6-K
Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF SEPTEMBER 2009
COMMISSION FILE NUMBER 333-04906
 
SK Telecom Co., Ltd.
(Translation of registrant’s name into English)
11, Euljiro2-ga, Jung-gu
Seoul 100-999, Korea
(Address of principal executive offices)
 
     (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F þ          Form 40-F o
     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
     Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
     Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
     Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.      Yes o No þ
     If “Yes” is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): 82-                    
 
 

 


Table of Contents

SEMI-ANNUAL BUSINESS REPORT
(From January 1, 2009 to June 30, 2009)
THIS IS A SUMMARY OF THE SEMI-ANNUAL BUSINESS REPORT ORIGINALLY PREPARED IN KOREAN AND IS IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SERVICES COMMISSION.
IN THE TRANSLATION PROCESS, SOME PARTS OF THE REPORT WERE REFORMATTED, REARRANGED OR SUMMARIZED FOR THE CONVENIENCE OF READERS.
UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A NON-CONSOLIDATED BASIS IN ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN KOREA, OR KOREAN GAAP, WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.

 


 

Contents
             
  Company Overview     2  
 
           
  Business     11  
 
           
  Financial Information     18  
 
           
  Auditor’s Opinion     20  
 
           
  Corporate Organization including Board of Directors and Affiliated Companies     22  
 
           
  Shareholders Information     35  
 
           
  Employees     38  
 
           
  Transactions with Parties Having Interests     39  
 
           
  Other Information Relating to the Protection of Investors     42  
 
           
Attachment: Korean GAAP Non-consolidated Financial Statements     46  

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I.   COMPANY OVERVIEW
1.   Company Overview
 
A.   Corporate Legal Business Name: SK Telecom Co., Ltd. (The “Company”)
 
B.   Date of Incorporation: March 29, 1984
 
C.   Location of Headquarters
  (1)   Address: 11 Euljiro 2-ga, Jung-gu, Seoul, Korea
 
  (2)   Phone: +82-2-6100-2114
 
  (3)   Website: http://www.sktelecom.com
D.   Corporate Purpose of the Company
Business Objectives
1. Information and communication business
2. Handset sales and lease business
3. New media business
4. Advertisement business
5. Communication sales business
6. Personal property and real property lease business
7. Research and technology development related to Clause 1 through 4
8. Overseas business and trading business related to Clause 1 through 4
9. Manufacturing and distribution business related to Clause 1 through 4
10. Tourism
11. Electronic financial business
12. Motion picture business (Production, Importation, Distribution, Screening)
13. Any business or undertaking incidental or conducive to the attainment of the objects above
E.   Credit Ratings
  (1)   Corporate Bonds
                 
            Credit rating entity    
Credit rating date   Subject of rating   Credit rating   (Credit rating range)   Rating classification
June 13, 2006
  Corporate bond   AAA   Korea Information Services, Inc.   Regular rating
June 21, 2006
  Corporate bond   AAA   Korea Ratings   Regular rating
June 22, 2006
  Corporate bond   AAA   Korea Investors Service, Inc.   Regular rating
September 1, 2006
  Corporate bond   AAA   Korea Information Services, Inc.   Current rating
September 1, 2006
  Corporate bond   AAA   Korea Ratings   Current rating
September 1, 2006
  Corporate bond   AAA   Korea Investors Service, Inc.   Current rating
October 27, 2006
  Corporate bond   AAA   Korea Information Services, Inc.   Current rating

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            Credit rating entity    
Credit rating date   Subject of rating   Credit rating   (Credit rating range)   Rating classification
October 27, 2006
  Corporate bond   AAA   Korea Ratings   Current rating
May 29, 2007
  Corporate bond   AAA   Korea Ratings   Regular rating
June 14, 2007
  Corporate bond   AAA   Korea Information Services, Inc.   Regular rating
June 27, 2007
  Corporate bond   AAA   Korea Investors Service, Inc.   Regular rating
November 5, 2007
  Corporate bond   AAA   Korea Ratings   Current rating
November 5, 2007
  Corporate bond   AAA   Korea Information Services, Inc.   Current rating
November 5, 2007
  Corporate bond   AAA   Korea Investors Service, Inc.   Current rating
February 20, 2008
  Corporate bond   AAA   Korea Ratings   Current rating
February 21, 2008
  Corporate bond   AAA   Korea Investors Service, Inc.   Current rating
February 21, 2008
  Corporate bond   AAA   Korea Information Services, Inc.   Current rating
June 3, 2008
  Corporate bond   AAA   Korea Ratings   Regular rating
June 17, 2008
  Corporate bond   AAA   Korea Investors Service, Inc.   Regular rating
June 30, 2008
  Corporate bond   AAA   Korea Information Services, Inc.   Regular rating
October 20, 2008
  Corporate bond   AAA   Korea Ratings   Current rating
October 20, 2008
  Corporate bond   AAA   Korea Investors Service, Inc.   Current rating
October 20, 2008
  Corporate bond   AAA   Korea Information Services, Inc.   Current rating
January 13, 2009
  Corporate bond   AAA   Korea Ratings   Current rating
January 13, 2009
  Corporate bond   AAA   Korea Investors Service, Inc.   Current rating
January 13, 2009
  Corporate bond   AAA   Korea Information Services, Inc.   Current rating
February 23, 2009
  Corporate bond   AAA   Korea Ratings   Current rating
February 23, 2009
  Corporate bond   AAA   Korea Investors Service, Inc.   Current rating
February 23, 2009
  Corporate bond   AAA   Korea Information Services, Inc.   Current rating
 
*   Rating definition: “AAA” — The certainty of principal and interest payment is at the highest level with extremely low investment risk, and is stable in that there is no influence of any environmental change under reasonable expectation conditions.
  (2)   Commercial Paper (“CP”)
                 
            Credit rating entity    
Credit rating date   Subject of rating   Credit rating   (Credit rating range)   Rating classification
June 13, 2006
  CP   A1   Korea Information Services, Inc.   Current rating
June 21, 2006
  CP   A1   Korea Ratings   Current rating
June 22, 2006
  CP   A1   Korea Investors Service, Inc.   Current rating

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            Credit rating entity    
Credit rating date   Subject of rating   Credit rating   (Credit rating range)   Rating classification
September 1, 2006
  CP   A1   Korea Ratings   Regular rating
December 27, 2006
  CP   A1   Korea Information Services, Inc.   Regular rating
December 27, 2006
  CP   A1   Korea Investors Service, Inc.   Regular rating
May 29, 2007
  CP   A1   Korea Ratings   Current rating
June 14, 2007
  CP   A1   Korea Information Services, Inc.   Current rating
June 27, 2007
  CP   A1   Korea Investors Service, Inc.   Current rating
November 5, 2007
  CP   A1   Korea Ratings   Regular rating
November 5, 2007
  CP   A1   Korea Information Services, Inc.   Regular rating
November 5, 2007
  CP   A1   Korea Investors Service, Inc.   Regular rating
June 3, 2008
  CP   A1   Korea Ratings   Current rating
June 16, 2008
  CP   A1   Korea Information Services, Inc.   Current rating
June 17, 2008
  CP   A1   Korea Investors Service, Inc.   Current rating
October 20, 2008
  CP   A1   Korea Ratings   Regular rating
October 20, 2008
  CP   A1   Korea Investors Service, Inc.   Regular rating
October 20, 2008
  CP   A1   Korea Information Services, Inc.   Regular rating
 
*   Rating definition: “A1” — Timely repayment capability is at the highest level with extremely low investment risk, and is stable in that there is no influence of any environmental change under reasonable expectation conditions.
  (3)   International Credit Ratings
                 
        Credit rating   Credit rating company    
Date of credit rating   Subject of rating   of securities   (Credit rating range)   Rating type
July 9, 2007
  Global Bonds   A   Fitch (England)   Current rating
July 9, 2007
  Global Bonds   A2   Moody’s (U.S.A.)   Current rating
July 9, 2007
  Global Bonds   A   S&P (U.S.A.)   Current rating
April 7, 2009
  Offshore Convertible Bonds   A   Fitch (England)   Current rating
April 7, 2009
  Offshore Convertible Bonds   A2   Moody’s (U.S.A.)   Current rating
April 7, 2009
  Offshore Convertible Bonds   A   S&P (U.S.A.)   Current rating

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2.   Company History
  A.   Location of Headquarters
    22 Dohwa-dong, Mapo-gu, Seoul (July 11, 1988)
 
    16-49 Hangang-ro 3-ga, Yongsan-gu, Seoul (November 19, 1991)
 
    267 Namdaemun-ro 5-ga, Jung-gu, Seoul (June 14, 1995)
 
    99 Seorin-dong, Jongro-gu, Seoul (December 20, 1999)
 
    11 Euljiro 2-ga, Jung-gu, Seoul (December 13, 2004)
  B.   Significant Changes in Management
 
      At the 25th General Shareholders’ Meeting held on March 13, 2009, Man Won Jung was elected as the Representative Director and Jae Won Chey was elected as an Executive Director while Hyun Chin Lim was re-elected as an Outside Director. Executive Directors Young Ho Park and Shin Bae Kim resigned from the Board on March 12, and on March 13, respectively.
 
  C.   Other Important Matters related to Management Activities
  (1)   Resolution to issue registered offshore unsecured convertible bonds.
      In accordance with the resolution of the Board of Directors on March 13, 2009, the Company decided to issue offshore registered, unsecured convertible bonds in order to refinance its maturing offshore unsecured convertible bonds (maturity date: May 27, 2009) originally issued in May of 2004. Details related to the said offshore unsecured convertible bonds to be issued are as follows:
     
Face value of the Convertible Bonds (“CB”)
  US$ 332,528,000 (Won 460, 019 million)
Interest and Payment Terms of the CB
  Coupon Rate of 1.75% payable semi-annually
Maturity of the CB
  April 7, 2014
Conversion Price and Ratio
  Won 230,010 per share, 100%
Shares to be Converted
  Registered Common (Treasury) Shares issued by the Company
Conversion Period
  From May 18, 2009 to March 28, 2014
  (2)   Acquisition of fixed-line network business and related ancillary businesses of SK Networks
      In accordance with the resolution of the Board of Directors on May 21, 2009, the Company decided to acquire fixed-line network business and related ancillary businesses (including all assets, liabilities and other rights and obligations related to such businesses) of SK Networks. Through the acquisition, the Company intends to increase the efficiency of its network utilization and provide optimal services by internalizing mobile phone transmission lines. Acquisition price was Won 892,850 million. As of March 31, 2009, the assets and liabilities of the businesses being acquired amounted to Won 654,074 million and Won 627,815 million, respectively. Revenue from the businesses being acquired in 2008 was Won 416,533 million. SK Networks approved the acquisition in its shareholders’ meeting held on July 6, 2009. The acquisition is expected to

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      close in late September, 2009.
  (3)   Purchase of SK Broadband shares
      On July 21, 2009, the Company purchased 47,187,105 shares of SK Broadband’s common stock in its rights offering, at Won 5,000 per share (aggregate purchase price of Won 235,935,525,000), to increase competitiveness of the Company’s and its affiliates’ businesses. The Company’s equity interest in SK Broadband increased from 43.4% to 50.6%.
  (4)   Payment of interim dividends
      In accordance with the resolution of the Board of Directors on July 23, 2009, the Company decided to pay interim dividends as follows:
  (a)   Dividend amount: Won 1,000 per share (aggregate dividend amount of 72,345,003,000)
 
  (b)   Market dividend rate: 0.57%
 
  (c)   Record date: June 30, 2009
 
  (d)   Dividend payment date: within 20 days from the date of the resolution of the Board of Directors
3.   Total Number of Shares
  A.   Total number of shares
                                 
(As of June 30, 2009)       (Unit: shares)
    Share type    
Classification   Common shares     Total   Remarks
I. Total number of authorized shares
    220,000,000             220,000,000        
II. Total number of shares issued to date
    89,278,946             89,278,946        
III. Total number of shares retired to date
    8,533,235             8,533,235        
1. Capital reduction
                       
2. Share cancellation
    8,533,235             8,533,235        
3. Redeemed shares
                       
4. Others
                       
IV. Total number of shares (II-III)
    80,745,711             80,745,711        
V. Number of treasury shares
    8,400,708             8,400,708        
VI. Number of shares outstanding (IV-V)
    72,345,003             72,345,003        
 
*   On January 9, 2009, the Company purchased (using retained earnings) and cancelled 448,000 common shares. As the result of such retirement of common shares, the total number of outstanding shares decreased to 80,745,711.

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  B.   Treasury Stock
  (1)   Acquisitions and Dispositions of Treasury Stocks
                                                 
(As of June 30, 2009)           (Unit: Shares)
Acquisition methods   Type of
shares
  At the
beginning of
period
  Changes   At the end of
period
  Remarks
      Acquired (+)   Disposed (-)   Retired (-)    
Direct
acquisi-
tion
  pursuant to Article 165-2 of the relevant Act1   Common shares     4,704,828       179,200 2       448,000       4,436,028    
   
  Preferred shares                            
 
based on reasons
other than those
stipulated in Article
165-2 of the relevant
Act
  Common shares     77,970                     77,970    
   
  Preferred shares                            
 
Sub-total   Common shares     4,782,798       179,200           448,000     4,513,9983  
   
 
Preferred shares                            
 
Indirect acquisition through trust and other agreements   Common shares     3,886,710                     3,886,710    
   
 
Preferred shares                            
 
Total   Common shares     8,669,508       179,200           448,000       8,400,708    
   
 
Preferred shares                            
 
1   The “relevant Act” in the above table refers to Financial Investment Services and Capital Markets Act of Korea (“FSCMA”)
 
2   The 179,200 common shares directly acquired pursuant to Article 165-2 of the FSCMA were acquired for the purpose of retirement; the retirement of such stock was completed on January 9, 2009.
 
3   Of the 4,513,998 shares of directly acquired treasury stock, 1,999,997 shares were deposited with Korea Securities Depository to be issued upon conversion of the Company’s offshore convertible bonds. (As of June 30, 2009)

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  (2)   Retirement of Treasury Stock
                                                 
              (Unit: in millions of Won, Shares)
                    Quantity   Monetary Amount        
                    Retired   Retired   Acquisition Period    
Retired Date   Retirement Purpose   Type of Share   (shares)   (in millions of Won)   of Retired Shares   Remarks
January 9, 2009
  Stabilization of
Share Price
  Common     448,000       92,476     December 2, 2008 -
January 7, 2009
     
 
Total
  Common     448,000       92,476              
 
Preferred                        
  (3)   Execution of Trust Agreements relating to Treasury Stocks, Etc.
                                                     
  (Amounts: in millions of Won)
    At Start of Period   Executed (+)   Cancelled (-)   At End of Period    
Category   Amount   No. of
Transactions
  Amount   No. of
Transactions
  Amount   No. of
Transactions
  Amount   No. of
Transactions
  Remark
Specified Money Trust
 
    982,000       4               982,000       4     1. Extension Date:
Oct. 26, 2007 Extension Amount:
Won 631,200
2. Extension Date:
October 29, 2007 Extension Amount:
Won 350,800
Trust Contracts with
Asset Management
Companies

 
                 
Acquisition
Contracts with
Investment Companies

 
                 
Total
    982,000       4               982,000       4    

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4.   Status of Voting Rights
                 
(As of June 30, 2009)               (Unit: shares)
Classification   Number of shares   Remarks
Total outstanding shares (A)
  Common share     80,745,711    
 
Preferred share        
Number of shares without voting rights (B)
  Common share     8,400,708     Treasury shares
 
Preferred share        
Shares with restricted voting rights under the Korean law (C)
         
Shares with reestablished voting rights (D)
         
The number of shares with exercisable voting right s (E = A - B - C - D)
  Common share     72,345,003    
Preferred share        
5.   Dividends and Others
A.   Dividends
     (1) Distribution of cash dividends was approved during the 22nd General Meeting of Shareholders held on March 10, 2006.
     — Distribution of cash dividends per share of Won 8,000 (exclusive of interim dividend of Won 1,000) was approved.
     (2) Distribution of interim dividends of Won 1,000 was approved during the 270th Board of Directors’ Meeting on July 28, 2006.
     (3) Distribution of cash dividends was approved during the 23rd General Meeting of Shareholders held on March 9, 2007.
     —Distribution of cash dividends per share of Won 7,000 (exclusive of an interim dividend of Won 1,000) was approved.
     (4) Distribution of interim dividends of Won 1,000 was approved during the 283rd Board of Directors’ Meeting on July 27, 2007.
     (5) Distribution of cash dividends was approved during the 24th General Meeting of Shareholders held on March 14, 2008.
     — Distribution of cash dividends per share Won 8,400 (exclusive of an interim dividend of Won 1,000) was approved.

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     (6) Distribution of interim dividends of Won 1,000 was approved during the 295th Board of Directors’ Meeting on July 18, 2008.
     (7) Distribution of cash dividends was approved during the 25th General Meeting of Shareholders held on March 13, 2009.
     — Distribution of cash dividends per share of Won 8,400 (exclusive of an interim dividend of Won 1,000) was approved.
     (8) Distribution of interim dividends of Won 1,000 was approved during the 305th Board of Directors’ Meeting on July 23, 2009.
B.   Dividends for the Last 3 Fiscal Years
                             
        (Unit: in millions of Won, except per share value)
        As of and for   As of and for   As of and for
        the six months   the year ended   the year ended
        ended June 30,   December 31,   December 31,
Classification   2009   2008   2007
Par value per share (Won)     500       500       500  
Current Period’s net income     628,392       1,277,658       1,642,451  
Net income per share (Won)     8,686       17,559       22,607  
Total cash dividend     72,345       681,996       682,379  
Total stock dividends                  
Percentage of cash dividend to available income (%)     11.5       53.4       41.5  
Cash dividend yield ratio (%)
  Common share     0.6       4.5       3.8  
 
  Preferred share                  
Stock dividend yield ratio (%)
  Common share                  
 
  Preferred share                  
Cash dividend per share (Won)
  Common share     1,000       9,400       9,400  
 
  Preferred share                  
Stock dividend per share (share)
  Common share                  
 
  Preferred share                  
 
*   Total cash dividend of Won 681,996 million for the year ended December 31, 2008 includes the total interim dividend amount of Won 72,793 million, and the cash dividend amount per share of Won 9,400 includes the interim cash dividend amount of Won 1,000.
 
*   Total cash dividend of Won 682,379 million for the year ended December 31, 2007 includes the total interim dividend amount of Won 72,667 million, and the cash dividend amount per share of Won 9,400 includes the interim cash dividend amount of Won 1,000.

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II.   BUSINESS
1.   Business Overview
A.   Industry Characteristics
As of June 30, 2009, the number of domestic mobile phone subscribers reached 47.1 million and, with a 95.6% penetration rate, the Korean mobile communication market can be considered to have reached its maturation stage. However, considering the number of European countries with penetration rates exceeding 100%, additional future growth of the domestic market may be possible.
The Korean mobile communications market continues to improve with the help of advances in network-related technology evidenced by the world’s first commercialization of CDMA2000 1x, CDMA 1x EV-DO, and the development of highly advanced handsets that enables the provision of convergence services for multimedia contents, mobile commerce, telematics, satellite DMB, digital home services and other related contents.
B.   Growth Potential
                                             
                                (Unit: 1,000 persons)
        As of   As of December 31,
Classification   June 30, 2009   2008   2007   2006   2005
Penetration rate (%)     95.6       93.8       89.8       83.2       79.4  
                                                 
Number of subscribers
  SK Telecom     23,830       23,032       21,968       20,271       19,530  
 
Others (KT, LGT)     23,241       22,575       21,529       19,926       18,812  
 
Total     47,071       45,607       43,497       40,197       38,342  
 
(Source: Korea Communications Commission website)
C.   Domestic and Overseas Market Conditions
The Korean mobile communication market includes the entire population of Korea with mobile communication service needs, and almost every Korean is considered a potential user. Although demand has primarily been in the domestic market, as the business territory expands to overseas market, the size of overseas sales is expected to grow in the near future. Seasonal and economic fluctuations have much less impact on the Korean mobile communication market compared to other industries.
Historical market share of the Company
                                 
(As of June 30, 2009)                   (Unit: %)
  As of   As of December 31,
Classification   June 30, 2009   2008   2007   2006
Mobile communication services
    50.6       50.5       50.5       50.4  
Comparative market share
                         
(As of June 30, 2009)           (Unit: %)
Classification   SK Telecom   KTF   LG Telecom
Market share
    50.6       31.3       18.1  
 
(Source: Korea Communications Commission website)

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2.   Major Products & Services
A.   Updates on Major Products and Services
                     
                (Unit: in millions of Won, %)
                    Sales amount
Business fields   Sales type   Item   Specific Usage   Major trademarks   (ratio)
Information and communication
  Services   Mobile communication   Mobile Phone   June, NATE and others   5,834,512 (98.2%)
                         
    Others     Others   109,848 (1.8%)
B.   Price Fluctuation Trend of Major Products and Services
Based on standard rates, the basic service fee is Won 13,000 per month and the usage fee is Won 20 per 10 seconds. These rates are the same as the rates for 2007 and 2008.
3.   Investment Status
A.   Investment in Progress
                                     
                            (Unit: in 100 millions of Won)
                            Amount    
        Investment   Subject of       Total   already   Future
Business field   Classification   period   investment   Investment effect   investments   invested   investment
Network/Common
  Upgrade/New
installation
    2009     Network, systems and others   Capacity increase and quality improvement; systems improvement   To be determined     6,674     To be determined
                         
Total
    To be determined     6,674     To be determined
B.   Future Investment Plan
                         
                    (Unit: in 100 millions of Won)
    Expected investment amount   Expected investment for each year    
Business field   Asset type   Amount   2009   2010   2011   Investment effect
Network/Common
  Network, systems and others   To be determined   To be determined   To be determined   To be determined   Upgrades to the existing services and provision of new services
                         
Total
      To be determined   To be determined   To be determined   To be determined   Upgrades to the existing services and provision of new services

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4.   Revenues
                                     
                (Unit: in millions of Won)
                First Half        
Business field   Sales type   Item   2009   2008   2007
Information and
communication

 
  Services
 
  Mobile communication
 
  Export                  
 
    Domestic     5,834,512       11,492,832       11,083,821  
 
    Subtotal     5,834,512
 
      11,492,832
 
      11,083,821
 
 
 
  Others   Export     1,761       5,855       4,101  
 
    Domestic     108,087       175,975       197,979  
 
    Subtotal     109,848       181,830       202,080  
 
Total
 
Export
    1,761       5,855       4,101  
 
Domestic     5,942,559       11,668,807       11,281,800  
 
Total     5,944,360       11,674,662       11,285,901  
5.   Derivative Transactions
In order to hedge risks related to fluctuations in currency exchange rates and interest rates, the Company enters into currency swap contracts and interest rate swap contracts. The gain or loss generated from the derivatives contracts is recognized as the gains/losses for the current period or other comprehensive income/loss, in accordance with Korean GAAP. Fair value of our derivatives is calculated using our transaction bank’s valuations. In accordance with the derivatives contracts, our estimated gain/loss on the date of expiration is zero.
A.   Currency Swap
 
(1)   Purpose of Contracts: Currency Exchange Rate Risk Hedging
 
(2)   Contract Terms
 
  Currency swap contract applying cash flow risk hedge accounting
The Company has entered into a fixed-for-fixed cross currency swap contracts with three banks including Citibank in order to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds (face amounts totaling US$ 300,000,000) issued on April 1, 2004. As of June 30, 2009, in connection with unsettled foreign currency swap contracts to which the cash flow risk hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to Won 9,014,479,000 (excluding tax effect

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totaling Won 3,083,580,000 and foreign exchange translation loss arising from unguaranteed U.S. dollar denominated bonds totaling Won 40,591,528,000) was accounted for as accumulated other comprehensive loss.
In addition, the Company has entered into a floating-to-fixed cross currency swap contract with Calyon to hedge the foreign currency risk and the interest rate risk of U.S. dollar denominated long-term borrowings with face amounts totaling US$ 100,000,000 borrowed on October 10, 2006. As of June 30, 2009, in connection with unsettled cross currency interest rate swap contracts to which the cash flow risk hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to Won 7,355,634,000 (excluding tax effect totaling Won 1,632,809,000 and foreign exchange translation loss arising from U.S. dollar denominated long-term borrowings totaling Won 33,670 million) was accounted for as accumulated other comprehensive loss.
In addition, the Company has entered into a floating-to-fixed cross currency swap contract with two banks including HSBC in order to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen dominated bonds (56-2) with face amounts totaling JPY 12,500,000,000 issued on November 13, 2007. As of June 30, 2009, in connection with unsettled cross currency interest rate swap contracts to which the cash flow risk hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to Won 2,059,792,000 (net of tax effect totaling Won 945,677,000 and foreign exchange translation loss arising from unguaranteed Japanese yen dominated bonds totaling Won 62,987,816,000 was accounted for as accumulated other comprehensive gain.
In addition, the Company has entered into a floating-to-fixed cross currency swap contract with two banks including DBS in order to hedge the foreign currency risk and interest rate risk of U.S. dollar denominated bonds with face amounts totaling US$ 150,000,000 issued on November 20, 2008. As of June 30, 2008, in connection with unsettled cross currency interest rate swap contracts to which the cash flow risk hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to Won 1,156,933,000 (net of tax effect totaling Won 326,314,000 and foreign exchange translation gain arising from U.S. dollar denominated bonds totaling Won 24,459,592,000) was accounted for as accumulated other comprehensive gain.
In addition, the Company has entered into a floating-to-fixed cross currency swap contract with Mizuho Corporate Bank in order to hedge the foreign currency risk and the interest rate risk of un-guaranteed Japanese yen dominated bonds (59-2) with face amounts totaling JPY 3,000,000,000 issued on January 22, 2009. As of June 30, 2009, in connection with unsettled cross currency interest rate swap contracts to which the cash flow risk hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to Won 1,574,649,000 (net of tax effect totaling Won 444,132,000 and foreign exchange translation gain arising from unguaranteed Japanese yen dominated bonds totaling Won 6,038,232,000) was accounted for as accumulated other comprehensive gain.

