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<TITLE>SK TELECOM CO., LTD.</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>As filed with the Securities and Exchange Commission on
June&nbsp;30, 2006</B>
</DIV>

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<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

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<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 11.0pt;color: #000000; background: #ffffff;">
<B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>WASHINGTON,&nbsp;D.C. 20549</B>
</DIV>

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</DIV>

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<B>FORM&nbsp;20-F</B>
</DIV>

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<TR style="font-size: 1pt;">
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>


<TR>
    <TD colspan="3" align="left" valign="top">
    <B>(Mark One)</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT face="wingdings">&#111;</FONT></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>REGISTRATION STATEMENT PURSUANT TO SECTION&nbsp;12(b) OR
    (g)&nbsp;OF THE SECURITIES EXCHANGE ACT OF&nbsp;1934</B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>OR</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT face="wingdings">&#254;</FONT></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>ANNUAL REPORT PURSUANT TO SECTION&nbsp;13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>For the fiscal year ended December&nbsp;31, 2005</B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>OR</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT face="wingdings">&#111;</FONT></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>TRANSITION REPORT PURSUANT TO SECTION&nbsp;13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>OR</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT face="wingdings">&#111;</FONT></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>SHELL COMPANY REPORT PURSUANT TO SECTION&nbsp;13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Date of event requiring this shall company report&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>For the transition period
    from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to</B></TD>
</TR>

</TABLE>
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<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Commission file number 1-14418</B>
</DIV>

<DIV align="center" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 16.0pt;color: #000000; background: #ffffff;">
<B>SK Telecom Co., Ltd.</B>
</DIV>

<DIV align="center" style="font-size: 7.0pt;color: #000000; background: #ffffff;">
<B>(Exact name of Registrant as specified in its charter)</B>
</DIV>

<DIV align="center" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 16.0pt;color: #000000; background: #ffffff;">
<B>SK Telecom Co., Ltd.</B>
</DIV>

<DIV align="center" style="font-size: 7.0pt;color: #000000; background: #ffffff;">
<B>(Translation of Registrant&#146;s name into English)</B>
</DIV>

<DIV align="center" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>The Republic of Korea</B>
</DIV>

<DIV align="center" style="font-size: 7.0pt;color: #000000; background: #ffffff;">
<B>(Jurisdiction of incorporation or organization)</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>11, EULJIRO 2-GA, JUNG-GU</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>SEOUL, KOREA</B>
</DIV>

<DIV align="center" style="font-size: 7.0pt;color: #000000; background: #ffffff;">
<B>(Address of principal executive offices)</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>Securities registered or to be registered pursuant to
Section&nbsp;12(b) of the Act.</B>
</DIV>

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<TR style="font-size: 1pt;">
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Title of each class</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Name of each exchange on which registered</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    American Depositary Shares, each representing one-ninth of one
    share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    New York Stock Exchange, Inc.</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    of Common Stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common Stock, par value <STRIKE> W</STRIKE>500&nbsp;per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    New York Stock Exchange, Inc.*</TD>
</TR>

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*&nbsp;Not for trading, but only in connection with the
registration of the American Depositary Shares.
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>Securities registered or to be registered pursuant to
Section&nbsp;12(g) of the Act.</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>None</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>Securities for which there is a reporting obligation pursuant
to Section&nbsp;15(d) of the Act.</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>None</B>
</DIV>

<DIV align="center" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate the number of outstanding shares of each of the
issuer&#146;s classes of capital or common stock as of the close
of the period covered by the annual report.
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>82,276,711&nbsp;shares of common stock, par value
<STRIKE>W</STRIKE>500&nbsp;per share</B>
</DIV>

<DIV align="left" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule&nbsp;405 of the Securities
Act.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#254;</FONT>&nbsp;Yes&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>&nbsp;No
</DIV>

<DIV align="left" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports
pursuant to Section&nbsp;13 or 15(d)&nbsp;of the Securities
Exchange Act of
1934.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;Yes&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#254;
</FONT>&nbsp;No
</DIV>

<DIV align="left" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant (1)&nbsp;has filed
all reports required to be filed by Section&nbsp;13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12&nbsp;months (or for such shorter period that the registrant
was required to file such reports), and (2)&nbsp;has been
subject to such filing requirements for the past
90&nbsp;days.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#254;</FONT>&nbsp;Yes&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>&nbsp;No
</DIV>

<DIV align="left" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of &#147;accelerated filer and large
accelerated filer&#148; in
Rule&nbsp;<FONT style="white-space: nowrap">12b-2</FONT> of the
Exchange Act. (Check one):
</DIV>

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<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD align="left">Large accelerated filer&nbsp; <FONT face="wingdings">&#254;</FONT></TD>
    <TD align="center">Accelerated filer&nbsp; <FONT face="wingdings">&#111;</FONT></TD>
    <TD align="right">Non-accelerated filer&nbsp; <FONT face="wingdings">&#111;</FONT></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark which financial statement item the
registrant has elected to
follow.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;Item&nbsp;17&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#254;
</FONT>&nbsp;Item&nbsp;18
</DIV>

<DIV align="left" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in
Rule&nbsp;<FONT style="white-space: nowrap">12b-2</FONT> of the
Exchange
Act).&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;Yes&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#254;
</FONT>&nbsp;No
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS)</B>
</DIV>

<DIV align="left" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections&nbsp;12,
13 or 15(d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by a
court.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;Yes&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>&nbsp;No
</DIV>

<DIV align="center" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 4pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

</DIV>

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<!-- TOC -->
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<A name="tocpage"></A>
</DIV>

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<B>TABLE OF CONTENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="16%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    &nbsp;<A HREF='#101'>Certain Defined Terms and Conventions used
    in this Report</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    &nbsp;<A HREF='#102'>Forward-Looking Statements</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#103'>Item&nbsp;1.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#103'>Identity of Directors, Senior Managers and
    Advisers</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#104'>Item&nbsp;1A.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#104'>Directors and Senior Management</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#105'>Item&nbsp;1B.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#105'>Advisers</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#106'>Item&nbsp;1C.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#106'>Auditors</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#107'>Item&nbsp;2.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#107'>Offer Statistics and Expected Timetable</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#108'>Item&nbsp;3.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#108'>Key Information</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#109'>Item&nbsp;3A.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#109'>Selected Financial Data</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#110'>Item&nbsp;3B.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#110'>Capitalization and Indebtedness</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#111'>Item&nbsp;3C.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#111'>Reasons for the Offer and Use of
    Proceeds</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#112'>Item&nbsp;3D.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#112'>Risk Factors</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#113'>Item&nbsp;4.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#113'>Information on the Company</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>22</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#114'>Item&nbsp;4A.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#114'>History and Development of the Company</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>22</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#115'>Item&nbsp;4B.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#115'>Business Overview</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#116'>Item&nbsp;4C.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#116'>Organizational Structure</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>54</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#117'>Item&nbsp;4D.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#117'>Property, Plants and Equipment</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>55</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#118'>Item&nbsp;4.A.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#118'>Unresolved Staff Comments</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>55</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#119'>Item&nbsp;5.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#119'>Operating and Financial Review and
    Prospects</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>56</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#120'>Item&nbsp;5A.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#120'>Operating Results</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>56</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#121'>Item&nbsp;5B.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#121'>Liquidity and Capital Resources</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>65</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#122'>Item&nbsp;5C.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#122'>Research and Development</A>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>78</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#123'>Item&nbsp;5D.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#123'>Trend Information</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>80</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#124'>Item&nbsp;5E.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#124'>Off-Balance Sheet Arrangements</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>80</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#125'>Item&nbsp;5F.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#125'>Tabular Disclosure of Contractual
    Obligations</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>80</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#126'>Item&nbsp;6.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#126'>Directors, Senior Management and
    Employees</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>80</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#127'>Item&nbsp;6A.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#127'>Directors and Senior Management</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>80</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#128'>Item&nbsp;6B.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#128'>Compensation</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>83</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#129'>Item&nbsp;6C.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#129'>Board Practices</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>84</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#130'>Item&nbsp;6D.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#130'>Employees</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>87</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#131'>Item&nbsp;6E.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#131'>Share Ownership</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>88</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#132'>Item&nbsp;7.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#132'>Major Shareholders and Related Party
    Transactions</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#133'>Item&nbsp;7A.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#133'>Major Shareholders</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#134'>Item&nbsp;7B.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#134'>Related Party Transactions</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>91</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#135'>Item&nbsp;7C.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#135'>Interest of Experts and Counsel</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>92</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#136'>Item&nbsp;8.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#136'>Financial Information</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>93</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#137'>Item&nbsp;8A.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#137'>Consolidated Statements and Other Financial
    Information</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>93</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#138'>Item&nbsp;8B.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#138'>Significant Changes</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>97</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">i

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; ">

<TR style="font-size: 1pt;">
    <TD width="16%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#139'>Item&nbsp;9.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#139'>The Offer and Listing</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#140'>Item&nbsp;9A.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#140'>Offering and Listing Details</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#141'>Item&nbsp;9B.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#141'>Plan of Distribution</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#142'>Item&nbsp;9C.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#142'>Markets</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#143'>Item&nbsp;9D.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#143'>Selling Shareholders</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#144'>Item&nbsp;9E.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#144'>Dilution</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#145'>Item&nbsp;9F.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#145'>Expenses of the Issue</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#146'>Item&nbsp;10.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#146'>Additional Information</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#147'>Item&nbsp;10A.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#147'>Share Capital</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#148'>Item&nbsp;10B.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#148'>Memorandum and Articles of Association</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#149'>Item&nbsp;10C.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#149'>Material Contracts</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>118</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#150'>Item&nbsp;10D.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#150'>Exchange Controls</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>119</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#151'>Item&nbsp;10E.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#151'>Taxation</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>123</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#152'>Item&nbsp;10F.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#152'>Dividends and Paying Agents</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>127</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#153'>Item&nbsp;10G.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#153'>Statements by Experts</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>127</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#154'>Item&nbsp;10H.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#154'>Documents on Display</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>127</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#155'>Item&nbsp;10I.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#155'>Subsidiary Information</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>128</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#156'>Item&nbsp;11.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#156'>Quantitative and Qualitative Disclosures
    about Market Risk</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>128</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#157'>Item&nbsp;12.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#157'>Description of Securities Other than Equity
    Securities</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>129</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#158'>Item&nbsp;13.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#158'>Defaults, Dividend Arrearages and
    Delinquencies</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>129</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#159'>Item&nbsp;14.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#159'>Material Modifications to the Rights of
    Security Holders and Use of Proceeds</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>129</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#160'>Item&nbsp;15.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#160'>Controls and Procedures</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>129</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;Item&nbsp;16.</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;Reserved</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#162'>Item&nbsp;16A.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#162'>Audit Committee Financial Expert</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>130</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#163'>Item&nbsp;16B.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#163'>Code of Ethics</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>130</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#164'>Item&nbsp;16C.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#164'>Principal Accountant Fees and Service</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>130</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#165'>Item&nbsp;16D.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#165'>Exemptions from the Listing Standards for
    Audit Committees</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>131</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    &nbsp;<A HREF='#166'>Item&nbsp;16E.</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#166'>Purchases of Equity Securities by the
    Issuer and Affiliated Purchasers</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>131</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#167'>Item&nbsp;17.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#167'>Financial Statements</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>132</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#168'>Item&nbsp;18.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#168'>Financial Statements</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>132</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#169'>Item&nbsp;19.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#169'>Exhibits</A></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>133</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv1w1.htm">EX-1.1 ARTICLES OF ASSOCIATION</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv2w1.htm">EX-2.1 DEPOSIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv4w1.htm">EX-4.1 TELECOMMUNICATIONS BASIC LAW OF 1983</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv4w2.htm">EX-4.2 ENFORCEMENT DECREE OF THE TELECOMMUNICATIONS BASIC LAW</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv4w3.htm">EX-4.3 TELECOMMUNICATIONS BUSINESS LAW OF 1983</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv4w7.htm">EX-4.7 KOREAN SECURITIES AND EXCHANGE ACT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv8w1.htm">EX-8.1 LIST OF SUBSIDIARIES OF SK TELECOM CO., LTD.</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv12w1.htm">EX-12.1 CERTIFICATION OF CEO PURSUANT TO SECTION 302</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv12w2.htm">EX-12.2 CERTIFICATION OF CFO PURSUANT TO SECTION 302</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv13w1.htm">EX-13.1 CERTIFICATION OF CEO PURSUANT TO SECTION 906</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv13w2.htm">EX-13.2 CERTIFICATION OF CFO PURSUANT TO SECTION 906</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h00576exv99w1.htm">EX-99.1 CONSENT OF DELOITTE ANJIN LLC</A></FONT></TD></TR>
</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<!-- /TOC -->
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">ii

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='101'></A>
</DIV>

<!-- link1 "CERTAIN DEFINED TERMS AND CONVENTIONS USED IN THIS REPORT" -->

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CERTAIN DEFINED TERMS AND CONVENTIONS USED IN THIS REPORT</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All references to &#147;Korea&#148; contained in this report
shall mean The Republic of Korea. All references to the
&#147;Government&#148; shall mean the government of The Republic
of Korea. All references to &#147;we&#148;, &#147;us&#148;,
&#147;our&#148; or the &#147;Company&#148; shall mean SK Telecom
Co., Ltd. and its consolidated subsidiaries. References to
&#147;SK Telecom&#148; shall mean SK Telecom Co., Ltd., but
shall not include its consolidated subsidiaries. All references
to &#147;U.S.&#148; shall mean the United States of America.
Unless otherwise indicated, from 2001 onwards, all references to
our number of subscribers shall include subscribers attributable
to Shinsegi Telecomm, Inc. (&#147;Shinsegi&#148;).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All references to &#147;KHz&#148; contained in this report shall
mean kilohertz, a unit of frequency denoting one thousand cycles
per second, used to measure band and bandwidth. All references
to &#147;MHz&#148; shall mean megahertz, a unit of frequency
denoting one million cycles per second. All references to
&#147;GHz&#148; shall mean gigahertz, a unit of frequency
denoting one billion cycles per second. All references to
&#147;Kbps&#148; shall mean one thousand binary digits, or bits,
of information per second. All references to &#147;Mbps&#148;
shall mean one million bits of information per second. Any
discrepancies in any table between totals and the sums of the
amounts listed are due to rounding.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In this report, we refer to third generation, or &#147;3G&#148;,
technology and &#147;3.5G&#148; technology. Second generation,
or 2G, technology was designed primarily with voice
communications in mind. On the other hand, 3G and 3.5G
technologies are designed to transfer both voice data and
non-voice, or multimedia, data, generally at faster transmission
speeds than was previously possible.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All references to &#147;Won&#148;, &#147;(Won)&#148; or
&#147;<STRIKE>W</STRIKE>&#148; in this report are to the
currency of Korea, all references to &#147;Dollars&#148;,
&#147;$&#148; or &#147;US$&#148; are to the currency of the
United States of America and all references to &#147;Yen&#148;
or &#147;&#165;&#148; are to the currency of Japan.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unless otherwise indicated, all financial information in this
report is presented in accordance with Korean generally accepted
accounting principles (&#147;Korean GAAP&#148;).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unless otherwise indicated, translations of Won amounts into
Dollars in this report were made at the noon buying rate in The
City of New York for cable transfers in Won per US$1.00 as
certified for customs purposes by the Federal Reserve Bank of
New York. Unless otherwise stated, the translations of Won into
Dollars were made at the noon buying rate in effect on
December&nbsp;31, 2005, which was Won 1,010.0 to US$1.00. On
June&nbsp;26, 2006, the noon buying rate was Won 959.2&nbsp;to
US$1.00. See &#147;Item&nbsp;3A. Selected Financial
Data&nbsp;&#151; Exchange Rates&#148;.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">1
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='102'></A>
</DIV>

<!-- link1 "FORWARD-LOOKING STATEMENTS" -->

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>FORWARD-LOOKING STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This report contains &#147;forward-looking statements&#148;, as
defined in Section&nbsp;27A of the U.S. Securities Act of 1933,
as amended, and Section&nbsp;21E of the U.S. Securities Exchange
Act of 1934, as amended, that are based on our current
expectations, assumptions, estimates and projections about our
company and our industry. The forward-looking statements are
subject to various risks and uncertainties. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as &#147;anticipate&#148;,
&#147;believe&#148;, &#147;considering&#148;,
&#147;depends&#148;, &#147;estimate&#148;, &#147;expect&#148;,
&#147;intend&#148;, &#147;plan&#148;, &#147;planning&#148;,
&#147;planned&#148;, &#147;project&#148; and similar
expressions, or that certain events, actions or results
&#147;will&#148;, &#147;may&#148;, &#147;might&#148;,
&#147;should&#148; or &#147;could&#148; occur, be taken or be
achieved.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Forward-looking statements in this annual report include, but
are not limited to, statements about the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our ability to anticipate and respond to various competitive
    factors affecting the wireless telecommunications industry,
    including new services that may be introduced, changes in
    consumer preferences, economic conditions and discount pricing
    strategies by competitors;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our implementation of high-speed download packet access, or
    HSDPA, technology and wireless broadband internet, or WiBro,
    technology;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our plans to spend approximately Won 1.6 trillion for capital
    expenditures in 2006 for a range of projects, including
    expansion of our upgraded, HSDPA-ready WCDMA network, as well as
    investments in our wireless Internet-related businesses and our
    expected future capital expenditures on various initiatives;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our efforts to make significant investments to build, develop
    and broaden our businesses, including developing and providing
    wireless data, multimedia, mobile commerce and Internet services;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our ability to comply with governmental rules and regulations,
    including the regulations of the Ministry of Information and
    Communication, or the MIC, related to telecommunications
    providers, rules related to our status as a
    &#147;market-dominating business entity&#148; under the Korean
    Monopoly Regulation and Fair Trade Act, or the Fair Trade Act,
    and the effectiveness of steps we have taken to comply with such
    regulations;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our ability to manage effectively our bandwidth and to implement
    timely and efficiently new bandwidth-efficient technologies;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our expectations and estimates related to interconnection fees;
    tariffs charged by our competitors; regulatory fees; operating
    costs and expenditures; working capital requirements; principal
    repayment obligations with respect to long-term borrowings,
    bonds and obligations under capital leases; and research and
    development expenditures and other financial estimates;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the success of our various joint ventures and investments in
    other telecommunications service providers; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the growth of the telecommunications industry in Korea and other
    markets in which we do business and the effect that economic,
    political or social conditions have on our number of
    subscribers, call volumes and results of operations.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We caution you that reliance on any forward-looking statement
involves risks and uncertainties, and that although we believe
that the assumptions on which our forward-looking statements are
based are reasonable, any of those assumptions could prove to be
inaccurate, and, as a result, the forward-looking statements
based on those assumptions could be incorrect. Risks and
uncertainties associated with our business, include but are not
limited to, risks related to changes in the regulatory
environment; technology changes; potential litigation and
governmental actions; changes in the competitive environment;
political changes; foreign exchange currency risks; foreign
ownership limitations; credit risks and other risks and
uncertainties that are more fully described under the heading
&#147;Item&nbsp;3. Key Information&nbsp;&#151; Risk
Factors&#148; and elsewhere in this report. In light of these
and other uncertainties, you should not conclude that we will
necessarily achieve any plans and objectives or
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">2

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
projected financial results referred to in any of the
forward-looking statements. We do not undertake to release the
results of any revisions of these forward-looking statements to
reflect future events or circumstances.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='103'></A>
</DIV>

<!-- link1 "Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS" -->

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<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;1.</B></TD>
    <TD>
    <B><I>IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
    ADVISERS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='104'></A>
</DIV>

<!-- link1 "Item 1A. Directors and Senior Management" -->

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;1A.</B></TD>
    <TD>
    <B><I>Directors and Senior Management</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable.</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='105'></A>
</DIV>

<!-- link1 "Item 1B. Advisers" -->

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;1B.</B></TD>
    <TD>
    <B><I>Advisers</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable.</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='106'></A>
</DIV>

<!-- link1 "Item 1C. Auditors" -->

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;1C.</B></TD>
    <TD>
    <B><I>Auditors</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable.</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='107'></A>
</DIV>

<!-- link1 "Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE" -->

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    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;2.</B></TD>
    <TD>
    <B><I>OFFER STATISTICS AND EXPECTED TIMETABLE</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable.</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='108'></A>
</DIV>

<!-- link1 "Item 3. KEY INFORMATION" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;3.</B></TD>
    <TD>
    <B><I>KEY INFORMATION</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='109'></A>
</DIV>

<!-- link1 "Item 3A. Selected Financial Data" -->

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;3A.</B></TD>
    <TD>
    <B><I>Selected Financial Data</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You should read the selected consolidated financial and
operating data below in conjunction with the consolidated
financial statements and the related notes included elsewhere in
this report. The selected consolidated financial data for the
five years ended December&nbsp;31, 2005 are derived from our
audited consolidated financial statements and related notes
thereto. Information as of and for the year ended
December&nbsp;31, 2001 includes information as of and for the
year ended December&nbsp;31, 2001 for Shinsegi unless otherwise
specified. Shinsegi was merged into SK Telecom in January 2002.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our consolidated financial statements are prepared in accordance
with Korean GAAP, which differ in certain respects from U.S.
GAAP. For more detailed information you should refer to notes 30
and 31 of the notes to our audited consolidated financial
statements included in this annual report.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>As of or for the Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(In billions of won and millions of dollars, except per share and percentage data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>INCOME STATEMENT DATA</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Korean GAAP:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Operating Revenue(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,371.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,324.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,272.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,570.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,721.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>10,615.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cellular Service(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,203.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,156.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,091.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,297.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,361.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,259.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Paging Service(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>160.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>167.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>180.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>273.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>359.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>356.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,047.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,526.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,167.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,130.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,051.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,971.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,324.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,797.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,105.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,439.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,670.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,644.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before Income Taxes and Minority Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,976.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,218.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,754.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,123.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,561.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,536.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before Minority Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,126.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,520.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,965.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,493.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,868.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,849.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,146.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,487.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,966.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,491.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,873.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,854.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income per Share of Common Stock(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,261</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted Net Income per Share of Common Stock(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.79</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividends Declared per Share of Common Stock(5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.91</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted Average Number of Shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86,545,041</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84,270,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,078,219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">3

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; ">

<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>As of or for the Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(In billions of won and millions of dollars, except per share and percentage data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>U.S. GAAP:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Operating Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,307.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,219.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,225.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,534.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,701.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>10,595.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,235.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,643.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,044.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,137.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,847.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,770.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,072.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,576.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,180.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,397.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,853.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,825.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,111.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,301.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,062.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,553.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,027.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,007.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income per Share of Common Stock(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,475</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,543</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted Net Income per Share of Common Stock(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,475</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.82</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>BALANCE SHEET DATA</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Korean GAAP:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Working Capital (Deficiency)(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>668.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(189.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(461.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,323.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,735.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>1,718.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fixed Assets&nbsp;&#151; Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,174.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,569.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,641.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,703.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,663.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,617.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,326.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,228.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,818.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,283.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,704.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,559.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term Liabilities(7)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,498.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,693.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,193.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,010.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,513.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,479.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Shareholders&#146; Equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,149.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,231.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,093.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,205.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,327.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,245.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>U.S. GAAP:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Working Capital (Deficiency)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>729.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(108.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(445.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,311.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,587.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,571.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,841.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,720.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,586.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,576.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,351.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,189.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Shareholders&#146; Equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,820.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,356.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,014.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,237.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,472.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,378.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>OTHER FINANCIAL DATA</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Korean GAAP:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    EBITDA(8)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,932.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,954.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,706.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,085.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,434.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>4,390.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital Expenditures(9)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,382.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,024.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,647.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,631.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,416.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,402.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    R&#38;D Expenses(10)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>153.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>253.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>336.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>321.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>317.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Internal R&#38;D</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>130.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>194.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>235.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>267.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>252.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>249.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    External R&#38;D</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and Amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,759.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,543.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,646.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,752.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,675.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,658.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash Flow from Operating Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,424.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,268.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,329.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,516.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,404.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,370.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash Flow from Investing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,973.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,064.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,415.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,470.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,938.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,919.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash Flow from Financing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>331.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,418.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,261.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(968.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,429.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,414.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Margins (% of total sales):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    EBITDA Margin(8)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating Margin</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Margin</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>U.S. GAAP:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    EBITDA(8)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,859.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,620.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,679.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,970.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,412.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,368.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital Expenditures(9)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,382.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,024.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,668.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,656.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,429.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,415.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash Flow from Operating Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,428.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,606.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,144.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,228.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,293.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,261.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash Flow from Investing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,977.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,892.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,285.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,634.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,816.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,798.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash Flow from Financing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>331.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(927.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,205.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,514.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,439.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,425.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">4

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>As of or for the Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>SELECTED OPERATING DATA</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Population of Korea (millions)(11)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Our Wireless Penetration(12)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Number of Employees(13)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,646</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Sales per Employee (millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,470.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,494.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,634.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,437.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,613.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Wireless Subscribers(14)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,179,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,219,562</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,313,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,783,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,530,117</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Average Monthly Outgoing Voice Minutes per Subscriber(15)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Average Monthly Revenue per Subscriber(16)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>36,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>38,383</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>39,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>39,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>40,205</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Average Monthly Churn Rate(17)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Digital Cell Sites(18)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,384</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,309</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,142</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>*&nbsp; &nbsp;</TD>
    <TD align="left">
    The conversion into Dollars was made at the rate of Won 1,010.0
    to US$1.00. See note&nbsp;2(a) of the notes to our consolidated
    financial statements.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Includes revenues from SK&nbsp;Teletech&nbsp;Co.,&nbsp;Ltd. of
    Won 702.4&nbsp;billion for 2001, Won 534.0&nbsp;billion for
    2002, Won 612.0&nbsp;billion for 2003,
    Won&nbsp;649.8&nbsp;billion for 2004 and Won 294.6&nbsp;billion
    for 2005 from the sale of digital handsets and Won
    1,339.9&nbsp;billion for 2001, Won 1,043.2&nbsp;billion for
    2002, Won&nbsp;1,017.1&nbsp;billion for 2003, Won
    849.4&nbsp;billion for 2004 and Won 898.6&nbsp;billion for 2005
    of interconnection revenue. Following our sale of a 60% equity
    interest in SK&nbsp;Teletech to Pantech&nbsp;&#38; Curitel in
    July 2005, our equity interest in the company was reduced to
    29.1% (which subsequently became a 22.7% interest in Pantech
    following the merger of SK&nbsp;Teletech into Pantech in
    December 2005) and SK&nbsp;Teletech ceased to be our
    consolidated subsidiary. See &#147;Item&nbsp;4B. Business
    Overview&nbsp;&#151; Interconnection&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    In March 2001, we transferred our paging business to Real
    Telecom Co., Ltd. (formerly known as INTEC Telecom Co., Ltd.) in
    exchange for 9.9% of Real Telecom&#146;s newly issued shares and
    bonds with a principal amount of Won 9.5&nbsp;billion that can
    be converted into an additional 7.8% interest in Real Telecom.
    Consequently, the results of the paging business are no longer
    included in our revenues after such date.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    For more information about our other revenue, see
    &#147;Item&nbsp;5. Operating and Financial Review and
    Prospects&#148; and &#147;Item&nbsp;4B. Business Overview&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Income per share of common stock is calculated by dividing net
    income by the weighted average number of shares outstanding
    during the period. Diluted net income per share of common stock
    is calculated by dividing adjusted net income by adjusted
    weighted average number of shares outstanding during the period,
    taking into account the dilutive effect of stock options in 2002
    and issuance of convertible bonds in 2004 and 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    On January&nbsp;1, 2002, we adopted Statement of Korea
    Accounting Standards (&#147;SKAS&#148;) No.&nbsp;6, &#147;Events
    Occurring after Balance Sheet Date&#148;. This statement
    requires that proposed cash dividends be reflected on the
    balance sheet when the appropriations are approved by
    shareholders which is similar to U.S. GAAP. In order to reflect
    this accounting change, our 2001 financial statements have been
    restated accordingly.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    Working capital means current assets minus current liabilities.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(7)&nbsp;</TD>
    <TD align="left">
    Our monetary assets and liabilities denominated in foreign
    currencies are valued at the exchange rate of Won 1,326 to
    US$1.00 as of December&nbsp;31, 2001, Won 1,200 to US$1.00 as of
    December&nbsp;31, 2002, Won&nbsp;1,198 to US$1.00 as of
    December&nbsp;31, 2003, Won 1,044 to US$1.00 as of
    December&nbsp;31, 2004 and Won&nbsp;1,013.0 to US$1.00 as of
    December&nbsp;31, 2005, the rates of exchange permitted under
    Korean GAAP as of those dates. See note&nbsp;2(w) of the notes
    to our consolidated financial statements.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">5
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(8)&nbsp;</TD>
    <TD align="left">
    EBITDA refers to income before interest income, interest
    expense, taxes, depreciation and amortization. EBITDA is
    commonly used in the telecommunications industry to analyze
    companies on the basis of operating performance, leverage and
    liquidity. Since the telecommunications business is a very
    capital intensive business, capital expenditures and level of
    debt and interest expenses may have a significant impact on net
    income for companies with similar operating results. Therefore,
    for a telecommunications company such as ourselves, we believe
    that EBITDA provides a useful reflection of our operating
    results. We use EBITDA as a measurement of operating performance
    because it assists us in comparing our performance on a
    consistent basis as it removes from our operating results the
    impact of our capital structure, which includes interest expense
    from our outstanding debt, and our asset base, which includes
    depreciation and amortization of our property and equipment.
    However, EBITDA should not be construed as an alternative to
    operating income or any other measure of performance determined
    in accordance with Korean GAAP or U.S. GAAP or as an indicator
    of our operating performance, liquidity or cash flows generated
    by operating, investing and financing activities. Other
    companies may define EBITDA differently than we do. EBITDA under
    U.S. GAAP is computed using interest income, interest expense,
    depreciation, amortization and income taxes under U.S. GAAP
    which may differ from Korean GAAP for these items.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(9)&nbsp;</TD>
    <TD align="left">
    Consists of investments in property, plant and equipment. Under
    U.S.&nbsp;GAAP, interest costs incurred during the period
    required to complete an asset or ready an asset for its intended
    use are capitalized based on the interest rates a company pays
    on its outstanding borrowings. Under Korean GAAP, beginning
    January&nbsp;1, 2003, such interest costs are expensed as
    incurred. Through the end of 2002, the accounting treatment for
    capitalizing interest costs under Korean GAAP was consistent
    with that under U.S.&nbsp;GAAP.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(10)&nbsp;</TD>
    <TD align="left">
    Includes donations to Korean research institutes and educational
    organizations. See &#147;Item&nbsp;5C. Research and Development,
    Patents and Licenses, etc.&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(11)&nbsp;</TD>
    <TD align="left">
    Population estimates based on historical data published by the
    National Statistical Office of Korea.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(12)&nbsp;</TD>
    <TD align="left">
    Wireless penetration is determined by dividing our subscribers
    by total estimated population, as of the end of the period.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(13)&nbsp;</TD>
    <TD align="left">
    Includes regular employees and temporary employees. See
    &#147;Item&nbsp;6D. Employees&#148;. Includes 1,332 Shinsegi
    employees as of December&nbsp;31, 2001.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(14)&nbsp;</TD>
    <TD align="left">
    Wireless subscribers include those subscribers who are
    temporarily deactivated, including (1)&nbsp;subscribers who
    voluntarily deactivate temporarily for a period of up to three
    months no more than twice a year and (2)&nbsp;subscribers with
    delinquent accounts who may be involuntarily deactivated up to
    two months before permanent deactivation, which we determine
    based on various factors, including prior payment history.
    Wireless subscribers also include 3,311,874 Shinsegi subscribers
    as of December&nbsp;31, 2001.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(15)&nbsp;</TD>
    <TD align="left">
    The average monthly outgoing voice minutes per subscriber is
    computed by dividing the total minutes of outgoing voice usage
    for the period by the monthly weighted average number of
    subscribers for the period and dividing the quotient by the
    number of months in the period. The monthly weighted average
    number of subscribers is the sum of the average number of
    subscribers for the month, calculated by taking the simple
    average number of subscribers at the beginning of the month and
    at the end of the month, divided by the number of months in the
    period. Shinsegi&#146;s subscribers and outgoing voice minutes
    are included from 2001.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(16)&nbsp;</TD>
    <TD align="left">
    The average monthly revenue per subscriber excludes
    interconnection revenue and is computed by dividing total
    initial connection fees, monthly access fees, usage charges for
    voice and data, international charges, value-added service fees;
    and interest on overdue accounts (net of telephone tax) for the
    period by the monthly weighted average number of subscribers for
    the period and dividing the quotient by the number of months in
    the period. Including interconnection revenue, consolidated
    average monthly revenue per subscriber was Won 45,441 for 2001,
    Won 43,958 for 2002, Won 44,546 for 2003, Won 43,542 for 2004
    and Won 44,167 for 2005. For information about the average
    monthly revenue per subscriber of SK&nbsp;Telecom and Shinsegi
    on a stand-alone basis, see &#147;Item&nbsp;5A. Operating
    Results&nbsp;&#151; Overview&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(17)&nbsp;</TD>
    <TD align="left">
    The average monthly churn rate for a period is the number
    calculated by dividing the sum of voluntary and involuntary
    deactivations during the period by the simple average of the
    number of subscribers at the beginning and end of the period and
    dividing the quotient by the number of months in the period.
    Churn</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">6

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    includes subscribers who upgrade to CDMA lxRTT or CDMA 1xEV/
    DO-capable handsets by terminating their service and opening a
    new subscriber account.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(18)&nbsp;</TD>
    <TD align="left">
    Includes 1,685 cell sites of Shinsegi as of December&nbsp;31,
    2001.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a measure of our operating performance, we believe that the
most directly comparable U.S. and Korean GAAP measure to EBITDA
is net income. The following table reconciles our net income
under U.S. GAAP to our definition of EBITDA on a consolidated
basis for the five years ended December&nbsp;31, 2001, 2002,
2003, 2004 and 2005.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>As of or for the Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(In billions of won and millions of dollars)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net Income</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,111.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,301.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,062.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,553.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,027.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>2,007.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ADD: Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(101.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(90.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(93.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(86.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(62.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(62.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>274.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>396.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>387.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>291.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>226.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>224.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>791.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>585.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>811.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>611.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>667.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>660.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and Amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,783.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,428.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,511.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,601.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,553.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,537.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    EBITDA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,859.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,620.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,679.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,970.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,412.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>4,368.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
The conversion into Dollars was made at the rate of Won 1,010.0
to US$1.00. See note&nbsp;2(a) of the notes to our consolidated
financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table reconciles our net income under Korean GAAP
to our definition of EBITDA on a consolidated basis for the five
years ended December&nbsp;31, 2001, 2002, 2003, 2004 and 2005.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>As of or for the Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(In billions of won and millions of dollars)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net Income</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,146.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,487.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,966.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,491.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,873.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>1,854.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ADD: Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(97.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(86.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(86.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(80.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(61.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(60.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>273.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>311.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>391.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>303.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>253.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>251.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>850.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>698.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>789.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>629.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>693.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>686.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and Amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,759.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,543.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,646.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,741.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,675.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,658.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>EBITDA</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,932.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,954.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,706.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,085.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,434.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>4,390.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Exchange Rates</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth, for the periods and dates
indicated, certain information concerning the noon buying rate
in The City of New York for cable transfers in Won per US$1.00
as certified for customs purposes by the Federal Reserve Bank of
New York. We make no representation that the Won or Dollar
amounts we refer to in this report could have been or could be
converted into Dollars or Won, as the case may be, at any
particular rate or at all.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>At End</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year Ended December 31,</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>of Period</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Rate(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>High</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Low</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,234</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,161</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,193</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,146</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,035</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,035</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,023</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,060</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>997</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">7
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    <TD width="82%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Past Six Months</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>High</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Low</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap><B>(Won per</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap><B>US$1.00)</B></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    January 2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>959</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    February 2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>976</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>962</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March 2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>967</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April 2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>940</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    May 2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>952</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>927</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    June 2006 (through June&nbsp;26, 2006)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>943</TD>
    <TD>&nbsp;</TD>
</TR>

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    <TD>(1)&nbsp;</TD>
    <TD align="left">
    The average rates for the annual periods were calculated based
    on the average noon buying rate on the last day of each month
    (or portion thereof) during the period. The average rate for the
    monthly periods were calculated based on the average noon buying
    rate of each day of the month (or portion thereof).</TD>
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;26, 2006, the noon buying rate was Won 959.2 to
US$1.00.
</DIV>

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<A name='110'></A>
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<B>Item&nbsp;3B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Capitalization
and Indebtedness</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
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<B>Item&nbsp;3C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Reasons for the
Offer and Use of Proceeds</I></B>
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<B>Not applicable</B>
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<B>Item&nbsp;3D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Risk
Factors</I></B>
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    <B><I>Competition may reduce our market share and harm our
    results of operations and financial condition.</I></B></TD>
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We face substantial competition in the wireless
telecommunications sector in Korea. We expect competition to
intensify as a result of consolidation of market leaders and the
development of new technologies, products and services. We
expect that such trends will continue to put downward pressure
on the prevailing tariffs we can charge our subscribers. Also,
continued competition from the other wireless and fixed-line
service providers has resulted in, and may continue to result
in, a substantial level of deactivations among our subscribers.
Subscriber deactivations, or churn, may significantly harm our
business and results of operations. In addition, increased
competition may cause our marketing expenses to increase as a
percentage of sales, reflecting higher advertising expenses and
other costs of new marketing activities, which may need to be
introduced to attract and retain subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to April 1996, we were the only wireless
telecommunications service provider in Korea. Since then,
several new providers have entered the market, offering wireless
voice and data services that compete directly with our own.
Together, these providers had a market share of approximately
49.1%, in terms of numbers of wireless service subscribers, as
of December&nbsp;31, 2005. Furthermore, in 2001, the Government
awarded to three companies licenses to provide high-speed third
generation, or 3G, wireless telecommunications services. In
Korea, this 3G license is also known as the &#147;IMT-2000&#148;
license. IMT-2000 is the global standard for 3G wireless
communications, as defined by the International
Telecommunication Union, an organization established to
standardize and regulate international radio and
telecommunications. One of these licenses was awarded to
SK&nbsp;Telecom&#146;s former subsidiary, SK IMT Co., Ltd.,
which was merged into SK Telecom on May&nbsp;1, 2003, and the
other two licenses were awarded to consortia led by or
associated with KT Corporation, Korea&#146;s principal
fixed-line operator and the parent of KTF, one of our principal
wireless competitors, and to LG Telecom, Ltd., or LGT. In
addition, our wireless voice businesses compete with
Korea&#146;s fixed-line operators, and our Wireless Internet
businesses compete with providers of fixed-line data and
Internet services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Beginning in 2000, there has been considerable consolidation in
the wireless telecommunications industry resulting in the
emergence of stronger competitors. In 2000, KT Corporation
acquired a 47.9% interest in Hansol M.Com (formerly Hansol PCS
Co., Ltd.), which was the fifth largest wireless operator in
terms of numbers of wireless service subscribers at such time.
Hansol M.Com subsequently changed its name to KT M.Com and
</DIV>

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merged into KTF in May 2001. In May 2002, the Government sold
its remaining 28.4% stake in KT Corporation. KT Corporation had
a 44.6% interest in KTF as of December&nbsp;31, 2005. Such
consolidation has created large, well-capitalized competitors
with substantial financial, technical, marketing and other
resources to respond to our business offerings. Future business
combinations and alliances in the telecommunications industry
may also create significant new competitors and could harm our
business and results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, in March 2006, the MIC lifted the prohibition on
the provision of handset subsidies, which had been in place
since June 2000. See &#147;Our businesses are subject to
extensive government regulation and any changes in government
policy relating to the telecommunications industry could have a
material adverse effect on our results of operations and
financial condition&#148;. This recent decision by the MIC has
intensified competition among mobile service providers and
increased our marketing expenses, which could, in turn,
adversely affect our results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect competition to intensify as a result of such
consolidation and as a result of the rapid development of new
technologies, products and services. Our ability to compete
successfully will depend on our ability to anticipate and
respond to various competitive factors affecting the industry,
including new services that may be introduced, changes in
consumer preferences, economic conditions and discount pricing
strategies by competitors.
</DIV>

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    <B><I>Inability to successfully implement or adapt our network
    and technology to meet the continuing technological advancements
    affecting the wireless industry will likely have a material
    adverse effect on our financial condition, results of operation
    and business.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The telecommunications industry has been characterized by
continuous improvement and advances in technology and this trend
is expected to continue. For example, we and our competitors
have introduced new network technology upgrades from our basic
CDMA network to a more advanced high-speed wireless
telecommunications network based on CDMA 1xRTT and CDMA 1xEV/ DO
technology. Korean wireless telecommunications companies,
including us, have also implemented newer technologies such as
wide-band code division access, or WCDMA, which is the 3G
technology implemented by us, and CDMA2000, which is the
3G&nbsp;technology implemented by certain of our competitors,
all of which are commonly referred to as 3G&nbsp;technology and
is also known as IMT-2000 in Korea. Our new WCDMA network is
expected to support data transmission services with more
advanced features at significantly higher data transmission
speeds than our basic CDMA, CDMA 1xRTT and CDMA 1xEV/ DO
networks.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We commenced provision of WCDMA services on a limited basis in
Seoul at the end of 2003 and continued to expand and improve our
WCDMA services in the Seoul metropolitan area in 2004. In 2005,
we completed commercial development of HSDPA technology, also
known as 3.5G technology. HSDPA is a new mobile telephony
protocol that represents an evolution of the WCDMA standard and,
among others, supports higher data capacity and allows faster
data transmissions than previous WCDMA-based protocols. HSDPA
upgrades to our existing WCDMA network do not require hardware
upgrades and may be accomplished through software upgrades at
virtually no cost. By May 2006, we had expanded HSDPA service to
25 cities, including Busan and Incheon. We are continuing
expansion of an upgraded, HSDPA-ready version of our WCDMA
network to other metropolitan areas of Korea. By the end of
2006, we expect that HSDPA service will be available in 84
cities nationwide. The successful introduction and operation of
a 3G or 3.5G network by a competitor could materially and
adversely affect our existing wireless businesses as well as the
returns on future investments we may make in our 3G network or
our other businesses. We could be harmed if we fail to adapt to
technological or other changes in the telecommunications sector
in a timely manner. For a description of some of the
difficulties that we are facing with respect to HSDPA, see
&#147;&#151;&nbsp;HSDPA technology may require significant
capital and other expenditures for implementation which we may
not recoup and such technology may be difficult to integrate
with our existing technology and business.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2005, we obtained a license from the MIC to provide
wireless broadband internet, or WiBro, services, which will
offer high-speed and large-packet data services at competitive
prices and complement our other wireless communication services,
such as HSDPA. WiBro service enables wireless broadband Internet
access to portable computers, mobile phones and other portable
devices. We conducted pilot testing of WiBro
</DIV>

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service in limited areas of metropolitan Seoul in May 2006 and
began commercial service to those limited areas in June 2006. In
addition to a license fee of Won 17.0&nbsp;billion paid to the
MIC in March 2005, we are planning to spend Won 170&nbsp;billion
in capital expenditures in 2006 to build and expand our WiBro
network, and we may spend additional amounts to expand our WiBro
service in the future; however, our investment plans may change
depending on the market demand for such services, competitors
offering similar services and development of competing
technologies. We cannot assure you, however, that there will be
sufficient demand for our WiBro services as a result of
competition or otherwise.
</DIV>

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    <B><I>HSDPA technology may require significant capital and other
    expenditures for implementation which we may not recoup and such
    technology may be difficult to integrate with our existing
    technology and business.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
HSDPA, an evolution of our WCDMA standard, is a high-speed
wireless communication technology that we believe will allow us
to offer even more sophisticated wireless data transmission
services at faster speeds than previously available on our WCDMA
network. Under the terms of our WCDMA license received in 2001
from the MIC, we were required to commence provision of WCDMA
services by the end of 2003. We commenced provision of our WCDMA
services on a limited basis in Seoul at the end of 2003 and
continued to improve our WCDMA services in the Seoul
metropolitan area in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We first deployed HSDPA technology in 2006.&nbsp;HSDPA is a new
mobile telephony protocol that represents an evolution of the
WCDMA standard and, among others, supports higher data capacity
and allows faster data transmissions than previous WCDMA-based
protocols. HSDPA upgrades to our existing WCDMA network do not
require hardware upgrades and may be accomplished through
software upgrades at virtually no cost. We are continuing
expansion of an upgraded, HSDPA-ready version of our WCDMA
network in other metropolitan areas of Korea. By May 2006, we
had expanded HSDPA service to 25 cities, including Busan and
Incheon. By the end of 2006, we expect HSDPA service to be
available in 84 cities nationwide. In March 2005, we developed
and launched dual band/dual mode handsets, which can be used in
both CDMA and WCDMA networks, to offer seamless nationwide 3G
service, an important factor for a nationwide deployment of
HSDPA. However, the actual scope and timing of the full
nationwide roll-out of our HSDPA service will depend on various
other factors, including the availability of required equipment,
our ability to overcome technical problems currently affecting
HSDPA performance, our assessment of the market opportunities
for HSDPA technology-based services and the competitive
landscape in the Korean wireless market.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We cannot assure you that we will be able to construct a
nationwide WCDMA network or provide HSDPA services in a timely,
effective and cost-efficient manner. Several companies in other
countries have announced delays in the roll-out of their 3G and
3.5G services as a result of technological problems and
difficulties with software, equipment and handset supply. We
believe that we may be vulnerable to similar problems, and if
such problems are not resolved effectively as they arise, our
financial condition or results of operations could be adversely
affected. In addition, the MIC is empowered to take various
measures against us ranging from the suspension of our business
to the revocation of our WCDMA license if we fail to comply with
the terms of our WCDMA license. We believe that we are currently
in compliance with all material terms of the license. Also, even
if we complete our WCDMA network on a timely basis, we cannot
assure you that there will be sufficient demand for our HSDPA
services, as a result of competition or otherwise, to permit us
to recoup or profit from our investment in the WCDMA license and
network. In addition, demand for our HSDPA services will depend
in part on the availability of attractive content and services.
We cannot assure you that such content and services will become
available in a timely manner, or at all.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect that the build-out of our WCDMA network may require
external financing, and we cannot assure you that such financing
will be available at a cost acceptable to us, or at all. Also,
we cannot assure you that we will be able to successfully
integrate WCDMA services into our existing businesses in a
timely or cost-effective manner or that the WCDMA business will
not adversely affect our existing wireless businesses, including
the services currently provided on our existing networks.
</DIV>

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    <B><I>Our growth strategy calls for significant investments in
    new businesses and regions, including businesses and regions in
    which we have limited experience.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a part of our growth strategy, we plan to selectively seek
business opportunities abroad. For example, in March 2005, we
established a joint venture with EarthLink, a major Internet
service provider in the United States, to provide voice and data
services as a mobile virtual network operator in the United
States. We also have ongoing projects in Vietnam and Mongolia.
In addition, in February 2005, we established a joint venture
company with China Unicom, China&#146;s second largest mobile
operator, called UNISK Information Technology Co., Ltd., to
market and offer wireless Internet service in China. In
addition, in June 2006, our board of directors approved plans to
subscribe for up to US$1&nbsp;billion of convertible bonds
issued by China Unicom, convertible into 899,745,075 common
shares of China Unicom, which represents an approximate 6.67%
equity interest in that company. We expect the subscription to
be consummated in July 2006. We will continue to seek other
opportunities to expand our business abroad, particularly in
Asia, as circumstances present themselves.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we believe that we must continue to make
significant investments to build, develop and broaden our
existing businesses, including by developing and improving our
wireless data, multimedia, mobile commerce and Internet
services. We will need to respond to market and technological
changes and the development of services which we may have little
or no experience in providing. Entering these new businesses and
regions, in which we have limited experience, may require us to
make substantial investments and no assurance can be given that
we will be successful in our efforts.
</DIV>

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    <B><I>Due to the existing high penetration rate of wireless
    services in Korea, we are unlikely to maintain our subscriber
    growth rate, which could adversely affect our results of
    operations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
According to data published by the MIC and our population
estimates based on historical data published by the National
Statistical Office of Korea, the penetration rate for the Korean
wireless telecommunications service industry as of
December&nbsp;31, 2005 was approximately 79.4%, which is high
compared to many industrialized countries. It is unlikely that
the penetration rates for wireless telecommunications service
will grow at the same pace as it has in the past given such high
penetration rates. As a result of the already high penetration
rates in Korea for wireless services coupled with our large
market share, we expect our subscriber growth rate to decrease.
Slowed growth in penetration rates without a commensurate
increase in revenues through the introduction of new services
and increased use of our services by existing subscribers would
likely have a material adverse effect on our financial condition
and results of operations.
</DIV>

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    <TD>
    <B><I>Our business and results of operations may be adversely
    affected if we fail to acquire adequate additional spectrum or
    use our bandwidth efficiently to accommodate subscriber growth
    and subscriber usage.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
One of the principal limitations on a wireless network&#146;s
subscriber capacity is the amount of spectrum available for use
by the system. We have been allocated 2 x 25 MHz of spectrum in
the 800 MHz band. As a result of bandwidth constraints, our CDMA
1xRTT network is currently operating near its capacity in the
Seoul metropolitan area, and although capacity constraints are
not as severe on our CDMA 1xEV/ DO network, this network
generally operates at high utilization rates. While we believe
that we can address this issue through system upgrades and
efficient allocation of bandwidth, inability to address such
capacity constraints in a timely manner may adversely affect our
business and results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The growth of our wireless data businesses has increased our
utilization of our bandwidth, since wireless data applications
are generally more bandwidth-intensive than voice services. This
trend has been offset in part by the implementation of our CDMA
1xEV/ DO network and, more recently, our WCDMA network, which
use bandwidth more efficiently for voice and data traffic than
our basic CDMA networks. If the current trend of increased data
transmission use by our subscribers continues, our bandwidth
capacity requirements are likely to increase. Growth of our
wireless business will depend in part upon our ability to manage
effectively our bandwidth capacity and to implement efficiently
and in a timely manner new bandwidth-efficient technologies if
they become available. We cannot assure you that bandwidth
constraints will not adversely affect the growth of our wireless
business.
</DIV>

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    <B><I>We may have to make further financing arrangements to meet
    our capital expenditure requirements and debt payment
    obligations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a network-based wireless telecommunications provider, we have
had in the past, and expect to continue to have, significant
capital expenditure requirements, as we continue to build-out
and maintain our networks. We estimate that we will spend
approximately Won 1.6 trillion for capital expenditures in 2006
for a range of projects, including expansion and improvement of
our wireless networks, investments in our Internet-related
businesses and expansion of our WCDMA network. We currently plan
to invest Won 570&nbsp;billion on expansion of our WCDMA network
and HSDPA service and Won 170&nbsp;billion to build and expand
our WiBro network in 2006. For a more detailed discussion of our
capital expenditure plans and a discussion of other factors
which may affect our future capital expenditures, see
&#147;Item&nbsp;5B. Liquidity and Capital, Resources&#148;. At
December&nbsp;31, 2005, we had approximately Won 814.4 billion
in contractual payment obligations due in 2006 of which almost
all involve repayment of debt obligations. See
&#147;Item&nbsp;5F. Tabular Disclosure of Contractual
Obligations&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have not arranged firm financing for all of our current or
future capital expenditure plans and contractual payment
obligations. We have in the past obtained funds for our proposed
capital expenditure and payment obligations from various
sources, including our cash flow from operations as well as from
financings, primarily debt and equity financings. Although we
believe that we have sufficient capital resources from
operations and financings to meet our capital expenditure
requirements and debt payment obligations in the near term,
inability to fund such capital expenditure requirements may have
a material adverse effect on our financial condition, results of
operations and business. In addition, although we currently
anticipate that the capital expenditure levels estimated by us
will be adequate to meet our business needs, such estimates may
need to be adjusted based on developments in technology and
markets. No assurance can be given that we will be able to meet
any such increased expenditure requirements or obtain adequate
financing for such requirements, on terms acceptable to us, or
at all.
</DIV>

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    <TD>
    <B><I>Termination or impairment of our relationship with a small
    number of key suppliers for network equipment and for lease
    lines could adversely affect our results of operations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We purchase wireless network equipment from a small number of
suppliers. We purchase our principal wireless network equipment
from Samsung Electronics Co., Ltd. and LG Electronics Inc. To
date, we have purchased substantially all of the equipment for
our CDMA 1xRTT and CDMA 1xEV/ DO networks from Samsung
Electronics and substantially all of the equipment for our WCDMA
network from Samsung Electronics and LG Electronics. Samsung
Electronics also currently manufactures more than 40% of the
wireless handsets sold to our subscribers. Although other
manufacturers sell the equipment we require, sourcing such
equipment from other manufacturers could result in unanticipated
costs in maintenance and upkeep of the CDMA 1xRTT and CDMA 1xEV/
DO networks or delays and additional costs in our expansion of
the WCDMA network. With respect to the introduction of 3G and
3.5G services, various wireless telecommunications service
providers globally have had difficulty in obtaining adequate
quantities of various types of 3G and 3.5G equipment from
suppliers. Inability to obtain the needed equipment for our
networks in a timely manner may have an adverse effect on our
business, financial condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we rely on KT Corporation and SK Networks to
provide a substantial majority of our leased lines used for our
wireless services. In 2005, KT Corporation and SK Networks
provided approximately 16.0% and 62.0%, respectively, of our
leased lines. We cannot assure you that we will be able to
continue to obtain the necessary equipment from one or more of
our suppliers. Any discontinuation or interruption in the
availability of equipment from our suppliers for any reason
could have an adverse effect on our results of operations.
Inability to lease adequate lines at commercially reasonable
rates may impact the quality of the services we offer and may
result in damage to our reputation and our business.
</DIV>

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    <TD>
    <B><I>Our businesses are subject to extensive government
    regulation and any change in government policy relating to the
    telecommunications industry could have a material adverse effect
    on our results of operations and financial condition.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of our businesses are subject to extensive government
supervision and regulation. The MIC has periodically reviewed
the tariffs charged by wireless operators and has, from time to
time, suggested tariff
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
reductions. Although these suggestions are not binding, we have
in the past implemented some level of tariff reductions in
response to these suggestions. After discussions with the MIC,
effective January&nbsp;1, 2003, we reduced our standard rate
plan&#146;s monthly access fee by Won 1,000, increased our free
air time from 7 minutes to 10 minutes per month and reduced our
peak usage charges from Won 21 to Won 20 per minute. After
discussions with the MIC, in October 2003, we reduced our
monthly charges for caller ID service from Won 2,000 to Won
1,000. In addition, after discussions with the MIC, effective
September&nbsp;1, 2004, we reduced our monthly basic charge by
7.1% from Won 14,000 to Won 13,000. Commencing January&nbsp;1,
2006, we began to provide caller ID service to our customers
free of charge.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Korean government plays an active role in the selection of
technology to be used by telecommunications operators in Korea.
The MIC has adopted the WCDMA and CDMA2000 technologies as the
only standards available in Korea for implementing 3G services.
The MIC may impose similar restrictions on the choice of
technology used in future telecommunications services and we can
give no assurance that the technologies promoted by the
Government will provide the best commercial returns for us.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our wireless telecommunications services depend, in part, on our
interconnection arrangements with domestic and international
fixed-line and other wireless networks. Charges for
interconnection affect our revenues and operating results. The
MIC determines the basic framework for interconnection
arrangements, including interconnection policies relating to
interconnection rates in Korea and has changed this framework
several times in the past. We cannot assure you that we will not
be adversely affected by future changes in the MIC&#146;s
interconnection policies. See &#147;Item&nbsp;4B. Business
Overview&nbsp;&#151; Interconnection&nbsp;&#151; Domestic
Calls&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2003, the MIC announced its plan to implement number
portability with respect to wireless telecommunications service
in Korea. The number portability system allows wireless
subscribers to switch wireless service operators while retaining
the same mobile phone number. In accordance with the plan
published by the MIC, the number portability system was adopted
by SK Telecom first, starting from January&nbsp;1, 2004. KTF and
LGT were required to introduce number portability starting from
July&nbsp;1, 2004 and January&nbsp;1, 2005, respectively. In
addition, in order to manage the availability of phone numbers
efficiently and to secure phone number resources for the new
services, the MIC has required all new subscribers to be given
numbers with the &#145;010&#146; prefix starting January 2004,
and it has been gradually retracting the mobile service
identification numbers which had been unique to each wireless
telecommunications service provider, including &#145;011&#146;
for our cellular services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the use of the common prefix identification
system may pose a greater risk to us compared to the other
wireless telecommunications providers because &#145;011&#146;
has very high brand recognition in Korea as the premium wireless
telecommunications service. The MIC&#146;s adoption of the
number portability system has resulted in and could continue to
result in a deterioration of our market share as a result of
weakened customer loyalty, increased competition among wireless
service providers and higher costs of marketing as a result of
maintaining the number portability system, increased subscriber
deactivations and increased churn rate, all of which had, and
may continue to have, an adverse effect on our results of
operations. See &#147;Item&nbsp;5. Operating and Financial
Review and Prospects&#148; and &#147;Item&nbsp;4B. Business
Overview&nbsp;&#151; Law and Regulation&nbsp;&#151; Number
Portability&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the past, wireless telecommunications service providers
provided handsets at below retail prices to attract new
subscribers, offsetting a significant portion of the cost of
handsets. The rapid growth in penetration rate in past years
can, at least in part, be attributed to such subsidies on
handsets given to new subscribers. The MIC prohibited all
wireless telecommunications service providers, subject to
certain exceptions stipulated in the Telecommunications Business
Act, from providing any such handset subsidies beginning
June&nbsp;1, 2000. The MIC has, on several occasions between
March 2002 and June 2006, imposed various types of sanctions and
fines against us and the other wireless service providers for
violating restrictions on providing handset subsidies and other
activities which were deemed to be disruptive to fair
competition. We paid the fines and believe that we have complied
in all material respects with the other sanctions imposed by the
MIC. For details on these and other government penalties, see
&#147;Item&nbsp;8A. Consolidated Statements and Other Financial
Information&nbsp;&#151; Legal Proceedings&#148;. Beginning on
March&nbsp;27, 2006 the MIC allowed mobile service providers to
grant subsidies to certain qualifying subscribers who purchase
new handsets. We currently provide subsidies of between Won
70,000 and Won 240,000 to subscribers meeting certain
subscription requirements. As a result of the MIC&#146;s
</DIV>

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recent decision to allow handset subsidies, we may face
increased competition from other mobile service providers. In
order to compete more effectively, we have begun providing such
handset subsidies, which may increase our marketing expenses,
which, in turn, may have a material adverse effect on our
results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2002, the MIC implemented a wireless Internet
network co-share system that permits the wireless application
protocol gateway, or WAP gateway, of a fixed-line operator to
connect to a wireless network service provider&#146;s
inter-working function, or IWF, device. IWF is a device that
connects a cellular network with an Internet Protocol, or IP,
network while WAP gateway converts hypertext transfer protocol,
or HTTP protocol, into WAP protocol. This co-share system would
allow subscribers of a wireless network service provider to have
access to wireless Internet content provided by a fixed-line
operator. In December 2002, KT Corporation connected to our IWF
but has not yet commenced service. In July 2003, the MIC
approved the basic terms regarding the implementation of a
network co-share system. In January 2004, we entered into a
memorandum of understanding with Onse to establish a co-share
system, under which we launched these services in June 2005.
Currently, our subscribers can access portals provided by
outside parties. In addition, the MIC has requested that a third
party oversee wireless operators&#146; customer billing
procedures with respect to third-party content providers who are
seeking to provide their content directly to subscribers without
going through an individual operator&#146;s portal, as
third-party content providers have experienced difficulties in
the past in providing their content service directly to
subscribers due to the lack of resources for billing users. We
believe that such a co-share system, if widely adopted, will
have the effect of giving our users access to a wide variety of
content using their handsets which may in turn increase revenues
attributable to our data services. However, this system could
also place significant competitive pressure on the revenues and
profits attributable to our NATE wireless portal.
</DIV>

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    <B><I>We are subject to additional regulation as a result of our
    market position, which could harm our ability to compete
    effectively.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The MIC&#146;s policy is to promote competition in the Korean
telecommunications markets through measures designed to prevent
the dominant service provider in a telecommunications market
from exercising its market power to prevent the emergence and
development of viable competitors. We are currently designated
by the MIC as a &#147;market dominant service provider&#148; in
respect of our wireless telecommunications business. As such, we
are subject to additional regulation to which our competitors
are not subject. For example, under current government
regulations, we must obtain prior approval from the MIC to
change our existing rates or introduce new rates while our
competitors may generally change their rates or introduce new
rates at their discretion. See &#147;Item&nbsp;4B. Business
Overview&nbsp;&#151; Law and Regulation&nbsp;&#151; Rate
Regulation&#148;. As of December&nbsp;31, 2005, our standard
peak usage charge rate was approximately 11.1% higher than those
charged by our competitors. We could also be required by the MIC
to charge higher usage rates than our competitors for future
services. In addition, we were required to introduce number
portability earlier than our competitors, KTF and LGT. The MIC
also awarded the IMT-2000 license to provide 3G services to LGT
at a fee lower than our license fee and on terms generally more
favorable than the terms of our license.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, when the MIC approved the merger of Shinsegi into
us in January 2002, the MIC imposed certain conditions on us.
The MIC periodically reviews our compliance with the conditions
related to our merger with Shinsegi. On May&nbsp;25, 2004, a
policy advisory committee to the MIC announced the results of
its review and stated that the committee believed that our
market dominance may significantly restrict competition in the
telecommunications market and that we had violated the
conditions related to our merger with Shinsegi by providing
subsidies to handset buyers. In June 2004, the MIC imposed a Won
11.9&nbsp;billion fine on us and extended the post-merger
monitoring period until January 2007 pursuant to the policy
advisory committee&#146;s recommendation. On May&nbsp;25, 2004,
we voluntarily undertook to limit our market share through the
end of 2005 to 52.3% of the wireless telecommunications market,
the level of our market share at the time of the approval of our
merger with Shinsegi in January 2002. On July&nbsp;6, 2005, we
voluntarily extended such market share limitation through the
end of 2007. We can give no assurance that the MIC will not take
action that may have a material adverse effect on our business,
operations and financial condition. See &#147;&#151;&nbsp;Our
businesses are subject to extensive government regulation and
any change in government policy relating to the
telecommunications industry could have a material adverse effect
on our results of operations and financial condition.&#148;
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we qualify as a &#147;market-dominating business
entity&#148; under the Fair Trade Act. The Fair Trade Commission
of Korea, or the FTC, approved our acquisition of Shinsegi on
various conditions, one of which was that SK Telecom&#146;s and
Shinsegi&#146;s combined market share of the wireless
telecommunications market, based on numbers of subscribers, be
less than 50.0% as of June&nbsp;30, 2001. In order to satisfy
this condition, we reduced the level of our subscriber
activations and adopted more stringent involuntary subscriber
deactivation policies beginning in 2000 and ceased accepting new
subscribers from April&nbsp;1, 2001 through June&nbsp;30, 2001.
We complied with this requirement by reducing our market share
to approximately 49.7% as of June&nbsp;30, 2001. We are not
currently subject to any market share limitations; however, on
May&nbsp;25, 2004, we voluntarily undertook to limit our market
share through the end of 2005 to 52.3% of the wireless
telecommunications market, the level of our market share at the
time of the approval of our merger with Shinsegi in January
2002. On July&nbsp;6, 2005, we voluntarily extended such market
share limitation through the end of 2007. We can give no
assurance that the Government will not impose restrictions on
our market share in the future or that we will not undertake to
voluntarily restrict our market share in the future. If we are
subject to market share limitations in the future, our ability
to compete effectively will be impeded.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The FTC is also currently conducting an antitrust investigation
into alleged price collusion among KTF, LGT and us. In May 2006,
the FTC imposed fines of Won 660&nbsp;million on KTF and us and
Won 462&nbsp;million on LGT for collusion in terminating
optional flat-rate subscription plans. We expect the FTC to
announce additional rulings on alleged collusive practices among
mobile service providers. We cannot predict the ultimate outcome
of the FTC&#146;s investigation, and there can be no assurance
that we will not be subject to additional fines or other
sanctions, or that the eventual outcome will not have a material
adverse effect on our financial condition or results of
operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The additional regulation to which we are subject has affected
our competitiveness in the past and may hurt our profitability
and impede our ability to compete effectively against our
competitors in the future.
</DIV>

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    <TD>
    <B><I>Financial difficulties and charges of financial statement
    irregularities at our affiliate, SK Networks (formerly SK
    Global), may cause disruptions in our business.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Charges of financial statement irregularities by certain
directors and executives at SK Networks culminated in the
resignation of four of our board members and executives in March
2004, although none of these resignations were related to any
allegations of wrongdoing in connection with their role in our
business. SK&nbsp;Telecom was not implicated in any of the
charges against SK Networks&#146; management. However,
continuing financial difficulties at SK Networks could result in
our having to look for alternative sources for handset
distribution and fixed network line needs. In February 2004,
Mr.&nbsp;Kil Seung Son and Mr.&nbsp;Tae Won Chey, who both
received prison terms of three years in the court of first
instance and appealed to the Seoul High Court in connection with
allegations of financial misconduct at SK Networks, resigned
from our board of directors, along with Mr.&nbsp;Moon Soo Pyo,
our president at the time, and Mr.&nbsp;Jae Won Chey, our
executive vice president at the time. See &#147;Item&nbsp;6A.
Directors and Senior Management&nbsp;&#151; Involvement In
Certain Legal Proceedings&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The financial future of SK Networks remains uncertain.&nbsp;In
March 2003, the principal creditor banks of SK&nbsp;Networks
commenced corporate restructuring procedures against SK Networks
after the company announced that its financial statements
understated its total debt by Won 1.1 trillion and overstated
its profits by Won 1.5 trillion. These banks agreed to a
temporary rollover of approximately Won 6.6 trillion of SK
Networks&#146; debt until June&nbsp;18, 2003 and subsequently
decided to put SK&nbsp;Networks into corporate restructuring. In
October 2003, SK&nbsp;Networks&#146; foreign and domestic
creditors agreed to a restructuring plan which, among other
things, allowed the foreign creditors to have their debts repaid
at a buyout rate of 43% of the face value of the outstanding
debt owed to them. In November 2003, SK Networks underwent a
capital reduction and sold approximately Won 1 trillion of its
assets as part of its restructuring plan, and SK Corporation
approved a Won 850&nbsp;billion debt-for-equity swap.
SK&nbsp;Networks is still under the joint management of its
domestic creditors in accordance with its business normalization
plan.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SK Networks also serves as a distributor of handsets
manufactured by third parties to our nationwide network of
dealers. SK Networks was also the exclusive distributor of all
of the handsets sold by our former subsidiary, SK Teletech,
prior to our sale of the company to Pantech &#38; Curitel in
July 2005. Samsung Electronics
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Co. Ltd., LG Electronics Inc., Motorola Korea, Inc. and Pantech
&#38; Curital suspended their supply handsets to
SK&nbsp;Networks from the beginning of April 2003 for two to
three weeks because of the credit risk of SK Networks. In May
2003, all suppliers resumed their supply of handsets on the
condition that payment on their mobile phones be made in cash
within one week of delivery. Although we believe that handset
manufacturers will be able to find another distributor to
replace SK Networks in the event SK Networks is no long able to
distribute handsets, there may be difficulties in efficiently
distributing handsets to our subscribers and other customers in
the short term.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, in 2005, we leased approximately 62.0% of our fixed
network lines, which connect our various cell sites and
switching stations, from SK Networks. If there is a material
disruption of SK Networks&#146; ability to maintain and operate
this business due to its financial difficulties, we may need to
seek alternative sources. Although we do not believe that this
will have a materially adverse effect on our business, this may
result in a disruption of our services in the short term.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Concerns that radio frequency emissions may be linked to
    various health concerns could adversely affect our business and
    we could be subject to litigation relating to these health
    concerns.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the past, allegations that serious health risks may result
from the use of wireless telecommunications devices or other
transmission equipment have adversely affected share prices of
some wireless telecommunications companies in the United States.
We cannot assure you that these health concerns will not
adversely affect our business. Several class action and personal
injury lawsuits have been filed in the United States against
several wireless phone manufacturers and carriers, asserting
product liability, breach of warranty and other claims relating
to radio transmissions to and from wireless phones. Certain of
these lawsuits have been dismissed. We could be subject to
liability or incur significant costs defending lawsuits brought
by our subscribers or other parties who claim to have been
harmed by or as a result of our services. In addition, the
actual or perceived risk of wireless telecommunications devices
could have an adverse effect on us by reducing our number of
subscribers or our usage per subscriber.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our businesses may be adversely affected by developments
    affecting the Korean economy.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We generate substantially all of our revenue from operations in
Korea. Our future performance will depend in large part on
Korea&#146;s future economic growth. Adverse developments in
Korea&#146;s economy or in political or social conditions in
Korea may have an adverse effect on our number of subscribers,
call volumes and results of operations, which could have an
adverse effect on our business.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
From early 1997 until 1999, Korea experienced a significant
financial and economic downturn, from which it is widely
believed the country has now recovered to a significant extent.
However, the economic indicators in the past three years have
shown mixed signs of recovery and uncertainty, and future
recovery or growth of the economy is subject to many factors
beyond our control. Events related to the terrorist attacks in
the United States on September&nbsp;11, 2001, recent
developments in the Middle East including the war in Iraq,
higher oil prices, the general weakness of the global economy
and the outbreak of severe acute respiratory syndrome, or SARS,
in Asia and other parts of the world have increased the
uncertainty of global economic prospects and may continue to
adversely affect the Korean economy. Any future deterioration of
the Korean or global economy could adversely affect our
financial condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Developments that could have an adverse impact on Korea&#146;s
economy include:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    financial problems or lack of progress in restructuring of
    chaebols, or Korean conglomerates, other large troubled
    companies, their suppliers or the financial sector;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    loss of investor confidence arising from corporate accounting
    irregularities and corporate governance issues of certain
    chaebols;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a slowdown in consumer spending;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    adverse changes or volatility in foreign currency reserve
    levels, commodity prices, exchange rates, interest rates or
    stock markets;</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    adverse developments in the economies of countries that are
    important export markets for Korea, such as the United States,
    Japan and China, or in emerging market economies in Asia or
    elsewhere;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the continued emergence of the Chinese economy, to the extent
    its benefits (such as increased exports to China) are outweighed
    by its costs (such as competition in export markets or for
    foreign investment and the relocation of manufacturing base from
    Korea to China);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    social and labor unrest;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    substantial decrease in market price of the Korean real estate
    market;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a decrease in tax revenues and a substantial increase in the
    Korean government&#146;s expenditures for unemployment
    compensation and other social programs that, together, would
    lead to an increased government budget deficit;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    geo-political uncertainty and risk of further attacks by
    terrorist groups around the world;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the recurrence of SARS or avian flu in Asia and other parts of
    the world;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    deterioration in economic or diplomatic relations between Korea
    and its trading partners or allies, including deterioration
    resulting from trade disputes or disagreements in foreign policy;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    political uncertainty or increasing strife among or within
    political parties in Korea;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    hostilities involving oil producing countries in the Middle East
    and any material disruption in the supply of oil or increase in
    the price of oil; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase in the level of tension or an outbreak of
    hostilities between North Korea and Korea or the United States.</TD>
</TR>

</TABLE>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Depreciation of the value of the Won against the Dollar
    and other major foreign currencies may have a material adverse
    effect on our results of operations and on the prices of our
    common stock and the ADSs.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Substantially all of our revenues are denominated in Won.
Depreciation of the Won may materially affect our results of
operations because, among other things, it causes:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase in the amount of Won required by us to make interest
    and principal payments on our foreign currency-denominated debt,
    which accounted for approximately 9.6% of our total consolidated
    long-term debt, including current portion, as of
    December&nbsp;31, 2005; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase, in Won terms, of the costs of equipment that we
    purchase from overseas sources which we pay for in Dollars or
    other foreign currencies.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fluctuations in the exchange rate between the Won and the Dollar
will affect the Dollar equivalent of the Won price of the shares
of our common stock on the Stock Market Division of the Korea
Exchange, on the KRX&nbsp;Stock Market. These fluctuations also
will affect:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amounts a registered holder or beneficial owner of ADSs will
    receive from the ADR depositary in respect of dividends, which
    will be paid in Won to the ADR depositary and converted by the
    ADR depositary into Dollars;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the Dollar value of the proceeds that a holder will receive upon
    sale in Korea of the shares; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the secondary market price of the ADSs.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For historical exchange rate information, see
&#147;Item&nbsp;3A. Selected Financial Data&nbsp;&#151; Exchange
Rate&#148;.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Increased tensions with North Korea could have an adverse
    effect on us and the prices of our common stock and the
    ADSs.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Relations between Korea and North Korea have been tense over
most of Korea&#146;s history. The level of tension between Korea
and North Korea has fluctuated and may increase or change
abruptly as a result of current and
</DIV>

