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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 |
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 | Moodys (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 | Moodys (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 Broadbands 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 Companys and its affiliates businesses. The Companys 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 Companys 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 |
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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 Periods 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 |
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 |
(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 |
(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 |
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 |
A. | Currency Swap | |
(1) | Purpose of Contracts: Currency Exchange Rate Risk Hedging | |
(2) | Contract Terms | |
| Currency swap contract applying cash flow risk hedge accounting |
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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: |
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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 |
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 |
B. | Business-related Intellectual Properties |
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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 Periods 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 |
18
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 Periods 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 |
19
IV. | AUDITORS 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 | Auditors 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 |
20
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 |
21
V. | CORPORATE ORGANIZATION INCLUDING BOARD OF DIRECTORS AND AFFILIATED COMPANIES |
1. | Board of Directors | |
A. | Overview of Board of Directors Composition |
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 |
22
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. |
23
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. |
24
(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 |
25
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 |
26
2. | Audit System |
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 Auditors
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 |
| |||||||
¡ Auditors 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 |
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. |
27
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 |
28
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 | % |
29
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 | % |
30
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 |
31
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 | % |
32
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 |
33
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 | % |
34
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 |
B. | Overview of the Largest Shareholder |
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 |
35
* | The above share holdings are based on common stock holdings as of June 30, 2009. |
2. | Changes in shareholdings of the Largest Shareholder |
(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 |
36
B. | Shareholdings under the Employee Stock Ownership Program |
(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 | |
37
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 | |
38
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 | |
39
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 | |
40
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) |
(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 | | |
(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 |
41
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. |
42
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. |
43
B. | Other Matters |
3. | Status of sanctions, etc. |
A. | Status of sanctions |
44
45
46
47
48
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 |
699,055 | 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 |
1,592,761 | 1,576,459 | 1,250,696 | 1,237,895 | ||||||||||||
Short-term loans, net of allowance for doubtful
accounts of |
92,953 | 107,934 | 72,990 | 84,754 | ||||||||||||
Accounts receivable other, net of allowance for
doubtful accounts of |
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 |
99,340 | 131,700 | 78,005 | 103,416 | ||||||||||||
Long-term accounts receivable other, net of present value
of |
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 |
19,485,915 | 18,617,495 | $ | 15,301,072 | $ | 14,619,156 | ||||||||||
49
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 |
131,500 | 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 |
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 |
19,485,915 | 18,617,495 | $ | 15,301,072 | $ | 14,619,156 | ||||||||||
50
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) |
3,067,899 | 5,944,360 | 2,931,263 | 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 | ||||||||||||||||||||||||