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In addition, the Company has entered into a floating-to-fixed cross currency swap contract with The Bank of Tokyo-Mitsubishi in order to hedge the foreign currency risk and the interest rate risk of un-guaranteed Japanese yen dominated bonds (60-2) with face amounts totaling JPY 5,000,000,000 issued on March 5, 2009. As of June 30, 2009, in connection with unsettled cross currency interest rate swap contracts to which the cash flow risk hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to Won 652,159,000 (net of tax effect totaling Won 183,942,000 and foreign exchange translation gain arising from unguaranteed Japanese yen dominated bonds totaling Won 11,790,260,000) was accounted for as accumulated other comprehensive gain.
— Currency swap contract to which the fair value hedge accounting is applied
The Company has entered into a fixed-for-fixed cross currency swap contract with 10 banks including Hana Bank in order to hedge the foreign exchange risk of U.S. dollar denominated equity securities of China Unicom stocks. In connection with unsettled foreign currency swap contracts to which the fair value accounting is applied, losses on valuation of currency swaps of Won 47,906,521,000 and Won 155,703,801,000 for the six months ended June 30, 2009 and June 30, 2008, respectively, were charged to current operations.
— Currency swap contract to which the hedge accounting is not applied
In addition, the Company has entered into fixed-for-fixed cross currency swap contract with three banks including Morgan Stanley to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds (with face amounts totaling US$400,000,000) issued on July 20, 2007. In connection with unsettled foreign currency swap contracts to which the hedge accounting is not applied, a loss on valuation of currency swap of Won 64,533,708,000 and a gain on valuation of currency swap of Won 51,851,327,000 for the six months ended June 30, 2009 and June 30, 2008, respectively, were charged to current operations.
B.   Interest Rate Swap
 
(1)   Purpose of Contracts: Interest Rate Risk Hedging
 
(2)   Contract Terms
 
  Interest rate swap contract to which the cash flow risk hedge accounting is applied:
The Company has entered into a floating-to-fixed interest rate swap contract with Shinhan Bank to hedge the interest rate risk of floating rate discounted bill with face amounts totaling Won 200,000 million borrowed on June 29, 2006. As of June 30, 2009, in connection with unsettled interest rate swap contracts to which the cash flow risk hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to Won 2,877,845,000 (net of tax effect totaling Won 811,700,000) was accounted for as accumulated other comprehensive loss.

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In addition, the Company has entered into a floating-to-fixed interest rate swap contract with three banks including Nonghyup Bank in order to hedge the interest rate risk of long-term floating rate borrowings (totaling Won 500 billion) borrowed between July 28, 2008 and August 13, 2008. As of June 30, 2009, in connection with unsettled interest rate swap contracts to which the cash flow risk hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to Won 15,827,558,000 (net of tax effect totaling Won 4,464,183,000) was accounted for as accumulated other comprehensive loss.
— Interest rate swap contract to which the hedge accounting is not applied
The Company has entered into a floating-to-fixed interest rate swap contract with two banks including DBS in order to hedge the interest rate risk of floating rate foreign currency bonds with face amounts totaling US$220,000,000 issued on April 29, 2009. In connection with this unsettled interest rate swap contract to which the hedge accounting is not applied, loss on valuation of interest rate swap of Won 2,897,336,000 for the six months ended June 30, 2009 was charged to current operations.
C.   Currency Option
  (1)   Purpose of Contracts: Currency Exchange Rate Risk Hedging
 
  (2)   Contract Terms
 
    Currency option contract to which the hedge accounting is not applied
The Company has entered into a currency put option contract with Calyon bank to hedge the foreign currency risk of US$50,000,000 deposit maturing on July 14, 2009. In connection with this unsettled currency put option contract to which the hedge accounting is not applied, a gain on valuation of currency option of Won 1,013,855,000 for the six months ended June 30, 2009 was accreted to current operations.
6.   Major Contracts
                         
            Completion   Contract   Contract Amount
Category   Vendor   Start Date   Date   Title   (Won 100M)
Product
  TU Media, ltd.   Feb. 23, 2009   December 31, 2009   2009 Satellite DMB Service
Collaboration Contract
    1,008  
Service
  SK C&C   Feb. 26, 2009   December 31, 2009   2009 IT SM Contract     2,079  
Product
  SK E&C   Mar. 19, 2009   December 31, 2009   2009 Cell Site Facility
Construction (Seoul Area)
    451  
Product
  SK E&C   Mar. 19, 2009   December 31, 2009   2009 RF Switching Facility
Construction (Seoul Area)
    414  
Product
  SK E&C   Mar. 19, 2009   December 31, 2009   2009 WIBRO Facility
Construction (Seoul Area)
    308  
Subtotal
    4,260  
 
*   Selected among contracts exceeding Won 30 billion and classified by product and service.

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7.   R&D Investments
                                         
                            (Unit: in thousands of Won)
                    For the year   For the year    
            For the six   ended   ended    
            months ended   December   December    
Category   June 30, 2009   31, 2008   31, 2007   Remarks
Raw material     11,563       89,176       96,217        
Labor     30,367,579       38,062,791       39,388,760        
Depreciation     63,619,972       138,511,764       129,208,262        
Commissioned service     31,846,607       85,836,738       90,363,645        
Others     17,370,765       34,539,984       37,609,969        
Total R&D costs     143,216,486       297,040,453       296,666,853        
Accounting   Sales and administrative expenses     142,212,749       293,443,380       288,519,863        
 
Development expenses (Intangible assets)     1,003,738       3,597,072       8,146,990        
R&D cost / sales amount ratio
(Total R&D costs / Current sales amount×100)
    2.41 %     2.54 %     2.63 %      
8.   Other information relating to investment decisions
A.   Trademark Policies
The Company manages its corporate brand and other product brands such as “T” in a comprehensive way to protect and increase their value.
The Company’s ‘Brand Management Council’ in charge of overseeing its systematic corporate branding operates full time to execute decisions involving major brands and operates ‘Brandnet’, an intranet system to manage corporate brands which provide solutions including licensing of the brands and downloading of the Company logos.
B.   Business-related Intellectual Properties
The Company owns intellectual property rights to the design of alphabet “T”. The rights are based on domestic trademark laws and the Company has proprietary and exclusive use of the trademark for 10 years and the rights are renewable. The designed alphabet “T” is registered in all business categories (total of 45) and is being used as the primary brand of the Company.

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III.   FINANCIAL INFORMATION
1.   Unaudited Summary Financial Information (Non-consolidated)
                                         
(Unit: in millions of Won)
    As of and for the six    
    months ended   As of and for the year ended December 31,
Classification / Fiscal Year   June 30, 2009   2008   2007   2006   2005
Current assets
    4,781,839       3,990,503       4,094,059       4,189,325       4,172,485  
• Quick assets
    4,763,062       3,976,576       4,075,378       4,172,887       4,166,500  
Inventory
    18,778       13,927       18,681       16,438       5,985  
Non-current assets
    14,704,076       14,626,992       14,038,451       11,624,728       10,349,191  
Investments
    6,191,427       5,668,127       5,940,045       3,547,942       2,366,760  
Property and Equipment
    4,618,118       4,698,214       4,594,413       4,418,112       4,595,884  
Intangible assets
    2,767,868       2,941,592       3,174,942       3,405,158       3,386,547  
Other non-current assets
    1,126,663       1,319,059       329,051       253,516        
 
Total assets
    19,485,915       18,617,495       18,132,510       15,814,053       14,521,676  
 
Current liabilities
    3,217,532       3,412,490       2,484,548       2,985,620       2,747,268  
Non-current liabilities
    5,335,982       4,475,998       4,221,016       3,522,006       3,516,528  
 
Total liabilities
    8,553,514       7,888,488       6,705,564       6,507,626       6,263,796  
 
Capital
    44,639       44,639       44,639       44,639       44,639  
Capital surplus
    3,031,999       2,957,095       2,954,829       2,962,699       2,966,198  
Capital adjustment
    (-)2,068,335       (-)2,147,530       (-)2,072,486       (-)2,019,568       (-)2,022,817  
Other Cumulative Profit and Loss
    552,411       373,784       1,594,099       473,904        
Retained earnings
    9,371,687       9,501,018       8,905,865       7,844,753       7,269,861  
 
Total stockholders’ equity
    10,932,401       10,729,007       11,426,946       9,306,427       8,257,881  
 
Sales
    5,944,360       11,674,662       11,285,900       10,650,952       10,161,129  
Operating Profit (or Loss)
    1,117,407       2,059,896       2,171,543       2,584,370       2,653,570  
Profit (or Loss) from continuing operation before income tax
    628,392       1,277,658       1,642,451       1,446,598       1,871,380  
Current Period’s Net Profit (or Loss) before income tax
    628,392       1,277,658       1,642,451       1,446,598       1,871,380  
                                         
(Unit: Won)
    For the six months    
    ended   For the year ended December 31,
Classification / Fiscal Year   June 30, 2009   2008   2007   2006   2005
Earnings per share
    8,686       17,559       22,607       19,734       25,421  
Diluted earnings per share
    8,567       17,395       22,289       19,458       25,015  

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2.   Unaudited Summary Financial Information (Consolidated)
                                         
(Unit: in millions of Won)
    As of and for the year ended December 31,
Classification / Fiscal Year   2008   2007   2006   2005   2004
Current assets
    5,422,447       4,813,072       4,663,962       4,598,580       4,390,692  
• Quick assets
    5,387,473       4,766,020       4,644,184       4,590,796       4,338,371  
• Inventory
    34,974       47,052       19,778       7,784       52,321  
 
Non-current assets
    17,051,224       14,235,863       11,576,006       10,106,193       9,892,665  
• Investments
    4,025,429       5,446,711       3,236,783       1,989,934       1,665,841  
• Property and Equipment
    7,437,689       4,969,353       4,507,335       4,663,369       4,703,922  
• Intangible assets
    3,978,145       3,433,962       3,518,411       3,452,889       3,522,903  
• Other non-current assets
    1,609,961       385,836       313,477              
 
Total assets
    22,473,671       19,048,935       16,239,968       14,704,772       14,283,358  
 
Current liabilities
    4,628,821       3,016,874       3,208,416       2,863,373       3,066,893  
Non-current liabilities
    6,020,410       4,344,428       3,548,464       3,513,860       4,010,721  
 
Total liabilities
    10,649,231       7,361,302       6,756,880       6,377,233       7,077,614  
 
Capital
    44,639       44,639       44,639       44,639       44,639  
Capital surplus
    2,958,854       2,956,106       2,950,327       2,954,840       2,968,301  
Capital adjustment
    (-)2,159,389       (-)2,072,723       (-)2,019,567       (-)2,048,515       (-)2,058,292  
Other Cumulative Profit/Loss
    356,192       1,591,258       490,010              
Retained earnings
    9,448,185       8,914,970       7,847,434       7,267,649       6,152,898  
 
Total stockholders’ equity
    11,824,440       19,048,935       9,483,088       8,327,540       7,205,743  
 
Sales
    14,020,984       11,863,357       11,027,977       10,721,820       10,570,615  
Operating Profit (or Loss)
    1,752,468       2,101,955       2,621,132       2,670,616       2,439,749  
Profit (or Loss) from continuing operation before tax
    972,338       1,562,265       1,449,552       1,868,307       1,493,414  
Current Period’s Net Profit before tax
    972,338       1,562,265       1,449,552       1,868,307       1,493,414  
                                         
(Unit: Won)
    For the year ended December 31,
Classification / Fiscal Year   2008   2007   2006   2005   2004
Earnings per share in Majority Interest
    16,707       22,696       19,801       25,443       20,261  
Diluted earnings per share in Majority Interest
    16,559       22,375       19,523       25,036       20,092  

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IV.   AUDITOR’S OPINION
1.   Auditor
             
Six months ended June 30,   Year ended December 31,
2009   2008   2007   2006
Deloitte Anjin LLC
  Deloitte Anjin LLC   Deloitte Anjin LLC   Deloitte Anjin LLC
2.   Audit Opinion
         
Term   Auditor’s opinion   Issues noted
Six months ended June 30, 2009
  Appropriate  
Six months ended June 30, 2008
  Appropriate  
Year ended December 31, 2008
  Appropriate  
Year ended December 31, 2007
  Appropriate  
3.   Remuneration for Independent Auditors for the Past Three Fiscal Years
A.   Audit Contracts
                         
(Unit: in thousands of Won)
Term   Auditors   Contents   Fee   Total hours
Six months ended June 30, 2009
  Deloitte Anjin LLC   Semi-annual review     1,275,000       13,709  
    Quarterly review            
    Non-consolidated financial statements audit            
    Consolidated financial statements audit            
Year ended December 31, 2008
  Deloitte Anjin LLC   Semi-annual review     1,310,097       13,346  
    Quarterly review            
    Non-consolidated financial statements audit            
    Consolidated financial statements audit            
Year ended December 31, 2007
  Deloitte Anjin LLC   Semi-annual review     1,066,318       11,468  
    Quarterly review            
    Non-consolidated financial statements audit            
    Consolidated financial statements audit            

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B.   Non-Audit Services Contract with External Auditors
                         
(Unit: in thousands of Won)
            Service    
Term   Contract date   Service provided   duration   Fee
Six months ended June 30, 2009
  May 13, 2009   Tax consulting   30 days     40,000  
  May 22, 2009   Tax consulting   10 days     10,000  
  May 22, 2009   Tax adjustment for fiscal year 2008   20 days     34,000  
  May 22, 2009   Review of deferred corporate income tax for 1Q and 2Q   10 days     14,000  
Year ended December 31, 2008
  November 20, 2007   Set up services for agency tax manual   60 days     48,000  
  March 3, 2008   Tax adjustment for fiscal year 2007   10 days     33,000  
  May 15, 2008   Tax consulting   5 days     7,500  
  June 24, 2008   Foreign tax consulting re indirect taxes   4 days     6,000  
  August 13, 2008   Tax consulting   10 days     9,400  
  November 1, 2008   Tax consulting   4 days     5,000  
  November 19, 2008   Tax consulting   10 days     10,800  
  November 19, 2008   Review of deferred corporate income tax for 1Q and 2Q   10 days     18,000  
  December 24, 2008   Review of deferred corporate income tax for 3Q   3 days     6,000  
  December 24, 2008   Tax consulting   3 days     3,600  
  December 24, 2008   Tax consulting   3 days     3,000  
Year ended December 31, 2007
  March 30, 2007   Tax adjustment for fiscal year 2006   10 days     30,000  
  September 28, 2007   Tax consulting for denial of deductions for corporate income tax   1 day     2,000  
  September 28, 2007   Review of deferred corporate income tax for 1Q and 2Q   6 days     10,000  
  September 28, 2007   Tax consulting   5 days     9,000  
  December 31, 2007   Review of deferred corporate income tax for 3Q   2 days     5,000  
  December 31, 2007   Tax consulting   3 days     3,000  

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V.   CORPORATE ORGANIZATION INCLUDING BOARD OF DIRECTORS AND AFFILIATED COMPANIES
1.   Board of Directors
 
A.   Overview of Board of Directors Composition
The Company’s Board of Directors is comprised of eight members: five non-executive outside directors and three executive directors. Within the Board, there are five Committees: Non-executive Outside Director Nomination Committee, Audit Committee, Compensation Committee, CapEx Review Committee, and Corporate Citizenship Committee.
B.   Significant Activities of the Board of Directors
                 
Meeting   Date   Agenda   Approval
300th (the first meeting of 2009)
  January 22, 2009     Financial Statements for the year ended December 31, 2008   Approved as proposed
      Annual Business Report for the year ended December 31, 2008   Approved as proposed
      Annual Business Plan and Budgeting for FY 2009   Approved as proposed
      Issuance of Corporate Bonds   Approved as proposed
301st (the second meeting of 2009)
  February 17, 2009     Convocation of the 25th General Meeting of Shareholders   Approved as proposed
      Partnership Agreement with Offshore Private Equity Fund   Approved as proposed
302nd (the third meeting of 2009)
  March 13, 2009     Election of the Representative Director   Approved as proposed
      Revision to the Regulations for the Board of Directors   Approved as proposed
      Appointment of Chairman of the Board of Directors   Approved as proposed
      Long-term Financing Plan for Foreign Currency   Approved as proposed
      Issuance of Offshore Convertible Bonds and Transfer of Treasury Shares in relation thereto   Approved as proposed
      Asset Management Transaction with Affiliated Company (SK Securities)   Approved as proposed
303rd (the fourth meeting of 2009)
  May 21, 2009     Election of Committee Members   Approved as proposed
      Resolution on Business Acquisition from SK Networks   Approved as proposed
      Resolution on Purchase of Investment Securities (SK Broadband)   Approved as proposed

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Meeting   Date   Agenda   Approval
304th (the fifth meeting of 2009)
  June 19, 2009     Asset Management Transaction with Affiliated Company (SK Securities)   Approved as proposed
305th (the sixth meeting of 2009)
  July 23, 2009     Proposal for Interim Dividend   Approved as proposed
             
        Outside Directors    
Meetings   Dates   Attended   Description
The first meeting of 2009 (300th)
  January 22, 2009   5 / 5  
The second meeting of 2009 (301st)
  February 17, 2009   5 / 5  
The third meeting of 2009 (302nd)
  March 13, 2009   5 / 5  
The fourth meeting of 2009 (303rd)
  May 21, 2009   5 / 5  
The fifth meeting of 2009 (304th)
  June 19, 2009   5 / 5  
The sixth meeting of 2009 (305th)
  July 23, 2009   4 / 5  
C.   Committees within Board of Directors
  (1)   Committee Structure
  a)   Non-executive Outside Director Nomination Committee
             
(As of June 30, 2009)
    Members    
Number of       Non-executive Outside    
Persons   Executive Directors   Directors   Remarks
4
  Man Won Jung, Sung Min Ha   Rak Yong Uhm, Jae Ho Cho  
 
*   The Non-executive Outside Director Nomination Committee is a committee established under the provisions of the Articles of Incorporation and Korean Commercial Code.

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  b)   Audit Committee
             
(As of June 30, 2009)
    Members    
Number of       Non-executive Outside    
Persons   Executive Directors   Directors   Remarks
3
      Dal Sup Shim, Hyun Chin Lim, Jae Ho Cho  
 
*   The Non-executive Outside Director Nomination Committee is a committee established under the provisions of the Articles of Incorporation and Korean Commercial Code.
  c)   Compensation Review Committee
         
(As of June 30, 2009)
Number of   Members
Persons   Executive Directors   Non-executive Outside Directors
5
  -   Dal Sup Shim, Rak Yong Uhm, Hyun Chin Lim, Jay Young Chung, Jae Ho Cho
 
*   The Compensation Review Committee is a committee established by the resolution of the Board of Directors.
  d)   Capex Review Committee
             
(As of June 30, 2009)        
    Members    
Number of   Executive        
Persons   Directors   Non-executive Outside Directors   Remarks
4
  Sung Min Ha   Dal Sup Shim, Rak Yong Uhm, Jay Young Chung  
 
*   The Capex Review Committee is a committee established by the resolution of the Board of Directors.
  e)   Corporate Citizenship Committee
             
(As of June 30, 2009)
    Members    
Number of   Executive        
Persons   Directors   Non-executive Outside Directors   Remarks
4
  Sung Min Ha   Rak Yong Uhm, Hyun Chin Lim, Jay Young Chung  
 
*   The Corporate Citizenship Committee is a committee established by the resolution of the Board of Directors.

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  (2)   Activities of the Committees of the Board of Directors (As of June 30, 2009)
                     
                Non-executive Outside Directors
                Dal Sup Shim   Hyun Chin Lim
                (Attendance:   (Attendance:
    Date of           100%)   100%)
Committee Name   Activity   Agenda   Approval   Vote
Non-executive Outside Director Nomination Committee
  February 17, 2009   25th General Meeting of Shareholders: Proposal to nominate an Independent Director Hyun Chin Lim   Approved as Proposed   For   For
                   
  June 19, 2009   Proposal to nominate the Head of Committee — Man Won Jung   Approved as Proposed   For   For
                         
                Non-executive Outside Directors
                Dal Sup Shim   Rak Yong Uhm   Jay Yung Chung
                (Attendance:   (Attendance:   (Attendance:
    Date of           100%)   100%)   100%)
Committee Name   Activity   Agenda   Approval   Vote
CapEx Committee
  January 21, 2009   CapEx plan for 2009   Approved as proposed   For   For   For
                       
  June 19, 2009   Proposal to nominate the Head of Committee — Rak Yong Uhm   Approved as proposed   For   For   For
                                 
                Non-executive Outside Directors
                    Rak            
                Dal Sup   Yong   Hyun   Jay Yung   Jae Ho
                Shim   Uhm   Chin Lim   Chung   Cho
                (Attendance:   (Attendance:   (Attendance:   (Attendance:   (Attendance:
Committee   Date of           100%)   100%)   100%)   100%)   100%)
Name   Activity   Agenda   Approval   Vote
Compensation Review Committee
  June 19, 2009   Proposal to nominate the Head of Committee — Hyun Chin Lim   Approved as proposed   For   For   For   For   For
                         
                Non-executive Outside Directors
                Rak Yong   Hyun Chin   Jay Yung
                Uhm   Lim   Chung
                (Attendance:   (Attendance:   (Attendance:
Committee   Date of           100%)   100%)   100%)
Name   Activity   Agenda   Approval   Vote
Corporate Citizenship Committee
  June 19, 2009   Proposal to nominate the Head of Committee — Jay Young Chung   Approved as proposed   For   For   For
D.   Directors’ Independence
On February 17, 2009, in the notice of the annual General Meeting of Shareholders, background information on Jae Won Chey, Man Won Jung, Hyun Chin Lim, candidates for the Board of Directors, was publicly disclosed. There was no other nomination by shareholders. For the election of the outside directors, the Company has established the Non-executive Outside Director Nomination Committee, which is currently in operation. In the 25th General Meeting of Shareholders held on February 17, 2009, the Committee nominated the outside director candidates.

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Name   Outside Director?   Remarks
Man Won Jung
  No  
¡ During the 303rd meeting of the Board of the Directors held on May 21st, 2009, the Non-Executive Outside Director Nomination Committee was established.
¡ Director Shin Bae Kim submitted his resignation on March 13, 2009.
¡ Director Man Won Jung was elected on May 21, 2009.
Sung Min Ha
  No  
Rak Yong Uhm
  Yes  
Jae Ho Cho
  Yes  

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2.   Audit System
The Company’s Audit Committee consists of three non-executive outside directors, Dal Sup Shim, Hyun Chin Lim and Jae Ho Cho.
Major activities of the Audit Committee are as follows.
                 