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future events, including ongoing contacts at the highest levels
of the governments of Korea and North Korea and increasing
hostility between North Korea and the United States. In December
2002, North Korea removed the seals and surveillance equipment
from its Yongbyon nuclear power plant and evicted inspectors
from the United&nbsp;Nations International Atomic Energy Agency,
and has reportedly resumed activity at its Yongbyon power plant.
In January 2003, North Korea announced its intention to withdraw
from the Nuclear Non-Proliferation Treaty, demanding that the
United States sign a non-aggression pact as a condition to North
Korea dismantling its nuclear program. In August 2003,
representatives of Korea, the United States, North Korea, China,
Japan and Russia held multilateral talks in an effort to resolve
issues relating to North Korea&#146;s nuclear weapons program.
In February 2005, North Korea declared that it had developed and
is in possession of nuclear weapons. In September 2005, North
Korea agreed to abandon all nuclear weapons and programs, and
the six participating nations signed a draft preliminary accord
pursuant to which North Korea agreed to dismantle its existing
nuclear weapons, abandon efforts to produce new future weapons
and readmit international inspectors to its nuclear facilities.
In return, the other five nations participating in the talks,
China, Japan, Korea, Russia and the United States, expressed
willingness to provide North Korea with energy assistance and
other economic support. The six parties agreed to hold further
talks in November 2005. However, one day after the joint
statement was released, North Korea announced that it would not
dismantle its nuclear weapons program unless the United States
agreed to provide civilian nuclear reactors in return, a demand
that the United States rejected. We cannot assure you that
future negotiations will result in a final agreement on North
Korea&#146;s nuclear program, including critical details such as
implementation and timing, or that the level of tensions between
Korea and North Korea will not escalate. In addition, in recent
years, there have been heightened security concerns stemming
from North Korea&#146;s nuclear weapon and long-range missile
programs and increased uncertainty regarding North Korea&#146;s
actions and possible responses from the international community.
Any further increase in tensions, resulting for example from a
break-down in contacts, test of long-range nuclear missiles
coupled with continuing nuclear programs by North Korea or an
outbreak in military hostilities, could adversely affect our
business, prospects, results of operations and financial
condition and could lead to a decline in the market value of our
common stock and the ADSs.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If SK Corporation causes us to breach the foreign
    ownership limitations on shares of our common stock, we may
    experience a change of control.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There is currently a 49% limit on the aggregate foreign
ownership of our issued shares. Under a newly adopted amendment
to the Telecommunications Business Law, which became effective
on May&nbsp;9, 2004, a Korean entity, such as SK Corporation, is
deemed to be a foreign entity if its largest shareholder
(determined by aggregating the shareholdings of such shareholder
and its related parties) is a foreigner and such shareholder
(together with the shareholdings of its related parties) holds
15% or more of the issued voting stock of the Korean entity. As
of December&nbsp;31, 2005, SK Corporation owned 17,663,127
shares of our common stock, or approximately 21.5%, of our
issued shares. If SK Corporation were considered a foreign
shareholder of SK&nbsp;Telecom, then its shareholding in SK
Telecom would be included in the calculation of the aggregate
foreign shareholding of SK Telecom and the aggregate foreign
shareholding in SK Telecom (based on our foreign ownership level
as of December&nbsp;31, 2005, which we believe was 48.7%) would
exceed the 49% ceiling on foreign shareholding. As of
December&nbsp;31, 2005, a foreign investment fund and its
related parties collectively held a 5.03% stake in SK
Corporation. We could breach the foreign ownership limitations
if the number of shares of our common stock or ADSs owned by
other foreign persons significantly increases.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the aggregate foreign shareholding limit in SK Telecom is
exceeded, the MIC may issue a corrective order to SK Telecom,
the breaching shareholder (including SK Corporation if the
breach is caused by an increase in foreign ownership of SK
Corporation) and the foreign investment fund and its related
parties who own in the aggregate 15% or more of SK Corporation.
Furthermore, if SK Corporation is considered a foreign
shareholder, it may not exercise its voting rights with respect
to the shares held in excess of the 49% ceiling, which may
result in a change in control of us. In addition, the MIC may
refuse to grant us licenses or permits necessary for entering
into new telecommunications businesses until the aggregate
foreign shareholding of SK Telecom is reduced to below 49%. If a
corrective order is issued to us by the MIC arising from the
violation of the foregoing foreign ownership limit, and we do
not comply within the prescribed period under such corrective
order, the MIC may (1)&nbsp;suspend all or part of our business,
or (2)&nbsp;if the suspension of business is deemed to result in
significant inconvenience to our customers or be detrimental to
the public interest, impose a one-time administrative penalty
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
of up to 3% of our sales revenues. The amendment to the
Telecommunications Business Law in May 2004 also authorizes the
MIC to assess monetary penalties of up to 0.3% of the purchase
price of the shares for each day the corrective order is not
complied with, as well as a prison term of up to one year and a
penalty of Won 50&nbsp;million. For a description of further
actions that the MIC could take, see &#147;Item&nbsp;4B.
Business Overview&nbsp;&#151; Law and Regulation&nbsp;&#151;
Foreign Ownership and Investment Restrictions and
Requirements&#148;.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If our convertible notes are converted by foreign holders
    and the conversion would cause a violation of the foreign
    ownership restrictions of the Telecommunications Business Law,
    or in certain other circumstances, we may sell common stock in
    order to settle the converting holders&#146; conversion rights
    in cash in lieu of delivering common stock to them, and these
    sales might adversely affect the market price of our common
    stock or ADRs.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2004, we sold US$329.5&nbsp;million in zero coupon
convertible notes due 2009. These convertible notes are
convertible by the holders into shares of our common stock at
the rate of Won 218,098 per share. These notes are held
principally by foreign holders. If (1)&nbsp;the exercise by the
holder of the conversion right would be prohibited by Korean law
or we reasonably conclude that the delivery of common stock upon
conversion of these notes would result in a violation of
applicable Korean law or (2)&nbsp;we do not have a sufficient
number of shares of our common stock to satisfy the conversion
right, then we will pay a converting holder a cash settlement
payment. In such situations, we may sell such number of treasury
shares held in trust for us that corresponds to the number of
shares of common stock that would have been deliverable in the
absence of the 49% foreign shareholding restrictions imposed by
the Telecommunications Law or other legal restrictions. The
number of shares sold in these circumstances might be
substantial. We cannot assure you that such sales would not
adversely affect the market prices of our common stock or ADSs.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Sales of SK Telecom shares by companies in the SK Group,
    POSCO and/or other large shareholders may adversely affect the
    prices of SK Telecom&#146;s common stock and the ADSs.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Sales of substantial amounts of shares of our common stock, or
the perception that such sales may occur, could adversely affect
the prevailing market price of the shares of our common stock or
the ADSs or our ability to raise capital through an offering of
our common stock.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, POSCO owned 3.64% of our issued
common stock. POSCO has not agreed to any restrictions on its
ability to dispose of our shares. See&nbsp;&#147;Item&nbsp;7A.
Major Shareholders&#148;. Companies in the SK&nbsp;Group, which
collectively owned 22.79% of our issued common stock as of
December&nbsp;31, 2005, may sell their shares of our common
stock in order to comply with the Fair Trade Act&#146;s limits
on the total investments that companies in a large business
group, such as the SK Group, may hold in other domestic
companies. See &#147;Item&nbsp;4B. Business Overview&nbsp;&#151;
Law and Regulation&nbsp;&#151; Competition Regulation&#148;. We
understand that SK&nbsp;Networks, which owned 1.32% of our
shares as of December&nbsp;31, 2005, has agreed with its
creditors in connection with its corporate restructuring to sell
certain of its assets, which may include our shares. We can make
no prediction as to the timing or amount of any sales of our
common stock. We cannot assure you that future sales of shares
of our common stock, or the availability of shares of our common
stock for future sale, will not adversely affect the market
prices of the shares of our common stock or ADSs prevailing from
time to time.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Korea&#146;s new legislation allowing class action suits
    related to securities transactions may expose us to additional
    litigation risk.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A new law enacted on January&nbsp;20, 2004 allows class action
suits to be brought by shareholders of companies (including us)
listed on the KRX Stock Market for losses incurred in connection
with purchases and sales of securities and other securities
transactions arising from (i)&nbsp;false or inaccurate
statements provided in the registration statements,
prospectuses, business reports and audit reports and omission of
material information in such documents; (ii)&nbsp;insider
trading and (iii)&nbsp;market manipulation. This law became
effective starting from January&nbsp;1, 2005 with respect to
companies (including us) whose total assets are equal to or
greater than Won 2.0 trillion as of the end of the fiscal year
immediately preceding January&nbsp;1, 2005. However, in the
event that certain elements of a financial statement for the
fiscal year ended before January&nbsp;1, 2005, were not in
compliance with the then effective accounting standards, this
law does not apply, if such non-compliance is cured or addressed
in the financial
</DIV>

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statements for the fiscal year ending on December&nbsp;31, 2006,
and such corrected information is submitted to the Financial
Supervisory Commission or the Korea Exchange Inc., or the KRX,
or made publicly available. This law permits 50 or more
shareholders who collectively hold 0.01% of the shares of a
company to bring a class action suit against, among others, the
issuer and its directors and officers. It is uncertain how the
courts will apply this law. Litigation can be time-consuming and
expensive to resolve, and can divert management time and
attention from the operation of a business. We are not aware of
any basis under which such suit may be brought against us, nor
are any such suits pending or threatened. Any such litigation
brought against us could have a material adverse effect on our
business, financial condition and results of operations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I>If an investor surrenders his ADSs to withdraw the
    underlying shares, he may not be allowed to deposit the shares
    again to obtain ADSs.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the deposit agreement, holders of shares of our common
stock may deposit those shares with the ADR depositary&#146;s
custodian in Korea and obtain ADSs, and holders of ADSs may
surrender ADSs to the ADR depositary and receive shares of our
common stock. However, under the terms of the deposit agreement,
as amended, the depositary bank is required to obtain our prior
consent to any such deposit if, after giving effect to such
deposit, the total number of shares of our common stock on
deposit, which was 1,777,173 shares as of April&nbsp;30, 2006,
exceeds a specified maximum, subject to adjustment under certain
circumstances. In addition, the depositary bank or the custodian
may not accept deposits of our common shares for issuance of
ADSs under certain circumstances, including (1)&nbsp;if it has
been determined by us that we should block the deposit to
prevent a violation of applicable Korean laws and regulations or
our articles of incorporation or (2)&nbsp;if a person intending
to make a deposit has been identified as a holder of at least 3%
of our common stock on October&nbsp;7, 2002. See
&#147;Item&nbsp;10B.&nbsp;Memorandum and Articles of
Incorporation&nbsp;&#151; Description of American Depositary
Shares&#148;. It is possible that we may not give the consent.
Consequently, an investor who has surrendered his ADSs and
withdrawn the underlying shares may not be allowed to deposit
the shares again to obtain ADSs.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>An investor in our ADSs may not be able to exercise
    preemptive rights for additional shares and may suffer dilution
    of his equity interest in us.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Korean Commercial Code and our articles of incorporation
require us, with some exceptions, to offer shareholders the
right to subscribe for new shares in proportion to their
existing ownership percentage whenever new shares are issued. If
we offer any rights to subscribe for additional shares of our
common stock or any rights of any other nature, the ADR
depositary, after consultation with us, may make the rights
available to an ADS holder or use reasonable efforts to dispose
of the rights on behalf of the ADS holder and make the net
proceeds available to the ADS holder. The ADR depositary,
however, is not required to make available to an ADS holder any
rights to purchase any additional shares unless it deems that
doing so is lawful and feasible and:
</DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a registration statement filed by us under the U.S. Securities
    Act of 1933, as amended, is in effect with respect to those
    shares; or</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the offering and sale of those shares is exempt from, or is not
    subject to, the registration requirements of the U.S. Securities
    Act.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are under no obligation to file any registration statement
with respect to any ADSs. If a registration statement is
required for an ADS holder to exercise preemptive rights but is
not filed by us, the ADS holder will not be able to exercise his
preemptive rights for additional shares. As a result, ADS
holders may suffer dilution of their equity interest in us.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Short selling of our ADSs by purchasers of securities
    convertible or exchangeable into our ADSs could materially
    adversely affect the market price of our ADSs.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SK Corporation, through one or more special purpose vehicles,
has engaged and may in the future engage in monetization
transactions relating to its ownership interest in us. These
transactions have included and may include offerings of
securities that are convertible or exchangeable into our ADSs.
Many investors in convertible or exchangeable securities seek to
hedge their exposure in the underlying equity securities at the
time of acquisition of the convertible or exchangeable
securities, often through short selling of the underlying equity
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
securities or through similar transactions. Since a monetization
transaction could involve debt securities linked to a
significant number of our ADSs, we expect that a sufficient
quantity of ADSs may not be immediately available for borrowing
in the market to facilitate settlement of the likely volume of
short selling activity that would accompany the commencement of
a monetization transaction. This short selling and similar
hedging activity could place significant downward pressure on
the market price of our ADSs, thereby having a material adverse
effect on the market value of ADSs owned by you.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>After the exchange of ADSs into the underlying common
    shares of SK Telecom, seller or purchasers of the underlying
    common shares may have to pay securities transaction tax upon
    the transfer of the shares.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean tax law, transfer of a company&#146;s common shares
after the exchange of ADSs into the underlying common shares of
SK Telecom will be subject to securities transaction tax
(including an agricultural and fishery special tax) at the rate
of 0.3% of the sales price if traded on the KRX Stock Market.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Securities transaction tax, if applicable, generally must be
paid by the transferor of the shares or the person transferring
rights to subscribe to such shares. When the transfer is
effected through a securities settlement company, such
settlement company is generally required to withhold and pay the
tax to the tax authority. When such transfer is made through a
securities company, such securities company is required to
withhold and pay the tax. In case the sale takes place outside
the KRX Stock Market, without going through a securities
settlement company or a securities company, between two
non-residents or between a non-resident seller and a Korean
resident purchaser, the purchaser will have to withhold
securities transaction tax at the rate of 0.5% of the sales
price of the common shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Failing to accurately report the securities transaction tax will
result in a penalty of 10% of the tax amount due. The failure to
pay the securities transaction tax due will result in imposition
of interest at 10.95% per annum on the unpaid tax amount for the
period from the day immediately following the last day of the
tax payment period to the day of the issuance of the tax notice.
The penalty is imposed on the party responsible for paying the
securities transaction tax or, if the securities transaction tax
is to be paid via withholding, the penalty is imposed on the
party that has the withholding obligation. See
&#147;Item&nbsp;10E. Taxation&nbsp;&#151; Korean Taxation&#148;.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>A holder of our ADSs may not be able to enforce a judgment
    of a foreign court against us.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are a corporation with limited liability organized under the
laws of Korea. Substantially all of our directors and officers
and other persons named in this document reside in Korea, and
all or a significant portion of the assets of our directors and
officers and other persons named in this document and
substantially all of our assets are located in Korea. As a
result, it may not be possible for holders of our ADSs to effect
service of process within the United&nbsp;States, or to enforce
against them or us in the United&nbsp;States judgments obtained
in United&nbsp;States courts based on the civil liability
provisions of the federal securities laws of the United States.
There is doubt as to the enforceability in Korea, either in
original actions or in actions for enforcement of judgments of
United&nbsp;States courts, of civil liabilities predicated on
the United&nbsp;States federal securities laws.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We are generally subject to Korean corporate governance
    and disclosure standards, which may differ from those in other
    countries.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Companies in Korea, including us, are subject to corporate
governance standards applicable to Korean public companies,
which may differ in some respects from standards applicable in
other countries, including the United&nbsp;States. As a
reporting company registered with the Securities and Exchange
Commission and listed on the New&nbsp;York Stock Exchange, we
are, and in the future will be, subject to certain corporate
governance standards as mandated by the Sarbanes-Oxley Act of
2002. However, foreign private issuers, including us, are exempt
from certain corporate governance requirements under the
Sarbanes-Oxley Act or under the rules of the New York Stock
Exchange. There may also be less publicly available information
about Korean companies, such as us, than is regularly made
available by public or non-public companies in other countries.
Such differences in corporate governance standards and less
public information could result in corporate governance
practices or disclosures that are perceived as less than
satisfactory by investors in certain countries.
</DIV>

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<A name='113'></A>
</DIV>

<!-- link1 "Item 4. INFORMATION ON THE COMPANY" -->

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<B>Item&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>INFORMATION ON
THE COMPANY</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<A name='114'></A>
</DIV>

<!-- link1 "Item 4A. History and Development of the Company" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;4A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>History and
Development of the Company</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are Korea&#146;s leading wireless telecommunications services
provider and a pioneer in the commercial development and
provision of high-speed Wireless Internet services. We served
approximately 19.8&nbsp;million subscribers throughout Korea as
of April&nbsp;30, 2006, including 19.2&nbsp;million subscribers
who owned data-capable handsets. As of April&nbsp;30, 2006, our
share of the Korean wireless market was approximately 50.7%,
based on the number of subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We provide our services principally through networks using CDMA
technology. In October 2000, we became the world&#146;s first
wireless operator to commercially launch CDMA 1xRTT, a
CDMA-based advanced radio transmission technology for high-speed
wireless data and wireless Internet services. CDMA 1xRTT allows
transmission of data at speeds of up to 144 Kbps, compared to
the 64 Kbps possible over our CDMA network. In addition to
higher data transfer speeds, CDMA 1xRTT technology uses
packet-based data transmission, which permits more efficient use
of wireless spectrum and packet-based pricing of data services.
As of April&nbsp;30, 2006, approximately 18.9&nbsp;million of
our subscribers had handsets capable of accessing our CDMA 1xRTT
network.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the first half of 2002, we launched an upgrade of our CDMA
1xRTT network in 26 cities in Korea to CDMA 1xEV/ DO. CDMA 1xEV/
DO is a more advanced CDMA-based technology which enables data
to be transmitted at speeds of up to 2.4 Mbps. CDMA 1xEV/ DO
technology also allows us to provide advanced wireless data
services such as streaming video and audio services. CDMA 1xEV/
DO-capable handsets became available in Korea in June 2002. As
of December&nbsp;31, 2004, the CDMA 1xEV/ DO network upgrade was
complete, with service available in 84 cities in Korea.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2000, the MIC awarded a consortium we led, the right
to acquire a license to develop, construct and operate a WCDMA
network using 2 X 20 MHz of spectrum in the 2 GHz band. WCDMA is
a high-speed wireless communication technology that allows us to
offer even more sophisticated data transmission services at
speeds faster than our CDMA 1xRTT and CDMA 1xEV/ DO networks. In
March 2001, we incorporated SK IMT to hold the license and
develop our WCDMA business and we, together with Shinsegi,
invested Won 985.2&nbsp;billion for a 61.6% interest in SK IMT.
In December 2001, we disposed of 144,000 shares of SK IMT worth
Won 3.9&nbsp;billion. In May 2003, SK IMT merged into SK
Telecom. The WCDMA license was awarded by the MIC to SK IMT in
December 2000, at a total license cost to SK IMT of Won 1.3
trillion. SK IMT paid Won 650&nbsp;billion of this amount in
March 2001, and we are required to pay the remainder of the
license cost in annual installments from 2007 through 2011. For
more information, see note&nbsp;2(j) of the notes to our
consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2002, we also acquired the remaining 29.6% interest
in Shinsegi, the second wireless operator to introduce wireless
voice services in Korea, which we did not yet own, and merged
Shinsegi into SK Telecom. As a result of this merger, we have a
combined 2 &#215; 25&nbsp;MHz of spectrum in the 800&nbsp;MHz
range.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We commenced construction of our WCDMA network in 2003 and began
provision of our WCDMA-based services on a limited basis in
Seoul at the end of 2003. We continued to expand and improve our
WCDMA services in the Seoul metropolitan area in 2004. In 2005,
we completed commercial development of HSDPA technology, also
known as 3.5G technology. HSDPA technology is a more advanced
mobile telephony protocol that represents an evolution of the
WCDMA standard. By May 2006, we had expanded HSDPA service to
25&nbsp;cities, including Busan and Incheon. We expect to
complete expansion of an upgraded, HSDPA ready version of our
WCDMA network to 84&nbsp;cities nationwide by the end of 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2004, we were assigned by the MIC, frequency for
satellite DMB. In October 2004, we granted the right to use such
satellite, satellite orbit and frequency to TU Media Corp., one
of our affiliates, which received a license from the MIC as a
satellite DMB provider on December&nbsp;30, 2004. On May&nbsp;1,
2005, TU Media Corp. began to provide satellite DMB services. As
of April&nbsp;30, 2006, TU Media had over 500,000 subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2005, we obtained a license from the MIC to provide
WiBro services, which will complement our other wireless
communication services, such as HSDPA. WiBro will offer wireless
Internet services at competitive prices in metropolitan areas
where there is a high demand for high-speed and large packet data
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">22

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
services. In April 2005, we were assigned by the MIC, a
27&nbsp;MHz of spectrum in the 2.3GHz (2,300&nbsp;- 2,327MHz)
range in connection with WiBro services. We conducted pilot
testing of WiBro service in limited areas of metropolitan Seoul
starting in May 2006 and began commercial service in those
limited areas in June 2006. We intend to expand coverage of our
WiBro service to other areas of metropolitan Seoul in 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;31, 2006, we had a market capitalization of
approximately Won 18.6 trillion (US$19.4&nbsp;billion, as
translated at the noon buying rate of June&nbsp;26, 2006) or
approximately 2.61% of the total market capitalization on the
KRX Stock Market, making us the fifth largest company listed on
the KRX Stock Market based on market capitalization on that
date. Our ADSs, each representing one-ninth of one share of our
common stock, have traded on the New York Stock Exchange since
June&nbsp;27, 1996.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We established our telecommunications business in March 1984
under the name of Korea Mobile Telecommunications Co., Ltd.,
under the laws of Korea. We changed our name to SK Telecom Co.,
Ltd., effective March&nbsp;21, 1997.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our registered office is at&nbsp;11, Euljiro 2-ga, Jung-gu,
Seoul 100-999, Korea and our telephone number is
<FONT style="white-space: nowrap">82-2</FONT>-6100-1639.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Our Business Strategy</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that trends in the Korean telecommunications industry
during the next decade will mirror those in the global market
and that the industry will be characterized by rapid
technological change, reduced regulatory barriers and increased
competition. Our business strategy is to enhance shareholder
value by maintaining and consolidating our leading position in
the Korean market for wireless services, including voice, data
and Internet services. As the Korean market continues to mature,
we will continue to focus on these core businesses in order to
expand and enhance the range and quality of our wireless
telecommunications services. Our principal strategies are to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Enhance the technical capabilities of our wireless networks
    to improve data transmission rates and service quality and to
    enable us to offer an increased range of services, including in
    connection with our development of new and improved wireless
    technologies.</I> We have completed expanding the geographic
    coverage and subscriber capacity of our existing CDMA 1xRTT and
    CDMA 1xEV/ DO networks and are currently upgrading our existing
    WCDMA network to support HSDPA service, as well as expanding an
    HSPDA-ready version of our WCDMA network nationwide. In
    addition, we began to offer WiBro&nbsp;service to limited areas
    of metropolitan Seoul in June 2006, and intend to continue to
    expand our WiBro&nbsp;service coverage area. We believe we are a
    leader in the development and implementation of wireless
    technologies in Korea and that convergence among communications
    technologies, as well as between telecommunications and other
    industries, creates growth opportunities for incumbent
    telecommunications service providers, like us, whose existing
    infrastructure and know-how will provide a competitive
    advantage. We also pursue a research and development program
    designed to allow us to implement new wireless technologies as
    market opportunities arise. As a part of such program, we
    operate a network research and development center which is
    focused on wireless network design, digital cellular
    technologies and wireless telecommunications applications.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Retain and capitalize on our large, high-quality wireless
    subscriber base.</I> With approximately 19.8&nbsp;million
    subscribers as of April&nbsp;30, 2006, we have the largest
    wireless subscriber base in Korea. We focus on maintaining and
    expanding our high-quality subscriber base through the provision
    of enhanced wireless services, particularly advanced Wireless
    Internet-based applications, at higher speeds than previously
    available.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Offer a broad range of new and innovative Wireless Internet
    contents and services.</I> Through our integrated wireless and
    on-line portal, NATE, we plan to continue expanding the range of
    our Wireless Internet contents and services, with a view to
    increasing revenue from these services to complement our core
    cellular revenues. Our strategy includes the introduction of
    sophisticated multimedia services (such as June, a premium
    wireless data service that provides streaming multimedia video
    content through our</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">23
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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    CDMA 1xEV/ DO and HSDPA technologies, as well as MelOn, our
    music portal service, GXG, our mobile gaming portal, and Cizle,
    our wireless Internet movie portal); mobile commerce services
    (such as Moneta, a wireless credit and payment system);
    community portal and mobile community portal services (such as
    Mobile Cyworld, which allows subscribers to access Cyworld, our
    on-line community portal service, using their cellular phone);
    and mobile finance services (such as M BANK, M-Stock and Moneta
    Card) that can be accessed using handsets and other devices,
    including personal computers, personal digital assistants and
    vehicle mounted terminals.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Create new opportunities that arise from an increasingly
    convergent and ubiquitous era in mobile communications,
    including by pioneering new businesses.</I> We seek to offer our
    customers a variety of innovative &#147;convergent&#148;
    services that create value and convenience for our customers.
    For example, we have launched new services, such as Telematics,
    Digital Home and mobile banking, that provide access to content
    and services previously available only through traditional media
    or requiring direct personal interface. In particular, we are
    focusing on new businesses that provide synergies with our
    existing services. For example, in May 2005, TU Media Corp., one
    of our affiliates, successfully launched satellite DMB service,
    which provides broadcasting of multimedia content by satellite
    to various portable and handheld devices.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Continue to seek opportunities in overseas markets.</I> We
    continue to seek opportunities into various overseas markets,
    particularly to Asia. In March 2005, we established a joint
    venture with EarthLink, Inc., the third largest Internet service
    provider in the United States, and, in May 2006 we launched our
    Mobile Virtual Network Operator, or MVNO, service, under the
    brand name &#147;HELIO&#148;, to provide wireless voice and data
    services across the United States. We have also been providing
    CDMA cellular service, under the brand name, &#147;S-Fone&#148;,
    in Vietnam since 2003 and plan to expand our network coverage to
    all of Vietnam. In February 2004, through the launch of a joint
    venture company with China Unicom, we also began extending our
    wireless Internet service to China. In addition, in June 2006,
    our board of directors approved plans to subscribe for up to
    US$1&nbsp;billion of convertible bonds issued by China Unicom
    convertible into 899,745,075 common shares of China Unicom. We
    expect the subscription to be consummated in July 2006. In the
    event all of such convertible bonds are converted into common
    shares, our equity interest in China Unicom would be 6.67%.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Merger with Shinsegi</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In a series of transactions between December 1999 and April
2000, we acquired a 51.2% interest in the common stock of
Shinsegi. In subsequent transactions between March and September
2001, we increased our interest to 70.4%. On January&nbsp;13,
2002, we acquired the remaining 29.6% interest in Shinsegi and
Shinsegi merged into SK Telecom.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The attractiveness of our merger with Shinsegi derived in large
measure from the synergies, growth opportunities and cost
savings we hoped to achieve by integrating Shinsegi&#146;s
operations and customer base with those of SK Telecom and our
plans to reallocate the spectrum used by Shinsegi to SK
Telecom&#146;s networks.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2001, we began integrating Shinsegi&#146;s operations with
those of SK Telecom. In 2002, we completed the following steps
to realize additional benefits from our merger with Shinsegi:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Decommissioned Shinsegi&#146;s former network and transferred
    Shinsegi&#146;s subscribers to SK Telecom&#146;s networks. We
    have allowed transferred subscribers to continue receiving
    services under their existing rate plans. However, after the
    merger, no new subscribers have been accepted under
    Shinsegi&#146;s plans and further marketing efforts have been
    limited to the SK Telecom brands. Shinsegi&#146;s subscribers do
    not have to purchase new handsets, are allowed to use the same
    mobile telephone numbers and have access to the same services as
    before the merger.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Re-allocated the spectrum formerly used by Shinsegi&#146;s
    network to SK Telecom&#146;s CDMA and CDMA&nbsp;1xRTT networks.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Redeployed a portion of Shinsegi&#146;s former network equipment
    to SK Telecom&#146;s CDMA network or sold it to wireless
    operators outside of Korea. The remainder of Shinsegi&#146;s
    network equipment was discarded and written off and we recorded
    an impairment loss of Won 185.8&nbsp;billion in 2002.</TD>
</TR>

</TABLE>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We also identified and implemented other cost saving measures,
such as the elimination of redundant distribution centers.
Shinsegi&#146;s business has been fully integrated into our
business.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Korean Telecommunications Industry</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Until April 1996, we were the sole provider of wireless
telecommunications services in Korea. Beginning in the early
1990&#146;s, the Government began to introduce competition into
the fixed-line and wireless telecommunications services markets.
In the early 1990&#146;s, the Government allowed new competitors
to enter the fixed-line sector, sold a controlling stake in us
to the SK Group, and granted a cellular license to our first
competitor, Shinsegi. In October 1997, three additional
companies, KTF, LGT, and Hansol PCS, began providing wireless
services under government licenses granting them the right to
provide wireless telecommunications services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2000 and 2001, the Korean wireless telecommunications market
experienced significant consolidation. In January 2002, Shinsegi
was merged into SK Telecom. Additionally, two of the other
wireless telecommunications services operators merged. See
&#147;Item&nbsp;4B. Business Overview&nbsp;&#151;
Competition&#148;. Thus, there are currently three providers of
wireless voice telecommunications services in Korea, ourselves
(including Shinsegi), KTF, which is a subsidiary of KT
Corporation, and LGT. As of April&nbsp;30, 2006, SK Telecom had
50.7% market share of the Korean wireless telecommunications
market in terms of subscribers, while KTF and LGT had market
shares of 32.2% and 17.1%, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;15, 2000, the MIC awarded to two companies the
right to receive a license to provide 3G&nbsp;services using
WCDMA, an extension of the Global System for Mobile
Communication standard for wireless telecommunications, which is
the most widely used wireless technology globally. These rights
were awarded to two consortia of companies, one led by SK
Telecom&#146;s former subsidiary, SK IMT Co., Ltd., and the
other to a consortium that included KT Corporation (formerly
known as Korea Telecom Corp.). SK IMT Co., Ltd. was merged into
SK Telecom on May&nbsp;1, 2004. The right to acquire an
additional license to operate a network using CDMA2000
technology was awarded to LGT in August 2001.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A one-way mobile number portability, or MNP, system was first
implemented in the beginning of January 2004 when our
subscribers were allowed to transfer to KTF and LGT. From July
2004, a two-way MNP was implemented so that KTF subscribers
could transfer to SK Telecom and LGT. A three-way MNP has been
in effect since January 2005 so that subscribers from each of
the wireless service providers may transfer to any other
wireless service provider. During 2004 and 2005, approximately
2.1&nbsp;million and 2.2&nbsp;million, respectively, of our
subscribers transferred to our competitors. Approximately
700,000 of LGT&#146;s subscribers in 2005 and approximately
600,000 and 1.5&nbsp;million in 2004 and 2005, respectively, of
KTF&#146;s subscribers moved to our service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2005, the government granted KT Corporation and us a
license to offer a new high-speed wireless Internet service
called WiBro, which will provide wireless Internet connection at
speeds which are much higher than currently available. According
to the MIC report entitled &#147;Introduction and Use of WiBro
Service,&#148; published on March&nbsp;11, 2005, the number of
WiBro subscribers is expected to rise to more than
9&nbsp;million subscribers within the next six years.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telecommunications industry growth in Korea has been among the
most rapid in the world, with fixed-line penetration increasing
from under five lines per 100 population in 1978 to 47.5 lines
per 100 population as of December&nbsp;31, 2005, and wireless
penetration increasing from 7.0 subscribers per 100 population
in 1996 to 79.4
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
subscribers per 100 population as of December&nbsp;31, 2005. The
table below sets forth certain subscription and penetration
information regarding the Korean telecommunications industry as
of the dates indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>As of December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(In thousands, except for per population amounts)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Population of Korea(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,849</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48,082</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48,294</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Wireless Subscribers(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,046</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,342</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Wireless Subscribers per 100 Population</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telephone Lines in Service(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,725</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,877</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,920</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telephone Lines per 100 Population</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.5</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Source: National Statistical Office of Korea</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Source: MIC</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Korean telecommunications industry is one of the most
developed in Asia in terms of wireless penetration, and in terms
of the growth of the Wireless Internet services markets. The
wireless penetration rate, which is calculated by dividing the
number of wireless subscribers by the population, is 79.4% as of
December&nbsp;31, 2005 and the number of wireless subscribers
has increased from approximately 3.2&nbsp;million in 1996 to
approximately 38.3&nbsp;million as of December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following graph sets forth the wireless penetration rates
for countries in the Asia/ Pacific region as of
December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Asia/ Pacific wireless penetration rates as of December&nbsp;31,
2005(1)
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<IMG src="h00576h0057601.gif" alt="(GRAPH)">
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Source: Merrill Lynch Global Wireless Matrix 4Q05.
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Percentages may differ depending on method selected for
    determining population.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since the introduction of short text messaging in 1998,
Korea&#146;s wireless data market has grown rapidly. Wireless
Internet service in Korea has grown rapidly since its
introduction in the second half of 1999. All of the Korean
wireless operators have developed extensive Wireless Internet
service portals. In Korea, SK Telecom launched the world&#146;s
first CDMA 1xRTT network, which enabled it to provide advanced
data services, in November 2000. As of April&nbsp;30, 2006,
approximately 18.9&nbsp;million of Korean wireless subscribers
owned Internet-enabled handsets capable of accessing advanced
Wireless Internet services. The table below sets forth
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">26

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
certain penetration information regarding the ownership of
Internet-enabled handsets by Korean wireless subscribers as of
the dates indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Wireless Internet Enabled Handsets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,874</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,431</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,202</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WAP/ ME Type</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,190</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,804</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,713</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    I-SMS Type</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,627</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>489</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Number of Wireless Subscribers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,046</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,342</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Penetration of Advanced Handsets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Source: MIC.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to its well-developed wireless telecommunications
sector, Korea has one of the largest Internet markets in the
Asia/ Pacific region. According to the Korean Network
Information Center (KNIC), the number of Internet subscribers in
Korea increased from approximately 3.1&nbsp;million at the end
of 1998 to approximately 33.0&nbsp;million at the end of 2005, a
40.0% compound annual growth rate. From the end of 2001 to the
end of 2005, the number of broadband Internet access subscribers
increased from approximately 7.8&nbsp;million to approximately
12.2&nbsp;million, a 11.8% annual growth rate. The table below
sets forth certain information regarding Internet users and
broadband subscribers as of the dates indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001.12</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002.12</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003.12</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004.12</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005.12</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Number of Internet Users(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,010</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Number of Broadband Subscribers(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,806</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,921</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,191</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Source: Korea Network Information Center (KRNIC).</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Source: MIC. Broadband service includes xDSL (Digital Subscriber
    Line), Cable Modem, Apartment LAN (Local Area Network) and
    Satellite.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='115'></A>
</DIV>

<!-- link1 "Item 4B. Business Overview" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;4B.</B></TD>
    <TD>
    <B><I>Business Overview</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Overview</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are Korea&#146;s leading wireless telecommunications services
provider and a pioneer in the commercial development and
provision of high-speed Wireless Internet services. We had
approximately 19.8&nbsp;million subscribers as of April&nbsp;30,
2006 and our share of the Korean wireless market was
approximately 50.7%, based on the number of subscribers. We
currently provide the following core services:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Cellular services</I>&nbsp;&#151; we provide digital cellular
    services to our subscribers using CDMA (code division multiple
    access) technology, with our network covering approximately 99%
    of the Korean population;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Wireless Internet services</I>&nbsp;&#151; under our
    &#147;NATE&#148; brand name, we allow our wireless subscribers
    to access various websites designed for cellular use, such as
    access to entertainment-related contents and services and
    on-line financial services;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Digital convergence and new businesses</I>&nbsp;&#151; we
    have pioneered new services that reflect the growing convergence
    between the telecommunications sector and other industries,
    including our provision of satellite DMB service, which enables
    satellite broadcasting to mobile devices; telematics service,
    which makes use of GPS technology; and our &#147;Digital
    Home&#148; service, which brings home maintenance and security
    into the mobile digital era.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we provide various services outside of Korea,
including in the United States, China, Vietnam and Mongolia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We provide our core services through our CDMA networks,
including our basic CDMA network, our CDMA 1x RTT and CDMA 1x
EV/ DO networks and, most recently, our WCDMA network. We also
recently
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
launched our WiBro service to complement our existing core
networks and technologies. For more information on our backbone
networks, see &#147;&#151;&nbsp;Digital Cellular Network&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We established our telecommunications business in March 1984
under the name of Korea Mobile Telecommunications Services Co.,
Ltd. We changed our name to Korea Mobile Telecommunications Co.,
Ltd. in 1988. We changed our name to SK Telecom Co., Ltd.
effective March&nbsp;21, 1997. Our registered office is
at&nbsp;11, Euljiro 2-ga, Jung-gu, Seoul 100-999, Korea and our
telephone number is 82-2-6100-1563.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Cellular Services</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SK Telecom was the sole provider of cellular services in Korea
from 1988, when we began network operations, to April 1996, when
Shinsegi began operating a digital cellular system in several
regions of Korea. In October 1997, three additional companies
commenced providing wireless telecommunications services. As a
result of consolidation in the wireless telecommunications
industry in Korea since 2000, there are currently three
providers of wireless telecommunications services in Korea,
namely us, KTF and LGT.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We introduced our digital cellular service using CDMA technology
in the Seoul metropolitan area in January 1996 and substantially
completed the geographic build-out of our network in 1998. On
December&nbsp;31, 1999, we terminated our analog service. Our
digital network provides wireless telecommunications service to
an area covering approximately 99% of the Korean population. We
continue to increase the capacity of our wireless networks to
keep pace with the growth of our subscriber base and increased
usage of voice and wireless data services by our subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of April&nbsp;30, 2006, approximately 18.9&nbsp;million out
of 19.8&nbsp;million subscribers owned handsets capable of
accessing our CDMA 1xRTT network. Beginning in 2002, we launched
an upgrade of our CDMA 1xRTT network in 26&nbsp;cities in Korea
to a more advanced technology called CDMA 1xEV/ DO. CDMA 1xEV/
DO technology enables data to be transmitted to CDMA 1xEV/
DO-capable handsets, which became available in Korea in June
2002, at speeds up to 2.4&nbsp;Mbps, which is 16 times faster
than CDMA 1xRTT&#146;s maximum transmission speed. CDMA 1xEV/ DO
technology allows us to provide advanced wireless data services
such as streaming video and audio services and also allows us to
use our spectrum more efficiently. As of December&nbsp;31, 2004,
we had completed our CDMA 1xEV/ DO network upgrade with services
available in 84&nbsp;cities in Korea.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We commenced provision of our WCDMA services on a limited basis
in Seoul at the end of 2003 and continued to improve our WCDMA
services in the Seoul metropolitan area in 2004. In 2005, we
completed development of HSDPA technology, which represents an
evolution of the WCDMA standard and, among others, supports
higher data capacity and allows faster data transmissions than
previous WCDMA-based protocols. HSDPA upgrades to our existing
WCDMA network do not require hardware upgrades and may be
accomplished through software upgrades at virtually no cost. By
May 2006, we had expanded HSDPA service to 25&nbsp;cities,
including Busan and Incheon. We expect to expand our WCDMA
network and HSDPA service to 84&nbsp;cities nationwide by the
end of 2006. For a more complete discussion of our CDMA-based
networks, see &#147;&#151;&nbsp;Digital Cellular Network&#148;
below.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We seek to continue to strengthen our market leadership and
diversify our revenue base by introducing a broad range of
subscriber-oriented &#147;value-added&#148; services. Our most
popular value-added services in 2005 included:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Call Keeper service, which provides a record of missed calls in
    the event a subscriber&#146;s mobile phone is engaged or
    switched off;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    COLORing service, which plays a &#147;ring back&#148; melody in
    lieu of a conventional dial tone when callers dial a COLORing
    subscriber&#146;s mobile phone;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Auto COLORing service, which periodically changes the default
    ring-back melody according to the subscriber&#146;s music
    category selection;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Perfect Call service, which combines Call Keeper service with a
    new service that alerts subscribers when a dialed number that
    was engaged when first dialed, is no longer engaged.</TD>
</TR>

</TABLE>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, 8.5&nbsp;million users had
subscribed to our COLORing service, 4.6&nbsp;million users to
our Perfect Call service and 3.5&nbsp;million users to our Call
Keeper service. In aggregate, revenues attributable to
value-added service fees were Won 339.9&nbsp;billion in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To complement the services we provide to our subscribers in
Korea, we have also entered into roaming service agreements with
various foreign wireless telecommunications service providers.
We provide global roaming services based on three basic
technologies in part depending on which mobile phone standards
are available in a particular region: CDMA, GSM and WCDMA
roaming. As of May&nbsp;31, 2006, we offered CDMA roaming
services in 18 countries including the U.S., Japan, China,
Thailand, Canada, New Zealand and Australia. Our GSM roaming
services are available in 78 countries, including countries in
Europe and Africa. Our WCDMA voice roaming service is currently
available in Japan, Hong Kong, Singapore, Italy, France and
Germany. The WCDMA voice roaming service area will be expanded
to include the United Kingdom, Spain and the Netherlands in
2006. In addition, our global data roaming service is available
in six countries, including China, Japan and Thailand. We have
approximately 2&nbsp;million global roaming service users, in
aggregate, as of December&nbsp;31, 2005.
</DIV>

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<B>Wireless Internet Services</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our wireless Internet services represent a key and growing
business area. We currently offer a wide variety of Internet
content and services, in addition to providing our wireless
subscribers access to the Internet. Through such wireless
Internet content and service offerings, we believe we are also
building greater loyalty among our subscribers. We intend to
continue to build our wireless Internet services as a platform
for growth, extending our portfolio of offerings and developing
new content for our subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under our brand name &#147;NATE&#148;, we offer our wireless
subscribers access to the Internet, where subscribers can access
a wide variety of content including current news, stock quotes
and other information, as well as gain access to a wide variety
of services including securities trading and on-line banking
services. Subscribers can purchase goods and services through
their wireless devices, send and receive
<FONT style="white-space: nowrap">e-mail</FONT> and gain access
to various third party Internet websites configured to work with
wireless technology. Subscribers access NATE using
WAP&nbsp;technology. WAP technology allows wireless data
transmission and has been adopted by over 200 major
telecommunications operators worldwide. As of April&nbsp;30,
2006, approximately 19.1&nbsp;million, or 96.5%, of our
subscribers owned WAP-enabled handsets capable of accessing our
CDMA 1xRTT network.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Multimedia</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2002, we introduced June, a wireless data service
that provides streaming content, primarily using our CDMA 1xEV/
DO technology. Content provided through the June service
includes Video on Demand, or VOD and Music on Demand, or MOD;
television programs, which can be viewed real-time; and
multimedia messaging. In addition, June subscribers can access
the Internet through NATE, our integrated wired and wireless
Internet platform. As of December&nbsp;31, 2005, June had
6.7&nbsp;million subscribers.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Music Portal Service</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2004, we introduced a music portal service called
MelOn, a new music service concept from a combined wireless and
wired network. This service allows subscribers to access digital
music through cellular phones on a wireless network, while
paying airtime charges and monthly flat rates. This service also
offers access to real-time streaming from on-line websites and
digital music downloads to MP3 players and MP3 phones. In
addition, the service protects the rights of music copyright
holders by preventing the illegal distribution and use of
digital music content through the application of Digital Right
Management technology. As of December&nbsp;31, 2005, we had
4.2&nbsp;million subscribers to our MelOn Service. We expect
demand for this service to continue to grow.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In August 2005, we also acquired a 60% stake in YBM Seoul
Records Inc., Korea&#146;s largest music recording company in
terms of records released and revenues, for Won
27.9&nbsp;billion. Through our acquisition of YBM, we are able
to offer customers of our MelOn service access to an expanded
digital music contents pool. Also, in July and October 2005, we
and certain other Korean investment companies invested an
aggregate Won 40&nbsp;billion to
</DIV>

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establish three funds to invest in the music industry and seek
strategic partnerships with recording companies. As of
December&nbsp;31, 2005, our contribution to the funds amounted
to Won 39.6&nbsp;billion. Furthermore, in September, October and
December 2005, we and our co-investors invested an aggregate Won
55.8&nbsp;billion in four movie production funds to strengthen
our ability to obtain movie contents. We had invested Won
20&nbsp;billion in such movie production funds as of
December&nbsp;31, 2005.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Community Portal Service</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Cyworld&#148;, which is offered by our subsidiary, SK
Communications, is one of the most popular on-line community
portal services in Korea. As of December&nbsp;31, 2005, our
Cyworld portal service had 16.6&nbsp;million subscribers. In
March 2004, we launched &#147;Mobile Cyworld&#148;, allowing our
subscribers to access the Cyworld portal community site through
their cellular phones. In 2005, approximately 1.25&nbsp;million
subscribers accessed Mobile Cyworld service, with the average
number of monthly users reaching 585,000.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Wireless Entertainment Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April 2005, we launched &#147;GXG&#148;, a 3D mobile game
portal, through which subscribers can download mobile games to
their cellular phones. The games offered through our GXG portal
feature advanced 3D graphics and high-speed action, which, we
believe, represent a new standard of mobile gaming. In order to
download and access the 3D mobile games available through our
GXG portal, subscribers must own handsets equipped with a mobile
gaming-specific chip. As of December&nbsp;31, 2005, GXG offered
62 mobile games from leading domestic and foreign game
publishers and more than 300,000 of our subscribers owned
handsets equipped with a mobile gaming-specific chip.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2003, we launched &#147;Cizle&#148;, a wireless
Internet movie portal. Cizle allows subscribers to purchase
movie tickets using their cellular phones, as well as to view
information about currently-playing movies. Cizle subscribers
may also receive discounts on their ticket purchases.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>M-Commerce</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April 2002, we introduced Moneta, a wireless credit and
payment system, which allows subscribers to make credit card
payments using their cellular phones. The Moneta service is
activated by installing an integrated circuit chip in the
subscriber&#146;s cellular phone which transmits transaction
information to the merchant&#146;s reader system. As of
December&nbsp;31, 2005, 4.3&nbsp;million Moneta-enabled handsets
had been sold in Korea. Moneta users do not need to manually
enter their credit card number when they make payments. The
system is based on an international technological standard
developed by Europay, Mastercard and Visa. We receive a fee from
the card issuer for each card issued and a transaction fee,
based on the transaction value, for each transaction effected
using the Moneta payment system. In May 2002, we entered into a
technological cooperation agreement with Visa pursuant to which
Visa has agreed to adopt our wireless credit and payment system
as the international standard for Visa&#146;s worldwide
operations. In addition, we have established payment systems
with major department stores and discount stores (such as Family
Mart) and affiliated merchant stores (such as Starbucks and
TGI). We are also developing other uses for mobile payment
technology to provide other services, such as payment for
transportation services and to serve as a means of
identification.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2002, we acquired Paxnet, an on-line financial portal
offering services related to securities trading. We expect to
expand our services provided through Paxnet to include an array
of financial services relating to insurance, real estate,
personal asset management and investment trust funds.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In August and November 2003, we launched Mobile Trading System
and Stock Investment Information Service, respectively. Unlike
other trading services where customers have to use stock trading
programs and terminals designated by securities firms, the
Mobile Trading System service provides a program that permits
customers to carry out a variety of stock trading, including
futures, options and ECN trading transactions.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, we provided chip-based mobile
banking services, under the brand name
<FONT style="white-space: nowrap">&#147;M-Bank&#148;,</FONT> in
conjunction with 17 commercial banks in Korea. M-Bank offers a
range of mobile banking services, allowing subscribers to
conduct a variety of banking transactions, including money
transfers and
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
account inquiries, through their mobile phones. As of
December&nbsp;31, 2005, M-Bank had approximately 760,000
subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under our &#147;NATE.com&#148; brand name, we offer a portal
service at our website, www.NATE.com. NATE.com includes
information and content formerly offered under our Netsgo brand
as well as the content and services formerly available on Lycos
Korea, which our subsidiary, SK Communications Co., Ltd.,
acquired in 2002. NATE.com offers a wide variety of content and
services, including an Internet search engine as well as access
to free <FONT style="white-space: nowrap">e-mail</FONT>
accounts. During the month of May 2006, approximately
25.7&nbsp;million unique users visited this website.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer an instant messaging service to our Nate.com and NATE
users. This service, which we call &#147;NATE-ON&#148;, allows
users to chat on-line through a variety of devices, including
personal computers, wireless handsets and personal digital
assistants. As of December&nbsp;31, 2005, the number of NATE-ON
subscribers reached approximately 10.3&nbsp;million, surpassing
that of MSN Messenger of Microsoft Corporation in Korea, making
us the market leader in terms of number of subscribers in Korea
in the instant messaging service market according to a survey
conducted by an independent consulting firm. We continue to seek
to introduce new wireless data services and innovations with a
view to increasing revenue from these businesses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under our &#147;NATE Auction&#148; brand name, launched in June
2006, we offer our wireless subscribers access to a real-time
auction platform, where subscribers can sell or bid on items
using their cellular phones. Subscribers can also upload images
of the items for sale. During the bidding process, each bidder
is notified through text message alerts on real-time basis
whenever higher competitive bids are made. We charge successful
bidders a commission of 2% of the sale price.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Digital Convergence and New Businesses</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Digital convergence is the new paradigm in telecommunications.
While we acknowledge the increasing equivocation of conventional
industry boundaries as a potential threat, given the entrance of
non-traditional players into the mobile communications space, we
also view convergence as significant growth opportunity. We
believe that incumbent telecommunications service providers,
like us, with existing advanced infrastructure, technical
know-how and a large subscriber base, are especially well
positioned to pioneer new &#147;convergent&#148; businesses. In
recent years, we have focused on developing cross-over services
that provide synergies with our existing business.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Satellite DMB</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In September 2003, we invested in a satellite-based DMB
business. DMB technology allows broadcasting of multimedia
content through transmission by satellite to various mobile
devices. For example, DMB technology allows users to view
satellite television broadcasts on portable handsets or
vehicle-mounted televisions enabled to receive DMB transmission.
We launched a DMB satellite in March 2004. In October 2004, we
granted the right to use our satellite, satellite orbit and
frequency to TU Media, an affiliate in which we held a 29.6%
equity stake as of December&nbsp;31, 2005. TU Media received a
license from the MIC as a satellite DMB provider on
December&nbsp;30, 2004. In May 2005, TU Media began to provide
commercial satellite DMB service, offering 7&nbsp;video and 20
audio channels. Currently, TU Media offers a range of broadcast
content including education, games, drama, music, news and
culture over more than 37 channels, 11 video and 26 audio. As of
April&nbsp;30, 2006, TU Media had over 500,000 subscribers. We
believe that this business will enable us to improve the breadth
of services that we already offer and remain competitive in the
face of increasing convergence in the telecommunications and
broadcasting industries.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Telematics Service</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In February 2002, we introduced a Telematics service called NATE
Drive. NATE Drive is an interactive navigation service that
provides driving directions, real-time traffic updates and
emergency rescue assistance through voice and graphic messaging.
It combines the global positioning system, or GPS, with our
cellular phone wireless network. In December 2004, we also added
new services to NATE Drive, including a tourist guide and
cultural information. As of December&nbsp;31, 2005, we had
approximately 285,000 NATE Drive subscribers.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April 2002, we also entered into an agreement with Renault
Samsung Motors and Samsung Electronics to jointly develop a
Telematics business. Pursuant to the agreement, we provide the
cellular phone network and NATE Drive service, Samsung
Electronics provides Telematics-enabled terminals for vehicles
and Renault Samsung Motors installs the Telematics-enabled
terminals in certain vehicles it sells. In February 2005, we
entered into a memorandum of understanding with Renault Samsung
Motors, under which we and Renault Samsung agreed to focus on
improving the Telematics service platform and infrastructure.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, we launched Telematics service on Jeju Island
and, in August 2005, were selected as the pilot Telematics
service provider for Jeju Island as part of the MIC and Jeju
Island&#146;s joint effort to showcase the island as a model for
Telematics service. In connection with this program, more than
80,000 tourists have used Nate Drive.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Digital Home</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April 2004, we, along with 40 other companies, formed the SKT
Digital Home Consortium, sponsored by the MIC to offer pilot
service in certain metropolitan areas within Seoul and Busan by
December of 2007. The consortium plans to initially offer
digital home services, which allow homeowners to access, monitor
and control certain electronic-based home appliances and other
functions remotely through their mobile phones, to a limited
test pool of households in those areas.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Global Business</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Provision of Wireless Internet Platforms and Cellular
    Network Solutions to Foreign CDMA Network Operators</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are seeking to expand our global business through sales of
our wireless Internet platforms and cellular network solutions,
as well as sales of consulting services in the field of mobile
communications. In April 2002, we entered into an agreement with
Pelephone Communications Ltd., an Israeli CDMA operator, to
supply our NATE wireless Internet platform to Pelephone on a
turnkey basis. In May 2002, we entered into a memorandum of
understanding with Openwave of the United States, a wireless
Internet-based communication software and application provider,
to form a strategic alliance in order to carry out co-marketing
of our NATE wireless Internet platform solutions in overseas
markets. In December 2002, we entered into an agreement with
Asia Pacific Broadband Wireless Communications
(&#147;APBW&#148;), one of five companies licensed to offer 3G
mobile services in Taiwan, to provide a wireless Internet
solution on a turn-key basis. Under the agreement, APBW was
granted a license to use certain of our software and wireless
Internet solutions for mobile Internet access and multimedia
services. We also signed a contract with TA Orange, a GSM-based
mobile communications operator in Thailand, in July 2004 to
provide wireless Internet platforms, including the NATE portal
platform and NATE service solutions and contents. We completed
the build-out of this network in June 2005. In addition, we have
also been successful in sales of our other cellular network
solutions, such as our color mail solution, which is a messaging
service that allows subscribers to send messages containing
various multimedia files such as background music, phone camera
photos and videos to other handsets.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Overseas Operations</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have been expanding our business operations in overseas
markets, including the United States, China, Vietnam and
Mongolia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>United States.</I> On March&nbsp;24, 2005, we and EarthLink
completed the formation of SK-EarthLink to market wireless voice
and data services in the United States. In October 2005, SK
EarthLink changed its name to HELIO. We have committed to invest
$220&nbsp;million over the next three years, of which
$161.5&nbsp;million has been invested as of March&nbsp;31, 2006,
and EarthLink has committed to invest $220&nbsp;million over the
next three years, of which $161.5&nbsp;million has been invested
as of the same date. HELIO is a non-facilities-based nationwide
mobile virtual network operator (&#147;MVNO&#148;) offering
cellular voice and data services to wireless consumers located
in the United States and commercially launched its MVNO services
in May 2006. HELIO taps into the previously under-served but
rapidly growing wireless data, entertainment, and voice market
in the United States, also leverages our expertise in developing
and implementing 3G technology and other cutting-edge
applications and
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
EarthLink&#146;s established sales channels, Wi-Fi experience,
network data centers and billing capabilities. We and EarthLink
each have a 50&nbsp;percent voting and economic ownership
interest in HELIO.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since December 2004, we have been offering our COLORing solution
to Verizon Wireless, a major mobile phone service provider in
the United States. As an application service provider, we
receive an agreed percentage of Verizon&#146;s COLORing service
related revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>China.</I> In February 2004, we and China Unicom, the second
largest telecom operator and the only CDMA service provider in
China, established a joint venture company called &#147;UNISK
Information Technology Co., Ltd.&#148; (&#147;UNISK&#148;), with
an aggregate initial investment of approximately
$6&nbsp;million. We own a 49% stake of UNISK and China Unicom
holds a 51% stake. UNISK offers wireless Internet service in
China under a brand name that means &#147;community of young
elites&#148; in Chinese. In June 2006, our board of directors
approved plans to subscribe for up to US$1&nbsp;billion of
convertible bonds issued by China Unicom convertible into
899,745,075 common shares of China Unicom. We expect the
subscription to be consummated in July 2006. The convertible
bonds have a three-year maturity and our conversion rights with
respect to such securities are exercisable commencing on the
first anniversary of the issue date until seven days prior to
the maturity date. In the event all of such convertible bonds
are converted into common shares, our equity interest in China
Unicom would be 6.67%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In July 2004, we acquired ViaTech, an Internet portal service
and mobile contents provider in China, to enhance our wireless
Internet contents and expand our service area. Through ViaTech,
we offer a Chinese-language version of Cyworld to subscribers in
China. ViaTech had approximately 1.3&nbsp;million Cyworld
subscribers as of January&nbsp;31, 2006. ViaTech generated
US$4.5&nbsp;million in revenues in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Vietnam.</I> In October 2000, with an aim toward
commercializing CDMA cellular service in Vietnam, we, LG
Electronics and Dongah Elecomm established a joint venture
company SLD Telecom PTE. In July 2003, SLD&nbsp;Telecom entered
into a business cooperation contract with Saigon Postal
Telecommunication Services Corporation to establish a joint
venture company, S-Telecom, to provide cellular mobile
communications services and commercial CDMA cellular service,
the first of its kind in Vietnam under the brand name
&#147;S-Fone&#148;. The
<FONT style="white-space: nowrap">&#147;S-Fone&#148;</FONT>
service is now being offered in 39 major provinces in Vietnam,
including HoChiMin and Hanoi, and has been increasing its
subscriber base through clear call quality, customized tariff
plans and value-added services. The number of S-Fone subscribers
had surpassed 370,000 as of December 2005. In November 2005, our
board of directors approved an additional $280&nbsp;million
investment in SLD Telecom to fund expansion of our network
coverage to all of Vietnam in order to meet the needs of a
growing subscriber base. As of January&nbsp;31, 2006, we had
invested $100&nbsp;million in this expansion project. As only
approximately 11.8% of Vietnam&#146;s population of
approximately 83.2&nbsp;million had subscribed to cellular
service as of December&nbsp;31, 2005, we believe that the
Vietnamese mobile communication market offers significant
opportunity for future growth.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Mongolia.</I> In July 1999, we acquired a 27.8% equity
interest in Skytel, Mongolia&#146;s second-largest cellular
service provider, by providing approximately Won
1.5&nbsp;billion worth of analog infrastructure. As of
May&nbsp;31, 2006, Skytel had approximately 100,000 subscribers.
We, together with Skytel, have been providing cellular service
in Mongolia since July 1999, and CDMA service since February
2001. In April 2001, we completed installation of the equipment
necessary to provide WAP service. In December 2002, we increased
our equity interest in Skytel to 28.6% through the subscription
of newly issued common shares in return for an additional
investment of approximately $500,000. As of December&nbsp;31,
2005, our equity interest in Skytel was 28.6%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As we have in the past, we expect to continue to seek
opportunities to create value utilizing our core competencies
abroad. We are currently studying various opportunities
overseas, particularly in Asia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Other Products and Services</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Handset Manufacturing</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Until our sale of a controlling interest in the company in July
2005, we designed, marketed and sold digital handsets through
our former consolidated subsidiary, SK Teletech, under the brand
name &#147;SKY&#148;. The handsets were principally manufactured
by third parties under contracts with SK Teletech. We
established SK Teletech together with Kyocera Corporation of
Japan, which held a significant minority interest in SK Teletech
before
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
selling all of its interest in SK Teletech to us in March 2004.
We increased our stake in SK Teletech to 89.1% in March 2004. On
May&nbsp;3, 2005, our board of directors approved the sale of
60% of the total issued and outstanding shares common stock of
SK Teletech to Pantech&nbsp;&#38; Curitel, a handset maker in
Korea. The sale was consummated in July 2005, reducing our
ownership in SK Teletech from 89.1% to 29.1%, which subsequently
became a 22.7% equity interest in Pantech following the merger
of SK Teletech (later renamed SKY Teletech) into Pantech in
December 2005. Until such sale, all of SK Teletech&#146;s
domestic sales of digital handsets were to our affiliate,
SK&nbsp;Networks, which distributed them principally to our
network of dealers for sale to our subscribers and other
consumers. Due to an FTC-imposed condition to our acquisition of
Shinsegi, which remained in effect through the end of 2005, SK
Teletech was unable to sell more than 1,200,000 handsets
(excluding WCDMA handsets) per year to SK Telecom and its
affiliates.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>International Calling Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Through our 90.8% owned subsidiary, SK Telink Co., Ltd., we
provide international telecommunications services, including
direct-dial as well as pre-and post-paid card calling services,
bundled services for corporate customers, voice services using
Internet protocol,
<FONT style="white-space: nowrap">Web-to</FONT>-phone services,
and data services. SK Telink handled approximately
960&nbsp;million total call minutes in 2005, which generated Won
138.7&nbsp;billion in revenues. SK Telink obtained a domestic
long distance telephone service business license in July 2004
and began commercial service of providing domestic long distance
service in Korea in February 2005. SK Telink provides affordable
international call services under the brand name
&#147;00700&#148; and has been offering commercial long-distance
telephony service since February 2005. SK Telink&#146;s efforts
are directed at continuing to reinforce its existing core
businesses such as international and domestic long distance
telephone service and seeking to create new sources of revenue.
For example, SK Telink offers Voice over Internet Protocol, or
VoIP, service through the Internet. VoIP is an advanced
technology that transmits voice data through an Internet
Protocol network. SK Telink also acquired licenses to operate
value-added domestic telephone service and Internet telephone
service in July 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2000, we established SK Telink America, Inc., to extend our
international telecommunications service to the United States.
We closed down business operations at SK Telink America, Inc. in
June 2003 because the business proved to be unprofitable. We
recorded US$1.2&nbsp;million in losses relating to impairment of
our investment in common stock of SK Telink America, Inc. in our
consolidated financial statements for 2003. We dissolved the
company as of May&nbsp;28, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Revenues, Rates and Facility Deposits</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our wireless revenues are generated principally from initial
connection fees, monthly access fees, usage charges for outgoing
calls and wireless data, interconnection fees and access fees
for value-added services. The
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
following table sets forth information regarding our cellular
revenues (net of taxes) and facility deposits for the periods
indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>As of and for the Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In billions of won)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Initial Connection Fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>176.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>198.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>232.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly Access Fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,132.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,266.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,365.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Usage Charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,615.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,300.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,538.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interconnection Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,017.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>849.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>898.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue from Sales of Digital Handsets(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>612.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>294.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other Revenue(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,538.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,091.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,297.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,361.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional Facility Deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>31.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Refunded Facility Deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Facility Deposits at Period End</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.8</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Until its sale to Pantech&nbsp;&#38; Curitel in July 2005, our
    revenue from handset sales consisted of sales by our former
    subsidiary, SK Teletech.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Other revenue includes revenue from value-added services,
    including voice-activated dialing, caller ID, call forwarding,
    call waiting and three-way calling.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On their initial subscription, we charge our new customers an
initial connection fee for service activation. After their
initial connection, we require our customers to pay a monthly
access fee and usage, or airtime, charges for outgoing calls and
access to wireless data services. Prior to April&nbsp;1, 1999,
all network service providers had mandatory subscription
periods. However, since April&nbsp;1, 1999, in accordance with
MIC guidelines, new wireless service subscribers cannot be
subjected to any mandatory subscription periods. We do not
charge our customers for incoming calls, although we do receive
interconnection charges from KT Corporation and other companies
for calls from the fixed-line network terminating on our
networks and, since 2000, interconnection revenues from other
wireless network operators. See
&#147;&#151;&nbsp;Interconnection&#148;. Monthly access fees for
some plans include free airtime and/or discounts for designated
calling numbers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SK Telecom currently offers four basic types of service plans:
the Standard rate plans, the TTL plans, the Ting plans and the
long-term contract discount plans. We also offer Date Free
plans, designed for multimedia wireless data service using CDMA
1xEV/ DO technology.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Higher rate plans generally include a fixed monthly amount of
usage time while the lower rate plans are generally usage-based.
The monthly access fees for the Standard plans range from Won
11,000 to Won 22,000, and generally target the adult market
segment. The monthly access fees for the TTL plans range from
Won&nbsp;15,000 to Won 25,000 and target young adults between
the ages of 19 and 24. The monthly access fees for the Ting
plans range from Won 13,500 to Won 26,000 and generally target
youths between the ages of 13 and 18. We also offer five
long-term discount plans, ranging from a monthly rate of Won
15,000 to Won 90,000.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In February 2005, we simplified our 26 different types of Data
Free plans into four types of flat fee based plans. The monthly
access fees range from Won 3,500 to Won 26,000.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2004, we introduced discount plans for subscribers
committing to long-term contracts with a duration of
18&nbsp;months or 24&nbsp;months based on usage levels.
Subscribers with the highest usage per month (whose monthly
charges are above Won 70,000) and on a two-year contract benefit
from the highest level of discount.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With the approval of the MIC, effective from January&nbsp;1,
2003, we reduced our Speed011 Standard rate plan&#146;s monthly
access fee by Won 1,000, included 10 minutes of free air time
per month and reduced our peak usage charges from Won 21 to Won
20&nbsp;per minute. Subsequently, in October 2003, we reduced
our monthly charges for caller ID service from Won 2,000 to Won
1,000. We began to provide the caller ID service to
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">35
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
customers free of charge starting January&nbsp;1, 2006. Also,
effective September&nbsp;1, 2004, we reduced our tariffs by 3.7%
and reduced our monthly basic charges from Won 14,000 to Won
13,000. See &#147;Item&nbsp;5A. Operating Results&nbsp;&#151;
Overview&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For all calls made from our subscribers&#146; handsets in Korea
to any destination in Korea, we charge usage fees based on the
subscriber&#146;s cellular rate plan (as described in the table
below). The fees are the same whether the call is local or long
distance. With respect to international calls placed by a
subscriber, we bill the subscriber the international rate
charged by the Korean international telephone service provider
through which the call is routed. We remit to that provider the
international charge less our usage charges. See
&#147;&#151;&nbsp;Interconnection&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes some of SK Telecom&#146;s
cellular rate plans as of April&nbsp;30, 2006:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Peak Usage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Off-Peak Usage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Night-Time Usage</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Included Airtime/</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Charges</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Charges</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Charges</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Monthly Access Fee</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Discount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Per 10 Seconds)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Per 10 Seconds)(2)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Per 10 Seconds)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Standard</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Regular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>13,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>10 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Slim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Family</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>5 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Designated Number Discount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Three-Three(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Time</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>7 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pink Couple</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>500 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Silver(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>30 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    i-Kids(5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>70 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Welfare 160/220(6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Won 10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Won 22,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>TTL Plans</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Standard</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SMS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Regional</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>7 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Designated Number</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pink Couple</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Couple</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>150 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Ting Plans</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Text Premium</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buddy</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>70 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ting 500</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>60 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ting 100 (Normal Rate)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>60 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ting 100 (Vacation Rate)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>60 minutes</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ting Start</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Data Free Plan</B>(7)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>&#147;Free Plans&#148;</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Free Holiday(8)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Free Everyday(9)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Free Plan for Calls Over 3 Minutes(10)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Discounts may include free text messages, ring tone downloads,
    coloring and NATE minutes.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Excludes a 5% discount on domestic calls for customers who have
    subscribed to our cellular services for over 1&nbsp;year; a 10%
    discount for customers who have subscribed to our cellular
    services over 2&nbsp;years; a 15%</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">36
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    discount for customers who have subscribed to our cellular
    services over 3&nbsp;years and a 20% discount for customers who
    have subscribed to our cellular services over 5&nbsp;years.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Under this plan, for the first three minutes of airtime we
    charge Won 20&nbsp;per 10 seconds; we offer the fourth to sixth
    minutes free of charge; and charge Won 15&nbsp;per 10 seconds
    for airtime thereafter.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Subscribers must be 65&nbsp;years old or older and each
    subscriber is limited to enrolling in one Silver Plan.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Subscribers must be 12&nbsp;years old or younger and each
    subscriber is limited to enrolling one i-Kid Plan.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    This plan is limited to mentally or physically challenged
    subscribers.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(7)&nbsp;</TD>
    <TD align="left">
    Includes unlimited use of data service. This plan is offered
    from September&nbsp;30, 2005 through September&nbsp;30, 2006.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(8)&nbsp;</TD>
    <TD align="left">
    11&nbsp;hours of airtime on Sundays and public holidays, for an
    additional Won 10,000&nbsp;per month.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(9)&nbsp;</TD>
    <TD align="left">
    11&nbsp;hours of airtime in excess of the average number of
    minutes used during the previous two months, for an additional
    Won 15,000&nbsp;per month.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(10)&nbsp;</TD>
    <TD align="left">
    11&nbsp;hours of domestic airtime for any airtime exceeding the
    first three minutes, for an additional Won 15,000&nbsp;per month.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer a variety of value-added services including
voice-activated calling, voice mail, short text messaging,
caller ID and call waiting. Depending on the rate plan selected
by the subscriber, the monthly fee may or may not include these
value-added services, except caller ID and call waiting
services, which are offered free of charge to all beginning
subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer wireless data services to our subscribers through NATE.
Subscribers using SK Telecom&#146;s CDMA network may elect to
pay a monthly fee, which includes a fixed amount of airtime or
data packets, or may elect to pay on a per-use basis. Standard
rates for NATE range from Won 7 to Won 15 for ten seconds of
airtime. Since April&nbsp;23, 2001, subscribers using our CDMA
1xRTT and CDMA 1xEV/ DO networks are charged based on the amount
of data that is transmitted to the subscriber&#146;s handset.
Subscribers using our WCDMA network are also charged based on
the amount of data transmitted. The data transmitted is measured
in packets of 512 bytes. We charge Won 6.5&nbsp;per text packet
and Won 1.3&nbsp;per multimedia packet. Prior to April&nbsp;23,
2001, our CDMA 1xRTT subscribers were charged time-based fees.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer wireless multimedia data services through June. In
February 2005, we simplified our 26 different types of Data Free
plans into four types of flat fee based plans. The monthly
access fees range from Won 3,500 to Won 26,000. Also, through
September&nbsp;30, 2006, we are offering a temporary promotional
WCDMA Data Free plan, which allows up to a 50% discount on all
services used by subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We generally require new subscribers (other than some corporate
and government subscribers) to pay a non-interest bearing
facility deposit of Won 200,000, which we may utilize to offset
a defaulting subscriber&#146;s outstanding account balance. In
lieu of paying the facility deposit, subscribers who meet the
credit qualifications required by the Seoul Guarantee Insurance
Company may elect to be covered under insurance provided by the
Seoul Guarantee Insurance Company. We pay a Won 10,000 premium
to the Seoul Guarantee Insurance Company on behalf of such
subscribers. Seoul Guarantee Insurance Company reimburses us up
to Won 350,000 for each insured subscriber that defaults on any
payment obligations. We refund the facility deposit to any
existing subscriber who had initially made a facility deposit
and later elects the facility insurance option. We bill
subscribers on a monthly basis and subscribers may make payment
at a bank, post office, any of our regional headquarters or
sales offices, or at any of our authorized dealers. As a result
of the facility insurance program, we have refunded a
substantial amount of facility deposits, and facility deposits
decreased from Won 61.8&nbsp;billion as of December&nbsp;31,
2000 to Won 23.8&nbsp;billion as of December&nbsp;31, 2005. We
do not expect to have to refund a significant amount of facility
deposits in the future, because we believe that most of our
subscribers who wish to be covered by the Seoul Guarantee
Insurance Company have already elected to so.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Because we have been designated by the MIC as a &#147;market
dominant service provider&#148;, our establishment or amendment
of fees, charges, and terms and conditions of service, including
promotional rates and facility deposits, requires prior approval
by the MIC.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">37

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2000, with effect from September&nbsp;1, 2001, the
National Assembly abolished the 10.0% telephone tax previously
charged to our customers as part of their monthly service
charges. Since September&nbsp;1, 2001, we have instead charged
our customers a 10.0% value-added tax. We can offset the
value-added tax we collect from our customers against
value-added tax refundable to us by the Korean tax authorities.
We remit taxes we collect from our customers to the Korean tax
authorities. We record revenues in our financial statements net
of such taxes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Subscribers</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We had 19.8&nbsp;million subscribers as of April&nbsp;30, 2006,
representing a market share of 50.7%, the largest market share
among Korean wireless service providers. We believe that,
historically, our subscriber growth has been due to many
factors, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our expansion and technical enhancement of our digital network,
    including with high-speed data capabilities;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increasing consumer awareness of the benefits of wireless
    telecommunications;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an effective marketing strategy;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our focus on customer service;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the introduction of new, value-added services, such as voicemail
    services, call-forwarding, caller ID, three-way calling and
    Wireless Internet services provided by NATE;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our acquisition of Shinsegi.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth selected historical information
about our subscriber base for the periods indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap><B>As of or for the Year Ended December&nbsp;31,</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subscribers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,313,153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,783,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,530,117</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subscribers Growth Rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Activations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,688,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,407,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,057,176</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deactivations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,594,721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,936,884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,310,397</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Average Monthly Churn Rate(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Average monthly churn rate for a period is the number calculated
    by dividing the sum of deactivations during the period by the
    simple average of the number of subscribers at the beginning and
    end of the period and dividing the quotient by the number of
    months in the period. Churn includes subscribers who upgrade to
    CDMA 1xRTT or CDMA lxEV/ DO-capable handsets by terminating
    their service and opening a new subscriber account.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We had 19,530,117 subscribers as of December&nbsp;31, 2005. For
the year ended December&nbsp;31, 2005, we had 5,057,176
activations and 4,310,397 deactivations, representing an average
monthly churn rate of 1.8% during the same period. Our
subscribers include those subscribers who are temporarily
deactivated, including (1)&nbsp;subscribers who voluntarily
deactivate temporarily for a period of up to three months no
more than twice a year and (2)&nbsp;subscribers with delinquent
accounts who may be involuntarily deactivated up to two months
before permanent deactivation, which we determine based on
various factors, including prior payment history.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our subscriber growth rate was adversely affected by actions we
took to comply with certain requirements of the FTC regarding
our acquisition of Shinsegi. The FTC approved our acquisition of
Shinsegi on the condition that SK Telecom&#146;s and
Shinsegi&#146;s combined market share of the wireless
telecommunications market, based on numbers of subscribers, be
less than 50.0% as of June&nbsp;30, 2001. In order to satisfy
this condition, we reduced the level of our subscriber
activations and adopted more stringent involuntary subscriber
deactivation policies beginning in 2000 and ceased accepting new
subscribers from April&nbsp;1, 2001 through June&nbsp;30, 2001.
We complied
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">38
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
with this requirement by reducing our market share to
approximately 49.7% as of June&nbsp;30, 2001. We are not
currently subject to any market share limitations; however, on
May&nbsp;25, 2004, we voluntarily undertook to limit our market
share through the end of 2005 to 52.3% of the wireless
telecommunications market, which was the combined market share
held by SK Telecom and Shinsegi at the time of the approval of
SK Telecom&#146;s merger with Shinsegi in January 2002. On
July&nbsp;6, 2005, we voluntarily extended such market share
limitation through the end of 2007. We can give no assurances
that the Government will not impose restrictions on our market
share in the future. If we are subject to market share
limitations in the future, our ability to compete effectively
will be impeded, and our subscriber growth rate may decline.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to January 2003, Korea&#146;s wireless telecommunications
system was based on a network-specific prefix system, in which a
unique prefix was assigned to all the phone numbers of a
specific network operator. We were assigned the &#147;011&#148;
prefix, and all of our subscriber&#146;s mobile phone numbers
began with &#147;011&#148; (former Shinsegi subscribers use the
&#147;017&#148; prefix) and our subscribers could not change
their wireless phone service to another wireless operator and
keep their existing numbers. In January 2003, the MIC announced
its plan to implement number portability with respect to
wireless telecommunications services in Korea, which allows
wireless subscribers to switch wireless service operators while
retaining the same mobile phone number. However, subscribers who
switch operators must purchase a new handset, as we use
different frequencies than KTF and LGT. Subscribers who switch
between KTF and LGT need not purchase a new handset, as KTF and
LGT use the same frequencies. In accordance with the plan
published by the MIC, the number portability system was adopted
by SK Telecom starting from January&nbsp;1, 2004. We were
required to adopt the number portability system earlier than our
competitors, allowing our customers to transfer their numbers to
our competitors but not allowing our competitors&#146; customers
to transfer their number to our service. KTF and LGT introduced
number portability beginning July&nbsp;1, 2004 and
January&nbsp;1, 2005, respectively. Subscribers who choose to
transfer to a different wireless operator have the right to
return to their original service provider without paying any
penalties within 14&nbsp;days of their initial transfer.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the number of subscribers of the
three wireless mobile telecommunications operators who
transferred from one operator to another during each month
following the implementation of the number portability system:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="3" align="left" nowrap><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>SKT&#8594;KTF</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>SKT&#8594;LGT</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>KTF&#8594;SKT</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>KTF&#8594;LGT</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>LGT&#8594;SKT</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>LGT&#8594;KTF</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2004</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>417,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>286,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>703,375</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>444,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>287,660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>731,885</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173,384</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>133,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>351,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>109,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>767,160</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>236,251</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149,939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>216,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>133,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>735,641</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>391,386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148,486</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>354,672</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>156,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>213,179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,322</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,484,439</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>355,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>372,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,367,757</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>395,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,604</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>392,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>154,723</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>161,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>128,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,402,281</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>344,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178,560</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>367,998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>164,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149,887</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,318,211</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2006</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    January</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,588</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>154,166</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,741</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,552</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>552,624</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    February</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>164,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,672</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>166,271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,880</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61,534</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>583,108</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>172,963</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>165,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>585,876</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81,071</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91,112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>321,286</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,331,804</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,753,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,632,336</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,114,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>908,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>813,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,553,643</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, in order to manage the availability of phone
numbers efficiently and to secure phone number resources for the
services, the MIC has begun to integrate mobile telephone
identification numbers into a common prefix identification
number &#147;010&#148; and to gradually retract the current
mobile service identification numbers which had been unique to
each wireless telecommunications service provider, including
&#147;011&#148; for our cellular services, starting from 2004.
All new subscribers were given the &#147;010&#148; prefix
starting January 2004.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">39
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth, based on data from the MIC, new
subscribers for each major wireless cellular provider following
the adoption of the &#147;010&#148; prefix in January 2004:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="center" nowrap><B>New Wireless Subscribers</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap><B>SK Telecom</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap><B>KTF</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap><B>LGT</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Percentage</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Percentage</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Percentage</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="left" nowrap><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Subscribers</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>of Total</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Subscribers</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>of Total</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Subscribers</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>of Total</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2004</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,210,435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,060,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>644,709</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,276,659</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>989,318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>613,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>547,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>501,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>341,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>795,359</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>552,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>384,825</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>739,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>670,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>338,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>713,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>516,628</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>314,811</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>707,228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>607,024</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>662,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>528,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>381,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2006</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    January</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>245,324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>186,804</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    February</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>262,623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191,535</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>124,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>250,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,461</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>122,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>164,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118,983</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85,964</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    May</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>196,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>140,814</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115,273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Marketing and Service Distribution</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We market our services and provide after-sales service support
to customers through 29 sales centers, 45&nbsp;branch offices
and a network of 1,378 authorized exclusive dealers located
throughout Korea. Our dealers are connected via computer to our
database and are capable of assisting customers with account
information. In addition, approximately 200,000 independent
retailers (principally handset dealers) assist new subscribers
to complete activation formalities, including processing
subscription applications and accepting facility deposits or
arranging for insurance with Seoul Guarantee Insurance Company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Currently, authorized dealers are entitled to an initial
commission for each new subscriber registered by the dealer as
well as an average ongoing commission calculated as a percentage
of that subscriber&#146;s monthly access and usage charges from
domestic calls for the first four years. In order to strengthen
our relationships with our exclusive dealers, we offer a dealer
financing plan, pursuant to which we provide to each authorized
dealer an interest-free or low-interest loan of up to Won
1.5&nbsp;billion with a repayment period of up to three years.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We operate a customer information system designed to provide us
with an extensive customer database. Our customer information
system includes a billing system which provides us with
comprehensive account information for internal purposes and
enables us to efficiently respond to customer requests. In May
2000, we launched
<FONT style="white-space: nowrap">011e-station.co.kr,</FONT> a
website through which SK Telecom customers can change their
service plans, verify the charges accrued on their accounts,
receive their bills on-line and send text messages to our other
subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
When we were the only cellular service provider in Korea, we
were able to maintain a low level of marketing and advertising
expenses. Over the last several years, competition in the
wireless telecommunications business has caused us to increase
significantly our marketing and advertising expenses and, with
continuing competition, we expect that such expenses will remain
high. We have implemented a range of marketing measures,
including more extensive promotions to attract new customers as
well as to encourage loyalty of our existing subscribers and
discourage migration to other service providers. In 2001,
advertising expenditures as a percentage of revenues amounted to
4.1%, principally for promotion of our voice and wireless data
services. Our
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">40
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
marketing expenses were lowered during the first half of 2001
due to the elimination of handset subsidies and our efforts to
satisfy the FTC-imposed condition that SK Telecom&#146;s and
Shinsegi&#146;s combined market share of the wireless
telecommunications market, based on numbers of subscribers, be
less than 50.0% as of June&nbsp;30, 2001. We complied with this
requirement by reducing our market share to approximately 49.7%
as of June&nbsp;30, 2001, and this market share limitation no
longer applies, although we voluntarily limited our market share
through the end of 2005 to 52.3% of the wireless
telecommunications market. On July&nbsp;6, 2005, we voluntarily
extended such market share limitation through the end of 2007.
In 2003, 2004 and 2005, advertising expenditures amounted to
3.7%, 3.3% and 2.6% of our revenues, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2004, we entered into a Won 120&nbsp;billion agreement
with IBM Business Consulting Services for a term of two years in
connection with our efforts to improve our marketing system. IBM
has been implementing a new process and application
infrastructure consisting of a new customer relationship
management system, as well as billing, partner relationship
management and content management systems. In May 2005, we and
IBM agreed to terminate the March 2004 agreement for a total
aggregate payment to IBM of Won 79.7&nbsp;billion for services
provided through the termination date, with an understanding
that another system integration company is better suited for our
needs in light of the enhanced features of the new systems to
cover data for our customers of newly launched services. On
June&nbsp;1, 2005, we entered into an agreement with SK C&#38;C
to develop our &#147;Next Generation Marketing&#148; project,
under which SK&nbsp;C&#38;C has agreed to develop and deliver
infrastructure necessary to implement our Next Generation
Marketing strategies, for Won 53.5&nbsp;billion. The agreement
will terminate on July&nbsp;1, 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Interconnection</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our networks interconnect with the public switched telephone
networks operated by KT Corporation, Hanaro Telecom, DACOM and
Onse, as well as the networks of the other wireless
telecommunications service providers in Korea. These connections
enable our subscribers to make and receive calls from telephones
outside our networks. Under Korean law, service providers are
required to permit other service providers to interconnect to
their networks. If a new service provider desires
interconnection with the networks of an existing service
provider but the parties are unable to reach an agreement within
90&nbsp;days, the new service provider can appeal to the Korea
Communications Commission, a government agency under the MIC. We
estimate that approximately 37.9% in 2003, approximately 34.0%
in 2004 and approximately 34.6% in 2005 of our incoming and
outgoing calls originated from or were routed to the networks of
KT Corporation and Hanaro Telecom or the international gateways
of KT Corporation, DACOM and Onse.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With respect to the interconnection arrangement for calls from
fixed-line networks to wireless networks, for the years 2000
through 2001, fixed-line operators&#146; payments to wireless
network service providers were calculated based on the actual
imputed costs in 1998 of the leading wireless network service
provider, which was us. For 2002, these payments were calculated
based on each wireless operator&#146;s actual imputed costs in
2001. This change reduced the interconnection revenue we
received from each call made from a fixed-line network
terminating on our network, adversely affecting our
interconnection revenue compared to previous years. For 2003,
pursuant to a new MIC policy, an operator&#146;s interconnection
fees were derived from that operator&#146;s actual
interconnection fees for 2001 and actual imputed costs for 2001.
Interconnection charges for calls between wireless service
providers, first implemented by the MIC beginning in January
2000, were also reduced beginning in January 2002 and in January
2003, affecting both our revenue and our expenses. On
July&nbsp;9, 2004, the MIC introduced a new method of
calculating interconnection payments, based on the
terminator&#146;s long-run incremental cost in 2004 and the
competitive market situation in the telecommunication service
industry of Korea. The long-run incremental cost method has been
adopted by other countries such as the United States, the United
Kingdom and Japan. The new interconnection rates paid to each
wireless network service provider are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>SK Telecom</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>KTF</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>LGT</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(Won/Minute)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52.89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58.55</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54.98</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">41

