonus payments in 2021. |
• | Others: The segment operating expenses for our others segment increased by 9.5% to Won 337.8 billion in 2021 from Won 308.6 billion in 2020, primarily due to an increase in the cost of goods sold of SK Stoa, which mainly reflected a corresponding increase in the revenue generated by SK Stoa’s T-commerce business. |
Operating Profit.
The following sets forth additional information about our segment operating profit (loss) with respect to each of our reportable segments. Our segment operating profit (loss) with respect to each of our reportable segments is based on
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operating profit presented in accordance with IFRS as issued by the IASB and operating profit presented in accordance with
• | Cellular services: The segment operating profit of our cellular services segment increased by 6.8% to Won 1,075.1 billion in 2021 from Won 1,006.8 billion in 2020, due to the greater increase in segment operating revenue as compared to the increase in segment operating expenses, for the various reasons described above.The segment operating margin (which, with respect to each reportable segment, is segment operating profit (loss) divided by revenue from such segment, expressed as a percentage) of our cellular services segment increased to 8.5% in 2021 from 8.2% in 2020. |
• | Fixed-line telecommunication services: The segment operating profit of our fixed-line telecommunication services segment increased by 22.5% to Won 297.5 billion in 2021 from Won 242.9 billion in 2020, due to the greater increase in segment operating revenue as compared to the increase in segment operating expenses, for the reasons described above.The segment operating margin of our fixed-line telecommunication services segment increased to 8.1% in 2021 from 7.1% in 2020. |
Others: Our others segment recorded operating profit of Won 14.6 billion in 2021 compared to operating loss of Won 1.1 billion in 2020, due to the greater increase in segment operating revenue as compared to the increase in segment operating expenses as described above. As a result, the segment operating margin of our others segment improved to 4.1% in 2021 from (0.4)% in 2020.
Finance Income and Finance Costs.
Our finance costs decreased by 2.3% to Won 315.6 billion in 2021 from Won 322.9 billion in 2020, primarily due to a 3.2% decrease in interest expense to Won 279.7 billion in 2021 from Won 289.0 billion in 2020, which primarily reflected lower market interest rates. The effect of such decrease was partially offset by a 21.7% increase in loss relating to financial instruments at fair value through profit or loss to Won 16.8 billion in 2021 from Won 13.8 billion in 2020, mainly related to our investments in certain fund products.
Gains (Losses) Related to Investments in Associates and Joint Ventures.
Income Tax.
Profit from Continuing Operations.
Profit from Discontinued Operations.
Profit for the Year.
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Item 5.B. | Liquidity and Capital Resources |
Liquidity
We had a working capital deficit (current liabilities in excess of current assets) of Won 827.3 billion as of December 31, 2022, a working capital deficit of Won 607.8 billion as of December 31, 2021 and a working capital surplus (current assets in excess of current liabilities) of Won 597.1 billion as of December 31, 2020. The decrease in our working capital as of December 31, 20212022 compared to December 31, 20202021 was mainly due to the
We had cash and cash equivalents,
For the presentation of the statement of cash flows for the years ended December 31, 2021 and 2020 in our consolidated financial statements, we elected to combine cash flows from discontinued operations with cash flows from continuing operations within each cash flow statement category. The absence of cash flows from discontinued operations is not expected to affect our future liquidity and capital resources.
Cash flows from operating activities and debt financing have been our principal sources of liquidity. We had cash and cash equivalents of Won 1,882.3 billion as of December 31, 2022, Won 872.7 billion as of December 31, 2021 and Won 1,369.7 billion as of December 31, 2020. We believe that we have a variety of alternatives available to us to satisfy our financial requirements to the extent that they are not met by funds generated by operations, including the issuance of debt securities and bank borrowings.
Year ended December 31, | Change | |||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2020 to 2021 | 2019 to 2020 | ||||||||||||||||||||||||
(In billions of Won, except percentages) | ||||||||||||||||||||||||||||
Net cash provided by operating activities | ₩ | 5,031.3 | ₩ | 5,821.9 | ₩ | 4,035.0 | ₩ | (790.6 | ) | (13.6 | )% | ₩ | 1,786.9 | 44.3 | % | |||||||||||||
Net cash used in investing activities | (3,486.2 | ) | (4,250.4 | ) | (3,581.6 | ) | 764.2 | (18.0 | ) | (668.8 | ) | 18.7 | ||||||||||||||||
Net cash used in financing activities | (2,053.6 | ) | (1,457.6 | ) | (686.7 | ) | (596.0 | ) | 40.9 | (770.9 | ) | 112.3 | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | (508.5 | ) | 113.9 | (233.3 | ) | (622.4 | ) | N.A. | 347.2 | N.A. | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents held in foreign currencies | 11.6 | (15.1 | ) | (2.6 | ) | 26.7 | (176.8 | ) | (12.5 | ) | 480.8 | |||||||||||||||||
Cash and cash equivalents at beginning of period | 1,369.7 | 1,270.8 | 1,506.7 | 98.9 | 7.8 | (235.9 | ) | (15.7 | ) | |||||||||||||||||||
Cash and cash equivalents at end of period | 872.7 | 1,369.7 | 1,270.8 | (497.0 | ) | (36.3 | ) | 98.8 | 7.8 |
Year ended December 31, | Change | |||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2021 to 2022 | 2020 to 2021 | ||||||||||||||||||||||||
(In billions of Won, except percentages) | ||||||||||||||||||||||||||||
Net cash provided by operating activities | ₩ | 5,159.3 | ₩ | 5,031.3 | ₩ | 5,821.9 | ₩ | 128.0 | 2.5 | % | ₩ | (790.6 | ) | (13.6 | )% | |||||||||||||
Net cash used in investing activities | (2,807.8 | ) | (3,486.2 | ) | (4,250.4 | ) | 678.4 | (19.5 | ) | 764.2 | (18.0 | ) | ||||||||||||||||
Net cash used in financing activities | (1,349.9 | ) | (2,053.6 | ) | (1,457.6 | ) | 703.7 | (34.3 | ) | (596.0 | ) | 40.9 | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 1,001.6 | (508.5 | ) | 113.9 | 1,510.1 | N.A. | (622.4 | ) | N.A. | |||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents held in foreign currencies | 7.9 | 11.6 | (15.1 | ) | (3.7 | ) | 31.9 | 26.7 | N.A. | |||||||||||||||||||
Cash and cash equivalents at beginning of period | 872.7 | 1,369.7 | 1,270.8 | (497.0 | ) | (36.3 | ) | 98.9 | 7.8 | |||||||||||||||||||
Cash and cash equivalents at end of period | 1,882.3 | 872.7 | 1,369.7 | 1,009.6 | 115.7 | (497.0 | ) | (36.3 | ) |
N.A. = Not available
Cash Flows from Operating Activities.
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operating activities in 2019 (of which Won 316.6 billion was2022 increased by 2.5% from discontinued operations).2021, primarily due to increases in accounts payable – other, mainly reflecting an increase in the outstanding year-end payables relating to our operational expenditures, as well as income tax paid in 2022. Net cash provided by operating activities in 2021 decreased by 13.6% from 2020, primarily due to increases in income tax paid and payments of costs associated with obtaining customer contracts in 2021.
Cash Flows from Investing Activities.
Cash outflows for investing activities were Won 4,037.7 billion in 2022, Won 4,086.4 billion in 2021 and Won 4,679.4 billion in 2020 and Won 4,336.7 billion in 2019.2020. Cash outflows in 2022, 2021 2020 and 20192020 were primarily attributable to expenditures related to the acquisition of property and equipment of Won 2,915.92,908.3 billion, Won 3,557.82,915.9 billion and Won 3,375.93,557.8 billion, respectively, primarily in connection with the acquisition of 5G and LTE equipment, the expansion of our 5G network and the maintenance of our LTE network.
Cash Flows from Financing Activities.
Cash outflows for financing activities were Won 3,151.9 billion in 2022, Won 3,850.4 billion in 2021 and Won 4,957.2 billion in 2020 and Won 2,733.9 billion in 2019.2020. Cash outflows for financing activities included repayments of debentures, repayments of long-term borrowings, payments of dividends, and repayments of other long-term payables and repayments of lease liabilities, among other items. Repayments of debentures were Won 1,390.0 billion in 2022, Won 890.0 billion in 2021 and Won 975.5 billion in 2020 and Won 940.0 billion in 2019.2020. Repayments of long-term borrowings were Won 41.5 billion in 2022, Won 286.9 billion in 2021 and Won 1,950.9 billion in 2020 and Won 89.9 billion in 2019.2020. Payments of dividends were Won 904.0 billion in 2022, Won 1,028.5 billion in 2021 and Won 742.1 billion in 2020 and2020. Repayments of other long-term payables were Won 718.7400.2 billion in 2019. Repayments of other
As of December 31, 2022, we had total long-term debt (excluding current portion) outstanding of Won 7,192.2 billion, which included debentures in the amount of Won 6,524.1 billion and bank and institutional borrowings in the amount of Won 668.1 billion. As of December 31, 2021, we had total long termlong-term debt (excluding current portion) outstanding of Won 7,390.5 billion, which included debentures in the amount of Won 7,037.4 billion and bank and institutional borrowings in the amount of Won 353.1 billion. As of December 31, 2020, we had total
As of December 31, 2021,2022, we had (i) Won 6,670.06,485.0 billion aggregate principal amount of Korean
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issued Won 1,270.01,000.0 billion, and (ii) Won 1,778.21,901.0 billion aggregate principal amount of debentures outstanding denominated in U.S. dollars. The fixed interest rates of our debentures range from 1.17% to 6.63% depending on the offering size, maturity, interest rate environment at the time of the offering and currency, among other factors. We have a diversified maturity profile with respect to our debentures. See “— Contractual Obligations and Commitments” for more details.
As of December 31, 2021,2022, substantially all of our foreign
Capital Requirements
Historically, capital expenditures, repayment of outstanding debt, frequency usage payments and lease payments have represented our most significant use of funds. In recent years, we have also increasingly dedicated capital resources to develop and invest in new ICT businesses (some of which were transferred to SK Square as of November 1, 2021 pursuant to the
To fund our scheduled debt repayment and planned capital expenditures over the next several years, we intend to rely primarily on cash flows from operating activities, as well as bank and institutional borrowings, and offerings of debt or equity in the domestic or international markets. We believe that these sources will be sufficient to fund our planned capital expenditures for 2022.
Capital Expenditures.
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
(In billions of Won) | ||||||||||||
Wireless Networks (1) | ₩ | 1,850.9 | ₩ | 1,878.6 | ₩ | 2,514.3 | ||||||
Fixed-line Network(2) | 822.8 | 818.3 | 815.8 | |||||||||
Others (3) | 242.2 | 860.9 | 45.8 | |||||||||
Total | ₩ | 2,915.9 | ₩ | 3,557.8 | ₩ | 3,375.9 | ||||||
Year ended December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
(In billions of Won) | ||||||||||||
Wireless Networks(1) | ₩ | 1,837.2 | ₩ | 1,850.9 | ₩ | 1,878.6 | ||||||
Fixed-line Network(2) | 820.2 | 822.8 | 818.3 | |||||||||
Others(3) | 250.9 | 242.2 | 860.9 | |||||||||
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Total | ₩ | 2,908.3 | ₩ | 2,915.9 | ₩ | 3,557.8 | ||||||
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(1) | Includes investments in wireless networks, primarily our 5G, LTE and Wi-Fi networks, as well as other capital expenditures related to our networks. |
(2) | Includes all capital expenditures made by SK Broadband. |
(3) | Includes non-network related investments such as capital expenditures for product development, upgrades of our information technology systems and equipment and investments in data infrastructure, including certain investments made in connection with our discontinued operations. |
We set our capital expenditure budget for each upcoming year on an annual basis. Our actual capital expenditures in 2022, 2021 and 2020 and 2019 were Won 2,908.3 billion, Won 2,915.9 billion Won 3,557.8 billion and Won 3,375.93,557.8 billion, respectively. Of such amounts, we spent approximately 63.5%63.2%, 52.8%63.5% and 74.5% in 2021, 2020 and 2019,52.8%, respectively, on capital
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expenditures related to building and enhancing our wireless networks. Our other
In particular, we have been making capital expenditures to build and expand our 5G network. We commenced commercial 5G services in April 2019. We have also been making capital expenditures to maintain our LTE network.
The following table sets forth our payment obligations relating to our acquisitions of frequency usage rights.
Spectrum | Technology (width) | Date of Acquisition (including renewals) | Initial Payment Amount (in billions of Won) | Initial Payment Year | Annual Payment Amount (in billions of Won) | Annual Payment Term | ||||||||||||||||
800 MHz | LTE (20 MHz) | Jul. 2021 | ₩ | 56.8 | 2021 | ₩ | 34.1 | 2022-2026 | ||||||||||||||
1.8 GHz | LTE (20 MHz + 15 MHz) | Dec. 2021 | 136.9 | 2021 | 82.2 | 2022-2026 | ||||||||||||||||
2.1 GHz | LTE (30 MHz) | Dec. 2021 | 102.9 | 2021 | 61.8 | 2022-2026 | ||||||||||||||||
WCDMA (10 MHz) | ||||||||||||||||||||||
2.6 GHz | LTE (40 MHz + 20 MHz) | Aug. 2016 | 332.5 | 2016 | 99.8 | 2017-2026 | ||||||||||||||||
3.5 GHz | 5G (100 MHz) | Dec. 2018 | 304.6 | 2018 | 91.4 | 2019-2028 | ||||||||||||||||
28 GHz | 5G (800 MHz) | Dec. 2018 | 51.8 | 2018 | 31.1 | 2019-2023 |
Spectrum | Technology (width) | Date of Acquisition (including renewals) | Initial Payment (in billions of Won) | Initial Payment Year | Annual Payment (in billions of Won) | Annual Payment Term | ||||||||||||||||
800 MHz | LTE (20 MHz) | Jul. 2021 | ₩ | 56.8 | 2021 | ₩ | 34.1 | 2022-2026 | ||||||||||||||
1.8 GHz | LTE (20 MHz + 15 MHz) | Dec. 2021 | 136.9 | 2021 | 82.2 | 2022-2026 | ||||||||||||||||
2.1 GHz
| LTE (30 MHz) | Dec. 2021 | 102.9 | 2021 | 61.8 | 2022-2026 | ||||||||||||||||
WCDMA (10 MHz) | ||||||||||||||||||||||
2.6 GHz | LTE (40 MHz + 20 MHz) | Aug. 2016 | 332.5 | 2016 | 99.8 | 2017-2026 | ||||||||||||||||
3.5 GHz | 5G (100 MHz) | Dec. 2018 | 304.6 | 2018 | 91.4 | 2019-2028 | ||||||||||||||||
28 GHz | 5G (800 MHz) | Dec. 2018 | 51.8 | 2018 | 31.1 | 2019-2023 | (1) |
(1) | The license period for our use of 800 MHz of bandwidth in the 28 GHz spectrum was reduced by six months by the MSIT, as a result of which the usage and payment term is expected to expire in May 2023 instead of November 2023. See “Item 4.B. Business Overview — Law and Regulation — Frequency Allocation.” |
We expect to spend a similar amount for capital expenditures in 20222023 compared to 20212022 for a range of projects, including investments to expand and improve our newly implemented 5G network, investments to maintain our LTE network and
Repayment of Outstanding Debt.
Year Ending December 31, | Total | |||
(In billions of Won) | ||||
2023 | ₩ | 2,111.8 | ||
2024 | 1,622.5 | |||
2025 | 2,242.7 | |||
2026 and thereafter | 3,345.0 |
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Year Ending December 31, | Total | |||
(In billions of Won) | ||||
2022 | ₩ | 1,444.1 | ||
2023 | 1,803.4 | |||
2024 | 1,432.5 | |||
2025 and thereafter | 4,175.5 |
Lease Payments.
Year Ending December 31, | Total | |||
(In billions of Won) | ||||
2022 | ₩ | 351.2 | ||
2023 | 318.2 | |||
2024 | 232.3 | |||
2025 and thereafter | 652.1 |
Year Ending December 31, | Total | |||
(In billions of Won) | ||||
2023 | ₩ | 391.7 | ||
2024 | 389.0 | |||
2025 | 283.8 | |||
2026 and thereafter | 998.7 |
Investments in New Growth Businesses.
In January 2022, we spun off our AI-enabled semiconductor business into a new subsidiary, Sapeon, in which we hold a majority equity interest and each of SK Square and SK Hynix holds a minority equity interest. Through Sapeon, we expect to actively collaborate with SK Square and SK Hynix to target customers in the United States and develop and commercialize next-generation AI-enabled semiconductors for applicable-specific uses. In February 2022, we established Sapeon Korea to target customers in Korea and sold our entire equity interest in id Quantique through capital contributions in cash amountingSapeon Korea to Sapeon for Won 12.2 billion in 2019 and Won 6.4 billion in 2020, respectively.
In June 2019,February 2022, we acquired a 34.6%100.0% interest in Incross, a digital advertising company,SK M&Service for an aggregate purchase price of Won 53.772.9 billion in lightorder to strengthen the competitiveness of potentialour online distribution capabilities and explore synergies with our mediaother businesses in the ICT sector.
In June 2022, we acquired a 2.8% interest in HAEGIN Co., Ltd., a metaverse game developer, for Won 25.1 billion in order to improve the user experience of our AI service customers and commerce businesses.
From time to time, we may make other investments in telecommunications or other businesses in Korea or abroad, where we perceive attractive opportunities for investment. From time to time, we may also dispose of existing investments when we believe that doing so would be in our best interest. Effective as of November 1, 2021, we conducted the
Severance Payments.
Also see “Item 6.D. Employees — Employee Benefits” and note 21 of the notes to our consolidated financial statements.
Dividends.
In April 2022,2023, we distributed annual dividends at Won 1,660830 per share (exclusive of aggregate interim dividends of Won 5,0002,490 per share)share distributed during the course of 2022) to our shareholders for an aggregate payout amount of Won 361.2181.0 billion.
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Contractual Obligations and Commitments
The following summarizes our contractual cash obligations (excluding short-term leases and leases of low-value assets) at December 31, 2021,2022, and the effect such obligations are expected to have on liquidity and cash flow in future periods:
Payments Due by Period (1) | ||||||||||||||||||||
Total | Less Than 1 Year | 1-3 Years | 4-5 Years | More Than 5 Years | ||||||||||||||||
(In billions of Won) | ||||||||||||||||||||
Bonds | ||||||||||||||||||||
Principal | ₩ | 8,448.3 | ₩ | 1,390.0 | ₩ | 2,898.4 | ₩ | 1,615.7 | ₩ | 2,544.2 | ||||||||||
Interest | 1,031.8 | 213.8 | 286.0 | 187.9 | 344.1 | |||||||||||||||
Long-term borrowings | ||||||||||||||||||||
Principal | 394.2 | 41.1 | 337.5 | 15.6 | — | |||||||||||||||
Interest | 13.2 | 5.7 | 7.3 | 0.2 | — | |||||||||||||||
Lease liabilities | ||||||||||||||||||||
Principal | 1,553.6 | 351.2 | 550.5 | 374.2 | 277.9 | |||||||||||||||
Interest | 99.6 | 8.1 | 31.1 | 33.8 | 26.6 | |||||||||||||||
Short-term leases and leases of low-value assets | 29.2 | 29.2 | — | — | — | |||||||||||||||
Facility deposits | 5.8 | 1.2 | — | — | 4.6 | |||||||||||||||
Derivatives | 0.1 | 0.1 | 0.1 | — | — | |||||||||||||||
Other long-term payables(2) | ||||||||||||||||||||
Principal | 2,090.7 | 400.2 | 769.4 | 738.3 | 182.8 | |||||||||||||||
Interest | 30.4 | 7.4 | 14.5 | 7.2 | 1.3 | |||||||||||||||
Short-term borrowings | 13.0 | 13.0 | — | — | — | |||||||||||||||
Total contractual cash obligations | ₩ | 13,710.1 | ₩ | 2,461.0 | ₩ | 4,894.8 | ₩ | 2,972.9 | ₩ | 3,381.5 | ||||||||||
Payments Due by Period(1) | ||||||||||||||||||||
Total | Less Than 1 Year | 1-3 Years | 4-5 Years | More Than 5 Years | ||||||||||||||||
(In billions of Won) | ||||||||||||||||||||
Bonds | ||||||||||||||||||||
Principal | ₩ | 8,385.9 | ₩ | 1,843.8 | ₩ | 3,200.2 | ₩ | 1,341.9 | ₩ | 2,000.0 | ||||||||||
Interest | 1,083.6 | 230.8 | 339.2 | 195.8 | 317.8 | |||||||||||||||
Long-term borrowings | ||||||||||||||||||||
Principal | 793.1 | 125.0 | 665.0 | 3.1 | — | |||||||||||||||
Interest | 38.0 | 20.2 | 17.8 | — | — | |||||||||||||||
Lease liabilities | 2,063.4 | 391.7 | 672.9 | 431.2 | 567.6 | |||||||||||||||
Facility deposits | 7.6 | 2.9 | — | — | 4.7 | |||||||||||||||
Other long-term payables(2) | ||||||||||||||||||||
Principal | 1,690.4 | 400.2 | 738.3 | 460.5 | 91.4 | |||||||||||||||
Interest | 83.6 | 29.9 | 39.1 | 13.0 | 1.6 | |||||||||||||||
Short-term borrowings | 144.8 | 144.8 | — | — | — | |||||||||||||||
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Total contractual cash obligations | ₩ | 14,290.4 | ₩ | 3,189.3 | ₩ | 5,672.5 | ₩ | 2,445.5 | ₩ | 2,983.1 | ||||||||||
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(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 frequency licenses. See note 19 of the notes to our consolidated financial statements. |
See note 37 of the notes to our consolidated financial statements for details related to our other commitments and contingencies.
Item 5.C. | Research and Development, Patents and Licenses, etc. |
We maintain a high level of spending on our research and development activity. We also donate funds to several Korean research institutes and educational organizations that focus on research and development activity. We believe that we must maintain a substantial
The main focus of our research and development activity is the development of new wireless technologies and services and value-added technologies and services for our 5G network and LTE network, such as wireless data communications, as well as the development of new technologies that reflect the growing convergence between telecommunications and other industries, such as AI, big data analytics, media, securitymetaverse and mobility.UAM. SK Telecom’s research and development activity is centered atprimarily conducted through our T3KAIX Center, located at our SK
Each business unit also has its own research team that can concentrate on specific short-term research needs, and some of our consolidated subsidiaries also have their own research and development organizations to focus on activities related to their respective business areas. Such research teams permit our research center to concentrate on long-term, technology-intensive research projects. We aim to establish strategic alliances with selected domestic and foreign companies with a view to exchanging or jointly developing technologies, products and services.
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Item 5.D. | Trend Information |
These matters are discussed under “Item 5.A. Operating Results” and “Item 5.B. Liquidity and Capital Resources” above where relevant.
Item 5.E. | Critical Accounting Estimates |
Our financial statements are prepared in accordance with IFRS as issued by the IASB. See notes 2(4) and 3 of the notes to our consolidated financial statements which provide summaries of certain critical accounting estimates that require our management to make difficult, complex or subjective judgments relating to matters which are highly uncertain and that may have a material impact on our financial conditions and results of operations.
Item 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Item 6.A. | Directors and Senior Management |
Directors and Senior Management
Our board of directors has ultimate responsibility for the management of our affairs. Under our articles of incorporation, our board is to consist of at least three but no more than twelve directors, more than half of whom must be independent
As required under relevant Korean laws and our articles of incorporation, we have a committee for recommendation of independent
The term of offices for directors is until the close of the third annual general shareholders meeting convened after he or she commences his or her term. Our directors may serve consecutive terms. The total term of office of
Representative directors are directors elected by the board of directors with the statutory power to represent our company.
The following are the names and positions of our standingexecutive and
Executive directors are our directors who also serve as our executive officers, and they also comprise the senior management, or the key personnel who manage us. Their names, dates of birth and positions at our company, other positions and business experience are set forth below:
Name | Month and Year of Birth | Director Since | Expiration of Term | Position | Other Positions | Business Experience | ||||||||||||
Young Sang Ryu | May 1970 | 2018 | 2024 | Executive Director, President and Chief Executive Officer | President and Chief Executive Officer of SK Broadband | President of Mobile Network Operations Division, SK Telecom; Executive Vice President of Business Development Group, SK Inc.; Head of Corporate Center, SK Telecom | ||||||||||||
Jong Ryeol Kang | Oct. 1964 | 2022 | 2025 | Executive Director, Head of ICT Infra | — | Head of Corporate Culture Center, SK Telecom |
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Name | Month and Year of Birth | Director Since | Expiration of Term | Position | Other Positions | Business Experience | ||||||||||||
Young Sang Ryu | May 1970 | 2018 | 2024 | Executive Director, President and Chief Executive Officer | — | President of Mobile Network Operations Division, SK Telecom; Executive Vice President of Business Development Group, SK Inc.; Head of Corporate Center, SK Telecom | ||||||||||||
Jong Ryeol Kang | Oct. 1964 | 2022 | 2025 | Head of ICT Infrastructure | — | Head of Corporate Culture Center, SK Telecom |
Our current
Name | Month and Year of Birth | Director Since | Expiration of Term | Position | Other Positions | Business Experience | ||||||||||||
Kyu Nam Choi | Apr. 1964 | 2021 | 2024 | Non-executive Director | Head of Global Business Development, SK SUPEX Council | Representative Director and President, Jeju Air | ||||||||||||
Jung Ho Ahn | Feb. 1978 | 2017 | 2023 | Independent Non-executive Director | Professor, Graduate School of Convergence Science and Technology, Seoul National University | Visiting Scholar, Google Inc.; Senior Research Scientist, Exascale Computing Lab, HP Labs | ||||||||||||
Youngmin Yoon | Dec. 1963 | 2018 | 2024 | Independent Non-executive Director | Dean of School of Media and Communications and Graduate School of Journalism and Mass Communication, Korea University | Professor, School of Media & Communication, Korea University; Vice-chair, Korean Academic Society for Public Relations; Advisor, Ministry of Land, Infrastructure and Transport Public Relations Division; Advisor, Korea Media Rating Board | ||||||||||||
Seok-Dong Kim | May 1953 | 2019 | 2025 | Independent Non-executive Director | Chairman, JIPYONG Institute of Humanities and Society | Chairman, Financial Services Commission; Vice Minister, Ministry of Finance and Economy; Vice Chairman, Financial Supervisory Commission |
Name | Month and Year of Birth | Director Since | Expiration of Term | Position | Other Positions | Business Experience | ||||||||||||
Yong-Hak Kim | Jan. 1953 | 2020 | 2023 | Independent Non-executive Director | Professor Emeritus, Yonsei University | President, Yonsei University; BK Planning Committee, Ministry of Education; Member, Presidential Advisory Council of Policy Planning; Professor of Sociology, Yonsei University | ||||||||||||
Junmo Kim | Sept. 1976 | 2020 | 2023 | Independent Non-executive Director | Associate Professor of Electrical Engineering, KAIST | Assistant Professor of Electrical Engineering, KAIST; Senior Researcher, Samsung Advanced Institute of Technology |
Name | Month and Year of Birth | Director Since | Expiration of Term | Position | Other Positions | Business Experience | ||||||||||||
Kyu Nam Choi | Apr. 1964 | 2021 | 2024 | Non-executive Director | Head of Investment 1, SK SUPEX Council | Head of Global Business Development, SK SUPEX Council; Representative Director and President, Jeju Air | ||||||||||||
Youngmin Yoon | Dec. 1963 | 2018 | 2024 | Independent Non-executive Director | Professor, School of Media & Communication, Korea University | Dean of School of Media and Communications and Graduate School of Journalism and Mass Communication, Korea University; Vice-chair, Korean Academic Society for Public Relations; Advisor, Ministry of Land, Infrastructure and Transport Public Relations Division; Advisor, Korea Media Rating Board | ||||||||||||
Seok-Dong Kim | May 1953 | 2019 | 2025 | Independent Non-executive Director | Chairman, JIPYONG Institute of Humanities and Society | Chairman, Financial Services Commission; Vice Minister, Ministry of Finance and Economy; Vice Chairman, Financial Supervisory Commission | ||||||||||||
Yong-Hak Kim | Jan. 1953 | 2020 | 2026 | Independent Non-executive Director | Professor Emeritus, Yonsei University | President, Yonsei University; BK Planning Committee, Ministry of Education; Member, Presidential Advisory Council of Policy Planning; Professor of Sociology, Yonsei University | ||||||||||||
Junmo Kim | Sept. 1976 | 2020 | 2026 | Independent Non-executive Director | Associate Professor of Electrical Engineering, KAIST | Assistant Professor of Electrical Engineering, KAIST; Senior Researcher, Samsung Advanced Institute of Technology | ||||||||||||
Haeyun Oh | Nov. 1974 | 2023 | 2026 | Independent Non-executive Director | President, KAIST Artificial Intelligence Research Institute | Director, KAIST Center for MARS Artificial Intelligence Research |
Other Executive Officers
In addition to our standingexecutive directors, we currently have the following executive officers:
Name | Month and | Position | Business Experience | |||
Chungsik Kang | Nov. 1971 | Project Leader, Communication Committee PR Team | ||||
Dec. 1971 | Head of Sales | Leader of Policy Cell | ||||
Young Sang Kwon | Mar. 1971 | Head of | ||||
Dae Sung Kim | Dec. 1971 | Head of Customer Planning | Head of MNO Support | |||
Kyeong Deog Kim | Apr. 1966 | Head of Enterprise CIC | Chief Executive Officer, Dell Technologies Korea | |||
Byong Jun Kim | Feb. 1970 | Head of SK Research Institute | Leader of mySUNI Innovation Design College | |||
Seong Joon Kim | Jul. 1970 | Head of | Representative of Service Top |
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Name | Month and | Position | Business Experience | |||
Yeong Joon Kim | Sept. 1972 | Head of | Leader of Voice Recognition Technology Cell | |||
Jung Hoon Kim | Nov. 1963 | Head of Cloud | Head of Platform Infrastructure Group | |||
Jiwon Kim | Jun. 1985 | Head of | Professional Researcher, Samsung Advanced Institute of Technology | |||
Oct. 1972 | Head of PMO | Research Officer of Deep Change, SK Research Institute | ||||
Ji Hyung Kim | Oct. 1971 | Head of Integrated Marketing Strategy | Head of Untact CP | |||
Ji Hoon Kim | Sept. 1978 | Leader | ||||
Sept. 1966 | Head of Corporate Planning | Representative, SK USA | ||||
Hyuk Kim | Sept. 1967 | Head of Media Business Support Group | ||||
Oct. 1968 | Head of | Head of Public Relations Office | ||||
Nov. 1966 | Director of Statistical Policy, Statistics Korea | |||||
Jung Hwan Ryu | Jun. 1970 | Head of | Head of Infrastructure Support Group | |||
May 1969 | Head of Smart Device CT | Head of | ||||
Myung Soon Park | Feb. 1969 | Head of | Head of AI Business Unit |
Year of Birth | ||||||||
Yong Joo Park | May 1965 | Head of ESG | Seoul Central District Prosecutor’s Office | |||||
Ji | Jun. 1976 | Officer of Talent Development, | Project Leader, HR Support Team, SUPEX Council Project | |||||
Jin Woo So | Dec. 1961 | Chairman of | Representative, SK Planet | |||||
Suk Ham Sung | Apr. 1970 | Head of Policy Cooperation | Evaluation Manager of Performance Evaluation Office, MSIT | |||||
Jin Soo Seong | May 1968 | Head of | Head of Daegu Infrastructure | |||||
Jun. 1979 | Head of Content | Head of A. Service Unit | ||||||
Yong Sik Shin | Aug. 1971 | Head of Connect | Head of Energy Business Team | |||||
Jeong Yeol Ahn | Aug. 1969 | Head of | Head of Corporate Center, Eleven Street | |||||
Jul. 1966 | Head of Corporate Culture | Head of HR Support Division, SK shieldus | ||||||
June Hyeon Ahn | Nov. 1969 | Officer of | ||||||
Maeng Seog Yang | Mar. 1969 | Head of Metaverse | Head of 5GX MNO Business Group | |||||
Head of | Vice President, Konan Technology | |||||||
Sung Jin Yeum | Oct. 1972 | Head of CR Support | ||||||
Yong-Seop Yum | Oct. 1962 | Head of SK Research Institute | Head of Future Research Office | |||||
Hui | Oct. 1970 | Head of Brand Strategy | Head of Brand 2 Office, Hyundai Card | |||||
Kyung | Mar. 1966 | Head of Sports Marketing | Leader of Sports Communications Team | |||||
Jul. 1963 | Head of | Head of SK C&C DT Business Development Division | ||||||
May 1966 | Director of SK Academy | Head of Corporate Culture, SK Hynix | ||||||
Jae Ho Yoo | Dec. 1973 | Head of Portfolio Management | Growth Business Group, Eleven Street | |||||
Sung Eun Yoon | Jan. 1973 | Officer of | Head of Corporate Relations Strategy Office Policy System Team |
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Name | Month and | Position | Business Experience | |||
Yong Chul Yoon | May 1965 | Officer of Communication Team, SUPEX Council Project | Head of Department, MBC Newsroom | |||
Nov. 1972 | Head of Subscription Service CO | Head of 5GX Cluster Marketing | ||||
Hyeong Sig Yoon | Apr. 1968 | Head of Infra Customer CT | Head of Infrastructure DT Team | |||
Gahp Jae Lee | Feb. 1973 | Head of | Head of Central Marketing Office | |||
Jun. 1973 | Head of Cloud Application | Head of Data Development Operations Group | ||||
Gyu Sik Lee | Jan. 1970 | Head of | Leader of Change 1 Cell | |||
Dec. 1969 | Head of Change Management 2 | |||||
Dong Kee Lee | Jan. 1982 | Head of Cloud/MEC Technology | Head of 5GX MEC Product | |||
Sang Gu Lee | Jul. 1970 | Head of Messaging CO | Head of MNO Data Business Team | |||
Sang Heon Lee | Aug. 1965 | Head of Policy Development | Head of Corporate Relations Strategy Office | |||
Head of | ||||||
Jul. 1978 | Head of | Head of Media Technology Institute | ||||
Joo Young Lee | May 1975 | Head of SK Research Institute | RF Researcher, Deep Change | |||
Joon Ho Lee | Aug. 1968 | Head of ESG | Head of Public Relation Office 2 | |||
Joong Ho Lee | Nov. 1967 | Head of Metropolitan Area CP | Head of Busan Marketing Office |
Year of Birth | ||||||
HyunA Lee | Aug. 1971 | Head of | Head of SK Planet Conversational Commerce Division | |||
Bong Ho Lim | Dec. 1966 | Head of | Head of Metropolitan Area Marketing | |||
Jeong Yeon Lim | May 1976 | Head of Media R&D | Leader of Media Processing Development Team | |||
Jong Pil Lim | Nov. 1960 | Officer of ICT Advisory | Head of Essencore | |||
Jun. | Head of | Head of | ||||
Hyun Ki Chang | Jan. 1971 | Head of Digital Innovation CT | General Manager, Shinhan Financial Group Digital Platform Implementation | |||
Hong Sung Chang | Mar. 1969 | Head of | Head of Data Technology | |||
Dae Dug Jeong | Sept. 1967 | Head of Finance | Head of Tax Team | |||
Doh Hee Jung | Sept. 1974 | Head of | Head of Data | |||
Sang Rok Jung | Jul. 1969 | Officer of VM Cooperation Team, SUPEX Council Project | Head of External Cooperation Office, SK Hynix | |||
Jai Hun Jung | Dec. 1959 | Officer of ICT Advisory Division | Officer of Corporate Growth, SK Square | |||
Chang | Jul. 1970 | Head of | Head of Infrastructure Engineering Group | |||
Hui Yong Jeong | Mar. 1973 | Head of Business Development | Head of Strategic Planning Office, SK Inc. | |||
Dong Hwan Cho | Nov. 1970 | Head of Cloud Technology | Head of Data CoE | |||
Young Log Cho | Jun. 1971 | Head of CR | Assistant to Head of External Cooperation Office | |||
Oct. 1977 | Head of Metaverse Development | Head of 5GX Service Development | ||||
Jong Keun Chai | Jul. 1968 | Head of | Head of Compliance Team | |||
Nag Hun Choi | Nov. 1972 | Head of | Head of IoT Business Support Group | |||
Yong Jin Choi | Feb. 1977 | Head of | Head of MNO DT Labs | |||
Woo Seong | Jan. 1974 | |||||
Il Gyu Choi | Nov. 1970 | Head of Digital | Head of Public Business Unit |
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Name | Month and | Position | Business Experience | |||
Chang Won Chey | Aug. 1964 | Vice President of SK Research Institute | Chief Executive Officer, SK Chemical | |||
Tae Won Chey | Dec. 1960 | Chairman | Representative Director of SK Inc., SK Innovation and SK Hynix | |||
Hwa Sik Choi | Jul. 1971 | Head of Serious Accident Prevention | Head of Growth SCM | |||
Hwan Seok Choi | Aug. 1971 | Head of Corporate Strategy | Head of IPO Promotion | |||
Myung Bok Ha | Mar. 1971 | Head of Central Regional CP | Head of Service Ace | |||
Min Yong Ha | Sept. 1970 | Head of Corporate Development | Head of Global Alliance Group | |||
Myung Jin Han | Oct. 1973 | Head of Corporate Strategy | Head of Global Alliance Group | |||
Aug. 1966 | Head of Metropolitan | Head of Infrastructure Engineering Group | ||||
Jin Hur | Jan. 1971 | Head of SK Research Institute | Deep Change Research Officer, SK Research Institute | |||
Seung Tae Hong | Jul. 1971 | Head of | Leader of Portfolio Innovation Team | |||
Davis Eric Hartman | Oct. 1980 | Head of | Head of Global AI Development Group | |||
Head of | Acting Head of AI/DT | |||||
Dong Hyun Kim | May 1977 | Head of | Acting Head of Brand Communications | |||
Head of | Acting Head of | |||||
Head of | Acting Head of ER | |||||
Jae Won Bok | Aug. 1973 | Head of | ||||
Ji Hwan Suk | ||||||
Head of Cloud | Acting Head of Cloud Data | |||||
In Hyuk Sohn | Oct. 1978 | Head of |
Year Birth | ||||||
Su Yeon Song | Project Leader, Investment Team 2, SUPEX Council Project | |||||
Officer of Strategy Support Team, SUPEX Council Project | Project Leader, Strategy Support Team, SUPEX Council Project | |||||
Young Tak Lee | Jul. 1972 | Head of | Acting Head of CR Support | |||
Jung Ryong Lee | Dec. 1975 | Head of | ||||
Jong Hoon Lee | Nov. 1975 | Head of | Acting Head of Infrastructure Solutions | |||
Joon Hyoung Lee | Dec. 1973 | Head of | ||||
Acting Head of | ||||||
Jul. 1971 | Head of | Project Leader, SKTA | ||||
Sang Hyuk Cho | Jun. 1972 | Head of Strategic Partnership | Acting Head of Strategic Alliances | |||
Jai Won Choi | Oct. 1970 | Head of Western Regional CP | Acting Head of West Region | |||
Sang Dong Han | Apr. 1974 | Head of Growth | ||||
Acting Head of | ||||||
Jae | ||||||
Mar. 1973 | Head of | Country Office Project Leader, SK E&S Indonesia | ||||
Jong Hwan Um | Jul. 1974 | Head of ESG Alliance | Project Leader, Business | |||
Officer of Investment Team 1, SK | ||||||
Do Youn Kim | Oct. 1973 | Head of Learning Center | Head of mySUNI LMS | |||
Do Youn Kim | Feb. 1973 | Head of Ethics Management | ||||
Yong Suk Lee | Nov. 1961 | Research Officer at SK Research Institute | ||||
Yong Hun Kim | CPO, WooWa Brothers |
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Item 6.B. | Compensation |
The aggregate of the remuneration paid and
The compensation of our directors who received total annual compensation exceeding Won 500 million in 20212022 was as follows:
Name | Position | Composition of Total Compensation | Total Compensation | |||||||||||||||||||
Salary | Bonus | Other Earned Income | Severance | |||||||||||||||||||
(in millions of Won) | ||||||||||||||||||||||
Jung Ho Park (1) | Executive Director | ₩ | 1,625 | ₩ | 2,170 | ₩ | 32 | — | ₩ | 3,827 | ||||||||||||
Young Sang Ryu | Executive Director | 792 | 730 | 31 | — | 1,553 |
Name | Position | Composition of Total Compensation | Total Compensation | |||||||||||||||||||
Salary | Bonus | Other Earned Income | Severance | |||||||||||||||||||
(in millions of Won) | ||||||||||||||||||||||
Young Sang Ryu | Executive Director | ₩ | 1,100 | ₩ | 1,024 | ₩ | 13 | — | ₩ | 2,137 | ||||||||||||
Jong Ryeol Kang | Executive Director | 519 | — | — | — | 519 |
Remuneration for our directors is determined by shareholder resolution. Severance allowances for our directors are determined by the board of directors in accordance with our regulation on severance allowances for officers, which was adopted by shareholder resolution. The regulation provides for monthly salary, performance bonus, severance payment and fringe benefits. The amount of performance bonuses is independently decided by a resolution of the board of directors.
The aggregate of the remuneration paid and
The compensation of the five individuals who received the highest compensation among those who received total annual compensation exceeding Won 500 million in 20212022 was as follows:
Name | Position | Composition of Total Compensation | Total Compensation | |||||||||||||||||||
Salary | Bonus | Other Earned Income | Severance | |||||||||||||||||||
(in millions of Won) | ||||||||||||||||||||||
Jin Woo So | Vice-chairman | ₩ | 1,600 | ₩ | 1,752 | ₩ | 2 | ₩ | — | ₩ | 3,354 | |||||||||||
Jung Ho Park | Former Vice-chairman | — | 2,106 | 25 | — | 2,800 | (1) | |||||||||||||||
Young Sang Ryu | Executive Director | 1,100 | 1,024 | 13 | — | 2,137 | ||||||||||||||||
Yong-Seop Yum | Head of SK Research Institute | 825 | 743 | 1 | — | 1,569 | ||||||||||||||||
Yong Chul Yoon | Officer of Communication Team, SUPEX Council Project | 450 | 838 | 9 | — | 1,297 |
(1) | Includes Won 670 million from the exercise of options to purchase shares of our common stock. |
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Name | Position | Composition of Total Compensation | Total Compensation | |||||||||||||||||||
Salary | Bonus | Other Earned Income | Severance | |||||||||||||||||||
(in millions of Won) | ||||||||||||||||||||||
Jung Ho Park | Executive Director | ₩ | 1,630 | ₩ | 2,170 | ₩ | 32 | ₩ | — | ₩ | 3,832 | |||||||||||
Jin Woo So | Chairman of Talent Development Committee | 1,286 | 1,699 | 1 | — | 2,986 | ||||||||||||||||
Yoon Kim | Head of T3K | 440 | 795 | 114 | 471 | 1,820 | ||||||||||||||||
Hyeong Chan Kim | PD of SK Research Institute for SUPEX Management | 361 | 315 | 39 | 899 | 1,614 | ||||||||||||||||
Dae Hwan Ko | Director of SK Academy | 369 | 303 | 4 | 895 | 1,571 |
On February 20, 2020, our board of directors resolved to grant options to purchase shares of our common stock to certain directors and executive officers, which was approved by shareholder resolution on March 26, 2020. On February 25, 2021, our board of directors resolved to grant options to purchase shares of our common stock to certain directors and executive officers, which was approved by shareholder resolution on March 25, 2021. On February 24, 2022, our board of directors resolved to grant options to purchase shares of our common stock to certain directors and executive officers, which was approved by shareholder resolution on March 25, 2022. On February 24, 2023, our board of directors resolved to grant options to purchase shares of our common stock to certain directors and executive officers, which was approved by shareholder resolution on March 28, 2023. The following table summarizes the exercisable stock options granted to our current and former directors and executive officers as of March 31, 2022:2023:
Recipient | Position | Grant date | Exercise period | Exercise price (per share) | Number of shares issuable | |||||||||||
From | To | |||||||||||||||
Jung Ho Park | Former Executive Director, President and Chief Executive Officer | March 24, 2017 | March 25, 2021 | March 24, 2024 | ₩ | 57,562 | 67,320 | |||||||||
March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 337,408 | ||||||||||||
Young Sang Ryu | Executive Director, President and Chief Executive Officer | March 26, 2019 | March 27, 2021 | March 26, 2024 | 50,862 | 5,265 | ||||||||||
March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 7,145 | ||||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 18,190 | ||||||||||||
March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 295,275 | ||||||||||||
Jong Ryeol Kang | Executive Director, Head of ICT Infra | March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 6,219 | ||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 7,136 | ||||||||||||
March 25, 2022 | March 26, 2024 | March 25, 2027 | 56,860 | 21,743 | ||||||||||||
March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 22,000 | ||||||||||||
Hyoung Il Ha | Former Head of Corporate Development | February 22, 2019 | February 23, 2021 | February 22, 2024 | 53,052 | 4,749 | ||||||||||
March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 5,955 | ||||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 11,418 | ||||||||||||
Poong Young Yoon | Former Head of Corporate Center 1 | March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 5,293 | ||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 10,203 | ||||||||||||
Seong Ho Ha | Former Head of Corporate Relations Center | February 22, 2019 | February 23, 2021 | February 22, 2024 | 53,052 | 4,157 | ||||||||||
March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 5,028 | ||||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 5,830 | ||||||||||||
March 25, 2022 | March 26, 2024 | March 25, 2027 | 56,860 | 9,341 | ||||||||||||
Dong Hwan Cho | Head of Cloud Technology | March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 4,631 | ||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 5,375 | ||||||||||||
March 25, 2022 | March 26, 2024 | March 25, 2027 | 56,860 | 8,697 | ||||||||||||
March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||||
HyunA Lee | Head of Comm Service | March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 4,631 | ||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 8,746 | ||||||||||||
March 25, 2022 | March 26, 2024 | March 25, 2027 | 56,860 | 12,884 | ||||||||||||
March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||||
Sang Kyu Shin | Former Head of Corporate Culture Center | March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 4,646 | ||||||||||
Jae Seung Song | Former Head of Corporate Development Croup | March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 8,047 | ||||||||||
Myung Jin Han | Head of Corporate Strategy | March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 4,403 | ||||||||||
March 25, 2022 | March 26, 2024 | March 25, 2027 | 56,860 | 11,274 | ||||||||||||
March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||||
Byung Hoon Ryu | Former Head of Corporate Strategy Group | March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 3,796 |
72
Recipient | Position | Grant date | Exercise period | Exercise price (per share) | Number of shares issuable | |||||||||||
From | To | |||||||||||||||
Jung Ho Park | Former Executive Director, President and Chief Executive Officer | March 24, 2017 | March 25, 2019 | March 24, 2022 | ₩ | 49,350 | 67,320 | |||||||||
March 25, 2020 | March 24, 2023 | 53,298 | 67,320 | |||||||||||||
March 25, 2021 | March 24, 2024 | 57,562 | 67,320 | |||||||||||||
March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 337,408 | ||||||||||||
Young Sang Ryu | Executive Director, President and Chief Executive Officer | February 20, 2018 | February 21, 2020 | February 20, 2023 | 50,824 | 4,123 | ||||||||||
March 26, 2019 | March 27, 2021 | March 26, 2024 | 50,862 | 5,265 | ||||||||||||
March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 7,145 | ||||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 18,190 | ||||||||||||
March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 295,275 | ||||||||||||
Seong Ho Ha | Head of Corporate Relations Center | February 22, 2019 | February 23, 2021 | February 22, 2024 | 53,052 | 4,157 | ||||||||||
March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 5,028 | ||||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 5,830 | ||||||||||||
March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 9,341 | ||||||||||||
Hyoung Il Ha | Head of Corporate Development | February 22, 2019 | February 23, 2021 | February 22, 2024 | 53,052 | 4,749 | ||||||||||
March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 5,955 | ||||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 11,418 | ||||||||||||
March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 10,737 | ||||||||||||
Poong Young Yoon | Head of Corporate Center 1 | February 22, 2019 | February 23, 2021 | February 22, 2024 | 53,052 | 3,777 | ||||||||||
March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 5,293 | ||||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 10,203 | ||||||||||||
Jong Ryeol Kang | Head of ICT Infrastructure Center | March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 6,219 | ||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 7,136 | ||||||||||||
March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 21,743 |
Recipient | Position | Grant date | Exercise period | Exercise price (per share) | Number of shares issuable | |||||||||||
From | To | |||||||||||||||
Yoon Kim | Head of T3K | March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 5,690 | ||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 6,407 | ||||||||||||
Seok Joon Huh | Head of Private Placement Group | March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 5,624 | ||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 6,863 | ||||||||||||
Dong Hwan Cho | Head of Cloud Transformation Center | March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 4,631 | ||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 5,375 | ||||||||||||
March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 8,697 | ||||||||||||
HyunA Lee | Head of AI&CO | March 26, 2020 | March 27, 2023 | March 26, 2027 | 38,452 | 4,631 | ||||||||||
March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 8,746 | ||||||||||||
March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 12,884 | ||||||||||||
Sang Kyu Shin | Head of Corporate Culture Center | March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 4,646 | ||||||||||
Jae Seung Song | Head of Corporate Development Croup | March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 8,047 | ||||||||||
Myung Jin Han | Head of Subscription Service CO | March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 4,403 | ||||||||||
March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 11,274 | ||||||||||||
Byung Hoon Ryu | Head of Corporate Strategy Group | March 25, 2021 | March 26, 2023 | March 25, 2026 | 50,276 | 3,796 | ||||||||||
Bong Ho Lim | Head of Mobile CO | March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 12,884 | ||||||||||
Jinwon Kim | Head of Corporate Planning Group | March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 10,629 | ||||||||||
Yong Joo Park | Head of ESG | March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 10,334 | ||||||||||
Heesup Kim | Head of Communications | March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 7,086 | ||||||||||
Jungwhan Ahn | Head of Corporate Culture | March 25, 2022 | March 26, 2025 | March 25, 2029 | 56,860 | 8,858 |
Recipient | Position | Grant date | Exercise period | Exercise price (per share) | Number of shares issuable | |||||||||||
From | To | |||||||||||||||
Bong Ho Lim | Head of Customer CIC | March 25, 2022 | March 26, 2024 | March 25, 2027 | 56,860 | 8,858 | ||||||||||
March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||||
Jin Won Kim | Head of Corporate Planning | March 25, 2022 | March 26, 2024 | March 25, 2027 | 56,860 | 10,629 | ||||||||||
March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||||
Yong Joo Park | Head of ESG | March 25, 2022 | March 26, 2024 | March 25, 2027 | 56,860 | 10,334 | ||||||||||
March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||||
Hee Sup Kim | Head of Communication | March 25, 2022 | March 26, 2024 | March 25, 2027 | 56,860 | 7,086 | ||||||||||
March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||||
Jung Whan Ahn | Head of Corporate Culture | March 25, 2022 | March 26, 2024 | March 25, 2027 | 56,860 | 8,858 | ||||||||||
March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||||
Kyeong Deog Kim | Head of Enterprise CIC | March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||
Hyuk Kim | Head of Media Business&Alliance | March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||
Min Yong Ha | Head of Corporate Development | March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||
Young Log Cho | Head of CR | March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||
Yong Hun Kim | Head of A. Product | March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 | ||||||||||
Hyun Ki Chang | Head of Digital Innovation CT | March 28, 2023 | March 29, 2025 | March 28, 2028 | 47,280 | 12,000 |
Item 6.C. | Board Practices |
For information regarding the expiration of each director’s term of appointment, as well as the period from which each director has served in such capacity, see the table set out under “Item 6.A. Directors and Senior Management” above.
Termination of Directors’ Services
Directors are given a retirement and severance payment upon termination of employment in accordance with our internal regulations on severance payments. Upon retirement, directors who have made significant contributions to our company during their term may be appointed to serve either as an advisor to us or as an officer of an affiliate company.
Audit Committee
Under relevant Korean laws and our articles of incorporation, we are required to have an audit committee under the board of directors. The committee is composed of at least three members,
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.
In addition, the audit committee must appoint independent auditors to examine our financial statements. An audit and review of our financial statements by independent auditors is required for the purposes of a securities report. Listed companies must provide such report on an annual, semi-annual and quarterly basis to the FSC and the KRX KOSPI Market.
Our audit committee is composed of four independent
73
NYSE as applicable. Seok-Dong Kim is the chairman of the committee. The board of directors has determined that Seok-Dong Kim is an “audit committee financial expert” as defined under the applicable rules of the SEC. See “Item 16A. Audit Committee Financial Expert.”
Independent Director Nomination Committee
This committee is devoted to recommending independent
Strategy Committee
This committee is responsible for reviewing our annual business plan (including the budget). It also examines major capital expenditure revisions,as well as establishing our key performance indicators (“KPIs”) and routinely monitors capital expenditure decisions that have already been executed.measuring our performance against such KPIs. The committee is comprised of onetwo executive director,directors, Young Sang Ryu and Jong Ryeol Kang, one
Compensation Review Committee
This committee oversees our overall compensation scheme for
ESG Committee
This committee is responsible for establishing and reviewing the direction of our environmental, social and governance policy as well as public filings and communications with related parties. This committee was established to help us achieve world-class sustainable growth and to help us fulfill our corporate social responsibilities. It is comprised of one executive director, Jong Ryeol Kang, and three independent directors, Jung Ho Ahn, Youngmin Yoon, Junmo Kim and Junmo Kim. Jung Ho AhnHaeyun Oh. Haeyun Oh is the chairmanchairwoman of the committee.
Item 6.D. | Employees |
The following table sets forth the numbers of our regular employees, temporary employees and total employees as of the dates indicated:
Regular Employees | Temporary Employees | Total | ||||||||||
December 31, 2019 (1) | 34,548 | 5,995 | 40,543 | |||||||||
December 31, 2020 (1) | 34,847 | 6,250 | 41,097 | |||||||||
December 31, 2021 | 23,457 | 668 | 24,125 |
Regular Employees | Temporary Employees | Total | ||||||||||
December 31, 2020(1) | 34,847 | 6,250 | 41,097 | |||||||||
December 31, 2021 | 23,457 | 668 | 24,125 | |||||||||
December 31, 2022 | 25,099 | 954 | 26,053 |
(1) | Includes employees of our former subsidiaries that were spun off pursuant to the Spin-off in November 2021. |
Labor Relations
As of December 31, 2021,2022, SK Telecom had a company union consisting of 2,4532,643 regular employees out of 23,4575,036 total regular employees. We have never experienced a work stoppage of a serious nature. Every two years,
74
Employee Benefits
Since April 1999, we have been required to contribute an amount equal to 4.5% of employee wages toward a national pension plan. Employees are eligible to participate in an employee stock ownership association. We are not required to, and we do not, make any contributions to the employee stock ownership association, although we subsidize the employee stock ownership association through the Employee Welfare Fund by providing low interest rate loans to employees who desire to purchase our stock through the plan in the event of a capitalization by the association.
We are required to pay a severance amount to eligible employees who voluntarily or involuntarily cease employment with us, including through retirement. This severance amount is based upon the employee’s length of service with us and the employee’s salary level at the time of severance. As of December 31, 2021,2022, the defined benefit obligation, which is the accrued and unpaid retirement and severance benefits, of Won 1,035.01,038.3 billion for all of our employees is reflected in our consolidated financial statements as a liability, of which a total of Won 1,040.31,214.0 billion was funded. Under Korean laws and regulations, we are prevented from involuntarily terminating a full-time employee except under certain limited circumstances. In September 2000, we entered into an employment stabilization agreement with the union. Among other things, in the event that we reorganize a department into a separate entity or we outsource an employee to a separate entity where the wage is lower, this agreement provides for a guarantee of the same wage level for the year that such an event occurs.
Under the Basic Labor Welfare Act, we may also contribute up to 5.0% of our annual earnings before tax for employee welfare. Contribution amounts are determined annually following negotiation with the union. The contribution amount for 2022 was set at 5.32% of SK Telecom’s profit before income tax on a separate basis, or Won 61.0 billion. The contribution amount for 2021 was set at 4.09% of SK Telecom’s profit before income tax on a separate basis, or Won 56.0 billion. The contribution amount for 2020 was set at 5.00% of SK Telecom’s profit before income tax on a separate basis, or Won 50.0 billion. The contribution amount for 2019 was set at 3.63% of SK Telecom’s profit before income tax on a separate basis, or Won 43.0 billion.
In addition, we provide our employees with miscellaneous other fringe benefits including medical cost subsidies, family camp programs and sabbatical programs for long-term employees.
Item 6.E. | Share Ownership |
The following table sets forth the share ownership by our directors and executive officers as of March 31, 2022:2023:
Name | Position | Number of Shares Owned | Percentage of Total Shares Outstanding | Special Voting Rights | Options | |||||||||||||
Directors: | ||||||||||||||||||
Young Sang Ryu | Executive Director, President and Chief Executive Officer | 11,974 | * | None | 325,875 | |||||||||||||
Jong Ryeol Kang | Executive Director, Head of ICT Infra | 5,758 | * | None | 57,098 | |||||||||||||
Executive Officers: | ||||||||||||||||||
Hyuncheol Ku | Head of Sales | 2,294 | * | None | — | |||||||||||||
Young Sang Kwon | Head of Strategy | 3,270 | * | None | — | |||||||||||||
Dae Sung Kim | Head of Customer Planning | 2,294 | * | None | — | |||||||||||||
Kyeong Deog Kim | Head of Enterprise CIC | * | None | 12,000 | ||||||||||||||
Seong Joon Kim | Head of Digital Channel | 3,932 | * | None | — | |||||||||||||
Yeong Joon Kim | Head of A. Conversation | 2,277 | * | None | — | |||||||||||||
Jung Hoon Kim | Head of Cloud Infra | 2,643 | * | None | — | |||||||||||||
Jiwon Kim | Head of Multimodal AI | 2,808 | * | None | — | |||||||||||||
Jee Hyun Kim | Head of PMO | 1,576 | * | None | — | |||||||||||||
Ji Hyung Kim | Head of Integrated Marketing Strategy | 1,350 | * | None | — | |||||||||||||
Ji Hoon Kim | Head of A. Product Growth | 203 | * | None | — | |||||||||||||
Jin Won Kim | Head of Corporate Planning | 6,538 | * | None | 22,629 | |||||||||||||
Hyuk Kim | Head of Media Business&Alliance | 3,185 | * | None | 12,000 |
75
Name | Position | Number of Shares Owned | Percentage of Total Shares Outstanding | Special Voting Rights | Options | |||||||||||||
Hee Sup Kim | Head of Communication | 3,856 | * | None | 19,086 | |||||||||||||
Jung Hwan Ryu | Head of Infra Strategy&Tech CT | 3,456 | * | None | — | |||||||||||||
Kap In Moon | Head of Smart Device CT | 4,329 | * | None | — | |||||||||||||
Myung Soon Park | Head of Infra DT | 2,030 | * | None | — | |||||||||||||
Yong Joo Park | Head of ESG | 6,978 | * | None | 22,334 | |||||||||||||
Suk Ham Sung | Head of Policy Cooperation | 4,135 | * | None | — | |||||||||||||
Jin Soo Seong | Head of Infra Service CT | 6,710 | * | None | — | |||||||||||||
Sang Wook Shin | Head of Content | 1,974 | * | None | — | |||||||||||||
Yong Sik Shin | Head of Connect Infra CO | 3,587 | * | None | — | |||||||||||||
Jeong Yeol Ahn | Head of HR Department | 2,790 | * | None | — | |||||||||||||
Jung Whan Ahn | Head of Corporate Culture | 1,243 | * | None | 20,858 | |||||||||||||
Maeng Seog Yang | Head of Metaverse CO | 2,856 | * | None | — | |||||||||||||
Sung Jin Yeum | Head of Corporate Culture Department | 3,450 | * | None | — | |||||||||||||
Hui Kang Yea | Head of Brand Strategy | 4,739 | * | None | — | |||||||||||||
Kyung Sig Oh | Head of Sports Marketing | 2,636 | * | None | — | |||||||||||||
Se Hyeon Oh | Head of Web3 CO | 1,626 | * | �� | None | — | ||||||||||||
Jae Ho Yoo | Head of Portfolio Management | 3,429 | * | None | — | |||||||||||||
Sung Eun Yoon | Officer of Communication Team, SUPEX Council Project | 1,911 | * | None | — | |||||||||||||
Yong Chul Yoon | Officer of Communication Team, SUPEX Council Project | 303 | * | None | — | |||||||||||||
Jae Woong Yoon | Head of Subscription Service CO | 1,474 | * | None | — | |||||||||||||
Hyeong Sig Yoon | Head of Infra Customer CT | 2,972 | * | None | — | |||||||||||||
Gahp Jae Lee | Head of Region CP | 3,632 | * | None | — | |||||||||||||
Kwan Woo Lee | Head of Cloud Application | 3,427 | * | None | — | |||||||||||||
Gyu Sik Lee | Head of Enterprise AI Business | 4,060 | * | None | — | |||||||||||||
Ki Yoon Lee | Head of Change Management 2 | 4,143 | * | None | — | |||||||||||||
Dong Kee Lee | Head of Cloud/MEC Technology | 1,842 | * | None | — | |||||||||||||
Sang Gu Lee | Head of Messaging CO | 3,784 | * | None | — | |||||||||||||
Sang Heon Lee | Head of Policy Development | 2,986 | * | None | — | |||||||||||||
Seung Yeoll Lee | Head of PR1 | 1,906 | * | None | — | |||||||||||||
Jong Min Lee | Head of Future R&D | 2,383 | * | None | — | |||||||||||||
Joon Ho Lee | Head of ESG Development | 2,854 | * | None | — | |||||||||||||
Joong Ho Lee | Head of Metropolitan Area CP | 2,929 | * | None | — | |||||||||||||
HyunA Lee | Head of Comm Service | 1,860 | * | None | 38,261 | |||||||||||||
Bong Ho Lim | Head of Customer CIC | 3,624 | * | None | 20,858 | |||||||||||||
Jeong Yeon Lim | Head of Media R&D | 1,802 | * | None | — | |||||||||||||
Hyuk Joon Chang | Head of Corporate Planning | 1,326 | * | None | — | |||||||||||||
Hyun Ki Chang | Head of Digital Innovation CT | — | * | None | 12,000 | |||||||||||||
Hong Sung Chang | Head of AdTech CO | 3,493 | * | None | — | |||||||||||||
Dae Dug Jeong | Head of Finance | 2,629 | * | None | — | |||||||||||||
Doh Hee Jung | Head of Data R&D | 1,971 | * | None | — | |||||||||||||
Jai Hun Jung | Officer of ICT Advisory Division | 303 | * | None | — | |||||||||||||
Chang Kawn Jung | Head of Infra Business | 2,882 | * | None | — | |||||||||||||
Hui Yong Jeong | Head of Business Development | 1,261 | * | None | — | |||||||||||||
Dong Hwan Cho | Head of Cloud Technology | 3,815 | * | None | 30,703 | |||||||||||||
Young Log Cho | Head of CR | 5,135 | * | None | 12,000 | |||||||||||||
Ik Hwan Cho | Head of Metaverse Development | 2,149 | * | None | — | |||||||||||||
Jong Keun Chai | Head of Compliance | 5,454 | * | None | — | |||||||||||||
Nag Hun Choi | Head of Industrial AIX CO | 3,463 | * | None | — | |||||||||||||
Yong Jin Choi | Head of Open AIX R&D | 2,668 | * | None | — |
76
Name | Position | Number of Shares Owned | Percentage of Total Shares Outstanding | Special Voting Rights | Options | |||||||||||||
Directors: | ||||||||||||||||||
Young Sang Ryu | Executive Director, President and Chief Executive Officer | 7,340 | * | None | 329,998 | |||||||||||||
Jong Ryeol Kang | Head of ICT Infrastructure | 3,484 | * | None | 35,098 | |||||||||||||
Executive Officers: | ||||||||||||||||||
Seong Joon Kim | Head of Untact CP | 2,514 | * | None | — | |||||||||||||
Yeong Joon Kim | Head of AI Technology Unit | 1,411 | * | None | — | |||||||||||||
Jung Hoon Kim | Head of Cloud Infrastructure | 1,759 | * | None | — | |||||||||||||
Jiwon Kim | Head of T3K Innovation Meta AI | 1,714 | * | None | — | |||||||||||||
Jinwoo Kim | Head of Global Business Office | 1,759 | * | None | — | |||||||||||||
Jinwon Kim | Head of Corporate Planning Group | 3,429 | * | None | 10,629 |
Name | Position | Number of Shares Owned | Percentage of Total Shares Outstanding | Special Voting Rights | Options | |||||||||||||
Hyuk Kim | Global Media Support, Media/Contents CO | 1,714 | * | None | — | |||||||||||||
Heesup Kim | Head of Communications | 2,411 | * | None | 7,086 | |||||||||||||
Jung Hwan Ryu | Head of Infrastructure Strategy | 2,420 | * | None | — | |||||||||||||
Gap In Moon | Head of Smart Device | 2,911 | * | None | — | |||||||||||||
Myung Soon Park | Head of Infrastructure Value Innovation | 1,459 | * | None | — | |||||||||||||
Yong Joo Park | Head of ESG | 5,527 | * | None | 10,334 | |||||||||||||
Jong Kwan Park | Head of Infrastructure Technology | 1,911 | * | None | — | |||||||||||||
Suk Ham Sung | Head of Policy Cooperation Office | 2,822 | * | None | — | |||||||||||||
Jin Soo Seong | Head of Infrastructure Engineering | 5,449 | * | None | — | |||||||||||||
Yongsik Shin | Head of Connect Infrastructure CO | 2,642 | * | None | — | |||||||||||||
Sang Soo Sim | Head of Western Infrastructure | 2,714 | * | None | — | |||||||||||||
Jeong Yeol Ahn | Head of Supply Chain Management | 2,182 | * | None | — | |||||||||||||
Maeng Seog Yang | Head of Metaverse Business, Metaverse CO | 1,911 | * | None | — | |||||||||||||
Ji Young Yeo | ESG Alliance, ESG Promotion | 1,763 | * | None | — | |||||||||||||
Sung Jin Yeum | Officer of Corporate Culture Center | 4,340 | * | None | — | |||||||||||||
Hui Gang Ye | Head of Brand Strategy | 2,411 | * | None | — | |||||||||||||
Kyung Sik Oh | Head of Sports Marketing | 1,866 | * | None | — | |||||||||||||
Sehyeon Oh | Head of Digital Asset CO | 1,107 | * | None | — | |||||||||||||
Sung Eun Yoon | Officer of Communications, SUPEX Council Project | 1,911 | * | None | — | |||||||||||||
Gab Jae Lee | Head of Regional CP | 2,214 | * | None | — | |||||||||||||
Kiyoon Lee | Head of Change Management 2 | 3,126 | * | None | — | |||||||||||||
Sang Gu Lee | Head of Messaging CO | 2,366 | * | None | — | |||||||||||||
Sang Heon Lee | Head of Policy Development | 2,148 | * | None | — | |||||||||||||
Jongmin Lee | Head of T3K Innovation | 1,911 | * | None | — | |||||||||||||
Joon Ho Lee | Head of ESG Promotion | 2,014 | * | None | — | |||||||||||||
Joong Ho Lee | Head of Metropolitan Area CP | 1,511 | * | None | — | |||||||||||||
HyunA Lee | Head of AI&CO | 1,107 | * | None | 26,261 | |||||||||||||
Bong Ho Lim | Head of Mobile CO | 1,759 | * | None | 8,858 | |||||||||||||
Hyoung Do Lim | Head of Change Management 1 | 1,638 | * | None | — | |||||||||||||
Hong Sung Chang | Head of Advertising/Data CO | 2,562 | * | None | — | |||||||||||||
Dae Dug Jeong | Head of Finance | 1,866 | * | None | — | |||||||||||||
Doh Hee Jung | Head of AI Transformation Intelligence Service | 1,607 | * | None | — | |||||||||||||
Chang Gweon Chung | Head of Infrastructure Business | 2,370 | * | None | — | |||||||||||||
Dong Hwan Cho | Head of Cloud Technology | 2,929 | * | None | 14,072 | |||||||||||||
Young Log Cho | Head of CR Innovation | 4,429 | * | None | — | |||||||||||||
Zonggeun Chai | Head of Ethics Management | 4,036 | * | None | — | |||||||||||||
Nag Hun Choi | Head of Smart Factory CO | 2,625 | * | None | — | |||||||||||||
Il Gyu Choi | Head of Digital Infrastructure CO | 1,509 | * | None | — | |||||||||||||
Jeong Hwan Choi | Strategic Investment, Business Development | 2,018 | * | None | — | |||||||||||||
Min Yong Ha | Head of Corporate Development | 2,714 | * | None | — | |||||||||||||
Seong Ho Ha | Head of Corporate Relations | 5,340 | * | None | 19,328 | |||||||||||||
Hyoung Il Ha | Head of Corporate Development | 7,340 | * | None | 26,904 | |||||||||||||
Geunman Heo | Head of Metropolitan Infrastructure | 2,514 | * | None | — | |||||||||||||
Myung Jin Han | Head of Corporate Strategy | 5,340 | * | None | 15,677 | |||||||||||||
Seung Tae Hong | Head of Client Value Innovation | 1,759 | * | None | — | |||||||||||||
Gyu Sik Lee | Head of ICT Support Office | 2,411 | * | None | — | |||||||||||||
Gwan Woo Lee | Head of Cloud Application Group | 2,062 | * | None | — | |||||||||||||
Yeong Sang Kwon | Head of Corporate Relations Strategy | 2,062 | * | None | — | |||||||||||||
Yong Jin Choi | Head of Apollo TF | 1,411 | * | None | — |
Name | Position | Number of Shares Owned | Percentage of Total Shares Outstanding | Special Voting Rights | Options | |||||||||||||
Yong Chul Yoon | Officer of Communication Team, SUPEX Council Project | 303 | * | None | — | |||||||||||||
Eric Hartman Davis | Head of Apollo TF | 803 | * | None | — | |||||||||||||
Woo Seong Chey | Representative, SK Telecom Japan | 303 | * | None | — | |||||||||||||
Jihoon Kim | Officer of Future Business Team, SUPEX Council Project | 203 | * | None | — | |||||||||||||
Jungwhan Ahn | Head of Corporate Culture | — | * | None | 8,858 | |||||||||||||
Jaeho Yoo | Head of Portfolio Mgmt | 2,168 | * | None | — | |||||||||||||
Hyuncheol Ku | Head of Policy, Mobile CO | 1,107 | * | None | — | |||||||||||||
Dae Sung Kim | Head of Customer Planning, Business Planning | 1,107 | * | None | — | |||||||||||||
Ji Hyung Kim | Head of Bundled Marketing Strategy | 955 | * | None | — | |||||||||||||
Sang Wook Shin | Head of AI Service, AI&CO | 1,607 | * | None | — | |||||||||||||
Jae Woong Yoon | Head of Subscription Marketing, Marketing CO | 1,107 | * | None | — | |||||||||||||
Hyeongsig Yoon | Head of Infrastructure Operation | 1,501 | * | None | — | |||||||||||||
Dong Kee Lee | Head of Cloud MEC Technology, Digital Infrastructure CO | 1,107 | * | None | — | |||||||||||||
Seoungyeoll Lee | Head of PR1 | 803 | * | None | — | |||||||||||||
Jeongyeon Lim | Head of Media Technology | 825 | * | None | — | |||||||||||||
Hyuk Joon Chang | Head of Business Planning | 500 | * | None | — | |||||||||||||
Jae Hyun Chung | Officer of ICT Advisory Group | 303 | * | None | — | |||||||||||||
Ikhwan Cho | Head of Metaverse Development, Metaverse CO | 1,046 | * | None | — | |||||||||||||
Hwasik Choi | Head of Safety and Health | 1,107 | * | None | — | |||||||||||||
Hwan Seok Choi | Head of Business Strategy | 1,000 | * | None | — | |||||||||||||
Jin Hur | PD of SK Research Institute for SUPEX Management | 197 | * | None | — | |||||||||||||
Tae-won Chey | Chairman | 303 | * | None | — | |||||||||||||
Jung Ho Park | Vice-chairman | 21,530 | * | None | 539,368 | |||||||||||||
Total | 191,464 | * | 1,052,471 |
Name | Position | Number of Shares Owned | Percentage of Total Shares Outstanding | Special Voting Rights | Options | |||||||||||||
Woo Seong Choi | Head of SK Telecom Japan | 303 | * | None | — | |||||||||||||
Il Gyu Choi | Head of Digital Infra CO | 2,272 | * | None | — | |||||||||||||
Tae Won Chey | Chairman | 303 | * | None | — | |||||||||||||
Hwa Sik Choi | Head of Serious Accident Prevention | 1,921 | * | None | — | |||||||||||||
Hwan Seok Choi | Head of Corporate Strategy | 2,103 | * | None | — | |||||||||||||
Myung Bok Ha | Head of Central Regional CP | 1,839 | * | None | — | |||||||||||||
Min Yong Ha | Head of Corporate Development | 4,749 | * | None | 12,000 | |||||||||||||
Myung Jin Han | Head of Corporate Strategy | 10,638 | * | None | 27,677 | |||||||||||||
Geun Man Hur | Head of Metropolitan Infra | 2,886 | * | None | — | |||||||||||||
Jin Hur | Head of SK Research Institute | 197 | * | None | — | |||||||||||||
Seung Tae Hong | Head of Customer Value Innovation | 2,722 | * | None | — | |||||||||||||
Davis Eric Hartman | Head of GLM | 1,205 | * | None | — | |||||||||||||
Hai Sung Kwon | Head of AI/DT | 1,637 | * | None | — | |||||||||||||
Dong Hyun Kim | Head of Brand Comm | 2,653 | * | None | — | |||||||||||||
Sang Bum Kim | Head of Distribution | 1,554 | * | None | — | |||||||||||||
Bu Sik Min | Head of ER | 598 | * | None | — | |||||||||||||
Jae Won Bok | Head of Infra Red | 740 | * | None | — | |||||||||||||
Ji Hwan Suk | Head of Cloud Data | 1,368 | * | None | — | |||||||||||||
In Hyuk Sohn | Head of PMO | 2,656 | * | None | — | |||||||||||||
Su Yeon Song | Officer of Investment Team 2, SUPEX Council Project | 774 | * | None | — | |||||||||||||
Young Tak Lee | Head of CR Support | 1,505 | * | None | — | |||||||||||||
Jung Ryong Lee | Head of A.Data | 1,339 | * | None | — | |||||||||||||
Jong Hoon Lee | Head of Infra Engineering | 1,063 | * | None | — | |||||||||||||
Joon Hyoung Lee | Head of Platform | 1,247 | * | None | — | |||||||||||||
Sang Hyuk Cho | Head of Strategic Partnership | 1,560 | * | None | — | |||||||||||||
Jai Won Choi | Head of Western Regional CP | 1,715 | * | None | — | |||||||||||||
Sang Dong Han | Head of Growth Support | 1,068 | * | None | — | |||||||||||||
Jong Hwan Um | Head of ESG Alliance | 49 | * | None | — | |||||||||||||
Yong Hun Kim | Head of A. Product | — | * | None | 12,000 | |||||||||||||
|
|
|
|
|
| |||||||||||||
Total | 162,145 | * | 657,379 |
* | Less than 1%. |
See “Item 6.B. Compensation” for information regarding the exercisable stock options granted to our directors and executive officers.
Item 6.F. | Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation |
Not applicable.
Item 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
Item 7.A. | Major Shareholders |
As of the close of our shareholders’ registry on December 31, 2021,2022, approximately 56.4%54.4% of our issued shares were held in Korea by approximately 18,648,100202,069 shareholders. According to Citibank, N.A. (“Citibank”), depositary for our ADRs,We estimate that, as of December 31, 2021,2022, there were at least 35,23227,252 record holders of our ADRs evidencing ADSs resident in the United States, to the best of Citibank’s knowledge, and 14,653,5982,876,366 shares of our common stock were held in the form of ADSs.
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The following table sets forth certain information as of December 31, 20212022 with respect to any person known to us to be the beneficial owner of more than 5.0% of our common shares:
Shareholder | Number of Shares | Percentage of Total Shares Issued (1) | Percentage of Total Shares Outstanding (2) | |||||||||
SK Inc. | 65,668,397 | 30.0 | % | 30.2 | % | |||||||
National Pension Service | 21,076,493 | 9.6 | 9.7 |
Shareholder | Number of Shares | Percentage of Total Shares Issued(1) | Percentage of Total Shares Outstanding(2) | |||||||||
SK Inc. | 65,668,397 | 30.0 | % | 30.1 | % | |||||||
National Pension Service | 16,846,066 | 7.7 | 7.7 |
(1) | Calculated based on 218,833,144 total issued shares, which include |
(2) | Calculated based on |
The following table sets forth significant changes in the percentage ownership held by our major shareholders during the past three years:
As of December 31, | ||||||||||||
Shareholder | 2021 | 2020 | 2019 | |||||||||
(As a percentage of total issued shares) (1) | ||||||||||||
SK Group (2) | 30.0 | % | 26.8 | % | 26.8 | % | ||||||
SK Inc. | 30.0 | 26.8 | 26.8 | |||||||||
National Pension Service | 9.6 | 11.0 | 11.1 |
As of December 31, | ||||||||||||
Shareholder | 2022 | 2021 | 2020 | |||||||||
(As a percentage of total issued shares)(1) | ||||||||||||
SK Group(2) | 30.0 | % | 30.0 | % | 26.8 | % | ||||||
SK Inc. | 30.0 | 30.0 | 26.8 | |||||||||
National Pension Service | 7.7 | 9.6 | 11.0 |
(1) | Includes 801,091 shares, 1,250,992 shares |
(2) | SK Group’s ownership interest as of December 31, 2022, 2021 |
Except as described above, other than companies in the SK Group, no other persons or entities known by us to be acting in concert, directly or indirectly, jointly or severally, own in excess of 5.0% of our total shares outstanding or exercise control or could exercise control over our business.
As of March 31, 2022,2023, SK Inc. held 30.0% of our total issued shares of common stock. For a description of our foreign ownership limitation, see “Item 3.D. Risk Factors — Risks Relating to Our Business — If SK Inc. causes us to breach the foreign ownership limitations on our common shares, we may experience a change of control.” and “Item 4.B. Business Overview — Law and Regulation — Foreign Ownership and Investment Restrictions and Requirements.” In the event that SK Inc. announces plans of a sale of our shares, we expect to be able to discuss the details of such sale with them in advance and will endeavor to minimize any adverse effects on our share prices as a result of such sale.
As of March 31, 2022,2023, the total number of our common shares outstanding was 218,002,830.
Other than as disclosed herein, there are no other arrangements, to the best of our knowledge, which would result in a material change in the control of us. Our major shareholders do not have different voting rights.
Item 7.B. | Related Party Transactions |
We are part of the SK Group of affiliated companies. See “Item 7.A. Major Shareholders.” As disclosed in note 36 of the notes to our consolidated financial statements, we had related party transactions with a number of affiliated companies of the SK Group during the year ended December 31, 20212022.
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SK Networks
As of December 31, 2021,2022, we had Won 0.20.5 billion of accounts receivable from SK Networks. As of the same date, we had Won 198.6113.9 billion of accounts payable to SK Networks, mainly relating to payments for wireless devices provided by PS&Marketing. The operating expenses we incurred with respect to SK Networks, including aggregate fees we paid to SK Networks for dealer commissions, amounted to Won 904.3 billion in 2022, Won 1,055.5 billion in 2021 and Won 1,023.0 billion in 2020 and Won 1,088.4 billion in 2019.
SK Inc.
We enter into agreements with SK Inc. from time to time for specific information technology-related projects, and we also pay SK Inc. for use of the SK brand. The operating expenses we incurred with respect to SK Inc., including aggregate fees we paid to SK Inc. for such information technology services and the use of the SK brand, amounted to Won 389.7 billion in 2022, Won 385.2 billion in 2021 and Won 380.3 billion in 2020 and Won 396.0 billion in 2019.2020. We also purchase various information technology-related equipment from SK Inc. from time to time. The total amount of such purchases was Won 114.9 billion in 2022, Won 82.2 billion in 2021 and Won 76.5 billion in 2020 and Won 95.4 billion in 2019.2020. We are a party to several service agreements with SK Inc. relating to the development and maintenance of our information technologies systems.
Item 7.C. | Interests of Experts and Counsel |
Not applicable.
Item 8. | FINANCIAL INFORMATION |
Item 8.A. | Consolidated Statements and Other Financial Information |
See “Item 18. Financial Statements” and pages
Legal Proceedings
KFTC Proceedings
In March 2021, the FTCKFTC imposed a fine of Won 3.2 billion on each of SK Telecom and SK Broadband (which SK Telecom and SK Broadband have paid in full) and issued a correctional order in connection with the payment by SK Telecom of a portion of sales commissions for SK Broadband’s IPTV services in the course of bundling and selling services that combine SK Telecom’s wireless and high-speed wireless Internet services with SK Broadband’s IPTV services in violation of the Fair Trade Act. In April 2021, we initiated an administrative proceeding, which is currently pending, requesting the revocation of the fine and the correctional order.
The KFTC is currently investigating all three of the MDDIA. On June 26, 2019,mobile network operators in the KCC imposed a fineKorean market, including us, in connection with alleged violations of Won 231 millionthe Act on usFair Labeling and issued a correctional orderAdvertising relating to restrictions on subscription cancelations. On July 9, 2019, the KCC imposed a fine of Won 1.5 million on us and issued a correctional order for failing to maintain the amount of subsidies for the minimum period in violationadvertised transmission speed of the MDDIA.
KCC Proceedings
On June 4, 2020, the KCC imposed a fine of Won 4 million on us and issued a correctional order for obtaining consent from subscribers for collection of personal information through contracts with material omissions in violation of the Location Information Act of Korea. On July 8, 2020, the KCC imposed a fine of Won 22.3 billion on us and issued a correctional order for providing handset subsidies that were in excess of their officially announced amounts and were discriminatory in nature, as well as unlawfully requiring subscribers to enroll to certain subscription plans or purchase certain value-added services in return, in connection with attracting new subscribers of 5G wireless services during the period between April 2019 and August 2019 in violation of the MDDIA. On September 9, 2020, the KCC imposed a fine of Won 76 million on us and issued a correctional order for false, exaggerated or deceptive advertising in violation of the Telecommunications Business Act.
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With respect to the fines imposed by the KCC set forth above, we have paid such fines in full. With respect to the correctional orders issued by the KCC set forth above, we have implemented remedial measures pursuant to such correctional orders and reported to the KCC on the implementation of such measures.