Meeting   Date   Agenda   Approval   Remarks
The first meeting of 2009
  January 21, 2009  
¡ Issuance of corporate bonds
   
   
¡ B2B Contract with TU Media
  Approved as proposed  
   
¡ Evaluation of Internal Accounting Controls based on Auditor’s Opinion
  Approved as proposed  
   
¡ 2nd half 2008 Management Audit Results
   
   
¡ Reports on Internal Accounting Management system
   
The second meeting of 2009
  February 16, 2009  
¡ Reports on 2008 Korean GAAP Audit
   
   
¡ Report on Review of Internal Accounting Management System
   
   
¡ 2009 Management Audit Plan
   
   
¡ Auditor’s Report for Fiscal Year 2008
  Approved as proposed  
   
¡ Evaluation of Internal Accounting Management System Operation
  Approved as proposed  
   
¡ Appointment of Auditor for FY 2009-2011
  Approved as proposed  
   
¡ Construction of Mobile Phone Facilities for 2009
  Approved as proposed  
The third meeting of 2009
  March 13, 2009  
¡ Purchase of Mobile Phone Relay Device for 2009
  Approved as proposed  
   
¡ Construction of Mobile Phone Facilities for 2009
  Approved as proposed  
   
¡ 2009 2Q Transactions with SK C&C Co., Ltd.
  Approved as proposed  
   
¡ Long-term Financing Plan for Foreign Currency
   
   
¡ Issuance of Offshore Convertible Bonds and Transfer of Treasury Shares
   
   
¡ Asset Management Transaction with Affiliated Company (SK Securities)
   
The fourth meeting of 2009
  April 23, 2009  
¡ Audit Plan for 2009
   
   
¡ Auditor Fees for 2009
  Approved as proposed  
    ¡ Re-approval of entire Auditor Services for 2009   Approved as proposed  
The fifth meeting of 2009
  May 19, 2009  
¡ Proposal for entering into an Agency Agreement with SK Marketing & Company for 2009
  Approved as proposed  
The sixth meeting of 2009
  June 19, 2009  
¡ Proposal to nominate the Chairman of the Committee
  Approved as proposed  
   
¡ Proposal for purchase of Mobile Phone Relay Device for 2009
  Approved as proposed  
   
¡ Proposal for construction of Mobile Phone Facilities for 2009
  Approved as proposed  
   
¡ Proposal for 2009 3Q transactions with SK C&C Co., Ltd.
  Approved as proposed  
   
¡ Asset Management Transaction with Affiliated Company (SK Securities)
   
   
¡ Reports on 2008 US GAAP Audit
   
The seventh meeting of 2009
  July 23, 2009  
¡ Proposal for Operation Services of T map Navigation
  Approved as proposed  
   
¡ Interim Dividends Plan
   
   
¡ Interim Closing of Accounts for Six Months ended June 30, 2009
   
 
*   The line items that do not show approval are for reporting purposes only.
3.   Shareholders’ Exercises of Voting Rights
A.   Voting System and Exercise of Minority Shareholders’ Rights
Pursuant to the Articles of Incorporation as shown below, the cumulative voting system was first introduced in the General Meeting of Shareholders in 2003.
     
Articles of Incorporation   Description
Article 32 (3) (Election of Directors)
  Cumulative voting under Article 382-2 of the Commercial Code will not be applied for the election of directors.
 
Article 4 of the 12th Supplement to the Articles of Incorporation (Interim Regulation)
  Article 32 (3) of the Articles of Incorporation shall remain effective until the day immediately preceding the date of the general shareholders’ meeting of 2003.
Also, neither written electronic voting system nor minority shareholder rights is applicable.

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4.   Affiliated Companies
A.   Capital Investments between Affiliated Companies
                                                                 
(As of March 31, 2009)   * Based on common shares
    Invested companies
    SK   SK   SK   SK   SK           SK   SK
Investing company   Corporation   Energy   Networks   Telecom   Chemicals   SKC   E&C   Shipping
SK Corporation
            33.40 %     39.98 %     23.22 %             42.50 %     0.02 %     72.13 %
SK Energy
                                                               
SK Networks
                                                            17.71 %
SK Telecom
                                                               
SK Chemicals
                                                    58.03 %        
SKC
                                                            10.16 %
SK E&C
                                                               
SK Securities
                                                               
SK C&C
    31.82 %                                                        
SK Telink
                                                               
SK E&S
                                                               
SK D&D
                                                               
SK Communications
                                                               
SK Broadband
                                                               
SK Marketing & Company
                                                               
SK Gas
                                                               
Total affiliated companies
    31.82 %     33.40 %     39.98 %     23.22 %     0.00 %     42.50 %     58.05 %     100.00 %
                                                                 
    Invested companies
    SK           SK   SK   SK            
Investing companies   Securities   Walkerhill   E&S   Gas   C&C   K-Power   DOPCO   CCES
SK Corporation
                    67.55 %     45.53 %             65.00 %                
SK Energy
                                                    38.28 %        
SK Networks
    22.71 %     50.37 %                     15.00 %             4.61 %        
SK Telecom
                                    30.00 %                        
SK Chemicals
            0.25 %                                                
SKC
    7.73 %     7.50 %                                                
SK E&C
                                                               
SK Securities
                                                               

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    Invested companies
    SK           SK   SK   SK            
Investing companies   Securities   Walkerhill   E&S   Gas   C&C   K-Power   DOPCO   CCES
SK C&C
                    32.45 %                                        
SK Telink
                                                               
SK E&S
                                                            100.00 %
SK D&D
                                                               
SK Communications
                                                               
SK Broadband
                                                               
SK Marketing & Company
                                                               
SK Gas
                                                               
Total affiliated companies
    30.43 %     58.12 %     100.00 %     45.53 %     45.00 %     65.00 %     42.89 %     100.00 %
                                                                 
    Invested companies
    YN   Daehan   SK   SK   SK   Busan   Jeonnam   Gangwon
Investing companies   Energy   City Gas   Sci-tech   NJC   Telink   City Gas   City Gas   City Gas
SK Corporation
                                                               
SK Energy
                                                               
SK Networks
                                                               
SK Telecom
                                    90.77 %                        
SK Chemicals
                    50.00 %     60.00 %                                
SKC
                                                               
SK E&C
                                                               
SK Securities
                                                               
SK C&C
                                                               
SK Telink
                                                               
SK E&S
    100.00 %     47.62 %                             40.00 %     100.00 %     100.00 %
SK D&D
                                                               
SK Communications
                                                               
SK Broadband
                                                               
SK Marketing & Company
                                                               
SK Gas
                                                               
Total affiliated companies
    100.00 %     47.62 %     50.00 %     60.00 %     90.77 %     40.00 %     100.00 %     100.00 %

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    Invested companies
            OK                                    
            Cashbag   Chungnam   SK                           Encar
Investing companies   GBES   Service   City Gas   Wyverns   Infosec   MRO Korea   SK Telesys   network
SK Corporation
                                                               
SK Energy
                                                            87.50 %
SK Networks
                                            51.00 %                
SK Telecom
                            99.99 %                                
SK Chemicals
                                                               
SKC
                                                    77.13 %        
SK E&C
                                                               
SK Securities
                                                               
SK C&C
                                    74.09 %                        
SK Telink
                                                               
SK E&S
    100.00 %             100.00 %                                        
SK D&D
                                                               
SK Communications
                                                               
SK Broadband
                                                               
SK Marketing & Company
            100.00 %                                                
SK Gas
                                                               
Total affiliated companies
    100.00 %     100.00 %     100.00 %     99.99 %     74.09 %     51.00 %     77.13 %     87.50 %
                                                                 
    Invested companies
    F&U           TU   SK   SK           Loen    
Investing companies   Credit Info.   Paxnet   Media   D&D   Utis   Netruck   Entertainment   Independence
SK Corporation
                                                               
SK Energy
                                            33.67 %                
SK Networks
                                                               
SK Telecom
    50.00 %     59.74 %     44.15 %                             63.48 %        
SK Chemicals
                                    60.00 %                        
SKC
                                                               
SK E&C
                            44.98 %                                
SK Securities
    40.00 %                                                        
SK C&C
                                                            67.78 %
SK Telink
                                                               
SK E&S
                                                               
SK D&D
                                                               
SK Communications
                                                               
SK Broadband
                                                               
SK Marketing & Company
                                                               
SK Gas
                                                               
Total affiliated companies
    90.00 %     59.74 %     44.15 %     44.98 %     60.00 %     33.67 %     63.48 %     67.78 %

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    Invested companies
    SK   SK Mobile                   NTREEV   SK   SK    
Investing companies   Petrochemical   Energy   SKC Media   iHQ   Soft   I-Media   Communications   Ecolgreen
SK Corporation
                                                               
SK Energy
    100.00 %     100.00 %                                                
SK Networks
                                                            59.00 %
SK Telecom
                            37.09 %     63.70 %             64.82 %        
SK Chemicals
                                                               
SKC
                    100.00 %                                        
SK E&C
                                                               
SK Securities
                                                               
SK C&C
                                                               
SK Telink
                                                    0.54 %        
SK E&S
                                                               
SK D&D
                                                               
SK Communications
                                            100.00 %                
SK Broadband
                                                               
SK Marketing & Company
                                                               
SK Gas
                                                               
Total affiliated companies
    100.00 %     100.00 %     100.00 %     37.09 %     63.70 %     100.00 %     65.71 %     59.00 %
                                                                 
    Invested companies
            SKC Air   SKN   Nuri   Commerce           Solmics   SK
Investing companies   I Platform   Gas   Service   Solution   Planet   Real Best   Co., Ltd.   Broadband
SK Corporation
                                                               
SK Energy
                                                               
SK Networks
    66.67 %             100.00 %                                        
SK Telecom
                                    100.00 %                     43.42 %
SK Chemicals
                                                               
SKC
            80.00 %                                     48.70 %        
SK E&C
                                            100.00 %                
SK Securities
                                                               

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    Invested companies
            SKC Air   SKN   Nuri   Commerce           Solmics   SK
Investing companies   I Platform   Gas   Service   Solution   Planet   Real Best   Co., Ltd.   Broadband
SK C&C
                            46.32 %                                
SK Telink
                                                               
SK E&S
                                                               
SK D&D
                                                               
SK Communications
                                                               
SK Broadband
                                                               
SK Marketing & Company
                                                               
SK Gas
                                                               
Total affiliated companies
    66.67 %     80.00 %     100.00 %     46.32 %     100.00 %     100.00 %     48.70 %     43.42 %
                                                                 
    Invested companies
                                    SK                
    Hanaro   Broadband   Broadband   Broadband   Marketing &           DOP    
Investing companies   Dream   Media   D&M   CS   Company   UB Care   Service   Pana Blu
SK Corporation
                                                               
SK Energy
                                    50.00 %                        
SK Networks
                                                               
SK Telecom
                                    50.00 %                        
SK Chemicals
                                            43.97 %                
SKC
                                                               
SK E&C
                                                    3.62 %        
SK Securities
                                                               
SK C&C
                                                               
SK Telink
                                                               
SK E&S
                                                    96.38 %        
SK D&D
                                                               
SK Communications
                                                               
SK Broadband
    36.03 %     100.00 %     100.00 %     100.00 %                                
SK Marketing & Company
                                                               
SK Gas
                                                            80.36 %
Total affiliated companies
    36.03 %     100.00 %     100.00 %     100.00 %     100.00 %     43.97 %     100.00 %     80.36 %

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    Invested companies
            Namwon                                
            Sarang                                
    WS   Electric           Jeju United   Cross M   MKS           PS &
Investing companies   Commerce   Power   Incyto   FC   Insight   Guarantee   Etoos   Marketing
SK Corporation
                                                               
SK Energy
                            100.00 %                                
SK Networks
    100.00 %                                                        
SK Telecom
                                                            100.00 %
SK Chemicals
                                                               
SKC
                    100.00 %                                        
SK E&C
                                                               
SK Securities
                                                               
SK C&C
                                                               
SK Telink
                                                               
SK E&S
                                                               
SK D&D
            100.00 %                             100.00 %                
SK Communications
                                                    100.00 %        
SK Broadband
                                                               
SK Marketing & Company
                                    100.00 %                        
SK Gas
                                                               
Total affiliated companies
    100.00 %     100.00 %     100.00 %     100.00 %     100.00 %     100.00 %     100.00 %     100.00 %
                                                                 
    Invested companies
            Green                        
Investing companies   SK Forest   Bairo                
SK Corporation
                                                               
SK Energy
                                                               
SK Networks
                                                               
SK Telecom
                                                               
SK Chemicals
                                                               
SKC
                                                               
SK E&C
    100.00 %                                                        
SK Securities
                                                               
SK C&C
                                                               
SK Telink
                                                               
SK E&S
                                                               

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    Invested companies
            Green                        
Investing companies   SK Forest   Bairo                
SK D&D
                                                               
SK Communications
                                                               
SK Broadband
                                                               
SK Marketing & Company
                                                               
SK Gas
            69.02 %                                                
Total affiliated companies
    100.00 %     69.02 %                                                

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VI.   SHAREHOLDERS INFORMATION
1.   Shareholdings of the Largest Shareholder and Related Persons
 
A.   Shareholdings of the Largest Shareholder and Related Persons
                                         
(As of June 30, 2009)       (Unit: Shares, %)
            Number of shares owned and ownership ratio
            Beginning of Period   End of Period
            Number of   Ownership   Number of   Ownership
Name   Relationship Type of share shares   ratio   shares   ratio
SK Corporation
  Largest Shareholder   Common share     18,748,452       23.09       18,748,452       23.22  
Tae Won Chey
  Officer of affiliated company   Common share     100       0.00       100       0.00  
Shin Won Chey
  Officer of affiliated company   Common share     500       0.00       500       0.00  
Shin Bae Kim
  Officer of affiliated company   Common share     1,270       0.00       1,270       0.00  
Man Won Jung
  Director   Common share     0       0.00       100          
Sung Min Ha
  Director   Common share     738       0.00       738       0.00  
Bang Hyung Lee
  Officer of affiliated company   Common share     200       0.00       200       0.00  
Total
    Common share     18,751,260       23.09       18,751,360       23.22  
The table above includes Man Won Jung who was elected as CEO at the March 13, 2009 General Meeting of Shareholders.
Although there has been no change in the number of shares held by the largest shareholder, SK Corporation, due to the Company’s purchase and subsequent retirement of its treasury shares, SK Corporation’s ownership ratio in the Company has increased to 23.22%.
B.   Overview of the Largest Shareholder
SK Corporation is a holding company and as of June 30, 2009, has eight subsidiaries: SK Energy Co., Ltd., SK Telecom Co., Ltd., SK Networks Co., Ltd., SKC Co., Ltd., SK E&S Co., Ltd., SK Shipping Co., Ltd., K-Power Co., Ltd. and SK Gas Co., Ltd. SK Corporation also operates a life science business division within its holding company to nurture the division for future growth. Details of SK Corporation’s subsidiaries are as follows:
                 
Affiliates   Share Holdings   Industry   Description
SK Energy Co., Ltd.
    33.40 %   Energy   Publicly Listed
SK Telecom Co., Ltd.
    23.22 %   Telecommunication   Publicly Listed
SK Networks Co., Ltd.
    39.98 %   Energy Sale   Publicly Listed
SKC Co., Ltd.
    42.50 %   Synthetic Resin Manufacturing   Publicly Listed
SK Shipping Co., Ltd.
    72.13 %   Ocean Freight   Privately Held
SK E&S Co., Ltd.
    67.55 %   Gas Company Holdings   Privately Held
SK Gas Co., Ltd.
    45.53 %   Gas   Publicly Listed
K-Power Co., Ltd.
    65.00 %   Power Generation   Privately Held

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*   The above share holdings are based on common stock holdings as of June 30, 2009.
SK Corporation is a publicly listed company and is required to submit a report of its significant business activities in accordance with Article 161 of the Financial Investment Services and Capital Markets Act. Also as a holding company, SK Corporation is required to report key management activities in accordance with Article 8 of Regulation on Securities Issuance and Disclosure. The rule is applicable to subsidiaries whose book value of the holding company’s shareholding exceeds 10% of its total assets. SK Energy Co., Ltd. and SK Telecom Co., Ltd. are two such subsidiaries.
2.   Changes in shareholdings of the Largest Shareholder
Changes in shareholdings of the largest shareholder are as follows.
                         
(Unit: Shares, %)
    Date of the change in the            
    largest shareholder/            
Largest   Date of change in   Shares        
Shareholder   shareholding   Held   Holding Ratio   Remarks
SK Corporation
  March 7, 2008     18,751,260       23.09     Purchased 1,085,325 shares from SK Networks on March 7, 2008
  March 13, 2009     18,751,360       23.22     At the 25th General Meeting of Shareholders, elected the CEO, Man Won Jung (who owns 100 shares of the Company stock)
 
*   Shares held are the sum of shares held by SK Corporation and its related parties.
3.   Distribution of Shares
A.   Shareholders with ownership of 5% or more
                                                     
(As of June 30, 2009)   (Unit: shares, %)
        Common share   Preferred share   Sub-total
        Number of   Ownership   Number of   Ownership   Number of   Ownership
Rank   Name (title)   shares   ratio   shares   ratio   shares   ratio
1
  SK Corporation     18,748,452       23.22                   18,748,452       23.22  
2
  Citibank ADR     18,136,115       22.46                   18,136,115       22.46  
3
  SK Telecom     8,400,708       10.40                   8,400,708       10.40  
Total     45,285,275       56.08                   45,285,275       56.08  

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B.   Shareholdings under the Employee Stock Ownership Program
As the relevant law requires an immediate transfer of the shares directly purchased by the employees to the account of the individual purchasers, the Company transfers and holds the employees’ stocks in separate individual accounts within the program once the number of shares for each individual member is determined.
                         
(As of June 30, 2009)   (Unit: Shares)
            Balance at the beginning   Balance at the end of
            of period   period
Classification   Account classification   Type of share   (Unit: Shares)   (Unit: Shares)
5th
  Employee Stock
Ownership Program
Member Account
  Common shares     114,168       108,660  
8th
        369,887       364,581  
 
Total     484,055       473,241  
C.   Shareholder Distribution
                                         
(As of June 30, 2009)
    Number of   Ratio   Number of   Ratio    
Classification   shareholders   (%)   shares   (%)   Remarks
Total minority shareholders
    44,963       99.96       31,037,893       38.44        
Minority shareholders (corporate)
    1,022       2.27       9,565,665       11.85        
Minority shareholders (individual)
    43,941       97.69       21,472,228       26.59        
Largest Shareholder and Related Persons
    7       0.02       18,751,360       23.22        
Major shareholders
                             
Other shareholders
    8       0.02       30,956,458       38.34        
Other shareholders (corporate)
    6       0.01       12,002,667       14.87        
Other shareholders (individual)
    2       0.01       18,953,791       23.47        
Total
    44,978       100.00       80,745,711       100.00        

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4.   Share Price and Trading Volume in the Last Six Months
A.   Domestic Securities Market
                                                     
(Unit: Won, shares)
        June   May   April   March   February   January
Types   2009   2009   2009   2009   2009   2009
Common stock
  Highest     182,000       183,500       192,500       195,000       204,000       218,000  
  Lowest     170,500       176,500       183,000       180,500       187,500       204,000  
Monthly transaction volume
    8,063,843       8,352,552       8,931,203       7,342,672       6,530,681       6,947,277  
B.   Overseas Securities Market
                                                     
New York Stock Exchange   (Unit: US$, ADR)
        June   May   April   March   February   January
Types   2009   2009   2009   2009   2009   2009
Depository Receipt
  Highest     15.86       16.53       16.42       16.25       16.56       18.35  
  Lowest     14.93       15.38       15.00       12.69       13.39       16.35  
Monthly transaction volume
    21,790,920       24,558,882       24,230,432       34,913,100       18,710,332       22,262,384  
VII.   EMPLOYEES
                                                                 
(As of June 30, 2009)   (Unit: persons, in millions of Won)
    Number of employees                
    Office                           Average   Aggregate   Average    
    managerial   Production                   service   wage for   wage per    
Classification   positions   positions   Others   Total   year   2009 1Q   person   Remarks
Male
    3,863                   3,863       11.4       128,519       33        
Female
    621                   621       9.4       16,643       26        
Total
    4,484                   4,484       11.1       145,162       32        

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VIII.   TRANSACTIONS WITH PARTIES HAVING INTERESTS
1.   Loans to the Largest Shareholder and others
                                                         
(As of June 30, 2009)       (Unit: in millions of Won)
Name                    
(Corporate       Account   Change details   Accrued    
name)   Relationship   category   Beginning   Increase   Decrease   Ending   interest   Remarks
SK Wyverns
  Affiliated company   Long-term and short-term loans     3,557                   3,557       132        
                                                 
(Unit: in millions of Won)
        Investment and Disposal Details    
Name           Transaction Details    
(Corporate       Types of   Period                   Period    
Name)   Relation-ship   Investment   Start   Increase   Decrease   End   Remarks
SKT Global Investment
    Common share     26,044       7,030             33,074        
SK Industrial Development
    Common share           4,773             4,773        
PS & Marketing, ltd.
  Affiliated company   Common share           150,000             150,000        
SK Telecom China Holdings
    Common share     23,293       6,302             29,595        
BcN ltd.
    Common share           196             196        
Air Cross Company, ltd.
  Affiliated company   Common share     2,440             2,440              
Total     51,777       168,301       2,440       217,638        

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2.   Transfer of Assets to/from the Largest Shareholder
A.   Transfer of Assets
                                         
(Units: in thousands of Won)
        Details    
                    Amount   Amount    
Name           Purpose       Transferred   Transferred    
(Corporate       Transferred   of   Date of   From Largest   to Largest    
Name)   Relation-ship   Objects   Transfer   Transfer   Shareholder   Shareholder   Remarks
Encar Network Co., Ltd.
  Affiliated Company   Automobiles   Sale of automobiles
not in use
  February 26, 2009           116,818        
Encar Network Co., Ltd.
  Affiliated Company   Automobiles   Sale of automobiles
not in use
  June 15, 2009           33,636        
Total           150,454        

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B.   Transfer of Business
                                     
(Units: in thousands of Won)
        Details
                    Amount        
                    Transferred   Amount    
Name                   From   Transferred    
(Corporate       Transferred   Purpose of   Date of   Largest   to Largest    
Name)   Relation-ship   Objects   Transfer   Transfer   Shareholder   Shareholder   Remarks
Loen Entertainment Co., Ltd.
  Affiliated Company   Entire MelOn business   To facilitate growth of MelOn business through separate management   October 23, 2008           24,333,022    
   
SK Networks, Ltd.
  Affiliated Company   Fixed-line network business, ancillary business, assets, liabilities and all other rights and obligations in connection thereto   Optimize service through increased network efficiency by internalizing mobile phone transmission lines   May 21, 2009     892,850,000          
Total
    892,850,000       24,333,022      
3.   Transactions with Shareholders (excluding the Largest Shareholder and Related Persons)
A.   Provisional Payment and Loans (including loans on marketable securities)
Agents
                                                         
(Unit: in millions of Won)
Name                    
(Corporate       Account   Change details   Accrued    
name)   Relationship   category   Beginning   Increase   Decrease   Ending   interest   Remarks
Hong Eun and others
  Agency   Long-term and short-term loans     154,801       137,075       183,244       108,632              
Overseas investment companies
                                                         
(Unit: in millions of Won)
Name                    
(Corporate       Account   Change details   Accrued    
name)   Relationship   category   Beginning   Increase   Decrease   Ending   interest   Remarks
DSS Mobile Com. (India)
  Overseas Investment company   Long-term loans     18,887                   18,887           Payment guarantee

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B.   Equity Investments
                                                         
(Unit: in millions of Won)
            Investment and Disposition Details    
                    Transaction Details    
Name (Corporate                   Start of                
Name)   Relation-ship   Category   Period   Increase   Decrease   End of Period   Remarks
Translink L.L.C.
                1,486       305             1,791        
Skylake Global Incubest Fund #1 —Private Equity Investment Firm (SGI 1)
                1,548       110             1,658        
Global Opportunities Breakaway Fund
                      125,120             125,120        
KTB Investment Association #1
                689             689              
Total
    3,723       125,535       689       128,569        
IX.   OTHER INFORMATION RELATING TO THE PROTECTION OF INVESTORS
1.   Developments in the Items mentioned in prior Reports on Important Business Matters
 
A.   Status and Progress of Major Management Events
                 
Date of                
Disclosure   Title   Report   Reports status
October 26, 2001
  Resolution on trust agreement for the acquisition of treasury shares and others   1.  Signatories: Shinhan Bank, Hana Bank, Chohung Bank, Korea Exchange Bank   1.  On December 24, 2003, cash surplus amount from the existing trust agreement was partially reduced (Won 318 billion).
    2.  Contract amount: Won 1,300 billion   2.  On September 24, 2004, the Board of Directors extended the term of the specified monetary trust agreement for 3 years.
    3.  Purpose: to increase shareholder value   3.  On October 16, 2007, the Board of Directors extended the term of the specified monetary trust agreement for 3 years.
          4.  As of December 31, 2008, the balance of specified monetary trust for treasury shares was Won 982 billion.