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The new rates had a negative impact on our operations in 2005 in
the amount of approximately Won&nbsp;124.9&nbsp;billion,
resulting in an estimated Won 49.2&nbsp;billion reduction in
revenue and Won 75.7&nbsp;billion increase in interconnection
expenses. The Won 75.7&nbsp;billion increase in interconnection
expenses include the increase in the
<FONT style="white-space: nowrap">land-to</FONT>-mobile
interconnection expenses that were paid to fixed-line service
providers. In 2005, we received Won&nbsp;898.6&nbsp;billion in
interconnection revenue and incurred Won 989.4&nbsp;billion in
interconnection expense. See &#147;Item&nbsp;5A. Operating
Results&nbsp;&#151; Overview&nbsp;&#151; Revenue&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For 2003, our total interconnection revenues were
Won&nbsp;1,017.1&nbsp;billion and our total interconnection
expenses were Won&nbsp;771.5&nbsp;billion. For 2004, our total
interconnection revenues were Won&nbsp;849.4&nbsp;billion and
our total interconnection expenses were
Won&nbsp;913.7&nbsp;billion. For 2005, our total interconnection
revenues were Won&nbsp;898.6&nbsp;billion and our total
interconnection expenses were Won 989.4&nbsp;billion.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Domestic Calls</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Guidelines issued by the MIC require that all interconnection
charges levied by a regulated carrier take into account
(i)&nbsp;the actual costs to that carrier of carrying a call or
(ii)&nbsp;imputed costs. The interconnecting parties are
required to calculate the relevant imputed costs on an annual
basis. In the event of a dispute regarding the imputed costs,
the Korea Communications Commission is empowered to act as
arbitrator.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="white-space: nowrap"><I>Wireless-to</FONT>-Fixed-line.</I>
According to our interconnection arrangement with KT
Corporation, for a call from our wireless network to KT
Corporation&#146;s fixed-line network, we collect the usage rate
from our wireless subscriber and in turn pay KT Corporation the
interconnection charges based on KT Corporation&#146;s imputed
costs.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Fixed<FONT style="white-space: nowrap">-line-to</FONT>-Wireless.</I>
The MIC determines interconnection arrangements for calls from a
fixed-line network to a wireless network. For a call initiated
by a fixed-line user to one of our wireless service subscribers,
the fixed-line network operator collects our usage fee from the
fixed-line user and pay us an interconnection charge.
Interconnection with KT Corporation accounts for substantially
all of our
fixed<FONT style="white-space: nowrap">-line-to</FONT>-wireless
interconnection revenue and expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April 2002, the MIC announced new interconnection
arrangements effective January&nbsp;1, 2002 which reduced the
interconnection fees payable among Korean wireless operators by
between 10.2% and 28.1%, depending upon the operators involved.
For 2002, KT Corporation&#146;s payments to network service
providers were calculated based on a discount of 28.1% to our
actual imputed costs for 2000. According to this calculation,
KT&nbsp;Corporation was required to pay interconnection charges
of Won 45.7&nbsp;per minute (exclusive of value-added taxes).
This was reduced to Won 41.0&nbsp;per minute for 2003. On
July&nbsp;9, 2004, the MIC introduced a new method of
calculating interconnection payments, based on the terminating
network&#146;s long-term incremental cost for 2004 and the
competitive market situation in the telecommunication service
industry of Korea. The new interconnection rates for us under
the new method are Won 31.8&nbsp;per minute for 2004 and Won
31.2&nbsp;per minute for 2005. The MIC determines the charges
and notifies the wireless operators.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="white-space: nowrap"><I>Wireless-to</FONT>-Wireless.</I>
The MIC did not determine interconnection charges for calls
between wireless telephone networks in Korea prior to 2000;
instead, the interconnection charges were negotiated among the
operators. The MIC implemented interconnection charges for such
calls starting in January 2000. Under these arrangements, the
operator originating the call pays an interconnection charge to
the operator terminating the call. For all operators, the amount
of the charge is derived from SK Telecom&#146;s imputed cost,
which was Won 45.7&nbsp;per minute for 2002. This was reduced to
Won 41.0&nbsp;per minute for 2003 and further reduced to Won
31.8&nbsp;per minute and Won 31.2&nbsp;per minute for 2004 and
2005, respectively. Our revenues from the
<FONT style="white-space: nowrap">wireless-to</FONT>-wireless
charge Won 435.2&nbsp;billion (including Won 86.6&nbsp;billion
for Shinsegi) in 2001, Won 350.9&nbsp;billion in 2002,
Won&nbsp;412.2&nbsp;billion in 2003, Won 426.6&nbsp;billion in
2004 and Won 502.7&nbsp;billion in 2005. Our expenses from these
charges were Won 496.0&nbsp;billion (including Won
105.5&nbsp;billion for Shinsegi) in 2001, Won 482.7&nbsp;billion
in 2002, Won&nbsp;518.2&nbsp;billion in 2003, Won
644.6&nbsp;billion in 2004 and Won 748.8&nbsp;billion in 2005.
The charges above were agreed among the parties involved and
confirmed by the MIC.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">42

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>International Calls</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With respect to international calls, if a call is initiated by a
wireless subscriber, we bill the wireless subscriber for the
international charges of KT Corporation, DACOM or Onse, and we
receive interconnection charges from such operators. If an
international call is received by our subscriber, KT
Corporation, DACOM or Onse pays interconnection charges to us
based on our imputed costs.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>International Roaming Arrangements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To complement the services we provide to our subscribers in
Korea, we have entered into roaming service agreements with
various foreign wireless telecommunications service providers.
We provide global roaming services based on three basic
technologies, in part, depending on which mobile phone standards
are available in a particular region: CDMA, GSM and WCDMA
roaming. As of May&nbsp;31, 2006, we offered CDMA roaming
services in 18 countries including the U.S., Japan, China,
Thailand, Canada, New Zealand and Australia. Our GSM roaming
services are available in 78 countries, including countries in
Europe and Africa. Our WCDMA voice roaming service is currently
available in Japan, Hong Kong, Singapore, Italy, France and
Germany. The WCDMA voice roaming service area will be expanded
to include the United Kingdom, Spain and the Netherlands in
2006. In addition, our global data roaming service is available
in six countries, including China, Japan and Thailand. We have
approximately 2&nbsp;million global roaming service users, in
aggregate, as of December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Digital Cellular Network</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer wireless voice and data telecommunications services
throughout Korea using digital wireless networks. SK Telecom
operates a CDMA network, which currently reaches approximately
99% of the population, a CDMA 1xRTT and CDMA 1xEV/ DO networks,
which currently reaches approximately 90% of the population, and
WCDMA network. Shinsegi operated a CDMA network prior to its
merger into SK Telecom that we completely decommissioned by July
2002.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>CDMA Networks</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 1996, SK Telecom introduced a digital wireless
network based on CDMA technology. This network has been the core
platform for our wireless telecommunications business. CDMA
technology is a continuous digital transmission technology that
accommodates higher throughput than analog technology by using
various coding sequences to allow concurrent transmission of
voice and data signals for wireless communication. CDMA
technology provides customers with a high degree of call quality
and security.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CDMA technology is currently in commercial operation in several
countries including Korea, Hong Kong and the United States. A
majority of the digital wireless networks currently in use
around the world are based on either the European Global System
for Mobile Communication standard or other time division
multiple access technologies. Unlike the continuous digital
transmission method of CDMA technology, these technologies break
voice signals into sequential pieces of a defined length, place
each piece into an information conduit at specific intervals and
then reconstruct the pieces at the end of the conduit.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>CDMA 1xRTT Network</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2000, we began offering wireless voice and data
services on our CDMA 1xRTT network. CDMA 1xRTT is an advanced
CDMA-based technology which allows transmission of data at
speeds of up to 144&nbsp;Kbps (compared to a maximum of
64&nbsp;Kbps for our CDMA networks) and constitutes what is
sometimes referred to as a 2.5G network. As of December&nbsp;31,
2005, our CDMA 1xRTT network covered 84&nbsp;cities in Korea, or
approximately 90% of the population. In areas where the CDMA
1xRTT network is currently unavailable, CDMA 1xRTT-enabled
handsets are capable of accessing the CDMA network.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unlike our CDMA network, our CDMA 1xRTT network has been
designed to be upgraded in step with advances in wireless
technology. In the first half of 2002, we launched an upgrade of
our CDMA 1xRTT network in 26&nbsp;cities in Korea to an advanced
technology called CDMA 1xEV/ DO. CDMA 1xEV/ DO is a CDMA-based
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">43

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
technology, similar to CDMA 1xRTT, which enables data to be
transmitted at speeds of up to 2.4&nbsp;Mbps. This speed permits
interactive transmission of data required for videophone
services, a high-speed wireless Internet connection, as well as
a multitude of multimedia services. CDMA 1xEV/ DO-capable
handsets became available in Korea in June 2002. We are
expanding our CDMA 1xEV/ DO network and completed the upgrades,
available in 84&nbsp;cities in Korea, or approximately 90% of
the population, as of the end of 2004. This network permits
3G&nbsp;capabilities. For details of our capital expenditure
plans relating to CDMA 1xRTT and CDMA 1xEV/ DO, see
&#147;Item&nbsp;5B. Liquidity and Capital Resources&#148;.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>WCDMA Network</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
WCDMA is a 3G-level, high capacity wireless communication system
that enables us to offer a wider range of telecommunications
services, including cellular voice communications, video
telephony, data communications, multimedia services, wireless
Internet connection, automatic roaming and satellite
communications. We commenced provision of our WCDMA services
based on our WCDMA network on a limited basis in Seoul at the
end of 2003. We developed and launched in March 2005 dual
band/dual mode handsets, to offer seamless nationwide 3G
service, an important factor for a nationwide deployment of
WCDMA services. We commenced provision of our WCDMA services on
a limited basis in Seoul at the end of 2003 and continued to
improve our WCDMA services in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005, we introduced HSDPA technology under the brand name
&#147;3G+&#148;, also known as 3.5G technology, which represents
an evolution of the WCDMA standard and, among others, supports
higher data capacity and allows faster data transmission, for
example, at speeds up to three times faster than CDMA 1xEV/ DO.
HSDPA upgrades to our existing WCDMA network do not require
hardware upgrades and may be accomplished through software
upgrades at virtually no cost. By May 2006, we had expanded
HSDPA service to 25&nbsp;cities, including Busan and Incheon. We
are continuing expansion of an upgraded, HSDPA-ready version of
our WCDMA network to other metropolitan areas of Korea. By the
end of 2006, we expect that HSDPA service will be available in
84&nbsp;cities nationwide. For more information about our
capital expenditure plans relating to WCDMA and HSDPA, see
&#147;Item&nbsp;5B. Liquidity and Capital Resources&#148;, and
for more information about risks relating to WCDMA and HSDPA,
see &#147;Item&nbsp;3D. Risk Factors&nbsp;&#151; HSDPA
technology may require significant capital and other
expenditures for implementation which we may not recoup and such
technology may be difficult to integrate with our existing
technology and business&#148;.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>WiBro</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have also received a license from the MIC to provide wireless
broadband, or WiBro services, which we believe will complement
our existing networks and technologies. WiBro service enables
wireless broadband access to portable computers, mobile phones
and other portable devices. We conducted pilot testing of WiBro
service in limited areas of metropolitan Seoul in May 2006 and
began commercial service in such limited areas in June 2006. We
plan to expand our WiBro service to other areas of metropolitan
Seoul in 2006.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Network infrastructure</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The principal components of our wireless networks are:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>cell sites</I>, which are physical locations equipped with
    transmitters, receivers and other equipment that communicate by
    radio signals with wireless handsets within range of the cell
    (typically a 3 to 40&nbsp;kilometer radius);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>base station transceiver subsystems</I>, which manage the
    radio transmission by the equipment located at one or more cell
    sites, including radio-channel management, message transport and
    hand-off of calls between cell sites;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>switching stations</I>, which switch calls to the proper
    destinations;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>leased lines, microwave links or other connections </I>which
    link the switching stations, the cell sites and the public
    switched telephone networks of KT Corporation and Hanaro Telecom.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">44
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth some basic information about our
wireless networks at December&nbsp;31, 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Switching</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cell Sites</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stations</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CDMA Network (excluding CDMA lxRTT and CDMA 1xEV/ DO)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.878</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CDMA 1xRTT Network and CDMA 1xEV/ DO</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WCDMA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.546</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiBro(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>&#151;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap><B>&nbsp;&#151;</B></TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    We first launched WiBro service in May 2006.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We purchase our principal digital wireless equipment for our
CDMA networks from LG Electronics and Samsung Electronics. We
have purchased from Samsung Electronics substantially all of the
equipment for our CDMA 1xRTT and CDMA 1xEV/ DO networks and have
purchased from Samsung Electronics and LG&nbsp;Electronics
substantially all of the equipment for our WCDMA network.
Several manufacturers, including Samsung Electronics,
Pantech&nbsp;&#38; Curitel, LG Electronics and Motorola Korea,
Inc., currently produce handsets for use on our CDMA, CDMA
1xRTT, CDMA 1xEV/ DO and WCDMA networks. We are currently
considering various equipment manufacturers to determine which
supplier will best match our needs.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under applicable Korean law, Korean fixed-line operators may not
decline to provide leased line services to us without reasonable
cause. We have completed installation of substantially all
optical fiber lines between our switching stations. In addition,
we own several microwave links in areas to serve certain
sections of the network formerly owned and operated by Shinsegi.
We have also installed optical fiber lines linking base stations
with switching stations and other base stations. Where we have
not installed optical fiber lines, we continue to use lines
leased by us from SK Networks and KT Corporation. KT
Corporation&#146;s fixed charges for the leased lines are based
on line capacity, length and type.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We use a cellular network surveillance system. This system
oversees the operation of cell sites and allows us to monitor
our main equipment located throughout the country from one
monitoring station. The automatic inspection and testing
provided to the cell sites lets the system immediately rebalance
to the most suitable setting, and the surveillance system
provides automatic dispatch of repair teams and quick recovery
in emergency situations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Other Investments and Relationships</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have investments in several other businesses and companies
and have entered into various business arrangements with other
companies. Our principal investments fall into the following
categories:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Wireless Application Developers and Content
    Providers</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of our strategy to develop additional applications and
content for our wireless data services, we invest in companies
which develop wireless applications and provide Internet
content, including content accessible by users of our wireless
networks. These investments include:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Information Technology and Content Providers.</I> We hold
    investments in approximately 40&nbsp;companies, with an
    aggregate book value of approximately Won 22.4&nbsp;billion as
    of December&nbsp;31, 2005. Such companies develop technology and
    content for use in our fixed-line and Wireless Internet
    businesses and help enable us to further develop of our
    multimedia platforms and networks.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Joint Ventures.</I> Pursuant to an agreement entered into on
    March&nbsp;20, 2003, we established UNISK, a joint venture
    company with China Unicom in December 2003. See
    &#147;&#151;&nbsp;Global Business&nbsp;&#151; Overseas
    Operations&#148;. In September 2003, we reached a business
    cooperation agreement with Teliasonera for the purpose of
    jointly developing and commercializing new businesses,
    cross-licensing, partnership exchange and joint advancement into
    overseas markets. On September&nbsp;16, 2003, we signed a
    memorandum of understanding with Alcatel for joint development
    of a Mobile Payment Service by combining our Nemo with
    Alcatel&#146;s Prepayment Instant Billing System.</TD>
</TR>

</TABLE>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Mobile Broadcasting Corporation.</I> In September 2003, we
    entered into an agreement with Mobile Broadcasting Corporation,
    or MBCO, a wireless multi-media company in Japan, for the
    purpose of co-owning and launching a satellite for the satellite
    DMB business. MBCO is a developer and provider of content and
    technology related to wireless multimedia services and has
    developed new services in satellite&nbsp;DMB. Under the terms of
    the agreement, SK Telecom is committed to fund 34.7% of the cost
    of launching and maintaining the operations of the satellite,
    which is approximately Won 96.9&nbsp;billion. As of
    December&nbsp;31, 2005, we had invested a total of Won
    27.3&nbsp;billion and had a 7.3% interest in MBCO. We launched
    the satellite in March 2004. In March 2004, the MIC assigned us
    a frequency for satellite DMB. In October 2004, we granted the
    right to use our satellite, satellite orbit and frequency to TU
    Media Corp., one of our affiliates, which received a license
    from the MIC as a satellite DMB provider on December&nbsp;30,
    2004. On May&nbsp;1, 2005, TU Media Corp. began to provide
    satellite DMB services. As of April&nbsp;30, 2006, TU Media had
    over 500,000 subscribers. See &#147;&#151;&nbsp;Multimedia&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Mobile Data and Digital Content Market.</I> In order to
    generate new revenue from the growing mobile data and digital
    content market, we plan to increase our investment in the
    entertainment sector, particularly in music and movies. As
    mobile data and digital content market has become increasingly
    important in the growth of our business, we are seeking to
    secure valuable mobile data and digital contents by making
    equity investments in various content providers. In March 2005,
    we acquired 8&nbsp;million shares, or 21.7% equity interest in
    iHQ Inc., for Won 14.46&nbsp;billion, with an option to
    purchase&nbsp;5&nbsp;million additional shares from
    Mr.&nbsp;Hun-Tak Jeong, a majority shareholder of iHQ Inc. iHQ
    Inc. is an entertainment management firm producing films,
    managing entertainers and operating on-line game services. We
    exercised the option to purchase&nbsp;5&nbsp;million shares of
    iHQ on April&nbsp;26, 2006, which purchase is expected to be
    consummated in July 2006. Following such purchase we will hold a
    34.91% equity interest in iHQ. In August 2005, we also acquired
    a 60% stake in YBM Seoul Records Inc., Korea&#146;s largest
    music recording company in terms of records released and
    revenues, for Won 27.9&nbsp;billion. Through our acquisition of
    YBM, we are able to offer customers of our MelOn service access
    to an expanded digital music contents pool. Also, in July and
    October 2005, we and certain other Korean investment companies
    invested an aggregate Won 40&nbsp;billion to establish three
    funds to invest in the music industry and seek strategic
    partnerships with recording companies. As of December&nbsp;31,
    2005, our contribution to the funds amounted to Won
    39.6&nbsp;billion. Furthermore, in September, October and
    December 2005, we and co-investors invested an aggregate Won
    55.8&nbsp;billion to establish four movie-production funds to
    strengthen our ability to obtain movie contents. We had invested
    Won 20&nbsp;billion in the funds as of December&nbsp;31, 2005.
    Such investments reflect our business strategy of
    diversification into new areas, such as media and entertainment.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Other Investments</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our other investments include:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Hanaro Telecom.</I> As of December&nbsp;31, 2005, we owned a
    4.8% interest in the outstanding capital stock of Hanaro
    Telecom. On September&nbsp;2, 2003, we purchased Won
    120.0&nbsp;billion of Hanaro Telecom commercial paper in order
    to provide Hanaro Telecom with short-term liquidity while it
    attempted to secure a foreign investor that would inject new
    capital into the company. The decision to provide liquidity
    support to Hanaro Telecom was made to protect the value of our
    stake in Hanaro Telecom. Following an investment in Hanaro
    Telecom by a consortium led by AIG and Newbridge, we disposed of
    the Hanaro Telecom commercial paper in December 2003. In May
    2004, we purchased from Samsung Electronics Co., Ltd.
    13,870,000&nbsp;shares of Hanaro Telecom, representing 3.0% of
    the outstanding shares of Hanaro, for Won 39.3&nbsp;billion as
    part of our strategic efforts in consideration of increasing
    convergence between wireless and fixed-line services. As a
    result of the acquisition, our equity interest in Hanaro had
    increased to 4.8% as of December&nbsp;31, 2004, up from 1.8% as
    of December&nbsp;31, 2003. Following Hanaro&#146;s merger with
    Korea Thrunet in January 2006, we continue to hold a 4.8% equity
    interest in Hanaro.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Powercomm.</I> We currently own a 5.0% interest in Powercomm
    Corporation, with a book value as of December&nbsp;31, 2005, of
    Won 77.1&nbsp;billion. For more information, see note&nbsp;4 of
    the notes to our consolidated financial statements. Powercomm is
    an operator of fixed-line networks that provides</TD>
</TR>

</TABLE>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    wholesale fixed-line network services, such as leased lines, to
    telecommunications, Internet and cable television service
    providers in Korea. We have no current plans to either increase
    or decrease our investment in Powercomm.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>SKC&#38;C.</I> We currently own a 30.0% equity interest in
    SKC&#38;C Co., Ltd., with a book value as of December&nbsp;31,
    2005 of Won 168.2&nbsp;billion. SKC&#38;C is an information
    technologies services provider. Substantially all of
    SKC&#38;C&#146;s revenue is generated from services provided to
    member companies of the SK Group, including us. We are party to
    several service contracts with SKC&#38;C related to development
    and maintenance of our information technologies systems. See
    &#147;Item&nbsp;7B. Related Party Transactions&#148;.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have from time to time engaged in discussions with several
wireless telecommunications services providers including KDDI
Corporation and Sprint PCS about strategic relationships of
various types.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Competition</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SK Telecom was Korea&#146;s only provider of cellular
telecommunications services until April 1996, when Shinsegi
began offering its CDMA service using 10&nbsp;MHz of spectrum in
the 800&nbsp;MHz band under a license issued in 1994. In 1996,
the Government issued three additional licenses to KTF, LGT and
Hansol PCS to operate CDMA services, each using 10&nbsp;MHz of
spectrum in the 1700-1800&nbsp;MHz band. Each of KTF, LGT and
Hansol PCS commenced operation of its CDMA service in October
1997.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Beginning in 2000, there has been considerable consolidation in
the wireless telecommunications industry, resulting in the
emergence of stronger competitors. In 2000, KT Corporation
acquired 47.9% of Hansol M.Com&#146;s outstanding shares and
renamed the company KT M.Com. KT M.Com merged into KTF in May
2001. In May 2002, the Government sold its remaining 28.4% stake
in KT Corporation.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Significant advances in technology are occurring that may affect
our businesses, including the roll-out or the planned roll-out
by us and our competitors of advanced high-speed wireless
telecommunications networks based on CDMA 1xEV/ DO technology
and other technologies such as WCDMA and CDMA2000. In October
2000, we launched the world&#146;s first CDMA 1xRTT network,
which enables us to provide advanced data services. Since then
one of our two principal competitors, KTF, has also launched a
network using CDMA 1xRTT technology. As of December&nbsp;31,
2004, our CDMA 1xEV/ DO network upgrade had been completed in
84&nbsp;cities in Korea. KTF has expanded its CDMA 1xEV/ DO
network to cover 75&nbsp;cities in Korea as of December&nbsp;31,
2005. In addition, we and our competitors also have licenses to
provide 3G services using WCDMA technology (in the case of us
and KTF) or CDMA2000 technology (in the case of LGT). Such
networks support data transmission services with more advanced
features and significantly higher data transmission rates than
our principal data networks, which use CDMA 1xRTT and CDMA 1xEV/
DO technologies. We commenced provision of our W-CDMA-based
services on a limited basis in Seoul at the end of 2003 and
continued to improve our WCDMA services in the Seoul
metropolitan area in 2004. In 2005, we completed development of
HSDPA technology, also known as 3.5G. HSDPA technology, a more
advanced telephony protocol that supports higher data capacity
and allows faster data transmissions than previous WCDMA-based
protocols. By May 2006, we had expanded HSDPA service to
25&nbsp;cities including Busan and Incheon. We expect to
complete expansion of our WCDMA network and HSDPA service to
84&nbsp;cities nationwide by the end of 2006. KTF began trial
service of its 3G&nbsp;services in metropolitan Seoul and parts
of Gyunggi Province in December 2003. We understand KTF intends
to upgrade its WCDMA network to support HSDPA service to
45&nbsp;cities by the end of June 2006 and 84&nbsp;cities by the
end 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We and certain other telecommunications service providers have
also received a license from the MIC to provide wireless
broadband, or WiBro services. WiBro service enables wireless
broadband access to portable computers, mobile phones and other
portable devices. We conducted pilot testing of WiBro service in
limited areas of metropolitan Seoul in May 2006 and began
commercial service in such limited areas in June 2006. We plan
to expand our WiBro service to other areas of metropolitan Seoul
in 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See &#147;Item&nbsp;3D,&nbsp;Risk Factors&nbsp;&#151;
Competition may reduce our market share and harm our results of
operations and financial condition.&#148;
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of April&nbsp;30, 2006, according to the MIC, KTF and LGT had
12.6&nbsp;million and 6.7&nbsp;million subscribers,
respectively, representing approximately 32.2% and 17.1%,
respectively, of the total number of wireless subscribers in
Korea on such date. As of April&nbsp;30, 2006, we had
19.8&nbsp;million subscribers, representing a market share of
approximately 50.7%. On May&nbsp;25, 2004, we voluntarily
undertook to limit our market share through the end of 2005 to
52.3% of the wireless telecommunications market, the level of
our market share at the time of the approval of our merger with
Shinsegi in January 2002.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For a description of the risks associated with the competitive
environment in which we operate, see &#147;Item&nbsp;3D. Risk
Factors&nbsp;&#151; Competition may reduce our market share and
harm our results of operations and financial condition.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under current government regulations, as the designated market
dominant service provider for wireless network services, we must
obtain prior MIC approval for any change in our wireless
telecommunications service rates, although our competitors may
change their rates at their discretion. The MIC gave new
entrants similar price advantages when DACOM started competing
with KT Corporation in international long distance service in
1991 and domestic long distance service in 1996. On
April&nbsp;9, 2003, the MIC announced its plan to adopt a
&#147;reserved reporting&#148; system for setting new rates as a
measure to relax the stringent regulation on pricing. Under the
&#147;reserved reporting&#148; system, we would have to report
our proposed new rate plan with the MIC in order to change our
rates. Unless the MIC objects to the proposed rate plan within a
certain period of time, such rates would be automatically
adopted. We believe that this system, if implemented, would give
us greater flexibility in setting our wireless communications
service rates in response to market conditions in a timely
manner, but we can give no assurance that such a system will be
adopted as currently contemplated, or at all, or that the rates
allowed by such a system will allow us to remain profitable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For a description of our rates and subscription plans, see
&#147;&#151;&nbsp;Revenues, Rates and Facility Deposits&#148;.
In addition, the FTC approved our acquisition of Shinsegi on two
conditions. First, the FTC required that SK&nbsp;Telecom&#146;s
and Shinsegi&#146;s combined market share of the wireless
telecommunications market, based on numbers of subscribers, be
less than 50.0% as of June&nbsp;30, 2001. As a result, we
reduced the level of our subscriber activations and adopted more
stringent involuntary subscriber deactivation policies beginning
in 2000 and ceased accepting new subscribers for three months,
from April&nbsp;1, 2001 through June&nbsp;30, 2001. We complied
with this requirement by reducing our market share to
approximately 49.7% as of June&nbsp;30, 2001, and this market
share limitation no longer applies. On May&nbsp;25, 2004, we
voluntarily undertook to limit our market share through the end
of 2005 to 52.3% of the wireless telecommunications market, the
level of our market share at the time of the approval of our
merger with Shinsegi in January 2002. On July&nbsp;6, 2005, we
voluntarily extended such market share limitation through the
end of 2007.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In February 1997, member governments of the World Trade
Organization, or WTO, reached the WTO Agreement on Basic
Telecommunications Services, which became effective in November
1997. As part of this agreement and to expedite the opening of
the telecommunications market and promote competition, the
Government has amended the Telecommunications Business Law
several times to, among other things, increase the allowed
foreign shareholding ownership threshold (up to an aggregate of
49.0%) and participation in telecommunications service
providers, including us.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While we believe that these measures will enable us to more
easily take advantage of opportunities for investments in
overseas telecommunications projects, they have increased and
may in the future increase competition and the financial and
technological resources of our competitors in the domestic
market.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Law and Regulation</B>
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Overview</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Korea&#146;s telecommunications industry is subject to
comprehensive regulation by the MIC, which is responsible for
information and telecommunications policies, radio and
broadcasting management, postal
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
services and postal finances. The MIC regulates and supervises a
broad range of communications issues, including:
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    entry into the telecommunications industry;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    scope of services provided by telecommunications service
    providers;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    allocation of radio spectrum;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    setting of technical standards and promotion of technical
    standardization;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    rates, terms and practices of telecommunications service
    providers;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    customer complaints;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    interconnection and revenue-sharing between telecommunications
    service providers;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    disputes between telecommunications service providers;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    research and development budgeting and objectives of
    telecommunications service providers;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    competition among telecommunications service providers.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telecommunications service providers are currently classified
into three categories: network service providers, value-added
service providers, and specific service providers. We are
classified as a network service provider because we provide
telecommunications services with our own telecommunications
networks and related facilities. As a network service provider,
we are required to obtain a license from the MIC for each of the
services we provide. Our licenses permit us to provide cellular
services and third generation wireless services using WCDMA
technology. Our cellular license does not provide for a fixed
term and our WCDMA license is valid for 15&nbsp;years starting
from 1999.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The MIC may revoke our licenses or suspend any of our businesses
if we fail to comply with its rules, regulations and corrective
orders, including the rules restricting beneficial ownership and
control and corrective orders issued in connection with any
violation of rules restricting beneficial ownership and control
or any violation of the conditions of our licenses.
Alternatively, in lieu of suspension of our business, the MIC
may levy a monetary penalty of up to 3% of our revenues. A
network services provider that wants to cease its business or
dissolve must obtain MIC approval.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The MIC has stated that its policy is to promote competition in
the Korean telecommunications market through measures designed
to prevent the dominant service provider in any such market from
exercising its market power in such a way as to prevent the
emergence and development of viable competitors. While all
network service providers are subject to MIC regulation, we are
subject to increased regulation because of our position as the
dominant wireless telecommunications services provider in Korea.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Rate Regulation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Most network service providers must report to the MIC the rates
and contractual terms for each type of service they provide, but
generally they may set rates at their discretion. However, as
the dominant network services provider for specific services
(based on having the largest market share in terms of number of
subscribers and meeting certain revenue thresholds), we must
obtain prior approval of our rates and terms of service from the
MIC. In each of the years in which this requirement has been
applicable, the MIC has designated us for wireless
telecommunications service and KT Corporation for local
telephone and Internet services, as dominant network service
providers subject to this approval requirement. As a condition
to its approval of SK Telecom&#146;s merger with SK IMT, the MIC
required that we submit the rates for our third generation
mobile services using WCDMA technology to the MIC for approval
prior to the launch of such services. The MIC&#146;s policy is
to approve rates if they are appropriate, fair and reasonable
and if they are calculated in a transparent and appropriate
manner. It may order changes if it deems the rates to be
significantly unreasonable or against public policy.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Interconnection</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Dominant network service providers such as ourselves that own
essential infrastructure facilities or that possess a certain
market share are required to provide interconnection of their
telecommunications network facilities to other service providers
upon request. The MIC sets and announces the standards for
determining the scope, procedures, compensation and other terms
and conditions of such provision, interconnection or co-use. We
have entered into interconnection agreements with KT
Corporation, DACOM, Onse and other network service providers
permitting these entities to interconnect with our network. We
expect that we will be required to enter into additional
agreements with new operators as the MIC grants permits to
additional telecommunications service providers.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

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    <TD></TD>
    <TD>
    <B><I>Wireless Internet Network Co-Share</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2002, the MIC implemented a wireless Internet
network co-share system that permits the WAP Gateway of a
fixed-line operator to connect to a wireless network service
provider&#146;s IWF (inter-working function) device. IWF is a
device that connects a cellular network with an IP (Internet
Protocol) network, while WAP Gateway converts HTTP protocol into
WAP protocol. This co-share system would allow subscribers of a
wireless network service provider to have access to wireless
Internet content provided by a fixed-line operator. In December
2002, KT Corporation connected to our IWF in December 2002 but
has not yet commenced service. In July 2003, the MIC approved
the basic terms regarding the implementation of a network
co-share system. In January 2004, we entered into a memorandum
of understanding with Onse to establish a co-share system, under
which we launched these services in June 2005. Currently, our
subscribers can access portals provided by outside parties. In
addition, the MIC has requested that a third party oversee
wireless operators&#146; customer billing procedures with
respect to third-party content providers who are seeking to
provide their content directly to subscribers without going
through an individual operator&#146;s portal, as third-party
content providers have experienced difficulties in providing
their content service directly to subscribers due to the lack of
resources for billing users. We believe that such a co-share
system, if widely adopted, will have the effect of giving our
users access to a wide variety of content using their handsets,
which may in turn increase revenues attributable to our data
services. However, this system could also place significant
competitive pressure on the services available on our NATE
platform.
</DIV>

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<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Contributions to the Fund for Development of Information
    Telecommunications</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The MIC has the authority to recommend to network service
providers that they provide funds for national research and
development of telecommunications technology and related
projects. For 2005, the MIC recommends that we contribute 0.75%
of budgeted revenues (calculated pursuant to MIC guidelines that
differ from our accounting practices) to the Fund for
Development of Information Telecommunications operated by the
MIC. Although these recommendations were not mandatory prior to
2002, we have in the past contributed the recommended amounts.
Our contribution to this fund in 2001 was Won 23.0&nbsp;billion
(including nil for Shinsegi) based on the MIC-recommended
minimum level of contribution of 1.0% of MIC-calculated revenues
for 2001.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2002, the MIC announced significant changes to the
government contribution system. Starting from 2002, the
contributions became mandatory, and the annual contribution
which was set at 1.0% of total revenues for the previous year
was lowered to 0.5% (0.75% for market dominant service providers
like us) of total revenues for the previous year, and will be
applicable only to those network service providers who have
Won&nbsp;30&nbsp;billion in total sales for the previous year
and have recorded no net loss in the current period. Under the
policy, the maximum amount of the annual contribution to be made
cannot exceed 70% of the net profit for the corresponding period
of each company. Our contribution to this fund in 2003, 2004 and
2005 was Won 64.9&nbsp;billion, Won 69.0&nbsp;billion and Won
69.1&nbsp;billion, respectively, based on the new MIC
requirement of 0.75% of MIC-calculated revenues.
</DIV>

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    <TD>
    <B><I>Universal Service Obligation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All telecommunications service providers other than value-added
service providers, specific service providers and regional
paging service providers or any telecommunications service
providers whose net annual
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
revenue is less than an amount determined by the MIC (currently
set at Won 30&nbsp;billion) are required to provide
&#147;universal&#148; telecommunications services including
local telephone services, local public telephone services,
telecommunications services for remote islands and wireless
communication services for ships and telephone services for the
handicapped and low-income citizens, or contribute toward the
supply of such universal services. The MIC designates universal
services and the service provider who is required to provide
each service. Currently, we are required to offer free
subscription fee and 30% discount of our monthly fee for
cellular services to the handicapped and the low-income
citizens. In addition to such universal services for the
handicapped and low-income citizens, we are also required to
make certain monetary contributions to compensate for other
service providers&#146; costs for the universal services. The
size of a service provider&#146;s contribution is based on its
net annual revenue (calculated pursuant to MIC guidelines which
differ from our accounting practices). In 2003, our contribution
amount was Won 80.7&nbsp;billion for our fiscal year 2002. In
2004, our contribution amount was Won&nbsp;46.6&nbsp;billion for
our fiscal year 2003. In 2005, our contribution amount was Won
25.5&nbsp;billion for our fiscal year 2004. As a wireless
telecommunications services provider, we are not considered a
provider of universal telecommunications services and do not
receive funds for providing universal service. Other network
service providers that do provide universal services make all or
a portion of their &#147;contribution&#148; in the form of
expenses related to the universal services they provide.
</DIV>

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</TR>

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    <TD></TD>
    <TD>
    <B><I>Frequency Allocation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The MIC has the discretion to allocate and adjust the frequency
band for each type of service. Upon allocation of new frequency
bands or adjustment of frequency bands, the MIC is required to
give a public notice. The MIC also regulates the frequency to be
used by each radio station, including our base stations, by the
terms of its approval for each radio station. All of our
frequency allocations are for an indefinite term. We pay fees to
the MIC for our frequency usage which are determined based upon
our number of subscribers, frequency usage by our networks and
other factors. For 2003, 2004 and 2005 the fee amounted to Won
129.5&nbsp;billion, Won&nbsp;143.0&nbsp;billion and Won
156.1&nbsp;billion, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we have paid Won 650&nbsp;billion of the Won 1.3
trillion cost of the WCDMA license in March 2001. We are
required to pay the remainder of the license cost in annual
installments for a five-year period from 2007 through 2011. For
more information, see note&nbsp;2(i) of the notes to our
consolidated financial statements for the years ended
December&nbsp;31, 2003, 2004 and 2005.
</DIV>

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    <TD width="3%"></TD>
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</TR>

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    <TD></TD>
    <TD>
    <B><I>Competition Regulation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Korea Communications Commission is charged with ensuring
that network service providers engage in fair competition and
has broad powers to carry out this goal. If a network service
provider is found to be in violation of the fair competition
requirement, the Korea Communications Commission may take
corrective measures it deems necessary, including, but not
limited to, prohibiting further violations, requiring amendments
to the articles of incorporation or to service contracts with
customers, and requiring the execution or performance of, or
amendments to, interconnection agreements with other network
service providers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we qualify as a market-dominating business entity
under the Fair Trade Act. Accordingly, we are prohibited from
engaging in any act of abuse, such as unreasonably determining,
maintaining or altering service rates, unreasonably controlling
the rendering of services, unreasonably interfering with
business activities of other business entities, hindering
unfairly the entry of newcomers or substantially restricting
competition to the detriment of the interests of consumers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Fair Trade Act, a company that is a member of a large
business group as designated by the FTC, such as ourselves, as a
company in the SK Group, is generally required to limit its
total investments in other domestic companies to 25% of its
non-consolidated net assets. Investment in companies engaging in
similar business is not included in calculating the 25% limit.
Depending on the time frame in which such a company acquired
shares in excess of the 25% ceiling, the FTC may issue
corrective orders requiring, for example, the disposition of the
shares held in excess of the 25% ceiling or imposing limitations
on the voting rights for such shares and/or monetary sanctions.
SK Telecom&#146;s total investments in other domestic companies
(excluding
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
investments in Hanaro Telecom, Powercomm, SK Telink, Enterprise
Networks and Real Telecom, companies engaging in similar
business) amounted to Won 794.3&nbsp;billion as of
March&nbsp;31, 2006.
</DIV>

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    <TD width="3%"></TD>
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    <TD></TD>
    <TD>
    <B><I>Number Portability</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previously, Korea&#146;s wireless telecommunications system was
based on a network-specific prefix system in which a unique
prefix was assigned to all the phone numbers of a network
operator. We were assigned the &#147;011&#148; prefix, and all
of our subscriber&#146;s mobile phone numbers began with
&#147;011&#148; (former Shinsegi subscribers use the
&#147;017&#148; prefix). Our subscribers could not change their
wireless phone service to another wireless operator and keep
their existing numbers. In January 2003, the MIC announced its
plan to implement number portability with respect to wireless
telecommunications services in Korea. The number portability
system allows wireless subscribers to switch wireless service
operators while retaining the same mobile phone number. However,
subscribers who switch operators must purchase a new handset, as
we use a different frequency than KTF and LGT. In accordance
with the plan published by the MIC, the number portability
system was adopted by SK&nbsp;Telecom starting from
January&nbsp;1, 2004. KTF and LGT introduced number portability
beginning on July&nbsp;1, 2004 and January&nbsp;1, 2005,
respectively. For details of the number of subscribers who
transferred to the services of our competitors following the
implementation of the number portability system, see
&#147;&#151;&nbsp;Subscribers&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, in order to manage the availability of phone
numbers efficiently and to secure phone number resources for the
new services, the MIC has begun to integrate mobile telephone
identification numbers into a common prefix identification
number &#147;010&#148; and to gradually retract the current
mobile service identification numbers which had been unique to
each wireless telecommunications service provider, including
&#147;011&#148; for our cellular services, starting from
January&nbsp;1, 2004. All new subscribers have been given the
&#147;010&#148; prefix starting January 2004. For details of the
number of new subscribers for each of the major wireless
cellular providers following the adoption of the &#147;010&#148;
prefix January 2004, see &#147;&#151;&nbsp;Subscribers&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For risks relating to number portability, see
&#147;Item&nbsp;3D. Risk Factors&nbsp;&#151; Our businesses are
subject to extensive government regulation and any change in
government policy relating to the telecommunications industry
could have a material adverse effect on our results of
operations and financial condition.&#148;
</DIV>

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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Contribution to 114&nbsp;Directory Service</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The MIC has been negotiating with network service providers on
sharing the cost of providing 114&nbsp;directory services
through KT Corporation. Prior to 1998, this cost was shared
among service providers through the NTS (Nontraffic Sensitive)
Participation Program. The NTS Participation Program included
both the Universal Service Provider Program and contributions
for 114&nbsp;directory services before it came to a halt due to
disagreements between network service providers and the MIC. The
MIC has determined SK Telecom&#146;s share of such costs for the
period between 1998 and 2001 to be Won 40.6&nbsp;billion and Won
18.3&nbsp;billion for the period between 2002 and 2004, based on
the number of calls made to the 114&nbsp;directory service
through its network. We paid the entire amount in April 2006.
Contributions for the 114&nbsp;directory service for 2005 have
not been determined yet.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Foreign Ownership and Investment Restrictions and
    Requirements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Because we are a network service provider, foreign governments,
individuals, and entities (including Korean entities that are
deemed foreigners, as discussed below) are prohibited from
owning more than 49% of our voting stock. Effective from
May&nbsp;9, 2004, Korean entities where a foreign government or
a foreigner (together with any of its related parties)
(i)&nbsp;is the largest shareholder and (ii)&nbsp;owns 15% or
more of the outstanding voting stock are deemed foreigners. If
this 49% ownership limitation is violated, certain of our
foreign shareholders will not be permitted to exercise voting
rights in excess of the limitation and the MIC may require other
corrective action.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, SK Corporation owned
17,663,127&nbsp;shares of our common stock, or approximately
21.47% of our issued shares. As of December&nbsp;31, 2005, a
foreign investment fund and its related parties collectively
held a 5.03% stake in SK Corporation. Effective from May&nbsp;9,
2004, if the foreign investment fund and its related parties
increase their shareholdings in SK Corporation to 15% or more
and such foreign investment fund and its related parties
collectively constitute the largest shareholder of SK
Corporation, SK Corporation will be considered a foreign
shareholder of SK Telecom, and its shareholding in SK Telecom
would be included in the
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
calculation of the aggregate foreign shareholding of SK Telecom.
If SK Corporation&#146;s shareholding in SK&nbsp;Telecom is
included in the calculation of the aggregate foreign
shareholding of SK Telecom, then the aggregate foreign
shareholding in SK Telecom, assuming the foreign ownership level
as of December&nbsp;31, 2005 (which we believe was 48.74%),
would reach 70.21%, exceeding the 49% ceiling on foreign
shareholding.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the aggregate foreign shareholding limit in SK Telecom is
exceeded, the MIC may issue a corrective order to SK Telecom,
the breaching shareholder (including SK Corporation if the
breach is caused by an increase in foreign ownership of SK
Corporation) and the foreign investment fund and its related
parties who own in the aggregate 15% or more of SK Corporation.
Furthermore, SK Corporation may not exercise its voting rights
with respect to the shares held in excess of the 49% ceiling,
which may result in a change in control of us. In addition, the
MIC may refuse to grant us licenses or permits necessary for
entering into new telecommunications businesses until the
aggregate foreign shareholding of SK Telecom is reduced to below
49%. If a corrective order is issued to us by the MIC arising
from the violation of the foregoing foreign ownership limit, and
we do not comply within the prescribed period under such
corrective order, the MIC may (1)&nbsp;suspend all or part of
our business, or (2)&nbsp;if the suspension of business is
deemed to result in significant inconvenience to our customers
or be detrimental to the public interest, impose a one-time
administrative penalty of up to 3% of our sales revenues.
Additionally, an amendment to the Telecommunications Business
Law in May 2004 also authorizes the MIC to assess monetary
penalties of up to 0.3% of the purchase price of the shares for
each day the corrective order is not complied with, as well as a
prison term of up to one year and a penalty of Won
50&nbsp;million. See &#147;Item&nbsp;3D. Risk
Factors&nbsp;&#151; If SK Corporation causes us to breach the
foreign ownership limitations on shares of our common stock, we
may experience a change of control.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are required under the Foreign Exchange Transaction Act to
file a report with a designated foreign exchange bank or with
the Ministry of Finance and Economy, or the MOFE, in connection
with any issue of foreign currency denominated securities by us
in foreign countries. Issuances of US$30&nbsp;million or less
require the filing of a report with a designated foreign
exchange bank, and issuances that are over US$30&nbsp;million
require the filing of a report with the MOFE.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A newly adopted amendment to the Telecommunications Business Law
effective from May&nbsp;9, 2004 provides for the creation of a
Public Interest Review Committee under the MIC to review
investments in or changes in the control of network services
providers. The following events would be subject to review by
the Public Interest Review Committee: (i)&nbsp;the acquisition
by an entity (and its related parties) of 15% or more of the
equity of a network services provider, (ii)&nbsp;a change in the
largest shareholder of a network services provider,
(iii)&nbsp;agreements by a network service provider or its
shareholders with foreign governments or parties regarding
important business matters of such network services provider,
such as the appointment of officers and directors and transfer
of businesses and (iv)&nbsp;a change in the entity that actually
controls a network services provider. If the Public Interest
Review Committee determines that any of the foregoing
transactions or events would be detrimental to the public
interest, then the MIC may issue orders to stop the transaction,
amend any agreements, suspend voting rights, or divest the
shares of the relevant network services provider. Additionally,
effective from May&nbsp;9, 2004, if a dominant network services
provider (which would currently include us and KT Corporation),
together with its specially related persons (as defined under
the Korean Securities and Exchange Act) holds more than 5% of
the equity of another dominant network services provider, the
voting rights on the shares held in excess of the 5%&nbsp;limit
may not be exercised.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Handset Subsidy Payments</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Until March&nbsp;26, 2006, telecommunications service providers
had been prohibited from providing handset subsidies to attract
new subscribers under the Telecommunications Business Act.
Pursuant to an amendment to the Telecommunications Business Act,
which came into effect on March&nbsp;27, 2006, the prohibition
on handset subsidies will continue until March&nbsp;26, 2008,
subject to the following exceptions: (i)&nbsp;a
telecommunications service provider may provide subsidies to
subscribers who have maintained their subscription with the same
telecommunications service provider for at least 18&nbsp;months,
<I>provided </I>that no separate subsidy is provided to the same
subscriber for two years thereafter; or (ii)&nbsp;a
telecommunications service provider that has provided a
particular telecommunications service for less than six years
may provide subsidies to subscribers of such service.
Accordingly, we may provide handset subsidies to our subscribers
who have been using our services
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
uninterruptedly for at least 18&nbsp;months, or to our
subscribers who are subscribing to our HSDPA or WiBro services.
The Telecommunications Business Act requires any
telecommunications service provider seeking to provide handset
subsidies to report to the MIC the qualifying criteria and range
of subsidy payments no later than 30&nbsp;days prior to the
effective date of the applicable subsidy payment. Also, the
Telecommunications Business Act requires the telecommunications
service providers to include information regarding proposed
subsidies in their subscriber agreements. Under the amended
Telecommunications Business Act, fines for violators are
calculated based on only the sales amount directly related to
the illegal subsidies, instead of the total sales amount, as had
been the case prior to the amendment. However, violators may
face higher fines because dominant telecommunications services
providers and repeat offenders will be charged with fines
calculated with a multiplier under the amendment.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Patents and Licensed Technology</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Access to the latest relevant technology is critical to our
ability to offer the most advanced wireless services and to
design and manufacture competitive products. In addition to
active internal and external research and development efforts as
described in &#147;Operating and Financial Review and
Prospects&nbsp;&#151; Research and Development&#148;, our
success depends in part on our ability to obtain patents,
licenses and other intellectual property rights covering our
products. We own numerous patents and trademarks worldwide, and
have applications for patents pending in many countries,
including Korea, Japan, China, the United States, and Europe.
Our patents are mainly related to CDMA technology and wireless
Internet applications. We also acquired a number of patents
related to WCDMA technology.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We also license a number of patented processes and trademarks
under cross-licensing, technical assistance and other
agreements. The most important agreement is with Qualcomm Inc.
and relates mainly to CDMA applications technology. This
agreement generally grants us a non-exclusive license to
manufacture handsets in return for royalty payment or a
sub-license to manufacture and sell certain products both in
Korea and overseas during a fixed, but usually renewable term.
We consider our technical assistance and licensing agreements to
be important to our business and believe that we will be able to
renew this agreement on commercially reasonable terms that will
not adversely affect our ability to use the relevant
technologies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are not currently involved in any material litigation
regarding patent infringement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Organizational Structure</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are a member of the SK Group, based on the definition of
&#147;group&#148; under the Fair Trade Act of Korea. As of
December&nbsp;31, 2005, SK&nbsp;Group members owned in aggregate
22.79% of the shares of our issued common stock as of
December&nbsp;31, 2005. The SK Group is a diversified group of
companies incorporated in Korea with interests in, among other
things, telecommunications, trading, energy, chemicals,
engineering and leisure industries. Until mid-1994, our largest
shareholder was KT Corporation (formerly known as
Korea&nbsp;Telecom Corp.), Korea&#146;s principal fixed-line
operator and the parent of KTF, one of our principal wireless
competitors.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Significant Subsidiaries</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For information regarding our subsidiaries, see note&nbsp;2(b)
of the notes to our consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='116'></A>
</DIV>

<!-- link1 "Item 4C. Organizational Structure" -->

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;4C.</B></TD>
    <TD>
    <B><I>Organizational Structure</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These matters are discussed under Item&nbsp;4B. where relevant.
</DIV>

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<A name='117'></A>
</DIV>

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;4D.</B></TD>
    <TD>
    <B><I>Property, Plants And Equipment</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth certain information concerning
our principal properties as of December&nbsp;31, 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Approximate Area</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Location</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Primary Use</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>in Square Feet</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Seoul Metropolitan Area</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Corporate Headquarters</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>988,455</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Regional Headquarters</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,095,992</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Customer Service Centers</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>384,223</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Training Centers</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>397,574</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Central Research and Development Center</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>482,725</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Others</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>547,061</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Busan</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Regional Headquarters</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>363,272</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Others</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>237,056</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Daegu</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Regional Headquarters</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>153,573</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Others</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>317,440</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cholla and Jeju Provinces</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Regional Headquarters</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>265,595</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Others</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>359,784</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Choongchung Province</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Regional Headquarters</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>459,240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Others</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>481,978</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Seoul National University Research Center</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108,530</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    KAIST SUPEX Management Center</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,817</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Ewha University SK Telecom Center</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,117</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, we constructed a new building with an area of
approximately 82,624&nbsp;square feet, in which we have full
ownership, for use as our corporate headquarters. We relocated
our corporate offices into the new building in January 2005. In
addition, we own or lease various locations for cell sites and
switching equipment. We do not anticipate that we will need a
significant number of new cell sites in connection with the
expansion of our CDMA networks which is planned for 2005, and we
expect to lease or acquire new sites as needed. We do expect
that we will need new cell sites in constructing our WCDMA
network. Our current plan is to share sites with our existing
network, and therefore, we do not at this time expect to have to
obtain a significant number of new cell site locations. We do
not anticipate that we will encounter material difficulties in
meeting our future needs for any existing or prospective leased
space for our cell sites. See &#147;Item&nbsp;4B. Business
Overview&nbsp;&#151; Cellular Services&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2004, we purchased certain land and building
(including incidental movables) of SK Life Insurance Co., Ltd.
accounting for 589,625&nbsp;square feet for Won 30&nbsp;billion
in order to secure stable training facilities to enhance
expertise and leadership of SK Telecom&#146;s employees as
required by its campaign of new value management.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We maintain a range of insurance policies to cover our assets
and employees, including our directors and officers. We are
insured against business interruption, fire, lightening,
flooding, theft, vandalism, public liability and certain other
risks that may affect our assets and employees. We believe that
the types and amounts of our insurance are in accordance with
general business practices in Korea.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='118'></A>
</DIV>

<!-- link1 "Item 4.A. UNRESOLVED STAFF COMMENTS" -->

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    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;4.A.</B></TD>
    <TD>
    <B><I>UNRESOLVED STAFF COMMENTS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We do not have any unresolved comments from the Securities and
Exchange Commission staff regarding our periodic reports under
the Exchange Act of 1934.
</DIV>

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<A name='119'></A>
</DIV>

<!-- link1 "Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS" -->

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<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;5.</B></TD>
    <TD>
    <B><I>OPERATING AND FINANCIAL REVIEW AND PROSPECTS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You should read the following discussion together with our
consolidated financial statements and the related notes thereto
which appear elsewhere in this annual report. We prepare our
financial statements in accordance with Korean GAAP, which
differs in some respects from U.S.&nbsp;GAAP. Notes&nbsp;30 and
31 of the notes to our consolidated financial statements provide
a description of the significant differences between Korean GAAP
and U.S.&nbsp;GAAP as they relate to us and provide a
reconciliation to U.S.&nbsp;GAAP of our net income and
shareholders&#146; equity for fiscal years 2003, 2004 and 2005.
In addition, you should read carefully the section titled
&#147;&#151;&nbsp;Critical Accounting Policies, Estimates and
Judgments&#148; as well as note&nbsp;2 of the notes to our
consolidated financial statements which provide summaries of
certain critical accounting policies that require our management
to make difficult, complex or subjective judgments relating to
matters which are highly uncertain and that may have a material
impact on our financial conditions and results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='120'></A>
</DIV>

<!-- link1 "Item 5A. Operating Results" -->

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;5A.</B></TD>
    <TD>
    <B><I>Operating Results</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Overview</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Revenue</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We earn revenue principally from initial connection fees and
monthly access fees; usage charges and value-added service fees
paid by subscribers to our wireless services; interconnection
fees paid to us by other telecommunications operators for use of
our network by their customers and subscribers; and until our
sale of a controlling interest in the company in July 2005,
sales of wireless handsets by our former consolidated
subsidiary, SK Teletech. The amount of our revenue depends
principally upon the number of our wireless subscribers, the
rates we charge for our services, subscriber usage of our
services and the terms of our interconnection with other
telecommunications operators. Government regulation also affects
our revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth certain revenue information about
our operations during the periods indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Revenue</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Revenue</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Revenue</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Revenue</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Revenue</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Revenue</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(In billions of won, except percentages)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><I>Cellular Revenue:</I></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Wireless Services(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,462.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,798.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>83.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,168.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interconnection</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,017.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>849.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>898.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Digital Handset Sales(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>612.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>294.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Cellular Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,091.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,297.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,361.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><I>Other Revenue:</I></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    International Calling Service(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Portal Service(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Miscellaneous</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Other Revenue:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>180.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>273.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>359.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><I>Total Operating Revenue:</I></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,272.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,570.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,721.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Operating Revenue Growth</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Wireless services revenue includes initial connection fees,
    monthly access fees, usage charges, international charges,
    wireless Internet service fees, value-added-service fees and
    interest on overdue subscriber accounts (net of telephone tax).</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">56
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<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Until July 2005, we consolidated revenues derived from sales of
    digital handsets made through our former subsidiary, SK
    Teletech. In July 2005, we sold 4,542,000&nbsp;shares of SK
    Teletech owned by us to Pantech&nbsp;&#38; Curitel, Inc., a
    Korean mobile handset manufacturer, reducing our equity interest
    in SK Teletech from 89.1% to 29.1%, which became a 22.7% equity
    interest in Pantech following the merger of SK Teletech (renamed
    SKY Teletech following our sale of the company to
    Pantech&nbsp;&#38; Curitel) into Pantech in December 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Provided by SK Telink Co.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Portal service revenue attributable to SK Communications Co.,
    Ltd. and, since 2003, SK Communications and Paxnet Co., Ltd.,
    and since 2005, SK Communications, Paxnet Co., Ltd. and U-Land
    Company Limited.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have had a dominant market share position in terms of
subscribers throughout our history and we continue to be the
market leader in terms of number of subscribers. Our wireless
subscriber base has continued to increase over the years,
growing from approximately 10.1&nbsp;million subscribers at the
end of 1999 to approximately 14.5&nbsp;million subscribers
(including approximately 3.5&nbsp;million Shinsegi subscribers),
15.2&nbsp;million subscribers (including approximately
3.3&nbsp;million Shinsegi subscribers), 17.2&nbsp;million
subscribers, 18.3&nbsp;million subscribers, 18.8&nbsp;million
subscribers and 19.5&nbsp;million subscribers at the end of
2000, 2001, 2002, 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a condition to its approval of our acquisition of Shinsegi,
the FTC required that SK Telecom&#146;s and Shinsegi&#146;s
combined market share of the wireless telecommunications market,
based on numbers of subscribers, be less than 50% as of
June&nbsp;30, 2001. As a result, we reduced the level of our
subscriber activations and adopted more stringent involuntary
subscriber deactivation policies beginning in 2000 and ceased
accepting new subscribers for three months, from April&nbsp;1,
2001 through June&nbsp;30, 2001. We complied with this
requirement by reducing our market share to approximately 49.7%
as of June&nbsp;30, 2001. On May&nbsp;25, 2004, a policy
advisory committee to the MIC announced the results of its
review and stated that the committee believed that our market
dominance may significantly restrict competition in the
telecommunications market and that we have violated a merger
condition related to our acquisition of Shinsegi by providing
subsidies to handset buyers. On the same day, we voluntarily
undertook to limit our market share through the end of 2005 to
52.3% of the wireless telecommunications market, which was the
level of our market share at the time of the approval of our
merger with Shinsegi in January 2002. On June&nbsp;7, 2004, the
MIC fined us Won 11.9&nbsp;billion and extended our post-merger
monitoring period until January 2007 pursuant to the policy
advisory committee&#146;s recommendation. On July&nbsp;6, 2005,
we voluntarily extended such market share limitation through the
end of 2007. As of December&nbsp;31, 2005, we had approximately
19.5&nbsp;million subscribers, representing a market share of
approximately 50.9%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to June 2000, wireless telecommunications service
providers provided handsets at below retail prices to attract
new subscribers, offsetting a significant portion of the cost of
handsets. The MIC prohibited all wireless telecommunications
service providers, subject to certain exceptions stipulated in
the Telecommunications Business Act, from providing handset
subsidies beginning June&nbsp;1, 2000. In February 2004, the MIC
imposed upon us a fine of Won 21.7&nbsp;billion with respect to
incentive payments that were deemed by the MIC to constitute
improper handset subsidies and thereby disrupt fair competition.
We paid the fine in March 2004. In February 2004, KTF and KT
Corporation were also fined Won 7.5&nbsp;billion and Won
4.1&nbsp;billion, respectively, in respect of such incentive
payments. On March&nbsp;21, 2005, the MIC ordered us, KTF and
LGT, to pay fines of Won 1.4&nbsp;billion, Won 360&nbsp;million
and Won 230&nbsp;million, respectively, for changing calling
plans and adding value-added services to the subscribers without
obtaining express consents of such subscribers. We paid such
fine in April 2005 and September 2005. In May 2005, the MIC
ordered us to pay a fine of Won 23.1&nbsp;billion and Won
9.3&nbsp;billion, respectively, with respect to our payment of
improper handset subsidies. In May 2005, LGT and KTF were also
fined Won 2.7&nbsp;billion and Won 1.1&nbsp;billion,
respectively, and in September 2005, KTF was fined Won
5.3&nbsp;billion, in respect of such subsidy payments. We were
fined more heavily than KTF and LGT as the MIC found that our
efforts to take corrective measures were not sufficient and that
such incentive payments were a violation of a merger condition
related to our acquisition of Shinsegi in January 2002.
Beginning in March 2006, the MIC lifted the prohibition on the
provision of handset subsidies. In June 2006, the MIC ordered
us, LGT, KTF and KT to pay fines of Won 42.6&nbsp;billion, Won
15.0&nbsp;billion, Won 12.0&nbsp;billion and Won
0.4&nbsp;billion, respectively, with respect to payments of
improper handset subsidies. We plan to pay such fines in July
2006.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">57

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to January 2003, Korea&#146;s wireless telecommunications
system was based on a network-specific prefix system in which a
unique prefix was assigned to all the phone numbers of a
specific network operator. We were assigned the &#147;011&#148;
prefix, and all of our subscriber&#146;s mobile phone numbers
began with &#147;011&#148; (former Shinsegi subscribers use the
&#147;017&#148; prefix) and our subscribers could not change
their wireless phone service to another wireless operator and
keep their existing numbers. In January 2003, the MIC announced
its plan to implement number portability with respect to
wireless telecommunications services in Korea, which allows
wireless subscribers to switch wireless service operators while
retaining the same mobile phone number. However, subscribers who
switch operators must purchase a new handset, as each operator
utilizes a different frequency. In accordance with the plan
published by the MIC, the number portability system was adopted
by SK Telecom starting from January&nbsp;1, 2004. We were
required to adopt the number portability system earlier than our
competitors, allowing our customers to transfer their numbers to
our competitors but not allowing our competitors&#146; customers
to transfer their number to our service. KTF and LGT introduced
number portability beginning July&nbsp;1, 2004 and
January&nbsp;1, 2005, respectively. Subscribers who choose to
transfer to a different wireless operator have the right to
return to their original service providers without paying any
penalties within 14&nbsp;days of their initial transfer.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, in order to manage the availability of phone
numbers efficiently and to secure phone number resources for the
new services, the MIC integrate mobile telephone identification
numbers into a common prefix identification number
&#147;010&#148; and to gradually retract the current mobile
service identification numbers which had been unique to each
wireless telecommunications service provider, including
&#147;011&#148; for our cellular services, starting from
January&nbsp;1, 2004. All new subscribers have been given the
&#147;010&#148; prefix starting January 2004. For details of the
number of new subscribers for each of the major wireless
cellular providers following the adoption of the &#147;010&#148;
prefix beginning January 2004, see &#147;Item&nbsp;4B. Business
Overview&nbsp;&#151; Subscribers&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the adoption of the common prefix identification
system has had, and may continue to have, a greater negative
effect on us than on other wireless telecommunications providers
because &#147;011&#148; has a very high brand recognition in
Korea as the premium wireless telecommunications service.
Adoption of the number portability system could also result in a
deterioration of our market share as a result of weakened
customer loyalty, increased competition among wireless service
providers and higher costs as a result of maintaining the number
portability system, increased subscriber deactivations,
increased churn rate and higher marketing costs. For 2005, our
churn rate has ranged from 1.7% to 2.3%, with an average churn
rate of 1.8% for 2005, compared to an average churn rate of 1.7%
in 2004. We cannot assure you that our churn rates will not
increase in the future. See &#147;Item&nbsp;3D. Risk
Factors&nbsp;&#151; Our businesses are subject to extensive
government regulation and any change in government policy
relating to the telecommunications industry could have a
material adverse effect on our results of operations and
financial condition.&#148; In February 2004, the MIC imposed a
total fine of Won 2.0&nbsp;billion on us in connection with our
marketing efforts related to the number portability system. For
details, see &#147;Item&nbsp;8A. Consolidated Statements and
Other Financial Information&nbsp;&#151; Legal
Proceedings&nbsp;&#151; MIC Proceedings&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For cellular services, we charge initial connection fees,
monthly access fees, usage charges, wireless Internet service
fees and monthly charges for value-added services. Under current
regulations, we must obtain prior MIC approval of the terms on
which we may offer our services, including all rates and fees
charged for these services. See &#147;Item&nbsp;4B. Business
Overview&nbsp;&#151; Law and Regulation&nbsp;&#151; Rate
Regulation&#148; and &#147;Item&nbsp;3D. Risk
Factors&nbsp;&#151; We are subject to additional regulation as a
result of our market position, which could harm our ability to
compete effectively&#148;. Generally, the rates we charge for
our services have been declining. After discussions with the
MIC, effective January&nbsp;1, 2003, we reduced our Standard
rate plan&#146;s monthly access fee by Won 1,000, included 10
minutes of free air time per month and reduced our peak usage
charges from Won 21 to Won 20&nbsp;per minute. After discussions
with the MIC, in October 2003, we reduced our monthly charges
for caller ID service from Won 2,000 to Won 1,000. Since January
2006, we have provided caller ID service to our subscribers free
of charge to heighten customer satisfaction. As of
December&nbsp;31, 2005, our standard peak usage rate was
approximately 11.1% higher than those charged by our
competitors. We can give no assurance that these rate changes
will not negatively affect our results of operations. For more
information about the rates we charge, see &#147;Item&nbsp;4B.
Business Overview&nbsp;&#151; Revenues, Rates and Facility
Deposits&#148;.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">58

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our wireless telecommunications services depend, in part, on our
interconnection arrangements with domestic and international
fixed-line and other wireless networks. Charges for
interconnection affect our revenues and operating results. The
MIC determines the basic framework for interconnection
arrangements in Korea and has changed this framework several
times in the past. We cannot assure you that we will not be
adversely affected by future changes in the MIC&#146;s
interconnection policies. Under our interconnection agreements,
we are required to make payments in respect of calls which
originate from our networks and terminate in the networks of
other Korean telecommunications operators, and the other
operators are required to make payments to us in respect of
calls which originate in their networks and terminate in our
network. See &#147;Item&nbsp;4B. Business Overview&nbsp;&#151;
Interconnection&#148;. With respect to the interconnection
arrangement for calls from fixed-line networks to wireless
networks, for 2003, pursuant to a new MIC policy, an
operator&#146;s interconnection fees are derived from that
operator&#146;s actual interconnection fees for 2001 and actual
imputed costs for 2001. The MIC also implemented interconnection
charges for calls between wireless network service providers
beginning in January 2000, affecting both our revenue and our
expenses. These charges were reduced beginning in January 2003.
On July&nbsp;9, 2004, the MIC introduced a new method of
calculating interconnection payments, based on the
terminator&#146;s long-run incremental cost in 2004 and the
competitive market situation in the telecommunication service
industry of Korea. The long-run incremental cost method has been
adopted by other countries such as the United States, the United
Kingdom and Japan. The new rates had a negative impact on our
operations in 2005 in the amount of approximately Won
124.9&nbsp;billion, resulting in an estimated Won
49.2&nbsp;billion reduction in revenue and Won 75.7&nbsp;billion
increase in interconnection expenses. The Won 75.7&nbsp;billion
increase in interconnection expenses include the increase in the
<FONT style="white-space: nowrap">land-to</FONT>-mobile
interconnection expenses that were paid to fixed-line service
providers. In 2005, we received Won 898.6&nbsp;billion in
interconnection revenue and incurred Won 989.4&nbsp;billion in
interconnection expense. For more information about our
interconnection revenue and expenses, see &#147;Item&nbsp;4B.
Business Overview&nbsp;&#151; Interconnection&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth selected information concerning
our wireless telecommunications network during the periods
indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outgoing Voice Minutes (In Thousands):(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,175,874</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,184,944</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45,241,348</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Average Monthly Outgoing Voice Minutes Per Subscriber:(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Average Monthly Revenue Per Subscriber:(3)(4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>39,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>39,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>40,205</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Does not include minutes of incoming calls or minutes of use
    relating the use of short text messaging and data services.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    The average monthly outgoing voice minutes per subscriber is
    computed by dividing the total minutes of outgoing voice usage
    for the period by the monthly weighted average number of
    subscribers for the period and dividing the quotient by the
    number of months in the period. The monthly weighted average
    number of subscribers is the sum of the average number of
    subscribers for the months calculated by taking the simple
    average number of subscribers at the beginning of the month and
    at the end of the month, divided by the number of months in the
    period.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    The average monthly revenue per subscriber excludes
    interconnection revenue and is computed by dividing total
    initial connection fees, monthly access fees, usage charges for
    voice and data, international charges, value-added service fees
    and interest on overdue subscriber accounts (net of telephone
    tax) for the period by the monthly weighted average number of
    subscribers for the period and dividing the quotient by the
    number of months in the period.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Including interconnection revenue, consolidated average monthly
    revenue per subscriber was Won 44,546 for 2003, Won 43,542 for
    2004 and Won 44,167 for 2005.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our average monthly outgoing minutes of voice traffic increased
by 2.4% in 2004 and 4.8% in 2005. We believe that this trend
principally reflects generally lower overall tariff levels and
increased use of wireless telecommunications as a substitute for
fixed-line communications. Due to the existing high penetration
rate of
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">59
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
wireless services in Korea, as well as subscribers&#146;
increasing use of data communications, including short text
messaging, or SMS, in place of conventional voice
communications, we expect the rate of increase to slow in the
near future.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our consolidated average monthly revenue per subscriber
decreased by 0.13% to Won 39,689 in 2004 compared to Won 39,739
in 2003. Our consolidated average monthly revenue per subscriber
increased by 1.3% to Won 40,205 in 2005 compared to Won 39,689
in 2004. These changes reflect the net effect of several
offsetting trends, including increases in wireless Internet
sales and value-added services sales, partially offset by the
tariff reduction on monthly fees beginning in September 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Operating Expenses and Operating Margins.</I> Our operating
expenses consist principally of depreciation, commissions paid
to authorized dealers, network interconnection and leased line
expenses, advertising expenses, labor costs and, until July
2005, the cost of manufacturing handsets. Operating income
represented 30.2% of operating revenue in 2003, 23.1% in 2004
and 24.9% in 2005. The decrease in our operating margin in 2004
was primarily due to an increase in our marketing expenses and
interconnection charges we paid. In 2005, our operating margin
increased, primarily due to decreases in cost of goods sold and,
to a lesser extent, decreases in advertising expenses and
depreciation and amortization. We cannot assure you that our
operating margin will not decrease in future periods.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Industry Consolidation.</I> Beginning in 2000, there has been
considerable consolidation in the wireless telecommunications
industry resulting in the emergence of stronger competitors. In
July 2000, KT Corporation acquired a 47.9% interest in KT M.Com
and merged KT M.Com into KTF in May 2001. In May 2002, the
Government sold its remaining 28.4% stake in KT Corporation.
Such consolidations have created large, well-capitalized
competitors with substantial financial, technical, marketing and
other resources to respond to our business offerings. See
&#147;Item&nbsp;3D. Risk Factors&nbsp;&#151; Competition may
reduce our market share and harm our results of operations and
financial condition.&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;1, 2003, we merged with SK IMT, in accordance with a
resolution of our board of directors on December&nbsp;20, 2002
and the approval of shareholders of SK IMT on February&nbsp;21,
2003. The exchange ratio of common stock between us and SK IMT
was 0.11276&nbsp;share of our common stock with a par value of
Won&nbsp;500&nbsp;shares to 1&nbsp;share of common stock of SK
IMT with a par value of Won 5,000. Using such exchange ratio, we
distributed 126,276&nbsp;shares of new issued common stock to
minority shareholders of SK IMT and we cancelled all shares of
SK IMT owned by us and SK IMT upon the merger. The assets and
liabilities transferred from SK IMT were accounted for at the
carrying amounts of SK IMT. The SK IMT merger resulted in an
increase in our cash and cash equivalents by Won
328.9&nbsp;billion and had no impact on our liabilities. Until
the date of the merger, SK&nbsp;IMT was not generating any
revenue.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;23, 2002, we acquired a 9.6% equity interest
(29,808,333&nbsp;shares of common stock) in KT&nbsp;Corporation
for Won 1,609&nbsp;billion. Pursuant to the terms of an
agreement between us and KT Corporation dated November&nbsp;14,
2002, we sold all of our shares of KT Corporation. Under the
terms of the agreement, we exchanged the 29,808,333&nbsp;shares
of KT Corporation&#146;s common stock for 8,266,923&nbsp;shares
of our common stock that KT Corporation owned and settled the
difference in the price in cash on December&nbsp;30, 2002 and
January&nbsp;10, 2003. The exchange was made at Won
50,900&nbsp;per share of KT Corporation&#146;s common stock and
Won&nbsp;224,000&nbsp;per share of our common stock. As a result
of the stock swap transaction, we no longer own any interest in
KT Corporation.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On September&nbsp;2, 2003, we purchased Won 120.0&nbsp;billion
of Hanaro Telecom commercial paper in order to provide Hanaro
Telecom with short-term liquidity while it attempted to secure a
foreign investor that would inject new capital into the company.
The decision to provide liquidity support to Hanaro Telecom was
made to protect the value of our stake in Hanaro Telecom, as we
held a 1.8% stake in Hanaro Telecom as of December&nbsp;31,
2003. Following an investment in Hanaro Telecom by a consortium
led by AIG and Newbridge, we disposed of the Hanaro Telecom
commercial paper in December 2003. In May 2004, we purchased
from Samsung Electronics Co., Ltd. 13,870,000&nbsp;shares of
Hanaro Telecom, representing 3.0% of the outstanding shares of
Hanaro for Won&nbsp;39.3&nbsp;billion as part of our strategic
efforts in consideration of increasing convergence between
wireless and fixed-line services. As a result of the
acquisition, our equity interest in Hanaro increased to 4.8% as
of
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">60