Except as described above, neither we nor any of our subsidiaries are involved in any litigation, arbitration or administrative proceedings relating to claims which may have, or have had during the twelve months preceding the date hereof, a significant effect on our financial position or the financial position of our subsidiaries taken as a whole, and, so far as we are aware, no such litigation, arbitration or administrative proceedings are pending or threatened.
Dividends
Annual dividends, if any, on our outstanding shares must be approved at the annual general meeting of shareholders. This meeting is generally held in March of the following year, and the annual dividend is generally paid shortly after the meeting. Since our shareholders have discretion to declare annual dividends, we cannot give any assurance as to the amount of dividends per share or that any dividends will be declared at all. Interim dividends, if any, could be approved by a resolution of our board of directors. We replaced the interim dividend system with a quarterly dividend system pursuant to an amendment to our articles of incorporation at our annual general meeting of shareholders held on March 25, 2021. Once declared, dividends must be claimed within five years, after which the right to receive the dividends is extinguished and reverted to us.
We pay cash dividends to the ADR depositary in Won. Under the terms of the deposit agreement, cash dividends received by the ADR depositary generally are to be converted by the ADR depositary into Dollars and distributed to the holders of the ADSs, less withholding tax, other governmental charges and the ADR depositary’s fees and expenses. The ADR depositary’s designated bank in Korea must approve this conversion and remittance of cash dividends. See “Item 10.D. Exchange Controls — Korean Foreign Exchange Controls and Securities Regulations.”
Year Ended December 31, | Dividend per Share | Total Amount of Dividends | Number of Shares Entitled to Dividend | |||||||||
(In Won) | (In billions of Won) | |||||||||||
2019 | ₩ | 10,000 | ₩ | 730.1 | 73,136,448 | (1) | ||||||
2020 | 10,000 | 715.1 | 71,327,153 | (2) |
The following table sets forth the interim and annual dividend per share and the aggregate total amount of dividends declared, as well as the number of outstanding shares entitled to dividends, with respect to the yearyears ended December 31, 2021.2020, 2021 and 2022. The annual dividend was paid in the immediately following year, and the interim dividends were paid in the same year.
Dividend Type | Dividend per Share | Total Amount of Dividends | Number of Shares Entitled to Dividend | |||||||||
(In Won) | (In billions of Won) | |||||||||||
Interim dividend (for the period ended June 30, 2021) | ₩ | 2,500 | ₩ | 177.9 | 71,160,643 | |||||||
Interim dividend (for the period ended September 30, 2021) | 2,500 | 177.9 | 71,160,643 | |||||||||
Annual dividend (for the year ended December 31, 2021) | 1,660 | 361.2 | 217,582,152 | (1) |
Dividend Type | Dividend per Share | Total Amount of Dividends | Number of Shares Entitled to Dividend | |||||||||
(In Won) | (In billions of Won) | |||||||||||
Interim dividend (for the period ended June 30, 2020) | ₩ | 1,000 | ₩ | 73.1 | 73,136,448 | |||||||
Annual dividend (for the year ended December 31, 2020) | 9,000 | 641.9 | 71,327,153 | |||||||||
Interim dividend (for the period ended June 30, 2021) | 2,500 | 177.9 | 71,160,643 | |||||||||
Interim dividend (for the period ended September 30, 2021) | 2,500 | 177.9 | 71,160,643 | |||||||||
Annual dividend (for the year ended December 31, 2021) | 1,660 | 361.2 | 217,582,152 | (1) | ||||||||
Interim dividend (for the period ended March 31, 2022) | 830 | 180.9 | 218,002,830 | (1) | ||||||||
Interim dividend (for the period ended June 30, 2022) | 830 | 181.0 | 218,032,053 | (1) | ||||||||
Interim dividend (for the period ended September 30, 2022) | 830 | 181.0 | 218,032,053 | (1) | ||||||||
Annual dividend (for the year ended December 31, 2022) | 830 | 181.0 | 218,032,053 | (1) |
(1) | Reflects the Stock Split, which became effective as of October 28, 2021. |
We distribute dividends to our shareholders in proportion to the number of shares owned by each shareholder. Our common shares represented by the ADSs have the same dividend rights as other outstanding common shares.
Holders of
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minimum required dividend, holders of
We declare dividends annually at the annual general meeting of shareholders which is generally held within three months after the end of the fiscal year. We pay the annual dividend shortly after the annual general meeting to the shareholders of record or registered pledges as of the end of the preceding fiscal year. We may distribute the annual dividend in cash or in shares. However, a dividend of shares must be distributed at par value. Dividends in shares may not exceed
Under the Korean Commercial Code, we may pay an annual dividend only out of the excess of our net assets, on a
In addition, the FSCMA and our articles of incorporation provide that, in addition to annual dividends, we may pay quarterly dividends. Unlike annual dividends, the decision to pay quarterly dividends can be made by a resolution of the board of directors and is not subject to shareholder approval. Any quarterly dividends must be paid in cash to the shareholders of record as of March 31, June 30 or September 30 of the relevant fiscal year.
Under the FSCMA, the total amount of quarterly dividends payable in a fiscal year shall not be more than the net assets on the balance sheet of the immediately preceding fiscal year, after deducting (1) a company’s capital in the immediately preceding fiscal year, (2) the aggregate amount of its capital reserves and legal reserves accumulated up to the immediately preceding fiscal year, (3) the amount of earnings for dividend payments confirmed at the general shareholders’ meeting with respect to the immediately preceding fiscal year and (4) the amount of legal reserve that should be set aside for the current fiscal year following the quarterly dividend payment. Furthermore, the rate of quarterly dividends for
Our obligation to pay quarterly dividends expires if no claims to such dividends are made for a period of five years from the payment date.
Item 8.B. | Significant Changes |
None.
Item 9. | THE OFFER AND LISTING |
Item 9.A. | Offering and Listing Details |
These matters are described under “Item 9.C. Markets” below where relevant.
Item 9.B. | Plan of Distribution |
Not applicable.
Item 9.C. | Markets |
The principal trading market for our common shares is the KRX KOSPI Market. Our common shares are traded on the KRX KOSPI Market under the identification code 017670. As of March 31, 2022, 218,002,8302023, 218,466,141 shares of our common stock were outstanding.
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The ADSs are traded on the NYSE and the London Stock Exchange. The ADSs have been issued by the ADR depositary and are traded on the NYSE under the ticker symbol “SKM.” Each ADS represents five-ninths of one share of our common stock. As of March 31, 2022,2023, ADSs representing 14,653,59813,718,088 shares of our common stock were outstanding.
Item 9.D. | Selling Shareholders |
Not applicable.
Item 9.E. | Dilution |
Not applicable.
Item 9.F. | Expenses of the Issue |
Not applicable.
Item 10. | ADDITIONAL INFORMATION |
Item 10.A. | Share Capital |
Not applicable.
Item 10.B. | Memorandum and Articles of Association |
Description of Capital Stock
This section provides information relating to our capital stock, including brief summaries of material provisions of our articles of incorporation, the FSCMA, the Korean Commercial Code, the Telecommunications Business Act and related laws of Korea, all as currently in effect. The following summaries are subject to, and are qualified in their entirety by reference to, our articles of incorporation and the applicable provisions of the FSCMA, the Korean Commercial Code and the Telecommunications Business Act. We have filed a copy of our articles of incorporation as an exhibit to our annual reports on
General
The name of our company is SK Telecom Co., Ltd. We are registered under the laws of Korea under the commercial registry number of 110111-0371346. As specified in Article 2 (Objectives) of our articles of incorporation, as amended, our objectives are the rational management of the telecommunications business, development of telecommunications technology, and contribution to public welfare and convenience. In order to achieve these objectives, we are engaged in the following:
information and communication business;
sale and lease of subscriber handsets;
new media business;
advertising business;
mail order sales business;
real estate business (development, management and leasing, etc.) and chattel leasing business;
research and technology development relating to the first four items above;
overseas and import/export business relating to the first four items above;
manufacture and distribution business relating to the first four items above;
travel business;
electronic financial services business;
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film business (production, import, distribution and screening);
lifetime education and management of lifetime educational facilities;
electric engineering business;
information- and communication-related engineering business;
ubiquitous city construction and related service business;
any related business through investment, management and operation of our Korean or offshore subsidiaries and investment companies;
construction business, including the machine and equipment business;
export/import business and export/import intermediation/agency business;
electrical business such as intelligent electrical grid business;
data production, trading and utilization business, including MyData business;
manufacture, import, maintenance, sale and lease of medical equipment and veterinary medical equipment business; and
any business or undertaking incidental or conducive to the attainment of the objectives stated above.
Currently, our authorized share capital is 670,000,000 shares, which consists of shares of common stock, par value Won 100 per share, and shares of
Board of Directors
Meetings of the board of directors are convened by the representative director as he or she deems necessary or upon the request of three or more directors. The board of directors determines all important matters relating to our business. In addition, the prior approval of the majority of the independent
investment by us or any of our subsidiaries in a foreign company in equity or acquisition of such foreign company’s other overseas assets in an amount equal to 5.0% or more of our 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 10.0 billion through one or a series of transactions.
Resolutions of the board are adopted in the presence of a majority of the directors in office and by the affirmative vote of a majority of the directors present. No director who has an interest in a matter for resolution may exercise his or her vote upon such matter.
There are no specific shareholding requirements for director’s qualification. Directors are elected at a general meeting of shareholders if the approval of the holders of the majority of the voting shares present at such meeting is obtained and if such majority also represents at least
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Korean Commercial Code, unless otherwise stated in the articles of incorporation, holders of an aggregate of 1.0% or more of the outstanding shares with voting rights may request cumulative voting in any election for two or more directors. Our articles of incorporation do not permit cumulative voting for the election of directors.
The term of office for directors is until the close of the third annual general shareholders meeting convened after he or she commences his or her term. Our directors may serve consecutive terms and our shareholders may remove them from office at any time by a special resolution adopted at a general meeting of shareholders. The total term of office of independent directors may not exceed six years, and when combined with the term of office at our affiliates, may not exceed nine years.
Dividends
We distribute dividends to our shareholders in proportion to the number of shares owned by each shareholder. Our common shares represented by the ADSs have the same dividend rights as other outstanding common shares. For a detailed discussion of our dividend policy, see “Item 8.A. Consolidated Statements and Other Financial Information — Dividends.”
Distribution of Free Shares
In addition to paying dividends in shares out of our retained or current earnings, we may also distribute to our shareholders an amount transferred from our capital surplus or legal reserve to our stated capital in the form of free shares. We must distribute such free shares to all of our shareholders in proportion to their existing shareholdings.
Preemptive Rights and Issuance of Additional Shares
We may at times issue authorized but unissued shares, unless otherwise provided in the Korean Commercial Code, on terms determined by our board of directors. All of our shareholders are generally entitled to subscribe to any newly-issued shares in proportion to their existing shareholdings. We must offer new shares on uniform terms to all shareholders who have preemptive rights and are listed on our shareholders’ registry as of the relevant record date. We must give public notice of the preemptive rights regarding new shares and their transferability at least two weeks before the relevant record date. Our board of directors may determine how to distribute shares for which preemptive rights have not been exercised or where fractions of shares occur.
Under the Korean Commercial Code and our articles of incorporation, we may issue new shares pursuant to a board resolution to persons other than existing shareholders only if (1) the new shares are issued for the purpose of issuing depositary receipts in accordance with the relevant regulations or through an offering to public investors and (2) the purpose of such issuance is deemed necessary by us to achieve a business purpose, including, but not limited to, the introduction of new technology or the improvement of our financial condition. If we make an allotment of new shares to persons other than our existing shareholders, we are required by the Korean Commercial Code to notify our existing shareholders of (a) the class and number of new shares, (b) the issuance price of new shares and the date set for the payment thereof, (c) in cases of no par value shares, the amount to be included in the
In addition, under our articles of incorporation, we may issue convertible bonds or bonds with warrants, each up to an aggregate principal amount of Won 400.0 billion, to persons other than existing shareholders, where such issuance is deemed necessary by us to achieve a business purpose, including, but not limited to, the introduction of new technology or the improvement of our financial condition.
Members of our employee stock ownership association, whether or not they are our shareholders, generally have a preemptive right to subscribe for up to 20.0% of the shares publicly offered pursuant to the FSCMA. This
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General Meeting of Shareholders
We generally hold the annual general meeting of shareholders within three months after the end of each fiscal year. Subject to a board resolution or court approval, we may hold an extraordinary general meeting of shareholders:
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.
Holders of
We must give shareholders written notice setting out the date, place and agenda of the meeting at least two weeks before the date of the general meeting of shareholders. However, for holders of less than 1.0% of the total number of issued and outstanding voting shares, we may give notice by placing at least two public notices in at least two daily newspapers at least two weeks in advance of the meeting. Currently, we use The Korea Economic Daily News and Maeil Business Newspaper, both published in Seoul, for this purpose, but we may give notice in the future through electronic means. Shareholders who are not on the shareholders’ registry as of the record date are not entitled to receive notice of the general meeting of shareholders or attend or vote at the meeting. Holders of
Our general meetings of shareholders have historically been held in or near Seoul.
Voting Rights
Holders of our common shares are entitled to one vote for each common share, except that voting rights of common shares held by us (including treasury shares and shares held by bank trust funds controlled by us), or by a corporate shareholder in which we own more than 10.0% equity interest, either directly or indirectly, may not be exercised. The Korean Commercial Code, unless otherwise stated in the articles of incorporation, permits cumulative voting, which would allow each shareholder to have multiple voting rights corresponding to the number of directors to be appointed in the voting and to exercise all voting rights cumulatively to elect one director. Our articles of incorporation do not permit cumulative voting for the election of directors.
Our shareholders may adopt resolutions at a general meeting by an affirmative majority vote of the voting shares present or represented at the meeting if such affirmative votes also represent at least
amending our articles of incorporation;
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.
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In general, holders of
However, in case of amendments to our articles of incorporation, or any merger or consolidation of us, or in some other cases which affect the rights or interests of the
Shareholders may exercise their voting rights by proxy. A shareholder may give proxies only to another shareholder, except that a corporate shareholder may give proxies to its officers or employees.
Holders of ADRs exercise their voting rights through the ADR depositary, an agent of which is the record holder of the underlying common shares. Subject to the provisions of the deposit agreement, ADR holders are entitled to instruct the ADR depositary how to vote our common shares underlying their ADSs.
Limitation on Shareholdings
The Telecommunications Business Act prohibits foreign governments, individuals, and entities (including Korean entities that are deemed foreigners, as discussed below) from owning more than 49.0% of our voting stock, subject to certain exceptions. See “Item 4.B Business Overview — Foreign Ownership and Investment Restrictions and Requirements.” Korean entities whose largest shareholder is a foreign government or a foreigner (together with any of its related parties) that owns 15.0% or more of such Korean entities’ outstanding voting stock are deemed foreigners. A foreigner who has acquired shares of our voting stock in excess of such limitation may not exercise the voting rights with respect to the shares exceeding such limitation and may be subject to the MSIT’s corrective orders.
Rights of Dissenting Shareholders
Under Financial Investment Services and Capital Market Act, in some limited circumstances, including the transfer of all or a significant part of our business or our merger or consolidation with another company (with certain exceptions), dissenting shareholders have the right to require us to purchase their shares. To exercise this right, shareholders, including holders of
Registry of Shareholders and Record Dates
Our transfer agent, Kookmin Bank, maintains the register of our shareholders at its office in Seoul, Korea. It records and registers transfers of shares on the register of shareholders.
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The record date for annual dividends is December 31. Further, for the purpose of determining the shareholders entitled to some other rights pertaining to the shares, we may set a record date with at least two weeks’ prior public notice by a resolution of our board of directors.
Annual Report
When sending a written notice for the general meeting of shareholders, we must attach our annual report prepared under the FSCMA and audit report prepared under the Act on External Audit of Stock Companies. Alternatively, we may inform the shareholders of the annual report and audit report by email or uploading them to our website one week before the general meeting of shareholders. Furthermore, at least one week before the annual general meeting of shareholders, we must make our business reports and audited
Under the FSCMA, we must file with the FSC and the Korea Exchange (1) an annual report within 90 days after the end of our fiscal year, (2) a
Transfer of Shares
Under the Korean Commercial Code and the Act on Electronic Registration of Stocks, Bonds, etc., the transfer of shares is effected by registration on the electronic registration ledger. However, to assert shareholders’ rights against us, the transferee must have his or her name, seal and address registered on our registry of shareholders, maintained by our transfer agent. A
Under current Korean regulations, the Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective investment license and internationally recognized custodians may act as agents and provide related services for foreign shareholders. Certain foreign exchange controls and securities regulations apply to the transfer of shares by
Our transfer agent is Kookmin Bank, located at 24,
Restrictions Applicable to Shares
Pursuant to the Telecommunications Business Act, the maximum aggregate foreign shareholding in us is limited to 49.0%. See “Item 4.B. Business Overview — Law and Regulation — Foreign Ownership and Investment Restrictions and Requirements.” In addition, certain foreign exchange controls and securities regulations apply to the acquisition of securities by
Acquisition of Shares by Us
We may acquire our own shares pursuant to an approval at the general meeting of shareholders, through purchases on the Korea Exchange or a tender offer, or by acquiring the interests in a trust account holding our own shares through agreements with trust companies and asset management companies. The aggregate purchase price
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Under the Korean Commercial Code, we may resell or transfer any shares acquired by us to a third party pursuant to an approval by the Board of Directors. In general, corporate entities in which we own a 50.0% or more equity interest may not acquire our common stock. Under the FSCMA, we are subject to certain selling restrictions with respect to the shares acquired by us.
Liquidation Rights
In the event of our liquidation, remaining assets after payment of all debts, liquidation expenses and taxes will be distributed among shareholders in proportion to their shareholdings. Holders of
Item 10.C. | Material Contracts |
We have not entered into any material contracts during the two years immediately preceding the date of this annual report, other than in the ordinary course of our business. For information regarding our agreements and transactions with entities affiliated with the SK Group, see “Item 7.B. Related Party Transactions” and note 36 of the notes to our consolidated financial statements. For a description of certain agreements entered into during the past three years related to our capital commitments and obligations, see “Item 5.B. Liquidity and Capital Resources.”
Item 10.D. | Exchange Controls |
Korean Foreign Exchange Controls and Securities Regulations
General
The Foreign Exchange Transaction Act and the Presidential Decree and regulations under that Act and Decree, collectively referred to as the Foreign Exchange Transaction Laws, regulate investment in Korean securities by
Subject to certain limitations, the MOEF has authority to take the following actions under the Foreign Exchange Transaction Laws:
• | if the Government deems it necessary on account of war, armed conflict, natural disaster or grave and sudden and significant changes in domestic or foreign economic circumstances or similar events or circumstances, the MOEF 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), impose an obligation to deposit, safe-keep or sell any means of payment to The Bank of Korea, a foreign exchange stabilization fund, certain other governmental agencies or financial companies or impose an obligation on a resident that holds a claim against a non-resident to collect such claim to enable the recovery of the relevant debt back to Korea; and |
if the Government concludes that the international balance of payments and international financial markets are experiencing or are likely to experience significant disruption or that the movement of capital between Korea and other countries are likely to adversely affect the Won, exchange rate or other macroeconomic policies, the MOEF 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, a foreign exchange stabilization fund, certain other governmental agencies or financial companies.
Under the regulations of the FSC amended on February 4, 2009, (1) if a company listed on the KRX KOSPI Market or a company listed on the KRX KOSDAQ Market has submitted a public disclosure of material matters to
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from a foreign stock market, then it must submit a copy of any document, which it submitted to or received from the relevant foreign government, foreign financial investment supervisory authority or the foreign stock market, and a Korean translation thereof to the FSC and the Korea Exchange.
Government Review of Issuances of ADSs
In order for us to issue ADSs in excess of US$30 million, we are required to submit a report to the MOEF with respect to the issuance of the ADSs prior to and after such issuance; provided that such US$30 million threshold amount would be reduced by the aggregate principal amount of any foreign currency loans borrowed, and any securities offered and issued, outside Korea during the
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 issuances of ADSs by us or with our consent and stock dividends or other distributions related to the ADSs).
In addition to such restrictions under Korean laws and regulations, there are also restrictions on the deposits of our common shares for issuance of ADSs. Therefore, a holder of ADRs who surrenders ADRs and withdraws shares may not be permitted subsequently to deposit those shares and obtain ADRs.
We submitted a report to and obtained acceptance thereof by the MOEF for the issuance of ADSs up to an amount corresponding to 24,321,893 common shares. No additional Korean governmental approval is necessary for the issuance of ADSs except that if the total number of our common shares on deposit for conversion into ADSs exceeds 24,321,893 common shares, we may be required to file a report to and obtain acceptance thereof by the MOEF with respect to the increase of such limit and the issuance of additional ADSs.
Reporting Requirements for Holders of Substantial Interests
Under the FSCMA, any person whose direct or beneficial ownership of shares with voting rights, certificates representing the rights to subscribe for shares and equity-related debt securities including convertible bonds and bonds with warrants (collectively referred to as “equity securities”), together with the equity securities beneficially owned by certain related persons or by any person acting in concert with the person, accounts for 5.0% or more of the total outstanding equity securities is required to report the status and purpose (in terms of whether the purpose of shareholding is to affect control over management of the issuer) of the holdings to the FSC and the Korea Exchange within five business days after reaching the 5.0% ownership interest threshold and promptly deliver a copy of such report to the issuer. In addition, any change (1) in the ownership interest subsequent to the report which equals or exceeds 1.0% of the total outstanding equity securities, or (2) in the shareholding purpose is required to be reported to the FSC and the Korea Exchange within five business days from the date of the change. However, the reporting deadline of such reporting requirement is extended for (1) certain professional investors, as specified under the FSCMA, or (2) persons who hold shares for purposes other than management control by up to the tenth day of the month immediately following the last month of the quarter in which the share acquisition or change in their shareholding occurred. Those who reported the purpose of shareholding is to affect control over management of the issuer are prohibited from exercising their voting rights and acquiring additional shares for five days subsequent to the report under the FSCMA.
Violation of these reporting requirements may subject a person to criminal sanctions such as fines or imprisonment and may result in a loss of voting rights with respect to the ownership of unreported equity securities exceeding 5.0%. Furthermore, the FSC may issue an order to dispose of such
In addition to the reporting requirements described above, any person whose direct or beneficial ownership of our common shares accounts for 10.0% or more of the total issued and outstanding shares with voting rights (a “major shareholder”) must report the status of his or her shareholding to the Securities and Futures Commission and the Korea Exchange within five business days after he or she becomes a major shareholder. In addition, any change
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in the ownership interest subsequent to the report must be reported to the Securities and Futures Commission and the Korea Exchange by the fifth business day of any changes in his or her shareholding. Violations of these reporting requirements may subject a person to criminal sanctions, such as fines or imprisonment.
Restrictions Applicable to ADSs
No Korean governmental approval is necessary for the sale and purchase of ADSs in the secondary market outside Korea or for the withdrawal of shares underlying ADSs and the delivery of shares in Korea in connection with the withdrawal, provided that a foreigner who intends to acquire the shares must obtain an investment registration card from the Financial Supervisory Service of Korea (the “FSS”), as described below. The acquisition of the shares by a foreigner must be reported by the foreigner or his or her standing proxy in Korea immediately to the Governor of the FSS (the “Governor”).
Persons who have acquired shares as a result of the withdrawal of shares underlying the ADSs may exercise their preemptive rights for new shares, participate in free distributions and receive dividends on shares without any further governmental approval.
In addition, we are required to file a securities registration statement with the FSC and such securities registration statement has to become effective pursuant to the FSCMA in order for us to issue shares represented by ADSs, except in certain limited circumstances.
Restrictions Applicable to Shares
As a result of amendments to the Foreign Exchange Transaction Laws and the regulations of the FSC, together referred to as the Investment Rules, adopted in connection with the stock market opening from January 1992 and after that date, foreigners may invest, with limited exceptions and subject to procedural requirements, in all shares of Korean companies, whether listed on the KRX KOSPI Market or the KRX KOSDAQ Market, unless prohibited by specific laws. Foreign investors may trade shares listed on the KRX KOSPI Market or the KRX KOSDAQ Market only through the KRX KOSPI Market or the KRX KOSDAQ Market, except in limited circumstances, including, among others:
• | odd-lot trading of shares; |
acquisition of shares 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 KOSPI Market or KRX KOSDAQ Market and such overseas stock exchange;
arm’s length transactions between foreigners in the event all such foreigners belong to an investment group managed by the same person; and
acquisition and disposal of shares through alternative trading systems.
For
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exceeded, a financial investment company with a brokerage license in Korea must act as an intermediary.
The Investment Rules require a foreign investor who wishes to invest in shares for the first time on the KRX KOSPI Market or the KRX KOSDAQ Market (including converted shares) and shares being publicly offered for initial listing on the KRX KOSPI Market or the KRX KOSDAQ Market to register its identity with the FSS prior to making any such investment; however, the registration requirement does not apply to foreign investors who acquire converted shares with the intention of selling such converted shares within three months from the date of acquisition of the converted shares or who acquire the shares in an
Upon a foreign investor’s purchase of shares through the KRX KOSPI Market or the KRX KOSDAQ Market, no separate report by the investor is required because the investment registration card system is designed to control and oversee foreign investment through a computer system. However, where a foreign investor acquires or sells shares outside the KRX KOSPI Market and the KRX KOSDAQ Market, such acquisition or sale of shares must be reported by the foreign investor or such foreign investor’s standing proxy to the Governor at the time of each such acquisition or sale; provided, however, that a foreign investor must ensure that any acquisition or sale of shares outside the KRX KOSPI Market or the KRX KOSDAQ Market in the case of trades in connection with a tender offer,
Shares of Korean companies must be electronically registered with an eligible custodian in Korea. The Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks), financial investment
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Under the Investment Rules, with certain exceptions, foreign investors may acquire shares of a Korean company without being subject to any foreign investment ceiling. As one such exception, designated public corporations are subject to a 40.0% ceiling on the acquisition of shares by foreigners in the aggregate. Designated public corporations may set a ceiling on the acquisition of shares by a single person within 3.0% of the total number of shares in their articles of incorporation. Currently, Korea Electric Power Corporation is the only designated public corporation which has set such a ceiling. Furthermore, an investment by a foreign investor of not less than 10.0% of the outstanding shares with voting rights of a Korean company is defined as a direct foreign investment under the Foreign Investment Promotion Law, which is, in general, subject to the report to, and acceptance by, the Ministry of Trade, Industry and Energy of Korea, which delegates its authority to foreign exchange banks or the Korea Trade-Investment Promotion Agency under the relevant regulations. The acquisition of our shares by a foreign investor is also subject to the restrictions prescribed in the Telecommunications Business Act. The Telecommunications Business Act generally limits the maximum aggregate foreign shareholdings in us to 49.0% of the outstanding shares. A foreigner who has acquired shares in excess of such restriction described above may not exercise the voting rights with respect to the shares exceeding such limitations and may be subject to corrective orders.
Under the Foreign Exchange Transaction Laws, a foreign investor who intends to make a portfolio investment in shares of a Korean company listed on the KRX KOSPI Market or the KRX KOSDAQ Market must designate a foreign exchange bank at which he, she or it must open a foreign currency account and a Won account exclusively for stock investments. No approval is required for remittance into Korea and deposit of foreign currency funds in the foreign currency account. Foreign currency funds may be transferred from the foreign currency account at the time required to place a deposit for, or settle the purchase price of, a stock purchase transaction to a Won account opened at a securities company. Funds in the foreign currency account may be remitted abroad without any governmental approval.
Dividends on shares are paid in Won. No governmental approval is required for foreign investors to receive dividends on, or the Won proceeds of the sale of, any such shares to be paid, received and retained in Korea. Dividends paid on, and the Won proceeds of the sale of, any such shares held by a
Financial investment companies with a securities dealing, brokerage or collective investment license are allowed to open foreign currency accounts with foreign exchange banks exclusively for accommodating foreign investors’ stock investments in Korea. Through these accounts, these financial investment companies may enter into foreign exchange transactions on a limited basis, such as conversion of foreign currency funds and Won funds, either as a counterparty to or on behalf of foreign investors, without the investors having to open their own accounts with foreign exchange banks.
Item 10.E. | Taxation |
United States Taxation
This summary describes certain U.S. federal income tax consequences for a U.S. holder (as defined below) of acquiring, owning, and disposing of common shares or ADSs. This summary applies to you only if you hold our common shares or ADSs as capital assets for tax purposes. This summary does not apply to you if you are a member of a class of holders subject to special rules, such as:
a dealer in securities or currencies;
• | a trader in securities that elects to use a mark-to-market method of accounting for securities holdings; |
a bank or other financial institution;
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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;
a person that owns or is deemed to own 10.0% or more of any class of our stock (by vote or value); or
an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes (or partners therein).
This summary is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations promulgated thereunder, and published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis.
Please consult your own tax advisers concerning the U.S. federal, state, local, and other tax consequences of purchasing, owning, and disposing of common shares or ADSs in your particular circumstances.
For purposes of this summary, you are a “U.S. holder” if you are the beneficial owner of a common share or an ADS and are:
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.
In general, if you are the beneficial owner of ADSs, you will be treated as the beneficial owner of the common shares represented by those ADSs for U.S. federal income tax purposes, and no gain or loss will be recognized if you exchange an ADS for the common share represented by that ADS.
Dividends
The gross amount of cash dividends that you receive (prior to deduction of Korean taxes) generally will be subject to U.S. federal income taxation as foreign source “passive income” dividend income and will not be eligible for the dividends received deduction. Dividends paid in Won will be included in your income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date of your receipt of the dividend, in the case of common shares, or the depositary’s receipt, in the case of ADSs, regardless of whether the payment is in fact converted into U.S. dollars. If such a dividend is converted into U.S. dollars on the date of receipt, you generally should not be required to recognize foreign currency gain or loss in respect of the dividend income.
Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by an individual with respect to the ADSs will be subject to taxation at a preferential rate if the dividends are “qualified dividends.” Dividends paid on the ADSs will be treated as qualified dividends if (1) the ADSs are readily tradable on an established securities market in the United States and (2) we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a passive foreign investment company as defined for U.S. federal income tax purposes (“PFIC”), as discussed below under “
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Distributions of additional shares in respect of common shares or ADSs that are made as part of a
Sale or Other Disposition
Subject to the discussion below under “Passive Foreign Investment Company Rules,” for U.S. federal income tax purposes, gain or loss you realize on a sale or other disposition of common shares or ADSs generally will be treated as U.S. source capital gain or loss, and will be long-term capital gain or loss if the common shares or ADSs were held for more than one year. Your ability to offset capital losses against ordinary income is limited. Long-term capital gain recognized by an individual U.S. holder generally is subject to taxation at reduced rates.
Passive Foreign Investment Company Rules
Special U.S. tax rules apply to companies that are considered to be PFICs. We will be classified as a PFIC in a particular taxable year if either (i) 75 percent or more of our gross income for the taxable year is passive income; or (ii) 50% or more of the value of our assets (generally determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income. Investments in companies in which we own less than 25 percent of the stock (by value) are considered to be assets that produce passive income.
The determination whether we are a PFIC is made annually based on the particular facts and circumstances, such as the composition of our income and the valuation of our assets. Due to fluctuations in our stock price and changes in the value and composition of our assets, including our substantial investment in the stock of SK Hynix prior to the
You should consult your own tax advisors regarding our classification as a PFIC for 2021, 2022 or in the current or future years.
If we are classified as a PFIC, and you do not make a
Although the determination of whether we are a PFIC is made annually, if we are a PFIC for any taxable year during which a U.S. holder holds our common shares or ADSs, such U.S. holder will generally be subject to the unfavorable rules described above for that year and for each subsequent year in which such U.S. holder holds the common shares or ADSs (even if we do not qualify as a PFIC in such subsequent years). However, if we cease to be a PFIC, a U.S. holder can avoid the continuing impact of the PFIC rules by making a special election to recognize gain as if such U.S. holder’s common shares or ADSs had been sold on the last day of the last taxable year during which we were a PFIC. As discussed above, we may have been a PFIC for our taxable year ending December 31, 2021. U.S. holders who held common shares or ADSs at any time during that year should consult their own tax advisor about the advisability of making this election.
A U.S. holder may be able to avoid the unfavorable rules described above by electing to mark its ADSs to market, provided the ADSs are treated as “marketable stock.” The ADSs generally will be treated as marketable stock if the ADSs are “regularly traded” on a “qualified exchange or other market” (which includes the NYSE).
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Further, it should also be noted that only the ADSs and not the common shares are listed on the NYSE. Consequently, a U.S. holder that holds common shares that are not represented by ADSs may not be eligible to make a
Although a U.S. holder can also avoid the unfavorable PFIC rules described above by electing to treat its common shares or ADSs as interests in a qualified electing fund (“QEF”), we do not intend to provide the information that would allow a U.S. holder to make such an election. Accordingly, in the event that we are treated as a PFIC, a U.S. holder will not be able to make a “QEF election.”
A U.S. holder that owns an equity interest in a PFIC must annually file IRS Form 8621, and may be required to file other IRS forms. A failure to file one or more of these forms as required may toll the running of the statute of limitations in respect of each of the U.S. holder’s taxable years for which such form is required to be filed. As a result, the taxable years with respect to which the U.S. holder fails to file the form may remain open to assessment by the IRS indefinitely, until the form is filed.
The U.S. federal income tax rules relating to PFICs are complex. U.S. holders are strongly urged to consult their own tax advisors regarding our potential classification as a PFIC and regarding the U.S. federal income tax consequences of acquiring, holding and disposing of our common shares or ADSs if we are so classified, including the advisability of making a
Foreign Tax Credit Considerations
You should consult your own tax advisers to determine whether you are subject to any special rules that limit your ability to make effective use of foreign tax credits, including the possible adverse impact of failing to take advantage of benefits under the income tax treaty between the United States and Korea. If no such rules apply, youKorea (the “Treaty”).
Subject to generally applicable limitations and conditions, Korean withholding tax imposed on dividends paid at the appropriate rate applicable to a U.S. holder may claimbe eligible for a credit against yoursuch U.S. holder’s U.S. federal income tax liabilityliability. These generally applicable limitations and conditions include new requirements recently adopted by the IRS and any Korean tax will need to satisfy these requirements in order to be eligible to be a creditable tax for a U.S. holder. In the case of a U.S. holder that is eligible for, and properly elects, the benefits of the Treaty, the Korean tax may be treated as meeting the new requirements and therefore as a creditable tax. The application of these requirements to the Korean tax on any dividends is uncertain and we have not determined
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whether these requirements are met, including requirements applicable to the Treaty. If the Korean tax is not a creditable tax for a U.S. holder or the U.S. holder does not elect to claim a foreign tax credit for any foreign income taxes withheldpaid or accrued in the same taxable year, the U.S. holder may be able to deduct the Korean tax in computing such U.S. holder’s taxable income for U.S. federal income tax purposes. Dividends will constitute income from dividendssources without the United States and, if such withholding tax is a creditable tax for a U.S. holder that elects to claim foreign tax credits, generally will constitute “passive category income” for foreign tax credit purposes.
Gain, if any, realized by a U.S. holder on the sale or other disposition of the common shares or ADSs so longgenerally will be treated as you have owned ourU.S. source income for U.S. foreign tax credit purposes. A U.S. holder that is eligible for, and properly elects, the benefits of the Treaty, will generally not be subject to Korean withholding tax on capital gains. If a U.S. holder is not eligible for benefits under the Treaty and is therefore subject to Korean withholding tax on capital gains, the U.S. holder may not be able to use the foreign tax credit arising from any Korean tax imposed on the disposition of common shares or ADSs (and not entered into specified kinds of hedging transactions) for at least a
Any Korean securities transaction tax or agricultural and fishery special surtax that you pay will not be creditable for foreign tax credit purposes.
The rules with respect of certain short-term or hedged positions in securities and may not be allowed in respect of arrangements in which a U.S. holder’s expected economic profit is insubstantial.
Specified Foreign Financial Assets
Certain U.S. holders that own “specified foreign financial assets” with an aggregate value in excess of U.S.$50,000 on the last day of the taxable year or U.S.$75,000 at any time during the taxable year are generally required to file an information statement along with their tax returns, currently on IRS Form 8938, with respect to such assets. “Specified foreign financial assets” include any financial accounts held at a
U.S. Information Reporting and Backup Withholding Rules
Payments of dividends and sales proceeds that are made within the United States or through certain
Korean Taxation
The following is a summary of the principal Korean tax consequences to owners of the common shares or ADSs, as the case may be, who are
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exhaustive of all possible tax considerations which may apply to a particular investor and potential investors are advised to satisfy themselves as to the overall tax consequences of the acquisition, ownership and disposition of the common shares or ADSs, including specifically the tax consequences under Korean law, the laws of the jurisdiction of which they are resident, and any tax treaty between Korea and their country of residence, by consulting their own tax advisors.
Tax on Dividends
Dividends on the common shares or ADSs paid (whether in cash or in shares) to a
The tax is withheld by the payer of the dividend. While it is the payer that is required to withhold the tax, Korean law generally entitles the person who was subject to the withholding of Korean tax to recover from the Government any part of the Korean tax withheld upon providing evidence that it was entitled to have tax withheld at a lower rate if certain conditions are met.
Tax on Capital Gains
As a general rule, capital gains earned by
However, a
It should be noted that capital gains earned by you (regardless of whether you have a permanent establishment in Korea) from a transfer of ADSs outside Korea will generally be exempt from Korean income taxation, provided that the ADSs are deemed to have been issued overseas. If and when an owner of the underlying common shares transfers the ADSs following the conversion of the underlying shares for ADSs, such person will not be exempt from Korean income taxation.
Inheritance Tax and Gift Tax
Korean inheritance tax is imposed upon (1) all assets (wherever located) of the deceased if at the time of his death he was a tax resident of Korea and (2) all property located in Korea which passes on death (irrespective of the domicile of the deceased). Gift tax is imposed in similar circumstances to the above. The taxes are imposed if the value of the relevant property is above a certain limit and vary depending on the value of the property and the identity of the parties involved.
Under Korean inheritance and gift tax laws, securities issued by a Korean corporation are deemed to be located in Korea irrespective of where they are physically located or by whom they are owned.
Securities Transaction Tax
Securities transaction tax is imposed on the transfer of shares issued by a Korean corporation or the right to subscribe for such shares generally at the rate of 0.43%0.35% of the sales price. In the case of the transfer of shares listed on the KRX KOSPI Market (such as our common shares), the securities transaction tax is imposed generally at the rate of (1) 0.23%0.20% of the sales price of such shares (including agricultural and fishery special surtax thereon) if traded on the KRX KOSPI Market or (2) subject to certain exceptions, 0.43%0.35% of the sales price of such shares if traded outside the KRX KOSPI Market.
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Securities transaction tax or the agricultural and fishery special surtax is not applicable if (1) the shares or rights to subscribe for shares are listed on a designated foreign stock exchange and (2) the sale of the shares takes place on such exchange.
Securities transaction tax, if applicable, must be paid by the transferor of the shares or rights, in principle. When the transfer is effected through a securities settlement company, such settlement company is generally required to withhold and pay (to the tax authority) the tax, and when such transfer is made through a financial investment company with a brokerage license only, such company is required to withhold and pay the tax. Where the transfer is effected by a
Tax Treaties
Currently, Korea has income tax treaties with a number of countries, inter alia, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Luxembourg, Ireland, the Netherlands, New Zealand, Norway, Singapore, Sweden, Switzerland, the United Kingdom and the United States under which the rate of withholding tax on dividend and interest is reduced, generally to between 5.0% and 16.5% (including local income tax), and the tax on capital gains derived by a
Each
Furthermore, in order for a
For a
At present, Korea has not entered into any tax treaty relating to inheritance or gift tax.
Item 10.F. | Dividends and Paying Agents |
Not applicable.
Item 10.G. | Statements by Experts |
Not applicable.
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Item 10.H. | Documents on Display |
We file reports, including annual reports on
Documents filed with annual reports and documents filed or submitted to the SEC are also available for inspection at our principal business office during normal business hours. Our principal business office is located at SK
Item 10.I. | Subsidiary Information |
Not applicable.
Item 10.J. | Annual Report to Security Holders |
Not applicable.
Item 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
We are exposed to foreign exchange rate and interest rate risk primarily associated with underlying liabilities and to equity price risk as a result of our investment in equity instruments.
We have entered into a
The following discussion and tables, which constitute “forward looking statements” that involve risks and uncertainties, summarize our market-sensitive financial instruments including fair value, maturity and contract terms. These tables address market risk only and do not present other risks which we face in the normal course of business, including country risk, credit risk and legal risk.
Exchange Rate Risk
Korea is our main market and, therefore, substantially all of our cash flow is denominated in Won. We are exposed to foreign exchange risk related to foreign currency denominated liabilities. These liabilities relate primarily to foreign currency denominated debt, primarily in Dollars. A 10.0% increase in the exchange rate between the Won and all foreign currencies would result in an increase in profit before income tax of Won 2.84.7 billion, with a decrease of 10.0% in the exchange rate having the opposite effect, as of December 31, 2021.2022. For a further discussion of our exchange rate risk exposures, see note 35(1) of the notes to our consolidated financial statements.
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Interest Rate Risk
We are also subject to market risk exposure arising from changing interest rates. The following table summarizes the carrying amounts and fair values, maturity and contract terms of our exchange rate and interest sensitive short-term and long-term liabilities as of December 31, 2021:
Maturities | ||||||||||||||||||||||||||||||||
2022 | 2023 | 2024 | 2025 | 2026 | Thereafter | Total | Fair Value | |||||||||||||||||||||||||
(In billions of Won, except for percentage data) | ||||||||||||||||||||||||||||||||
Local currency: | ||||||||||||||||||||||||||||||||
Fixed-rate | ₩ | 1,402.3 | ₩ | 829.0 | ₩ | 1,417.6 | ₩ | 848.0 | ₩ | 458.9 | ₩ | 2,063.9 | ₩ | 7,019.7 | ₩ | 7,008.5 | ||||||||||||||||
Average weighted rate (1) | 2.21 | % | 2.96 | % | 2.03 | % | 1.92 | % | 1.86 | % | 2.38 | % | ||||||||||||||||||||
Variable rate | 12.5 | 25.0 | — | — | — | — | 37.5 | 37.5 | ||||||||||||||||||||||||
Average weighted rate (1) | 2.78 | % | 2.67 | % | — | — | — | — | ||||||||||||||||||||||||
Sub-total | 1,414.8 | 854.0 | 1,417.6 | 848.0 | 458.9 | 2,063.9 | 7,057.2 | 7,046.0 | ||||||||||||||||||||||||
Foreign currency: | ||||||||||||||||||||||||||||||||
Fixed-rate | 6.7 | 945.2 | — | — | — | 470.6 | 1,422.5 | 1,671.5 | ||||||||||||||||||||||||
Average weighted rate (1) | 1.70 | % | 3.88 | % | — | — | — | 6.63 | % | |||||||||||||||||||||||
Variable rate | — | — | — | 354.2 | — | — | 354.2 | 354.2 | ||||||||||||||||||||||||
Average weighted rate (1) | — | — | — | 1.12 | % | — | — | |||||||||||||||||||||||||
Sub-total | 6.7 | 945.2 | — | 354.2 | — | 470.6 | 1,776.7 | 2,025.7 | ||||||||||||||||||||||||
Total | ₩ | 1,421.5 | ₩ | 1,799.2 | ₩ | 1,417.6 | ₩ | 1,202.2 | ₩ | 458.9 | ₩ | 2,534.5 | ₩ | 8,833.9 | ₩ | 9,071.7 | ||||||||||||||||
Maturities | ||||||||||||||||||||||||||||||||
2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | Total | Fair Value | |||||||||||||||||||||||||
(In billions of Won, except for percentage data) | ||||||||||||||||||||||||||||||||
Local currency: | ||||||||||||||||||||||||||||||||
Fixed-rate | ₩ | 1,072.8 | ₩ | 1,568.2 | ₩ | 1,846.0 | ₩ | 449.8 | ₩ | 423.8 | ₩ | 1,994.2 | ₩ | 7,354.8 | ₩ | 6,723.5 | ||||||||||||||||
Average weighted rate(1) | 2.85 | % | 2.28 | % | 2.86 | % | 1.98 | % | 3.46 | % | 2.46 | % | ||||||||||||||||||||
Variable rate | 12.5 | 40.0 | — | — | — | — | 52.5 | 52.5 | ||||||||||||||||||||||||
Average weighted rate(1) | 4.80 | % | 6.31 | % | — | — | — | — | ||||||||||||||||||||||||
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Sub-total | 1,085.3 | 1,608.2 | 1,846.0 | 449.8 | 423.8 | 1,994.2 | 7,407.3 | 6,776.0 | ||||||||||||||||||||||||
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Foreign currency: | ||||||||||||||||||||||||||||||||
Fixed-rate | 1,012.8 | — | — | — | 503.6 | — | 1,516.4 | 1,569.9 | ||||||||||||||||||||||||
Average weighted rate(1) | 3.80 | % | — | — | — | 6.63 | % | — | ||||||||||||||||||||||||
Variable rate | — | — | 379.1 | — | — | — | 379.1 | 379.1 | ||||||||||||||||||||||||
Average weighted rate(1) | — | — | 5.66 | % | — | — | — | |||||||||||||||||||||||||
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Sub-total | 1,012.8 | — | 379.1 | — | 503.6 | — | 1,895.5 | 1,949.0 | ||||||||||||||||||||||||
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Total | ₩ | 2,098.1 | ₩ | 1,608.2 | ₩ | 2,225.1 | ₩ | 449.8 | ₩ | 927.4 | ₩ | 1,994.2 | ₩ | 9,302.8 | ₩ | 8,725.0 | ||||||||||||||||
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(1) | Weighted average rates of the portfolio at the period end. |
A 1.0% point increase in interest rates would result in a decrease in profit before income tax of Won 20.916.9 billion with a 1.0% point decrease in interest rates having the opposite effect, as of December 31, 2021.2022. For a further discussion of our interest rate risk exposures, see note 35(1) of the notes to our consolidated financial statements.
Equity Price Risk
We are also subject to market risk exposure arising from changes in the equity securities market, which affect the fair value of our equity portfolio. As of December 31, 2022, 2021 2020 and 2019,2020, a 10.0% increase in the equity indices where our equity investments at fair value through other comprehensive income are listed, with all other variables held constant, would have increased our total equity by Won 140.0103.8 billion, Won 94.6140.0 billion and Won 40.894.6 billion, respectively, with a 10.0% decrease in the equity index having the opposite effect.
Item 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
Item 12.A. | Debt Securities |
Not applicable.
Item 12.B. | Warrants and Rights |
Not applicable.
Item 12.C. | Other Securities |
Not applicable.
100
Item 12.D. | American Depositary Shares |
Fees and Charges under Deposit Agreement
The ADR depositary will charge the party receiving ADSs up to US$5.00 per 100 ADSs (or fraction thereof), provided that the ADR depositary has agreed to waive such fee as would have been payable by us in the case of (1) an offering of ADSs by us or (2) any distribution of shares of common stock or any rights to subscribe for additional shares of common stock. The ADR depositary will not charge the party to whom ADSs are delivered against deposits. The ADR depositary will charge the party surrendering ADSs for delivery of deposited securities up to US$5.00 per 100 ADSs (or fraction thereof) surrendered. The ADR depositary will also charge the party to whom any cash distribution, or for whom the sale or exercise of rights or other corporate action involving distributions to shareholders, is made with respect to ADSs up to US$0.02 per ADS held plus the expenses of the ADR depositary on a
Holders of ADRs must pay (1) taxes and other governmental charges, (2) share transfer registration fees on deposits of shares of common stock, (3) such cable, telex, facsimile transmission and delivery expenses as are expressly provided in the deposit agreement to be at the expense of persons depositing shares of common stock or holders of ADRs and (4) such reasonable expenses as are incurred by the ADR depositary in the conversion of foreign currency into United States dollars.
Notwithstanding any other provision of the deposit agreement, in the event that the ADR depositary determines that any distribution in property (including shares or rights to subscribe therefor or other securities) is subject to any tax or governmental charges which the ADR depositary is obligated to withhold, the ADR depositary may dispose of all or a portion of such property (including shares and rights to subscribe therefor) in such amounts and in such manner as the ADR depositary deems necessary and practicable to pay such taxes or governmental charges, including by public or private sale, and the ADR depositary will distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes or governmental charges to the holders of ADSs entitled thereto in proportion to the number of ADSs held by them respectively.
All such charges may be changed by agreement between the ADR depositary and us at any time and from time to time, subject to the deposit agreement. The right of the ADR depositary to receive payment of fees, charges and expenses shall survive the termination of this deposit agreement and, as to any depositary, the resignation or removal of such depositary pursuant to the deposit agreement.
Payments made by ADR Depositary
The ADR depositary reimburses us for certain expenses we incur in connection with our ADR program, subject to certain ceilings. These reimbursable expenses currently include expenses relating to the preparation of SEC filings and submissions, listing fees, education and training fees, corporate action expenses and other miscellaneous fees. In the fiscal year 2021,2022, we received US$1,791,012.52,1,314,492.18, net of taxes, from the ADR depositary in connection with such reimbursements.
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PART II
Item 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
None.
Item 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
None.
Item 15. | CONTROLS AND PROCEDURES |
Our management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as such term is defined in
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in
Report of the Independent Registered Public Accounting Firm on the Effectiveness of Our Internal Control Over Financial Reporting
The report of our independent registered public accounting firm, KPMG Samjong Accounting Corp. (“KPMG Samjong”),Ernst & Young Han Young, or E&Y, on the effectiveness of our internal control over financial reporting as of December 31, 20212022 is included in Item 18 of this
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting during 20212022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Item 16. | RESERVED |
Item 16A. | AUDIT COMMITTEE FINANCIAL EXPERT |
Seok-Dong Kim is the chairman of our audit committee and determined to be an “audit committee financial expert” within the meaning of this Item 16A by the board of directors. The board of directors have further determined that Seok-Dong Kim is independent within the meaning of applicable SEC rules and the listing standards of the NYSE.
Item 16B. | CODE OF ETHICS |
Code of Ethics for Chief Executive Officer, Chief Financial Officer and Controller
We have a code of ethics that applies to our Chief Executive Officer, Chief Financial Officer, senior accounting officers and employees. We also have internal control and disclosure policy designed to promote full, fair, accurate, timely and understandable disclosure in all of our reports and publicly filed documents. A copy of our code of ethics is available on our website at www.sktelecom.com. If we amend the provisions of our code of ethics that apply to our Chief Executive Officer, Chief Financial Officer and persons performing similar functions, or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our website.
Item 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
The table sets forth the fees we paid to our current independent registered public accounting firm E&Y and its affiliates for the year ended December 31, 2022 and our former independent registered public accounting firm KPMG Samjong Accounting Corp. (“KPMG Samjong”) and its affiliates for the yearsyear ended December 31, 2021 and 2020:
Year Ended December 31, | ||||||||
2021 | 2020 | |||||||
(In millions of Won) | ||||||||
Audit Fees | ₩ | 5,969 | ₩ | 5,157 | ||||
Audit-Related Fees | 62 | 16 | ||||||
Tax Fees | 262 | 372 | ||||||
All Other Fees | — | 93 | ||||||
Total | ₩ | 6,293 | ₩ | 5,638 |
Year Ended December 31, | ||||||||
2022 | 2021 | |||||||
(In millions of Won) | ||||||||
Audit Fees | ₩ | 4,654 | ₩ | 5,969 | ||||
Audit-Related Fees | — | 62 | ||||||
Tax Fees | 26 | 262 | ||||||
All Other Fees | 200 | — | ||||||
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Total | ₩ | 4,880 | ₩ | 6,293 |
“Audit Fees”
“Audit-Related Fees”
“Tax Fees”
All Other Fees”
Pre-Approval
Our audit committee
103
by our independent auditors is that all such services shall be
Our audit committee did not
Item 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
Not applicable.
Item 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
During the fiscal year ended December 31, 2021.
Period | Total Number of Shares Purchased | Average Price Paid per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||
(In billions of Won) | ||||||||||||||||
January 1, 2021 – April 30, 2021 (2)(3) | 1,440,000 | ₩ | 47,647 | 1,440,000 | ₩ | — | ||||||||||
November 29, 2021 (4) | 54,032 | 57,900 | 54,032 | — | ||||||||||||
Total | 1,494,032 | ₩ | 48,018 | 1,494,032 | ₩ | — | ||||||||||
Item 16F. | CHANGE IN REGISTRANT ’ S CERTIFYING ACCOUNTANT |
The disclosure called for by paragraph (a) of this Item 16F was previously reported, as that term is defined in Rule 12b-2 under the Exchange Act, in our Audit Committee approvedAnnual Report on Form 20-F for the appointment of Ernst & Young Han Young, or E&Y, as our principal accountant to audit our consolidated financial statements prepared in accordance with IFRS, as issued by the IASB for the fiscal years ending December 31, 2022, 2023 and 2024, and, in effect, dismissed KPMG Samjong, our former independent registered public accountants (including for the fiscal years ending December 31, 2019, 2020 and 2021). We provided notice of the expected dismissal to KPMG Samjong on December 10, 2021. E&Y’s appointment was effective as of January 1, 2022, and KPMG Samjong’s dismissal was effective as of April 28, 2022, the date of completion of its audit of our financial statements for the fiscal year ending December 31, 2021 and the issuance of its report thereon.
Item 16G. | CORPORATE GOVERNANCE |
The following is a summary of the significant differences between the NYSE’s corporate governance standards and those that we follow under Korean law.
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 | ||
Non-management directors must meet in regularly scheduled executive sessions without management. Independent directors should meet alone in an executive session at least once a year. | Our audit committee, which is comprised solely of four 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. The committee must have a charter that addresses the purpose, responsibilities (including development of corporate governance guidelines) and annual performance evaluation of the committee. | Although we do not have a separate nomination/corporate governance committee, we maintain an independent director nomination committee composed of | |
Compensation Committee | ||
Listed companies must have a compensation committee composed entirely of independent directors. The committee must have a charter that addresses the purpose, responsibilities and annual performance evaluation of the committee. The charter must be made available on the company’s website. In addition, in accordance with the SEC rules adopted pursuant to Section 952 of the Dodd-Frank Act, the NYSE listing standards were amended to expand the factors relevant in determining whether a committee member has a relationship with the company. | We maintain a compensation non-independent director and three independent directors. |
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NYSE Corporate Governance Standards | Our Corporate Governance Practice | |
Audit Committee | ||
Listed companies must have an audit committee that satisfies the independence and other requirements of Rule 10A-3 under the Exchange Act. All members must be independent. The committee must have a charter addressing the committee’s purpose, an annual performance evaluation of the committee, and the duties and responsibilities of the committee. The charter must be made available on the company’s website. | We maintain an audit committee comprised solely of four independent directors. | |
Audit Committee Additional Requirements | ||
Listed companies must have an audit committee that is composed of at least three directors. | Our audit committee has four 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. | |
Shareholder Approval of Equity Offerings | ||
Listed companies must allow its shareholders to exercise their voting rights with respect to equity offerings that do not qualify as public offerings for cash, and offerings of equity of related parties. | Pursuant to the Korean Commercial Code and the FSCMA, our shareholders are generally entitled to preemptive rights with respect to the issuance of new shares. Exceptions include public offerings as prescribed in the FSCMA and allotments to third parties in cases necessary for the achievement of a business purpose, such as the introduction of new technology and the improvement of our financial condition. | |
Corporate Governance Guidelines | ||
Listed companies must adopt and disclose corporate governance guidelines. | We have adopted a Corporate Governance Charter, which is available (in Korean) on our website at www.sktelecom.com. We are also 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 at www.sktelecom.com . |
Item 16H. | MINE SAFETY DISCLOSURE |
Not applicable.
Item 16I. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
Not applicable.
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PART III
Item 17. | FINANCIAL STATEMENTS |
Not applicable.
Item 18. | FINANCIAL STATEMENTS |
F-1 | ||||
F-2 | ||||
F-4 | ||||
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting | ||||
Financial Statements of SK Hynix | ||||
(incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022) | ||||
(incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022) | ||||
(incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022) | ||||
(incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022) | ||||
(incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022) | ||||
(incorporated by reference to Item 18 of the Registrant’s Annual Report on Form 20-F filed on April 28, 2022) |
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Item 19. | EXHIBITS |
107
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on
SK TELECOM CO., LTD. | ||
(Registrant) | ||
/s/ Hee Jun Chung | ||
Name: | Hee Jun Chung | |
Title: | Vice President, Head of IR |
Date: April 28, 2022
108
Page | ||||
F-2 | ||||
F-4 | ||||
F-9 | ||||
F-10 | ||||
F-11 | ||||
Impairment assessment of goodwill for the fixed-line telecommunication services cash generating unit |
Description of the Matter | At December 31, 2022, the amount of goodwill allocated to the fixed-line telecommunication services CGU is ₩764,082 million. As described in notes 3 (12) and 16 of the consolidated financial statements, the Group assesses impairment of goodwill allocated to a cash generating unit (“CGU”), at least, annually or when there is an indication of possible impairment by comparing the carrying amount of the CGU to its recoverable amount based on value-in-use (“VIU”). |
Auditing management’s evaluation of goodwill impairment for the fixed-line telecommunication services CGU was complex due to the significant judgment involved in the management’s estimates of future operating revenue, perpetual growth rate and discount rate applied in determining the recoverable amount of the fixed-line telecommunication services CGU. |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness, of controls over the Group’s goodwill impairment assessment process, including controls over management’s review of the significant assumptions described above. |
To test the estimated recoverable amount of the Group’s fixed line telecommunication services CGU, we performed audit procedures that included, among others, sensitivity analyses over both the discount rate and the perpetual growth rate used in the discounted cash flow forecast to assess the impact of changes in these assumptions on the Group’s determination of the VIU of the fixed-line telecommunication services CGU. We also assessed the Group’s ability to make accurate forecast by comparing the historical projections with the actual results and evaluated the appropriateness of the estimated operating revenue by comparing it with the financial budgets approved by the Group. |
In addition, we involved our internal specialists to assist us in evaluating the reasonableness of: (1) the estimated operating revenue and perpetual growth rate by comparing them with telecommunication industry reports as well as the Group’s historical performance; and (2) the discount rate by comparing it with a discount rate that was independently developed using publicly available market data for comparable entities. |
(In millions of won) | Note | December 31, 2021 | December 31, 2020 | Note | December 31, 2022 | December 31, 2021 | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current Assets: | ||||||||||||||||||||||||
Cash and cash equivalents | 34,35 | ₩ | 872,731 | 1,369,653 | 5,34,35 | ₩ | 1,882,291 | 872,731 | ||||||||||||||||
Short-term financial instruments | 5,34,35 | 508,677 | 1,426,952 | 5,34,35 | 237,230 | 508,677 | ||||||||||||||||||
Short-term investment securities | 10,34,35 | 5,010 | 150,392 | 10,34,35 | — | 5,010 | ||||||||||||||||||
Accounts receivable — trade, net | 6,34,35,36 | 1,913,511 | 2,188,893 | 6,34,35,36 | 1,970,611 | 1,913,511 | ||||||||||||||||||
Short-term loans, net | 6,34,35,36 | 70,817 | 97,464 | 6,34,35,36 | 78,590 | 70,817 | ||||||||||||||||||
Accounts receivable — other, net | 6,34,35,36,37 | 548,362 | 979,044 | 6,34,35,36,37 | 479,781 | 548,362 | ||||||||||||||||||
Contract assets | 8,35 | 76,698 | 100,606 | 8,35 | 83,058 | 76,698 | ||||||||||||||||||
Prepaid expenses | 7 | 1,987,503 | 2,128,349 | 7 | 1,974,315 | 1,987,503 | ||||||||||||||||||
Prepaid income taxes | 31 | 77 | 1,984 | 31 | 415 | 77 | ||||||||||||||||||
Derivative financial assets | 22,34,35,38 | 30,110 | 8,704 | 22,34,35,38 | 168,527 | 30,110 | ||||||||||||||||||
Inventories, net | 9 | 204,637 | 171,443 | 9 | 166,355 | 204,637 | ||||||||||||||||||
Non-current assets held for sale | 40 | 8,734 | 0 | 40 | 6,377 | 8,734 | ||||||||||||||||||
Advanced payments and others | 6,34,35 | 125,798 | 151,602 | 6,34,35 | 171,646 | 125,798 | ||||||||||||||||||
6,352,665 | 8,775,086 | 7,219,196 | 6,352,665 | |||||||||||||||||||||
Non-Current Assets: | ||||||||||||||||||||||||
Long-term financial instruments | 5,34,35 | 375 | 893 | 5,34,35 | 375 | 375 | ||||||||||||||||||
Long-term investment securities | 10,34,35 | 1,715,078 | 1,648,837 | 10,34,35 | 1,410,736 | 1,715,078 | ||||||||||||||||||
Investments in associates and joint ventures | 12 | 2,197,351 | 14,354,113 | 12 | 1,889,289 | 2,197,351 | ||||||||||||||||||
Investment property, net | 14 | 23,034 | 0 | 14 | 25,137 | 23,034 | ||||||||||||||||||
Property and equipment, net | 13,15,36,37 | 12,871,259 | 13,377,077 | 13,15,36,37 | 13,322,492 | 12,871,259 | ||||||||||||||||||
Goodwill | 11,16 | 2,072,493 | 3,357,524 | 11,16 | 2,075,009 | 2,072,493 | ||||||||||||||||||
Intangible assets, net | 17 | 3,869,769 | 4,436,194 | 17 | 3,324,910 | 3,869,769 | ||||||||||||||||||
Long-term contract assets | 8,35 | 41,580 | 47,675 | 8,35 | 49,163 | 41,580 | ||||||||||||||||||
Long-term loans, net | 6,34,35,36 | 21,979 | 40,233 | 6,34,35,36 | 26,973 | 21,979 | ||||||||||||||||||
Long-term accounts receivable — other | 6,34,35,36,37 | 275,238 | 332,803 | 6,34,35,36,37 | 373,951 | 275,238 | ||||||||||||||||||
Long-term prepaid expenses | 7 | 1,069,148 | 1,063,711 | 7 | 1,073,422 | 1,069,148 | ||||||||||||||||||
Guarantee deposits | 6,34,35,36 | 186,713 | 172,474 | |||||||||||||||||||||
Guarantee deposits, net | 6,34,35,36 | 167,441 | 186,713 | |||||||||||||||||||||
Long-term derivative financial assets | 22,34,35,38 | 187,484 | 155,991 | 22,34,35,38 | 152,633 | 187,484 | ||||||||||||||||||
Deferred tax assets | 31 | 128 | 105,088 | 31 | 6,860 | 128 | ||||||||||||||||||
Defined benefit assets | 21 | 18,427 | 3,557 | 21 | 175,748 | 18,427 | ||||||||||||||||||
Other non-current assets | 6,34,35 | 8,556 | 35,701 | 6,34,35 | 14,927 | 8,556 | ||||||||||||||||||
24,558,612 | 39,131,871 | 24,089,066 | 24,558,612 | |||||||||||||||||||||
Total Assets | ₩ | 30,911,277 | 47,906,957 | ₩ | 31,308,262 | 30,911,277 | ||||||||||||||||||
(In millions of won) | Note | December 31, 2021 | December 31, 2020 | |||||||||
Liabilities and Shareholders’ Equity | ||||||||||||
Current Liabilities: | ||||||||||||
Accounts payable — trade | 34,35,36 | ₩ | 190,559 | 372,909 | ||||||||
Accounts payable — other | 34,35,36 | 2,071,870 | 2,484,466 | |||||||||
Withholdings | 34,35,36 | 790,489 | 1,410,239 | |||||||||
Contract liabilities | 8 | 166,436 | 229,892 | |||||||||
Accrued expenses | 34,35 | 1,295,404 | 1,554,889 | |||||||||
Income tax payable | 3 1 | 192,221 | 219,766 | |||||||||
Derivative financial liabilities | 22,34,35,38 | 52 | 77 | |||||||||
Provisions | 20,39 | 61,656 | 69,363 | |||||||||
Short-term borrowings | 18,34,35,38 | 12,998 | 109,998 | |||||||||
Current portion of long-term debt, net | 18,34,35,38 | 1,430,324 | 939,237 | |||||||||
Current portion of long-term payables — other | 19,34,35,38 | 398,823 | 424,600 | |||||||||
Lease liabilities | 34,35,36,38 | 349,568 | 359,936 | |||||||||
Other current liabilities | 35 | 2,595 | ||||||||||
6,960,435 | 8,177,967 | |||||||||||
Non-Current Liabilities: | ||||||||||||
Debentures, excluding current portion, net | 18,34,35,38 | 7,037,424 | 7,690,169 | |||||||||
Long-term borrowings, excluding current portion, net | 18,34,35,38 | 353,122 | 1,979,261 | |||||||||
Long-term payables — other | 19,34,35,38 | 1,611,010 | 1,142,354 | |||||||||
Long-term lease liabilities | 34,35,36,38 | 1,184,714 | 1,076,841 | |||||||||
Long-term contract liabilities | 8 | 36,531 | 30,704 | |||||||||
Defined benefit liabilities | 21 | 13,157 | 154,944 | |||||||||
Long-term derivative financial liabilities | 22,34,35,38 | 321,084 | 375,083 | |||||||||
Long-term provisions | 20 | 65,339 | 81,514 | |||||||||
Deferred tax liabilities | 31 | 941,301 | 2,709,075 | |||||||||
Other non-current liabilities | 34,35,36 | 52,022 | 92,802 | |||||||||
11,615,704 | 15,332,747 | |||||||||||
Total Liabilities | 18,576,139 | 23,510,714 | ||||||||||
Shareholders’ Equity: | ||||||||||||
Share capital | 1,23 | 30,493 | 44,639 | |||||||||
Capital surplus and others | 11,23,24,26 | (12,022,485 | ) | 278,444 | ||||||||
Hybrid bonds | 25 | 398,759 | 398,759 | |||||||||
Retained earnings | 27 | 22,437,341 | 22,981,913 | |||||||||
Reserves | 28 | 735,238 | 40,139 | |||||||||
Equity attributable to owners of the Parent Company | 11,579,346 | 23,743,894 | ||||||||||
Non-controlling interests | 755,792 | 652,349 | ||||||||||
Total Shareholders’ Equity | 12,335,138 | 24,396,243 | ||||||||||
Total Liabilities and Shareholders’ Equity | ₩ | 30,911,277 | 47,906,957 | |||||||||
(In millions of won) | Note | December 31, 2022 | December 31, 2021 | |||||||||
Liabilities and Shareholders’ Equity | ||||||||||||
Current Liabilities: | ||||||||||||
Accounts payable — trade | 34,35,36 | ₩ | 89,255 | 190,559 | ||||||||
Accounts payable — other | 34,35,36 | 2,427,906 | 2,071,870 | |||||||||
Withholdings | 34,35,36 | 803,555 | 790,489 | |||||||||
Contract liabilities | 8 | 172,348 | 166,436 | |||||||||
Accrued expenses | 26,34,35 | 1,505,549 | 1,295,404 | |||||||||
Income tax payable | 31 | 112,358 | 192,221 | |||||||||
Derivative financial liabilities | 22,34,35,38 | — | 52 | |||||||||
Provisions | 20,39 | 39,683 | 61,656 | |||||||||
Short-term borrowings | 18,34,35,38 | 142,998 | 12,998 | |||||||||
Current portion of long-term debt, net | 18,34,35,38 | 1,967,586 | 1,430,324 | |||||||||
Current portion of long-term payables — other | 19,34,35,38 | 398,874 | 398,823 | |||||||||
Lease liabilities | 34,35,36,38 | 386,429 | 349,568 | |||||||||
Other current liabilities | — | 35 | ||||||||||
8,046,541 | 6,960,435 | |||||||||||
Non-Current Liabilities: | ||||||||||||
Debentures, excluding current portion, net | 18,34,35,38 | 6,524,095 | 7,037,424 | |||||||||
Long-term borrowings, excluding current portion, net | 18,34,35,38 | 668,125 | 353,122 | |||||||||
Long-term payables — other | 19,34,35,38 | 1,239,467 | 1,611,010 | |||||||||
Long-term lease liabilities | 34,35,36,38 | 1,395,628 | 1,184,714 | |||||||||
Long-term contract liabilities | 8 | 61,574 | 36,531 | |||||||||
Defined benefit liabilities | 21 | 61 | 13,157 | |||||||||
Long-term derivative financial liabilities | 22,34,35,38 | 302,593 | 321,084 | |||||||||
Long-term provisions | 20 | 79,415 | 65,339 | |||||||||
Deferred tax liabilities | 31 | 763,766 | 941,301 | |||||||||
Other non-current liabilities | 34,35,36 | 71,801 | 52,022 | |||||||||
11,106,525 | 11,615,704 | |||||||||||
Total Liabilities | 19,153,066 | 18,576,139 | ||||||||||
Shareholders’ Equity: | ||||||||||||
Share capital | 1,23 | 30,493 | 30,493 | |||||||||
Capital surplus and others | 11,23,24,26 | (11,965,876 | ) | (12,022,485 | ) | |||||||
Hybrid bonds | 25 | 398,759 | 398,759 | |||||||||
Retained earnings | 27 | 22,463,711 | 22,437,341 | |||||||||
Reserves | 28 | 391,233 | 735,238 | |||||||||
Equity attributable to owners of the Parent Company | 11,318,320 | 11,579,346 | ||||||||||
Non-controlling interests | 836,876 | 755,792 | ||||||||||
Total Shareholders’ Equity | 12,155,196 | 12,335,138 | ||||||||||
Total Liabilities and Shareholders’ Equity | ₩ | 31,308,262 | 30,911,277 | |||||||||
(In millions of won except for per share data) | Note | 2022 | 2021 | 2020 | ||||||||||||
Continuing operations | ||||||||||||||||
Operating revenue and other income: | ||||||||||||||||
Revenue | 4,36 | ₩ | 17,304,973 | 16,748,585 | 16,087,747 | |||||||||||
Other income | 4,29,36 | 56,259 | 115,763 | 95,751 | ||||||||||||
17,361,232 | 16,864,348 | 16,183,498 | ||||||||||||||
Operating expenses: | 36 | |||||||||||||||
Labor | 2,449,813 | 2,300,754 | 2,108,496 | |||||||||||||
Commission | 7 | 5,518,786 | 5,426,114 | 5,103,012 | ||||||||||||
Depreciation and amortization | 4 | 3,621,325 | 3,672,555 | 3,664,665 | ||||||||||||
Network interconnection | 715,285 | 749,599 | 770,712 | |||||||||||||
Leased lines | 268,426 | 310,141 | 293,960 | |||||||||||||
Advertising | 252,402 | 233,401 | 272,091 | |||||||||||||
Rent | 143,747 | 140,418 | 171,179 | |||||||||||||
Cost of goods sold | 1,268,124 | 1,167,417 | 1,106,001 | |||||||||||||
Others | 4,29 | 1,528,976 | 1,431,587 | 1,658,362 | ||||||||||||
15,766,884 | 15,431,986 | 15,148,478 | ||||||||||||||
Operating profit | 4 | 1,594,348 | 1,432,362 | 1,035,020 | ||||||||||||
Finance income | 4,30 | 179,838 | 155,133 | 140,685 | ||||||||||||
Finance costs | 4,30 | (456,327 | ) | (315,604 | ) | (322,943 | ) | |||||||||
Gain (loss) relating to investments in subsidiaries, associates and joint ventures, net | 4,12 | (81,707 | ) | 446,300 | 52,456 | |||||||||||
Profit before income tax | 4 | 1,236,152 | 1,718,191 | 905,218 | ||||||||||||
Income tax expense | 31 | 288,321 | 446,796 | 221,262 | ||||||||||||
Profit from continuing operations | 947,831 | 1,271,395 | 683,956 | |||||||||||||
Profit from discontinued operations, net of taxes | 41 | — | 1,147,594 | 816,582 | ||||||||||||
Profit for the year | ₩ | 947,831 | 2,418,989 | 1,500,538 | ||||||||||||
Attributable to: | ||||||||||||||||
Owners of the Parent Company | ₩ | 912,400 | 2,407,523 | 1,504,352 | ||||||||||||
Non-controlling interests | 35,431 | 11,466 | (3,814 | ) | ||||||||||||
Earnings per share | 32 | |||||||||||||||
Basic earnings per share (in won) | ₩ | 4,118 | 7,191 | 4,093 | ||||||||||||
Basic earnings per share — continuing operations (in won) | 4,118 | 3,614 | 1,741 | |||||||||||||
Diluted earnings per share (in won) | 4,116 | 7,187 | 4,092 | |||||||||||||
Diluted earnings per share — continuing operations (in won) | 4,116 | 3,613 | 1,741 |
(In millions of won except for per share data) | Note | 2021 | 2020 | 2019 | ||||||||||||
Continuing operations | ||||||||||||||||
Operating revenue and other income: | ||||||||||||||||
Revenue | 4,36 | ₩ | 16,748,585 | 16,087,747 | 15,416,431 | |||||||||||
Other income | 4,29,36 | 115,763 | 95,751 | 95,583 | ||||||||||||
16,864,348 | 16,183,498 | 15,512,014 | ||||||||||||||
Operating expenses: | 36 | |||||||||||||||
Labor | 2,300,754 | 2,108,496 | 1,981,864 | |||||||||||||
Commissions | 7 | 5,426,114 | 5,103,012 | 4,766,682 | ||||||||||||
Depreciation and amortization | 4 | 3,672,555 | 3,664,665 | 3,540,984 | ||||||||||||
Network interconnection | 749,599 | 770,712 | 752,334 | |||||||||||||
Leased lines | 310,141 | 293,960 | 262,268 | |||||||||||||
Advertising | 233,401 | 272,091 | 279,846 | |||||||||||||
Rent | 140,418 | 171,179 | 152,589 | |||||||||||||
Cost of goods sold | 1,167,417 | 1,106,001 | 1,378,105 | |||||||||||||
Others | 4,29 | 1,431,587 | 1,658,362 | 1,410,288 | ||||||||||||
15,431,986 | 15,148,478 | 14,524,960 | ||||||||||||||
Operating profit | 4 | 1,432,362 | 1,035,020 | 987,054 | ||||||||||||
Finance income | 4,30 | 155,133 | 140,685 | 121,692 | ||||||||||||
Finance costs | 4,30 | (315,604 | ) | (322,943 | ) | (334,912 | ) | |||||||||
Gain relating to investments in subsidiaries, associates and joint ventures, net | 4,12 | 446,300 | 52,456 | 33,199 | ||||||||||||
Profit before income tax | 4 | 1,718,191 | 905,218 | 807,033 | ||||||||||||
Income tax expense | 31 | 446,796 | 221,262 | 262,940 | ||||||||||||
Profit from continuing operations | 1,271,395 | 683,956 | 544,093 | |||||||||||||
Profit from discontinued operations, net of taxes | 41 | 1,147,594 | 816,582 | 316,640 | ||||||||||||
Profit for the year | ₩ | 2,418,989 | 1,500,538 | 860,733 | ||||||||||||
Attributable to: | ||||||||||||||||
Owners of the Parent Company | ₩ | 2,407,523 | 1,504,352 | 888,698 | ||||||||||||
Non-controlling interests | 11,466 | (3,814 | ) | (27,965 | ) | |||||||||||
Earnings per share | 32 | |||||||||||||||
Basic earnings per share (in won) | ₩ | 7,191 | 4,093 | 2,425 | ||||||||||||
Basic earnings per share — continuing operations (in won) | 3,614 | 1,741 | 1,469 | |||||||||||||
Diluted earnings per share (in won) | 7,187 | 4,092 | 2,425 | |||||||||||||
Diluted earnings per share — continuing operations (in won) | 3,613 | 1,741 | 1,469 |
(In millions of won) | Note | 2021 | 2020 | 2019 | Note | 2022 | 2021 | 2020 | ||||||||||||||||||||||||
Profit for the year | ₩ | 2,418,989 | 1,500,538 | 860,733 | ₩ | 947,831 | 2,418,989 | 1,500,538 | ||||||||||||||||||||||||
Other comprehensive income (loss) | ||||||||||||||||||||||||||||||||
Items that will never be reclassified to profit or loss, net of taxes: | ||||||||||||||||||||||||||||||||
Remeasurement of defined benefit liabilities | 21 | 16,374 | (2,637 | ) | (72,605 | ) | ||||||||||||||||||||||||||
Net change in other comprehensive income (loss) of investments in associates and joint ventures | 1 2 ,28 | 4,796 | 271 | (19,269 | ) | |||||||||||||||||||||||||||
Items that will not be reclassified subsequently to profit or loss, net of taxes: | ||||||||||||||||||||||||||||||||
Remeasurement of defined benefit liabilities (assets) | 21 | 70,885 | 16,374 | (2,637 | ) | |||||||||||||||||||||||||||
Net change in other comprehensive income of investments in associates and joint ventures | 12,28 | — | 4,796 | 271 | ||||||||||||||||||||||||||||
Valuation gain (loss) on financial assets at fair value through other comprehensive income | 28,3 0 | 920,871 | 579,678 | (17,943 | ) | 28,30 | (491,853 | ) | 920,871 | 579,678 | ||||||||||||||||||||||
Items that are or may be reclassified subsequently to profit or loss, net of taxes: | ||||||||||||||||||||||||||||||||
Net change in other comprehensive income (loss) of investments in associates and joint ventures | 1 2 ,28 | 356,503 | (114,478 | ) | 75,763 | 12,28 | 119,707 | 356,503 | (114,478 | ) | ||||||||||||||||||||||
Net change in unrealized fair value of derivatives | 22,28,30 | 16,133 | 19,138 | 40,681 | 22,28,30 | (21,366 | ) | 16,133 | 19,138 | |||||||||||||||||||||||
Foreign currency translation differences for foreign operations | 28 | 47,515 | (20,150 | ) | (5,618 | ) | 28 | 16,401 | 47,515 | (20,150 | ) | |||||||||||||||||||||
Other comprehensive income for the year, net of taxes | 1,362,192 | 461,822 | 1,009 | |||||||||||||||||||||||||||||
Other comprehensive income (loss) for the year, net of taxes | (306,226 | ) | 1,362,192 | 461,822 | ||||||||||||||||||||||||||||
Total comprehensive income | ₩ | 3,781,181 | 1,962,360 | 861,742 | ₩ | 641,605 | 3,781,181 | 1,962,360 | ||||||||||||||||||||||||
Total comprehensive income (loss) attributable to: | ||||||||||||||||||||||||||||||||
Total comprehensive income attributable to: | Total comprehensive income attributable to: | |||||||||||||||||||||||||||||||
Owners of the Parent Company | ₩ | 3,473,445 | 1,869,075 | 891,051 | ₩ | 601,193 | 3,473,445 | 1,869,075 | ||||||||||||||||||||||||
Non-controlling interests | 307,736 | 93,285 | (29,309 | ) | 40,412 | 307,736 | 93,285 |
(In millions of won) | Attributable to owners | Non-controlling interests | Total equity | |||||||||||||||||||||||||||||
Share capital | Capital surplus (deficit) and others | Hybrid bonds | Retained earnings | Reserves | Sub-total | |||||||||||||||||||||||||||
Balance, December 31, 2018 | ₩ | 44,639 | 256,325 | 398,759 | 22,144,541 | (373,442 | ) | 22,470,822 | (121,572 | ) | 22,349,250 | |||||||||||||||||||||
Impact of adopting IFRS 16 in 2019 | — | — | — | (24,186 | ) | — | (24,186 | ) | (503 | ) | (24,689 | ) | ||||||||||||||||||||
Balance, January 1, 2019(As reported) | 44,639 | 256,325 | 398,759 | 22,120,355 | (373,442 | ) | 22,446,636 | (122,075 | ) | 22,324,561 | ||||||||||||||||||||||
Changes in accounting policies | — | — | — | (5,393 | ) | — | (5,393 | ) | — | (5,393 | ) | |||||||||||||||||||||
Balance, January 1, 2019(Restated) | 44,639 | 256,325 | 398,759 | 22,114,962 | (373,442 | ) | 22,441,243 | (122,075 | ) | 22,319,168 | ||||||||||||||||||||||
Total comprehensive income: | ||||||||||||||||||||||||||||||||
Profit (loss) for the year | — | — | — | 888,698 | — | 888,698 | (27,965 | ) | 860,733 | |||||||||||||||||||||||
Other comprehensive income (loss) (note 12,21,22,28,30) | — | — | — | (41,513 | ) | 43,866 | 2,353 | (1,344 | ) | 1,009 | ||||||||||||||||||||||
— | — | — | 847,185 | 43,866 | 891,051 | (29,309 | ) | 861,742 | ||||||||||||||||||||||||
Transactions with owners: | ||||||||||||||||||||||||||||||||
Annual dividends (note 33) | — | — | — | (646,828 | ) | — | (646,828 | ) | (21,150 | ) | (667,978 | ) | ||||||||||||||||||||
Interim dividends (note 33) | — | — | — | (71,870 | ) | — | (71,870 | ) | (8,650 | ) | (80,520 | ) | ||||||||||||||||||||
Share option (note 26) | — | 295 | — | — | — | 295 | 764 | 1,059 | ||||||||||||||||||||||||
Interest on hybrid bonds (note 25) | — | — | — | (14,766 | ) | — | (14,766 | ) | — | (14,766 | ) | |||||||||||||||||||||
Disposal of treasury shares (note 24) | — | 300,000 | — | — | — | 300,000 | — | 300,000 | ||||||||||||||||||||||||
Changes in ownership in subsidiaries (note 1 1 ) | — | 51,102 | — | — | — | 51,102 | 47,127 | 98,229 | ||||||||||||||||||||||||
— | 351,397 | — | (733,464 | ) | — | (382,067 | ) | 18,091 | (363,976 | ) | ||||||||||||||||||||||
Balance, December 31, 2019 | ₩ | 44,639 | 607,722 | 398,759 | 22,228,683 | (329,576 | ) | 22,950,227 | (133,293 | ) | 22,816,934 | |||||||||||||||||||||
(In millions of won) | Attributable to owners | Non-controlling interests | Total equity | |||||||||||||||||||||||||||||
Share capital | Capital surplus (deficit) and others | Hybrid bonds | Retained earnings | Reserves | Sub-total | |||||||||||||||||||||||||||
Balance, January 1, 2020 | ₩ | 44,639 | 607,722 | 398,759 | 22,228,683 | (329,576 | ) | 22,950,227 | (133,293 | ) | 22,816,934 | |||||||||||||||||||||
Total comprehensive income: | ||||||||||||||||||||||||||||||||
Profit (loss) for the year | — | — | — | 1,504,352 | — | 1,504,352 | (3,814 | ) | 1,500,538 | |||||||||||||||||||||||
Other comprehensive income (loss) (note 1 2 ,21,22,28,30) | — | — | — | (4,992 | ) | 369,715 | 364,723 | 97,099 | 461,822 | |||||||||||||||||||||||
— | — | — | 1,499,360 | 369,715 | 1,869,075 | 93,285 | 1,962,360 | |||||||||||||||||||||||||
Transactions with owners: | ||||||||||||||||||||||||||||||||
Annual dividends (note 33) | — | — | — | (658,228 | ) | — | (658,228 | ) | (5,771 | ) | (663,999 | ) | ||||||||||||||||||||
Interim dividends (note 33) | — | — | — | (73,136 | ) | — | (73,136 | ) | — | (73,136 | ) | |||||||||||||||||||||
Share option (note 26) | — | 179 | — | — | — | 179 | 1,256 | 1,435 | ||||||||||||||||||||||||
Interest on hybrid bonds (note 25) | — | — | — | (14,766 | ) | — | (14,766 | ) | — | (14,766 | ) | |||||||||||||||||||||
Acquisition of treasury shares (note 24) | — | (426,664 | ) | — | — | — | (426,664 | ) | — | (426,664 | ) | |||||||||||||||||||||
Changes in ownership in subsidiaries (note 1 1 ) | — | 97,207 | — | — | — | 97,207 | 696,872 | 794,079 | ||||||||||||||||||||||||
— | (329,278 | ) | — | (746,130 | ) | — | (1,075,408 | ) | 692,357 | (383,051 | ) | |||||||||||||||||||||
Balance, December 31, 2020 | ₩ | 44,639 | 278,444 | 398,759 | 22,981,913 | 40,139 | 23,743,894 | 652,349 | 24,396,243 | |||||||||||||||||||||||
(In millions of won) | Attributable to owners | Non-controlling interests | Total equity | |||||||||||||||||||||||||||||
Share capital | Capital surplus (deficit) and others | Hybrid bonds | Retained earnings | Reserves | Sub-total | |||||||||||||||||||||||||||
Balance, January 1, 2020 | ₩ | 44,639 | 607,722 | 398,759 | 22,228,683 | (329,576 | ) | 22,950,227 | (133,293 | ) | 22,816,934 | |||||||||||||||||||||
Total comprehensive income: | ||||||||||||||||||||||||||||||||
Profit (loss) for the year | — | — | — | 1,504,352 | — | 1,504,352 | (3,814 | ) | 1,500,538 | |||||||||||||||||||||||
Other comprehensive income (loss) (note 12,21,22,28,30) | — | — | — | (4,992 | ) | 369,715 | 364,723 | 97,099 | 461,822 | |||||||||||||||||||||||
— | — | — | 1,499,360 | 369,715 | 1,869,075 | 93,285 | 1,962,360 | |||||||||||||||||||||||||
Transactions with owners: | ||||||||||||||||||||||||||||||||
Annual dividends (note 33) | — | — | — | (658,228 | ) | — | (658,228 | ) | (5,771 | ) | (663,999 | ) | ||||||||||||||||||||
Interim dividends (note 33) | — | — | — | (73,136 | ) | — | (73,136 | ) | — | (73,136 | ) | |||||||||||||||||||||
Share option (note 26) | — | 179 | — | — | — | 179 | 1,256 | 1,435 | ||||||||||||||||||||||||
Interest on hybrid bonds (note 25) | — | — | — | (14,766 | ) | — | (14,766 | ) | — | (14,766 | ) | |||||||||||||||||||||
Acquisition of treasury shares (note 24) | — | (426,664 | ) | — | — | — | (426,664 | ) | — | (426,664 | ) | |||||||||||||||||||||
Changes in ownership in subsidiaries (note 11) | — | 97,207 | — | — | — | 97,207 | 696,872 | 794,079 | ||||||||||||||||||||||||
— | (329,278 | ) | — | (746,130 | ) | — | (1,075,408 | ) | 692,357 | (383,051 | ) | |||||||||||||||||||||
Balance, December 31, 2020 | ₩ | 44,639 | 278,444 | 398,759 | 22,981,913 | 40,139 | 23,743,894 | 652,349 | 24,396,243 | |||||||||||||||||||||||
(In millions of won) | Attributable to owners | Non-controlling interests | Total equity | Attributable to owners | Non-controlling interests | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share capital | Capital surplus (deficit) and others | Hybrid bonds | Retained earnings | Reserves | Sub-total | Share capital | Capital surplus (deficit) and others | Hybrid bonds | Retained earnings | Reserves | Sub-total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2021 | ₩ | 44,639 | 278,444 | 398,759 | 22,981,913 | 40,139 | 23,743,894 | 652,349 | 24,396,243 | ₩ | 44,639 | 278,444 | 398,759 | 22,981,913 | 40,139 | 23,743,894 | 652,349 | 24,396,243 | ||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit for the year | — | — | — | 2,407,523 | — | 2,407,523 | 11,466 | 2,418,989 | — | — | — | 2,407,523 | — | 2,407,523 | 11,466 | 2,418,989 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) (note 1 2 ,21,22,28,30) | — | — | — | 26,371 | 1,039,551 | 1,065,922 | 296,270 | 1,362,192 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (note 12,21,22,28,30) | — | — | — | 26,371 | 1,039,551 | 1,065,922 | 296,270 | 1,362,192 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | 2,433,894 | 1,039,551 | 3,473,445 | 307,736 | 3,781,181 | — | — | — | 2,433,894 | 1,039,551 | 3,473,445 | 307,736 | 3,781,181 | |||||||||||||||||||||||||||||||||||||||||||||||||
Transactions with owners: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual dividends (note 33) | — | — | — | (641,944 | ) | — | (641,944 | ) | (25,771 | ) | (667,715 | ) | — | — | — | (641,944 | ) | — | (641,944 | ) | (25,771 | ) | (667,715 | ) | ||||||||||||||||||||||||||||||||||||||||
Interim dividends (note 33) | — | — | — | (355,804 | ) | — | (355,804 | ) | — | (355,804 | ) | — | — | — | (355,804 | ) | — | (355,804 | ) | — | (355,804 | ) | ||||||||||||||||||||||||||||||||||||||||||
Share option (note 26) | — | 75,498 | — | — | — | 75,498 | 12,124 | 87,622 | — | 75,498 | — | — | — | 75,498 | 12,124 | 87,622 | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest on hybrid bonds (note 25) | — | — | — | (14,766 | ) | — | (14,766 | ) | — | (14,766 | ) | — | — | — | (14,766 | ) | — | (14,766 | ) | — | (14,766 | ) | ||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury shares (note 24) | — | (76,111 | ) | — | — | — | (76,111 | ) | — | (76,111 | ) | — | (76,111 | ) | — | — | — | (76,111 | ) | — | (76,111 | ) | ||||||||||||||||||||||||||||||||||||||||||
Disposal of treasury shares (note 24) | — | 57,017 | — | — | — | 57,017 | — | 57,017 | — | 57,017 | — | — | — | 57,017 | — | 57,017 | ||||||||||||||||||||||||||||||||||||||||||||||||
Retirement of treasury shares (note 24) | — | 1,965,952 | — | (1,965,952 | ) | — | — | — | — | — | 1,965,952 | — | (1,965,952 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Changes from spin-off (note 41) | (14,146 | ) | (14,460,588 | ) | — | — | (344,452 | ) | (14,819,186 | ) | (186,211 | ) | (15,005,397 | ) | (14,146 | ) | (14,460,588 | ) | — | — | (344,452 | ) | (14,819,186 | ) | (186,211 | ) | (15,005,397 | ) | ||||||||||||||||||||||||||||||||||||
Changes in ownership in subsidiaries (note 1 1 ) | — | 137,303 | — | — | — | 137,303 | (4,435 | ) | 132,868 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in ownership in subsidiaries (note 11) | — | 137,303 | — | — | — | 137,303 | (4,435 | ) | 132,868 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(14,146 | ) | (12,300,929 | ) | — | (2,978,466 | ) | (344,452 | ) | (15,637,993 | ) | (204,293 | ) | (15,842,286 | ) | (14,146 | ) | (12,300,929 | ) | — | (2,978,466 | ) | (344,452 | ) | (15,637,993 | ) | (204,293 | ) | (15,842,286 | ) | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | ₩ | 30,493 | (12,022,485 | ) | 398,759 | 22,437,341 | 735,238 | 11,579,346 | 755,792 | 12,335,138 | ₩ | 30,493 | (12,022,485 | ) | 398,759 | 22,437,341 | 735,238 | 11,579,346 | 755,792 | 12,335,138 | ||||||||||||||||||||||||||||||||||||||||||||
(In millions of won) | Attributable to owners | Non-controlling interests | Total equity | |||||||||||||||||||||||||||||
Share capital | Capital surplus (deficit) and others | Hybrid bonds | Retained earnings | Reserves | Sub-total | |||||||||||||||||||||||||||
Balance, January 1, 2022 | ₩ | 30,493 | (12,022,485 | ) | 398,759 | 22,437,341 | 735,238 | 11,579,346 | 755,792 | 12,335,138 | ||||||||||||||||||||||
Total comprehensive income: | ||||||||||||||||||||||||||||||||
Profit for the year | — | — | — | 912,400 | — | 912,400 | 35,431 | 947,831 | ||||||||||||||||||||||||
Other comprehensive income (loss) (note 12,21,22,28,30) | — | — | — | 32,798 | (344,005 | ) | (311,207 | ) | 4,981 | (306,226 | ) | |||||||||||||||||||||
— | — | — | 945,198 | (344,005 | ) | 601,193 | 40,412 | 641,605 | ||||||||||||||||||||||||
Transactions with owners: | ||||||||||||||||||||||||||||||||
Annual dividends (note 33) | — | — | — | (361,186 | ) | — | (361,186 | ) | — | (361,186 | ) | |||||||||||||||||||||
Interim dividends (note 33) | — | — | — | (542,876 | ) | — | (542,876 | ) | — | (542,876 | ) | |||||||||||||||||||||
Share option (note 26) | — | 72,261 | — | — | — | 72,261 | — | 72,261 | ||||||||||||||||||||||||
Interest on hybrid bonds (note 25) | — | — | — | (14,766 | ) | — | (14,766 | ) | — | (14,766 | ) | |||||||||||||||||||||
Transactions of treasury shares (note 24) | — | (2,683 | ) | — | — | — | (2,683 | ) | — | (2,683 | ) | |||||||||||||||||||||
Changes in ownership in subsidiaries (note 11) | — | (12,969 | ) | — | — | — | (12,969 | ) | 40,672 | 27,703 | ||||||||||||||||||||||
— | 56,609 | — | (918,828 | ) | — | (862,219 | ) | 40,672 | (821,547 | ) | ||||||||||||||||||||||
Balance, December 31, 2022 | ₩ | 30,493 | (11,965,876 | ) | 398,759 | 22,463,711 | 391,233 | 11,318,320 | 836,876 | 12,155,196 | ||||||||||||||||||||||
(In millions of won) | Note | 2021 | 2020 | 2019 | Note | 2022 | 2021 | 2020 | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||||
Cash generated from operating activities | ||||||||||||||||||||||||||||
Profit for the year | ₩ | 2,418,989 | 1,500,538 | 860,733 | ₩ | 947,831 | 2,418,989 | 1,500,538 | ||||||||||||||||||||
Adjustments for income and expenses | 38 | 3,473,779 | 4,256,654 | 4,435,039 | 38 | 4,719,438 | 3,473,779 | 4,256,654 | ||||||||||||||||||||
Changes in assets and liabilities related to operating activities | 38 | (568,695 | ) | 302,458 | (856,130 | ) | 38 | 118,106 | (568,695 | ) | 302,458 | |||||||||||||||||
5,324,073 | 6,059,650 | 4,439,642 | 5,785,375 | 5,324,073 | 6,059,650 | |||||||||||||||||||||||
Interest received | 37,403 | 41,832 | 56,392 | 52,163 | 37,403 | 41,832 | ||||||||||||||||||||||
Dividends received | 327,906 | 166,019 | 241,117 | 16,388 | 327,906 | 166,019 | ||||||||||||||||||||||
Interest paid | (306,634 | ) | (397,351 | ) | (360,439 | ) | (259,719 | ) | (306,634 | ) | (397,351 | ) | ||||||||||||||||
Income tax paid | (351,469 | ) | (48,274 | ) | (341,728 | ) | (434,890 | ) | (351,469 | ) | (48,274 | ) | ||||||||||||||||
Net cash provided by operating activities | 5,031,279 | 5,821,876 | 4,034,984 | 5,159,317 | 5,031,279 | 5,821,876 | ||||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||||||
Cash inflows from investing activities: | ||||||||||||||||||||||||||||
Decrease in short-term financial instr uments, net | 162,565 | — | 253,971 | |||||||||||||||||||||||||
Decrease in short-term financial instruments, net | 264,693 | 162,565 | — | |||||||||||||||||||||||||
Decrease in short-term investment securities, net | 32,544 | 17,684 | 29,503 | 5,010 | 32,544 | 17,684 | ||||||||||||||||||||||
Collection of short-term loans | 137,196 | 77,114 | 113,345 | 123,700 | 137,196 | 77,114 | ||||||||||||||||||||||
Decrease in long-term financial instruments | 343 | 99 | 231 | 330,032 | 343 | 99 | ||||||||||||||||||||||
Proceeds from disposals of long-term investment securities | 78,261 | 46,065 | 234,683 | 104,190 | 78,261 | 46,065 | ||||||||||||||||||||||
Proceeds from disposals of investments in associates and joint ventures | 100,634 | 2,715 | 220 | 342,645 | 100,634 | 2,715 | ||||||||||||||||||||||
Proceeds from disposals of non-current assets held for sale | 20,136 | — | — | |||||||||||||||||||||||||
Proceeds from disposals of property and equipment | 61,425 | 102,526 | 18,478 | 15,792 | 61,425 | 102,526 | ||||||||||||||||||||||
Proceeds from disposals of intangible assets | 14,618 | 39,654 | 7,327 | 10,993 | 14,618 | 39,654 | ||||||||||||||||||||||
Collection of long-term loans | 4,166 | 4,608 | 4,435 | 1,134 | 4,166 | 4,608 | ||||||||||||||||||||||
Decrease in deposits | 6,941 | 16,244 | 9,180 | 10,056 | 6,941 | 16,244 | ||||||||||||||||||||||
Proceeds from settlement of derivatives | 1,495 | 845 | 601 | 1,542 | 1,495 | 845 | ||||||||||||||||||||||
Collection of lease receivables | — | — | 27,712 | |||||||||||||||||||||||||
Proceeds from disposals of subsidiaries | — | 165 | 4,802 | — | — | 165 | ||||||||||||||||||||||
Cash inflow from business combination, net | — | 115,834 | 5,016 | — | — | 115,834 | ||||||||||||||||||||||
Cash inflow from transfers of business, net | — | 5,395 | 45,658 | — | — | 5,395 | ||||||||||||||||||||||
600,188 | 428,948 | 755,162 | 1,229,923 | 600,188 | 428,948 | |||||||||||||||||||||||
Cash outflows for investing activities: | ||||||||||||||||||||||||||||
Increase in short-term financial instruments, net | — | (596,025 | ) | — | — | — | (596,025 | ) | ||||||||||||||||||||
Increase in short-term loans | (100,209 | ) | (103,604 | ) | (116,320 | ) | (127,263 | ) | (100,209 | ) | (103,604 | ) | ||||||||||||||||
Increase in long-term loans | (9,877 | ) | (11,044 | ) | (11,541 | ) | (11,724 | ) | (9,877 | ) | (11,044 | ) | ||||||||||||||||
Increase in long-term financial instruments | (21 | ) | (2 | ) | — | (330,032 | ) | (21 | ) | (2 | ) | |||||||||||||||||
Acquisitions of long-term investment securities | (286,566 | ) | (95,474 | ) | (383,976 | ) | (436,753 | ) | (286,566 | ) | (95,474 | ) | ||||||||||||||||
Acquisitions of investments in associates and joint ventures | (222,765 | ) | (170,292 | ) | (264,015 | ) | (11,065 | ) | (222,765 | ) | (170,292 | ) | ||||||||||||||||
Acquisitions of property and equipment | (2,915,851 | ) | (3,557,800 | ) | (3,375,883 | ) | (2,908,287 | ) | (2,915,851 | ) | (3,557,800 | ) | ||||||||||||||||
Acquisitions of intangible assets | (392,588 | ) | (129,976 | ) | (141,010 | ) | (138,136 | ) | (392,588 | ) | (129,976 | ) | ||||||||||||||||
Increase in deposits | �� | (51,274 | ) | (12,175 | ) | (6,164 | ) | (12,146 | ) | (51,274 | ) | (12,175 | ) | |||||||||||||||
Cash outflow for business combinations, net | (107,226 | ) | (2,958 | ) | (36,910 | ) | (62,312 | ) | (107,226 | ) | (2,958 | ) | ||||||||||||||||
Cash outflow for disposal and liquidation of subsidiaries | — | — | (927 | ) | ||||||||||||||||||||||||
(4,086,377 | ) | (4,679,350 | ) | (4,336,746 | ) | (4,037,718 | ) | (4,086,377 | ) | (4,679,350 | ) | |||||||||||||||||
Net cash used in investing activities | ₩ | (3,486,189 | ) | (4,250,402 | ) | (3,581,584 | ) | ₩ | (2,807,795) | (3,486,189 | ) | (4,250,402 | ) | |||||||||||||||
(In millions of won) | Note | 2021 | 2020 | 2019 | Note | 2022 | 2021 | 2020 | ||||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||||
Cash inflows from financing activities: | ||||||||||||||||||||||||||||
Proceeds from short-term borrowings, net | ₩ | — | 76,375 | — | ₩ | 130,000 | — | 76,375 | ||||||||||||||||||||
Proceeds from issuance of debentures | 873,245 | 1,420,962 | 1,633,444 | 1,200,122 | 873,245 | 1,420,962 | ||||||||||||||||||||||
Proceeds from long-term borrowings | 350,000 | 1,947,848 | — | 440,000 | 350,000 | 1,947,848 | ||||||||||||||||||||||
Increase in financial liabilities at FVTPL | 129,123 | — | — | — | 129,123 | — | ||||||||||||||||||||||
Cash inflows from settlement of derivatives | 332 | 36,691 | 12,426 | 768 | 332 | 36,691 | ||||||||||||||||||||||
Proceeds from disposals of treasury shares | — | — | 300,000 | |||||||||||||||||||||||||
Transactions with non-controlling shareholders | 444,124 | 17,766 | 101,398 | 31,151 | 444,124 | 17,766 | ||||||||||||||||||||||
1,796,824 | 3,499,642 | 2,047,268 | 1,802,041 | 1,796,824 | 3,499,642 | |||||||||||||||||||||||
Cash outflows for financing activities: | ||||||||||||||||||||||||||||
Repayments of short-term borrowings, net | (50,823 | ) | — | (59,860 | ) | — | (50,823 | ) | — | |||||||||||||||||||
Repayments of long-term payables — other | (426,267 | ) | (428,100 | ) | (428,153 | ) | (400,245 | ) | (426,267 | ) | (428,100 | ) | ||||||||||||||||
Repayments of debentures | (890,000 | ) | (975,500 | ) | (940,000 | ) | (1,390,000 | ) | (890,000 | ) | (975,500 | ) | ||||||||||||||||
Repayments of long-term borrowings | (286,868 | ) | (1,950,874 | ) | (89,882 | ) | (41,471 | ) | (286,868 | ) | (1,950,874 | ) | ||||||||||||||||
Payments of dividends | (1,028,520 | ) | (742,136 | ) | (718,698 | ) | (904,020 | ) | (1,028,520 | ) | (742,136 | ) | ||||||||||||||||
Payments of interest on hybrid bonds | (14,766 | ) | (14,766 | ) | (14,766 | ) | (14,766 | ) | (14,766 | ) | (14,766 | ) | ||||||||||||||||
Repayments of lease liabilities | (431,674 | ) | (412,666 | ) | (443,238 | ) | (401,054 | ) | (431,674 | ) | (412,666 | ) | ||||||||||||||||
Acquisition of treasury shares | (76,111 | ) | (426,664 | ) | — | — | (76,111 | ) | (426,664 | ) | ||||||||||||||||||
Cash outflows resulting from spin-off | (626,000 | ) | — | — | — | (626,000 | ) | — | ||||||||||||||||||||
Transactions with non-controlling shareholders | (19,406 | ) | (6,515 | ) | (39,345 | ) | (367 | ) | (19,406 | ) | (6,515 | ) | ||||||||||||||||
(3,850,435 | ) | (4,957,221 | ) | (2,733,942 | ) | (3,151,923 | ) | (3,850,435 | ) | (4,957,221 | ) | |||||||||||||||||
Net cash used in financing activities | (2,053,611 | ) | (1,457,579 | ) | (686,674 | ) | 38 | (1,349,882 | ) | (2,053,611 | ) | (1,457,579 | ) | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | (508,521 | ) | 113,895 | (233,274 | ) | 1,001,640 | (508,521 | ) | 113,895 | |||||||||||||||||||
Cash and cash equivalents at beginning of the year | 1,369,653 | 1,270,824 | 1,506,699 | 872,731 | 1,369,653 | 1,270,824 | ||||||||||||||||||||||
Effects of exchange rate changes on cash and cash equivalents | 11,599 | (15,066 | ) | (2,601 | ) | 7,920 | 11,599 | (15,066 | ) | |||||||||||||||||||
Cash and cash equivalents at end of the year | ₩ | 872,731 | 1,369,653 | 1,270,824 | ₩ | 1,882,291 | 872,731 | 1,369,653 | ||||||||||||||||||||
1. | Reporting Entity |
Number of shares | Percentage of total shares issued (%) | Number of shares | Percentage of total shares issued (%) | |||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||
SK Inc. | 65,668,397 | 21,624,120 | 30.00 | 26.78 | 65,668,397 | 65,668,397 | 30.01 | 30.00 | ||||||||||||||||||||||||
National Pension Service | 21,076,493 | 8,853,906 | 9.63 | 10.97 | 16,846,066 | 21,076,493 | 7.69 | 9.63 | ||||||||||||||||||||||||
Institutional investors and other shareholders | 126,990,775 | 39,582,507 | 58.04 | 49.02 | 131,671,103 | 126,990,775 | 60.17 | 58.04 | ||||||||||||||||||||||||
Kakao Co rp . | 3,846,487 | 1,266,620 | 1.76 | 1.57 | ||||||||||||||||||||||||||||
Kakao Corp. | — | 3,846,487 | — | 1.76 | ||||||||||||||||||||||||||||
Kakao Investment Co., Ltd. | 3,846,487 | — | 1.76 | — | ||||||||||||||||||||||||||||
Treasury shares | 1,250,992 | 9,418,558 | 0.57 | 11.66 | 801,091 | 1,250,992 | 0.37 | 0.57 | ||||||||||||||||||||||||
218,833,144 | 80,745,711 | 100.00 | 100.00 | 218,833,144 | 218,833,144 | 100.00 | 100.00 | |||||||||||||||||||||||||
Ownership (%)(*1) | Ownership (%)(*1) | |||||||||||||||||||||||||||
Subsidiary | Subsidiary | Location | Primary business | Dec. 31, 2021 | Dec. 31, 2020 | Subsidiary | Location | Primary business | Dec. 31, 2022 | Dec. 31, 2021 | ||||||||||||||||||
Subsidiaries owned by the Parent Company | SK Telink Co., Ltd. | Korea | Telecommunication and Mobile Virtual Network Operator service | 100.0 | 100.0 | SK Telink Co., Ltd. | Korea | International telecommunication and Mobile Virtual Network Operator service | 100.0 | 100.0 | ||||||||||||||||||
SK Communications Co., Ltd. | Korea | Internet website services | 100.0 | 100.0 | SK Communications Co., Ltd. | Korea | Internet website services | 100.0 | 100.0 | |||||||||||||||||||
SK Broadband Co., Ltd. | Korea | Telecommunication services | 74.3 | 74.3 | SK Broadband Co., Ltd. | Korea | Fixed-line telecommunication services | 74.4 | 74.3 | |||||||||||||||||||
PS&Marketing Corporation | Korea | Communications device retail business | 100.0 | 100.0 | PS&Marketing Corporation | Korea | Communications device retail business | 100.0 | 100.0 | |||||||||||||||||||
SERVICE ACE Co., Ltd. | Korea | Call center management service | 100.0 | 100.0 | SERVICE ACE Co., Ltd. | Korea | Call center management service | 100.0 | 100.0 | |||||||||||||||||||
SERVICE TOP Co., Ltd. | Korea | Call center management service | 100.0 | 100.0 | SERVICE TOP Co., Ltd. | Korea | Call center management service | 100.0 | 100.0 | |||||||||||||||||||
SK O&S Co., Ltd. | Korea | Base station maintenance service | 100.0 | 100.0 | SK O&S Co., Ltd. | Korea | Base station maintenance service | 100.0 | 100.0 | |||||||||||||||||||
SK Telecom China Holdings Co., Ltd. | China | Investment (Holdings company) | 100.0 | 100.0 | SK Telecom China Holdings Co., Ltd. | China | Investment (Holdings company) | 100.0 | 100.0 | |||||||||||||||||||
SK Global Healthcare Business Group Ltd. | Hong Kong | Investment | 100.0 | 100.0 | SK Global Healthcare Business Group Ltd. | Hong Kong | Investment | 100.0 | 100.0 | |||||||||||||||||||
YTK Investment Ltd. | Cayman Islands | Investment association | 100.0 | 100.0 | YTK Investment Ltd. | Cayman Islands | Investment | 100.0 | 100.0 | |||||||||||||||||||
Atlas Investment | Cayman Islands | Investment association | 100.0 | 100.0 | Atlas Investment | Cayman Islands | Investment | 100.0 | 100.0 | |||||||||||||||||||
SKT Americas, Inc. | USA | Information gathering and consulting | 100.0 | 100.0 | SK Telecom Americas, Inc. | USA | Information gathering and consulting | 100.0 | 100.0 | |||||||||||||||||||
One Store Co., Ltd.(*2) | Korea | Telecommunication services | — | 52.1 | Quantum Innovation Fund I | Korea | Investment | 59.9 | 59.9 | |||||||||||||||||||
SK Telecom Japan Inc. | Japan | Information gathering and consulting | 100.0 | 100.0 | ||||||||||||||||||||||||
Happy Hanool Co., Ltd. | Korea | Service | 100.0 | 100.0 | ||||||||||||||||||||||||
SK stoa Co., Ltd. | Korea | Other telecommunication retail business | 100.0 | 100.0 | ||||||||||||||||||||||||
Broadband Nowon Co., Ltd.(*2) | Korea | Cable broadcasting services | — | 100.0 | ||||||||||||||||||||||||
SAPEON Inc.(*2,3) | USA | Manufacturing non-memory and other electronic integrated circuits | 62.5 | — |
Ownership (%)(*1) | Ownership (%)(*1) | |||||||||||||||||||||||||||
Subsidiary | Subsidiary | Location | Primary business | Dec. 31, 2021 | Dec. 31, 2020 | Subsidiary | Location | Primary business | Dec. 31, 2022 | Dec. 31, 2021 | ||||||||||||||||||
SK Planet Co., Ltd.(*2) | Korea | Telecommunication services, system software development and supply services | — | 98.7 | ||||||||||||||||||||||||
Eleven Street Co., Ltd.(*2) | Korea | E-commerce | — | 80.3 | ||||||||||||||||||||||||
DREAMUS COMPANY(*2) | Korea | Manufacturing digital audio players and other portable media devices | — | 51.4 | ||||||||||||||||||||||||
SK Shieldus Co., Ltd. (Formerly, ADT CAPS Co., Ltd.)(*2) | Korea | Information security and unmanned security service | — | 62.6 | ||||||||||||||||||||||||
Quantum Innovation Fund I | Korea | Investment | 59.9 | 59.9 | ||||||||||||||||||||||||
SK Telecom Japan Inc. | Japan | Information gathering and consulting | 100.0 | 100.0 | ||||||||||||||||||||||||
id Quantique SA(*2) | Switzerland | Quantum information and communications service | — | 68.1 | ||||||||||||||||||||||||
SK Square Americas, Inc. (Formerly, SK Telecom TMT InvestmentCorp.)(*2) | USA | Investment | — | 100.0 | ||||||||||||||||||||||||
FSK L&S Co., Ltd.(*2) | Korea | Freight and logistics consulting business | — | 60.0 | ||||||||||||||||||||||||
Incross Co., Ltd.(*2) | Korea | Media representative business | — | 34.6 | ||||||||||||||||||||||||
Happy Hanool Co., Ltd. | Korea | Service | 100.0 | 100.0 | ||||||||||||||||||||||||
SK stoa Co., Ltd. | Korea | Other telecommunication retail business | 100.0 | 100.0 | ||||||||||||||||||||||||
Broadband Nowon Co., Ltd.(*3) | Korea | Cable broadcasting services | 100.0 | 55.0 | ||||||||||||||||||||||||
T map Mobility Co., Ltd.(*2) | Korea | Mobility business | — | 100.0 | ||||||||||||||||||||||||
Subsidiaries owned by SK Planet Co., Ltd.(*2) | SK m&service Co., Ltd. | Korea | Database and Internet website service | — | 100.0 | |||||||||||||||||||||||
SK Planet Global Holdings Pte. Ltd. | Singapore | Investment (Holdings company) | — | 100.0 | ||||||||||||||||||||||||
SKP America LLC. | USA | Digital contents sourcing service | — | 100.0 | ||||||||||||||||||||||||
K-net Culture and Contents Venture Fund | Korea | Capital investing in startups | — | 59.0 | ||||||||||||||||||||||||
Subsidiaries owned by DREAMUS COMPANY(*2) | iriver Enterprise Ltd. | Hong Kong | Management of Chinese subsidiaries | — | 100.0 | |||||||||||||||||||||||
iriver China Co., Ltd. | China | Sales and manufacturing of MP3 and 4 | — | 100.0 | ||||||||||||||||||||||||
Dongguan iriver Electronics Co., Ltd. | China | Sales and manufacturing of e-book devices | — | 100.0 | ||||||||||||||||||||||||
LIFE DESIGN COMPANY Inc. | Japan | Sales of goods in Japan | — | 100.0 | ||||||||||||||||||||||||
Subsidiaries owned by SK Shieldus Co., Ltd. (Formerly, ADT CAPS Co., Ltd.)(*2) | SKinfosec Information Technology(Wuxi) Co., Ltd. | China | System software development and supply services | — | 100.0 | |||||||||||||||||||||||
ADT CAPS Co., Ltd. | Korea | Unmanned security | — | 100.0 | ||||||||||||||||||||||||
CAPSTEC Co., Ltd. | Korea | Manned security | — | 100.0 | ||||||||||||||||||||||||
Subsidiaries owned by SK Broadband Co., Ltd. | Home & Service Co., Ltd. | Korea | Operation of information and communication facility | 100.0 | 100.0 | Home & Service Co., Ltd. | Korea | Operation of information and communication facility | 100.0 | 100.0 | ||||||||||||||||||
Media S Co., Ltd.(*2) | Korea | Production and supply services of broadcasting programs | 100.0 | — | Media S Co., Ltd. | Korea | Production and supply services of broadcasting programs | 100.0 | 100.0 | |||||||||||||||||||
Subsidiary owned by PS&Marketing Corporation | SK m&service Co., Ltd.(*2,4) | Korea | Database and Internet website service | 100.0 | — | |||||||||||||||||||||||
Subsidiary owned by Quantum Innovation Fund I | PanAsia Semiconductor Materials LLC. | Korea | Investment | 66.4 | 66.4 | PanAsia Semiconductor Materials LLC. | Korea | Investment | 66.4 | 66.4 | ||||||||||||||||||
Subsidiary owned by SK Telecom Japan Inc. | SK Planet Japan, K. K. | Japan | Digital contents sourcing service | 79.8 | 79.8 | SK Planet Japan, K. K. | Japan | Digital contents sourcing service | 79.8 | 79.8 | ||||||||||||||||||
Subsidiary owned by id Quantique SA(*2) | Id Quantique LLC | Korea | Quantum information and communications service | — | 100.0 | |||||||||||||||||||||||
Subsidiary owned by SAPEON Inc. | SAPEON Korea Inc.(*2,5) | Korea | Manufacturing non-memory and other electronic integrated circuits | 100.0 | — | |||||||||||||||||||||||
Others(*6) | SK Telecom Innovation Fund, L.P. | USA | Investment | 100.0 | 100.0 | |||||||||||||||||||||||
SK Telecom China Fund I L.P. | Cayman Islands | Investment | 100.0 | 100.0 |
Ownership (%)(*1) | ||||||||||||||
Subsidiary | Location | Primary business | Dec. 31, 2021 | Dec. 31, 2020 | ||||||||||
Subsidiaries owned by FSK L&S Co., Ltd.(*2) | FSK L&S (Shanghai) Co., Ltd. | China | Logistics business | — | 66.0 | |||||||||
FSK L&S (Hungary) Co., Ltd. | Hungary | Logistics business | — | 100.0 | ||||||||||
FSK L&S VIETNAM COMPANY LIMITED | Vietnam | Logistics business | — | 100.0 | ||||||||||
Subsidiaries owned by Incross Co., Ltd.(*2) | Infra Communications Co., Ltd. | Korea | Service operation | — | 100.0 | |||||||||
Mindknock Co., Ltd. | Korea | Software development | — | 100.0 | ||||||||||
Others(*4) | SK Telecom Innovation Fund, L.P. | USA | Investment | 100.0 | 100.0 | |||||||||
SK Telecom China Fund I L.P. | Cayman Islands | Investment | 100.0 | 100.0 |
(*1) | The ownership interest represents direct ownership interest in subsidiaries either by the Parent Company or subsidiaries of the Parent Company. |
(*2) | Details of changes in the consolidation scope for the year ended December 31, 1-(4). |
(*3) | The Parent Company newly established SAPEON inc. and the ownership interest of the Parent Company in SAPEON inc. has changed from 100% to 62.5% due to unequal paid-in capital increase of SAPEON Inc. incurred after the establishment for the year ended December 31, 2022. |
(*4) | PS&Marketing Corporation acquired ₩ |
(* | The Parent Company newly established SAPEON Korea Inc. and disposed the entire shares of SAPEON Korea Inc. to SAPEON Inc. at ₩ 40,000 million in cash during the year ended December 31, 2022. |
(*6) | Others are owned by Atlas Investment and another subsidiary of the Parent Company. |
1) | Condensed financial information of significant subsidiaries as of and for the year ended December 31, |
(In millions of won) | As of December 31, 2021 | 2021 | As of December 31, 2022 | 2022 | ||||||||||||||||||||||||||||||||||||
Subsidiary | Total assets | Total liabilities | Total equity | Revenue | Profit | Total assets | Total liabilities | Total equity | Revenue | Profit (loss) | ||||||||||||||||||||||||||||||
SK Telink Co., Ltd. | ₩ | 174,837 | 52,821 | 122,016 | 313,404 | 8,846 | ₩ | 196,281 | 60,927 | 135,354 | 302,595 | 15,008 | ||||||||||||||||||||||||||||
SK Broadband Co., Ltd. | 5,971,505 | 3,091,837 | 2,879,668 | 4,058,997 | 213,468 | 6,245,484 | 3,134,949 | 3,110,535 | 4,162,093 | 212,816 | ||||||||||||||||||||||||||||||
PS&Marketing Corporation | 478,745 | 263,457 | 215,288 | 1,445,540 | 3,179 | 403,030 | 177,739 | 225,291 | 1,376,400 | 3,856 | ||||||||||||||||||||||||||||||
SERVICE ACE Co., Ltd. | 99,059 | 66,496 | 32,563 | 197,146 | 2,519 | 97,597 | 59,189 | 38,408 | 194,798 | 2,429 | ||||||||||||||||||||||||||||||
SERVICE TOP Co., Ltd. | 72,026 | 46,067 | 25,959 | 185,452 | 2,066 | 81,590 | 53,589 | 28,001 | 179,365 | 1,613 | ||||||||||||||||||||||||||||||
SK O&S Co., Ltd. | 95,748 | 58,870 | 36,878 | 285,591 | 69 | 121,755 | 70,280 | 51,475 | 331,715 | 2,059 | ||||||||||||||||||||||||||||||
Home & Service Co., Ltd. | 131,947 | 90,775 | 41,172 | 405,255 | 550 | 158,248 | 102,184 | 56,064 | 413,259 | (1,217 | ) | |||||||||||||||||||||||||||||
SK stoa Co., Ltd. | 107,943 | 59,931 | 48,012 | 316,249 | 19,163 | 103,910 | 44,696 | 59,214 | 329,304 | 9,977 | ||||||||||||||||||||||||||||||
SK m&service Co., Ltd.(*) | 160,704 | 95,263 | 65,441 | 211,081 | 4,157 |
(*) | The financial information is the condensed financial information after the entity was included in the scope of consolidation. |
2) | Condensed financial information of significant subsidiaries as of and for the year ended December 31, 2021 is as follows: |
(In millions of won) | As of December 31, 2021 | 2021 | ||||||||||||||||||
Subsidiary | Total assets | Total liabilities | Total equity | Revenue | Profit | |||||||||||||||
SK Telink Co., Ltd. | ₩ | 174,837 | 52,821 | 122,016 | 313,404 | 8,846 | ||||||||||||||
SK Broadband Co., Ltd. | 5,971,505 | 3,091,837 | 2,879,668 | 4,058,997 | 213,468 | |||||||||||||||
PS&Marketing Corporation | 478,745 | 263,457 | 215,288 | 1,445,540 | 3,179 | |||||||||||||||
SERVICE ACE Co., Ltd. | 99,059 | 66,496 | 32,563 | 197,146 | 2,519 | |||||||||||||||
SERVICE TOP Co., Ltd. | 72,026 | 46,067 | 25,959 | 185,452 | 2,066 | |||||||||||||||
SK O&S Co., Ltd. | 95,748 | 58,870 | 36,878 | 285,591 | 69 | |||||||||||||||
Home & Service Co., Ltd. | 131,947 | 90,775 | 41,172 | 405,255 | 550 | |||||||||||||||
SK stoa Co., Ltd. | 107,943 | 59,931 | 48,012 | 316,249 | 19,163 |
3) | Condensed financial information of the significant subsidiaries as of and for the year ended December 31, 2020 is as follows: |
(In millions of won) | As of December 31, 2020 | 2020 | ||||||||||||||||||
Subsidiary | Total assets | Total liabilities | Total equity | Revenue | Profit (loss) | |||||||||||||||
SK Telink Co., Ltd. | ₩ | 176,872 | 60,702 | 116,170 | 351,334 | 18,010 | ||||||||||||||
Eleven Street Co., Ltd. | 999,225 | 542,534 | 456,691 | 545,556 | (29,623 | ) | ||||||||||||||
SK m&service Co., Ltd. | 129,738 | 74,962 | 54,776 | 214,949 | 2,759 | |||||||||||||||
SK Broadband Co., Ltd. | 5,765,808 | 3,119,489 | 2,646,319 | 3,713,021 | 150,694 | |||||||||||||||
K-net Culture and Contents Venture Fund | 377,683 | 65,896 | 311,787 | — | (44,737 | ) | ||||||||||||||
PS&Marketing Corporation | 470,521 | 257,809 | 212,712 | 1,427,218 | (847 | ) | ||||||||||||||
SERVICE ACE Co., Ltd. | 96,258 | 71,890 | 24,368 | 206,612 | 2,905 | |||||||||||||||
SERVICE TOP Co., Ltd. | 69,496 | 51,584 | 17,912 | 195,479 | 2,592 | |||||||||||||||
SK O&S Co., Ltd. | 88,663 | 54,012 | 34,651 | 278,948 | 778 | |||||||||||||||
SK Planet Co., Ltd. | 536,981 | 214,846 | 322,135 | 276,462 | 1,305 | |||||||||||||||
DREAMUS COMPANY(*1) | 172,443 | 76,642 | 95,801 | 226,329 | (23,068 | ) | ||||||||||||||
SK Shieldus Co., Ltd. (Formerly, ADT CAPS Co., Ltd.)(*2) | 2,927,396 | 2,550,936 | 376,460 | 1,327,150 | 14,227 | |||||||||||||||
One Store Co., Ltd. | 243,442 | 99,943 | 143,499 | 155,218 | 1,952 | |||||||||||||||
Home & Service Co., Ltd. | 124,197 | 88,740 | 35,457 | 397,754 | (20 | ) | ||||||||||||||
SK stoa Co., Ltd. | 107,982 | 79,339 | 28,643 | 268,693 | 17,154 | |||||||||||||||
FSK L&S Co., Ltd.(*3) | 66,117 | 35,192 | 30,925 | 205,623 | 3,022 | |||||||||||||||
Incross Co., Ltd.(*4) | 179,308 | 104,778 | 74,530 | 39,440 | 12,307 | |||||||||||||||
T map Mobility Co., Ltd. | 170,381 | 17,179 | 153,202 | 0 | (1,857 | ) |
(In millions of won) | As of December 31, 2020 | 2020 | ||||||||||||||||||
Subsidiary | Total assets | Total liabilities | Total equity | Revenue | Profit (loss) | |||||||||||||||
SK Telink Co., Ltd. | ₩ | 176,872 | 60,702 | 116,170 | 351,334 | 18,010 | ||||||||||||||
Eleven Street Co., Ltd. | 999,225 | 542,534 | 456,691 | 545,556 | (29,623 | ) | ||||||||||||||
SK m&service Co., Ltd. | 129,738 | 74,962 | 54,776 | 214,949 | 2,759 | |||||||||||||||
SK Broadband Co., Ltd. | 5,765,808 | 3,119,489 | 2,646,319 | 3,713,021 | 150,694 | |||||||||||||||
K-net Culture and Contents Venture Fund | 377,683 | 65,896 | 311,787 | — | (44,737 | ) | ||||||||||||||
PS&Marketing Corporation | 470,521 | 257,809 | 212,712 | 1,427,218 | (847 | ) | ||||||||||||||
SERVICE ACE Co., Ltd. | 96,258 | 71,890 | 24,368 | 206,612 | 2,905 | |||||||||||||||
SERVICE TOP Co., Ltd. | 69,496 | 51,584 | 17,912 | 195,479 | 2,592 | |||||||||||||||
SK O&S Co., Ltd. | 88,663 | 54,012 | 34,651 | 278,948 | 778 | |||||||||||||||
SK Planet Co., Ltd. | 536,981 | 214,846 | 322,135 | 276,462 | 1,305 | |||||||||||||||
Dreamus Company(*1) | 172,443 | 76,642 | 95,801 | 226,329 | (23,068 | ) | ||||||||||||||
SK Shieldus Co., Ltd. (Formerly, ADT CAPS Co., Ltd.)(*2) | 2,927,396 | 2,550,936 | 376,460 | 1,327,150 | 14,227 | |||||||||||||||
Onestore Co., Ltd. | 243,442 | 99,943 | 143,499 | 155,218 | 1,952 | |||||||||||||||
Home & Service Co., Ltd. | 124,197 | 88,740 | 35,457 | 397,754 | (20 | ) | ||||||||||||||
SK stoa Co., Ltd. | 107,982 | 79,339 | 28,643 | 268,693 | 17,154 | |||||||||||||||
FSK L&S Co., Ltd.(*3) | 66,117 | 35,192 | 30,925 | 205,623 | 3,022 | |||||||||||||||
Incross Co., Ltd.(*4) | 179,308 | 104,778 | 74,530 | 39,440 | 12,307 | |||||||||||||||
Tmap Mobility Co., Ltd. | 170,381 | 17,179 | 153,202 | — | (1,857 | ) |
(*1) | The condensed financial information of |
(*2) | The condensed financial information of SK Shieldus Co., Ltd.(Formerly, ADT CAPS Co., Ltd.) is consolidated financial information including SKinfosec Information Technology(Wuxi) Co., Ltd. and two other subsidiaries of SK Shieldus Co., Ltd.(Formerly, ADT CAPS Co., Ltd.) and including profit and loss which Life Security & Holdings Co., Ltd. recognized prior to the merger. |
(*3) | The condensed financial information of FSK L&S Co., Ltd. is consolidated financial information including FSK L&S (Shanghai) Co., Ltd. and two other subsidiaries of FSK L&S Co., Ltd. |
(*4) | The condensed financial information of Incross Co., Ltd. is consolidated financial information including Infra Communications Co., Ltd. and another subsidiary of Incross Co., Ltd. |
Subsidiary | Reason | |
SAPEON Korea Inc. | Established by the Parent Company | |
SAPEON Inc. | Established by the Parent Company | |
SK m&service Co., Ltd. | Acquired by PS&Marketing Corporation |
Subsidiary | Reason | |
Broadband Nowon Co., Ltd. | Merged into SK Broadband Co., Ltd |
(In millions of won) | SK Broadband Co., Ltd.(*) | |||
Ownership of non-controlling interests (%) | 25.3 | |||
As of December 31, 2022 | ||||
Current assets | ₩ | 1,348,305 | ||
Non-current assets | 5,076,410 | |||
Current liabilities | (1,707,805 | ) | ||
Non-current liabilities | (1,488,834 | ) | ||
Net assets | 3,228,076 | |||
Carrying amount of non-controlling interests | 816,676 | |||
2022 | ||||
Revenue | ₩ | 4,156,326 | ||
Profit for the year | 217,303 | |||
Total comprehensive income | 237,860 | |||
Profit attributable to non-controlling interests | 51,528 | |||
Net cash provided by operating activities | ₩ | 1,184,794 | ||
Net cash used in investing activities | (807,965 | ) | ||
Net cash used in financing activities | (415,908 | ) | ||
Effects of exchange rate changes on cash and cash equivalents | (584 | ) | ||
Net decrease in cash and cash equivalents | (39,663 | ) | ||
Dividends paid to non-controlling interests for the year ended December 31, 2022 | ₩ | — |
(*) | The condensed financial information above is the consolidated financial information of the subsidiary and is reflected fair value adjustments that occurred a business combination. |
(In millions of won) | As of December 31, 2019 | 2019 | ||||||||||||||||||
Subsidiary | Total assets | Total liabilities | Total equity | Revenue | Profit (loss) | |||||||||||||||
SK Telink Co., Ltd.(*1) | ₩ | 265,725 | 77,378 | 188,347 | 363,627 | 3,010 | ||||||||||||||
Eleven Street Co., Ltd. | 923,424 | 446,432 | 476,992 | 530,489 | (5,077 | ) | ||||||||||||||
SK m&service Co., Ltd. | 109,699 | 58,605 | 51,094 | 218,848 | 2,448 | |||||||||||||||
SK Broadband Co., Ltd. | 4,565,732 | 2,930,482 | 1,635,250 | 3,170,691 | 47,701 | |||||||||||||||
K-net Culture and Contents Venture Fund | 151,493 | 21,163 | 130,330 | — | (294 | ) | ||||||||||||||
PS&Marketing Corporation | 439,947 | 225,942 | 214,005 | 1,684,576 | 96 | |||||||||||||||
SERVICE ACE Co., Ltd. | 80,844 | 55,133 | 25,711 | 206,080 | 3,906 | |||||||||||||||
SERVICE TOP Co., Ltd. | 66,932 | 50,060 | 16,872 | 193,377 | 2,230 | |||||||||||||||
SK O&S Co., Ltd. | 96,446 | 62,086 | 34,360 | 281,634 | 1,724 | |||||||||||||||
SK Planet Co., Ltd. | 595,838 | 278,438 | 317,400 | 275,544 | 1,214 | |||||||||||||||
DREAMUS COMPANY(*2) | 171,586 | 53,669 | 117,917 | 196,961 | (48,006 | ) | ||||||||||||||
Life & Security Holdings Co., Ltd.(*3) | 2,639,781 | 2,330,920 | 308,861 | 913,301 | 12,703 | |||||||||||||||
SK Infosec Co., Ltd.(*4) | 158,424 | 61,644 | 96,780 | 270,423 | 18,520 | |||||||||||||||
One Store Co., Ltd. | 236,329 | 93,625 | 142,704 | 135,116 | (5,415 | ) | ||||||||||||||
Home & Service Co., Ltd. | 121,202 | 84,378 | 36,824 | 351,154 | (427 | ) | ||||||||||||||
SK stoa Co., Ltd. | 70,754 | 59,207 | 11,547 | 196,063 | 875 | |||||||||||||||
FSK L&S Co., Ltd.(*5) | 47,550 | 19,651 | 27,899 | 130,872 | 306 | |||||||||||||||
Incross Co., Ltd.(*6) | 144,263 | 78,519 | 65,744 | 19,787 | 5,756 |
(In millions of won) | SK Broadband Co., Ltd.(*) | |||
Ownership of non-controlling interests (%) | ||||
As of December 31, 2021 | ||||
Current assets | ₩ | |||
Non-current assets | ||||
Current liabilities | ( | ) | ||
Non-current liabilities | ( | ) | ||
Net assets | ||||
Carrying amount of non-controlling interests | ||||
2021 | ||||
Revenue | ₩ | |||
Profit for the year | ||||
Total comprehensive income | ||||
Profit attributable to non-controlling interests | ||||
Net cash provided by operating activities | ₩ | |||
Net cash used in investing activities | ( | ) | ||
Net cash used in financing activities | ( | ) | ||
Effects of exchange rate changes on cash and cash equivalents | (59 | ) | ||
Net increase in cash and cash equivalents | ||||
Dividends paid to non-controlling interests for the year ended December 31, 2021 | ₩ |
(*) | The condensed financial information above is the consolidated financial information of the subsidiary and is reflected fair value adjustments that occurred a business combination. |
(In millions of won) | DREAMUS COMPANY | One Store Co., Ltd. | Eleven Street Co., Ltd. | SK Shieldus Co., Ltd.(Formerly, ADT CAPS Co., Ltd.)(*) | Incross Co., Ltd. | SK Broadband Co., Ltd. | Dreamus Company | Onestore Co., Ltd. | Eleven Street Co., Ltd. | SK Shieldus Co., Ltd.(Formerly, ADT CAPS Co., Ltd.)(*) | Incross Co., Ltd. | SK Broadband Co., Ltd. | ||||||||||||||||||||||||||||||||||||
Ownership of non-controlling interests (%) | 48.6 | 47.4 | 18.2 | 37.4 | 55.2 | 24.9 | 48.6 | 47.4 | 18.2 | 37.4 | 55.2 | 24.9 | ||||||||||||||||||||||||||||||||||||
As of December 31, 2020 | As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Current assets | ₩ | 146,278 | 215,672 | 896,828 | 306,520 | 165,668 | 1,179,743 | ₩ | 146,278 | 215,672 | 896,828 | 306,520 | 165,668 | 1,179,743 | ||||||||||||||||||||||||||||||||||
Non-current assets | 26,165 | 27,770 | 102,397 | 2,620,876 | 13,640 | 4,586,065 | 26,165 | 27,770 | 102,397 | 2,620,876 | 13,640 | 4,586,065 | ||||||||||||||||||||||||||||||||||||
Current liabilities | (72,762 | ) | (96,139 | ) | (508,427 | ) | (417,194 | ) | (101,065 | ) | (1,279,132 | ) | (72,762 | ) | (96,139 | ) | (508,427 | ) | (417,194 | ) | (101,065 | ) | (1,279,132 | ) | ||||||||||||||||||||||||
Non-current liabilities | (3,880 | ) | (3,804 | ) | (34,107 | ) | (2,133,742 | ) | (3,713 | ) | (1,840,357 | ) | (3,880 | ) | (3,804 | ) | (34,107 | ) | (2,133,742 | ) | (3,713 | ) | (1,840,357 | ) | ||||||||||||||||||||||||
Net assets | 95,801 | 143,499 | 456,691 | 376,460 | 74,530 | 2,646,319 | 95,801 | 143,499 | 456,691 | 376,460 | 74,530 | 2,646,319 | ||||||||||||||||||||||||||||||||||||
Fair value adjustment and others | — | — | (14,297 | ) | (1,227,442 | ) | — | — | — | — | (14,297 | ) | (1,227,442 | ) | — | — | ||||||||||||||||||||||||||||||||
Net assets on the consolidated financial statements | 95,801 | 143,499 | 442,394 | (850,982 | ) | 74,530 | 2,646,319 | 95,801 | 143,499 | 442,394 | (850,982 | ) | 74,530 | 2,646,319 | ||||||||||||||||||||||||||||||||||
Carrying amount of non-controlling interests | 47,452 | 68,573 | 81,754 | (318,267 | ) | 46,010 | 665,020 | 47,452 | 68,573 | 81,754 | (318,267 | ) | 46,010 | 665,020 | ||||||||||||||||||||||||||||||||||
2020 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Revenue | ₩ | 226,329 | 155,218 | 545,556 | 1,327,150 | 39,440 | 3,713,021 | ₩ | 226,329 | 155,218 | 545,556 | 1,327,150 | 39,440 | 3,713,021 | ||||||||||||||||||||||||||||||||||
Profit (loss) for the year | (23,068 | ) | 1,952 | (29,623 | ) | 14,227 | 12,307 | 150,694 | (23,068 | ) | 1,952 | (29,623 | ) | 14,227 | 12,307 | 150,694 | ||||||||||||||||||||||||||||||||
Depreciation of the fair value adjustment and others | — | — | (492 | ) | (19,229 | ) | — | — | — | — | (492 | ) | (19,229 | ) | — | — | ||||||||||||||||||||||||||||||||
Profit (loss) for the year on the consolidated financial statements | (23,068 | ) | 1,952 | (30,115 | ) | (5,002 | ) | 12,307 | 150,694 | (23,068 | ) | 1,952 | (30,115 | ) | (5,002 | ) | 12,307 | 150,694 | ||||||||||||||||||||||||||||||
Total comprehensive income (loss) | (22,740 | ) | 2,278 | (15,793 | ) | (3,758 | ) | 12,145 | 151,417 | (22,740 | ) | 2,278 | (15,793 | ) | (3,758 | ) | 12,145 | 151,417 | ||||||||||||||||||||||||||||||
Profit (loss) attributable to non-controlling interests | (10,770 | ) | 930 | (5,565 | ) | (12,432 | ) | 7,568 | 27,240 | (10,770 | ) | 930 | (5,565 | ) | (12,432 | ) | 7,568 | 27,240 | ||||||||||||||||||||||||||||||
Net cash provided by operating activities | ₩ | 15,223 | 38,006 | 65,499 | 248,524 | 24,629 | 1,035,474 | ₩ | 15,223 | 38,006 | 65,499 | 248,524 | 24,629 | 1,035,474 | ||||||||||||||||||||||||||||||||||
Net cash used in investing activities | (2,471 | ) | (62,816 | ) | (71,644 | ) | (229,130 | ) | (2,284 | ) | (844,454 | ) | (2,471 | ) | (62,816 | ) | (71,644 | ) | (229,130 | ) | (2,284 | ) | (844,454 | ) | ||||||||||||||||||||||||
Net cash provided by (used in) financing activities | (2,329 | ) | (2,499 | ) | (18,059 | ) | 11,134 | (4,278 | ) | (93,259 | ) | (2,329 | ) | (2,499 | ) | (18,059 | ) | 11,134 | (4,278 | ) | (93,259 | ) | ||||||||||||||||||||||||||
Effects of exchange rate changes on cash and cash equivalents | (2,053 | ) | — | (385 | ) | (554 | ) | — | — | (2,053 | ) | — | (385 | ) | (554 | ) | — | — | ||||||||||||||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 8,370 | (27,309 | ) | (24,589 | ) | 29,974 | 18,067 | 97,761 | 8,370 | (27,309 | ) | (24,589 | ) | 29,974 | 18,067 | 97,761 | ||||||||||||||||||||||||||||||||
Dividends paid to non-controlling interests for the year ended December 31, 2020 | ₩ | — | — | 5,000 | 17,273 | — | — | ₩ | — | — | 5,000 | 17,273 | — | — |
(*) | The condensed financial information of SK Shieldus Co., Ltd.(Formerly, ADT CAPS Co., Ltd.) includes profit and loss, cash flows which Life Security & Holdings Co., Ltd. recognized prior to the merger. |
2. | Basis of Preparation |
(In millions of won) | DREAMUS COMPANY | One Store Co., Ltd. | Eleven Street Co., Ltd. | Life & Security Holdings Co., Ltd. | Incross Co., Ltd. | |||||||||||||||
Ownership of non-controlling interests (%) | 48.6 | 47.3 | 18.2 | 45.0 | 65.4 | |||||||||||||||
As of December 31, 2019 | ||||||||||||||||||||
Current assets | ₩ | 136,269 | 208,527 | 779,568 | 126,437 | 133,741 | ||||||||||||||
Non-current assets | 35,317 | 27,802 | 143,856 | 2,513,344 | 10,522 | |||||||||||||||
Current liabilities | (49,776 | ) | (88,842 | ) | (420,022 | ) | (279,403 | ) | (77,530 | ) | ||||||||||
Non-current liabilities | (3,893 | ) | (4,783 | ) | (26,410 | ) | (2,051,517 | ) | (989 | ) | ||||||||||
Net assets | 117,917 | 142,704 | 476,992 | 308,861 | 65,744 | |||||||||||||||
Fair value adjustment and others | — | — | (18,805 | ) | (1,219,701 | ) | — | |||||||||||||
Net assets on the consolidated financial statements | 117,917 | 142,704 | 458,187 | (910,840 | ) | 65,744 | ||||||||||||||
Carrying amount of non- controlling interests | 57,175 | 67,742 | 84,673 | (409,878 | ) | 41,074 | ||||||||||||||
2019 | ||||||||||||||||||||
Revenue | ₩ | 196,961 | 135,116 | 530,489 | 913,301 | 19,787 | ||||||||||||||
Profit (loss) for the year | (48,006 | ) | (5,415 | ) | (5,077 | ) | 12,703 | 5,756 | ||||||||||||
Depreciation of the fair value adjustment and others | — | — | (614 | ) | (14,913 | ) | — | |||||||||||||
Profit (loss) for the year on the consolidated financial statements | (48,006 | ) | (5,415 | ) | (5,691 | ) | (2,210 | ) | 5,756 | |||||||||||
Total comprehensive income (loss) | (47,971 | ) | (5,856 | ) | (13,590 | ) | (5,413 | ) | 5,396 | |||||||||||
Profit (loss) attributable to non-controlling interests | (23,281 | ) | (2,256 | ) | (1,064 | ) | (978 | ) | 3,630 | |||||||||||
Net cash provided by (used in) operating activities | ₩ | (1,387 | ) | 14,426 | 7,980 | 238,378 | (9,331 | ) | ||||||||||||
Net cash provided by (used in) investing activities | (2,596 | ) | (87,275 | ) | 102,366 | (194,472 | ) | 5,053 | ||||||||||||
Net cash provided by (used in) financing activities | (2,965 | ) | 96,189 | (72,686 | ) | (51,129 | ) | (4,644 | ) | |||||||||||
Effects on exchange rate changes on cash and cash equivalents | 197 | 2 | 35 | — | — | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | (6,751 | ) | 23,342 | 37,695 | (7,223 | ) | (8,922 | ) | ||||||||||||
Dividend paid to non- controlling interests for the year ended December 31, 2019 | ₩ | — | — | 17,500 | 28,786 | — |
3. | Significant Accounting Policies |
Financial assets at FVTPL | These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss. | |
Financial assets at amortized cost | These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss. | |
Debt investments at FVOCI | These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss. | |
Equity investments at FVOCI | These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to profit or loss. |
Useful lives (years) | ||
Buildings and structures | 15 ~ 40 | |
Machinery | 3 ~ 15, 30 | |
Other property and equipment | ||
Right-of-use | 1 ~ 50 |
Useful lives (years) | ||
Frequency usage rights | ||
Land usage rights | 5 | |
Industrial rights | 5, 10 | |
Development costs | 5 | |
Facility usage rights | 10, 20 | |
Customer relations | 3 ~ 15 | |
Other | 3 ~ 20 |
4. | Operating Segments |
(1) | Segment information for the years ended December 31, 2022, 2021 |
(In millions of won) | (In millions of won) | |||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Continuing operations | Discontinued operations | Continuing operations | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cellular services | Fixed-line telecommunication services | Others(*1) | Sub-total | Adjustments (*2) | Total | Cellular services | Fixed-line telecommunication services | Others (*1) | Sub-total | Adjustments (*2) | Total | |||||||||||||||||||||||||||||||||||||||||
Total revenue | ₩ | 14,214,407 | 4,790,641 | 362,978 | 19,368,026 | (2,619,441 | ) | 16,748,585 | 2,845,424 | ₩ | 14,496,866 | 4,895,791 | 592,188 | 19,984,845 | (2,679,872 | ) | 17,304,973 | |||||||||||||||||||||||||||||||||||
Inter-segment revenue | 1,495,934 | 1,112,935 | 10,572 | 2,619,441 | (2,619,441 | ) | — | 462,341 | 1,554,550 | 1,082,802 | 42,520 | 2,679,872 | (2,679,872 | ) | — | |||||||||||||||||||||||||||||||||||||