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B.   Summary Minutes of the General Meeting of Shareholders
         
Date   Agenda   Resolution
23rd Fiscal Year Meeting of Shareholders (March 9, 2007)
  1. Approval of the financial statements for the year ended December 31, 2006   Approved (Cash dividend, Won 7,000 per share)
  2. Remuneration limit for Directors    
  3. Election of Directors   Approved (Won 12 billion)
 
— Election of executive directors
   
 
— Election of independent non-executive directors as Audit Committee members
  Approved (Jung Nam Cho, Sung Min Ha)
Approved (Dal Sup Shim)
24th Fiscal Year Meeting of Shareholders (March 14, 2008)
  1. Approval of the Financial Statements for the year ended December 31, 2007   Approved (Cash dividend, Won 8,400 per share)
  2. Amendment to Articles of Incorporation    
  3. Approval of Remuneration Limit for Directors   Approved
  4. Election of Directors   Approved (Won 12 billion)
 
— Election of executive directors
   
 
— Election of independent non-executive directors
  Approved (Shin Bae Kim, Young Ho Park)
 
— Election of independent non-executive directors as Audit Committee member
  Approved (Rak Yong Uhm, Jay Young Chung)
Approved (Jae Ho Cho)
25th Fiscal Year Meeting of Shareholders (March 13, 2009)
  1. Approval of the financial statements for the year ended December 31, 2008   Approved (Cash dividend, Won 8,400 per share)
  2. Approval of Remuneration Limit for Directors    
  3. Amendment to Company Regulation on Executive Compensation   Approved (Won 12 billion)
Approved
  4. Election of Directors    
 
— Election of executive directors
   
 
— Election of independent non-executive directors
  Approved (Jae Won Chey, Man Won Jung)
 
— Election of independent non-executive directors as Audit Committee member
  Approved (Hyun Chin Lim)
Approved (Hyun Chin Lim)
2.   Contingent Liabilities
A.   Material Legal Proceedings
 
(1)   Claim for damages by G. Mate Inc.
(a) Details: G.Mate alleged that the Company had engaged G.Mate to develop and deliver certain PDA units, but the Company subsequently refused to take delivery of such units. We appealed against G.Mate’s claim for approximately Won 4 billion in damages.
(b) Date of the Appeal: February 3, 2009

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(c) Parties to the lawsuit: G.Mate Inc. (plaintiff) vs. the Company (defendant)
(d) Progress: A mediation requested by G.Mate could not reach an agreement (in January 2007) thus an action for monetary damages was brought before the Seoul Central District Court, to which seven creditors of G.Mate, including DNF Consulting Co., Ltd., requested intervenient participation as successors to part of the claim. On December 4, 2008, the trial court awarded the plaintiffs approximately Won 420 million in damages, to which all of plaintiff, defendant and successors appealed, and the case was submitted as of February 3, 2009 and is currently pending before the Seoul High Court. Two trial sessions were held on May 19, 2009 and June 25, 2009.
(e) Future court dates and the Company’s position: The third trial session is scheduled on August 20, 2009. As to the denied claims concerning the YP3600 model, the Company will continue its defense that ‘no valid contract was executed.’ As to the partial loss concerning the YP3700 model, the Company will do its best to question the statute of limitations and contest the alleged damage claims to either reduce the award amount or to get the claim completely dismissed.
(f) Impacts on operation and finance: As the original judgment was found in our favor in most of the disputed amount except Won 420 million, a similar judgment will not materially adversely impact the Company’s operation and finance. However, as both parties to the lawsuit appealed, it is difficult to anticipate the outcome of the appeals proceedings with certainty. These results and analysis on impact are only anticipations. Actual results of the litigation and actual impact on the Company’s operations and finances may differ depending on future events.
B.   Other Matters
The Company has no other blank bills, mortgage bills, assumption of debt agreement or other contingent liabilities.
3.   Status of sanctions, etc.
A.   Status of sanctions
The Company was sanctioned with a fine of Won 50 million on December 30, 2008 for a violation of Telecommunications Law involving its mismanagement of privacy policy. The Company continues to improve related system security and is implementing system enhancements, such as introduction of scanning devices, to avoid unnecessary keeping of applications at the distributor level.
Due to the Company’s ineffective measures taken with respect to phone numbers that are used for sending illegal unsolicited bulk messages, the Korea Communications Committee ordered the Company to improve its work procedures. The Company expects to complete the upgrade of the related computer system to prevent illegal messages by September 2009.
In addition, on January 21, 2009, the Company was sanctioned for unfair business practices with a fine of Won 1.268 billion by the Fair Trade Commission of Korea along with a correction order of its policy of restricting certain rate plan subscribers from using third party portal contents. The Company has taken efforts to educate applicable divisions of the issue and to improve the level of the voluntary compliance program to comply with fair trade laws to prevent a repeat of the same violation.
Also on February 3, 2009, the Company received a correctional order and a fine of Won 500 million involving an unfair trade interference practice including refusal of applications for subscription for certain PDA phones distributed by third party manufacturers. The Company paid fines related to the sanction and is currently seeking a suspension of execution and is preparing an administrative litigation.

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Forward-Looking Statement Disclaimer
The material above contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results or performance to be materially different from any future results or performance expressed or implied by such forward-looking statements. We do not make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein, and nothing contained herein is, or shall be relied upon as, a promise or representation, whether as to the past or the future. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Additional information concerning these and other risk factors are contained in our latest annual report on Form 20-F and in our other filings with the U.S. Securities and Exchange Commission.

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SK TELECOM CO., LTD.
NON-CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS
ENDED JUNE 30, 2009 AND 2008
AND INDEPENDENT ACCOUNTANTS’
REVIEW REPORT

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Independent Accountants’ Review Report
English Translation of a Report Originally Issued in Korean
To the Stockholders and Board of Directors of
SK Telecom Co., Ltd.
We have reviewed the accompanying non-consolidated statement of financial position of SK Telecom Co., Ltd. (the “Company”) as of June 30, 2009, the related non-consolidated statements of income for the three months and six months ended June 30, 2009 and 2008, and non-consolidated statements of changes in stockholders’ equity and cash flows for the six months ended June 30, 2009 and 2008, all expressed in Korean won. These non-consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these non-consolidated financial statements based on our reviews.
We conducted our reviews in accordance with standards for review of interim financial statements in the Republic of Korea. Those standards require that we plan and perform the review to obtain moderate assurance as to whether the non-consolidated financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data, and this provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.
Based on our reviews, nothing has come to our attention that causes us to believe that the non-consolidated financial statements referred to above are not presented fairly, in all material respects, in conformity with accounting principles generally accepted in the Republic of Korea.
We have previously audited, in accordance with auditing standards generally accepted in the Republic of Korea, the non-consolidated statement of financial position of the Company as of December 31, 2008, and the related non-consolidated statements of income, appropriations of retained earnings, changes in stockholders’ equity and cash flows for the year then ended (not presented herein); and in our report dated January 30, 2009, we expressed an unqualified opinion on those non-consolidated financial statements. The accompanying non-consolidated statement of financial position as of December 31, 2008, which is comparatively presented, does not differ in material respects from such audited non-consolidated statement of financial position.
Our reviews also comprehended the translation of the Korean won amounts into U.S. dollar amounts and nothing has come to our attention that causes us to believe that such translation has not been made in conformity with the basis stated in Note 2. Such U.S. dollar amounts are presented solely for the convenience of readers of financial statements.

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Accounting principles and review standards and their application in practice vary among countries. The accompanying financial statements are not intended to present the financial position, results of operations, changes in stockholders’ equity and cash flows in accordance with accounting principles and practices generally accepted in countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying non-consolidated financial statements are for use by those knowledgeable about Korean accounting procedures and review standards and their application in practice.
July 24, 2009
Notice to Readers
This report is effective as of July 24, 2009, the accountants’ review report date. Certain subsequent events or circumstances may have occurred between the accountants’ review report date and the time the accountants’ review report is read. Such events or circumstances could significantly affect the accompanying financial statements and may result in modification to the accountants’ review report.

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SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
JUNE 30, 2009 AND DECEMBER 31, 2008
                                 
                    Translation into U.S. dollars  
    Korean won     (Note 2)  
    June 30,     December 31,     June 30,     December 31,  
A S S E T S   2009     2008     2009     2008  
    (In millions)     (In thousands)  
 
                               
CURRENT ASSETS:
                               
Cash and cash equivalents
  W 699,055     W 434,177     $ 548,924     $ 340,932  
Short-term financial instruments
    296,632       98,406       232,927       77,272  
Short-term investment securities (Note 3)
    352,458       369,744       276,763       290,337  
Accounts receivable — trade, net of allowance for doubtful accounts of W121,788 million as of June 30, 2009 and W58,404 million as of December 31, 2008 (Note 16)
    1,592,761       1,576,459       1,250,696       1,237,895  
Short-term loans, net of allowance for doubtful accounts of W1,090 million as of June 30, 2009 and W1,090 million as of December 31, 2008 (Notes 5 and 16)
    92,953       107,934       72,990       84,754  
Accounts receivable — other, net of allowance for doubtful accounts of W20,981 million and present value of W18,845 million as of June 30, 2009 and W21,071 million and W27,314 as of December 31, 2008 (Note 16)
    1,472,276       1,225,983       1,156,086       962,688  
Inventories
    18,778       13,927       14,745       10,936  
Prepaid expenses
    95,125       98,273       74,696       77,168  
Current deferred income tax assets, net (Note 12)
    134,741       21,677       105,804       17,022  
Currency swap (Note 18)
          8,236             6,467  
Accrued income and other
    27,060       35,687       21,248       28,022  
 
                       
 
                               
Total Current Assets
    4,781,839       3,990,503       3,754,879       3,133,493  
 
                       
 
                               
NON-CURRENT ASSETS:
                               
Property and equipment, net (Notes 6 and 16)
    4,618,118       4,698,214       3,626,320       3,689,214  
Intangible assets, net (Note 7)
    2,767,868       2,941,592       2,173,434       2,309,848  
Long-term financial instruments (Note 15)
    6,519       19       5,119       15  
Long-term investment securities (Note 3)
    3,551,682       3,067,389       2,788,914       2,408,629  
Equity securities accounted for using the equity method (Note 4)
    2,633,226       2,600,719       2,067,708       2,042,182  
Long-term loans, net of allowance for doubtful accounts of W22,794 million as of June 30, 2009 and W23,342 million as of December 31, 2008 (Notes 5 and 16)
    99,340       131,700       78,005       103,416  
Long-term accounts receivable — other, net of present value of W6,237 million as of June 30, 2009 and W45,464 million as of December 31, 2008
    464,874       572,139       365,037       449,265  
Guarantee deposits (Note 16)
    156,700       147,970       123,047       116,192  
Long-term currency swap (Note 18)
    293,116       356,815       230,166       280,185  
Long-term deposits and other
    112,633       110,435       88,443       86,717  
 
                       
 
                               
Total Non-current Assets
    14,704,076       14,626,992       11,546,193       11,485,663  
 
                       
 
                               
TOTAL ASSETS
  W 19,485,915     W 18,617,495     $ 15,301,072     $ 14,619,156  
 
                       
(Continued)

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SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED)
JUNE 30, 2009 AND DECEMBER 31, 2008
                                 
                    Translation into U.S. dollars  
    Korean won     (Note 2)  
    June 30,     December 31,     June 30,     December 31,  
LIABILITIES AND STOCKHOLDERS’ EQUITY   2009     2008     2009     2008  
    (In millions)     (In thousands)  
 
                               
CURRENT LIABILITIES:
                               
Short-term borrowings
  W 131,500     W 154,700     $ 103,259     $ 121,476  
Accounts payable (Note 16)
    1,058,736       1,039,509       831,359       816,261  
Income tax payable
    224,769       322,431       176,497       253,185  
Accrued expenses (Note 17)
    831,886       692,788       653,228       544,003  
Withholdings
    358,094       285,164       281,189       223,921  
Current portion of long-term debt, net (Note 8)
    345,883       708,619       271,600       556,434  
Current portion of subscription deposits
    7,057       7,082       5,541       5,561  
Currency swap (Note 18)
    238,265       190,359       187,095       149,477  
Interest swap (Note 18)
    3,690             2,898        
Advanced receipts and other
    17,652       11,838       13,861       9,297  
 
                       
 
                               
Total Current Liabilities
    3,217,532       3,412,490       2,526,527       2,679,615  
 
                       
 
                               
NON-CURRENT LIABILITIES:
                               
Bonds payable, net (Note 8)
    3,698,010       2,882,483       2,903,816       2,263,434  
Long-term borrowings (Note 9)
    828,470       825,750       650,546       648,410  
Subscription deposits
    5,171       4,796       4,060       3,766  
Long-term payables — other, net of present value discount of W8,106 million as of June 30, 2009 and W15,416 million as of December 31, 2008
    161,894       304,584       127,125       239,171  
Accrued severance indemnities, net
    36,739       24,222       28,849       19,020  
Non-current deferred income tax liabilities, net (Note 12)
    442,290       279,616       347,303       219,565  
Long-term currency swap (Note 18)
    37,950       23,947       29,800       18,804  
Long-term interest swap (Note 18)
    23,189       33,498       18,209       26,304  
Guarantee deposits received and other (Notes 16 and 17)
    102,269       97,102       80,305       76,248  
 
                       
 
                               
Total Non-current Liabilities
    5,335,982       4,475,998       4,190,013       3,514,722  
 
                       
 
                               
Total Liabilities
    8,553,514       7,888,488       6,716,540       6,194,337  
 
                       
 
                               
STOCKHOLDERS’ EQUITY:
                               
Capital stock (Notes 1 and 10)
    44,639       44,639       35,052       35,052  
Capital surplus (Notes 8 and 10)
    3,031,999       2,957,095       2,380,839       2,322,022  
Capital adjustments:
                               
Treasury stock (Notes 1 and 11)
    (1,992,082 )     (2,055,620 )     (1,564,258 )     (1,614,150 )
Loss on disposal of treasury stock (Note 11)
    (716 )           (562 )      
Equity method in capital adjustments (Note 4)
    (75,537 )     (91,910 )     (59,314 )     (72,171 )
Accumulated other comprehensive income (loss) (Note 13):
                               
Unrealized gains on valuation of long-term investment securities, net (Note 3)
    602,967       413,270       473,472       324,515  
Equity in other comprehensive loss of affiliates, net (Note 4)
    (20,925 )     (4,824 )     (16,430 )     (3,788 )
Loss on valuation of currency swap, net (Note 18)
    (10,926 )     (8,532 )     (8,579 )     (6,700 )
Loss on valuation of interest swap, net (Note 18)
    (18,705 )     (26,129 )     (14,688 )     (20,517 )
Retained earnings:
                               
Appropriated
    8,890,053       8,295,037       6,980,803       6,513,574  
Unappropriated
    481,634       1,205,981       378,197       946,982  
 
                       
 
                               
Total Stockholders’ Equity
    10,932,401       10,729,007       8,584,532       8,424,819  
 
                       
 
                               
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  W 19,485,915     W 18,617,495     $ 15,301,072     $ 14,619,156  
 
                       
See accompanying notes to non-consolidated financial statements.

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SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008
                                                                 
    Korean won     Translation into U.S. dollars (Note 2)  
    2009     2008     2009     2008  
    Three months     Six months     Three months     Six months     Three months     Six months     Three months     Six months  
    ended June 30     ended June 30     ended June 30     ended June 30     ended June 30     ended June 30     ended June 30     ended June 30  
    (In millions except for per share data)     (In thousands except for per share data)  
 
OPERATING REVENUE (Note 16)
  W 3,067,899     W 5,944,360     W 2,931,263     W 5,768,282     $ 2,409,029     $ 4,667,735     $ 2,301,738     $ 4,529,472  
 
                                               
 
                                                               
OPERATING EXPENSES (Note 16):
                                                               
Labor cost
    (81,597 )     (271,048 )     (71,727 )     (236,311 )     (64,073 )     (212,837 )     (56,323 )     (185,560 )
Commissions paid
    (1,279,186 )     (2,280,673 )     (1,186,779 )     (2,235,820 )     (1,004,465 )     (1,790,870 )     (931,903 )     (1,755,650 )
Depreciation and amortization (Notes 6 and 7)
    (426,941 )     (827,657 )     (403,084 )     (783,723 )     (335,250 )     (649,907 )     (316,517 )     (615,409 )
Network interconnection
    (267,725 )     (523,781 )     (262,362 )     (506,406 )     (210,228 )     (411,293 )     (206,016 )     (397,649 )
Leased line
    (93,225 )     (191,315 )     (99,918 )     (199,831 )     (73,204 )     (150,228 )     (78,459 )     (156,915 )
Advertising
    (62,604 )     (106,681 )     (75,782 )     (127,788 )     (49,159 )     (83,770 )     (59,507 )     (100,344 )
Research and development
    (55,023 )     (114,394 )     (50,507 )     (103,322 )     (43,206 )     (89,826 )     (39,660 )     (81,132 )
Rent
    (66,182 )     (129,942 )     (56,407 )     (109,907 )     (51,969 )     (102,035 )     (44,293 )     (86,303 )
Frequency usage
    (38,956 )     (78,136 )     (40,540 )     (81,417 )     (30,590 )     (61,355 )     (31,834 )     (63,932 )
Repair
    (35,189 )     (64,090 )     (38,856 )     (73,358 )     (27,632 )     (50,326 )     (30,511 )     (57,603 )
Cost of goods sold
    (8,887 )     (16,195 )     (16,834 )     (38,032 )     (6,978 )     (12,717 )     (13,219 )     (29,864 )
Other
    (98,984 )     (223,041 )     (95,516 )     (185,424 )     (77,725 )     (175,141 )     (75,003 )     (145,603 )
 
                                               
 
                                                               
Sub-total
    (2,514,499 )     (4,826,953 )     (2,398,312 )     (4,681,339 )     (1,974,479 )     (3,790,305 )     (1,883,245 )     (3,675,964 )
 
                                               
 
                                                               
OPERATING INCOME
    553,400       1,117,407       532,951       1,086,943       434,550       877,430       418,493       853,508  
 
                                               
 
                                                               
OTHER INCOME:
                                                               
Interest income (Note 3)
    35,053       77,573       14,321       40,484       27,525       60,913       11,245       31,790  
Dividends
    2       59,293             45,868             46,559             36,017  
Commissions (Note 16)
    3,669       6,493       3,415       8,370       2,881       5,099       2,682       6,572  
Foreign exchange and translation gains (Note 2)
    47,863       64,964       72,336       173,169       37,585       51,013       56,802       135,979  
Equity in earnings of affiliates (Note 4)
    14,536       25,733       12,133       21,939       11,414       20,207       9,527       17,227  
Reversal of allowance for doubtful accounts
    481       481       1,520       138       378       378       1,194       108  
Gain on valuation of short-term investment securities (Note 3)
    1,966       7,810                     1,544       6,133              
Gain on disposal of investment assets
    63       63       14,466       14,467       49       49       11,359       11,360  
Gain on disposal of property and equipment and intangible assets
    153       445       368       976       120       349       289       766  
Gain on valuation of currency swap (Note 18)
    109,182             44,744       63,095       85,734             35,135       49,545  
Gain on valuation of currency option (Note 18)
    1,014       1,014                     796       796              
Other
    10,075       22,943       10,365       19,824       7,912       18,015       8,138       15,567  
 
                                               
 
                                                               
Sub-total
    224,057       266,812       173,668       388,330       175,938       209,511       136,371       304,931  
 
                                               
(Continued)

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SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008
                                                                 
    Korean won     Translation into U.S. dollars (Note 2)  
    2009     2008     2009     2008  
    Three months     Six months     Three months     Six months     Three months     Six months     Three months     Six months  
    ended June 30     ended June 30     ended June 30     ended June 30     ended June 30     ended June 30     ended June 30     ended June 30  
    (In millions except for per share data)     (In thousands except for per share data)  
 
OTHER EXPENSES:
                                                               
Interest and discounts
  (W 76,431 )   (W 147,755 )   (W 59,835 )   (W 115,605 )   ($ 60,016 )   ($ 116,023 )   ($ 46,985 )   ($ 90,777 )
Donations
    (10,272 )     (22,693 )     (18,499 )     (29,421 )     (8,066 )     (17,819 )     (14,526 )     (23,102 )
Foreign exchange and translation losses (Note 2)
    (133,852 )     (61,055 )     (21,851 )     (43,994 )     (105,106 )     (47,943 )     (17,158 )     (34,547 )
Loss on valuation of short-term investment securities (Note 3)
                (710 )     (2,159 )                 (558 )     (1,695 )
Equity in losses of affiliates (Note 4)
    (50,759 )     (98,755 )     (67,929 )     (116,893 )     (39,858 )     (77,546 )     (53,340 )     (91,789 )
Impairment loss on investment securities (Note 3)
          (3,186 )                       (2,502 )            
Loss on disposal of investment assets
    (1,542 )     (2,420 )     (126 )     (6,002 )     (1,211 )     (1,900 )     (99 )     (4,713 )
Loss on disposal of account receivable — other (Note 20)
    (28,711 )     (28,711 )                 (22,545 )     (22,545 )            
Loss on disposal of property, equipment and intangible assets
    (16,021 )     (16,181 )     (17,065 )     (18,054 )     (12,580 )     (12,706 )     (13,400 )     (14,177 )
Loss on transaction and valuation of currency swap (Note 18)
    (32,219 )     (135,725 )     (73,408 )     (155,704 )     (25,300 )     (106,577 )     (57,643 )     (122,265 )
Loss on valuation of interest swap (Note 18)
    (2,897 )     (2,897 )                 (2,275 )     (2,275 )            
External research and development cost
    (13,913 )     (27,818 )     (17,947 )     (35,895 )     (10,925 )     (21,844 )     (14,093 )     (28,186 )
Other
    (6,030 )     (8,916 )     (551 )     (5,261 )     (4,734 )     (7,000 )     (432 )     (4,130 )
 
                                               
 
                                                               
Sub-total
    (372,647 )     (556,112 )     (277,921 )     (528,988 )     (292,616 )     (436,680 )     (218,234 )     (415,381 )
 
                                               
 
                                                               
INCOME BEFORE INCOME TAX
    404,810       828,107       428,698       946,285       317,872       650,261       336,630       743,058  
 
                                                               
PROVISION FOR INCOME TAX (Note 12)
    (93,167 )     (199,715 )     (130,688 )     (265,390 )     (73,158 )     (156,824 )     (102,621 )     (208,394 )
 
                                               
 
                                                               
NET INCOME
  W 311,643     W 628,392     W 298,010     W 680,895     $ 244,714     $ 493,437     $ 234,009     $ 534,664  
 
                                               
 
                                                               
NET INCOME PER SHARE
                                                               
(In Korean won and U.S. dollars) (Note 14)
  W 4,308     W 8,686     W 4,094     W 9,357     $ 3.383     $ 6.821     $ 3.215     $ 7.347  
 
                                               
 
                                                               
DILUTED NET INCOME PER SHARE
                                                               
(In Korean won and U.S. dollars) (Note 14)
  W 4,234     W 8,567     W 4,056     W 9,261     $ 3.325     $ 6,727     $ 3.185     $ 7.272  
 
                                               
See accompanying notes to non-consolidated financial statements.