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
December&nbsp;31, 2004. Following Hanaro&#146;s merger with
Korea Thrunet in January 2006, we continue to hold a 4.8% equity
interest in Hanaro.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Operating Results</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth selected income statement data,
including data expressed as a percentage of operating revenue,
for the periods indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>For the Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>




<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(In billions of won, except percentage data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating Revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,272.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,570.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,721.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,167.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,130.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76.92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,051.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75.09</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,105.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,439.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,670.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.91</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>261.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>392.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.66</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>612.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>516.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>501.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.68</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income Before Income Taxes and Minority Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,754.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,123.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,561.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income Taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>789.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>629.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>693.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.47</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.02</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.04</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,966.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.14</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,491.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.10</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,873.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.47</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and Amortization(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,510.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.70</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,607.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.20</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,546.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.42</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Excludes the depreciation and amortization allocated to internal
    research and development costs of Won&nbsp;135.8&nbsp;billion,
    Won 134.1&nbsp;billion and Won 126.9&nbsp;billion for the years
    ended December&nbsp;31, 2003, 2004 and 2005, respectively.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>2005 Compared to 2004</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Operating Revenue.</I> Our operating revenue increased by
1.4% to Won 10,721.8&nbsp;billion from
Won&nbsp;10,570.6&nbsp;billion in 2004, principally due to a
0.6% increase in our cellular revenue to Won
10,361.9&nbsp;billion in 2005 from Won 10,297.6&nbsp;billion in
2004, a 49.3% increase in portal service revenues to Won
126.9&nbsp;billion in 2005 from Won 85.0&nbsp;billion in 2004
and, to a lesser extent, a 9.8% increase in international call
service revenues to Won 138.7&nbsp;billion in 2005 from Won
126.3&nbsp;billion in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The increase in our cellular revenue was principally due to an
increase in our wireless services revenue and, to a lesser
extent, an increase in our interconnection revenue, which
increase was offset, in part, by a decrease in revenue
attributable to handset sales. Wireless services revenue
increased 4.2% to Won 9,168.7&nbsp;billion in 2005 from Won
8,798.4&nbsp;billion in 2004, as a result of a 3.7% increase in
the number of our wireless subscribers to approximately
19.5&nbsp;million subscribers as of December&nbsp;31, 2005 from
approximately 18.8&nbsp;million subscribers as of
December&nbsp;31, 2004, as well as a slight increase in our
consolidated average monthly revenue per subscriber (excluding
interconnection revenue) from Won 39,689 in 2004 to Won 40,205
in 2005. Such increase was principally due to increases in
average monthly revenue per subscriber from wireless Internet
services and, to a lesser extent, increases in average revenue
per subscriber from value-added services and
<FONT style="white-space: nowrap">sign-up</FONT> fees, which
were partially offset by a decrease in monthly fee and call
charges. Our consolidated average monthly revenue per subscriber
from wireless Internet services sales increased by 30.6% to Won
10,689 in 2005 from Won 8,182 in 2004, primarily due to
increased purchases of our contents products and increased
subscriptions to our new rate plans. Our consolidated average
monthly revenue per subscriber from value-added services such as
international roaming services, caller ID, Auto COLORing and
Perfect Call service and other sales increased by 10.0% to
Won&nbsp;1,753 in 2005 from Won 1,594 in 2004. Our consolidated
average monthly revenue per subscriber from
<FONT style="white-space: nowrap">sign-up</FONT> fees increased
13.5% to Won 1,010 in 2005 from Won 890 in 2004. Our
consolidated average monthly revenue per subscriber increased by
1.4% to Won 44,167 in 2005 from Won 43,542 in 2004. Our
consolidated
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
average monthly revenue per subscriber from monthly fee and call
charges decreased by 7.8% to Won 26,754 in 2005 from Won 29,023
in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Portal service revenues increased to Won 126.9&nbsp;billion in
2005 from Won 85.0&nbsp;billion in 2004, primarily due to
increased use by our subscribers of our wireless Internet
contents services, such as NATE and Cyworld.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
International call service revenues increased to Won
138.7&nbsp;billion in 2005 from Won 126.3&nbsp;billion in 2004
as a result of general increases in traffic volume.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interconnection revenue also increased to Won 898.6&nbsp;billion
in 2005 from Won 849.4&nbsp;billion in 2004. The increase was
primarily due to an increase in
<FONT style="white-space: nowrap">mobile-to</FONT>-mobile
interconnection traffic volume, which was partially offset by a
slight decrease in
<FONT style="white-space: nowrap">mobile-to</FONT>-land traffic
volume. See &#147;Item&nbsp;4B. Business Overview&nbsp;&#151;
Interconnection&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Such increases in wireless Internet service revenue, value-added
services revenue, portal service revenue, international call
service revenue and interconnection revenue were partly offset
by a decrease in revenue attributable to sales of digital
handsets by 54.7% to Won 294.6&nbsp;billion in 2005 from Won
649.8&nbsp;billion in 2004, primarily as a result of our sale in
July 2005, of shares representing 60% of the issued and
outstanding common shares of SK Teletech, our former
consolidated subsidiary, to Pantech&nbsp;&#38; Curitel.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Operating Expenses.</I> Our operating expenses in 2005
decreased by 1.0% to Won 8,051.2&nbsp;billion in 2005 from Won
8,130.9&nbsp;billion in 2004, primarily due to decreases in cost
of goods sold, advertising expenses, depreciation and
amortization and research and development expenses, which more
than offset increases in provision for bad debts, network
interconnection costs, commissions paid and leased line expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cost of goods sold decreased by 49.8% to Won 240.7&nbsp;billion
in 2005 from Won 479.3&nbsp;billion in 2004, primarily due to
the decrease in handset sales attributable to the sale of our
controlling interest in SK Teletech and its exclusion, as
discussed above, from consolidation beginning in July 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Advertising expenses decreased by 20.8% to Won
279.4&nbsp;billion in 2005 from Won 352.9&nbsp;billion in 2004.
As the negative impact of the introduction of number portability
decreased, we were able to shift our marketing efforts away from
mitigating the effects of number portability, and plan and
execute more cost-effective marketing activities. Also in 2005,
we continued to shift our marketing strategy away from mass
advertising toward a more targeted campaign focused on
attracting and retaining high-end, high-volume user customers,
which also reduced marketing costs.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Depreciation and amortization expenses decreased 3.8% to
Won&nbsp;1,546.3&nbsp;billion in 2005 from
Won&nbsp;1,607.5&nbsp;billion in 2004. The decrease in
depreciation and amortization expenses was primarily due to a
decline in capital expenditures in 2005 compared to 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Research and development expenses decreased 5.7% to Won
252.0&nbsp;billion in 2005 from Won 267.1&nbsp;billion in 2004,
as a result of a decrease in our internal research and
development expenses in 2005, primarily attributable to the
exclusion of SK Teletech from consolidation beginning
July&nbsp;1, 2005. Prior to SK Teletech&#146;s elimination from
consolidation, SK Teletech&#146;s research and development
expenses accounted for approximately 18.7% of our consolidated
internal research and development expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Network interconnection expenses increased by 8.3% to Won
989.4&nbsp;billion in 2005 from Won 913.7&nbsp;billion in 2004,
primarily due to the interconnection rate adjustments beginning
in September 2004, an increase in the level of interconnection
fees that we paid to other operators for calls using their
networks due to increased traffic volume.
<FONT style="white-space: nowrap">Mobile-to</FONT>-mobile
interconnection expenses increased by 16.2% to Won
748.8&nbsp;billion in 2005 from Won&nbsp;644.6&nbsp;billion in
2004, primarily due to higher traffic volume.
<FONT style="white-space: nowrap">Mobile-to</FONT>-land
interconnection expenses decreased by 14.5% to Won
183.2&nbsp;billion in 2005 compared to Won 214.2&nbsp;billion in
2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Commissions paid, including to our authorized dealers, increased
by 1.7% to Won 2,859.6&nbsp;billion in 2005 from Won
2,812.3&nbsp;billion in 2004, primarily due to our continued
efforts to retain existing subscribers and to acquire new
subscribers, as well as increases in non-marketing related
commissions paid to our Internet content providers, in line with
increased wireless Internet usage. Such increases were partially
offset by slight decreases in marketing related monthly
commissions paid due to our more efficient marketing strategy.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Leased line expenses increased by 8.5% to Won 407.0&nbsp;billion
in 2005 compared to Won 375.2&nbsp;billion in 2004, primarily
due to an increase in the number of leased lines to accommodate
our increasing subscriber base and data traffic volume, as well
as to enhance overall call quality.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Operating Income.</I> Our operating income increased by 9.5%
to Won 2,670.6&nbsp;billion in 2005 from
Won&nbsp;2,439.7&nbsp;billion in 2004, increased while operating
expenses decreased, as discussed above.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other Income.</I> Other income consists primarily of interest
income, dividend income and commission income, as well as gains
on disposal of consolidated subsidiaries and gains on disposal
of investment assets. Other income increased by 96.9% to Won
392.6&nbsp;billion in 2005 from Won 199.4&nbsp;billion in 2004,
primarily due to gains on the sale of a 60% equity interest in
SK Teletech, our former consolidated subsidiary, to
Pantech&nbsp;&#38; Curitel in July 2005 of Won
178.7&nbsp;billion and, to a lesser extent, gain on disposal of
investment assets and increased equity earnings of affiliates
primarily attributable to earnings of SK C&#38;C Co., Ltd. Such
increase was offset, in part, by decreases in interest income
and foreign exchange and translation gains primarily reflecting
the slower pace of appreciation of the Won against the Dollar,
in which a significant portion of our debt is denominated in
2005 as compared to such pace in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other Expenses.</I> Other expenses primarily include interest
and discount expenses, donations and equity losses of
affiliates. Other expenses decreased by 2.8% to Won
501.6&nbsp;billion in 2005 from Won 516.0&nbsp;billion in 2004.
The decrease was primarily due to decreases in interest and
discounts, loss on impairment of long-term investment
securities, loss on transactions and valuation of currency
forward and swap transactions and loss on disposal and
impairment of property, equipment and intangible assets. Such
decreases were offset, in part, by increases in donations and
equity in losses of affiliates. As a percentage of operating
revenue, other expenses slightly decreased to 4.7% in 2005 from
4.9% in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Income Tax.</I> Provision for income taxes increased by 10.1%
to Won 693.3&nbsp;billion in 2005 from
Won&nbsp;629.7&nbsp;billion in 2004. Our effective tax rate in
2005 decreased to 27.1% from an effective tax rate of 29.7% in
2004, mainly due to a decrease in the statutory tax rate to
27.5% from 29.7%, effective January&nbsp;1, 2005. See
note&nbsp;18 of the notes to our consolidated financial
statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Net Income.</I> Principally as a result of the factors
discussed above, our net income increased by 25.6% to Won
1,873.0&nbsp;billion in 2005 from Won 1,491.5&nbsp;billion in
2004. Net income as a percentage of operating revenues was 17.5%
in 2005 compared to 14.1% in 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>2004 Compared to 2003</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Operating Revenue.</I> Our operating revenue increased by
2.9% to Won 10,570.6&nbsp;billion in 2004 from
Won&nbsp;10,272.1&nbsp;billion in 2003 principally due to a 2.0%
increase in our cellular revenue to Won 10,297.6&nbsp;billion in
2004 from Won 10,091.8&nbsp;billion in 2003 and to a lesser
extent due to a 102.4% increase in portal service revenues to
Won 85.0&nbsp;billion in 2004 from Won 42.0&nbsp;billion in 2003
and a 29.7% increase in international call service revenues to
Won 126.3&nbsp;billion in 2004 from Won 97.4&nbsp;billion in
2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The increase in our cellular revenue was principally due to an
increase in our wireless services revenue and to a lesser extent
due to an increase in revenue attributable to sales of digital
handsets, which increases were offset in part by a decrease in
interconnection revenue. Wireless services revenue increased
4.0% to Won&nbsp;8,798.4&nbsp;billion in 2004 from Won
8,462.7&nbsp;billion in 2003 as a result of a 2.7% increase in
the number of our wireless subscribers to approximately
18.8&nbsp;million subscribers as of December&nbsp;31, 2004 from
approximately 18.3&nbsp;million subscribers as of
December&nbsp;31, 2003, which was partially offset by a slight
decrease in our consolidated average monthly revenue per
subscriber (excluding interconnection revenue) from Won 39,739
in 2003 to Won 39,689 in 2004. Such decrease was principally due
to decreases in average monthly revenue per subscriber from call
charges and value-added services, which was mostly offset by an
increase in average monthly revenue per subscriber from wireless
Internet services. Our consolidated average monthly revenue per
subscriber from monthly fee and call charges decreased by 5.6%
to Won 29,023 for the year ended December&nbsp;31, 2004 from Won
30,748 in the corresponding period in 2003. The decrease was
primarily due to the reduction in monthly fee effective
September&nbsp;1, 2004. Our consolidated average monthly revenue
per subscriber from wireless Internet services sales increased
by 32.5% to Won 8,182 in 2004 from Won 6,177 in 2003. Our
consolidated
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
average monthly revenue per subscriber from value-added services
such as caller ID services and ring tone service and other sales
decreased by 19.8% to Won 1,594 in 2004 from Won 1,988 in 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Value-added services and other sales decreased by 16.4% to Won
355.2&nbsp;billion in 2004 from Won&nbsp;424.8&nbsp;billion in
2003 primarily due to a decrease in caller ID rates from Won
2,000 to Won 1,000 that took effect in October 2003. Wireless
Internet services sales increased by 38.1% to Won
1,823.4&nbsp;billion in 2004 (representing 17.7% of our cellular
revenue) from Won 1,320.1&nbsp;billion in 2003, primarily due to
the increased number of subscribers who use wireless
Internet-enabled handsets.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues attributable to sales of digital handsets increased by
6.2% to Won 649.8&nbsp;billion in 2004 from
Won&nbsp;612.0&nbsp;billion in 2003 as a result of an increase
in volume of handsets sold and a higher portion of sales of
high-end digital handsets, which generally are sold at higher
retail prices.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Such increases in wireless service revenue and revenues
attributable to sales of digital handsets were partially offset
by a 16.5% decrease in interconnection revenue to Won
849.4&nbsp;billion in 2004 from Won&nbsp;1,017.1&nbsp;billion in
2003. The decrease was due in part to the new adjusted
interconnection rates announced by the MIC on July&nbsp;9, 2004,
which were applied retroactively beginning January&nbsp;1, 2004,
which was partially offset by an increase in the NATE service
revenue and the phone mail service revenue. See
&#147;Item&nbsp;4B. Business Overview&nbsp;&#151;
Interconnection&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our international calling service revenues increased as a result
of increases in traffic volume and our portal service revenues
increased as a result of increased use by our subscribers of our
wireless Internet contents services, such as NATE and Cyworld.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Operating Expenses.</I> Our operating expenses in 2004
increased by 13.4% to Won 8,130.9&nbsp;billion compared to Won
7,167.0&nbsp;billion in 2003 primarily due to increases in
commissions paid, network interconnection expenses, depreciation
and amortization expenses, labor costs, leased line expenses,
and miscellaneous operating expenses, which more than offset
decreases in cost of goods sold and advertising expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Commissions paid, including to our authorized dealers, increased
by 21.5% to Won 2,812.3&nbsp;billion in 2004 compared to Won
2,314.6&nbsp;billion in 2003, primarily due our efforts to
retain existing subscribers and to acquire new subscribers.
Commissions paid also increased due to our efforts to counter
the effects of number portability. In addition, commissions paid
to our Internet content providers increased as the wireless
Internet usage increased.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Network interconnection expenses increased by 18.4% to Won
913.7&nbsp;billion in 2004 compared to
Won&nbsp;771.6&nbsp;billion in 2003, primarily due to an
increase in interconnection rates and an increase in the level
of interconnection fees that we must pay to other operators for
calls using their networks.
<FONT style="white-space: nowrap">Mobile-to</FONT>-mobile
interconnection expenses increased by 22.7% to Won
644.6&nbsp;billion in 2004, compared to Won 525.4&nbsp;billion
in 2003 primarily due to increased interconnection rates.
<FONT style="white-space: nowrap">Mobile-to</FONT>-land
interconnection expenses increased by 0.6% to Won
214.2&nbsp;billion in 2004, compared to Won 212.9&nbsp;billion
in 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Depreciation and amortization expenses increased by 6.4% to Won
1,607.5&nbsp;billion in 2004 compared to
Won&nbsp;1,510.5&nbsp;billion in 2003. The increase in
depreciation and amortization expenses was primarily due to the
continued expansion of our CDMA 1xRTT and 1xEV/ DO networks.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Labor costs increased by 14.1% to Won 464.8&nbsp;billion in 2004
compared to Won 407.2&nbsp;billion in 2003. The increase was
primarily due to an increase in performance bonuses and an
increase in salaries due to improving business performance over
the period.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Leased line expenses increased by 22.4% to Won
375.2&nbsp;billion in 2004 compared to Won 306.5&nbsp;billion in
2003 primarily due to an increase in the number of leased lines
to handle higher call volumes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Miscellaneous operating expenses increased by 22.4% to Won
1,125.2&nbsp;billion in 2004 compared to
Won&nbsp;919.3&nbsp;billion in 2003 primarily due to increases
in taxes and other dues and rent expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cost of goods sold decreased by 14.5% to Won 479.3&nbsp;billion
in 2004 compared to Won 560.9&nbsp;billion in 2003. The decrease
was primarily due to a decrease in sales of wireless Internet
solutions (including software, hardware and service) following
the completion of our obligation to provide wireless Internet
solutions to Asia Pacific Broadband Wireless Communications
(APBW)&nbsp;at the end of 2003.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">64

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Advertising expenses decreased by 6.2% to Won 352.9&nbsp;billion
in 2004 compared to Won 376.4&nbsp;billion in 2003, as we
changed our focus from a mass advertising campaign to a
marketing strategy focused on certain high end, high volume user
customers in order to mitigate the negative impact of number
portability on our subscriber base.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Operating Income.</I> Our operating income decreased by 21.4%
to Won 2,439.7&nbsp;billion in 2004 from
Won&nbsp;3,105.1&nbsp;billion in 2003 because the increase in
our operating expenses was greater than the increase in our
operating revenue.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other Income.</I> Other income consists primarily of interest
income, dividend income, commission income and foreign exchange
and translation gains. Other income decreased by 23.7% to Won
199.4&nbsp;billion in 2004 compared to Won 261.4&nbsp;billion in
2003, primarily due to decreases in commissions and to a lesser
extent due to decreases in interest income and dividend income.
Such decrease was offset in part by an increase in foreign
exchange and translation gains due to the depreciation of the
US&nbsp;Dollar against the Won.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other Expenses.</I> Other expenses include interest and
discount expenses, donations, loss in impairment of long-term
investment securities and loss on disposal of property,
equipment and intangible assets and loss on translation and
valuation of currency swap. Other expenses decreased by 15.7% to
Won 516.0&nbsp;billion in 2004, compared to Won
612.2&nbsp;billion in 2003. The decrease was primarily due to
decreases in interest and discounts and loss on disposal of
investment assets and to a lesser extent due to decreases in
donations, foreign exchange and translation losses and loss on
disposal and valuation of trading securities. Such decreases
were offset in part by increases in loss on impairment of
long-term investment securities and loss on translation and
valuation of currency swaps and equity in losses of affiliates.
As a percentage of operating revenue, other expenses decreased
to 4.9% in 2004 from 6.0% in 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Income Tax.</I> Provision for income taxes decreased by 20.2%
to Won 629.7&nbsp;billion in 2004 from
Won&nbsp;789.0&nbsp;billion in 2003. Our effective tax rate in
2004 increased to 29.7% from an effective tax rate of 28.7% in
2003. See note&nbsp;18 of the notes to our consolidated
financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Net Income.</I> Principally as a result of the factors
discussed above, our net income decreased by 24.1% to Won
1,491.5&nbsp;billion in 2004 from Won 1,966.1&nbsp;billion in
2003. Net income as a percentage of operating revenues was 14.1%
in 2004 as compared to 19.1% in 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='121'></A>
</DIV>

<!-- link1 "Item 5B. Liquidity and Capital Resources" -->

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;5B.</B></TD>
    <TD>
    <B><I>Liquidity and Capital Resources</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Liquidity</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We had a working capital (current assets minus current
liabilities) deficit of Won 461.4&nbsp;billion as of
December&nbsp;31, 2003, a working capital surplus of Won
1,323.8&nbsp;billion as of December&nbsp;31, 2004 and a working
capital surplus of Won 1,735.2&nbsp;billion as of
December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We had cash, cash equivalents, short-term financial instruments
and trading securities of Won 1,365.1&nbsp;billion as of
December&nbsp;31, 2003, 1,038.1&nbsp;billion as of
December&nbsp;31, 2004 and Won 1,262.5&nbsp;billion as of
December&nbsp;31, 2005. We had outstanding short-term borrowings
of Won 786.1&nbsp;billion as of December&nbsp;31, 2003,
Won&nbsp;425.5&nbsp;billion as of December&nbsp;31, 2004 and Won
1.0&nbsp;billion as of December&nbsp;31, 2005. As of
December&nbsp;31, 2005, we had availability under unused credit
lines of approximately Won 835.3&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Management believes all the above-mentioned sources provide
adequate liquidity to SK Telecom to meet its operation needs in
the foreseeable future.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Operating cash flow and debt financing have been our principal
sources of liquidity. Cash and cash equivalents increased by Won
7.8&nbsp;billion to Won 378.4&nbsp;billion in 2005 from Won
370.6&nbsp;billion in 2004.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">65

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Cash Flow Analysis</I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Change</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003 to 2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004 to 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>



<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>(In billions of won, except percentages)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Flow from Operating Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,329.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,516.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,404.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(812.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24.4</TD>
    <TD align="left" valign="bottom" nowrap>)%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>887.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Used in Investing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,415.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,470.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,938.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(55.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(467.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(31.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Used in Financing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,261.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(968.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,429.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,292.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(460.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Flow due to Changes in Consolidated Subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(249.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(17.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(346.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>53.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>399.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(45.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(85.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and Cash Equivalents at Beginning of Period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>664.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>317.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>370.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(346.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(52.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and Cash Equivalents at End of Period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>317.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>370.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>378.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>53.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Net Cash Flow from Operating Activities.</I> Net cash flow
provided by operations was Won 3,329.4&nbsp;billion in 2003, Won
2,516.8&nbsp;billion in 2004 and Won 3,404.1&nbsp;billion in
2005. Depreciation and amortization were
Won&nbsp;1,649.9&nbsp;billion in 2003, Won 1,752.5&nbsp;billion
in 2004 and Won 1,675.5&nbsp;billion in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;2, 2003, September&nbsp;4, 2003 and
December&nbsp;15, 2003, we sold Won 577.3&nbsp;billion, Won
549.3&nbsp;billion and Won 498.4&nbsp;billion of accounts
receivable resulting from our mobile phone dealer financing plan
to Nate Third Special Purpose Company, Nate Fourth Special
Purpose Company and Nate Fifth Special Purpose Company,
respectively, in asset-backed securitization transactions and
recorded a loss on disposal of accounts receivable-other of
Won&nbsp;10.8&nbsp;billion, Won 12.9&nbsp;billion and Won
9.9&nbsp;billion, respectively. Such special purpose companies
have all been liquidated.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Net Cash from Investing Activities.</I> Net cash used in
investing activities was Won 1,415.1&nbsp;billion in 2003, Won
1,470.3&nbsp;billion in 2004 and Won 1,938.2&nbsp;billion in
2005. Cash inflows from investing activities were
Won&nbsp;1,126.0&nbsp;billion in 2003, Won 649.0&nbsp;billion in
2004 and Won 666.1&nbsp;billion in 2005. The primary contributor
to such inflows in 2003 related to proceeds from the sale of
long-term investment securities which resulted from sales of our
shares and convertible bonds of KT Corporation, while cash
inflow from investing activities in 2004 and 2005, respectively,
related to a decrease in trading securities of Won
240.2&nbsp;billion and proceeds from the sale of consolidated
subsidiaries of Won 291.0&nbsp;billion in 2005. Cash outflows
for investing activities were Won&nbsp;2,541.1&nbsp;billion in
2003, Won 2,119.3&nbsp;billion in 2004 and Won
2,604.3&nbsp;billion in 2005. The primary contributors to the
overall cash outflows for investing activities were expenditures
related to the acquisition of property and equipment, which were
Won 1,647.6&nbsp;billion in 2003, Won 1,631.9&nbsp;billion in
2004, and Won&nbsp;1,416.6&nbsp;billion in 2005, all generally
relating to expenditures in connection with the maintenance and
build-out of our wireless network, including upgrades to and
expansion of our WCDMA network, acquisition of long-term
investment securities, which were Won 437.1&nbsp;billion in
2003, Won 54.1&nbsp;billion in 2004 and
Won&nbsp;319.1&nbsp;billion in 2005 and acquisition of equity
securities accounted for using the equity method, which were
Won&nbsp;7.2&nbsp;billion in 2003, Won&nbsp;21.1&nbsp;billion in
2004 and Won 231.8&nbsp;billion in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Net Cash from Financing Activities.</I> Net cash used in
financing activities was Won 2,261.0&nbsp;billion in 2003, Won
968.6&nbsp;billion in 2004 and Won 1,429.0&nbsp;billion in 2005.
Cash inflows from financing activities were primarily driven by
issuances of bonds payable, which provided cash of Won
688.7&nbsp;billion in 2003, Won&nbsp;1,205.7&nbsp;billion in
2004 and Won 193.7&nbsp;billion in 2005. Cash outflows for
financing activities included payment of short-term borrowings,
payments of current portion of long-term debt and payment of
dividends, among other items. Payment of short-term borrowings
were Won 12.1&nbsp;billion in 2003, Won 359.1&nbsp;billion in
2004 and Won&nbsp;376.9&nbsp;billion in 2005. Payments of
current portion of long-term debt were
Won&nbsp;939.2&nbsp;billion in 2003,
Won&nbsp;1,370.6&nbsp;billion in 2004 and Won 500.0&nbsp;billion
in 2005. Payment of dividends were Won 151.7&nbsp;billion in
2003, Won 478.3&nbsp;billion in 2004 and Won 758.2&nbsp;billion
in 2005. Also, as a result of the issuance of convertible
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">66
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
bonds in 2004 by us in the amount of Won 385.9&nbsp;billion, net
increase in treasury stock was Won 2&nbsp;million in 2004
compared to Won 1,379.3&nbsp;billion in 2003. We recorded no net
increase in treasury stock in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2003, we had total long-term debt
(excluding current portion and facility deposits) outstanding of
Won 2,263.5&nbsp;billion. Our long-term debt as of
December&nbsp;31, 2003 included bonds in the amount of Won
2,261.9&nbsp;billion and bank and institutional borrowings in
the amount of Won 1.6&nbsp;billion. We had long-term facility
deposits of Won 44.2&nbsp;billion as of December&nbsp;31, 2003.
As of December&nbsp;31, 2004, we had total long-term debt
(excluding current portion and facility deposits) outstanding of
Won 2,891.8&nbsp;billion and we did not have any bank or
institutional borrowings. We had facility deposits of Won
31.4&nbsp;billion as of December&nbsp;31, 2004. As of
December&nbsp;31, 2005, we had total long-term debt (excluding
current portion and facility deposits) outstanding of Won
2,314.4&nbsp;billion, which included bonds in the amount of Won
2,314.2&nbsp;billion and bank and institutional borrowings in
the amount of Won 0.2&nbsp;billion. We had long-term facility
deposits of Won 23.8&nbsp;billion as of December&nbsp;31, 2005.
For a description of our long-term liabilities, see
notes&nbsp;9, 10 and 11 of the notes to our consolidated
financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, substantially all of our foreign
currency-denominated long-term debt, which amounted to
approximately 9.6% of our total outstanding long-term debt,
including current portion as of such date, was denominated in
Dollars. Appreciation of the Won against the Dollar will result
in net foreign exchange and translation gains. Changes in
foreign currency exchange rates will also affect our liquidity
because of the effect of such changes on the amount of funds
required for us to make interest and principal payments on our
foreign currency-denominated debt.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We issued Won-denominated bonds with a principal amount of Won
300.0&nbsp;billion, Won 150.0&nbsp;billion and Won
250.0&nbsp;billion in March, August and November 2003,
respectively. These bonds mature in March 2008, August 2006 and
November 2006, respectively, and have an annual interest rate of
5.0%. In March, May and December 2004, we issued Won-denominated
bonds with a principal amount of Won 150.0&nbsp;billion,
Won&nbsp;150.0&nbsp;billion and Won 200&nbsp;billion,
respectively. These bonds will mature in April 2009, May 2009
and December 2011, respectively, and have an annual interest
rates of 5.0%, 5.0% and 3.0%, respectively. The proceeds of the
Won-denominated note offering in March, May and December 2004
were used for our operations. In March 2005, we issued
Won-denominated bonds with a principal amount of Won
200.0&nbsp;billion. These bonds will mature in March 2010 and
have an annual interest rate of 4.0%. The proceeds of these
bonds were primarily used for repayment of maturing long-term
debt. See note&nbsp;9 of the notes to our consolidated financial
statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April 2004, we issued notes in the principal amount of
US$300,000,000 with a maturity of seven years and an interest
rate of 4.25%. The proceeds from the offering in April 2004 were
used to pay maturing debt.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In late May 2004, we issued zero coupon convertible notes with a
maturity of five years in the principal amount of
US$329,450,000, with an initial conversion price of Won
235,625&nbsp;per share of our common stock, subject to certain
redemption rights. In connection with the issuance of the zero
coupon convertible notes, we deposited 1,645,000&nbsp;shares of
our common stock with Korea Securities Depository to be reserved
and used to satisfy the note holders&#146; conversion rights. On
March&nbsp;11, 2005, our shareholders approved a cash dividend
of Won 9,300 per common share at the general shareholders&#146;
meeting. On March&nbsp;14, 2005, we filed a report with the
Financial Supervisory Service to disclose that we adjusted the
conversion price of the convertible notes issued in late
May&nbsp;2004 in the principal amount of US$329,450,000 from Won
235,625 to Won&nbsp;226,566 and made an additional deposit of
our common stock accordingly, so that the total number of shares
of common stock deposited with Korea Securities Depository to
satisfy the note holders&#146; conversion rights increased from
1,644,978 to 1,710,750. On July&nbsp;29, 2005, our board of
directors resolved to recommend an interim cash dividend of
Won&nbsp;1,000 per common share. On August&nbsp;1, 2005, we
filed a report with the Financial Supervisory Service to
disclose that we adjusted the conversion price from
Won&nbsp;226,566 to Won&nbsp;225,518 and made an additional
deposit of our common stock accordingly, so that the total
number of shares of common stock deposited increased from
1,710,750 to 1,718,700. On March&nbsp;10, 2006, our shareholders
approved a cash dividend of Won&nbsp;8,000 per common share. On
March&nbsp;13, 2006, we filed a report with the Financial
Supervisory Service to disclose that we adjusted the conversion
price from Won&nbsp;225,518 to Won&nbsp;218,098 and made an
additional deposit of our common stock accordingly, so that the
total number of shares of common stock deposited increased from
1,718,700 to 1,777,173.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We also have long-term liabilities in respect of facility
deposits received from subscribers, which stood at Won
44.2&nbsp;billion at December&nbsp;31, 2003, Won
31.4&nbsp;billion at December&nbsp;31, 2004 and Won
23.8&nbsp;billion at December&nbsp;31 2005. These non-interest
bearing deposits are collected from some subscribers when they
initiate service and returned (less unpaid amounts due from the
subscriber for our services) when the subscriber&#146;s service
is deactivated. See &#147;Item&nbsp;4B. Business
Overview&nbsp;&#151; Revenues, Rates and Facility Deposits&#148;.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Capital Requirements and Resources</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth our actual capital expenditures
for 2003, 2004 and 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended (Ending) December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In billions of won)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CDMA (95A/B, 1xRTT and EV-DO) Network3</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>737</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>728</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>376</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WCDMA Network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>575</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiBro(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>466</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,632</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,417</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    We commenced WiBro service in May 2006.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Includes investments in infrastructure consisting of equipment
    necessary for the provision of data services and marketing.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Also, see note&nbsp;7 of the notes to our consolidated financial
    statements.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We set our capital expenditure budget for an upcoming year on an
annual basis. Our actual capital expenditures in 2003 were Won
1,647.6&nbsp;billion, primarily for the expansion and upgrading
of our CDMA 1xRTT network, for our initial investment in the
satellite-based digital multimedia broadcasting
(&#147;DMB&#148;) business and for the development and
introduction of wireless data services. Our actual capital
expenditures in 2004 were Won&nbsp;1,631.9&nbsp;billion. Our
actual capital expenditures in 2005 were Won
1,416.6&nbsp;billion, primarily related to investment in our
WCDMA network. Of such amount, we spent approximately Won
574.5&nbsp;billion on capital expenditures related to expansion
of our WCDMA network and development of HSDPA services,
Won&nbsp;375.8&nbsp;billion related to general upkeep of our
CDMA 1xRTT and CMDA EV/ DO networks and
Won&nbsp;466.3&nbsp;billion on other capital expenditures and
projects. We are required to pay the remainder of the cost of
our WCDMA license in annual installments for a five-year period
from 2007 through 2011. For more information, see note&nbsp;2(i)
of the notes to our consolidated financial statements for the
years ended December&nbsp;31, 2003, 2004 and 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We estimate that we will spend approximately Won 1.6 trillion
for capital expenditures in 2006 for a range of projects,
including primarily for the expansion and improvement of our
WCDMA network build out of our WiBro network and investments in
our wireless Internet-related businesses. We may also make
additional capital expenditure investments as opportunities
arise. In addition, we may increase, reduce or suspend our
planned capital expenditures for 2006 or change the timing and
area of our capital expenditure spending from the estimates
reflected in the table above in response to market conditions or
for other reasons.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently plan to spend up to Won 570&nbsp;billion in 2006 on
capital expenditures related to expansion of our WCDMA network
and provision of HSDPA service. We commenced provision of our
WCDMA services on a limited basis in Seoul at the end of 2003
and continued to improve our WCDMA services in the Seoul
metropolitan area in 2004. In 2005, we completed development of
HSDPA technology, which represents an evolution of the WCDMA
standard and, among others, supports higher data capacity and
allows faster data transmissions than previous WCDMA-based
protocols. HSDPA upgrades to our existing WCDMA network do not
require hardware upgrades and may be accomplished through
software upgrades at virtually no cost. By May 2006, we had
expanded HSDPA service to 25&nbsp;cities, including Busan and
Incheon. We expect to expand our WCDMA network and HSDPA service
to 84&nbsp;cities nationwide by the end of 2006. Our actual
capital expenditures for the construction of the WCDMA network
will depend upon many factors, including network
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
roll-out, whether WCDMA-based technology is widely implemented
worldwide (which could lower the cost of network equipment) and
other factors.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2005, we obtained a license from the MIC to provide
WiBro services. We conducted pilot testing of WiBro service in
limited areas of metropolitan Seoul in May 2006 and began
commercial service to those limited areas in June 2006. In
addition to a license fee of Won 117.0&nbsp;billion paid to the
MIC in March 2005, we are planning to spend approximately Won
170&nbsp;billion in capital expenditures in 2006 to build and
expand our WiBro network, and we may spend additional amounts to
expand our WiBro service in the future. However, our investment
plans may change depending on the market demand for such
services, competitors offering similar services and development
of competing technologies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In September 2003, we entered into an agreement with Mobile
Broadcasting Corporation for the purposes of co-owning and
launching a satellite for the satellite DMB business. Under the
terms of the agreement, SK&nbsp;Telecom is committed to fund
34.7% of the cost of launching and maintaining the operations of
the satellite. The total cost is expected to be approximately
Won 92.0&nbsp;billion, of which SK Telecom&#146;s committed
amount is approximately Won 31.9&nbsp;billion. We launched the
satellite in March 2004. In March 2004, we were assigned by the
MIC frequency for satellite DMB. In October 2004, we granted the
right to use our satellite, satellite orbit and frequency to TU
Media Corp., one of our affiliates, which received a license
from the MIC as a satellite DMB provider on December&nbsp;30,
2004. In May 2005, TU Media Corp. began to provide satellite DMB
services and had surpassed 500,000 subscribers by April 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;24, 2005, EarthLink and we completed the formation
of HELIO, LLC. (formerly named
<FONT style="white-space: nowrap">SK-EarthLink</FONT> LLC.), a
Delaware limited liability company, to provide wireless voice
and data services in the United&nbsp;States. We, via SK Telecom
USA Holdings, Inc., our wholly-owned subsidiary in the United
States, and EarthLink plan to each invest $220&nbsp;million in
HELIO from 2005 to 2007. The joint-venture is a
non-facilities-based nationwide mobile virtual network operator
(&#147;MVNO&#148;) offering cellular voice and data services to
U.S.&nbsp;consumers. HELIO commercially launched its MVNO
service in May 2006. HELIO expects to enter into a previously
under-served, but rapidly growing wireless data, entertainment,
and voice market and will leverage our expertise in developing
and implementing 3G technology and other cutting-edge
applications and EarthLink&#146;s established sales channels,
Wi-Fi experience, network data centers and billing capabilities.
We and EarthLink each have a 50&nbsp;percent voting and economic
ownership interest in HELIO. As of March&nbsp;31, 2006 we and
EarthLink had each invested $161.5&nbsp;million in HELIO.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In July 2005, we sold a 60% equity interest in SK Teletech to
Pantech&nbsp;&#38; Curitel, reducing our equity interest in the
company from 89.1% to 29.1% and recording a Won
178.7&nbsp;billion gain. Effective December&nbsp;1, 2005,
SK&nbsp;Teletech (which was renamed SKY Teletech following our
sale to Pantech&nbsp;&#38; Curitel) was merged into Pantech and
our equity interest in Pantech became 22.7%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have been providing CDMA cellular service in Vietnam since
2003 through our overseas subsidiary, SLD Telecom PTE Ltd. In
November 2005, our board of directors approved an additional
US$280&nbsp;million investment to expand our network coverage to
all of Vietnam. As of January&nbsp;31, 2006, we had invested
US$100&nbsp;million in this expansion project through the
acquisition of 100&nbsp;million additional shares of
SLD&nbsp;Telecom PTE&#146;s unissued common stock for such
amount.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2002, the Government sold its remaining 28.4% stake in KT
Corporation. By participating in this privatization, we acquired
9.6% of KT Corporation&#146;s common stock and Won
332.0&nbsp;billion aggregate principal amount of exchangeable
bonds issued by KT Corporation exchangeable at our option for
1.8% of KT&nbsp;Corporation&#146;s common stock. We purchased
29,808,333&nbsp;shares of common stock of KT Corporation for Won
1.6 trillion and bonds exchangeable into 5,589,666&nbsp;shares
of such common stock for Won 332.0&nbsp;billion. We funded our
investment in shares and bonds of KT Corporation in May 2002
with Won 901.7&nbsp;billion of cash and by incurring Won
1,040.0&nbsp;billion of short-term debt. On July&nbsp;16, 2002,
we sold all of the exchangeable bonds of KT&nbsp;Corporation
which we owned to several Korean institutional investors for an
aggregate sale price of Won&nbsp;340.3&nbsp;billion. We used the
proceeds of the sale to repay our short-term debt and for
general corporate purposes. We exchanged 29,808,333&nbsp;shares
of KT Corporation&#146;s common stock at Won 50,900&nbsp;per
share for 8,266,923&nbsp;shares of our common stock at Won
224,000&nbsp;per share and settled the difference of Won
334.5&nbsp;billion between the aggregate sale and purchase
prices in cash on December&nbsp;30, 2002 and January&nbsp;10,
2003, under a
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
mutual agreement on stock exchange between us and KT Corporation
dated November&nbsp;14, 2002. Related to these stock exchanges,
a loss on exchange of investments in 15,454,659&nbsp;shares of
KT Corporation for 4,457,635&nbsp;shares of our common stock on
December&nbsp;31, 2002, amounting to Won 47.9&nbsp;billion, was
recorded as a loss on disposal of investments during the year
ended December&nbsp;31, 2002. An impairment loss amounting to
Won 44.5&nbsp;billion, which was related to the investments in
14,353,674&nbsp;shares of KT Corporation&#146;s common stock as
of December&nbsp;31, 2002, was also recorded during the year
ended December&nbsp;31, 2002. All impairment loss in respect of
this transaction was recorded in 2002. 4,457,635&nbsp;shares
were subsequently cancelled and 3,809,288&nbsp;shares were
designated as treasury stock for use in future mergers and
acquisitions transactions and strategic alliances or for other
corporate purposes to be determined by us. As a result of the
share swap, all cross-shareholdings between KT Corporation and
us have been completely eliminated.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;22, 2003, we acquired 2,481,310&nbsp;shares of
POSCO common stock held by SK Corporation at a price of Won
134,000&nbsp;per share in accordance with a resolution of our
board of directors dated July&nbsp;22, 2003. We elected to
purchase the shares for strategic reasons in order to address
the potentially negative impact on the price of our shares of
common stock available for sale in the marketplace arising from
POSCO&#146;s ownership of our shares. As of December&nbsp;31,
2005, POSCO owned 3.64% of our shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
From time to time, we may make other investments in
telecommunications or other businesses, in Korea or abroad,
where we perceive attractive opportunities for investment. From
time to time, we may also dispose of existing investments when
we believe that doing so would be in our best interest.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, our principal repayment
obligations with respect to long-term borrowings, bonds and
obligations under capital leases outstanding were as follows for
the periods indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year Ending December&nbsp;31,</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In billions of won)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>814.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>708.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>301.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    After 2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,389.8</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our research and development expenses have been influenced by
the MIC, which makes annual recommendations concerning the level
of our research and development spending. Our research and
development expenses (including donations to research institutes
and educational organizations) equaled 2.9% in 2003, 3.2% in
2004 and 3.0% in 2005, respectively, of operating revenue. See
&#147;Item&nbsp;5C. Research and Development&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We anticipate that capital expenditures, repayment of
outstanding debt and research and development expenditures will
represent our most significant use of funds in 2006 and
thereafter. To fund our scheduled debt repayment and planned
capital expenditures over the next several years, we intend to
rely primarily on funds provided by operations, as well as bank
and institutional borrowings, and offerings of debt or equity in
the domestic or international markets. We believe that these
sources will be sufficient to fund our planned capital
expenditures for 2006. Our ability to rely on these alternatives
could be affected by the liquidity of the Korean financial
markets or by government policies regarding Won and foreign
currency borrowings and the issuance of equity and debt. Our
failure to make needed expenditures would adversely affect our
ability to sustain subscriber growth and provide quality
services and, consequently, our results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No commercial bank in Korea may extend credit (including loans,
guarantees and purchase of bonds) in excess of 20% of its
shareholders&#146; equity to any one borrower. In addition, no
commercial bank in Korea may extend credit exceeding 25% of the
bank&#146;s shareholders&#146; equity to any one borrower and to
any person with whom the borrower shares a credit risk.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We generally collect refundable, non-interest bearing deposits
from our customers as a condition to activating their service.
Subject to the approval of the MIC, we set the amounts to be
collected for deposits for cellular services. Effective
February&nbsp;1, 1996, we generally require cellular subscribers
to pay a facility deposit of Won 200,000. These deposits were an
important source of interest-free capital for us and
historically funded a substantial portion of our capital
expenditures. Since 1997, we have been offering existing and new
cellular
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
subscribers the option of obtaining facility insurance from the
Seoul Guarantee Insurance Company, instead of paying the
facility deposit. In order to obtain this facility insurance,
subscribers must meet Seoul Guarantee Insurance Company&#146;s
credit requirements and pay a Won 10,000 premium for three years
of coverage. After three years, we pay the cost of such
insurance on the subscriber&#146;s behalf. For each defaulting
insured subscriber, Seoul Guarantee Insurance Company reimburses
us up to Won 350,000. We refund the facility deposit to any
existing subscriber who elects to have facility insurance. As a
result of the facility insurance program, we have refunded a
substantial amount of facility deposits, and facility deposits
decreased from Won 44.2&nbsp;billion as of December&nbsp;31,
2003 to Won 31.4&nbsp;billion as of December&nbsp;31, 2004 and
Won 23.8&nbsp;billion as of December&nbsp;31, 2005. We do not
expect to have a significant amount of facility deposits
available for capital expenditures in the future.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;11, 2003, we concluded a stock buyback program
which we commenced on June&nbsp;30, 2003. We acquired a total of
2,544,600&nbsp;shares of our outstanding common stock, all of
which were cancelled on August&nbsp;20, 2003. The total purchase
price for the stock buyback was Won 525.2&nbsp;billion (or an
average of approximately Won&nbsp;206,388&nbsp;per share), with
the price per share ranging from Won 192,000 (on July&nbsp;24,
2003) to Won 216,000 (on July 15 and16, 2003). As a result of
the stock buyback and subsequent cancellation of shares, the
total number of our outstanding common stock declined from
82,993,404 as of December&nbsp;31, 2001 to 73,614,308 as of
December&nbsp;31, 2003. On February&nbsp;20, 2004, we
additionally acquired fractional shares totaling 12&nbsp;shares
for Won&nbsp;2&nbsp;million, which resulted from the merger of
SK&nbsp;IMT&nbsp;Co., Ltd. into SK&nbsp;Telecom in May&nbsp;2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2001, in accordance with the approval of our board of
directors, we established trust funds with four Korean banks
with a total funding of Won 1.3 trillion for the purpose of
acquiring our shares at market prices plus or minus five
percent. Each of the trust funds has an initial term of three
years but is terminable at our option six months after the
establishment of the trust fund and at the end of each
succeeding six-month period thereafter. While held by the trust
funds, our shares are not entitled to voting rights or
dividends. Upon termination of the trust funds, we are required
to resell the shares acquired by the trust funds. On
November&nbsp;6, 2001, these funds purchased an aggregate of
2,674,580 of our shares of common stock, or approximately 3.0%
of our issued shares, from KT Corporation. On January&nbsp;31,
2002, these funds purchased from SK Networks an aggregate of
1,367,180&nbsp;shares of our common stock, or approximately 1.5%
of our issued shares. In December 2003, we terminated trust
funds in the amount of Won 318&nbsp;billion. In October 2004, we
extended trust funds with a balance of Won 982&nbsp;billion, for
another three years.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The total accrued and unpaid retirement and severance benefits
for all of our employees as of December&nbsp;31, 2005 of Won
71.3&nbsp;billion was reflected in our consolidated financial
statements as a liability, which is net of deposits with
insurance companies totaling Won 191.4&nbsp;billion to fund a
portion of the employees&#146; severance indemnities. See
&#147;Item&nbsp;6D. Employees&#148; and note&nbsp;2(o) of the
notes to our consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Dividends declared on our common stock amounted to Won
404.9&nbsp;billion, Won 758.2&nbsp;billion and
Won&nbsp;662.5&nbsp;billion, respectively, in 2003, 2004 and
2005. In 2004, we amended our articles of incorporation to
permit payment of interim dividends in accordance with relevant
laws. On July&nbsp;29, 2005, our board of directors approved the
interim dividend rate of Won 1,000&nbsp;per common share for the
first half of fiscal year 2005. The shareholders who are
registered in our shareholders registry as of July&nbsp;30, 2005
were entitled to receive the interim dividend. The interim
dividend was paid in August 2005. The total amount of the
interim dividend paid was Won&nbsp;73.6&nbsp;billion. At the
ordinary shareholder&#146;s meeting in March,&nbsp;10, 2006, our
shareholders approved a cash dividend of Won 8,000&nbsp;per
common share (excluding interim dividend). The cash dividend was
paid in March 2006. The overall dividend payout ratio with
respect to dividends to be paid for 2006 is currently expected
to be up to 40% of net income from 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Substantially all of our revenue and operating expenses are
denominated in Won. We generally pay for imported capital
equipment in Dollars.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We did not have any outstanding swap or derivative transactions
as of December&nbsp;31, 2005 other than fixed-to-fixed currency
swap agreements entered into in the first quarter of 2004 to
reduce our foreign currency exposure with respect to our
issuance of US$300&nbsp;million notes on April&nbsp;1, 2004 and
a <FONT style="white-space: nowrap">fixed-to</FONT>-fixed cross
currency swap contract with Credit Suisse First Boston
International to hedge the foreign currency risk of Dollar
denominated convertible bonds with face amounts of
US$329.5&nbsp;million issued on May&nbsp;27, 2004. See
note&nbsp;26 of the notes to our consolidated financial
statements.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For a discussion of debt securities and convertible notes we
have issued in connection with our financing activities, see
&#147;&#151;&nbsp;Cash Flow Analysis&#148; above.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may consider in the future entering into additional currency
swap agreements, currency forward contracts transactions and
other arrangements solely for hedging purposes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Contractual Obligations and Commitments</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following summarizes our contractual cash obligations at
December&nbsp;31, 2005, and the effect such obligations are
expected to have on liquidity and cash flow in future periods:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Payments Due by Period<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Less Than</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>After</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1&nbsp;Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1-3&nbsp;Years</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>4-5&nbsp;Years</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5&nbsp;Years</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(In billions of won)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,189.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>800.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,000.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>885.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>503.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>334.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term borrowings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital lease obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Facility deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Derivatives</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Investment commitment to HELIO</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other long-term payables(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>650.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>280.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total contractual cash obligations(3)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,601.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,126.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,426.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,270.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>778.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    We are contractually obligated to make severance payments to
    eligible employees we have employed for more than one year, upon
    termination of their employment, regardless of whether such
    termination is voluntary or involuntary. Accruals for severance
    indemnities are recorded based on the amount we would be
    required to pay in the event the employment of all our employees
    were to terminate at the balance date. However, we have not yet
    estimated cash flows for future periods. Accordingly, payments
    due in connection with severance indemnities have been excluded
    from this table.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Related to acquisition of IMT license. See note&nbsp;2(j) of the
    notes to our consolidated financial statements.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    This amount does not include our future investments in the CDMA
    market in Vietnam, which we expect to make through our overseas
    subsidiary SLD Telecom PTE. Ltd. under a business cooperation
    contract with Saigon Post&nbsp;&#38; Telecommunication Service
    Corporation. See &#147;Item&nbsp;4B. Business
    Overview&nbsp;&#151; Other Investments and Relationships&#148;
    and &#147;&#151;&nbsp;Critical Accounting Policies, Estimates
    And Judgments&nbsp;&#151;
    <FONT style="white-space: nowrap">Off-Balance</FONT> Sheet
    Arrangements&#148;.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See note&nbsp;22 of the notes to our consolidated financial
statements for details related to our other commitments and
contingencies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Inflation</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We do not consider that inflation in Korea has had a material
impact on our results of operations in recent years. According
to data published by The Bank of Korea, annual inflation in
Korea was 3.6% in 2003, 3.0% in 2004 and 2.7% in 2005.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>U.S.&nbsp;GAAP Reconciliation</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our consolidated financial statements are prepared in accordance
with Korean GAAP, which differs in certain significant respects
from U.S.&nbsp;GAAP. For a discussion of significant differences
between Korean GAAP and U.S.&nbsp;GAAP, see notes&nbsp;30 and 31
of our notes to consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our net income in 2003 under U.S.&nbsp;GAAP is higher than under
Korean GAAP by Won 96.6&nbsp;billion, primarily due to reversal
of goodwill amortization under U.S.&nbsp;GAAP and the differing
treatment of loss on impairment of investment securities and
capitalization under U.S.&nbsp;GAAP of foreign exchange loss and
interest expense related to tangible assets, which were offset
in part by difference in treatment of non-refundable activation
fees, intangible assets and deferred income taxes. Our net
income in 2004 under U.S.&nbsp;GAAP is higher than under Korean
GAAP by Won 61.6&nbsp;billion, primarily due to reversal of
goodwill amortization under U.S.&nbsp;GAAP, the differing
treatment of loss on impairment of investment securities and the
tax effect of the reconciling items which were partially offset
by the differing treatment of loss on valuation of currency swap
and nonrefundable activation fees. Our net income in 2005 under
U.S.&nbsp;GAAP is higher than under Korean GAAP by Won
154.6&nbsp;billion, primarily due to reversal of goodwill
amortization under U.S.&nbsp;GAAP, deferred income tax
adjustments due to the difference in accounting principles and
the differing treatment of loss on valuation of currency swap,
partially offset by the differing treatment of nonrefundable
activation fees and intangible assets.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our shareholders&#146; equity at December&nbsp;31, 2003 under
U.S.&nbsp;GAAP is higher than under Korean GAAP by Won
920.8&nbsp;billion primarily due to increases from differing
treatment of intangible assets, reversal of goodwill
amortization and tax effect of the reconciling items, partially
offset by decreases from the differing treatment of
nonrefundable activation fees and minority interest of equity in
consolidated affiliates. Our shareholders&#146; equity at
December&nbsp;31, 2004 under U.S.&nbsp;GAAP is higher than under
Korean GAAP by Won 1,031.3&nbsp;billion primarily due to the
same reasons as in 2003: increases from the differing treatment
of intangible assets, reversal of goodwill amortization and tax
effect of the reconciling items, partially offset by decreases
from the differing treatment of nonrefundable activation fees
and minority interest of equity in consolidated affiliates. Our
shareholders&#146; equity at December&nbsp;31, 2005 under
U.S.&nbsp;GAAP is higher than under Korean GAAP by
Won&nbsp;1,144.9&nbsp;billion primarily due to the same reasons
as in 2003 and 2004: increases from the differing treatment of
intangible assets, reversal of goodwill amortization and tax
effect of the reconciling items, partially offset by decreases
from the differing treatment of nonrefundable activation fees
and minority interest of equity in consolidated affiliates.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>New Accounting Pronouncements under U.S.&nbsp;GAAP</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2004, the EITF supplemented EITF Issue
No.&nbsp;<FONT style="white-space: nowrap">03-1,</FONT>
&#147;The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments.&#148; EITF Issue
No.&nbsp;<FONT style="white-space: nowrap">03-1</FONT> provides
guidance for evaluating whether an investment is
other-than-temporarily impaired and requires disclosures about
unrealized losses on investments in debt and equity securities.
In September 2004, the FASB issued FASB Staff Position
EITF&nbsp;Issue&nbsp;<FONT style="white-space: nowrap">03-1</FONT>-1,
&#147;Effective Date of Paragraphs&nbsp;10-20 of EITF
Issue&nbsp;<FONT style="white-space: nowrap">03-1,&#148;</FONT>
which deferred the effective date of the recognition and
measurement provisions of the consensus until further guidance
is issued.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2004, the FASB issued Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No.&nbsp;151,
&#147;Inventory Costs, an Amendment of ARB No.&nbsp;43,
Chapter&nbsp;4.&#148; SFAS&nbsp;No.&nbsp;151 clarifies the
accounting for abnormal amounts of idle facility expense,
freight, handling costs, and wasted material. The Statement is
effective for inventory costs incurred during fiscal year
beginning after June&nbsp;15, 2005. Management does not expect
this statement will have a material impact on our consolidated
financial position or results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, the FASB issued SFAS&nbsp;No.&nbsp;123
(revised 2004), &#147;Share-Based Payments&#148;
(&#147;SFAS&nbsp;123R&#148;). This statement eliminates the
option to apply the intrinsic value measurement provisions of
Accounting Principles Board (&#147;APB&#148;) Opinion
No.&nbsp;25, &#147;Accounting for Stock Issued to
Employees&#148; to stock compensation awards issued to
employees. Rather, SFAS&nbsp;123R requires companies to measure
the cost of employee services received in exchange for an award
of equity instruments based on the grant-data fair value of the
award. That cost will be recognized over the period during which
an employee is required to provide services in exchange for the
award (usually the vesting period). SFAS&nbsp;123R applies to
all awards granted after the required effective date and to
awards modified, repurchased, or cancelled after that date.
SFAS&nbsp;123R will be effective for
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
our fiscal year ending December&nbsp;31, 2006. Management does
not expect that adoption of this statement will have a material
impact on our consolidated financial position or results of
operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, the FASB issued SFAS&nbsp;No.&nbsp;153,
&#147;Exchanges of Non-monetary Assets&nbsp;&#151; an amendment
of APB Opinion No.&nbsp;29&#148; (&#147;SFAS&nbsp;153&#148;),
which amends Accounting Principles Board Opinion No.&nbsp;29,
&#147;Accounting for Non-monetary Transactions&#148; to
eliminate the exception for non-monetary exchanges of similar
productive assets and replaces it with a general exception for
exchanges of non-monetary assets that do not have commercial
substance. SFAS&nbsp;153 is effective for non-monetary assets
exchanges occurring in fiscal periods beginning after
June&nbsp;15, 2005. Management does not anticipate that the
adoption of this statement will have a material effect on our
consolidated financial position or results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2005, the FASB issued SFAS&nbsp;No.&nbsp;154,
&#147;Accounting Changes and Error Corrections&#148;
(&#147;SFAS&nbsp;154&#148;) which replaces Accounting Principles
Board Opinions No.&nbsp;20 &#147;Accounting Changes&#148; and
SFAS&nbsp;No.&nbsp;3, &#147;Reporting Accounting Changes in
Interim Financial Statements&nbsp;&#151; An Amendment of APB
Opinion No.&nbsp;28.&#148; SFAS&nbsp;154 provides guidance on
the accounting for and reporting of accounting changes and error
corrections. It establishes retrospective application, to the
extent practicable, as the required method for reporting a
change in accounting principle and the reporting of a correction
of an error. SFAS&nbsp;154 is effective for accounting changes
and corrections of errors made in fiscal years beginning after
December&nbsp;15, 2005 and is required to be adopted by us in
2006. We are currently evaluating the effect that the adoption
of SFAS&nbsp;154 will have on our consolidated results of
operations and financial condition but does not expect it to
have a material impact.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In June 2005, the Emerging Issues Task Force (&#147;EITF&#148;)
of the FASB issued EITF Issue No.&nbsp;04-5, &#147;Determining
Whether a General Partner, or the General Partners as a Group,
Controls a Limited Partnership or Similar Entity When the
Limited Partners Have Certain Rights.&#148; EITF Issue
No.&nbsp;04-5 provides that the general partner(s) is presumed
to control the limited partnership, unless the limited partners
possess either substantive participating rights or the
substantive ability to dissolve the limited partnership or
otherwise remove the general partner(s) without cause
(&#147;kick-out rights&#148;). Kick-out rights are substantive
if they can be exercised by a simple majority of the limited
partners voting interests. The guidance applies to general
partners of all new limited partnerships formed and for existing
limited partnerships for which the partnership agreements are
modified after June&nbsp;29, 2005, and to general partners in
all other limited partnerships no later than the beginning of
the first reporting period in fiscal years beginning after
December&nbsp;15, 2005. Management does not expect adoption of
this guidance to have a material impact on our consolidated
financial position, operating results or cash flows.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2005, the FASB issued FASB Staff Position
(&#147;FSP&#148;) No.&nbsp;FAS&nbsp;115-1, &#147;The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain
Investments,&#148; revising the recognition and measurement
provisions of EITF Issue
No.&nbsp;<FONT style="white-space: nowrap">03-1.</FONT> This FSP
clarified and reaffirmed existing guidance as to when an
investment is considered impaired, whether that impairment is
other than temporary, and the measurement of an impairment loss.
Certain disclosures about unrealized losses on
available-for-sale debt and equity securities that have not been
recognized as other-than-temporary impairments are required
under FSP No.&nbsp;FAS&nbsp;115-1. The FSP is effective for
fiscal years beginning after December&nbsp;15, 2005. As the FSP
reaffirms existing guidance, management does not expect this FSP
to have a significant impact on our consolidated financial
position, operating results or cash flows.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In February 2006, the FASB issued SFAS&nbsp;No.&nbsp;155,
&#147;Accounting for Certain Hybrid Financial
Instruments&nbsp;&#151; an amendment of FASB Statements
No.&nbsp;133 and 140,&#148; (&#147;SFAS&nbsp;155&#148;) that
permits fair value remeasurement of certain hybrid financial
instruments, clarifies the scope of SFAS&nbsp;No.&nbsp;133
regarding interest-only and principal-only strips, and provides
further guidance on certain issues regarding beneficial
interests in securitized financial assets, concentrations of
credit risk and qualifying special purpose entities.
SFAS&nbsp;155 is effective for all instruments acquired or
issued as of the first fiscal year beginning after
September&nbsp;15, 2006 and may be applied to certain other
financial instruments held prior to the adoption date. Earlier
adoption is permitted as of the beginning of an entity&#146;s
fiscal year providing the entity has not yet issued financial
statements. Management does not expect the adoption of
SFAS&nbsp;155 to have a material impact on our consolidated
financial position, operating results or cash flows.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2006, the FASB issued SFAS&nbsp;No.&nbsp;156,
&#147;Accounting for Servicing of Financial Assets&nbsp;&#151;
an amendment of FASB Statement No.&nbsp;140.&#148;
(&#147;SFAS&nbsp;156&#148;). SFAS&nbsp;156 requires that an
entity separately recognize
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
a servicing asset or a servicing liability when it undertakes an
obligation to service a financial asset under a servicing
contract in certain situations. Such servicing assets or
servicing liabilities are required to be initially measured at
fair value, if practicable. SFAS&nbsp;156 also allows an entity
to choose one of two methods when subsequently measuring its
servicing assets and servicing liabilities: (1)&nbsp;the
amortization method or (2)&nbsp;the fair value measurement
method. The amortization method existed under
SFAS&nbsp;No.&nbsp;140 and remains unchanged in
(1)&nbsp;allowing entities to amortize their servicing assets or
servicing liabilities in proportion to and over the period of
estimated net servicing income or net servicing loss and
(2)&nbsp;requiring the assessment of those servicing assets or
servicing liabilities for impairment or increased obligation
based on fair value at each reporting date. The fair value
measurement method allows entities to measure their servicing
assets or servicing liabilities at fair value each reporting
date and report changes in fair value in earnings in the period
the change occurs. SFAS&nbsp;156 is effective for fiscal years
beginning after September&nbsp;15, 2006. Management does not
expect the adoption of this SFAS&nbsp;156 to have a material
impact on our consolidated financial position, operating results
or cash flows.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Significant Changes in Korean GAAP</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;1, 2003, we and our subsidiaries adopted SKAS
No.&nbsp;2 through No.&nbsp;9, except for SKAS No.&nbsp;6, which
was early adopted in 2002. As a result, we reclassified the
accounts relating to securities as explained in note&nbsp;2(g)
of our consolidated financial statements for the years ended
2003, 2004 and 2005, and changed the accounting policy for
capitalization of interest and other financing costs to charge
such interest expense and other financing cost to current
operations as incurred as explained in notes&nbsp;2(i) and 2(j)
to our consolidated financial statements for the years ended
December&nbsp;31, 2003, 2004 and 2005. If financing costs had
been capitalized, our consolidated net income for the year ended
December&nbsp;31, 2003 would have increased by Won
32.3&nbsp;billion (net of income tax effect of Won
13.6&nbsp;billion). In addition, in accordance with the
application of SKAS No.&nbsp;3, &#147;Intangible Assets&#148;,
effective from January&nbsp;1, 2003 organization costs which
were recorded in intangible assets through 2002, are charged to
expenses as incurred and the cumulative effect of this
accounting change was charged to beginning retained earnings as
of January&nbsp;1, 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;1, 2004, we adopted SKAS No.&nbsp;10,
No.&nbsp;12 and No.&nbsp;13. Such adoptions of new SKAS did not
have an effect on our consolidated financial position as of
December&nbsp;31, 2004 or our consolidated ordinary income and
net income for the year ended December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;1, 2005, we and our subsidiaries adopted SKAS
No.&nbsp;15 through No.&nbsp;17. The adoption of such accounting
standards did not have an effect on our consolidated financial
position as of December&nbsp;31, 2005, except as follows:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Through 2004, when our equity interests in the equity method
    investees were diluted as a result of the equity method
    investees&#146; direct sales of their unissued shares to third
    parties, the changes in the our proportionate equity of
    investees were accounted for as capital transactions. Effective
    January&nbsp;1, 2005, such transactions are accounted for as
    income statement treatment, pursuant to adoption of SKAS
    No.&nbsp;15, &#147;Investments: Equity Method&#148;. As a result
    of adopting SKAS No.&nbsp;15, net income for the year ended
    December&nbsp;31, 2005 increased by Won 6.3&nbsp;billion (net of
    tax effect of Won 2.4&nbsp;billion).</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Through 2004, tax effects of temporary differences related to
    capital surplus or capital adjustments were excluded in
    determining the deferred tax assets or liabilities. Effective
    January&nbsp;1, 2005, such tax effects of temporary differences
    are included in determining the deferred tax assets or
    liabilities, pursuant to adoption of SKAS No.&nbsp;16
    &#147;Income Taxes&#148;. Accordingly, adjustments made directly
    to capital surplus or capital adjustments, which result in
    temporary differences, are recorded net of related tax effects.
    In addition, effective January&nbsp;1, 2005, deferred income tax
    assets and liabilities which were presented on the balance sheet
    as a single non-current net number through 2004, are separated
    into current and non-current portions. As a result of adopting
    SKAS No.&nbsp;16, total assets and total liabilities as of
    December&nbsp;31, 2005 increased by Won 67.6&nbsp;billion and
    Won 97.8&nbsp;billion, respectively, and total
    stockholders&#146; equity as of December&nbsp;31, 2005 decreased
    by Won 30.2&nbsp;billion, which was directly reflected in
    capital surplus or capital adjustments. See note&nbsp;18 of the
    notes to our consolidated financial statements.</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Through 2004, provisions were recorded at nominal value.
    Effective January&nbsp;1, 2005, provisions are recorded at the
    present value when the effect of the time value of money is
    material, pursuant to adoption of SKAS No.&nbsp;17
    &#147;Provisions, Contingent Liabilities and Contingent
    Assets&#148;. SKAS No.&nbsp;17 is prospectively applied and as a
    result of adopting such accounting standard, total liabilities
    as of December&nbsp;31, 2005 decreased by Won 7.4&nbsp;billion
    and ordinary income and net income for the year ended
    December&nbsp;31, 2005 increased by Won 5.4&nbsp;billion. See
    note&nbsp;25 of the notes to our consolidated financial
    statements.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Such newly adopted accounting standards are prospectively
applied as allowed by SKAS No.&nbsp;15 through No.&nbsp;17. As a
result, our consolidated balance sheets as of December&nbsp;31,
2004 and 2003 and our consolidated statements of income and cash
flows for the years ended December&nbsp;31, 2004 and 2003 were
not adjusted to reflect the effect of adoption of SKAS
No.&nbsp;15 through No.&nbsp;17.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As SKAS No.&nbsp;11 is not effective until the fiscal year
ending December&nbsp;31, 2006 and SKAS No.&nbsp;14 is related to
exceptions to accounting for small and medium-sized entities,
they do not apply to us.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Critical Accounting Policies, Estimates And Judgments</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our consolidated financial statements are prepared in accordance
with Korean GAAP. The preparation of these financial statements
requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenue and expenses as
well as the disclosure of contingent assets and liabilities. We
continually evaluate our estimates and judgments including those
related to revenue recognition, allowances for doubtful
accounts, inventories, useful lives of property and equipment,
investments, employee stock option compensation plans and income
taxes. We base our estimates and judgments on historical
experience and other factors that are believed to be reasonable
under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions. We also
provide a summary of significant differences between accounting
principles followed by us and our subsidiaries and
U.S.&nbsp;GAAP. We believe that of our significant accounting
policies, the following may involve a higher degree of judgment
or complexity:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Allowances for Doubtful Accounts</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An allowance for doubtful accounts is provided based on a review
of the status of individual receivable accounts at the end of
the year. We maintain allowances for doubtful accounts for
estimated losses that result from the inability of our customers
to make required payments. We base our allowances on the
likelihood of recoverability of accounts receivable based on
past experience and taking into account current collection
trends that are expected to continue. If economic or specific
industry trends worsen beyond our estimates, we increase our
allowances for doubtful accounts by recording additional
expenses.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Inventories</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Inventories are stated at the lower of cost, determined using
the moving average method, or market value. Inventories consist
of supplies for wireless telecommunications facilities, handsets
and raw materials for handsets.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Estimated Useful Lives</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We estimate the useful lives of long-lived assets in order to
determine the amount of depreciation and amortization expense to
be recorded during any reporting period. The useful lives are
estimated at the time the asset is acquired and are based on
historical experience with similar assets as well as taking into
account anticipated technological or other changes. If
technological changes were to occur more rapidly than
anticipated or in a different form than anticipated, the useful
lives assigned to these assets may need to be shortened,
resulting in the recognition of increased depreciation and
amortization expense in future periods.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Impairment of Long-lived Assets Including the WCDMA
    Frequency Usage Right</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Long-lived assets generally consist of property, plant and
equipment and intangible assets. We review long-lived assets for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not recoverable. In
addition, we evaluate our long-lived assets for impairment each
year as part of our annual forecasting process. An impairment
loss would be considered when estimated undiscounted future net
cash flow expected to result from the use of the asset and its
eventual disposition are less than its carrying amount. If such
assets are considered to be impaired, the impairment to be
recognized is measured as the amount by which the carrying
amount of the assets exceeds the fair value of the assets.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our intangible assets include the WCDMA frequency usage right,
which has a contractual life of 15&nbsp;years and is amortized
from the date commercial service is initiated through the end of
its contractual life, which is December&nbsp;15, 2015. We
started to amortize this frequency usage right on
December&nbsp;1, 2003. Because WCDMA presents risks and
challenges to our business, any or all of which, if realized or
not properly addressed, may have a material adverse effect on
our financial condition and results of operations, we review the
WCDMA frequency usage right for impairment on an annual basis.
In connection with our review, we utilize the estimated
long-term revenue and cash flow forecasts. The use of different
assumptions within our cash flow model could result in different
amounts for the WCDMA frequency usage right. The results of our
review using the testing method described above did not indicate
any need to impair the WCDMA frequency usage right for 2005.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Impairment of Investment Securities</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
When the declines in fair value of individual available-for-sale
and <FONT style="white-space: nowrap">held-to</FONT>-maturity
securities below their acquisition cost are other than temporary
and there is objective evidence of impairment, the carrying
value of the securities is adjusted to their fair value with the
resulting valuation loss charged to current operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of this review, the investee&#146;s operating results,
net asset value and future performance forecasts as well as
general market conditions are taken into consideration. If we
believe, based on this review, that the market value of an
equity security or a debt security may realistically be expected
to recover, the loss will continue to be classified as
temporary. If economies or specific industry trends worsen
beyond our estimates, valuation losses previously determined to
be recoverable may need to be charged as an impairment loss in
current operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Significant management judgment is involved in the evaluation of
declines in value of individual investments. The estimates and
assumptions used by management to evaluate declines in value can
be impacted by many factors, such as our financial condition,
earnings capacity and near-term prospects in which we have
invested and, for publicly-traded securities, the length of time
and the extent to which fair value has been less than cost. The
evaluation of these investments is also subject to the overall
condition of the economy and its impact on the capital markets.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Employee Stock Option Compensation Plan</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We adopted the fair value based method of accounting for the
employee stock option compensation plan. The plan was
established, effective as of March&nbsp;17, 2000, to reward the
performance of management who have contributed, or have the
ability to contribute, significantly to our company. Under the
fair value based method, compensation cost is measured at the
grant date based on the value of the award and is recognized
over the service period. For stock options, fair value is
determined using an option-pricing model that takes into account
the stock price at the grant date, the exercise price, the
expected life of the option, the volatility of the underlying
stock, expected dividends and the current risk-free interest
rate for the expected life of the option. However, as permitted
under Korean GAAP, we exclude the volatility factor in
estimating the value of our stock options, which results in
measurement at minimum value. The total compensation cost of an
option estimated at the grant date is not subsequently adjusted
for changes in the price of the underlying stock or its
volatility, the life of the option, dividends on the stock, or
the risk-free interest rate.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Income Taxes</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are required to estimate the amount of tax payable or
refundable for the current year and the deferred income tax
liabilities and assets for the future tax consequences of events
that have been reflected in our financial statements or tax
returns. This process requires management to make assessments
regarding the timing and probability of the tax impact. Actual
income taxes could vary from these estimates due to future
changes in income tax law or unpredicted results from the final
determination of each year&#146;s liability by taxing
authorities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the accounting estimate related to establishing
tax valuation allowances is a &#147;critical accounting
estimate&#148; because (i)&nbsp;it requires management to make
assessments about the timing of future events, including the
probability of expected future taxable income and available tax
planning opportunities, and (ii)&nbsp;the impact that changes in
actual performance versus these estimates could have on the
realization of tax benefits as reported in our results of
operations could be material. Management&#146;s assumptions
require significant judgment because actual performance has
fluctuated in the past and may continue to do so.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Off-Balance Sheet Arrangements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have sold certain receivables in 2002 and 2003 in five
separate transactions described under
&#147;&#151;&nbsp;Liquidity and Capital Resources&nbsp;&#151;
Liquidity&#148; to Nate First Special Purpose Company, Nate
Second Special Purpose Company, Nate Third Special Purpose
Company, Nate Fourth Special Purpose Company and Nate Fifth
Special Purpose Company in asset-backed securitization
transactions. Under Korean GAAP, we accounted for these
transactions as sales of the receivables to the special purpose
companies. See note&nbsp;4 of the notes to our consolidated
financial statements. Under U.S.&nbsp;GAAP, we are required to
consolidate these entities as these entities do not meet the
qualifications for a qualifying special purpose entity. See
&#147;&#151;&nbsp;U.S.&nbsp;GAAP Reconciliation&#148; and
note&nbsp;30 of our notes to consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SLD Telecom, our overseas subsidiary, entered into a business
cooperation contract with Saigon Post&nbsp;&#38;
Telecommunication Services Corporation to establish cellular
mobile communication services and provide CDMA service
throughout Vietnam. In accordance with this contract, in the
event that the cash inflow for the business is insufficient to
cover the cash outflow necessary to cover the joint expenditure
of the business (&#147;cash shortfall&#148;), SLD Telecom and
Saigon Post&nbsp;&#38; Telecommunication Services Corporation
will contribute the necessary funds to the business and bear
additional cash shortfalls according to their gross profit
sharing ratios at that time. With respect to our involvement in
the business, our maximum exposure to loss was approximately Won
54.6&nbsp;billion as of December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2005, we and EarthLink, an Internet service provider in
the U.S.&nbsp;established HELIO (formerly named SK-Earthlink), a
joint venture company, to provide wireless voice and data
services across the U.S.&nbsp;We have committed to invest
$220&nbsp;million over the next three years, of which
$161.5&nbsp;million has been invested as of March&nbsp;31, 2006,
and EarthLink has committed to invest $220&nbsp;million over the
next three years, of which $161.5&nbsp;million had been invested
as of the same date.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='122'></A>
</DIV>