External revenue | 12,718,473 | 3,677,706 | 352,406 | 16,748,585 | — | 16,748,585 | 2,383,083 | 12,942,316 | 3,812,989 | 549,668 | 17,304,973 | — | 17,304,973 | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 2,812,827 | 958,462 | 11,318 | 3,782,607 | (110,052 | ) | 3,672,555 | 287,412 | 2,738,547 | 981,838 | 22,730 | 3,743,115 | (121,790 | ) | 3,621,325 | |||||||||||||||||||||||||||||||||||||
Operating profit (loss) | 1,123,147 | 294,070 | 14,550 | 1,431,767 | 595 | 1,432,362 | 73,005 | 1,334,306 | 311,210 | (2,126 | ) | 1,643,390 | (49,042 | ) | 1,594,348 | |||||||||||||||||||||||||||||||||||||
Finance income and costs, net | (160,471 | ) | (222,406 | ) | (276,489 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Gain relating to investments in subsidiaries, associates and joint ventures, net | 446,300 | 1,502,147 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loss relating to investments in associates and joint ventures, net | (81,707 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Profit before income tax | 1,718,191 | 1,352,746 | 1,236,152 |
(In millions of won) | ||||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||
Continuing operations | Discontinued operations | |||||||||||||||||||||||||||
Cellular services | Fixed-line telecommunication services | Others (*1) | Sub-total | Adjustments (*2) | Total | |||||||||||||||||||||||
Total revenue | ₩ | 14,214,407 | 4,790,641 | 362,978 | 19,368,026 | (2,619,441 | ) | 16,748,585 | 2,845,424 | |||||||||||||||||||
Inter-segment revenue | 1,495,934 | 1,112,935 | 10,572 | 2,619,441 | (2,619,441 | ) | — | 462,341 | ||||||||||||||||||||
External revenue | 12,718,473 | 3,677,706 | 352,406 | 16,748,585 | — | 16,748,585 | 2,383,083 | |||||||||||||||||||||
Depreciation and amortization | 2,812,827 | 958,462 | 11,318 | 3,782,607 | (110,052 | ) | 3,672,555 | 287,412 | ||||||||||||||||||||
Operating profit (loss) | 1,123,147 | 294,070 | 14,550 | 1,431,767 | 595 | 1,432,362 | 73,005 | |||||||||||||||||||||
Finance income and costs, net | (160,471 | ) | (222,406 | ) | ||||||||||||||||||||||||
Gain relating to investments in subsidiaries, associates and joint ventures, net | 446,300 | 1,502,147 | ||||||||||||||||||||||||||
Profit before income tax | 1,718,191 | 1,352,746 |
(In millions of won) | ||||||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||||
Continuing operations | Discontinued operations | |||||||||||||||||||||||||||
Cellular services | Fixed-line telecommunication services | Others(*1) | Sub-total | Adjustments (*2) | Total | |||||||||||||||||||||||
Total revenue | ₩ | 13,853,274 | 4,467,863 | 317,065 | 18,638,202 | (2,550,455 | ) | 16,087,747 | 3,015,563 | |||||||||||||||||||
Inter-segment revenue | 1,505,311 | 1,035,645 | 9,499 | 2,550,455 | (2,550,455 | ) | — | 478,659 | ||||||||||||||||||||
External revenue | 12,347,963 | 3,432,218 | 307,566 | 16,087,747 | — | 16,087,747 | 2,536,904 | |||||||||||||||||||||
Depreciation and amortization | 2,892,460 | 874,562 | 10,675 | 3,777,697 | (113,032 | ) | 3,664,665 | 326,417 | ||||||||||||||||||||
Operating profit (loss) | 1,031,887 | 258,973 | 645 | 1,291,505 | (256,485 | ) | 1,035,020 | 69,614 | ||||||||||||||||||||
Finance income and costs, net | (182,258 | ) | (73,739 | ) | ||||||||||||||||||||||||
Gain relating to investments in subsidiaries, associates and joint ventures, net | 52,456 | 975,947 | ||||||||||||||||||||||||||
Profit before income tax | 905,218 | 971,822 | ||||||||||||||||||||||||||
(In millions of won) |
2019 | ||||||||||||||||||||||||||||
Continuing operations | ||||||||||||||||||||||||||||
Cellular services | Fixed-line telecommunication services | Others(*1) | Sub-total | Adjustments (*2) | Total | Discontinued operations | ||||||||||||||||||||||
Total revenue | ₩ | 13,787,009 | 3,944,260 | 250,409 | 17,981,678 | (2,565,247 | ) | 15,416,431 | 2,729,552 | |||||||||||||||||||
Inter-segment revenue | 1,563,205 | 984,967 | 17,075 | 2,565,247 | (2,565,247 | ) | — | 405,267 | ||||||||||||||||||||
External revenue | 12,223,804 | 2,959,293 | 233,334 | 15,416,431 | — | 15,416,431 | 2,324,285 | |||||||||||||||||||||
Depreciation and amortization | 2,828,285 | 792,334 | 9,133 | 3,629,752 | (88,768 | ) | 3,540,984 | 315,678 | ||||||||||||||||||||
Operating profit (loss) | 963,207 | 144,739 | (15,095 | ) | 1,092,851 | (105,797 | ) | 987,054 | 20,204 | |||||||||||||||||||
Finance income and costs, net | (213,220 | ) | (82,580 | ) | ||||||||||||||||||||||||
Gain relating to investments in subsidiaries, associates and joint ventures, net | 33,199 | 416,344 | ||||||||||||||||||||||||||
Profit before income tax | 807,033 | 353,968 |
(In millions of won) | ||||||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||||
Continuing operations | Discontinued operations | |||||||||||||||||||||||||||
Cellular services | Fixed-line telecommunication services | Others (*1) | Sub-total | Adjustments (*2) | Total | |||||||||||||||||||||||
Total revenue | ₩ | 13,853,274 | 4,467,863 | 317,065 | 18,638,202 | (2,550,455 | ) | 16,087,747 | 3,015,563 | |||||||||||||||||||
Inter-segment revenue | 1,505,311 | 1,035,645 | 9,499 | 2,550,455 | (2,550,455 | ) | — | 478,659 | ||||||||||||||||||||
External revenue | 12,347,963 | 3,432,218 | 307,566 | 16,087,747 | — | 16,087,747 | 2,536,904 | |||||||||||||||||||||
Depreciation and amortization | 2,892,460 | 874,562 | 10,675 | 3,777,697 | (113,032 | ) | 3,664,665 | 326,417 | ||||||||||||||||||||
Operating profit (loss) | 1,031,887 | 258,973 | 645 | 1,291,505 | (256,485 | ) | 1,035,020 | 69,614 | ||||||||||||||||||||
Finance income and costs, net | (182,258 | ) | (73,739 | ) | ||||||||||||||||||||||||
Gain relating to investments in subsidiaries, associates and joint ventures, net | 52,456 | 975,947 | ||||||||||||||||||||||||||
Profit before income tax | 905,218 | 971,822 |
(*1) | The Parent Company carried out spin-off of its business of managing investments in semiconductor, new Information and Communication Technologies(“ICT”) and making new investments during the year ended December 31, 2021. Accordingly, the Group reclassified SK stoa Co., Ltd. from Commerce Services segment to Others segment. |
(*2) | Adjustments for operating profit (loss) are the amount differences from operating profit (loss) included in CODM report which is based on Korean IFRS to operating profit (loss) under IFRS. The reconciliation of these amounts is included in note 4-(2). Adjustments for depreciation and amortization and operating profit (loss) also included the amount due to the consolidation adjustments, such as internal transactions. |
(2) | Reconciliation of total segment operating profit to consolidated operating profit from continuing operations for the years ended December 31, 2022, 2021 |
(In millions of won) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021 | 2020 | |||||||||||||||||||
Total segment operating profit (Before adjustments) | ₩ | 1,431,767 | 1,291,505 | 1,092,851 | ₩ | 1,643,390 | 1,431,767 | 1,291,505 | ||||||||||||||||
Adjustments(*1) | (44,605 | ) | (42,927 | ) | (54,184 | ) | (31,320 | ) | (44,605 | ) | (42,927 | ) | ||||||||||||
Total segment operating profit | 1,387,162 | 1,248,578 | 1,038,667 | 1,612,070 | 1,387,162 | 1,248,578 | ||||||||||||||||||
Other operating income: | ||||||||||||||||||||||||
Gain on disposal of property and equipment and intangible assets | 39,136 | 34,625 | 7,755 | 15,985 | 39,136 | 34,625 | ||||||||||||||||||
Others(*2) | 76,627 | 61,126 | 87,828 | 40,274 | 76,627 | 61,126 | ||||||||||||||||||
115,763 | 95,751 | 95,583 | 56,259 | 115,763 | 95,751 | |||||||||||||||||||
Other operating expenses: | ||||||||||||||||||||||||
Impairment loss on property and equipment and intangible assets | (3,135 | ) | (200,705 | ) | (42,823 | ) | (17,027 | ) | (3,135 | ) | (200,705 | ) | ||||||||||||
Loss on disposal of property and equipment and intangible assets | (28,158 | ) | (25,633 | ) | (23,821 | ) | (20,465 | ) | (28,158 | ) | (25,633 | ) | ||||||||||||
Donations | (12,800 | ) | (16,051 | ) | (16,782 | ) | (13,125 | ) | (12,800 | ) | (16,051 | ) | ||||||||||||
Bad debt for accounts receivable — other | (3,995 | ) | (6,640 | ) | (3,594 | ) | (3,011 | ) | (3,995 | ) | (6,640 | ) | ||||||||||||
Others(*3) | (22,475 | ) | (60,280 | ) | (60,176 | ) | (20,353 | ) | (22,475 | ) | (60,280 | ) | ||||||||||||
(70,563 | ) | (309,309 | ) | (147,196 | ) | (73,981 | ) | (70,563 | ) | (309,309 | ) | |||||||||||||
Consolidated operating profit from continuing operations | ₩ | 1,432,362 | 1,035,020 | 987,054 | ₩ | 1,594,348 | 1,432,362 | 1,035,020 | ||||||||||||||||
(*1) | Adjustments for operating profit included the amount due to the consolidation adjustments, such as internal transactions. |
(*2) | Others for the year ended December 31, 2020 includes |
(*3) | Others for the years ended December 31, 2022, 2021 and 2020 |
(3) | Disaggregation of operating revenues considering the economic factors that affect the amounts, timing and uncertainty of the Group’s revenue and future cash flows is as follows: |
(In millions of won) | ||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021 | 2020 | |||||||||||||||||||||||
Goods and Services transferred at a point in time: | Goods and Services transferred at a point in time: | Goods and Services transferred at a point in time: | ||||||||||||||||||||||||||
Cellular revenue | Goods(*1) | ₩ | 959,932 | 983,431 | 1,151,236 | Goods(*1) | ₩ | 969,025 | 959,932 | 983,431 | ||||||||||||||||||
Fixed-line telecommunication revenue | Goods | 105,340 | 90,692 | 145,876 | Goods | 66,477 | 105,340 | 90,692 | ||||||||||||||||||||
Other revenue | Others(*2) | 328,328 | 284,221 | 198,732 | Others(*2) | 464,805 | 328,328 | 284,221 | ||||||||||||||||||||
1,393,600 | 1,358,344 | 1,495,844 | 1,500,307 | 1,393,600 | 1,358,344 | |||||||||||||||||||||||
Goods and Services transferred over time: | Goods and Services transferred over time: | Goods and Services transferred over time: | ||||||||||||||||||||||||||
Cellular revenue | Wireless service(*3) | 10,100,368 | 9,806,719 | 9,538,162 | Wireless service(*3) | 10,253,217 | 10,100,368 | 9,806,719 | ||||||||||||||||||||
Cellular interconnection | 493,820 | 472,215 | 494,267 | Cellular interconnection | 471,163 | 493,820 | 472,215 | |||||||||||||||||||||
Other(*4) | 1,164,353 | 1,085,598 | 1,040,139 | Other(*4) | 1,248,911 | 1,164,353 | 1,085,598 | |||||||||||||||||||||
Fixed-line telecommunication revenue | Fixed-line service | 217,000 | 230,401 | 225,557 | Fixed-line service | 156,662 | 217,000 | 230,401 | ||||||||||||||||||||
Cellular interconnection | 69,769 | 83,762 | 92,396 | Cellular interconnection | 21,209 | 69,769 | 83,762 | |||||||||||||||||||||
Internet Protocol Television(*5) | 1,786,765 | 1,606,740 | 1,285,831 | Internet Protocol Television(*5) | 1,816,130 | 1,786,765 | 1,606,740 | |||||||||||||||||||||
International calls | 162,379 | 160,293 | 137,902 | International calls | 180,689 | 162,379 | 160,293 | |||||||||||||||||||||
Internet service and miscellaneous(*6) | 1,336,453 | 1,260,330 | 1,071,731 | Internet service and miscellaneous(*6) | 1,571,822 | 1,336,453 | 1,260,330 | |||||||||||||||||||||
Other revenue | Miscellaneous | 24,078 | 23,345 | 34,602 | Miscellaneous | 84,863 | 24,078 | 23,345 | ||||||||||||||||||||
15,354,985 | 14,729,403 | 13,920,587 | 15,804,666 | 15,354,985 | 14,729,403 | |||||||||||||||||||||||
Continuing operations | 16,748,585 | 16,087,747 | 15,416,431 | 17,304,973 | 16,748,585 | 16,087,747 | ||||||||||||||||||||||
Discontinued operations | 2,383,083 | 2,536,904 | 2,324,285 | — | 2,383,083 | 2,536,904 | ||||||||||||||||||||||
₩ | 19,131,668 | 18,624,651 | 17,740,716 | ₩ | 17,304,973 | 19,131,668 | 18,624,651 | |||||||||||||||||||||
(*1) | Cellular revenue includes revenue from sales of handsets and other electronic accessories. |
(*2) | Miscellaneous other revenue includes revenue from considerations received for the product sales-type data broadcasting channel use and sales of goods through data broadcasting. |
(*3) | Wireless service includes revenue from wireless voice and data transmission services principally derived from usage charges to wireless subscribers. |
(*4) | Other revenue includes revenue from billing and collection services as well as other miscellaneous services. |
(*5) |
(*6) | Internet service includes revenue from the high speed broadband internet service principally derived from usage charges to subscribers as well as other miscellaneous services. |
5. |
(In millions of won) | ||||||||
December 31, 2021 | December 31, 2020 | |||||||
Short-term financial instruments(*) | ₩ | 79,500 | 98,057 | |||||
Long-term financial instruments(*) | 372 | 890 | ||||||
₩ | 79,872 | 98,947 | ||||||
(In millions of won) | ||||||||
December 31, 2022 | December 31, 2021 | |||||||
Cash and cash equivalents(*) | ₩ | 43 | — | |||||
Short-term financial instruments (*) | 79,514 | 79,500 | ||||||
Long-term financial instruments (*) | 375 | 372 | ||||||
₩ | 79,932 | 79,872 | ||||||
(*) |
6. | Trade and Other Receivables |
(1) | Details of trade and other receivables as of December 31, |
(In millions of won) | ||||||||||||||||||||||||
December 31, 2021 | December 31, 2022 | |||||||||||||||||||||||
Gross amount | Loss allowance | Carrying amount | Gross amount | Loss allowance | Carrying amount | |||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Accounts receivable — trade | ₩ | 2,152,358 | (238,847 | ) | 1,913,511 | ₩ | 2,205,530 | (234,919 | ) | 1,970,611 | ||||||||||||||
Short-term loans | 71,750 | (933 | ) | 70,817 | 79,298 | (708 | ) | 78,590 | ||||||||||||||||
Accounts receivable — other(*) | 593,109 | (44,747 | ) | 548,362 | 522,091 | (42,310 | ) | 479,781 | ||||||||||||||||
Accrued income | 762 | 0 | 762 | 1,732 | — | 1,732 | ||||||||||||||||||
Guarantee deposits (Other current assets) | 92,046 | 0 | 92,046 | 113,204 | — | 113,204 | ||||||||||||||||||
2,910,025 | (284,527 | ) | 2,625,498 | 2,921,855 | (277,937 | ) | 2,643,918 | |||||||||||||||||
Non-current assets: | ||||||||||||||||||||||||
Long-term loans | 66,431 | (44,452 | ) | 21,979 | 71,857 | (44,884 | ) | 26,973 | ||||||||||||||||
Long-term accounts receivable — other(*) | 277,116 | (1,878 | ) | 275,238 | 375,829 | (1,878 | ) | 373,951 | ||||||||||||||||
Guarantee deposits | 186,713 | 0 | 186,713 | 167,741 | (300 | ) | 167,441 | |||||||||||||||||
Long-term accounts receivable — trade (Other non-current assets) | 8,140 | (34 | ) | 8,106 | 14,165 | (4 | ) | 14,161 | ||||||||||||||||
538,400 | (46,364 | ) | 492,036 | 629,592 | (47,066 | ) | 582,526 | |||||||||||||||||
₩ | 3,448,425 | (330,891 | ) | 3,117,534 | ₩ | 3,551,447 | (325,003 | ) | 3,226,444 | |||||||||||||||
(*) | Gross and carrying amounts of accounts receivable – other as of December 31, |
(In millions of won) | ||||||||||||||||||||||||
December 31, 2020 | December 31, 2021 | |||||||||||||||||||||||
Gross amount | Loss allowance | Carrying amount | Gross amount | Loss allowance | Carrying amount | |||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Accounts receivable — trade | ₩ | 2,453,149 | (264,256 | ) | 2,188,893 | ₩ | 2,152,358 | (238,847 | ) | 1,913,511 | ||||||||||||||
Short-term loans | 98,366 | (902 | ) | 97,464 | 71,750 | (933 | ) | 70,817 | ||||||||||||||||
Accounts receivable — other(*) | 1,034,119 | (55,075 | ) | 979,044 | 593,109 | (44,747 | ) | 548,362 | ||||||||||||||||
Accrued income | 3,418 | (166 | ) | 3,252 | 762 | — | 762 | |||||||||||||||||
Guarantee deposits (Other current assets) | 112,733 | 0 | 112,733 | 92,046 | — | 92,046 | ||||||||||||||||||
3,701,785 | (320,399 | ) | 3,381,386 | 2,910,025 | (284,527 | ) | 2,625,498 | |||||||||||||||||
Non-current assets: | ||||||||||||||||||||||||
Long-term loans | 84,355 | (44,122 | ) | 40,233 | 66,431 | (44,452 | ) | 21,979 | ||||||||||||||||
Long-term accounts receivable — other(*) | 332,803 | 0 | 332,803 | 277,116 | (1,878 | ) | 275,238 | |||||||||||||||||
Guarantee deposits | 172,774 | (300 | ) | 172,474 | 186,713 | — | 186,713 | |||||||||||||||||
Long-term accounts receivable — trade (Other non-current assets) | 25,702 | (242 | ) | 25,460 | 8,140 | (34 | ) | 8,106 | ||||||||||||||||
615,634 | (44,664 | ) | 570,970 | 538,400 | (46,364 | ) | 492,036 | |||||||||||||||||
₩ | 4,317,419 | (365,063 | ) | 3,952,356 | ₩ | 3,448,425 | (330,891 | ) | 3,117,534 | |||||||||||||||
(*) | Gross and carrying amounts of accounts receivable — other as of December 31, |
(2) | Changes in the loss allowance on accounts receivable — trade measured at amortized costs for the years ended December 31, |
(In millions of won) | ||||||||||||||||||||||||||||
Beginning balance | Impairment(*1) | Write-offs(*2) | Collection of receivables previously written-off | Business combination | Spin-off | Ending balance | ||||||||||||||||||||||
2021 | ₩ | 264,498 | 31,546 | (65,852 | ) | 14,565 | 878 | (6,754 | ) | 238,881 | ||||||||||||||||||
2020 | ₩ | 249,501 | 48,625 | (48,278 | ) | 12,771 | 1,879 | 0 | 264,498 |
(In millions of won) | ||||||||||||||||||||||||||||
Beginning balance | Impairment | Write-offs (*2) | Collection of receivables previously written-off | Business combination | Spin-off | Ending balance | ||||||||||||||||||||||
2022 | ₩ | 238,881 | 27,053 | (42,296 | ) | 11,282 | 3 | — | 234,923 | |||||||||||||||||||
2021(*1) | ₩ | 264,498 | 31,546 | (65,852 | ) | 14,565 | 878 | (6,754 | ) | 238,881 |
(*1) | Includes amounts related to discontinued operations. |
(*2) | The Group writes off the trade and other receivables that are determined to be uncollectable due to reasons such as termination of operations or bankruptcy. |
(3) | The Group applies the practical expedient that allows the Group to estimate the loss allowance for accounts receivable — trade at an amount equal to the lifetime expected credit losses. The expected credit losses include the forward-looking information. To make the assessment, the Group uses its historical credit loss experience over the past three years and classifies the accounts receivable — trade by their credit risk characteristics and days overdue. Details of loss allowance on accounts receivable — trade as of December 31, |
(In millions of won) | ||||||||||||||||||||||||||||||||||||
Less than 6 months | 6 months ~ 1 year | 1 ~ 3 years | More than 3 years | Less than 6 months | 6 months ~ 1 year | 1 ~ 3 years | More than 3 years | |||||||||||||||||||||||||||||
Telecommunications service revenue | Expected credit loss rate | 2.06 | % | 76.34 | % | 86.51 | % | 99.92 | % | Expected credit loss rate | 2.24 | % | 76.22 | % | 85.59 | % | 93.00 | % | ||||||||||||||||||
Gross amount | ₩ | 1,364,899 | 46,399 | 132,810 | 26,540 | Gross amount | ₩ | 1,408,471 | 47,412 | 126,479 | 20,100 | |||||||||||||||||||||||||
Loss allowance | 28,102 | 35,422 | 114,891 | 26,519 | Loss allowance | 31,500 | 36,139 | 108,249 | 18,693 | |||||||||||||||||||||||||||
Other revenue | Expected credit loss rate | 2.44 | % | 43.30 | % | 70.77 | % | 89.19 | % | Expected credit loss rate | 2.92 | % | 50.75 | % | 69.89 | % | 97.02 | % | ||||||||||||||||||
Gross amount | ₩ | 565,378 | 1,150 | 6,192 | 17,130 | Gross amount | ₩ | 589,484 | 3,464 | 8,606 | 15,679 | |||||||||||||||||||||||||
Loss allowance | 13,789 | 498 | 4,382 | 15,278 | Loss allowance | 17,357 | 1,758 | 6,015 | 15,212 | |||||||||||||||||||||||||||
7. | Prepaid expenses |
(In millions of won) | ||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2022 | December 31, 2021 | |||||||||||||
Current assets: | ||||||||||||||||
Incremental costs of obtaining contracts | ₩ | 1,886,680 | 2,016,570 | ₩ | 1,888,182 | 1,886,680 | ||||||||||
Others | 100,823 | 111,779 | 86,133 | 100,823 | ||||||||||||
₩ | 1,987,503 | 2,128,349 | ₩ | 1,974,315 | 1,987,503 | |||||||||||
Non-current assets: | ||||||||||||||||
Incremental costs of obtaining contracts | ₩ | 977,236 | 982,952 | ₩ | 996,180 | 977,236 | ||||||||||
Others | 91,912 | 80,759 | 77,242 | 91,912 | ||||||||||||
₩ | 1,069,148 | 1,063,711 | ₩ | 1,073,422 | 1,069,148 | |||||||||||
(In millions of won) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021(*) | 2020(*) | |||||||||||||||||||
Amortization and impairment losses recognized(*) | ₩ | 2,634,134 | 2,418,947 | 2,193,333 | ||||||||||||||||||||
Amortization recognized | ₩ | 2,485,593 | 2,634,134 | 2,418,947 |
(*) | Includes amounts related to discontinued operations. |
8. | Contract Assets and Liabilities |
(In millions of won) | ||||||||
December 31, 2021 | December 31, 2020 | |||||||
Contract assets: | ||||||||
Allocation of consideration between performance obligations | ₩ | 118,278 | 148,281 | |||||
Contract liabilities: | ||||||||
Wireless service contracts | 18,397 | 22,026 | ||||||
Customer loyalty programs | 12,699 | 16,709 | ||||||
Fixed-line service contracts | 118,525 | 106,916 | ||||||
Security services | 0 | 30,597 | ||||||
Others | 53,346 | 84,348 | ||||||
₩ | 202,967 | 260,596 | ||||||
(In millions of won) | ||||||||||||||||
Less than 1 year | 1 ~ 2 years | More than 2 years | Total | |||||||||||||
Wireless service contracts | ₩ | 18,397 | 0 | 0 | 18,397 | |||||||||||
Customer loyalty programs | 10,650 | 1,399 | 650 | 12,699 | ||||||||||||
Fixed-line service contracts | 91,143 | 11,981 | 15,401 | 118,525 | ||||||||||||
Others | 46,246 | 2,828 | 4,272 | 53,346 | ||||||||||||
₩ | 166,436 | 16,208 | 20,323 | 202,967 | ||||||||||||
(1) | Details of contract assets and liabilities as of December 31, 2022 and 2021 are as follows: |
(In millions of won) | ||||||||
December 31, 2022 | December 31, 2021 | |||||||
Contract assets: | ||||||||
Allocation of consideration between performance obligations | ₩ | 132,221 | 118,278 | |||||
Contract liabilities: | ||||||||
Wireless service contracts | 18,544 | 18,397 | ||||||
Customer loyalty programs | 7,706 | 12,699 | ||||||
Fixed-line service contracts | 136,880 | 118,525 | ||||||
Others | 70,792 | 53,346 | ||||||
₩ | 233,922 | 202,967 | ||||||
(2) | The amount of revenue recognized for the years ended December 31, 2022 and 2021 related to the contract liabilities carried forward from the prior periods are ₩109,867 million and ₩185,515 million, respectively and are included in amounts of revenue related to discontinued operations for the year ended December 31, 2021. Details of revenue expected to be recognized from contract liabilities as of December 31, 2022 are as follows: |
(In millions of won) | ||||||||||||||||
Less than 1 year | 1 ~ 2 years | More than 2 years | Total | |||||||||||||
Wireless service contracts | ₩ | 18,544 | — | — | 18,544 | |||||||||||
Customer loyalty programs | 6,141 | 1,048 | 517 | 7,706 | ||||||||||||
Fixed-line service contracts | 88,051 | 14,198 | 34,631 | 136,880 | ||||||||||||
Others | 59,612 | 10,935 | 245 | 70,792 | ||||||||||||
₩ | 172,348 | 26,181 | 35,393 | 233,922 | ||||||||||||
9. | Inventories |
(1) | Details of inventories as of December 31, |
(In millions of won) | ||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||
Acquisition cost | Write- down | Carrying amount | Acquisition cost | Write- down | Carrying amount | Acquisition cost | Write- down | Carrying amount | Acquisition cost | Write- down | Carrying amount | |||||||||||||||||||||||||||||||||||||
Merchandise | ₩ | 204,545 | (3,419 | ) | 201,126 | 172,762 | (10,566 | ) | 162,196 | ₩ | 156,919 | (5,616 | ) | 151,303 | 204,545 | (3,419 | ) | 201,126 | ||||||||||||||||||||||||||||||
Finished goods | 0 | 0 | 0 | 3,730 | (1,879 | ) | 1,851 | |||||||||||||||||||||||||||||||||||||||||
Work in process | 0 | 0 | 0 | 2,579 | (818 | ) | 1,761 | |||||||||||||||||||||||||||||||||||||||||
Raw materials | 0 | 0 | 0 | 11,921 | (6,905 | ) | 5,016 | |||||||||||||||||||||||||||||||||||||||||
Supplies | 3,511 | 0 | 3,511 | 619 | 0 | 619 | 15,052 | — | 15,052 | 3,511 | — | 3,511 | ||||||||||||||||||||||||||||||||||||
₩ | 208,056 | (3,419 | ) | 204,637 | 191,611 | (20,168 | ) | 171,443 | ₩ | 171,971 | (5,616 | ) | 166,355 | 208,056 | (3,419 | ) | 204,637 | |||||||||||||||||||||||||||||||
(2) | The amount of the inventory write-downs and write-off of inventories charged to statement of income are as follows: |
(In millions of won) | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Charged to cost of products that have been resold(*) | ₩ | (3,287 | ) | (1,560 | ) | 15,019 | ||||||
Write-off upon sale(*) | (347 | ) | (3,312 | ) | (1,101 | ) |
(In millions of won) | ||||||||||||
2022 | 2021(*) | 2020(*) | ||||||||||
Charged to cost of products that have been resold | ₩ | 2,297 | (3,287 | ) | (1,560 | ) | ||||||
Write-off upon sale | (756 | ) | (347 | ) | (3,312 | ) |
(*) | Includes amounts related to discontinued operations. |
(3) | Inventories recognized as operating expenses for the years ended December 31, 2022, 2021, and 2020 Those amounts include profit or loss from discontinued operations. |
10. | Investment Securities |
(1) | Details of short-term investment securities as of December 31, |
(In millions of won) | ||||||||||
Category | December 31, 2021 | December 31, 2020 | ||||||||
Beneficiary certificates | FVTPL | ₩ | 5,010 | 150,392 |
(In millions of won) | ||||||||||||
Category | December 31, 2022 | December 31, 2021 | ||||||||||
Beneficiary certificates | FVTPL | ₩ | — | 5,010 |
(2) | Details of long-term investment securities as of December 31, 2022 and 2021 are as follows: |
(In millions of won) | ||||||||||||
Category | December 31, 2022 | December 31, 2021 | ||||||||||
Equity instruments | FVOCI(*) | ₩ | 1,189,597 | 1,510,428 | ||||||||
FVTPL | 44,440 | 57,830 | ||||||||||
1,234,037 | 1,568,258 | |||||||||||
Debt instruments | FVOCI | — | 1,177 | |||||||||
FVTPL | 176,699 | 145,643 | ||||||||||
176,699 | 146,820 | |||||||||||
₩ | 1,410,736 | 1,715,078 | ||||||||||
(*) | The Group designated investments in equity instruments that are not held for trading as financial assets at FVOCI, the amounts to those FVOCI as of December 31, 2022 and 2021 are ₩1,189,597 million and ₩1,510,428 million, respectively. |
11. | Business Combinations |
(1) | 2022 |
1) | Acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation: |
(In millions of won) | ||||||||||
Category | December 31, 2021 | December 31, 2020 | ||||||||
Equity instruments | FVOCI(*) | ₩ | 1,510,428 | 1,454,361 | ||||||
FVTPL | 57,830 | 67,833 | ||||||||
1,568,258 | 1,522,194 | |||||||||
Debt instruments | FVOCI | 1,177 | 1,080 | |||||||
FVTPL | 145,643 | 125,563 | ||||||||
146,820 | 126,643 | |||||||||
₩ | 1,715,078 | 1,648,837 | ||||||||
(i) | Summary of the acquiree |
Information of | ||
Corporate name | ||
Location | ||
CEO | ||
Industry |
(ii) | Considerations transferred, identifiable assets acquired and liabilities assumed |
(In millions of won) | ||||
Amounts | ||||
I. Consideration transferred: | ||||
Cash and cash equivalents | ₩ | 72,859 | ||
II. Fair value of identifiable assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | 10,547 | |||
Accounts receivable — trade and other, net | 76,035 | |||
Inventories, net | 3,349 | |||
Property and equipment, net | 27,138 | |||
Intangible assets, net | 12,462 | |||
Goodwill | 2,516 | |||
Other assets | 10,394 | |||
Accounts payable — trade and other | (53,894 | ) | ||
Income tax payable | (399 | ) | ||
Lease liabilities | (6,503 | ) | ||
Provisions | (991 | ) | ||
Defined benefit liabilities | (2,739 | ) | ||
Other liabilities | (18,337 | ) | ||
59,578 | ||||
III. Capital surplus and others(I - II) | ₩ | 13,281 | ||
(2) | 2021 |
1) | Merger of ADT CAPS Co., Ltd. by SK Shieldus Co., Ltd.(Formerly, ADT CAPS Co, Ltd., at the time of merger, SK Infosec Co., Ltd.): |
2) | Acquisition of Studio Dolphin Co., Ltd. by Dreamus Company: |
(i) | Summary of the acquiree |
Information of acquiree | ||
Corporate name | Studio Dolphin Co., Ltd. | |
Location | 3 rd floor, 10,Jandari-ro 7an-gil, Mapo-gu, Seoul, Korea | |
CEO | Kim, Dong-Hee | |
Industry | Music and sound recording business |
(ii) | Considerations transferred, identifiable assets acquired and liabilities assumed as of the acquisition date are as follows: |
(In millions of won) | ||||
Amounts | ||||
I. Consideration transferred: | ||||
Cash and cash equivalents | ₩ | 1,500 | ||
II. Fair value of identifiable assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | 20 | |||
Accounts receivable — trade and other | 31 | |||
Other assets | 7 | |||
Accounts payable — trade and other | (4 | ) | ||
Short-term borrowings | (2 | ) | ||
Other liabilities | (17 | ) | ||
35 | ||||
III. Goodwill(I - II) | ₩ | 1,465 | ||
Acquisition of YLP Inc. by |
(i) | Summary of the acquiree |
Information of | ||
Corporate name | YLP Inc. | |
Location | 1740, Cheongwon-ro, Pyeongtaek-si, Gyeonggi-do, Korea | |
CEO | Lee, Hyeok-Ju | |
Industry | Freight forwarders and cargo agents |
(ii) | Considerations transferred, identifiable assets acquired and liabilities assumed |
(In millions of won) | ||||
Amounts | ||||
I. Consideration transferred: | ||||
Cash and cash equivalents | ₩ | 55,598 | ||
Fair value of shares of | 23,402 | |||
II. Fair value of identifiable assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | 1,897 | |||
Financial instruments | 4,000 | |||
Accounts receivable — trade and other, net | 4,480 | |||
Property and equipment, net | 431 | |||
Intangible assets, net | 3,595 | |||
Other assets | 325 | |||
Borrowings | (1,000 | ) | ||
Accounts payable — trade and other | (3,542 | ) | ||
Lease liabilities | (327 | ) | ||
Other liabilities | (48 | ) | ||
Deferred tax liabilities | (327 | ) | ||
9,484 | ||||
III. Goodwill(I - II) | ₩ | 69,516 | ||
Acquisition of Rokmedia Co., Ltd. by |
(i) | Summary of the acquiree |
Information of | ||
Corporate name | Rokmedia Co., Ltd. | |
Location | 3 rd floor, 330,Seongam-ro, Mapo-gu, Seoul, Korea | |
CEO | Kang, Jun-Gyu / Kim,Jeong-Su | |
Industry | Publishing and telecommunications retail business |
(ii) | Considerations transferred, identifiable assets acquired and liabilities assumed |
(In millions of won) | ||||||||
Amounts | ||||||||
I. Consideration transferred: | ||||||||
Cash and cash equivalents | ₩ | 40,000 | ||||||
II. Fair value of identifiable assets acquired and liabilities assumed: | ||||||||
Cash and cash equivalents | 719 | |||||||
Financial instruments | 2,170 | |||||||
Accounts receivable — trade and other, net | 1,374 | |||||||
Inventories | 933 | |||||||
Other assets | 3,212 | |||||||
Short-term loans, net | 30 | |||||||
Property and equipment, net | 792 | |||||||
Intangible assets, net | 2,677 | |||||||
Accounts payable — trade and other | (1,885 | ) | ||||||
Contract liabilities | (1,401 | ) | ||||||
Borrowings | (1,485 | ) | ||||||
Provisions | (385 | ) | ||||||
Lease liabilities | (56 | ) | ||||||
Other liabilities | (111 | ) | ||||||
Deferred tax liabilities | (135 | ) | ||||||
Income tax payable | (90 | ) | ||||||
6,359 | ||||||||
III. Goodwill(I - II) | ₩ | 33,641 | ||||||
Acquisition of GOOD SERVICE Co., Ltd. by |
(i) | Summary of the acquiree |
Information of | ||
Corporate name | GOOD SERVICE Co., Ltd. | |
Location | 4 th floor, 54,Daeheung-ro, Mapo-gu, Seoul, Korea | |
CEO | Kim, Seung-Wook | |
Industry | Surrogate driving service business and related business |
(ii) | Considerations transferred, identifiable assets acquired and liabilities assumed |
(In millions of won) | ||||
Amounts | ||||
I. Consideration transferred: | ||||
Cash and cash equivalents | ₩ | 10,000 | ||
II. Fair value of identifiable assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | 1,328 | |||
Financial instruments | 116 | |||
Accounts receivable — trade and other, net | 1,881 | |||
Property and equipment, net | 116 | |||
Intangible assets, net | 3,492 | |||
Accounts payable — trade and other | (883 | ) | ||
Other liabilities | (85 | ) | ||
Deferred tax liabilities | (696 | ) | ||
Lease liabilities | (113 | ) | ||
5,156 | ||||
III. Goodwill(I - II) | ₩ | 4,844 | ||
2020 |
1) | Merger of Tbroad Co., Ltd. and two other companies by SK Broadband Co., Ltd.: |
(In millions of won) | ||||
Amounts | ||||
I. Consideration transferred: | ||||
Fair value of shares of SK Broadband Co., Ltd. | ₩ | 862,147 | ||
Fair value of derivative liability(*1) | 320,984 | |||
II. Fair value of identifiable assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | 110,644 | |||
Short-term financial instruments | 6 | |||
Accounts receivable — trade and other | 66,241 | |||
Prepaid expenses | 36,324 | |||
Contract assets | 14,033 | |||
Long-term investment securities | 6,239 | |||
Investments in associates and joint ventures | 13,637 | |||
Property and equipment, net | 245,654 | |||
Intangible assets, net(*2) | 423,515 | |||
Other assets | 3,261 | |||
Deferred tax assets | 1,296 | |||
Accounts payable — trade and other | (105,179 | ) | ||
Contract liabilities | (1,674 | ) | ||
Income tax payable | (18,065 | ) | ||
Provisions | (2,755 | ) | ||
Defined benefit liabilities | (30 | ) | ||
Other liabilities | (15,655 | ) | ||
777,492 | ||||
III. Goodwill(I - II) | ₩ | 405,639 | ||
(*1) | The Parent Company has recognized fair value of obligations and rights in connection with the shareholders’ agreement with the acquiree’s shareholders as consideration for the business combination. (See note 22) |
(*2) | Identifiable intangible assets recognized by the Group in the business combination included customer relationships measured at fair value on the acquisition date of ₩374,019 million. Fair value of the customer relationship was estimated based on the multi-period excess earnings method (“MPEEM”). MPEEM is a valuation technique under income approach which estimates fair value by discounting the expected future excess earnings attributable to an intangible asset using risk adjusted discount rate. The following table shows the details of valuation technique used in measuring fair values as well as the significant unobservable inputs used. |
Type | Valuation technique | Significant unobservable inputs | Interrelationship between key unobservable inputs and fair value measurement | |||
Customer relationships | MPEEM | • Estimated revenue per user • Future churn rates • Weighted average cost of capital (“WACC”) (7.7% for Tbroad Co., Ltd. and 8.3% for Tbroad Dongdaemun Broadcasting Co., Ltd.) | • The fair value of customer relationship will increase if expected revenue per subscriber increases and customer churn rate in the future and WACC decrease. • The fair value of customer relationship will decrease if expected revenue per subscriber decreases and customer churn rate in the future and WACC increase. |
2) | Acquisition of Broadband Nowon Co.,Ltd. by the Parent Company: |
(i) | Summary of the acquiree |
Information of | ||
Corporate name | Broadband Nowon Co., Ltd. | |
Location | 21, 81gil, Dobong-ro, Gangbuk-gu, Seoul, Korea | |
CEO | Yoo, Chang-Wan | |
Industry | Cable broadcasting services |
(ii) | Considerations transferred, identifiable assets acquired and liabilities assumed |
(In millions of won) | ||||
Amounts | ||||
I. Consideration transferred: | ||||
Cash and cash equivalents | ₩ | 10,421 | ||
II. Fair value of identifiable assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | 18,106 | |||
Accounts receivable — trade and other | 1,122 | |||
Property and equipment, net | 1,784 | |||
Intangible assets, net | 360 | |||
Other assets | 595 | |||
Accounts payable — trade and other | (1,351 | ) | ||
Other liabilities | (336 | ) | ||
20,280 | ||||
III. Non-controlling interests: | 9,126 | |||
IV. Gain on bargain purchase(I - II+III) | ₩ | (733 | ) | |
3) | Acquisition of security equipment construction and security services business of SK hystec inc. by ADT CAPS Co., Ltd. |
(In millions of won) | ||||
Amounts | ||||
I. Consideration transferred: | ||||
Cash and cash equivalents | ₩ | 8,047 | ||
II. Fair value of identifiable assets acquired and liabilities assumed: | ||||
Accounts receivable — trade and other | 6,787 | |||
Property and equipment, net | 363 | |||
Intangible assets, net | 6,460 | |||
Other assets | 4 | |||
Accounts payable — trade and other | (5,306 | ) | ||
Defined benefit liabilities | (1,227 | ) | ||
Deferred tax liabilities | (1,554 | ) | ||
Other liabilities | (372 | ) | ||
5,155 | ||||
III. Goodwill (I - II) | ₩ | 2,892 | ||
4) | Merger of Life & ecur ity Holdings Co., Ltd. by SK Infosec Co., Ltd. |
12. | Investments in Associates and Joint Ventures |
December 31, 2021 | December 31, 2020 | |||||||||||||||||||
(In millions of won) | Country | Ownership (%) | Carrying amount | Ownership (%) | Carrying amount | |||||||||||||||
Investments in associates: | ||||||||||||||||||||
SK China Company Ltd. | China | 27.3 | ₩ | 793,754 | 27.3 | ₩ | 555,133 | |||||||||||||
Korea IT Fund(*1) | Korea | 63.3 | 339,976 | 63.3 | 323,294 | |||||||||||||||
KEB HanaCard Co., Ltd.(*2) | Korea | 15.0 | 349,866 | 15.0 | 314,930 | |||||||||||||||
SK Telecom CS T1 Co., Ltd.(*3) | Korea | — | — | 54.9 | 53,010 | |||||||||||||||
NanoEnTek, Inc.(*3) | Korea | — | — | 28.4 | 43,190 | |||||||||||||||
UniSK | China | 49.0 | 19,156 | 49.0 | 15,700 | |||||||||||||||
SK Technology Innovation Company | Cayman Islands | | 49.0 | 86,301 | 49.0 | 41,579 | ||||||||||||||
SK MENA Investment B.V. | Netherlands | 32.1 | 15,343 | 32.1 | 14,043 | |||||||||||||||
SK hynix Inc.(*3) | Korea | — | — | 20.1 | 12,251,861 | |||||||||||||||
SK Latin America Investment S.A. | Spain | 32.1 | 14,004 | 32.1 | 13,930 | |||||||||||||||
Grab Geo Holdings PTE. LTD.(*3) | Singapore | — | — | 30.0 | 30,063 | |||||||||||||||
SK South East Asia Investment Pte. Ltd. | Singapore | 20.0 | 348,782 | 20.0 | 311,990 | |||||||||||||||
Pacific Telecom Inc.(*2) | USA | 15.0 | 43,789 | 15.0 | 39,723 | |||||||||||||||
S.M. Culture & Contents Co., Ltd.(*4) | Korea | 23.1 | 60,261 | 23.3 | 62,248 | |||||||||||||||
Content Wavve Co., Ltd.(*3) | Korea | — | — | 30.0 | 75,803 | |||||||||||||||
Hello Nature Co., Ltd.(*3) | Korea | — | — | 49.9 | 11,969 | |||||||||||||||
Digital Games International Pte. Ltd. | Singapore | 33.3 | 2,208 | 33.3 | 6,449 | |||||||||||||||
Invites Healthcare Co., Ltd.(*5) | Korea | 27.1 | 26,474 | 43.5 | 25,536 | |||||||||||||||
Nam Incheon Broadcasting Co., Ltd. | Korea | 27.3 | 12,525 | 27.3 | 10,902 | |||||||||||||||
NANO-X IMAGING LTD.(*3) | Israel | — | — | 5.6 | 28,484 | |||||||||||||||
Home Choice Corp.(*2) | Korea | 17.8 | 3,052 | 17.8 | 3,585 | |||||||||||||||
Carrot General Insurance Co., Ltd.(*6) | Korea | — | — | 21.4 | 13,469 | |||||||||||||||
12CM JAPAN and others(*2,3,7) | — | — | 72,605 | — | 65,750 | |||||||||||||||
2,188,096 | 14,312,641 | |||||||||||||||||||
Investments in joint ventures: | ||||||||||||||||||||
Dogus Planet, Inc.(*3) | Turkey | — | — | 50.0 | 15,071 | |||||||||||||||
Finnq Co., Ltd.(*8) | Korea | 49.0 | 7,255 | 49.0 | 13,342 | |||||||||||||||
NEXTGEN BROADCAST SERVICES CO, LLC(*3) | USA | — | — | 50.0 | 5,850 | |||||||||||||||
NEXTGEN ORCHESTRATION, LLC(*3) | USA | — | — | 50.0 | 1,600 | |||||||||||||||
Techmaker GmbH(*3) | Germany | — | — | 50.0 | 5,609 | |||||||||||||||
UTC Kakao-SK Telecom ESG Fund(*8,9) | Korea | 48.2 | 2,000 | — | — | |||||||||||||||
9,255 | 41,472 | |||||||||||||||||||
₩ | 2,197,351 | ₩ | 14,354,113 | |||||||||||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||||||||
(In millions of won) | Country | Ownership (%) | Carrying amount | Ownership (%) | Carrying amount | |||||||||||||||
Investments in associates: | ||||||||||||||||||||
SK China Company Ltd. | China | 27.3 | ₩ | 879,527 | 27.3 | ₩ | 793,754 | |||||||||||||
Korea IT Fund(*1) | Korea | 63.3 | 324,860 | 63.3 | 339,976 | |||||||||||||||
HanaCard Co., Ltd.(*2) | Korea | — | — | 15.0 | 349,866 | |||||||||||||||
UniSK | China | 49.0 | 20,839 | 49.0 | 19,156 | |||||||||||||||
SK Technology Innovation Company | Cayman Islands | | 49.0 | 69,375 | 49.0 | 86,301 | ||||||||||||||
SK MENA Investment B.V. | Netherlands | 32.1 | 14,296 | 32.1 | 15,343 | |||||||||||||||
SK Latin America Investment S.A. | Spain | 32.1 | 11,961 | 32.1 | 14,004 | |||||||||||||||
SK South East Asia Investment Pte. Ltd. | Singapore | 20.0 | 357,537 | 20.0 | 348,782 | |||||||||||||||
Pacific Telecom Inc.(*3) | USA | 15.0 | 48,542 | 15.0 | 43,789 | |||||||||||||||
SM. Culture & Contents Co., Ltd. | Korea | 23.1 | 59,611 | 23.1 | 60,261 | |||||||||||||||
Digital Games International Pte. Ltd.(*4) | Singapore | — | — | 33.3 | 2,208 | |||||||||||||||
Invites Healthcare Co., Ltd.(*5) | Korea | 31.1 | — | 27.1 | 26,474 | |||||||||||||||
Nam Incheon Broadcasting Co., Ltd. | Korea | 27.3 | 13,575 | 27.3 | 12,525 | |||||||||||||||
Home Choice Corp.(*3) | Korea | 17.8 | 4,456 | 17.8 | 3,052 | |||||||||||||||
Konan Technology Inc. | Korea | 20.8 | 8,366 | 26.5 | 3,639 | |||||||||||||||
CMES Inc.(*3,6) | Korea | 7.7 | 900 | — | — | |||||||||||||||
12CM JAPAN and others(*3,7) | — | — | 69,734 | — | 68,966 | |||||||||||||||
1,883,579 | 2,188,096 | |||||||||||||||||||
Investments in joint ventures: | ||||||||||||||||||||
Finnq Co., Ltd.(*8) | Korea | — | — | 49.0 | 7,255 | |||||||||||||||
UTC Kakao-SK Telecom ESG Fund(*9) | Korea | 48.2 | 5,710 | 48.2 | 2,000 | |||||||||||||||
5,710 | 9,255 | |||||||||||||||||||
₩ | 1,889,289 | ₩ | 2,197,351 | |||||||||||||||||
(1) | Investments in associates and joint ventures accounted for using the equity method as of December 31, 2022 and 2021 are as follows, Continued: |
(*1) | Investment in Korea IT Fund was classified as investment in associates as the Group does not have control over the investee under the contractual agreement with other shareholders. |
(*2) |
(*3) | Although the Group holds less than 20% of equity interests in these investees, investments in such investees were classified as investments in associates as the Group can exercise significant influence through its right to appoint the members of the Board of |
(*4) | The |
(* | The Group |
(In millions of won, except for share data) | December 31, 2021 | December 31, 2020 | ||||||||||||||||||||||
Market price per share (in won) | Number of shares | Market value | Market price per share (in won) | Number of shares | Market value | |||||||||||||||||||
NanoEnTek, Inc.(*) | ₩ | — | — | — | 8,620 | 7,600,649 | 65,518 | |||||||||||||||||
SK hynix Inc.(*) | — | — | — | 118,500 | 146,100,000 | 17,312,850 | ||||||||||||||||||
S.M. | 4,485 | 22,033,898 | 98,822 | 1,630 | 22,033,898 | 35,915 | ||||||||||||||||||
NANO-X IMAGING LTD.(*) | — | — | — | 49,678 (USD 45.66 | ) | 2,607,466 | 129,534 |
(*6) | As the Group obtained significant influence over the investee, ₩900 million of financial assets at FVOCI are reclassified to investments in associates for the year ended December 31, 2022. |
(*7) | The Group additionally contributed ₩2,000 million in cash to Smart SKT Infinitum Game Fund for the year ended December 31, 2022. In addition, the Group disposed the shares of Start-up Win-Win Fund (₩4,850 million) at ₩5,800 million in cash and recognized ₩950 million of gain on disposal of investments in associates, accordingly. The Group also disposed the shares of Daekyo Wipoongdangdang Contents Korea Fund (₩1,080 million) at ₩1,080 million in cash and reclassified the entire shares asnon-current assets held for sale. Furthermore, the Group newly invested ₩4,000 million in cash to KB ESG Fund of three telecommunications companies for the year ended December 31, 2022. |
(*8) | The Group disposed the entire shares of Finnq Co., Ltd. to Hana Financial Group Inc. for ₩5,733 million in cash and recognized ₩1,043 million of gain on disposal of investments in joint ventures for the year ended December 31, 2022. |
(*9) | The Group additionally contributed ₩4,000 million in cash to the investee for the year ended December 31, 2022, but there is no change in the ownership interest. As the Group has a joint control over the investee pursuant to the agreement with the other shareholders, the investment in the investee was classified as investments in joint ventures. |
(In millions of won, except for share data) | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
Market price per share (in won) | Number of shares | Market value | Market price per share (in won) | Number of shares | Market value | |||||||||||||||||||
SM.Culture & Contents Co.,Ltd. | 2,960 | 22,033,898 | 65,220 | 4,485 | 22,033,898 | 98,822 | ||||||||||||||||||
Konan Technology Inc. | 28,250 | 1,179,580 | 33,323 | — | — | — |
(In millions of won) | Korea IT Fund | SK China Company Ltd.(*) | SK South East Asia Investment Pte. Ltd.(*) | |||||||||
As of December 31, 2022 | ||||||||||||
Current assets | ₩ | 98,132 | 1,223,426 | 146,589 | ||||||||
Non-current assets | 414,804 | 2,050,001 | 3,034,335 | |||||||||
Current liabilities | — | 76,654 | 488,132 | |||||||||
Non-current liabilities | — | 276,525 | — | |||||||||
2022 | ||||||||||||
Revenue | ₩ | 19,916 | 62,334 | 72,658 | ||||||||
Profit (loss) for the year | 7,505 | (11,681 | ) | (17,504 | ) | |||||||
Other comprehensive income (loss) | (11,779 | ) | 58,034 | (34,220 | ) | |||||||
Total comprehensive income (loss) | (4,274 | ) | 46,353 | (51,724 | ) |
(In millions of won) | KEB HanaCard Co., Ltd. (*) | Korea IT Fund | SK China Company Ltd. (*) | SK South East Asia Investment Pte. Ltd. (*) | ||||||||||||
As of December 31, 2021 | ||||||||||||||||
Current assets | ₩ | 9,130,044 | 117,172 | 1,124,219 | 133,110 | |||||||||||
Non-current assets | 465,333 | 419,632 | 1,849,102 | 2,853,184 | ||||||||||||
Current liabilities | 1,281,783 | — | 53,199 | 412,962 | ||||||||||||
Non-current liabilities | 6,284,587 | — | 316,470 | — | ||||||||||||
2021 | ||||||||||||||||
Revenue | ₩ | 1,270,568 | 58,741 | 80,241 | 9,945 | |||||||||||
Profit (loss) for the year | 250,484 | 50,107 | 933,475 | (188,678 | ) | |||||||||||
Other comprehensive income (loss) | 909 | (6,847 | ) | 326,661 | 304,700 | |||||||||||
Total comprehensive income | 251,393 | 43,260 | 1,260,136 | 116,022 |
(In millions of won) | SK hynix Inc. (*) | KEB HanaCard Co., Ltd. (*) | Korea IT Fund | SK China Company Ltd. (*) | SK South East Asia Investment Pte. Ltd. (*) | |||||||||||||||
As of December 31, 2020 | ||||||||||||||||||||
Current assets | ₩ | 16,570,953 | 7,910,517 | 107,652 | 380,413 | 797,045 | ||||||||||||||
Non-current assets | 54,602,900 | 298,438 | 402,812 | 1,706,634 | 1,672,412 | |||||||||||||||
Current liabilities | 9,072,360 | 897,594 | — | 51,025 | 67 | |||||||||||||||
Non-current liabilities | 10,192,396 | 5,531,968 | — | 308,606 | — | |||||||||||||||
2020 | ||||||||||||||||||||
Revenue | ₩ | 31,900,418 | 1,231,815 | 52,330 | 107,791 | — | ||||||||||||||
Profit (loss) for the year | 4,758,914 | 154,521 | 36,615 | 20,369 | (158,680 | ) | ||||||||||||||
Other comprehensive income (loss) | (107,378 | ) | (4,283 | ) | 9,647 | 42,921 | (390,851 | ) | ||||||||||||
Total comprehensive income (loss) | 4,651,536 | 150,238 | 46,262 | 63,290 | (549,531 | ) |
(In millions of won) | HanaCard Co., Ltd.(*) | Korea IT Fund | SK China Company Ltd.(*) | SK South East Asia Investment Pte. Ltd.(*) | ||||||||||||
As of December 31, 2021 | ||||||||||||||||
Current assets | ₩ | 9,130,044 | 117,172 | 1,124,219 | 133,110 | |||||||||||
Non-current assets | 465,333 | 419,632 | 1,849,102 | 2,853,184 | ||||||||||||
Current liabilities | 1,281,783 | — | 53,199 | 412,962 | ||||||||||||
Non-current liabilities | 6,284,587 | — | 316,470 | — | ||||||||||||
2021 | ||||||||||||||||
Revenue | ₩ | 1,270,568 | 58,741 | 80,241 | 9,945 | |||||||||||
Profit (loss) for the year | 250,484 | 50,107 | 933,475 | (188,678 | ) | |||||||||||
Other comprehensive income (loss) | 909 | (6,847 | ) | 326,661 | 304,700 | |||||||||||
Total comprehensive income | 251,393 | 43,260 | 1,260,136 | 116,022 |
(In millions of won) | SK hynix Inc. (*) | KEB HanaCard Co., Ltd. (*) | Korea IT Fund | SK China Company Ltd. (*) | SK South East Asia Investment Pte. Ltd. (*) | |||||||||||||||
As of December 31, 2019 | ||||||||||||||||||||
Current assets | ₩ | 14,457,602 | 7,974,407 | 113,233 | 615,028 | 81,065 | ||||||||||||||
Non-current assets | 50,331,892 | 207,284 | 378,691 | 1,442,748 | 1,797,239 | |||||||||||||||
Current liabilities | 7,874,033 | 1,015,657 | — | 59,395 | 94 | |||||||||||||||
Non-current liabilities | 8,972,266 | 5,537,850 | — | 215,354 | — | |||||||||||||||
2019 | ||||||||||||||||||||
Revenue | ₩ | 26,990,733 | 1,236,678 | 70,565 | 116,269 | — | ||||||||||||||
Profit for the year | 2,016,391 | 56,281 | 53,867 | 23,474 | 1,190 | |||||||||||||||
Other comprehensive income (loss) | 94,023 | (4,458 | ) | 6,132 | (15,093 | ) | 97,508 | |||||||||||||
Total comprehensive income | 2,110,414 | 51,823 | 59,999 | 8,381 | 98,698 |
(In millions of won) | SK hynix Inc.(*) | HanaCard Co., Ltd.(*) | Korea IT Fund | SK China Company Ltd.(*) | SK South East Asia Investment Pte. Ltd. (*) | |||||||||||||||
As of December 31, 2020 | ||||||||||||||||||||
Current assets | ₩ | 16,570,953 | 7,910,517 | 107,652 | 380,413 | 797,045 | ||||||||||||||
Non-current assets | 54,602,900 | 298,438 | 402,812 | 1,706,634 | 1,672,412 | |||||||||||||||
Current liabilities | 9,072,360 | 897,594 | — | 51,025 | 67 | |||||||||||||||
Non-current liabilities | 10,192,396 | 5,531,968 | — | 308,606 | — | |||||||||||||||
2020 | ||||||||||||||||||||
Revenue | ₩ | 31,900,418 | 1,231,815 | 52,330 | 107,791 | — | ||||||||||||||
Profit (loss) for the year | 4,758,914 | 154,521 | 36,615 | 20,369 | (158,680 | ) | ||||||||||||||
Other comprehensive income (loss) | (107,378 | ) | (4,283 | ) | 9,647 | 42,921 | (390,851 | ) | ||||||||||||
Total comprehensive income (loss) | 4,651,536 | 150,238 | 46,262 | 63,290 | (549,531 | ) |
(*) | The financial information of SK hynix Inc., |
(In millions of won) | Dogus Planet, Inc. | Finnq Co., Ltd. | ||||||
As of December 31, 2020 | ||||||||
Current assets | ₩ | 55,951 | 26,781 | |||||
Cash and cash equivalents | 9,083 | 23,936 | ||||||
Non-current assets | 30,408 | 8,530 | ||||||
Current liabilities | 46,186 | 7,367 | ||||||
Accounts payable, other payables and provisions | 28,145 | 5,094 | ||||||
Non-current liabilities | 10,031 | 879 | ||||||
2020 | ||||||||
Revenue | ₩ | 177,084 | 3,937 | |||||
Depreciation and amortization | (4,642 | ) | (4,417 | ) | ||||
Interest income | 1,878 | 29 | ||||||
Interest expense | (555 | ) | (51 | ) | ||||
Profit (loss) for the year | 7,030 | (19,426 | ) | |||||
Total comprehensive loss | (1,659 | ) | (19,426 | ) |
(In millions of won) | Dogus Planet, Inc. | Finnq Co., Ltd. | ||||||
As of December 31, 2020 | ||||||||
Current assets | ₩ | 55,951 | 26,781 | |||||
Cash and cash equivalents | 9,083 | 23,936 | ||||||
Non-current assets | 30,408 | 8,530 | ||||||
Current liabilities | 46,186 | 7,367 | ||||||
Accounts payable, other payables and provisions | 28,145 | 5,094 | ||||||
Non-current liabilities | 10,031 | 879 |
(In millions of won) | Dogus Planet, Inc. | Finnq Co., Ltd. | ||||||
As of December 31, 2019 | ||||||||
Current assets | ₩ | 59,632 | 42,995 | |||||
Cash and cash equivalents | 13,422 | 40,619 | ||||||
Non-current assets | 25,247 | 11,389 | ||||||
Current liabilities | 52,238 | 6,756 | ||||||
Accounts payable, other payables and provisions | 35,459 | 5,062 | ||||||
Non-current liabilities | 800 | 1,099 | ||||||
2019 | ||||||||
Revenue | ₩ | 136,777 | 1,968 | |||||
Depreciation and amortization | (5,487 | ) | (4,769 | ) | ||||
Interest income | 1,455 | 12 | ||||||
Interest expense | (92 | ) | (198 | ) | ||||
Profit (loss) for the year | 9,294 | (17,079 | ) | |||||
Total comprehensive income (loss) | 9,294 | (17,361 | ) |
2020 | ||||||||
Revenue | ₩ | 177,084 | 3,937 | |||||
Depreciation and amortization | (4,642 | ) | (4,417 | ) | ||||
Interest income | 1,878 | 29 | ||||||
Interest expense | (555 | ) | (51 | ) | ||||
Profit (loss) for the year | 7,030 | (19,426 | ) | |||||
Total comprehensive loss | (1,659 | ) | (19,426 | ) |
(In millions of won) | December 31, 2021 | |||||||||||||||||||
Net assets | Ownership interests (%) | Net assets attributable to the ownership interests | Cost-book value differentials | Carrying amount | ||||||||||||||||
KEB HanaCard Co., Ltd. | ₩ | 2,029,007 | 15.0 | 304,351 | 45,515 | 349,866 | ||||||||||||||
Korea IT Fund | 536,804 | 63.3 | 339,976 | — | 339,976 | |||||||||||||||
SK China Company Ltd.(*1) | 2,603,336 | 27.3 | 709,961 | 83,793 | 793,754 | |||||||||||||||
SK South East Asia Investment Pte. Ltd.(*1) | 1,743,908 | 20.0 | 348,782 | — | 348,782 | |||||||||||||||
(In millions of won) | December 31, 2020 | |||||||||||||||||||
Net assets | Ownership interests (%) | Net assets attributable to the ownership interests | Cost-book value differentials | Carrying amount | ||||||||||||||||
SK hynix Inc.(*1,2) | ₩ | 51,883,236 | 20.1 | 11,082,048 | 1,169,813 | 12,251,861 | ||||||||||||||
KEB HanaCard Co., Ltd. | 1,779,393 | 15.0 | 266,909 | 48,021 | 314,930 | |||||||||||||||
Korea IT Fund | 510,464 | 63.3 | 323,294 | — | 323,294 | |||||||||||||||
SK China Company Ltd.(*1) | 1,725,949 | 27.3 | 470,687 | 84,446 | 555,133 | |||||||||||||||
SK South East Asia Investment Pte. Ltd.(*1) | 1,559,951 | 20.0 | 311,990 | — | 311,990 |
(In millions of won) | December 31, 2022 | |||||||||||||||||||
Net assets | Ownership interests (%) | Net assets attributable to the ownership interests | Cost-book value differentials | Carrying amount | ||||||||||||||||
Korea IT Fund | ₩ | 512,936 | 63.3 | 324,860 | — | 324,860 | ||||||||||||||
SK China Company Ltd.(*) | 2,920,248 | 27.3 | 796,387 | 83,140 | 879,527 | |||||||||||||||
SK South East Asia Investment Pte. Ltd.(*) | 1,787,685 | 20.0 | 357,537 | — | 357,537 | |||||||||||||||
(In millions of won) | December 31, 2021 | |||||||||||||||||||
Net assets | Ownership interests (%) | Net assets attributable to the ownership interests | Cost-book value differentials | Carrying amount | ||||||||||||||||
HanaCard Co., Ltd. | ₩ | 2,029,007 | 15.0 | 304,351 | 45,515 | 349,866 | ||||||||||||||
Korea IT Fund | 536,804 | 63.3 | 339,976 | — | 339,976 | |||||||||||||||
SK China Company Ltd.(*) | 2,603,336 | 27.3 | 709,961 | 83,793 | 793,754 | |||||||||||||||
SK South East Asia Investment Pte. Ltd.(*) | 1,743,908 | 20.0 | 348,782 | — | 348,782 |
(* | Net assets of these entities represent net assets excluding those attributable to their non-controlling interests. |
(In millions of won) | 2022 | |||||||||||||||||||||||
Beginning balance | Acquisition and Disposal | Share of profit (loss) | Other compre- hensive income (loss) | Other increase (decrease) | Ending balance | |||||||||||||||||||
Investments in associates: | ||||||||||||||||||||||||
SK China Company Ltd. | ₩ | 793,754 | — | (19,395 | ) | 105,168 | — | 879,527 | ||||||||||||||||
Korea IT Fund(*1) | 339,976 | — | 4,753 | (7,459 | ) | (12,410 | ) | 324,860 | ||||||||||||||||
HanaCard Co., Ltd. | 349,866 | (368,389 | ) | 17,749 | 774 | — | — | |||||||||||||||||
UniSK | 19,156 | — | 2,424 | (741 | ) | — | 20,839 | |||||||||||||||||
SK Technology Innovation Company | 86,301 | — | (22,923 | ) | 5,997 | — | 69,375 | |||||||||||||||||
SK MENA Investment B.V. | 15,343 | — | (2,059 | ) | 1,012 | — | 14,296 | |||||||||||||||||
SK Latin America Investment S.A. | 14,004 | — | (2,083 | ) | 40 | — | 11,961 | |||||||||||||||||
SK South East Asia Investment Pte. Ltd. | 348,782 | — | (6,975 | ) | 15,730 | — | 357,537 | |||||||||||||||||
Pacific Telecom Inc. | 43,789 | — | 2,890 | 1,863 | — | 48,542 | ||||||||||||||||||
SM. Culture & Contents Co., Ltd. | 60,261 | 37 | (756 | ) | 69 | — | 59,611 | |||||||||||||||||
Digital Games International Pte. Ltd. | 2,208 | (1,757 | ) | (562 | ) | 111 | — | — | ||||||||||||||||
Invites Healthcare Co., Ltd.(*2) | 26,474 | — | (11,759 | ) | (74 | ) | (14,641 | ) | — | |||||||||||||||
Nam Incheon Broadcasting Co., Ltd.(*1) | 12,525 | — | 1,186 | — | (136 | ) | 13,575 | |||||||||||||||||
Home Choice Corp. | 3,052 | — | 1,403 | 1 | — | 4,456 | ||||||||||||||||||
Konan Technology Inc. | 3,639 | 5,451 | (710 | ) | (14 | ) | — | 8,366 | ||||||||||||||||
CMES Inc.(*3) | — | — | — | — | 900 | 900 | ||||||||||||||||||
12CM JAPAN and others(*4) | 68,966 | 1,873 | 1,245 | — | (2,350 | ) | 69,734 | |||||||||||||||||
2,188,096 | (362,785 | ) | (35,572 | ) | 122,477 | (28,637 | ) | 1,883,579 | ||||||||||||||||
Investments in joint ventures: | ||||||||||||||||||||||||
Finnq Co., Ltd. | 7,255 | (3,840 | ) | (3,617 | ) | 202 | — | — | ||||||||||||||||
UTC Kakao-SK Telecom ESG Fund | 2,000 | 4,000 | (290 | ) | — | — | 5,710 | |||||||||||||||||
9,255 | 160 | (3,907 | ) | 202 | — | 5,710 | ||||||||||||||||||
₩ | 2,197,351 | (362,625 | ) | (39,479 | ) | 122,679 | (28,637 | ) | 1,889,289 | |||||||||||||||
2021 | ||||||||||||||||||||||||||||
(In millions of won) | Beginning balance | Acquisition and Disposal | Share of profits (losses) | Other compre- hensive income (loss) | Other increase (decrease) | Spin-off | Ending balance | |||||||||||||||||||||
Investments in associates: | ||||||||||||||||||||||||||||
SK China Company Ltd.(*1) | ₩ | 555,133 | — | 274,066 | 95,696 | (131,141 | ) | — | 793,754 | |||||||||||||||||||
Korea IT Fund(*1) | 323,294 | — | 31,734 | (4,336 | ) | (10,716 | ) | — | 339,976 | |||||||||||||||||||
KEB HanaCard Co., Ltd. | 314,930 | — | 35,057 | (121 | ) | — | — | 349,866 | ||||||||||||||||||||
SK Telecom CS T1 Co., Ltd.(*2) | 53,010 | 4,888 | (8,769 | ) | (575 | ) | — | (48,554 | ) | — | ||||||||||||||||||
NanoEnTek, Inc.(*2) | 43,190 | — | 1,836 | (86 | ) | — | (44,940 | ) | — | |||||||||||||||||||
UniSK | 15,700 | — | 1,475 | 1,981 | — | — | 19,156 | |||||||||||||||||||||
SK Technology Innovation Company | 41,579 | — | 39,256 | 5,466 | — | — | 86,301 | |||||||||||||||||||||
SK MENA Investment B.V. | 14,043 | — | 2 | 1,298 | — | — | 15,343 | |||||||||||||||||||||
SK hynix Inc.(*1,2) | 12,251,861 | 19,482 | 1,542,757 | 197,473 | (170,937 | ) | (13,840,636 | ) | — | |||||||||||||||||||
SK Latin America Investment S.A. | 13,930 | — | (49 | ) | 123 | — | — | 14,004 | ||||||||||||||||||||
Grab Geo Holdings PTE. LTD.(*2) | 30,063 | — | — | — | — | (30,063 | ) | — | ||||||||||||||||||||
SK South East Asia Investment Pte. Ltd. | 311,990 | — | (18,218 | ) | 55,010 | — | — | 348,782 | ||||||||||||||||||||
Pacific Telecom Inc. | 39,723 | — | 1,598 | 2,468 | — | — | 43,789 | |||||||||||||||||||||
S.M. Culture & Contents Co., Ltd. | 62,248 | 144 | (2,484 | ) | 353 | — | — | 60,261 | ||||||||||||||||||||
Contents Wavve Co., Ltd.(*2) | 75,803 | 100,000 | (20,716 | ) | — | — | (155,087 | ) | — | |||||||||||||||||||
Hello Nature Co., Ltd.(*2,3) | 11,969 | 9,980 | (10,899 | ) | (1 | ) | (1,730 | ) | (9,319 | ) | — | |||||||||||||||||
Digital Games International Pte. Ltd. | 6,449 | — | (4,529 | ) | 288 | — | — | 2,208 | ||||||||||||||||||||
Invites Healthcare Co., Ltd. | 25,536 | 7,000 | (5,968 | ) | (94 | ) | — | — | 26,474 | |||||||||||||||||||
Nam Incheon Broadcasting Co., Ltd.(*1) | 10,902 | — | 1,759 | — | (136 | ) | — | 12,525 | ||||||||||||||||||||
NANO-X IMAGING LTD.(*2) | 28,484 | (47 | ) | (2,049 | ) | — | 2,437 | (28,825 | ) | — | ||||||||||||||||||
Home Choice Corp. | 3,585 | — | (533 | ) | — | — | — | 3,052 | ||||||||||||||||||||
Carrot General Insurance Co., Ltd.(*4) | 13,469 | 12,289 | (6,666 | ) | (358 | ) | (8,734 | ) | (10,000 | ) | — | |||||||||||||||||
Bertis Inc.(*2) | — | 15,739 | (423 | ) | — | — | (15,316 | ) | — | |||||||||||||||||||
UT LLC(*2) | — | 86,319 | (7,773 | ) | — | — | (78,546 | ) | — | |||||||||||||||||||
SPARKPLUS Co., Ltd.(*2) | — | 34,166 | — | — | — | (34,166 | ) | — | ||||||||||||||||||||
12CM JAPAN and others(*2,5) | 65,750 | 9,038 | (2,869 | ) | 7,693 | (1,624 | ) | (5,383 | ) | 72,605 | ||||||||||||||||||
14,312,641 | 298,998 | 1,837,595 | 362,278 | (322,581 | ) | (14,300,835 | ) | 2,188,096 | ||||||||||||||||||||
(*1) | Dividends distributed by the associates are deducted from the carrying amount for the year ended December 31, 2022. |
(*2) | The Group recognized ₩14,641 million of impairment loss for the year ended December 31, 2022. |
(*3) | As the Group obtained significant influence over the investee, ₩900 million of financial assets at FVOCI are reclassified to investments in associates for the year ended December 31, 2022. |
(*4) | The acquisition for the year ended December 31, 2022 includes ₩2,000 million of cash investment in Smart SKT Infinitum Game Fund, ₩4,000 million of cash investment in KB ESG Fund of three telecommunications companies and ₩12 million of cash investment in SK VENTURE CAPITAL, LLC. The disposal for the year ended December 31, 2022 includes ₩4,850 million relating to disposal of the part of shares of Start-up Win-Win Fund and ₩1,080 million relating to disposal of the part of shares of Daekyo Wipoongdangdang Contents Korea Fund. In addition, dividends amounting to ₩1,290 million received fromStart-up Win-Win Fund deducted from the carrying amount for the year ended December 31, 2022. |
(In millions of won) | 2021 | |||||||||||||||||||||||||||
Beginning balance | Acquisition and Disposal | Share of profits (losses) | Other compre- hensive income (loss) | Other increase (decrease) | Spin-off | Ending balance | ||||||||||||||||||||||
Investments in associates: | ||||||||||||||||||||||||||||
SK China Company Ltd.(*1) | ₩ | 555,133 | — | 274,066 | 95,696 | (131,141 | ) | — | 793,754 | |||||||||||||||||||
Korea IT Fund(*1) | 323,294 | — | 31,734 | (4,336 | ) | (10,716 | ) | — | 339,976 | |||||||||||||||||||
HanaCard Co., Ltd. | 314,930 | — | 35,057 | (121 | ) | — | — | 349,866 | ||||||||||||||||||||
SK Telecom CS T1 Co., Ltd.(*2) | 53,010 | 4,888 | (8,769 | ) | (575 | ) | — | (48,554 | ) | — | ||||||||||||||||||
NanoEnTek, Inc.(*2) | 43,190 | — | 1,836 | (86 | ) | — | (44,940 | ) | — | |||||||||||||||||||
UniSK | 15,700 | — | 1,475 | 1,981 | — | — | 19,156 | |||||||||||||||||||||
SK Technology Innovation Company | 41,579 | — | 39,256 | 5,466 | — | — | 86,301 | |||||||||||||||||||||
SK MENA Investment B.V. | 14,043 | — | 2 | 1,298 | — | — | 15,343 | |||||||||||||||||||||
SK hynix Inc.(*1,2) | 12,251,861 | 19,482 | 1,542,757 | 197,473 | (170,937 | ) | (13,840,636 | ) | — | |||||||||||||||||||
SK Latin America Investment S.A. | 13,930 | — | (49 | ) | 123 | — | — | 14,004 | ||||||||||||||||||||
Grab Geo Holdings PTE. LTD.(*2) | 30,063 | — | — | — | — | (30,063 | ) | — | ||||||||||||||||||||
SK South East Asia Investment Pte. Ltd. | 311,990 | — | (18,218 | ) | 55,010 | — | — | 348,782 | ||||||||||||||||||||
Pacific Telecom Inc. | 39,723 | — | 1,598 | 2,468 | — | — | 43,789 | |||||||||||||||||||||
SM. Culture & Contents Co., Ltd. | 62,248 | 144 | (2,484 | ) | 353 | — | — | 60,261 | ||||||||||||||||||||
Contents Wavve Co., Ltd.(*2) | 75,803 | 100,000 | (20,716 | ) | — | — | (155,087 | ) | — | |||||||||||||||||||
Hello Nature Co., Ltd.(*2,3) | 11,969 | 9,980 | (10,899 | ) | (1 | ) | (1,730 | ) | (9,319 | ) | — | |||||||||||||||||
Digital Games International Pte. Ltd. | 6,449 | — | (4,529 | ) | 288 | — | — | 2,208 | ||||||||||||||||||||
Invites Healthcare Co., Ltd. | 25,536 | 7,000 | (5,968 | ) | (94 | ) | — | — | 26,474 | |||||||||||||||||||
Nam Incheon Broadcasting Co., Ltd.(*1) | 10,902 | — | 1,759 | — | (136 | ) | — | 12,525 | ||||||||||||||||||||
NANO-X IMAGING LTD.(*2) | 28,484 | (47 | ) | (2,049 | ) | — | 2,437 | (28,825 | ) | — | ||||||||||||||||||
Home Choice Corp. | 3,585 | — | (533 | ) | — | — | — | 3,052 | ||||||||||||||||||||
Carrot General Insurance Co., Ltd.(*4) | 13,469 | 12,289 | (6,666 | ) | (358 | ) | (8,734 | ) | (10,000 | ) | — | |||||||||||||||||
Bertis Inc.(*2) | — | 15,739 | (423 | ) | — | — | (15,316 | ) | — | |||||||||||||||||||
UT LLC(*2) | — | 86,319 | (7,773 | ) | — | — | (78,546 | ) | — | |||||||||||||||||||
SPARKPLUS Co., Ltd.(*2) | — | 34,166 | — | — | — | (34,166 | ) | — | ||||||||||||||||||||
Konan Technology Inc. | 1,265 | 2,015 | 357 | 2 | — | — | 3,639 | |||||||||||||||||||||
12CM JAPAN and others(*2,5) | 64,485 | 7,023 | (3,226 | ) | 7,691 | (1,624 | ) | (5,383 | ) | 68,966 | ||||||||||||||||||
14,312,641 | 298,998 | 1,837,595 | 362,278 | (322,581 | ) | (14,300,835 | ) | 2,188,096 | ||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||
(In millions of won) | Beginning balance | Acquisition and Disposal | Share of profits (losses) | Other compre- hensive income (loss) | Other increase (decrease) | Spin-off | Ending balance | |||||||||||||||||||||
Investments in joint ventures: | ||||||||||||||||||||||||||||
Dogus Planet, Inc.(*2) | ₩ | 15,071 | — | (6,990 | ) | (1,447 | ) | — | (6,634 | ) | — | |||||||||||||||||
Finnq Co., Ltd. | 13,342 | — | (5,969 | ) | (118 | ) | — | — | 7,255 | |||||||||||||||||||
NEXTGEN BROADCAST SERVICES CO, LLC(*2) | 5,850 | 9,048 | (1,276 | ) | — | 892 | (14,514 | ) | — | |||||||||||||||||||
NEXTGEN ORCHESTRATION, LLC(*2) | 1,600 | — | — | — | 142 | (1,742 | ) | — | ||||||||||||||||||||
Techmaker GmbH(*2) | 5,609 | — | (94 | ) | 145 | — | (5,660 | ) | — | |||||||||||||||||||
WAVVE Americas Inc. (Formerly, Korea Content Platform, Inc.)(*2) | — | 30,191 | (14 | ) | — | 598 | (30,775 | ) | — | |||||||||||||||||||
UTC Kakao-SK Telecom ESG Fund | — | 2,000 | — | — | — | — | 2,000 | |||||||||||||||||||||
41,472 | 41,239 | (14,343 | ) | (1,420 | ) | 1,632 | (59,325 | ) | 9,255 | |||||||||||||||||||
₩ | 14,354,113 | 340,237 | 1,823,252 | 360,858 | (320,949 | ) | (14,360,160 | ) | 2,197,351 | |||||||||||||||||||
(In millions of won) | 2021 | |||||||||||||||||||||||||||
Beginning balance | Acquisition and Disposal | Share of profits (losses) | Other compre- hensive income (loss) | Other increase (decrease) | Spin-off | Ending balance | ||||||||||||||||||||||
Investments in joint ventures: | ||||||||||||||||||||||||||||
Dogus Planet, Inc.(*2) | 15,071 | — | (6,990 | ) | (1,447 | ) | — | (6,634 | ) | — | ||||||||||||||||||
Finnq Co., Ltd. | 13,342 | — | (5,969 | ) | (118 | ) | — | — | 7,255 | |||||||||||||||||||
NEXTGEN BROADCAST SERVICES CO, LLC(*2) | 5,850 | 9,048 | (1,276 | ) | — | 892 | (14,514 | ) | — | |||||||||||||||||||
NEXTGEN ORCHESTRATION, LLC(*2) | 1,600 | — | — | — | 142 | (1,742 | ) | — | ||||||||||||||||||||
Techmaker GmbH(*2) | 5,609 | — | (94 | ) | 145 | — | (5,660 | ) | — | |||||||||||||||||||
WAVVE Americas Inc. (Formerly, Korea Content Platform, Inc.)(*2) | — | 30,191 | (14 | ) | — | 598 | (30,775 | ) | — | |||||||||||||||||||
UTC Kakao-SK Telecom ESG Fund | — | 2,000 | — | — | — | — | 2,000 | |||||||||||||||||||||
41,472 | 41,239 | (14,343 | ) | (1,420 | ) | 1,632 | (59,325 | ) | 9,255 | |||||||||||||||||||
₩ | 14,354,113 | 340,237 | 1,823,252 | 360,858 | (320,949 | ) | (14,360,160 | ) | 2,197,351 | |||||||||||||||||||
(*1) | Dividends received from the associates are deducted from the carrying amount for the year ended December 31, 2021. |
(*2) | Investment in SK Telecom CS T1 Co., Ltd. and spin-off company for the year ended December 31, 2021. In addition, profit or loss related to investments in associates and joint ventures, which are transferred to thespin-off company, are included in profit or loss from discontinued operations. |
(*3) | The Group recognized |
(*4) | The Parent Company has entered into an agreement whereby the entire shares of Carrot General Insurance Co., Ltd. will transfer to ₩ non-current assets held for spin-off, were transferred to thespin-off company for the year ended December 31, 2021. |
(*5) | The acquisition for the year ended December 31, 2021 includes |
(7) | The Group discontinued the application of equity method to the following investees due to their carrying amounts being reduced to zero. The details of cumulative unrecognized equity method losses as of December 31, 2022 are as follows: |
2020 | ||||||||||||||||||||||||||||
(In millions of won) | Beginning balance | Acquisition and Disposal | Share of profits (losses) | Other compre- hensive income (loss) | Other increase (decrease) | Business Combina- tion | Ending balance | |||||||||||||||||||||
Investments in associates: | ||||||||||||||||||||||||||||
SK China Company Ltd. | ₩ | 568,459 | — | 3,752 | (17,078 | ) | — | — | 555,133 | |||||||||||||||||||
Korea IT Fund(*1) | 311,552 | — | 23,189 | 6,110 | (17,557 | ) | — | 323,294 | ||||||||||||||||||||
KEB HanaCard Co., Ltd. | 294,756 | — | 20,671 | (497 | ) | — | — | 314,930 | ||||||||||||||||||||
SK Telecom CS T1 Co., Ltd.(*2) | 60,305 | — | (7,282 | ) | (13 | ) | — | — | 53,010 | |||||||||||||||||||
NanoEnTek, Inc.(*2) | 42,127 | 143 | 830 | 90 | — | — | 43,190 | |||||||||||||||||||||
UniSK(*1) | 14,342 | — | 1,403 | 168 | (213 | ) | — | 15,700 | ||||||||||||||||||||
SK Technology Innovation Company | 43,997 | — | 184 | (2,602 | ) | — | — | 41,579 | ||||||||||||||||||||
SK MENA Investment B.V. | 14,904 | — | — | (861 | ) | — | — | 14,043 | ||||||||||||||||||||
SK hynix Inc.(*1,2) | 11,425,325 | — | 995,117 | (22,481 | ) | (146,100 | ) | — | 12,251,861 | |||||||||||||||||||
SK Latin America Investment S.A. | 13,698 | — | (40 | ) | 272 | — | — | 13,930 | ||||||||||||||||||||
Grab Geo Holdings PTE. LTD.(*2) | 31,269 | — | (425 | ) | (781 | ) | — | — | 30,063 | |||||||||||||||||||
SK South East Asia Investment Pte. Ltd. | 250,034 | 119,770 | 11,250 | (69,064 | ) | — | — | 311,990 | ||||||||||||||||||||
Pacific Telecom Inc.(*1) | 40,016 | — | 2,307 | (1,621 | ) | (979 | ) | — | 39,723 | |||||||||||||||||||
S.M. Culture & Contents Co., Ltd. | 63,469 | (162 | ) | (813 | ) | (246 | ) | — | — | 62,248 | ||||||||||||||||||
Contents Wavve Co., Ltd.(*2) | 83,640 | — | (7,837 | ) | — | — | — | 75,803 | ||||||||||||||||||||
Hello Nature Co., Ltd.(*2,3) | 13,620 | 9,980 | (11,118 | ) | (79 | ) | (434 | ) | — | 11,969 | ||||||||||||||||||
Digital Games International Pte. Ltd. | — | 8,810 | (2,038 | ) | (323 | ) | — | — | 6,449 | |||||||||||||||||||
Invites Healthcare Co., Ltd. | — | 28,000 | (2,645 | ) | 181 | — | — | 25,536 | ||||||||||||||||||||
Nam Incheon Broadcasting Co., Ltd. | — | — | 676 | — | — | 10,226 | 10,902 | |||||||||||||||||||||
NANO-X IMAGING LTD.(*2,4) | — | 28,515 | (747 | ) | — | 716 | — | 28,484 | ||||||||||||||||||||
Home Choice Corp. | — | — | 174 | — | — | 3,411 | 3,585 | |||||||||||||||||||||
Carrot General Insurance Co., Ltd. (*5) | 6,459 | 31 | (6,188 | ) | (33 | ) | 13,200 | — | 13,469 | |||||||||||||||||||
12CM JAPAN and others(*2,6) | 58,884 | (1,508 | ) | (2,134 | ) | (2,302 | ) | 12,810 | — | 65,750 | ||||||||||||||||||
13,336,856 | 193,579 | 1,018,286 | (111,160 | ) | (138,557 | ) | 13,637 | 14,312,641 | ||||||||||||||||||||
2020 | ||||||||||||||||||||||||||||
(In millions of won) | Beginning balance | Acquisition and Disposal | Share of profits (losses) | Other compre- hensive income (loss) | Other increase (decrease) | Business Combina- tion | Ending balance | |||||||||||||||||||||
Investments in joint ventures: | ||||||||||||||||||||||||||||
Dogus Planet, Inc.(*2) | ₩ | 15,921 | — | 3,453 | (4,303 | ) | — | — | 15,071 | |||||||||||||||||||
Finnq Co., Ltd. | 22,880 | — | (9,538 | ) | — | — | — | 13,342 | ||||||||||||||||||||
NEXTGEN BROADCAST SERVICES CO, LLC(*2) | 7,961 | — | (1,769 | ) | — | (342 | ) | — | 5,850 | |||||||||||||||||||
NEXTGEN ORCHESTRATION, LLC(*2) | 1,646 | — | 57 | — | (103 | ) | — | 1,600 | ||||||||||||||||||||
Techmaker GmbH(*2) | — | 5,609 | — | — | — | — | 5,609 | |||||||||||||||||||||
48,408 | 5,609 | (7,797 | ) | (4,303 | ) | (445 | ) | — | 41,472 | |||||||||||||||||||
₩ | 13,385,264 | 199,188 | 1,010,489 | (115,463 | ) | (139,002 | ) | 13,637 | 14,354,113 | |||||||||||||||||||
(In millions of won) | Unrecognized loss | Unrecognized change in equity | ||||||||||||||
2022 | Cumulative loss | 2022 | Cumulative loss | |||||||||||||
Wave City Development Co., Ltd. | ₩ | 152 | 8,695 | — | — | |||||||||||
Daehan Kanggun BcN Co., Ltd. and others | — | 5,780 | — | (124 | ) | |||||||||||
₩ | 152 | 14,475 | — | (124 | ) | |||||||||||
December 31, 2022 | ||||||||||||||||
(In millions of won) | Acquisition cost | Accumulated depreciation | Accumulated impairment loss | Carrying amount | ||||||||||||
Land | ₩ | 1,005,857 | — | — | 1,005,857 | |||||||||||
Buildings | 1,736,257 | (950,582 | ) | (450 | ) | 785,225 | ||||||||||
Structures | 935,276 | (668,019 | ) | (1,601 | ) | 265,656 | ||||||||||