51
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 |
( |
76,431 | ) | ( |
147,755 | ) | ( |
59,835 | ) | ( |
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 |
311,643 | 628,392 | 298,010 | 680,895 | $ | 244,714 | $ | 493,437 | $ | 234,009 | $ | 534,664 | ||||||||||||||||||||
NET INCOME PER SHARE |
||||||||||||||||||||||||||||||||
(In Korean won and U.S. dollars) (Note 14) |
4,308 | 8,686 | 4,094 | 9,357 | $ | 3.383 | $ | 6.821 | $ | 3.215 | $ | 7.347 | ||||||||||||||||||||
DILUTED NET INCOME PER SHARE |
||||||||||||||||||||||||||||||||
(In Korean won and U.S. dollars) (Note 14) |
4,234 | 8,567 | 4,056 | 9,261 | $ | 3.325 | $ | 6,727 | $ | 3.185 | $ | 7.272 | ||||||||||||||||||||
52
Accumulated | ||||||||||||||||||||||||
other | Total | |||||||||||||||||||||||
Common | Capital | Capital | comprehensive | Retained | stockholders | |||||||||||||||||||
stock | surplus | adjustments | income | earnings | equity | |||||||||||||||||||
(In millions of Korean won) | ||||||||||||||||||||||||
Balance, January 1, 2008 |
44,639 | 2,939,353 | ( |
2,041,578 | ) | 1,589,206 | 8,905,865 | 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 |
44,639 | 2,954,829 | ( |
2,060,209 | ) | 991,943 | 8,977,049 | 10,908,251 | ||||||||||||||||
Balance, January 1, 2009 |
44,639 | 2,957,095 | ( |
2,147,530 | ) | 373,785 | 9,501,018 | 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 |
44,639 | 3,031,999 | ( |
2,068,335 | ) | 552,411 | 9,371,687 | 10,932,401 | ||||||||||||||||
53
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 | ||||||||||||
54
Translation into U.S. dollars | ||||||||||||||||
Korean won | (Note 2) | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(In millions) | (In thousands) | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||||||||||
Net income |
628,392 | 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 | ||||||||||||
55
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 |
| 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 |
699,055 | 395,967 | $ | 548,924 | $ | 310,928 | ||||||||||
56
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 Companys 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 Companys 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 Companys 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 |
57
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) |
350,000 | 348,850 | 348,850 | 366,040 | ||||||||||||
Current portion of
long-term investment
securities (Note b) |
3,557 | 3,608 | 3,608 | 3,704 | ||||||||||||
Total |
353,557 | 352,458 | 352,458 | 369,744 | ||||||||||||
(Note a) | The Companys 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 |
3,460,654 | 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 |
3,551,682 | 3,067,389 | ||||||
58
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 | 5,781 | 8,585 | 8,585 | 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 |
2,727,777 | 3,460,654 | 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 |
|
(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 |
|
(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 |
|
(Note d) | Due to the impairment of the investment of Mobinex Inc. and others, the Company recorded |
59
(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) | 104 | 104 | 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 |
91,028 | 91,028 | 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
|
(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 |
57 | 153 | ||||||
After one year but within five years |
47 | 1,083 | ||||||
104 | 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). |
60
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 |
941,096 | 100,169 | | 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 |
413,270 | 189,697 | | 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 |
2,402,284 | ( |
685,469 | ) | ( |
9,389 | ) | 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 |
1,626,689 | ( |
496,343 | ) | ( |
3,072 | ) | 1,127,274 | ||||||||
61
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 | 1,209,629 | 520,953 | 1,049,941 | 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 |
62
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 | 5,000 | 5,068 | 5,068 | 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 |
3,095,811 | 2,633,226 | 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 |
|
(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 Companys portion of stockholders equity of such investees were not expected to be material. |
63
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) | 1,146,736 | | ( |
36,415 | ) | 662 | | ( |
56,043 | ) | ( |
4,999 | ) | | | 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 |
2,577,155 | 163,332 | (73,022 | ) | (12,908 | ) | 2,003 | (56,043 | ) | 18,280 | (6,817 | ) | (7,289 | ) | 2,604,692 | |||||||||||||||||||||||||||||
64
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 |
156,302 | ( |
) | ( |
) | 245 | | 359 | | | ||||||||||||||||||||||||||||||||||
(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 Companys 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 Companys investment resulting from the full liquidation of Aircross Co., Ltd. |