<!-- link1 "Item 5C. Research and Development" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;5C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Research and
Development</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Overview</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In conformity with the MIC&#146;s guidance, we have maintained a
high level of spending on research and development activity.
Prior to 1996, the majority of our research and development
expense consisted of MIC-directed donations to several Korean
research institutes and educational organizations. More
recently, we have sharply increased our spending for our
internal research activity, resulting in such amounts exceeding
our spending on external research. We believe that we must
maintain a substantial in-house technology capability to achieve
our strategic goals.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth our annual research and
development expenses:
</DIV>

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    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>As of and for the Year Ended</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In billions of won)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Internal R&#38;D Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>235.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>267.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>252.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    External R&#38;D Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total R&#38;D Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>300.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>336.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>321.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The MIC has the statutory power to recommend levels of spending
by telecommunications service providers on research and
development activity and the allocation of expenditures between
internal and external research. In practice, the MIC has issued
guidelines regarding the amount and allocation of research
spending. In its May 1995 guidelines, the MIC recommended that
that we observe the following minimum levels of total research
and development spending (set as a percentage of budgeted
revenue and calculated according to MIC guidelines which differ
from our accounting treatment of such expenses): 9.0% from 1995
through 1997; 9.5% for 1998; and 10.0% for 1999 through 2001.
With respect to the level of contribution specifically for
external research and development, in July 1998, the MIC reduced
the recommended minimum level of contribution to the MIC-run
Fund for Development of Information and Telecommunications from
2.0% to 1.5%. In 2001, the recommended minimum level of
contribution was further reduced to 1.0%. In 2002, the
contribution became mandatory, and the required minimum level of
contribution was further reduced to 0.75%. In 2003, 2004 and
2005, the required minimum level of contribution was 0.75%, the
same as 2002. We are not obligated to make donations to any
other external research institutes.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Internal Research and Development</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The main focus of our internal research and development activity
is the development of 3G and 3.5G&nbsp;technologies and services
and value-added technologies and services for our CDMA network,
such as wireless data communications, as well as development of
new technologies that reflect the growing convergence between
telecommunications and other industries. We spent approximately
Won 252.0&nbsp;billion on internal research and development in
2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our internal research and development activity is centered at a
research center with
<FONT style="white-space: nowrap">state-of</FONT>-the-art
facilities and equipment established in January 1999 in
Bundang-gu, Sungnam-si, Kyunggi-do, Korea. As of
December&nbsp;31, 2005, our research center housed 552 research
engineers (including both full time and temporary research
engineers). Their work focuses on planning of cell sites,
network management, digital wireless technologies, multimedia,
information processing and other wireless telecommunications
areas. Although the technology is at its very early stages, our
research center includes a team that is helping to develop what
is known as 4G wireless technology, which if successfully
completed is expected to enable wireless data transmissions at
speeds of up to 155&nbsp;Mbps, which would be faster than the
current WCDMA technology.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each business unit has its own research team that can
concentrate on specific short-term research needs. Such research
teams permit our research center to concentrate on long-term,
technology-intensive research projects. We aim to establish
strategic alliances with selected domestic and foreign companies
with a view to exchanging or jointly developing technologies,
products and services.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>External Research and Development</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to conducting research in our own facilities, we
have been a major financial supporter of other Korean research
institutes, and we have helped coordinate the Government&#146;s
effort to commercialize the CDMA digital technology. We do not
independently own intellectual property rights in the
technologies or products developed by any external research
institute.
</DIV>

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<A name='123'></A>
</DIV>

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    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;5D.</B></TD>
    <TD>
    <B><I>Trend Information</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These matters are discussed under Item&nbsp;5A. and
Item&nbsp;5B. above where relevant.
</DIV>

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<A name='124'></A>
</DIV>

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    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;5E.</B></TD>
    <TD>
    <B><I>Off-Balance Sheet Arrangements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These matters are discussed under Item&nbsp;5B. above where
relevant.
</DIV>

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<A name='125'></A>
</DIV>

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    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;5F.</B></TD>
    <TD>
    <B><I>Tabular Disclosure of Contractual Obligations</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These matters are discussed under Item&nbsp;5B. above where
relevant.
</DIV>

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<A name='126'></A>
</DIV>

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    <TD width="8%"></TD>
    <TD width="92%"></TD>
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<TR valign="top">
    <TD><B>Item&nbsp;6.</B></TD>
    <TD>
    <B><I>DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</I></B></TD>
</TR>

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    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;6A.</B></TD>
    <TD>
    <B><I>Directors and Senior Management</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our board of directors has ultimate responsibility for the
management of our affairs. Under our articles of incorporation,
our board is to consist of at least three but no more than
twelve directors, more than a half of whom must be independent
non-executive directors. We currently have a total of eleven
directors, seven of whom are independent non-executive
directors. We elect our directors at a general meeting of
shareholders with the approval of at least a majority of those
shares present or represented at such meeting. Such majority
must represent at least one-fourth of our total issued and
outstanding shares with voting rights.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As required under relevant Korean laws and our articles of
incorporation, we have a committee for recommendation of
independent non-executive directors within the board of
directors, the Recommendation Committee. Independent
non-executive directors are appointed from among those
candidates recommended by the Recommendation Committee.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The term of offices for directors is until the close of the
third annual general shareholders meeting convened after he or
she commences his or her term. Our directors may serve
consecutive terms. Our shareholders may remove them from office
by a resolution at a general meeting of shareholders adopted by
the holders of at least two-thirds of the voting shares present
or represented at the meeting, and such affirmative votes also
represent at least one-third of our total voting shares then
issued and outstanding.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Representative directors are directors elected by the board of
directors with the statutory power to represent our company.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">80

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following are the names and positions of our standing and
non-standing directors. The business address of all of our
directors is the address of our registered office at&nbsp;11,
Euljiro 2-ga, Jung-gu, Seoul 100-999, Korea.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Standing directors are our full-time employees and executive
officers, and they also comprise the senior management, or the
key personnel who manage us. Their names, dates of birth and
positions at our company and other positions are set forth below:
</DIV>

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<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="18%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Other Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Director</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Expiration</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Directorships and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Date of Birth</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Since</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Term</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Position</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Positions</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Business Experience</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jung Nam Cho</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Nov.&nbsp;20, 1941</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Vice-Chairman and Representative Director</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    President&nbsp;&#38; COO, SK Telecom</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shin Bae Kim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Oct.&nbsp;15, 1954</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    CEO and Representative Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chairman, Korea Association of RFID/USN</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Head of Strategic Planning Group, Shinsegi Telecomm, Inc.;
    Director, SK Telecom; Senior Vice President, SK Telecom;
    Director, KORMS</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bang Hyung Lee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Aug.&nbsp;20, 1955</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Executive Vice- President, Chief Marketing Officer and Head of
    Business Center</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Head of Internet Business Group, SK Telecom; Head of Marketing
    Group, SK Telecom; Senior Accountant, Deloitte Haskin&nbsp;&#38;
    Sells, USA</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sung Min Ha</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Mar.&nbsp;24, 1957</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Senior Vice President and Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Representative Director, SK Capital</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Head of Strategic Planning Group, SK Telecom; Director, SK
    Telink; Auditor, SK C&#38;C; Chairman and Representative
    Director, SLD Telecom; Auditor, SK Teletech</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">81

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our current non-standing directors are as set forth below:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="18%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Other Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Director</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Expiration</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Directorships and</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Date of Birth</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Since</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Term</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Position</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Positions</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Business Experience</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dae Sik Kim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Jan.&nbsp;11, 1955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Independent Non- executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Professor, Hanyang University; Committee Member, MOFE Advisory
    Committee on Financial Development</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    University of Pennsylvania, MBA (1981),&nbsp;Ph.D. (1987)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Yong Woon Kim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Oct.&nbsp;4, 1943</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Independent Non- executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Non-Standing Auditor, Pohang University of Science and Technology</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Senior Executive Vice President (Legal Department, Seoul Office,
    Investment and Finance) and Director, POSCO; Standing Advisor,
    POSCO Research Institute</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dae Kyu Byun</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Mar.&nbsp;8, 1960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Independent Non- executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    CEO&nbsp;&#38; Representative Director, Humax Co., Ltd.; Head
    Vice-President, Korea Venture Business Association</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Director, the Federation of Korea Information Industries;
    Representative Director, Guin Co.; Co-founder, Venture Leaders
    Club</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Seung Taik Yang</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Oct.&nbsp;24, 1939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Independent Non- executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    President, Tong- Myung University of Information Technology</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Polytechnic Institute of Brooklyn,&nbsp;Ph.D.;
    7th&nbsp;Minister, Ministry of Information and Communication</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jae Seung Yoon</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Nov.&nbsp;9, 1962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Independent Non- executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    CEO&nbsp;&#38; Representative Director; Daewoong Pharmaceutical
    Co., Ltd.; Vice-president, Insung Information Co., Ltd.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Public Prosecutor, The Seoul/Busan District Public
    Prosecutors&#146; Office; Auditor and Vice President, Daewoong
    Pharmaceutical Co., Ltd.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sang C. Lee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Jan.&nbsp;24, 1941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Independent Non- executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    IT Consultant</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Chairman, Communication Network Interface, Inc.; Chairman and
    CEO, Spectron Corp.; President, Scovill Fasteners, Inc.;
    Director of Organization, ITT Worldwide Corp.; Vice President,
    ITT Asia Pacific Corp.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Hyun Chin Lim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Apr.&nbsp;26, 1949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Independent Non- executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Dean, Seoul National University, Professor, Central Officials
    Training Institute; Chairman, Korea Association of Sociology</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Professor, Seoul National University</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">82

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Involvement In Certain Legal Proceedings</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In February 2004, certain members of our board of directors and
executive officers resigned following a finding of accounting
misconduct at SK Networks and the resulting movement to improve
corporate governance in companies in the SK Group. The
resignations were tendered by Mr.&nbsp;Tae Won Chey, former
non-standing director of SK Telecom and chairman and CEO of SK
Corporation, Mr.&nbsp;Kil Seung Son, former Chairman, Chief
Executive Officer and Representative Director of SK Telecom and
representative director of SK Networks and non-standing director
of SK Corporation, Mr.&nbsp;Jae Won Chey, executive vice
president of SK Telecom at the time and Mr.&nbsp;Moon Soo Pyo,
president of SK Telecom at the time. None of these resignations
were related to any allegations of wrongdoing in connection with
their role in our business, and SK Telecom was not implicated in
any of the charges against SK Network&#146;s management. For
details of the charges against Mr.&nbsp;Tae Won Chey and
Mr.&nbsp;Kil Seung Son, see &#147;Item&nbsp;3D. Risk
Factors&nbsp;&#151; Financial difficulties and charges of
financial statement irregularities at our affiliate, SK Networks
(formerly SK Global), may cause disruptions in our
business.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='128'></A>
</DIV>

<!-- link1 "Item 6B. Compensation" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;6B.</B></TD>
    <TD>
    <B><I>Compensation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The aggregate of the remuneration paid and in-kind benefits
granted to the directors (both standing directors, who also
serve as our executive officers, and non-standing directors)
during the year ended December&nbsp;31, 2005 totaled
approximately Won 3.9&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Remuneration for the directors is determined by shareholder
resolutions. Severance allowances for directors are determined
by the board of directors in accordance with our regulation on
severance allowances for officers, which was adopted by
shareholder resolutions. The regulation provides for monthly
salary, performance bonus, severance payment and fringe
benefits. The amount of performance bonuses is independently
decided by a resolution of the board of directors.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2001 and 2002, pursuant to resolutions of the
shareholders, and in accordance with our articles of
incorporation, certain of our directors and officers were
granted options to purchase our common shares. In 2001 and 2002,
42 and 70 officers, respectively, were granted options to
purchase&nbsp;43,820 and 65,730 common shares. The exercise
price for the shares are Won 211,000 and Won 267,000,
respectively, for 2001 and 2002. Each stock option agreement
also provides for adjustments to the amount and exercise price
of the shares in cases where the share price may become diluted
as a result of issuance of new shares, stock dividends or
mergers. The officers may exercise their options during a
two-year period starting from March 2004 for shares granted in
2001. No officer exercised his option to purchase for shares
granted in 2002. The board of directors may, by resolution,
cancel any director&#146;s or officer&#146;s stock options under
certain circumstances. Since 2003, none of our directors and
officers have been granted options to purchase our common shares.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">83

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table shows the share allotment for the directors
under our 2001 and 2002 stock option program. There has been no
stock option program since 2003.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Shares Allotted</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Options</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="left" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Position</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Exercised</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jung Nam Cho</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shin Bae Kim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bang Hyung Lee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sung Min Ha</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dae Sik Kim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Yong Woon Kim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dae Kyu Byun</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Seung Taik Yang</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jae Seung Yoon</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sang C. Lee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Hyun Chin Lim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other Officers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='129'></A>
</DIV>

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    <TD width="9%"></TD>
    <TD width="91%"></TD>
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<TR valign="top">
    <TD><B>Item&nbsp;6C.</B></TD>
    <TD>
    <B><I>Board Practices</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Termination of Directors, Services</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Directors are given a retirement and severance payment upon
termination of employment in accordance with our internal
regulations on severance payments. Upon retirement, directors
who have made significant contributions to our company during
their term may be appointed to serve either as an advisor to us
or as an officer of an affiliate company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Audit Committee</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under relevant Korean laws and our articles of incorporation, we
are required to have an audit committee under the board of
directors. The committee is composed of at least three members,
two-thirds of whom must be independent non-executive directors
independent with respect to applicable rules. The members of the
audit committee are appointed annually by a resolution of the
board of directors. They are required to:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    examine the agenda for the general meeting of shareholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    examine financial statements and other reports to be submitted
    by the board of directors to the general meeting of shareholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    review the administration by the board of directors of our
    affairs;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    examine the operations and asset status of us and our
    subsidiaries.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the audit committee must appoint independent
certified public accountants to examine our financial
statements. An audit and review by certified public accountants
of our financial statements is required for the purposes of a
securities report. Listed companies must provide such report on
an annual, semi-annual and quarterly basis to the Financial
Supervisory Commission of Korea and the KRX Stock Market.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our audit committee is composed of three independent
non-executive directors: Dae Sik Kim, Yong Woon Kim and Hyun
Chin Lim, each of whom must be financially literate and
independent under the rules of the New York Stock Exchange as
applicable. The board of directors has determined that Dae Sik
Kim is an &#147;audit committee financial expert&#148; as
defined under the applicable rules of the Securities and
Exchange Commission. See &#147;Item&nbsp;16A. Audit Committee
Financial Expert&#148;.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">84
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Independent Non-executive Director Nomination Committee</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This committee is devoted to recommending independent
non-executive directors for the board of directors. The
objective of the committee is to help promote fairness and
transparency in the nomination of candidates for these
positions. The board of directors decides from time to time who
will comprise the members of this committee.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Capex Review Committee</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This committee is responsible for reviewing our business plan
(including the budget). It also examines major capital
expenditure revisions, and routinely monitors capital
expenditure decisions that have already been executed. The board
of directors decides from time to time who will comprise the
members of this committee.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Compensation Review Committee</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This committee oversees our overall compensation scheme for the
Chief Executive Officer and directors. The committee consists of
three independent non-executive directors and is in charge of
reviewing the criteria for and levels of directors&#146;
compensation packages and benefits. The board of directors
decides from time to time who will comprise the members of this
committee. We do not have an independent internal remuneration
committee. Remuneration for the directors and officers is
determined by shareholder resolutions. Severance allowances for
directors are determined by the board of directors in accordance
with our internal regulation on remuneration of officers, which
was also adopted by shareholder resolutions and provides for
monthly salary, performance bonus, severance payment and fringe
benefits. The amount of performance bonuses is independently
decided by a resolution of the board of directors in accordance
with internal regulations. The regulation on payment of
remuneration to company officers also provides for a special
contribution bonus upon retirement, in addition to the basic
severance package, for any officer or director who during his or
her term of service makes special contributions to the company.
We may also reimburse our independent non-executive directors
for expenses they incurred in performance of their services. See
&#147;Item&nbsp;6B. Compensation&#148;. We are currently
receiving consulting services on creating a remuneration
committee under the Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Global Committee</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This committee is a temporary committee consisting of four
directors, established on July&nbsp;29, 2005 for a period of one
year to establish and advise on our core global strategies and
business areas.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">85

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Differences in Corporate Governance Practices</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the rules of the New York Stock Exchange applicable
to foreign private issuers like us that are listed on the New
York Stock Exchange, we are required to disclose significant
differences between the New&nbsp;York Stock Exchange&#146;s
corporate governance standards and those that we follow under
Korean law. The following is a summary of such significant
differences.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>NYSE Corporate Governance Standards</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>SK Telecom Corporate Governance Practice</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Director Independence</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Listed companies must have a majority of independent directors.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Of the 11 members of our board of directors, 7 are independent
    directors.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Executive Session</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Listed companies must hold meetings solely attended by
    non-management directors to more effectively check and balance
    management directors.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Our Audit Committee, which is comprised solely of three
    independent directors, holds meetings whenever there are matters
    related to management directors, and such meetings are generally
    held once every month.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Nomination/ Corporate Governance Committee</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Listed companies must have a nomination/corporate governance
    committee composed entirely of independent directors.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Although we do not have a separate nomination/ corporate
    governance committee, we maintain an Independent Director
    Recommendation Committee composed of independent directors and
    management directors.</TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>NYSE Corporate Governance Standards</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>SK Telecom Corporate Governance Practice</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Audit Committee</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Listed companies must have an audit committee that satisfies the
    requirements of Rule&nbsp;10A-3 under the Exchange Act.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    We maintain an Audit Committee comprised solely of three
    independent directors.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Audit Committee Additional Requirements</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Listed companies must have an audit committee that is composed
    of more than three directors.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Our Audit Committee has three independent directors.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <B>Shareholder Approval of Equity Compensation Plan</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Listed companies must allow its shareholders to exercise their
    voting rights with respect to any material revision to the
    company&#146;s equity compensation plan.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    We currently have two equity compensation plans: a stock option
    plan for officers and directors and employee stock ownership
    plan for employees (&#147;ESOP&#148;). We manage such
    compensation plans in compliance with the applicable laws and
    our articles of incorporation, provided that, under certain
    limited circumstances, the grant of stock options or matters
    relating to ESOP are not subject to shareholders&#146; approval
    under Korean law.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Corporate Governance Guidelines</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Listed companies must adopt and disclose corporate governance
    guidelines.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Although we do not maintain separate corporate governance
    guidelines, we are in compliance with the Korean Commercial Law
    in connection with such matters, including the governance of the
    board of directors.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Code of Business Conduct and Ethics</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Listed companies must adopt and disclose a code of business
    conduct and ethics for directors, officers and employees and
    promptly disclose any waivers of the code for directors or
    executive officers.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    We have adopted a Code of Business Conduct and Ethics for all of
    our directors, officers and employees, and such code is also
    available on our website at www.sktelecom.com.</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">86

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='130'></A>
</DIV>

<!-- link1 "Item 6D. Employees" -->

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;6D.</B></TD>
    <TD>
    <B><I>Employees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the numbers of our regular
employees, temporary employees and total employees as of the
dates indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Regular</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Temporary</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Employees</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Employees</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    December&nbsp;31, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,921</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    December&nbsp;31, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,353</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    December&nbsp;31, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>919</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,646</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The number of our regular employees decreased in 2005 due to our
divestiture of SK Teletech.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth numbers of our regular employees
and temporary employees by categories of activity as of
December&nbsp;31, 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>New</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Marketing</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Production</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Research</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Support</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Business</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Regular Employees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,613</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,880</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>552</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,727</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Temporary Employees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>669</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>919</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,282</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>558</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,091</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>687</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,646</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, we had a company union comprised
of 5,727 regular employees. We have never experienced a work
stoppage of a serious nature. Every two years, the union and
management negotiate and enter into a new collective bargaining
agreement that has a two-year duration, which is focused on
employee benefits and welfare, except for employee wages, which
are separately negotiated on an annual basis. Our wage
negotiations completed on May&nbsp;24, 2004 resulted in an
average wage rate increase of 3.0% for 2005 from 2004. We plan
to begin wage discussions with the Company&#146;s union for 2006
in June 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since April 1999, we have been required to contribute an amount
equal to 4.5% of employee wages toward a national pension plan.
Employees are eligible to participate in an employee stock
ownership association. We are not required to, and we do not,
make any contributions to the employee stock ownership
association, although through the Employee Welfare Fund we
subsidize the employee stock ownership association by providing
low interest rate loans to employees desiring to purchase our
stock through the plan in the case of a capitalization by the
association. As of December&nbsp;31, 2005, the employee stock
ownership association owned approximately 0.36% of our issued
common stock.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are required to pay a severance amount to eligible employees
who voluntarily or involuntarily cease working for us, including
through retirement. This severance amount is based upon the
employee&#146;s length of service with us and the
employee&#146;s salary level at the time of severance. As of
December&nbsp;31, 2005, the accrued and unpaid retirement and
severance benefits of Won 256.3&nbsp;billion for all of our
employees are reflected in our non-consolidated financial
statements as a liability, of which a total of Won
187.1&nbsp;billion was funded. Under Korean laws and
regulations, we are prevented from involuntarily terminating a
full-time employee except under certain limited circumstances.
In September 2002, we entered into an employment stabilization
agreement with the union. Among other things, this agreement
provides for a one-year guarantee of the same wage level in the
event that we reorganize a department into a separate entity or
we outsource an employee to a separate entity where the wage is
lower. If the new entity is a subsidiary of which we own at
least a 50% stake, employment is guaranteed for three years.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Intra-Company Labor Welfare Fund&nbsp;Law, we
may also contribute up to 5% of our annual earnings before tax
for employee welfare. We contributed 3% of our revenues annually
for years prior to 2002. Beginning in 2003, we have decided to
negotiate an exact amount each year as necessary. In 2003 and
2004, we did not negotiate contribution amounts for year 2002
and 2003, respectively. We negotiated the contribution amount
for 2004 in the latter half of 2005, which amounts to 0.93% of
our annual earnings before tax, or Won 23.8&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We consider our relations with our employees to be good.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">87

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='131'></A>
</DIV>

<!-- link1 "Item 6E. Share Ownership" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;6E.</B></TD>
    <TD>
    <B><I>Share Ownership</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the share ownership by our
standing and non-standing directors as of April&nbsp;30, 2006:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Special</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Voting</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Position</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Owned</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rights</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Options</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><I>Standing Directors</I>:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jung Nam Cho</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Vice-Chairman and Representative</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,150</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Director</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shin Bae Kim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>CEO and Representative Director</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,650</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bang Hyung Lee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Executive Vice-President</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,620</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sung Min Ha</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>738</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>690</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><I>Non-Standing Directors</I>:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dae Sik Kim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Yong Woon Kim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dae Kyu Byun</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Seung Taik Yang</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Jae Seung Yoon</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sang C. Lee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Hyun Chin Lim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Independent Non-executive Director</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>None</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    Less than 1.0%</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">88
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='132'></A>
</DIV>

<!-- link1 "Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;7.</B></TD>
    <TD>
    <B><I>MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<A name='133'></A>
</DIV>

<!-- link1 "Item 7A. Major Shareholders" -->

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;7A.</B></TD>
    <TD>
    <B><I>Major Shareholders</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, approximately 51.3% of our issued
shares were held in Korea by approximately
20,000&nbsp;shareholders. The following table sets forth certain
information as of the close of our shareholders&#146; registry
on December&nbsp;31, 2005 with respect to any person known to us
to be the beneficial owner of more than 5.0% of the shares of
our common stock and with respect to the total amount of such
shares owned by our employees and our officers and directors, as
a group:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="56%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="left" nowrap><B>Shareholder/Category</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Issued</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Domestic Shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Group(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,748,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.79</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.47</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    POSCO</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,991,496</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.06</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employees(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>297,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.40</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury shares(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,662,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Officers and Directors</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other Domestic Shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,466,681</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.58</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign Shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,105,726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54.48</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Issued Shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    The SK Group&#146;s ownership interest consists of the following
    as of December&nbsp;31, 2005:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>SK Group Member</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Issued</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,663,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.47</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Securities Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Networks</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,085,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.47</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,748,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.79</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.47</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    The SK Group is a group of affiliated entities. As of
    December&nbsp;31, 2005, the ownership interests among the SK
    Group included, among others:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SK Corporation owned: 21.47% of SK Telecom Co., Ltd., 40.97% of
    SK Networks, 46.22% of SKC and 72.13% of SK Shipping Co., Ltd.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SK Networks owned 1.32% of SK Telecom Co., Ltd., 17.71% of SK
    Shipping, 15% of SK Computer&nbsp;&#38; Communications Co.,
    Ltd., and 22.71% of SK Securities Co., Ltd.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SK Chemicals owned 0.83% of SK Corporation and 39.40% of SK
    Engineering and Construction.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SKC owned 6.2% of SK Chemicals, 10.16% of SK Shipping Co., Ltd.
    and 12.41% of SK Securities Co., Ltd.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SK Shipping Co., Ltd. owned 30.94% of SK Engineering and
    Construction.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    SK Computer&nbsp;&#38; Communications Co., Ltd. owned 11.16% of
    SK Corporation.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    We owned 30.0% of SK Computer&nbsp;&#38; Communications Co., Ltd.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Represents shares owned by our employee stock ownership
    association. See &#147;Item&nbsp;6D. Employees&#148;.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">89

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Treasury shares do not have any voting rights; includes
    1,777,173 treasury shares that were deposited with Korea
    Securities Depository to be reserved and used to satisfy the
    conversion rights of the holders of US$329.5&nbsp;million in
    zero coupon convertible notes that were sold in May 2004.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth significant changes in the
percentage ownership held by our major shareholders during the
past three years:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>As of December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Shareholder</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As a percentage of total</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>issued shares)(1)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Group</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.60</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.03</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.79</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.47</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Networks(2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.32</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    POSCO(3)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.64</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Includes 8,662,403, 8,662,415 and 8,662,415&nbsp;shares held in
    treasury as of December&nbsp;31, 2003, 2004 and 2005,
    respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    SK Networks sold 418,000&nbsp;shares in January 2004 and
    currently owns 1,085,325&nbsp;shares.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    POSCO acquired these shares in connection with our acquisition
    of a 27.7% equity interest in Shinsegi.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other than companies in the SK Group and POSCO, no other persons
or entities known by us to be acting in concert, directly or
indirectly, jointly or severally, own in excess of 5.0% of our
total shares outstanding or exercise control or could exercise
control over our business.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;30, 2006, SK Corporation held 21.47% of our shares
of common stock. For a description of our foreign ownership
limitation, see &#147;Item&nbsp;3D. Risk Factors&nbsp;&#151; If
SK Corporation causes us to breach the foreign ownership
limitations on shares of our common stock, we may experience a
change of control.&#148; and &#147;Item&nbsp;4B. Business
Overview&nbsp;&#151; Law and Regulation&nbsp;&#151; Foreign
Ownership and Investment Restrictions and Requirements&#148;. As
a result of significant financial difficulties and
prosecutors&#146; discovery of alleged fraudulent accounting
practices at SK Networks, SK Networks sold 418,000 of the shares
it owns in SK Telecom in January 2004. In December 2005, SK
Networks disposed of additional shares of our common stock. As a
result of such sale, SK Networks currently owns 1.32% of our
shares. In the event that either SK Corporation or SK Networks
announces plans of a sale of our shares, we expect to be able to
discuss the details of such sale with them in advance and will
endeavor to minimize any adverse effects on our share prices as
a result of such sale.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There is currently a 49% limit on the aggregate foreign
ownership of our issued shares. As of December&nbsp;31, 2005, SK
Corporation owns 17,663,127&nbsp;shares of our common stock, or
approximately 21.47%, of our issued shares. As of
December&nbsp;31, 2005, a foreign investment fund and its
related parties collectively held a 5.03% stake in SK
Corporation. Under a newly adopted amendment to the
Telecommunications Business Law, which became effective on
May&nbsp;9, 2004, a Korean entity, such as SK Corporation, is
deemed to be a foreign entity if its largest shareholder
(determined by aggregating the shareholdings of such shareholder
and its related parties) is a foreigner and such shareholder
(together with the shareholdings of its related parties) holds
15% or more of the outstanding voting stock of the Korean
entity. Thus, effective from May&nbsp;9, 2004, if the foreign
investment fund and its related parties increased their
shareholdings in SK Corporation to 15% or more and such foreign
investment fund and its related parties collectively constituted
the largest shareholder of SK Corporation, SK&nbsp;Corporation
would have been considered a foreign shareholder of SK Telecom,
and its shareholding in SK&nbsp;Telecom would have been included
in the calculation of the aggregate foreign shareholding of SK
Telecom.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If SK Corporation&#146;s shareholding in SK Telecom were
included in the calculation of the aggregate foreign
shareholding of SK Telecom, then the aggregate foreign
shareholding in SK Telecom assuming foreign ownership level as
of December&nbsp;31, 2005 (which we believe was 48.74%), would
have reached 70.21%, exceeding the 49% ceiling on foreign
shareholding. If the aggregate foreign shareholding limit in SK
Telecom is exceeded, the MIC may issue a corrective order to SK
Telecom, the breaching shareholder (including SK Corporation if
the breach is caused by an increase in foreign ownership of SK
Corporation) and any foreign investment fund and its related
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">90

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
parties who may own in the aggregate 15% or more of SK
Corporation. Furthermore, SK Corporation may not exercise its
voting rights with respect to the shares held in excess of the
49% ceiling, which may result in a change in control of us. In
addition, the MIC may refuse to grant us licenses or permits
necessary for entering into new telecommunications businesses
until the aggregate foreign shareholding of SK Telecom is
reduced to below 49%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If a corrective order is issued to us by the MIC arising from
the violation of the foregoing foreign ownership limit, and we
do not comply within the prescribed period under such corrective
order, the MIC may (1)&nbsp;suspend all or part of our business,
or (2)&nbsp;if the suspension of business is deemed to result in
significant inconvenience to our customers or be detrimental to
the public interest, impose a one-time administrative penalty of
up to 3% of our sales revenues. The amendment to the
Telecommunications Business Law in May 2004 also authorizes the
MIC to assess monetary penalties of up to 0.3% of the purchase
price of the shares for each day the corrective order is not
complied with, as well as a prison term of up to one year and a
penalty of Won 50&nbsp;million. See &#147;Item&nbsp;3D. Risk
Factors&nbsp;&#151; If SK Corporation causes us to breach the
foreign ownership limitations on shares of our common stock, we
may experience a change of control.&#148; and
&#147;Item&nbsp;4B. Business Overview&nbsp;&#151; Law and
Regulation&nbsp;&#151; Foreign Ownership and Investment
Restrictions and Requirements&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;11, 2003 we concluded a stock buyback program
which we had commenced on June&nbsp;30, 2003. We acquired a
total of 2,544,600&nbsp;shares of our then-outstanding common
stock, all of which were cancelled on August&nbsp;20, 2003. The
total purchase price for the stock buyback was Won
525.2&nbsp;billion (or an average of approximately Won
206,388&nbsp;per share), with the price per share ranging from
Won 192,000 (on July&nbsp;24, 2003) to Won 216,000 (on July 15
and&nbsp;16, 2003). As a result of the stock buyback and
subsequent cancellation of shares, the total number of our
outstanding common stock declined from 82,993,404 as of
December&nbsp;31, 2001 to 73,614,308 as of December&nbsp;31,
2003. On February&nbsp;20, 2004, we additionally acquired
fractional shares totaling 12&nbsp;shares for Won
12&nbsp;million, which resulted from the merger of
SK&nbsp;IMT&nbsp;Co.,&nbsp;Ltd. into SK&nbsp;Telecom in May
2003. As of April&nbsp;30, 2006, the total number of shares of
our common stock outstanding was 73,614,296.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other than as disclosed herein, there are no other arrangements,
to the best of our knowledge, which would result in a material
change in the control of us. Our major shareholders do not have
different voting rights.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='134'></A>
</DIV>

<!-- link1 "Item 7B. Related Party Transactions" -->

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    <TD width="91%"></TD>
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<TR valign="top">
    <TD><B>Item&nbsp;7B.</B></TD>
    <TD>
    <B><I>Related Party Transactions</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SK Networks</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are a party to several contracts with SK Networks, including
a series of sale and purchase agreements pursuant to which we
and our former subsidiary, SK Teletech, sell handsets to SK
Networks. The aggregate sales to SK Networks pursuant to these
contracts were Won 481.2&nbsp;billion in 2003, Won
581.6&nbsp;billion in 2004 and Won&nbsp;279.2&nbsp;billion in
the first half of 2005 until our divestiture of SK Teletech.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If SK Networks is required to sell off its leased line business,
this may result in a disruption of the service provided to us.
However, we currently believe that it is not likely that its
creditors will require SK Networks to sell this business unit.
In 2005, KT Corporation and SK Networks provided approximately
16% and 62%, respectively, of our leased lines.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SK Networks also serves as our distributor of handsets to a
network of dealers. Samsung Electronics Co., Ltd., LG
Electronics Inc, Motorola Korea, Inc. and Pantech&nbsp;&#38;
Curitel suspended their supply of handsets to SK&nbsp;Networks
on April&nbsp;7, 2003. In May 2003, all suppliers resumed their
supply of handsets on the condition that payment on their mobile
phones be made in cash within one week of delivery. Previously,
SK Networks issued three-month promissory notes for payment to
handset suppliers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, we had Won 1.8&nbsp;billion of
accounts receivables from SK Network. As of the same date, we
had Won 22.2&nbsp;billion of accounts payable to SK Networks,
mainly consisting of leased line charges and commissions to
dealers owned by SK Networks. For more information on SK
Networks, see &#147;Item&nbsp;3D. Risk Factors&nbsp;&#151;
Financial difficulties and charges of financial statement
irregularities at our affiliate, SK Networks (formerly SK
Global), may cause disruption in our business.&#148;
</DIV>

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<B>Other Related Parties</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are party to several contracts with SK Engineering and
Construction related to the construction of our new
headquarters. The construction of our new headquarters was
completed at the end of 2004. The total paid to SK
Engineering&nbsp;&#38; Construction Co., Ltd., for the
demolition of buildings on the site on which our new
headquarters was constructed and the construction of our new
headquarters was Won 209&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;22, 2003, we acquired 2,481,310&nbsp;shares of
POSCO common stock held by SK Corporation at a price of Won
134,000&nbsp;per share in accordance with a resolution of our
board of directors dated July&nbsp;22, 2003. We decided to
purchase the shares for strategic reasons in order to address
overhang concerns arising from POSCO&#146;s ownership of our
shares. As of December&nbsp;31, 2005, POSCO owned 3.64% of our
shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are party to an agreement with SKC&#38;C pursuant to which
SKC&#38;C provides us with information technology services. This
agreement will expire on December&nbsp;31, 2009 but may be
terminated by us at any time without cause on six months&#146;
prior notice. The agreement provides that the parties will agree
annually on the specific services to be provided and the monthly
fees to be paid by us. We also enter into agreements with
SKC&#38;C from time to time for specific information
technology-related projects. The aggregate fees we paid to
SKC&#38;C for information technology services amounted to Won
284.3&nbsp;billion for 2003, Won 295.6&nbsp;billion for 2004 and
Won 322.9&nbsp;billion for 2005. We also purchase various
information technology-related equipment from SKC&#38;C from
time to time. The total amount of such purchases was Won
182.8&nbsp;billion for 2003, Won&nbsp;130.2&nbsp;billion for
2004 and Won 249.6&nbsp;billion for 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are part of the SK Group of affiliated companies. See
&#147;Item&nbsp;7A. Major Shareholders&#148; As disclosed in
note&nbsp;24 of our consolidated financial statements, we had
related party transactions with a number of affiliated companies
of the SK Group during the year ended December&nbsp;31, 2005. In
October 2003, the FTC ordered us to pay a fine of Won
5.1&nbsp;billion in connection with our payment of
advertisements on behalf of certain companies in the SK Group.
We paid the fine in December 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In September 1994, we provided DSS Mobile Communications, Ltd.,
a guarantee of a loan from Sumitomo Bank in the amount of
US$18,118,863. We paid the loan obligation of DSS Mobile
Communications, Ltd. to Sumitomo Bank in 2001 and have a claim
against DSS Mobile Communications, Ltd. for such payment.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All other loans were made in the ordinary course of business, on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with unrelated persons and did not involve more
than the normal risks of non-collection or present other
unfavorable features.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In September 2005, we sold all of our shares of Cowon Systems,
Inc. (&#147;Cowon&#148;) in the public market for Won
2.6&nbsp;billion. Prior to such disposition, our equity interest
in Cowon was 6.2%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2005, we invested Won 25.6&nbsp;billion to acquire an
additional 5,122,266&nbsp;shares of common stock of TU Media to
increase our equity interest to 29.6%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have been providing CDMA cellular service in Vietnam since
2003 through our overseas subsidiary, SLD Telecom PTE Ltd. In
November 2005, our board of directors approved an additional
US$280&nbsp;million investment to expand our network coverage to
all Vietnam. As of January&nbsp;31, 2006, we had invested
US$100&nbsp;million in this expansion project through the
acquisition of 100&nbsp;million additional shares of SLD Telecom
PTE&#146;s unissued common stock for such amount.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='135'></A>
</DIV>

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    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;7C.</B></TD>
    <TD>
    <B><I>Interest of Experts and Counsel</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
</DIV>

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<A name='136'></A>
</DIV>

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    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;8.</B></TD>
    <TD>
    <B><I>FINANCIAL INFORMATION</I></B></TD>
</TR>

</TABLE>

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<A name='137'></A>
</DIV>

<!-- link1 "Item 8A. Consolidated Statements and Other Financial Information" -->

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    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;8A.</B></TD>
    <TD>
    <B><I>Consolidated Statements and Other Financial
    Information</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See &#147;Item&nbsp;18. Financial Statements&#148; and pages F-1
through F-82.
</DIV>

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<B>Legal Proceedings</B>
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

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    <TD></TD>
    <TD>
    <B><I>FTC Proceedings</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2003, the FTC ordered us, SK Corporation and
SKC&#38;C to pay fines of Won 1.0&nbsp;billion,
Won&nbsp;0.9&nbsp;billion and Won 0.9&nbsp;billion,
respectively, in connection with loans extended to SK Life. FTC
charged that the interest on the loans was below market-price.
We paid the fine in December 2003. The Seoul High Court, an
appellate court, also found in favor of the FTC, but we have
filed an appeal at the Supreme Court of Korea, as we believe
that the interest on the loans was not below the interest rates
customarily charged in the market. The appeal is currently
pending.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2003, the FTC ordered us to pay a fine of Won
4.1&nbsp;billion in connection with our payment of
advertisements on behalf of certain companies in the SK Group.
We paid the fine in December 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2004, the FTC ordered us to pay a fine of Won
228&nbsp;million for certain allegedly misleading advertisements
made by us with respect to our competition and the nature of our
services, which we paid in full in May 2004. LGT and KTF were
also fined in connection with related offenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2006, the FTC ordered us to pay a fine of Won
660&nbsp;million for price collusion with KTF and LGT. The FTC
charged that we, along with KTF and LGT, engaged in unfair
business practices in 2004 by agreeing to discontinue flat-rate
services. KTF and LGT were also fined Won 660&nbsp;million and
Won 462&nbsp;million, respectively. We expect the FTC to
announce additional rulings on alleged collusion among mobile
service providers. We cannot predict the ultimate outcome of the
investigation.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>MIC Proceedings</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;26, 2003, we were ordered by the MIC to pay a fine
of Won 300&nbsp;million and to make public announcements in four
major newspapers for violating certain provisions of the
Telecommunications Business Act by not entering into written
contracts with and checking personal identification of
subscribers for subscription of pre-paid wireless handsets,
which is required to prevent handsets from being used for
criminal purposes. KTF and LGT were also fined Won
200&nbsp;million and Won 120&nbsp;million, respectively, for the
same violations. We made such payment and such public
announcements in April 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In February 2004, the MIC imposed a total fine of Won
2.0&nbsp;billion on us in connection with our marketing efforts
related to the number portability system that was adopted by us
in January 2004. The fine was imposed in response to
(i)&nbsp;the adoption of a voice recording identifying our
network upon connection of each outgoing call made on our
network without the consent of our subscribers and
(ii)&nbsp;&#147;reverse-marketing&#148; calls made between
January&nbsp;1, 2004 and January&nbsp;9, 2004 informing our
subscribers of benefits that they would lose by switching to
another operator. We were ordered to make public announcements
of these violations in major newspapers in Korea. In February
2004, the MIC also imposed fines of Won 250&nbsp;million and Won
150&nbsp;million on KTF and LGT, respectively, for their failure
to accept cancellations of service by certain of their
subscribers. We made such payment in March 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In February 2004, the MIC imposed upon us a fine of Won
21.7&nbsp;billion with respect to other incentive payments that
were deemed by the MIC to constitute improper handset subsidies
and thereby disrupt fair competition. We paid the fine in March
2004. In February 2004, KTF and KT Corporation were also fined
Won 7.5&nbsp;billion and Won 4.1&nbsp;billion, respectively, in
respect of such incentive payments. We filed an appeal, but the
MIC upheld the fine in April 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April 2004, the MIC ordered us, KTF, KT Corporation and LGT,
to pay fines of Won 650&nbsp;million, Won 170&nbsp;million, Won
20&nbsp;million and Won 100&nbsp;million, respectively, for
failing to establish sufficient safeguards against the execution
of telecommunications service contracts by users using false
names. We were found to have
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
conveyed payment delinquency information to credit rating
companies without confirming that the names on the service
contracts belonged to the actual users of our services. We,
along with KTF, KT Corporation and LGT, were ordered to publish
the violations in newspapers. We complied with such order and
made such payment.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, when the MIC approved the merger of Shinsegi into
us in January 2002, the MIC imposed certain conditions on us.
The MIC periodically reviews our compliance with the conditions
related to our merger with Shinsegi. On May&nbsp;25, 2004, a
policy advisory committee to the MIC announced the results of
its review and stated that the committee believed that our
market dominance may significantly restrict competition in the
telecommunications market and that we have violated the
conditions related to our merger with Shinsegi by providing
subsidies to handset buyers. In June 2004, the MIC imposed a Won
11.9&nbsp;billion fine on us and extended the post-merger
monitoring period until January 2007 pursuant to the policy
advisory committee&#146;s recommendation. On May&nbsp;25, 2004,
we voluntarily undertook to limit our market share through the
end of 2005 to 52.3% of the wireless telecommunications market,
the level of our market share at the time of the approval of our
merger with Shinsegi in January 2002. We can give no assurance
that the MIC will not take action that may have a material
adverse effect on our business, operations and financial
condition. See &#147;Item&nbsp;3D. Risk Factors&nbsp;&#151; Our
businesses are subject to extensive government regulation and
any change in government policy relating to the
telecommunications industry could have a material adverse effect
on our results of operations and financial condition.&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;7, 2004, the MIC prohibited us from acquiring new
subscribers for a period of 40&nbsp;days beginning on
August&nbsp;20, 2004. The MIC also prohibited other
telecommunications companies from acquiring new subscribers for
periods ranging from 20 to 30&nbsp;days. KTF was issued a
<FONT style="white-space: nowrap">30-day</FONT> suspension
beginning on July&nbsp;21, 2004; LGT was issued a
<FONT style="white-space: nowrap">30-day</FONT> suspension
beginning on June&nbsp;21, 2004; and KT Corporation was issued a
<FONT style="white-space: nowrap">20-day</FONT> suspension
beginning on July&nbsp;21, 2004. These suspensions resulted from
MIC&#146;s determination that we violated the ban on providing
subsidies to handset purchasers. During the suspensions, each
company was able to continue regular business activities,
including replacement of handsets, changes in user names,
changes in mobile phone numbers and changes in tariff plans
applicable to the existing subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;29, 2004, the MIC ordered us, KTF and LGT to
pay fines of Won 7.5&nbsp;billion, Won 2&nbsp;billion and Won
600&nbsp;million, respectively, with respect to our payment of
improper handset subsidies. We were more heavily fined than the
other two companies as the FTC found that our efforts to remedy
such violations were not sufficient and that our payment of such
subsidies was in violation of the conditions related to our
merger with Shinsegi in January 2002. We made such payment in
January 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;21, 2005, the MIC ordered us, KTF and LGT to pay
fines of Won 1.4&nbsp;billion, Won 360&nbsp;million and Won
230&nbsp;million, respectively, for changing calling plans and
adding value-added services to the subscribers without obtaining
express consents of such subscribers. We paid such fine in April
2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2005 and September 2005, the MIC ordered us to pay fines
of Won 23.1&nbsp;billion and Won 9.3&nbsp;billion, respectively,
with respect to our payment of improper handset subsidies. In
May 2005, LGT and KTF were also fined Won 2.7&nbsp;billion and
Won 1.1&nbsp;billion, respectively, and in September 2005, KTF
was fined Won 5.3 billion, in respect of improper subsidy
payments. We were more heavily fined than the other two
companies as the FTC found that our efforts to remedy such
violations were not sufficient and that our payment of such
subsidies was in violation of the conditions related to our
merger with Shinsegi in January 2002.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2005, the MIC ordered us to pay fines of Won
1.5&nbsp;billion, alleging that we have denied our competitors
equal access to our wireless Internet network. We paid such
fines in November 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2005, the MIC ordered us to pay fines of Won
540&nbsp;million, alleging that our wireless Internet NATE
service menu was overly complex. KTF and LGT were also fined Won
140&nbsp;million and Won 90&nbsp;million on the same grounds. We
paid such fines in December 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2006 and April 2006, the MIC ordered us to pay fines of
Won 13.8&nbsp;billion and Won 7.8&nbsp;billion, respectively,
with respect to our payment of improper handset subsidies. In
March 2006 and April 2006, KTF and LGT were also fined Won
3.7&nbsp;billion and Won 1.5&nbsp;billion and Won
2.1&nbsp;billion and Won 700&nbsp;million, respectively, in
respect of improper subsidy payments. We paid Won
13.8&nbsp;billion in March 2006 and Won 7.8&nbsp;billion in May
2006.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">94

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2006, the MIC ordered us to pay fines of Won
1.1&nbsp;billion, alleging that we had improperly solicited
subscribers to our
<FONT style="white-space: nowrap">value-added</FONT> services.
KTF and LGT were also fined Won 290&nbsp;million and Won
130&nbsp;million, respectively on the same grounds. We paid such
fines in June 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In June 2006, the MIC ordered us, LGT, KTF and KT to pay fines
of Won 42.6&nbsp;billion, Won 15.0&nbsp;billion, Won
12.0&nbsp;billion and Won 0.4&nbsp;billion, respectively, with
respect to payments of improper handset subsidies. We plan to
pay such fines in July 2006.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Multinet Litigation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2002, Korea Multinet Inc. (&#147;Multinet&#148;)
filed a lawsuit against the MIC in the Seoul Administrative
Court to revoke the MIC&#146;s registration with the
International Telecommunication Union for the frequency spectrum
necessary for DMB businesses. Multinet had been previously
granted the right to use this frequency by the MIC, but their
right had been granted on the condition that Multinet would
renounce its right to use the frequency upon implementation of a
DMB business (to the extent necessary for the operation of our
DMB business) and that Multinet would comply with any directive
of the MIC to reallocate the frequency. The Seoul Administrative
Court ruled in favor of the MIC in December 2002. Multinet filed
an appeal with the Seoul High Court, but the Seoul High Court
ruled in favor of the MIC in June 2004. Multinet again appealed
the case and the case is now pending in the Supreme Court of
Korea.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2004, the MIC released a public notice announcing its
allotments of frequency for satellite DMB. In accordance with
such announcement, we were assigned a frequency and a license to
run a DMB business as a network service operator. In June 2004,
Multinet filed a lawsuit against the MIC in the Seoul
Administrative Court demanding revocation of the public notice.
In September 2004, Multinet also filed a lawsuit against the MIC
in the Seoul Administrative Court seeking revocation of our
assigned satellite DMB frequency to us, as well as revocation of
our satellite DMB business license. In July 2005, these two
lawsuits were consolidated by the Seoul Administrative Court and
are currently pending in the court of first instance.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2004, in connection with the above lawsuits,
Multinet sought injunctive relief in the Seoul Administrative
Court to suspend the MIC&#146;s allocation of satellite DMB
frequency and granting of the satellite DMB business license to
us. The court of first instance ruled against Multinet, which
decision was upheld in the appellate court following
Multinet&#146;s appeal. In June 2005, the Supreme Court upheld
the prior rulings against Multinet.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Coloring Litigation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2002, in connection with certain technology we use
to provide our coloring service, Mr.&nbsp;Park Won-Seop filed a
lawsuit against us in the Seoul Central District Court. In the
lawsuit, Mr.&nbsp;Park alleged that our coloring service
infringed upon his patent rights. While the lawsuit is currently
pending before the Seoul Central District Court, we sought an
administrative action to nullify Mr.&nbsp;Park&#146;s patent
rights in the Intellectual Property Tribunal. The Tribunal
upheld the nullification of Mr.&nbsp;Park&#146;s patent rights.
Mr.&nbsp;Park withdrew his appeal before the Patent Court in
January 2006, and the case has been abandoned.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>GNI Enterprise Litigation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On October&nbsp;18, 2002, GNI Enterprise Inc. filed a lawsuit
against SK Communications, our subsidiary, asserting that Lycos
Korea, which was subsequently merged into SK Communications in
December 2002, had illegally terminated a license agreement
granting GNI Enterprise the right to use the Lycos brand name in
Korea.&nbsp;The court of first instance ruled against GNI, which
decision was upheld in the appellate court following GNI&#146;s
appeal. The case is currently pending before the Supreme Court.
In addition, in a lawsuit filed on November&nbsp;15, 2002, GNI
asserted that the merger of Netsgo Co., Ltd. into SK
Communications was invalid. On January&nbsp;11, 2004, GNI
withdrew its claims and the suit was terminated.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except as described above, neither we nor any of our
subsidiaries are involved in any litigation, arbitration or
administrative proceedings relating to claims which may have, or
have had during the twelve months preceding the date hereof, a
significant effect on our financial position or the financial
position of our subsidiaries taken as a
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">95
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
whole, and, so far as we are aware, no such litigation,
arbitration or administrative proceedings are pending or
threatened.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Dividends</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Annual dividends, if any, on our outstanding shares must be
approved at the annual general meeting of shareholders. This
meeting is generally held in March of the following year, and
the annual dividend is generally paid shortly after the meeting.
Since our shareholders have discretion to declare annual
dividends, we cannot give any assurance as to the amount of
dividends per share or that any dividends will be declared at
all. Interim dividends, if any, can be approved by a resolution
of our board of directors. Once declared, dividends must be
claimed within five years, after which the right to receive the
dividends is extinguished.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We pay cash dividends to the ADR depositary in Won.&nbsp;Under
the terms of the deposit agreement, cash dividends received by
the ADR depositary generally are to be converted by the ADR
depositary into Dollars and distributed to the holders of the
ADSs, less withholding tax, other governmental charges and the
ADR depositary&#146;s fees and expenses. The ADR
depositary&#146;s designated bank in Korea must approve this
conversion and remittance of cash dividends. See
&#147;Item&nbsp;10D. Exchange Controls&nbsp;&#151; Korean
Foreign Exchange Controls and Securities Regulations&#148; and
&#147;Item&nbsp;10E. Taxation&nbsp;&#151; Korean Taxation&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the dividend per share, the
aggregate total amount of dividends, as well as the number of
outstanding shares entitled to dividends to the shareholders of
record on December&nbsp;31 of the years indicated. The dividends
set out for each of the years below were paid in the immediately
following year.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Number of Shares</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Dividend</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Total Amount of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Entitled to</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year Ended December&nbsp;31,</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Dividends</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Dividend</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(In won)(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(In billions of won)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1997</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,169,720</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1998</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,258,670</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1999</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>83,284,110</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>540</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,079,034</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>690</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,993,404</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>151.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84,299,698</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>404.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,308</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>758.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>662.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Dividend per share and amount of shares entitled to dividend
    have been adjusted to give effect to the
    <FONT style="white-space: nowrap">10-for-1</FONT> stock split of
    our common shares which became effective on April&nbsp;21, 2000.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We distribute dividends to our shareholders in proportion to the
number of shares owned by each shareholder. The common shares
represented by the ADSs have the same dividend rights as other
outstanding common shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Holders of non-voting shares are entitled to receive dividends
in priority to the holders of common shares. The dividend on the
non-voting shares is between 9.0% and 25.0% of the par value as
determined by the board of directors at the time of their
issuance. If the dividends for common shares exceed the
dividends for non-voting shares, the holders of non-voting
shares will be entitled to participate in the distribution of
such excess amount with the holders of common shares. If the
amount available for dividends is less than the aggregate amount
of the minimum required dividend, holders of non-voting shares
will be entitled to receive such accumulated unpaid dividend
from dividends payable in the next fiscal year before holders of
common shares. There are no non-voting shares issued or
outstanding.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Commercial Code, we may pay an annual dividend
only out of the excess of our net assets, on a non-consolidated
basis, over the sum of (1)&nbsp;our stated capital and
(2)&nbsp;the total amount of our capital surplus reserve and
legal reserve accumulated up to the end of the relevant dividend
period. In addition, we may
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">96
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
not pay an annual dividend unless we have set aside as a legal
reserve an amount equal to at least 10% of the cash portion of
the annual dividend or until we have accumulated a legal reserve
of not less than one-half of our stated capital. As a KRX Stock
Market-listed company, we are also required under the relevant
laws and regulations to set aside in reserve a certain amount
each fiscal year until the ratio of our own capital to total
assets is at least 30%. We may not use our legal reserve to pay
cash dividends but may transfer amounts from our legal reserve
to capital stock or use our legal reserve to reduce an
accumulated deficit.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the Korean Commercial Code and our articles of
incorporation provide that, in addition to annual dividends, we
may pay interim dividends once during each fiscal year. Unlike
annual dividends, the decision to pay interim dividends can be
made by a resolution of the board of directors and is not
subject to shareholder approval. Any interim dividends must be
paid in cash to the shareholders of record as of June&nbsp;30 of
the relevant fiscal year. In August 2005, we distributed such
interim dividends at Won 1,000&nbsp;per share to our
shareholders for a total amount of Won 73.6&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Securities and Exchange Act, the total amount
of interim dividends payable in a fiscal year shall not be more
than the net assets on the balance sheet of the immediately
preceding fiscal year, after deducting (1)&nbsp;a company&#146;s
capital in the immediately preceding fiscal year, (2)&nbsp;the
aggregate amount of its capital reserves and legal reserves
accumulated up to the immediately preceding fiscal year,
(3)&nbsp;the amount of earnings for dividend payments confirmed
at the general shareholders&#146; meeting with respect to the
immediately preceding fiscal year and (4)&nbsp;the amount of
legal reserve that should be set aside for the current fiscal
year following the interim dividend payment. Furthermore, the
rate of interim dividends for non-voting shares must be the same
as that for our common shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our obligation to pay interim dividends expires if no claims to
such dividends are made for a period of five years from the
payment date.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='138'></A>
</DIV>

<!-- link1 "Item 8B. Significant Changes" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;8B.</B></TD>
    <TD>
    <B><I>Significant Changes</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='139'></A>
</DIV>

<!-- link1 "Item 9. THE OFFER AND LISTING" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="8%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;9.</B></TD>
    <TD>
    <B><I>THE OFFER AND LISTING</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<A name='140'></A>
</DIV>

<!-- link1 "Item 9A. Offering and Listing Details" -->

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;9A.</B></TD>
    <TD>
    <B><I>Offering and Listing Details</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These matters are described under Item&nbsp;9C below where
relevant.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='141'></A>
</DIV>

<!-- link1 "Item 9B. Plan of Distribution" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;9B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Plan of
Distribution</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='142'></A>
</DIV>

<!-- link1 "Item 9C. Markets" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;9C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Markets</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The principal trading market for our common stock is the KRX
Stock Market. As of December&nbsp;31, 2005,
73,614,296&nbsp;shares of our common stock were outstanding.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ADSs are traded on the New York Stock Exchange and the
London Stock Exchange. The ADSs have been issued by the ADR
depositary and are traded on the New York Stock Exchange under
the symbol &#147;SKM&#148;. Each ADS represents one-ninth of one
share of common stock. As of December&nbsp;31, 2005, ADSs
representing 22,491,046&nbsp;shares of our common stock were
outstanding.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">97

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Shares of Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the high, low and closing prices
and the average daily trading volume of the shares of common
stock on the KRX Stock Market since January&nbsp;1, 2001:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="center" nowrap><B>Prices(1)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Average Daily</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Trading Volume</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3" align="left" nowrap><B>Calendar Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>High(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Low(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Close</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(Number of Shares)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(Won per share)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>295,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>165,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>242,254</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>293,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>182,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>253,393</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>235,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>165,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>312,070</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>233,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>184,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>208,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>154,785</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>295,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>250,676</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>299,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>209,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>229,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>261,482</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>299,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>242,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>290,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>263,168</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>292,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>239,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>269,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>227,115</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>279,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>209,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>237,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>241,154</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>252,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>229,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>314,019</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>235,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>327,689</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>235,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>153,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>497,115</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>210,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>157,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>204,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>298,346</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>216,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>184,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>267,821</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>212,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>185,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>247,332</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>238,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>154,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>179,712</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>238,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>243,681</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>213,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>179,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>190,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188,095</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>186,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>154,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>175,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,559</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>205,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>174,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>151,903</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>216,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>187,053</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>203,869</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>182,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,021</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>216,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>202,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>156,019</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>209,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>249,550</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006 (through June&nbsp;26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>237,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>176,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197,780</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>204,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>176,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>177,491</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    January</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>176,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>221,563</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    February</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>204,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>189,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>202,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,075</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>203,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>187,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113,984</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter (through June&nbsp;26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>237,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,204</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>222,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>221,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>262,914</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    May</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>237,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>225,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>182,659</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    June (through June&nbsp;26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>234,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>193,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214,127</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Source: KRX
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Both high and low prices are based on the daily closing prices
    for the period.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">98
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>American Depositary Shares</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the high, low and closing prices
and the average daily trading volume of the ADSs on the New York
Stock Exchange since January&nbsp;1, 2001:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="center" nowrap><B>Prices(1)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Average Daily</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Trading Volume</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3" align="left" nowrap><B>Calendar Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>High(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Low(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Close</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(Number of Shares)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(US$ per ADS)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(Number of ADSs)</B></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>710,410</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>743,602</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>817,532</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>655,302</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>623,611</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>684,421</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>488,958</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>555,865</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>963,578</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>717,859</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>743,316</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>971,259</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>723,959</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>724,406</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>564,023</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>911,823</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,331,177</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>832,175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>768,117</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>727,683</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>882,342</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>798,390</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>618,870</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,071,227</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,039,398</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006 (through June&nbsp;26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>983,033</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>952,819</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    January</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,123,040</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    February</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,096,226</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>686,335</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter (through June&nbsp;26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,015,329</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>874,747</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    May</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,577</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    June (through June&nbsp;26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,097,071</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Source: New York Stock Exchange
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Both high and low prices are based on the daily closing prices
    for the period.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">99
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>The Korean Securities Market</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The Korea Exchange Inc.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With the enactment of the Korea Stock and Futures Exchange Act,
which came into effect on January&nbsp;27, 2005, the three
existing spot and futures exchanges (which were the Korea Stock
Exchange, Korean Futures Exchange, and KOSDAQ) and KOSDAQ
Committee, a sub-organization of Korea Securities Dealers
Association, were merged and integrated into the Korea Exchange,
Inc. (the &#147;KRX&#148;) as a joint stock company. There are
three different markets run by the KRX: the KRX Stock Market,
the KRX KOSDAQ Market, and the Futures Market (the &#147;KRX
Futures Market&#148;). The KRX has two trading floors located in
Seoul, one for the KRX Stock Market and one for the KRX KOSDAQ
Market, and one trading floor in Busan for the KRX Futures
Market. Currently, the KRX is the only stock exchange in Korea
and is run by membership, having most of Korean securities
companies and some Korean branches of foreign securities
companies as its members.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of May&nbsp;31, 2006, the aggregate market value of equity
securities listed on the KRX Stock Market was approximately Won
642.4 trillion. The average daily trading volume of equity
securities for 2005 was approximately 467.5&nbsp;million shares
with an average transaction value of Won 3,157.0&nbsp;billion
and for the period from January&nbsp;1, 2006 through
May&nbsp;31, 2006 was approximately 356.3&nbsp;million shares
with an average transaction value of Won 4,275.0&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The KRX has the power in some circumstances to suspend trading
in the shares of a given company or to de-list a security. The
KRX also restricts share price movements. All listed companies
are required to file accounting reports annually, semi-annually
and quarterly and to release immediately all information that
may affect trading in a security.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government has in the past exerted, and continues to exert,
substantial influence over many aspects of the private sector
business community which can have the intention or effect of
depressing or boosting the market. In the past, the Government
has informally both encouraged and restricted the declaration
and payment of dividends, induced mergers to reduce what it
considers excess capacity in a particular industry and induced
private companies to offer publicly their securities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The KRX publishes the Korea Composite Stock Price Index, or
KOSPI, every ten seconds, which is an index of all equity
securities listed on the KRX Stock Market. On January&nbsp;1,
1983, the method of computing KOSPI was changed from the Dow
Jones method to the aggregate value method. In the new method,
the market capitalizations of all listed companies are
aggregated, subject to certain adjustments, and this aggregate
is expressed as a percentage of the aggregate market
capitalization of all listed companies as of the base date,
January&nbsp;4, 1980.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">100

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Movements in KOSPI are set out in the following table together
with the associated dividend yields and price to earnings ratios:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap><B>Period Average</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Price</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Dividend</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Earnings</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Opening</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>High</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Low</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Closing</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Yield(1)(%)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Ratio(2)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1980</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1981</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>165.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1982</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>134.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>127.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1983</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>122.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>134.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>121.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1984</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>116.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1985</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>139.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1986</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>161.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>279.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>153.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>272.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1987</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>264.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>525.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>264.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>525.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1988</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>532.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>922.56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>527.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>907.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1989</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>919.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,007.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>844.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>909.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1990</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>908.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>928.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>566.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>696.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1991</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>679.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>763.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>586.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>610.92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1992</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>624.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>691.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>459.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>678.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1993</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>697.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>874.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>605.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>866.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1994</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>879.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,138.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>860.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,027.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1995</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,013.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,016.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>847.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>882.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1996</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>888.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>986.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>651.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>651.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1997</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>653.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>792.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>350.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>376.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1998</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>579.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>280.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>562.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1999</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>587.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,028.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>498.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,028.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,059.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,059.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>504.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>520.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>704.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>468.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>693.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>724.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>937.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>584.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>829.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>635.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>822.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>515.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>810.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>821.26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>936.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>719.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>895.92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>893.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,379.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>870.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,379.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006 (though June&nbsp;26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,383.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,469.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,192.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,238.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Source: KRX
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Dividend yields are based on daily figures. Before 1983,
    dividend yields were calculated at the end of each month.
    Dividend yields after January&nbsp;3, 1984 include cash
    dividends only.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    The price to earnings ratio is based on figures for companies
    that record a profit in the preceding year.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Starting in April 2000, dividend yield and price earnings ratio
    of KOSPI 200, an index of 200 equity securities listed on the
    KRX Stock Market. Starting in April 2000, excludes classified
    companies, companies which did not submit annual reports to the
    KRX, and companies which received disqualified opinion from
    external auditors.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shares are quoted &#147;ex-dividend&#148; on the first trading
day of the relevant company&#146;s accounting period. Since the
calendar year is the accounting period for the majority of
listed companies, this may account for the drop in KOSPI between
its closing level at the end of one calendar year and its
opening level at the beginning of the following calendar year.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">101
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With certain exceptions, principally to take account of a share
being quoted &#147;ex-dividend&#148; and &#147;ex-rights&#148;,
permitted upward and downward movements in share prices of any
category of shares on any day are limited&nbsp;under the rules
of the KRX to 15.0% of the previous day&#146;s closing price of
the shares, rounded down as set out below:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Rounded Down</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Previous Day&#146;s Closing Price <STRIKE> W</STRIKE></B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>to&nbsp;<STRIKE>W</STRIKE></B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less than 5,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    5,000 to less than 10,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    10,000 to less than 50,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    50,000 to less than 100,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    100,000 to less than 500,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    500,000 or more</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a consequence, if a particular closing price is the same as
the price set by the fluctuation limit, the closing price may
not reflect the price at which persons would have been prepared,
or would be prepared to continue, if so permitted, to buy and
sell shares. Orders are executed on an auction system with
priority rules to deal with competing bids and offers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Due to a recent deregulation of restrictions on brokerage
commission rates, the brokerage commission rate on equity
securities transactions may be determined by the parties,
subject to commission schedules being filed with the KRX by the
securities companies. In addition, a securities transaction tax
of 0.15% of the sales price will generally be imposed on the
transfer of shares or certain securities representing rights to
subscribe for shares. A special agricultural and fishery tax of
0.15% of the sales prices will also be imposed on transfer of
these shares and securities on the KRX Stock Market. See
&#147;Item&nbsp;10E. Taxation&nbsp;&#151; Korean Taxation&#148;.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">102
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the number of companies listed on
the KRX Stock Market, the corresponding total market
capitalization and the average daily trading volume at the end
of the periods indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap><B>Market Capitalization</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap><B>on the Last Day of Each Period</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap><B>Average Trading Volume&nbsp;&#38; Value</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Listed</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(Millions of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(Thousands of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Thousands of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(Millions of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(Thousands of</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Companies</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Won)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Dollars)(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Won)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Dollars)(1)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1980</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,526,553</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">US&nbsp;$</TD>
    <TD align="right" valign="bottom" nowrap>3,828,691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,897</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">US&nbsp;$</TD>
    <TD align="right" valign="bottom" nowrap>5,905</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1981</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,959,057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,224,207</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,565</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,708</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,433</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1982</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>334</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,000,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,407,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,904</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1983</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,489,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,386,743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,468</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1984</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>336</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,148,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,222,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,642</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,862</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1985</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,570,404</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,380,818</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,834</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1986</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,994,233</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,924,115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,870</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,159</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1987</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,172,174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,033,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70,185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,584</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1988</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>502</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,543,685</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94,348,318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,367</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>198,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>289,963</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1989</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95,476,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>140,489,660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>280,967</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>414,431</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1990</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>669</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79,019,676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>110,301,055</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>256,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1991</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>686</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,117,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96,182,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214,263</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>281,850</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1992</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84,711,982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>107,502,515</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>308,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>391,175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1993</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112,665,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>139,419,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>574,048</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>676,954</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1994</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>151,217,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191,729,721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,862</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>776,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>984,223</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1995</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>141,151,399</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>182,201,367</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>487,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>629,614</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1996</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>760</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117,369,988</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>139,031,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>486,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>575,733</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1997</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>776</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70,988,897</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,161,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>555,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>392,707</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1998</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,798,451</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,090,455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97,716</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>660,429</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>471,432</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1999</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>725</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>349,503,966</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>305,137,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>278,551</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,481,620</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,039,654</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188,041,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150,162,898</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>306,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,602,211</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,078,028</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>225,850,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>194,784,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>473,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,997,420</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,520,685</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>258,680,756</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218,167,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>851,242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,041,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,414,362</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>355,362,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>297,960,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>542,010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,216,636</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,858,580</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>412,588,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>427,069,982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>372,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,232,108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,310,455</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>702</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>655,074,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>648,588,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>467,629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,157,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,126,398</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006 (through June&nbsp;26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>604,501,659</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>598,516,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>336,721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,105,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,065,062</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Source: KRX
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Converted at the noon buying rate in The City of New York for
    cable transfers in Won per US$1.00 as certified for customs
    purposes by the Federal Reserve Bank of New York.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Korean securities markets are principally regulated by the
Financial Supervisory Commission of Korea and the Korean
Securities and Exchange Act. The Korean Securities and Exchange
Act was amended fundamentally numerous times in recent years to
broaden the scope and improve the effectiveness of official
supervision of the securities markets. As amended, the law
imposes restrictions on insider trading and price manipulation,
requires specified information to be made available by listed
companies to investors and establishes rules regarding margin
trading, proxy solicitation, takeover bids, acquisition of
treasury shares and reporting requirements for shareholders
holding substantial interests.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">103
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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Further Opening of the Korean Securities Market</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A stock index futures market was opened on May&nbsp;3, 1996 and
a stock index option market was opened on July&nbsp;7, 1997, in
each case at the Korea Stock Exchange. Remittance and
repatriation of funds in connection with investment in stock
index futures and options are subject to regulations similar to
those that govern remittance and repatriation in the context of
foreign investment in Korean stocks.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the Korea Stock Exchange opened new option markets
for stocks of seven companies including our shares of common
stock and common stock of six other companies on
January&nbsp;28, 2002. Foreigners will be permitted to invest in
such options for individual stocks subject to certain procedural
requirements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Starting from May&nbsp;1, 1996, foreign investors were permitted
to invest in warrants representing the right to subscribe for
shares of a company listed on the Korea Stock Exchange or
registered on the KOSDAQ, subject to certain investment
limitations. A foreign investor may not acquire such warrants
with respect to shares of a class of a company for which the
ceiling on aggregate investment by foreigners has been reached
or exceeded.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;30, 1997, foreign investors were permitted
to invest in all types of corporate bonds, bonds issued by
national or local governments and bonds issued in accordance
with certain special laws without being subject to any aggregate
or individual investment ceiling. The Financial Supervisory
Commission of Korea sets forth procedural requirements for such
investments. The Government announced on February&nbsp;8, 1998
its plans for the liberalization of the money market with
respect to investment in money market instruments by foreigners
in 1998. According to the plan, foreigners have been permitted
to invest in money market instruments issued by corporations,
including commercial paper, starting February&nbsp;16, 1998 with
no restrictions as to the amount. Starting May&nbsp;25, 1998,
foreigners have been permitted to invest in certificates of
deposit and repurchase agreements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Currently, foreigners are permitted to invest in securities
including shares of all Korean companies which are not listed on
the KRX Stock Market nor the KRX KOSDAQ Market and in bonds
which are not listed.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Protection of Customer&#146;s Interest in Case of
    Insolvency of Securities Companies</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean law, the relationship between a customer and a
securities company in connection with a securities sell or buy
order is deemed to be consignment and the securities acquired by
a consignment agent (i.e., the securities company) through such
sell or buy order are regarded as belonging to the customer in
so far as the customer and the consignment agent&#146;s
creditors are concerned. Therefore, in the event of a bankruptcy
or reorganization procedure involving a securities company, the
customer of the securities company is entitled to the proceeds
of the securities sold by the securities company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
When a customer places a sell order with a securities company
which is not a member of the KRX and this securities company
places a sell order with another securities company which is a
member of the KRX, the customer is still entitled to the
proceeds of the securities sold received by the non-member
company from the member company regardless of the bankruptcy or
reorganization of the non-member company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Securities and Exchange Act, the KRX is obliged
to indemnify any loss or damage incurred by a counterparty as a
result of a breach by its members. If a securities company which
is a member of the KRX breaches its obligation in connection
with a buy order, the KRX is obliged to pay the purchase price
on behalf of the breaching member.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
When a customer places a buy order with a non-member company and
the non-member company places a buy order with a member company,
the customer has the legal right to the securities received by
the non-member company from the member company because the
purchased securities are regarded as belonging to the customer
in so far as the customer and the non-member company&#146;s
creditors are concerned.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As the cash deposited with a securities company is regarded as
belonging to the securities company, which is liable to return
the same at the request of its customer, the customer cannot
take back deposited cash from the securities company if a
bankruptcy or reorganization procedure is instituted against the
securities company and, therefore, can suffer from loss or
damage as a result. However, the Depositor Protection Act
provides that Korea Deposit Insurance Corporation will, upon the
request of the investors, pay investors up to Won
50&nbsp;million per
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
investor in case of the securities company&#146;s bankruptcy,
liquidation, cancellation of securities business license or
other insolvency events. Pursuant to the Korean Securities and
Exchange Act, as amended, subject to certain exceptions,
securities companies are required to deposit the cash received
from its customers with the Korea Securities Finance
Corporation, a special entity established pursuant to the Korean
Securities and Exchange Act. Set-off or attachment of cash
deposits by securities companies is prohibited. The premiums
related to this insurance under the Depositor Protection Act are
paid by securities companies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='143'></A>
</DIV>

<!-- link1 "Item 9D. Selling Shareholders" -->

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;9D.</B></TD>
    <TD>
    <B><I>Selling Shareholders</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='144'></A>
</DIV>

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;9E.</B></TD>
    <TD>
    <B><I>Dilution</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='145'></A>
</DIV>

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;9F.</B></TD>
    <TD>
    <B><I>Expenses of the Issue</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='146'></A>
</DIV>

<!-- link1 "Item 10. ADDITIONAL INFORMATION" -->

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<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;10.</B></TD>
    <TD>
    <B><I>ADDITIONAL INFORMATION</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<A name='147'></A>
</DIV>

<!-- link1 "Item 10A. Share Capital" -->

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<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;10A.</B></TD>
    <TD>
    <B><I>Share Capital</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='148'></A>
</DIV>

<!-- link1 "Item 10B. Memorandum and Articles of Association" -->

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<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;10B.</B></TD>
    <TD>
    <B><I>Memorandum and Articles of Association</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Description of Capital Stock</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This section provides information relating to our capital stock,
including brief summaries of material provisions of our articles
of incorporation, the Korean Securities and Exchange Act, the
Korean Commercial Code and related laws of Korea, all as
currently in effect. The following summaries are subject to, and
are qualified in their entirety by reference to, our articles of
incorporation and the applicable provisions of the Korean
Securities and Exchange Act and the Korean Commercial Code. We
have filed or incorporated by reference copies of our articles
of incorporation and these laws as exhibits to our most recently
filed annual report.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>General</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The name of our company is SK Telecom Co., Ltd. We are
registered under the laws of Korea under the commercial registry
number of 110111-0371346. As specified in Article&nbsp;2
(Objectives) of our articles of incorporation, the
company&#146;s objectives are the rational management of the
telecommunications business, development of telecommunications
technology, and contribution to public welfare and convenience.
In order to achieve these objectives, we are engaged in the
following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    information and communication business;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    sale and lease of subscriber handsets;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    new media business;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    advertising business;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    mail order business;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    business of leasing available and real estate property;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    research and technology development relating to the first four
    items above;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    overseas and import/export business relating to the first four
    items above;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    manufacture and distribution business relating to the first four
    items above;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">105