Machinery | 37,100,715 | (29,185,881 | ) | (1,934 | ) | 7,912,900 | ||||||||||
Other | 1,771,890 | (1,273,655 | ) | (841 | ) | 497,394 | ||||||||||
Right-of-use | 2,555,685 | (766,350 | ) | (3,206 | ) | 1,786,129 | ||||||||||
Construction in progress | 1,069,331 | — | — | 1,069,331 | ||||||||||||
₩ | 46,175,011 | (32,844,487 | ) | (8,032 | ) | 13,322,492 | ||||||||||
(In millions of won) | Unrecognized loss | Unrecognized change in equity | ||||||||||||||
2021 | Cumulative loss | 2021 | Cumulative loss | |||||||||||||
Wave City Development Co., Ltd. | ₩ | 6,143 | 8,543 | — | — | |||||||||||
Daehan Kanggun BcN Co., Ltd. and others | (5,167 | ) | 5,780 | — | (124 | ) | ||||||||||
₩ | 976 | 14,323 | — | (124 | ) | |||||||||||
December 31, 2021 | ||||||||||||||||
(In millions of won) | Acquisition cost | Accumulated depreciation | Accumulated impairment loss | Carrying amount | ||||||||||||
Land | ₩ | 972,800 | — | — | 972,800 | |||||||||||
Buildings | 1,692,239 | (897,336 | ) | (450 | ) | 794,453 | ||||||||||
Structures | 922,637 | (629,757 | ) | (1,601 | ) | 291,279 | ||||||||||
Machinery | 35,770,485 | (27,771,040 | ) | (1,518 | ) | 7,997,927 | ||||||||||
Other | 1,718,337 | (1,230,128 | ) | (493 | ) | 487,716 | ||||||||||
Right-of-use | 2,229,945 | (669,389 | ) | (1,223 | ) | 1,559,333 | ||||||||||
Construction in progress | 767,751 | — | — | 767,751 | ||||||||||||
₩ | 44,074,194 | (31,197,650 | ) | (5,285 | ) | 12,871,259 | ||||||||||
December 31, 2021 | ||||||||||||||||
(In millions of won) | Acquisition cost | Accumulated depreciation | Accumulated impairment loss | Carrying amount | ||||||||||||
Land | ₩ | 972,800 | — | — | 972,800 | |||||||||||
Buildings | 1,692,239 | (897,336 | ) | (450 | ) | 794,453 | ||||||||||
Structures | 922,637 | (629,757 | ) | (1,601 | ) | 291,279 | ||||||||||
Machinery | 35,770,485 | (27,771,040 | ) | (1,518 | ) | 7,997,927 | ||||||||||
Other | 1,718,337 | (1,230,128 | ) | (493 | ) | 487,716 | ||||||||||
Right-of-use | 2,229,945 | (669,389 | ) | (1,223 | ) | 1,559,333 | ||||||||||
Construction in progress | 767,751 | — | — | 767,751 | ||||||||||||
₩ | 44,074,194 | (31,197,650 | ) | (5,285 | ) | 12,871,259 | ||||||||||
December 31, 2020 | ||||||||||||||||
(In millions of won) | Acquisition cost | Accumulated depreciation | Accumulated impairment loss | Carrying amount | ||||||||||||
Land | ₩ | 1,039,323 | — | — | 1,039,323 | |||||||||||
Buildings | 1,747,445 | (888,389 | ) | (450 | ) | 858,606 | ||||||||||
Structures | 913,102 | (594,098 | ) | (1,601 | ) | 317,403 | ||||||||||
Machinery | 36,152,031 | (27,761,449 | ) | (14,370 | ) | 8,376,212 | ||||||||||
Other | 2,047,405 | (1,391,201 | ) | (2,588 | ) | 653,616 | ||||||||||
Right-of-use | 1,961,346 | (489,311 | ) | — | 1,472,035 | |||||||||||
Construction in progress | 659,882 | — | — | 659,882 | ||||||||||||
₩ | 44,520,534 | (31,124,448 | ) | (19,009 | ) | 13,377,077 | ||||||||||
(2) | Changes in property and equipment for the years ended December 31, |
(In millions of won) | ||||||||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
Beginning balance | Acquisition | Disposal | Transfer | Depreciation | Impairment | Business combination(*) | Ending balance | |||||||||||||||||||||||||
Land | ₩ | 972,800 | 79 | (175 | ) | 30,364 | — | — | 2,789 | 1,005,857 | ||||||||||||||||||||||
Buildings | 794,453 | 1,071 | (638 | ) | 36,219 | (54,463 | ) | — | 8,583 | 785,225 | ||||||||||||||||||||||
Structures | 291,279 | 2,288 | (32 | ) | 10,422 | (38,301 | ) | — | — | 265,656 | ||||||||||||||||||||||
Machinery | 7,997,927 | 560,889 | (49,586 | ) | 1,696,447 | (2,292,358 | ) | (419 | ) | — | 7,912,900 | |||||||||||||||||||||
Other | 487,716 | 780,382 | (938 | ) | (672,199 | ) | (105,730 | ) | (391 | ) | 8,554 | 497,394 | ||||||||||||||||||||
Right-of-use | 1,559,333 | 720,932 | (65,961 | ) | (27,579 | ) | (403,794 | ) | (3,133 | ) | 6,331 | 1,786,129 | ||||||||||||||||||||
Construction in progress | 767,751 | 1,564,345 | (1,709 | ) | (1,261,937 | ) | — | — | 881 | 1,069,331 | ||||||||||||||||||||||
₩ | 12,871,259 | 3,629,986 | (119,039 | ) | (188,263 | ) | (2,894,646 | ) | (3,943 | ) | 27,138 | 13,322,492 | ||||||||||||||||||||
(*) | Includes assets acquired from the acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation, a subsidiary of the Parent Company. |
(In millions of won) | ||||||||||||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||||||
Beginning balance | Acquisition | Disposal | Transfer | Deprecia- tion(*1) | Impairment (*2) | Business combina- tion(*3) | Spin-off | Ending balance | ||||||||||||||||||||||||||||
Land | ₩ | 1,039,323 | 634 | (21,557 | ) | 24,789 | — | — | — | (70,389 | ) | 972,800 | ||||||||||||||||||||||||
Buildings | 858,606 | 3,919 | (9,706 | ) | 47,612 | (55,818 | ) | — | 639 | (50,799 | ) | 794,453 | ||||||||||||||||||||||||
Structures | 317,403 | 2,482 | (6,124 | ) | 16,546 | (37,968 | ) | — | — | (1,060 | ) | 291,279 | ||||||||||||||||||||||||
Machinery | 8,376,212 | 593,225 | (44,477 | ) | 1,816,003 | (2,394,351 | ) | (1,054 | ) | — | (347,631 | ) | 7,997,927 | |||||||||||||||||||||||
Other | 653,616 | 830,277 | (2,286 | ) | (607,271 | ) | (180,980 | ) | (495 | ) | 193 | (205,338 | ) | 487,716 | ||||||||||||||||||||||
Right-of-use | 1,472,035 | 672,723 | (60,159 | ) | (9,610 | ) | (433,970 | ) | (1,223 | ) | 507 | (80,970 | ) | 1,559,333 | ||||||||||||||||||||||
Construction in progress | 659,882 | 1,695,316 | (1,071 | ) | (1,554,047 | ) | — | — | — | (32,329 | ) | 767,751 | ||||||||||||||||||||||||
₩ | 13,377,077 | 3,798,576 | (145,380 | ) | (265,978 | ) | (3,103,087 | ) | (2,772 | ) | 1,339 | (788,516 | ) | 12,871,259 | ||||||||||||||||||||||
(*1) | Includes amounts related to discontinued operations. |
(*2) | The Group recognized impairment losses for obsolete assets for the year ended December 31, 2021. |
(*3) | Includes assets acquired from the acquisition of YLP Inc. and another company by Tmap Mobility Co., Ltd. and from the acquisition of Rokmedia Co., Ltd. by Onestore Co., Ltd. |
(In millions of won) | ||||||||||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||||||||
Beginning balance | Acquisition | Disposal | Transfer | Deprecia- tion(*1) | Impairment(*2) | Business combina- tion(*3) | Ending balance | |||||||||||||||||||||||||
Land | ₩ | 981,389 | 525 | (20,415 | ) | 37,532 | — | — | 40,292 | 1,039,323 | ||||||||||||||||||||||
Buildings | 867,408 | 3,034 | (21,811 | ) | 48,160 | (55,215 | ) | — | 17,030 | 858,606 | ||||||||||||||||||||||
Structures | 347,069 | 2,542 | (4,417 | ) | 9,167 | (36,995 | ) | — | 37 | 317,403 | ||||||||||||||||||||||
Machinery | 7,924,392 | 553,052 | (32,369 | ) | 2,180,445 | (2,419,522 | ) | (1,745 | ) | 171,959 | 8,376,212 | |||||||||||||||||||||
Other | 731,066 | 945,499 | (6,486 | ) | (817,819 | ) | (203,376 | ) | — | 4,732 | 653,616 | |||||||||||||||||||||
Right-of-use | 1,326,628 | 736,157 | (163,217 | ) | — | (436,231 | ) | — | 8,698 | 1,472,035 | ||||||||||||||||||||||
Construction in progress | 755,508 | 1,625,218 | (16,162 | ) | (1,709,735 | ) | — | — | 5,053 | 659,882 | ||||||||||||||||||||||
₩ | 12,933,460 | 3,866,027 | (264,877 | ) | (252,250 | ) | (3,151,339 | ) | (1,745 | ) | 247,801 | 13,377,077 | ||||||||||||||||||||
14. | Investment Property |
(1) | Investment property as of December 31, 2022 and 2021 |
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||
December 31, 2021 | Acquisition cost | Accumulated depreciation | Carrying amount | Acquisition cost | Accumulated depreciation | Carrying amount | ||||||||||||||||||||||||||||||
Acquisition cost | Accumulated depreciation | Carrying amount | ||||||||||||||||||||||||||||||||||
Land | ₩ | 6,071 | — | 6,071 | ₩ | 6,115 | — | 6,115 | 6,071 | — | 6,071 | |||||||||||||||||||||||||
Buildings | 21,021 | (13,668 | ) | 7,353 | 21,490 | (14,606 | ) | 6,884 | 21,021 | (13,668 | ) | 7,353 | ||||||||||||||||||||||||
Right-of-use | 12,577 | (2,967 | ) | 9,610 | 17,057 | (4,919 | ) | 12,138 | 12,577 | (2,967 | ) | 9,610 | ||||||||||||||||||||||||
₩ | 39,669 | (16,635 | ) | 23,034 | ₩ | 44,662 | (19,525 | ) | 25,137 | 39,669 | (16,635 | ) | 23,034 | |||||||||||||||||||||||
(2) | Changes in Investment property for the |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) | The Group recognized lease income of |
(4) | The fair value of investment property is |
(In millions of won) | ||||||||
December 31, 2021 | December 31, 2020 | |||||||
Land, buildings and structures | ₩ | 1,392,925 | 1,269,753 | |||||
Others | 166,408 | 202,282 | ||||||
₩ | 1,559,333 | 1,472,035 | ||||||
(In millions of won) | 2021 | 2020 | 2019 | |||||||||
Depreciation of right-of-use | ||||||||||||
Land, buildings and structures | ₩ | 338,304 | 347,166 | 359,755 | ||||||||
Others | 95,666 | 89,065 | 89,062 | |||||||||
₩ | 433,970 | 436,231 | 448,817 | |||||||||
Interest expense on lease liabilities(*) | ₩ | 23,998 | 22,976 | 25,981 | ||||||||
Expenses related to short-term leases(*) | 25,435 | 20,193 | 19,098 | |||||||||
Expenses related to leases of low-value assets except for short-term leases(*) | 3,772 | 3,297 | 2,550 |
(In millions of won) | ||||||||
December 31, 2021 | December 31, 2020 | |||||||
Goodwill related to merger of Shinsegi Telecom, Inc. | ₩ | 1,306,236 | 1,306,236 | |||||
Goodwill related to acquisition of SK Broadband Co., Ltd. | 764,082 | 764,082 | ||||||
Goodwill related to acquisition of Life & Security Holdings Co., Ltd.(*) | 0 | 1,176,274 | ||||||
Other goodwill(*) | 2,175 | 110,932 | ||||||
₩ | 2,072,493 | 3,357,524 | ||||||
15. | Leases |
(1) | Group as a lessee |
(In millions of won) | ||||||||
December 31, 2022 | December 31, 2021 | |||||||
Land, buildings and structures | ₩ | 1,546,918 | 1,392,925 | |||||
Others | 239,211 | 166,408 | ||||||
₩ | 1,786,129 | 1,559,333 | ||||||
(In millions of won) | 2022 | 2021(*) | 2020(*) | |||||||||
Depreciation of right-of-use | ||||||||||||
Land, buildings and structures | ₩ | 346,499 | 338,304 | 347,166 | ||||||||
Others | 57,295 | 95,666 | 89,065 | |||||||||
₩ | 403,794 | 433,970 | 436,231 | |||||||||
Interest expense on lease liabilities | ₩ | 29,996 | 23,998 | 22,976 |
(*) | Includes amounts related to discontinued operations. |
3) | The total cash outflows due to lease payments for the years ended December 31, 2022, 2021 and 2020 amounted to ₩449,196 million, ₩484,879 million and ₩459,132 million, respectively. The amounts for the years ended December 31, 2021 and 2020 include cash flows from discontinued operations. |
(2) | Group as a lessor |
(In millions of won) | ||||
Amount | ||||
Less than 1 year | ₩ | 11,079 | ||
1 ~ 2 years | 3,707 | |||
2 ~ 3 years | 2,062 | |||
3 ~ 4 years | 509 | |||
4 ~ 5 years | 231 | |||
Undiscounted lease payments | ₩ | 17,588 | ||
Unrealized finance income | 449 | |||
Net investment in the lease | 17,139 |
(In millions of won) | ||||
Amount | ||||
Less than 1 year | ₩ | 239,174 | ||
1 ~ 2 years | 132,802 | |||
2 ~ 3 years | 60,808 | |||
3 ~ 4 years | 9,424 | |||
4 ~ 5 years | 3,520 | |||
More than 5 years | 1,706 | |||
₩ | 447,434 | |||
16. | Goodwill |
(In millions of won) | ||||||||
December 31, 2022 | December 31, 2021 | |||||||
Goodwill related to merger of Shinsegi Telecom, Inc. | ₩ | 1,306,236 | 1,306,236 | |||||
Goodwill related to acquisition of SK Broadband Co., Ltd. | 764,082 | 764,082 | ||||||
Other goodwill | 4,691 | 2,175 | ||||||
₩ | 2,075,009 | 2,072,493 | ||||||
(*1) | Goodwill related to merger of Shinsegi Telecom, Inc. |
(*2) | Goodwill related to acquisition of SK Broadband Co., Ltd. |
(3) | Details of the changes in goodwill for the years ended December 31, |
(In millions of won) | ||||||||||||||||
2021 | 2020 | 2022 | 2021 | |||||||||||||
Beginning balance | ₩ | 3,357,524 | 2,949,530 | ₩ | 2,072,493 | 3,357,524 | ||||||||||
Acquisition(*) | 111,928 | 408,531 | 2,516 | 111,928 | ||||||||||||
Impairment loss | 0 | (519) | ||||||||||||||
Other | (43 | ) | (18 | ) | — | (43 | ) | |||||||||
Spin-off | (1,396,916 | ) | — | — | (1,396,916 | ) | ||||||||||
Ending balance | ₩ | 2,072,493 | 3,357,524 | ₩ | 2,075,009 | 2,072,493 | ||||||||||
(*) | It consists of goodwill recognized as |
17. | Intangible Assets |
(1) | Intangible assets as of December 31, |
(In millions of won) | December 31, 2021 | December 31, 2022 | ||||||||||||||||||||||||||||||
Acquisition cost | Accumulated amortization | Accumulated impairment | Carrying amount | Acquisition cost | Accumulated amortization | Accumulated impairment | Carrying amount | |||||||||||||||||||||||||
Frequency usage rights(*1) | ₩ | 7,221,735 | (4,476,046 | ) | (186,000 | ) | 2,559,689 | ₩ | 3,767,590 | (1,499,158 | ) | (186,000 | ) | 2,082,432 | ||||||||||||||||||
Land usage rights | 48,318 | (45,586 | ) | — | 2,732 | 59,389 | (58,165 | ) | — | 1,224 | ||||||||||||||||||||||
Industrial rights | 92,332 | (36,342 | ) | (36 | ) | 55,954 | 94,238 | (30,068 | ) | (12,378 | ) | 51,792 | ||||||||||||||||||||
Development costs | 34,393 | (34,193 | ) | 0 | 200 | 14,497 | (14,213 | ) | — | 284 | ||||||||||||||||||||||
Facility usage rights | 156,062 | (138,188 | ) | — | 17,874 | 157,651 | (142,654 | ) | — | 14,997 | ||||||||||||||||||||||
Customer relations | 507,581 | (180,324 | ) | — | 327,257 | 505,063 | (204,882 | ) | — | 300,181 | ||||||||||||||||||||||
Club memberships(*2) | 113,300 | — | (24,806 | ) | 88,494 | 116,401 | — | (24,430 | ) | 91,971 | ||||||||||||||||||||||
Brands(*2) | 0 | — | — | 0 | ||||||||||||||||||||||||||||
Other(*3) | 4,347,971 | (3,524,002 | ) | (6,400 | ) | 817,569 | 4,627,565 | (3,839,030 | ) | (6,506 | ) | 782,029 | ||||||||||||||||||||
₩ | 12,521,692 | (8,434,681 | ) | (217,242 | ) | 3,869,769 | ₩ | 9,342,394 | (5,788,170 | ) | (229,314 | ) | 3,324,910 | |||||||||||||||||||
(In millions of won) | �� | December 31, 2020 | December 31, 2021 | |||||||||||||||||||||||||||||
Acquisition cost | Accumulated amortization | Accumulated impairment | Carrying amount | Acquisition cost | Accumulated amortization | Accumulated impairment | Carrying amount | |||||||||||||||||||||||||
Frequency usage rights(*1) | ₩ | 6,210,882 | (4,079,729 | ) | (198,388 | ) | 1,932,765 | ₩ | 7,221,735 | (4,476,046 | ) | (186,000 | ) | 2,559,689 | ||||||||||||||||||
Land usage rights | 50,503 | (45,783 | ) | — | 4,720 | 48,318 | (45,586 | ) | — | 2,732 | ||||||||||||||||||||||
Industrial rights | 116,889 | (45,300 | ) | (147 | ) | 71,442 | 92,332 | (36,342 | ) | (36 | ) | 55,954 | ||||||||||||||||||||
Development costs | 67,989 | (54,771 | ) | (3,854 | ) | 9,364 | 34,393 | (34,193 | ) | — | 200 | |||||||||||||||||||||
Facility usage rights | 159,865 | (137,985 | ) | — | 21,880 | 156,062 | (138,188 | ) | — | 17,874 | ||||||||||||||||||||||
Customer relations | 1,091,146 | (171,283 | ) | — | 919,863 | 507,581 | (180,324 | ) | — | 327,257 | ||||||||||||||||||||||
Club memberships(*2) | 139,349 | — | (32,484 | ) | 106,865 | 113,300 | — | (24,806 | ) | 88,494 | ||||||||||||||||||||||
Brands(*2) | 374,096 | — | — | 374,096 | ||||||||||||||||||||||||||||
Other(*3) | 4,604,077 | (3,586,596 | ) | (22,282 | ) | 995,199 | 4,347,971 | (3,524,002 | ) | (6,400 | ) | 817,569 | ||||||||||||||||||||
₩ | 12,814,796 | (8,121,447 | ) | (257,155 | ) | 4,436,194 | ₩ | 12,521,692 | (8,434,681 | ) | (217,242 | ) | 3,869,769 | |||||||||||||||||||
(*1) | The |
(*2) | Club memberships |
(*3) | Other intangible assets primarily consist of computer software and others. |
(2) |
(In millions of won) | ||||||||||||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||||||
Beginning balance | Acquisition | Disposal | Transfer | Amorti- zation (*1) | Reversal (Impairment) (*2) | Business Combina- tion(*3) | Spin-off | Ending balance | ||||||||||||||||||||||||||||
Frequency usage rights | ₩ | 1,932,765 | 1,145,999 | — | — | (519,075 | ) | 0 | — | — | 2,559,689 | |||||||||||||||||||||||||
Land usage rights | 4,720 | 175 | (76 | ) | — | (2,087 | ) | — | — | — | 2,732 | |||||||||||||||||||||||||
Industrial rights | 71,442 | 5,158 | (8 | ) | 390 | (6,377 | ) | (36 | ) | — | (14,615 | ) | 55,954 | |||||||||||||||||||||||
Development costs | 9,364 | 1,279 | (150 | ) | — | (3,210 | ) | 0 | — | (7,083 | ) | 200 | ||||||||||||||||||||||||
Facility usage rights | 21,880 | 1,690 | (21 | ) | 328 | (6,003 | ) | — | — | 0 | 17,874 | |||||||||||||||||||||||||
Customer relations | 919,863 | 4,854 | (461 | ) | — | (53,342 | ) | — | 4,705 | (548,362 | ) | 327,257 | ||||||||||||||||||||||||
Club memberships | 106,865 | 6,518 | (9,925 | ) | — | — | 653 | — | (15,617 | ) | 88,494 | |||||||||||||||||||||||||
Brands | 374,096 | — | — | — | — | — | — | (374,096 | ) | 0 | ||||||||||||||||||||||||||
Other | 995,199 | 80,713 | (4,580 | ) | 276,890 | (421,213 | ) | (111 | ) | 5,059 | (114,388 | ) | 817,569 | |||||||||||||||||||||||
₩ | 4,436,194 | 1,246,386 | (15,221 | ) | 277,608 | (1,011,307 | ) | 506 | 9,764 | (1,074,161 | ) | 3,869,769 | ||||||||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
Beginning balance | Acquisition | Disposal | Transfer | Amortization | Impairment(*1) | Business combination(*2) | Ending balance | |||||||||||||||||||||||||
Frequency usage rights | ₩ | 2,559,689 | — | — | — | (477,257 | ) | — | — | 2,082,432 | ||||||||||||||||||||||
Land usage rights | 2,732 | — | — | — | (1,508 | ) | — | — | 1,224 | |||||||||||||||||||||||
Industrial rights | 55,954 | 13,428 | (823 | ) | (103 | ) | (4,324 | ) | (12,343 | ) | 3 | 51,792 | ||||||||||||||||||||
Development costs | 200 | — | — | — | (573 | ) | — | 657 | 284 | |||||||||||||||||||||||
Facility usage rights | 17,874 | 1,396 | (2 | ) | 252 | (4,523 | ) | — | — | 14,997 | ||||||||||||||||||||||
Customer relations | 327,257 | — | — | — | (27,076 | ) | — | — | 300,181 | |||||||||||||||||||||||
Club memberships(*1) | 88,494 | 9,926 | (7,113 | ) | — | — | (725 | ) | 1,389 | 91,971 | ||||||||||||||||||||||
Other(*2) | 817,569 | 108,144 | (380 | ) | 189,075 | (342,776 | ) | (16 | ) | 10,413 | 782,029 | |||||||||||||||||||||
₩ | 3,869,769 | 132,894 | (8,318 | ) | 189,224 | (858,037 | ) | (13,084 | ) | 12,462 | 3,324,910 | |||||||||||||||||||||
(*1) |
The Group recognized the difference between recoverable amount and the carrying amount of intangible assets amounting to |
(* | Includes assets acquired from the acquisition of |
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | Acquisition | Disposal | Transfer | Amortization (*1) | Impairment (*1,2) | Business Combination(*3) | Ending balance | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | Acquisition | Disposal | Transfer | Amorti- zation (*1) | Reversal (Impairment) (*2) | Business Combina- tion(*3) | Spin-off | Ending balance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Frequency usage rights | ₩ | 2,647,501 | — | — | — | (516,348 | ) | (198,388 | ) | — | 1,932,765 | ₩ | 1,932,765 | 1,145,999 | — | — | (519,075 | ) | — | — | — | 2,559,689 | ||||||||||||||||||||||||||||||||||||||||||||||
Land usage rights | 7,349 | 550 | (100 | ) | — | (3,079 | ) | — | — | 4,720 | 4,720 | 175 | (76 | ) | — | (2,087 | ) | — | — | — | 2,732 | |||||||||||||||||||||||||||||||||||||||||||||||
Industrial rights | 66,824 | 1,836 | (513 | ) | 8,281 | (4,825 | ) | (161 | ) | — | 71,442 | 71,442 | 5,158 | (8 | ) | 390 | (6,377 | ) | (36 | ) | — | (14,615 | ) | 55,954 | ||||||||||||||||||||||||||||||||||||||||||||
Development costs | 11,146 | 1,141 | (294 | ) | 3,302 | (4,644 | ) | (1,287 | ) | — | 9,364 | 9,364 | 1,279 | (150 | ) | — | (3,210 | ) | — | — | (7,083 | ) | 200 | |||||||||||||||||||||||||||||||||||||||||||||
Facility usage rights | 25,832 | 1,810 | (3 | ) | 434 | (6,193 | ) | — | — | 21,880 | 21,880 | 1,690 | (21 | ) | 328 | (6,003 | ) | — | — | — | 17,874 | |||||||||||||||||||||||||||||||||||||||||||||||
Customer relations | 591,371 | 2,014 | (1,604 | ) | 491 | (52,849 | ) | — | 380,440 | 919,863 | 919,863 | 4,854 | (461 | ) | — | (53,342 | ) | — | 4,705 | (548,362 | ) | 327,257 | ||||||||||||||||||||||||||||||||||||||||||||||
Club memberships | 80,410 | 11,821 | (35,432 | ) | 544 | — | (323 | ) | 49,845 | 106,865 | 106,865 | 6,518 | (9,925 | ) | — | — | 653 | — | (15,617 | ) | 88,494 | |||||||||||||||||||||||||||||||||||||||||||||||
Brands(*4) | 374,096 | — | — | — | — | — | — | 374,096 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brands | 374,096 | — | — | — | — | — | — | (374,096 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 1,061,563 | 112,011 | (13,729 | ) | 272,433 | (430,719 | ) | (6,410 | ) | 50 | 995,199 | 995,199 | 80,713 | (4,580 | ) | 276,890 | (421,213 | ) | (111 | ) | 5,059 | (114,388 | ) | 817,569 | ||||||||||||||||||||||||||||||||||||||||||||
₩ | 4,866,092 | 131,183 | (51,675 | ) | 285,485 | (1,018,657 | ) | (206,569 | ) | 430,335 | 4,436,194 | ₩ | 4,436,194 | 1,246,386 | (15,221 | ) | 277,608 | (1,011,307 | ) | 506 | 9,764 | (1,074,161 | ) | 3,869,769 | ||||||||||||||||||||||||||||||||||||||||||||
(*1) | Includes amounts related to discontinued operations. |
(*2) | The Group recognized the difference between recoverable amount and the carrying amount of intangible assets amounting to |
(*3) | Includes assets acquired from the acquisition of |
(3) | Research and development expenditures recognized as expense for the years ended December 31, 2022, 2021 |
(In millions of won) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021(*) | 2020(*) | |||||||||||||||||||
Research and development costs expensed as incurred(*) | ₩ | 406,672 | 416,445 | 391,327 | ||||||||||||||||||||
Research and development costs expensed as incurred | ₩ | 340,864 | 406,672 | 416,445 |
(*) | Includes amounts related to discontinued operations. |
(4) | Details of frequency usage rights as of December 31, |
(In millions of won) | ||||||||||||||||
As of December 31, 2022 | ||||||||||||||||
Amount | Description | Commencement of amortization | Completion of amortization | |||||||||||||
800MHz license | ₩ | LTE service | Jun. 2026 | |||||||||||||
1.8GHz license | LTE service | Dec. 2021 | Dec. 2026 | |||||||||||||
2.6GHz license | LTE service | Sep | Dec. 2026 | |||||||||||||
2.1GHz license | W-CDMA and LTE service | Dec. 2021 | Dec. 2026 | |||||||||||||
3.5GHz license | 5G service | Apr. 2019 | Nov. 2028 | |||||||||||||
28GHz license | 5G service | Jan. 2021 | ||||||||||||||
₩ | ||||||||||||||||
18. | Borrowings and Debentures |
(1) | Short-term borrowings as of December 31, |
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||||||||||
Lender | Annual interest rate (%) | December 31, 2021 | December 31, 2020 | |||||||||||||||||||||
Short-term borrowings | Citibank | 2.45 | ₩ | — | 50,000 | |||||||||||||||||||
Lender | Annual interest rate (%) | Maturity | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||
BNK Securities. Co.,Ltd. | 4.60 | Jan. 20, 2023 | ₩ | 100,000 | — | |||||||||||||||||||
KEB Hana Bank | 6.62 | Oct. 31, 2023 | 30,000 | — | ||||||||||||||||||||
Hana Financial Investment Co., Ltd.(*) | 6.30 | May. 29, 2023 | 4,642 | 4,642 | ||||||||||||||||||||
DB Financial Investment Co., Ltd.(*) | 6.30 | May. 29, 2023 | 2,785 | 2,785 | ||||||||||||||||||||
Shinhan Financial Investment Co., Ltd.(*) | 6.20 | Feb. 20, 2023 | 5,571 | 5,571 | ||||||||||||||||||||
KEB Hana Bank(*1,3) | FTP 1M +1.01 | — | 27,000 | |||||||||||||||||||||
KEB Hana Bank(*2,3) | 6M financial I (bank) + 1.59 | — | 5,000 | ₩ | 142,998 | 12,998 | ||||||||||||||||||
Shinhan Bank(*2,3) | 6M financial I (bank) + 1.35 | — | 15,000 | |||||||||||||||||||||
Hana Financial Investment Co., Ltd. | 4.20 | 4,642 | 4,642 | |||||||||||||||||||||
DB Financial Investment Co., Ltd. | 4.00 | 2,785 | 2,785 | |||||||||||||||||||||
Shinhan Financial Investment Co., Ltd. | 4.20 | 5,571 | 5,571 | |||||||||||||||||||||
₩ | 12,998 | 109,998 | ||||||||||||||||||||||
(* |
(2) |
(In millions of won and thousands of other currencies) | ||||||||||||||||
Lender | Annual interest rate (%) | Maturity | December 31, 2021 | December 31, 2020 | ||||||||||||
Korea Development Bank(*1) | 3M CD + 0.61 | Dec. 20, 2021 | ₩ | — | 12,250 | |||||||||||
Korea Development Bank(*1,2) | 3M CD + 0.71 | Dec. 21, 2022 | 12,500 | 25,000 | ||||||||||||
Korea Development Bank(*3) | 1.87 | Feb. 10, 2026 | 50,000 | — | ||||||||||||
Credit Agricole CIB(*1,4) | 3M CD + 0.82 | Dec. 14, 2023 | 25,000 | 37,500 | ||||||||||||
Export Kreditnamnden(*5) | 1.70 | Apr. 29, 2022 | 6,746 (USD 5,690) | | 18,726 (USD 17,211) | | ||||||||||
Shinhan Bank and others(*6) | 3.20 | Oct. 5, 2025 | — | 1,950,000 | ||||||||||||
UBS(*6) | 0.00 | Mar. 28, 2025 | | — | 617 (CHF 500) | | ||||||||||
FAE(*6) | 0.00 | May 7, 2025 | — | 617 (CHF 500 | ) | |||||||||||
Mizuho bank, Ltd. | 1.35 | May 20, 2024 | 100,000 | — | ||||||||||||
DBS bank Ltd. | 1.32 | May 28, 2024 | 200,000 | — | ||||||||||||
394,246 | 2,044,710 | |||||||||||||||
Less present value discount | (59 | ) | (15,786 | ) | ||||||||||||
394,187 | 2,028,924 | |||||||||||||||
Less current installments | (41,065 | ) | (49,663 | ) | ||||||||||||
₩ | 353,122 | 1,979,261 | ||||||||||||||
(In millions of won and thousands of other currencies) | ||||||||||||||||
Lender | Annual interest rate (%) | Maturity | December 31, 2022 | December 31, 2021 | ||||||||||||
Korea Development Bank(*1) | 1.87 | Feb. 10, 2026 | ₩ | 40,625 | 50,000 | |||||||||||
Korea Development Bank(*2) | 3M CD + 0.71 | Dec. 21, 2022 | — | 12,500 | ||||||||||||
Credit Agricole CIB(*2,3) | 3M CD + 0.82 | Dec. 14, 2023 | 12,500 | 25,000 | ||||||||||||
Export Kreditnamnden | 1.70 | Apr. 29, 2022 | — | 6,746 (USD 5,690) | | |||||||||||
Mizuho bank, Ltd. | 1.35 | May. 20, 2024 | 100,000 | 100,000 | ||||||||||||
DBS bank Ltd. | 1.32 | May. 28, 2024 | 200,000 | 200,000 | ||||||||||||
DBS bank Ltd. | 2.68 | Mar. 10, 2025 | 200,000 | — | ||||||||||||
Credit Agricole CIB | 3.30 | Apr. 29, 2024 | 50,000 | — | ||||||||||||
Mizuho Bank, Ltd. | 3.29 | Nov. 27, 2023 | 100,000 | — | ||||||||||||
Nonghyup Bank(*4) | MOR + 1.96 | Nov. 17, 2024 | 40,000 | — | ||||||||||||
Credit Agricole CIB | 4.89 | Nov. 28, 2025 | 50,000 | — | ||||||||||||
793,125 | 394,246 | |||||||||||||||
Less: present value discount | (13 | ) | (59 | ) | ||||||||||||
793,112 | 394,187 | |||||||||||||||
Less: current portions | (124,987 | ) | (41,065 | ) | ||||||||||||
₩ | 668,125 | 353,122 | ||||||||||||||
(*1) |
The long-term borrowings are to be repaid by installments on an annual basis from 2022 to 2026. |
(* | 3M CD rates are 3.98 1.29 |
(*3) | The long-term borrowings are to be repaid by installments on an annual basis from 2020 to 2023. |
(* |
(In millions of won and thousands of U.S. dollars) | ||||||||||||||||||
Purpose | Maturity | Annual interest rate (%) | December 31, 2021 | December 31, 2020 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2021 | 4.22 | ₩ | — | 190,000 | ||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2022 | 3.30 | 140,000 | 140,000 | |||||||||||||
Unsecured corporate bonds | 2032 | 3.45 | 90,000 | 90,000 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2023 | 3.03 | 230,000 | 230,000 | |||||||||||||
Unsecured corporate bonds | 2033 | 3.22 | 130,000 | 130,000 | ||||||||||||||
Unsecured corporate bonds | 2024 | 3.64 | 150,000 | 150,000 | ||||||||||||||
Unsecured corporate bonds | Refinancing fund | 2021 | 2.66 | — | 150,000 | |||||||||||||
Unsecured corporate bonds | 2024 | 2.82 | 190,000 | 190,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2022 | 2.40 | 100,000 | 100,000 | |||||||||||||
Unsecured corporate bonds | 2025 | 2.49 | 150,000 | 150,000 |
(In millions of won and thousands of U.S. dollars) | ||||||||||||||||||
Purpose | Maturity | Annual interest rate (%) | December 31, 2021 | December 31, 2020 | ||||||||||||||
Unsecured corporate bonds | 2030 | 2.61 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2025 | 2.66 | 70,000 | 70,000 | |||||||||||||
Unsecured corporate bonds | 2030 | 2.82 | 90,000 | 90,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2025 | 2.55 | 100,000 | 100,000 | |||||||||||||
Unsecured corporate bonds | 2035 | 2.75 | 70,000 | 70,000 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2021 | 1.80 | — | 100,000 | |||||||||||||
Unsecured corporate bonds | 2026 | 2.08 | 90,000 | 90,000 | ||||||||||||||
Unsecured corporate bonds | 2036 | 2.24 | 80,000 | 80,000 | ||||||||||||||
Unsecured corporate bonds | 2021 | 1.71 | — | 50,000 | ||||||||||||||
Unsecured corporate bonds | 2026 | 1.97 | 120,000 | 120,000 | ||||||||||||||
Unsecured corporate bonds | 2031 | 2.17 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | Refinancing fund | 2022 | 2.17 | 120,000 | 120,000 | |||||||||||||
Unsecured corporate bonds | 2027 | 2.55 | 100,000 | 100,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2032 | 2.65 | 90,000 | 90,000 | |||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2022 | 2.63 | 80,000 | 80,000 | |||||||||||||
Unsecured corporate bonds | Refinancing fund | 2027 | 2.84 | 100,000 | 100,000 | |||||||||||||
Unsecured corporate bonds | 2021 | 2.57 | — | 110,000 | ||||||||||||||
Unsecured corporate bonds | 2023 | 2.81 | 100,000 | 100,000 | ||||||||||||||
Unsecured corporate bonds | 2028 | 3.00 | 200,000 | 200,000 | ||||||||||||||
Unsecured corporate bonds | 2038 | 3.02 | 90,000 | 90,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2021 | 2.10 | — | 100,000 | |||||||||||||
Unsecured corporate bonds | 2023 | 2.33 | 150,000 | 150,000 | ||||||||||||||
Unsecured corporate bonds | 2038 | 2.44 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2022 | 2.03 | 180,000 | 180,000 | |||||||||||||
Unsecured corporate bonds | 2024 | 2.09 | 120,000 | 120,000 | ||||||||||||||
Unsecured corporate bonds | 2029 | 2.19 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | 2039 | 2.23 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2022 | 1.40 | 120,000 | 120,000 | |||||||||||||
Unsecured corporate bonds | 2024 | 1.49 | 60,000 | 60,000 | ||||||||||||||
Unsecured corporate bonds | 2029 | 1.50 | 120,000 | 120,000 | ||||||||||||||
Unsecured corporate bonds | 2039 | 1.52 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | 2049 | 1.56 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2022 | 1.69 | 230,000 | 230,000 | |||||||||||||
Unsecured corporate bonds | 2024 | 1.76 | 70,000 | 70,000 | ||||||||||||||
Unsecured corporate bonds | 2029 | 1.79 | 40,000 | 40,000 | ||||||||||||||
Unsecured corporate bonds | 2039 | 1.81 | 60,000 | 60,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2023 | 1.64 | 170,000 | 170,000 | |||||||||||||
Unsecured corporate bonds | Operating fund | 2025 | 1.75 | 130,000 | 130,000 | |||||||||||||
Unsecured corporate bonds | 2030 | 1.83 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | 2040 | 1.87 | 70,000 | 70,000 |
(3) | Debentures as of December 31, 2022 and 2021 are as follows: |
(In millions of won and thousands of U.S. dollars) | ||||||||||||||||||
Purpose | Maturity | Annual interest rate (%) | December 31, 2022 | December 31, 2021 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2022 | 3.30 | — | 140,000 | |||||||||||||
Unsecured corporate bonds | 2032 | 3.45 | 90,000 | 90,000 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2023 | 3.03 | 230,000 | 230,000 | |||||||||||||
Unsecured corporate bonds | 2033 | 3.22 | 130,000 | 130,000 | ||||||||||||||
Unsecured corporate bonds | 2024 | 3.64 | 150,000 | 150,000 | ||||||||||||||
Unsecured corporate bonds | Refinancing fund | 2024 | 2.82 | 190,000 | 190,000 | |||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2022 | 2.40 | — | 100,000 | |||||||||||||
Unsecured corporate bonds | 2025 | 2.49 | 150,000 | 150,000 | ||||||||||||||
Unsecured corporate bonds | 2030 | 2.61 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2025 | 2.66 | 70,000 | 70,000 | |||||||||||||
Unsecured corporate bonds | 2030 | 2.82 | 90,000 | 90,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2025 | 2.55 | 100,000 | 100,000 | |||||||||||||
Unsecured corporate bonds | 2035 | 2.75 | 70,000 | 70,000 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2026 | 2.08 | 90,000 | 90,000 | |||||||||||||
Unsecured corporate bonds | 2036 | 2.24 | 80,000 | 80,000 | ||||||||||||||
Unsecured corporate bonds | 2026 | 1.97 | 120,000 | 120,000 | ||||||||||||||
Unsecured corporate bonds | 2031 | 2.17 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | Refinancing fund | 2022 | 2.17 | — | 120,000 | |||||||||||||
Unsecured corporate bonds | 2027 | 2.55 | 100,000 | 100,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2032 | 2.65 | 90,000 | 90,000 | |||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2022 | 2.63 | — | 80,000 | |||||||||||||
Unsecured corporate bonds | Refinancing fund | 2027 | 2.84 | 100,000 | 100,000 | |||||||||||||
Unsecured corporate bonds | 2023 | 2.81 | 100,000 | 100,000 | ||||||||||||||
Unsecured corporate bonds | 2028 | 3.00 | 200,000 | 200,000 | ||||||||||||||
Unsecured corporate bonds | 2038 | 3.02 | 90,000 | 90,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2023 | 2.33 | 150,000 | 150,000 | |||||||||||||
Unsecured corporate bonds | 2038 | 2.44 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2022 | 2.03 | — | 180,000 | |||||||||||||
Unsecured corporate bonds | 2024 | 2.09 | 120,000 | 120,000 | ||||||||||||||
Unsecured corporate bonds | 2029 | 2.19 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | 2039 | 2.23 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2022 | 1.40 | — | 120,000 | |||||||||||||
Unsecured corporate bonds | 2024 | 1.49 | 60,000 | 60,000 | ||||||||||||||
Unsecured corporate bonds | 2029 | 1.50 | 120,000 | 120,000 | ||||||||||||||
Unsecured corporate bonds | 2039 | 1.52 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | 2049 | 1.56 | 50,000 | 50,000 | ||||||||||||||
Unsecured corporate bonds | Operating fund | 2022 | 1.69 | — | 230,000 | |||||||||||||
Unsecured corporate bonds | 2024 | 1.76 | 70,000 | 70,000 | ||||||||||||||
Unsecured corporate bonds | 2029 | 1.79 | 40,000 | 40,000 | ||||||||||||||
Unsecured corporate bonds | 2039 | 1.81 | 60,000 | 60,000 | ||||||||||||||
Unsecured corporate bonds | Operating and refinancing fund | 2023 | 1.64 | 170,000 | 170,000 |
(In millions of won and thousands of U.S. dollars) | (In millions of won and thousands of U.S. dollars) | (In millions of won and thousands of U.S. dollars) | ||||||||||||||||||||||||||||||||||
Purpose | Maturity | Annual interest rate (%) | December 31, 2021 | December 31, 2020 | Purpose | Maturity | Annual interest rate (%) | December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||
Unsecured corporate bonds | Operating fund | 2025 | 1.75 | 130,000 | 130,000 | |||||||||||||||||||||||||||||||
Unsecured corporate bonds | 2030 | 1.83 | 50,000 | 50,000 | ||||||||||||||||||||||||||||||||
Unsecured corporate bonds | 2040 | 1.87 | 70,000 | 70,000 | ||||||||||||||||||||||||||||||||
Unsecured corporate bonds | Refinancing fund | 2025 | 1.40 | 140,000 | 140,000 | |||||||||||||||||||||||||||||||
Unsecured corporate bonds | 2030 | 1.59 | 40,000 | 40,000 | ||||||||||||||||||||||||||||||||
Unsecured corporate bonds | 2040 | 1.76 | 110,000 | 110,000 | ||||||||||||||||||||||||||||||||
Unsecured corporate bonds | Refinancing fund | 2024 | 1.17 | 80,000 | 80,000 | |||||||||||||||||||||||||||||||
Unsecured corporate bonds | 2026 | 1.39 | 80,000 | 80,000 | ||||||||||||||||||||||||||||||||
Unsecured corporate bonds | 2031 | 1.80 | 50,000 | 50,000 | ||||||||||||||||||||||||||||||||
Unsecured corporate bonds | 2041 | 1.89 | 100,000 | 100,000 | ||||||||||||||||||||||||||||||||
Unsecured corporate bonds | Refinancing fund | 2024 | 2.47 | 90,000 | 90,000 | |||||||||||||||||||||||||||||||
Unsecured corporate bonds | 2026 | 2.69 | 70,000 | 70,000 | ||||||||||||||||||||||||||||||||
Unsecured corporate bonds | Refinancing fund | 2025 | 1.40 | 140,000 | 140,000 | 2041 | 2.68 | 40,000 | 40,000 | |||||||||||||||||||||||||||
Unsecured corporate bonds | 2030 | 1.59 | 40,000 | 40,000 | 2025 | 3.80 | 240,000 | — | ||||||||||||||||||||||||||||
Unsecured corporate bonds | 2040 | 1.76 | 110,000 | 110,000 | 2027 | 3.84 | 70,000 | — | ||||||||||||||||||||||||||||
Unsecured corporate bonds | Refinancing fund | 2024 | 1.17 | 80,000 | — | 2042 | 3.78 | 40,000 | — | |||||||||||||||||||||||||||
Unsecured corporate bonds | 2026 | 1.39 | 80,000 | — | 2025 | 4.00 | 300,000 | — | ||||||||||||||||||||||||||||
Unsecured corporate bonds | 2031 | 1.80 | 50,000 | — | 2027 | 4.00 | 95,000 | — | ||||||||||||||||||||||||||||
Unsecured corporate bonds | 2041 | 1.89 | 100,000 | — | 2024 | 4.79 | 100,000 | — | ||||||||||||||||||||||||||||
Unsecured corporate bonds | Refinancing fund | 2024 | 2.47 | 90,000 | — | 2025 | 4.73 | 110,000 | — | |||||||||||||||||||||||||||
Unsecured corporate bonds | 2026 | 2.69 | 70,000 | — | 2027 | 4.74 | 60,000 | — | ||||||||||||||||||||||||||||
Unsecured corporate bonds | 2041 | 2.68 | 40,000 | — | 2032 | 4.69 | 40,000 | — | ||||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | Operating and refinancing fund | 2021 | 1.77 | — | 120,000 | Operating fund | 2022 | 2.26 | — | 150,000 | ||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | Operating fund | 2022 | 2.26 | 150,000 | 150,000 | Operating and refinancing fund | 2022 | 2.70 | — | 140,000 | ||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | Operating and refinancing fund | 2022 | 2.70 | 140,000 | 140,000 | 2023 | 2.93 | 80,000 | 80,000 | |||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | 2021 | 2.59 | — | 70,000 | Refinancing fund | 2022 | 2.00 | — | 50,000 | |||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | 2023 | 2.93 | 80,000 | 80,000 | 2024 | 2.09 | 160,000 | 160,000 | ||||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | Refinancing fund | 2022 | 2.00 | 50,000 | 50,000 | Operating and refinancing fund | 2022 | 1.71 | — | 80,000 | ||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | 2024 | 2.09 | 160,000 | 160,000 | 2024 | 1.71 | 100,000 | 100,000 | ||||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | Operating and refinancing fund | 2022 | 1.71 | 80,000 | 80,000 | 2026 | 1.86 | 50,000 | 50,000 | |||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | 2024 | 1.71 | 100,000 | 100,000 | Refinancing fund | 2023 | 1.48 | 100,000 | 100,000 | |||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | 2026 | 1.86 | 50,000 | 50,000 | Operating and refinancing fund | 2025 | 1.64 | 100,000 | 100,000 | |||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | Refinancing fund | 2023 | 1.48 | 100,000 | 100,000 | |||||||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | Operating and refinancing fund | 2025 | 1.64 | 100,000 | 100,000 | |||||||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | Refinancing fund | 2025 | 1.41 | 160,000 | 160,000 | |||||||||||||||||||||||||||||||
Unsecured corporate bonds(*1) | Refinancing fund | 2024 | 1.69 | 100,000 | — | |||||||||||||||||||||||||||||||
Private placement corporate bonds(*2) | Operating fund | 2023 | — | — | 6,292 | |||||||||||||||||||||||||||||||
Private placement corporate bonds(*2) | Operating fund | 2023 | — | — | 6,222 | |||||||||||||||||||||||||||||||
Private placement corporate bonds(*2) | Operating fund | 2023 | — | — | 6,168 | |||||||||||||||||||||||||||||||
Private placement corporate bonds(*2) | Operating fund | 2023 | — | — | 6,100 |
(In millions of won and thousands of U.S. dollars) | ||||||||||||||||||
Purpose | Maturity | Annual interest rate (%) | December 31, 2021 | December 31, 2020 | ||||||||||||||
Unsecured global bonds | Operating fund | 2027 | 6.63 | 474,200 (USD 400,000 | ) | 435,200 (USD 400,000 | ) | |||||||||||
Unsecured global bonds | 2023 | 3.75 | 592,750 (USD 500,000 | ) | 544,000 (USD 500,000 | ) | ||||||||||||
Unsecured global bonds(*1) | Refinancing fund | 2023 | 3.88 | 355,650 (USD 300,000 | ) | 326,400 (USD 300,000 | ) | |||||||||||
Floating rate notes(*3) | Operating fund | 2025 | 3M LIBOR + 0.91 | | 355,650 (USD 300,000 | ) | 326,400 (USD 300,000 | ) | ||||||||||
8,448,250 | 8,606,782 | |||||||||||||||||
Less discounts on bonds | (21,567 | ) | (27,039 | ) | ||||||||||||||
8,426,683 | 8,579,743 | |||||||||||||||||
Less current installments of bonds | (1,389,259 | ) | (889,574 | ) | ||||||||||||||
₩ | 7,037,424 | 7,690,169 | ||||||||||||||||
(In millions of won and thousands of U.S. dollars) | ||||||||||||||||||
Purpose | Maturity | Annual interest rate (%) | December 31, 2022 | December 31, 2021 | ||||||||||||||
Unsecured corporate bonds(*1) | Refinancing fund | 2025 | 1.41 | 160,000 | 160,000 | |||||||||||||
Unsecured corporate bonds(*1) | 2024 | 1.69 | 100,000 | 100,000 | ||||||||||||||
Unsecured corporate bonds(*1) | 2025 | 2.58 | 100,000 | — | ||||||||||||||
Unsecured corporate bonds(*1) | 2032 | 2.92 | 50,000 | — | ||||||||||||||
Unsecured global bonds | Operating fund | 2027 | 6.63 | 506,920 (USD 400,000 | ) | 474,200 (USD 400,000 | ) | |||||||||||
Unsecured global bonds | 2023 | 3.75 | 633,650 (USD 500,000 | ) | 592,750 (USD 500,000 | ) | ||||||||||||
Unsecured global bonds(*1) | Refinancing fund | 2023 | 3.88 | 380,190 (USD 300,000 | ) | 355,650 (USD 300,000 | ) | |||||||||||
Floating rate notes(*2) | Operating fund | 2025 | 3M LIBOR + 0.91 | | 380,190 (USD 300,000 | ) | 355,650 (USD 300,000 | ) | ||||||||||
8,385,950 | 8,448,250 | |||||||||||||||||
Less: discounts on bond | (19,256 | ) | (21,567 | ) | ||||||||||||||
8,366,694 | 8,426,683 | |||||||||||||||||
Less: current portions of bonds | (1,842,599 | ) | (1,389,259 | ) | ||||||||||||||
6,524,095 | 7,037,424 | |||||||||||||||||
(*1) | Unsecured corporate bonds were issued by SK Broadband Co., Ltd., a subsidiary of the Parent Company. |
(*2) |
3M LIBOR rates are |
19. | Long-term Payables |
(1) |
(In millions of won) | ||||||||
December 31, 2021 | December 31, 2020 | |||||||
Payables related to acquisition of frequency usage rights | ₩ | 1,611,010 | 1,141,723 | |||||
Other | — | 631 | ||||||
₩ | 1,611,010 | 1,142,354 | ||||||
As of December 31, |
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2022 | December 31, 2021 | |||||||||||||
Long-term payables — other | ₩ | 2,090,715 | 1,626,040 | ₩ | 1,690,470 | 2,090,715 | ||||||||||
Present value discount on long-term payables — other | (80,882 | ) | (59,717 | ) | (52,129 | ) | (80,882 | ) | ||||||||
Current installments of long-term payables — other | (398,823 | ) | (424,600 | ) | (398,874 | ) | (398,823 | ) | ||||||||
Carrying amount at December 31 | ₩ | 1,611,010 | 1,141,723 | |||||||||||||
Carrying amount as of December 31 | ₩ | 1,239,467 | 1,611,010 | |||||||||||||
The sum of portions repaid among the principal |
(In millions of won) | |||||
Amount | |||||
Less than 1 year | ₩ | 400,245 | |||
1~3 years | |||||
3~5 years | |||||
More than 5 years | |||||
₩ | |||||
20. | Provisions |
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | As of December 31, 2021 | 2022 | As of December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | Increase | Utilization | Reversal | Other | Business Combination | Spin-off | Ending balance | Current | Non-current | Beginning balance | Increase | Utilization | Reversal | Other | Business combination | Ending balance | Current | Non-current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for restoration | ₩ | 113,653 | 12,648 | (6,283 | ) | (440 | ) | 172 | — | (5,019 | ) | 114,731 | 59,204 | 55,527 | ₩ | 114,731 | 6,823 | (5,679 | ) | (1,767 | ) | (10 | ) | 991 | 115,089 | 36,998 | 78,091 | |||||||||||||||||||||||||||||||||||||||||||||||||
Emission allowance | 7,424 | 1,368 | (1,091 | ) | (5,816 | ) | — | — | — | 1,885 | 1,885 | — | 1,885 | 2,719 | — | (2,418 | ) | — | — | 2,186 | 2,186 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other provisions | 29,800 | 1,655 | (18,909 | ) | (1,820 | ) | — | 385 | (732 | ) | 10,379 | 567 | 9,812 | 10,379 | 4,071 | (9,509 | ) | (3,080 | ) | (38 | ) | — | 1,823 | 499 | 1,324 | |||||||||||||||||||||||||||||||||||||||||||||||||||
₩ | 150,877 | 15,671 | (26,283 | ) | (8,076 | ) | 172 | 385 | (5,751 | ) | 126,995 | 61,656 | 65,339 | ₩ | 126,995 | 13,613 | (15,188 | ) | (7,265 | ) | (48 | ) | 991 | 119,098 | 39,683 | 79,415 | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | As of December 31, 2020 | 2021 | As of December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | Increase | Utilization | Reversal | Other | Business Combination | Ending balance | Current | Non-current | Beginning balance | Increase | Utilization | Reversal | Other | Business combination | Spin-off | Ending balance | Current | Non-current | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for restoration | ₩ | 102,519 | 15,616 | (3,610 | ) | (1,492 | ) | (6 | ) | 626 | 113,653 | 42,348 | 71,305 | ₩ | 113,653 | 12,648 | (6,283 | ) | (440 | ) | 172 | — | (5,019 | ) | 114,731 | 59,204 | 55,527 | |||||||||||||||||||||||||||||||||||||||||||||||||
Emission allowance | 5,257 | 7,400 | — | (5,233 | ) | — | — | 7,424 | 7,424 | — | 7,424 | 1,368 | (1,091 | ) | (5,816 | ) | — | — | — | 1,885 | 1,885 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other provisions(*) | 57,385 | 3,250 | (30,861 | ) | (1,904 | ) | (199 | ) | 2,129 | 29,800 | 19,591 | 10,209 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other provisions | 29,800 | 1,655 | (18,909 | ) | (1,820 | ) | — | 385 | (732 | ) | 10,379 | 567 | 9,812 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
₩ | 165,161 | 26,266 | (34,471 | ) | (8,629 | ) | (205 | ) | 2,755 | 150,877 | 69,363 | 81,514 | ₩ | 150,877 | 15,671 | (26,283 | ) | (8,076 | ) | 172 | 385 | (5,751 | ) | 126,995 | 61,656 | 65,339 | ||||||||||||||||||||||||||||||||||||||||||||||||||
21. | Defined Benefit Liabilities (Assets) |
(1) | Details of defined benefit liabilities (assets) as of December 31, |
(In millions of won) | ||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2022 | December 31, 2021 | |||||||||||||
Present value of defined benefit obligations | ₩ | 1,035,016 | 1,278,550 | ₩ | 1,038,320 | 1,035,016 | ||||||||||
Fair value of plan assets | (1,040,286 | ) | (1,127,163 | ) | (1,214,007 | ) | (1,040,286 | ) | ||||||||
Defined benefit assets(*) | (18,427 | ) | (3,557 | ) | (175,748 | ) | (18,427 | ) | ||||||||
Defined benefit liabilities | 154,944 | 61 | 13,157 | |||||||||||||
(*) | Since the Group entities neither have legally enforceable right nor intention to settle the defined benefit obligations of Group entities with defined benefit assets of other Group entities, defined benefit assets of Group entities have been separately presented from defined benefit liabilities. |
(2) | Principal actuarial assumptions as of December 31, |
December 31, 2022 | December 31, 2021 | ||||||||
Discount rate for defined benefit obligations | 5.09% ~ 5.71% | 2.35 ~ 3.29% | |||||||
Expected rate of salary increase | 2.00% ~ 8.37% | 2.00 ~ 5.29% |
(3) | Changes in defined benefit obligations for the years ended December 31, |
(In millions of won) | For the year ended December 31 | For the year ended December 31 | ||||||||||||||
2021 | 2020 | 2022 | 2021(*1) | |||||||||||||
Beginning balance | ₩ | 1,278,550 | 1,136,787 | ₩ | 1,035,016 | 1,278,550 | ||||||||||
Current service cost(*1) | 186,395 | 193,078 | ||||||||||||||
Past service cost | — | 815 | ||||||||||||||
Interest cost(*1) | 28,617 | 25,958 | ||||||||||||||
Current service cost | 134,847 | 186,395 | ||||||||||||||
Interest cost | 32,572 | 28,617 | ||||||||||||||
Remeasurement - Demographic assumption | (794 | ) | 2,071 | (28,222 | ) | (794 | ) | |||||||||
- Financial assumption | (29,399 | ) | (18,266 | ) | (84,532 | ) | (29,399 | ) | ||||||||
- Adjustment based on experience | 5,773 | 17,364 | 2,369 | 5,773 | ||||||||||||
Business combinations | — | 1,742 | ||||||||||||||
Business combinations(*2) | 29,357 | — | ||||||||||||||
Benefit paid | (114,897 | ) | (76,987 | ) | (79,117 | ) | (114,897 | ) | ||||||||
Spin-off | (318,476 | ) | — | — | (318,476 | ) | ||||||||||
Others(*2) | (753 | ) | (4,012 | ) | ||||||||||||
Others(*3) | (3,970 | ) | (753 | ) | ||||||||||||
Ending balance | ₩ | 1,035,016 | 1,278,550 | ₩ | 1,038,320 | 1,035,016 | ||||||||||
(*1) | Includes amounts related to discontinued operations. |
(*2) | Includes liabilities acquired from the acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation, a subsidiary of the Parent Company. |
(*3) | Others include changes of liabilities due to employee’s transfers among affiliates for the years ended December 31, |
(4) | Changes in plan assets for the years ended December 31, |
(In millions of won) | For the year ended December 31 | For the year ended December 31 | ||||||||||||||
2021 | 2020 | 2022 | 2021(1*) | |||||||||||||
Beginning balance | ₩ | 1,127,163 | 965,654 | ₩ | 1,040,286 | 1,127,163 | ||||||||||
Interest income(*) | 24,550 | 21,057 | ||||||||||||||
Interest income | 32,910 | 24,550 | ||||||||||||||
Remeasurement | (3,798 | ) | (1,385 | ) | (18,622 | ) | (3,798 | ) | ||||||||
Contributions | 152,208 | 213,298 | 215,254 | 152,208 | ||||||||||||
Benefit paid | (100,511 | ) | (68,084 | ) | (83,123 | ) | (100,511 | ) | ||||||||
Business combinations | 0 | 485 | ||||||||||||||
Business combinations(*2) | 26,618 | — | ||||||||||||||
Spin-off | (157,522 | ) | 0 | — | (157,522 | ) | ||||||||||
Others | (1,804 | ) | (3,862 | ) | 684 | (1,804 | ) | |||||||||
Ending balance | ₩ | 1,040,286 | 1,127,163 | ₩ | 1,214,007 | 1,040,286 | ||||||||||
(* | Includes amounts related to discontinued operations. |
(*2) | Includes assets acquired from the acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation, a subsidiary of the Parent Company. |
(5) | Total cost of benefit plan, which is recognized in profit and loss (included in labor in the statement of income) |
(In millions of won) | For the year ended December 31 | |||||||
2021 | 2020 | |||||||
Current service cost(*) | ₩ | 186,395 | 193,078 | |||||
Past service cost | 0 | 815 | ||||||
Net interest cost(*) | 4,067 | 4,901 | ||||||
₩ | 190,462 | 198,794 | ||||||
(In millions of won) | For the year ended December 31 | |||||||
2022 | 2021(*) | |||||||
Current service cost | ₩ | 134,847 | 186,395 | |||||
Net interest cost | (338 | ) | 4,067 | |||||
₩ | 134,509 | 190,462 | ||||||
(*) | Includes amounts related to discontinued operations. |
(6) | Details of plan assets as of December 31, |
(In millions of won) | ||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2022 | December 31, 2021 | |||||||||||||
Equity instruments | ₩ | 25,083 | 15,770 | ₩ | 17,716 | 25,083 | ||||||||||
Debt instruments | 228,534 | 228,839 | 174,385 | 228,534 | ||||||||||||
Short-term financial instruments, etc. | 786,669 | 882,554 | 1,021,906 | 786,669 | ||||||||||||
₩ | 1,040,286 | 1,127,163 | ₩ | 1,214,007 | 1,040,286 | |||||||||||
(7) | As of December 31, |
(In millions of won) | ||||||||||||||||
0.5% Increase | 0.5% Decrease | 0.5% Increase | 0.5% Decrease | |||||||||||||
Discount rate | ₩ | (43,702) | 47,870 | ₩ | (35,826) | 38,337 | ||||||||||
Expected salary increase rate | 47,552 | (43,940 | ) | 38,500 | (36,315 | ) |
22. | Derivative Instruments |
(In millions of won and thousands of U.S. dollars) | ||||||||
Borrowing date | Hedging Instrument (Hedged item) | Hedged risk | Financial institution | Duration of contract | ||||
Jul. 20, 2007 | Fixed-to-fixed face value of USD 400,000 ) | Foreign currency risk | Morgan Stanley and four other banks | Jul. 20, 2007 ~ Jul. 20, 2027 | ||||
Apr. 16, 2018 | Fixed-to-fixed value of USD 500,000 ) | Foreign currency risk | The Export-Import Bank of Korea and three other banks | Apr. 16, 2018 ~ Apr. 16, 2023 | ||||
Mar. 4, 2020 | Floating-to-fixed 300,000 ) | Foreign currency risk and Interest rate risk | Citibank | Mar. 4, 2020 ~ Jun. 4, 2025 | ||||
Aug. 13, 2018 | Fixed-to-fixed value of USD 300,000) | Foreign currency risk | Citibank | Aug. 13, 2018 ~ Aug. 13, 2023 | ||||
Dec. | ||||||||
Floating-to-fixed 12,500 ) | Interest rate risk | Credit Agricole CIB | Mar.19, 2019 ~ Dec.14, 2023 |
(2) | SK Broadband Co., Ltd., a subsidiary of the Parent Company, entered into Total Return Swap(TRS) contract n ting to |
Alternative Investment Type Private Real Estate Investment Trust No. 62, respectively. The Derivative financial assets were measured using the discounted present value methods for estimated future cash flows. |
(3) | In relation to the business acquisition by SK Broadband Co., Ltd. for the year ended December 31, 2020 the Parent Company has entered into a shareholders’ agreement with the shareholders of the acquirees. Pursuant to the agreement, when certain conditions are met within a period of time subsequent to the merger, the shareholders of the acquirees can exercise their drag-along rights and require the Parent Company to sell its shares in SK Broadband Co., Ltd. Should the shareholders exercise their drag-along rights, the Parent Company also can exercise its call options over the shares held by those shareholders. The Group recognized a long-term derivative financial liability of million |
Significant unobservable inputs | Correlations between inputs and fair value measurements | |
Fair value of SK Broadband Co., Ltd.’s common stock | The estimated fair value of derivative financial liabilities would decrease (increase) if the fair value of common stock would increase (decrease) | |
Volatility of stock price | The estimated fair value of derivative financial liabilities would decrease (increase) if the volatility of stock price increase (decrease) |
(4) | The Group has entered into the agreement with Newberry Global Limited, whereby the Group has been granted subscription right and contingent subscription right to acquire Newberry series-C redeemable convertible preferred stock for the year ended December 31, 2020. The Group recognized derivative financial assets |
(5) | The Parent Company has entered into the agreement with HAEGIN Co., Ltd., whereby the Parent Company has been granted contingent subscription right to acquire HAEGIN Co., Ltd.’s common stock for the year ended December 31, 2022. The Parent Company is able to exercise the right in accordance with the agreement when |
certain conditions are met and recognized long-term derivative financial assets of ₩6,895 million for the contingent subscription right as of December 31, 2022. The fair value of HAEGIN Co., Ltd.’s common stock was estimated using 5-year projected cash flows discounted at 12% per annum. Meanwhile, if the fair value of HAEGIN Co., Ltd.’s common stock, significant unobservable input used in the fair value measurement, increases (decreases), the estimated fair value of derivative financial asset would increase (decrease). If the volatility of stock price, significant unobservable input used in the fair value measurement, increases (decreases), the estimated fair value of derivative financial asset would increase (decrease). |
(6) | The fair value of derivative financial instruments to which the Group applies cash flow hedge is recorded in the consolidated financial statements as derivative financial assets, long-term derivative financial |
(In millions of won and thousands of U.S. dollars) | ||||||||
Hedging instrument (Hedged item) | Cash flow hedge | Fair value | ||||||
Current assets: | ||||||||
Fixed-to-fixed | ₩ | 427 | 427 | |||||
Non-current assets: | ||||||||
Fixed-to-fixed | ₩ | 74,555 | 74,555 | |||||
Fixed-to-fixed | 75,069 | 75,069 | ||||||
Fixed-to-fixed | 30,150 | 30,150 | ||||||
Floating-to-fixed cross currency interest rate swap (U.S dollar denominated bonds face value of USD 300,000) | 2,460 | 2,460 | ||||||
₩ | 182,661 | 182,661 | ||||||
Current liabilities: | ||||||||
Floating-to-fixed | ₩ | (52) | (52) | |||||
Non-current liabilities: | ||||||||
Floating-to-fixed | ₩ | (59) | (59) | |||||
₩ | (111 | ) | (111 | ) | ||||
(In millions of won and thousands of U.S. dollars) | ||||||||
Hedging instrument (Hedged item) | Cash flow hedge | Fair value | ||||||
Current assets: | ||||||||
Fixed-to-fixed | ₩ | 44,365 | 44,365 | |||||
Fixed-to-fixed | 102,780 | 102,780 | ||||||
Floating-to-fixed | 164 | 164 | ||||||
Non-current assets: | ||||||||
Fixed-to-fixed | ₩ | 82,735 | 82,735 | |||||
Floating-to-fixed | 37,107 | 37,107 | ||||||
₩ | 267,151 | 267,151 | ||||||
The fair value of derivatives held for trading is recorded in the consolidated financial statements as derivative financial assets, long-term derivative financial assets and long-term derivative financial liabilities. As of December 31, |
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||
Held for trading | Fair value | Held for trading | Fair value | |||||||||||||
Current assets: | ||||||||||||||||
Contingent subscription right | ₩ | 9,524 | 9,524 | ₩ | 8,083 | 8,083 | ||||||||||
Subscription right | 15,477 | 15,477 | 13,135 | 13,135 | ||||||||||||
Total return swap | 4,682 | 4,682 | ||||||||||||||
21,218 | 21,218 | |||||||||||||||
Non-current assets: | ||||||||||||||||
Contingent subscription right | 6,895 | 6,895 | ||||||||||||||
Total return swap | ₩ | 5,250 | 5,250 | 25,896 | 25,896 | |||||||||||
₩ | 34,933 | 34,933 | 32,791 | 32,791 | ||||||||||||
₩ | 54,009 | 54,009 | ||||||||||||||
Non-current liabilities: | ||||||||||||||||
Share option | ₩ | (321,025) | (321,025 | ) | ||||||||||||
Drag-along and call option rights | ₩ | (302,593 | ) | (302,593 | ) |
23. | Share Capital and Capital Surplus and Others |
(1) | Details of share capital as of December 31, |
(In millions of won, except for share data) | (In millions of won, except for share data) | |||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2022 | December 31, 2021 | |||||||||||||
Number of authorized shares(*1) | 670,000,000 | 220,000,000 | 670,000,000 | 670,000,000 | ||||||||||||
Par value (in won)(*1) | 100 | 500 | ||||||||||||||
Par value (in W on)(*1) | 100 | 100 | ||||||||||||||
Number of issued shares | 218,833,144 | 80,745,711 | 218,833,144 | 218,833,144 | ||||||||||||
Share capital: | ||||||||||||||||
Common share(*2) | ₩ | 30,493 | 44,639 | ₩ | 30,493 | 30,493 |
(*1) | As a result of stock split and spin-off for the year ended December 31, 2021, the number of shares that the Parent Company is allowed to be issue under its article of incorporation has changed from 220,000,000 shares with a par value of |
(*2) | The Parent Company’s share capital decreased by spin-off for the year ended December 31, 2021. In addition, the Parent Company retired 8,685,568 treasury shares with reduction of its retained earnings before appropriation, as a result, the Parent Company’s issued shares have decreased without change in share capital for the year ended December 31, 2021. Meanwhile, in 2002 and 2003, the Parent Company retired treasury shares with reduction of its retained earnings before appropriation. As a result, the Parent Company’s issued shares have decreased without change in share capital. |
(2) | Changes in issued shares for the years ended December 31, |
(In shares) | ||||||||||||||||
2021 | 2020 | 2022 | 2021 | |||||||||||||
Issued shares at January 1 | 80,745,711 | 80,745,711 | ||||||||||||||
Issued shares as of January 1 | 218,833,144 | 80,745,711 | ||||||||||||||
Retirement of treasury shares(*1) | (8,685,568 | ) | 0 | — | (8,685,568 | ) | ||||||||||
Stock split(*2) | 288,240,572 | 0 | — | 288,240,572 | ||||||||||||
Spin-off(*3) | (141,467,571 | ) | 0 | — | (141,467,571 | ) | ||||||||||
Issued shares at December 31 | 218,833,144 | 80,745,711 | ||||||||||||||
Issued shares as of December 31 | 218,833,144 | 218,833,144 | ||||||||||||||
(*1) | The Parent Company retired 8,685,568 treasury shares with reduction of its retained earnings before |
(*2) | The stock split of the Parent Company’s common share was approved at the shareholders’ meeting held on October 12, ₩500 to ₩100. |
(*3) | The allocation of new shares to shareholders of the spin-off company is based on the number of shares at par value of |
Surviving Company | Spin-off Company | Surviving Company | Spin-off Company | |||||||||||||
Company name | SK Telecom Co., Ltd. | SK Square Co., Ltd. | SK Telecom Co., Ltd. | SK Square Co., Ltd. | ||||||||||||
Common shares (in shares) | 0.6073625 | 0.3926375 | ||||||||||||||
Common shares (in the number of shares) | 0.6073625 | 0.3926375 |
(3) | Details of shares outstanding as of December 31, |
(In shares) | 2021 | 2020 | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
Issued shares | Treasury shares | Outstanding shares | Issued shares | Treasury shares | Outstanding shares | Issued shares | Treasury shares | Outstanding shares | Issued shares | Treasury shares | Outstanding shares | |||||||||||||||||||||||||||||||||||||
Shares outstanding | 218,833,144 | 1,250,992 | 217,582,152 | 80,745,711 | 9,418,558 | 71,327,153 | 218,833,144 | 801,091 | 218,032,053 | 218,833,144 | 1,250,992 | 217,582,152 |
(4) | Details of capital surplus and others as of December 31, |
(In millions of won) | ||||||||
December 31, 2021 | December 31, 2020 | |||||||
Paid-in surplus | ₩ | 1,771,000 | 2,915,887 | |||||
Treasury shares(Note 24) | (57,314 | ) | (2,123,661 | ) | ||||
Hybrid bonds(Note 25) | 398,759 | 398,759 | ||||||
Share option(Note 26) | 47,166 | 1,481 | ||||||
Others(*) | (13,783,337 | ) | (515,263 | ) | ||||
₩ | (11,623,726 | ) | 677,203 | |||||
(In millions of won) | ||||||||
December 31, 2022 | December 31, 2021 | |||||||
Paid-in surplus | ₩ | 1,771,000 | 1,771,000 | |||||
Treasury shares (Note 24) | (36,702 | ) | (57,314 | ) | ||||
Hybrid bonds (Note 25) | 398,759 | 398,759 | ||||||
Share option (Note 26) | 2,061 | 47,166 | ||||||
Others (*) | (13,702,235 | ) | (13,783,337 | ) | ||||
₩ | (11,567,117 | ) | (11,623,726 | ) | ||||
(*) | Others primarily consists of the consideration paidin excess of the carrying amount ofthe net assets acquired fromthe entities under common control. |
24. | Treasury Shares |
(1) | Treasury shares as of December 31, |
(In millions of won, except for share data) | ||||||||||||||||
(In millions of won, except for the number of shares) | ||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2022 | December 31, 2021 | |||||||||||||
Number of shares | 1,250,992 | 9,418,558 | 801,091 | 1,250,992 | ||||||||||||
Acquisition cost | ₩ | 57,314 | 2,123,661 | ₩ | 36,702 | 57,314 |
(2) | Changes in treasury shares for the years ended December 31, |
(In shares) | ||||||||
2021 | 2020 | |||||||
Treasury shares at January 1 | 9,418,558 | 7,609,263 | ||||||
Acquisition(*1) | 288,000 | 1,809,295 | ||||||
Disposal(*2) | (626,740 | ) | 0 | |||||
Retirement of treasury shares(*3) | (8,685,568 | ) | 0 | |||||
Stock split(*4) | 1,577,000 | 0 | ||||||
Spin-off(*5) | (719,955 | ) | 0 | |||||
Disposal(*6) | (303 | ) | 0 | |||||
Treasury shares at December 31 | 1,250,992 | 9,418,558 | ||||||
(In shares) | ||||||||
2022 | 2021 | |||||||
Treasury shares as of January 1 | 1,250,992 | 9,418,558 | ||||||
Acquisition (*1) | — | 288,000 | ||||||
Disposal (*2) | — | (626,740 | ) | |||||
Retirement of treasury shares (*3) | — | (8,685,568 | ) | |||||
Stock split (*4) | — | 1,577,000 | ||||||
Spin-off (*5) | — | (719,955 | ) | |||||
Disposal (*6) | (449,901 | ) | (303 | ) | ||||
Treasury shares as of December 31 | 801,091 | 1,250,992 | ||||||
(*1) | The Parent Company acquired 288,000 of its treasury shares for |
(*2) | The Parent Company distributed 626,240 treasury shares (acquisition cost: ₩141,342 million) as bonus payment to the employees and congratulatory bonus payment for the spin-off, resulting in gain on disposal of treasury shares of ₩2,659 million and loss on disposal of treasury shares of ₩114,359 million, |
non-executive directors, resulting in gain on disposal of treasury shares of |
(*3) | The Parent Company retired 8,685,568 treasury shares with reduction of its retained earnings before appropriation, as a result, the |
(*4) | The stock split of the Parent Company’s common stock was approved at the shareholders’ meeting held on October 12, 2021, to increase the number of its outstanding shares, effective from October 28, 2021. |
(*5) | 773,987treasury shares, some of treasury shares held by the Parent Company, have been replaced common shares of SK Square Co., Ltd., spin-off company, due to |
(*6) | The Parent Company distributed 303 treasury shares (acquisition cost: spin-off to |
25. | Hybrid Bonds |
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||||||||||||||||||||||
Type | Issuance date | Maturity(*1) | Annual interest rate(%)(*2) | December 31, 2021 | December 31, 2020 | Type | Issuance date | Maturity(*1) | Annual interest rate(%)(*2) | December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||
Series 2-1 hybrid bonds | Unsecured subordinated bearer bond | June 7, 2018 | June 7, 2078 | 3.70 | ₩ | 300,000 | 300,000 | Unsecured subordinated bearer bond | June 7, 2018 | June 7, 2078 | 3.70 | ₩ | 300,000 | 300,000 | ||||||||||||||||||||||
Series 2-2 hybrid bonds | Unsecured subordinated bearer bond | June 7, 2018 | June 7, 2078 | 3.65 | 100,000 | 100,000 | Unsecured subordinated bearer bond | June 7, 2018 | June 7, 2078 | 3.65 | 100,000 | 100,000 | ||||||||||||||||||||||||
Issuance costs | (1,241 | ) | (1,241 | ) | (1,241 | ) | (1,241 | ) | ||||||||||||||||||||||||||||
₩ | 398,759 | 398,759 | ₩ | 398,759 | 398,759 | |||||||||||||||||||||||||||||||
(*1) | The Parent Company has a right to extend the maturity without any notice or announcement. |
(*2) | Annual interest rate is determined as yield rate of 5-year national bond plus premium. According to thestep-up clause, additional premium of 0.25% and 0.75%, respectively, after 10 years and 25 years from the issuance date are applied. |
26. | Share based payment arrangement |
(1) | The terms and conditions related to the grants of the |
Parent Company | Series | |||||||||||||||||||||||||||||
1-1 | 1-2 | 1-3 | 2 | 3 | 4 | 5(*2) | 6(*2) | 1-2 | 1-3 | 2 | 3 | 4 | 5(*2) | 6(*2) | ||||||||||||||||
Grant date | March 24, 2017 | February 20, 2018 | February 22, 2019 | March 26, 2019 | March 26, 2020 | March 25, 2021 | March 24, 2017 | February 20, 2018 | February 22, 2019 | March 26, 2019 | March 26, 2020 | March 25, 2021 | ||||||||||||||||||
Types of shares to be issued | Registered common shares | Registered common shares | ||||||||||||||||||||||||||||
Grant method | Reissue of treasury shares, cash settlement | Reissue of treasury shares, Cash settlement | ||||||||||||||||||||||||||||
Number of shares (in shares)(*1) | 67,320 | 67,320 | 67,320 | 4,124 | 12,685 | 5,266 | 381,937 | 94,657 | ||||||||||||||||||||||
Exercise price (in won)(*1) | 49,350 | 53,298 | 57,562 | 50,824 | 53,052 | 50,862 | 38,452 | 50,276 | ||||||||||||||||||||||
Number of shares (*1) (in share) | 67,320 | 67,320 | 4,124 | 8,907 | 5,266 | 376,313 | 87,794 | |||||||||||||||||||||||
Exercise price (*1) (in won) | 53,298 | 57,562 | 50,824 | 53,052 | 50,862 | 38,452 | 50,276 | |||||||||||||||||||||||
Exercise period | Mar. 25, 2019 ~ Mar. 24, 2022 | Mar. 25, 2020 ~ Mar. 24, 2023 | Mar. 25, 2021 ~ Mar. 24, 2024 | Feb. 21, 2020 ~ Feb. 20, 2023 | Feb. 23, 2021 ~ Feb. 22, 2024 | Mar. 27, 2021 ~ Mar. 26, 2024 | Mar. 27, 2023 ~ Mar. 26, 2027 | Mar. 26, 2023 ~ Mar. 25, 2026 | Mar. 25, 2020 ~ Mar. 24, 2023 | Mar. 25, 2021 ~ Mar. 24, 2024 | Feb. 21, 2020 ~ Feb. 20, 2023 | Feb. 23, 2021 ~ Feb. 22, 2024 | Mar. 27, 2021 ~ Mar. 26, 2024 | Mar. 27, 2023 ~ Mar. 26, 2027 | Mar. 26, 2023 ~ Mar. 25, 2026 | |||||||||||||||
Vesting conditions | 2 years’ service from the grant date | 3 years’ service from the grant date | 4 years’ service from the grant date | 2 years’ service from the grant date | 2 years’ service from the grant date | 2 years’ service from the grant date | 3 years’ service from the grant date | 2 years’ service from the grant date | 3 years’ service from the grant date | 4 years’ service from the grant date | 2 years’ service from the grant date | 2 years’ service from the grant date | 2 years’ service from the grant date | 3 years’ service from the grant date | 2 years’ service from the grant date |
Series | ||||
7-1 | 7-2(*2) | |||
Grant date | March 25, 2022 | |||
Types of shares to be issued | Registered common shares | |||
Grant method | Reissue of treasury shares, Cash settlement | |||
Number of shares (in share) | 295,275 | 109,704 | ||
Exercise price (in won) | 56,860 | 56,860 | ||
Exercise period | Mar. 26, 2025 ~ Mar. 25, 2029 | Mar. 26, 2024 ~ Mar. 25, 2027 | ||
Vesting conditions | 2 years’ service from the grant date | 2 years’ service from the grant date |
2021 | 2022 | |||||||||||||
Share appreciation rights of SK Telecom Co., Ltd.(*3) | Share appreciation rights of SK Square Co., Ltd.(*3) | Share appreciation rights of SK Telecom Co., Ltd. (*3) | Share appreciation rights of SK Square Co., Ltd. (*3) | Share appreciation rights of SK Telecom Co., Ltd. (*3) | ||||||||||
Grant date | January 1, 2021 | January 1, 2021 | January 1, 2022 | |||||||||||
Grant method | Cash settlement | Cash settlement | ||||||||||||
Number of shares (in shares)(*1) | 224,692 | 145,247 | ||||||||||||
Exercise price (in won)(*1) | 50,276 | |||||||||||||
Number of shares (*1) (in share) | 183,246 | 118,456 | 338,525 | |||||||||||
Exercise price (*1) (in won) | 50,276 | 56,860 | ||||||||||||
Exercise period | Jan. 1, 2023 ~ Mar. 28, 2024 | Jan. 1, 2023 ~ Mar. 28, 2024 | Jan. 1, 2024 ~ Mar. 25, 2025 | |||||||||||
Vesting conditions | 2 years’ service from the grant date | 2 years’ service from the grant date | 2 years’ service from the grant date |
(*1) | Number of shares granted and exercise price are adjusted as a result of stock split and spin-off for the year ended December 31, 1-1st share option and 3rd share option were fully and partially exercised for the year ended December 31, 2022. |
(*2) | Parts of the grant that have not met the vesting conditions have been forfeited for the |
(*3) | The Parent Company newly established the long-term incentive policy as part of the compensation related to the growth of corporate value |
(2) | The Parent Company has changed the accounting treatment for share-based payment arrangements with cash alternatives from equity-settled share-based payment arrangements to cash-settled share-based payment arrangements for the year ended December 31, 2022. The fair value of the goods or services that the Parent Company acquired from its employees and the liability incurred at the date of reclassification is ₩4,221 million, which is included in accrued expenses as of December 31, 2022. The Parent Company recognized the difference between the fair value of the liability at the date of reclassification and amount of the share options that the Parent Company had already recognized as capital surplus and others. Share compensation expense for share-based payment arrangements with cash alternatives recognized for the year ended December 31, |
(In millions of won) | ||||
Share compensation expense | ||||
As of December 31, | ₩ | |||
For the year ended December 31, | ||||
In subsequent periods | ||||
₩ | ||||
SK TELECOM CO., LTD. and Subsidiaries Notes to the Consolidated Financial Statements — (Continued) For the years ended December 31, 2022, 2021 and 2020 |
(3) | The Parent Company used binomial option pricing model in the measurement of the fair value of the share options at grant date and the inputs used in the model are as follows: |
(In won) | Series | |||||||||||||||||||||||||||
1-2 | 1-3 | 2 | 3 | 4 | 5 | 6 | ||||||||||||||||||||||
Risk-free interest rate | 3.67 | % | 3.70 | % | 3.65 | % | 3.70 | % | 3.70 | % | 3.76 | % | 3.74 | % | ||||||||||||||
Estimated option’s life | 6 years | 7 years | 5 years | 5 years | 5 years | 7 years | 5 years | |||||||||||||||||||||
Share price on the remeasurement date | 47,400 | 47,400 | 47,400 | 47,400 | 47,400 | 47,400 | 47,400 | |||||||||||||||||||||
Expected volatility | 20.80 | % | 20.80 | % | 20.80 | % | 20.80 | % | 20.80 | % | 20.80 | % | 20.80 | % | ||||||||||||||
Expected dividends | 6.90 | % | 6.90 | % | 6.90 | % | 6.90 | % | 6.90 | % | 6.90 | % | 6.90 | % | ||||||||||||||