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SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
                                                 
                            Accumulated                
                            other             Total  
    Common     Capital     Capital     comprehensive     Retained     stockholders’  
    stock     surplus     adjustments     income     earnings     equity  
 
(In millions of Korean won)
 
Balance, January 1, 2008
  W 44,639     W 2,939,353     (W 2,041,578 )   W 1,589,206     W 8,905,865     W 11,437,485  
Cumulative effect of change in accounting policies
          15,476       (30,908 )     4,893             (10,539 )
 
                                   
Adjusted balance, January 1, 2008
    44,639       2,954,829     ( 2,072,486 )     1,594,099       8,905,865       11,426,946  
Cash dividends
                            (609,711 )     (609,711 )
Net income
                            680,895       680,895  
Difference between the acquisition cost and the net book value incurred from the transactions between companies under common control companies (Note 4)
                (30,849 )                 (30,849 )
Treasury stock (Note 11)
                49,401                   49,401  
Loss on disposal of treasury stock (Note 11)
                (6,275 )                 (6,275 )
Unrealized loss on valuation of long-term investment securities, net (Note 3)
                      (499,415 )           (499,415 )
Equity in other comprehensive loss changes of affiliates, net (Note 4)
                      (106,030 )           (106,030 )
Gain on valuation of currency swap, net (Note 18)
                      3,337             3,337  
Loss on valuation of interest swap, net (Note 18)
                      (48 )           (48 )
 
                                   
 
                                               
Balance, June 30, 2008
  W 44,639     W 2,954,829     (W 2,060,209 )   W 991,943     W 8,977,049     W 10,908,251  
 
                                   
 
                                               
Balance, January 1, 2009
  W 44,639     W 2,957,095     (W 2,147,530 )   W 373,785     W 9,501,018     W 10,729,007  
Cash dividends
                            (609,203 )     (609,203 )
Net income
                            628,392       628,392  
Conversion right
          73,622                         73,622  
Treasury stock (Note 11)
                63,538             (92,477 )     (28,939 )
Loss on disposal of treasury stock (Note 11)
          (721 )     (716 )                 (1,437 )
Unrealized loss on valuation of long-term investment securities, net (Notes 3)
                      189,697             189,697  
Equity in other comprehensive income changes of affiliates, net (Note 4)
          2,003       16,373       (16,101 )     (56,043 )     (53,768 )
Loss on valuation of currency swap, net (Note 18)
                      (2,394 )           (2,394 )
Gain on valuation of interest swap, net (Note 18)
                      7,424             7,424  
 
                                   
 
                                               
Balance, June 30, 2009
  W 44,639     W 3,031,999     (W 2,068,335 )   W 552,411     W 9,371,687     W 10,932,401  
 
                                   
(Continued)

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SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
                                                 
                            Accumulated                
                            other             Total  
    Common     Capital     Capital     comprehensive     Retained     stockholders’  
    stock     surplus     adjustments     income     earnings     equity  
 
                                               
(Translation into U.S. dollars [Note 2], in thousands)
                                               
Balance, January 1, 2008
  $ 35,052     $ 2,308,090       ($1,603,124 )   $ 1,247,905     $ 6,993,220     $ 8,981,143  
Cumulative effect of change in accounting policies
          12,153       (24,271 )     3,842             (8,276 )
 
                                   
Adjusted balance, January 1, 2008
    35,052       2,320,243       (1,627,395 )     1,251,747       6,993,220       8,972,867  
Cash dividends
                            (478,768 )     (478,768 )
Net income
                            534,664       534,664  
Difference between the acquisition cost and the net book value incurred from the transactions between companies under common control (Note 4)
                (24,224 )                 (24,224 )
Treasury stock (Note 11)
                38,792                   38,792  
Loss on disposal of treasury stock (Note 11)
                (4,927 )                 (4,927 )
Unrealized loss on valuation of long-term investment securities, net (Note 3)
                      (392,159 )           (392,159 )
Equity in other comprehensive loss changes of affiliates, net (Note 4)
                      (83,259 )           (83,259 )
Gain on valuation of currency swap, net (Note 18)
                      2,620             2,620  
Loss on valuation of interest swap, net (Note 18)
                      (38 )           (38 )
 
                                   
 
                                               
Balance, June 30, 2008
  $ 35,052     $ 2,320,243       ($1,617,754 )   $ 778,911     $ 7,049,116     $ 8,565,568  
 
                                   
 
                                               
Balance, January 1, 2009
  $ 35,052     $ 2,322,022       ($1,686,321 )   $ 293,510     $ 7,460,556     $ 8,424,819  
Cash dividends
                            (478,369 )     (478,369 )
Net income
                            493,437       493,437  
Conversion right
          57,811                         57,811  
Treasury stock (Note 11)
                49,892             (72,616 )     (22,724 )
Loss on disposal of treasury stock (Note 11)
          (566 )     (562 )                 (1,128 )
Unrealized loss on valuation of long-term investment securities, net (Note 3)
                      148,957             148,957  
Equity in other comprehensive income changes of affiliates, net (Note 4)
          1,572       12,857       (12,642 )     (44,008 )     (42,221 )
Loss on valuation of currency swap, net (Note 18)
                      (1,879 )           (1,879 )
Gain on valuation of interest swap, net (Note 18)
                      5,829             5,829  
 
                                   
 
                                               
Balance, June 30, 2009
  $ 35,052     $ 2,380,839       ($1,624,134 )   $ 433,775     $ 7,359,000     $ 8,584,532  
 
                                   
See accompanying notes to non-consolidated financial statements.

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SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
                                 
                    Translation into U.S. dollars  
    Korean won     (Note 2)  
    2009     2008     2009     2008  
    (In millions)     (In thousands)  
CASH FLOWS FROM OPERATING ACTIVITIES:
                               
 
                               
Net income
  W 628,392     W 680,895     $ 493,437     $ 534,664  
 
                       
 
                               
Expenses not involving cash payments:
                               
Provision for severance indemnities
    18,181       19,961       14,276       15,674  
Depreciation and amortization
    891,277       848,173       699,864       666,017  
Allowance for doubtful accounts
    76,933       24,019       60,411       18,861  
Foreign translation loss
    11,641       41,716       9,141       32,757  
Loss on valuation of short-term investment securities
          2,159             1,695  
Equity in losses of affiliates
    98,755       116,893       77,546       91,789  
Impairment loss on investment securities
    3,186             2,502        
Loss on disposal of investment assets
    2,420       6,002       1,900       4,713  
Loss on disposal of property, equipment and intangible assets
    16,181       18,054       12,706       14,177  
Loss on valuation of currency swap
    112,440       155,704       88,292       122,265  
Loss on valuation of interest swap
    2,897             2,275        
Donations
          126             99  
Amortization of discounts on bonds and other
    20,558       18,315       16,143       14,381  
 
                       
 
                               
Sub-total
    1,254,469       1,251,122       985,056       982,428  
 
                       
 
                               
Income not involving cash receipts:
                               
Gain on valuation of short-term investment securities
    (7,810 )           (6,133 )      
Foreign translation gain
    (46,477 )     (147,981 )     (36,495 )     (116,200 )
Equity in earnings of affiliates
    (25,733 )     (21,939 )     (20,207 )     (17,227 )
Gain on disposal of investment assets
    (63 )     (14,467 )     (49 )     (11,360 )
Gain on disposal of property, equipment and intangible assets
    (445 )     (976 )     (349 )     (766 )
Gain on valuation of currency swap
          (63,095 )           (49,545 )
Gain on valuation of currency option
    (1,014 )           (796 )      
Other
    (548 )     (1,415 )     (431 )     (1,112 )
 
                       
 
                               
Sub-total
    (82,090 )     (249,873 )     (64,460 )     (196,210 )
 
                       
 
                               
Changes in assets and liabilities related to operating activities:
                               
Accounts receivable — trade
    (89,251 )     40,644       (70,083 )     31,915  
Accounts receivable — other
    (233,699 )     (125,701 )     (183,509 )     (98,705 )
Inventories
    (4,851 )     2,788       (3,809 )     2,189  
Prepaid expenses
    39,402       46,548       30,940       36,551  
Advanced payments and other
    8,533       (12,627 )     6,700       (9,915 )
Accounts payable
    13,389       (170,146 )     10,514       (133,605 )
Income tax payable
    (105,782 )     27,772       (83,064 )     21,808  
Accrued expenses
    140,016       176,025       109,946       138,221  
Withholdings
    72,930       85,744       57,268       67,329  
Current portion of subscription deposits
    (25 )     (226 )     (20 )     (177 )
Advanced receipts and other
    5,814       (7,792 )     4,564       (6,118 )
Deferred income taxes
    (22,022 )     (87,780 )     (17,293 )     (68,928 )
Severance indemnities payments
    (15,407 )     (10,426 )     (12,098 )     (8,187 )
Deposits for group severance indemnities and other deposits
    9,440       1,697       7,413       1,333  
Dividends received from affiliate
    6,817       6,394       5,353       5,021  
 
                       
 
                               
Sub-total
    (174,696 )     (27,086 )     (137,178 )     (21,268 )
 
                       
 
                               
Net Cash Provided by Operating Activities
    1,626,075       1,655,058       1,276,855       1,299,614  
 
                       
(Continued)

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SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
                                 
                    Translation into U.S. dollars  
    Korean won     (Note 2)  
    2009     2008     2009     2008  
    (In millions)     (In thousands)  
CASH FLOWS FROM INVESTING ACTIVITIES:
                               
 
                               
Cash inflows from investing activities:
                               
Withdrawal of short-term financial instruments
  W     W 1,896     $     $ 1,489  
Withdrawal of long-term financial instruments
          10,000             7,852  
Disposal of short-term investment securities, net
    25,153       270,495       19,751       212,403  
Collection of short-term loans
    184,144       116,412       144,597       91,411  
Collection of long-term loans
    8,119       2,237       6,375       1,757  
Proceeds from sales of long-term investment securities
    1,865       366,655       1,464       287,911  
Proceeds from sales of equity securities accounted for using the equity method
    6,444       1,739       5,060       1,365  
Decrease in guarantee deposits
    12,360       6,143       9,706       4,824  
Decrease in other non-current assets
    27,594       166,632       21,668       130,845  
Proceeds from disposal of property and equipment
    1,492       2,810       1,172       2,207  
Proceeds from disposal of intangible assets
    65       1       51       1  
 
                       
 
                               
Sub-total
    267,236       945,020       209,844       742,065  
 
                       
 
                               
Cash outflows for investing activities :
                               
Acquisition of short-term financial instruments
    (198,226 )           (155,654 )      
Acquisition of long-term financial instruments
    (6,500 )             (5,104 )      
Extension of short-term loans
    (138,223 )     (117,817 )     (108,538 )     (92,514 )
Extension of long-term loans
    (6,972 )     (90,848 )     (5,475 )     (71,337 )
Acquisition of long-term investment securities
    (125,538 )     (10,513 )     (98,577 )     (8,255 )
Acquisition of equity securities accounted for using the equity method
    (168,301 )     (1,442,951 )     (132,156 )     (1,133,059 )
Increase in guarantee deposits and other
    (87,026 )     (220,803 )     (68,336 )     (173,383 )
Acquisition of property and equipment
    (647,652 )     (584,930 )     (508,561 )     (459,309 )
Increase in intangible assets
    (6,795 )     (11,568 )     (5,336 )     (9,084 )
 
                       
 
                               
Sub-total
    (1,385,233 )     (2,479,430 )     (1,087,737 )     (1,946,941 )
 
                       
 
                               
Net Cash Used in Investing Activities
    (1,117,997 )     (1,534,410 )     (877,893 )     (1,204,876 )
 
                       
 
                               
CASH FLOWS FROM FINANCING ACTIVITIES:
                               
 
                               
Cash inflows from financing activities:
                               
Proceeds from short-term borrowings
    100,000       300,000       78,524       235,571  
Issuance of bonds
    1,114,898       380,042       875,460       298,423  
Increase in guarantee deposits received and other
    5,830       8,230       4,578       6,462  
Proceeds from disposal of treasury stock
          42,246             33,173  
Cash inflows from transaction of currency swap
    8,236             6,467        
Cash inflows from transaction of currency option
    1,014             796        
 
                       
 
                               
Sub-total
    1,229,978       730,518       965,825       573,629  
 
                       
 
                               
Cash outflows for financing activities:
                               
Repayment of short-term borrowings
    (123,200 )           (96,741 )      
Repayment of current portion of long-term debts
    (715,672 )     (411,642 )     (561,973 )     (323,237 )
Payment of dividends
    (604,162 )     (609,747 )     (474,411 )     (478,796 )
Decrease in subscription deposits
          (1,496 )           (1,175 )
Decrease in other non-current liabilities
    (1,206 )     (7,960 )     (947 )     (6,250 )
Acquisition of treasury stock
    (28,938 )           (22,723 )      
 
                       
 
                               
Sub-total
    (1,473,178 )     (1,030,845 )     (1,156,795 )     (809,458 )
 
                       
 
                               
Net Cash Used in Financing Activities
    (243,200 )     (300,327 )     (190,970 )     (235,829 )
 
                       
 
                               
NET INCREASE IN CASH AND CASH EQUIVALENTS
    264,878       (179,679 )     207,992       (141,091 )
 
                               
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD
    434,177       575,646       340,932       452,019  
 
                       
 
                               
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD
  W 699,055     W 395,967     $ 548,924     $ 310,928  
 
                       
See accompanying notes to non-consolidated financial statements.

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SK TELECOM CO., LTD.
NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008
1.   GENERAL
    SK Telecom Co., Ltd. (the “Company”) was incorporated in March 1984 under the laws of Korea to engage in providing nationwide cellular telephone communication services in the Republic of Korea. The Company’s common shares and depositary receipts (DRs) are listed on the Stock Market of Korea Exchange (formerly “Korea Stock Exchange”) and the New York and London Stock Exchanges, respectively. As of June 30, 2009, the Company’s total issued shares are held by the following:
                 
            Percentage of
    Number of shares   total shares issued (%)
 
               
SK Group
    18,748,452       23.22  
POSCO Corp.
    2,341,569       2.90  
Institutional investors and other minority shareholders
    51,254,982       63.48  
Treasury stock
    8,400,708       10.40  
 
               
 
    80,745,711       100.00  
 
               
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    The accompanying non-consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the Republic of Korea (“Korean GAAP”) which is the same as accounting policies for annual financial statements for the year ended December 31, 2008, except for the following:
  a.   Revision of External Audit Law
 
      In accordance with the revised External Audit Law of Korea, effective January 1, 2009, the title of “Balance Sheet” was replaced with “Statement of Financial Position”.
    The Company maintains its official accounting records in Korean won and prepares statutory non-consolidated financial statements in Korean language (Hangul) in conformity with Korean GAAP. Certain accounting principles applied by the Company that conform with financial accounting standards and accounting principles in the Republic of Korea may not conform with accounting principles generally accepted in other countries. Accordingly, these financial statements are intended for use by those who are informed about Korean accounting principles and practices. The accompanying financial statements have been condensed, restructured and translated into English with certain expanded descriptions from the Korean language financial statements. Certain information included in the Korean language financial statements, but not required for a fair presentation of the Company’s financial position, results of operations, changes in stockholders’ equity or cash flows, is not presented in the accompanying financial statements.
 
    The accompanying non-consolidated financial statements are stated in Korean won, the currency of the country in which the Company is incorporated and operates. The translation of Korean won amounts into U.S. dollar amounts is included solely for the convenience of readers of financial statements and has been made at the rate of W1,273.50 to US$1.00, the Noon Buying Rate in the City of New York for cable transfers in Korean won as certified for customs purposes by the Federal Reserve Bank of New York on the last business day of the period ended June 30, 2009. Such translations into U.S. dollars should not be construed as representations that the Korean won amounts could be converted into U.S. dollars at that, or any other rate.

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3.   INVESTMENT SECURITIES
  a.   Short-term Investment Securities
 
      Short-term investment securities as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won):
                                 
                            December 31,  
    June 30, 2009     2008  
    Acquisition           Carrying     Fair value and  
    cost     Fair value     amount     carrying amount  
 
                               
Trading securities (Note a)
  W 350,000     W 348,850     W 348,850     W 366,040  
Current portion of long-term investment securities (Note b)
    3,557       3,608       3,608       3,704  
 
                       
Total
  W 353,557     W 352,458     W 352,458     W 369,744  
 
                       
 
(Note a)   The Company’s trading securities as of June 30, 2009 are all beneficiary certificates, and the difference between the fair value and acquisition cost was recorded in other income (expenses) as gain (loss) on valuation of short-term investment securities.
 
(Note b)   The difference between the fair value and acquisition cost was recorded as unrealized gain (loss) on valuation of long-term investment securities in other comprehensive income.
  b.   Long-term Investment Securities
 
      Long-term investment securities as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won):
                 
    June 30, 2009     December 31, 2008  
 
               
Available-for-sale equity securities
  W 3,460,654     W 3,066,306  
Available-for-sale debt securities
    94,636       4,787  
 
           
 
               
Total
    3,555,290       3,071,093  
Less: current portion
    (3,608 )     (3,704 )
 
           
 
               
Long-term portion
  W 3,551,682     W 3,067,389  
 
           

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  b-(1).   Available-for-sale Equity Securities
 
      Available-for-sale equity securities as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won):
                                                         
    June 30, 2009             Carrying amount  
    Number of     Percentage     Acquisition                     June     December  
    shares     (%)     cost     Fair value             30, 2009     31, 2008  
(Investments in listed companies)
                                                       
Digital Chosunilbo Co., Ltd.
    2,890,630       7.8     W 5,781     W 8,585             W 8,585     W 5,636  
KRTnet Corporation
    234,150       4.4       1,171       1,409               1,409       1,098  
POSCO Corp.
    2,481,310       2.8       332,662       1,050,835               1,050,835       942,898  
LG Powercomm Co., Ltd.
    6,000,000       4.5       240,243       38,520     (Note a)     38,520       39,000  
nTels Co., Ltd.
    205,200       6.2       34       616               616       504  
Qualcomm Inc.
    55,805       0.1       2,756       3,240               3,240       2,514  
China Unicom Ltd.
    899,745,075       3.8       1,333,009       1,530,287               1,530,287       1,357,648  
DAEA TI Co., Ltd.
                          (Note b)           89  
Extended Computing Environment Co., Ltd.
                          (Note b)           40  
 
                                               
Sub-total
                    1,915,656       2,633,492               2,633,492       2,349,427  
 
                                               
 
                                                       
(Investments in non-listed companies)
                                                       
SK C&C Co., Ltd.
    15,000,000       30.0       501,651       665,340     (Note c)     665,340       676,716  
The Korea Economic Daily
    2,585,069       13.8       13,964     (Note e)             13,964       13,964  
Others
                    158,394     (Notes d&e)             9,746       12,932  
 
                                                 
Sub-total
                    674,009                       689,050       703,612  
 
                                                 
(Investments in funds)
                                                       
Global Opportunities Breakaway Fund
                    125,120     (Notes e&f)             125,120        
Others
                    12,992     (Note e)             12,992       13,267  
 
                                                 
Sub-total
                    138,112                       138,112       13,267  
 
                                                 
 
                                                       
Total
                  W 2,727,777                     W 3,460,654     W 3,066,306  
 
                                                 
 
(Note a)   As the common stocks of LG Powercomm Co., Ltd. were listed on the stock Market of Korea Exchange during the year ended December 31, 2008, the Company recorded the investment at its market value as of June 30, 2009. In addition, as the difference between the market value and carrying value of the investments is material and the market value is significantly less than the acquisition cost over the long-term period, the Company recorded W201,243 million of impairment loss on investment securities for the year ended December 31, 2008.
 
(Note b)   The investments in common stock of DAEA TI Co., Ltd. and Extended Computing Environment Co., Ltd. were all sold during the six months ended June 30, 2009 and the Company recorded W1,541 million of loss on disposal of long term investment securities.
 
(Note c)   The number of shares held by the Company increased to 15,000,000 shares from 6,000,000 shares as the SK C&C performed stock split of 1:2.5 for the six months ended June 30, 2009. The Company recorded its investments in common stock of SK C&C Co., Ltd. at its fair value, which was estimated with the assistance of an outside professional valuation company using the present value of expected future cash flows and the unrealized gain on valuation of investments totals W241,790 million (net of tax effect of W77,194 million) and W250,413 million (net of tax effect of W79,947 million) as of June 30, 2009 and December 31, 2008, respectively.
 
(Note d)   Due to the impairment of the investment of Mobinex Inc. and others, the Company recorded W3,186 million of impairment loss on investment securities for the six months ended June 30, 2009.

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(Note e)   As a reasonable estimate of fair value could not be made, the investment is stated at acquisition cost.
 
(Note f)   For the six months ended June 30, 2009, the Company entered into limited partnership agreement with overseas private fund. In accordance with the partnership agreement, the Company has contributed US$ 100million out of total capital commitment of US$ 200million.
  b-(2).   Available-for-sale Debt Securities
 
      Available-for-sale debt securities as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won):
                                 
                    Carrying amount  
                    June     December  
    Maturity     Acquisition cost     30, 2009     31, 2008  
 
                               
Public bonds
  (Note a)   W 104     W 104     W 1,236  
Closed beneficiary certificates (Note b)
  October, 2009     3,501       3,552       3,551  
Subordinated bonds (Note c)
  October, 2009     90,980       90,980        
 
                         
 
                               
Total
            94,585       94,636       4,787  
Less current portion
            (3,557 )     (3,608 )     (3,704 )
 
                         
 
                               
Long-term available-for-sale debt securities
          W 91,028     W 91,028     W 1,083  
 
                         
    The interest income incurred from available-for-sale debt securities for the six months ended June 30, 2009 and 2008, and for the three months ended June 30, 2009 and 2008 were W161 million and W2,756 million, W90 million and W1,336 million, respectively.
 
(Note a)   The maturities of public bonds as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won):
                 
Maturity   June 30, 2009     December 31, 2008  
 
               
Within one year
  W 57     W 153  
After one year but within five years
    47       1,083  
 
           
 
               
 
  W 104     W 1,236  
 
           
 
(Note b)   Returns on the closed beneficiary certificates were accounted for as interest income.
 
(Note c)   The Company purchased subordinated bonds issued by special purpose company in the asset-backed securitization of accounts receivable-other resulting from its mobile phone financing plan (See Note 20).