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    tourism;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any business or undertaking incidental or conducive to the
    attainment of the objectives stated above.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Currently, our authorized share capital is
220,000,000&nbsp;shares, which consists of shares of common
stock, par value Won 500&nbsp;per share, and shares of
non-voting stock, par value Won 500&nbsp;per share (common
shares and non-voting shares together are referred to as
&#147;shares&#148;). Under our articles of incorporation, we are
authorized to issue up to 5,500,000 non-voting preferred shares.
As of December&nbsp;31, 2005, 82,276,711 common shares were
issued, of which 8,662,415&nbsp;shares were held by us in
treasury. We have never issued any non-voting preferred shares.
All of the issued and outstanding common shares are fully-paid
and non-assessable and are in registered form. We issue share
certificates in denominations of&nbsp;1, 5,&nbsp;10, 50, 100,
500, 1,000 and 10,000&nbsp;shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Board of Directors</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Meetings of the board of directors are convened by the
representative director as he or she deems necessary or upon the
request of three or more directors. The board of directors
determines all important matters relating to our business. In
addition, the prior approval of the majority of the independent
non-executive directors is required for certain matters, which
include:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    investment by us or any of our subsidiaries in a foreign company
    or equity or other overseas assets in an amount equal to 5.0% or
    more of our shareholders&#146; equity under our most recent
    balance sheet;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    contribution of capital, loans or guarantees, acquisition of our
    subsidiaries&#146; assets or similar transactions with our
    affiliated companies in excess of Won 10&nbsp;billion through
    one or a series of transactions.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Resolutions of the board are adopted in the presence of a
majority of the directors in office and by the affirmative vote
of a majority of the directors present. No director who has an
interest in a matter for resolution may exercise his or her vote
upon such matter.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There are no specific shareholding requirements for
director&#146;s qualification. Directors are elected at a
general meeting of shareholders if the approval of a majority
vote of the shareholders present at such meeting is obtained,
and such majority also represents at least one-fourth of the
total number of shares outstanding. Under the Korean Securities
and Exchange Act, unless stated otherwise in the articles of
incorporation, holders of an aggregate of 1% or more of the
outstanding shares with voting rights may request cumulative
voting in any election for two or more directors. Our articles
of incorporation permit cumulative voting starting from the
ordinary general meeting of shareholders in 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The term of office for directors shall be until the close of the
third annual general shareholders&#146; meeting convened after
he or she commences his or her term. Our directors may serve
consecutive terms and our shareholders may remove them from
office at any time by a special resolution adopted at a general
meeting of shareholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Dividends</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We distribute dividends to our shareholders in proportion to the
number of shares owned by each shareholder. The common shares
represented by the ADSs have the same dividend rights as other
outstanding common shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Holders of non-voting shares are entitled to receive dividends
in priority to the holders of common shares. The dividend on the
non-voting shares is between 9.0% and 25.0% of the par value as
determined by the board of directors at the time of their
issuance. If the dividends for common shares exceed the
dividends for non-voting shares, the holders of non-voting
shares will be entitled to participate in the distribution of
such excess amount with the holders of common shares. If the
amount available for dividends is less than the aggregate amount
of the minimum required dividend, holders of non-voting shares
will be entitled to receive such accumulated unpaid dividend
from dividends payable in the next fiscal year before holders of
common shares. There are no non-voting shares issued or
outstanding.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We declare dividends annually at the annual general meeting of
shareholders which is generally held within three months after
the end of the fiscal year. We pay the annual dividend shortly
after the annual general meeting to the shareholders of record
or registered pledges as of the end of the preceding fiscal
year. We may distribute the annual dividend in cash or in
shares. However, a dividend of shares must be distributed at par
value. If the market price of the shares is less than their par
value, dividends in shares may not exceed one-half of the annual
dividend. Our obligation to pay dividend expires if no claim to
dividend is made for five years from the payment date.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Commercial Code, we may pay an annual dividend
only out of the excess of our net assets, on a non-consolidated
basis, over the sum of (1)&nbsp;our stated capital and
(2)&nbsp;the total amount of our capital surplus reserve and
legal reserve accumulated up to the end of the relevant dividend
period. In addition, we may not pay an annual dividend unless we
have set aside as legal reserve an amount equal to at least
10.0% of the cash portion of the annual dividend or until we
have accumulated a legal reserve of not less than one-half of
our stated capital. As a KRX Stock Market-listed company, we are
also required under the relevant laws and regulations to set
aside in reserve a certain amount each fiscal year until the
ratio of our own capital to total assets is at least 30%. We may
not use legal reserve to pay cash dividends but may transfer
amounts from legal reserve to capital stock or use legal reserve
to reduce an accumulated deficit.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the Korean Commercial Code and our articles of
incorporation provide that, in addition to annual dividends, we
may pay interim dividends once during each fiscal year. Unlike
annual dividends, the decision to pay interim dividends can be
made by a resolution of the board of directors and is not
subject to shareholder approval. Any interim dividends must be
paid in cash to the shareholders of record as of June&nbsp;30 of
the relevant fiscal year. In August 2005, we distributed such
interim dividends at Won 1,000&nbsp;per share to our
shareholders for a total amount of Won 73.6&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Securities and Exchange Act, the total amount
of interim dividends payable in a fiscal year shall not be more
than the net assets on the balance sheet of the immediately
preceding fiscal year, after deducting (1)&nbsp;a company&#146;s
capital in the immediately preceding fiscal year, (2)&nbsp;the
aggregate amount of its capital reserves and legal reserves
accumulated up to the immediately preceding fiscal year,
(3)&nbsp;the amount of earnings for dividend payments confirmed
at the general shareholders&#146; meeting with respect to the
immediately preceding fiscal year and (4)&nbsp;the amount of
legal reserve that should be set aside for the current fiscal
year following the interim dividend payment. Furthermore, the
rate of interim dividends for non-voting shares must be the same
as that for our common shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our obligation to pay interim dividends expires if no claims to
such dividends are made for a period of five years from the
payment date.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Distribution of Free Shares</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to paying dividends in shares out of our retained or
current earnings, we may also distribute to our shareholders an
amount transferred from our capital surplus or legal reserve to
our stated capital in the form of free shares. We must
distribute such free shares to all our shareholders in
proportion to their existing shareholdings.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Preemptive Rights and Issuance of Additional Shares</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may at times issue authorized but unissued shares, unless
otherwise provided in the Korean Commercial Code, on terms
determined by our board of directors. All our shareholders are
generally entitled to subscribe to any newly-issued shares in
proportion to their existing shareholdings. We must offer new
shares on uniform terms to all shareholders who have preemptive
rights and are listed on our shareholders&#146; registry as of
the relevant record date. We must give public notice of the
preemptive rights regarding new shares and their transferability
at least two weeks before the relevant record date. Our board of
directors may determine how to distribute shares for which
preemptive rights have not been exercised or where fractions of
shares occur.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Commercial Code and our articles of
incorporation, we may issue new shares pursuant to a board
resolution to persons other than existing shareholders only if
(1)&nbsp;the new shares are issued for the purpose
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
of issuing depositary receipts in accordance with the relevant
regulations or through an offering to public investors and
(2)&nbsp;the purpose of such issuance is deemed necessary by us
to achieve a business purpose, including, but not limited to,
the introduction of new technology or the improvement of our
financial condition. Under our articles of incorporation, only
our board of directors is authorized to set the terms and
conditions with respect to such issuance of new shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, under our articles of incorporation, we may issue
convertible bonds or bonds with warrants, each up to an
aggregate principal amount of Won 400&nbsp;billion, to persons
other than existing shareholders, where such issuance is deemed
necessary by us to achieve a business purpose, including, but
not limited to, the introduction of new technology or the
improvement of our financial condition.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Members of our employee stock ownership association, whether or
not they are our shareholders, generally have a preemptive right
to subscribe for up to 20.0% of the shares publicly offered
pursuant to the Korean Securities and Exchange Act. This right
is exercisable only to the extent that the total number of
shares so acquired and held by members of our employee stock
ownership association does not exceed 20.0% of the sum of the
number of shares then outstanding and the number of newly-issued
shares. As of December&nbsp;31, 2005, approximately 0.36% of the
issued shares were held by members of our employee stock
ownership association.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>General Meeting of Shareholders</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We generally hold the annual general meeting of shareholders
within three months after the end of each fiscal year. Subject
to a board resolution or court approval, we may hold an
extraordinary general meeting of shareholders:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    as necessary;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    at the request of holders of an aggregate of 3.0% or more of our
    outstanding common shares;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    at the request of shareholders holding an aggregate of 3.0% or
    more of our outstanding shares for at least six months;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    at the request of our audit committee.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Holders of non-voting shares may request a general meeting of
shareholders only after the non-voting shares become entitled to
vote or &#147;enfranchised,&#148; as described under
&#147;&#151;&nbsp;Voting Rights&#148; below.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We must give shareholders written notice setting out the date,
place and agenda of the meeting at least two weeks before the
date of the general meeting of shareholders. However, for
holders of less than 1.0% of the total number of issued and
outstanding voting shares, we may give notice by placing at
least two public notices in at least two daily newspapers at
least two weeks in advance of the meeting. Currently, we use The
Korea Economic Daily News and Mail Business Newspaper, both
published in Seoul, for this purpose. Shareholders who are not
on the shareholders&#146; registry as of the record date are not
entitled to receive notice of the general meeting of
shareholders or attend or vote at the meeting. Holders of
non-voting shares, unless enfranchised, are not entitled to
receive notice of or vote at general meetings of shareholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our general meetings of shareholders have historically been held
in or near Seoul.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Voting Rights</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Holders of our common shares are entitled to one vote for each
common share, except that voting rights of common shares held by
us (including treasury shares and shares held by bank trust
funds controlled by us), or by a corporate shareholder that is
more than 10.0% owned by us either directly or indirectly, may
not be exercised. Under the Korean Securities and Exchange Act,
unless stated otherwise in the articles of incorporation,
holders of an aggregate of 1% or more of the outstanding shares
with voting rights may request cumulative voting in any election
for two or more directors. Our articles of incorporation have
permitted cumulative voting since our annual shareholders
meeting in March 2003. Cumulative voting provides each
shareholder with multiple voting rights corresponding to the
number of directors to be appointed in a particular election
allows each shareholder to exercise all his or her voting rights
cumulatively to elect a director.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">108

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our shareholders may adopt resolutions at a general meeting by
an affirmative majority vote of the voting shares present or
represented at the meeting if the proportion of affirmative
votes also represent at least one-fourth of our total voting
shares then issued and outstanding. However, under the Korean
Commercial Code and our articles of incorporation, the following
matters, among others, require approval by the holders of at
least two-thirds of the voting shares present or represented at
a meeting, and such affirmative votes also represent at least
one-third of our total voting shares then issued and outstanding:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    amending our articles of incorporation;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    removing a director;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    effecting any dissolution, merger or consolidation of us;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    transferring the whole or any significant part of our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    effecting our acquisition of all of the business of any other
    company or a part of the business of any other company having a
    material effect on our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reducing our capital;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    issuing any new shares at a price lower than their par value.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In general, holders of non-voting shares are not entitled to
vote on any resolution or receive notice of any general meeting
of shareholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
However, in the case of amendments to our articles of
incorporation, or any merger or consolidation of us, or in some
other cases which affect the rights or interests of the
non-voting shares, approval of the holders of non-voting shares
is required. We may obtain the approval by a resolution of
holders of at least two-thirds of the non-voting shares present
or represented at a class meeting of the holders of non-voting
shares, where the affirmative votes also represent at least
one-third of our total issued and outstanding non-voting shares.
In addition, if we are unable to pay dividends on non-voting
shares as provided in our articles of incorporation, the holders
of non-voting shares will become enfranchised and will be
entitled to exercise voting rights beginning at the next general
meeting of shareholders to be held after the declaration of
non-payment of dividends is made until such dividends are paid.
The holders of enfranchised non-voting shares have the same
rights as holders of common shares to request, receive notice
of, attend and vote at a general meeting of shareholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shareholders may exercise their voting rights by proxy. A
shareholder may give proxies only to another shareholder, except
that a corporate shareholder may give proxies to its officers or
employees.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Holders of ADRs exercise their voting rights through the ADR
depositary, an agent of which is the record holder of the
underlying common shares. Subject to the provisions of the
deposit agreement, ADR holders are entitled to instruct the ADR
depositary how to vote the common shares underlying their ADSs.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Rights of Dissenting Shareholders</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In some limited circumstances, including the transfer of all or
a significant part of our business or our merger or
consolidation with another company (with certain exceptions),
dissenting shareholders have the right to require us to purchase
their shares. To exercise this right, shareholders, including
holders of non-voting shares, must submit to us a written notice
of their intention to dissent before the general meeting of
shareholders. Then, within 20&nbsp;days after the relevant
resolution is passed at a meeting, the dissenting shareholders
must request us in writing to purchase their shares. We are
obligated to purchase the shares of such dissenting shareholders
within one month after the expiration of the
<FONT style="white-space: nowrap">20-day</FONT> period. The
purchase price for the shares is required to be determined
through negotiation between the dissenting shareholders and us.
If we cannot agree on a price through negotiation, the purchase
price will be the average of (1)&nbsp;the weighted average of
the daily share prices on the KRX Stock Market for the two-month
period before the date of the adoption of the relevant board
resolution, (2)&nbsp;the weighted average of the daily share
price on the KRX Stock Market for the one month period before
the date of the adoption of the relevant resolution and
(3)&nbsp;the weighted average of the daily share price on the
KRX&nbsp;Stock Market for the one week period before such date
of the adoption of the relevant resolution. However, the
Financial Supervisory Commission of Korea may adjust this price
if we or shareholders collectively holding
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
30.0% or more of the total number of the shares held by
dissenting shareholders do not accept the purchase price.
Holders of ADSs will not be able to exercise dissenter&#146;s
rights unless they have withdrawn the underlying common stock
and become our direct shareholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Registry of Shareholders and Record Dates</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our transfer agent, Kookmin Bank, maintains the registry of our
shareholders at its office in Seoul, Korea. It records and
registers transfers of shares on the registry of shareholders
upon presentation of the share certificates.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The record date for annual dividends is December&nbsp;31. For
the purpose of determining the shareholders entitled to annual
dividends, the registry of shareholders is closed for the period
from January 1 to January 31 of the following year. Further, for
the purpose of determining the shareholders entitled to some
other rights pertaining to the shares, we may, on at least two
weeks&#146; public notice, set a record date and/or close the
register of shareholders for not more than three months. The
trading of shares and the delivery of share certificates may
continue while the register of shareholders is closed.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Annual Report</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At least one week before the annual general meeting of
shareholders, we must make our annual reports and audited
non-consolidated financial statements available for inspection
at our principal office and at all of our branch offices. In
addition, copies of annual reports, the audited non-consolidated
financial statements and any resolutions adopted at the general
meeting of shareholders will be available to our shareholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Securities and Exchange Act, we must file with
the Financial Supervisory Commission of Korea and the KRX
(1)&nbsp;an annual securities report within 90&nbsp;days after
the end of our fiscal year, (2)&nbsp;a half-year report within
45&nbsp;days after the end of the first six months of our fiscal
year, and (3)&nbsp;quarterly reports within 45&nbsp;days after
the end of the third month and the ninth month of our fiscal
year. Copies of these reports are or will be available for
public inspection at the Financial Supervisory Commission of
Korea and the KRX.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Transfer of Shares</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Commercial Code, the transfer of shares is
effected by the delivery of share certificates. However, to
assert shareholders&#146; rights against us, the transferee must
have his or her name, seal and address registered on our
registry of shareholders, maintained by our transfer agent. A
non-Korean shareholder may file a sample signature in place of a
seal, unless he or she is a citizen of a country with a sealing
system similar to that of Korea. In addition, a non-resident
shareholder must appoint an agent in Korea authorized to receive
notices on his or her behalf and file his or her mailing address
in Korea. These requirements do not apply to holders of ADSs.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under current Korean regulations, Korean securities companies
and banks, including licensed branches of non-Korean securities
companies and banks, asset management companies, futures trade
companies, internationally recognized foreign custodians and the
Korea Securities Depository may act as agents and provide
related services for foreign shareholders. Certain foreign
exchange controls and securities regulations apply to the
transfer of shares by non-residents or non-Koreans. See
&#147;Item&nbsp;10D. Exchange Controls&nbsp;&#151; Korean
Foreign Exchange Controls and Securities Regulations&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our transfer agent is Kookmin Bank, located at 24-3, Yoido-dong,
Yongdungpo-ku, Seoul, Korea.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Restrictions Applicable to Shares</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the Telecommunications Business Law, the maximum
aggregate foreign shareholding in us is limited to 49.0%. See
&#147;Item&nbsp;4B. Business Overview&nbsp;&#151; Law and
Regulation&nbsp;&#151; Foreign Ownership and Investment
Restrictions and Requirements&#148;. In addition, certain
foreign exchange controls and securities regulations apply to
the acquisition of securities by non-residents or non-Koreans.
See &#147;Item&nbsp;10D. Exchange Controls&nbsp;&#151; Korean
Foreign Exchange Controls and Securities Regulations&#148;.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Acquisition of Shares by Us</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Commercial Code, we may not acquire our own
shares except in limited circumstances, such as a reduction in
capital. However, we may acquire our own shares under the
relevant provisions of the Korean Securities and Exchange Act.
In such cases, we may acquire shares through purchases on the
KRX Stock Market or through a tender-offer after filing the
required report with the Financial Supervisory Commission of
Korea and the KRX. We may also acquire interests in our own
shares through agreements with trust companies and asset
management companies after filing a report with the Financial
Supervisory Commission and the KRX. The aggregate purchase price
for the shares may not exceed the total amount available for
distribution of dividends, subject to certain procedural
requirements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Commercial Code, except in the case of a
reduction in capital, we must resell or transfer any shares we
acquire to a third party within a reasonable time. In general,
corporate entities in which we own more than 50% equity interest
may not acquire our shares. Under the Korean Securities and
Exchange Act, we are subject to certain selling restrictions for
the shares we acquire. In the case of a reduction in capital, we
must immediately cancel the shares we acquire. On
October&nbsp;26, 2001, in accordance with the approval of our
board of directors, we announced plans to establish trust funds
with four Korean banks with a total funding of Won 1.3 trillion
for the purpose of acquiring our shares at market prices or
within a range of five percent of market prices. For more
details on the trust funds, see &#147;Item&nbsp;5B. Liquidity
and Capital Resources&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Liquidation Rights</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the event of our liquidation, assets remaining after payment
of all debts, liquidation expenses and taxes will be distributed
among shareholders in proportion to their shareholdings. Holders
of non-voting shares have no preference in liquidation. Holders
of debt securities have no preference over other creditors in
the event of liquidation.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Description of American Depositary Shares</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a summary of the deposit agreement dated as of
May&nbsp;31, 1996, as amended by amendment no. 1 dated as of
March&nbsp;15, 1999, amendment no. 2 dated as of April&nbsp;24,
2000 and amendment no. 3 dated as of July&nbsp;24, 2002, among
us, Citibank, N.A., as ADR depositary, and all holders and
beneficial owners of ADSs. The deposit agreement is governed by
the laws of the State of New York. Because it is a summary, this
description does not contain all the information that may be
important to you. For more complete information, you should read
the entire deposit agreement and the ADR. The deposit agreement
has been filed as an exhibit to our registration statement on
Form&nbsp;<FONT style="white-space: nowrap">F-3</FONT> (File
No.&nbsp;<FONT style="white-space: nowrap">333-91304)</FONT>
filed with the United States Securities and Exchange Commission.
Copies of the deposit agreement are available for inspection at
the principal New York office of the ADR depositary, currently
located at 388 Greenwich Street, 14th&nbsp;Floor, New York, New
York 10013, United States of America, and at the principal
London office of the ADR depositary, currently located at Canada
Square, Canary Wharf, London, E14 5LB, England.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>American Depositary Receipts</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ADR depositary will execute and deliver the ADRs evidencing
the ADSs. Each ADR evidences a specified number of ADSs, each
ADS representing one-ninth of one share of our common stock to
be deposited with the ADR depositary&#146;s custodian in Seoul,
or the Custodian. The Custodian is Korea Securities Depository,
located at 1328 Paeksok-Dong, Ilsan-Ku, Koyang, 411-770,
Kyunggi-Do, Seoul, 150-884, Korea. Korea Securities Depository
is also the institution authorized under applicable law to
effect book-entry transfers of our common shares, known as the
&#147;Custodian&#148;. An ADR may represent any number of ADSs.
We and the ADR depositary will treat only persons in whose names
ADRs are registered on the books of the registrar as holders of
ADRs.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Deposit and Withdrawal of Shares of Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Notwithstanding the provisions described below, under the terms
of the deposit agreement, as supplemented by a side letter dated
as of October&nbsp;1, 2002, the deposit of shares and issuance
of ADSs may only be made if the total number of shares
represented by ADRs after such deposit does not exceed a
specified maximum, 13,598,544&nbsp;shares as of October&nbsp;1,
2002. This limit will be adjusted in certain circumstances,
including (1)&nbsp;increases upon the cancellation of existing
ADRs (up to a maximum of 5,605,839&nbsp;shares),
(2)&nbsp;increases upon future offerings of ADSs by us or our
shareholders, (3)&nbsp;increases upon issuances of ADSs upon the
exchange of outstanding exchangeable bonds issued by Momenta
(Cayman) (a special purpose vehicle incorporated in the Cayman
Islands, which sold bonds exchangeable initially into such ADSs,
see &#147;Item&nbsp;6E. Share Ownership&#148;),
(4)&nbsp;increases for rights offerings and (5)&nbsp;adjustments
for share reclassifications. The limit also may be decreased in
certain circumstances, including in connection with purchases of
ADSs by Momenta (Cayman) in accordance with the terms of its
exchangeable bonds. Notwithstanding the foregoing, the ADR
depositary and the custodian may not accept deposits of shares
of common stock for issuance of ADSs (other than in the case of
an exercise of the exchange rights of the exchangeable bonds
issued by Momenta (Cayman)) (i)&nbsp;if it has been notified by
us in writing that we block deposits to prevent a violation of
applicable Korean laws or regulations or a violation of our
articles of incorporation or (ii)&nbsp;from a person intending
to make a deposit that identifies itself to the depositary and
that has been identified in writing by us as a holder of at
least 3% of our shares of common stock on October&nbsp;7, 2002.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The shares of common stock underlying the ADSs are delivered to
the ADR depositary&#146;s custodian in book-entry form.
Accordingly, no share certificates will be issued for them, and
the ADR depositary will hold the shares of common stock through
the book-entry settlement system of the Custodian. The delivery
of the shares of common stock pursuant to the deposit agreement
will take place through the facilities of the Custodian in
accordance with its applicable settlement procedures. The ADR
depositary will execute and deliver ADRs if you or your broker
deposit shares or evidence of rights to receive shares of common
stock with the Custodian. Upon payment of its fees and expenses
and of any taxes or charges, such as stamp taxes or stock
transfer taxes or fees, the ADR depositary will register the
appropriate number of ADSs in the names you designate and will
deliver an ADR or ADRs for those ADSs to the persons you
designate. The ADR depositary and the ADR depositary&#146;s
custodian will refuse to accept shares of common stock for
deposit whenever we restrict transfer of shares of common stock
to comply with ownership restrictions under applicable law or
our articles of incorporation or whenever the deposit would
cause the total number of shares of common stock deposited to
exceed a level we determine from time to time. We may instruct
the ADR depositary to take certain actions with respect to a
holder of ADSs who holds in excess of the ownership limitation
set forth in the deposit agreement, including the mandatory sale
or disposition of the shares represented by the ADSs in excess
of such ownership limitations if, and to the extent, permitted
by applicable law.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You may surrender your ADRs to the ADR depositary to withdraw
the underlying shares of our common stock. Upon payment of the
fees and any governmental charges and taxes provided in the
deposit agreement, and subject to applicable laws and
regulations of Korea and our articles of incorporation, you will
be entitled to physical delivery or electronic delivery to an
account in Korea or, if permissible under applicable Korean law,
outside the United States, of the shares of common stock
evidenced by the ADRs and any other property at the time
represented by ADRs you surrendered. If you surrender an ADR
evidencing a number of ADSs not evenly divisible by nine, the
ADR depositary will deliver the appropriate whole number of
shares of common stock represented by the surrendered ADSs and
will execute and deliver to you a new ADR evidencing ADSs
representing any remaining fractional shares of common stock.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you request withdrawal of shares of common stock, you must
deliver to the ADR depositary a written order directing the ADR
depositary to cause the shares of common stock being withdrawn
to be delivered to or upon the written order of the person
designated in your order, subject to applicable Korean laws and
the provisions of the deposit agreement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the provisions of the deposit agreement, the ADR
depositary may not lend shares of common stock or ADSs. However,
subject to the provisions of the deposit agreement and
limitations established by the ADR depositary, the ADR
depositary may execute and deliver ADSs before deposit of the
underlying shares of
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
common stock. This is called a pre-release of the ADS. The ADR
depositary may also deliver shares of common stock upon
cancellation of pre-released ADSs (even if the cancellation
occurs before the termination of the pre-release). The ADR
depositary may pre-release ADSs only under the following
circumstances:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    before or at the time of the pre-release, the person to whom the
    pre-release is being made must represent to the ADR depositary
    in writing that it or its customer owns the shares of common
    stock or ADSs to be deposited and show evidence of the ownership
    to the ADR depositary&#146;s satisfaction;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    before or at the time of such pre-release, the person to whom
    the pre-release is being made must agree in writing that he will
    hold the shares of common stock or ADSs in trust for the ADR
    depositary until their delivery to the ADR depositary or
    custodian, reflect on his records the ADR depositary as owner of
    such shares of common stock or ADSs and deliver such shares of
    common stock upon the ADR depositary&#146;s request;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the pre-release must be fully collateralized with cash or
    U.S.&nbsp;government securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the ADR depositary must be able to terminate the pre-release on
    not more than five business day&#146;s notice;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the pre-release is subject to further indemnities and credit
    regulations as the ADR depositary deems appropriate.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ADR depositary may retain for its own account any
compensation received by it in connection with the pre-release,
such as earnings on the collateral.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you want to withdraw the shares of common stock from the
depositary facility, you must register your identity with the
Financial Supervisory Service of Korea before you acquire the
shares of common stock unless you intend to sell the shares of
common stock within three months. See &#147;Item&nbsp;10D.
Exchange Controls&nbsp;&#151; Korean Foreign Exchange Controls
and Securities Regulations&nbsp;&#151; Restrictions Applicable
to Shares&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Dividends, Other Distributions and Rights</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the ADR depositary can, in its judgment and pursuant to
applicable law, convert Won (or any other foreign currency) into
Dollars on a reasonable basis and transfer the resulting Dollars
to the United States, the ADR depositary will as promptly as
practicable convert all cash dividends and other cash
distributions received by it on the deposited shares of common
stock into Dollars and distribute the Dollars to you in
proportion to the number of ADSs representing shares of common
stock held by you, after deduction of the fees and expenses of
the ADR depositary. If the ADR depositary determines that in its
judgment any currency other than Dollars it receives from us
cannot be converted and distributed on a reasonable basis, the
ADR depositary may distribute the currency it receives to the
extent permitted under applicable law or hold the currency for
your account if you are entitled to receive the distribution.
The ADR depositary will not be liable for any interest. Before
making a distribution, the ADR depositary will deduct any
withholding taxes that must be paid.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the event that the ADR depositary or the ADR
depositary&#146;s custodian receives any distribution upon any
deposited shares of common stock in property or securities
(other than shares of common stock, non-voting shares or rights
to receive shares of common stock or non-voting shares), the ADR
depositary will distribute the property or securities to you in
proportion to your holdings in any manner that the ADR
depositary deems, after consultation with us, equitable and
practicable. If the ADR depositary determines that any
distribution of property or securities (other than shares of
common stock, non-voting shares or rights to receive shares of
common stock or non-voting shares) cannot be made
proportionally, or if for any other reason the ADR depositary
deems the distribution not to be feasible, the ADR depositary
may, after consultation with us, dispose of all or a portion of
the property or securities in such amounts and in such manner,
including by public or private sale, as the ADR depositary deems
equitable or practicable. The ADR depositary will distribute to
you the net proceeds of any such sale, or the balance of the
property or securities, after the deduction of the fees and
expenses of the ADR depositary.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If a distribution by us consists of a dividend in, or free
distribution of, our shares of common stock, the ADR depositary
may, with our approval, and will, if we request, deposit the
shares of common stock and either
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
(1)&nbsp;distribute to you, in proportion to your holdings,
additional ADSs representing those shares of common stock, or
(2)&nbsp;reflect on the records of the ADR depositary the
increase in the aggregate number of ADSs representing those
number of shares of common stock, in both cases, after the
deduction of the fees and expenses of the ADR depositary. If the
ADR depositary deems that such distribution for any reason is
not feasible, the ADR depositary may adopt, after consultation
with us, any method as it may deem equitable and practicable,
including by public or private sale of all or part of the shares
of common stock received. The ADR depositary will distribute to
you the net proceeds of any such sale in the same way as it does
with cash. The ADR depositary will only distribute whole ADSs.
If the ADR depositary does not distribute additional ADSs, then
each outstanding ADS will also represent the new shares so
distributed.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If a distribution by us consists of a dividend in, or free
distribution of, non-voting shares, the ADR depositary will
deposit the non-voting shares under a non-voting shares deposit
agreement to be entered into among us, the ADR depositary and
all holders and beneficial owners of depositary shares. The ADR
depositary will deliver to you, in proportion to your holdings
of ADSs, depositary shares issued under the non-voting shares
deposit agreement representing the number of non-voting shares
received as such dividend or distribution. If the ADR depositary
deems such distribution for any reason is not feasible, the ADR
depositary may adopt, after consultation with us, any method as
it may deem equitable and practicable, including by public or
private sale of all or part of the nonvoting shares received.
The ADR depositary will distribute to you the net proceeds of
any such sale in the same way as it does with cash. The ADR
depositary will only distribute whole depositary shares. We are
not obligated to list depositary shares representing non-voting
shares on any exchange.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If we offer holders of our securities any rights to subscribe
for additional shares of common stock or any other rights, the
ADR depositary may make these rights available to you. The ADR
depositary must first determine whether it is lawful and
feasible to do so. If the ADR depositary determines that it is
not lawful or feasible to make these rights available to you,
then upon our request, the ADR depositary will sell the rights
and distribute the proceeds in the same way as it would do with
cash. The ADR depositary may allow these rights that are not
distributed or sold to lapse. In that case, you will receive no
value for these rights.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If we issue any rights with respect to non-voting shares, the
securities issuable upon any exercise of such rights by holders
or beneficial owners will be depositary shares representing
those non-voting shares issued under the provisions of a
non-voting share deposit agreement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If a registration statement under the U.S.&nbsp;Securities Act
is required with respect to the securities to which any rights
relate in order for us to offer the rights to you and to sell
the securities represented by these rights, the ADR depositary
will not offer such rights to you until such a registration is
in effect, or unless the offering and sale of such securities
and such rights to you are exempt from the registration
requirements of the U.S.&nbsp;Securities Act or any required
filing, report, approval or consent has been submitted, obtained
or granted. We or the ADR depositary will not be obligated to
register the rights or securities under the U.S.&nbsp;Securities
Act or to submit, obtain or request any filing, report, approval
or consent.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ADR depositary may not be able to convert any currency or to
sell or dispose of any distributed or offered property or rights
in a timely manner or at a specified price, or at all.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Record Dates</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ADR depositary will fix a record date, after consultation
with us, in each of the following situations:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any cash dividend or other cash distribution becomes payable;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    any distribution other than cash is made;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    rights are issued with respect to deposited shares of common
    stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the ADR depositary causes a change in the number of shares of
    common stock that are represented by each ADS;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the ADR depositary receives notice of any shareholders&#146;
    meeting.</TD>
</TR>

</TABLE>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The record date will, to the extent practicable, be as near as
the record date fixed by us for the shares of common stock. The
record date will determine (1)&nbsp;the ADR holders who are
entitled to receive the dividend, distribution or rights, or the
net proceeds of the sale of the rights; or (2)&nbsp;the ADR
holders who are entitled to receive notices or exercise rights.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Voting of the Underlying Shares of Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will give the ADR depositary a notice of any meeting or
solicitation of shareholder proxies immediately after we
finalize the form and substance of such notice but not less than
14&nbsp;days before the meeting. As soon as practicable after it
receives our notice, the ADR depositary will fix a record date,
and upon our written request, the ADR depositary will mail to
you a notice that will contain the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the information contained in our notice to the ADR depositary
    including an English translation, or, if requested by us, a
    summary of the information provided by us;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a statement that the ADR holders as of the close of business on
    a specified record date will be entitled to instruct the ADR
    depositary as to how to exercise their voting rights for the
    number of shares of deposited shares of common stock, subject to
    the provisions of applicable Korean law and our articles of
    incorporation, which provisions, if any, will be summarized in
    the notice to the extent that they are material;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a statement as to the manner in which the ADR holders may give
    their instructions.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon your written request received on or before the date set by
the ADR depositary for this purpose, the ADR depositary will
endeavor, in so far as practicable, to vote or cause to be voted
the deposited shares of common stock in accordance with the
instructions set forth in your written requests. The ADR
depositary may not itself exercise any voting discretion over
any deposited shares of common stock. You may only exercise the
voting rights in respect of 9 ADSs or multiples of 9 ADSs. ADR
holders may not be entitled to give instruction to vote the
shares represented by the ADSs if, and to the extent, the total
number of shares represented by the ADSs of an ADR holder
exceeds the limit set under applicable law. We can give no
assurance to you, however, that we will notify the ADR
depositary sufficiently in advance of the scheduled date of a
meeting or solicitation of consents or proxies to enable the ADR
depositary to make a timely mailing of notices to you, or that
you will receive the notices sufficiently in advance of a
meeting or solicitation of consents or proxies to give
instructions to the ADR depositary.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Inspection of Transfer Books</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ADR depositary will keep books at its principal New York
office, which is currently located at 388&nbsp;Greenwich Street,
14th&nbsp;Floor, New York, New York 10013, for the registration
and transfer of ADRs. You may inspect the books of the ADR
depositary as long as the inspection is not for the purpose of
communicating with holders in the interest of a business or
object other than our business or a matter related to the
deposit agreement or the ADRs.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Reports and Notices</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On or before the first date on which we give notice, by
publication or otherwise, of any meeting of shareholders, or of
any adjourned meeting of shareholders, or of the taking of any
action in respect of any cash or other distributions or the
offering of any rights in respect of the shares of common stock,
we will transmit to the Custodian and the ADR depositary
sufficient copies of the notice in English in the form given or
to be given to shareholders. We will furnish to the ADR
depositary English language versions of any reports, notices and
other communications that we generally transmit to holders of
our common stock, including our annual reports, with annual
audited consolidated financial statements prepared in conformity
with Korean GAAP and, if prepared pursuant to the Securities
Exchange Act of 1934, as amended, a reconciliation of net
earnings for the year and stockholders&#146; equity to
U.S.&nbsp;GAAP, and unaudited non-consolidated semiannual
financial statements prepared in conformity with Korean GAAP.
The ADR depositary will arrange for the prompt mailing of copies
of these documents, or, if we request, a summary of any such
notice provided by us to you or, at our request, make
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
notices, reports (other than the annual reports and semiannual
financial statements) and other communications available to you
on a basis similar to that for the holders of our common stock
or on such other basis as we may advise the ADR depositary
according to any applicable law, regulation or stock exchange
requirement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Notices to you under the deposit agreement will be deemed to
have been duly given if personally delivered or sent by mail or
cable, telex or facsimile transmission, confirmed by letter,
addressed to you at your address as it appears on the transfer
books of the ADR depositary or at such other address as you have
notified the ADR depositary.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the ADR depositary will make available for
inspection by holders at its principal New York office and its
principal London office any notices, reports or communications,
including any proxy soliciting materials, received from us that
we generally transmit to the holders of our common stock or
other deposited securities, including the ADR depositary. The
ADR depositary will also send to you copies of reports and
communications we will provide as provided in the deposit
agreement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Changes Affecting Deposited Shares of Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In case of a change in the par value, or a split-up,
consolidation or any other reclassification of shares of our
common stock or upon any recapitalization, reorganization,
merger or consolidation or sale of assets affecting us, any
securities received by the ADR depositary or the Custodian in
exchange for, in conversion of or in respect of deposited shares
of our common stock will be treated as new deposited shares of
common stock under the deposit agreement. In that case, ADSs
will, subject to the terms of the deposit agreement and
applicable laws and regulations, including any registration
requirements under the U.S.&nbsp;Securities Act, represent the
right to receive the new deposited shares of common stock,
unless additional ADRs are issued, as in the case of a stock
dividend, or unless the ADR depositary calls for the surrender
of outstanding ADRs to be exchanged for new ADRs.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Amendment and Termination of the Deposit Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may agree with the ADR depositary to amend the deposit
agreement and the ADSs without your consent for any reason. If
the amendment adds or increases fees or charges, except for
taxes and other governmental charges or certain expenses of the
ADR depositary, or prejudices any substantial existing right of
ADR holders, it will only become effective 30&nbsp;days after
the ADR depositary notifies you of the amendment. If you
continue to hold your ADSs at the time an amendment becomes
effective, you will be considered to have agreed to the
amendment and to be bound by the deposit agreement as amended.
Except as otherwise required by any mandatory provisions of
applicable law, no amendment may impair your right to surrender
your ADSs and to receive the underlying deposited securities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ADR depositary will terminate the deposit agreement if we
ask it to do so with 90&nbsp;days&#146; prior written notice.
The ADR depositary may also terminate the deposit agreement if
the ADR depositary has notified us at least 90&nbsp;days in
advance that it would like to resign and we have not appointed a
new depositary. In both cases, the ADR depositary must notify
you at least 30&nbsp;days before the termination date.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If any ADRs remain outstanding after the date of termination,
the ADR depositary will stop performing any further acts under
the deposit agreement, except:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    to collect dividends and other distributions pertaining to the
    deposited shares of common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    to sell property and rights and the conversion of deposited
    shares of common stock into cash as provided in the deposit
    agreement;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    to deliver deposited shares of common stock, together with any
    dividends or other distributions received with respect to the
    deposited shares of common stock and the net proceeds of the
    sale of any rights or other property represented by those ADSs
    in exchange for surrendered ADRs.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At any time after the expiration of six months from the date of
termination, the ADR depositary may sell any remaining deposited
shares of common stock and hold uninvested the net proceeds in
an unsegregated account, together with any other cash or
property then held, without liability for interest, for the pro
rata benefit of the holders of ADSs that have not been
surrendered by then.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Charges of ADR Depositary</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The fees and expenses of the ADR depositary as agreed between us
and the ADR depositary include:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    taxes and other governmental charges;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    registration fees applicable to transfers of shares of common
    stock on our shareholders&#146; register, or that of any entity
    acting as registrar for the shares, to the name of the ADR
    depositary or its nominee, or the Custodian or its nominee, when
    making deposits or withdrawals under the deposit agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    cable, telex and facsimile transmission expenses that are
    expressly provided in the deposit agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    expenses incurred by the ADR depositary in the conversion of
    foreign currency into Dollars under the deposit agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a fee of up to US$5.00&nbsp;per 100 ADSs, or portion thereof,
    for execution and delivery of ADSs and the surrender of ADRs
    under the deposit agreement;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a fee of up to US$0.02&nbsp;per ADS held for cash distributions,
    a sale or exercise of rights or the taking of any other
    corporate action involving distributions to shareholders.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>General</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Neither we nor the ADR depositary will be liable to you if
prevented or delayed by law, governmental authority, any
provision of our articles of incorporation or any circumstances
beyond our or its control in performing our or its obligations
under the deposit agreement. The deposit agreement provides that
the ADR depositary will hold the shares of common stock for your
sole benefit. Our obligations and those of the ADR depositary
under the deposit agreement are expressly limited to performing,
in good faith and without negligence, our and its respective
duties specified in the deposit agreement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The ADSs are transferable on the books of the ADR depositary;
provided, however, that the ADR depositary may, after
consultation with us, close the transfer books at any time or
from time to time, when deemed expedient by it in connection
with the performance of its duties. As a condition precedent to
the execution and delivery of any ADSs, registration of
transfer, split-up, combination of any ADR or surrender of any
ADS for the purpose of withdrawal of deposited shares of common
stock, the ADR depositary or the Custodian may require payment
from the depositor of the shares of common stock or a holder of
ADSs of a sum sufficient to reimburse the ADR depositary for any
tax or other governmental charge and any stock transfer or
registration fee and payment of any applicable fees payable by
the holders of ADSs.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any person depositing shares of common stock, any holder of an
ADS or any beneficial owner may be required from time to time to
file with the ADR depositary or the Custodian a proof of
citizenship, residence, exchange control approval, payment of
applicable Korean or other taxes or governmental charges, or
legal or beneficial ownership and the nature of their interest,
to provide information relating to the registration on our
shareholders&#146; register (or our appointed agent for the
transfer and registration of shares of common stock) of the
shares of common stock presented for deposit or other
information, to execute certificates and to make representations
and warranties as we or the ADR depositary may deem necessary or
proper or to enable us or the ADR depositary to perform our and
its obligations under the deposit agreement. The ADR depositary
may withhold the execution or delivery or registration of
transfer of all or part of any ADR or the distribution or sale
of any dividend or other distribution of rights or of the
proceeds from their sale or the delivery of any shares deposited
under the deposit agreement and any other securities, property
and cash received by the ADR depositary or the Custodian until
the proof or other information is filed or the certificates are
executed or the representations and warranties are made. The ADR
depositary shall provide us, unless otherwise instructed by us,
in a timely manner, with copies of any these proofs and
certificates and these written representations and warranties.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The delivery and surrender of ADSs and transfer of ADSs
generally may be suspended during any period when our or the ADR
depositary&#146;s transfer books are closed or, if that action
is deemed necessary or advisable by us or the ADR depositary, at
any time or from time to time in accordance with the deposit
agreement. We may
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
restrict, in a manner as we deem appropriate, transfers of
shares of common stock where the transfers may result in
ownership of shares of common stock in excess of limits under
applicable law. Except as described in &#147;Deposit and
Withdrawal of Shares of Common Stock&#148; above,
notwithstanding any other provision of the deposit agreement,
the surrender of outstanding ADRs and withdrawal of Deposited
Securities (as defined in the deposit agreement) represented by
the ADRs may be suspended, but only as required in connection
with (1)&nbsp;temporary delays caused by closing the transfer
books of the ADR depositary or the issuer of any Deposited
Securities (or the appointed agent or agents for such issuer for
the transfer and registration of such Deposited Securities) in
connection with voting at a shareholders&#146; meeting or the
payment of dividends, (2)&nbsp;payment of fees, taxes and
similar charges, or (3)&nbsp;compliance with any United States
or foreign laws or governmental regulations relating to the ADRs
or to the withdrawal of the Deposited Securities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Governing Law</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The deposit agreement and the ADRs will be interpreted under,
and all rights under the deposit agreement or the ADRs are
governed by, the laws of the State of New York.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have irrevocably submitted to the non-exclusive jurisdiction
of New York State or United States Federal Courts located in New
York City and waived any objection to legal actions or
proceedings in these courts whether on the ground of venue or on
the ground that the proceedings have been brought in an
inconvenient forum.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This submission was made for the benefit of the ADR depositary
and the holders and shall not limit the right of any of them to
take legal actions or proceedings in any other court of
competent jurisdiction nor shall the taking of legal actions or
proceedings in one or more jurisdictions preclude the taking of
legal actions or proceedings in any other jurisdiction (whether
concurrently or not), to the extent permitted under applicable
law.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Information Relating to the ADR Depositary</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Citibank, N.A. has been appointed as ADR depositary pursuant to
the deposit agreement. Citibank is a wholly-owned subsidiary of
Citicorp, a Delaware corporation whose principal office is
located in New York, New&nbsp;York, which in turn is a
wholly-owned subsidiary of Citigroup Inc. Citibank is a global
financial services organization serving individuals, businesses,
governments and financial institutions in approximately
100&nbsp;countries around the world.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Citibank was originally organized on June&nbsp;16, 1812, and now
is a national banking association organized under the National
Bank Act of 1864 of the United States of America. Citibank is
primarily regulated by the United States Office of the
Comptroller of the Currency. Its principal office is at 399 Park
Avenue, New York, NY 10022.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated balance sheets of Citibank are set forth in
Citicorp&#146;s Annual Reports on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> and in
Citicorp&#146;s quarterly financial reviews and
Forms&nbsp;<FONT style="white-space: nowrap">10-Q.</FONT>
Citicorp&#146;s Annual Reports on
Form&nbsp;<FONT style="white-space: nowrap">10-K</FONT> and
quarterly financial reviews and
Forms&nbsp;<FONT style="white-space: nowrap">10-Q</FONT> are
filed periodically with the United States Securities and
Exchange Commission, or SEC.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Citibank&#146;s Articles of Association and By-laws, each as
currently in effect, together with Citicorp&#146;s most recent
annual and quarterly reports will be available for inspection at
the Depositary Receipt office of Citibank, N.A., 388 Greenwich
Street, 14th&nbsp;Floor, New York, New York 10013.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='149'></A>
</DIV>

<!-- link1 "Item 10C. Material Contracts" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;10C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Material
Contracts</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have not entered into any material contracts since
January&nbsp;1, 2003, other than in the ordinary course of our
business. For information regarding our agreements and
transactions with entities affiliated with the SK&nbsp;Group see
&#147;Item&nbsp;6E. Share Ownership&#148;. For a description of
certain agreements entered into during the past three years
related to our capital commitments and obligations, see
&#147;Item&nbsp;5B. Liquidity and Capital Resources&nbsp;&#151;
Capital Requirements and Resources&#148;.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='150'></A>
</DIV>

<!-- link1 "Item 10D. Exchange Controls" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;10D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exchange
Controls</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Korean Foreign Exchange Controls and Securities
Regulations</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>General</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Foreign Exchange Transaction Act and the Presidential Decree
and regulations under that Act and Decree, collectively referred
to as the Foreign Exchange Transaction Laws, regulate investment
in Korean securities by non-residents and issuance of securities
outside Korea by Korean companies. Under the Foreign Exchange
Transaction Laws, non-residents may invest in Korean securities
only to the extent specifically allowed by these laws. The
Financial Supervisory Commission of Korea has also adopted,
pursuant to its authority under the Securities and Exchange Act,
regulations that restrict investment by foreigners in Korean
securities and regulate issuance of securities outside Korea by
Korean companies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to certain limitations, the MOFE has authority to take
the following actions under the Foreign Exchange Transaction
Laws:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    if the Government deems it necessary on account of war, armed
    conflict, natural disaster or grave and sudden and significant
    changes in domestic or foreign economic circumstances or similar
    events or circumstances, the MOFE may temporarily suspend
    performance under any or all foreign exchange transactions, in
    whole or in part, to which the Foreign Exchange Transaction Laws
    apply (including suspension of payment and receipt of foreign
    exchange) or impose an obligation to deposit, safe-keep&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    sell any means of payment to The Bank of Korea or certain other
    governmental agencies or financial institutions;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    if the Government concludes that the international balance of
    payments and international financial markets are experiencing or
    are likely to experience significant disruption or that the
    movement of capital between Korea and other countries are likely
    to adversely affect the Won, exchange rate or other
    macroeconomic policies, the MOFE may take action to require any
    person who intends to effect or effects a capital transaction to
    deposit all or a portion of the means of payment acquired in
    such transactions with The Bank of Korea or certain other
    governmental agencies or financial institutions.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Government Review of Issuances of ADSs</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order for us to issue ADSs in excess of US$30&nbsp;million,
we are required to submit a report to the MOFE with respect to
the issuance of the ADSs prior to and after such issuance. The
MOFE may at its discretion direct us to take necessary measures
to avoid exchange rate fluctuation in connection with its
acceptance of report of the issuance of the ADSs.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Under current Korean laws and regulations, the depositary is
    required to obtain our prior consent for any proposed deposit of
    common shares if the number of shares to be deposited in such
    proposed deposit exceeds the number of common shares initially
    deposited by us for the issuance of ADSs (including deposits in
    connection with the initial and all subsequent offerings of ADSs
    and stock dividends or other distributions related to the ADSs).</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    We can give no assurance that we would grant our consent, if our
    consent is required. In addition to such restrictions under
    Korean laws and regulations, there are also restrictions on the
    deposits of our common shares for issuance of ADSs. See
    &#147;Item&nbsp;10B. Memorandum and Articles of
    Incorporation&nbsp;&#151; Description of American Depositary
    Shares&#148;. Therefore, a holder of ADRs who surrenders ADRs
    and withdraws shares may not be permitted subsequently to
    deposit those shares and obtain ADRs.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Reporting Requirements for Holders of Substantial
Interests</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean Securities and Exchange Act, any person whose
direct or beneficial ownership of shares with voting rights,
whether in the form of shares or ADSs, certificates representing
the rights to subscribe for shares and equity-related debt
securities including convertible bonds and bonds with warrants
(collectively referred to as &#147;Equity Securities&#148;),
together with the Equity Securities beneficially owned by
certain related
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
persons or by any person acting in concert with the person,
accounts for 5.0% or more of the total outstanding Equity
Securities is required to report the status and purpose (in
terms of whether the purpose of shareholding is to affect
control over management of the issuer) of the holdings to the
Financial Supervisory Commission of Korea and the KRX within
five business days after reaching the 5.0% ownership interest
threshold. In addition, any change (i)&nbsp;in the ownership
interest subsequent to the report which equals or exceeds 1.0%
of the total outstanding Equity Securities, or (ii)&nbsp;in the
shareholding purpose is required to be reported to the Financial
Supervisory Commission of Korea and KRX within five business
days from the date of the change. However, reporting deadline of
such reporting requirement is extended to institutional
investors who hold shares for purposes other than management
control by the tenth day of the month immediately following the
month of share acquisition or change in their shareholding.
Those who reported the purpose of shareholding is to affect
control over management of the issuer are prohibited from
exercising their voting rights and acquiring additional shares
for five days subsequent to the report under the recently
amended Korean Securities and Exchange Act.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Violation of these reporting requirements may subject a person
to criminal sanctions such as fines or imprisonment and may
result in a loss of voting rights with respect to the ownership
of unreported Equity Securities exceeding 5.0%. Furthermore, the
Financial Supervisory Commission of Korea may issue an order to
dispose of such non-reported Equity Securities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the reporting requirements described above, any
person whose direct or beneficial ownership of our common shares
accounts for 10% or more of the total issued and outstanding
shares with voting rights (a &#147;major shareholder&#148;) must
report the status of his/her shareholding to the Securities and
Futures Commission and the KRX by the tenth day of the calendar
month immediately following the month in which any changes in
shareholding have occurred. Violations of these reporting
requirements may subject a person to criminal sanctions, such as
fines or imprisonment.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Financial Supervisory Commission Regulations newly
amended on March 2005, (i)&nbsp;if a company listed on the Stock
Market (the &#147;KRX Stock Market&#148;) or a company listed on
the KOSDAQ Market (the &#147;KRX&nbsp;KOSDAQ Market&#148;) has
reported material matters regarding management which have not
been disclosed to KRX to a foreign exchange pursuant to the laws
of the jurisdiction in which the foreign exchange is located,
then it must submit a Korean translation of the material matters
regarding management that have been reported to the foreign
exchange to the FSC and KRX, and (ii)&nbsp;if a KRX Stock
Market-listed company or KRX KOSDAQ Market-listed company has
submitted business reports or similar documents to a foreign
exchange, then it must submit a Korean summary thereof to the
FSC and KRX.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Restrictions Applicable to ADSs</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No Korean governmental approval is necessary for the sale and
purchase of ADSs in the secondary market outside Korea or for
the withdrawal of shares underlying ADSs and the delivery of
shares in Korea in connection with the withdrawal, provided that
a foreigner who intends to acquire the shares must obtain an
investment registration card from the Financial Supervisory
Service, as described below. The acquisition of the shares by a
foreigner must be reported by the foreigner or his standing
proxy in Korea immediately to the Governor of the Financial
Supervisory Service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Persons who have acquired shares as a result of the withdrawal
of shares underlying the ADSs may exercise their preemptive
rights for new shares, participate in free distributions and
receive dividends on shares without any further governmental
approval.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Restrictions Applicable to Shares</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of amendments to the Foreign Exchange Transaction
Laws and the regulations of Financial Supervisory Commission of
Korea, together referred to as the Investment Rules, adopted in
connection with the stock market opening from January 1992 and
after that date, foreigners may invest, with limited exceptions
and subject to procedural requirements, in all shares of Korean
companies, whether listed on the KRX Stock Market or the KRX
KOSDAQ Market, unless prohibited by specific laws. Foreign
investors may trade shares listed on the
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
KRX Stock Market or the KRX KOSDAQ Market only through the KRX
Stock Market or the KRX KOSDAQ Market, except in limited
circumstances, including, among others:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    odd-lot trading of shares;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    acquisition of shares by a foreign company as a result of a
    merger;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    acquisition or disposal of shares in connection with a tender
    offer;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    acquisition of shares by exercise of warrant, conversion right
    under convertible bonds, exchange right under exchangeable bonds
    or withdrawal right under depositary receipts issued outside of
    Korea by a Korean company (&#147;Converted Shares&#148;);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    acquisition of shares through exercise of rights under
    securities issued outside of Korea;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    acquisition of shares as a result of inheritance, donation,
    bequest or exercise of shareholders&#146; rights, including
    preemptive rights or rights to participate in free distributions
    and receive dividends;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <FONT style="white-space: nowrap">over-the</FONT>-counter
    transactions between foreigners of a class of shares for which
    the ceiling on aggregate acquisition by foreigners, as explained
    below, has been reached or exceeded;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    acquisition of shares by direct investment under the Foreign
    Investment Promotion Law.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For <FONT style="white-space: nowrap">over-the</FONT>-counter
transactions of shares between foreigners outside the KRX Stock
Market or the KRX KOSDAQ Market for shares with respect to which
the limit on aggregate foreign ownership has been reached or
exceeded, a securities company licensed in Korea must act as an
intermediary. Odd-lot trading of shares outside the KRX Stock
Market or the KRX KOSDAQ Market must involve a licensed
securities company in Korea as the other party. Foreign
investors are prohibited from engaging in margin transactions
through borrowing shares from securities companies with respect
to shares which are subject to a foreign ownership limit.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Investment Rules require a foreign investor who wishes to
invest in shares for the first time on the KRX Stock Market or
the KRX KOSDAQ Market (including Converted Shares) and shares
being publicly offered for initial listing on the KRX Stock
Market or the KRX KOSDAQ Market to register its identity with
the Financial Supervisory Service prior to making any such
investment; however, the registration requirement does not apply
to foreign investors who acquire Converted Shares with the
intention of selling such Converted Shares within three months
from the date of acquisition of the Converted Shares or who
acquire the shares in an
<FONT style="white-space: nowrap">over-the</FONT>-counter
transaction or dispose of shares where such acquisition or
disposal is deemed to be a foreign direct investment pursuant to
the Foreign Investment Promotion Law. Upon registration, the
Financial Supervisory Service will issue to the foreign investor
an investment registration card which must be presented each
time the foreign investor opens a brokerage account with a
securities company or financial institution in Korea. Foreigners
eligible to obtain an investment registration card include
foreign nationals who are individuals residing in Korea for six
months or longer, foreign governments, foreign municipal
authorities, foreign public institutions, international
financial institutions or similar international organizations,
corporations incorporated under foreign laws and any person in
any additional category designated by decree of the MOFE. All
Korean offices of a foreign corporation as a group are treated
as a separate foreigner from the offices of the corporation
outside Korea for the purpose of investment registration.
However, a foreign corporation or depositary issuing depositary
receipts may obtain one or more investment registration cards in
its name in certain circumstances as described in the relevant
regulations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon a foreign investor&#146;s purchase of shares through the
KRX Stock Market or the KRX KOSDAQ Market, no separate report by
the investor is required because the investment registration
card system is designed to control and oversee foreign
investment through a computer system. However, where a foreign
investor acquires or sells shares outside the KRX Stock Market
and the KRX KOSDAQ Market, such acquisition or sale of shares
must be reported by the foreign investor or his standing proxy
to the Governor at the time of each such acquisition or sale;
provided, however, that a foreign investor must ensure that any
acquisition or sale by it of shares outside the KRX Stock Market
or the KRX KOSDAQ Market in the case of trades in connection
with a tender offer, odd-lot trading of shares or trades of a
class of shares for which the aggregate foreign ownership limit
has been reached or exceeded, is reported to the Governor by the
securities company engaged to facilitate such transaction. In
the event a foreign investor desires to acquire or sell shares
outside the KRX Stock Market or
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
the KRX KOSDAQ Market and the circumstances in connection with
such sale or acquisition do not fall within the exceptions made
for certain limited circumstances described above, then the
foreign investor must obtain the prior approval of the Governor.
In addition, in the event a foreign investor acquires or sells
shares outside the KRX Stock Market or the KRX KOSDAQ Market, a
prior report to the Bank of Korea may also be required in
certain circumstances. A foreign investor must appoint one or
more standing proxies from among the Korea Securities
Depository, foreign exchange banks, including domestic branches
of foreign banks, securities companies, including domestic
branches of foreign securities companies, asset management
companies, futures trading companies and internationally
recognized custodians which will act as a standing proxy to
exercise shareholders&#146; rights, or perform any matters
related to the foregoing activities if the foreign investor does
not perform these activities himself. However, a foreign
investor may be exempted from complying with these standing
proxy rules with the approval of the Governor in cases deemed
inevitable by reason of conflict between laws of Korea and the
home country of the foreign investor.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certificates evidencing shares of Korean companies must be kept
in custody with an eligible custodian in Korea. Only foreign
exchange banks, including domestic branches of foreign banks,
securities companies, including domestic branches of foreign
securities companies, the Korea Securities Depository, asset
management companies, futures trading companies and
internationally recognized custodians are eligible to act as a
custodian of shares for a non-resident or foreign investor. A
foreign investor must ensure that his custodian deposits its
shares with the Korea Securities Depository. However, a foreign
investor may be exempted from complying with this deposit
requirement with the approval of the Governor in circumstances
where compliance with that requirement is made impracticable,
including cases where compliance would contravene the laws of
the home country of such foreign investor.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Investment Rules, with certain exceptions, foreign
investors may acquire shares of a Korean company without being
subject to any foreign investment ceiling. As one such
exception, designated public corporations are subject to a 40.0%
ceiling on the acquisition of shares by foreigners in the
aggregate. Designated public corporations may set a ceiling on
the acquisition of shares by a single person within 3.0% of the
total number of shares in their articles of incorporation.
Currently, Korea Electric Power Corporation is the only
designated public corporation which has set such a ceiling.
Furthermore, an investment by a foreign investor of not less
than 10.0% of the outstanding shares with voting rights of a
Korean company is defined as a direct foreign investment under
the Foreign Investment Promotion Law, which is, in general,
subject to the report to, and acceptance by, the Ministry of
Commerce, Industry and Energy of Korea, which delegates its
authority to foreign exchange banks or the Korea
Trade-Investment Promotion Agency under the relevant
regulations. The acquisition of our shares by a foreign investor
is also subject to the restrictions prescribed in the
Telecommunications Business Law. The Telecommunications Business
Law generally limits the maximum aggregate foreign shareholdings
in us to 49.0% of the outstanding shares. A foreigner who has
acquired shares in excess of such restriction described above
may not exercise its voting rights with respect to the shares
exceeding such limitations, and may be subject to corrective
orders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Foreign Exchange Transaction Laws, a foreign investor
who intends to make a portfolio investment in shares of a Korean
company listed on the KRX Stock Market or the KRX KOSDAQ Market
must designate a foreign exchange bank at which he must open a
foreign currency account and a Won account exclusively for stock
investments. No approval is required for remittance into Korea
and deposit of foreign currency funds in the foreign currency
account. Foreign currency funds may be transferred from the
foreign currency account at the time required to place a deposit
for, or settle the purchase price of, a stock purchase
transaction to a Won account opened at a securities company.
Funds in the foreign currency account may be remitted abroad
without any governmental approval.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Dividends on shares are paid in Won. No governmental approval is
required for foreign investors to receive dividends on, or the
Won proceeds of the sale of, any such shares to be paid,
received and retained in Korea. Dividends paid on, and the Won
proceeds of the sale of, any such shares held by a non-resident
of Korea must be deposited either in a Won account with the
investor&#146;s securities company or the investor&#146;s Won
account. Funds in the investor&#146;s Won account may be
transferred to his foreign currency account or withdrawn for
local living expenses, provided that any withdrawal of local
living expenses in excess of a certain amount is reported to the
tax authorities by the foreign exchange bank at which the Won
account is maintained. Funds in the investor&#146;s
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Won account may also be used for future investment in shares or
for payment of the subscription price of new shares obtained
through the exercise of preemptive rights.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Securities companies and asset management companies are allowed
to open foreign currency accounts with foreign exchange banks
exclusively for accommodating foreign investors&#146; stock
investments in Korea. Through these accounts, these securities
companies and asset management companies may enter into foreign
exchange transactions on a limited basis, such as conversion of
foreign currency funds and Won funds, either as a counterparty
to or on behalf of foreign investors, without the investors
having to open their own accounts with foreign exchange banks.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='151'></A>
</DIV>

<!-- link1 "Item 10E. Taxation" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;10E.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxation</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>United States Taxation</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This summary describes certain material U.S.&nbsp;federal income
tax consequences for a U.S.&nbsp;holder (as defined below) of
acquiring, owning, and disposing of common shares or ADSs. This
summary applies to you only if you hold the common shares or
ADSs as capital assets for tax purposes. This summary does not
apply to you if you are a member of a class of holders subject
to special rules, such as:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a dealer in securities or currencies;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a trader in securities that elects to use a
    <FONT style="white-space: nowrap">mark-to</FONT>-market method
    of accounting for securities holdings;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a bank;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a life insurance company;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a tax-exempt organization;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a person that holds common shares or ADSs that are a hedge or
    that are hedged against interest rate or currency risks;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a person that holds common shares or ADSs as part of a straddle
    or conversion transaction for tax purposes;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a person whose functional currency for tax purposes is not the
    U.S.&nbsp;dollar;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a person that owns or is deemed to own 10% or more of any class
    of our stock.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This summary is based on the Internal Revenue Code of 1986, as
amended, its legislative history, existing and proposed
regulations promulgated thereunder, and published rulings and
court decisions, all as currently in effect. These laws are
subject to change, possibly on a retroactive basis.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Please consult your own tax advisers concerning the
U.S.&nbsp;federal, state, local, and other tax consequences of
purchasing, owning, and disposing of common shares or ADSs in
your particular circumstances.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For purposes of this summary, you are a
&#147;U.S.&nbsp;holder&#148; if you are the beneficial owner of
a common share or an ADS and are:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a citizen or resident of the United States;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a U.S.&nbsp;domestic corporation;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    otherwise subject to U.S.&nbsp;federal income tax on a net
    income basis with respect to income from the common share or ADS.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In general, if you are the beneficial owner of ADSs, you will be
treated as the beneficial owner of the common shares represented
by those ADSs for U.S.&nbsp;federal income tax purposes, and no
gain or loss will be recognized if you exchange an ADS for the
common share represented by that ADS.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Dividends</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The gross amount of cash dividends that you receive (prior to
deduction of Korean taxes) generally will be subject to
U.S.&nbsp;federal income taxation as foreign source dividend
income and will not be eligible for the dividends received
deduction. Dividends paid in Won will be included in your income
in a U.S.&nbsp;dollar amount calculated by reference to the
exchange rate in effect on the date of your receipt of the
dividend, in the case of common shares, or the depositary&#146;s
receipt, in the case of ADSs, regardless of whether the payment
is in fact converted into U.S.&nbsp;dollars. If such a dividend
is converted into U.S.&nbsp;dollars on the date of receipt, you
generally should not be required to recognize foreign currency
gain or loss in respect of the dividend income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to certain exceptions for short-term and hedged
positions, the U.S.&nbsp;dollar amount of dividends received by
an individual prior to January&nbsp;1, 2011 with respect to the
ADSs will be subject to taxation at a maximum rate of 15% if the
dividends are &#147;qualified dividends.&#148; Dividends paid on
the ADSs will be treated as qualified dividends if (i)&nbsp;the
ADSs are readily tradable on an established securities market in
the United States and (ii)&nbsp;the Company was not, in the year
prior to the year in which the dividend was paid, and is not, in
the year in which the dividend is paid, a passive foreign
investment company (&#147;PFIC&#148;). The ADSs are listed on
the New&nbsp;York Stock Exchange, and will qualify as readily
tradable on an established securities market in the United
States so long as they are so listed. Based on the
Company&#146;s audited financial statements and relevant market
and shareholder data, the Company believes that it was not
treated as a PFIC for U.S.&nbsp;federal income tax purposes with
respect to its 2004 or 2005 taxable year. In addition, based on
the Company&#146;s audited financial statements and its current
expectations regarding the value and nature of its assets, the
sources and nature of its income, and relevant market and
shareholder data, the Company does not anticipate becoming a
PFIC for its 2006 taxable year.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Distributions of additional shares in respect of common shares
or ADSs that are made as part of a pro-rata distribution to all
of our stockholders generally will not be subject to
U.S.&nbsp;federal income tax.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Sale or Other Disposition</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For U.S.&nbsp;federal income tax purposes, gain or loss you
realize on a sale or other disposition of common shares or ADSs
generally will be treated as U.S.&nbsp;source capital gain or
loss, and will be long-term capital gain or loss if the common
shares or ADSs were held for more than one year. Your ability to
offset capital losses against ordinary income is limited.
Long-term capital gain recognized by an individual
U.S.&nbsp;holder generally is subject to taxation at reduced
rates.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Foreign Tax Credit Considerations</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You should consult your own tax advisers to determine whether
you are subject to any special rules that limit your ability to
make effective use of foreign tax credits, including the
possible adverse impact of failing to take advantage of benefits
under the income tax treaty between the United States and Korea.
If no such rules apply, you may claim a credit against your
U.S.&nbsp;federal income tax liability for Korean taxes withheld
from dividends on the common shares or ADSs, so long as you have
owned the common shares or ADSs (and not entered into specified
kinds of hedging transactions) for at least a
<FONT style="white-space: nowrap">16-day</FONT> period that
includes the ex-dividend date. Instead of claiming a credit, you
may, if you so elect, deduct such Korean taxes in computing your
taxable income, subject to generally applicable limitations
under U.S.&nbsp;tax law. Korean taxes withheld from a
distribution of additional shares that is not subject to
U.S.&nbsp;tax may be treated for U.S.&nbsp;federal income tax
purposes as imposed on &#147;general limitation&#148; income.
Such treatment could affect your ability to utilize any
available foreign tax credit in respect of such taxes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any Korean securities transaction tax or agriculture and fishery
special surtax that you pay will not be creditable for foreign
tax credit purposes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Foreign tax credits will not be allowed for withholding taxes
imposed in respect of certain short-term or hedged positions in
securities and may not be allowed in respect of arrangements in
which a U.S.&nbsp;holder&#146;s expected economic profit is
insubstantial.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The calculation of foreign tax credits and, in the case of a
U.S.&nbsp;holder that elects to deduct foreign taxes, the
availability of deductions involve the application of complex
rules that depend on a U.S.&nbsp;holder&#146;s particular
circumstances. You should consult your own tax advisers
regarding the creditability or deductibility of such taxes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>U.S.&nbsp;Information Reporting and Backup Withholding
Rules</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Payments of dividends and sales proceeds that are made within
the United States or through certain
<FONT style="white-space: nowrap">U.S.-related</FONT> financial
intermediaries are subject to information reporting and may be
subject to backup withholding unless the holder (i)&nbsp;is a
corporation or other exempt recipient and demonstrates this when
required or (ii)&nbsp;provides a taxpayer identification number
and certifies that no loss of exemption from backup withholding
has occurred. Holders that are not U.S.&nbsp;persons generally
are not subject to information reporting or backup withholding.
However, such a holder may be required to provide a
certification of its
<FONT style="white-space: nowrap">non-U.S.&nbsp;</FONT>status in
connection with payments received within the United States or
through a <FONT style="white-space: nowrap">U.S.-related</FONT>
financial intermediary.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Korean Taxation</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following summary of Korean tax considerations applies to
you so long as you are not:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a resident of Korea;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a corporation organized under Korean law;&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    engaged in a trade or business in Korea through a permanent
    establishment or a fixed base to which the relevant income is
    attributable or with which the relevant income is effectively
    connected.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Dividends on the Shares or ADSs</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will deduct Korean withholding tax from dividends paid to you
at a rate of 27.5% (including resident surtax). If you are a
qualified resident in a country that has entered into a tax
treaty with Korea, you may qualify for a reduced rate of Korean
withholding tax. For example, if you are a qualified resident of
the United States for purposes of the income tax treaty between
the United States and Korea, and you are the &#147;beneficial
owner&#148; of a dividend, generally, a reduced withholding tax
at the rate of 16.5%, will apply. However, in the event the
recipient is a corporation (the &#147;recipient
corporation&#148;), a withholding tax rate of 11.0% will apply,
<I>provided that </I>(i)&nbsp;during any part of the taxable
year of the company making the dividend payment (the
&#147;paying corporation&#148;) that precedes the dividend
payment date, and during the entirety of the prior taxable year
(if any), at least 10% of the outstanding shares of the voting
stock of the paying corporation was owned by the recipient
corporation, and (ii)&nbsp;not more than 25% of the gross income
of the paying corporation for such prior taxable year (if any)
consisted of interest or dividends (other than interest derived
from the operation of a banking, insurance, or financing
business and dividends or interest received from subsidiary
corporation, 50% or more of the outstanding shares of the voting
stock of which is owned by the paying corporation at the time
such dividends or interest is received).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to obtain the benefits of a reduced withholding tax
rate under the treaty, you must submit to us, prior to the
dividend payment date, such evidence of residence as may be
required by the Korean tax authorities. Evidence of residence
may be submitted to us through the ADR depositary. Excess taxes
withheld are generally not recoverable, even if you subsequently
produce evidence that you were entitled to have tax withheld at
a lower rate.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If we distribute to you shares representing a transfer of
certain capital reserves or asset revaluation reserves into
paid-in capital, that distribution may be regarded as dividend
and, as such, subject to Korean withholding tax.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Taxation of Capital Gains</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You may be exempt from Korean taxation on capital gains from the
shares, if you have owned, together with certain related
parties, less than 25.0% of our total issued and outstanding
shares at any time during the year of sale and the five calendar
years before the year of sale, and the sale is made through the
KRX Stock Market or the KRX KOSDAQ Market. As for the ADSs,
according to a ruling issued by Korean taxation authorities,
capital gains earned by a non-resident holder from the transfer
of ADSs outside Korea are not subject to Korean taxation,
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
irrespective of whether or not such holder has a permanent
establishment in Korea. Under the Tax Benefit Limitation Law,
capital gains earned by a non-resident holder (whether or not
such holder has a permanent establishment in Korea) from the
transfer outside Korea of securities issued outside Korea by a
Korean company, which are denominated in foreign currency or
satisfy certain criteria established by the Ministry of Finance
and Economy are exempt from Korean taxation. The Korean tax
authorities have issued a tax ruling confirming that receipts
(which would include the ADSs) are deemed to be securities
issued outside Korea by the issuer of the underlying stock.
Further, capital gains earned by a non-resident from the
transfer of stocks issued by a Korean company are also exempt
from Korean taxation, if listed or registered and sold through
an overseas securities exchange having functional similarity to
the KRX Stock Market or the KRX KOSDAQ Market under the Korean
Securities and Futures Exchange Act.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you are subject to tax on capital gains with respect to the
sale of ADSs, or of shares which you acquired as a result of a
withdrawal, your gain will be calculated based on your cost of
acquiring the ADSs representing such shares, although there are
no specific Korean tax provisions or rulings on this issue. In
the absence of the application of a tax treaty which exempts or
reduces the rate of tax on capital gains, the amount of Korean
tax imposed on your capital gains will be the lesser of 11.0%
(including resident surtax) of the gross realization proceeds
or, subject to production of satisfactory evidence of
acquisition cost and transfer expenses of the ADSs, 27.5% of the
net capital gains. Under the Korea-United States Tax Treaty, a
U.S.&nbsp;resident is generally exempt from Korean taxation on
gains from the sale, exchange or other disposition of our Shares
or ADSs, subject to certain exceptions.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you sell your shares or ADSs, the purchaser or, in the case
of the sale of shares on the KRX Stock Market or through a
licensed securities company in Korea, the licensed securities
company, is required to withhold Korean tax from the sales price
in an amount equal to 11.0% of the gross realization proceeds
and to make payment of such amounts to the Korean tax authority,
unless you establish your entitlement to an exemption or lower
rate of taxation under an applicable tax treaty or produce
satisfactory evidence of your acquisition and transfer costs for
the ADSs. To obtain the benefit of an exemption or reduced rate
of tax pursuant to a tax treaty, you must submit to the
purchaser or the securities company (or through the ADR
depositary), as the case may be, prior to or at the time of
payment, such evidence of your tax residence as the Korean tax
authorities may require in support of your claim for treaty
protection. In addition, Korean tax law requires a non-resident
seller to submit to the relevant tax office (through the payer
of the income, subject to certain exceptions) an application for
exemption by the 9th&nbsp;day of the month following the month
in which the first payment date falls, with a certificate of tax
residence of the seller issued by a competent authority of the
seller&#146;s residence country, to obtain the benefit of a tax
treaty exemption available under applicable tax treaties.
However, this requirement will not apply to exemptions under
Korean tax law. Excess taxes withheld are generally not
recoverable even if you subsequently produce evidence that you
were entitled to have taxes withheld at a lower rate.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Inheritance Tax And Gift Tax</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you die while holding an ADS or transfer an ADS as a gift, it
is unclear whether you will be treated as the owner of the
shares underlying the ADSs for Korean inheritance and gift tax
purposes. If you are treated as the owner of the shares, the
heir or the donee (or in certain circumstances, you as the
donor) will be subject to Korean inheritance or gift tax
presently at the rate of 10.0% to 50.0%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If you die while holding a share or donate a share, the heir or
donee (or in certain circumstances, you as the donor) will be
subject to Korean inheritance or gift tax at the same rate as
indicated above.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Securities Transaction Tax</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You will not pay a securities transaction tax on your transfer
of ADSs. If you transfer shares, you will be subject to a
securities transaction tax at the rate of 0.15% and an
agricultural and fishery special tax at the rate of 0.15% of the
sale price of the share when traded on the KRX Stock Market. If
you transfer shares through the KRX KOSDAQ Market, you will be
subject to a securities transaction tax at the rate of 0.3% of
the sales price of the shares. If your transfer is not made on
the KRX Stock Market or the KRX KOSDAQ Market, subject to
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">126