Exercise price(*) | 53,298 | 57,562 | 50,824 | 53,052 | 50,862 | 38,452 | 50,276 | |||||||||||||||||||||
Per-share fair value of the option(*) | 250 | 947 | 357 | 1,639 | 2,289 | 9,628 | 3,837 |
(In won) | Series | |||||||
7-1 | 7-2 | |||||||
Risk-free interest rate | 3.75 | % | 3.76 | % | ||||
Estimated option’s life | 7 years | 5 years | ||||||
Share price on the | ||||||||
remeasurement date | 47,400 | 47,400 | ||||||
Expected volatility | 20.80 | % | 20.80 | % | ||||
Expected dividends | 6.90 | % | 6.90 | % | ||||
Exercise price | 56,860 | 56,860 | ||||||
Per-share fair value of the option | 3,153 | 2,693 |
(In won) | Series | |||||||||||||||||||||||||||
1-2 | 1-3 | 2 | 3 | 4 | 5 | 6 | ||||||||||||||||||||||
Risk-free interest rate | 1.95 | % | 2.07 | % | 2.63 | % | 1.91 | % | 1.78 | % | 1.52 | % | 1.55 | % | ||||||||||||||
Estimated option’s life | 6 years | 7 years | 5 years | 5 years | 5 years | 7 years | 5 years | |||||||||||||||||||||
Share price (Closing price on the preceding day)(*) | 52,500 | 52,500 | 48,700 | 51,800 | 50,600 | 34,900 | 49,800 | |||||||||||||||||||||
Expected volatility | 13.38 | % | 13.38 | % | 16.45 | % | 8.30 | % | 7.70 | % | 8.10 | % | 25.70 | % | ||||||||||||||
Expected dividends | 3.80 | % | 3.80 | % | 3.70 | % | 3.80 | % | 3.90 | % | 5.70 | % | 4.00 | % | ||||||||||||||
Exercise price(*) | 53,298 | 57,562 | 50,824 | 53,052 | 50,862 | 38,452 | 50,276 | |||||||||||||||||||||
Per-share fair value of the option(*) | 4,048 | 3,096 | 4,798 | 1,720 | 1,622 | 192 | 8,142 |
(In won) | Parent Company | |||||||||||||||||||||||||||||||
1-1 | 1-2 | 1-3 | 2 | 3 | 4 | 5 | 6 | |||||||||||||||||||||||||
Risk-free interest rate | 1.86 | % | 1.95 | % | 2.07 | % | 2.63 | % | 1.91 | % | 1.78 | % | 1.52 | % | 1.55 | % | ||||||||||||||||
Estimated option’s life | 5 years | 6 years | 7 years | 5 years | 5 years | 5 years | 7 years | 5 years | ||||||||||||||||||||||||
Share price (Closing price on the preceding day)(*) | 52,500 | 52,500 | 52,500 | 48,700 | 51,800 | 50,600 | 34,900 | 49,800 | ||||||||||||||||||||||||
Expected volatility | 13.38 | % | 13.38 | % | 13.38 | % | 16.45 | % | 8.30 | % | 7.70 | % | 8.10 | % | 25.70 | % | ||||||||||||||||
Expected dividends | 3.80 | % | 3.80 | % | 3.80 | % | 3.70 | % | 3.80 | % | 3.90 | % | 5.70 | % | 4.00 | % | ||||||||||||||||
Exercise price(*) | 49,350 | 53,298 | 57,562 | 50,824 | 53,052 | 50,862 | 38,452 | 50,276 | ||||||||||||||||||||||||
Per-share fair value of the option(*) | 5,403 | 4,048 | 3,096 | 4,798 | 1,720 | 1,622 | 192 | 8,142 |
(In won) | 2021 | 2022 | ||||||||||||||||||
Share appreciation rights of SK Telecom Co., Ltd. | Share appreciation rights of SK Square Co., Ltd. | Share appreciation rights of SK Telecom Co., Ltd. | Share appreciation rights of SK Square Co., Ltd. | Share appreciation rights of SK Telecom Co., Ltd. | ||||||||||||||||
Risk-free interest rate | 1.71 | % | 1.71 | % | 3.70 | % | 3.70 | % | 3.72 | % | ||||||||||
Estimated option’s life | 3.25 years | 3.25 years | 3.25 years | 3.25 years | 3.25 years | |||||||||||||||
Share price on the remeasurement date | 57,900 | 66,400 | 47,400 | 33,550 | 47,400 | |||||||||||||||
Expected volatility | 26.00 | % | 26.00 | % | 20.80 | % | 37.40 | % | 20.80 | % | ||||||||||
Expected dividends | 3.40 | % | 0.00 | % | 6.90 | % | 0.00 | % | 6.90 | % | ||||||||||
Exercise price(*) | 50,276 | 50,276 | 50,276 | 50,276 | 56,860 | |||||||||||||||
Per-share fair value of the option | 10,646 | 20,321 | 2,308 | 1,760 | 1,625 |
(*) | Share price (closing price on the preceding day), exercise price and per-share fair value of the option are adjusted as a result of stock split andspin-off for the year ended December 31, 2021. |
27. | Retained Earnings |
(1) | Retained earnings as of December 31, |
(In millions of won) | December 31, 2021 | December 31, 2020 | ||||||||||||||
December 31, 2022 | December 31, 2021 | |||||||||||||||
Appropriated: | ||||||||||||||||
Legal reserve | ₩ | 22,320 | 22,320 | ₩ | 22,320 | 22,320 | ||||||||||
Reserve for business expansion | 11,631,138 | 11,631,138 | 9,631,138 | 11,631,138 | ||||||||||||
Reserve for technology development | 4,365,300 | 4,365,300 | 4,365,300 | 4,365,300 | ||||||||||||
15,996,438 | 15,996,438 | 13,996,438 | 15,996,438 | |||||||||||||
Unappropriated | 6,418,583 | 6,963,155 | 8,444,953 | 6,418,583 | ||||||||||||
₩ | 22,437,341 | 22,981,913 | ₩ | 22,463,711 | 22,437,341 | |||||||||||
(2) | Legal ser ve |
(In millions of won) | December 31, 2021 | December 31, 2020 | ||||||
Valuation gain on FVOCI | ₩ | 633,240 | 438,979 | |||||
Other comprehensive gain (loss) of investments in associates and joint ventures | 53,770 | (392,333 | ) | |||||
Valuation gain on derivatives | 33,918 | 17,615 | ||||||
Foreign currency translation differences for foreign operations | 14,310 | (24,122 | ) | |||||
₩ | 735,238 | 40,139 | ||||||
(In millions of won) | ||||||||||||||||||||
Valuation gain (loss) on financial assets at FVOCI | Other comprehensive income(loss) of investments in associates and joint ventures | Valuation gain (loss) on derivatives | Foreign currency translation differences for foreign operations | Total | ||||||||||||||||
Balance at January 1, 2020 | ₩ | (47,086 | ) | (278,142 | ) | (920 | ) | (3,428 | ) | (329,576 | ) | |||||||||
Changes, net of taxes | 486,065 | (114,191 | ) | 18,535 | (20,694 | ) | 369,715 | |||||||||||||
Balance at December 31, 2020 | ₩ | 438,979 | (392,333 | ) | 17,615 | (24,122 | ) | 40,139 | ||||||||||||
Changes, net of taxes | 194,261 | 446,103 | 16,303 | 38,432 | 695,099 | |||||||||||||||
Balance at December 31, 2021 | ₩ | 633,240 | 53,770 | 33,918 | 14,310 | 735,238 | ||||||||||||||
(In millions of won) | ||||||||
2021 | 2020 | |||||||
Balance at January 1 | ₩ | 438,979 | (47,086 | ) | ||||
Amount recognized as other comprehensive income for the year, net of taxes | 627,833 | 486,440 | ||||||
Amount reclassified to retained earnings, net of taxes | (12,429 | ) | (375 | ) | ||||
Changes from spin-off, net of taxes | (421,143 | ) | 0 | |||||
Balance at December 31 | ₩ | 633,240 | 438,979 | |||||
(In millions of won) | ||||||||
2021 | 2020 | |||||||
Balance at January 1 | ₩ | 17,615 | (920 | ) | ||||
Amount recognized as other comprehensive income for the year, net of taxes | 9,731 | 15,414 | ||||||
Amount reclassified to profit, net of taxes | 6,572 | 3,121 | ||||||
Balance at December 31 | ₩ | 33,918 | 17,615 | |||||
28. | Reserves |
(1) | Details of reserves, net of taxes, as of December 31, 2022 and 2021 are as follows: |
(In millions of won) | ||||||||
December 31, 2022 | December 31, 2021 | |||||||
Valuation gain on FVOCI | ₩ | 173,281 | 633,240 | |||||
Other comprehensive gain of investments in associates and joint ventures | 173,477 | 53,770 | ||||||
Valuation gain on derivatives | 14,463 | 33,918 | ||||||
Foreign currency translation differences for foreign operations | 30,012 | 14,310 | ||||||
₩ | 391,233 | 735,238 | ||||||
(2) | Changes in reserves for the years ended December 31, 2022 and 2021 are as follows: |
(In millions of won) | ||||||||||||||||||||
Valuation gain (loss) on financial assets at FVOCI | Other comprehensive income (loss) of investments in associates and joint ventures | Valuation gain (loss) on derivatives | Foreign currency translation differences for foreign operations | Total | ||||||||||||||||
Balance as of January 1, 2021 | ₩ | 438,979 | (392,333 | ) | 17,615 | (24,122 | ) | 40,139 | ||||||||||||
Changes, net of taxes | 194,261 | 446,103 | 16,303 | 38,432 | 695,099 | |||||||||||||||
Balance as of December 31, 2021 | ₩ | 633,240 | 53,770 | 33,918 | 14,310 | 735,238 | ||||||||||||||
Changes, net of taxes | (459,959 | ) | 119,707 | (19,455 | ) | 15,702 | (344,005 | ) | ||||||||||||
Balance as of December 31, 2022 | ₩ | 173,281 | 173,477 | 14,463 | 30,012 | 391,233 | ||||||||||||||
(3) | Changes in valuation gain (loss) on financial assets at FVOCI for the years ended December 31, 2022 and 2021 are as follows: |
(In millions of won) | ||||||||
2022 | 2021 | |||||||
Balance as of January 1 | ₩ | 633,240 | 438,979 | |||||
Amount recognized as other comprehensive income (loss) for the year, net of taxes | (490,959 | ) | 627,833 | |||||
Amount reclassified to retained earnings, net of taxes | 31,000 | (12,429 | ) | |||||
Changes from spin-off, net of taxes | — | (421,143 | ) | |||||
Balance as of December 31 | ₩ | 173,281 | 633,240 | |||||
(4) | Changes in valuation gain (loss) on derivatives for the years ended December 31, 2022 and 2021 are as follows: |
(In millions of won) | ||||||||
2022 | 2021 | |||||||
Balance as of January 1 | ₩ | 33,918 | 17,615 | |||||
Amount recognized as other comprehensive income (loss) for the year, net of taxes | (25,630 | ) | 9,731 | |||||
Amount reclassified to profit, net of taxes | 6,175 | 6,572 | ||||||
Balance as of December 31 | ₩ | 14,463 | 33,918 | |||||
29. | Other Operating Income and Expenses |
(In millions of won) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021 | 2020 | |||||||||||||||||||
Other Operating Income: | ||||||||||||||||||||||||
Gain on disposal of property and equipment and intangible assets | ₩ | 39,136 | 34,625 | 7,755 | ₩ | 15,985 | 39,136 | 34,625 | ||||||||||||||||
Others(*) | 76,627 | 61,126 | 87,828 | 40,274 | 76,627 | 61,126 | ||||||||||||||||||
₩ | 115,763 | 95,751 | 95,583 | ₩ | 56,259 | 115,763 | 95,751 | |||||||||||||||||
Other Operating Expenses: | ||||||||||||||||||||||||
Communication | ₩ | 32,462 | 34,462 | 32,986 | ₩ | 31,881 | 32,462 | 34,462 | ||||||||||||||||
Utilities | 350,678 | 336,187 | 315,129 | 401,025 | 350,678 | 336,187 | ||||||||||||||||||
Taxes and dues | 33,935 | 34,577 | 38,688 | 49,445 | 33,935 | 34,577 | ||||||||||||||||||
Repair | 425,606 | 399,376 | 368,620 | 435,572 | 425,606 | 399,376 | ||||||||||||||||||
Research and development | 347,711 | 353,198 | 324,052 | 340,864 | 347,711 | 353,198 | ||||||||||||||||||
Training | 31,761 | 33,384 | 32,581 | 39,632 | 31,761 | 33,384 | ||||||||||||||||||
Bad debt for accounts receivable — trade | 29,402 | 45,002 | 25,376 | 27,053 | 29,402 | 45,002 | ||||||||||||||||||
Travel | 7,813 | 7,534 | 20,717 | 15,684 | 7,813 | 7,534 | ||||||||||||||||||
Supplies and other | 101,656 | 105,333 | 104,943 | 113,839 | 101,656 | 105,333 | ||||||||||||||||||
Loss on disposal of property and equipment and intangible assets | 28,158 | 25,633 | 23,821 | 20,465 | 28,158 | 25,633 | ||||||||||||||||||
Impairment loss on property and equipment and intangible assets | 3,135 | 200,705 | 42,823 | 17,027 | 3,135 | 200,705 | ||||||||||||||||||
Donations | 12,800 | 16,051 | 16,782 | 13,125 | 12,800 | 16,051 | ||||||||||||||||||
Bad debt for accounts receivable — other | 3,995 | 6,640 | 3,594 | 3,011 | 3,995 | 6,640 | ||||||||||||||||||
Others(*) | 22,475 | 60,280 | 60,176 | 20,353 | 22,475 | 60,280 | ||||||||||||||||||
₩ | 1,431,587 | 1,658,362 | 1,410,288 | ₩ | 1,528,976 | 1,431,587 | 1,658,362 | |||||||||||||||||
(*) | See note 4 (2). |
30. | Finance Income and Costs |
(1) | Details of finance income and costs for the years ended December 31, 2022, 2021 |
(In millions of won) | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Finance Income: | ||||||||||||
Interest income | ₩ | 36,708 | 37,030 | 48,605 | ||||||||
Gain on sale of accounts receivable — other | 27,725 | 22,605 | 15,855 | |||||||||
Dividends | 12,039 | 1,170 | 10,011 | |||||||||
Gain on foreign currency transactions | 10,987 | 9,029 | 8,836 | |||||||||
Gain on foreign currency translations | 7,505 | 7,888 | 4,064 | |||||||||
Gain relating to financial instruments at FVTPL | 60,169 | 62,963 | 34,321 | |||||||||
₩ | 155,133 | 140,685 | 121,692 | |||||||||
Finance Costs: | ||||||||||||
Interest expense | ₩ | 279,737 | 288,972 | 306,665 | ||||||||
Loss on sale of accounts receivable — other | 0 | 0 | 5,823 | |||||||||
Loss on foreign currency transactions | 12,270 | 11,053 | 10,038 | |||||||||
Loss on foreign currency translations | 6,764 | 8,973 | 4,242 | |||||||||
Loss on disposal of long-term investment securities | 0 | 98 | 0 | |||||||||
Loss relating to financial instruments at FVTPL | 16,833 | 13,847 | 8,144 | |||||||||
₩ | 315,604 | 322,943 | 334,912 | |||||||||
(In millions of won) | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
Finance Income: | ||||||||||||
Interest income | ₩ | 58,472 | 36,708 | 37,030 | ||||||||
Gain on sale of accounts receivable — other | 1,043 | 27,725 | 22,605 | |||||||||
Dividends | 2,552 | 12,039 | 1,170 | |||||||||
Gain on foreign currency transactions | 21,283 | 10,987 | 9,029 | |||||||||
Gain on foreign currency translations | 2,095 | 7,505 | 7,888 | |||||||||
Gain relating to financial instruments at FVTPL | 94,393 | 60,169 | 62,963 | |||||||||
₩ | 179,838 | 155,133 | 140,685 | |||||||||
Finance Costs: | ||||||||||||
Interest expense | ₩ | 328,307 | 279,737 | 288,972 | ||||||||
Loss on sale of accounts receivable — other | 61,841 | — | — | |||||||||
Loss on foreign currency transactions | 19,485 | 12,270 | 11,053 | |||||||||
Loss on foreign currency translations | 3,814 | 6,764 | 8,973 | |||||||||
Loss on disposal of long-term investment securities | — | — | 98 | |||||||||
Loss relating to financial instruments at FVTPL | 41,597 | 16,833 | 13,847 | |||||||||
Loss on disposal of investment assets | 1,283 | — | — | |||||||||
₩ | 456,327 | 315,604 | 322,943 | |||||||||
(2) | Details of interest income included in finance income for the years ended December 31, 2022, 2021 |
(In millions of won) | 2021 | 2020 | 2019 | |||||||||
Interest income on cash equivalents and financial instruments(*) | ₩ | 16,141 | 24,378 | 29,854 | ||||||||
Interest income on loans and others(*) | 27,709 | 25,979 | 33,725 | |||||||||
₩ | 43,850 | 50,357 | 63,579 | |||||||||
(In millions of won) | 2022 | 2021(*) | 2020(*) | |||||||||
Interest income on cash equivalents and financial instruments | ₩ | 27,991 | 16,141 | 24,378 | ||||||||
Interest income on loans and others | 30,481 | 27,709 | 25,979 | |||||||||
₩ | 58,472 | 43,850 | 50,357 | |||||||||
(*) | Includes amounts related to discontinued operations. |
(3) | Details of interest expenses included in finance costs for the years ended December 31, 2022, 2021 |
(In millions of won) | 2021 | 2020 | 2019 | |||||||||
Interest expense on borrowings(*) | ₩ | 66,188 | 116,397 | 104,991 | ||||||||
Interest expense on debentures(*) | 224,144 | 225,309 | 224,765 | |||||||||
Others(*) | 52,010 | 57,470 | 76,331 | |||||||||
₩ | 342,342 | 399,176 | 406,087 | |||||||||
(In millions of won) | 2022 | 2021(*) | 2020(*) | |||||||||
Interest expense on borrowings | ₩ | 25,736 | 66,188 | 116,397 | ||||||||
Interest expense on debentures | 217,475 | 224,144 | 225,309 | |||||||||
Others | 85,096 | 52,010 | 57,470 | |||||||||
₩ | 328,307 | 342,342 | 399,176 | |||||||||
(*) | Includes amounts related to discontinued operations. |
(4) | Finance income and costs by category of financial instruments for the years ended December 31, 2022, 2021 and 2020 are as follows. Bad debt expense (reversal of loss allowance) for accounts receivable – trade, loans and receivables are presented and explained separately in notes 6 and 35. |
(In millions of won) | ||||||||
2022 | ||||||||
Finance income | Finance costs | |||||||
Financial Assets: | ||||||||
Financial assets at FVTPL | ₩ | 104,068 | 103,292 | |||||
Financial assets at FVOCI | 1,495 | 1,283 | ||||||
Financial assets at amortized cost | 45,008 | 23,094 | ||||||
Derivatives designated as hedging instrument | — | 146 | ||||||
150,571 | 127,815 | |||||||
Financial Liabilities: | ||||||||
Financial liabilities at FVTPL | 18,432 | — | ||||||
Financial liabilities at amortized cost | 10,835 | 328,512 | ||||||
29,267 | 328,512 | |||||||
₩ | 179,838 | 456,327 | ||||||
(In millions of won) | ||||||||
2021 | ||||||||
Finance income(*) | Finance costs(*) | |||||||
Financial Assets: | ||||||||
Financial assets at FVTPL | ₩ | 149,590 | 67,503 | |||||
Financial assets at FVOCI | 3,413 | 142,015 | ||||||
Financial assets at amortized cost | 48,940 | 12,262 | ||||||
Derivatives designated as hedging instrument | — | 600 | ||||||
201,943 | 222,380 | |||||||
Financial Liabilities: | ||||||||
Financial liabilities at FVTPL | — | 8,036 | ||||||
Financial liabilities at amortized cost | 607 | 355,011 | ||||||
607 | 363,047 | |||||||
₩ | 202,550 | 585,427 | ||||||
(*) | Includes amounts related to discontinued operations. |
(In millions of won) | ||||||||
2021 | ||||||||
Finance income(*) | Finance costs(*) | |||||||
Financial Assets: | ||||||||
Financial assets at FVTPL | ₩ | 149,590 | 67,503 | |||||
Financial assets at FVOCI | 3,413 | 142,015 | ||||||
Financial assets at amortized cost | 48,940 | 12,262 | ||||||
Derivatives designated as hedging instrument | 0 | 600 | ||||||
201,943 | 222,380 | |||||||
Financial Liabilities: | ||||||||
Financial liabilities at FVTPL | 0 | 8,036 | ||||||
Financial liabilities at amortized cost | 607 | 355,011 | ||||||
607 | 363,047 | |||||||
₩ | 202,550 | 585,427 | ||||||
(In millions of won) | ||||||||
2020 | ||||||||
Finance income(*1) | Finance costs(*1) | |||||||
Financial Assets: | ||||||||
Financial assets at FVTPL(*2) | ₩ | 180,254 | 10,894 | |||||
Financial assets at FVOCI | 993 | 44,832 | ||||||
Financial assets at amortized cost(*2) | 46,135 | 24,601 | ||||||
Derivatives designated as hedging instrument | — | 1,867 | ||||||
227,382 | 82,194 | |||||||
Financial Liabilities: | ||||||||
Financial liabilities at FVTPL | — | 12,115 | ||||||
Financial liabilities at amortized cost | 6,434 | 400,678 | ||||||
Derivatives designated as hedging instrument | 7,380 | 2,206 | ||||||
13,814 | 414,999 | |||||||
₩ | 241,196 | 497,193 | ||||||
(*1) | Includes amounts related to discontinued operations. |
(*2) | The Group reclassified the category of financial assets measured at amortized cost. Accordingly, the category of financial income arising on reclassification of a financial asset is reclassified. |
(In millions of won) | ||||||||
2019 | ||||||||
Finance income(*1) | Finance costs(*1) | |||||||
Financial Assets: | ||||||||
Financial assets at FVTPL(*2) | ₩ | 79,529 | 13,577 | |||||
Financial assets at FVOCI | 9,924 | — | ||||||
Financial assets at amortized cost(*2) | 52,543 | 17,488 | ||||||
141,996 | 31,065 | |||||||
Financial Liabilities: | ||||||||
Financial liabilities at FVTPL | 56 | 43 | ||||||
Financial liabilities at amortized cost | 103 | 406,206 | ||||||
Derivatives designated as hedging instrument | — | 641 | ||||||
159 | 406,890 | |||||||
₩ | 142,155 | 437,955 | ||||||
(In millions of won) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021 | 2020 | |||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||||
Financial assets at FVOCI | ₩ | 920,871 | 579,678 | (17,943 | ) | ₩ | (491,853 | ) | 920,871 | 579,678 | ||||||||||||||
Derivatives designated as hedging instrument | 15,427 | 24,320 | 41,305 | (21,548 | ) | 15,427 | 24,320 | |||||||||||||||||
936,298 | 603,998 | 23,362 | (513,401 | ) | 936,298 | 603,998 | ||||||||||||||||||
Financial Liabilities: | ||||||||||||||||||||||||
Derivatives designated as hedging instrument | 706 | (5,182 | ) | (624 | ) | 182 | 706 | (5,182 | ) | |||||||||||||||
₩ | 937,004 | 598,816 | 22,738 | ₩ | (513,219 | ) | 937,004 | 598,816 | ||||||||||||||||
(5) | Details of impairment losses for financial assets for |
(In millions of won) | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Accounts receivable — trade(*) | ₩ | 31,546 | 48,625 | 28,841 | ||||||||
Other receivables(*) | 6,001 | 10,559 | 5,802 | |||||||||
₩ | 37,547 | 59,184 | 34,643 | |||||||||
(In millions of won) | ||||||||||||
2022 | 2021(*) | 2020(*) | ||||||||||
Accounts receivable — trade | ₩ | 27,053 | 31,546 | 48,625 | ||||||||
Other receivables | 3,011 | 6,001 | 10,559 | |||||||||
₩ | 30,064 | 37,547 | 59,184 | |||||||||
(*) | Includes amounts related to discontinued operations. |
31. | Income Tax Expense |
(1) | Income tax expenses for the years ended December 31, 2022, 2021 |
(In millions of won) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021 | 2020 | |||||||||||||||||||
Current tax expense: | ||||||||||||||||||||||||
Current year | ₩ | 319,539 | 286,717 | 105,859 | ₩ | 274,902 | 319,539 | 286,717 | ||||||||||||||||
Current tax of prior years(*) | 705 | 14,536 | (6,855 | ) | 73,477 | 705 | 14,536 | |||||||||||||||||
320,244 | 301,253 | 99,004 | 348,379 | 320,244 | 301,253 | |||||||||||||||||||
Deferred tax expense: | ||||||||||||||||||||||||
Changes in net deferred tax assets | 331,704 | 75,249 | 201,264 | (60,058 | ) | 331,704 | 75,249 | |||||||||||||||||
Income tax expense | ||||||||||||||||||||||||
Tax expense of continuing operation | 446,796 | 221,262 | 262,940 | 288,321 | 446,796 | 221,262 | ||||||||||||||||||
Tax expense of discontinued operation | 205,152 | 155,240 | 37,328 | — | 205,152 | 155,240 | ||||||||||||||||||
₩ | 651,948 | 376,502 | 300,268 | ₩ | 288,321 | 651,948 | 376,502 | |||||||||||||||||
(*) | Current tax of prior years are mainly composed of the income tax refund due to a change in the interpretation of the tax authority in relation to the income tax previously recognized by the Group. |
(2) | The difference between income taxes computed using the statutory corporate income tax rates and the recorded income taxes for the years ended December 31, 2022, 2021 |
(In millions of won) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021(*) | 2020(*) | |||||||||||||||||||
Income taxes at statutory income tax rate | ₩ | 834,146 | 505,824 | 308,913 | ₩ | 329,580 | 834,146 | 505,824 | ||||||||||||||||
Non-taxable income | (13,924 | ) | (41,084 | ) | (92,666 | ) | (14,969 | ) | (13,924 | ) | (41,084 | ) | ||||||||||||
Non-deductible expenses | 15,329 | 31,882 | 14,630 | 24,679 | 15,329 | 31,882 | ||||||||||||||||||
Tax credit and tax reduction | (62,075 | ) | (48,774 | ) | (32,877 | ) | (10,300 | ) | (62,075 | ) | (48,774 | ) | ||||||||||||
Changes in unrecognized deferred taxes | (68,589 | ) | (69,776 | ) | 83,940 | 21,057 | (68,589 | ) | (69,776 | ) | ||||||||||||||
Changes in tax rate | (36,193 | ) | 24,537 | 4,050 | (42,307 | ) | (36,193 | ) | 24,537 | |||||||||||||||
Income tax refund and others | (16,746 | ) | (26,107 | ) | 14,278 | (19,419 | ) | (16,746 | ) | (26,107 | ) | |||||||||||||
Income tax expense | ₩ | 651,948 | 376,502 | 300,268 | ₩ | 288,321 | 651,948 | 376,502 | ||||||||||||||||
(*) | The aggregated amount of profit before income tax from continuing and discontinued operations. |
(3) | Deferred taxes directly charged to (credited from) equity for the years ended December 31, |
(In millions of won) | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Valuation gain (loss) on financial assets measured at fair value | ₩ | (208,490 | ) | (166,612 | ) | 2,983 | ||||||
Share of other comprehensive income (loss) of associates and joint ventures | (34 | ) | (14 | ) | 2,279 | |||||||
Valuation loss on derivatives | (5,709 | ) | (6,886 | ) | (16,083 | ) | ||||||
Remeasurement of defined benefit liabilities | (3,780 | ) | (164 | ) | 22,733 | |||||||
Gain on disposal of treasury shares and others | 26,970 | 0 | 0 | |||||||||
₩ | (191,043 | ) | (173,676 | ) | 11,912 | |||||||
(In millions of won) | ||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||
Beginning | Deferred tax expense (income) | Directly charged to (credited from) equity | Business combinations | Spin-off | Ending | |||||||||||||||||||
Deferred tax assets (liabilities) related to temporary differences: | ||||||||||||||||||||||||
Loss allowance | ₩ | 91,285 | (8,397 | ) | 0 | 0 | (5,531 | ) | 77,357 | |||||||||||||||
Accrued interest income | (1,631 | ) | (2,022 | ) | 0 | 0 | 3,487 | (166 | ) | |||||||||||||||
Financial assets measured at fair value | (81,055 | ) | (6,765 | ) | (208,490 | ) | 0 | 138,482 | (157,828 | ) | ||||||||||||||
Investments in subsidiaries, associates and joint ventures | (1,673,906 | ) | (281,035 | ) | (34 | ) | 0 | 1,923,158 | (31,817 | ) | ||||||||||||||
Property and equipment and intangible assets | (511,862 | ) | (42,456 | ) | 0 | (1,023 | ) | 249,374 | (305,967 | ) | ||||||||||||||
Provisions | 6,294 | (1,436 | ) | 0 | 0 | (660 | ) | 4,198 | ||||||||||||||||
Retirement benefit obligation | 102,285 | (3,563 | ) | (3,780 | ) | 0 | (42,610 | ) | 52,332 | |||||||||||||||
Valuation gain on derivatives | 14,767 | 210 | (5,709 | ) | 0 | (2,932 | ) | 6,336 | ||||||||||||||||
Gain or loss on foreign currency translation | 21,774 | (396 | ) | 0 | 0 | 0 | 21,378 | |||||||||||||||||
Incremental costs to acquire a contract | (807,831 | ) | 53,492 | 0 | 0 | 4,468 | (749,871 | ) | ||||||||||||||||
Contract assets and liabilities | (2,606 | ) | 405 | 0 | 0 | 0 | (2,201 | ) | ||||||||||||||||
Right-of-use | (372,297 | ) | (35,851 | ) | 0 | 0 | 18,646 | (389,502 | ) | |||||||||||||||
Lease liabilities | 362,476 | 38,600 | 0 | 0 | (19,539 | ) | 381,537 | |||||||||||||||||
Others | 120,514 | (95,537 | ) | 26,970 | (135 | ) | 16,669 | 68,481 | ||||||||||||||||
(2,731,793 | ) | (384,751 | ) | (191,043 | ) | (1,158 | ) | 2,283,012 | (1,025,733 | ) | ||||||||||||||
Deferred tax assets related to unused tax loss carryforwards and tax credit carryforwards: | ||||||||||||||||||||||||
Tax loss carryforwards | 88,223 | 7,915 | 0 | 0 | (96,138 | ) | 0 | |||||||||||||||||
Tax credit | 39,583 | 45,132 | 0 | 0 | (155 | ) | 84,560 | |||||||||||||||||
127,806 | 53,047 | 0 | 0 | (96,293 | ) | 84,560 | ||||||||||||||||||
₩ | (2,603,987 | ) | (331,704 | ) | (191,043 | ) | (1,158 | ) | 2,186,719 | (941,173 | ) | |||||||||||||
(In millions of won) | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
Valuation gain (loss) on financial assets measured at fair value | ₩ | 167,249 | (208,490 | ) | (166,612 | ) | ||||||
Share of other comprehensive loss of investment in associates and joint ventures | (2,972 | ) | (34 | ) | (14 | ) | ||||||
Valuation gain (loss) on derivatives | 7,649 | (5,709 | ) | (6,886 | ) | |||||||
Remeasurement of defined benefit liabilities | (20,867 | ) | (3,780 | ) | (164 | ) | ||||||
Gain (loss) on disposal of treasury shares and others | (28,108 | ) | 26,970 | — | ||||||||
₩ | 122,951 | (191,043 | ) | (173,676 | ) | |||||||
(In millions of won) | ||||||||||||||||||||
2020 | ||||||||||||||||||||
Beginning | Deferred tax expense (income) | Directly charged to (credited from) equity | Business combinations | Ending | ||||||||||||||||
Deferred tax assets (liabilities) related to temporary differences: | ||||||||||||||||||||
Loss allowance | ₩ | 88,913 | 1,326 | — | 1,046 | 91,285 | ||||||||||||||
Accrued interest income | (2,039 | ) | 435 | — | (27 | ) | (1,631 | ) | ||||||||||||
Financial assets measured at fair value | 98,101 | (17,586 | ) | (166,612 | ) | 5,042 | (81,055 | ) | ||||||||||||
Investments in subsidiaries, associates and joint ventures | (1,613,048 | ) | (60,844 | ) | (14 | ) | — | (1,673,906 | ) | |||||||||||
Property and equipment and intangible assets | (371,489 | ) | (47,468 | ) | — | (92,905 | ) | (511,862 | ) | |||||||||||
Provisions | 2,543 | 3,751 | — | — | 6,294 | |||||||||||||||
Retirement benefit obligation | 100,194 | 1,873 | (164 | ) | 382 | 102,285 | ||||||||||||||
Valuation gain on derivatives | 17,507 | 4,146 | (6,886 | ) | — | 14,767 | ||||||||||||||
Gain or loss on foreign currency translation | 22,005 | (231 | ) | — | — | 21,774 | ||||||||||||||
Incremental costs to acquire a contract | (829,055 | ) | 21,224 | — | — | (807,831 | ) | |||||||||||||
Contract assets and liabilities | (28,030 | ) | 25,424 | — | — | (2,606 | ) | |||||||||||||
Right-of-use | (390,936 | ) | 18,639 | — | — | (372,297 | ) | |||||||||||||
Lease liabilities | 385,394 | (22,918 | ) | — | — | 362,476 | ||||||||||||||
Others | 64,620 | (30,310 | ) | — | 86,204 | 120,514 | ||||||||||||||
(2,455,320 | ) | (102,539 | ) | (173,676 | ) | (258 | ) | (2,731,793 | ) | |||||||||||
Deferred tax assets related to unused tax loss carryforwards and tax credit carryforwards: | ||||||||||||||||||||
Tax loss carryforwards | 91,136 | (2,913 | ) | — | — | 88,223 | ||||||||||||||
Tax credit | 9,380 | 30,203 | — | — | 39,583 | |||||||||||||||
100,516 | 27,290 | — | — | 127,806 | ||||||||||||||||
₩ | (2,354,804 | ) | (75,249 | ) | (173,676 | ) | (258 | ) | (2,603,987 | ) | ||||||||||
(4) | Details of the changes in deferred tax assets (liabilities) for the years ended December 31, 2022 and 2021 are as follows: |
(In millions of won) | ||||||||||||||||||||
2022 | ||||||||||||||||||||
Beginning | Deferred tax expense (income) | Directly charged to (credited from) equity | Business combinations | Ending | ||||||||||||||||
Deferred tax assets (liabilities) related to temporary differences: | ||||||||||||||||||||
Loss allowance | ₩ | 77,357 | (2,315 | ) | — | — | 75,042 | |||||||||||||
Accrued interest income | (166 | ) | (5,057 | ) | — | (2,680 | ) | (7,903 | ) | |||||||||||
Financial assets measured at fair value | (157,828 | ) | (19,592 | ) | 167,249 | — | (10,171 | ) | ||||||||||||
Investments in subsidiaries, associates and joint ventures | (31,817 | ) | 51,635 | (2,972 | ) | — | 16,846 | |||||||||||||
Property and equipment and intangible assets | (305,967 | ) | (46,895 | ) | — | 257 | (352,605 | ) | ||||||||||||
Provisions | 4,198 | (2,569 | ) | — | — | 1,629 | ||||||||||||||
Retirement benefit obligation | 52,332 | (875 | ) | (20,867 | ) | 29 | 30,619 | |||||||||||||
Valuation gain on derivatives | 6,336 | (1,217 | ) | 7,649 | — | 12,768 | ||||||||||||||
Gain (loss) on foreign currency translation | 21,378 | (745 | ) | — | — | 20,633 | ||||||||||||||
Incremental costs to acquire a contract | (749,871 | ) | 26,971 | — | — | (722,900 | ) | |||||||||||||
Contract assets and liabilities | (2,201 | ) | 6,480 | — | — | 4,279 | ||||||||||||||
Right-of-use | (389,502 | ) | (41,895 | ) | — | — | (431,397 | ) | ||||||||||||
Lease liabilities | 381,537 | 47,111 | — | — | 428,648 | |||||||||||||||
Others | 68,481 | 41,691 | (28,108 | ) | 3,652 | 85,716 | ||||||||||||||
(1,025,733 | ) | 52,728 | 122,951 | 1,258 | (848,796 | ) | ||||||||||||||
Deferred tax assets related to unused tax loss carryforwards and tax credit carryforwards: | ||||||||||||||||||||
Tax loss carryforwards | — | 2,007 | — | — | 2,007 | |||||||||||||||
Tax credit | 84,560 | 5,323 | — | — | 89,883 | |||||||||||||||
84,560 | 7,330 | — | — | 91,890 | ||||||||||||||||
₩ | (941,173) | 60,058 | 122,951 | 1,258 | (756,906 | ) | ||||||||||||||
(In millions of won) | ||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||
Beginning | Deferred tax expense (income) | Directly charged to (credited from) equity | Business combinations | Spin-off | Ending | |||||||||||||||||||
Deferred tax assets (liabilities) related to temporary differences: | ||||||||||||||||||||||||
Loss allowance | ₩ | 91,285 | (8,397 | ) | — | — | (5,531 | ) | 77,357 | |||||||||||||||
Accrued interest income | (1,631 | ) | (2,022 | ) | — | — | 3,487 | (166 | ) | |||||||||||||||
Financial assets measured at fair value | (81,055 | ) | (6,765 | ) | (208,490 | ) | — | 138,482 | (157,828 | ) | ||||||||||||||
Investments in subsidiaries, associates and joint ventures | (1,673,906 | ) | (281,035 | ) | (34 | ) | — | 1,923,158 | (31,817 | ) | ||||||||||||||
Property and equipment and intangible assets | (511,862 | ) | (42,456 | ) | — | (1,023 | ) | 249,374 | (305,967 | ) | ||||||||||||||
Provisions | 6,294 | (1,436 | ) | — | — | (660 | ) | 4,198 | ||||||||||||||||
Retirement benefit obligation | 102,285 | (3,563 | ) | (3,780 | ) | — | (42,610 | ) | 52,332 | |||||||||||||||
Valuation gain (loss) on derivatives | 14,767 | 210 | (5,709 | ) | — | (2,932 | ) | 6,336 | ||||||||||||||||
Gain (loss) on foreign currency translation | 21,774 | (396 | ) | — | — | — | 21,378 | |||||||||||||||||
Incremental costs to acquire a contract | (807,831 | ) | 53,492 | — | — | 4,468 | (749,871 | ) | ||||||||||||||||
Contract assets and liabilities | (2,606 | ) | 405 | — | — | — | (2,201 | ) | ||||||||||||||||
Right-of-use | (372,297 | ) | (35,851 | ) | — | — | 18,646 | (389,502 | ) | |||||||||||||||
Lease liabilities | 362,476 | 38,600 | — | — | (19,539 | ) | 381,537 | |||||||||||||||||
Others | 120,514 | (95,537 | ) | 26,970 | (135 | ) | 16,669 | 68,481 | ||||||||||||||||
(2,731,793 | ) | (384,751 | ) | (191,043 | ) | (1,158 | ) | 2,283,012 | (1,025,733 | ) | ||||||||||||||
Deferred tax assets related to unused tax loss carryforwards and tax credit carryforwards: | ||||||||||||||||||||||||
Tax loss carryforwards | 88,223 | 7,915 | — | — | (96,138 | ) | — | |||||||||||||||||
Tax credit | 39,583 | 45,132 | — | — | (155 | ) | 84,560 | |||||||||||||||||
127,806 | 53,047 | — | — | (96,293 | ) | 84,560 | ||||||||||||||||||
₩ | (2,603,987 | ) | (331,704 | ) | (191,043 | ) | (1,158 | ) | 2,186,719 | (941,173 | ) | |||||||||||||
(5) | Details of temporary differences, unused tax loss carryforwards and unused tax credits carryforwards which are not recognized as deferred tax assets (liabilities), in the consolidated statements of financial position as of December 31, |
(In millions of won) | ||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2022 | December 31, 2021 | |||||||||||||
Loss allowance | ₩ | 85,998 | 102,085 | ₩ | 85,969 | 85,998 | ||||||||||
Investments in subsidiaries, associates and joint ventures | (176,520 | ) | 8,365 | (434,253 | ) | (176,520 | ) | |||||||||
Other temporary differences | 61,368 | 68,415 | 61,817 | 61,368 | ||||||||||||
Unused tax loss carryforwards | 347,889 | 1,042,063 | 229,410 | 347,889 | ||||||||||||
Unused tax credit carryforwards | 34 | 1,037 | — | 34 |
(6) | The amount of unused tax loss carryforwards and unused tax credit carryforwards which are not recognized as deferred tax assets as of December 31, |
(In millions of won) | ||||||||
Unused tax loss carryforwards | Unused tax credit carryforwards | |||||||
Less than 1 year | ₩ | 57,346 | 0 | |||||
1 ~ 2 years | 39,974 | 0 | ||||||
2 ~ 3 years | 19,087 | 0 | ||||||
More than 3 years | 231,482 | 34 | ||||||
₩ | 347,889 | 34 | ||||||
(In millions of won) | ||||
Unused tax loss carryforwards | ||||
Less than 1 year | ₩ | — | ||
1 ~ 2 years | 11,544 | |||
2 ~ 3 years | 14,345 | |||
More than 3 years | 203,521 | |||
₩ | 229,410 | |||
32. | Earnings per Share |
1) | Basic earnings per share for the years ended December 31, 2022, 2021 |
(In millions of won, except for share data) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021 | 2020 | |||||||||||||||||||
Basic earnings per share attributable to owners of the Parent Company: | ||||||||||||||||||||||||
Profit from continuing operation attributable to owners of the Parent Company | ₩ | 1,217,520 | 648,579 | 544,099 | ||||||||||||||||||||
Profit attributable to owners of the Parent Company | ₩ | 912,400 | 1,217,520 | 648,579 | ||||||||||||||||||||
Interest on hybrid bonds | (14,766 | ) | (14,766 | ) | (14,766 | ) | (14,766 | ) | (14,766 | ) | (14,766 | ) | ||||||||||||
Profit from continuing operation attributable to owners of the Parent Company on common shares | 1,202,754 | 633,813 | 529,333 | 897,634 | 1,202,754 | 633,813 | ||||||||||||||||||
Profit from discontinued operation attributable to owners of the Parent Company on common shares | 1,190,003 | 855,773 | 344,598 | — | 1,190,003 | 855,773 | ||||||||||||||||||
Weighted average number of common shares outstanding | 332,761,592 | 363,977,155 | 360,320,795 | 217,994,490 | 332,761,592 | 363,977,155 | ||||||||||||||||||
Basic earnings per share (in won) | ||||||||||||||||||||||||
Basic earnings per share (in W on) | ||||||||||||||||||||||||
Continuing operation | ₩3,614 | 1,741 | 1,469 | ₩ | 4,118 | 3,614 | 1,741 | |||||||||||||||||
Discontinued operation | 3,576 | 2,352 | 956 | — | 3,576 | 2,352 | ||||||||||||||||||
2) | The weighted average number of common shares outstanding for the years ended December 31, 2022, 2021 and 2020 are calculated as follows: |
(In shares) | ||||||||
2022 | ||||||||
Number of common shares | Weighted average number of common shares | |||||||
Issued shares as of January 1, 2022 | 218,833,144 | 218,833,144 | ||||||
Treasury shares as of January 1, 2022 | (1,250,992 | ) | (1,250,992 | ) | ||||
Disposal of treasury shares | 449,901 | 412,338 | ||||||
218,032,053 | 217,994,490 | |||||||
(In shares) | ||||||||
2021 | ||||||||
Number of common shares | Weighted average number of common shares | |||||||
Issued shares as of January 1, 2021 | 403,728,555 | 403,728,555 | ||||||
Treasury shares as of January 1, 2021 | (47,092,790 | ) | (47,092,790 | ) | ||||
Acquisition of treasury shares | (1,494,032 | ) | (1,383,241 | ) | ||||
Disposal of treasury shares | 3,134,003 | 1,022,242 | ||||||
Spin-off | (140,693,584 | ) | (23,513,174 | ) | ||||
217,582,152 | 332,761,592 | |||||||
(In shares) | ||||||||
2020 | ||||||||
Number of common shares | Weighted average number of common shares | |||||||
Issued shares as of January 1, 2020 | 403,728,555 | 403,728,555 | ||||||
Treasury shares as of January 1, 2020 | (38,046,315 | ) | (38,046,315 | ) | ||||
Acquisition of treasury shares | (9,046,475 | ) | (1,705,085 | ) | ||||
356,635,765 | 363,977,155 | |||||||
(In shares) | ||||||||
2021 | ||||||||
Number of common shares | Weighted average number of common shares | |||||||
Issued shares at January 1, 2021 | 403,728,555 | 403,728,555 | ||||||
Treasury shares at January 1, 2021 | (47,092,790 | ) | (47,092,790 | ) | ||||
Acquisition of treasury shares | (1,494,032 | ) | (1,383,241 | ) | ||||
Disposal of treasury shares | 3,134,003 | 1,022,242 | ||||||
Spin-off | (140,693,584 | ) | (23,513,174 | ) | ||||
217,582,152 | 332,761,592 | |||||||
(In shares) | ||||||||
2020 | ||||||||
Number of common shares | Weighted average number of common shares | |||||||
Issued shares at January 1, 2020 | 403,728,555 | 403,728,555 | ||||||
Treasury shares at January 1, 2020 | (38,046,315 | ) | (38,046,315 | ) | ||||
Acquisition of treasury shares | (9,046,475 | ) | (1,705,085 | ) | ||||
356,635,765 | 363,977,155 | |||||||
(In shares) | ||||||||
2019 | ||||||||
Number of common shares | Weighted average number of common shares | |||||||
Issued shares at January 1, 2019 | 403,728,555 | 403,728,555 | ||||||
Treasury shares at January 1, 2019 | (44,379,415 | ) | (44,379,415 | ) | ||||
Disposal of treasury shares | 6,333,100 | 971,655 | ||||||
365,682,240 | 360,320,795 | |||||||
1) | Diluted earnings per share for the years ended December 31, 2022, 2021 and 2020 are calculated as follows: |
(In millions of won, except for share data) | ||||||||||||||||||||
2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||
Profit from continuing operation attributable to owners of the Parent Company on common shares | ₩ | 1,202,754 | 633,813 | ₩ | 897,634 | 1,202,754 | 633,813 | |||||||||||||
Profit from discontinued operation attributable to owners of the Parent Company on common shares | 1,190,003 | 855,773 | — | 1,190,003 | 855,773 | |||||||||||||||
Adjusted weighted average number of common shares outstanding | 332,917,848 | 364,041,895 | 218,108,742 | 332,917,848 | 364,041,895 | |||||||||||||||
Diluted earnings per share (in won) | ||||||||||||||||||||
Continuing operation | ₩ | 3,613 | 1,741 | ₩ | 4,116 | 3,613 | 1,741 | |||||||||||||
Discontinued operation | 3,574 | 2,351 | — | 3,574 | 2,351 | |||||||||||||||
2) | The adjusted weighted average number of common shares outstanding for the years ended December 31, 2022, 2021 and 2020 are calculated as follows: |
(In shares) | ||||||||||||||||||||
2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||
Outstanding shares at January 1 | 356,635,765 | 365,682,240 | ||||||||||||||||||
Outstanding shares as of January 1 | 217,582,152 | 356,635,765 | 365,682,240 | |||||||||||||||||
Effect of treasury shares | (360,999 | ) | (1,705,085 | ) | 412,338 | (360,999 | ) | (1,705,085 | ) | |||||||||||
Effect of Spin-off | (23,513,174 | ) | — | — | (23,513,174 | ) | — | |||||||||||||
Effect of share option | 156,256 | 64,740 | 114,252 | 156,256 | 64,740 | |||||||||||||||
Adjusted weighted average number of common shares outstanding | 332,917,848 | 364,041,895 | 218,108,742 | 332,917,848 | 364,041,895 | |||||||||||||||
33. | Dividends |
(In millions of won, except for face value and share data) | (In millions of won, except for face value and share data) | (In millions of won, except for face value and share data) | ||||||||||||||||||||||||||||||||||
Year | Dividend type | Number of shares outstanding | Face value (in won) | Dividend ratio | Dividends | Dividend type | Number of shares outstanding | Face value (in won) | Dividend ratio | Dividends | ||||||||||||||||||||||||||
2022 | Cash dividends (Interim) | 218,002,830 | 100 | 830 | % | ₩ | 180,942 | |||||||||||||||||||||||||||||
Cash dividends (Interim) | 218,032,053 | 100 | 830 | % | 180,967 | |||||||||||||||||||||||||||||||
Cash dividends (Interim) | 218,032,053 | 100 | 830 | % | 180,967 | |||||||||||||||||||||||||||||||
Cash dividends (Year-end) | 218,032,053 | 100 | 830 | % | 180,967 | |||||||||||||||||||||||||||||||
₩ | 723,843 | |||||||||||||||||||||||||||||||||||
2021 | Cash dividends (Interim) | 217,616,645 | 100 | 1,635 | % | ₩ | 355,804 | Cash dividends (Interim) | 217,616,645 | 100 | 1,635 | % | ₩ | 355,804 | ||||||||||||||||||||||
Cash dividends (Year-end) | 217,582,152 | 100 | 1,660 | % | 361,186 | Cash dividends (Year-end) | 217,582,152 | 100 | 1,660 | % | 361,186 | |||||||||||||||||||||||||
₩ | 716,990 | ₩ | 716,990 | |||||||||||||||||||||||||||||||||
2020 | Cash dividends (Interim) | 73,136,448 | 500 | 200 | % | ₩ | 73,136 | Cash dividends (Interim) | 73,136,448 | 500 | 200 | % | ₩ | 73,136 | ||||||||||||||||||||||
Cash dividends (Year-end) | 71,327,153 | 500 | 1,800 | % | 641,944 | Cash dividends (Year-end) | 71,327,153 | 500 | 1,800 | % | 641,944 | |||||||||||||||||||||||||
₩ | 715,080 | ₩ | 715,080 | |||||||||||||||||||||||||||||||||
2019 | Cash dividends (Interim) | 71,869,828 | 500 | 200 | % | ₩ | 71,870 | |||||||||||||||||||||||||||||
Cash dividends (Year-end) | 73,136,448 | 500 | 1,800 | % | 658,228 | |||||||||||||||||||||||||||||||
₩ | 730,098 | |||||||||||||||||||||||||||||||||||
(In won) | (In won) | (In won) | ||||||||||||||||||
Year | Dividend type | Dividend per share | Closing price at year-end | Dividend yield ratio | Dividend type | Dividend per share | Closing price at year-end | Dividend yield ratio | ||||||||||||
2022 | Cash dividends | 3,320 | 47,400 | 7.00% | ||||||||||||||||
2021 | Cash dividends | 3,295 | 57,900 | 5.69% | Cash dividends | 3,295 | 57,900 | 5.69% | ||||||||||||
2020 | Cash dividends | 10,000 | 238,000 | 4.20% | Cash dividends | 10,000 | 238,000 | 4.20% | ||||||||||||
2019 | Cash dividends | 10,000 | 238,000 | 4.20% |
34. | Categories of Financial Instruments |
(1) | Financial assets by category as of December 31, 2022 and 2021 are as follows: |
(In millions of won) | ||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||
Financial assets at FVTPL | Equity instruments at FVOCI | Financial assets at amortized cost | Derivatives hedging instrument | Total | ||||||||||||||||
Cash and cash equivalents | ₩ | 245,982 | — | 1,636,309 | — | 1,882,291 | ||||||||||||||
Financial instruments | 148,365 | — | 89,240 | — | 237,605 | |||||||||||||||
Long-term investment securities(*) | 221,139 | 1,189,597 | — | — | 1,410,736 | |||||||||||||||
Accounts receivable — trade | — | — | 1,984,772 | — | 1,984,772 | |||||||||||||||
Loans and other receivables | 332,669 | — | 909,003 | — | 1,241,672 | |||||||||||||||
Derivative financial assets | 54,009 | — | — | 267,151 | 321,160 | |||||||||||||||
₩ | 1,002,164 | 1,189,597 | 4,619,324 | 267,151 | 7,078,236 | |||||||||||||||
(*) | The Group designated ₩1,189,597 million of equity instruments that are not held for trading as financial assets at FVOCI. |
(In millions of won) | ||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||
Financial assets at FVTPL | Equity instruments at FVOCI | Debt instruments at FVOCI | Financial assets at amortized cost | Derivatives hedging instrument | Total | |||||||||||||||||||
Cash and cash equivalents | ₩ | 505,578 | — | — | 367,153 | — | 872,731 | |||||||||||||||||
Financial instruments | 389,368 | — | — | 119,684 | — | 509,052 | ||||||||||||||||||
Short-term investment securities | 5,010 | — | — | — | — | 5,010 | ||||||||||||||||||
Long-term investment securities(*) | 203,473 | 1,510,428 | 1,177 | — | — | 1,715,078 | ||||||||||||||||||
Accounts receivable — trade | — | — | — | 1,921,617 | — | 1,921,617 | ||||||||||||||||||
Loans and other receivables | 459,959 | — | — | 735,958 | — | 1,195,917 | ||||||||||||||||||
Derivative financial assets | 34,933 | — | — | — | 182,661 | 217,594 | ||||||||||||||||||
₩ | 1,598,321 | 1,510,428 | 1,177 | 3,144,412 | 182,661 | 6,436,999 | ||||||||||||||||||
(*) | The Group designated ₩1,510,428 million of equity instruments that are not held for trading as financial assets at FVOCI. |
(In millions of won) | ||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||
Financial assets at FVTPL | Equity instruments at FVOCI | Debt instruments at FVOCI | Financial assets at amortized cost | Derivatives hedging instrument | Total | |||||||||||||||||||
Cash and cash equivalents | ₩ | 505,578 | — | — | 367,153 | — | 872,731 | |||||||||||||||||
Financial instruments | 389,368 | — | — | 119,684 | — | 509,052 | ||||||||||||||||||
Short-term investment securities | 5,010 | — | — | — | — | 5,010 | ||||||||||||||||||
Long-term investment securities(*) | 203,473 | 1,510,428 | 1,177 | — | — | 1,715,078 | ||||||||||||||||||
Accounts receivable — trade | — | — | — | 1,921,617 | — | 1,921,617 | ||||||||||||||||||
Loans and other receivables | 459,959 | — | — | 735,958 | — | 1,195,917 | ||||||||||||||||||
Derivative financial assets | 34,933 | — | — | — | 182,661 | 217,594 | ||||||||||||||||||
₩ | 1,598,321 | 1,510,428 | 1,177 | 3,144,412 | 182,661 | 6,436,999 | ||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||
Financial assets at FVTPL | Equity instruments at FVOCI | Debt instruments at FVOCI | Financial assets at amortized cost | Derivatives hedging instrument | Total | |||||||||||||||||||
Cash and cash equivalents(*1) | ₩ | 539,372 | — | — | 830,281 | — | 1,369,653 | |||||||||||||||||
Financial instruments(*1) | 1,122,251 | — | — | 305,594 | — | 1,427,845 | ||||||||||||||||||
Short-term investment securities | 150,392 | — | — | — | — | 150,392 | ||||||||||||||||||
Long-term investment securities(*2) | 193,396 | 1,454,361 | 1,080 | — | — | 1,648,837 | ||||||||||||||||||
Accounts receivable — trade | — | — | — | 2,214,353 | — | 2,214,353 | ||||||||||||||||||
Loans and other receivables | 517,175 | — | — | 1,220,828 | — | 1,738,003 | ||||||||||||||||||
Derivative financial assets | 99,559 | — | — | — | 65,136 | 164,695 | ||||||||||||||||||
₩ | 2,622,145 | 1,454,361 | 1,080 | 4,571,056 | 65,136 | 8,713,778 | ||||||||||||||||||
(2) | Financial liabilities by category as of December 31, |
(In millions of won) | ||||||||||||||||||||||||||||
December 31, 2021 | December 31, 2022 | |||||||||||||||||||||||||||
Financial liabilities at FVTPL | Financial liabilities at amortized cost | Derivatives hedging instrument | Total | Financial liabilities at FVTPL | Financial liabilities at amortized cost | Total | ||||||||||||||||||||||
Accounts payable — trade | ₩ | — | 190,559 | — | 190,559 | ₩ | — | 89,255 | 89,255 | |||||||||||||||||||
Derivative financial liabilities | 321,025 | — | 111 | 321,136 | 302,593 | — | 302,593 | |||||||||||||||||||||
Borrowings | — | 407,185 | — | 407,185 | — | 936,110 | 936,110 | |||||||||||||||||||||
Debentures | — | 8,426,683 | — | 8,426,683 | — | 8,366,694 | 8,366,694 | |||||||||||||||||||||
Lease liabilities(*) | — | 1,534,282 | — | 1,534,282 | — | 1,782,057 | 1,782,057 | |||||||||||||||||||||
Accounts payable — other and others | — | 5,524,692 | — | 5,524,692 | — | 5,505,465 | 5,505,465 | |||||||||||||||||||||
₩ | 321,025 | 16,083,401 | 111 | 16,404,537 | ₩ | 302,593 | 16,679,581 | 16,982,174 | ||||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||||||||||
December 31, 2020 | December 31, 2021 | |||||||||||||||||||||||||||||||
Financial liabilities at FVTPL | Financial liabilities at amortized cost | Derivatives hedging instrument | Total | Financial liabilities at FVTPL | Financial liabilities at amortized cost | Derivatives hedging instrument | Total | |||||||||||||||||||||||||
Accounts payable — trade | ₩ | — | 372,909 | — | 372,909 | ₩ | — | 190,559 | — | 190,559 | ||||||||||||||||||||||
Derivative financial liabilities | 333,099 | — | 42,061 | 375,160 | 321,025 | — | 111 | 321,136 | ||||||||||||||||||||||||
Borrowings | — | 2,138,922 | — | 2,138,922 | — | 407,185 | — | 407,185 | ||||||||||||||||||||||||
Debentures | — | 8,579,743 | — | 8,579,743 | — | 8,426,683 | — | 8,426,683 | ||||||||||||||||||||||||
Lease liabilities(*) | — | 1,436,777 | — | 1,436,777 | — | 1,534,282 | — | 1,534,282 | ||||||||||||||||||||||||
Accounts payable — other and others | — | 6,051,550 | — | 6,051,550 | — | 5,524,692 | — | 5,524,692 | ||||||||||||||||||||||||
₩ | 333,099 | 18,579,901 | 42,061 | 18,955,061 | ₩ | 321,025 | 16,083,401 | 111 | 16,404,537 | |||||||||||||||||||||||
(*) | Lease liabilities are not applicable on category of financial liabilities, but are classified as financial liabilities measured at amortized cost on consideration of nature for measurement of liabilities. |
35. | Financial Risk Management |
1) | Market risk |
(In millions of won, thousands of foreign currencies) | (In millions of won, thousands of foreign currencies) | (In millions of won, thousands of foreign currencies) | ||||||||||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||||||||||||
Foreign currencies | Won equivalent | Foreign currencies | Won equivalent | Foreign currencies | Won equivalent | Foreign currencies | Won equivalent | |||||||||||||||||||||||||
USD | 52,331 | ₩ | 62,038 | 1,527,169 | ₩ | 1,810,459 | 53,243 | ₩ | 67,475 | 1,517,930 | ₩ | 1,923,672 | ||||||||||||||||||||
EUR | 59 | 80 | 0 | 0 | 5,626 | 7,602 | 20 | 27 | ||||||||||||||||||||||||
JPY | 0 | 0 | 87,837 | 905 | ||||||||||||||||||||||||||||
Others | — | 172 | — | 145 | — | 452 | — | 175 | ||||||||||||||||||||||||
₩ | 62,290 | ₩ | 1,811,509 | ₩ | 75,529 | ₩ | 1,923,874 | |||||||||||||||||||||||||
(In millions of won) | ||||||||||||||||
If increased by 10% | If decreased by 10% | If increased by 10% | If decreased by 10% | |||||||||||||
USD | ₩ | 2,830 | (2,830 | ) | ₩ | 3,933 | (3,933 | ) | ||||||||
EUR | 8 | (8 | ) | 758 | (758 | ) | ||||||||||
JPY | (90 | ) | 90 | |||||||||||||
Others | 2 | (2 | ) | 28 | (28 | ) | ||||||||||
₩ | 2,750 | (2,750 | ) | ₩ | 4,719 | (4,719 | ) | |||||||||
2) | Credit risk |
(In millions of won) | ||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2022 | December 31, 2021 | |||||||||||||
Cash and cash equivalents | ₩ | 872,550 | 1,369,423 | ₩ | 1,882,093 | 872,550 | ||||||||||
Financial instruments | 509,052 | 1,427,845 | 237,605 | 509,052 | ||||||||||||
Investment securities | 2,077 | 4,154 | 900 | 2,077 | ||||||||||||
Accounts receivable — trade | 1,921,617 | 2,214,353 | 1,984,772 | 1,921,617 | ||||||||||||
Contract assets | 118,278 | 148,281 | 132,221 | 118,278 | ||||||||||||
Loans and other receivables | 1,195,917 | 1,738,003 | 1,241,672 | 1,195,917 | ||||||||||||
Derivative financial assets | 217,594 | 164,695 | 321,160 | 217,594 | ||||||||||||
₩ | 4,837,085 | 7,066,754 | ₩ | 5,800,423 | 4,837,085 | |||||||||||
(In millions of won) | ||||||||||||||||||||
Financial assets at FVTPL | Financial assets at FVOCI | At amortized cost | ||||||||||||||||||
12-month ECL | Lifetime ECL — not credit impaired | Lifetime ECL — credit impaired | ||||||||||||||||||
Gross amount | ₩ | 850,227 | 1,177 | 754,918 | 43,643 | 149,091 | ||||||||||||||
Loss allowance | — | — | (2,787 | ) | (6,190 | ) | (83,033 | ) | ||||||||||||
Carrying amount | ₩ | 850,227 | 1,177 | 752,131 | 37,453 | 66,058 | ||||||||||||||
(In millions of won) | ||||||||||||||||
Financial assets at FVTPL | Financial assets at amortized cost | |||||||||||||||
12-month ECL | Lifetime ECL — not credit impaired | Lifetime ECL — credit impaired | ||||||||||||||
Gross amount | ₩ | 481,935 | 994,868 | 5,592 | 87,862 | |||||||||||
Loss allowance | — | (3,081 | ) | (3,314 | ) | (83,685 | ) | |||||||||
Carrying amount | ₩ | 481,935 | 991,787 | 2,278 | 4,177 | |||||||||||
(In millions of won) | ||||||||||||||||
12-month ECL | Lifetime ECL — not credit impaired | Lifetime ECL — credit impaired | Total | |||||||||||||
December 31, 2020 | ₩ | 3,751 | 7,995 | 88,819 | 100,565 | |||||||||||
Remeasurement of loss allowance, net(*) | 316 | 2,885 | 2,800 | 6,001 | ||||||||||||
Transfer to lifetime ECL — not credit impaired | (306 | ) | 306 | 0 | 0 | |||||||||||
Transfer to lifetime ECL — credit impaired | (980 | ) | (2,555 | ) | 3,535 | 0 | ||||||||||
Amounts written off | 0 | 0 | (16,429 | ) | (16,429 | ) | ||||||||||
Recovery of amounts written off | 6 | 0 | 10,495 | 10,501 | ||||||||||||
Business combination | 0 | 0 | 358 | 358 | ||||||||||||
Spin-off | 0 | (2,441 | ) | (6,545 | ) | (8,986 | ) | |||||||||
December 31, 2021 | ₩ | 2,787 | 6,190 | 83,033 | 92,010 | |||||||||||
(In millions of won) | ||||||||||||||||
12-month ECL | Lifetime ECL — not credit impaired | Lifetime ECL — credit impaired | Total | |||||||||||||
December 31, 2021 | ₩ | 2,787 | 6,190 | 83,033 | 92,010 | |||||||||||
Remeasurement of loss allowance, net | 1,571 | (1,517 | ) | 2,957 | 3,011 | |||||||||||
Transfer to lifetime ECL — not credit impaired | (1,277 | ) | 1,277 | — | — | |||||||||||
Transfer to lifetime ECL — credit impaired | — | (2,636 | ) | 2,636 | — | |||||||||||
Amounts written off | — | — | (6,594 | ) | (6,594 | ) | ||||||||||
Recovery of amounts written off | — | — | 1,653 | 1,653 | ||||||||||||
December 31, 2022 | ₩ | 3,081 | 3,314 | 83,685 | 90,080 | |||||||||||
3) | idit y risk |
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||||||||||||||||||||||||||
Carrying amount | Contractual cash flows | Less than 1 year | 1 - 5 years | More than 5 years | Carrying amount | Contractual cash flows | Less than 1 year | 1-5 years | More than 5 years | |||||||||||||||||||||||||||||||
Accounts payable — trade | ₩ | 190,559 | 190,559 | 190,559 | — | — | ₩ | 89,255 | 89,255 | 89,255 | — | — | ||||||||||||||||||||||||||||
Borrowings(*) | 407,185 | 420,503 | 59,864 | 360,639 | — | 936,110 | 975,960 | 290,024 | 685,936 | — | ||||||||||||||||||||||||||||||
Debentures(*) | 8,426,683 | 9,479,976 | 1,603,760 | 4,987,959 | 2,888,257 | 8,366,694 | 9,469,549 | 2,074,631 | 5,077,080 | 2,317,838 | ||||||||||||||||||||||||||||||
Lease liabilities | 1,534,282 | 1,653,416 | 359,356 | 989,603 | 304,457 | 1,782,057 | 2,063,294 | 391,686 | 1,104,040 | 567,568 | ||||||||||||||||||||||||||||||
Accounts payable — other and others(*) | 5,524,692 | 5,636,104 | 3,917,356 | 1,534,636 | 184,112 | 5,505,465 | 5,641,277 | 4,291,518 | 1,256,702 | 93,057 | ||||||||||||||||||||||||||||||
₩ | 16,083,401 | 17,380,558 | 6,130,895 | 7,872,837 | 3,376,826 | ₩ | 16,679,581 | 18,239,335 | 7,137,114 | 8,123,758 | 2,978,463 | |||||||||||||||||||||||||||||
(*) | Includes interest payables. |
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||||||||||||||||||||||
Carrying amount | Contractual cash flows | Less than 1 year | 1 - 5 years | More than 5 years | Carrying amount | Contractual cash flows | Less than 1 year | 1-5 years | ||||||||||||||||||||||||||||
Assets | ₩ | 182,661 | 188,759 | 27,248 | 135,409 | 26,102 | ₩ | 267,151 | 281,636 | 169,761 | 111,875 | |||||||||||||||||||||||||
Liabilities | (111 | ) | (111 | ) | (52 | ) | (59 | ) | 0 | |||||||||||||||||||||||||||
₩ | 182,550 | 188,648 | 27,196 | 135,350 | 26,102 | |||||||||||||||||||||||||||||||
(2) | Capital management |
(In millions of won) | ||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2022 | December 31, 2021 | |||||||||||||
Total liabilities | ₩ | 18,576,139 | 23,510,714 | ₩ | 19,153,066 | 18,576,139 | ||||||||||
Total equity | 12,335,138 | 24,396,243 | 12,155,196 | 12,335,138 | ||||||||||||
Debt-equity ratios | 150.60 | % | 96.37 | % | 157.57 | % | 150.60 | % | ||||||||
(3) | Fair value |
1) | Fair value and carrying amount of financial assets and liabilities including fair value hierarchy as of December 31, |
(In millions of won) | December 31, 2021 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Carrying amount | Level 1 | Level 2 | Level 3 | Total | Carrying amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||
Financial assets that are measured at fair value: | ||||||||||||||||||||||||||||||||||||||||
FVTPL | ₩ | 1,598,321 | 55,455 | 1,359,915 | 182,951 | 1,598,321 | ₩ | 1,002,164 | 44,431 | 727,014 | 230,719 | 1,002,164 | ||||||||||||||||||||||||||||
Derivative hedging instruments | 182,661 | — | 182,661 | — | 182,661 | 267,151 | — | 267,151 | — | 267,151 | ||||||||||||||||||||||||||||||
FVOCI | 1,511,605 | 1,344,434 | — | 167,171 | 1,511,605 | 1,189,597 | 993,765 | — | 195,832 | 1,189,597 | ||||||||||||||||||||||||||||||
₩ | 3,292,587 | 1,399,889 | 1,542,576 | 350,122 | 3,292,587 | ₩ | 2,458,912 | 1,038,196 | 994,165 | 426,551 | 2,458,912 | |||||||||||||||||||||||||||||
Financial liabilities that are measured at fair value: | ||||||||||||||||||||||||||||||||||||||||
FVTPL | ₩ | 321,025 | — | — | 321,025 | 321,025 | ₩ | 302,593 | — | — | 302,593 | 302,593 | ||||||||||||||||||||||||||||
Derivative hedging instruments | 111 | — | 111 | — | 111 | |||||||||||||||||||||||||||||||||||
₩ | 321,136 | — | 111 | 321,025 | 321,136 | |||||||||||||||||||||||||||||||||||
Financial liabilities that are not measured at fair value: | ||||||||||||||||||||||||||||||||||||||||
Borrowings | ₩ | 407,185 | — | 392,237 | — | 392,237 | ₩ | 936,110 | — | 911,597 | — | 911,597 | ||||||||||||||||||||||||||||
Debentures | 8,426,683 | — | 8,679,472 | — | 8,679,472 | 8,366,694 | — | 7,813,420 | — | 7,813,420 | ||||||||||||||||||||||||||||||
Long-term payables — other | 2,009,833 | — | 2,010,852 | — | 2,010,852 | 1,638,341 | — | 1,614,934 | — | 1,614,934 | ||||||||||||||||||||||||||||||
₩ | 10,843,701 | — | 11,082,561 | — | 11,082,561 | ₩ | 10,941,145 | — | 10,339,951 | — | 10,339,951 | |||||||||||||||||||||||||||||
2) | Fair value and carrying amount of financial assets and liabilities including fair value hierarchy as of December 31, |
(In millions of won) | December 31, 2020 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Carrying amount | Level 1 | Level 2 | Level 3 | Total | Carrying amount | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||
Financial assets that are measured at fair value: | ||||||||||||||||||||||||||||||||||||||||
FVTPL(*) | ₩ | 2,622,145 | 60,473 | 2,291,355 | 270,317 | 2,622,145 | ||||||||||||||||||||||||||||||||||
FVTPL | ₩ | 1,598,321 | 55,455 | 1,359,915 | 182,951 | 1,598,321 | ||||||||||||||||||||||||||||||||||
Derivative hedging instruments | 65,136 | — | 65,136 | — | 65,136 | 182,661 | — | 182,661 | — | 182,661 | ||||||||||||||||||||||||||||||
FVOCI | 1,455,441 | 885,452 | — | 569,989 | 1,455,441 | 1,511,605 | 1,344,434 | — | 167,171 | 1,511,605 | ||||||||||||||||||||||||||||||
₩ | 4,142,722 | 945,925 | 2,356,491 | 840,306 | 4,142,722 | ₩ | 3,292,587 | 1,399,889 | 1,542,576 | 350,122 | 3,292,587 | |||||||||||||||||||||||||||||
Financial liabilities that are measured at fair value: | ||||||||||||||||||||||||||||||||||||||||
FVTPL | ₩ | 333,099 | — | — | 333,099 | 333,099 | ₩ | 321,025 | — | — | 321,025 | 321,025 | ||||||||||||||||||||||||||||
Derivative hedging instruments | 42,061 | — | 42,061 | — | 42,061 | 111 | — | 111 | — | 111 | ||||||||||||||||||||||||||||||
₩ | 375,160 | — | 42,061 | 333,099 | 375,160 | ₩ | 321,136 | — | 111 | 321,025 | 321,136 | |||||||||||||||||||||||||||||
Financial liabilities that are not measured at fair value: | ||||||||||||||||||||||||||||||||||||||||
Borrowings | ₩ | 2,138,923 | — | 2,282,316 | — | 2,282,316 | ₩ | 407,185 | — | 392,237 | — | 392,237 | ||||||||||||||||||||||||||||
Debentures | 8,579,743 | — | 9,085,324 | — | 9,085,324 | 8,426,683 | — | 8,679,472 | — | 8,679,472 | ||||||||||||||||||||||||||||||
Long-term payables — other | 1,566,954 | — | 1,582,805 | — | 1,582,805 | 2,009,833 | — | 2,010,852 | — | 2,010,852 | ||||||||||||||||||||||||||||||
₩ | 12,285,620 | — | 12,950,445 | — | 12,950,445 | ₩ | 10,843,701 | — | 11,082,561 | — | 11,082,561 | |||||||||||||||||||||||||||||
Interest rate | ||
Derivative instruments | ||
Borrowings and debentures | ||
Long-term payables — other |
3) | There have been no transfers between Level 2 and Level 1 for the year ended December 31, |
(In millions of won) | ||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | Gain (loss) for the year(*1) | OCI | Acquisition | Disposal | Transfer | Spin-off | Balance at December 31, 2021 | |||||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||||||||
FVTPL | ₩ | 270,317 | 21,973 | 7,318 | 128,517 | (75,238 | ) | (37,564 | ) | (132,372 | ) | 182,951 | ||||||||||||||||||||
FVOCI(*2) | 569,989 | 0 | 38,520 | 11,019 | (24,921 | ) | (369,185 | ) | (58,251 | ) | 167,171 | |||||||||||||||||||||
₩ | 840,306 | 21,973 | 45,838 | 139,536 | (100,159 | ) | (406,749 | ) | (190,623 | ) | 350,122 | |||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||||||
FVTPL | ₩ | (333,099 | ) | (8,036 | ) | — | (217,736 | ) | — | — | 237,846 | (321,025 | ) | |||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||||||
Balance as of January 1, 2022 | Gain / (Loss) | OCI | Acquisition | Disposal | Transfer | Balance as of December 31, 2022 | ||||||||||||||||||||||
Financial assets | ||||||||||||||||||||||||||||
FVTPL | ₩ | 182,951 | 42,145 | 1,375 | 48,458 | (38,894 | ) | (5,316 | ) | 230,719 | ||||||||||||||||||
FVOCI | 167,171 | — | 1,088 | 55,333 | (26,860 | ) | (900 | ) | 195,832 | |||||||||||||||||||
₩ | 350,122 | 42,145 | 2,463 | 103,791 | (65,754 | ) | (6,216 | ) | 426,551 | |||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||
FVTPL | ₩ | (321,025 | ) | 18,432 | — | — | — | — | (302,593 | ) |
(4) | Enforceable master netting agreement or similar agreement |
(In millions of won) | December 31, 2021 | December 31, 2022 | ||||||||||||||||||||||
Gross financial instruments recognized | Amount offset | Net financial instruments presented on the statements of financial position | Gross financial instruments recognized | Amount offset | Net financial instruments presented on the consolidated statements of financial position | |||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||
Accounts receivable — trade and others | ₩ | 197,828 | (189,424 | ) | 8,404 | ₩ | 245,835 | (236,921 | ) | 8,914 | ||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||
Accounts payable — other and others | ₩ | 200,849 | (189,424 | ) | 11,425 | ₩ | 244,509 | (236,921 | ) | 7,588 |
(In millions of won) | December 31, 2020 | December 31, 2021 | ||||||||||||||||||||||||||||||
Gross financial instruments recognized | Amount offset | Net financial instruments presented on the statements of financial position | Relevant financial instruments not offset | Net amount | Gross financial instruments recognized | Amount offset | Net financial instruments presented on the consolidated statements of financial position | |||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Derivative instruments(*) | ₩ | 8,015 | — | 8,015 | (453 | ) | 7,562 | |||||||||||||||||||||||||
Accounts receivable — trade and others | 317,332 | (203,403 | ) | 113,929 | — | 113,929 | ₩ | 197,828 | (189,424 | ) | 8,404 | |||||||||||||||||||||
₩ | 325,347 | (203,403 | ) | 121,944 | (453 | ) | 121,491 | |||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Derivative instruments(*) | ₩ | 453 | — | 453 | (453 | ) | — | |||||||||||||||||||||||||
Accounts payable — other and others | 301,996 | (203,403 | ) | 98,593 | — | 98,593 | �� | ₩ | 200,849 | (189,424 | ) | 11,425 | ||||||||||||||||||||
₩ | 302,449 | (203,403 | ) | 99,046 | (453 | ) | 98,593 | |||||||||||||||||||||||||
36. | Transactions with Related Parties |
Relationship | Company | |
Ultimate | SK Inc. | |
Joint | ||
SK China Company Ltd. and 42 others | ||
Others | The Ultimate |
(In millions of won) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021 | 2020 | |||||||||||||||||||
Salaries | ₩ | 5,956 | 10,029 | 5,969 | ₩ | 3,487 | 5,956 | 10,029 | ||||||||||||||||
Defined benefits plan expenses | 2,845 | 3,459 | 1,237 | 761 | 2,845 | 3,459 | ||||||||||||||||||
Share option | 146 | 158 | 325 | 1,598 | 146 | 158 | ||||||||||||||||||
₩ | 13,646 | 7,531 | ₩5,846 | 8,947 | 13,646 | |||||||||||||||||||
(3) | Transactions with related parties for the years ended December 31, 2022, 2021 and 2020 are as follows: |
(In millions of won) | ||||||||||||||
2022 | ||||||||||||||
Scope | Company | Operating revenue and others | Operating expense and others(*1) | Acquisition of property and equipment | ||||||||||
Ultimate Controlling Entity | SK Inc.(*2) | ₩ | 22,162 | 662,247 | 114,895 | |||||||||
Associates | F&U Credit information Co., Ltd. | 3,490 | 49,227 | 265 | ||||||||||
HanaCard Co., Ltd.(*3) | 8,932 | 1,820 | 22 | |||||||||||
Daehan Kanggun BcN Co., Ltd. | 20,290 | — | — | |||||||||||
Others(*4) | 13,795 | 5,608 | 80 | |||||||||||
46,507 | 56,655 | 367 | ||||||||||||
Others | SK Innovation Co., Ltd. | 27,524 | 19,598 | — | ||||||||||
SK Energy Co., Ltd. | 4,585 | 710 | — | |||||||||||
SK Geo Centric Co., Ltd. | 925 | 1 | — | |||||||||||
SK Networks Co., Ltd.(*5) | 4,312 | 904,320 | 288 | |||||||||||
SK Networks Service Co., Ltd. | 6,110 | 71,432 | 7,891 | |||||||||||
SK Ecoplant Co., Ltd. | 3,330 | 112 | — | |||||||||||
SK hynix Inc. | 60,933 | 75 | — | |||||||||||
SK Shieldus Co., Ltd. | 39,455 | 147,731 | 35,854 | |||||||||||
Content Wavve Corp. | 6,797 | 108,760 | 229 | |||||||||||
Eleven Street Co., Ltd. | 71,972 | 31,589 | — | |||||||||||
SK Planet Co., Ltd. | 19,753 | 95,261 | 17,481 | |||||||||||
SK RENT A CAR Co., Ltd. | 14,992 | 15,891 | — | |||||||||||
SK Magic Co., Ltd. | 2,204 | 1,071 | — | |||||||||||
Tmap Mobility Co., Ltd. | 22,011 | 4,973 | 892 | |||||||||||
Onestore Co., Ltd. | 17,181 | 24 | — | |||||||||||
Dreamus Company | 7,235 | 85,193 | 649 | |||||||||||
UbiNS Co., Ltd. | 283 | 46,222 | 53,897 | |||||||||||
Happy Narae Co., Ltd. | 1,637 | 24,727 | 143,188 | |||||||||||
Others | 40,058 | 29,610 | 20,555 | |||||||||||
351,297 | 1,587,300 | 280,924 | ||||||||||||
₩ | 419,966 | 2,306,202 | 396,186 | |||||||||||
(*1) | Operating expenses and others include lease payments paid by the Group. |
(*2) | Operating expenses and others include ₩272,524 million of dividends declared to be paid by the Parent Company. |
(*3) | HanaCard Co., Ltd. was excluded from the related parties due to the disposal of the Group’s shares in the entity for the year ended December 31, 2022, and the transactions above occurred before the disposal. |
(*4) | Operating revenue and others include ₩13,700 million of dividends deducted from the investment in associates as a result of receipt by the Group. |
(*5) | Operating expenses and others include costs for handset purchases amounting to ₩844,157 million. |
(In millions of won) | ||||||||||||||
2021 | ||||||||||||||
Scope | Company | Operating revenue and others | Operating expense and others(*1) | Acquisition of property and equipment | ||||||||||
Ultimate Controlling Entity | SK Inc.(*2) | ₩ | 33,253 | 633,868 | 82,191 | |||||||||
Associates | F&U Credit information Co., Ltd. | 3,828 | 50,029 | — | ||||||||||
HanaCard Co., Ltd. | 17,962 | 4,374 | — | |||||||||||
SK Wyverns Co., Ltd.(*3) | 202 | 8,203 | — | |||||||||||
Daehan Kanggun BcN Co., Ltd. | 10,943 | — | — | |||||||||||
SK China Company Ltd.(*4) | 131,141 | — | — | |||||||||||
Others(*5) | 11,778 | 8,356 | — | |||||||||||
175,854 | 70,962 | — | ||||||||||||
Others | SK Innovation Co., Ltd. | 53,445 | 19,093 | — | ||||||||||
SK Energy Co., Ltd. | 18,970 | 1,250 | — | |||||||||||
SK Geo Centric Co., Ltd. | 33,435 | 9 | — | |||||||||||
SK TNS Co., Ltd.(*3) | 75 | 6,868 | 57,903 | |||||||||||
SKC Infra Service Co., Ltd.(*3) | 26 | 30,798 | 8,028 | |||||||||||
SK Networks Co., Ltd.(*6) | 14,439 | 1,055,512 | 24 | |||||||||||
SK Networks Service Co., Ltd. | 7,292 | 73,596 | 3,520 | |||||||||||
SK hynix Inc.(*7) | 285,104 | 199 | — | |||||||||||
Happy Narae Co., Ltd. | 6,899 | 20,229 | 133,625 | |||||||||||
SK Shieldus Co., Ltd.(*8) | 5,793 | 18,861 | 20,382 | |||||||||||
Content Wavve Co., Ltd. | 174 | 78,964 | — | |||||||||||
Eleven Street Co., Ltd. | 2,785 | 5,699 | — | |||||||||||
SK Planet Co., Ltd. | 2,048 | 16,747 | 6,081 | |||||||||||
SK hynix Semiconductor (China) Ltd. | 48,546 | — | — | |||||||||||
SK hynix system ic (Wuxi) Co., Ltd. | 20,807 | — | — | |||||||||||
SK ON Hungary Kft. | 38,413 | — | — | |||||||||||
SK RENT A CAR Co., Ltd. | 5,843 | 18,564 | — | |||||||||||
Dreamus Company | 795 | 20,074 | 396 | |||||||||||
SK m&service Co., Ltd. | 764 | 3,670 | 888 | |||||||||||
UbiNS Co., Ltd. | 415 | 42,335 | 50,847 | |||||||||||
Others | 156,055 | 30,762 | 23,428 | |||||||||||
702,123 | 1,443,230 | 305,122 | ||||||||||||
₩ | 911,230 | 2,148,060 | 387,313 | |||||||||||
(In millions of won) | ||||||||||||||
2021 | ||||||||||||||
Scope | Company | Operating revenue and others | Operating expense and others(*1) | Acquisition of property and equipment | ||||||||||
Ultimate Controlling Entity | SK Inc.(*2) | ₩ | 33,253 | 633,868 | 82,191 | |||||||||
Associates | F&U Credit information Co., Ltd. | 3,828 | 50,029 | — | ||||||||||
KEB HanaCard Co., Ltd. | 17,962 | 4,374 | — | |||||||||||
SK Wyverns Co., Ltd.(*3) | 202 | 8,203 | — | |||||||||||
Daehan Kanggun BcN Co., Ltd. | 10,943 | — | — | |||||||||||
SK China Company Ltd.(*4) | 131,141 | — | — | |||||||||||
Others(*5) | 11,778 | 8,356 | — | |||||||||||
175,854 | 70,962 | — | ||||||||||||
Others | SK Innovation Co., Ltd. | 53,445 | 19,093 | — | ||||||||||
SK Energy Co., Ltd. | 18,970 | 1,250 | — | |||||||||||
SK Geo Centric Co., Ltd. (Formerly, SK Global Chemical Co., Ltd.) | 33,435 | 9 | — | |||||||||||
SK TNS Co., Ltd.(*3) | 75 | 6,868 | 57,903 | |||||||||||
SKC Infra Service Co., Ltd.(*3) | 26 | 30,798 | 8,028 | |||||||||||
SK Networks Co., Ltd.(*6) | 14,439 | 1,055,512 | 24 | |||||||||||
SK Networks Service Co., Ltd. | 7,292 | 73,596 | 3,520 | |||||||||||
SK hynix Inc.(*7) | 285,104 | 199 | — | |||||||||||
Happy Narae Co., Ltd. | 6,899 | 20,229 | 133,625 | |||||||||||
SK Shieldus Co., Ltd. (Formerly, ADT CAPS Co., Ltd.)(*8) | 5,793 | 18,861 | 20,382 | |||||||||||
Content Wavve Co., Ltd. | 174 | 78,964 | — | |||||||||||
Eleven Street Co., Ltd. | 2,785 | 5,699 | — | |||||||||||
SK Planet Co., Ltd. | 2,048 | 16,747 | 6,081 | |||||||||||
SK hynix Semiconductor (China) Ltd. | 48,546 | — | — | |||||||||||
SK hynix system ic (Wuxi) Co., Ltd. | 20,807 | — | — | |||||||||||
SK ON Hungary Kft. (Formerly, SK Battery Hungary Kft.) | 38,413 | — | — | |||||||||||
SK RENT A CAR Co., Ltd. | 5,843 | 18,564 | — | |||||||||||
DREAMUS COMPANY | 795 | 20,074 | 396 | |||||||||||
SK m&service Co., Ltd. | 764 | 3,670 | 888 | |||||||||||
UbiNS Co., Ltd. | 415 | 42,335 | 50,847 | |||||||||||
Others | 156,055 | 30,762 | 23,428 | |||||||||||
702,123 | 1,443,230 | 305,122 | ||||||||||||
₩ | 911,230 | 2,148,060 | 387,313 | |||||||||||
(*1) | Operating expense and others include lease payments paid by the Group. |
(*2) | Operating expense and others include |
(*3) | Transactions occurred before the related party relationship terminated. |
(*4) | Operating revenue and others include |
(*5) | Operating revenue and others include |
(*6) | Operating expenses and others include costs for handset purchases amounting to |
(*7) | Operating revenue and others include |
(*8) | Operating revenue and others include |
(In millions of won) | ||||||||||||||||||||||||||||
2020 | 2020 | |||||||||||||||||||||||||||