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  b-(3).   Changes in Unrealized Gains (Losses) on Investments in Common Stock
 
      The changes in unrealized gains (losses) on investments in common stock for the six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                                 
    For the six months ended June 30, 2009  
                    Transferred to        
    Beginning     Increase     realized     Ending  
    balance     (decrease)     gain (loss)     balance  
Available-for-sales securities:
                               
Unrealized gain on valuation of long-term Investment securities
  W 941,096     W 100,169     W     W 1,041,265  
Unrealized loss on valuation of long-term Investment securities
    (401,945 )     142,712             (259,233 )
 
                       
 
                               
Sub-total
    539,151       242,881             782,032  
Less tax effect
    (125,881 )     (53,184 )           (179,065 )
 
                       
 
                               
Total
  W 413,270     W 189,697     W     W 602,967  
 
                       
                                 
    For the six months ended June 30, 2008  
                    Transferred to        
    Beginning     Increase     realized     Ending  
    balance     (decrease)     gain (loss)     balance  
Available-for-sales securities:
                               
Unrealized gain on valuation of long-term Investment securities
  W 2,402,284     (W 685,469 )   (W 9,389 )   W 1,707,426  
Unrealized loss on valuation of long-term Investment securities
    (158,575 )     858       5,152       (152,565 )
 
                       
 
                               
Sub-total
    2,243,709       (684,611 )     (4,237 )     1,554,861  
Less tax effect
    (617,020 )     188,268       1,165       (427,587 )
 
                       
 
                               
Total
  W 1,626,689     (W 496,343 )   (W 3,072 )   W 1,127,274  
 
                       

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4.   EQUITY SECURITIES ACCOUNTED FOR USING THE EQUITY METHOD
    Equity securities accounted for using the equity method of accounting as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won):
                                                         
    June 30, 2009             Carrying amount  
            Ownership                                    
    Number     percentage     Acquisition     Net asset             June 30,     December  
    of shares     (%)     cost     value             2009     31, 2008  
 
                                                       
SK Broadband Co., Ltd.
    102,451,249       43.4     W 1,209,629     W 520,953             W 1,049,941     W 1,146,736  
SK Communications Co., Ltd.
    28,029,945       64.8       175,441       130,254               141,731       147,392  
SK Telink Co., Ltd.
    943,997       90.8       5,296       119,657               119,656       112,358  
SK Marketing & Company Co., Ltd.
    5,000,000       50.0       190,000       103,550               103,550       101,345  
PS&Marketing Corporation
    30,000,000       100.0       150,000       140,372     (Note a)     140,372        
SK Wyverns Baseball Club Co., Ltd.
    199,997       100.0       1,000       (2,048 )                    
Paxnet Co., Ltd.
    5,590,452       59.7       26,563       15,884               30,367       30,086  
F&U Credit Information Co., Ltd.
    300,000       50.0       2,410       3,665               4,157       4,244  
TU Media Corp.
    28,538,064       44.2       151,980       12,593               12,593       14,847  
Aircross Co., Ltd.
                          (Note b)           7,289  
IHQ, Inc.
    14,960,784       37.1       51,846       12,991               24,005       26,957  
Ntreev Soft Co., Ltd.
    2,064,970       63.7       33,120       8,697               8,995       9,575  
Commerce Planet Co., Ltd.
    29,396       100.0       14,344       1,107               1,107       1,535  
Loen Entertainment, Inc.
    16,054,812       63.5       57,874       38,167               38,983       35,895  
Harex Info Tech, Inc.
    225,000       21.2       3,375       245               421       598  
SK Mobile
          20.0       4,930       2,111               2,111       2,111  
SKT Vietnam PTE Ltd.
    180,476,700       73.3       191,273       101,152               101,152       112,160  
Skytel Co., Ltd.
    1,951,777       29.3       2,159       14,735               14,735       12,381  
SK China Company Ltd.
    94,960       29.7       6,159       4,556               3,470       3,657  
SK Telecom China Co., Ltd.
          100.0       7,340       10,258               10,258       7,157  
TR Entertainment
    13,542,553       42.2       10,953       2,710               8,759       9,626  
ULand Company Ltd.
    14,100,100       70.2       17,511       4,571               4,571       5,401  
Virgin Mobile USA, Inc.
    13,940,549       16.6       62,096       (59,948 )             52,726       62,096  
SKT Americas, Inc.
    109       100.0       17,467       31,420               31,420       36,126  
SK Telecom China Holding Co., Ltd.
          100.0       29,595       34,085     (Note c)     34,085       30,780  
SK USA, Inc.
    49       49.0       3,184       5,249               5,249       5,041  
Helio, Inc.
    794,375       14.3       1,342       116               116       116  
Korea IT Fund
    190       63.3       190,000       210,166               210,166       210,725  
1st Music Investment Fund of SK-PVC
    1,385       69.3       6,925       4,660               4,660       5,688  
2nd Music Investment Fund of SK-PVC
    1,585       79.3       7,925       7,894               7,894       8,441  
SK-KTB Music Investment Fund
    297       74.2       14,850       13,488               13,488       13,954  
IMM Cinema Fund
    120       45.6       12,000       8,241               8,241       8,435  
Michigan Global Cinema Fund
    40       36.4       4,000       3,577               3,577       3,577  
3rd Fund of Isu Entertainment
    25       31.3       2,500       1,568               1,568       1,568  
SK Telecom Advanced Tech & Service Center
          100.0       6,989       9,828               9,828       10,053  
Cyworld China Holdings
    10,500,000       53.8       10,272       1,175               1,175       2,117  
Magic Tech Network
    4,500       30.0       8,494       2,162               7,107       7,725  
SK Telecom Global Investment B.V.
    18,000       100.0       33,074       38,674     (Note c)     38,674       31,866  
SKY Property Mgmt. Ltd.
    22,980       60.0       283,367       294,072               294,072       287,405  
Wave City Development Co. Ltd.
    382,000       19.1       1,967       1,908               1,908       1,908  

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    June 30, 2009             Carrying amount  
            Ownership                                    
    Number     percentage     Acquisition     Net asset                     December  
    of shares     (%)     cost     value             June 30, 2009     31, 2008  
Prmaxsoftware Tech. Co., Ltd.
          91.4       7,127       6,437               6,782       7,127  
Benex Digital Cultural Contents Fund
    50       19.9     W 5,000     W 5,068             W 5,068     W 5,068  
Benex Focus Limited Partnership II
    200       66.7       20,000       20,043               20,043       20,089  
K-net Culture & Contents Venture Fund
    59       59.0       5,900       5,856               5,856       5,856  
Open Innovation Fund
    200       98.5       20,000       20,055               20,055       20,044  
Other investments in affiliates
                    28,534             (Note d)     28,534       23,564  
 
                                                 
 
                                                       
Total
                  W 3,095,811                     W 2,633,226     W 2,600,719  
 
                                                 
 
(Note a)   For the Six months ended June 30, 2009, the Company acquired 30,000,000 shares of PS&Marketing Corporation. As a result, the Company holds 100.0% of PS&Marketing Corporation.
 
(Note b)   For the Six months ended June 30, 2009, Aircross Co., Ltd. was fully liquidated.
 
(Note c)   For Six months ended June 30, 2009, the Company additionally invested W6,302 million in SK Telecom China Holding Co., Ltd. and W7,030 million in SK Telecom Global Investment B.V..
 
(Note d)   As allowed under Korean GAAP, investments in equity securities of SK Telecom Europe Limited and others were stated at their acquisition cost instead of amount valued using the equity method of accounting, as changes in the Company’s portion of stockholders’ equity of such investees were not expected to be material.

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    Details of the changes in investments in affiliates accounted for using the equity method for the three months and six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                                                                                         
            For the six months ended June 30, 2009  
                                    Equity in             Equity     Equity                      
                            Equity in     other com-             method in     method in             Other        
            Beginning     Acquisi     earnings     prehensive     Capital     retained     capital     Dividend     increase     Ending  
            balance     -tion     (losses)     income     surplus     earnings     adjustments     received     (decrease)     balance  
SK Broadband Co., Ltd.
  (Note a)   W 1,146,736     W     (W 36,415 )   W 662     W     (W 56,043 )   (W 4,999 )   W     W     W 1,049,941  
SK Communications Co., Ltd.
  (Note a)     147,392             (7,273 )     (18,629 )     2,039             18,202                   141,731  
SK Telink Co., Ltd.
  (Notes a and c)     112,358             13,353       270                         (6,325 )           119,656  
SK Marketing & Company Co., Ltd.
  (Note a)     101,345             7,082       (4,877 )                                   103,550  
PS&Marketing Corporation
  (Note a)           150,000       (9,628 )                                         140,372  
SK Wyverns Baseball Club Co., Ltd.
  (Note b)                 (1 )                                          
Paxnet Co., Ltd.
  (Notes a and c)     30,086             773       (281 )                 281       (492 )           30,367  
F&U Credit Information Co., Ltd.
  (Note b)     4,244             (87 )                                         4,157  
TU Media Corp.
  (Note a)     14,847             (2,254 )     36       (36 )                             12,593  
Aircross Co., Ltd.
  (Note d)     7,289                                                 (7,289 )      
IHQ, Inc.
  (Note a)     26,957             (3,819 )     (5,103 )                 5,970                   24,005  
Ntreev Soft Co., Ltd.
  (Note a)     9,575             (637 )     8                   49                   8,995  
Commerce Planet Co., Ltd.
  (Note b)     1,535             (428 )                                         1,107  
Loen Entertainment, Inc.
  (Note a)     35,895             421       2,989                   (322 )                 38,983  
Harex Info Tech, Inc.
  (Note b)     598             (177 )                                         421  
SK Mobile
  (Note b)     2,111                                                       2,111  
SKT Vietnam PTE Ltd.
  (Note a)     112,160             (13,683 )     2,675                                     101,152  
Skytel Co., Ltd.
  (Note a)     12,381             3,709       (1,355 )                                   14,735  
SK China Company Ltd.
  (Note b)     3,657             (176 )     (11 )                                   3,470  
SK Telecom China Co., Ltd.
  (Note b)     7,157             5       3,096                                     10,258  
TR Entertainment
  (Note a)     9,626             (932 )     65                                     8,759  
ULand Company Ltd.
  (Note a)     5,401             (935 )     105                                     4,571  
Virgin Mobile USA, Inc.
  (Note a)     62,096             (9,216 )     (154 )                                   52,726  
SKT Americas, Inc.
  (Note a)     36,126             (4,629 )     (77 )                                   31,420  
SK Telecom China Holding Co., Ltd.
  (Note a)     30,780       6,302       (3,518 )     521                                     34,085  
SK USA, Inc.
  (Note b)     5,041             182       26                                     5,249  
Helio, Inc.
  (Note b)     116                   (26 )                 26                   116  
Korea IT Fund
  (Note a)     210,725             (734 )     175                                     210,166  
1st Music Investment Fund of SK-PVC
  (Note b)     5,688             (1,181 )     153                                     4,660  
2nd Music Investment Fund of SK-PVC
  (Note b)     8,441             (547 )                                         7,894  
SK-KTB Music Investment Fund
  (Note a)     13,954             (600 )     133                   1                   13,488  
IMM Cinema Fund
  (Note a)     8,435             (194 )                                         8,241  
Michigan Global Cinema Fund
  (Note b)     3,577                                                       3,577  
3rd Fund of Isu Entertainment
  (Note b)     1,568                                                       1,568  
SK Telecom Advanced Tech & Service Center
  (Note b)     10,053             (194 )     (31 )                                   9,828  
Cyworld China Holdings
  (Note b)     2,117             179       (193 )                 (928 )                 1,175  
Magic Tech Network
  (Note b)     7,725             (618 )                                         7,107  
SK Telecom Global Investment B.V.
  (Note a)     31,866       7,030       17       (239 )                                   38,674  
SKY Property Mgmt. Ltd.
  (Note a)     287,405             (487 )     7,154                                     294,072  
Wave City Development Co. Ltd.
  (Note b)     1,908                                                       1,908  
Prmaxsoftware Tech. Co., Ltd.
  (Note b)     7,127             (345 )                                         6,782  
Benex Digital Cultural Contents Fund
  (Note b)     5,068                                                       5,068  
Benex Focus Limited Partnership II
  (Note a)     20,089             (46 )                                         20,043  
K-net Culture & Contents Venture Fund
  (Note b)     5,856                                                       5,856  
Open Innovation Fund
  (Note a)     20,044             11                                           20,055  
 
                                                                   
 
                                                                                       
Total
          W 2,577,155       163,332       (73,022 )     (12,908 )     2,003       (56,043 )     18,280       (6,817 )     (7,289 )   W 2,604,692  
 
                                                                                   

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            For the six months ended June 30, 2009  
                                    Equity in             Equity     Equity                      
                            Equity in     other com-             method in     method in             Other        
            Beginning     Acquisi     earnings     prehensive     Capital     retained     capital     Dividend     increase     Ending  
            balance     -tion     (losses)     income     surplus     earnings     adjustments     received     (decrease)     balance  
Less: three months ended March 31, 2009
                    7,030       (36,800 )     16,418       1,758       (56,043 )     17,921       (6,817 )     (7,289 )        
 
                                                                       
 
                                                                                       
Three months ended June 30, 2009
                  W 156,302       (W36,222 )     (W29,326 )   W 245     W     W 359     W     W          
 
                                                                       
 
(Note a)   Investments were recorded using the equity method of accounting based on unaudited and unreviewed financial statements as of and for the six months ended June 30, 2009. In order to verify the reliability of such unaudited and unreviewed financial statements, the Company has performed the following procedures and found no significant errors:
 
  i)   obtained the signature from the chief executive officer of the equity method investee asserting that the unaudited and unreviewed financial statements are accurate
 
  ii)   checked whether the major transactions identified by the Company, including public disclosures, were appropriately reflected in the unaudited and unreviewed financial statements
 
  iii)   performed an analytical review on the unaudited and unreviewed financial statements
 
(Note b)   Investments in equity securities are carried using the equity method of accounting based on the financial statements as of December 31, 2008 as information as of June 30, 2009 was not available and the change in the Company’s portion of stockholders’ equity of the investee for the six months ended June 30, 2009 was immaterial.
 
(Note c)   The Company received dividends from SK Telink Co., Ltd. and Paxnet Co., Ltd., and the corresponding amount was deducted from the carrying amount of equity method securities.
 
(note d)   Other decrease in investments in Aircross Co., Ltd. represents the collection of the Company’s investment resulting from the full liquidation of Aircross Co., Ltd.

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        For the six months ended June 30, 2008  
                                        Equity                      
                        Equity in     Equity in other     method in             Other        
        Beginning             earnings     comprehensive     capital     Dividend     increase     Ending  
        balance     Acquisition     (losses)     income     adjustments     received     (decrease)     balance  
 
                                                                   
SK Broadband Co., Ltd.
      W     W 1,093,104     (W 11,628 )   W 4,573     W     W     W 116,525     W 1,202,574  
SK Communications Co., Ltd.
        149,850             (2,409 )     7,402                         154,843  
SK Telink Co., Ltd.
        97,136             12,671       (17 )           (5,947 )           103,843  
SK Wyverns Baseball Club Co., Ltd.
  (Note a)                 (989 )                              
Paxnet Co., Ltd.
        30,237             (65 )     407             (447 )           30,132  
F&U Credit Information Co., Ltd.
  (Note a)     3,851             (21 )                             3,830  
TU Media Corp.
        5,527       55,000       (9,770 )           (30,642 )                 20,115  
Aircross Co., Ltd.
  (Note a)     5,967             (939 )     (18 )                       5,010  
IHQ, Inc.
        38,911             (6,799 )     704                         32,816  
Ntreev Soft Co., Ltd.
        13,221             (5,343 )     76                         7,954  
Baba Club
  (Note a)     1,733                                     (1,733 )      
Commerce Planet Co., Ltd.
  (Note a)     6,266             (199 )                       1,733       7,800  
Loen Entertainment, Inc.
        21,415             711       (3,143 )                       18,983  
Harex Info Tech, Inc.
  (Note a)     1,118             (175 )                             943  
SK Mobile
  (Note a)     3,272                                           3,272  
SKT Vietnam PTE Ltd.
        101,412             (8,998 )     10,855       (71 )                 103,198  
Skytel Co., Ltd.
  (Note a)     7,797             (52 )     (1 )                       7,744  
SK China Company Ltd.
  (Note a)                 54       83                         137  
SK Telecom China Co., Ltd.
  (Note a)     7,154             3                               7,157  
TR Entertainment
              10,635       (978 )     193                         9,850  
ULand Company Ltd.
        5,290             2,882       825                         8,997  
SK Telecom USA Holdings, Inc.
        63,023       58,145       (65,715 )     (6,757 )                       48,696  
SKT Americas, Inc.
  (Note a)     26,454             132       2,943                         29,529  
SK Telecom China Holding Co., Ltd.
        19,070       3,031       (1,120 )     4,674                         25,655  
SK USA, Inc.
  (Note a)     3,140                                           3,140  
Helio, LLC & Inc.
        333             (573 )     16       340                   116  
Korea IT Fund
        210,568             3,914       (581 )                       213,901  
Centurion IT Investment Association
        2,463                                     (2,463 )      
1st Music Investment Fund of SK-PVC
  (Note a)     5,607                                           5,607  
2nd Music Investment Fund of SK-PVC
  (Note a)     8,517             (338 )                             8,179  
SK-KTB Music Investment Fund
        13,367             236       (1,113 )                       12,490  
IMM Cinema Fund
        9,089             (782 )                             8,307  
Michigan Global Cinema Fund
  (Note a)     3,542                                           3,542  
3rd Fund of Isu Entertainment
  (Note a)     1,690                                           1,690  
SK Marketing & Company Co. Ltd
              190,000       1,336       (125,332 )                       66,004  
Cyworld China Holdings
  (Note a)           10,272                                     10,272  
Magic Tech Network
  (Note a)           7,929                                     7,929  
 
                                                   
 
                                                                   
Total
      W 867,020       1,428,116       (94,954 )     (104,211 )     (30,373 )     (6,394 )     114,062     W 2,174,255  
 
                                                               
Less: three months ended March 31, 2008
                1,205,778       (39,158 )     7,144       (30,317 )     (6,394 )     114,062          
 
                                                       
Three months ended June 30, 2008
              W 222,338     (W 55,796 )   (W 111,355 )   (W 56 )   W     W          
 
                                                       

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(Note a)   Investments in equity securities are carried using the equity method of accounting based on the financial statements as of December 31, 2007 as information as of June 30, 2008 was not available and the change in the Company’s portion of stockholders’ equity of the investee for the six months ended June 30, 2008 was immaterial.
    Details of changes in the differences between the acquisition cost and net asset value of equity method investees at the acquisition date for the three months and six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                                 
    For the six months ended June 30, 2009  
    Beginning     Increase/             Ending  
    balance     (decrease)     Amortization     balance  
SK Broadband Co., Ltd.
  W 534,051     W     (W 5,062 )   W 528,989  
SK Communications Co., Ltd.
    12,122             (446 )     11,676  
Paxnet Co., Ltd.
    15,018             (536 )     14,482  
F&U Credit Information Co., Ltd.
    503             (11 )     492  
IHQ, Inc.
    13,767             (2,753 )     11,014  
Ntreev Soft Co., Ltd.
    595             (297 )     298  
Loen Entertainment, Inc.
    1,223             (408 )     815  
Harex Info Tech, Inc.
    351             (176 )     175  
Skytel Co., Ltd.
    (1,387 )           1,387        
SK China Company Ltd.
    106             (106 )      
TR Entertainment
    6,856             (807 )     6,049  
Virgin mobile USA, Inc.
    125,930             (13,256 )     112,674  
Magic Tech Network
    5,562             (618 )     4,944  
Prmaxsoftware Tech. Co., Ltd.
    691             (345 )     346  
 
                       
 
                               
Total
  W 715,388             (23,434 )   W 691,954  
 
                           
Less: three months ended March 31, 2009
                  (4,019 )        
 
                           
Three months ended June 30, 2009
          W     (W 19,415 )        
 
                           
                                 
    For the six months ended June 30, 2008  
    Beginning     Increase/             Ending  
    balance     (decrease)     Amortization     balance  
SK Broadband Co., Ltd.
  W     W 565,174     (W 7,064 )   W 558,110  
SK Communications Co., Ltd.
    21,019       (8,005 )     (446 )     12,568  
Paxnet Co., Ltd.
    16,091             (536 )     15,555  
F&U Credit Information Co., Ltd.
    545             (21 )     524  
IHQ, Inc.
    19,274             (2,754 )     16,520  
Ntreev Soft Co., Ltd.
    1,282       (92 )     (298 )     892  
Baba Club
    2,504       (2,504 )            
Commerce Planet Co., Ltd.
    3,950             (439 )     3,511  
Loen Entertainment, Inc.
    2,039             (408 )     1,631  
Harex Info Tech, Inc.
    701             (175 )     526  
Uland Company Ltd.
    4,245             (129 )     4,116  
TR Entertainment
          7,748       (387 )     7,361  
Cyworld China Holdings
          6,904             6,904  
 
                       
 
                               
Total
  W 71,650       569,225       (12,657 )   W 628,218  
 
                           
Less: three months ended March 31, 2008
            560,805       (2,634 )        
 
                           
Three months ended June 30, 2008
          W 8,420     (W 10,023 )        
 
                           

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    Details of changes in unrealized inter-company gains incurred from sales of assets for the three months and six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                                 
    For the six months ended June 30, 2009  
    Beginning                     Ending  
Subsidiary   balance     Increase     Decrease     balance  
 
                               
SK Communications Co., Ltd.
  W 269     W     (W 70 )   W 199  
SK China Company Ltd.
    1,086                   1,086  
 
                       
 
                               
Total
  W 1,355             (70 )   W 1,285  
 
                           
Less: three months ended March 31, 2009
                  (35 )        
 
                           
Three months ended June 30, 2009
          W     (W 35 )        
 
                           
                                 
    For the six months ended June 30, 2008  
    Beginning                     Ending  
Subsidiary   balance     Increase     Decrease     balance  
 
                               
SK Communications Co., Ltd.
  W 2,192     W     (W 1,853 )   W 339  
Uland Company Limited.
    2,981             (2,981 )      
SK China Company Ltd.
    1,086                   1,086  
 
                       
 
                               
Total
  W 6,259             (4,834 )   W 1,425  
 
                           
Less: three months ended March 31, 2008
                  (4,799 )        
 
                           
Three months ended June 30, 2008
          W     (W 35 )        
 
                           
    Details of market price of the equity securities accounted for using the equity method as of June 30, 2009 are as follows (In millions of Korean won, except for market price per share):
                         
    Market price   Number of    
    per share   shares owned by    
    (In Korean won)   the Company   Market price
SK Broadband Co., Ltd.
  W 5,200       102,451,249     W 532,746  
SK Communications Co., Ltd.
    9,540       28,029,945       267,406  
IHQ, Inc.
    1,600       14,960,784       23,937  
Loen Entertainment, Inc.
    5,070       16,054,812       81,398  

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    The condensed financial information of the investees as of and for the six months ended June 30, 2009 is as follows (In millions of Korean won):
                                 
    Total   Total           Net
    assets   liabilities   Revenue   income (loss)
 
                               
SK Broadband Co., Ltd.
  W 2,900,582     W 1,700,757     W 156,101       (W72,211 )
SK Communications Co., Ltd.
    270,184       69,239       97,861       (10,484 )
SK Telink Co., Ltd.
    195,012       63,186       144,682       14,736  
SK Marketing & Company Co., Ltd.
    575,523       368,423       128,730       14,493  
PS&Marketing Corporation
    140,372             113,589       (9,628 )
Paxnet Co., Ltd.
    41,420       14,830       21,677       2,262  
TU Media Corp.
    283,656       255,136       65,436       (4,291 )
IHQ, Inc.
    52,195       17,170       19,752       (105 )
Ntreev Soft Co., Ltd.
    22,390       8,736       9,824       (635 )
Loen Entertainment, Inc.
    91,995       31,869       45,859       2,609  
SKT Vietnam PTE Ltd.
    159,904       21,943       78       (16,294 )
Skytel Co., Ltd.
    55,168       4,951       19,824       8,015  
TR Entertainment
    7,930       1,508       6,186       (297 )
ULand Company Limited
    8,949       2,433       2,954       (988 )
Virgin Mobile USA, Inc.
    416,004       778,007       455,652       24,398  
SKT Americas, Inc
    42,141       10,722       6,831       115  
SK Telecom China Holdings
    45,718       11,634       12,061       (1,832 )
Korea IT Fund
    331,841             10,241       (1,175 )
SKT-KTB Music Investment Fund
    18,239       56       230       (808 )
IMM Cinema Fund
    18,063             243       185  
SK Telecom Global Investment B.V.
    38,744       69       296       82  
SKY Property Mgmt. Ltd.
    667,876       177,755       20,768       980  
2nd Benex Focus investment Fund
    30,345       280       491       (69 )
Open Innovation Fund
    20,545       190       390       11  
5.   LOANS TO EMPLOYEES
    Short-term and long-term loans to employees as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won):
                                 
    June 30, 2009     December 31,  
    Short-term     Long-term     Total     2008  
 
                               
Loans to employees’ stock ownership Association (Note)
  W 1,187     W 58,169     W 59,356     W 60,908  
Loans to employees for housing and other
    52       20       72       106  
 
                       
 
                               
Total
  W 1,239     W 58,189     W 59,428     W 61,014  
 
                       
 
(Note)   The Company loaned the amount above to employees’ stock ownership association to help fund employees’ acquisition of the Company’s treasury stocks. The loan will be repaid over a period of five years, beginning on the second anniversary of each loan date and will expire on December 25, 2014.