65
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. |
| 1,093,104 | ( |
11,628 | ) | 4,573 | | | 116,525 | 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 |
867,020 | 1,428,116 | (94,954 | ) | (104,211 | ) | (30,373 | ) | (6,394 | ) | 114,062 | 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 |
222,338 | ( |
55,796 | ) | ( |
111,355 | ) | ( |
56 | ) | | | ||||||||||||||||||||||
66
(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 Companys 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. |
534,051 | | ( |
5,062 | ) | 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 |
715,388 | | (23,434 | ) | 691,954 | |||||||||||
Less: three months ended
March 31, 2009 |
| (4,019 | ) | |||||||||||||
Three months ended
June 30, 2009 |
| ( |
19,415 | ) | ||||||||||||
For the six months ended June 30, 2008 | ||||||||||||||||
Beginning | Increase/ | Ending | ||||||||||||||
balance | (decrease) | Amortization | balance | |||||||||||||
SK Broadband Co., Ltd. |
| 565,174 | ( |
7,064 | ) | 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 |
71,650 | 569,225 | (12,657 | ) | 628,218 | |||||||||||
Less: three months ended
March 31, 2008 |
560,805 | (2,634 | ) | |||||||||||||
Three months ended
June 30, 2008 |
8,420 | ( |
10,023 | ) | ||||||||||||
67
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. |
269 | | ( |
70 | ) | 199 | ||||||||||
SK China Company Ltd. |
1,086 | | | 1,086 | ||||||||||||
Total |
1,355 | | (70 | ) | 1,285 | |||||||||||
Less: three months ended
March 31, 2009 |
| (35 | ) | |||||||||||||
Three months ended
June 30, 2009 |
| ( |
35 | ) | ||||||||||||
For the six months ended June 30, 2008 | ||||||||||||||||
Beginning | Ending | |||||||||||||||
Subsidiary | balance | Increase | Decrease | balance | ||||||||||||
SK Communications Co., Ltd. |
2,192 | | ( |
1,853 | ) | 339 | ||||||||||
Uland Company Limited. |
2,981 | | (2,981 | ) | | |||||||||||
SK China Company Ltd. |
1,086 | | | 1,086 | ||||||||||||
Total |
6,259 | | (4,834 | ) | 1,425 | |||||||||||
Less: three months ended
March 31, 2008 |
| (4,799 | ) | |||||||||||||
Three months ended
June 30, 2008 |
| ( |
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. |
5,200 | 102,451,249 | 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 |
68
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. |
2,900,582 | 1,700,757 | 156,101 | ( |
) | |||||||||||
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) |
1,187 | 58,169 | 59,356 | 60,908 | ||||||||||||
Loans to employees for housing and other |
52 | 20 | 72 | 106 | ||||||||||||
Total |
1,239 | 58,189 | 59,428 | 61,014 | ||||||||||||
(Note) | The Company loaned the amount above to employees stock ownership association to help fund employees acquisition of the Companys 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. |
69
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 |
| 455,967 | 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 |
4,618,118 | 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 |
447,088 | 8,431 | ( |
70 | ) | 518 | | 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 |
4,698,214 | 647,652 | ( |
17,067 | ) | ( |
56,311 | ) | ( |
654,370 | ) | 4,618,118 | ||||||||||||
For the six months ended June 30, 2008 | ||||||||||||||||||||||||
Beginning | Ending | |||||||||||||||||||||||
balance | Acquisition | Disposal | Transfer | Depreciation | balance | |||||||||||||||||||
Land |
444,252 | 61 | ( |
554 | ) | 1,291 | | 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 |
4,594,413 | 584,930 | (19,753 | ) | (63,859 | ) | (620,056 | ) | 4,475,675 | |||||||||||||||
70
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 |
2,341,625 | ( |
967,199 | ) | 1,374,426 | 2,341,625 | ( |
902,259 | ) | 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 | ||||||||||||||||
5,291,877 | ( |
2,524,009 | ) | 2,767,868 | 5,229,573 | ( |
2,287,981 | ) | 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 |
1,439,366 | | | | ( |
64,940 | ) | 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 |
2,941,592 | 6,795 | (225 | ) | 56,613 | (236,907 | ) | 2,767,868 | ||||||||||||||||
For the six months ended June 30, 2008 | ||||||||||||||||||||||||
Beginning | Ending | |||||||||||||||||||||||
balance | Increase | Decrease | Transfer | Amortization | balance | |||||||||||||||||||
Goodwill |
1,569,247 | | | | ( |
64,940 | ) | 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 |
3,174,942 | 11,568 | (136 | ) | 64,062 | (228,117 | ) | 3,022,319 | ||||||||||||||||
71
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
|
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. |
72
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 | | 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
|
3,698,010 | 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%. |
73
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$326,397,463 with an initial conversion price of
|
||