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
certain exceptions, you will be subject to a securities
transaction tax at the rate of 0.5% and will not be subject to
an agricultural and fishery special tax.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
According to a tax ruling issued by the Korean tax authorities,
foreign shareholders will not be subject to a securities
transaction tax upon the deposit of underlying shares and
receipt of depositary shares or upon the surrender of depositary
shares and withdrawal of originally deposited underlying shares.
Moreover, to date, the imposition of securities transaction tax
has not been enforced on the transfers of ADSs. However, the
Ministry of Finance and Economy recently issued a ruling on
February&nbsp;25, 2004 to the Korean National Tax Service,
holding that depositary shares fall under the meaning of share
certificates that are subject to the securities transaction tax.
In the ruling, the Ministry of Finance and Economy treats the
transfers of depositary shares the same as the transfer of the
underlying Korean shares. Under Korean tax laws, transfers of
depositary shares listed or registered on the New York Stock
Exchange, NASDAQ National Market, or other foreign exchanges
designated by the Ministry of Finance and Economy (which are the
(i)&nbsp;Tokyo Stock Exchange, (ii)&nbsp;London Stock Exchange,
(iii)&nbsp;Deutsche Stock Exchange, and a stock exchange with
functions similar to (i), (ii)&nbsp;or (iii)&nbsp;above, on
which trading is done by standardized procedure as set forth in
the Enforcement Regulation of the Korean Securities and Exchange
Act) will be exempted from the securities transaction tax.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Securities transaction tax, if applicable, must be paid in
principle by the transferor of the shares or the rights to
subscribe to such shares. When the transfer is effected through
a securities settlement company, the settlement company is
generally required to withhold and pay the tax to the tax
authority. When the transfer is made through a securities
company, the securities company is required to withhold and pay
the tax. Where the transfer is effected by a non-resident
without a permanent establishment in Korea, other than through a
securities settlement company or a securities company, the
transferee is required to withhold the securities transaction
tax.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Failing to report (or under-report) the securities transaction
tax will result in a penalty of 10% of the tax amount due. The
failure to pay the securities transaction tax due will result in
imposition of interest at 10.95%&nbsp;per annum on the unpaid
tax amount for the period from the day immediately following the
last day of tax payment period to the day of issuance of tax
notice. The penalty is imposed on the party responsible for
paying the securities transaction tax or, if the securities
transaction tax is to be withheld, the penalty is imposed on the
party that has the withholding obligation.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='152'></A>
</DIV>

<!-- link1 "Item 10F. Dividends and Paying Agents" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;10F.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends and
Paying Agents</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<A name='153'></A>
</DIV>

<!-- link1 "Item 10G. Statements by Experts" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;10G.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statements by
Experts</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<A name='154'></A>
</DIV>

<!-- link1 "Item 10H. Documents on Display" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;10H.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Documents on
Display</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We file reports, including annual reports on
Form&nbsp;<FONT style="white-space: nowrap">20-F,</FONT> and
other information with the SEC pursuant to the rules and
regulations of the SEC that apply to foreign private issuers.
You may read and copy any materials filed with the SEC at the
Public Reference Room at 100 F Street, N.E.,
Washington,&nbsp;D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at
<FONT style="white-space: nowrap">1-800-SEC-0330.</FONT> Any
filings we make electronically will be available to the public
over the Internet at the SEC&#146;s Website at
http://www.sec.gov.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Documents filed with annual reports and documents filed or
submitted to the SEC are also available for inspection at our
principal business office during normal business hours. Our
principal business office is located at&nbsp;11, Euljiro 2-ga,
Jung-gu, Seoul 100-999, Korea.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">127

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='155'></A>
</DIV>

<!-- link1 "Item 10I. Subsidiary Information" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;10I.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsidiary
Information</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<A name='156'></A>
</DIV>

<!-- link1 "Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;11.</B></TD>
    <TD>
    <B><I>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Exchange Rate and Interest Rate Risks</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are exposed to foreign exchange rate and interest rate risk
primarily associated with underlying liabilities. In the first
quarter of 2004, we entered into fixed-to-fixed currency swap
agreements and currency forward contracts with three banks to
reduce our foreign currency exposure with respect to our
issuance of US$300&nbsp;million notes on April&nbsp;1, 2004. In
addition, we have entered into a currency swap contract with a
bank to hedge the foreign currency risk of Dollar denominated
convertible bonds with face amount of US$329.5&nbsp;million
issued on May&nbsp;27, 2004. See note&nbsp;26 of the notes to
our consolidated financial statements. We may consider in the
future entering into other such transactions solely for hedging
purposes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following discussion and tables, which constitute
&#147;forward looking statements&#148; that involve risks and
uncertainties, summarize our market-sensitive financial
instruments including fair value, maturity and contract terms.
These tables address market risk only and do not present other
risks which we face in the normal course of business, including
country risk, credit risk and legal risk.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Exchange Rate Risk</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Korea is our main market and, therefore, substantially all of
our cash flow is denominated in Won. We are exposed to foreign
exchange risk related to foreign currency denominated
liabilities. These liabilities relate primarily to foreign
currency denominated debt, all in Dollars and Yen. A 10% change
in the exchange rate between the Won and all foreign currencies
would result in a change in net liabilities (total monetary
liabilities minus total monetary assets) of approximately 3.69%
or Won 23.7&nbsp;billion as of December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Interest Rate Risk</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are also subject to market risk exposure arising from
changing interest rates. The following table summarizes the
carrying amounts and fair values, maturity and contract terms of
our exchange rate and interest sensitive short-term and
long-term liabilities as of December&nbsp;31, 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="30" align="center" nowrap><B>Maturities</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="30" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2007</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2008</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2009</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2010</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Thereafter</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="30" align="center" nowrap><B>(In billions of won, except for percentage data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Local currency:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fixed rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>795.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>692.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>297.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>297.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>194.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>189.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>2,466.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>2,509.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Average weighted rate(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.53</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.57</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Variable rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Average weighted rate(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>795.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>692.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>297.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>297.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>194.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>189.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>2,466.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>2,509.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fixed rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>341.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>301.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>642.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>647.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Average weighted rate(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.25</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Variable rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Average weighted rate(1)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.34</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.39</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.39</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.39</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>341.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>301.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>643.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>648.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>796.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>692.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>297.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>639.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>194.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>490.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>3,110.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>3,158.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Weighted average rates of the portfolio at the period end.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">128
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<P><HR noshade><P>
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A 1.0% change in interest rates would result in a change of
approximately 2.24% in the fair value of our liabilities
resulting in a Won 70.7&nbsp;billion change in their value as of
December&nbsp;31, 2005 and a Won 12.1&nbsp;million annualized
change in interest expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='157'></A>
</DIV>

<!-- link1 "Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;12.</B></TD>
    <TD>
    <B><I>DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable.</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='158'></A>
</DIV>

<!-- link1 "Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;13.</B></TD>
    <TD>
    <B><I>DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>None.</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='159'></A>
</DIV>

<!-- link1 "Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;14.</B></TD>
    <TD>
    <B><I>MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
    AND USE OF PROCEEDS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>None.</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='160'></A>
</DIV>

<!-- link1 "Item 15. CONTROLS AND PROCEDURES" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;15.</B></TD>
    <TD>
    <B><I>CONTROLS AND PROCEDURES</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have evaluated, with the participation of our management,
including our Chief Executive Officer and Chief Financial
Officer, the effectiveness of the design and operation of our
disclosure controls and procedures as of December&nbsp;31, 2005.
There are inherent limitations to the effectiveness of any
system of disclosure controls and procedures, including the
possibility of human error and the circumvention or overriding
of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can only provide reasonable
assurance of achieving their control objectives. Based upon our
evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures as
of December&nbsp;31, 2005 were effective to provide reasonable
assurance that information required to be disclosed by us in the
reports that we file or submit under the Securities Exchange Act
of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the applicable
rules and forms, and that it is accumulated and communicated to
our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions
regarding required disclosure<B><I>.</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a company with ADSs listed on the New York Stock Exchange, we
are required to comply with the Sarbanes-Oxley Act of 2002.
Section&nbsp;404 of the Act and the applicable rules of the
Securities and Exchange Commission require foreign private
issuers such as us to assess and report on internal controls
over financial reporting on an annual basis, commencing with the
fiscal year ending December&nbsp;31, 2006. We are in the process
of evaluating the requirements of Section&nbsp;404 and are
making preparations to comply with such requirements when they
become applicable to us.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subsequent to the issuance of our consolidated financial
statements for the years ended December&nbsp;31, 2003 and 2004,
we determined that (a)&nbsp;the cash inflows related to
dividends considered to be returns on investments were
incorrectly classified as cash flows from investing activities
as opposed to cash flows from operating activities and
(b)&nbsp;cash flows related to trading securities were
incorrectly classified as cash flows from investing activities
as opposed to cash flows from operating activities in our
statement of cash flows. As a result, U.S.&nbsp;GAAP
reconciliation of consolidated statement of cash flows for the
years ended December&nbsp;31, 2003 and 2004 has been revised
from amounts previously reported. Notwithstanding such revision
to our U.S. GAAP reconciliation of consolidated statement of
cash flows for the years ended December&nbsp;31, 2003 and 2004,
we believe that our disclosure of controls and procedures as of
December&nbsp;31, 2005 were effective in the manner described in
the second preceding paragraph. In order to prevent future
errors in classification, we will implement measures to improve
our U.S.&nbsp;GAAP reconciliation procedures as part of our
preparations to comply with the requirements of Section&nbsp;404.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There has been no change in our internal control over financial
reporting during 2005 that has materially affected, or is
reasonably likely to materially affect, our internal control
over financial reporting.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">129
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='162'></A>
</DIV>

<!-- link1 "Item 16A. Audit Committee Financial Expert" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;16A.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit
Committee Financial Expert</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The board of directors has determined that Dae Sik Kim is an
&#147;audit committee financial expert&#148; and
&#147;independent&#148; as defined under the applicable rules of
the Securities and Exchange Commission. See &#147;Item&nbsp;6C.
Board Practices&nbsp;&#151; Audit Committee&#148; for additional
information regarding our Audit Committee.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='163'></A>
</DIV>

<!-- link1 "Item 16B. Code of Ethics" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;16B.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Code of
Ethics</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Code of Ethics for Chief Executive Officer, Chief Financial
Officer and Controller</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have a code of ethics that applies to our Chief Executive
Officer, senior accounting officers and employees. We also have
internal control and disclosure policy designed to promote full,
fair, accurate, timely and understandable disclosure in all of
our reports and publicly filed documents. A copy of the
Company&#146;s code of ethics is attached to this annual report
as Exhibit&nbsp;11.1.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='164'></A>
</DIV>

<!-- link1 "Item 16C. Principal Accountant Fees and Services" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;16C.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal
Accountant Fees and Services</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table sets forth the fees we paid to our independent
registered public accounting firm: Deloitte Anjin LLC (formerly
&#147;Deloitte HanaAnjin LLC&#148; or &#147;Deloitte&nbsp;&#38;
Touche LLC (Hana)&#148;) for the year ended December&nbsp;31,
2005 and 2004, respectively:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap><B>Years Ended</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap><B>December&nbsp;31,</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2004</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="center" nowrap><B>(In millions of won)</B></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Audit</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>838.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>841.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Audit Related</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>86.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>127.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>139.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>110.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    All Other Fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>900.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,418.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,965.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,497.1</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Audit Fees&#148; are the aggregate fees billed by Deloitte
Anjin LLC in 2005 and 2004, respectively, for the audit of our
consolidated annual financial statements, reviews of interim
financial statements and attestation services that are provided
in connection with statutory and regulatory filings or
engagements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Audit-Related Fees&#148; are fees charged by Deloitte
Anjin LLC in 2005 and 2004, respectively, for assurance and
related services that are reasonably related to the performance
of the audit or review of our financial statements and are not
reported under &#147;Audit Fees&#148;. This category comprises
fees billed for advisory services associated with our financial
reporting.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Tax Fees&#148; are fees for professional services rendered
by Deloitte Anjin LLC in 2005 and 2004, respectively, for tax
compliance, tax advice on actual or contemplated transactions.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fees disclosed under the category &#147;All Other Fees&#148; are
fees for professional services rendered by Deloitte Anjin LLC in
2005 and 2004, respectively, primarily for business consulting.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Pre-Approval of Audit and Non-Audit Services Provided by
Independent Registered Public Accounting Firm</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our audit committee pre-approves all audit services to be
provided by Deloitte Anjin LLC, our independent registered
public accounting firm. Our audit committee&#146;s policy
regarding the pre-approval of non-audit services to be provided
to us by our independent auditors is that all such services
shall be pre-approved by the Audit Committee. Non-audit services
that are prohibited to be provided to us by our independent
auditors under the rules of the Securities and Exchange
Commission and applicable law may not be pre-approved. In
addition, prior to the granting of any pre-approval, our audit
committee must be satisfied that the performance of the services
in question will not compromise the independence of our
independent registered public accounting firm.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">130
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our audit committee did not pre-approve any non-audit services
under the <I>de minimis </I>exception of
Rule&nbsp;<FONT style="white-space: nowrap">2-01</FONT>
(c)(7)(i)(C) of
Regulation&nbsp;<FONT style="white-space: nowrap">S-X</FONT> as
promulgated by the Securities and Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='165'></A>
</DIV>

<!-- link1 "Item 16D. Exemptions from the Listing Standards for Audit Committees" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;16D.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exemptions
from the Listing Standards for Audit Committees</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable.</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='166'></A>
</DIV>

<!-- link1 "Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;16E.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of
Equity Securities by the Issuer and Affiliated Purchasers</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;11, 2003, we concluded a stock buyback program
which we commenced on June&nbsp;30, 2003. We acquired a total of
2,544,600&nbsp;shares of our outstanding common stock, all of
which were cancelled on August&nbsp;20, 2003. The total purchase
price for the stock buyback was Won 525.2&nbsp;billion (or an
average of approximately Won 206,388&nbsp;per share), with the
price per share ranging from Won 192,000 (on July&nbsp;24, 2003)
to Won 216,000 (on July 15-16, 2003). As a result of the stock
buyback and subsequent cancellation of shares, the total number
of our outstanding common stock declined from 82,993,404 as of
December&nbsp;31, 2001 to 73,614,308 as of December&nbsp;31,
2003. On February&nbsp;20, 2004, we additionally acquired
fractional shares totaling 12&nbsp;shares for Won
2&nbsp;million, which resulted from the merger of SK IMT Co.,
Ltd. into SK Telecom in May 2003. As of April&nbsp;30, 2006, the
total number of shares of our common stock outstanding was
73,614,296. In 2006, we intend to purchase up to Won
200&nbsp;billion of our common shares pursuant to open market
purchases.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Set forth in the following table is information with respect to
purchases made by or on behalf of the issuer or any
&#147;affiliated purchaser&#148; (as defined in
Rule&nbsp;<FONT style="white-space: nowrap">10b-18(a)(3)</FONT>
of the Exchange Act) of our common shares.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Total Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Shares Purchased</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Maximum Number of</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Total Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>as Part of Publicly</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Shares That May yet</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Price Paid</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Announced Plans or</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>be Purchased Under</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="left" nowrap><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Purchased</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Program</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>the Plans or Program</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    January</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    February</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>173,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    May</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    June</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    July</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    August</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    September</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    October</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    November</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    December</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>173,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We exchanged 29,808,333&nbsp;shares of KT Corporation&#146;s
common stock at Won 50,900&nbsp;per share for
8,266,923&nbsp;shares of our common stock at Won
224,000&nbsp;per share and settled the difference of Won
334.5&nbsp;billion between the aggregate sale and purchase
prices in cash on December&nbsp;30, 2002 and January&nbsp;10,
2003, under a mutual agreement on stock exchange between us and
KT Corporation dated November&nbsp;14, 2002. Of the
8,266,923&nbsp;shares of our common stock exchanged,
4,457,635&nbsp;shares of our common stock were subsequently
cancelled and 3,809,288&nbsp;shares were designated as treasury
stock for use in future mergers and acquisitions transactions
and strategic alliances or for other corporate purposes to be
determined by us. As a result of the share swap, all
cross-shareholdings between KT Corporation and us have been
completely eliminated.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In late May 2004, we sold US$329.5&nbsp;million in zero coupon
convertible notes due 2009. These convertible notes are
convertible by the holders into shares of our common stock at
the rate of Won 218,098&nbsp;per share as of May&nbsp;31, 2006.
In connection with the issuance of the zero coupon convertible
notes, we deposited
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">131
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
1,645,000&nbsp;shares of our common stock with Korea Securities
Depository to be reserved and used to satisfy the note
holders&#146; conversion rights. This will be deemed as the
repurchase of treasury stock and cancellation thereof for the
purposes of Korean law. On March&nbsp;11, 2005 our shareholders
approved a cash dividend of Won&nbsp;9,300 per common share at
the general shareholders&#146; meeting. On March&nbsp;14, 2005,
we filed a report with the Financial Supervisory Service to
disclose that we adjusted the conversion price of the
convertible notes issued in late May&nbsp;2004 in the principal
amount of US$329,450,000 from Won&nbsp;235,625 to
Won&nbsp;226,566 and made an additional deposit of our common
stock accordingly, so that the total number of shares of common
stock deposited with Korea Securities Depository to satisfy the
note holders&#146; conversion rights increased from 1,644,978 to
1,710,750. On July&nbsp;29, 2005, our board of directors
resolved to recommend an interim cash dividend of Won&nbsp;1,000
per common share. On August&nbsp;1, 2005, we filed a report with
the Financial Supervisory Service to disclose that we adjusted
the conversion price from Won&nbsp;226,566 to Won&nbsp;225,518
and made an additional deposit of our common stock accordingly,
so that the total number of shares of common stock deposited
increased from 1,710,750 to 1,718,700. On March&nbsp;10, 2006,
our shareholders approved a cash dividend of Won&nbsp;8,000 per
common share. On March&nbsp;13, 2006, we filed a report with the
Financial Supervisory Service to disclose that we adjusted the
conversion price from Won&nbsp;225,518 to Won&nbsp;218,098 and
made an additional deposit of our common stock accordingly, so
that the total number of shares of common stock deposited
increased from 1,718,700 to 1,777,173.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='167'></A>
</DIV>

<!-- link1 "Item 17. FINANCIAL STATEMENTS" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;17.</B></TD>
    <TD>
    <B><I>FINANCIAL STATEMENTS</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Not applicable.</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='168'></A>
</DIV>

<!-- link1 "Item 18. FINANCIAL STATEMENTS" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;18.</B></TD>
    <TD>
    <B><I>FINANCIAL STATEMENTS</I></B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="85%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Report of Independent Registered Public Accounting Firm</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    F-3</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated balance sheets as of December&nbsp;31, 2004 and 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    F-4</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated statements of income for the years ended
    December&nbsp;31, 2003, 2004 and 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    F-6</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated statements of changes in stockholders&#146; equity
    for the years ended December&nbsp;31, 2003, 2004 and 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    F-8</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated statements of cash flows for the years ended
    December&nbsp;31, 2003, 2004 and 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    F-10</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Notes to consolidated financial statements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    F-14</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">132

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='169'></A>
</DIV>

<!-- link1 "Item 19. EXHIBITS" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Item&nbsp;19.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBITS</I></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3" align="center" nowrap><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Memorandum and Articles of Association</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Deposit Agreement dated as of May&nbsp;31, 1996, as amended by
    Amendment No.&nbsp;1 dated as of March&nbsp;15, 1999, Amendment
    No.&nbsp;2 dated as of April&nbsp;24, 2000 and Amendment
    No.&nbsp;3 dated as of July&nbsp;24, 2002, entered into among SK
    Telecom Co., Ltd., Citibank, N.A., as Depositary, and all
    Holders and Beneficial Owners of American Depositary Shares</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Telecommunications Basic Law of 1983, as amended (English
    translation)</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Enforcement Decree of the Telecommunications Basic Law, as
    amended (English translation)</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.3</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Telecommunications Business Law of 1983, as amended (English
    translation)</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.4</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Enforcement Decree of the Telecommunications Business Law
    (English translation)***</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.5</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Korean Commercial Code (together with English translation)*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.6</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment to Korean Commercial Code dated December&nbsp;29, 2001
    (together with English translation)**</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.7</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Korean Securities and Exchange Act, as amended (English
    translation)</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>8</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    List of Subsidiaries of SK&nbsp;Telecom Co., Ltd.</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>11</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Code of Ethics of SK Telecom Co., Ltd.***</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>12</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Principal Executive Officer Pursuant to
    Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>12</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Principal Financial Officer Pursuant to
    Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>13</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Principal Executive Officer Pursuant to
    18&nbsp;U.S.C. Section&nbsp;1350, As Adopted Pursuant to
    Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>13</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Principal Financial Officer Pursuant to
    18&nbsp;U.S.C. Section&nbsp;1350, As Adopted Pursuant to
    Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>99</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Deloitte Anjin LLC</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    *</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Filed previously as exhibits to our Form&nbsp;20-F filed on
    June&nbsp;30, 2000.</TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    **</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Filed previously as exhibits to our Form&nbsp;20-F filed on
    June&nbsp;28, 2002.</TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ***</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Filed previously as exhibits to our Form&nbsp;20-F filed on
    May&nbsp;31, 2005.</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">133
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<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>INDEX TO FINANCIAL STATEMENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="91%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    F-3</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CONSOLIDATED BALANCE SHEETS AS OF DECEMBER&nbsp;31, 2004 AND 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    F-4</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED
    DECEMBER&nbsp;31, 2003, 2004 AND 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    F-6</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS&#146; EQUITY
    FOR THE YEARS ENDED DECEMBER&nbsp;31, 2003, 2004 AND 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    F-8</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
    DECEMBER&nbsp;31, 2003, 2004 AND 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    F-10</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    F-14</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-1

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<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED FINANCIAL STATEMENTS</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>FOR THE YEARS ENDED DECEMBER&nbsp;31, 2003, 2004 AND 2005
AND</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-2

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
To the Board of Directors and Shareholders of
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
SK Telecom Co., Ltd.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Seoul, Republic of Korea
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have audited the accompanying consolidated balance sheets of
SK Telecom Co., Ltd. (the &#147;Company&#148;) and its
subsidiaries as of December&nbsp;31, 2003, 2004 and 2005, and
the related consolidated statements of income,
shareholders&#146; equity, and cash flows for the years then
ended (all expressed in Korean won). These consolidated
financial statements are the responsibility of the
Company&#146;s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion
on the effectiveness of the Company&#146;s internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of SK
Telecom Co., Ltd. and its subsidiaries at December&nbsp;31,
2003, 2004 and 2005, and the results of their operations and
their cash flows for the years then ended, in conformity with
accounting principles generally accepted in the Republic of
Korea.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our audits also comprehended the translation of the Korean won
amounts into U.S.&nbsp;dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in
Note&nbsp;2(a) to the accompanying consolidated financial
statements. Such U.S.&nbsp;dollar amounts are presented solely
for the convenience of readers outside of the Republic of Korea.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed in Note&nbsp;2(y) to the accompanying consolidated
financial statements, in 2005 the Company changed its method of
accounting for income taxes to conform to Statement of Korean
Accounting Standards No.&nbsp;16.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Accounting principles generally accepted in the Republic of
Korea vary in certain significant respects from accounting
principles generally accepted in the United states of America.
Information relating to the nature and effect of such
differences is presented in Notes&nbsp;30 and 31 to the
consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 30pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
May&nbsp;19, 2006
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
/s/ Deloitte Anjin LLC
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Seoul, Republic of Korea
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-3

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<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED BALANCE SHEETS</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>December&nbsp;31, 2003, 2004 and 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In millions of Korean won)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>U.S.&nbsp;dollars</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;2(a)))</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="19" align="center" valign="top">
    <B>ASSETS</B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CURRENT ASSETS:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents (Notes&nbsp;2 and 13)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>317,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>370,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>378,426</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>374,679</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term financial instruments (Notes&nbsp;13, 21 and 22)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>154,922</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>105,537</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading securities (Notes&nbsp;2 and 4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>893,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>654,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>769,774</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current portion of long-term investment securities (Notes&nbsp;2
    and 4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,709</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable&nbsp;&#151; trade, net of allowance for
    doubtful accounts of <STRIKE> W</STRIKE>65,327&nbsp;million,
    <STRIKE> W</STRIKE>71,090&nbsp;million and <STRIKE>
    W</STRIKE>133,499&nbsp;million at December&nbsp;31, 2003, 2004
    and 2005, respectively (Notes&nbsp;2,13 and 24)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,579,153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,720,201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,684,119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,667,445</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term loans, net of allowance for doubtful accounts of
    <STRIKE> W</STRIKE>516&nbsp;million, <STRIKE>
    W</STRIKE>564&nbsp;million and <STRIKE>
    W</STRIKE>1,350&nbsp;million at December&nbsp;31, 2003, 2004 and
    2005, respectively (Notes&nbsp;2 and 6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48,849</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,890</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable&nbsp;&#151; other, net of allowance for
    doubtful accounts of <STRIKE> W</STRIKE>16,768&nbsp;million,
    <STRIKE> W</STRIKE>15,622&nbsp;million and <STRIKE>
    W</STRIKE>17,526&nbsp;million at December&nbsp;31, 2003, 2004
    and 2005, respectively (Notes&nbsp;2, 13 and 24)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>867,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,406,553</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,369,691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,356,130</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inventories, net (Notes&nbsp;2,&nbsp;3, 23 and 24)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,707</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84,933</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>104,124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,093</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current deferred income tax assets (Notes&nbsp;2 and 18)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,462</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued income and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,331</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Current Assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,069,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,390,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,598,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,553,049</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NON-CURRENT ASSETS:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property and equipment, net (Notes&nbsp;2,&nbsp;7, 12,&nbsp;22,
    23 and 24)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,641,547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,703,922</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,663,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,617,197</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets, net (Notes&nbsp;2 and 8)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,674,944</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,522,903</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,452,889</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,418,702</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term investment securities (Notes&nbsp;2 and 4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>879,193</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>948,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,220,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,208,127</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity securities accounted for using the equity method
    (Notes&nbsp;2 and 5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183,709</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>304,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>471,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>467,207</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term bank deposits (Note&nbsp;21)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,464</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term loans, net of allowance for doubtful accounts of
    <STRIKE> W</STRIKE>19,552&nbsp;million, <STRIKE>
    W</STRIKE>19,273&nbsp;million and <STRIKE>
    W</STRIKE>19,130&nbsp;million at December&nbsp;31, 2003, 2004
    and 2005, respectively (Notes&nbsp;2 and 6)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,248</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits (Notes&nbsp;13 and 24)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>270,255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>289,015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>168,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>166,890</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-current deferred income tax assets (Notes&nbsp;2 and 18)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,480</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,873</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>83,903</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>107,884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106,816</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Non-Current Assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,748,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,892,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,106,192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,006,131</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TOTAL ASSETS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>13,818,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>14,283,358</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>14,704,772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14,559,180</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-4
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED BALANCE SHEETS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>December&nbsp;31, 2003, 2004 and 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In millions of Korean won)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands of</B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>U.S.&nbsp;dollars</B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;2(a)))</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="19" align="center" valign="top">
    <B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CURRENT LIABILITIES:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable (Notes&nbsp;13, 22 and 24)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,317,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,205,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,047,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,037,405</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term borrowings (Notes&nbsp;13 and 22)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>786,096</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>425,496</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>962</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income taxes payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>402,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>273,495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>370,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>367,150</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued expenses (Notes&nbsp;2, 13 and 25)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>420,995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>394,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>364,830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>361,218</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividend payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>263</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>295</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Withholdings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>184,304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>196,534</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>216,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214,477</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current portion of long-term debt, net (Notes&nbsp;9, 10 and 12)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,364,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>498,278</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>809,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>801,557</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current portion of subscription deposits (Note&nbsp;11)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,881</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,728</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current deferred income tax liabilities (Notes&nbsp;2 and 18)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,561</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,558</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,187</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Current Liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,530,910</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,066,893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,863,373</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,835,023</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    LONG-TERM LIABILITIES:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bonds payable, net (Notes&nbsp;2 and 9)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,261,868</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,891,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,314,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,291,295</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term borrowings (Notes&nbsp;10 and 22)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>153</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subscription deposits (Note&nbsp;11)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,770</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,535</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term payables&nbsp;&#151; other, net of present value
    discount of <STRIKE> W</STRIKE>85,881&nbsp;million, <STRIKE>
    W</STRIKE>72,663&nbsp;million and <STRIKE>
    W</STRIKE>58,413&nbsp;million at December&nbsp;31, 2003, 2004
    and 2005, respectively (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>564,119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>577,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>591,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>585,730</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Obligations under capital leases (Notes&nbsp;2, 12 and 13)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,103</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued severance indemnities, net (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,284</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70,578</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-current deferred income tax liabilities (Notes&nbsp;2 and 18)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>226,029</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>306,052</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>401,156</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>397,184</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term currency swap (Notes&nbsp;2 and 26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96,743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,723</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits received and other (Notes&nbsp;22 and 24)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,322</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,767</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Long-Term Liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,193,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,010,721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,513,859</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,479,068</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,724,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,077,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,377,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,314,091</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    COMMITMENTS AND CONTINGENCIES (Note&nbsp;22)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SHAREHOLDERS&#146; EQUITY:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital stock (Notes&nbsp;1 and 14)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,197</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital surplus (Note&nbsp;14)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,911,556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,968,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,954,840</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,925,584</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Retained earnings (Note&nbsp;15)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,139,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,152,898</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,267,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,195,692</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury stock (Note&nbsp;16)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,047,103</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,047,105</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,047,105</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,026,837</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized profit (loss) on valuation of long-term investment
    securities, net (Notes&nbsp;2 and 4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(160,622</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(92,975</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(42,093</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(41,676</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in capital adjustment of affiliates, net (Notes&nbsp;2
    and&nbsp;5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,581</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>134,376</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61,368</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,760</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on valuation of currency swap, net (Notes&nbsp;2 and 26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(49,452</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,177</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,037</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock options (Notes&nbsp;2 and 17)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,741</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,446</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign-based operations&#146; translation adjustment
    (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,969</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,988</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,889</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in equity of consolidated subsidiaries
    (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98,198</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>107,849</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Shareholders&#146; Equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,093,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,205,744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,327,540</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,245,089</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TOTAL LIABILITIES AND SHAREHOLDERS&#146; EQUITY</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>13,818,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>14,283,358</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>14,704,772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14,559,180</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying Notes to Consolidated Financial Statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-5
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF INCOME</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>Years Ended December&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>U.S.&nbsp;dollars, except</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In millions of Korean won,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>for income per share</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>except for income per share)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;2(a)))</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OPERATING REVENUE (Notes&nbsp;2, 24 and&nbsp;28)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,272,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,570,615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,721,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10,615,663</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OPERATING EXPENSES (Notes&nbsp;2, 22 and&nbsp;24)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Labor cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(407,243</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(464,778</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(464,764</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(460,162</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissions paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,314,558</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,812,318</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,859,638</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,831,325</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization (Notes&nbsp;7 and 8)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,510,545</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,607,478</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,546,285</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,530,975</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Network interconnection&nbsp;(Note&nbsp;28)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(771,553</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(913,688</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(989,417</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(979,621</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Leased line</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(306,527</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(375,227</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(407,043</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(403,013</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Advertising</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(376,424</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(352,877</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(279,390</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(276,624</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Research and development (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(235,551</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(267,107</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(252,046</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(249,550</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rent</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(144,509</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(178,310</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(190,134</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(188,251</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Frequency usage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(129,525</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(143,047</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(156,098</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(154,552</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repair</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(96,464</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(112,094</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(131,719</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(130,415</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Provision for bad debts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(22,378</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29,181</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(112,792</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(111,675</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cost of goods sold</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(560,859</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(479,257</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(240,746</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(238,362</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(290,838</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(395,504</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(421,132</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(416,964</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,166,974</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,130,866</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,051,204</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,971,489</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OPERATING INCOME</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,105,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,439,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,670,616</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,644,174</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OTHER INCOME:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income (Note&nbsp;4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86,485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61,143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,538</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,515</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,252</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,738</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,414</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in earnings of affiliates (Notes&nbsp;2 and 5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,742</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign exchange and translation gains (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,167</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,126</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reversal of allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,555</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>446</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on disposal and valuation of trading securities
    (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,548</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on disposal of investment assets (Notes&nbsp;4 and 5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,259</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,613</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,369</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on disposal of consolidated subsidiary (Note&nbsp;5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>176,920</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on disposal of property, equipment and intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,067</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,647</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on transactions and valuation of currency forward and swap
    (Notes&nbsp;2 and 26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,578</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,552</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,973</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,659</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>261,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199,419</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>392,552</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>388,666</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-6
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF
INCOME&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>Years Ended December&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>U.S.&nbsp;dollars, except</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In millions of Korean won,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>for income per share</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>except for income per share)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;2(a)))</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OTHER EXPENSES:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest and discounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(391,482</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(303,410</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(253,472</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(250,962</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Donations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(91,487</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(89,232</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(145,325</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(143,886</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in losses of affiliates (Notes&nbsp;2 and&nbsp;5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,975</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,954</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(71,825</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(71,114</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign exchange and translation losses (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,230</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,074</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,178</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,137</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on disposal and valuation of trading securities
    (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,974</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(232</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on disposal of investment assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(45,403</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,539</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,017</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,977</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on disposal and impairment of property, equipment and
    intangible assets (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,784</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(19,208</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,783</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,716</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on impairment of long-term investment securities
    (Notes&nbsp;2 and 4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,749</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(33,654</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,422</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,388</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on transactions and valuation of currency forward and swap
    (Notes&nbsp;2 and 26)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15,818</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(43,131</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(31,872</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,564</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,440</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(612,215</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(515,993</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(501,602</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(496,636</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    INCOME BEFORE INCOME TAXES AND MINORITY INTEREST</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,754,336</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,123,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,561,566</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,536,204</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    INCOME TAXES (Notes&nbsp;2 and 18)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(789,059</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(629,761</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(693,259</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(686,395</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    INCOME BEFORE MINORITY INTEREST</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,965,277</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,493,414</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,868,307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,849,809</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    MINORITY INTEREST IN NET LOSS (GAIN) OF CONSOLIDATED SUBSIDIARIES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>823</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,935</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,671</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,625</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NET INCOME</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,966,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,491,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,872,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,854,434</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NET INCOME PER SHARE (Notes&nbsp;2 and&nbsp;19)&nbsp;(In Korean
    won and U.S.&nbsp;dollars)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>26,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>20,261</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>25,443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>25.19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    DILUTED NET INCOME PER SHARE (Notes&nbsp;2 and 19) (In Korean
    won and U.S.&nbsp;dollars)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>26,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>20,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>25,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>24.79</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying Notes to Consolidated Financial Statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-7
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF SHAREHOLDERS&#146; EQUITY</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>Years Ended December&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Common</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Retained</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Minority</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shareholders&#146;</B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Surplus</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjustments</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Interest</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(In millions of Korean won)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, January&nbsp;1, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" valign="bottom"> <STRIKE>W</STRIKE>44,576</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,884,382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,873,205</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,295,770</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>725,507</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,231,900</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,966,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(823</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,965,277</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of treasury stock (Note&nbsp;16)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,379,337</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,379,337</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Retirement of treasury stock (Note&nbsp;16)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,545,281</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,524,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,598</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash dividends paid (Note&nbsp;20)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(151,739</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(151,739</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Excess unallocated purchase price (Note&nbsp;14)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(230</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(230</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of common stock for the merger with SK IMT Co., Ltd.
    (Note&nbsp;14)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,809</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,872</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on disposal of investments in common stock of subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in beginning retained earnings change of affiliates
    (Notes&nbsp;2 and 5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(33</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(33</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cumulative effect of an accounting change (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,341</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(515</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,856</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized loss on valuation of long-term investment securities
    (Notes&nbsp;2 and 4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(56,505</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(56,505</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in capital surplus and capital adjustment changes of
    affiliates (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,463</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,289</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock compensation plans (Notes&nbsp;2 and 17)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,289</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,289</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign-based operations&#146; translation adjustment
    (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(356</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(356</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in minority interest in equity of consolidated
    subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(568,184</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(568,184</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, December&nbsp;31, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" valign="bottom"> <STRIKE>W</STRIKE>44,639</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,911,556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,139,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,158,244</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>155,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,093,847</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,491,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,493,414</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash dividends paid (Note&nbsp;20)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(404,878</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(404,878</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interim cash dividends paid (Note&nbsp;20)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(73,614</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(73,614</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Excess unallocated purchase price (Note&nbsp;14)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(77</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(77</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consideration for conversion rights (Notes&nbsp;2 and 14)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,279</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,279</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of treasury stock (Note&nbsp;16)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in capital surplus and capital adjustment changes of
    affiliates (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,457</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91,795</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81,338</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized gain on valuation of long-term investment securities
    (Notes&nbsp;2 and 4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,647</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on valuation of currency swap (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(49,452</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(49,452</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock compensation plans (Notes&nbsp;2 and 17)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,092</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign-based operations&#146; translation adjustment
    (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,128</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,128</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in minority interest in equity of consolidated
    subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(59,722</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(59,722</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, December&nbsp;31, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" valign="bottom"> <STRIKE>W</STRIKE>44,639</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,968,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,152,898</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,058,292</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>98,198</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,205,744</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-8
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF SHAREHOLDERS&#146;
EQUITY&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>Years Ended December&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Common</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Retained</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Minority</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shareholders&#146;</B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Surplus</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjustments</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Interest</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(In millions of Korean won)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, January&nbsp;1, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" valign="bottom"> <STRIKE>W</STRIKE>44,639</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,968,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,152,898</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,058,292</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>98,198</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,205,744</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,872,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,671</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,868,307</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash dividends paid (Note&nbsp;20)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(684,613</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(684,613</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interim cash dividends paid (Note&nbsp;20)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(73,614</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(73,614</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax effect of temporary differences related to
    conversion rights (Note&nbsp;14)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,502</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,502</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transfer of stock option from capital adjustments to capital
    surplus (Notes&nbsp;14 and 17)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,533</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in capital surplus and capital adjustment changes of
    affiliates (Notes&nbsp;2 and 5)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(73,008</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(69,500</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized gain on valuation of long-term investment securities
    (Notes&nbsp;2 and 4)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,882</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on valuation of currency swap (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,276</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock compensation plans (Notes&nbsp;2 and 17)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>180</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign-based operations&#146; translation adjustment
    (Note&nbsp;2)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,020</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,020</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in minority interest in equity of consolidated
    subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, December&nbsp;31, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" valign="bottom"> <STRIKE>W</STRIKE>44,639</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,954,840</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,267,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,048,515</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>108,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,327,540</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 8pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="center" valign="bottom">
    <B>(In thousands of U.S.&nbsp;dollars) (Note&nbsp;2(a))</B></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, January&nbsp;1, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;2,938,912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;6,091,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;(2,037,913</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;&nbsp;&nbsp;97,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;7,134,400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,854,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,625</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,849,809</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash dividends paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(677,835</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(677,835</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interim cash dividends paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(72,885</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(72,885</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax effect of temporary differences related to
    conversion rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,319</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,319</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transfer of stock option from capital adjustments to capital
    surplus</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,518</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in capital surplus and capital adjustment changes of
    affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(72,285</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(68,812</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized gain on valuation of long-term investment securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,378</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on valuation of currency swap</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,927</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock compensation plans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign-based operations&#146; translation adjustment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in minority interest in equity of consolidated
    subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,248</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,248</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, December&nbsp;31, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>44,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;2,925,584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;7,195,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;(2,028,233</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;107,849</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>$&nbsp;&nbsp;8,245,089</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying Notes to Consolidated Financial Statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-9
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>Years Ended December&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of U.S.&nbsp;dollars</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In millions of Korean won)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;2(a)))</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CASH FLOWS FROM OPERATING ACTIVITIES:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,966,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,491,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,872,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>1,854,434</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expenses not involving cash payments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,649,902</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,752,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,675,528</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,658,939</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Provision for severance indemnities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,607</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Provision for bad debts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115,731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,585</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,546</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>971</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on disposal and valuation of trading securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,974</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on disposal and impairment of property, equipment and
    intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,783</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,716</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on impairment of long-term investment securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,388</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on disposal of investment assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45,403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,017</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,977</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on transaction and valuation of currency forward and swap</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,818</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in losses of affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,975</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,954</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,825</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,114</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in net gain of consolidated subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of discounts on bonds and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,274</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,333</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,890,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,986,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,977,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,957,646</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income not involving cash receipts:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reversal of allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,555</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(759</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(450</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(446</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation gain</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(668</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,367</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(658</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(651</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on disposal and valuation of trading securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(188</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,548</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on disposal of investment assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,555</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,004</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,613</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,369</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on disposal of consolidated subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(178,689</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(176,920</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on disposal of property, equipment and intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,750</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,067</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,693</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,647</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on transactions and valuation of currency forward and swap</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,850</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,578</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,552</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in earnings of affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,949</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,742</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in net loss of consolidated subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(823</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,671</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,625</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,491</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,129</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,769</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,731</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,030</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(25,724</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(241,071</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(238,684</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-10
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF CASH
FLOWS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>Years Ended December&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of U.S.&nbsp;dollars</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In millions of Korean won)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;2(a)))</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Changes in assets and liabilities related to operating
    activities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable&nbsp;&#151; trade</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(159,160</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(170,891</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(210,957</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(208,868</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable&nbsp;&#151; other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(48,789</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(552,343</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,284</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,063</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inventories</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,056</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,982</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,215</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(30,417</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,549</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15,922</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15,764</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(396,700</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(90,977</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,441</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,100</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income taxes payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,597</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(125,430</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87,601</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(26,622</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,944</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,816</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45,776</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,009</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(999</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>120,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,564</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Severance indemnity payments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,516</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27,582</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,365</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,124</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividends received from affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>785</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deposits for group severance indemnities and other deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,727</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(19,489</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(32,869</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(32,543</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transfer of accrued severance indemnities from affiliates and
    related companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(507,346</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(935,566</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(205,024</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(202,994</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Provided by Operating Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,329,391</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,516,807</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,404,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,370,402</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-11
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF CASH
FLOWS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>Years Ended December&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of U.S.&nbsp;dollars</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In millions of Korean won)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;2(a)))</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CASH FLOWS FROM INVESTING ACTIVITIES:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease (increase) in short-term financial instruments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>95,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>90,034</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(75,261</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(74,516</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease (increase) in trading securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(137,618</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>240,204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(122,710</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(121,495</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in short-term loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,931</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in long-term bank deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sale of current portion of long-term investment
    securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70,267</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,077</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sale of long-term investment securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>762,896</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,889</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,484</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sale of equity securities accounted for using the
    equity method</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,889</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,464</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sale of consolidated subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>290,966</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>288,085</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in long-term loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,980</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in guarantee deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,096</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142,131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>140,724</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in other non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,753</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from disposal of property and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,828</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,841</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from disposal of intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,248</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,291</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in long-term loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(60,145</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(56,428</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(59,008</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(58,424</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in long-term bank deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(350</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(60,005</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,140</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,129</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of long-term investment securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(437,076</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(54,132</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(319,061</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(315,902</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of equity securities accounted for using the equity
    method</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,158</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,086</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(231,793</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(229,498</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in long-term loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15,578</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(35,291</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,766</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,709</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in guarantee deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(88,223</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(40,957</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(75,295</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(74,550</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in other non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(54,090</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(82,843</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(86,803</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(85,943</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of property and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,647,639</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,631,941</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,416,622</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,402,596</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(56,745</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(72,376</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(199,494</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(197,519</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(36,442</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(64,247</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,352</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,240</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Used in Investing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,415,053</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,470,292</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,938,187</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,918,998</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-12
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF CASH
FLOWS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>Years Ended December&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of U.S.&nbsp;dollars</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In millions of Korean won)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;2(a)))</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CASH FLOWS FROM FINANCING ACTIVITIES:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in short-term borrowings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>108,669</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of bonds payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>688,737</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,205,727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>193,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191,765</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in long-term borrowings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payment of short-term borrowings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,087</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(359,133</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(376,929</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(373,197</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payment of current portion of long-term debt</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(939,176</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,370,611</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(500,033</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(495,082</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayment of bonds payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,068</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payment of dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(151,739</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(478,318</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(758,192</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(750,685</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in facility deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,654</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,757</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,670</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,594</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transaction of currency forward and swap</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,821</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net increase in treasury stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,379,337</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in minority interest in equity of consolidated
    subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,278</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,033</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(609,262</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,706</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,140</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,129</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Used in Financing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,261,039</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(968,570</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,429,038</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,414,889</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS DUE TO
    CHANGES IN CONSOLIDATED SUBSIDIARIES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,803</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29,084</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(28,796</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(346,629</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,142</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,796</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,719</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>664,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>317,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>370,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366,960</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CASH AND CASH EQUIVALENTS AT END OF THE YEAR</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>317,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>370,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>378,426</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>374,679</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash paid for interest (net of amounts capitalized)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>328,890</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>264,224</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>203,259</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>201,247</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash paid for income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>675,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>679,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>588,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>582,471</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying Notes to Consolidated Financial Statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-13
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>Years Ended December&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>1.</B></TD>
    <TD>
    <B>GENERAL</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
SK Telecom Co., Ltd. (the &#147;Company&#148;) was incorporated
in March 1984 under the laws of Korea to engage in providing
cellular telephone communication services in the Republic of
Korea. The Company mainly provides wireless telecommunications
in the Republic of Korea and recently acquired foreign wireless
telecommunications operators in Vietnam, Mongolia, and the
United States of America. The Company&#146;s common shares and
depositary receipts (DRs) are listed on the Korea Stock Exchange
and the New York and London Stock Exchanges, respectively. As of
December&nbsp;31, 2005, the Company&#146;s total issued shares
are held by the following:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Percentage of</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Total Shares</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Issued (%)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Group</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,748,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.79</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    POSCO</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,991,496</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.64</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Institutional investors and other minority shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,874,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63.04</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,662,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.53</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>2.</B></TD>
    <TD>
    <B>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accompanying consolidated financial statements of the
Company have been prepared in accordance with Korean Financial
Accounting Standards and Statements of Korean Accounting
Standards (&#147;SKAS&#148;) No.&nbsp;1 through No.&nbsp;17
(except for No.&nbsp;11 and No.&nbsp;14). As SKAS No. 11 is not
effective until the fiscal year ending December&nbsp;31, 2006
and SKAS No. 14 is related to exceptions to accounting for small
and medium-sized entities, they do not apply to the Company.
Significant accounting policies followed in preparing the
accompanying consolidated financial statements are summarized as
follows.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>a.</B></TD>
    <TD>
    <B>Basis of Presentation</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The official accounting records of the Company are expressed in
Korean won and are maintained in accordance with the relevant
laws and regulations of the Republic of Korea. The accounting
principles and reporting practices followed by the Company and
generally accepted in Korea (&#147;Korean GAAP&#148;) may differ
in certain respects from accounting principles and reporting
practices generally accepted in other countries and
jurisdictions. To conform more closely to presentations
customary in filings with the Securities and Exchange Commission
of the United States of America, the accompanying consolidated
financial statements have been condensed, restructured and
translated into English. The conversion into U.S.&nbsp;dollars
was made at the rate of W1,010.00 to US$1, the Noon Buying Rate
in the City of New York for cable transfers in Korean won as
certified for customs purposes by the Federal Reserve Bank of
New York on the last business day of the year ended
December&nbsp;31, 2005. Such conversion into U.S.&nbsp;dollars
should not be construed as representations that the Korean won
amounts could be converted into U.S.&nbsp;dollars at the above
or any other rate. Certain supplementary information included in
the statutory Korean language consolidated financial statements,
not required for a fair presentation of the Company and its
subsidiaries&#146; financial position or results of operations,
is not presented in the accompanying consolidated financial
statements.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>b.</B></TD>
    <TD>
    <B>Principles of Consolidation</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements include the accounts of
the Company and the following controlled subsidiaries as of
December&nbsp;31, 2003, 2004 and 2005. Controlled subsidiaries
include (a)&nbsp;majority-owned entities by the Company or its
controlled subsidiary and (b)&nbsp;other entities where the
Company or its controlled subsidiary
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-14

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
owns more than 30% of total outstanding common stock and is the
largest shareholder. Significant intercompany accounts and
transactions have been eliminated in consolidation.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap><B>Ownership Percentage (%)</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Year of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Subsidiary</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Establishment</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Primary Business</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Teletech Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Capital Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    <BR>
    Finance</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Telink Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telecommunication services</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90.77</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Communications Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Internet website services</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>92.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>92.37</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Wyverns Baseball Club Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Business related sports</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99.99</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Centurion IT Investment Association</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Investment association</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.50</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Global Credit &#38; information Corp.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Credit and collection services</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PAXNet Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Internet website services</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67.10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Seoul Records, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Release of music disc</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Telecom International Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Internet website services</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SLD Telecom PTE Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telecommunication services</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55.10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Telecom China Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telecommunication services</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TU Media Corp.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Digital multi media<BR>&nbsp;&nbsp;broadcasting service</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.60</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U-Land Company Limited</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telecommunication services</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Telecom USA Holdings, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telecommunication services</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The First Music Investment Fund of SK-PVC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Investment association</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Second Music Investment Fund of SK-PVC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Investment association</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK-KTB Music Investment Fund</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Investment association</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IMM Cinema Fund</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Investment association</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48.39</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective January&nbsp;1, 2004, TU Media Corp. that was included
in the consolidated financial statements for the year ended
December&nbsp;31, 2003 is excluded from the consolidation as the
Company&#146;s equity interest in TU Media Corp. decreased from
100% to 46.1%, effective January&nbsp;1, 2004 and to 28.5%,
effective May&nbsp;21, 2004. As of December&nbsp;31, 2005, the
Company&#146;s equity interest in TU Media corp. is 29.6%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective January&nbsp;1, 2004, SK Telecom China., Ltd. is
included in the consolidation of the accompanying financial
statements as its total assets at the beginning of the fiscal
year were more than <STRIKE>W</STRIKE>7&nbsp;billion, in
accordance with Korean GAAP.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective July&nbsp;1, 2005, SK Teletech Co., Ltd. that had been
included in the accompanying consolidated financial statements
for the years ended December&nbsp;31, 2003 and 2004 is excluded
from the consolidation as the Company sold 60% equity interest
in SK Teletech Co., Ltd. to Curitel Communications, Inc. in July
2005. Effective December&nbsp;1, 2005, SK Teletech Co., Ltd. was
merged into Pantech Co., Ltd. and the Company&#146;s equity
interest in Pantech Co., Ltd. became 22.7%.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-15
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In August 2005, the Company purchased a 60.0% equity interest in
Seoul Records, Inc. and included it in the consolidation of the
accompanying financial statements from the date of acquisition.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective January&nbsp;1, 2005, U-Land Company Limited is
included in the consolidation of the accompanying consolidated
financial statements as its total assets at the beginning of the
fiscal year were more than <STRIKE>W</STRIKE>7&nbsp;billion, in
accordance with Korean GAAP.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>c.</B></TD>
    <TD>
    <B>Use of Estimates</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preparation of financial statements in conformity with
accounting principles generally accepted in Korea and the United
States of America requires management to make estimates and
assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the
consolidated financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from these estimates.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>d.</B></TD>
    <TD>
    <B>Cash and Cash Equivalents</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cash and cash equivalents are cash in banks and short-term
highly liquid investments with an original maturity of three
months or less at the date of purchase, which are readily
convertible without significant transaction cost on risk or
changes in interest rates.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>e.</B></TD>
    <TD>
    <B>Allowance for Doubtful Accounts</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An allowance for doubtful accounts is provided based on the
estimated collectibility of individual accounts and historical
bad debt experience.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Activity in the allowance for doubtful accounts
receivable&nbsp;&#151; trade for 2003, 2004 and 2005 is as
follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Beginning balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>60,542</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>65,327</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>71,090</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Write-offs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(17,593</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(23,418</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(49,181</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,909</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,909</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Provision for bad debt</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,181</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112,792</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease from changes in consolidated subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,202</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    End of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>65,327</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>71,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>133,499</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>f.</B></TD>
    <TD>
    <B>Inventories</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Inventories, which consist mainly of replacement units for
wireless telecommunication facilities, handsets, raw material
for handsets, supplies for sales promotion and music CDs, are
stated at the lower of cost or market value, with cost
determined using the moving average method. During the year,
perpetual inventory systems are used to value inventories, which
are adjusted to physical inventory counts performed at the end
of the year. When the market value of inventories is less than
the acquisition cost, carrying amount is reduced to the market
value and any difference is charged to current operations as
operating expenses. A valuation loss of
<STRIKE>W</STRIKE>639&nbsp;million was recorded for the year
ended December&nbsp;31, 2005 (nil for the years ended
December&nbsp;31, 2003 and 2004).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-16
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>g.</B></TD>
    <TD>
    <B>Securities (excluding securities accounted for using the
    equity method of accounting)</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Debt and equity securities are initially recorded at their
acquisition costs (fair value of considerations paid) including
incidental cost incurred in connection with acquisition of the
related securities and classified into trading,
available-for-sale and
<FONT style="white-space: nowrap">held-to</FONT>-maturity
securities depending on the acquisition purpose and nature.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trading securities are stated at fair value with gains or losses
on valuation reflected in current operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Securities classified as available-for-sale are reported at fair
value. Unrealized gains or losses on valuation of
available-for-sale securities are included in capital
adjustments and the unrealized gains or losses are reflected in
net income when the securities are sold or if an impairment is
other than temporary as discussed below. Equity securities are
stated at acquisition cost if fair value cannot be reliably
measured. If the declines in the fair value of individual
available-for-sale securities below their acquisition or
amortized cost are other than temporary and there is objective
evidence of impairment, write-downs of the individual securities
are recorded to reduce the carrying value to their fair value.
The related write-downs are recorded in current operations as a
loss on impairment of investment securities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="white-space: nowrap">Held-to</FONT>-maturity
securities are presented at acquisition cost after premiums or
discounts for debt securities are amortized or accreted,
respectively. The Company and its subsidiaries recognize
write-downs resulting from the other-than-temporary declines in
the fair value below its book value on the balance sheet date if
there is objective evidence of impairment. The related
write-downs are recorded in current operations as a loss on
impairment of investment securities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trading securities are presented in the current asset section of
the balance sheet, and available-for-sales and
<FONT style="white-space: nowrap">held-to</FONT>-maturity
securities are presented in the current asset section of the
balance sheet if their maturities are within one year; otherwise
such securities are recorded in the non-current section of the
balance sheet.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>h.</B></TD>
    <TD>
    <B>Investment Securities with 20% or More
    Ownership&nbsp;Interest</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investment securities of affiliated companies, in which the
Company has a 20% or more ownership interest and/or the ability
to exercise significant influence, are carried using the equity
method of accounting, whereby the Company&#146;s initial
investment is recorded at cost and the carrying value is
subsequently increased or decreased to reflect the
Company&#146;s portion of shareholders&#146; equity of the
investee. Differences between the purchase cost and net asset
value of the investee are amortized over 5 to 20&nbsp;years
using the straight-line method. When applying the equity method
of accounting, unrealized intercompany gains and losses are
eliminated.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>i.</B></TD>
    <TD>
    <B>Property and Equipment</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property and equipment are stated at cost. Major renewals and
betterments, which prolong the useful life or enhance the value
of assets, are capitalized; expenditures for maintenance and
repairs are charged to expense as incurred.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Depreciation is computed using the declining balance method
(except for buildings and structures acquired on or after
January&nbsp;1, 1995 which are depreciated using straight-line
method) over the estimated useful lives
(3&nbsp;&#150;&nbsp;30&nbsp;years) of the related assets.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interest expenses and other financing charges for borrowings
related to the manufacture or construction of property and
equipment are charged to current operations as incurred.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>j.</B></TD>
    <TD>
    <B>Intangible Assets</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Intangible assets are stated at cost less amortization computed
using the straight-line method over 2 to 20&nbsp;years.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-17

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With its application for a license to provide IMT services, the
Company has a commitment to pay
<STRIKE>W</STRIKE>1,300,000&nbsp;million to the Ministry of
Information Communication (&#147;MIC&#148;). SK IMT Co., Ltd.,
which was merged into the Company on May&nbsp;1, 2003, paid
<STRIKE>W</STRIKE>650,000&nbsp;million in March 2001 and the
Company is required to pay the remainder over 10&nbsp;years with
an annual interest rate equal to the
<FONT style="white-space: nowrap">3-year</FONT>-maturity
government bond rate minus 0.75% (3.58% as of December&nbsp;31,
2005). The future payment obligations are
<STRIKE>W</STRIKE>90,000&nbsp;million in 2007,
<STRIKE>W</STRIKE>110,000&nbsp;million in 2008,
<STRIKE>W</STRIKE>130,000&nbsp;million in 2009,
<STRIKE>W</STRIKE>150,000&nbsp;million in 2010 and
<STRIKE>W</STRIKE>170,000&nbsp;million in 2011. On
December&nbsp;4, 2001, SK IMT Co., Ltd. received the IMT license
from the MIC, and recorded the total license cost as an
intangible asset. 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 of the IMT license which expires in December 2016. The
Company determined the IMT license has a finite life,
considering that renewal cost is expected to be substantial.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company capitalizes the cost of internal-use software which
has a useful life in excess of one year. Capitalized
internal-use software costs are amortized using the
straight-line method over 5&nbsp;years and are recorded in
intangible assets.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>k.</B></TD>
    <TD>
    <B>Convertible Bonds</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The proceeds from issuance of convertible bonds are allocated
between the conversion rights and the debt issued; the portion
allocable to the conversion rights is accounted for as capital
surplus with a corresponding conversion right adjustment which
is deducted from the related bonds. Such conversion right
adjustment is amortized to interest expense using the effective
interest rate method over the redemption period of the
convertible bonds. The portion allocable to the conversion
rights is measured by deducting the present value of the debt at
time of issuance from the gross proceeds from issuance of
convertible bonds, with the present value of the debt being
computed by discounting the expected future cash flows
(including call premium, if any) using the effective interest
rate applied to ordinary or straight debt of the Company at the
issue date.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>l.</B></TD>
    <TD>
    <B>Discounts on Bonds</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Discounts on bonds are amortized to interest expense using the
effective interest rate method over the redemption period of the
bonds.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>m.</B></TD>
    <TD>
    <B>Valuation of Long-Term Payables</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Long-term payables resulting from long-term installment
transactions are stated at the present value of the expected
future cash flows. Imputed interest amounts are recorded in
present value discount accounts which are deducted directly from
the related nominal payable balances. Such imputed interest is
included in operations using the effective interest rate method
over the redemption period.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>n.</B></TD>
    <TD>
    <B>Provisions, Contingent Liabilities and Contingent Assets</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries recognize a provision when
i)&nbsp;it has a present obligation as a result of a past
event,&nbsp;ii) it is probable that a disbursement of economic
resources will be required to settle the obligation, and
iii)&nbsp;a reliable estimate can be made of the amount of the
obligation (see Note&nbsp;25).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries do not recognize the following
contingent obligations as liabilities;
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#151;&nbsp;</TD>
    <TD align="left">
    Possible obligations related to past events, for which the
    existence of a liability can only be confirmed upon occurrence
    of uncertain future event or events outside the control of the
    Company and certain subsidiaries.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-18
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#151;&nbsp;</TD>
    <TD align="left">
    Present obligations arising out of past events or transactions,
    for which i)&nbsp;a disbursement of economic resources to
    fulfill such obligations is not probable or ii)&nbsp;a
    disbursement of economic resources is probable, but the related
    amount cannot be reasonably estimated.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the Company and its subsidiaries do not recognize
potential assets related to past events or transactions, for
which the existence of an asset or future benefit can only be
confirmed upon occurrence of uncertain future event or events
outside the control of the Company and its subsidiaries.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>o.</B></TD>
    <TD>
    <B>Accrued Severance Indemnities</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with the policies of the Company and its
subsidiaries, all employees with more than one year of service
are entitled to receive severance indemnities, based on length
of service and rate of pay, upon termination of their
employment. Accruals for severance indemnities are recorded to
approximate the amount required to be paid if all employees were
to terminate at the balance sheet date.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and certain subsidiaries have deposits with
insurance companies to fund the portion of the employees&#146;
severance indemnities which is in excess of the tax deductible
amount allowed under the Corporate Income Tax Law, in order to
take advantage of the additional tax deductibility for such
funding. Such funding of severance indemnities in outside
insurance companies, where the beneficiaries are their
employees, totaling <STRIKE>W</STRIKE>144,861&nbsp;million,
<STRIKE>W</STRIKE>164,643&nbsp;million and
<STRIKE>W</STRIKE>191,354&nbsp;million as of December&nbsp;31,
2003, 2004 and 2005, respectively, were deducted from accrued
severance indemnities in accordance with Korean GAAP.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with the Korean National Pension Fund&nbsp;Law,
the Company and its domestic subsidiaries transferred a portion
of its accrued severance indemnities to the National Pension
Fund through March 1999. Such transfers, amounting to
<STRIKE>W</STRIKE>6,229&nbsp;million,
<STRIKE>W</STRIKE>5,687&nbsp;million and
<STRIKE>W</STRIKE>5,217&nbsp;million as of December&nbsp;31,
2003, 2004 and 2005, respectively, are deducted from accrued
severance indemnities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Changes in accrued severance indemnities for 2003, 2004 and 2005
are as follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="57%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Beginning net balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>48,519</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>67,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>80,984</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Provision</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,073</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payments to employees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,516</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27,582</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,365</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transfer from affiliated and related companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net increase due to the changes in consolidated subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>594</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deposits for severance indemnities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,904</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(19,781</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(33,002</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ending net balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>67,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>80,984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>71,284</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ending balance:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued severance indemnities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>218,914</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>251,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>267,855</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deposits with insurance companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(144,861</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(164,643</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(191,354</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transfer to the National Pension Fund</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,229</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,687</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,217</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>67,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>80,984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>71,284</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-19
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the Company and certain subsidiaries expect to pay
the following future benefits for the next 10&nbsp;years to
their employees upon their normal retirement age as follows (in
millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="left" nowrap><B>Year ending December&nbsp;31,</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>248,710</TD>
    <TD align="left" valign="bottom" nowrap>(note)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>629</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2009</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2010</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>808</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2011Y2015</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,661</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>261,217</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>(note)&nbsp;</TD>
    <TD align="left">
    The future benefits in 2006 include early settlement of
    retirement benefit of <STRIKE>W</STRIKE>243,847&nbsp;million
    which is paid in April 2006, in accordance with a resolution of
    the Company&#146;s a joint labor-management conference dated
    March&nbsp;16, 2006. These amounts do not include additional
    bonuses for early settlement and voluntary early retirement
    amounting to <STRIKE>W</STRIKE>125,890&nbsp;million and
    <STRIKE>W</STRIKE>14,705&nbsp;million, respectively, which is
    paid in April 2006.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The above amounts were determined based on the employees&#146;
current salary rates and the number of service years that will
be accumulated upon their retirement date. These amounts do not
include amounts that might be paid to employees that will cease
working with the Company before their normal retirement age.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>p.</B></TD>
    <TD>
    <B>Accounting for Leases</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lease agreements that include a bargain purchase option, result
in the transfer of ownership at the end of the lease term, have
a lease term equal to 75% or more of the estimated economic life
of the leased property or where the present value of minimum
lease payments equals or exceeds 90% of the fair value of the
leased property, are accounted for as capital leases. All other
leases are accounted for as operating leases.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Assets and liabilities related to capital leases are recorded as
property and equipment and obligations under capital leases,
respectively, and the related interest is calculated using the
effective interest rate method and charged to expense. For
operating leases, the future minimum lease payments are expensed
ratably over the lease term while contingent rentals are
expensed as incurred.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>q.</B></TD>
    <TD>
    <B>Research and Development Costs</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries charge substantially all
research and development costs to expense as incurred. The
Company and its subsidiaries incurred internal research and
development costs of <STRIKE>W</STRIKE>235,551&nbsp;million,
<STRIKE>W</STRIKE>267,107&nbsp;million and
<STRIKE>W</STRIKE>252,046&nbsp;million for the years ended
December&nbsp;31, 2003, 2004 and 2005, respectively, and
external research and development costs of
<STRIKE>W</STRIKE>64,893&nbsp;million,
<STRIKE>W</STRIKE>69,016&nbsp;million and
<STRIKE>W</STRIKE>69,140&nbsp;million for the years ended
December&nbsp;31, 2003, 2004 and 2005, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>r.</B></TD>
    <TD>
    <B>Derivative Instruments</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company records rights and obligations arising from
derivative instruments as assets and liabilities, which are
stated at fair value. The gains and losses that result from the
change in the fair value of derivative instruments are reported
in current earnings. However, for derivative instruments
designated as hedging the exposure of variable cash flows, the
effective portion of the gains or losses on the hedging
instruments are recorded as a separate component of
shareholders&#146; equity and credited/ charged to operations at
the time the
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-20
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
hedged transactions affect earnings, and the ineffective
portions of the gains or losses is credited/ charged immediately
to operations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>s.</B></TD>
    <TD>
    <B>Revenue Recognition</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The revenues of the Company and its subsidiaries are principally
derived from telecommunication service revenue including data
services, and telephone sales. Telecommunication service
consists of fixed monthly charges, usage-related charges and
non-refundable activation fees. Fixed monthly charges are
recognized in the period earned. Usage-related charges are
recognized at the time services are rendered. Non-refundable
activation fees and costs are recognized when the activation
service was performed.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s subsidiaries also sell telephones to
customers and telephone sales are recognized at the time
products are delivered.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>t.</B></TD>
    <TD>
    <B>Income Taxes</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Income tax expense is determined by adding or deducting the
total income tax and surtaxes to be paid for the current period
and the changes in deferred income tax assets and liabilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Deferred tax is recognized on differences between the carrying
amounts of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of
taxable profits. Deferred tax liabilities are generally
recognized for all taxable temporary differences with some
exceptions and deferred tax assets are recognized to the extent
that it is probable that taxable profits will be available
against which the deductible temporary differences can be
utilized. The carrying amount of deferred tax assets is reduced
to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the
assets to be recovered. Effective January&nbsp;1, 2005 deferred
income tax assets and liabilities, which were presented on the
balance sheet as a single non-current net amount through 2004,
are classified into current and non-current based on the
classification of related assets or liabilities for financial
reporting purposes.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>u.</B></TD>
    <TD>
    <B>Net Income Per Share and Dilutive Net Income Per Share</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net income per share is computed by dividing net income by the
weighted average number of common shares outstanding during the
period. Diluted net income per share of common stock is
calculated by dividing adjusted net income by adjusted weighted
average number of shares outstanding during the period, taking
into account the dilutive effect of stock options in 2002 and
issuance of convertible bonds in 2004 and 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>v.</B></TD>
    <TD>
    <B>Foreign-Based Operations&#146; Translation Adjustment</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In translating the foreign currency financial statements of the
Company&#146;s overseas subsidiaries into Korean won, the
Company presents the translation gain or loss as a foreign-based
operations&#146; translation adjustment in the capital
adjustment section of the balance sheet. The translation gain or
loss arises from the application of different exchange rates;
the year-end rate for balance sheet items except
shareholders&#146; equity, the historical rate for
shareholders&#146; equity and the daily average rate for
statement of income items.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>w.</B></TD>
    <TD>
    <B>Accounting for Foreign Currency Transactions and
    Translation</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its domestic subsidiaries maintain their
accounts in Korean won. Transactions in foreign currencies are
recorded in Korean won based on the prevailing rate of exchange
at the dates of transactions. As allowed under Korean GAAP,
monetary assets and liabilities denominated in foreign
currencies are translated in the accompanying consolidated
financial statements at the Base Rates announced by Seoul Money
Brokerage Services, Ltd. on the balance sheet dates, which, for
U.S.&nbsp;dollars, were <STRIKE>W</STRIKE>1,197=US$1,
<STRIKE>W</STRIKE>1,043=US$1 and <STRIKE>W</STRIKE>1,013=US$1 at
December&nbsp;31, 2003, 2004 and 2005, respectively. The
resulting gains and losses arising from the translation or
settlement of such assets and liabilities are included in
current operations.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-21
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>x.</B></TD>
    <TD>
    <B>Accounting for Employee Stock Option Compensation Plan</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company adopted the fair value based method of accounting
for its employee stock option compensation plan (see
Note&nbsp;17). Under the fair value based method, compensation
cost is measured at the grant date based on the value of the
award and is recognized over the service period. For stock
options, fair value is determined using an option-pricing model
that takes into account the stock price at the grant date, the
exercise price, the expected life of the option, the volatility
of the underlying stock, expected dividends and the current
risk-free interest rate for the expected life of the option.
However, as permitted under Korean GAAP, the Company excludes
the volatility factor in estimating the value of its stock
options granted before December&nbsp;31, 2003, which results in
measurement at minimum value. The total compensation cost of an
option estimated at the grant date is not subsequently adjusted
for changes in the price of the underlying stock or its
volatility, the actual life of the option, dividends on the
stock, or the risk-free interest rate.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>y.</B></TD>
    <TD>
    <B>Adoption of New Statements of Korea Accounting Standards
    (&#147;SKAS&#148;)</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;1, 2004, the Company and its subsidiaries
adopted SKAS No.&nbsp;10, No.&nbsp;12 and No.&nbsp;13. Such
adoptions of new SKAS did not have an effect on the consolidated
financial position of the Company and its subsidiaries as of
December&nbsp;31, 2004 or consolidated ordinary income and net
income of the Company and its subsidiaries for the year ended
December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;1, 2005, the Company and its subsidiaries
adopted SKAS No.&nbsp;15 through No.&nbsp;17. The adoption of
such accounting standards did not have an effect on the
consolidated financial position of the Company and its
subsidiaries as of December&nbsp;31, 2005 or consolidated
ordinary income and net income of the Company and its
subsidiaries for the year ended December&nbsp;31, 2005 except as
follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#151;&nbsp;</TD>
    <TD align="left">
    Through 2004, when the Company&#146;s equity interests in the
    equity method investees were diluted as a result of the equity
    method investees&#146; direct sales of their unissued shares to
    third parties, the changes in the Company&#146;s proportionate
    equity of investees were accounted for as capital transactions.
    Effective January&nbsp;1, 2005, such transactions are accounted
    for as income statement treatment, pursuant to adoption of SKAS
    No.&nbsp;15, &#147;Investments: Equity Method&#148;. As a result
    of adopting SKAS No.&nbsp;15, net income for the year ended
    December&nbsp;31, 2005 increased by
    <STRIKE>W</STRIKE>6,262&nbsp;million (net of tax effect of
    <STRIKE>W</STRIKE>2,375&nbsp;million).</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#151;&nbsp;</TD>
    <TD align="left">
    Through 2004, tax effects of temporary differences related to
    capital surplus or capital adjustments were excluded in
    determining the deferred tax assets or liabilities. Effective
    January&nbsp;1, 2005, such tax effects of temporary differences
    are included in determining the deferred tax assets or
    liabilities, pursuant to adoption of SKAS No.&nbsp;16
    &#147;Income Taxes&#148;. Accordingly, adjustments made directly
    to capital surplus or capital adjustments, which result in
    temporary differences, are recorded net of related tax effects.
    In addition, effective January&nbsp;1, 2005, deferred income tax
    assets and liabilities which were presented on the balance sheet
    as a single non-current net number through 2004, are separated
    into current and non-current portions. As a result of adopting
    SKAS No.&nbsp;16, total assets and total liabilities as of
    December&nbsp;31, 2005 increased by
    <STRIKE>W</STRIKE>67,612&nbsp;million and
    <STRIKE>W</STRIKE>97,768&nbsp;million, respectively, and total
    stockholders&#146; equity as of December&nbsp;31, 2005 decreased
    by <STRIKE>W</STRIKE>30,156&nbsp;million, which was directly
    reflected in capital surplus or capital adjustments
    (see&nbsp;Note&nbsp;18).</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#151;&nbsp;</TD>
    <TD align="left">
    Through 2004, provisions were recorded at nominal value.
    Effective January&nbsp;1, 2005, provisions are recorded at the
    present value when the effect of the time value of money is
    material, pursuant to adoption of SKAS No.&nbsp;17
    &#147;Provisions, Contingent Liabilities and Contingent
    Assets&#148;. SKAS No.&nbsp;17 is prospectively applied and as a
    result of adopting such accounting standard, total liabilities
    as of December&nbsp;31, 2005 decreased by
    <STRIKE>W</STRIKE>7,415&nbsp;million and ordinary income and net
    income for the year ended December&nbsp;31, 2005 increased by
    <STRIKE>W</STRIKE>5,376&nbsp;million (see Note&nbsp;25).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Such newly adopted accounting standards are prospectively
applied as allowed by SKAS No.&nbsp;15 through No.&nbsp;17. As a
result, the consolidated balance sheets as of December&nbsp;31,
2004 and 2003 and the consolidated
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-22
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
statements of income and cash flows for the years ended
December&nbsp;31, 2004 and 2003, which are comparatively
presented herein, were not adjusted to reflect the effect of
adoption of SKAS No.&nbsp;15 through No.&nbsp;17.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>z.</B></TD>
    <TD>
    <B>Reclassifications</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain reclassifications have been made in prior years&#146;
consolidated financial statements to conform to classifications
used in the current year. Such reclassifications did not have an
effect on the previously reported financial position as of
December&nbsp;31, 2003 and 2004 and ordinary income and net
income for the years ended December&nbsp;31, 2003 and 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>3.</B></TD>
    <TD>
    <B>INVENTORIES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Inventories as of December&nbsp;31, 2003 and 2004 and 2005
consist of the following (in millions of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Merchandise</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>863</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Finished goods</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>766</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Semi-finished goods</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,216</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Raw materials</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,791</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>493</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Supplies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,301</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,423</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less allowance for valuation loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(639</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>31,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>52,321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>7,784</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>4.</B></TD>
    <TD>
    <B>INVESTMENT SECURITIES</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>a.</B></TD>
    <TD>
    <B>Trading Securities</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trading securities as of December&nbsp;31, 2003, 2004 and 2005
are as follows (in millions of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition Cost</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair Value at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Carrying Amount</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>at December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stocks</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>368</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Public bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Corporate bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,383</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Beneficiary certificates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>870,335</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>654,411</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777,460</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>777,471</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>777,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>893,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>654,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</STRIKE></TD>
    <TD align="right" valign="bottom" nowrap>777,472</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-23
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>b.</B></TD>
    <TD>
    <B>Long-term Investment Securities</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Long-term investment securities at of December&nbsp;31, 2003,
2004 and 2005 are as follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Available-for-sale equity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>824,392</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>896,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>923,821</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Available-for-sale debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296,273</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Held-to-maturity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>965,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>951,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,220,209</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less current portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(85,861</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,709</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>879,193</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>948,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,220,208</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-24
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>b-(1). Available-for-sale Equity Securities</U></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Available-for-sale equity securities as of December&nbsp;31,
2003, 2004 and 2005 are as follows (in millions of Korean won,
except for share data):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ownership</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage&nbsp;(%)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Carrying Amount</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>at Dec.&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dec.&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>at Dec.&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>(Investments in listed companies)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Digital Chosunilbo Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,890,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,781</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="right" valign="bottom"><STRIKE>W</STRIKE>&nbsp;&nbsp;5,796</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,023</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,796</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    hanarotelecom incorporated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,090,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>121,677</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,440</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KRTnet Corporation (formerly Korea Radio Wave Basestation
    Management)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>234,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,669</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,646</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    POSCO</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,481,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>332,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>501,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>404,454</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>464,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>501,225</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    INNOTG Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>83</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    HB Entertainment Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>752,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,408</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK SECURITIES CO., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note a</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,877</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SINJISOFT Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note a</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>590</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cowon System, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note a</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>465,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>438,685</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>543,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>568,598</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>(Investments in non-listed companies)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Powercomm Co., Ltd. (note b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>240,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,565</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77,130</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japan MBCO</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note d</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,517</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,332</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Real Telecom Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>398,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note c</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Enterprise Networks Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>423,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note c</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Mirae Asset Life Insurance Co., Ltd. (formerly SK Life Insurance
    Co., Ltd.)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note a</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,890</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,890</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Eonex Technologies Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>144,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note d</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,593</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WideThan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note e</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Korea Economic Daily</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,792,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,964</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note d</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,964</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>121,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(notes d and f</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,210</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,212</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>426,848</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>189,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>156,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,231</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>(Investments in funds)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Korea IT Fund</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note d</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>190,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>190,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>190,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(notes d and g</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,992</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    sub-total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>196,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>196,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199,992</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>824,392</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>896,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>923,821</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;a)&nbsp;&nbsp;</TD>
    <TD align="left">
    The investments in common stock of SK Securities&nbsp;Co., Ltd.,
    SINJISOFT Corporation, Cowon Systems, Inc. and Mirae Asset Life
    Insurance&nbsp;Co., Ltd. were all sold for the year ended
    December&nbsp;31, 2005.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;b)&nbsp;</TD>
    <TD align="left">
    The Company recorded its investments in common stock of
    Powercomm Co., Ltd. at its fair value, which was estimated by an
    outside professional valuation company using the present value
    of expected future cash flow, and the unrealized loss on
    valuation of investments amounting to
    <STRIKE>W</STRIKE>171,836&nbsp;million,
    <STRIKE>W</STRIKE>168,678&nbsp;million and
    <STRIKE>W</STRIKE>163,113&nbsp;million as of December&nbsp;31,
    2003, 2004 and 2005, respectively, were recorded as a capital
    adjustment.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-25
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;c)&nbsp;&nbsp;</TD>
    <TD align="left">
    Due to the impairment of the Company&#146;s investments in
    common stock of Real Telecom Co.,&nbsp;Ltd. and Enterprise
    Networks Co.,&nbsp;Ltd., the Company recorded impairment losses
    of <STRIKE>W</STRIKE>20,419&nbsp;million for the year ended
    December&nbsp;31, 2004.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;d)&nbsp;&nbsp;</TD>
    <TD align="left">
    As a reasonable estimate of fair value could not be made, the
    investment is stated at acquisition cost. The investments in
    common stock of Eonex Technologies Inc. was reclassified to
    available-for-sale securities from equity securities accounted
    for using the equity method during 2003, as the Company&#146;s
    ownership in such investees decreased to less than 20% and the
    Company lost significant influence. Such securities were
    transferred to available-for-sale securities at the carrying
    amount valued using the equity method of accounting prior to the
    reclassification.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;e)&nbsp;&nbsp;</TD>
    <TD align="left">
    The investment in common stock of WiderThan Co., Ltd. was
    reclassified to equity securities accounted for using the equity
    method during 2005. Although the Company&#146;s ownership in
    WiderThan Co., Ltd. is less than 20%, the Company exercises
    significant influence on the selection of directors and the
    investee has significant transactions with the Company.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;f)&nbsp;&nbsp;</TD>
    <TD align="left">
    Due to the impairment of their investments in common stock of
    CCK Van, Biznet Tech, Hanse Telecom, Cybird Korea and Venture
    Korea in 2003, Mobilewelcom Co., Ltd., CXP Inc., LoveHunt Inc.
    and others in 2004 and TeleMerc.com, Fibernett Co.,&nbsp;Ltd.
    and others in 2005, the Company and certain subsidiaries
    recorded impairment losses of
    <STRIKE>W</STRIKE>5,749&nbsp;million,
    <STRIKE>W</STRIKE>2,580&nbsp;million and
    <STRIKE>W</STRIKE>3,057&nbsp;million for the years ended
    December&nbsp;31, 2003, 2004 and 2005, respectively.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;g)&nbsp;</TD>
    <TD align="left">
    Due to the impairment of their investments in cinema projects,
    the Company and certain subsidiaries recorded impairment losses
    of <STRIKE>W</STRIKE>235&nbsp;million for the year ended
    December&nbsp;31, 2005.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>b-(2). Available-for-sale Debt Securities</U></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Available-for-sale debt securities as of December&nbsp;31, 2003,
2004 and 2005 are as follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Carrying Amount</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Maturity</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Public bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note a</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,599</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>971</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,599</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Currency stabilization bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note b</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>294,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>294,674</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Convertible bonds of Real Telecom Co., Ltd. (note c)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>March 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,514</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Convertible bonds of Eonex Technologies, Inc. (note d)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>January 2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296,273</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less current portion of available-for-sale debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,514</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,700</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term available-for-sale debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,801</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>296,273</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Interest income incurred from available-for-sale debt
securities for the years ended December&nbsp;31, 2003, 2004 and
2005 were <STRIKE>W</STRIKE>735&nbsp;million,
<STRIKE>W</STRIKE>391&nbsp;million and
<STRIKE>W</STRIKE>914&nbsp;million, respectively.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-26
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)&nbsp; &nbsp;</TD>
    <TD align="left">
    The maturities of public bonds as of December&nbsp;31, 2003,
    2004 and 2005 are as follows (in millions of Korean won):</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Maturity</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Within five years</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>857</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>904</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,238</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Within ten years</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>361</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>971</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,599</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note b)&nbsp; &nbsp;</TD>
    <TD align="left">
    The maturities of currency stabilization bonds as of
    December&nbsp;31, 2003, 2004 and 2005 are as follows (in
    millions of Korean won):</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Maturity</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Within five years</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>294,674</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note c)&nbsp; &nbsp;</TD>
    <TD align="left">
    The convertible bonds of Real Telecom Co., Ltd. with a principal
    amount of <STRIKE>W</STRIKE>10,655&nbsp;million can be converted
    into 371,018&nbsp;shares of common stock of Real Telecom Co.,
    Ltd. at <STRIKE>W</STRIKE>28,721&nbsp;per share over the period
    from September&nbsp;29, 2004 to March&nbsp;28, 2007. Due to the
    impairment in such bonds, the Company recorded an impairment
    loss of <STRIKE>W</STRIKE>10,655&nbsp;million for the year ended
    December&nbsp;31, 2004.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note d)&nbsp;</TD>
    <TD align="left">
    The convertible bonds of Eonex Technologies, Inc. were all
    settled in cash during the year ended December&nbsp;31, 2005.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>b-(3).
<FONT style="white-space: nowrap">Held-to</FONT>-maturity
Securities</U></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="white-space: nowrap">Held-to</FONT>-maturity
securities as of December&nbsp;31, 2003, 2004 and 2005 are as
follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Carrying Amount</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Maturity</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Public bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note a</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>115</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subordinated bonds of Mirae Asset Life Insurance Co., Ltd.
    (formerly SK Life Insurance Co., Ltd.)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note b</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subordinated bonds of Nate Third Special Purpose Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>May 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,464</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subordinated bonds of Nate Fourth Special Purpose Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>September 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,393</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subordinated bonds of Nate Fifth Special Purpose Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>December 2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less current portion of held-to-maturity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(76,347</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term held-to-maturity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>50,135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>114</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Interest income incurred from
<FONT style="white-space: nowrap">held-to</FONT>-maturity
securities for the years ended December&nbsp;31, 2003, 2004 and
2005 were <STRIKE>W</STRIKE>6,504&nbsp;million,
<STRIKE>W</STRIKE>15,692&nbsp;million and
<STRIKE>W</STRIKE>3,755&nbsp;million, respectively.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-27
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)&nbsp;</TD>
    <TD align="left">
    The maturities of public bonds as of December&nbsp;31, 2005 is
    as follows (in millions of Korean won):</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="84%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Maturity</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Within one year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Within five years</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Within ten years</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>115</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note b)&nbsp;</TD>
    <TD align="left">
    The Subordinated bonds of Mirae Asset Life Insurance Co., Ltd.
    (formerly SK Life Insurance Co., Ltd.) were all early repaid
    during 2005.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;2, 2003, September&nbsp;4, 2003 and
December&nbsp;15, 2003, the Company sold
<STRIKE>W</STRIKE>577,253&nbsp;million,
<STRIKE>W</STRIKE>549,256&nbsp;million and
<STRIKE>W</STRIKE>498,426&nbsp;million, respectively, of
accounts receivable resulting from its mobile phone dealer
financing plan to Nate Third Special Purpose Company, Nate
Fourth Special Purpose Company and Nate Fifth Special Purpose
Company, respectively, in asset-backed securitization
transactions. In the course of these transactions, the Company
acquired subordinate bonds issued by such special purpose
companies, in order to supplement the creditworthiness of bonds
issued by them. All such subordinated bonds were repaid in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>b-(4). Changes in Unrealized Gains (Losses) on Valuation
on Long-term Investment Securities</U></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The changes in unrealized gains (losses) on valuation on
long-term investment securities during the years ended
December&nbsp;31, 2003, 2004 and 2005 are as follows (in
millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Increase/</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transferred to</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Decrease)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Realized Gain (Loss)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Digital Chosunilbo Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(3,353</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>419</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,934</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    hanarotelecom incorporated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(101,788</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(55,468</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KRTnet Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,498</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    POSCO</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,792</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,792</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Powercomm Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(171,836</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(171,836</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Securities Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(498</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,176</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,674</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(104,117</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(56,505</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(160,622</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-28
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 24pt; ">