Scope | Company | Operating revenue and others | Operating expense and others(*1) | Acquisition of property and equipment | Company | Operating revenue and others | Operating expense and others(*1) | Acquisition of property and equipment | ||||||||||||||||||||
Ultimate Controlling Entity | SK Inc.(*2) | ₩ | 40,717 | 596,509 | 76,534 | SK Inc.(*2) | ₩ | 40,717 | 596,509 | 76,534 | ||||||||||||||||||
Associates | F&U Credit information Co., Ltd. | 3,484 | 51,228 | — | F&U Credit information Co., Ltd. | 3,484 | 51,228 | — | ||||||||||||||||||||
SK hynix Inc.(*3) | 316,001 | 267 | — | SK hynix Inc.(*3) | 316,001 | 267 | — | |||||||||||||||||||||
KEB HanaCard Co., Ltd. | 683 | 3,065 | — | HanaCard Co., Ltd. | 683 | 3,065 | — | |||||||||||||||||||||
SK Wyverns Co., Ltd. | 1,279 | 19,354 | — | SK Wyverns Co., Ltd. | 1,279 | 19,354 | — | |||||||||||||||||||||
Content Wavve Co., Ltd. | 446 | 56,631 | — | Content Wavve Co., Ltd. | 446 | 56,631 | — | |||||||||||||||||||||
Others(*4) | 65,431 | 12,511 | 78 | Others(*4) | 65,431 | 12,511 | 78 | |||||||||||||||||||||
387,324 | 143,056 | 78 | 387,324 | 143,056 | 78 | |||||||||||||||||||||||
Others | SK Ecoplant Co., Ltd. (Formerly, SK Engineering & Construction Co., Ltd.) | 12,349 | 238 | — | SK Ecoplant Co., Ltd. (Formerly, SK Engineering & Construction Co., Ltd.) | 12,349 | 238 | — | ||||||||||||||||||||
SK Innovation Co., Ltd. | 38,999 | 18,464 | — | SK Innovation Co., Ltd. | 38,999 | 18,464 | — | |||||||||||||||||||||
SK Networks Co., Ltd.(*5) | 13,893 | 1,022,976 | 32 | SK Networks Co., Ltd.(*5) | 13,893 | 1,022,976 | 32 | |||||||||||||||||||||
SK Networks Services Co., Ltd. | 6,936 | 76,653 | 2,023 | SK Networks Services Co., Ltd. | 6,936 | 76,653 | 2,023 | |||||||||||||||||||||
SK Telesys Co., Ltd. | 388 | 10,751 | 30,453 | SK Telesys Co., Ltd. | 388 | 10,751 | 30,453 | |||||||||||||||||||||
SK TNS Co., Ltd. | 1,118 | 43,767 | 496,460 | SK TNS Co., Ltd. | 1,118 | 43,767 | 496,460 | |||||||||||||||||||||
SK Energy Co., Ltd. | 16,009 | 296 | — | SK Energy Co., Ltd. | 16,009 | 296 | — | |||||||||||||||||||||
SK hynix Semiconductor (China) Ltd. | 73,683 | — | — | SK hynix Semiconductor (China) Ltd. | 73,683 | — | — | |||||||||||||||||||||
SK ON Hungary Kft. (Formerly, SK Battery Hungary Kft.) | 19,394 | — | — | SK ON Hungary Kft. (Formerly, SK Battery Hungary Kft.) | 19,394 | — | — | |||||||||||||||||||||
SK Geo Centric Co., Ltd. (Formerly, SK Global Chemical Co., Ltd.) | 20,667 | 9 | — | SK Geo Centric Co., Ltd. (Formerly, SK Global Chemical Co., Ltd.) | 20,667 | 9 | — | |||||||||||||||||||||
SK Global Chemical International Trading (Shanghai) Co., Ltd. | 15,898 | 8 | — | SK Global Chemical International Trading (Shanghai) Co., Ltd. | 15,898 | 8 | — | |||||||||||||||||||||
HappyNarae Co., Ltd. | 9,871 | 17,361 | 129,621 | HappyNarae Co., Ltd. | 9,871 | 17,361 | 129,621 | |||||||||||||||||||||
Others | 102,141 | 128,268 | 83,693 | Others | 102,141 | 128,268 | 83,693 | |||||||||||||||||||||
331,346 | 1,318,791 | 742,282 | 331,346 | 1,318,791 | 742,282 | |||||||||||||||||||||||
₩ | 759,387 | 2,058,356 | 818,894 | ₩ | 759,387 | 2,058,356 | 818,894 | |||||||||||||||||||||
(*1) | Operating expense and others include lease payments by the Group. |
(*2) | Operating expense and others include |
(*3) | Operating revenue and others include |
(*4) | Operating revenue and others include |
(*5) | Operating expenses and others include costs for handset purchases amounting to |
(In millions of won) | ||||||||||||||
2019 | ||||||||||||||
Scope | Company | Operating revenue and others | Operating expense and others(*1) | Acquisition of property and equipment | ||||||||||
Ultimate Controlling Entity | SK Inc.(*2) | ₩ | 53,507 | 612,248 | 95,426 | |||||||||
Associates | F&U Credit information Co., Ltd. | 2,293 | 55,179 | — | ||||||||||
SK hynix Inc.(*3) | 273,047 | 481 | — | |||||||||||
KEB HanaCard Co., Ltd. | 832 | 1,901 | — | |||||||||||
SK Wyverns Co., Ltd. | 1,399 | 21,528 | — | |||||||||||
Others(*4) | 17,286 | 13,864 | 457 | |||||||||||
294,857 | 92,953 | 457 | ||||||||||||
Others | SK Ecoplant Co., Ltd. (Formerly, SK Engineering & Construction Co., Ltd.) | 13,339 | 1,601 | 7,400 | ||||||||||
SK Innovation Co., Ltd. | 26,697 | 2,777 | — | |||||||||||
SK Networks Co., Ltd.(*5) | 29,321 | 1,088,443 | 449 | |||||||||||
SK Networks Services Co., Ltd. | 1,056 | 76,671 | 4,979 | |||||||||||
SK Telesys Co., Ltd. | 474 | 9,686 | 59,392 | |||||||||||
SK TNS Co., Ltd. | 240 | 35,824 | 607,546 | |||||||||||
SK Energy Co., Ltd. | 16,294 | 516 | — | |||||||||||
SK hynix Semiconductor (China) Ltd. | 73,542 | — | — | |||||||||||
SK Global Chemical International Trading (Shanghai) Co., Ltd. | 14,535 | 131 | — | |||||||||||
HappyNarae Co., Ltd. | 6,943 | 18,121 | 168,286 | |||||||||||
Others | 90,307 | 105,569 | 109,189 | |||||||||||
272,748 | 1,339,339 | 957,241 | ||||||||||||
₩ | 621,112 | 2,044,540 | 1,053,124 | |||||||||||
�� |
(4) | Account balances with related parties as of December 31, |
(In millions of won) | ||||||||||||||||||||||||||||
December 31, 2021 | December 31, 2022 | |||||||||||||||||||||||||||
Receivables | Payables | Receivables | Payables | |||||||||||||||||||||||||
Scope | Company | Loans | Accounts receivable — trade, etc. | Accounts payable — other, etc. | Company | Loans | Accounts receivable – trade, etc. | Accounts payable – other, etc. | ||||||||||||||||||||
Ultimate Controlling Entity | SK Inc. | ₩ | — | 2,092 | 69,652 | SK Inc. | ₩ | — | 2,383 | 103,141 | ||||||||||||||||||
Associates | F&U Credit information Co., Ltd. | — | 4 | 5,265 | F&U Credit information Co., Ltd. | — | 64 | 5,682 | ||||||||||||||||||||
Wave City Development Co., Ltd.(*1) | — | 2,623 | — | SK USA, Inc. | — | — | 1,519 | |||||||||||||||||||||
Daehan Kanggun BcN Co., Ltd.(*2) | 22,147 | 3,857 | — | Wave City Development Co., Ltd.(*1) | — | 901 | — | |||||||||||||||||||||
KEB HanaCard Co., Ltd. | — | 529 | 48,020 | Daehan Kanggun BcN Co., Ltd.(*2) | 22,147 | 3,199 | — | |||||||||||||||||||||
Others | — | 84 | 1,197 | Others | — | — | 65 | |||||||||||||||||||||
22,147 | 7,097 | 54,482 | 22,147 | 4,164 | 7266 | |||||||||||||||||||||||
Others | SK Innovation Co., Ltd. | — | 3,022 | 38,022 | SK Innovation Co., Ltd. | — | 9,726 | 33,091 | ||||||||||||||||||||
SK Networks Co., Ltd. | — | 241 | 198,631 | SK Networks Co., Ltd. | — | 488 | 113,943 | |||||||||||||||||||||
Mintit Co., Ltd. | — | 17,929 | 131 | Mintit Co., Ltd. | — | 35,058 | 3 | |||||||||||||||||||||
SK hynix Inc. | — | 11,526 | 166 | SK hynix Inc. | — | 15,494 | 311 | |||||||||||||||||||||
Happy Narae Co., Ltd. | — | 6 | 49,349 | Happy Narae Co., Ltd. | — | 31 | 31,979 | |||||||||||||||||||||
SK m&service Co., Ltd. | — | 1,453 | 18,921 | SK Shieldus Co., Ltd. | — | 14,035 | 17,447 | |||||||||||||||||||||
SK Shieldus Co., Ltd. (Formerly, ADT CAPS Co., Ltd.) | — | 2,649 | 24,593 | Content Wavve Corp. | — | 349 | 19,244 | |||||||||||||||||||||
Content Wavve Co., Ltd. | — | 183 | 9,873 | Incross Co., Ltd. | — | 3,774 | 16,152 | |||||||||||||||||||||
Incross Co., Ltd. | — | 3,610 | 11,829 | Eleven Street Co., Ltd. | — | 6,797 | 13,026 | |||||||||||||||||||||
Eleven Street Co., Ltd. | — | 2,851 | 7,782 | SK Planet Co., Ltd. | — | 8,190 | 43,238 | |||||||||||||||||||||
SK Planet Co., Ltd. | — | 668 | 31,652 | SK RENT A CAR Co., Ltd. | — | 1,291 | 22,895 | |||||||||||||||||||||
SK RENT A CAR Co., Ltd. | — | 116 | 16,715 | UbiNS Co., Ltd. | — | — | 21,179 | |||||||||||||||||||||
UbiNS Co., Ltd. | — | 24 | 14,932 | Others(*3) | 16,475 | 13,996 | 41,890 | |||||||||||||||||||||
Others | — | 8,307 | 29,106 | |||||||||||||||||||||||||
16,475 | 109,229 | 374,398 | ||||||||||||||||||||||||||
— | 52,585 | 451,702 | ||||||||||||||||||||||||||
₩ | 38,622 | 115,776 | 484,805 | |||||||||||||||||||||||||
₩ | 22,147 | 61,774 | 575,836 | |||||||||||||||||||||||||
(*1) | As of December 31, 2022, the Parent Company recognized loss allowance amounting to ₩379 million on accounts receivable – trade. |
(*2) | As of December 31, 2022, the Parent Company recognized full loss allowance for the balance of loans to Daehan Kanggun BcN Co., Ltd. |
(*3) | During the year ended December 31, 2022, SK Telecom Innovation Fund, L.P., a subsidiary of the Parent Company, entered into a convertible loan agreement for USD 13,000,000 with id Quantique SA, classified as an other related party. |
(In millions of won) | ||||||||||||||
December 31, 2021 | ||||||||||||||
Receivables | Payables | |||||||||||||
Scope | Company | Loans | Accounts receivable – trade, etc. | Accounts payable – other, etc. | ||||||||||
Ultimate Controlling Entity | SK Inc. | ₩ | — | 2,092 | 69,652 | |||||||||
Associates | F&U Credit information Co., Ltd. | — | 4 | 5,265 | ||||||||||
Wave City Development Co., Ltd.(*1) | — | 2,623 | — | |||||||||||
Daehan Kanggun BcN Co., Ltd.(*2) | 22,147 | 3,857 | — | |||||||||||
HanaCard Co., Ltd. | — | 529 | 48,020 | |||||||||||
Others | — | 84 | 1,197 | |||||||||||
22,147 | 7,097 | 54,482 | ||||||||||||
Others | SK Innovation Co., Ltd. | — | 3,022 | 38,022 | ||||||||||
SK Networks Co., Ltd. | — | 241 | 198,631 | |||||||||||
Mintit Co., Ltd. | — | 17,929 | 131 | |||||||||||
SK hynix Inc. | — | 11,526 | 166 | |||||||||||
Happy Narae Co., Ltd. | — | 6 | 49,349 | |||||||||||
SK m&service Co., Ltd. | — | 1,453 | 18,921 | |||||||||||
SK Shieldus Co., Ltd. | — | 2,649 | 24,593 | |||||||||||
Content Wavve Co., Ltd. | — | 183 | 9,873 | |||||||||||
Incross Co., Ltd. | — | 3,610 | 11,829 | |||||||||||
Eleven Street Co., Ltd. | — | 2,851 | 7,782 | |||||||||||
SK Planet Co., Ltd. | — | 668 | 31,652 | |||||||||||
SK RENT A CAR Co., Ltd. | — | 116 | 16,715 | |||||||||||
UbiNS Co., Ltd. | — | 24 | 14,932 | |||||||||||
Others | — | 8,307 | 29,106 | |||||||||||
— | 52,585 | 451,702 | ||||||||||||
₩ | 22,147 | 61,774 | 575,836 | |||||||||||
(*1) | As of December 31, 2021, the Parent Company recognized loss allowance amounting to |
(*2) | As of December 31, 2021, the Parent Company recognized full loss allowance for the balance of loans to Daehan Kanggun BcN Co., Ltd. |
(In millions of won) | ||||||||||||||
December 31, 2020 | ||||||||||||||
Receivables | Payables | |||||||||||||
Scope | Company | Loans | Accounts receivable — trade, etc | Accounts payable — other, etc | ||||||||||
Ultimate Controlling Entity | SK Inc. | ₩ | — | 6,449 | 64,373 | |||||||||
Associates | F&U Credit information Co., Ltd. | — | 10 | 4,699 | ||||||||||
SK hynix Inc. | — | 33,773 | 128 | |||||||||||
Wave City Development Co., Ltd.(*1) | — | 25,782 | — | |||||||||||
Daehan Kanggun BcN Co., Ltd.(*2) | 22,147 | 2,779 | — | |||||||||||
KEB HanaCard Co., Ltd. | — | 352 | 145,328 | |||||||||||
Content Wavve Co., Ltd. | — | 283 | 2,491 | |||||||||||
Others | — | 9,098 | 1,686 | |||||||||||
22,147 | 72,077 | 154,332 | ||||||||||||
Others | SK Ecoplant Co., Ltd. (Formerly, SK Engineering & Construction Co., Ltd.) | — | 1,521 | 152 | ||||||||||
SK Innovation Co., Ltd. | — | 11,737 | 44,105 | |||||||||||
SK Networks. Co., Ltd. | — | 2,245 | 108,233 | |||||||||||
SK Networks Services Co., Ltd. | — | 579 | 7,103 | |||||||||||
SK Telesys Co., Ltd. | — | 37 | 9,253 | |||||||||||
SK TNS Co., Ltd. | — | 263 | 89,915 | |||||||||||
SK Energy Co., Ltd. | — | 3,502 | 1,837 | |||||||||||
SK hystec Co., Ltd. | — | 494 | 6,085 | |||||||||||
SK hynix Semiconductor (China) Ltd. | — | 5,896 | — | |||||||||||
SK ON Hungary Kft. (Formerly, SK Battery Hungary Kft.) | — | 2,075 | — | |||||||||||
SK Geo Centric Co., Ltd. (Formerly, SK Global Chemical Co., Ltd.) | — | 1,142 | 5 | |||||||||||
SK Global Chemical International Trading (Shanghai) Co., Ltd. | — | 795 | 21 | |||||||||||
HappyNarae Co., Ltd. | — | 720 | 16,534 | |||||||||||
Others | — | 15,564 | 120,575 | |||||||||||
— | 46,570 | 403,818 | ||||||||||||
₩ | 22,147 | 125,096 | 622,523 | |||||||||||
(5) | The Group has granted SK REIT Co., Ltd. |
(6) | The details of additional investments and disposal of associates and joint ventures for the year ended December 31, |
37. | Commitments and Contingencies |
(In millions of won) | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Interest income | ₩ | (43,850) | (50,357) | (63,579) | ||||||||
Dividends | (14,132) | (1,170) | (10,011) | |||||||||
Gain on foreign currency translations | (10,753) | (8,928) | (4,576) | |||||||||
Gain on sale of accounts receivable — other | (27,725) | (22,605) | (15,855) | |||||||||
Gain relating to investments in associates and joint ventures, net | (1,948,447) | (1,028,403) | (449,543) | |||||||||
Gain on disposal of property and equipment and intangible assets | (40,109) | (35,644) | (8,533) | |||||||||
Gain on business transfer | (82,248) | (12,455) | (69,522) | |||||||||
Gain relating to financial instruments at FVTPL | (91,244) | (145,016) | (36,336) | |||||||||
Other income | (10,369) | (4,220) | (1,875) | |||||||||
Interest expense | 342,342 | 399,176 | 406,087 | |||||||||
Loss on foreign currency translations | 8,005 | 12,730 | 4,948 | |||||||||
Loss on disposal of long-term investment securities | — | 98 | — | |||||||||
Loss on sale of accounts receivable — other | — | — | 5,823 | |||||||||
Income tax expense | 651,948 | 376,502 | 300,268 | |||||||||
Expense related to defined benefit plan | 190,462 | 198,794 | 175,165 | |||||||||
Share option | 91,646 | 4,313 | 2,073 | |||||||||
Bonus paid by treasury shares | 29,643 | — | — | |||||||||
Depreciation and amortization | 4,114,394 | 4,169,996 | 4,021,016 | |||||||||
Bad debt for accounts receivables — trade | 31,546 | 48,625 | 28,841 | |||||||||
Loss on disposal of property and equipment and intangible assets | 47,369 | 41,598 | 47,760 | |||||||||
Impairment loss on property and equipment and intangible assets | 3,135 | 208,833 | 65,935 | |||||||||
Bad debt for accounts receivable — other | 6,001 | 10,559 | 5,802 | |||||||||
Loss on impairment of investment assets | — | — | 1,670 | |||||||||
Loss relating to financial instruments at FVTPL | 76,142 | 27,082 | 8,437 | |||||||||
Other financial fees | 142,015 | 44,734 | — | |||||||||
Other expenses | 8,008 | 22,412 | 21,044 | |||||||||
₩ | 3,473,779 | 4,256,654 | 4,435,039 | |||||||||
(1) | Adjustments for income and expenses from operating activities for the years ended December 31, 2022, 2021 and 2020 are as follows: |
(In millions of won) | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
Interest income | ₩ | (58,472 | ) | (43,850 | ) | (50,357 | ) | |||||
Dividends | (2,552 | ) | (14,132 | ) | (1,170 | ) | ||||||
Gain on foreign currency translations | (2,095 | ) | (10,753 | ) | (8,928 | ) | ||||||
Gain on sale of accounts receivable — other | (1,043 | ) | (27,725 | ) | (22,605 | ) | ||||||
Gain (loss) relating to investments in associates and joint ventures, net | 81,707 | (1,948,447 | ) | (1,028,403 | ) | |||||||
Gain on disposal of property and equipment and intangible assets | (15,985 | ) | (40,109 | ) | (35,644 | ) | ||||||
Gain on business transfer | — | (82,248 | ) | (12,455 | ) | |||||||
Gain relating to financial instruments at FVTPL | (94,393 | ) | (91,244 | ) | (145,016 | ) | ||||||
Other income | (6,515 | ) | (10,369 | ) | (4,220 | ) | ||||||
Interest expense | 328,307 | 342,342 | 399,176 | |||||||||
Loss on foreign currency translations | 3,814 | 8,005 | 12,730 | |||||||||
Loss on sale of accounts receivables-other | 61,841 | — | — | |||||||||
Loss on disposal of long-term investment securities | — | — | 98 | |||||||||
Income tax expense | 288,321 | 651,948 | 376,502 | |||||||||
Expense related to defined benefit plan | 134,509 | 190,462 | 198,794 | |||||||||
Share option | 84,463 | 91,646 | 4,313 | |||||||||
Bonus paid by treasury shares | 25,425 | 29,643 | — | |||||||||
Depreciation and amortization | 3,755,312 | 4,114,394 | 4,169,996 | |||||||||
Bad debt for accounts receivables — trade | 27,053 | 31,546 | 48,625 | |||||||||
Loss on disposal of property and equipment and intangible assets | 20,465 | 47,369 | 41,598 | |||||||||
Impairment loss on property and equipment and intangible assets | 17,027 | 3,135 | 208,833 | |||||||||
Bad debt for accounts receivable — other | 3,011 | 6,001 | 10,559 | |||||||||
Loss relating to financial instruments at FVTPL | 41,597 | 76,142 | 27,082 | |||||||||
Loss on disposal of investment assets | 1,283 | — | — | |||||||||
Other financial fees | — | 142,015 | 44,734 | |||||||||
Other expenses | 26,358 | 8,008 | 22,412 | |||||||||
₩ | 4,719,438 | 3,473,779 | 4,256,654 | |||||||||
(2) | Changes in assets and liabilities from operating activities for the years ended December 31, 2022, 2021 |
(In millions of won) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021 | 2020 | |||||||||||||||||||
Accounts receivable — trade | ₩ | (95,374 | ) | (33,410 | ) | (211,712 | ) | ₩ | (60,546 | ) | (95,374 | ) | (33,410 | ) | ||||||||||
Accounts receivable — other | (152,038 | ) | (50,003 | ) | 48,399 | 54,988 | (152,038 | ) | (50,003 | ) | ||||||||||||||
Accrued income | — | — | 151 | |||||||||||||||||||||
Advanced payments | (43,212 | ) | (945 | ) | (12,204 | ) | (25,377 | ) | (43,212 | ) | (945 | ) | ||||||||||||
Prepaid expenses | 77,404 | 112,270 | (680,925 | ) | 11,989 | 77,404 | 112,270 | |||||||||||||||||
Inventories | (70,601 | ) | (7,219 | ) | 115,893 | 39,633 | (70,601 | ) | (7,219 | ) | ||||||||||||||
Long-term accounts receivable — other | 83,658 | 26,027 | (56,216 | ) | (74,729 | ) | 83,658 | 26,027 | ||||||||||||||||
Contract assets | (11,582 | ) | 1,528 | (68,805 | ) | (13,400 | ) | (11,582 | ) | 1,528 | ||||||||||||||
Guarantee deposits | 8,125 | 26,122 | 6,392 | 6,245 | 8,125 | 26,122 | ||||||||||||||||||
Accounts payable — trade | 12,312 | 3,023 | (23,607 | ) | (101,465 | ) | 12,312 | 3,023 | ||||||||||||||||
Accounts payable — other | (109,476 | ) | 311,737 | 167,595 | 369,693 | (109,476 | ) | 311,737 | ||||||||||||||||
Withholdings | (55,925 | ) | 33,348 | (31,545 | ) | 4,964 | (55,925 | ) | 33,348 | |||||||||||||||
Contract liabilities | (2,158 | ) | 35,426 | 33,574 | 18,910 | (2,158 | ) | 35,426 | ||||||||||||||||
Deposits received | (3,737 | ) | (1,028 | ) | (3,112 | ) | 99 | (3,737 | ) | (1,028 | ) | |||||||||||||
Accrued expenses | 7,505 | 61,848 | 116,949 | 116,039 | 7,505 | 61,848 | ||||||||||||||||||
Provisions | (19,324 | ) | (30,773 | ) | (36,478 | ) | (20 | ) | (19,324 | ) | (30,773 | ) | ||||||||||||
Long-term provisions | (260 | ) | (548 | ) | (1,699 | ) | (13,792 | ) | (260 | ) | (548 | ) | ||||||||||||
Plan assets | (51,697 | ) | (145,214 | ) | (130,790 | ) | (132,131 | ) | (51,697 | ) | (145,214 | ) | ||||||||||||
Retirement benefit payment | (114,897 | ) | (76,987 | ) | (84,098 | ) | (79,117 | ) | (114,897 | ) | (76,987 | ) | ||||||||||||
Others | (27,418 | ) | 37,256 | (3,892 | ) | (3,877 | ) | (27,418 | ) | 37,256 | ||||||||||||||
₩ | (568,695 | ) | 302,458 | (856,130 | ) | ₩ | 118,106 | (568,695 | ) | 302,458 | ||||||||||||||
(3) | Significant non-cash transactions for the years ended December 31, 2022, 2021 |
(In millions of won) | ||||||||||||||||||||||||
2021 | 2020 | 2019 | 2022 | 2021 | 2020 | |||||||||||||||||||
Increase (decrease) in accounts payable — other relating to the acquisition of property and equipment and intangible assets | ₩ | 1,063,800 | (426,723 | ) | 438,622 | ₩ | (39,977 | ) | 1,063,800 | (426,723 | ) | |||||||||||||
Increase of right-of-use | 672,723 | 736,157 | 1,141,349 | 720,932 | 672,723 | 736,157 | ||||||||||||||||||
Merger of Tbroad Co., Ltd. and two other companies by SK Broadband Co., Ltd. | — | 1,072,487 | — | — | — | 1,072,487 | ||||||||||||||||||
Change in assets and liabilities by spin-off (notes 41) | 14,379,397 | — | — | |||||||||||||||||||||
Change in assets and liabilities by spin-off (Note 41) | — | 14,379,397 | — | |||||||||||||||||||||
Retirement of treasury shares | 1,965,952 | — | — | — | 1,965,952 | — | ||||||||||||||||||
Disposal of treasury shares (Congratulatory bonus for spin-off) | 114,373 | — | — | — | 114,373 | — | ||||||||||||||||||
Transfer from property and equipment to investment property | 4,732 | 23,034 | — |
(In millions of won) | ||||||||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Non-cash transactions | ||||||||||||||||||||||||||||||||
January 1, 2021 | Cash flows | Exchange rate changes(*) | Fair value changes | Business combinations | Spin-off | Other changes | December 31, 2021 | |||||||||||||||||||||||||
Total liabilities from financing activities: | ||||||||||||||||||||||||||||||||
Short-term borrowings | ₩ | 109,998 | (50,823 | ) | — | — | 1,825 | (48,510 | ) | 508 | 12,998 | |||||||||||||||||||||
Long-term borrowings | 2,028,924 | 63,132 | 600 | — | 662 | (1,703,300 | ) | 4,169 | 394,187 | |||||||||||||||||||||||
Debentures | 8,579,743 | (16,755 | ) | 145,584 | — | — | (295,544 | ) | 13,655 | 8,426,683 | ||||||||||||||||||||||
Lease liabilities | 1,436,777 | (431,674 | ) | — | — | 497 | (85,322 | ) | 614,003 | 1,534,281 | ||||||||||||||||||||||
Long-term payables — other | 1,566,954 | (426,267 | ) | — | — | — | — | 869,146 | 2,009,833 | |||||||||||||||||||||||
Derivative financial liabilities | 54,176 | 332 | — | (42,282 | ) | — | (12,115 | ) | — | 111 | ||||||||||||||||||||||
Derivative financial assets | (65,136 | ) | — | — | (117,525 | ) | — | — | — | (182,661 | ) | |||||||||||||||||||||
Financial liabilities at FVTPL | — | 129,123 | — | 7,996 | — | (137,119 | ) | — | — | |||||||||||||||||||||||
₩ | 13,711,436 | (732,932 | ) | 146,184 | (151,811 | ) | 2,984 | (2,281,910 | ) | 1,501,481 | 12,195,432 | |||||||||||||||||||||
Other cash flows from financing activities: | ||||||||||||||||||||||||||||||||
Payments of cash dividends | ₩ | (1,028,520 | ) | |||||||||||||||||||||||||||||
Payments of interest on hybrid bonds | (14,766 | ) | ||||||||||||||||||||||||||||||
Acquisition of treasury shares | (76,111 | ) | ||||||||||||||||||||||||||||||
Cash inflow from transactions with the non-controlling shareholders | 444,124 | |||||||||||||||||||||||||||||||
Cash outflow from transactions with the non-controlling shareholders | (19,406 | ) | ||||||||||||||||||||||||||||||
Cash outflow from spin-off | (626,000 | ) | ||||||||||||||||||||||||||||||
(1,320,679 | ) | |||||||||||||||||||||||||||||||
₩ | (2,053,611 | ) | ||||||||||||||||||||||||||||||
(4) | Reconciliation of liabilities arising from financing activities for the years ended December 31, 2022 and 2021 are as follows: |
(In millions of won) | (In millions of won) | (In millions of won) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
January 1, 2020 | Cash flows | Non-cash transactions | Non-cash transactions | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange rate changes(*) | Fair value changes | Business combinations | Other changes | December 31, 2020 | January 1, 2022 | Cash flows | Exchange rate changes(*) | Fair value changes | Business combinations | Other changes | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||
Total liabilities from financing activities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term borrowings | ₩ | 20,603 | 76,375 | 13,020 | — | — | — | 109,998 | ₩ | 12,998 | 130,000 | — | — | — | — | 142,998 | ||||||||||||||||||||||||||||||||||||||||
Long-term borrowings | 2,022,537 | (3,026 | ) | (14,208 | ) | — | — | 23,621 | 2,028,924 | 394,187 | 398,529 | — | — | — | 397 | 793,113 | ||||||||||||||||||||||||||||||||||||||||
Debentures | 8,220,833 | 445,462 | (94,391 | ) | — | — | 7,839 | 8,579,743 | 8,426,683 | (189,878 | ) | 122,350 | — | — | 7,538 | 8,366,693 | ||||||||||||||||||||||||||||||||||||||||
Lease liabilities | 1,291,007 | (412,666 | ) | — | — | 7,696 | 550,740 | 1,436,777 | 1,534,281 | (401,054 | ) | — | — | 6,503 | 642,327 | 1,782,057 | ||||||||||||||||||||||||||||||||||||||||
Long-term payables — other | 1,971,609 | (428,100 | ) | — | — | — | 23,445 | 1,566,954 | 2,009,833 | (400,245 | ) | — | — | — | 28,753 | 1,638,341 | ||||||||||||||||||||||||||||||||||||||||
Derivative financial liabilities | 1,043 | 8,191 | — | 44,942 | — | — | 54,176 | 111 | — | — | (111 | ) | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Derivative financial assets | (144,886 | ) | 28,500 | — | 51,250 | — | — | (65,136 | ) | (182,661 | ) | 768 | — | (85,258 | ) | — | — | (267,151 | ) | |||||||||||||||||||||||||||||||||||||
₩ | 13,382,746 | (285,264 | ) | (95,579 | ) | 96,192 | 7,696 | 605,645 | 13,711,436 | ₩ | 12,195,432 | (461,880 | ) | 122,350 | (85,369 | ) | 6,503 | 679,015 | 12,456,051 | |||||||||||||||||||||||||||||||||||||
Other cash flows from financing activities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments of cash dividends | ₩ | (742,136) | ₩ | (904,020 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Payments of interest on hybrid bonds | (14,766 | ) | (14,766 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury shares | (426,664 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash inflow from transactions with the non-controlling shareholders | 17,766 | 31,151 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash outflow from transactions with the non-controlling shareholders | (6,515 | ) | (367 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(1,172,315 | ) | (888,002 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
₩ | (1,457,579 | ) | ₩ | (1,349,882 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
(*) | The effect of changes in foreign exchange rates for financial liabilities at amortized cost. |
(In millions of won) | ||||||||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Non-cash transactions | ||||||||||||||||||||||||||||||||
January 1, 2021 | Cash flows | Exchange rate changes(*) | Fair value changes | Business combinations | Spin-off | Other changes | December 31, 2021 | |||||||||||||||||||||||||
Total liabilities from financing activities: | ||||||||||||||||||||||||||||||||
Short-term borrowings | ₩ | 109,998 | (50,823 | ) | — | — | 1,825 | (48,510 | ) | 508 | 12,998 | |||||||||||||||||||||
Long-term borrowings | 2,028,924 | 63,132 | 600 | — | 662 | (1,703,300 | ) | 4,169 | 394,187 | |||||||||||||||||||||||
Debentures | 8,579,743 | (16,755 | ) | 145,584 | — | — | (295,544 | ) | 13,655 | 8,426,683 | ||||||||||||||||||||||
Lease liabilities | 1,436,777 | (431,674 | ) | — | — | 497 | (85,322 | ) | 614,003 | 1,534,281 | ||||||||||||||||||||||
Long-term payables — other | 1,566,954 | (426,267 | ) | — | — | — | — | 869,146 | 2,009,833 | |||||||||||||||||||||||
Derivative financial liabilities | 54,176 | 332 | — | (42,282 | ) | — | (12,115 | ) | — | 111 | ||||||||||||||||||||||
Derivative financial assets | (65,136 | ) | — | — | (117,525 | ) | — | — | — | (182,661 | ) | |||||||||||||||||||||
Financial liabilities at FVTPL | — | 129,123 | — | 7,996 | — | (137,119 | ) | — | — | |||||||||||||||||||||||
₩ | 13,711,436 | (732,932 | ) | 146,184 | (151,811 | ) | 2,984 | (2,281,910 | ) | 1,501,481 | 12,195,432 | |||||||||||||||||||||
Other cash flows from financing activities: | ||||||||||||||||||||||||||||||||
Payments of cash dividends | ₩ | (1,028,520 | ) | |||||||||||||||||||||||||||||
Payments of interest on hybrid bonds | (14,766 | ) | ||||||||||||||||||||||||||||||
Acquisition of treasury shares | (76,111 | ) | ||||||||||||||||||||||||||||||
Cash inflow from transactions with the non-controlling shareholders | 444,124 | |||||||||||||||||||||||||||||||
Cash outflow from transactions with the non-controlling shareholders | (19,406 | ) | ||||||||||||||||||||||||||||||
Cash outflow from spin-off | (626,000 | ) | ||||||||||||||||||||||||||||||
(1,320,679 | ) | |||||||||||||||||||||||||||||||
₩ | (2,053,611 | ) | ||||||||||||||||||||||||||||||
(*) | The effect of changes in foreign exchange rates for financial liabilities at amortized cost. |
39. | Emissions Liabilities |
(1) | The quantity of emissions rights allocated free of charge for each implementation year as of December 31, |
(In tCO2-eQ) | (In tCO2-eQ) | (In tCO2-eQ) | ||||||||||||||||||||||||||||||
Quantities allocated in 2019 | Quantities allocated in 2020 | Quantities allocated in 2021 | Total | Quantities allocated in 2020 | Quantities allocated in 2021 | Quantities allocated in 2022 | Total | |||||||||||||||||||||||||
Emissions rights allocated free of charge | 815,927 | 814,842 | 1,033,764 | 2,664,533 | 814,842 | 1,387,671 | 1,410,823 | 3,613,336 |
(2) | Changes in emissions rights quantities the Parent Company held are as follows: |
(In tCO2-eQ) | (In tCO2-eQ) | (In tCO2-eQ) | ||||||||||||||||||||||||||||||
Quantities allocated in 2019 | Quantities allocated in 2020 | Quantities allocated in 2021 | Total | Quantities allocated in 2020 | Quantities allocated in 2021 | Quantities allocated in 2022 | Total | |||||||||||||||||||||||||
January 1 | (2,343 | ) | (60,977 | ) | — | (63,320 | ) | |||||||||||||||||||||||||
Beginning | (60,977 | ) | 306,234 | 281,234 | 526,491 | |||||||||||||||||||||||||||
Allocation at no cost | 815,927 | 814,842 | 1,033,764 | 2,664,533 | 814,842 | 1,387,671 | 1,410,823 | 3,613,336 | ||||||||||||||||||||||||
Additional allocation | 131,015 | 217,643 | — | 348,658 | 217,643 | — | — | 217,643 | ||||||||||||||||||||||||
Other changes | — | (8,049 | ) | 3,573 | (4,476 | ) | ||||||||||||||||||||||||||
Purchase | — | 68,471 | — | 68,471 | 68,471 | — | — | 68,471 | ||||||||||||||||||||||||
Surrender or shall be surrendered | (1,005,576 | ) | (1,039,979 | ) | (1,087,455 | ) | (3,133,010 | ) | (1,039,979 | ) | (1,424,476 | ) | (1,421,550 | ) | (3,886,005 | ) | ||||||||||||||||
Borrowing | 60,977 | — | — | 60,977 | — | 19,854 | 108,790 | 128,644 | ||||||||||||||||||||||||
December 31 | — | — | (53,691 | ) | (53,691 | ) | ||||||||||||||||||||||||||
Ending | — | 281,234 | 382,870 | 664,104 | ||||||||||||||||||||||||||||
(3) | As of December 31, tCO2-eQ. |
40. | Non-current Assets Held for Sale |
(1) | On February 25, 2021, the Parent Company has decided to dispose of the investments in an associate engaged in mobility business to Tmap Mobility Co., Ltd. pursuant to the approval of the Board of Directors and reclassified entire shares of the investments in associates as non-current assets held for sale. The disposal of the investment in the associate was completed in 2022 after the Financial Services Commission approved the transaction. |
(In millions of won) | ||||||
December 31, 2021 | ||||||
Investments in associates | Carrot General Insurance Co., Ltd. | ₩ | 8,734 |
(2) | The Group classified investment securities scheduled to be liquidated as non-current assets held for sale as of December 31, 2022, and the details are as follows: |
(In millions of won) | ||||||
December 31, 2022 | ||||||
Investments in associates | Daekyo Wipoongdangdang Contents Korea Fund | ₩ | 1,062 | |||
FVTPL | Digital Content Korea Fund | 3,645 | ||||
InterVest Fund | 107 | |||||
Central Fusion Content Fund | 1,563 | |||||
5,315 | ||||||
₩ | 6,377 | |||||
41. | Spin-off |
(1) | In accordance with the resolution of the Board of Directors held on June 10, 2021 and shareholders’ meeting held on October 12, 2021, the Parent Company completed the spin-off of its business of managing investments in semiconductor, spin-off was completed as of November 2, 2021. The details of thespin-off are as follows: |
Method of spin-off | Horizontal spin-off | |
Company | SK Telecom Co., Ltd. (Surviving Company) | |
SK Square Co., Ltd. (Spin-off Company) | ||
Effective date of spin-off | November 1, 2021 |
(2) | The details of financial information due to the spin-off of its business of managing investments in semiconductor, New ICT and other business and making new investments are as follows: |
1) | Statements of Income |
(In millions of won) | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Operating revenue and other operating income | ₩ | 2,469,329 | 2,541,133 | 2,331,433 | ||||||||
Revenue | 2,383,083 | 2,536,904 | 2,324,285 | |||||||||
Other income | 86,246 | 4,229 | 7,148 | |||||||||
Operating expenses: | 2,396,324 | 2,471,519 | 2,311,229 | |||||||||
Labor | 824,505 | 897,676 | 840,809 | |||||||||
Commission | 349,344 | 244,074 | 235,384 | |||||||||
Depreciation and amortization | 287,412 | 326,417 | 315,678 | |||||||||
Network interconnection | 863 | 762 | 1,099 | |||||||||
Advertising | 158,512 | 159,589 | 154,715 | |||||||||
Rent | 2,754 | 2,115 | 2,254 | |||||||||
Cost of goods sold | 426,161 | 502,469 | 455,257 | |||||||||
Others | 346,773 | 338,417 | 306,033 | |||||||||
Operating profit | 73,005 | 69,614 | 20,204 | |||||||||
Finance income | 47,417 | 100,511 | 20,464 | |||||||||
Finance costs | 269,823 | 174,250 | 103,044 | |||||||||
Gain relating to investments in subsidiaries, associates and joint ventures, | 1,502,147 | 975,947 | 416,344 | |||||||||
Profit before income tax | 1,352,746 | 971,822 | 353,968 | |||||||||
Income tax expense | 205,152 | 155,240 | 37,328 | |||||||||
Profit for the year | ₩ | 1,147,594 | 816,582 | 316,640 | ||||||||
(In millions of won) | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cash flows from operating activities | ₩ | 59,255 | 495,696 | 196,518 | ||||||||
Cash flows from investing activities | (967,053 | ) | (483,599 | ) | (189,064 | ) | ||||||
Cash flows from investing activities | (88,872 | ) | (22,902 | ) | (35,395 | ) |
(In millions of won) | ||||||||
2021 | 2020 | |||||||
Operating revenue and other operating income | ₩ | 2,469,329 | 2,541,133 | |||||
Revenue | 2,383,083 | 2,536,904 | ||||||
Other income | 86,246 | 4,229 | ||||||
Operating expenses: | 2,396,324 | 2,471,519 | ||||||
Labor | 824,505 | 897,676 | ||||||
Commission | 349,344 | 244,074 | ||||||
Depreciation and amortization | 287,412 | 326,417 | ||||||
Network interconnection | 863 | 762 | ||||||
Advertising | 158,512 | 159,589 | ||||||
Rent | 2,754 | 2,115 | ||||||
Cost of goods sold | 426,161 | 502,469 | ||||||
Others | 346,773 | 338,417 | ||||||
Operating profit | 73,005 | 69,614 | ||||||
Finance income | 47,417 | 100,511 | ||||||
Finance costs | 269,823 | 174,250 | ||||||
Gain relating to investments in subsidiaries, associates and joint ventures, | 1,502,147 | 975,947 | ||||||
Profit before income tax | 1,352,746 | 971,822 | ||||||
Income tax expense | 205,152 | 155,240 | ||||||
Profit from discontinued operations, net of taxes | ₩ | 1,147,594 | 816,582 | |||||
2) | Statements of Cash Flows |
(In millions of won) | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities | ₩ | 59,255 | 495,696 | |||||
Cash flows from investing activities | (967,053 | ) | (483,599 | ) | ||||
Cash flows from investing activities | (88,872 | ) | (22,902 | ) |
(3) | spin-off of its business of managing investments in semiconductor, New ICT and other business and making new investments are as spin-off, the Parent Company lost control over the related businesses. Thespin-off was accounted for by derecognizing all related assets and liabilities. The net assets of thespin-off business as of thespin-off date was recognized in capital surplus and others. |
(In millions of won) | ||||
Amount | ||||
Current assets | ₩ | 2,608,601 | ||
Non-current assets | 19,269,615 | |||
Total assets | ₩ | 21,878,216 | ||
Current liabilities | ₩ | 2,161,458 | ||
Non-current liabilities | 4,676,324 | |||
Total liabilities | ₩ | 6,837,782 | ||
Net assets | ₩ | 15,040,434 | ||
(4) | As of November 1, 2021, the Parent Company has split the business division for the purpose of new investments and management of shares in related investee companies belong to semiconductors and New ICT sector. The Parent Company has the obligation to jointly and severally reimburse the spin-off with SK Square Co., Ltd., thespin-off company, in accordance with Article530-9 (1) of Korean Commercial Act. |
42. | Cash Dividends paid to the Parent Company |
(In millions of won) | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
Cash dividends received from consolidated subsidiaries | ₩ | 35,733 | 12,646 | 119,036 | ||||||||
Cash dividends received from associates | 13,700 | 312,793 | 164,850 | |||||||||
₩ | 49,443 | 325,439 | 283,886 | |||||||||
(In millions of won) | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cash dividends received from consolidated subsidiaries | ₩ | 12,646 | 119,036 | 287,549 | ||||||||
Cash dividends received from associates | 312,793 | 164,850 | 227,500 | |||||||||
₩ | 325,439 | 283,886 | 515,049 | |||||||||
43. | Subsequent Events |
Information of disposal | ||
Number of treasury shares | ||
Price of the treasury | ₩46,700 | |
Aggregate disposal value | ₩15,158 million | |
Disposal date | ||
Purpose of disposal | Allotment of shares as bonus payment | |
Method of disposal | Over-the-counter |
Note | 2021 | 2020 | ||||||||||
(In millions of won) | ||||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 5,6 | ₩ | 4,874,752 | 2,975,989 | ||||||||
Short-term financial instruments | 5,6,7 | 599,125 | 436,708 | |||||||||
Short-term investment assets | 5,6 | 5,494,158 | 1,535,518 | |||||||||
Trade receivables, net | 5,6,8,34 | 7,123,034 | 4,931,322 | |||||||||
Loans and other receivables, net | 5,6,8,34 | 65,007 | 69,194 | |||||||||
Inventories, net | 9 | 7,089,084 | 6,136,318 | |||||||||
Current tax assets | 6,102 | 202 | ||||||||||
Other current assets | 10 | 707,169 | 485,672 | |||||||||
Other financial assets | 5,6,7 | 30 | 30 | |||||||||
25,958,461 | 16,570,953 | |||||||||||
Non-current assets | ||||||||||||
Investments in associates and joint ventures | 11 | 1,483,366 | 1,166,244 | |||||||||
Long-term investment assets | 5,6,12 | 6,626,956 | 6,139,627 | |||||||||
Loans and other receivables, net | 5,6,8,34 | 340,850 | 75,589 | |||||||||
Other financial assets | 5,6,7 | 52,481 | 353 | |||||||||
Property, plant and equipment, net | 13,16,35 | 44,349,102 | 41,230,562 | |||||||||
Right-of-use assets, net | 3,14 | 1,569,669 | 1,707,645 | |||||||||
Intangible assets, net | 15 | 3,474,968 | 3,400,278 | |||||||||
Investment property, net | 13,16 | 164,544 | 209,417 | |||||||||
Deferred tax assets | 22,32 | 600,125 | 556,194 | |||||||||
Employee benefit assets, net | 21 | 3,930 | 61,962 | |||||||||
Other non-current assets | 10,35 | 92,870 | 55,029 | |||||||||
58,758,861 | 54,602,900 | |||||||||||
Total assets | ₩ | 84,717,322 | 71,173,853 | |||||||||
Note | 2021 | 2020 | ||||||||||
(In millions of won) | ||||||||||||
Liabilities | ||||||||||||
Current liabilities | ||||||||||||
Trade payables | 5,6,34 | ₩ | 1,171,300 | 1,046,159 | ||||||||
Other payables | 5,6,34 | 2,377,446 | 2,348,909 | |||||||||
Other non-trade payables | 5,6,17,34 | 2,154,302 | 1,367,193 | |||||||||
Borrowings | 5,6,18,35 | 2,736,032 | 3,114,250 | |||||||||
Provisions | 20 | 8,786 | 13,797 | |||||||||
Current tax liabilities | 2,327,409 | 636,649 | ||||||||||
Lease liabilities | 3,5,6,14 | 301,846 | 347,464 | |||||||||
Other current liabilities | 19 | 231,760 | 197,395 | |||||||||
Other financial liabilities | 5,6 | 605 | 544 | |||||||||
11,309,486 | 9,072,360 | |||||||||||
Non-current liabilities | ||||||||||||
Long-term other payables | 5,6 | 261,875 | 272,396 | |||||||||
Other non-trade payables | 5,6,17 | 22,638 | 29,923 | |||||||||
Borrowings | 5,6,18,35 | 11,404,344 | 8,137,398 | |||||||||
Defined benefit liabilities, net | 21 | 141,747 | 2,739 | |||||||||
Deferred tax liabilities | 22,32 | 458,986 | 266,640 | |||||||||
Lease liabilities | 3,5,6,14 | 1,259,638 | 1,296,252 | |||||||||
Other financial liabilities | 5,6,23 | 5,064 | 88,121 | |||||||||
Other non-current liabilities | 19 | 92,892 | 98,927 | |||||||||
13,647,184 | 10,192,396 | |||||||||||
Total liabilities | 24,956,670 | 19,264,756 | ||||||||||
Equity | ||||||||||||
Equity attributable to owners of the Parent Company | ||||||||||||
Capital stock | 24 | 3,657,652 | 3,657,652 | |||||||||
Capital surplus | 24 | 4,334,643 | 4,143,736 | |||||||||
Other equity | 24,37 | (2,294,986 | ) | (2,503,122 | ) | |||||||
Accumulated other comprehensive income(loss) | 25 | 500,222 | (405,453 | ) | ||||||||
Retained earnings | 26 | 53,527,575 | 46,995,728 | |||||||||
Total equity attributable to owners of the Parent Company | 59,725,106 | 51,888,541 | ||||||||||
Non-controlling interests | 35,546 | 20,556 | ||||||||||
Total equity | 59,760,652 | 51,909,097 | ||||||||||
Total liabilities and equity | ₩ | 84,717,322 | 71,173,853 | |||||||||
Note | 2021 | 2020 | 2019 | |||||||||||||
(In millions of won, except per share information) | ||||||||||||||||
Revenue | 4,27,34 | ₩ | 33,974,293 | 31,900,418 | 26,990,733 | |||||||||||
Cost of sales | 29,34 | 19,340,881 | 21,089,789 | 18,818,814 | ||||||||||||
Gross profit | 14,633,412 | 10,810,629 | 8,171,919 | |||||||||||||
Selling and administrative expenses | 28,29 | (5,245,543 | ) | (5,798,005 | ) | (5,452,740 | ) | |||||||||
Finance income | 5,30 | 2,040,145 | 3,327,905 | 1,247,640 | ||||||||||||
Finance expenses | 5,30 | (1,331,343 | ) | (1,980,411 | ) | (1,531,417 | ) | |||||||||
Share of profit of equity-accounted investees | 11 | 204,086 | (36,279 | ) | 22,633 | |||||||||||
Other income | 31 | 81,441 | 84,773 | 88,179 | ||||||||||||
Other expenses | 31 | (145,480 | ) | (171,575 | ) | (113,575 | ) | |||||||||
Profit before income tax | 10,236,718 | 6,237,037 | 2,432,639 | |||||||||||||
Income tax expense | 32 | 2,915,323 | 1,478,123 | 423,561 | ||||||||||||
Profit for the period | 7,321,395 | 4,758,914 | 2,009,078 | |||||||||||||
Other comprehensive income (loss) | ||||||||||||||||
Item that will never be reclassified to profit or loss: | ||||||||||||||||
Remeasurements of defined benefit liability, net of tax | 21 | 22,612 | 1,266 | (90,211 | ) | |||||||||||
Items that are or may be reclassified to profit or loss: | ||||||||||||||||
Foreign operations – foreign currency translation differences, net of tax | 25 | 800,810 | (47,407 | ) | 150,037 | |||||||||||
Gain (loss) on valuation of derivatives, net of tax | 23,25 | 17,103 | (417 | ) | 12,753 | |||||||||||
Equity-accounted investees – share of other comprehensive income (loss), net of tax | 11,25 | 90,874 | (60,820 | ) | 21,444 | |||||||||||
Other comprehensive income (loss) for the period, net of tax | 931,399 | (107,378 | ) | 94,023 | ||||||||||||
Total comprehensive income for the period | ₩ | 8,252,794 | 4,651,536 | 2,103,101 | ||||||||||||
Profit or loss attributable to: | ||||||||||||||||
Owners of the Parent Company | ₩ | 7,309,517 | 4,755,102 | 2,005,975 | ||||||||||||
Non-controlling interests | 11,878 | 3,812 | 3,103 | |||||||||||||
Total comprehensive income attributable to: | ||||||||||||||||
Owners of the Parent Company | 8,237,804 | 4,649,850 | 2,099,648 | |||||||||||||
Non-controlling interests | 14,990 | 1,686 | 3,453 | |||||||||||||
Earnings per share | ||||||||||||||||
Basic earnings per share (in won) | 33 | 10,653 | 6,952 | 2,933 | ||||||||||||
Diluted earnings per share (in won) | 33 | 10,649 | 6,950 | 2,932 |
Attributable to owners of the Parent Company | ||||||||||||||||||||||||||||||||||||
Notes | Capital stock | Capital surplus | Other equity | Accumulated other comprehensive income (loss) | Retained earnings | Total | Non-controlling interests | Total equity | ||||||||||||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||||||||||||||
Balance at January 1, 2019 | ₩ | 3,657,652 | 4,143,736 | (2,506,451 | ) | (482,819 | ) | 42,033,601 | 46,845,719 | 6,612 | 46,852,331 | |||||||||||||||||||||||||
Total comprehensive income | ||||||||||||||||||||||||||||||||||||
Profit for the year | — | — | — | — | 2,005,975 | 2,005,975 | 3,103 | 2,009,078 | ||||||||||||||||||||||||||||
Other comprehensive income (loss) | 25 | — | — | — | 183,884 | (90,211 | ) | 93,673 | 350 | 94,023 | ||||||||||||||||||||||||||
Total comprehensive income | — | — | — | 183,884 | 1,915,764 | 2,099,648 | 3,453 | 2,103,101 | ||||||||||||||||||||||||||||
Transactions with owners of the Parent Company | ||||||||||||||||||||||||||||||||||||
Increase of non-controlling interests | — | — | — | — | — | — | 4,715 | 4,715 | ||||||||||||||||||||||||||||
Dividends paid | 26 | — | — | — | — | (1,026,003 | ) | (1,026,003 | ) | — | (1,026,003 | ) | ||||||||||||||||||||||||
Share-based payment transactions | 37 | — | — | 1,738 | — | — | 1,738 | — | 1,738 | |||||||||||||||||||||||||||
Total transactions with owners of the Parent Company | — | — | 1,738 | — | (1,026,003 | ) | (1,024,265 | ) | 4,715 | (1,019,550 | ) | |||||||||||||||||||||||||
Balance at December 31, 2019 | ₩ | 3,657,652 | 4,143,736 | (2,504,713 | ) | (298,935 | ) | 42,923,362 | 47,921,102 | 14,780 | 47,935,882 | |||||||||||||||||||||||||
Balance at January 1, 2020 | ₩ | 3,657,652 | 4,143,736 | (2,504,713 | ) | (298,935 | ) | 42,923,362 | 47,921,102 | 14,780 | 47,935,882 | |||||||||||||||||||||||||
Total comprehensive income | ||||||||||||||||||||||||||||||||||||
Profit for the year | — | — | — | — | 4,755,102 | 4,755,102 | 3,812 | 4,758,914 | ||||||||||||||||||||||||||||
Other comprehensive income (loss) | 25 | — | — | — | (106,518 | ) | 1,266 | (105,252 | ) | (2,126 | ) | (107,378 | ) | |||||||||||||||||||||||
Total comprehensive income | — | — | — | (106,518 | ) | 4,756,368 | 4,649,850 | 1,686 | 4,651,536 | |||||||||||||||||||||||||||
Transactions with owners of the Parent Company | ||||||||||||||||||||||||||||||||||||
Increase of non-controlling interests | — | — | — | — | — | — | 4,090 | 4,090 | ||||||||||||||||||||||||||||
Dividends paid | 26 | — | — | — | — | (684,002 | ) | (684,002 | ) | — | (684,002 | ) | ||||||||||||||||||||||||
Share-based payment transactions | 37 | — | — | 1,591 | — | — | 1,591 | — | 1,591 | |||||||||||||||||||||||||||
Total transactions with owners of the Parent Company | — | — | 1,591 | — | (684,002 | ) | (682,411 | ) | 4,090 | (678,321 | ) | |||||||||||||||||||||||||
Balance at December 31, 2020 | ₩ | 3,657,652 | 4,143,736 | (2,503,122 | ) | (405,453 | ) | 46,995,728 | 51,888,541 | 20,556 | 51,909,097 | |||||||||||||||||||||||||
Attributable to owners of the Parent Company | ||||||||||||||||||||||||||||||||||||
Notes | Capital stock | Capital surplus | Other equity | Accumulated other comprehensive income (loss) | Retained earnings | Total | Non-controlling interests | Total equity | ||||||||||||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | ₩ | 3,657,652 | 4,143,736 | (2,503,122 | ) | (405,453 | ) | 46,995,728 | 51,888,541 | 20,556 | 51,909,097 | |||||||||||||||||||||||||
Total comprehensive income | ||||||||||||||||||||||||||||||||||||
Profit for the ten-month period | — | — | — | — | 7,309,517 | 7,309,517 | 11,878 | 7,321,395 | ||||||||||||||||||||||||||||
Other comprehensive income (loss) | 25 | — | — | — | 905,675 | 22,612 | 928,287 | 3,112 | 931,399 | |||||||||||||||||||||||||||
Total comprehensive income | — | — | — | 905,675 | 7,332,129 | 8,237,804 | 14,990 | 8,252,794 | ||||||||||||||||||||||||||||
Transactions with owners of the Parent Company | ||||||||||||||||||||||||||||||||||||
Dividends paid | — | — | — | — | (800,282 | ) | (800,282 | ) | — | (800,282 | ) | |||||||||||||||||||||||||
Disposal of treasury stock | 26 | — | 191,247 | 206,308 | — | — | 397,555 | — | 397,555 | |||||||||||||||||||||||||||
Share-based payment transactions | 37 | — | (340 | ) | 1,828 | — | — | 1,488 | — | 1,488 | ||||||||||||||||||||||||||
Total transactions with owners of the Parent Company | — | 190,907 | 208,136 | — | (800,282 | ) | (401,239 | ) | — | (401,239 | ) | |||||||||||||||||||||||||
Balance at October 31, 2021 | ₩ | 3,657,652 | 4,334,643 | (2,294,986 | ) | 500,222 | 53,527,575 | 59,725,106 | 35,546 | 59,760,652 | ||||||||||||||||||||||||||
Note | 2021 | 2020 | 2019 | |||||||||||||
(In millions of won) | ||||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Cash generated from operating activities | 36 | ₩ | 17,041,459 | 12,916,771 | 11,895,834 | |||||||||||
Interest received | 14,338 | 40,635 | 30,543 | |||||||||||||
Interest paid | (201,274 | ) | (288,565 | ) | (238,314 | ) | ||||||||||
Dividends received | 25,962 | 16,365 | 14,891 | |||||||||||||
Income tax paid | (914,511 | ) | (370,635 | ) | (5,153,218 | ) | ||||||||||
Net cash provided by operating activities | 15,965,974 | 12,314,571 | 6,549,736 | |||||||||||||
Cash flows from investing activities | ||||||||||||||||
Net change in short-term financial instruments | (180,388 | ) | (140,810 | ) | 225,447 | |||||||||||
Net change in short-term investment assets | (3,901,661 | ) | (115,122 | ) | 4,164,793 | |||||||||||
Decrease in other financial assets | 211 | 773 | — | |||||||||||||
Increase in other financial assets | (29,270 | ) | (205 | ) | (627 | ) | ||||||||||
Collection of loans and other receivables | 39,556 | 36,722 | 13,057 | |||||||||||||
Increase in loans and other receivables | (69,291 | ) | (238,727 | ) | (57,482 | ) | ||||||||||
Proceeds from disposal of long-term investment assets | 21,022 | 708 | 4,316 | |||||||||||||
Acquisition of long-term investment assets | (86,942 | ) | (93,846 | ) | (81,447 | ) | ||||||||||
Proceeds from disposal of property, plant and equipment | 61,117 | 59,089 | 53,840 | |||||||||||||
Acquisition of property, plant and equipment | (10,457,621 | ) | (10,068,662 | ) | (13,920,244 | ) | ||||||||||
Proceeds from disposal of intangible assets | 2,073 | 695 | 183 | |||||||||||||
Acquisition of intangible assets | (780,876 | ) | (800,729 | ) | (673,356 | ) | ||||||||||
Proceeds from business transfer | 3,000 | 2,958 | — | |||||||||||||
Receipt of government grants | 7 | — | — | |||||||||||||
Acquisition of investments in associates | (40,062 | ) | (483,237 | ) | (176,954 | ) | ||||||||||
Net cash outflow from business combination | — | — | (2,462 | ) | ||||||||||||
Net cash used in investing activities | (15,419,125 | ) | (11,840,393 | ) | (10,450,936 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||||
Proceeds from borrowings | 36 | 5,230,157 | 5,173,016 | 9,833,882 | ||||||||||||
Repayments of borrowings | 36 | (2,975,415 | ) | (3,921,310 | ) | (4,585,425 | ) | |||||||||
Payments of lease liabilities | 36 | (264,409 | ) | (319,740 | ) | (390,501 | ) | |||||||||
Proceeds from disposal of treasury shares | 7,761 | — | — | |||||||||||||
Dividends paid | (800,282 | ) | (684,002 | ) | (1,026,003 | ) | ||||||||||
Increase of non-controlling interests | — | 4,090 | 4,715 | |||||||||||||
Net cash provided by financing activities | 1,197,812 | 252,054 | 3,836,668 | |||||||||||||
Effect of movements in exchange rates on cash and cash equivalents | 154,102 | (56,313 | ) | 21,283 | ||||||||||||
Net increase (decrease) in cash and cash equivalents | 1,898,763 | 669,919 | (43,249 | ) | ||||||||||||
Cash and cash equivalents at beginning of the period | 2,975,989 | 2,306,070 | 2,349,319 | |||||||||||||
Cash and cash equivalents at end of the period | ₩ | 4,874,752 | 2,975,989 | 2,306,070 | ||||||||||||
Shareholder | Number of shares | Percentage of ownership (%) | ||||||
SK Telecom Co., Ltd. 1 | 146,100,000 | 20.07 | ||||||
Other investors | 541,520,673 | 74.38 | ||||||
Treasury shares | 40,381,692 | 5.55 | ||||||
728,002,365 | 100.00 | |||||||
Ownership (%) | ||||||||||||
Company | Location | Business | 2021 | 2020 | ||||||||
SK hyeng Inc. | Korea | Construction and service | 100.00 | 100.00 | ||||||||
SK hystec Inc. | Korea | Business support and service | 100.00 | 100.00 | ||||||||
Happymore Inc. | Korea | Manufacturing cleanroom suits and cleaning | 100.00 | 100.00 | ||||||||
SK hynix system ic Inc. | Korea | Semiconductor manufacturing and sales | 100.00 | 100.00 | ||||||||
HappyNarae Co., Ltd. | Korea | Industrial material supply | 100.00 | 100.00 | ||||||||
SK hynix America Inc. | U.S.A. | Semiconductor sales | 97.74 | 97.74 | ||||||||
SK hynix Deutschland GmbH | Germany | Semiconductor sales | 100.00 | 100.00 | ||||||||
SK hynix Asia Pte. Ltd. | Singapore | Semiconductor sales | 100.00 | 100.00 | ||||||||
SK hynix Semiconductor Hong Kong Ltd. | Hong Kong | Semiconductor sales | 100.00 | 100.00 | ||||||||
SK hynix U.K. Ltd. | U.K. | Semiconductor sales | 100.00 | 100.00 | ||||||||
SK hynix Semiconductor Taiwan Inc. | Taiwan | Semiconductor sales | 100.00 | 100.00 | ||||||||
SK hynix Japan Inc. | Japan | Semiconductor sales | 100.00 | 100.00 | ||||||||
SK hynix Semiconductor (Shanghai) Co., Ltd. | China | Semiconductor sales | 100.00 | 100.00 | ||||||||
SK hynix Semiconductor India Private Ltd. 1 | India | Semiconductor sales | 100.00 | 100.00 | ||||||||
SK hynix (Wuxi) Semiconductor Sales Ltd. | China | Semiconductor sales | 100.00 | 100.00 | ||||||||
SK hynix Semiconductor (China) Ltd. | China | Semiconductor manufacturing | 100.00 | 100.00 | ||||||||
SK hynix Semiconductor (Chongqing) Ltd. 2 | China | Semiconductor manufacturing | 100.00 | 100.00 | ||||||||
SK hynix Italy S.r.l | Italy | Semiconductor research and development | 100.00 | 100.00 | ||||||||
SK hynix memory solutions America Inc. | U.S.A. | Semiconductor research and development | 100.00 | 100.00 | ||||||||
SK hynix memory solutions Taiwan Ltd. | Taiwan | Semiconductor research and development | 100.00 | 100.00 | ||||||||
SK hynix memory solutions Eastern Europe LLC. | Belarus | Semiconductor research and development | 100.00 | 100.00 | ||||||||
SK APTECH Ltd. | Hong Kong | Overseas investment | 100.00 | 100.00 | ||||||||
SK hynix Ventures Hong Kong Limited | Hong Kong | Overseas investment | 100.00 | 100.00 | ||||||||
SK hynix (Wuxi) Investment Ltd. 3 | China | Overseas investment | 100.00 | 100.00 | ||||||||
SK hynix (Wuxi) Industry Development Ltd. 4 | China | Foreign hospital construction | 100.00 | 100.00 | ||||||||
SK hynix Happiness (Wuxi) Hospital Management Ltd. 4 | China | Foreign hospital operation | 70.00 | 70.00 | ||||||||
SK hynix system ic (Wuxi) Co., Ltd. 5 | China | Overseas Semiconductor manufacturing and sales | 100.00 | 100.00 | ||||||||
SK hynix cleaning (Wuxi) Ltd. 4 | China | Building maintenance | 100.00 | 100.00 | ||||||||
SUZHOU HAPPYNARAE Co., Ltd. 6 | China | Overseas industrial material supply | 100.00 | 100.00 |
Ownership (%) | ||||||||||||
Company | Location | Business | 2021 | 2020 | ||||||||
CHONGQING HAPPYNARAE Co., Ltd. 7 | China | Overseas industrial material supply | 100.00 | 100.00 | ||||||||
SkyHigh Memory Limited 5 | Hong Kong | Overseas Semiconductor manufacturing and sales | 60.00 | 60.00 | ||||||||
SK hynix (Wuxi) Education Technology Co.,Ltd. 4 | China | Education | 100.00 | 100.00 | ||||||||
Gauss Labs Inc. | U.S.A | Telecommunication of information | 100.00 | — | ||||||||
SkyHigh Memory China Limited 9 | China | Semiconductor sales | 60.00 | — | ||||||||
SkyHigh Memory Limited Japan 9 | Japan | Semiconductor sales | 60.00 | — | ||||||||
SK hynix NAND Product Solutions Corp. 8 | U.S.A | Semiconductor sales | 100.00 | — | ||||||||
SK hynix NAND Product Solutions Taiwan Co., Ltd. 8 | Taiwan | Semiconductor R&D center and sales supporting | 100.00 | — | ||||||||
SK hynix NAND Product Solutions Canada Ltd. 8 | Canada | Semiconductor R&D center | 100.00 | — | ||||||||
SK hynix NAND Product Solutions Mexico, S. DE R.L. DE C.V. 8 | Mexico | Semiconductor R&D center | 100.00 | — | ||||||||
SK hynix Semiconductor (Dalian) Co., Ltd. 8 | China | Semiconductor manufacturing | 100.00 | — | ||||||||
SK hynix NAND Product Solutions UK Limited. 8 | U.K. | Semiconductor Sales | 100.00 | — | ||||||||
SK hynix NAND Product Solutions Israel Ltd. 8 | Israel | Semiconductor sales supporting | 100.00 | — | ||||||||
SK hynix NAND Product Solutions Japan G.K 8 | Japan | Semiconductor sales | 100.00 | — | ||||||||
SK hynix NAND Product Solutions International LLC. 8 | U.S.A. | Semiconductor sales | 100.00 | — | ||||||||
SK hynix NAND Product Solutions Asia Pacific LLC. 8 | U.S.A. | Semiconductor sales | 100.00 | — | ||||||||
SK hynix NAND Product Solutions Singapore Pte. Ltd. 8 | Singapore | Semiconductor R&D center and sales supporting | 100.00 | — | ||||||||
SK hynix NAND Product Solutions Malaysia Sdn. Bhd. 8 | Malaysia | Semiconductor sales supporting | 100.00 | — | ||||||||
SK hynix NAND Product Solutions Poland sp. z.o.o. 8 | Poland | Semiconductor R&D center | 100.00 | — | ||||||||
SK hynix NAND Product Solutions (Beijing) Co., Ltd. 8 | China | Semiconductor sales supporting | 100.00 | — | ||||||||
SK hynix NAND Product Solutions (Shanghai) Co., Ltd. 8 | China | Semiconductor R&D center | 100.00 | — | ||||||||
SK hynix (Wuxi) Education Service Development Co., Ltd. 10 | China | Education | 100.00 | — | ||||||||
HappyNarae America LLC 6 | U.S.A | Overseas industrial material supply | 100.00 | — | ||||||||
HappyNarae Hungary Kft 6 | Hungary | Overseas industrial material supply | 100.00 | — | ||||||||
SK hynix Ventures America LLC | U.S.A | Overseas investing subsidiary | 100.00 | — | ||||||||
MMT (Money Market Trust) | Korea | Money Market Trust | 100.00 | 100.00 |
2021 | 2020 | |||||||||||||||||||||||
Assets | Liabilities | Equity | Assets | Liabilities | Equity | |||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||
SK hynix system ic Inc. | ₩ | 1,155,469 | 383,426 | 772,043 | 998,154 | 368,517 | 629,636 | |||||||||||||||||
SK hynix America Inc. | 3,626,670 | 3,157,080 | 469,590 | 2,722,417 | 2,330,715 | 391,702 | ||||||||||||||||||
SK hynix Asia Pte. Ltd. | 906,789 | 815,308 | 91,481 | 284,115 | 197,442 | 86,673 | ||||||||||||||||||
SK hynix Semiconductor Hong Kong Ltd. | 436,517 | 277,758 | 158,759 | 282,273 | 134,019 | 148,254 | ||||||||||||||||||
SK hynix U.K. Ltd. | 386,978 | 367,378 | 19,600 | 303,729 | 283,833 | 19,896 | ||||||||||||||||||
SK hynix Semiconductor Taiwan Inc. | 333,517 | 306,768 | 26,749 | 273,651 | 247,895 | �� | 25,756 | |||||||||||||||||
SK hynix Japan Inc. | 376,231 | 299,721 | 76,510 | 348,336 | 278,622 | 69,714 | ||||||||||||||||||
SK hynix (Wuxi) Semiconductor Sales Ltd. | 1,832,638 | 1,543,348 | 289,290 | 1,250,087 | 1,024,006 | 226,081 | ||||||||||||||||||
SK hynix Semiconductor (China) Ltd. | 12,706,152 | 7,047,555 | 5,658,597 | 11,862,866 | 6,685,079 | 5,177,787 | ||||||||||||||||||
SK hynix Semiconductor (Chongqing) Ltd. | 1,064,176 | 341,413 | 722,763 | 920,531 | 317,216 | 603,315 | ||||||||||||||||||
HappyNarae Co., Ltd. | 136,439 | 77,947 | 58,492 | 171,026 | 116,728 | 54,298 |
2021 | ||||||||||||
Revenue | Profit (Loss) | Total comprehensive income (loss) | ||||||||||
(In millions of won) | ||||||||||||
SK hynix system ic Inc. | ₩ | 600,996 | 145,211 | 145,082 | ||||||||
SK hynix America Inc. | 13,133,432 | 46,293 | 46,293 | |||||||||
SK hynix Asia Pte. Ltd. | 2,626,853 | (1,764 | ) | (1,764 | ) | |||||||
SK hynix Semiconductor Hong Kong Ltd. | 2,103,667 | (354 | ) | (354 | ) | |||||||
SK hynix U.K. Ltd. | 1,005,271 | (1,771 | ) | (1,771 | ) | |||||||
SK hynix Semiconductor Taiwan Inc. | 2,386,011 | 2,931 | 2,931 | |||||||||
SK hynix Japan Inc. | 604,054 | 8,377 | 8,377 | |||||||||
SK hynix (Wuxi) Semiconductor Sales Ltd. | 10,544,302 | 39,704 | 39,704 | |||||||||
SK hynix Semiconductor (China) Ltd. | 3,883,534 | 2,199 | 2,199 | |||||||||
SK hynix Semiconductor (Chongqing) Ltd. | 792,505 | 59,968 | 59,968 | |||||||||
HappyNarae Co., Ltd. | 709,047 | 4,195 | 4,195 |
2020 | ||||||||||||
Revenue | Profit (Loss) | Total comprehensive income (Loss) | ||||||||||
(In millions of won) | ||||||||||||
SK hynix system ic Inc. | ₩ | 702,979 | 97,317 | 95,903 | ||||||||
SK hynix America Inc. | 12,761,911 | 53,448 | 53,448 | |||||||||
SK hynix Asia Pte. Ltd. | 1,858,091 | 3,055 | 3,055 | |||||||||
SK hynix Semiconductor Hong Kong Ltd. | 1,746,160 | 6,320 | 6,320 | |||||||||
SK hynix U.K. Ltd. | 994,299 | 1,331 | 1,331 | |||||||||
SK hynix Semiconductor Taiwan Inc. | 1,917,103 | 4,657 | 4,657 | |||||||||
SK hynix Japan Inc. | 551,890 | (181 | ) | (212 | ) | |||||||
SK hynix (Wuxi) Semiconductor Sales Ltd. | 10,423,701 | 90,303 | 90,303 | |||||||||
SK hynix Semiconductor (China) Ltd. | 3,936,769 | 484,677 | 484,677 | |||||||||
SK hynix Semiconductor (Chongqing) Ltd. | 699,558 | 73,048 | 73,048 | |||||||||
HappyNarae Co., Ltd. | 981,466 | 4,314 | 4,475 | |||||||||
2019 | ||||||||||||
Revenue | Profit | Total comprehensive income | ||||||||||
(In millions of won) | ||||||||||||
SK hynix system ic Inc. | ₩ | 661,511 | 76,195 | 76,400 | ||||||||
SK hynix America Inc. | 8,353,658 | 47,947 | 47,947 | |||||||||
SK hynix Asia Pte. Ltd. | 1,662,315 | 1,965 | 1,965 | |||||||||
SK hynix Semiconductor Hong Kong Ltd. | 1,579,680 | 2,493 | 2,493 | |||||||||
SK hynix U.K. Ltd. | 907,945 | 1,057 | 1,057 | |||||||||
SK hynix Semiconductor Taiwan Inc. | 1,455,320 | 8,127 | 8,127 | |||||||||
SK hynix Japan Inc. | 672,393 | 701 | 700 | |||||||||
SK hynix (Wuxi) Semiconductor Sales Ltd. | 10,882,152 | 94,768 | 94,768 | |||||||||
SK hynix Semiconductor (China) Ltd. | 3,177,415 | 18,551 | 18,551 | |||||||||
SK hynix Semiconductor (Chongqing) Ltd. | 477,849 | 39,102 | 39,102 | |||||||||
HappyNarae Co., Ltd. | 1,107,524 | 8,473 | 8,162 |
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Korea | ₩ | 38,387,308 | 35,954,666 | |||||
China | 10,780,547 | 10,302,196 | ||||||
Asia (other than China) | 17,568 | 20,397 | ||||||
U.S.A. | 487,969 | 373,767 | ||||||
Europe | 15,599 | 13,868 | ||||||
₩ | 49,688,991 | 46,664,894 | ||||||
October 31, 2021 | ||||||||||||||||
Financial assets at fair value through profit or loss | Financial assets at fair value through other comprehensive income or loss | Financial assets at amortized cost | Total | |||||||||||||
(In millions of won) | ||||||||||||||||
Cash and cash equivalents | ₩ | — | — | 4,874,752 | 4,874,752 | |||||||||||
Short-term financial instruments | 222,500 | — | 376,625 | 599,125 | ||||||||||||
Short-term investment assets | 5,494,158 | — | — | 5,494,158 | ||||||||||||
Trade receivables 1 | — | 660,211 | 6,462,823 | 7,123,034 | ||||||||||||
Loans and other receivables | — | — | 405,857 | 405,857 | ||||||||||||
Other financial assets | 23,028 | — | 29,483 | 52,511 | ||||||||||||
Long-term investment assets | 6,626,956 | — | — | 6,626,956 | ||||||||||||
₩ | 12,366,642 | 660,211 | 12,149,540 | 25,176,393 | ||||||||||||
December 31, 2020 | ||||||||||||||||
Financial assets at fair value through profit or loss | Financial assets at fair value through other comprehensive income or loss | Financial assets at amortized cost | Total | |||||||||||||
(In millions of won) | ||||||||||||||||
Cash and cash equivalents | ₩ | — | — | 2,975,989 | 2,975,989 | |||||||||||
Short-term financial instruments | 227,500 | — | 209,208 | 436,708 | ||||||||||||
Short-term investment assets | 1,535,518 | — | — | 1,535,518 | ||||||||||||
Trade receivables 1 | — | 512,458 | 4,418,864 | 4,931,322 | ||||||||||||
Loans and other receivables | — | — | 144,783 | 144,783 | ||||||||||||
Other financial assets | — | — | 383 | 383 | ||||||||||||
Long-term investment assets | 6,139,627 | — | — | 6,139,627 | ||||||||||||
₩ | 7,902,645 | 512,458 | 7,749,227 | 16,164,330 | ||||||||||||
October 31, 2021 | ||||||||||||
Financial liabilities measured at amortized cost | Other financial liabilities | Total | ||||||||||
(In millions of won) | ||||||||||||
Trade payables | ₩ | 1,171,300 | — | 1,171,300 | ||||||||
Other payables | 2,639,321 | — | 2,639,321 | |||||||||
Other non-trade payables | 2,176,940 | — | 2,176,940 | |||||||||
Borrowings | 14,140,376 | — | 14,140,376 | |||||||||
Lease liabilities | 1,561,484 | — | 1,561,484 | |||||||||
Other financial liabilities | 4,496 | 1,173 | 5,669 | |||||||||
₩ | 21,693,917 | 1,173 | 21,695,090 | |||||||||
December 31, 2020 | ||||||||||||
Financial liabilities measured at amortized cost | Other financial liabilities | Total | ||||||||||
(In millions of won) | ||||||||||||
Trade payables | ₩ | 1,046,159 | — | 1,046,159 | ||||||||
Other payables | 2,621,305 | — | 2,621,305 | |||||||||
Other non-trade payables | 1,397,116 | — | 1,397,116 | |||||||||
Borrowings | 11,251,648 | — | 11,251,648 | |||||||||
Lease liabilities | 1,643,716 | — | 1,643,716 | |||||||||
Other financial liabilities | 3,958 | 84,707 | 88,665 | |||||||||
₩ | 17,963,902 | 84,707 | 18,048,609 | |||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Financial assets at amortized cost | ||||||||||||
Interest income | ₩ | 18,496 | 27,872 | 30,062 | ||||||||
Foreign exchange differences | 649,633 | (959,065 | ) | 229,649 | ||||||||
Loss on disposal | (125 | ) | — | — | ||||||||
Impairment | (868 | ) | (555 | ) | — | |||||||
Reversal of impairment | — | 5 | 85 | |||||||||
667,136 | (931,743 | ) | 259,796 | |||||||||
Financial assets at fair value through profit or loss | ||||||||||||
Dividend income | 7,875 | 1,325 | 429 | |||||||||
Gain on disposal | 52,903 | 27,510 | 59,217 | |||||||||
Gain (loss) on valuation | 11,150 | 1,736,345 | (227,423 | ) | ||||||||
Foreign exchange differences | (83,298 | ) | (40,222 | ) | 209,563 | |||||||
(11,370 | ) | 1,724,958 | 41,786 | |||||||||
Financial liabilities measured at amortized cost | ||||||||||||
Interest expenses | (218,076 | ) | (253,468 | ) | (245,440 | ) | ||||||
Foreign exchange differences | (227,930 | ) | 809,001 | (339,834 | ) | |||||||
(446,006 | ) | 555,533 | (585,274 | ) | ||||||||
Financial liabilities measured at fair value through profit or loss | ||||||||||||
Loss on valuation | (1,704 | ) | (1,681 | ) | — | |||||||
₩ | 208,056 | 1,347,067 | (283,692 | ) | ||||||||
Assets | Liabilities | |||||||||||||||
Foreign currencies | Korean won equivalent | Foreign currencies | Korean won equivalent | |||||||||||||
(In millions of won and millions of foreign currencies) | ||||||||||||||||
USD | 14,671 | ₩ | 17,189,434 | 14,254 | ₩ | 16,701,257 | ||||||||||
JPY | 348 | 3,593 | 46,901 | 483,851 | ||||||||||||
CNY | — | 82 | 24 | 4,354 | ||||||||||||
EUR | 9 | 11,718 | 178 | 243,349 |
If strengthening by 10% | If weakening by 10% | |||||||
(In millions of won) | ||||||||
USD | ₩ | 165,519 | (165,519 | ) | ||||
JPY | (48,026 | ) | 48,026 | |||||
CNY | (427 | ) | 427 | |||||
EUR | (23,163 | ) | 23,163 |
October 31, 2021 | ||||||||||||||||||||
Less than 1 year | 1 – 2 years | 2 – 5 years | More than 5 years | Total | ||||||||||||||||
(In millions of won) | ||||||||||||||||||||
Borrowings 1 | ₩ | 2,984,990 | 2,876,617 | 6,736,101 | 2,512,410 | 15,110,118 | ||||||||||||||
Lease liabilities | 429,548 | 271,723 | 436,883 | 616,039 | 1,754,193 | |||||||||||||||
Trade payables | 1,171,300 | — | — | — | 1,171,300 | |||||||||||||||
Other payables | 2,378,123 | 63,945 | 175,208 | 42,181 | 2,659,457 | |||||||||||||||
Other non-trade payables | 2,112,716 | 11,073 | 11,565 | — | 2,135,354 | |||||||||||||||
Derivative Liabilities | 1,069 | 276 | — | — | 1,345 | |||||||||||||||
Other financial liabilities | 127,724 | — | — | — | 127,724 | |||||||||||||||
₩ | 9,205,470 | 3,223,634 | 7,359,757 | 3,170,630 | 22,959,491 | |||||||||||||||
December 31, 2020 | ||||||||||||||||||||
Less than 1 year | 1 – 2 years | 2 – 5 years | More than 5 years | Total | ||||||||||||||||
(In millions of won) | ||||||||||||||||||||
Borrowings 1 | ₩ | 3,309,009 | 2,317,331 | 5,136,314 | 1,121,480 | 11,884,134 | ||||||||||||||
Lease liabilities | 352,201 | 250,840 | 391,356 | 848,315 | 1,842,712 | |||||||||||||||
Trade payables | 1,046,159 | — | — | — | 1,046,159 | |||||||||||||||
Other payables | 2,348,909 | 56,902 | 160,488 | 78,336 | 2,644,635 | |||||||||||||||
Other non-trade payables | 1,346,254 | 17,896 | 12,028 | — | 1,376,178 | |||||||||||||||
Derivative Liabilities | (3,538 | ) | (3,839 | ) | 77,573 | 13,460 | 83,656 | |||||||||||||
Other financial liabilities | 117,106 | — | — | — | 117,106 | |||||||||||||||
Financial guarantee contract | 87,040 | — | — | — | 87,040 | |||||||||||||||
₩ | 8,603,140 | 2,639,130 | 5,777,759 | 2,061,591 | 19,081,620 | |||||||||||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Total liabilities (A) | ₩ | 24,956,670 | 19,264,756 | |||||
Total equity (B) | 59,760,652 | 51,909,097 | ||||||
Cash and cash equivalents; short-term financial instruments;and short-term investment asset (C) | 10,968,035 | 4,948,215 | ||||||
Total borrowings (D) | 14,140,376 | 11,251,648 | ||||||
Debt-to-equity | 41.76% | 37.11% | ||||||
Net borrowing ratio (D-C)/B | 5.31% | 12.14% |
October 31, 2021 | ||||||||||||||||||||
Carrying amounts | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
(In millions of won) | ||||||||||||||||||||
Financial assets measured at fair value | ||||||||||||||||||||
Short-term financial instruments | ₩ | 222,500 | — | — | 222,500 | 222,500 | ||||||||||||||
Short-term investment asset | 5,494,158 | — | 5,494,158 | — | 5,494,158 | |||||||||||||||
Trade receivables 1 | 660,211 | — | 660,211 | — | 660,211 | |||||||||||||||
Long-term investment asset | 6,626,956 | — | — | 6,626,956 | 6,626,956 | |||||||||||||||
Other financial assets | 23,028 | — | 23,028 | — | 23,028 | |||||||||||||||
13,026,853 | — | 6,177,397 | 6,849,456 | 13,026,853 | ||||||||||||||||
Financial assets not measured at fair value | ||||||||||||||||||||
Cash and cash equivalents 2 | 4,874,752 | — | — | — | — | |||||||||||||||
Short-term financial instruments 2 | 376,625 | — | — | — | — | |||||||||||||||
Trade receivables 2 | 6,462,823 | — | — | — | — | |||||||||||||||
Loans and other receivables 2 | 405,857 | — | — | — | — | |||||||||||||||
Other financial assets 2 | 29,483 | — | — | — | — | |||||||||||||||
12,149,540 | — | — | — | — | ||||||||||||||||
Total financial asset | 25,176,393 | — | 6,177,397 | 6,849,456 | 13,026,853 | |||||||||||||||
Financial liabilities measured at fair value | ||||||||||||||||||||
Other financial liabilities | 1,173 | — | 1,173 | — | 1,173 | |||||||||||||||
Financial liabilities not measured at fair value | ||||||||||||||||||||
Trade payables 2 | 1,171,300 | — | — | — | — | |||||||||||||||
Other payables 2 | 2,639,321 | — | — | — | — | |||||||||||||||
Other non-trade payables2 | 2,176,940 | — | — | — | — | |||||||||||||||
Borrowings | 14,140,376 | — | 13,973,972 | — | 13,973,972 | |||||||||||||||
Lease liabilities 2 | 1,561,484 | — | — | — | — | |||||||||||||||
Other financial liabilities 2 | 4,496 | — | — | — | — | |||||||||||||||
21,693,917 | — | 13,973,972 | — | 13,973,972 | ||||||||||||||||
Total financial liabilities | ₩ | 21,695,090 | — | 13,975,145 | — | 13,975,145 | ||||||||||||||
December 31, 2020 | ||||||||||||||||||||
Carrying amounts | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
(In millions of won) | ||||||||||||||||||||
Financial assets measured at fair value | ||||||||||||||||||||
Short-term financial instruments | ₩ | 227,500 | — | — | 227,500 | 227,500 | ||||||||||||||
Short-term investment asset | 1,535,518 | — | 1,535,518 | — | 1,535,518 | |||||||||||||||
Trade receivables 1 | 512,458 | — | 512,458 | — | 512,458 | |||||||||||||||
Long-term investment asset | 6,139,627 | — | — | 6,139,627 | 6,139,627 | |||||||||||||||
8,415,103 | — | 2,047,976 | 6,367,127 | 8,415,103 | ||||||||||||||||
Financial assets not measured at fair value | ||||||||||||||||||||
Cash and cash equivalents 2 | 2,975,989 | — | — | — | — | |||||||||||||||
Short-term financial instruments 2 | 209,208 | — | — | — | — | |||||||||||||||
Trade receivables 2 | 4,418,864 | — | — | — | — | |||||||||||||||
Loans and other receivables 2 | 144,783 | — | — | — | — | |||||||||||||||
Other financial assets 2 | 383 | — | — | — | — | |||||||||||||||
7,749,227 | — | — | — | — | ||||||||||||||||
Total financial asset | 16,164,330 | — | 2,047,976 | 6,367,127 | 8,415,103 | |||||||||||||||
Financial liabilities measured at fair value | ||||||||||||||||||||
Other financial liabilities | 84,707 | — | 84,707 | — | 84,707 | |||||||||||||||
Financial liabilities not measured at fair value | ||||||||||||||||||||
Trade payables 2 | 1,046,159 | — | — | — | — | |||||||||||||||
Other payables 2 | 2,621,305 | — | — | — | — | |||||||||||||||
Other non-trade payables2 | 1,397,116 | — | — | — | — | |||||||||||||||
Borrowings | 11,251,648 | — | 11,372,509 | — | 11,372,509 | |||||||||||||||
Lease liabilities 2 | 1,643,716 | — | — | — | — | |||||||||||||||
Other financial liabilities 2 | 3,958 | — | — | — | — | |||||||||||||||
17,963,902 | — | 11,372,509 | — | 11,372,509 | ||||||||||||||||