Conversion of notes to common shares may be prohibited under the Telecommunications Law or other legal restrictions which restrains foreign governments, individuals and entities from owning more than 49% of the Companys voting stock, if this 49% ownership limitation is violated due to the exercise of conversion rights. In this case, the Company will pay a bond holder as cash settlement determined at the average price of one day after a holder exercises its conversion right or the weighted average price for the following five or twenty business days. The Company intends to sell treasury shares held in trust by the Company that corresponds to the number of shares of common stock that would have been delivered in the absence of the 49% foreign shareholding restrictions. Unless either previously redeemed or converted, the notes are redeemable at 100% of the principal amount at maturity. | ||
During the six months ended June 30, 2009, no conversion was made. |
9. | LONG-TERM BORROWINGS |
Long-term borrowings as of June 30, 2009 and December 31, 2008 are as follows (In millions of Korean won and thousands of U.S. dollars): |
Final | Annual interest | June 30, | December 31, | |||||||||||
Lender | maturity year | rate (%) (Note) | 2009 | 2008 | ||||||||||
Long-term floating rate discount bill |
Shinhan Bank | June 29, 2011 | 91 days CD yield + 0.25% | 200,000 | 200,000 | |||||||||
Long-term floating rate borrowings |
KDB | July 28, 2011 | 91 days CD yield + 1.02% | 100,000 | 100,000 | |||||||||
² |
Citibank | July 29, 2011 | 91 days CD yield + 1.20% | 100,000 | 100,000 | |||||||||
² |
Nonghyup | July 30, 2011 | 91 days CD yield + 1.30% | 100,000 | 100,000 | |||||||||
² |
Hana Bank | July 31, 2011 | 91 days CD yield + 1.50% | 150,000 | 150,000 | |||||||||
² |
Nonghyup | August 12, 2011 | 91 days CD yield + 1.50% | 50,000 | 50,000 | |||||||||
² |
Calyon Bank | October 10, 2013 | 6M LIBOR + 0.29% | US$ | 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 |
700,000 | 700,000 | ||||||||||||
Equivalent in Korean won |
828,470 | 825,750 | ||||||||||||
Less current portion |
| | ||||||||||||
Long-term borrowings |
828,470 | 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. |
74
10. | CAPITAL STOCK AND CAPITAL SURPLUS |
The Companys capital stock consists entirely of common stock with a par value of |
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 | 44,639 | 2,915,887 | |||||||||
At June 30, 2009 |
80,745,711 | 44,639 | 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 |
75
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 |
221,736 | 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 |
93,167 | 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 |
307,549 | 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 | |||||
( |
22,021 | ) | ( |
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 |
828,107 | 946,285 | ||||||
Income tax expense at statutory income tax rate
(12.1% of taxable income less than |
200,377 | 260,215 | ||||||
Differences (Note) |
(662 | ) | 5,175 | |||||
Income tax expense |
199,715 | 265,390 | ||||||
Effective tax rates |
24.12 | % | 28.05 | % | ||||
76
(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 |
21,861 | 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 | ) | ||||
( |
662 | ) | 5,175 | |||||
77
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 |
311,643 | 628,392 | ||||||||||||||
Other comprehensive income (loss): |
||||||||||||||||
Unrealized gain on valuation of long-term
investment securities, net |
407,946 | ( |
116,662 | ) | 189,697 | ( |
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 | ( |
117,393 | ) | 178,626 | ( |
57,794 | ) | ||||||||
Comprehensive income |
721,259 | 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 |
298,010 | 680,895 | ||||||||||||||
Other comprehensive income (loss): |
||||||||||||||||
Unrealized gain on valuation of long-term
investment securities, net |
(63,782 | ) | 24,193 | (499,415 | ) | 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 | ) | 18,663 | (602,156 | ) | 186,723 | ||||||||||
Comprehensive income |
134,596 | 78,739 | ||||||||||||||
78
14. | NET INCOME PER SHARE |
The Companys 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 |
311,643 | 298,010 | 628,392 | 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 |
4,308 | 4,094 | 8,686 | 9,357 | ||||||||||||
Net income and ordinary income per share for the year ended December 31, 2008 is |
||
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): |
79
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 |
317,733 | 300,613 | 637,294 | 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 |
4,234 | 4,056 | 8,567 | 9,261 | ||||||||||||
Diluted net income and ordinary income per share for the year ended December 31, 2008 was
|
||
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 |
311,643 | 298,010 | 628,392 | 680,895 | ||||||||||||
Effect of convertible bonds (Note a) |
6,090 | 2,603 | 8,902 | 5,180 | ||||||||||||
Adjusted net income and ordinary income |
317,733 | 300,613 | 637,294 | 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. |
80
15. | RESTRICTED CASH AND CASH EQUIVALENTS |
As of June 30, 2009, the Company has guarantee deposits restricted for checking
accounts totaling |
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 Companys ultimate parent company as of December, 31, 2007. | |
(Note b) | The ownership percentage represents parent companys ownership over the Company. | |