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6.   PROPERTY AND EQUIPMENT
    Property and equipment as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won):
                     
    Useful lives            
    (years)   June 30, 2009     December 31, 2008  
 
                   
Land
    W 455,967     W 447,088  
Buildings and structures
  30,15     1,511,108       1,510,018  
Machinery
  6     13,481,672       13,441,993  
Vehicles
  4     20,029       21,070  
Other
  4     1,006,974       1,016,133  
Construction in progress
      426,386       281,574  
 
               
 
                   
 
        16,902,136       16,717,876  
Less: accumulated depreciation
        (12,284,018 )     (12,019,662 )
 
               
 
                   
Property and equipment, net
      W 4,618,118     W 4,698,214  
 
               
    Details of change in property and equipment for the six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                                                 
    For the six months ended June 30, 2009  
    Beginning                                     Ending  
    balance     Acquisition     Disposal     Transfer     Depreciation     balance  
 
                                               
Land
  W 447,088     W 8,431     (W 70 )   W 518     W     W 455,967  
Buildings and structures
    1,012,226       940             151       (28,241 )     985,076  
Machinery
    2,594,086       7,513       (1,629 )     408,653       (578,833 )     2,429,790  
Vehicles
    2,035       43       (41 )           (556 )     1,481  
Other
    361,205       500,215       (15,327 )     (479,935 )     (46,740 )     319,418  
Construction in progress
    281,574       130,510             14,302             426,386  
 
                                   
 
                                               
Total
  W 4,698,214     W 647,652     (W 17,067 )   (W 56,311 )   (W 654,370 )   W 4,618,118  
 
                                   
                                                 
    For the six months ended June 30, 2008  
    Beginning                                     Ending  
    balance     Acquisition     Disposal     Transfer     Depreciation     balance  
 
                                               
Land
  W 444,252     W 61     (W 554 )   W 1,291     W     W 445,050  
Buildings and structures
    1,054,484       1,207       (863 )           (27,967 )     1,026,861  
Machinery
    2,495,252       4,642       (1,705 )     290,192       (545,648 )     2,242,733  
Vehicles
    3,196       52       (239 )           (911 )     2,098  
Other
    305,095       466,705       (15,133 )     (403,492 )     (45,530 )     307,645  
Construction in progress
    292,134       112,263       (1,259 )     48,150             451,288  
 
                                   
 
                                               
Total
  W 4,594,413       584,930       (19,753 )     (63,859 )     (620,056 )   W 4,475,675  
 
                                   

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7.   INTANGIBLE ASSETS
    Intangible assets as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won):
                                                 
    June 30, 2009     December 31, 2008  
    Acquisition     Accumulated     Carrying     Acquisition     Accumulated     Carrying  
    cost     amortization     amounts     cost     amortization     amounts  
 
                                               
Goodwill
  W 2,341,625     (W 967,199 )   W 1,374,426     W 2,341,625     (W 902,259 )   W 1,439,366  
Frequency use rights
    1,385,120       (599,615 )     785,505       1,385,120       (541,349 )     843,771  
Software development costs
    188,358       (177,146 )     11,212       188,358       (174,869 )     13,489  
Computer software
    1,232,786       (692,483 )     540,303       1,174,908       (586,654 )     588,254  
Other
    143,988       (87,566 )     56,422       139,562       (82,850 )     56,712  
 
                                   
 
                                               
 
  W 5,291,877     (W 2,524,009 )   W 2,767,868     W 5,229,573     (W 2,287,981 )   W 2,941,592  
 
                                   
    Details of changes in intangible assets for the six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                                                 
    For the six months ended June 30, 2009  
    Beginning                                     Ending  
    balance     Increase     Decrease     Transfer     Amortization     balance  
 
                                               
Goodwill
  W 1,439,366     W     W     W     (W 64,940 )   W 1,374,426  
Frequency use rights
    843,771                         (58,266 )     785,505  
Software development costs
    13,489                         (2,277 )     11,212  
Computer software
    588,254       1,804       (138 )     56,563       (106,180 )     540,303  
Other
    56,712       4,991       (87 )     50       (5,244 )     56,422  
 
                                   
 
                                               
Total
  W 2,941,592       6,795       (225 )     56,613       (236,907 )   W 2,767,868  
 
                                   
                                                 
    For the six months ended June 30, 2008  
    Beginning                                     Ending  
    balance     Increase     Decrease     Transfer     Amortization     balance  
 
                                               
Goodwill
  W 1,569,247     W     W     W     (W 64,940 )   W 1,504,307  
Frequency use rights
    960,302                         (58,266 )     902,036  
Software development costs
    13,029                   2,351       (6,052 )     9,328  
Computer software
    585,574       2,479             60,158       (94,548 )     553,663  
Other
    46,790       9,089       (136 )     1,553       (4,311 )     52,985  
 
                                   
 
                                               
Total
  W 3,174,942       11,568       (136 )     64,062       (228,117 )   W 3,022,319  
 
                                   

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    The book value as of June 30, 2009 and residual useful lives of major intangible assets are as follows (In millions of Korean won):
                 
    Amount   Description   Residual useful lives
 
               
Goodwill
  W 1,370,567     Goodwill related to acquisition of Shinsegi Telecomm, Inc.   10 years and 9 months
IMT license
    724,910     Frequency use rights relating to W-CDMA Service   (Note a)
WiBro license
    55,637     WiBro Service   (Note b)
DMB license
    4,958     DMB Service   7 years
 
(Note a)   Amortization of the IMT license commenced when the Company started its commercial IMT 2000 service in December 2003, using the straight-line method over the estimated useful life (13 years) of the IMT license which expires in December 2016.
 
(Note b)   The Company purchased the WiBro license from MIC on March 30, 2005. The license period is seven years from the purchase date. Amortization of the WiBro license commenced when the Company started its commercial WiBro services on June 30, 2006 using the straight line basis over the remaining useful life.

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8.   BONDS PAYABLE
    Bonds payable as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won and thousands of Foreign Currency):
                                 
    Maturity   Annual interest   June   December
    year   rate (%)   30, 2009   31, 2008
 
                               
Domestic general bonds
    2009       5.0     W     W 300,000  
²
    2010       4.0       200,000       200,000  
²
    2010       6.77       50,000       50,000  
²
    2011       3.0       200,000       200,000  
²
    2013       4.0       200,000       200,000  
²
    2013       6.92       250,000       250,000  
²
    2014       5.0       200,000       200,000  
²
    2015       5.0       200,000       200,000  
²
    2016       5.0       200,000       200,000  
²
    2016       5.54       40,000      
²
    2016       5.94       230,000      
²
    2018       5.0       200,000       200,000  
Dollar denominated bonds (US$ 300,000)
    2011       4.25       385,410       377,250  
Dollar denominated bonds (US$ 400,000)
    2027       6.63       513,880       503,000  
Yen denominated bonds (JPY 12,500,000)
    2012     3-month Euro Yen
LIBOR rate +0.55 (Note a)
    167,035       174,237  
Yen denominated bonds (JPY 5,000,000)
    2012     3-month Euro Yen
TIBOR rate +2.5 (Note b)
    66,814      
Yen denominated bonds (JPY 3,000,000)
    2012     3-month Euro Yen
LIBOR rate +2.5 (Note a)
    40,088      
Convertible bonds (US$ 229,160)
    2009                   268,415  
Convertible bonds (US$ 332,528)
    2014       1.75       437,674      
Floating rate notes (US$ 150,000,000)
    2010     3-month
LIBOR rate +3.05 (Note c)
    192,705       188,625  
Floating rate notes (US$ 220,000,000)
    2012     3-month
LIBOR rate +3.15 (Note c)
    282,634      
 
                               
 
                               
Total
                    4,056,240       3,511,527  
Less discounts on bonds
                    (69,800 )     (61,143 )
Less conversion right adjustments
                    (89,456 )     (5,733 )
Add long-term accrued interest
                          17,256  
 
                               
 
                               
Net
                    3,896,984       3,461,907  
Less portion due within one year
                    (198,974 )     (579,424 )
 
                               
 
                               
Long-term portion
                  W 3,698,010     W 2,882,483  
 
                               
 
(Note a)   The 3-months Euro Yen LIBOR rate as of June 30, 2009 is 0.46%.
 
(Note b)   The 3-months Euro Yen TIBOR rate as of June 30, 2009 is 0.56%.
 
(Note c)   The 3-months LIBOR rate as of June 30, 2009 is 0.60%.

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    All of the above bonds will be paid in full at maturity.
 
    On April 7, 2009, the Company issued convertible bonds with a maturity of five years in the principal amount of US$332,528,000 for US$326,397,463 with an initial conversion price of W230,010 per share of the Company’s common stock, which was greater than market value at the date of issuance. The Company may redeem the principal amount after 3 years from the issuance date if the market price exceeds 130% of the conversion price during a predetermined period. On the other hand, the bond holders may redeem their notes at 100% of the principal amount on April 7, 2012 (3 years from the issuance date). The conversion right may be exercised during the period from May 18, 2009 to March 24, 2014 and the number of common shares to be converted as of June 30, 2009 is 1,999,997 shares.
 
    Conversion of notes to common shares may be prohibited under the Telecommunications Law or other legal restrictions which restrains foreign governments, individuals and entities from owning more than 49% of the Company’s voting stock, if this 49% ownership limitation is violated due to the exercise of conversion rights. In this case, the Company will pay a bond holder as cash settlement determined at the average price of one day after a holder exercises its conversion right or the weighted average price for the following five or twenty business days. The Company intends to sell treasury shares held in trust by the Company that corresponds to the number of shares of common stock that would have been delivered in the absence of the 49% foreign shareholding restrictions. Unless either previously redeemed or converted, the notes are redeemable at 100% of the principal amount at maturity.
 
    During the six months ended June 30, 2009, no conversion was made.
9.   LONG-TERM BORROWINGS
    Long-term borrowings as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won and thousands of U.S. dollars):
                             
        Final   Annual interest   June 30,     December 31,  
    Lender   maturity year   rate (%) (Note)   2009     2008  
 
                           
Long-term floating rate discount bill
  Shinhan Bank   June 29, 2011   91 days CD yield + 0.25%   W 200,000     W 200,000  
Long-term floating rate borrowings
  KDB   July 28, 2011   91 days CD yield + 1.02%     100,000       100,000  
²
  Citibank   July 29, 2011   91 days CD yield + 1.20%     100,000       100,000  
²
  Nonghyup   July 30, 2011   91 days CD yield + 1.30%     100,000       100,000  
²
  Hana Bank   July 31, 2011   91 days CD yield + 1.50%     150,000       150,000  
²
  Nonghyup   August 12, 2011   91 days CD yield + 1.50%     50,000       50,000  
²
  Calyon Bank   October 10, 2013   6M LIBOR + 0.29%   US$ 50,000     US$ 50,000  
²
  DBS Bank   October 10, 2013   6M LIBOR + 0.29%     25,000       25,000  
²
  SMBC   October 10, 2013   6M LIBOR + 0.29%     25,000       25,000  
²
                       
 
                           
 
              US$ 100,000     US$ 100,000  
Total
              W 700,000     W 700,000  
 
                       
 
                           
Equivalent in Korean won
              W 828,470     W 825,750  
Less current portion
                       
 
                       
 
                           
Long-term borrowings
              W 828,470     W 825,750  
 
                       
    The above long-term floating rate discount bill is classified as long-term borrowing as the borrowing is to be rolled-over exceeding 1 year from June 30, 2009 in accordance with the loan agreement.
 
(Note)   At June 30, 2009, the 91 days CD yield and the 6M LIBOR rate are 2.41% and 1.11%, respectively.

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10.   CAPITAL STOCK AND CAPITAL SURPLUS
    The Company’s capital stock consists entirely of common stock with a par value of W500. The number of authorized and issued shares as of June 30, 2009 and December 31, 2008 are as follows:
                 
    June 30, 2009   December 31, 2008
 
               
Authorized shares
    220,000,000       220,000,000  
Issued shares
    80,745,711       81,193,711  
Outstanding shares, net of treasury stock
    72,345,003       72,486,015  
    Significant changes in capital stock and capital surplus for the six months ended June 30, 2009 and for the year ended December 31, 2008 are as follows (In millions of Korean won except for share data):
                         
    Number of shares             Additional paid in  
    issued (Note)     Capital stock     capital  
 
                       
At December 31, 2008
    81,193,711     W 44,639     W 2,915,887  
 
                 
 
                       
At June 30, 2009
    80,745,711     W 44,639     W 2,915,887  
 
                 
 
(Note)   During the year ended December 31, 2003, 2006 and the six months ended June 30, 2009, the Company retired 7,002,235 shares, 1,083,000 shares and 448,000 shares, respectively, and reduced retained earnings before appropriations in accordance with the Korean Commercial Law. As a result, the total par value of outstanding capital stock does not agree to the capital balance of capital stock. In addition, there are no changes in capital stock for the six months ended June 30, 2009 and for the year ended December 31, 2008.
11.   TREASURY STOCK
    The Company retired 448,000 shares of common stock at January 9, 2009 in accordance with Korean Commercial law, which were acquired by the Company from December 2, 2008 through January 7, 2009 for W92,477 million. As a result of these transactions, retained earnings decreased by W92,477 million.

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12.   INCOME TAX
  a.   Details of income tax expense
 
      Income tax expense for the three months and the six months ended June 30, 2009 and 2008 consists of the following (In millions of Korean won):
                 
    2009     2008  
 
               
Current
  W 221,736     W 353,170  
Changes in net deferred tax liabilities (note a)
    (22,021 )     (87,780 )
 
           
 
               
Income tax expense
    199,715       265,390  
Less three months ended March 31
    (106,548 )     (134,702 )
 
           
 
               
Three months ended June 30
  W 93,167     W 130,688  
 
           
 
(Note a)   Changes in net deferred tax liabilities for the six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                 
    2009     2008  
 
               
Ending balance of net deferred tax liabilities
  W 307,549     W 736,151  
Beginning balance of net deferred tax liabilities
    (257,939 )     (1,015,002 )
Adjustment to the beginning net deferred tax liabilities based on tax return filed
    5,319       3,945  
Tax effect of temporary differences charged or credited directly to related components of stockholders’ equity
    (76,950 )     187,126  
 
           
 
  (W 22,021 )   (W 87,780 )
 
           
b.   An explanation of the relationship between income tax expense and accounting income before income tax expense for the six months ended June 30, 2009 and 2008 is as follows (In millions of Korean won) :
                 
    2009     2008  
 
               
Income before income tax
  W 828,107     W 946,285  
Income tax expense at statutory income tax rate (12.1% of taxable income less than W200 million and 24.2% of taxable income exceeding W200 million)
    200,377       260,215  
Differences (Note)
    (662 )     5,175  
 
           
 
               
Income tax expense
  W 199,715     W 265,390  
 
           
 
               
Effective tax rates
    24.12 %     28.05 %
 
           

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(Note)   The differences between income tax computed using the statutory corporate income tax rates and the recorded income tax for the six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                 
    2009     2008  
 
               
Permanent difference
  W 21,861     W 17,064  
Changes in deferred income tax assets (liabilities) recognized related to equity method investment securities
    19,008       20,128  
Tax credit for investment
    (40,693 )     (36,396 )
Other tax credits
    (1,794 )     (831 )
Sur tax on exempted income
    7,412       6,629  
Tax refund for prior periods
    (6,456 )     (1,419 )
 
           
 
               
 
  (W 662 )   W 5,175  
 
           

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13.   COMPREHENSIVE INCOME
    Details of comprehensive income for the three months and six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
 
    For the six months ended June 30, 2009
                                 
    For the     For the  
    three months ended     six months ended  
    Profit and             Profit and        
    loss effect     Tax effect     loss effect     Tax effect  
 
                               
Net income
  W 311,643             W 628,392          
Other comprehensive income (loss):
                               
Unrealized gain on valuation of long-term investment securities, net
    407,946     (W 116,662 )     189,697     (W 53,183 )
Equity in other comprehensive income of affiliates, net
    (23,077 )     6,249       (16,101 )     (3,192 )
Gain (loss) on valuation of currency swap, net
    18,987       (5,355 )     (2,394 )     675  
Loss on valuation of interest swap, net
    5,760       (1,625 )     7,424       (2,094 )
 
                       
Sub total
    409,616     (W 117,393 )     178,626     (W 57,794 )
 
                       
 
                               
Comprehensive income
  W 721,259             W 807,018          
 
                           
    For the six months ended June 30, 2008
                                 
    For the     For the  
    three months ended     six months ended  
    Profit and             Profit and        
    loss effect     Tax effect     loss effect     Tax effect  
Net income
  W 298,010             W 680,895          
Other comprehensive income (loss):
                               
Unrealized gain on valuation of long-term investment securities, net
    (63,782 )   W 24,193       (499,415 )   W 189,433  
Equity in other comprehensive income of affiliates, net
    (112,141 )     (786 )     (106,030 )     (1,463 )
Loss on valuation of currency swap, net
    10,296       (3,905 )     3,337       (1,265 )
Loss on valuation of interest swap, net
    2,213       (839 )     (48 )     18  
 
                       
Sub total
    (163,414 )   W 18,663       (602,156 )   W 186,723  
 
                       
 
                               
Comprehensive income
  W 134,596             W 78,739          
 
                           

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14.   NET INCOME PER SHARE
    The Company’s net income and ordinary income per share amounts for the three months and six months ended June 30, 2009 and 2008 is computed as follows (In millions of Korean won, except for per share income per share):
 
    Net income and ordinary income per share
                                 
    For the     For the  
    three months ended     six months ended  
    June 30,     June 30,     June 30,     June 30,  
    2009     2008     2009     2008  
Net income and ordinary income
  W 311,643     W 298,010     W 628,392     W 680,895  
Weighted average number of common shares outstanding
    72,345,003       72,793,003       72,348,552       72,767,821  
 
                       
 
                               
Net income and ordinary income per share
  W 4,308     W 4,094     W 8,686     W 9,357  
 
                       
    Net income and ordinary income per share for the year ended December 31, 2008 is W17,559 and net income and ordinary income per share for the three months ended March 31, 2009 and 2008 is W4,378 and W5,264, respectively.
 
    The weighted average numbers of common shares outstanding for the three months and six months ended June 30, 2009 and 2008 are calculated as follows:
                     
    Number of   Weighted   Weighted
    shares   number of days   number of shares
For the three months ended June 30, 2009
                   
Outstanding common stocks at January 1, 2009
    81,193,711     91 / 91     81,193,711  
Treasury stocks at January 1, 2009
    (8,707,696 )   91 / 91     (8,707,696 )
Disposal of treasury stock
    (141,012 )   91 / 91     (141,012 )
 
                   
Total
    72,345,003           72,345,003  
 
                   
 
                   
For the six months ended June 30, 2009
                   
Outstanding common stocks at January 1, 2009
    81,193,711     181 / 181     81,193,711  
Treasury stocks at January 1, 2009
    (8,707,696 )   181 / 181     (8,707,696 )
Acquisition of treasury stock
    (141,012 )   (note a)     (137,463 )
 
                   
Total
    72,345,003           72,348,552  
 
                   
 
(Note a)   The Company acquired treasury stocks on many different dates, and weighted number of shares was calculated considering each transaction date as follows:
                     
    Number of   Weighted   Weighted
    shares   number of days   number of shares
For the six months ended June 30, 2008
                   
Outstanding common stocks at January 1, 2008
    81,193,711     91 / 91     81,193,711  
Treasury stocks at January 1, 2008
    (8,609,034 )   91 / 91     (8,609,034 )
Disposal of treasury stock
    208,326     91 / 91     208,326  
 
                   
Total
    72,793,003           72,793,003  
 
                   
 
                   
For the six months ended June 30, 2008
                   
Outstanding common stocks at January 1, 2008
    81,193,711     182 / 182     81,193,711  
Treasury stocks at January 1, 2008
    (8,609,034 )   182 / 182     (8,609,034 )
Disposal of treasury stock
    208,326     160 / 182     183,144  
 
                   
Total
    72,793,003           72,767,821  
 
                   
    Diluted net income and ordinary income per share amounts for the three months and six months ended June 30, 2009 and 2008 is computed as follows (In millions of won, except for share data):

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    Diluted net income and ordinary income per share
                                 
    For the     For the  
    three months ended     six months ended  
    June 30,     June 30,     June 30,     June 30,  
    2009     2008     2009     2008  
 
                               
Adjusted net income and ordinary income
  W 317,733     W 300,613     W 637,294     W 686,075  
Adjusted weighted average number of common shares outstanding
    75,050,417       74,110,497       74,390,846       74,085,315  
 
                       
 
                               
Diluted net income and ordinary income per share
  W 4,234     W 4,056     W 8,567     W 9,261  
 
                       
    Diluted net income and ordinary income per share for the year ended December 31, 2008 was W17,395 and diluted net income and ordinary income per share for the three months ended March 31, 2009 and 2008 is W4,335 and W5,205, respectively.
 
    Adjusted net income and ordinary income per share and the adjusted weighted average number of common shares outstanding for the three months and six months ended June 30, 2009 and 2008 are calculated as follows:
                                 
    For the     For the  
    three months ended     six months ended  
    June 30,     June 30,     June 30,     June 30,  
    2009     2008     2009     2008  
 
                               
Net income and ordinary income
  W 311,643     W 298,010     W 628,392     W 680,895  
Effect of convertible bonds (Note a)
    6,090       2,603       8,902       5,180  
 
                       
Adjusted net income and ordinary income
  W 317,733     W 300,613     W 637,294     W 686,075  
 
                       
 
                               
Weighted average number of common shares outstanding
    72,345,003       72,793,003       72,348,552       72,767,821  
Effect of exchangeable bonds (Note a)
    2,705,414       1,317,494       2,042,294       1,317,494  
 
                       
Adjusted weighted average number of common shares outstanding
    75,050,417       74,110,497       74,390,846       74,085,315  
 
                       
 
(Note a)   The effect of exchangeable bonds increased net income related to interest expenses that would not have been incurred, and increase in the weighted average number of common shares outstanding related to common shares that would have been issued, assuming that the conversion of convertible bonds was made on the beginning of the period.

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15.   RESTRICTED CASH AND CASH EQUIVALENTS
    As of June 30, 2009, the Company has guarantee deposits restricted for checking accounts totaling W19 million and deposits restricted for a charitable trust for small businesses in cooperation with SK Group amounting to W50,000 million of which due date is June 2, 2010 and for the public amounting to W6,500 million of which due date is May 4, 2011.
16.   RELATED PARTY TRANSACTIONS
    As of June 30, 2009 and December 31, 2008, the parent company and subsidiaries of the Company are as follows:
  a.   Holding company and subsidiaries
                 
        Ownership    
Type   Company   percentage (%)   Types of business
Ultimate parent company
  SK C&C Co., Ltd.   (Note a)   Information technology and software production
Parent company
  SK Holdings Co., Ltd.   23.1 (Note b)   Holding company
Subsidiary
  SK Broadband Co., Ltd.     43.4     Internet website services and telecommunication service
²
  SK Communications Co., Ltd.     64.8     Internet website services
²
  SK Telink Co., Ltd.     90.8     Telecommunication service
²
  PAXNet Co., Ltd.     59.7     Internet website services
²
  F&U Credit Information Co., Ltd.     50.0     Credit and collection services
²
  TU Media Corp.     44.2     Digital multimedia broadcasting service
²
  IHQ, Inc.     37.1     Entertainment management
²
  Ntreev Soft Co., Ltd.     66.7     Game software production
²
  Commerce Planet Co., Ltd.     100.0     Cosmetic wholesale
²
  Loen Entertainment, Inc.     63.5     Release of music disc
²
  The Second Music Investment Fund of SK-PVC     79.3     Investment association
²
  SK-KTB Music Investment Fund     74.2     Investment association
²
  IMM Cinema Fund     45.6     Investment association
²
  SK I-Media Co., Ltd.   100.0 (Note c)   Game software production
²
  HanaroDream Incorporated   36.0 (Note c)   Internet digital contents distribution
²
  Benex Digital Cultural Contents Fund     19.9     Investment association
²
  Etoos Co., Ltd.   100.0 (Note c)   Web-based education service
²
  2nd Benex Focus Investment Fund     66.7     Investment association
²
  Open Innovation Fund     98.5     Investment association
²
  PS&Marketing Co., Ltd.     100.0     Retail
²
  SK Telecom China Holdings     100.0     Equity investment (Holding company)
²
  SK Telecom Advanced Tech & Service Center     100.0     Mobile solution production
²
  Shenzhen E-eye High Tech Co., Ltd.   65.5 (Notec c)   GPS manufacturing and selling
²
  SKY Property Mgmt. Ltd.     60.0     Equity investment
²
  SK Telecom Global Investment B.V.     100.0     Equity investment
²
  SKT Vietnam PTE Ltd.     73.3     Telecommunication service
²
  SK Telecom China Co., Ltd.     100.0     Telecommunication service
²
  SKT Americas, Inc.     100.0     Telecommunication service
 
(Note a)   SK C&C Co., Ltd. became the Company’s ultimate parent company as of December, 31, 2007.
 