Total financial liabilities | ₩ | 18,048,609 | — | 11,457,216 | — | 11,457,216 | ||||||||||||||
Fair value | Level | Valuation Techniques | ||||||||||
(In millions of won) | ||||||||||||
Financial assets at fair value through profit or loss: | ||||||||||||
Short-term investment assets | ₩ | 5,494,158 | 2 | Present value technique | ||||||||
Long-term investment assets | 6,626,956 | 3 | Present value technique and others | |||||||||
Short-term financial instruments | 222,500 | 3 | Present value technique | |||||||||
Other financial assets | 23,028 | 2 | Present value technique | |||||||||
Financial assets at fair value through other comprehensive income | ||||||||||||
Trade receivables | 660,211 | 2 | Present value technique | |||||||||
Financial liabilities at fair value through other comprehensive income | ||||||||||||
Other financial liabilities | ₩ | 1,173 | 2 | Present value technique |
Fair value | Valuation Techniques | Level 3 inputs | Input Range | |||||||||
(In millions of won) | ||||||||||||
Equity investment in SPC1 | ₩ | 3,823,456 | Present value technique and option-pricing method | Terminal growth rate | 0 | % | ||||||
Discount rate (Weighted-average capital cost) | 7.2 | % | ||||||||||
Expected timing of liquidation of the SPC (years) | 2.58 | |||||||||||
Volatility | 41.3 | % | ||||||||||
Risk free rate | -0.10 | % | ||||||||||
SPC2 convertible bonds | Present value technique | Terminal growth rate | 0 | % | ||||||||
2,521,342 | Discount rate (Weighted-average capital cost) | 7.2 | % |
Positive fluctuation | Negative fluctuation | |||||||
(In millions of won) | ||||||||
Equity investment in SPC1 1 | ₩ | 953,531 | ₩ | (760,371 | ) | |||
SPC2 convertible bonds 1 | 633,526 | (479,870 | ) |
Beginning Balance | Acquisition | Disposals | Payments | Gain on Valuation | Foreign Exchange Difference | Transfer 1 | Ending Balance | |||||||||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Short-term Financial instruments | ₩ | 227,500 | — | (5,000 | ) | — | — | — | — | 222,500 | ||||||||||||||||||||||
Long-term investment assets | 6,139,627 | 88,258 | (5,475 | ) | — | 520,229 | (115,683 | ) | — | 6,626,956 |
October 31 2021 | December 31, 2020 | Description | ||||||||
(In millions of won) | ||||||||||
Short-term financial instruments | ₩ | 222,500 | 227,500 | Restricted for supporting small businesses | ||||||
8,253 | 8,434 | Pledged for consumption tax | ||||||||
178,200 | 84,419 | Guarantee deposits for repayments of borrowings | ||||||||
408,953 | 320,353 | |||||||||
Other financial assets | 28,790 | — | Deposits for the share purchase agreement | |||||||
11 | 11 | Bank overdraft guarantee deposit | ||||||||
614 | 305 | Others | ||||||||
29,415 | 316 | |||||||||
₩ | 438,368 | 320,669 | ||||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Trade receivables | ₩ | 7,053,653 | 4,873,602 | |||||
Trade receivables to be collected from related parties | 69,381 | 57,720 | ||||||
₩ | 7,123,034 | 4,931,322 | ||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Current | ||||||||
Other receivables | ₩ | 17,435 | 13,603 | |||||
Accrued income | 2,345 | 2,570 | ||||||
Short-term loans | 10,222 | 5,045 | ||||||
Short-term guarantee and other deposits | 35,005 | 47,976 | ||||||
65,007 | 69,194 | |||||||
Non-current | ||||||||
Long-term other receivables | — | 2,977 | ||||||
Long-term loans | 292,454 | 37,838 | ||||||
Guarantee deposits | 48,163 | 34,558 | ||||||
Others | 233 | 216 | ||||||
340,850 | 75,589 | |||||||
₩ | 405,857 | 144,783 | ||||||
October 31,2021 | ||||||||||||
Gross amount | Provision for impairment | Carrying amount | ||||||||||
(In millions of won) | ||||||||||||
Trade receivables | ₩ | 7,123,952 | (918 | ) | 7,123,034 | |||||||
Current loans and other receivables | 66,282 | (1,275 | ) | 65,007 | ||||||||
Non-current loans and other receivables | 342,085 | (1,235 | ) | 340,850 | ||||||||
₩ | 7,532,319 | (3,428 | ) | 7,528,891 | ||||||||
December 31,2020 | ||||||||||||
Gross amount | Provision for impairment | Carrying amount | ||||||||||
(In millions of won) | ||||||||||||
Trade receivables | ₩ | 4,931,366 | (44 | ) | 4,931,322 | |||||||
Current loans and other receivables | 70,472 | (1,278 | ) | 69,194 | ||||||||
Non-current loans and other receivables | 76,743 | (1,154 | ) | 75,589 | ||||||||
₩ | 5,078,581 | (2,476 | ) | 5,076,105 | ||||||||
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Beginning balance | ₩ | 44 | 9 | |||||
Bad debt expense | 871 | 555 | ||||||
Write-off | — | (517 | ) | |||||
Foreign exchange difference | 3 | (3 | ) | |||||
Ending balance | ₩ | 918 | 44 | |||||
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Beginning balance | ₩ | 1,278 | 1,280 | |||||
Reversal | (3 | ) | (2 | ) | ||||
Ending balance | ₩ | 1,275 | 1,278 | |||||
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Beginning balance | ₩ | 1,154 | 1,162 | |||||
Reversal | — | (3 | ) | |||||
Write-off | — | 64 | ||||||
Foreign exchange difference | 81 | (69 | ) | |||||
Ending balance | ₩ | 1,235 | 1,154 | |||||
October 31, 2021 | ||||||||||||||||||||||||
Not impaired | ||||||||||||||||||||||||
Overdue | ||||||||||||||||||||||||
Not past due | Less than 3 months | Over 3 months and less than 6 months | Over 6 months | Impaired | Total | |||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||
Trade receivables | ₩ | 7,123,034 | — | — | — | 918 | 7,123,952 | |||||||||||||||||
Current loans and other receivables | 65,007 | — | — | — | 1,275 | 66,282 | ||||||||||||||||||
Non-current loans and other receivables | 340,850 | — | — | — | 1,235 | 342,085 | ||||||||||||||||||
₩ | 7,528,891 | — | — | — | 3,428 | 7,532,319 | ||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||
Not impaired | ||||||||||||||||||||||||
Overdue | ||||||||||||||||||||||||
Not past due | Less than 3 months | Over 3 months and less than 6 months | Over 6 months | Impaired | Total | |||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||
Trade receivables | ₩ | 4,931,328 | — | — | — | 38 | 4,931,366 | |||||||||||||||||
Current loans and other receivables | 69,194 | — | — | — | 1,278 | 70,472 | ||||||||||||||||||
Non-current loans and other receivables | 75,589 | — | — | — | 1,154 | 76,743 | ||||||||||||||||||
₩ | 5,076,111 | — | — | �� | — | 2,470 | 5,078,581 | |||||||||||||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Merchandise | ₩ | 2,519 | 2,173 | |||||
Finished goods | 1,420,798 | 1,078,967 | ||||||
Work-in-process | 4,088,176 | 3,584,955 | ||||||
Raw materials | 771,082 | 724,482 | ||||||
Supplies | 683,200 | 588,009 | ||||||
Goods in transit | 123,309 | 157,732 | ||||||
₩ | 7,089,084 | 6,136,318 | ||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Inventories recognized as cost of sales | ₩ | 19,446,999 | 21,313,696 | 18,547,022 |
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Beginning balance | ₩ | 420,985 | 647,498 | |||||
Charged to cost of sales | 65,093 | 79,560 | ||||||
Utilization upon sales | (175,956 | ) | (306,072 | ) | ||||
Ending balance | ₩ | 310,122 | 420,986 | |||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Current | ||||||||
Advance payments | ₩ | 78,258 | 51,047 | |||||
Prepaid expenses | 216,573 | 145,298 | ||||||
Value added tax refundable | 348,450 | 235,602 | ||||||
Contract assets | 63,059 | 53,605 | ||||||
Others | 829 | 120 | ||||||
707,169 | 485,672 | |||||||
Non-current | ||||||||
Long-term advance payments | 37,351 | 36,985 | ||||||
Long-term prepaid expenses | 50,008 | 14,961 | ||||||
Others | 5,511 | 3,083 | ||||||
92,870 | 55,029 | |||||||
₩ | 800,039 | 540,701 | ||||||
October 31, 2021 | December 31, 2020 | |||||||||||||||||||||
Type | Investee | Owner ship (%) | Net asset value | Carrying amount | Owner ship (%) | Carrying amount | ||||||||||||||||
(In millions of won) | ||||||||||||||||||||||
Associate | Stratio, Inc. 1 | 9.35 | ₩ | 100 | 403 | 9.12 | ₩ | 407 | ||||||||||||||
SK China Company Limited 2 | 11.87 | 352,909 | 405,506 | 11.87 | 257,474 | |||||||||||||||||
Gemini Partners Pte. Ltd. | 20.00 | 2,254 | 2,254 | 20.00 | 1,771 | |||||||||||||||||
TCL Fund 1 | 11.05 | 11,871 | 12,305 | 11.05 | 11,538 | |||||||||||||||||
SK South East Asia Investment Pte. Ltd. | 20.00 | 363,109 | 363,109 | 20.00 | 325,006 | |||||||||||||||||
Hushan Xinju (Chengdu) Venture Investment Center (Smartsource) 2 | 16.67 | 8,563 | 8,564 | 16.67 | 7,970 | |||||||||||||||||
Prume Social Farm, Co., Ltd. 3 | 35.52 | 2,138 | 2,702 | 35.52 | 2,221 | |||||||||||||||||
Wuxi xinfa IC industry park., Ltd. 4 | 30.00 | 32,756 | 32,756 | 30.00 | 20,952 | |||||||||||||||||
Magnus Private Investment Co., Ltd. | 49.76 | 207,888 | 207,888 | 49.76 | 150,840 | |||||||||||||||||
L&S (No.10) Early Stage III Investment Association | 24.39 | 4,013 | 4,013 | 24.39 | 2,609 | |||||||||||||||||
SiFive Inc. 1 | 8.27 | 7,161 | 33,186 | 7.87 | 34,372 | |||||||||||||||||
YD-SK-KDB | 23.26 | 5,398 | 5,398 | 23.26 | 2,566 | |||||||||||||||||
Ningbo Zhongxin Venture Capital Partnership (Limited Partnership) 1,3 | 7.54 | 3,549 | 3,550 | — | — | |||||||||||||||||
Jiangsu KVTS Semiconductor science and Technology Co Ltd. 3 | 33.00 | 4,421 | 7,215 | — | — | |||||||||||||||||
Joint venture | HITECH Semiconductor (Wuxi) Co., Ltd. 4 | 45.00 | 120,407 | 117,836 | 45.00 | 113,430 | ||||||||||||||||
Hystars Semiconductor (Wuxi) Co., Ltd. 4 | 50.10 | 220,711 | 222,301 | 50.10 | 195,423 | |||||||||||||||||
Specialized Investment-type Private Equity Investment Trust For Growth Of Semiconductor 4 | 33.33 | 24,629 | 24,629 | 33.33 | 24,818 | |||||||||||||||||
Specialized Investment-type Private Equity Investment Trust For Win-win System Semiconductor4 | 37.50 | 29,751 | 29,751 | 37.50 | 14,847 | |||||||||||||||||
₩ | 1,401,628 | 1,483,366 | ₩ | 1,166,244 | ||||||||||||||||||
October 31, 2021 | ||||||||||||||||||||||||||||
Beginning balance | Acquisition | Transfer | Share of profit (loss) | Other equity movement | Dividend | Ending balance | ||||||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||||||
Stratio, Inc. | ₩ | 407 | — | — | (12 | ) | 8 | — | 403 | |||||||||||||||||||
SK China Company Limited | 257,474 | — | — | 119,944 | 28,088 | — | 405,506 | |||||||||||||||||||||
Gemini Partners Pte. Ltd. | 1,771 | — | — | 361 | 122 | — | 2,254 | |||||||||||||||||||||
TCL Fund | 11,538 | 680 | — | 110 | 1,106 | (1,129 | ) | 12,305 | ||||||||||||||||||||
SK South East Asia Investment Pte. Ltd. | 325,006 | — | — | 7,691 | 30,412 | — | 363,109 | |||||||||||||||||||||
Hushan Xinju (Chengdu) Venture Investment Center (Smartsource) | 7,970 | — | — | (170 | ) | 764 | — | 8,564 | ||||||||||||||||||||
Prume Social Farm, Co., Ltd. | 2,221 | — | — | 481 | — | — | 2,702 | |||||||||||||||||||||
Wuxi xinfa IC industry park., Ltd. | 20,952 | 9,603 | — | (100 | ) | 2,301 | — | 32,756 | ||||||||||||||||||||
Magnus Private Investment Co., Ltd. | 150,840 | — | — | 57,048 | — | — | 207,888 | |||||||||||||||||||||
L&S (No.10) Early Stage III Investment Association | 2,609 | 1,500 | — | (96 | ) | — | — | 4,013 | ||||||||||||||||||||
SiFive Inc. | 34,372 | — | — | (1,702 | ) | 516 | — | 33,186 | ||||||||||||||||||||
YD-SK-KDB | 2,566 | 3,000 | — | (168 | ) | — | — | 5,398 | ||||||||||||||||||||
Ningbo Zhongxin Venture Capital Partnership (Limited Partnership) | — | 3,448 | — | (86 | ) | 188 | — | 3,550 | ||||||||||||||||||||
Jiangsu KVTS Semiconductor science and Technology Co Ltd. | — | 6,831 | — | 241 | 143 | — | 7,215 | |||||||||||||||||||||
HITECH Semiconductor (Wuxi) Co., Ltd. | 113,430 | — | — | 12,997 | 8,180 | (16,771 | ) | 117,836 | ||||||||||||||||||||
Hystars Semiconductor (Wuxi) Co., Ltd. | 195,423 | — | — | 7,832 | 19,046 | — | 222,301 | |||||||||||||||||||||
Specialized Investment-type Private Equity Investment Trust For Growth Of Semiconductor | 24,818 | — | — | (189 | ) | — | — | 24,629 | ||||||||||||||||||||
Specialized Investment-type Private Equity Investment Trust For Win-win System Semiconductor | 14,847 | 15,000 | — | (96 | ) | — | — | 29,751 | ||||||||||||||||||||
₩ | 1,166,244 | 40,062 | — | 204,086 | 90,874 | (17,900 | ) | 1,483,366 | ||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||||
Beginning balance | Acquisition | Transfer | Share of profit (loss) | Other equity movement | Dividend | Ending balance | ||||||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||||||
Stratio, Inc. | ₩ | 395 | — | — | 19 | (7 | ) | — | 407 | |||||||||||||||||||
SK China Company Limited | 259,272 | — | — | 5,746 | (7,544 | ) | — | 257,474 | ||||||||||||||||||||
Gemini Partners Pte. Ltd. | 2,735 | — | — | (872 | ) | (92 | ) | — | 1,771 | |||||||||||||||||||
TCL Fund | 4,995 | 5,280 | — | 999 | 264 | — | 11,538 | |||||||||||||||||||||
SK South East Asia Investment Pte. Ltd. | 237,599 | 121,450 | — | 10,889 | (44,932 | ) | — | 325,006 | ||||||||||||||||||||
Hushan Xinju (Chengdu) Venture Investment Center(Smartsource) | 5,659 | 2,565 | — | (233 | ) | (14 | ) | (7 | ) | 7,970 | ||||||||||||||||||
Prume Social Farm, Co., Ltd. | 1,000 | 1,000 | — | 221 | — | — | 2,221 | |||||||||||||||||||||
Wuxi xinfa IC industry park., Ltd. | — | 21,860 | — | (86 | ) | (822 | ) | — | 20,952 | |||||||||||||||||||
Magnus Private Investment Co., Ltd. | — | 207,346 | — | (56,506 | ) | — | — | 150,840 | ||||||||||||||||||||
L&S (No.10) Early Stage III Investment Association | — | 2,250 | 500 | (141 | ) | — | — | 2,609 | ||||||||||||||||||||
SiFive Inc. | — | 35,709 | — | (880 | ) | (457 | ) | — | 34,372 | |||||||||||||||||||
YD-SK-KDB | — | 1,400 | 1,400 | (234 | ) | — | — | 2,566 | ||||||||||||||||||||
HITECH Semiconductor (Wuxi) Co., Ltd. | 114,518 | — | — | 21,241 | (7,296 | ) | (15,033 | ) | 113,430 | |||||||||||||||||||
Hystars Semiconductor (Wuxi) Co., Ltd. | 142,594 | 69,377 | — | (16,627 | ) | 79 | — | 195,423 | ||||||||||||||||||||
Specialized Investment-type Private Equity Investment Trust For Growth Of Semiconductor | — | — | 24,480 | 338 | — | — | 24,818 | |||||||||||||||||||||
Specialized Investment-type Private Equity Investment Trust For Win-win System Semiconductor | — | 15,000 | — | (153 | ) | — | — | 14,847 | ||||||||||||||||||||
₩ | 768,767 | 483,237 | 26,380 | (36,279 | ) | (60,821 | ) | (15,040 | ) | 1,166,244 | ||||||||||||||||||
October 31, 2021 | ||||||||||||||||
Current assets | Non-current assets | Current liabilities | Non-current liabilities | |||||||||||||
(In millions of won) | ||||||||||||||||
SK China Company Limited | ₩ | 1,699,028 | 1,581,229 | 71,745 | 274,934 | |||||||||||
SK South East Asia Investment Pte. Ltd. | 193,874 | 2,542,885 | 198 | — | ||||||||||||
Magnus Private Investment Co., Ltd. | 242,796 | 523,673 | 100,304 | 470,255 | ||||||||||||
HITECH Semiconductor (Wuxi) Co., Ltd. | 239,084 | 374,467 | 116,780 | 229,200 | ||||||||||||
Hystars Semiconductor (Wuxi) Co., Ltd. | 164,480 | 577,694 | 18,439 | 283,194 |
December 31, 2020 | ||||||||||||||||
Current assets | Non-current assets | Current liabilities | Non-current liabilities | |||||||||||||
(In millions of won) | ||||||||||||||||
SK China Company Limited | ₩ | 380,413 | 1,706,634 | 51,485 | 308,147 | |||||||||||
SK South East Asia Investment Pte. Ltd. | 797,045 | 1,672,412 | 67 | — | ||||||||||||
Magnus Private Investment Co., Ltd. | 175,007 | 522,600 | 85,754 | 461,012 | ||||||||||||
HITECH Semiconductor (Wuxi) Co., Ltd. | 208,103 | 380,648 | 129,135 | 203,246 | ||||||||||||
Hystars Semiconductor (Wuxi) Co., Ltd. | 89,629 | 555,551 | 31,557 | 226,732 |
2021 | 2020 | 2019 | ||||||||||||||||||||||
Revenue | Profit for the Period | Revenue | Profit (loss) for the year | Revenue | Profit (loss) for the year | |||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||
SK China Company Limited | ₩ | 54,549 | 1,010,813 | 154,355 | 48,427 | 120,317 | 28,309 | |||||||||||||||||
SK South East Asia Investment Pte. Ltd. | 1,172 | 38,450 | 9,467 | 54,448 | 10,294 | 28,763 | ||||||||||||||||||
Magnus Private Investment Co., Ltd. | 394,717 | 57,047 | 164,662 | (56,505 | ) | — | — | |||||||||||||||||
HITECH Semiconductor (Wuxi) Co., Ltd. | 521,362 | 29,926 | 622,653 | 51,871 | 657,741 | 36,398 | ||||||||||||||||||
Hystars Semiconductor (Wuxi) Co., Ltd. | 60,696 | 15,634 | — | (33,188 | ) | — | (1,044 | ) |
October 31, 2021 | December 31, 2020 | |||||||||||||||
Type | Acquisition cost | Book value | Book value | |||||||||||||
(In millions of won) | ||||||||||||||||
ProMOS Technologies Inc. | Equity securities | ₩ | 21,847 | — | — | |||||||||||
Intellectual Discovery | Equity securities | 4,000 | 2,182 | 2,182 | ||||||||||||
China Walden Venture Investments II, L.P. | Certificate | 8,457 | 12,520 | 10,965 | ||||||||||||
China Walden Venture Investments III, L.P. | Certificate | 7,014 | 7,577 | 7,085 | ||||||||||||
Keyssa, Inc | Equity securities | 6,174 | 189 | 189 | ||||||||||||
BCPE Pangea Intermediate Holdings Cayman, L.P. 1 | Certificate | 2,752,014 | 3,823,456 | 3,595,494 | ||||||||||||
BCPE Pangea Cayman2, Ltd. 1 | Convertible bond | 1,283,095 | 2,521,342 | 2,351,225 | ||||||||||||
FemtoMetrix, Inc. | Convertible bond | 4,387 | 4,387 | 4,387 | ||||||||||||
GigaIO Networks, Inc. | Equity securities | 4,066 | 3,103 | 3,103 | ||||||||||||
Inpria Corporation | Equity securities | 4,753 | 4,729 | 4,729 | ||||||||||||
Shanghai IoT Phase II Venture Capital Fund Partnership, L.P | Certificate | 7,292 | 18,572 | 13,262 | ||||||||||||
Beijing Horizon Robotics Technology Co., Ltd. | Equity securities | 55,091 | 58,819 | 56,190 | ||||||||||||
Shanghi Sitrus Microelectronics Technology Co., Ltd. | Equity securities | 5,254 | 1,441 | 1,314 | ||||||||||||
Jiangsu Jiequan Junhai Rongxin Investment Partnership | Certificate | 52,124 | 53,290 | 20,035 | ||||||||||||
Impact Venture Capital I, L.P. | Certificate | 5,242 | 6,899 | 5,881 | ||||||||||||
AutoTech Fund I, L.P. | Certificate | 4,294 | 4,340 | 3,840 | ||||||||||||
TransLink Capital Partners IV, L.P. | Certificate | 4,357 | 4,147 | 3,563 | ||||||||||||
Nuvolta | Equity securities | 12,296 | 12,816 | — | ||||||||||||
GPT | Certificate | 12,296 | 12,816 | — | ||||||||||||
Others | — | 66,949 | 74,331 | 56,183 | ||||||||||||
₩ | 4,321,002 | 6,626,956 | 6,139,627 | |||||||||||||
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Beginning balance | ₩ | 6,139,627 | 4,381,812 | |||||
Acquisition | 88,258 | 95,332 | ||||||
Disposal | (5,475 | ) | (706 | ) | ||||
Gain (loss) on valuation | 520,229 | 1,733,783 | ||||||
Foreign exchange difference | (115,683 | ) | (44,214 | ) | ||||
Transfer | — | (26,380 | ) | |||||
Ending balance | ₩ | 6,626,956 | 6,139,627 | |||||
2021 | ||||||||||||||||||||||||||||||||
Land | Buildings | Structures | Machinery | Vehicles | Others | Construction- in-progress | Total | |||||||||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||||||||||
Beginning balance | ₩ | 971,606 | 7,018,249 | 1,812,107 | 26,491,042 | 40,557 | 724,825 | 4,172,176 | 41,230,562 | |||||||||||||||||||||||
Changes during 2021 | ||||||||||||||||||||||||||||||||
Acquisitions | 12,072 | 184,553 | 177,751 | 6,696,835 | 88 | 112,384 | 2,836,605 | 10,020,288 | ||||||||||||||||||||||||
Disposals | (55 | ) | (190 | ) | (26 | ) | (4,092 | ) | — | (40 | ) | (6,241 | ) | (10,644 | ) | |||||||||||||||||
Depreciation | — | (241,629 | ) | (107,833 | ) | (7,261,632 | ) | (2,786 | ) | (239,432 | ) | — | (7,853,312 | ) | ||||||||||||||||||
Transfers 1 | 72,952 | 107,106 | 24,163 | 1,769,609 | — | 74,946 | (2,008,779 | ) | 39,997 | |||||||||||||||||||||||
Exchange differences and others | 3,494 | 84,058 | 53,835 | 727,670 | 26 | 13,057 | 40,071 | 922,211 | ||||||||||||||||||||||||
Ending net book amount | 1,060,069 | 7,152,147 | 1,959,997 | 28,419,432 | 37,885 | 685,740 | 5,033,832 | 44,349,102 | ||||||||||||||||||||||||
Acquisition cost | 1,060,069 | 8,894,310 | 2,769,189 | 83,165,139 | 48,940 | 2,225,869 | 5,033,832 | 103,197,348 | ||||||||||||||||||||||||
Accumulated depreciation | — | (1,702,197 | ) | (790,088 | ) | (54,575,300 | ) | (11,048 | ) | (1,540,100 | ) | — | (58,618,733 | ) | ||||||||||||||||||
Accumulated impairment | — | (23,699 | ) | (19,104 | ) | (162,456 | ) | — | (23 | ) | — | (205,282 | ) | |||||||||||||||||||
Government grants | — | (16,267 | ) | — | (7,951 | ) | (7 | ) | (6 | ) | — | (24,231 | ) | |||||||||||||||||||
₩ | 1,060,069 | 7,152,147 | 1,959,997 | 28,419,432 | 37,885 | 685,740 | 5,033,832 | 44,349,102 | ||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||||||||
Land | Buildings | Structures | Machinery | Vehicles | Others | Construction- in-progress | Total | |||||||||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||||||||||
Beginning balance | ₩ | 1,041,771 | 5,547,744 | 1,619,064 | 26,974,270 | 43,096 | 764,043 | 3,959,952 | 39,949,940 | |||||||||||||||||||||||
Changes during 2020 | ||||||||||||||||||||||||||||||||
Acquisitions | 38,075 | 476,831 | 284,113 | 6,044,813 | 55 | 192,353 | 3,012,558 | 10,048,798 | ||||||||||||||||||||||||
Disposals | (9,231 | ) | (327 | ) | (73 | ) | (17,095 | ) | — | (884 | ) | (37,850 | ) | (65,460 | ) | |||||||||||||||||
Depreciation | — | (233,909 | ) | (114,307 | ) | (7,888,654 | ) | (3,351 | ) | (274,913 | ) | — | (8,515,134 | ) | ||||||||||||||||||
Transfers 1 | (96,096 | ) | 1,222,639 | 21,076 | 1,367,213 | 753 | 45,476 | (2,767,284 | ) | (206,223 | ) | |||||||||||||||||||||
Exchange differences and others | (2,913 | ) | 5,271 | 2,234 | 10,495 | 4 | (1,250 | ) | 4,800 | 18,641 | ||||||||||||||||||||||
Ending net book amount | 971,606 | 7,018,249 | 1,812,107 | 26,491,042 | 40,557 | 724,825 | 4,172,176 | 41,230,562 | ||||||||||||||||||||||||
Acquisition cost | 971,606 | 8,459,016 | 2,494,982 | 74,141,182 | 48,860 | 2,045,915 | 4,172,176 | 92,333,737 | ||||||||||||||||||||||||
Accumulated depreciation | — | (1,401,792 | ) | (663,771 | ) | (47,485,857 | ) | (8,292 | ) | (1,321,067 | ) | — | (50,880,779 | ) | ||||||||||||||||||
Accumulated impairment | — | (23,699 | ) | (19,104 | ) | (162,276 | ) | — | (23 | ) | — | (205,102 | ) | |||||||||||||||||||
Government grants | — | (15,276 | ) | — | (2,007 | ) | (11 | ) | — | — | (17,294 | ) | ||||||||||||||||||||
₩ | 971,606 | 7,018,249 | 1,812,107 | 26,491,042 | 40,557 | 724,825 | 4,172,176 | 41,230,562 | ||||||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Cost of sales | ₩ | 7,186,705 | 7,749,569 | 6,878,303 | ||||||||
Selling and administrative expenses | 583,056 | 725,791 | 574,961 | |||||||||
Other expenses | 8,128 | 7,418 | 14,923 | |||||||||
Development costs and others | 75,423 | 32,356 | 43,607 | |||||||||
₩ | 7,853,312 | 8,515,134 | 7,511,794 | |||||||||
2021 | ||||||||||||||||||||||||
Properties | Structures | Machinery | Vehicles | Others | Total | |||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||
Beginning net book amount | ₩ | 111,860 | 1,048,208 | 504,539 | 18,207 | 24,831 | 1,707,645 | |||||||||||||||||
Increase | 51,971 | 11,466 | 77,220 | 12,519 | 55 | 153,231 | ||||||||||||||||||
Others | 2,489 | (10,770 | ) | (64,060 | ) | (1,114 | ) | 1,949 | (71,506 | ) | ||||||||||||||
Depreciation | (28,821 | ) | (71,854 | ) | (155,295 | ) | (13,111 | ) | (13,057 | ) | (282,138 | ) | ||||||||||||
Foreign exchange difference | 8,977 | 48,727 | 3,334 | 197 | 1,202 | 62,437 | ||||||||||||||||||
Ending net book amount | 146,476 | 1,025,777 | 365,738 | 16,698 | 14,980 | 1,569,669 | ||||||||||||||||||
Acquisition cost | 220,026 | 1,238,000 | 675,759 | 32,937 | 34,886 | 2,201,608 | ||||||||||||||||||
Accumulated amortization | (40,012 | ) | (212,223 | ) | (310,021 | ) | (16,239 | ) | (19,906 | ) | (598,401 | ) | ||||||||||||
Government grants | (33,538 | ) | — | — | — | — | (33,538 | ) | ||||||||||||||||
₩ | 146,476 | 1,025,777 | 365,738 | 16,698 | 14,980 | 1,569,669 | ||||||||||||||||||
2020 | ||||||||||||||||||||||||
Properties | Structures | Machinery | Vehicles | Others | Total | |||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||
Beginning net book amount | ₩ | 97,855 | 975,996 | 609,529 | 11,491 | 11,787 | 1,706,658 | |||||||||||||||||
Increase | 26,358 | 159,166 | 52,849 | 25,881 | 20,212 | 284,466 | ||||||||||||||||||
Others | 6,607 | (7,706 | ) | 15,823 | (4,746 | ) | — | 9,978 | ||||||||||||||||
Depreciation | (18,686 | ) | (83,522 | ) | (172,750 | ) | (14,436 | ) | (6,824 | ) | (296,218 | ) | ||||||||||||
Foreign exchange difference | (274 | ) | 4,274 | (912 | ) | 17 | (344 | ) | 2,761 | |||||||||||||||
Ending net book amount | 111,860 | 1,048,208 | 504,539 | 18,207 | 24,831 | 1,707,645 | ||||||||||||||||||
Acquisition cost | 169,300 | 1,210,800 | 811,315 | 29,684 | 40,787 | 2,261,886 | ||||||||||||||||||
Accumulated amortization | (26,193 | ) | (162,592 | ) | (306,776 | ) | (11,477 | ) | (15,956 | ) | (522,994 | ) | ||||||||||||
Government grants | (31,247 | ) | — | — | — | — | (31,247 | ) | ||||||||||||||||
₩ | 111,860 | 1,048,208 | 504,539 | 18,207 | 24,831 | 1,707,645 | ||||||||||||||||||
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Beginning net book amount | ₩ | 1,643,716 | 1,666,999 | |||||
Increase | 153,231 | 284,466 | ||||||
Others | (71,812 | ) | 9,389 | |||||
Interest expense | 27,046 | 34,435 | ||||||
Payments | (271,859 | ) | (326,665 | ) | ||||
Foreign exchange difference | 81,162 | (24,908 | ) | |||||
Ending net book amount | ₩ | 1,561,484 | 1,643,716 | |||||
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Depreciation of right-to-use | ₩ | 282,138 | 296,218 | |||||
Interest expenses of lease liabilities | 27,046 | 34,435 | ||||||
Expenses relating to short-term leases | 9,710 | 17,911 | ||||||
Expenses relating to leases of low-value assets | 1,363 | 1,733 |
Property, plant and equipment | Investment Property | Total | ||||||||||
(In millions of won) | ||||||||||||
Less than 1 year | ₩ | 12,042 | 14,650 | 26,692 | ||||||||
1~2 years | 3,948 | 14,547 | 18,495 | |||||||||
2~3 years | — | 14,438 | 14,438 | |||||||||
3~4 years | — | — | — | |||||||||
₩ | 15,990 | 43,635 | 59,625 | |||||||||
2021 | ||||||||||||||||||||
Goodwill | Industrial property rights | Development costs | Others | Total | ||||||||||||||||
(In millions of won) | ||||||||||||||||||||
Beginning net book amount | ₩ | 701,596 | 86,127 | 597,930 | 2,014,625 | 3,400,278 | ||||||||||||||
Changes during 2021 | ||||||||||||||||||||
Internal development | — | — | 325,845 | — | 325,845 | |||||||||||||||
External acquisition | — | 7,608 | — | 415,569 | 423,177 | |||||||||||||||
Business combination | — | — | — | 11 | 11 | |||||||||||||||
Disposals | — | (1,665 | ) | — | (13,073 | ) | (14,738 | ) | ||||||||||||
Amortization | — | (13,971 | ) | (296,134 | ) | (340,773 | ) | (650,878 | ) | |||||||||||
Impairment | — | — | (43,069 | ) | (384 | ) | (43,453 | ) | ||||||||||||
Transfers | — | 10,734 | — | (7,284 | ) | 3,450 | ||||||||||||||
Others | 21,799 | — | — | 9,477 | 31,276 | |||||||||||||||
Ending net book amount | 723,395 | 88,833 | 584,572 | 2,078,168 | 3,474,968 | |||||||||||||||
Acquisition cost | 723,395 | 209,239 | 3,511,249 | 3,484,980 | 7,928,863 | |||||||||||||||
Accumulated amortization and impairment | — | (120,406 | ) | (2,926,677 | ) | (1,406,812 | ) | (4,453,895 | ) | |||||||||||
₩ | 723,395 | 88,833 | 584,572 | 2,078,168 | 3,474,968 | |||||||||||||||
2020 | ||||||||||||||||||||
Goodwill | Industrial property rights | Development costs | Others | Total | ||||||||||||||||
(In millions of won) | ||||||||||||||||||||
Beginning net book amount | ₩ | 720,197 | 85,724 | 931,788 | 833,340 | 2,571,049 | ||||||||||||||
Changes during 2020 | ||||||||||||||||||||
Internal development | — | — | 259,020 | — | 259,020 | |||||||||||||||
External acquisition | — | 13,693 | — | 412,524 | 426,217 | |||||||||||||||
Disposals | — | (3,782 | ) | — | (8,504 | ) | (12,286 | ) | ||||||||||||
Amortization | — | (16,001 | ) | (576,334 | ) | (368,215 | ) | (960,550 | ) | |||||||||||
Impairment | — | — | (16,544 | ) | — | (16,544 | ) | |||||||||||||
Transfers | — | 6,493 | — | (9,720 | ) | (3,227 | ) | |||||||||||||
Others 1 | (18,601 | ) | — | — | 1,155,200 | 1,136,599 | ||||||||||||||
Ending net book amount | 701,596 | 86,127 | 597,930 | 2,014,625 | 3,400,278 | |||||||||||||||
Acquisition cost | 701,596 | 195,637 | 3,185,403 | 3,110,632 | 7,193,268 | |||||||||||||||
Accumulated amortization and impairment | — | (109,510 | ) | (2,587,473 | ) | (1,096,007 | ) | (3,792,990 | ) | |||||||||||
₩ | 701,596 | 86,127 | 597,930 | 2,014,625 | 3,400,278 | |||||||||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Cost of sales | ₩ | 206,661 | 219,851 | 88,445 | ||||||||
Selling and administrative expenses | 442,908 | 739,247 | 705,383 | |||||||||
Development costs | 1,309 | 1,452 | 1,341 | |||||||||
₩ | 650,878 | 960,550 | 795,169 | |||||||||
October 31, 2021 | ||||||
Book value | Residual amortization period | |||||
(In millions of won) | ||||||
DRAM | ₩ | 114,613 | 1~20 months | |||
1,659 | 1 | |||||
NAND | 310,885 | 8~21 months | ||||
122,385 | 1 | |||||
CIS | 48,388 | 2~21 months | ||||
₩ | 597,930 | |||||
December 31, 2020 | ||||||
Book value | Residual amortization period | |||||
(In millions of won) | ||||||
DRAM | ₩ | 46,995 | 11 months | |||
60,549 | 1 | |||||
NAND | 296,317 | 18 months | ||||
124,328 | 1 | |||||
CIS | 43,883 | 2~12 months | ||||
25,858 | 1 | |||||
₩ | 597,930 | |||||
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Beginning net book amount | ₩ | 209,417 | 258 | |||||
Depreciation | (1,426 | ) | (291 | ) | ||||
Transfer 1 | (43,447 | ) | 209,450 | |||||
Ending net book amount | 164,544 | 209,417 | ||||||
Acquisition cost | 170,550 | 249,135 | ||||||
Accumulated depreciation | (6,006 | ) | (39,718 | ) | ||||
Ending net book amount | ₩ | 164,544 | 209,417 | |||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Current | ||||||||
Rent deposits payable | ₩ | 4,946 | — | |||||
Accrued expenses | 2,149,356 | 1,367,193 | ||||||
2,154,302 | 1,367,193 | |||||||
Non-current | ||||||||
Rent deposits payable | 8,679 | 6,360 | ||||||
Long-term accrued expenses | 13,959 | 23,563 | ||||||
22,638 | 29,923 | |||||||
₩ | 2,176,940 | 1,397,116 | ||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Current | ||||||||
Short-term borrowings | ₩ | 181,611 | 179,579 | |||||
Current portion of long-term borrowings | 2,004,747 | 2,604,724 | ||||||
Current portion of debentures | 549,674 | 329,947 | ||||||
2,736,032 | 3,114,250 | |||||||
Non-current | ||||||||
Long-term borrowings | 4,223,014 | 4,526,968 | ||||||
Debentures | 7,181,330 | 3,610,430 | ||||||
11,404,344 | 8,137,398 | |||||||
₩ | 14,140,376 | 11,251,648 | ||||||
Financial Institutions | Maturity date | Interest rate per annum as of October 31, 2021 (%) 1 | October 31, 2021 | December 31, 2020 | ||||||||||
(In millions of won) | ||||||||||||||
General borrowings | Shinhan Bank | 2021.09.27 | — | ₩ | — | 4,000 | ||||||||
Foreign general borrowings | Cypress | 2021.12.31 | — | — | 6,924 | |||||||||
Industrial & Commercial Bank of China | 2021.01.20 | — | — | 32,682 | ||||||||||
China Construction Bank and others | 2021.02.26 | — | — | 76,258 | ||||||||||
City Bank | 2021.07.14 ~ 2021.11.17 | 1M USD LIBOR + 0.55 | 25,263 | 59,715 | ||||||||||
China Merchants Bank | 2022.01.21 ~ 2022.09.27 | 3M USD LIBOR + 0.55~1.90 | 57,508 | — | ||||||||||
Bank of China | 2022.09.07 ~ 2022.11.12 | 3M USD LIBOR + 1.18~1.20 | 21,207 | — | ||||||||||
Hystars Semiconductor (Wuxi) Co., Ltd. | 2022.03.21 ~ 2022.05.13 | 4.15~5.10 | 77,633 | — | ||||||||||
₩ | 181,611 | 179,579 | ||||||||||||
Financial institutions | Maturity date | Interest rate per annum as of October 31, 2021 (%) 1 | October 31, 2021 | December 31, 2020 | ||||||||||||||
(In millions of won) | ||||||||||||||||||
Local currency borrowings: | ||||||||||||||||||
Funds for equipment | Korea Development Bank | | 2021.09.29 ~ 2025.04.14 | | 1.98 ~ 2.50 | ₩ | 475,000 | 725,000 | ||||||||||
The Export-Import Bank of Korea | | 2022.10.23 ~ 2025.05.15 | | 1.31 ~ 2.00 | 600,000 | 600,000 | ||||||||||||
Shinhan Bank and others | | 2025.03.31 ~ 2028.04.09 | | 1.00 ~ 3.08 | 5,167 | 3,573 | ||||||||||||
Commercial Paper | Shinhan Bank General Finance Department | 2023.11.20 | CD(91 days) + 0.67 | 300,000 | 300,000 | |||||||||||||
1,380,167 | 1,628,573 | |||||||||||||||||
Foreign currency borrowings: | ||||||||||||||||||
General borrowings | The Export-Import Bank of Korea | 2021.05.31 | — | — | 843,408 | |||||||||||||
The Export-Import Bank of Korea | 2023.02.03 | 3M USD LIBOR + 1.30 | 117,170 | 108,800 | ||||||||||||||
Bank of China | 2023.12.09 | 3M USD LIBOR + 0.8 | 111,151 | — | ||||||||||||||
Bank of China | 2024.05.26 | 0.9 | 117,001 | — | ||||||||||||||
Funds for equipment | The Export-Import Bank of Korea | | 2021.02.25 ~ 2022.03.10 | | 3M USD LIBOR + 1.10 ~ 1.40 | | 58,585 | 244,800 | ||||||||||
The Export-Import Bank of Korea | | 2021.12.25 ~ 2021.12.27 | | 3M USD LIBOR + 1.30 | 292,502 | 272,349 | ||||||||||||
The Export-Import Bank of Korea | 2026.04.28 | 3M USD LIBOR + 0.95 | 351,510 | — | ||||||||||||||
Korea Development Bank | 2026.10.02 | 3M USD LIBOR + 1.10 | 585,850 | 544,000 | ||||||||||||||
China Development Bank | | 2023.05.26 ~ 2023.11.25 | 3M USD LIBOR + 1.00 | 210,602 | 212,432 | |||||||||||||
China Bank | 2022.11.28 | 3M USD LIBOR + 1.70 | 103,196 | 187,376 | ||||||||||||||
Industrial & Commercial Bank of China and others | 2027.12.21 | 3M USD LIBOR + 1.65 | 234,002 | — | ||||||||||||||
Syndicated loan | Industrial & Commercial Bank of China and others | 2024.04.24 | 3M USD LIBOR + 1.65 | 2,559,395 | 3,097,974 | |||||||||||||
SLB | Macquarie | | 2024.03.22 ~ 2024.04.26 | | 4.17 ~ 7.85 | 120,879 | — | |||||||||||
4,861,843 | 5,511,139 | |||||||||||||||||
6,242,010 | 7,139,712 | |||||||||||||||||
Less: Current portion | (2,004,747 | ) | (2,604,724 | ) | ||||||||||||||
Less: Present value discount | (14,249 | ) | (8,020 | ) | ||||||||||||||
₩ | 4,223,014 | 4,526,968 | ||||||||||||||||
of October 31, 2021 | ||||
Maturity date | Interest rate per annum as of October 31, 2021 (%) | October 31, 2021 | December 31, 2020 | |||||||||||||
(In millions of won) | ||||||||||||||||
Unsecured notes in local currency: | ||||||||||||||||
Unsecured corporate bonds 214-2nd | 2022.08.26 | 2.63 | ₩ | 140,000 | 140,000 | |||||||||||
Unsecured corporate bonds 215-3rd | 2022.11.25 | 2.75 | 10,000 | 10,000 | ||||||||||||
Unsecured corporate bonds 216-2nd | 2021.02.19 | — | — | 180,000 | ||||||||||||
Unsecured corporate bonds 216-3rd | 2023.02.19 | 2.53 | 80,000 | 80,000 | ||||||||||||
Unsecured corporate bonds 217-2nd | 2021.05.27 | — | — | 150,000 | ||||||||||||
Unsecured corporate bonds 218th | 2023.03.14 | 3.01 | 300,000 | 300,000 | ||||||||||||
Unsecured corporate bonds 219-1st | 2023.08.27 | 2.48 | 250,000 | 250,000 | ||||||||||||
Unsecured corporate bonds 219-2nd | 2025.08.27 | 2.67 | 90,000 | 90,000 | ||||||||||||
Unsecured corporate bonds 220-1st | 2022.05.09 | 1.96 | 410,000 | 410,000 | ||||||||||||
Unsecured corporate bonds 220-2nd | 2024.05.09 | 1.99 | 200,000 | 200,000 | ||||||||||||
Unsecured corporate bonds 220-3rd | 2026.05.09 | 2.17 | 120,000 | 120,000 | ||||||||||||
Unsecured corporate bonds 220-4rd | 2029.05.09 | 2.54 | 250,000 | 250,000 | ||||||||||||
Unsecured corporate bonds 221-1st | 2023.02.14 | 1.61 | 340,000 | 340,000 | ||||||||||||
Unsecured corporate bonds 221-2nd | 2025.02.14 | 1.72 | 360,000 | 360,000 | ||||||||||||
Unsecured corporate bonds 221-3rd | 2027.02.14 | 1.93 | 130,000 | 130,000 | ||||||||||||
Unsecured corporate bonds 221-4th | 2030.02.14 | 2.21 | 230,000 | 230,000 | ||||||||||||
Unsecured corporate bonds 222-1st | 2030.11.10 | 2.33 | 70,000 | 70,000 | ||||||||||||
Unsecured corporate bonds 222-2nd | 2035.11.10 | 2.73 | 100,000 | 100,000 | ||||||||||||
Unsecured corporate bonds 223-1st | 2024.04.12 | 1.51 | 550,000 | — | ||||||||||||
Unsecured corporate bonds 223-2nd | 2026.04.13 | 1.89 | 360,000 | — | ||||||||||||
Unsecured corporate bonds 223-3rd | 2028.04.13 | 2.11 | 80,000 | — | ||||||||||||
Unsecured corporate bonds 223-4th | 2031.04.13 | 2.48 | 190,000 | — | ||||||||||||
4,260,000 | 3,410,000 | |||||||||||||||
Unsecured notes in foreign currency: | ||||||||||||||||
Unsecured global bonds 9th | 2024.09.17 | 3.00 | 585,850 | 544,000 | ||||||||||||
Unsecured global bonds 10-1st | 2024.01.19 | 1.00 | 585,850 | — | ||||||||||||
Unsecured global bonds 10-2nd | 2026.01.19 | 1.50 | 1,171,700 | — | ||||||||||||
Unsecured global bonds 10-3th | 2031.01.19 | 2.38 | 1,171,700 | — | ||||||||||||
7,775,100 | 3,954,000 | |||||||||||||||
Less: Discounts on debentures | (44,096 | ) | (13,623 | ) | ||||||||||||
Less: Current portion | (549,674 | ) | (329,947 | ) | ||||||||||||
₩ | 7,181,330 | 3,610,430 | ||||||||||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Current | ||||||||
Advance receipts | ₩ | 36,193 | 13,006 | |||||
Unearned income | 1,259 | 404 | ||||||
Withholdings | 61,054 | 67,043 | ||||||
Deposits received | — | 14,063 | ||||||
Contract liabilities | 130,167 | 96,378 | ||||||
Others | 3,087 | 6,501 | ||||||
231,760 | 197,395 | |||||||
Non-current | ||||||||
Other long-term employee benefits | 92,890 | 94,026 | ||||||
Long-term advance receipts | — | 4,901 | ||||||
Others | 2 | — | ||||||
92,892 | 98,927 | |||||||
₩ | 324,652 | 296,322 | ||||||
2021 | ||||||||||||||||||||
Beginning balance | Increase | Utilization | Reversal | Ending Balance | ||||||||||||||||
(In millions of won) | ||||||||||||||||||||
Warranty | ₩ | 3,015 | 315 | (322 | ) | 531 | 3,539 | |||||||||||||
Emission allowances | 10,782 | 4,192 | (9,727 | ) | — | 5,247 | ||||||||||||||
₩ | 13,797 | 4,507 | (10,049 | ) | 531 | 8,786 | ||||||||||||||
2020 | ||||||||||||||||||||
Beginning balance | Increase | Utilization | Reversal | Ending Balance | ||||||||||||||||
(In millions of won) | ||||||||||||||||||||
Warranty | ₩ | 4,081 | 1,087 | (2,153 | ) | — | 3,015 | |||||||||||||
Emission allowances | 6,620 | 13,070 | (8,908 | ) | — | 10,782 | ||||||||||||||
₩ | 10,701 | 14,157 | (11,061 | ) | — | 13,797 | ||||||||||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Present value of defined benefit obligations | ₩ | 2,316,449 | 2,169,154 | |||||
Fair value of plan assets | (2,178,632 | ) | (2,228,377 | ) | ||||
Net defined benefit liabilities | ₩ | 137,817 | (59,223 | ) | ||||
Defined benefit liabilities | 141,747 | 2,739 | ||||||
Defined benefit assets 1 | (3,930 | ) | (61,962 | ) |
2021 (%) | 2020 (%) | |||||||
Discount rate for defined benefit obligations | 1.96 ~ 4.31 | 1.96 ~ 3.56 | ||||||
Expected rate of salary increase | 3.00 ~ 5.52 | 3.00 ~ 5.51 |
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Beginning balance | ₩ | 2,169,154 | 1,936,868 | |||||
Current service cost | 211,020 | 250,098 | ||||||
Past service cost | — | (714 | ) | |||||
Interest expense | 62,101 | 65,002 | ||||||
Transfer from associates | 315 | (2,205 | ) | |||||
Remeasurements: | (54,285 | ) | (25,036 | ) | ||||
Demographic assumption | — | 39,198 | ||||||
Financial assumption | (199,131 | ) | (35,429 | ) | ||||
Adjustment based on experience | 144,846 | (28,805 | ) | |||||
Benefits paid | (71,884 | ) | (54,824 | ) | ||||
Effect of movements in exchange rates | 28 | (35 | ) | |||||
Ending balance | ₩ | 2,316,449 | 2,169,154 | |||||
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Beginning balance | ₩ | 2,228,377 | 1,886,650 | |||||
Contributions | 211 | 355,664 | ||||||
Interest income | 63,850 | 62,834 | ||||||
Transfer from associates | (257 | ) | 231 | |||||
Benefits paid | (90,470 | ) | (53,588 | ) | ||||
Remeasurements | (23,107 | ) | (23,373 | ) | ||||
Foreign exchange differences | 28 | (41 | ) | |||||
Ending balance | ₩ | 2,178,632 | 2,228,377 | |||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Current service cost | ₩ | 211,020 | 250,098 | 220,870 | ||||||||
Past service cost | — | (714 | ) | — | ||||||||
Net interest expense | (1,748 | ) | 2,168 | 129 | ||||||||
₩ | 209,272 | 251,552 | 220,999 | |||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Cost of sales | ₩ | 111,827 | 135,999 | 120,736 | ||||||||
Selling and administrative expenses | 97,445 | 115,553 | 100,263 | |||||||||
₩ | 209,272 | 251,552 | 220,999 | |||||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Deposits | ₩ | 2,177,484 | 2,227,196 | |||||
Others | 1,147 | 1,181 | ||||||
₩ | 2,178,631 | 2,228,377 | ||||||
Effects on defined benefit obligation | ||||||||
Increase of rate | Decrease of rate | |||||||
(In millions of won) | ||||||||
Discount rate (if changed by 1%) | ₩ | (236,013 | ) | 277,245 | ||||
Expected rate of salary increase (if changed by 1%) | 278,286 | (241,038 | ) |
Less than 1 year | 2 - 5 years | 6 - 10 years | More than 11 years | Total | ||||||||||||||||
(In millions of won) | ||||||||||||||||||||
Benefits paid | ₩ | 150,636 | 399,940 | 738,364 | 2,646,403 | 3,935,343 |
October 31, 2021 | ||||||||||||||||||||||||
Beginning | Adjustment | Profit or loss | Equity | Foreign exchange differences | Ending | |||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||
Inventories, net | ₩ | 123,341 | — | (9,104 | ) | — | 488 | 114,725 | ||||||||||||||||
Property, plant and equipment, net | 436,672 | — | (95,094 | ) | — | 38,508 | 380,086 | |||||||||||||||||
Defined benefits liabilities, net | (1,876 | ) | — | 34,933 | (8,544 | ) | (6 | ) | 24,507 | |||||||||||||||
Short-term and long-term investment assets and others | (542,300 | ) | — | (146,906 | ) | — | — | (689,206 | ) | |||||||||||||||
Employee benefits | 59,471 | — | 11,363 | — | 10 | 70,844 | ||||||||||||||||||
Provisions | (9,441 | ) | — | (12,132 | ) | — | 31 | (21,542 | ) | |||||||||||||||
Other assets and other liabilities | 19,378 | — | 8,260 | — | (148 | ) | 27,490 | |||||||||||||||||
Accrued expenses | 100,714 | — | 24,682 | — | — | 125,396 | ||||||||||||||||||
Others | 11,815 | — | 1,349 | — | 286 | 13,450 | ||||||||||||||||||
Deferred tax assets for temporary differences, net | 197,774 | — | (182,649 | ) | (8,544 | ) | 39,169 | 45,750 | ||||||||||||||||
Tax credit carryforwards recognized | 3,899 | — | (650 | ) | — | 259 | 3,508 | |||||||||||||||||
Tax loss carryforwards recognized | 87,881 | — | — | — | 4,000 | 91,881 | ||||||||||||||||||
Deferred tax assets recognized, net | ₩ | 289,554 | — | (183,299 | ) | (8,544 | ) | 43,428 | 141,139 | |||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||
Beginning | Adjustment | Profit or loss | Equity | Foreign exchange differences | Ending | |||||||||||||||||||
(In millions of won) | ||||||||||||||||||||||||
Inventories, net | ₩ | 176,742 | — | (52,937 | ) | — | (464 | ) | 123,341 | |||||||||||||||
Property, plant and equipment, net | 208,478 | 27,188 | 201,165 | — | (159 | ) | 436,672 | |||||||||||||||||
Defined benefits liabilities, net | 7,756 | — | (9,798 | ) | 169 | (3 | ) | (1,876 | ) | |||||||||||||||
Short-term and long-term investment assets and others | (27,555 | ) | — | (514,745 | ) | — | — | (542,300 | ) | |||||||||||||||
Employee benefits | 46,537 | — | 12,936 | — | (2 | ) | 59,471 | |||||||||||||||||
Provisions | 3,589 | — | (13,006 | ) | — | (24 | ) | (9,441 | ) | |||||||||||||||
Other assets and other liabilities | 11,629 | — | 7,632 | — | 117 | 19,378 | ||||||||||||||||||
Accrued expenses | 92,408 | — | 8,306 | — | — | 100,714 | ||||||||||||||||||
Others | 14,681 | — | (2,410 | ) | — | (456 | ) | 11,815 | ||||||||||||||||
Deferred tax assets for temporary differences, net | 534,265 | 27,188 | (362,857 | ) | 169 | (991 | ) | 197,774 | ||||||||||||||||
Tax credit carryforwards recognized | 6,251 | — | (2,192 | ) | — | (160 | ) | 3,899 | ||||||||||||||||
Tax loss carryforwards recognized | 117,381 | — | (24,561 | ) | — | (4,939 | ) | 87,881 | ||||||||||||||||
Deferred tax assets recognized, net | ₩ | 657,897 | 27,188 | (389,610 | ) | 169 | (6,090 | ) | 289,554 | |||||||||||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Deductible temporary differences | ₩ | 2,864,208 | 2,637,294 | |||||
Taxable temporary differences | (3,224,408 | ) | (3,130,362 | ) | ||||
Investments in subsidiaries, associates, and joint ventures | (360,200 | ) | (493,068 | ) | ||||
Other deductible temporary differences | 12,790 | 12,790 | ||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Deferred income tax assets to be recovered after more than 12 months | ₩ | 1,295,936 | 1,410,835 | |||||
Deferred income tax assets to be recovered within 12 months | 287,102 | 142,651 | ||||||
Deferred income tax assets recognized | 1,583,038 | 1,553,486 | ||||||
Deferred income tax liabilities to be recovered after more than 12 months | (1,441,381 | ) | (1,263,264 | ) | ||||
Deferred income tax liabilities to be settled within 12 months | (518 | ) | (668 | ) | ||||
Deferred income tax liabilities recognized | (1,441,899 | ) | (1,263,932 | ) | ||||
Net income deferred tax assets (liabilities) recognized | ₩ | 141,139 | 289,554 | |||||
instrument | ||||||||||
instrument | ||||||||||
Type of contract | Hedged items | Cash flow hedge | Fair value | |||||||
(In millions of won and thousands of foreign currencies) | ||||||||||
Fixed-to-fixed | Foreign currency denominated bond with fixed rate (Par value: USD 500,000) | ₩ | 21,298 | 21,298 | ||||||
Floating-to-fixed | Foreign currency denominated borrowing for equipment with floating rate (Par value: USD 500,000) | 1,730 | 1,730 | |||||||
Derivative financial assets | ₩ | 23,028 | ||||||||
Interest rate swap | Foreign currency denominated borrowing with floating rate (Par value: USD 50,000) | ₩ | 865 | 865 | ||||||
Interest rate swap | Foreign currency denominated borrowing with floating rate (Par value: USD 50,000) | 308 | 308 | |||||||
Derivative financial liabilities | ₩ | 1,173 | ||||||||
October 31, 2021 | Decmber 31, 2020 | |||||||
(In millions of won, thousands of shares) | ||||||||
Issued shares 1 | 731,530 | 731,530 | ||||||
Capital stock: | ||||||||
Common stock | ₩ | 3,657,652 | 3,657,652 | |||||
Capital surplus: | ||||||||
Additional paid in capital | 3,625,797 | 3,625,797 | ||||||
Others | 708,846 | 517,939 | ||||||
4,334,643 | 4,143,736 | |||||||
Other equity: | ||||||||
Acquisition cost of treasury shares 2 | (2,302,119 | ) | (2,508,427 | ) | ||||
Stock option | 7,133 | 5,305 | ||||||
₩ | (2,294,986 | ) | (2,503,122 | ) | ||||
Number of treasury shares | 40,382 | 44,001 |
October 31, 2021 | ||||||||||||
Issued shares | Treasury shares | Outstanding shares | ||||||||||
(In shares) | ||||||||||||
The number of outstanding shares | 728,002,365 | (40,381,692 | ) | 687,620,673 |
December 31, 2020 | ||||||||||||
Issued shares | Treasury shares | Outstanding shares | ||||||||||
(In shares) | ||||||||||||
The number of outstanding shares | 728,002,365 | (44,000,570 | ) | 684,001,795 |
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Equity-accounted investees — share of other comprehensive income (loss) | ₩ | 33,332 | (57,542 | ) | ||||
Foreign operations — foreign currency translation differences | 437,451 | (360,247 | ) | |||||
Gain on valuation of derivatives | 29,439 | 12,336 | ||||||
₩ | 500,222 | (405,453 | ) | |||||
2021 | ||||||||||||
Beginning | Change | Ending | ||||||||||
(In millions of won) | ||||||||||||
Equity-accounted investees — share of other comprehensive income (loss) | ₩ | (57,542 | ) | 90,874 | 33,332 | |||||||
Foreign operations — foreign currency translation differences | (360,247 | ) | 797,698 | 437,451 | ||||||||
Gain (loss) on valuation of derivatives | 12,336 | 17,103 | 29,439 | |||||||||
₩ | (405,453 | ) | 905,675 | 500,222 | ||||||||
2020 | ||||||||||||
Beginning | Change | Ending | ||||||||||
(In millions of won) | ||||||||||||
Equity-accounted investees — share of other comprehensive income (loss) | ₩ | 3,278 | (60,820 | ) | (57,542 | ) | ||||||
Foreign operations — foreign currency translation differences | (314,966 | ) | (45,281 | ) | (360,247 | ) | ||||||
Gain on valuation of derivatives | 12,753 | (417 | ) | 12,336 | ||||||||
₩ | (298,935 | ) | (106,518 | ) | (405,453 | ) | ||||||
October 31, 2021 | December 31, 2020 | |||||||
(In millions of won) | ||||||||
Legal reserve 1 | ₩ | 429,983 | 349,954 | |||||
Discretionary reserve 2 | 235,506 | 235,506 | ||||||
Unappropriated retained earnings | 52,862,086 | 46,410,268 | ||||||
₩ | 53,527,575 | 46,995,728 | ||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won and in thousands of shares) | ||||||||||||
Type of dividends | Cash Dividends | Cash Dividends | Cash Dividends | |||||||||
Outstanding ordinary shares | 687,621 | 684,002 | 684,002 | |||||||||
Par value (in won) | ₩ | 5,000 | 5,000 | 5,000 | ||||||||
Dividend rate | 31% | 23% | 20% | |||||||||
Total dividends | ₩ | 1,058,936 | 800,282 | 684,002 |
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Dividends | ₩ | 1,058,936 | 800,282 | 684,002 | ||||||||
Profit attributable to owners of the Parent Company | 7,309,517 | 4,755,102 | 2,005,975 | |||||||||
Dividend payout ratio 1 | 14.49% | 16.83% | 34.10% |
2021 | 2020 | 2019 | ||||||||||
(In won) | ||||||||||||
Dividends per share | ₩ | 1,540 | 1,170 | 1,000 | ||||||||
Closing stock price | 103,000 | 118,500 | 94,100 | |||||||||
Dividend yield ratio | 1.50% | 0.99% | 1.06% |
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Sale of goods | ₩ | 33,920,345 | 31,837,538 | 26,922,416 | ||||||||
Providing services | 53,948 | 62,880 | 68,317 | |||||||||
₩ | 33,974,293 | 31,900,418 | 26,990,733 | |||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
DRAM | ₩ | 24,413,236 | 22,536,404 | 20,292,687 | ||||||||
NAND Flash | 8,040,201 | 7,471,242 | 5,139,563 | |||||||||
Other | 1,520,856 | 1,892,772 | 1,558,483 | |||||||||
₩ | 33,974,293 | 31,900,418 | 26,990,733 | |||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Korea | ₩ | 1,174,928 | 1,452,006 | 1,446,997 | ||||||||
China | 12,810,386 | 12,217,634 | 12,570,278 | |||||||||
Taiwan | 2,370,792 | 1,905,650 | 1,444,188 | |||||||||
Asia (other than China and Taiwan) | 3,288,069 | 2,416,321 | 2,301,314 | |||||||||
U.S.A. | 13,065,022 | 12,686,108 | 8,141,151 | |||||||||
Europe | 1,265,096 | 1,222,699 | 1,086,805 | |||||||||
₩ | 33,974,293 | 31,900,418 | 26,990,733 | |||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Performance obligations satisfied at a point in time | ₩ | 33,920,345 | 31,837,538 | 26,922,416 | ||||||||
Performance obligations satisfied over time | 53,948 | 62,880 | 68,317 | |||||||||
₩ | 33,974,293 | 31,900,418 | 26,990,733 | |||||||||
obligation satisfaction | ||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Selling and administrative expenses: | ||||||||||||
Salaries | ₩ | 638,686 | 592,894 | 516,226 | ||||||||
Defined benefit plan | 36,969 | 40,927 | 34,692 | |||||||||
Employee benefits | 146,959 | 159,600 | 141,104 | |||||||||
Commission | 387,111 | 334,570 | 460,644 | |||||||||
Depreciation | 178,860 | 245,858 | 206,429 | |||||||||
Amortization | 428,094 | 719,652 | 687,365 | |||||||||
Freight and custody charge | 39,996 | 48,617 | 40,222 | |||||||||
Legal cost | 7,798 | 20,323 | 31,679 | |||||||||
Rental | 10,967 | 8,944 | 6,933 | |||||||||
Taxes and dues | 66,650 | 56,934 | 54,525 | |||||||||
Training | 51,744 | 67,626 | 43,217 | |||||||||
Advertising | 72,313 | 95,158 | 92,792 | |||||||||
Utilities | 12,927 | 13,688 | 12,193 | |||||||||
Supplies | 74,888 | 100,748 | 99,029 | |||||||||
Repair | 20,938 | 26,541 | 29,546 | |||||||||
Travel and transportation | 3,876 | 4,692 | 16,731 | |||||||||
Others | 173,348 | 149,935 | 123,770 | |||||||||
2,352,124 | 2,686,707 | 2,597,097 | ||||||||||
Research and development: | ||||||||||||
Expenditure on research and development | 3,219,264 | 3,370,318 | 3,188,531 | |||||||||
Development cost capitalized | (325,845 | ) | (259,020 | ) | (332,888 | ) | ||||||
2,893,419 | 3,111,298 | 2,855,643 | ||||||||||
₩ | 5,245,543 | 5,798,005 | 5,452,740 | |||||||||
2021 | 2020 | 2019 2 | ||||||||||
(In millions of won) | ||||||||||||
Changes in finished goods and work-in-process | ₩ | (845,052) | (616,725 | ) | (523,777 | ) | ||||||
Raw materials, supplies and consumables | 6,652,116 | 7,649,164 | 6,787,445 | |||||||||
Employee benefit | 4,379,783 | 3,833,439 | 3,411,234 | |||||||||
Depreciation and others | 8,778,793 | 9,764,776 | 8,605,492 | |||||||||
Commission | 2,002,944 | 2,149,025 | 2,113,753 | |||||||||
Utilities | 1,291,681 | 1,459,346 | 1,366,041 | |||||||||
Repair | 1,056,337 | 1,129,642 | 1,080,705 | |||||||||
Outsourcing | 853,737 | 1,188,589 | 1,128,458 | |||||||||
Others | 886,355 | 639,284 | 650,002 | |||||||||
Transfer: capitalized development cost and others | (470,270 | ) | (308,746 | ) | (347,799 | ) | ||||||
Total 1 | ₩ | 24,586,424 | 26,887,794 | 24,271,554 | ||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Finance income: | ||||||||||||
Interest income | ₩ | 18,496 | 27,872 | 30,062 | ||||||||
Dividend income | 7,875 | 1,325 | 429 | |||||||||
Foreign exchange differences 1 | 1,440,639 | 1,527,580 | 1,143,099 | |||||||||
Gain on valuation of short-term investment assets | — | 2,592 | 5,811 | |||||||||
Gain on valuation of long-term investment assets | 520,232 | 1,741,026 | 8,237 | |||||||||
Gain on disposal of short-term investment assets | 37,127 | 27,510 | 58,784 | |||||||||
Gain on disposal of long-term investment assets | 15,776 | — | 1,218 | |||||||||
2,040,145 | 3,327,905 | 1,247,640 | ||||||||||
Finance expenses: | ||||||||||||
Interest expenses | 218,137 | 253,468 | 245,440 | |||||||||
Foreign exchange differences 2 | 1,102,436 | 1,717,989 | 1,043,720 | |||||||||
Loss on valuation of short-term investment assets | 8,938 | — | — | |||||||||
Loss on disposal of long-term investment assets | 3 | — | 786 | |||||||||
Loss on valuation of long-term investment assets | 1,704 | 7,273 | 241,471 | |||||||||
Loss on valuation of financial liabilities | 125 | 1,681 | — | |||||||||
1,331,343 | 1,980,411 | 1,531,417 | ||||||||||
Net finance income (expense) | ₩ | 708,802 | 1,347,494 | (283,777 | ) | |||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Gain on disposal of property, plant and equipment | ₩ | 57,014 | 38,585 | 26,158 | ||||||||
Others | 24,427 | 46,188 | 62,021 | |||||||||
₩ | 81,441 | 84,773 | 88,179 | |||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Loss on disposal of property, plant and equipment | ₩ | 7,330 | 44,955 | 11,531 | ||||||||
Loss on disposal of intangible assets | 2,938 | 4,841 | 7,668 | |||||||||
Loss on disposal of trade receivables | 4,216 | 6,320 | 8,564 | |||||||||
Loss on impairment of intangible assets | 43,453 | 16,544 | 71 | |||||||||
Donation | 59,526 | 70,461 | 59,522 | |||||||||
Others | 28,017 | 28,454 | 26,219 | |||||||||
₩ | 145,480 | 171,575 | 113,575 | |||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Current tax: | ||||||||||||
Current tax on profits for the year | ₩ | 2,632,016 | 1,113,166 | 603,692 | ||||||||
Adjustments for the current tax liabilities attributable to prior year, but recognized in current year | 100,008 | (24,653 | ) | (85,520 | ) | |||||||
2,732,024 | 1,088,513 | 518,172 | ||||||||||
Deferred tax: | ||||||||||||
Changes in net deferred tax assets | 183,299 | 389,610 | (94,611 | ) | ||||||||
Income tax expense | ₩ | 2,915,323 | 1,478,123 | 423,561 | ||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Profit before income tax | ₩ | 10,236,718 | 6,237,037 | 2,432,639 | ||||||||
Tax calculated at domestic tax rates applicable to profits in the respective countries | 2,867,154 | 1,704,823 | 658,614 | |||||||||
Tax effects of: | ||||||||||||
Tax-exempt income | (5,840 | ) | (70,922 | ) | (36,618 | ) | ||||||
Non-deductible expenses | 6,435 | 19,977 | 11,694 | |||||||||
Changes in unrecognized deferred tax assets | 53,251 | 8,667 | (93,041 | ) | ||||||||
Tax credits | (129,703 | ) | (118,011 | ) | (102,755 | ) | ||||||
Adjustments for the current tax liabilities attributable to prior year, but recognized in current year | 100,007 | (24,653 | ) | (85,520 | ) | |||||||
Others | 24,019 | (41,758 | ) | 71,187 | ||||||||
Income tax expense | ₩ | 2,915,323 | 1,478,123 | 423,561 | ||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Remeasurements of defined benefit liabilities | ₩ | (8,544 | ) | 169 | 34,132 | |||||||
Gain on valuation of derivatives | (6,094 | ) | (680 | ) | (4,837 | ) | ||||||
Gain on disposal of treasury stock | (72,542 | ) | ||||||||||
₩ | (87,180 | ) | (511 | ) | 29,295 | |||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won, except for shares and per share information) | ||||||||||||
Profit attributable to ordinary shareholders of the Parent Company | ₩ | 7,309,517 | 4,755,102 | 2,005,975 | ||||||||
Weighted average number of outstanding ordinary shares 1 | 686,168,360 | 684,001,795 | 684,001,795 | |||||||||
Basic earnings per share (in won) | ₩ | 10,653 | 6,952 | 2,933 |
2021 | 2020 | 2019 | ||||||||||
(In shares) | ||||||||||||
Outstanding ordinary shares | 728,002,365 | 728,002,365 | 728,002,365 | |||||||||
Acquisition of treasury shares | (41,834,005 | ) | (44,000,570 | ) | (44,000,570 | ) | ||||||
Weighted average number of outstanding ordinary shares | 686,168,360 | 684,001,795 | 684,001,795 | |||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won, except for shares and per share amounts) | ||||||||||||
Profit attributable to ordinary shareholders of the Parent Company | ₩ | 7,309,517 | 4,755,102 | 2,005,975 | ||||||||
Weighted average number of diluted outstanding ordinary shares 1 | 686,419,424 | 684,139,222 | 684,089,944 | |||||||||
Diluted earnings per share (in won) | ₩ | 10,649 | 6,950 | 2,932 |
2021 | 2020 | 2019 | ||||||||||
(In shares) | ||||||||||||
Weighted average number of outstanding ordinary shares | 686,168,360 | 684,001,795 | 684,001,795 | |||||||||
Stock options | 251,064 | 137,427 | 88,149 | |||||||||
Weighted average number of diluted outstanding ordinary shares | 686,419,424 | 684,139,222 | 684,089,944 | |||||||||
For the ten-month period ended October 31, 2021 | ||||||||||||||||||||||
Company | Operating revenue and others | Operating expense and others | Asset acquisition | Dividend income | Borrowings | |||||||||||||||||
(In millions of won) | ||||||||||||||||||||||
Associate | SK China Company Limited | ₩ | 21 | 8,923 | — | — | — | |||||||||||||||
Joint ventures | HITECH Semiconductor (Wuxi) Co., Ltd. | 2,442 | 456,081 | 36,164 | 17,115 | — | ||||||||||||||||
Hystars Semiconductor (Wuxi) Co., Ltd. | 193 | 19,913 | 9,075 | — | 77,633 | |||||||||||||||||
Magnus Private Investment Co., Ltd., | 45,610 | 302 | — | — | — | |||||||||||||||||
Other related parties | SK Telecom Co., Ltd. 1 | 73,059 | 191,180 | 7,414 | — | — | ||||||||||||||||
SK Inc. 2 | 20,768 | 248,242 | 136,167 | — | — | |||||||||||||||||
ESSENCORE Limited | 721,250 | — | — | — | — | |||||||||||||||||
SK Ecoplant Co.,Ltd. (formerly, SK Engineering & Construction Co., Ltd.) | 24,519 | 260 | 998,929 | — | — | |||||||||||||||||
SK Energy Co., Ltd. | 35,858 | 69,434 | 2,558 | — | — | |||||||||||||||||
SK Networks Co., Ltd. | 5,933 | 7,409 | 386 | — | — | |||||||||||||||||
SKC Solmics Co., Ltd. | 845 | 111,780 | 289 | — | — | |||||||||||||||||
Chungcheong energy service Co., Ltd. | 28 | 19,959 | — | — | — | |||||||||||||||||
SK Materials Co., Ltd. | 3,645 | 97,990 | — | — | — | |||||||||||||||||
SK Siltron Co., Ltd. | 26,645 | 285,215 | — | — | — | |||||||||||||||||
SK Airgas Co., Ltd. | 574 | 106,853 | — | — | — | |||||||||||||||||
Techdream Co., Ltd | — | 100,911 | — | — | — | |||||||||||||||||
SK Trichem Co., Ltd. | 531 | 116,818 | — | — | — | |||||||||||||||||
SK Shieldus Co., Ltd. | 1,738 | 62,077 | 15,194 | — | — | |||||||||||||||||
SK Innovation Co., Ltd. | 27,959 | 56,473 | 44 | — | — | |||||||||||||||||
Others | 111,797 | 228,588 | 37,663 | — | — | |||||||||||||||||
₩ | 1,103,415 | 2,188,408 | 1,243,883 | 17,115 | 77,633 | |||||||||||||||||
For the year ended December 31, 2020 | ||||||||||||||||||
Company | Operating revenue and others | Operating expense and others | Asset acquisition | Dividend income | ||||||||||||||
(In millions of won) | ||||||||||||||||||
Associate | SK China Company Limited | ₩ | 18 | 8,019 | — | — | ||||||||||||
Joint ventures | HITECH Semiconductor (Wuxi) Co., Ltd. | 4,766 | 543,575 | 21,780 | 15,033 | |||||||||||||
Hystars Semiconductor (Wuxi) Co., Ltd. | 168 | — | — | — | ||||||||||||||
Other related parties | SK Telecom Co., Ltd. 1 | 135,050 | 166,019 | 82,044 | — | |||||||||||||
SK Inc. 2 | 20,905 | 264,994 | 272,980 | — | ||||||||||||||
ESSENCORE Limited | 675,915 | — | — | — | ||||||||||||||
SK Ecoplant Co.,Ltd. | 42,814 | 8,507 | 1,375,083 | — | ||||||||||||||
SK Energy Co., Ltd. | 50,035 | 72,386 | — | — | ||||||||||||||
SK Networks Co., Ltd. | 6,638 | 9,434 | 526 | — | ||||||||||||||
SKC Solmics Co., Ltd. | 623 | 93,862 | 178 | — | ||||||||||||||
Chungcheong energy service Co., Ltd. | 118 | 24,335 | — | — | ||||||||||||||
SK Materials Co., Ltd. | 4,349 | 95,007 | — | — | ||||||||||||||
SK Siltron Co., Ltd. | 32,429 | 380,571 | — | — | ||||||||||||||
SK Airgas Co., Ltd. | 13,220 | 75,990 | 110,858 | — | ||||||||||||||
Others | 173,971 | 631,656 | 65,385 | — | ||||||||||||||
₩ | 1,161,019 | 2,374,355 | 1,928,834 | 15,033 | ||||||||||||||
For the year ended December 31, 2019 | ||||||||||||||||||
Company | Operating revenue and others | Operating expense and others | Asset acquisition | Dividend income | ||||||||||||||
(In millions of won) | ||||||||||||||||||
Associate | SK China Company Limited | ₩ | 15 | 10,954 | — | — | ||||||||||||
Joint ventures | HITECH Semiconductor(Wuxi) Co., Ltd. | 4,362 | 656,911 | 1,616 | 14,458 | |||||||||||||
Hystars Semiconductor (Wuxi) Co., Ltd. | 238 | — | — | — | ||||||||||||||
Other related parties | SK Telecom Co., Ltd. 1 | 167,878 | 242,559 | 10,699 | — | |||||||||||||
SK Inc. 2 | 25,912 | 265,496 | 259,280 | — | ||||||||||||||
ESSENCORE Limited | 708,497 | — | — | — | ||||||||||||||
SK Ecoplant Co.,Ltd. | 60,886 | 1,249 | 1,851,230 | — | ||||||||||||||
SK Energy Co., Ltd. | 62,220 | 73,717 | — | — | ||||||||||||||
SK Networks Co., Ltd. | 12,704 | 12,698 | — | — | ||||||||||||||
SKC Solmics Co., Ltd. | 676 | 82,814 | 1,067 | — | ||||||||||||||
Chungcheong energy service Co., Ltd. | 215 | 27,215 | — | — | ||||||||||||||
SK Materials Co., Ltd. | 4,118 | 79,000 | — | — | ||||||||||||||
SK Siltron Co., Ltd. | 32,411 | 397,327 | — | — | ||||||||||||||
SK Airgas Co., Ltd. | 106 | 72,675 | — | — | ||||||||||||||
Others | 163,648 | 484,678 | 68,445 | — | ||||||||||||||
₩ | 1,243,886 | 2,407,293 | 2,192,337 | 14,458 | ||||||||||||||
October 31, 2021 | ||||||||||
Company | Trade receivables and others | Other payables and others | ||||||||
(In millions of won) | ||||||||||
Associate | SK China Company Limited | ₩ | 3 | 9,151 | ||||||
Joint ventures | HITECH Semiconductor (Wuxi) Co., Ltd. | 203 | 432,586 | |||||||
Hystars Semiconductor (Wuxi) Co., Ltd. 1 | 15 | 184,675 | ||||||||
Magnus Private Investment Co., Ltd., | 781 | 5 | ||||||||
Other related parties | SK Telecom Co., Ltd. | 2,591 | 7,463 | |||||||
SK Inc. | 1,453 | 125,579 | ||||||||
ESSENCORE Limited | 30,550 | — | ||||||||
SK Ecoplant Co.,Ltd. | 3,746 | 397,609 | ||||||||
SK Energy Co., Ltd. | 1,626 | 17,119 | ||||||||
SK Networks Co., Ltd. | 161 | 1,378 | ||||||||
SKC solmics Co., Ltd. | 91 | 40,750 | ||||||||
Chungcheong energy service Co., Ltd. | — | 1,194 | ||||||||
SK Materials Co., Ltd. | 675 | 11,596 | ||||||||
SK Siltron Co., Ltd. 1 | 3,287 | 31,910 | ||||||||
SK Airgas Co., Ltd. | 28 | 379,088 | ||||||||
Techdream Co., Ltd | — | 7,010 | ||||||||
SK Trichem Co., Ltd. | 120 | 14,565 | ||||||||
SK Shieldus Co., Ltd. | 3,144 | 21,116 | ||||||||
SK Inovation Co., Ltd. | 639 | 4,305 | ||||||||
Others | 26,831 | 42,289 | ||||||||
₩ | 75,944 | 1,729,388 | ||||||||
December 31, 2020 | ||||||||||
Company | Trade receivables and others | Other payables and others | ||||||||
(In millions of won) | ||||||||||
Associate | SK China Company Limited | ₩ | 7 | 8,771 | ||||||
Joint ventures | HITECH Semiconductor (Wuxi) Co., Ltd. | 198 | 417,730 | |||||||
Hystars Semiconductor (Wuxi) Co., Ltd. | 7 | — | ||||||||
Other related parties | SK Telecom Co., Ltd. | 10,747 | 7,920 | |||||||
SK Inc. | 1,757 | 176,752 | ||||||||
ESSENCORE Limited | 55,500 | — | ||||||||
SK Ecoplant Co.,Ltd. | 3,397 | 592,630 | ||||||||
SK Energy Co., Ltd. | 1,204 | 22,328 | ||||||||
SK Networks Co., Ltd. | 289 | 1,712 | ||||||||
SKC solmics Co., Ltd. | 74 | 24,128 | ||||||||
Chungcheong energy service Co., Ltd. | 69 | 3,295 | ||||||||
SK Materials Co., Ltd. | 411 | 10,130 | ||||||||
SK Siltron Co., Ltd. 1 | 44,847 | 36,792 | ||||||||
SK Airgas Co., Ltd. | 12 | 390,967 | ||||||||
Others | 31,324 | 124,499 | ||||||||
₩ | 149,843 | 1,817,654 | ||||||||
Details | 2021 | 2020 | 2019 | |||||||||
(In millions of won) | ||||||||||||
Salaries | ₩ | 4,502 | 5,006 | 3,849 | ||||||||
Defined benefit plan related expenses | 533 | 545 | 406 | |||||||||
Share-based payment | 725 | 1,175 | 954 | |||||||||
₩ | 5,760 | 6,726 | 5,209 | |||||||||
Book value | Pledged amount | |||||||||||||||||||||
Category | Currency | Amount | Currency | Amount in USD | Amount in KRW | Remark | ||||||||||||||||
(In millions of won and millions of foreign currencies) | ||||||||||||||||||||||
Land and buildings | KRW | 140,039 | USD | 133 | 156,386 | | Borrowings for equipment and others | | ||||||||||||||
KRW | — | 14,854 | ||||||||||||||||||||
Machinery | KRW | 4,608,294 | USD | 6,600 | 7,733,768 | |||||||||||||||||
KRW | — | 1,020,000 | ||||||||||||||||||||
USD | 6,733 | 7,890,154 | ||||||||||||||||||||
KRW | 4,748,333 | KRW | — | 1,034,854 | ||||||||||||||||||
Institution | ||||||||||
millions of foreign currencies) | ||||||||||
and others | ||||||||||
Bank of China and others | ||||||||||
others | ||||||||||
and others |
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Profit for the period | ₩ | 7,321,395 | 4,758,914 | 2,009,078 | ||||||||
Adjustment | ||||||||||||
Income tax expense | 2,915,323 | 1,478,123 | 423,561 | |||||||||
Defined benefit plan related expenses | 209,272 | 251,552 | 220,999 | |||||||||
Depreciation of property, plant and equipment | 7,853,312 | 8,515,134 | 7,511,794 | |||||||||
Depreciation of investment property | 1,426 | 291 | 37 | |||||||||
Amortization | 650,878 | 960,550 | 795,169 | |||||||||
Depreciation of right-of-use | 282,138 | 296,218 | 313,415 | |||||||||
Share-based compensation expenses | 1,957 | 1,591 | 1,738 | |||||||||
Loss on disposal of property, plant and equipment | 7,330 | 44,955 | 11,531 | |||||||||
Loss on disposal of intangible assets | 2,938 | 4,841 | 7,668 | |||||||||
Loss on impairment of intangible assets | 43,453 | 16,544 | 71 | |||||||||
Loss on valuation of short-term investment asset | 8,938 | — | — | |||||||||
Loss on disposal of short-term investment assets | 125 | — | — | |||||||||
Loss on valuation of long-term investment asset | 3 | 7,273 | 241,471 | |||||||||
Impairment loss on associate investment | — | — | 1,695 | |||||||||
Loss on valuation of financial liabilities | 1,704 | 1,681 | — | |||||||||
Interest expense | 218,137 | 253,468 | 245,440 | |||||||||
Loss on foreign currency translation | 530,637 | 375,504 | 250,974 | |||||||||
Loss on disposal of trade receivables | 4,216 | 6,320 | 8,564 | |||||||||
Loss (gain) on equity method investments, net | (204,086 | ) | 36,279 | (24,328 | ) | |||||||
Gain on disposal of property, plant and equipment | (57,014 | ) | (38,585 | ) | (26,158 | ) | ||||||
Gain on disposal of intangible assets | — | (122 | ) | — | ||||||||
Gain on valuation of short-term investment assets | — | (2,592 | ) | (5,811 | ) | |||||||
Gain on disposal of short-term investment assets | (37,127 | ) | (27,510 | ) | (58,784 | ) | ||||||
Gain on valuation of long-term investment assets | (520,232 | ) | (1,741,026 | ) | (8,237 | ) | ||||||
Gain on disposal of long-term investment assets | (15,776 | ) | — | (1,218 | ) | |||||||
Interest income | (18,496 | ) | (27,872 | ) | (30,062 | ) | ||||||
Gain on foreign currency translation | (407,483 | ) | (595,266 | ) | (263,012 | ) | ||||||
Others, net | 157,468 | (9,646 | ) | 99 | ||||||||
Changes in operating assets and liabilities | ||||||||||||
Decrease (increase) in trade receivables | (1,599,109 | ) | (935,346 | ) | 2,214,776 | |||||||
Decrease (increase) in loans and other receivables | (8,332 | ) | 5,303 | 41,676 | ||||||||
Increase in inventories | (839,741 | ) | (843,842 | ) | (851,735 | ) | ||||||
Decrease (increase) in other assets | (202,281 | ) | 47,350 | 114,792 | ||||||||
Increase (decrease) in trade payables | (291,814 | ) | 222,036 | (278,529 | ) | |||||||
Decrease in other payables | 263,345 | (6,583 | ) | (16,623 | ) | |||||||
Increase (decrease) in other non-trade payables | 733,596 | 158,514 | (645,164 | ) | ||||||||
Increase (decrease) in provisions | 4,712 | 12,008 | (42,787 | ) | ||||||||
Increase in other liabilities | 31,487 | 46,961 | 17,605 | |||||||||
Payment of defined benefit liabilities | (629 | ) | (585 | ) | (4,120 | ) | ||||||
Contributions to plan assets | (211 | ) | (355,664 | ) | (279,751 | ) | ||||||
Cash generated from operating activities | ₩ | 17,041,459 | 12,916,771 | 11,895,834 | ||||||||
2021 | 2020 | 2019 | ||||||||||
(In millions of won) | ||||||||||||
Increase in other payables related to acquisition of property, plant and equipment | ₩ | 1,480,098 | 1,721,481 | 1,786,787 | ||||||||
Transfer of investment property to property, plant and equipment | — | — | 1,105 | |||||||||
Transfer of property, plant and equipment to investment property | — | 209,450 | — |
2021 | 2020 | |||||||
(In millions of won) | ||||||||
Beginning balance | ₩ | 12,895,364 | 12,190,505 | |||||
Cash flows from financing activities | ||||||||
Proceeds from borrowings | 5,230,157 | 5,173,016 | ||||||
Repayments of borrowings | (2,975,415 | ) | (3,921,310 | ) | ||||
Payments of lease liabilities | (264,409 | ) | (319,740 | ) | ||||
Increase of lease liabilities | 81,783 | 293,855 | ||||||
Foreign currency differences | 700,052 | (557,923 | ) | |||||
Present value discount (interest expense) | 42,082 | 43,885 | ||||||
Interest paid | (7,754 | ) | (6,924 | ) | ||||
Ending balance | ₩ | 15,701,860 | 12,895,364 | |||||
Total numbers of share option granted | Exercised | Forfeited or Cancelled | Outstanding at October 31, 2021 | |||||||||||||
(In shares) | ||||||||||||||||
1 st | 99,600 | — | — | 99,600 | ||||||||||||
2 nd | 99,600 | — | — | 99,600 | ||||||||||||
3 rd | 99,600 | — | — | 99,600 | ||||||||||||
4 th | 7,747 | 7,747 | — | — | ||||||||||||
5 th | 7,223 | — | — | 7,223 | ||||||||||||
6 th | 8,171 | — | 8,171 | — | ||||||||||||
7 th | 61,487 | — | — | 61,487 | ||||||||||||
8 th | 61,487 | — | — | 61,487 | ||||||||||||
9 th | 61,487 | — | — | 61,487 | ||||||||||||
10 th | 54,020 | — | — | 54,020 | ||||||||||||
11 th | 6,397 | — | — | 6,397 | ||||||||||||
12 th | 6,469 | — | 6,469 | |||||||||||||
13 th | 75,163 | — | 75,163 | |||||||||||||
648,451 | 7,747 | 8,171 | 632,533 | |||||||||||||
Won) | ||||||||||||
F-12 6 | ||||||||||||
1 st | 2 nd | 3 rd | 4 th | 5 th | 6 th | 7 th | 8 th | |||||||||||||||||||||||||
Expected volatility | 23.23 | % | 23.23 | % | 23.23 | % | 22.50 | % | 25.30 | % | 25.60 | % | 26.17 | % | 26.17 | % | ||||||||||||||||
Estimated fair value of share options (in Korean won) | ₩ | 10,026 | 9,613 | 9,296 | 16,687 | 18,362 | 16,505 | 17,744 | 16,888 | |||||||||||||||||||||||
Dividend yield ratio | 1.20 | % | 1.20 | % | 1.20 | % | 0.78 | % | 1.23 | % | 1.36 | % | 1.98 | % | 1.98 | % | ||||||||||||||||
Risk free rate | 1.86 | % | 1.95 | % | 2.07 | % | 2.38 | % | 2.46 | % | 1.89 | % | 1.82 | % | 1.88 | % |
9 th | 10 th | 11 th | 12 th | 13 th | ||||||||||||||||
Expected volatility | 26.17 | % | 26.15 | % | 26.15 | % | 35.50 | % | 35.50 | % | ||||||||||
Estimated fair value of share options (in Korean won) | ₩ | 16,093 | 11,786 | 11,786 | 39,995 | 39,995 | ||||||||||||||
Dividend yield ratio | 1.98 | % | 2.10 | % | 2.10 | % | 0.70 | % | 0.70 | % | ||||||||||
Risk free rate | 1.91 | % | 1.59 | % | 1.59 | % | 1.55 | % | 1.55 | % |