(Note c) | The ownership percentage represents subsidiaries ownership over their subsidiaries, in which the Company has no direct investment. |
81
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. |
35,042 | 55,869 | 939 | 41,345 | 115,852 | 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 |
143,039 | 504,769 | 74,719 | 183,684 | 883,348 | 117,181 | ||||||||||||||||||
82
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. |
30,111 | 46,811 | 1,872 | 41,325 | 96,366 | 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 |
96,844 | 335,681 | 47,186 | 161,277 | 649,181 | 86,144 | ||||||||||||||||||
83
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. |
298 | | | | 30,465 | 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 |
48,167 | 575 | 26,308 | 6,268 | 217,654 | 26,593 | ||||||||||||||||||
84
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. |
2,399 | | | | 98,342 | 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 |
28,655 | 575 | 25,803 | 1,212 | 289,557 | 22,010 | ||||||||||||||||||
85
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) |
282 | 17 | 299 | 956 | 35 | 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) |
299 | 74 | 373 | 3,832 | 409 | 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 Companys services. Points provision was provided based on the historical usage experience and the Companys 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 |
24,889 | 27,668 | ||||||
Increase |
7,248 | 2,608 | ||||||
Decrease (used points) |
(11,433 | ) | (4,284 | ) | ||||
Ending balance |
20,704 | 25,992 | ||||||
86
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 |
9,325 | 8,846 | ||||||
2011 |
5,970 | 5,373 | ||||||
2012 |
3,830 | 3,270 | ||||||
2013 |
2,462 | 1,995 | ||||||
2014 |
1,588 | 1,220 | ||||||
Ending balance |
23,175 | 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 |
339,696 | | ||||||
Increase (provision) |
274,157 | 86,532 | ||||||
Decrease (subsidy payment) |
(167,099 | ) | (9,643 | ) | ||||
Ending balance |
446,754 | 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 |
394,012 | 386,035 | ||||||
2011 |
64,142 | 60,719 | ||||||
Ending balance |
458,154 | 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 |
87
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 |
|||
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 |
|||
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 |
|||
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 |
|||
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 |
|||
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 |
88
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 |
|||
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
|
|||
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 |
|||
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 |
|||
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$50,000,000. In connection with unsettled foreign currency option
contract to which the hedge accounting is not applied, gain on valuation of currency option
of |
89
As of June 30, 2009, fair values of above derivatives recorded in assets or liabilities and details of derivative instruments as of June 30, 2009 are as follows (In thousands of U.S. dollars, H.K. dollars, Japanese yen and millions of Korean won): |
Fair value | ||||||||||||||||||||||||
Designated | Designated | |||||||||||||||||||||||
Duration | as cash | as fair | Not | |||||||||||||||||||||
Type | Hedged item | Amount | of contract | flow hedge | value hedge | designated | Total | |||||||||||||||||
Non-Current assets: |
||||||||||||||||||||||||
Fix-to-fixed cross currency swap
|
U.S. dollar denominated bonds | US$ | 300,000 | Mar. 23, 2004 ~ Apr. 1, 2011 |
28,493 | | | 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
|
117,277 | | 175,839 | 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 |
| 238,265 | | 238,265 | ||||||||||||||||
Floating-to-fixed interest rate swap
|
Long-term floating rate discounted bill | 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 | 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
|
61,932 | 238,265 | 2,897 | 303,094 | ||||||||||||||||||||
90
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 Companys
wireless service and to strengthen network efficiency. The total acquisition cost would be
|
||
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 |
21. | SUBSEQUENT EVENTS |
a. | Acquisition of equity interest in SK Broadband Co., Ltd. | ||
On July 21, 2009, for the purpose of strengthening the Companys 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 |
|||
b. | Interim dividend | ||
On July 23, 2009, the board of directors of the Company resolved to pay interim cash
dividends of |
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 Companys 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 Companys accounting policy, setting up action plan to decide the Companys accounting policy under K-IFRS and changing operating procedures to coincide with K-IFRS. |
91
SK Telecom Co., Ltd. (Registrant) |
||||
By: /s/ Tae Jin Park | ||||
(Signature) | ||||
Name: | Tae Jin Park | |||
Title: | Senior Vice President | |||