(Note b)   The ownership percentage represents parent company’s ownership over the Company.
 
(Note c)   The ownership percentage represents subsidiaries’ ownership over their subsidiaries, in which the Company has no direct investment.

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  b.   Transactions and balances with related companies
      Significant related party transactions for the three months and six months ended June 30, 2009 and 2008, and account balances as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won):
  b-(1)   Transactions
                                                 
    For three months ended June 30, 2009     For six months ended June 30, 2009  
    Purchases of     Commissions     Commissions     Purchases of     Commissions     Commissions  
    property and     paid and     earned and     property and     paid and     earned and  
    equipment     other expenses     other income     equipment     Other expenses     other income  
Ultimate parent company:
                                               
SK C&C Co., Ltd.
  W 35,042     W 55,869     W 939     W 41,345     W 115,852     W 2,518  
 
                                               
Parent Company:
                                               
SK Holdings Co., Ltd.
          6,406       208             12,184       263  
 
                                               
Subsidiaries:
                                               
SK Broadband Co., Ltd.
          11,605       13,597             19,270       27,354  
SK Communications Co., Ltd.
          2,583       1,970             8,312       3,826  
SK Telink Co., Ltd.
          3,042       10,408             6,744       16,608  
F&U Credit Information Co., Ltd.
          12,335       334             23,241       662  
TU Media Corp.
    211       22,480       9,445       211       37,188       18,363  
SKT Americas, Inc.
          4,447                   11,030        
Loen Entertainment, Inc
          8,232       1,336             15,183       2,399  
Commerce Planet Co., Ltd.
    700       16,730       1,075       700       32,222       1,276  
SK Telecom China Holdings
          8,864                   17,179        
PS&Marketing Co., Ltd.
          55,632       191             55,632       191  
Others
          6,925       1,072             11,768       1,262  
 
                                               
Equity Method Investees:
                                               
SK Marketing & Company Co., Ltd.
          24,215       1,025             57,696       2,151  
SK Wyverns Baseball Club Co., Ltd.
          4,200       181             11,414       181  
Wave City Development Co. Ltd.
                21,280                   21,280  
Others
          2,384       693             5,364       889  
 
                                               
Others:
                                               
SK Energy Co., Ltd.
          231       1,135             545       1,658  
SK Engineering & Construction Co., Ltd.
    32,966       5,504       625       51,990       8,020       1,093  
SK Networks Co., Ltd.
    5,432       227,636       6,715       5,530       397,984       11,826  
SK Networks Service Co., Ltd.
          5,569                   11,287        
Innoace Co., Ltd.
    4,208       4,175       64       4,532       5,374       117  
SK Telesys Co., Ltd.
    62,354       1,955       432       75,803       2,291       489  
Others
    2,126       13,750       1,994       3,573       17,568       2,775  
 
                                   
 
                                               
Total
  W 143,039     W 504,769     W 74,719     W 183,684     W 883,348     W 117,181  
 
                                   

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    For three months ended June 30, 2008     For six months ended June 30, 2008  
    Purchases of     Commissions     Commissions     Purchases of     Commissions     Commissions  
    property and     paid and     earned and     property and     paid and     earned and  
    equipment     other expenses     other income     equipment     Other expenses     other income  
Ultimate parent company:
                                               
SK C&C Co., Ltd.
  W 30,111     W 46,811     W 1,872     W 41,325     W 96,366     W 4,043  
 
                                               
Parent Company:
                                               
SK Holdings Co., Ltd.
          156       91             306       168  
 
                                               
Subsidiaries:
                                               
SK Broadband Co., Ltd.
          4,475       16,591             4,475       16,591  
SK Communications Co., Ltd.
          8,790       1,881             12,601       3,616  
SK Telink Co., Ltd.
    26       3,416       6,810       41       6,979       13,738  
SK Wyverns Baseball Club Co., Ltd.
          4,500                   9,800        
PAXNet Co., Ltd.
          1,645       25             3,202       49  
F&U Credit Information Co., Ltd.
          11,604       328             22,699       647  
TU Media Corp.
          727       8,278       32       2,007       26,546  
Aircross Co., Ltd.
          5,041       430       35       8,858       664  
SKT America, Inc.
          2,860                   2,860        
Helio, LLC & Inc.
                192                   405  
Others
    840       28,674       727       840       35,861       3,326  
 
                                               
Equity Method Investees:
                                               
SK Marketing & Company Co., Ltd.
          5,838       2,448             5,838       2,448  
Others
    113       1,917             127       2,497        
 
                                               
Others:
                                               
SK Energy Co., Ltd.
          3,331       2,088             8,050       3,190  
SK Engineering & Construction Co., Ltd.
    41,845       2,429       553       49,639       2,623       1,292  
SK Networks Co., Ltd.
    254       190,794       3,668       2,456       397,401       6,959  
Innoace Co., Ltd.
    1,918       1,979       47       2,063       3,553       94  
SK Telesys Co., Ltd.
    20,739       1,727       57       63,658       2,048       149  
Others
    998       8,967       1,100       1,061       21,157       2,219  
 
                                   
 
                                               
Total
  W 96,844     W 335,681     W 47,186     W 161,277     W 649,181     W 86,144  
 
                                   

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  b-(2)   Account balances
                                                 
    As of June 30, 2009  
                                            Guarantee  
    Accounts     Short-term     Long-term     Guarantee     Accounts     deposits  
    receivable     loans     loans     deposits     payable     received  
 
                                               
Ultimate parent company:
                                               
SK C&C Co., Ltd.
  W 298     W     W     W     W 30,465     W 197  
 
                                               
Parent Company:
                                               
SK Holdings Co., Ltd.
    44                                
 
                                               
Subsidiaries:
                                               
SK Broadband Co., Ltd.
    455                   660       10       4,805  
SK Communications Co., Ltd.
    1,748                         5,186       5,524  
SK Telink Co., Ltd.
    903                         133       1,041  
F&U Credit Information Co., Ltd.
    8                         1,086        
TU Media Corp.
    6,920                         420       2,709  
SKT Americas, Inc.
                            10,453        
IHQ, Inc.
                            1,387        
Ntreev Soft Co., Ltd.
    2,051                         71        
Commerce Planet Co., Ltd.
    1,385                         7,336        
Loen Entertainment, Inc.
                            3,394        
SKT Vietnam PTE Ltd.
    4,220                                
SK Telecom China Co., Ltd.
    1,056                                
SK Telecom China Holdings
                            7,200        
PS&Marketing Co., Ltd.
    201                         43,311       5,048  
Others
    42                         1,062       150  
 
                                               
Equity Method Investees:
                                               
SK Marketing & Company Co., Ltd.
    771                         16,352       248  
Virgin Mobile USA, Inc.
    757             23,326                    
SK Wyverns Baseball Club Co., Ltd.
    159       575       2,982                    
Wave City Development Co. Ltd.
    23,408                                
Others
                            3,927        
 
                                               
Others:
                                               
SK Energy Co., Ltd.
    334                   96       24       23  
SK Engineering & Construction Co., Ltd.
    211                         2,670       519  
SK Networks Co., Ltd.
    967                   112       35,224       3,607  
Innoace Co., Ltd.
                            8,148       2,444  
SK Telesys Co., Ltd.
    186                         30,440        
Others
    2,043                   5,400       9,355       278  
 
                                   
 
                                               
Total
  W 48,167     W 575     W 26,308     W 6,268     W 217,654     W 26,593  
 
                                   

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    As of December 31, 2008  
                                            Guarantee  
    Accounts     Short-term     Long-term     Guarantee     Accounts     deposits  
    receivable     loans     loans     deposits     payable     received  
 
                                               
Ultimate parent company:
                                               
SK C&C Co., Ltd.
  W 2,399     W     W     W     W 98,342     W 24  
 
                                               
Parent Company:
                                               
SK Holdings Co., Ltd.
    46                                
 
                                               
Subsidiaries:
                                               
SK Broadband Co., Ltd.
    1,662                   60       5       4,805  
SK Communications Co., Ltd.
    1,450                         15,221       5,524  
SK Telink Co., Ltd.
    7,115                         24,215       1,217  
SK Wyverns Baseball Club Co., Ltd.
    114       575       2,982             11        
PAXNet Co., Ltd.
                            725       150  
F&U Credit Information Co., Ltd.
    38                         4,311        
TU Media Corp.
    4,318                         13,055       2,709  
SKT Americas, Inc.
                            8,234        
IHQ, Inc.
    29                         1,159        
Ntreev Soft Co., Ltd.
    32                         5,145        
Commerce Planet Co., Ltd.
    567                         5,966        
Loen Entertainment, Inc.
    3,523                         3,998        
SKT Vietnam PTE Ltd.
    3,130                                
SK Telecom China Co., Ltd.
    1,035                                
Others
    62                         4,172        
 
                                               
Equity Method Investees:
                                               
SK Marketing & Company Co., Ltd.
    1,113                         17,916       248  
Virgin Mobile USA, Inc.
    151             22,821                    
Aircross Co., Ltd.
    57                         397       276  
Others
                            1,575        
 
                                               
Others:
                                               
SK Energy Co., Ltd.
    45                   140       3,448        
SK Engineering & Construction Co., Ltd.
    203                         1,164       1,076  
SK Networks Co., Ltd.
    771                   112       57,400       3,537  
Innoace Co., Ltd.
                            3,889       2,444  
SK Telesys Co., Ltd.
    332                         11,152        
Others
    463                   900       8,057        
 
                                   
 
                                               
Total
  W 28,655     W 575     W 25,803     W 1,212     W 289,557     W 22,010  
 
                                   

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  c.   Compensation for the key management
 
      The Company considers registered directors who have substantial roles and responsibility for planning, operating, and controlling of the business as key management, and the considerations given to the key management for the three months and six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                                                 
    For the three months ended     For the six months ended  
    June 30, 2009     June 30, 2009  
            Severance                     Severance        
Payee   Payroll     indemnities     Total     Payroll     indemnities     Total  
 
                                               
8 Registered directors (including outside directors)
  W 282     W 17     W 299     W 956     W 35     W 991  
 
                                   
                                                 
    For the three months ended     For the six months ended  
    June 30, 2008     June 30, 2008  
            Severance                     Severance        
Payee   Payroll     indemnities     Total     Payroll     indemnities     Total  
 
                                               
12 Registered directors (including outside directors)
  W 299     W 74     W 373     W 3,832     W 409     W 4,241  
 
                                   
17.   PROVISION
  a.   Provision for point program
 
      The Company, for its marketing purposes, grants Rainbow Points and Point Box Points (the “Points”) to its subscribers based on their usage of the Company’s services. Points’ provision was provided based on the historical usage experience and the Company’s marketing policy. Such provision was recorded as accrued expenses or other non-current liabilities in accordance with the expected points’ usage duration since balance sheet date.
 
      Details of change in the provisions for such mileage points for the six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                 
    2009     2008  
 
               
Beginning balance
  W 24,889     W 27,668  
Increase
    7,248       2,608  
Decrease (used points)
    (11,433 )     (4,284 )
 
           
 
               
Ending balance
  W 20,704     W 25,992  
 
           

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      Points expire after 5 years. The expected year when unused points as of Jun 30, 2009 are expected to be used and the respective estimated monetary amount to be paid in a given year are as follows (In millions of Korean won):
                 
Expected usage   Estimated amount to be paid        
for the year ended June 30,   in nominal value (Note a)     Current value (Note b)  
 
               
2010
  W 9,325     W 8,846  
2011
    5,970       5,373  
2012
    3,830       3,270  
2013
    2,462       1,995  
2014
    1,588       1,220  
 
           
 
               
Ending balance
  W 23,175     W 20,704  
 
           
 
(Note a)   The above expected year of the usage and the current value of the estimated amount to be paid are estimated based on the historical usage experience.
  b.   Provision for handset subsidy
 
      The Company provides provision for handset subsidies to be provided to the subscribers who purchase handsets on installment basis. Such provision was recorded as accrued expenses or non-current liabilities in accordance with the expected points when the subsidies are paid. Details of change in the provision for handset subsidies for the six months ended June 30, 2009 and 2008 are as follows (In millions of Korean won):
                 
    2009     2008  
 
               
Beginning balance
  W 339,696     W  
Increase (provision)
    274,157       86,532  
Decrease (subsidy payment)
    (167,099 )     (9,643 )
 
           
 
               
Ending balance
  W 446,754     W 76,889  
 
           
      The estimated monetary amount to be paid in a given year is as follows (In millions of Korean won):
                 
Expected payment   Estimated amount to be paid        
for the year ended June 30,   in nominal value     Present value  
 
               
2010
  W 394,012     W 386,035  
2011
    64,142       60,719  
 
           
 
               
Ending balance
  W 458,154     W 446,754  
 
           
18.   DERIVATIVE INSTRUMENTS
  a.   Currency swap contract to which the cash flow hedge accounting is applied
 
      The Company has entered into a fixed-to-fixed cross currency swap contract with Citibank, BNP Paribas and Credit Suisse First Boston International to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds with face amounts totaling US$300,000,000 at annual fixed interest rate of 4.25% issued on April 1, 2004. As of June 30, 2009, in connection with unsettled foreign currency swap contract to which the cash flow hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to W9,014 million (net of tax effect totaling W3,084 million and foreign exchange translation loss arising from unguaranteed U.S. dollar denominated bonds totaling W40,592 million) was accounted for as accumulated other comprehensive loss.

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      In addition, the Company has entered into a floating-to-fixed cross currency swap contract with Calyon bank to hedge the foreign currency risk and the interest rate risk of U.S. dollar denominated long-term borrowings with face amounts totaling US$100,000,000 borrowed on October 10, 2006. As of June 30, 2009, in connection with unsettled cross currency interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to W7,356 million (net of tax effect totaling W1,633 million and foreign exchange translation loss arising from U.S. dollar denominated long-term borrowings totaling W33,670 million) was accounted for as accumulated other comprehensive loss.
 
      In addition, the Company has entered into a floating-to-fixed cross currency swap contract with HSBC and SMBC Bank to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen denominated bonds with face amounts totaling JPY12,500,000,000 issued on November 13, 2007. As of June 30, 2009, in connection with unsettled cross currency interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to W2,060 million (net of tax effect totaling W946 million and foreign exchange translation loss arising from unguaranteed Japanese yen denominated bonds totaling W62,988 million) was accounted for as accumulated other comprehensive income.
 
      In addition, the Company has entered into a floating-to-fixed cross currency swap contract with DBS and Calyon Bank to hedge the foreign currency risk and the interest rate risk of U.S. dollar denominated notes with face amounts totaling US$150,000,000 borrowed on November 20, 2008. As of June 30, 2009, in connection with unsettled cross currency interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to W1,157 million (net of tax effect totaling W326 million and foreign exchange translation gain arising from U.S. dollar denominated bonds totaling W24,460 million) was accounted for as accumulated other comprehensive income.
 
      In addition, the Company has entered into a floating-to-fixed cross currency swap contract with Mizuho Corporate Bank to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen denominated bonds with face amounts totaling JPY3,000,000,000 issued on January 22, 2009. As of June 30, 2009, in connection with unsettled cross currency interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to W1,575 million (net of tax effect totaling W444 million and foreign exchange translation gain arising from unguaranteed Japanese yen denominated bonds totaling W6,038 million) was accounted for as accumulated other comprehensive income.
 
      In addition, the Company has entered into a floating-to-fixed cross currency swap contract with Bank of Tokyo-Misuboshi Bank to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen denominated bonds with face amounts totaling JPY5,000,000,000 issued on March 5, 2009. As of June 30, 2009, in connection with unsettled cross currency interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to W652 million (net of tax effect totaling W184 million and foreign exchange translation gain arising from unguaranteed Japanese yen denominated bonds totaling W11,790 million) was accounted for as accumulated other comprehensive income.
 
  b.   Interest rate swap contract to which the cash flow hedge accounting is applied
 
      The Company has entered into a floating-to-fixed interest rate swap contract with Shinhan Bank to hedge the interest rate risk of floating rate discounted bill with face amounts totaling W200,000 million borrowed on June 29, 2006. As of June 30, 2009, in connection with unsettled interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to

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      W2,878 million (net of tax effect totaling W812 million) was accounted for as accumulated other comprehensive loss.
 
      In addition, the Company has entered into a floating-to-fixed interest rate swap contract with Nonghyup Bank and other two banks to hedge the interest rate risk of long-term floating rate borrowings with face amounts totaling W500,000 million borrowed from July 28, 2008 to August 13, 2008. As of June 30, 2009, in connection with unsettled interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to W15,828 million (net of tax effect totaling W4,464 million) was accounted for as accumulated other comprehensive loss.
 
  c.   Currency swap contract to which the fair value hedge accounting is applied
 
      The Company has entered into a fixed-to-fixed cross currency swap contract with Hana Bank and other nine banks to hedge the foreign currency risk of U.S. dollar denominated equity securities of China Unicom. In connection with unsettled foreign currency swap contract to which the fair value hedge accounting is applied, loss on valuation of currency swap of W47,907 million and W155,704 million for the six months ended June 30, 2009 and 2008, respectively, was charged to current operations.
 
  d.   Currency swap contract to which the hedge accounting is not applied
 
      The Company has entered into fixed-to-fixed cross currency swap contract with Morgan Stanley Bank and two other banks to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds with face amounts totaling US$400,000,000 issued on July 20, 2007. In connection with unsettled foreign currency swap contract to which the hedge accounting is not applied, loss on valuation of currency swap of W64,534 million and gain on valuation of currency swap of W51,851 million for the six months ended June 30, 2009 and 2008, respectively, was charged to current operations.
 
  e.   Interest rate swap contract to which the hedge accounting is not applied
 
      The Company has entered into a floating-to-fixed interest rate swap contract with DBS and two other banks the interest rate risk of floating rate U.S. dollar denominated bonds with face amounts totaling US$220,000,000 issued on April 29, 2009. In connection with unsettled interest rate swap contract to which the hedge accounting is not applied, loss on valuation of currency swap of W2,897 million for the six months ended June 30, 2009 was charged to current operations.
 
  f.   Currency option contract to which the hedge accounting is not applied
 
      The Company has entered into the short position in the cross currency option contract with Calyon Bank to hedge the foreign currency risk of U.S. dollar denominated deposits with face amounts totaling US$50,000,000. In connection with unsettled foreign currency option contract to which the hedge accounting is not applied, gain on valuation of currency option of W1,014 million for the six months ended June 30, 2009 was charged to current operations.

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      As of June 30, 2009, fair values of above derivatives recorded in assets or liabilities and details of derivative instruments as of June 30, 2009 are as follows (In thousands of U.S. dollars, H.K. dollars, Japanese yen and millions of Korean won):
                                                 
                    Fair value
                    Designated   Designated        
                Duration   as cash   as fair   Not    
Type   Hedged item   Amount   of contract   flow hedge   value hedge   designated   Total
 
                                               
Non-Current assets:
                                               
Fix-to-fixed cross currency swap
  U.S. dollar denominated bonds   US$ 300,000     Mar. 23, 2004
~ Apr. 1, 2011
  W 28,493     W     W     W 28,493  
Fix-to-fixed cross currency swap
  U.S. dollar denominated convertible bond   US$ 100,000     May 27, 2004
~ May 27, 2009
    24,682                   24,682  
Fix-to-fixed cross currency swap
  U.S. dollar denominated bonds   US$ 400,000     Jul. 20, 2007
~ Jul. 20, 2017
                175,839       175,839  
Floating-to-fixed cross currency interest rate swap
  Japanese yen denominated bonds   JPY 12,500,000     Nov. 13, 2007
~ Nov. 13, 2012
    64,102                   64,102  
 
                                               
 
                                               
 
                                               
Total assets
                  W 117,277     W     W 175,839     W 293,116  
 
                                               
 
                                               
Current liabilities:
                                               
Fix-to-fixed cross currency swap
  U.S. dollar denominated China Unicom Equity Securities   HK$ 10,940,900     Sep. 11, 2008
~ Sep. 16, 2009
  W     W 238,265     W     W 238,265  
Floating-to-fixed interest rate swap
  Long-term floating rate discounted bill   W 200,000     Jun. 29, 2006
~ Jun. 29, 2010
    3,690                   3,690  
 
                                               
Non-current liabilities:
                                               
Fix-to-fixed cross currency swap
  U.S. dollar denominated bonds   US$ 150,000     Nov 20, 2008
~ Nov 20, 2010
    22,976                   22,976  
Floating-to-fixed cross currency interest rate swap
  Japanese yen
denominated bonds
  JPY 3,000,000     Jan. 22, 2009 ~ Jan. 22, 2012     4,020                   4,020  
Floating-to-fixed cross currency interest rate swap
  Japanese yen denominated bonds   JPY 5,000,000     Mar. 5, 2009
~ Mar. 5, 2012
    10,954                   10,954  
Floating-to-fixed interest rate swap
  Long-term borrowings   W 500,000     July 28, 2008
~ August 13, 2009
    20,292                   20,292  
Floating-to-fixed cross currency interest rate swap
  Long-term borrowings   US$ 220,000     April 29, 2009
~ April 30, 2012
                2,897       2,897  
 
                                               
 
                                               
Total liabilities
                  W 61,932     W 238,265     W 2,897     W 303,094  
 
                                               

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19.   COMMITMENTS
    On May 21, 2009, the board of directors of the Company resolved to acquire the leased line business from SK Networks Co., Ltd., its related party, in order to maximize the Company’s wireless service and to strengthen network efficiency. The total acquisition cost would be W892,850 million and the expected acquisition date is September 30, 2009.
 
    The above acquisition cost and acquisition date are subject to change in accordance with the agreement or contract which will be made by the Company and SK Networks Co., Ltd. There is a possibility that the agreement will not be executed if the agreement is not approved by authorities concerned.
20.   ASSETS TRANSFER
    On May 29, 2009, the Company sold W669.7 billion of accounts receivables-other resulting from its mobile phone dealer financing plan to “Realizing T First Special Purpose Company” in exchange for cash of W550 billion and subordinated bond of W91 billion in asset-backed securitization transaction. As a result, the Company recorded loss on disposal of accounts receivable-other of W28,711 million for the six months ended June 30, 2009.
21.   SUBSEQUENT EVENTS
  a.   Acquisition of equity interest in SK Broadband Co., Ltd.
 
      On July 21, 2009, for the purpose of strengthening the Company’s business competitive power, the Company purchased additional 47,187,105 shares of SK Broadband Co., Ltd.’s newly issued common stock at the price of W5,000 per share (total acquisition cost of W235,936 million). As a result, the Company owned 50.6% shareholder interest in SK Broadband Co., Ltd.
 
  b.   Interim dividend
 
      On July 23, 2009, the board of directors of the Company resolved to pay interim cash dividends of W1,000 per share totaling W72,345 million. The ex-dividend date was June 30, 2008 and the interim dividends are expected to be paid within twenty days after the date of the board of directors’ resolution.
22.   K-IFRS ADOPTION PLAN AND STATUS
    In accordance with IFRS adoption roadmap released by the Financial Supervisory Commission in March 2007, the Company is required to prepare financial statements under K-IFRS from fiscal year of 2011. In April 2008, the Company set up a task force for the adoption and hired outside consulting firm to evaluate the impact that K-IFRS may have on the Company’s financial statements as well as to educate the concerned employees. As of June 30, 2009, the Company is currently performing analysis on the major GAAP differences between K-IFRS and the Company’s accounting policy, setting up action plan to decide the Company’s accounting policy under K-IFRS and changing operating procedures to coincide with K-IFRS.

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
  SK Telecom Co., Ltd.
(Registrant)
 
 
  By:  /s/ Tae Jin Park    
  (Signature  
  Name:  Tae Jin Park  
  Title:   Senior Vice President   
 
Date: September 9, 2009