<TR style="font-size: 1pt;">
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Increase/</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transferred to</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Decrease)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Realized Gain (Loss)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Digital Chosunilbo Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,934</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(824</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(3,758</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    hanarotelecom incorporated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(55,468</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,811</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(50,657</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KRTnet Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,498</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(491</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,007</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    POSCO</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,792</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,551</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131,343</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    INNOTG Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,543</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,543</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SINJISOFT Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>460</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Powercomm Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(171,836</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(168,678</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Eonex Technologies Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,011</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiderThan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Securities Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,674</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,133</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(160,622</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>67,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(92,975</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transferred</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Minority Interest in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Increase/</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>to Realized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity of Consolidated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tax Effect</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Decrease)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gain (Loss)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Subsidiaries</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Digital Chosunilbo Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(3,758</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    hanarotelecom incorporated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(50,657</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,580</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47,297</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KRTnet Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>468</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(406</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,069</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    POSCO</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131,343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(46,355</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>122,208</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    INNOTG Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,543</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(68</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,168</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    HB Entertainment Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(94</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Securities Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,133</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,610</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(477</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SINJISOFT Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(460</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cowon Systems, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>585</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(585</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Powercomm Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(168,678</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,565</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,856</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(118,257</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Eonex Technologies Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(553</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,458</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiderThan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Currency stabilization bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(217</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(157</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(92,975</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>36,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,522</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(94</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>15,966</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(42,093</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>(note)&nbsp;</TD>
    <TD align="left">
    Represents adjustments to reflect the tax effect of temporary
    differences directly charged or credited to unrealized gains
    (losses) on valuation of long-term investment securities, which
    are capital adjustment items, in accordance with SKAS
    No.&nbsp;16 &#147;Income Taxes&#148;, which is effective
    January&nbsp;1, 2005.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-29
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>5.</B></TD>
    <TD>
    <B>EQUITY SECURITIES ACCOUNTED FOR USING THE EQUITY METHOD</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Equity securities accounted for using the equity method as of
December&nbsp;31, 2003, 2004 and 2005 are as follows (in
millions of Korean won, except for share data):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ownership</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Net Asset</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage (%)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Carrying Amount</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>at December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pantech Co., Ltd.<BR>
    (formerly SK&nbsp;Teletech Co., Ltd.)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,570,306</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>26,309</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>54,939</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp; (note&nbsp;a)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>55,732</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK C&#38;C Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,071</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163,374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>92,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>168,244</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    STIC Ventures Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,600,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,379</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,379</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TU Media Corp.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,922,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,611</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,350</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp; (note&nbsp;b)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,343</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    VCASH Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;(note&nbsp;c)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,048</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Aircross Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>600,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>966</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;(note&nbsp; d)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>966</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiderThan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,503</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp; (note&nbsp;e)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,503</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IHQ, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,488</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp; (note&nbsp;f)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,755</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Harex Info Tech, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>225,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,128</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp; (note&nbsp;g)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,530</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Skytel Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,756,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,401</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,786</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK China Company Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>485</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    HELIO, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102,272</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp; (note&nbsp;h)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102,272</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK USA, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,279</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp; (note&nbsp;d)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,279</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SKT-QC Wireless Development Fund</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,901</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SKT-HP Ventures, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,290</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CDMA Mobile Phone Center</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,286,825</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,680</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,810</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Mobile</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cyworld Japan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,252</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp; (note&nbsp;i)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>726</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Etoos Group Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,036,353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,586</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other investments in affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,709</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>&nbsp;(note&nbsp;j)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,193</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>416,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>183,709</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>304,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>471,879</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)</TD>
    <TD align="left">
    60% equity interest in SK Teletech Co., Ltd. were sold to
    Curitel Communications, Inc. and the Company recorded a gain of
    <STRIKE>W</STRIKE>178,689&nbsp;million for the year ended
    December&nbsp;31, 2005. As the Company&#146;s ownership in SK
    Teletech Co., Ltd. decreased from 89.1% to 29.1%, SK Teletech
    Co., Ltd. was excluded from the consolidation, effective
    July&nbsp;1, 2005. And, the investments in common stock of SK
    Teletech Co., Ltd. were accounted for using the equity method of
    accounting for the six months ended December&nbsp;31, 2005. In
    addition, effective December&nbsp;1, 2005, SK Teletech Co., Ltd
    was merged into Pantech Co., Ltd. and the Company&#146;s
    ownership interest decreased from 29.1% to 22.7%. The difference
    between the Company&#146;s portion of the merged company&#146;s
    equity and the carrying amount at the date of merger of
    <STRIKE>W</STRIKE>269&nbsp;million was recorded as a loss on
    disposal of investment assets.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note b)</TD>
    <TD align="left">
    As the Company&#146;s ownership in TU&nbsp;Media Corp. decreased
    from 100% to 28.5% in 2004, TU&nbsp;Media Corp. was excluded
    from the consolidation, effective January&nbsp;1, 2004. And, the
    investments in common stock of TU&nbsp;Media Corp. are accounted
    for using the equity method of accounting.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note c)</TD>
    <TD align="left">
    The investments in common stock of VCASH&nbsp;Co., Ltd. were
    sold to Korea Railway Transportation Promotion Foundation
    in&nbsp;2004.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-30
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>(note d)</TD>
    <TD align="left">
    Effective January&nbsp;1, 2004, the Company recorded its
    investments in Aircross Co., Ltd. and SK&nbsp;USA, Inc. using
    the equity method of accounting as changes in the Company&#146;s
    portion of such investees&#146; equity amounts resulting from
    applying the equity method of accounting is material.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note e)</TD>
    <TD align="left">
    Effective January&nbsp;1, 2005, the investment in common stock
    of WiderThan Co., Ltd. was reclassified to equity securities
    accounted for using the equity method. Although the
    Company&#146;s ownership in WiderThan Co., Ltd. is less than
    20%, the Company exercises significant influences on the
    selection of directors and the investee has significant
    transactions with the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note f)</TD>
    <TD align="left">
    In February 2005, the Company acquired 8,000,000&nbsp;shares of
    IHQ,&nbsp;Inc., an entertainment management company, for
    <STRIKE>W</STRIKE>1,805&nbsp;per share with an option to
    purchase an additional 5,000,000&nbsp;shares at the previously
    agreed upon price during the period from March&nbsp;15, 2006 to
    April&nbsp;30, 2006, in order to secure high-quality content for
    the Company&#146;s wireless internet services.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note g)</TD>
    <TD align="left">
    Effective January&nbsp;1, 2005, the Company recorded its
    investments in Harex Info Tech, Inc. using the equity method of
    accounting as changes in the Company&#146;s portion of such
    investees&#146; equity amounts resulting from applying the
    equity method of accounting is material.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note h)</TD>
    <TD align="left">
    In the first quarter of 2005, the Company incorporated
    SK&nbsp;Telecom USA Holdings, Inc. with an initial investment of
    US$83&nbsp;million in order to invest in and manage
    HELIO,&nbsp;LLC, a joint venture company in the Untied States of
    America, which was established in order to provide wireless
    telecommunication services in the United States of America (see
    Note&nbsp;29.&nbsp;(b)).</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note i)</TD>
    <TD align="left">
    Even though the Company and its subsidiary&#146;s ownership
    interest is 100%, Cyworld Japan Co., Ltd. is excluded from the
    consolidation and accounted for using the equity method as its
    total assets at the beginning of the fiscal year were less than
    <STRIKE>W</STRIKE>7&nbsp;billion, in accordance with Korean GAAP.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note j)</TD>
    <TD align="left">
    As allowed under Korean GAAP, investments in equity securities
    of SK Telecom Europe Limited and certain others were not
    accounted for using the equity method of accounting, as changes
    in the Company&#146;s portion of shareholders&#146; equity of
    such investees were not expected to be material.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of changes in investments in affiliates accounted for
using the equity method for the years ended December&nbsp;31,
2003, 2004 and 2005 are as follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="30" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="30" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital&nbsp;Surplus</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Retained</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>and Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dividend</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Losses)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Earning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjustments</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Received</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Decrease</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK C&#38;C Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>39,687</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>45,795</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(600</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>92,844</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    STIC Ventures Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note a)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,086</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Eonex Technologies, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note b)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(22</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,593</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    VCASH Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note a)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,353</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(30</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,048</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiderThan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,188</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Skytel Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,401</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK China Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,864</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,683</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK-QC Wireless Development Fund</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(79</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,901</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SKT-HP Ventures, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,990</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,960</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CDMA Mobile Phone Center</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note c)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,839</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(71</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,444</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>136,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(6,975</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(33</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>46,285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(621</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(4,664</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>170,555</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;a)</TD>
    <TD align="left">
    Effective January&nbsp;1, 2003, the Company&#146;s investees
    including STIC Ventures Co., Ltd. and VCASH Co., Ltd., adopted
    SKAS No.&nbsp;3, &#147;Intangible Assets&#148;. This statement
    requires that organization cost be</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-31
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    charged to expenses as incurred and the unamortized organization
    costs at January&nbsp;1, 2003 be offset against the beginning
    retained earnings. To reflect the Company&#146;s portion of the
    decrease in the beginning retained earnings of the investees,
    the Company reduced its beginning retained earnings of&nbsp;2003.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;b)</TD>
    <TD align="left">
    Investments in common stock of Eonex Technologies, Inc. were
    reclassified to available-for-sale securities as the
    Company&#146;s ownership in Eonex Technologies, Inc. decreased
    to 16.1% from 22.5% during the first quarter of 2003.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;c)</TD>
    <TD align="left">
    The other decrease in investments in equity securities of CDMA
    Mobile Phone Center represents a translation loss incurred from
    translating the foreign currency financial statements of SLD
    Telecom PTE Ltd., an overseas subsidiary of the Company, which
    makes investments in CDMA Mobile Phone Center, into Korean won.</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital&nbsp;Surplus</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>and Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dividend</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Losses)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjustments</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Received</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Decrease</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK C&#38;C Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>92,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>13,322</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>95,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(600</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>201,484</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    STIC Ventures Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(123</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>514</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,477</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TU Media Corp.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,681</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,213</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,592</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    VCASH Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,048</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(657</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(391</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Aircross Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note a)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>659</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(19</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>940</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiderThan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note b)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,188</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Skytel Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,401</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(603</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(155</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,713</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK China Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(595</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(258</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>830</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK USA, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note a)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(296</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,056</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK-QC Wireless Development Fund</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,901</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(759</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,146</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SKT-HP Ventures, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(741</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,281</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CDMA Mobile Phone Center</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note c)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,651</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,655</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,117</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>212,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(11,954</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>93,880</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(755</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(12,234</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>287,636</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)</TD>
    <TD align="left">
    As their total assets at the beginning of 2004 were over
    <STRIKE>W</STRIKE>7&nbsp;billion, effective January&nbsp;1,
    2004, investments in equity securities of SK USA, Inc. and
    Aircross Co., Ltd. are accounted for using the equity method of
    accounting.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note b)</TD>
    <TD align="left">
    As the Company&#146;s ownership in WiderThan Co., Ltd. decreased
    to 14.3% form&nbsp;20% in 2004, investments in common stock of
    WiderThan Co., Ltd. are reclassified to available-for-sale
    securities in&nbsp;2004.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note c)</TD>
    <TD align="left">
    SLD Telecom PTE Ltd. (&#147;SLD&#148;), an oversea subsidiary of
    the Company, accounted for the in-kind contribution of network
    equipment to CDMA Mobile Phone Center as an increase in the
    investment securities and the reimbursement in the amount equal
    to depreciation of such network equipment in accordance with the
    Business Co-Operation Contract between SLD and Saigon Post and
    Telecommunication Service Corp., a Vietnamese counterparty, was
    accounted for as a decrease in the investment. During the year
    ended December&nbsp;31, 2004, SLD got such reimbursement of
    <STRIKE>W</STRIKE>4,046&nbsp;million from CDMA Mobile Phone
    Center and decreased the investment in CDMA Mobile Phone Center
    by the same amount. In addition, translation loss of
    <STRIKE>W</STRIKE>4,609&nbsp;million incurred from translating
    the foreign currency financial statement of SLD Telecom PTE Ltd.
    into Korean won was accounted for as a decrease in the
    investment in CDMA Mobile Phone Center.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-32
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Surplus and</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dividend</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Increase</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Losses)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjustments</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Received</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Decrease)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pantech Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note a)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(183</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>55,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>55,732</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK C&#38;C Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note b)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(50,742</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(600</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>168,244</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    STIC Ventures Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note c)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(779</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,379</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TU Media Corp.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,611</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27,852</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,343</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Aircross Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>966</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiderThan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note d)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>868</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,628</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,503</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IHQ, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note c)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(197</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,755</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Harex Info Tech, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note e)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(845</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,530</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Skytel Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note b)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(120</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(184</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,786</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK China Company Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(295</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(50</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>485</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    HELIO, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note f)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123,586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,550</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>236</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102,272</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK USA, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(93</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,279</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SKT-QC Wireless Development Fund</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note g)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,146</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SKT-HP Ventures, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>167</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(158</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,290</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CDMA Mobile Phone Center</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note h)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,376</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,880</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,810</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Mobile</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">
    (note i)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,566</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(22</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,776</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cyworld Japan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,867</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>726</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Etoos Group Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(498</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,586</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>292,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>219,361</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(50,876</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(50,526</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(784</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>45,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>454,686</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)</TD>
    <TD align="left">
    The other increase in investments in equity securities of
    Pantech Co., Ltd. is net of the carrying amount of the
    investment in equity securities of SK Teletech Co., Ltd.
    amounting to <STRIKE>W</STRIKE>56,091&nbsp;million reclassified
    to equity securities accounted for using the equity method as a
    result of the decrease in the Company&#146;s ownership in SK
    Teletech Co., Ltd. to less than 50% and the dilution of the
    Company&#146;s equity portion of
    <STRIKE>W</STRIKE>269&nbsp;million as a result of the merger
    between Pantech Co., Ltd. and SK Teletech Co., Ltd.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note b)</TD>
    <TD align="left">
    The Company received dividends from SK C&#38;C Co., Ltd. and
    Skytel Co., Ltd. and the corresponding amount was deducted from
    its equity method securities.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note c)</TD>
    <TD align="left">
    The other increases in investments in equity securities of STIC
    Ventures Co., Ltd. and IHQ, Inc. represent gains on disposal of
    investments in equity securities resulting from the dilution of
    the Company&#146;s ownership as a result of the fact that
    investees sold its unissued shares to third parties directly.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note d)</TD>
    <TD align="left">
    The other increase in investments in equity securities of
    WiderThan Co., Ltd. represents the carrying amount of the
    investment in equity securities of WiderThan Co., Ltd. amounting
    to <STRIKE>W</STRIKE>3,188&nbsp;million reclassified to equity
    securities accounted for using the equity method from
    available-for-sale securities and gains on disposal of
    investments in equity method investee of
    <STRIKE>W</STRIKE>7,440&nbsp;million resulting from the dilution
    of the Company&#146;s ownership as a result of the fact that
    investees sold its unissued shares to third parties directly.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note e)</TD>
    <TD align="left">
    Effective January&nbsp;1, 2005, the Company recorded its
    investments in Harex Info Tech, Inc. using the equity method of
    accounting as changes in the Company&#146;s portion of such
    investees&#146; equity amounts resulting from applying the
    equity method of accounting is material.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-33
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>(note f)</TD>
    <TD align="left">
    The increase in investments in equity securities of HELIO, LLC
    represents a translation gain incurred from translating the
    financial statements of SK&nbsp;Telecom USA Holdings, Inc.
    denominated in foreign currency, which makes investments in
    HELIO,&nbsp;LLC, into Korean won.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note g)</TD>
    <TD align="left">
    Investment was fully liquidated due to dissolution of SKT-QC
    Wireless Development Fund during the year ended
    December&nbsp;31, 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note h)</TD>
    <TD align="left">
    During the year ended December&nbsp;31, 2005, SLD got the
    reimbursement of <STRIKE>W</STRIKE>3,956&nbsp;million from CDMA
    Mobile Phone Center and decreased the investment in CDMA Mobile
    Phone Center by the same amount. In addition, translation loss
    of <STRIKE>W</STRIKE>924&nbsp;million incurred from translating
    the foreign currency financial statement of SLD&nbsp;Telecom
    PTE&nbsp;Ltd. into Korean won was accounted for as a decrease in
    the investment in CDMA&nbsp;Mobile Phone Center.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note i)</TD>
    <TD align="left">
    Effective January&nbsp;1, 2005, SK&nbsp;Mobile became an equity
    method investee of SK&nbsp;Teletech Co., Ltd., a former
    subsidiary of the Company as changes in SK&nbsp;Teletech Co.,
    Ltd.&#146;s portion of such investee&#146;s equity amounts
    resulting from applying the equity method of accounting was
    material. Effective July&nbsp;1, 2005, the investment in equity
    securities of SK&nbsp;Teletech Co., Ltd. was reclassified to
    equity securities accounted for using the equity method, which
    resulted in the exclusion of SK&nbsp;Mobile from equity
    securities accounted for using the equity method.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of changes in the differences between the acquisition
cost and net asset value of equity method investees at the
acquisition date for the years ended December&nbsp;31, 2003,
2004 and 2005 are as follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Increase</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amortization</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK C&#38;C Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(406</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,682</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Increase</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amortization</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK C&#38;C Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(406</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,276</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Increase</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amortization</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pantech Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(27</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>793</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK C&#38;C Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(406</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,870</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TU Media Corp.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(52</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>993</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IHQ, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,110</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,267</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Harex Info Tech, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(350</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,402</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Etoos Group Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,914</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(333</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,581</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>12,908</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,278</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>15,906</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-34
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of changes in unrealized intercompany gains incurred
from sales of assets for the year ended December&nbsp;31, 2004
and 2005 are as follows and there was no unrealized intercompany
gain for the year ended December&nbsp;31, 2003 (in millions of
Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Increase</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Decrease</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK China Company Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,086</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Increase</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Decrease</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK China Company Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,086</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cyworld Japan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(43</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,526</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(43</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,612</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of market price of the equity securities of the listed
equity method investees as of December&nbsp;31, 2005 are as
follows (in millions of Korean won, except for market price per
share):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="54%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Market Price</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>per Share (in</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Shares Owned</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Market</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Korean Won)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>by the Company</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Price</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pantech Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,570,306</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>150,865</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiderThan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,816</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IHQ, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,760</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The condensed financial information of the investees as of and
for the year ended December&nbsp;31, 2005 are as follows (in
millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="45%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Total</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Net Income</B></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Total Assets</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Liabilities</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Revenue</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>(Loss)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pantech Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>843,996</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>604,118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>655,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(21,745</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK C&#38;C Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,544,980</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,002,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61,693</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    STIC Ventures Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,845</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,347</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TU Media Corp.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>393,945</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>287,966</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(96,487</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Aircross Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,642</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiderThan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,388</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,773</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,467</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,052</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IHQ, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,661</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,235</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Harex Info Tech, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,977</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,337</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Skytel Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,812</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,387</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,824</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK China Company Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,849</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,423</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    HELIO, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>225,322</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,733</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,812</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(43,100</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK USA, Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,387</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,139</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>646</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SKT-HP Ventures, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>333</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CDMA Mobile Phone Center</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>110,468</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,359</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(26,750</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cyworld Japan Co., Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,914</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,594</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Etoos Group Inc.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,814</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,898</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,739</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-35
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>6.&nbsp;&nbsp;&nbsp;LOANS TO EMPLOYEES</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Short-term and long-term loans to employees as of
December&nbsp;31, 2003, 2004 and 2005 are as follows (in
millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loans to employees&#146; stock ownership association</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>33,788</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>22,546</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>14,586</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loans to employees for housing and other (3&nbsp;-&nbsp;4%)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,859</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,799</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>42,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>31,405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>19,385</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>7.&nbsp;&nbsp;&nbsp;PROPERTY AND EQUIPMENT</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property and equipment as of December&nbsp;31, 2003, 2004 and
2005 are as follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Useful</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Lives</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>(Years)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>449,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>466,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>466,562</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings and structures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    15, 30</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,081,134</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,445,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,484,360</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Machinery</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    3-6</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,440,624</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,584,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,510,486</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    3-4</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,741</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,680</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    3-4</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>794,495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>791,829</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>825,133</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Construction in progress</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>323,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>264,309</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,108,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,448,119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,572,530</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less accumulated depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,467,314</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,744,197</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,909,161</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property and equipment, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,641,547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,703,922</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,663,369</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The government&#146;s declared standard value of land owned as
of December&nbsp;31, 2003, 2004 and 2005 are
<STRIKE>W</STRIKE>396,103&nbsp;million,
<STRIKE>W</STRIKE>404,385&nbsp;million and
<STRIKE>W</STRIKE>419,698&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of changes in property and equipment for the years ended
December&nbsp;31, 2003, 2004 and 2005 are as follows (in
millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Disposal</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transfer</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Depreciation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>439,915</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,381</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(4,793</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,874</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>449,377</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings and structures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>778,832</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,393</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,599</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(40,166</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>843,801</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Machinery</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,475,663</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125,332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,996</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,360,240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,285,271</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,670,968</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,012</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(123</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,137</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,168</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>515,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>861,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,329</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(916,464</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(106,519</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>349,743</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Construction in progress</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>352,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>644,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(673,630</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>323,490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,569,417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,647,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(18,840</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(121,576</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,435,093</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,641,547</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-36
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Disposal</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transfer</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Depreciation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>449,377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,684</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>16,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>466,460</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings and structures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>843,801</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,849</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(42,945</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,166,542</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Machinery</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,670,968</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,098</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,143,335</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,271,336</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,643,107</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(425</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>674</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,370</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,791</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>349,743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>740,752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,481</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(697,135</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(102,859</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>285,020</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Construction in progress</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>323,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>768,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(756</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(953,305</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138,002</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,641,547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,631,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(25,293</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(123,763</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,420,510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,703,922</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Disposal</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transfer</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Depreciation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>466,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>723</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(4,698</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>466,562</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings and structures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,166,542</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,581</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,095</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(55,406</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,151,094</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Machinery</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,643,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,681</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,990</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>983,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,182,664</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,479,623</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,791</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,620</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(250</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(232</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,530</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,399</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>285,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>766,708</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,741</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(657,328</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(92,277</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>298,382</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Construction in progress</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>580,309</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(454,002</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>264,309</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,703,922</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,416,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(35,774</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(88,524</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,332,877</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,663,369</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>8.</B></TD>
    <TD>
    <B>INTANGIBLE ASSETS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Intangible assets as of December&nbsp;31, 2003, 2004 and 2005
are as follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Accumulated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Accumulated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amortization at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Impairment at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Carrying Amounts</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,409,303</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(540,301</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(70</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,129,980</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,994,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,868,932</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Frequency use rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,384,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(200,141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,251,278</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,163,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,184,292</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Software development costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>230,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(163,947</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(501</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>105,955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,991</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>623,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(288,445</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,426</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>259,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>333,674</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,647,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,192,834</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,997</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,674,944</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,522,903</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,452,889</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-37
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of changes in intangible assets for the years ended
December&nbsp;31, 2003, 2004 and 2005 are as follows (in
millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Disposal</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transfer</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amortization</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,255,868</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(111</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(135,151</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,129,980</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Software development costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(36,704</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,810</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Frequency use rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,259,253</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,975</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,251,278</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,275</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,979</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,876</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,721,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>65,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(7,275</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>110,772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(214,809</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,674,944</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Disposal</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transfer</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amortization</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Impairment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,129,980</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(136,288</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,994,339</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Software development costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,349</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(45,244</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(42</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>105,955</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Frequency use rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,251,278</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(95,759</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,163,319</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(865</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,514</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(54,729</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>259,290</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,674,944</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>72,376</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(4,214</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>111,859</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(332,020</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(42</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,522,903</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>For the Year Ended December&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Beginning</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Disposal</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transfer</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amortization</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Impairment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,994,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(134,630</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,868,932</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Frequency use rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,163,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(96,407</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,184,292</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Software development costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>105,955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(41,436</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,991</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>259,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,642</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(342</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(70,178</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(260</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>333,674</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,522,903</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>199,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(342</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>73,745</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(342,651</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(260</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,452,889</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The book value and residual useful lives of major intangible
assets as of December&nbsp;31, 2005 are as follows (in millions
of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Residual Useful Lives</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top"> <STRIKE>W</TD>
    <TD align="right" valign="top" nowrap></STRIKE>1,820,884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill related to acquisition of Shinsegi Telecomm, Inc.</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14&nbsp;years and 3&nbsp; months</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IMT license</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1,059,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Frequency use rights relating to WCDMA Service</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note a</TD>
    <TD align="left" valign="bottom" nowrap>)&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiBro license</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>117,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiBro Service</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(note b</TD>
    <TD align="left" valign="bottom" nowrap>)&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    DMB license</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>7,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    DMB Service</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10&nbsp;years and 6&nbsp; months</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Software development costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>65,991</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Software for business use</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1-5&nbsp;years</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)&nbsp;</TD>
    <TD align="left">
    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&nbsp;years) of the IMT license which expires in December
    2016.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note b)&nbsp;</TD>
    <TD align="left">
    The Company purchased the WiBro license from MIC on
    March&nbsp;20, 2005. The license period is seven years from that
    date. Amortization of the WiBro license will be on a straight
    line basis over the remaining useful life from the commencement
    date of the Company&#146;s commercial WiBro services.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-38
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BONDS PAYABLE</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Bonds payable as of December&nbsp;31, 2003, 2004 and 2005 are as
follows (in millions of Korean won and thousands of
U.S.&nbsp;dollars):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Maturity</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Annual Interest</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rate (%)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Domestic general bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.0-7.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,120,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.0-6.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>800,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.0-6.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>700,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>700,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>700,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dollar denominated bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    (US$200,078)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>239,653</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    (US$300,000)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>313,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>303,900</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Convertible bonds (US$329,450)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,885</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,885</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bonds with stock purchase<BR>
    warrants (US$4,000)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6M Libor-0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,791</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,664,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,499,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,189,785</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less discounts on bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47,553</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(51,467</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(40,016</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less conversion right adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(82,245</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(65,218</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Add long-term accrued interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>491</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,808</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,808</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,617,382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,390,121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,109,359</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less portion due within one year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,355,514</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(498,278</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(795,151</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,261,868</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,891,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,314,208</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of the above bonds will be paid in full at maturities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The bonds with stock purchase warrants were issued on
December&nbsp;11, 2001 by PAXNet Co., Ltd., in which the Company
purchased a 67.1% interest in December 2002. The stock purchase
warrants are detachable and the bonds are unsecured oversea
public bonds. These bonds were in full redeemed for cash at the
option of the bondholders in 2004, at 114.79% of the principal
amount. The stock purchase warrants, however, are still
effective and may be exercised at any time after 3&nbsp;months
from the issuance date and up to 1&nbsp;month before the
original maturity date of the bonds. As of December&nbsp;31,
2005, the exercise price per common stock of PAXNet Co., Ltd. is
<STRIKE>W</STRIKE>5,000.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;27, 2004, the Company issued zero coupon convertible
bonds with a maturity of five years in the principal amount of
US$329,450,000 for US$324,923,469, with an initial conversion
price of <STRIKE>W</STRIKE>235,625&nbsp;per share of the
Company&#146;s common stock which was greater than market value
at the date of issuance and do not change, except under
antidilution protection, subject to certain redemption rights.
Subsequently, the initial conversion price was changed to
<STRIKE>W</STRIKE>225,518&nbsp;per share in accordance with
antidilution protection. The Company may redeem their principal
amount after 3&nbsp;years from the issuance date if the market
price exceeds 130% of the conversion price during a
predetermined period. On the other hand, the bond holders may
redeem their notes at 103.81% of the principal amount on
May&nbsp;27, 2007 (3&nbsp;years from the issuance date). The
conversion right may be exercised during the period from
July&nbsp;7, 2004 to May&nbsp;13, 2009 and the number of common
shares to be converted
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-39
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
as of December&nbsp;31, 2005 is 1,718,700&nbsp;shares.
Conversion of notes to common shares may be prohibited under the
Telecommunications Law or other legal restrictions which
restrains foreign governments, individuals and entities from
owning more than 49% of the Company&#146;s voting stock, if this
49% ownership limitation is violated due to the exercise of
conversion rights. In this case, the Company will pay a bond
holder a 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 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. The Company entered into an agreement
with Credit Suisse First Boston International to reduce the
effect of fluctuation with respect to cash settlement payments
that may be more or less than the proceeds from sales of
treasury shares held in trust. Unless either previously redeemed
or converted, the notes are redeemable at 106.43% of the
principal amount at maturity.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LONG-TERM BORROWINGS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Long-term borrowings denominated in foreign currency as of
December&nbsp;31, 2003, 2004 and 2005 are as follows (in
millions of Korean won, thousands of U.S.&nbsp;dollars and
thousands of Japanese yen):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Final</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Maturity</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Annual Interest Rate</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Lender</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(%)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Korea Development Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3M Libor + 3.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$4,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Woori Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Floating rate + 0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fine Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.50&#126;3.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;14,802</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fine Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total in foreign currency</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$8,567</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;27,602</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equivalent in Korean won</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>237</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less portion due within one year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,629</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(82</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>155</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>11.</B></TD>
    <TD>
    <B>SUBSCRIPTION DEPOSITS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company receives facility guarantee deposits from customers
of cellular services at the subscription date. The Company has
no obligation to pay interest on these deposits and returns all
amounts to subscribers upon termination of the subscription
contract.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Long-term subscription guarantee deposits by service type held
as of December&nbsp;31, 2003, 2004 and 2005 are as follows (in
millions of Korean won, except deposit per subscriber amounts):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Deposit per</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Service type</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Subscriber</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>44,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>31,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>23,770</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company offers existing and new cellular subscribers the
option of obtaining credit insurance from Seoul Guarantee
Insurance company (&#147;SGIC&#148;) in lieu of the facility
deposit. Existing subscribers who elect this option are refunded
their subscription deposits. As a result of this arrangement,
the balance of facility guarantee deposits has been decreasing.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-40
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>12.</B></TD>
    <TD>
    <B>LEASES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries leases certain machinery and
equipment under capital leases. The Company and its subsidiaries
have an option to acquire the leased machinery and equipment,
free of charge, upon termination of the lease period.
Depreciation expense for the years ended December&nbsp;31, 2003,
2004 and 2005 were <STRIKE>W</STRIKE>250&nbsp;million,
<STRIKE>W</STRIKE>37&nbsp;million and nil, respectively. For the
year ended December&nbsp;31, 2005, all capital leases were
terminated and the Company acquired the related leased machinery
free of charge.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, in 2005 the Company acquired certain computer
equipment and software from SK C&#38;C Co., Ltd. and succeeded
certain capital lease agreements between SK C&#38;C Co., Ltd.
and HP Financial Service. The acquisition cost of such leased
computer equipment and software is
<STRIKE>W</STRIKE>24,543&nbsp;million. Depreciation expense for
the year ended December&nbsp;31, 2005 was
<STRIKE>W</STRIKE>871&nbsp;million. The Company&#146;s minimum
future lease payments as of December&nbsp;31, 2005 are as
follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Annual Lease</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Payments</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Interest</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Principal</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>15,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>14,339</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,494</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,734</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,710</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>25,908</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,543</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less portion due within one year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,339</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital lease liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,204</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries leased certain machinery and
equipment under an operating lease and the related lease
expenses for the years ended December&nbsp;31, 2003 and 2004
were <STRIKE>W</STRIKE>1,774&nbsp;million and
<STRIKE>W</STRIKE>261&nbsp;million, respectively. All the
operating leases were terminated in 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>13.</B></TD>
    <TD>
    <B>ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The details of monetary assets and liabilities denominated in
foreign currencies (except for bonds payable and long-term
borrowings denominated in foreign currencies described in
Notes&nbsp;9 and 10)&nbsp;as of December&nbsp;31, 2003, 2004 and
2005 are as follows (in millions of Korean won, thousands of
U.S.&nbsp;dollars, thousands of HK&nbsp;dollars, thousands of
Japanese yen, thousands of Singaporean dollars, thousands of
Euros, thousands of Great Britain pounds, thousands of Swiss
francs, thousands of Chinese yuan, thousands of Vietnam dongs,
thousands of Canadian dollars and thousands of Australian
dollars):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Foreign Currencies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Korean Won Equivalent</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$24,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$4,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$11,826</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>29,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>11,980</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>GBP5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>VND902,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>SG$30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term financial instruments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$31,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable&nbsp;&#151; trade</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$8,627</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$19,284</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$31,334</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,741</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>SG$743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR248</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>298</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-41

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Foreign Currencies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Korean Won Equivalent</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable&nbsp;&#151; other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$12,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$2,989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$3,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,408</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>VND6,173,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>394</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$193</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$142</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;16,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;15,756</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;16,156</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>139</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>93,646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>28,645</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>48,039</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable&nbsp;&#151; trade</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>S$15,432</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$17,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$28,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>18,485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>18,169</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>28,728</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;555,277</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;26,240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term borrowings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$26,853</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$19,392</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;2,255,431</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;438,499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR 7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR 207</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>294</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>GBP260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable&nbsp;&#151; other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$35,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$13,539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$15,737</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,832</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,942</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;20,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;60,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;8,498</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>HK$267</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>HK$217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>HK$254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>CNY140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>CNY1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>GBP304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>GBP 118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>GBP453</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>791</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>SG$5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>SG$5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>SG$22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR504</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>604</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>AU$1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>CHF4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>CHF19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>CAD2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>VND11,823,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>755</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#165;1,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR 23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Obligation under capital leases including current portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>126,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>59,528</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>46,956</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>14.</B></TD>
    <TD>
    <B>CAPITAL STOCK AND CAPITAL SURPLUS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s outstanding capital stock consists entirely
of common stock with a par value of <STRIKE>W</STRIKE>500. The
number of authorized, issued and outstanding common shares as of
December&nbsp;31, 2003, 2004 and 2005 are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Authorized shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,000,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issued shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outstanding shares, net of treasury stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The number of authorized shares of preferred stock as of
December&nbsp;31, 2005 is 5,500,000&nbsp;shares, none of which
is outstanding as of December&nbsp;31, 2005.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-42
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Significant changes in common stock and capital surplus in 2003,
2004 and 2005 are as follows (in millions of Korean won, except
for share data):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares Issued</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Common Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Surplus</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At January&nbsp;1, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,152,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>44,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,884,382</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Excess unallocated purchase price (note a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(230</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Retirement of treasury stock (note b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,002,235</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of common stock for the merger with SK IMT Co., Ltd.
    (note c)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,809</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on disposal of investments In common stock of subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in capital surplus changes of affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,463</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At December&nbsp;31, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,911,556</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Excess unallocated purchase price (note a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(77</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Considerations for conversion right (note d)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,279</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in capital surplus changes of affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,457</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At December&nbsp;31, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,968,301</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax effect of temporary difference related to
    conversion rights (note e)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,502</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transfer of stock option from capital adjustment (note f)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,533</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in capital surplus changes of affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,508</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At December&nbsp;31, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>44,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,954,840</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)</TD>
    <TD align="left">
    During the years ended December&nbsp;31, 2003 and 2004, the
    Company paid <STRIKE>W</STRIKE>230&nbsp;million and
    <STRIKE>W</STRIKE>77&nbsp;million, respectively, to certain
    former shareholders of Shinsegi Telecomm, Inc. in accordance
    with the ruling of the court and deducted it from capital
    surplus in accordance with Korean GAAP.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note b)</TD>
    <TD align="left">
    The Company retired 4,457,635&nbsp;shares and
    2,544,600&nbsp;shares of treasury stock on January&nbsp;3, 2003
    and August&nbsp;20, 2003, respectively, and reduced
    unappropriated retained earnings in accordance with the Korean
    Commercial Laws.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note c)</TD>
    <TD align="left">
    The excess of acquired net assets over the par value of
    <STRIKE>W</STRIKE>63&nbsp;million for the issuance of
    126,276&nbsp;shares of new common stock to minority shareholders
    of SK IMT Co., Ltd. upon the merger dated May&nbsp;1, 2003, was
    added to capital surplus in accordance with Korean GAAP.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note d)</TD>
    <TD align="left">
    The Company issued zero coupon convertible bonds in the
    principal amount of US$329,450,000 at US$324,923,469 with an
    initial conversion price of <STRIKE>W</STRIKE>235,625&nbsp;per
    share of the Company&#146;s common stock on May&nbsp;27, 2004
    and the considerations for conversion right of
    <STRIKE>W</STRIKE>67,279&nbsp;million was added to capital
    surplus in accordance with Korean GAAP (see Note&nbsp;2(j)).</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note e)</TD>
    <TD align="left">
    The tax effect of temporary difference related to consideration
    for conversion rights was deducted directly from related
    components of stockholders&#146; equity, pursuant to adoption of
    SKAS No.&nbsp;16 for the year ended December&nbsp;31, 2005 (see
    Note&nbsp;2(x)).</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note f)</TD>
    <TD align="left">
    During the year ended December&nbsp;31, 2005, the exercisable
    period for the stock options representing 17,800&nbsp;shares, of
    which recognized compensation costs was
    <STRIKE>W</STRIKE>1,533&nbsp;million, expired and the related
    stock options of <STRIKE>W</STRIKE>1,533&nbsp;million in capital
    adjustments were transferred to capital surplus in accordance
    with Korean GAAP.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-43
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>15.</B></TD>
    <TD>
    <B>RETAINED EARNINGS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Retained earnings as of December&nbsp;31, 2003, 2004 and 2005
are as follows (in&nbsp;millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Appropriated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,743,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,733,936</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,470,701</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unappropriated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>396,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,418,962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,796,948</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,139,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,152,898</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,267,649</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The details of appropriated retained earnings as of
December&nbsp;31, 2003, 2004 and 2005 are as follows
(in&nbsp;millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Legal reserve</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>22,288</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>22,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>22,320</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reserve for improvement of financial structure</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reserve for loss on disposal of treasury stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>221,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>477,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>477,182</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reserve for research and manpower development</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>559,198</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>776,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>822,061</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reserve for business expansion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,908,139</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,425,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,116,138</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,743,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,733,936</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,470,701</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>a.</B></TD>
    <TD>
    <B>Legal Reserve</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Korean Commercial Code requires the Company to appropriate
as a legal reserve at least 10% of cash dividends for each
accounting period until the reserve equals 50% of outstanding
capital stock. The legal reserve may not be utilized for cash
dividends, but may only be used to offset a future deficit, if
any, or may be transferred to capital stock.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>b.</B></TD>
    <TD>
    <B>Reserve for Improvement of Financial Structure</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Financial Control Regulation for listed companies in Korea
requires that at least 10% of net income (net of accumulated
deficit), and an amount equal to net gains (net of related
income taxes, if any) on the disposal of property and equipment
be appropriated as a reserve for improvement of financial
structure until the ratio of stockholders&#146; equity to total
assets reaches 30%. The reserve for improvement of financial
structure may not be utilized for cash dividends, but may only
be used to offset a future deficit, if any, or may be
transferred to capital stock.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>c.</B></TD>
    <TD>
    <B>Reserves for Loss on Disposal of Treasury Stock and Research
    and Manpower Development</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reserves for loss on disposal of treasury stock and research and
manpower development were appropriated in order to recognize
certain tax deductible benefits through the early recognition of
future expenditures. These reserves will be unappropriated from
appropriated retained earnings in accordance with the relevant
tax laws. Such unappropriation will be included in taxable
income in the year of unappropriation.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>d.</B></TD>
    <TD>
    <B>Reserve for Business Expansion</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The reserve for business expansion is voluntary and was approved
by the board of directors and shareholders.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-44
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>16.</B></TD>
    <TD>
    <B>TREASURY STOCK</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon the issuances of stock dividends and new common stock and
the merger with Shinsegi Telecomm, Inc. and SK IMT Co., Ltd.,
the Company acquired fractional shares totaling
77,958&nbsp;shares for <STRIKE>W</STRIKE>6,108&nbsp;million
through 2003. In addition, the Company acquired
7,452,810&nbsp;shares of treasury stock in the market or through
the trust funds for <STRIKE>W</STRIKE>1,771,507&nbsp;million
through 2003 in order to stabilize the market price of its stock.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Mutual Agreement on Stock Exchange between the Company
and KT Corporation, on December&nbsp;30, 2002 and
January&nbsp;10, 2003, the Company acquired
8,266,923&nbsp;shares of the Company&#146;s common stock from KT
Corporation for <STRIKE>W</STRIKE>1,853,643&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;13, 2002, the Company merged with Shinsegi
Telecomm, Inc. and distributed 2,677,653&nbsp;shares of treasury
stock to minority shareholders of Shinsegi Telecomm, Inc., of
which the cost was <STRIKE>W</STRIKE>584,646&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;6, 2003, the Company retired
4,457,635&nbsp;shares of treasury stock that were purchased from
KT&nbsp;Corporation as mentioned above in accordance with a
resolution of the board of directors dated December&nbsp;26,
2002 and reduced unappropriated retained earnings by
<STRIKE>W</STRIKE>1,008,882&nbsp;million including the tax
effect of <STRIKE>W</STRIKE>9,373&nbsp;million, in accordance
with the Korean Commercial Laws.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;30, 2003, in accordance with a resolution of the
board of directors dated June&nbsp;24, 2003, the Company
announced a stock repurchase program to acquire
2,544,600&nbsp;shares of common stock in the market in order to
enhance stockholders&#146; interest and to stabilize the stock
price. Pursuant to the program, the Company acquired a total of
2,544,600&nbsp;shares of Company&#146;s outstanding common stock
for <STRIKE>W</STRIKE>525,174&nbsp;million during the period
from June&nbsp;30, 2003 to August&nbsp;11, 2003 and retired such
treasury shares on August&nbsp;20, 2003, which reduced the
unappropriated retained earnings by
<STRIKE>W</STRIKE>537,138&nbsp;million including the tax effect
of <STRIKE>W</STRIKE>11,964&nbsp;million, in accordance with
Korean Commercial Laws.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;20, 2004, the Company additionally acquired
fractional shares totaling 12&nbsp;shares for
<STRIKE>W</STRIKE>2&nbsp;million which resulted from the merger
with SK IMT Co., Ltd.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>17.</B></TD>
    <TD>
    <B>STOCK OPTIONS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;17, 2000, March&nbsp;16, 2001 and March&nbsp;8,
2002, in accordance with the approval of its stockholders or its
board of directors, the Company granted stock options to its
management, representing 17,800&nbsp;shares at an exercise price
of <STRIKE>W</STRIKE>424,000&nbsp;per share, 43,820&nbsp;shares
at an exercise price of <STRIKE>W</STRIKE>211,000&nbsp;per share
and 65,730&nbsp;shares at an exercise price of
<STRIKE>W</STRIKE>267,000&nbsp;per share. The stock options will
become exercisable after three years from the date of grant and
shall be exercisable for two years from the first exercisable
date. Upon exercise of stock options, the Company will issue its
common stock. If the employee leaves the Company within three
years after the grant of stock options, such employee forfeits
the unvested stock options awarded. During the year ended
December&nbsp;31, 2004, stock options representing
530&nbsp;shares, of which total compensation cost was
<STRIKE>W</STRIKE>3&nbsp;million, were forfeited.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The value of stock options granted is determined using the
Black-Scholes option-pricing model, without considering the
volatility factor in estimating the value of its stock options,
as permitted under Korean GAAP. The following assumptions are
used to estimate the fair value of options granted in 2000, 2001
and 2002; risk-free interest rate of 9.1% for 2000, 5.9% for
2001 and 6.2% for 2002; expected life of three years for 2000,
2001 and 2002; expected dividend of
<STRIKE>W</STRIKE>500&nbsp;per share for 2000, 2001 and 2002.
Under these assumptions, total compensation cost, the recognized
compensation cost (included in labor cost) for the years ended
December&nbsp;31, 2003, 2004 and 2005, the compensation cost to
be recognized for the following period after December&nbsp;31,
2005
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-45
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
and the outstanding balance of stock option in capital
adjustment as of December&nbsp;31, 2005 and 2004 are as follows
(in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="17%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Recognized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Compensation Cost</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Compensation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Stock Option in Capital Adjustment</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Compensation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost to be</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD align="left" nowrap><B>Grant Date</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Recognized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March&nbsp;17, 2000 (note&nbsp;a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March&nbsp;16, 2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>224</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>234</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March&nbsp;8, 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,082</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,082</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,066</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,246</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,289</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,741</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,480</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)&nbsp;</TD>
    <TD align="left">
    During the year ended December&nbsp;31, 2005, the exercisable
    period for stock options representing 17,800&nbsp;shares, for
    which the Company had recognized compensation cost of
    <STRIKE>W</STRIKE>1,533&nbsp;million, expired and the related
    stock options of <STRIKE>W</STRIKE>1,533&nbsp;million in capital
    adjustments were transferred to capital surplus.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The pro forma net income and net income per common share, if the
Company had not excluded the volatility factor (expected
volatility of 66.8% for options granted in 2000, 67.5% for
options granted in 2001 and 63.0% for options granted in 2002)
in estimating the value of its stock options, for years ended
December&nbsp;31, 2003, 2004 and 2005 are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pro forma ordinary income (in millions of Korean&nbsp;won)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,751,221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,121,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,561,268</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pro forma ordinary income per common shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,439</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pro forma net income (in millions of Korean won)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,962,986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,489,542</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,872,680</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pro forma net income per common shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,439</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>18.</B></TD>
    <TD>
    <B>INCOME TAXES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Income tax expenses for the years ended December&nbsp;31, 2003,
2004 and 2005 consist of the following (in millions of Korean
won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Currently</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>668,180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>551,405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>685,541</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Changes in net deferred tax liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>120,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,718</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>789,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>629,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>693,259</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-46
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The difference between income taxes computed using the statutory
corporate income tax rates and the recorded income taxes for the
years ended December&nbsp;31, 2003, 2004 and 2005 is
attributable to the following (in&nbsp;millions of
Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income taxes at statutory income tax rate of 27% in 2003 and
    2004 and 25% in 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>743,671</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>573,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>640,391</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Resident surtax payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,367</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,326</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,039</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax credit for investments, technology and human resource
    development and others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(83,826</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(89,080</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(100,160</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Special surtax for agriculture and fishery industries and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,685</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,736</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,838</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill amortization not deductible for tax purpose</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,382</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Undistributed earnings (unrecognized deficit) of subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,909</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,846</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of the change in income tax rate (note a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,204</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other permanent differences</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,327</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,581</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,973</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase (decrease) in valuation allowance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(452</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,950</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Recorded income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>789,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>629,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>693,259</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effective tax rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.65</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.66</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.06</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)&nbsp;</TD>
    <TD align="left">
    Pursuant to a revision in the Korean Corporate Income Tax Law
    during 2003, statutory corporate income tax rate including
    resident surtax is changed from 29.5% to 27.5%, effective
    January&nbsp;1, 2005. Such change in statutory corporate income
    tax rate resulted in a decrease in deferred tax liabilities as
    of December&nbsp;31, 2003 by
    <STRIKE>W</STRIKE>20,204&nbsp;million.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-47
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The tax effects of each type of temporary difference that gave
rise to a significant portion of the deferred tax assets and
liabilities at December&nbsp;31, 2003, 2004 and 2005 are as
follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="57%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current (note a):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>39,334</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Write-off of doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,239</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,229</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net operating loss carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax credit carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,623</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net deferred tax assets&nbsp;&#151; current</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66,073</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-Current (note a):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,039</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Write-off doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,764</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,026</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,463</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(561</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,712</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(40,220</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47,472</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on impairment of investment securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,851</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,959</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on disposition of properties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in losses of affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,593</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,671</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,244</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized deficit (undistributed earnings) of subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,364</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,434</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,732</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax free reserve for research and manpower development</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(182,518</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(195,103</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(211,208</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax free reserve for loss on disposal of treasury stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(130,373</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(130,372</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(130,372</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on valuation of foreign currency swap</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,642</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on valuation of derivatives (capital adjustment)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,377</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Considerations for conversion right</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,502</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in Capital Adjustments of Affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,967</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net operating loss carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,108</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax credit carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,091</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(187,574</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(268,196</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(344,856</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Valuation allowance for:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,321</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,022</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net operating loss carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29,575</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,980</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(23,523</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,880</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,555</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(25,260</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net deferred tax assets liabilities&nbsp;&#151; non-current</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(226,029</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(306,052</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(399,661</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)&nbsp;</TD>
    <TD align="left">
    Effective January&nbsp;1, 2005, deferred income tax assets and
    liabilities which were presented on the balance sheet as a
    single non-current net number through 2004, are separated into
    current and non-current portions, pursuant to adoption of SKAS
    No.&nbsp;16 &#147;Income Taxes&#148;. Such newly adopted
    accounting</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-48
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    standards are prospectively applied as allowed by SKAS
    No.&nbsp;16. As a result, the deferred income tax liabilities at
    December&nbsp;31, 2003 and 2004 were not separated into current
    and non-current portions to reflect the effect of such new
    adoption of SKAS No.&nbsp;16.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The net operating loss carryforwards and tax credit
carryforwards of the Company&#146;s certain subsidiaries as of
December&nbsp;31, 2005 will expire as follows (in&nbsp;millions
of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Net Operating Loss</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tax Credit</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year Ending December&nbsp;31,</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Carryforwards</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Carryforwards</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2009</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,892</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2010</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,542</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>89,318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Deferred tax assets (liabilities) added to (deducted from)
capital surplus or capital adjustments as of December&nbsp;31,
2005 are as follows (in millions of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="81%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Considerations for conversion right</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(18,502</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized loss on valuation of long-term investment securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,966</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in capital adjustment of affiliates, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,119</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on valuation of currency swap</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,377</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign-based operations&#146; translation adjustment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(21,276</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>19.</B></TD>
    <TD>
    <B>INCOME PER SHARE</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net income and ordinary income per share for the years ended
December&nbsp;31, 2003, 2004 and 2005 are computed as follows
(in millions of Korean won, except for share data):
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Net income and ordinary income per share</U></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,966,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,491,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,872,978</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average number of common shares outstanding</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,078,219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>26,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>20,261</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>25,443</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-49
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The weighted average number of common shares outstanding for
2003, 2004 and 2005 is calculated as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Weighted</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Days</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    For 2003:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At January&nbsp;1, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,152,670</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>365/365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,152,670</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury stock, at the beginning</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,310,607</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>365/365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,310,607</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase of treasury stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    Jan.&nbsp;10</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,809,288</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>356/365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,715,360</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase of fractional shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    Feb.&nbsp;3</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(52</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>332/365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase of fractional shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    May&nbsp;1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(91</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>233/365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(58</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    May&nbsp;1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>233/365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,609</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    (note a)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,544,600</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,128,988</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,078,219</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    For 2004:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At January&nbsp;1, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366/366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury stock, at the beginning</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,662,403</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366/366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,662,403</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase of fractional shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    Feb.&nbsp;20</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>316/366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,297</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    For 2005:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At January&nbsp;1, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>365/365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,276,711</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury stock, at the beginning</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    &#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,662,415</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>365/365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,662,415</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)&nbsp;</TD>
    <TD align="left">
    Such treasury stock was acquired or disposed of on several
    different dates in 2003, and the weighted number of shares was
    calculated according to each transaction date.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Diluted net income and ordinary income per share amounts for the
years ended December&nbsp;31, 2003, 2004 and 2005 are computed
as follows (in millions of Korean won except for share data):
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Diluted net income and ordinary income per share</U></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjusted net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,966,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,498,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,886,033</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjusted weighted average number of common shares outstanding</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,078,219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,596,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,332,996</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>26,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>20,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>25,036</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-50
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The numerator and denominator of basic and diluted income per
share for the years ended December&nbsp;31, 2003, 2004 and 2005
are as follows:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Diluted net income and ordinary income per share</U></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Average Weighted</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Per-share</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Net Income</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In&nbsp;millions of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In Korean Won)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Korean&nbsp;Won)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    For 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,966,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,078,219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>26,187</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of stock option (note&nbsp;a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,966,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,078,219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>26,187</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    For 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,491,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>20,261</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of stock option (note&nbsp;a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of convertible bonds (note&nbsp;b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>982,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,498,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,596,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>20,092</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    For 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,872,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>25,443</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of stock option (note&nbsp;a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of convertible bonds (note&nbsp;b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,055</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,718,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,886,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,332,996</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>25,036</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)&nbsp;</TD>
    <TD align="left">
    In the years ended December&nbsp;31, 2003, 2004 and 2005, the
    assumed exercise of stock options was not reflected in diluted
    earnings per share because the exercise of stock options would
    not dilute the earnings per share.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note b)&nbsp;</TD>
    <TD align="left">
    The effect of convertible bonds are increase in net income
    related to interest expense that would not have incurred, and
    increase in the weighted average number of common shares
    outstanding related to common shares that would have been
    issued, assuming the conversion of convertible bonds issued on
    May&nbsp;27, 2004 (see Note&nbsp;9).</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-51
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DIVIDEND DISCLOSURE</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of dividends which were declared for the years ended
December&nbsp;31, 2003, 2004 and 2005 are as follows (in
millions of Korean won except for share data):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Fiscal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Face</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dividend</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" nowrap><B>Dividend Type</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Shares Outstanding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ratio</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dividends</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Cash dividends</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,100%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>404,878</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Cash dividends (interim)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>73,614</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Cash dividends (year-end)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,860%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>684,613</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Total</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>758,227</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Cash dividends (interim)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>73,614</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Cash dividends (year-end)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,600%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>588,915</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Total</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>662,529</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Dividends payout ratios for the years ended December&nbsp;31,
2003, 2004 and 2005 are as follows (in millions of Korean won
and %):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>404,878</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>758,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>662,529</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,966,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,491,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,872,978</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividends payout ratio</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.59</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.84</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.37</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Dividends yield ratios for the years ended December&nbsp;31,
2003, 2004 and 2005 are as follows (in Korean won and %):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividend per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock price at the year-end</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividends yield ratio</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.76</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.23</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.97</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESTRICTED DEPOSITS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a.&nbsp;At December&nbsp;31, 2005, the Company and its
subsidiaries have guarantee deposits restricted for their
checking accounts totaling <STRIKE>W</STRIKE>43&nbsp;million,
and deposits totaling <STRIKE>W</STRIKE>10,000&nbsp;million from
which the interest incurred is restricted for use for the
interest of the public until August&nbsp;10, 2006 (due date).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
b.&nbsp;The Company entered into a contract to sell the
investment in common stock of KPMS&nbsp;Corporation, which was
held by the Company and accounted for as available-for-sale
securities, with First Data Corporation. Some portion of
proceeds from sales of such investment totaling
<STRIKE>W</STRIKE>1,137&nbsp;million is kept in escrow accounts
in accordance with the Escrow Agreement, which is restricted for
use until November&nbsp;16, 2007 (final settlement date) and
recorded as long-term bank deposits.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>22.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COMMITMENTS AND
CONTINGENCIES</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a.&nbsp;The Company and its subsidiaries have credit lines with
several local banks that provide for borrowings of up to
<STRIKE>W</STRIKE>323,000&nbsp;million. At December&nbsp;31,
2005, the borrowings under these credit lines were nill and the
net availability under these credit lines was
<STRIKE>W</STRIKE>323,000&nbsp;million. In addition, Seoul
Records, Inc., a subsidiary of the Company, has credit lines
with Kiup Bank related to opening the letter of credit up to
US$750,000.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-52
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
b.&nbsp;At December&nbsp;31, 2005, certain short-term financial
instruments amounting to <STRIKE>W</STRIKE>7,384&nbsp;million
are secured for payment guarantee of short-term borrowing,
accounts payable and other.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
c.&nbsp;PAXNet Co., Ltd., a subsidiary of the Company, has
guaranteed the repayment of borrowings for Finger Co., Ltd.,
which is a related company. The outstanding balance of such
guarantees as of December&nbsp;31, 2005 approximated
<STRIKE>W</STRIKE>332&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
d.&nbsp;Seoul Records, Inc., a subsidiary of the Company, has
provided Kiup Bank with its lands, buildings and machineries of
which the carrying amount at December&nbsp;31, 2005 is totaling
<STRIKE>W</STRIKE>4,118&nbsp;million as a collateral for its
foreign currency long-term borrowings. In addition, Seoul
Record, Inc. has provided Universal Music Ltd. with a note
amounting to <STRIKE>W</STRIKE>292&nbsp;million as a collateral
for its leasehold key money received from Universal Music Ltd.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
e.&nbsp;SK Communications Co., Ltd., which is the Company&#146;s
subsidiary, had entered into a license agreement with Lycos
Intangibles, LLC to use technology and pay royalties related to
the Lycos License and TRIPOD for two years from August&nbsp;14,
2002. In accordance with this agreement, SK Communications Co.,
Ltd. paid US$2,313,098 in royalty fees for the years ended
December&nbsp;31, 2003 and 2004, respectively. The license
agreement expired on August&nbsp;13, 2004. SK Communications
Co., Ltd. entered into a new
<FONT style="white-space: nowrap">e-mail</FONT> service and
license agreement with Lycos Intangible, LLC to pay royalties
totaling US$700,000 for two years from August&nbsp;14, 2004 for
the exclusive right to offer
<FONT style="white-space: nowrap">e-mail</FONT> services to
existing <FONT style="white-space: nowrap">e-mail</FONT> users
who have Lycos <FONT style="white-space: nowrap">e-mail</FONT>
accounts in the Republic of Korea. In accordance with this new
agreement, SK Communications Corp. paid US$400,000 in advance on
August&nbsp;14, 2004 and the rest of royalties of US$300,000 is
recorded as accounts payable as of December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
f.&nbsp;On October&nbsp;18, 2002 and November&nbsp;15, 2002, GNI
Enterprise Inc. filed lawsuits against SK Communications Co.,
Ltd., which is the Company&#146;s subsidiary. In the lawsuit
filed on October&nbsp;18, 2002, GNI Enterprise Inc. asserted
that the contract for usage of Lycos brand between GNI
Enterprise Inc. and SK Communications Co., Ltd. was effective. A
judgment in the first trial and the second trial was made in
favor of SK Communications Co., Ltd.; however, GNI Enterprise
Inc. appealed the judgment and the appeal is in process. In
addition, Synnara Music Co., Ltd. and others filed a lawsuit
against Seoul Records, Inc., a subsidiary of the Company, to
claim damages totaling <STRIKE>W</STRIKE>760&nbsp;million. A
judgement is in process. The ultimate outcome of the above
lawsuit cannot presently be determined. SK Communications Co.,
Ltd. and Seoul Records, Inc. believe that any liability that may
be subject to thereunder will not be material.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
g.&nbsp;Under the Service Agreement dated on November&nbsp;17,
2005 between SK Telecom International Inc. (&#147;SKTI&#148;), a
subsidiary of the Company, and HELIO, LLC (&#147;HELIO&#148;),
of which SK Telecom USA Holdings, Inc., a subsidiary of the
Company, has 50% ownership interest, SKTI has been retained to
provide a minimum of level of qualified employees (each, an
&#147;Employee&#148; and collectively, the
&#147;Employees&#148;), and for the first four years of this
Agreement, if any Employee&#146;s employment with HELIO ceases
or is terminated for any reason, then, upon HELIO&#146;S written
request, SKTI is obligated to replace the employee of like-level
and experience at no cost to, and full discretion of, HELIO. In
consideration of such services, HELIO granted the time-based
warrant to purchase up to 1,995,000&nbsp;shares of HELIO&#146;S
stock at a vesting rate of 25%&nbsp;per year over next four
years, at a purchase price of $1.71&nbsp;per share and the
performance-based warrant to purchase up to
1,800,000&nbsp;shares at a purchase price of $1.71&nbsp;per
share, which are earned upon HELIO reaching certain scheduled
performance milestones, to SKTI.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
h.&nbsp;SLD Telecom, a subsidiary of the Company, entered into a
business cooperation contract with Saigon Post&nbsp;&#38;
Telecommunication Services Corporation to establish cellular
mobile communication services and provide CDMA service
throughout Vietnam. In accordance with this contract, in the
event that the cash inflow for the business is insufficient to
cover the cash outflow necessary to cover the joint expenditure
of the business (&#147;cash shortfall&#148;), SLD Telecom and
Saigon Post&nbsp;&#38; Telecommunication Services Corporation
will contribute the necessary funds to the business and bear
additional cash shortfalls according to their gross profit
sharing ratios at
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-53
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
the time. With respect to the Company&#146;s involvement in the
business, the maximum exposure to loss was approximately Won
54.6&nbsp;billion as of December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>23.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INSURANCE</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2005, certain of the Company and its
subsidiaries&#146; assets are insured with local insurance
companies as follows (in million of Korean won and thousands of
U.S.&nbsp;dollars):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Asset</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Risk</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Book Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Coverage</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inventories and property and</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>US$68,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Fire and comprehensive liability</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,754,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,395,950</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>24.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TRANSACTIONS WITH AFFILIATED
COMPANIES</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Significant related party transactions and balances with
affiliated companies as of and for the years ended
December&nbsp;31, 2003, 2004 and 2005 were as follows (in
millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="left" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Transactions</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Engineering&nbsp;&#38; Construction Co., Ltd.:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Construction (note a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>324,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>419,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>257,823</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissions paid and other expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,593</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commission income and other income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>776</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,580</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Networks (formerly known as SK Global):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of property and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,853</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,220</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of inventory</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissions paid, leased line and other expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>411,053</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>432,967</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sales of handsets and other income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>491,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,177,249</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>279,197</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Corporation:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of property and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,831</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,071</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,302</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissions paid and other expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,921</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48,266</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commission income and other income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,826</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,243</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Telesys:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of property and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188,111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>294,829</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissions paid and other expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,410</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commission income and other income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>575</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SKC:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of inventories</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>204,694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>899,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>219,767</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Disposal of inventories and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissions paid and other expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,316</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commission income and other income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>747</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Innoace:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of property and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,776</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,652</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissions paid and other expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,109</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commission income and other income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-54
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="left" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>2005</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    WiderThan Co., Ltd.:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of property and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,643</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,780</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,248</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissions paid and other expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98,211</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commission income and other income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,216</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,277</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK C&#38;C Co., Ltd.:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of property and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>182,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>130,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>249,633</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissions paid and other expenses (note b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>284,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>295,562</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>322,856</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commission income and other income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,853</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balances</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Engineering&nbsp;&#38; Construction Co., Ltd.:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>135,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,326</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits received</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>942</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Networks (formerly known as SK Global):</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>107,782</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>216,412</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,787</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,641</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,047</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,237</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits received</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>719</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,700</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Corporation:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,643</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits (note c)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,703</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,914</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits received</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,174</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK Telesys:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,904</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,954</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,819</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SKC:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,680</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,549</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,383</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115,839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Innoace:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,100</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits received</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,069</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,138</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Widerthan Co., Ltd.:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,398</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SK C&#38;C Co., Ltd.:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>174,884</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guarantee deposits received</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>346</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-55
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)&nbsp;</TD>
    <TD align="left">
    The Company is a party to several contracts with SK Engineering
    and Construction Co., Ltd. related to the construction of its
    new corporate headquarters in Ulchiro 2-ga, Chongro-gu, Seoul.
    Construction of its new headquarters was completed at the end of
    2004. The total payment to SK Engineering&nbsp;&#38;
    Construction Co., Ltd. for the demolition of existing buildings
    on the site and construction of the new building was
    <STRIKE>W</STRIKE>209&nbsp;billion.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note b)&nbsp;</TD>
    <TD align="left">
    The Company and certain subsidiaries are party to an agreement
    with SK C&#38;C Co., Ltd., pursuant to which SK C&#38;C Co.,
    Ltd. provides them with information technology services, dated
    as of December&nbsp;28, 1998 and amended as of November&nbsp;1,
    1999. This agreement will expire on December&nbsp;31, 2009, but
    may be terminated by the Company and certain subsidiaries
    without cause on a six months notice. The agreement provides
    that the parties will agree annually on the specific services to
    be provided and the monthly fees to be paid by the Company and
    certain subsidiaries. The Company and certain subsidiaries also
    enter into agreements with SK&nbsp;C&#38;C Co., Ltd. from time
    to time for specific information technology-related projects.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(note c)&nbsp;</TD>
    <TD align="left">
    On December&nbsp;19, 2000, the Company entered into an agreement
    with SK Corporation for the sale and leaseback of the
    Company&#146;s head office with the lease period from
    December&nbsp;19, 2000 to March&nbsp;31, 2004. Under the lease
    agreement, in January 2001 the Company deposited refundable
    leasehold key money of <STRIKE>W</STRIKE>80,113&nbsp;million
    and, as a result there will be no rent payment for the remaining
    lease period. On January&nbsp;30, 2003, the Company prolonged
    the lease term to February&nbsp;28, 2005 and deposited
    additional refundable leasehold key money of
    <STRIKE>W</STRIKE>20,027&nbsp;million. In addition, in December
    2003, the Company deposited additional refundable leasehold key
    money of <STRIKE>W</STRIKE>3,580&nbsp;million. When such lease
    agreement was terminated in February 2005, the Company collected
    all leasehold key money of
    <STRIKE>W</STRIKE>103,720&nbsp;million. Under another lease
    agreement with SK Corporation, the Company deposited refundable
    leasehold key money of <STRIKE>W</STRIKE>768&nbsp;million in
    2005. And SK Communications Co., Ltd., a subsidiary of the
    Company, has entered into an agreement with SK Corporation Co.,
    Ltd. for the lease of its head office with the lease period from
    January&nbsp;13, 2005 to January&nbsp;31, 2007 and deposited
    refundable leasehold key money of
    <STRIKE>W</STRIKE>36,935&nbsp;million. As a result, the
    refundable leasehold key money to SK&nbsp;Corporation as of
    December&nbsp;31, 2005 totaled
    <STRIKE>W</STRIKE>37,703&nbsp;million.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>25.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PROVISION FOR MILEAGE
POINTS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company, for its marketing purposes, grant certain mileage
points (&#147;Rainbow Points&#148;) to its subscribers based on
their usage of the Company&#146;s services. Rainbow Points
provision was provided based on the historical usage experience
and the Company&#146;s marketing policy. Such provision as of
December&nbsp;31, 2003, 2004 and 2005 totaled
<STRIKE>W</STRIKE>103,679&nbsp;million,
<STRIKE>W</STRIKE>61,596&nbsp;million and
<STRIKE>W</STRIKE>52,172&nbsp;million, respectively, and was
recorded as accrued expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of change in the provisions for such mileage points for
the years ended December&nbsp;31, 2005 and 2004 are as follows
(in millions of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Beginning balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>86,139</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>103,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>61,596</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Present value discount (note&nbsp;a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,415</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,283</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,265</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,605</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(76,366</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,274</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ending Balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>103,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>61,596</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>52,172</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note a)&nbsp;</TD>
    <TD align="left">
    Effective January&nbsp;1, 2005, pursuant to adoption of SKAS
    No.&nbsp;17 (see Note&nbsp;2(m)), Rainbow Points provision is
    recorded at the present value, which was recorded at nominal
    value through 2004.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-56
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>26.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DERIVATIVE INSTRUMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has entered into a foreign currency forward contract
and a <FONT style="white-space: nowrap">fixed-to</FONT>-fixed
cross currency swap contract with Citi Bank, BNP Paribas and
Credit Suisse First Boston International to hedge the foreign
currency risk of US dollar denominated bonds with face amounts
totaling US$300,000,000 at annual fixed interest rate of 4.25%
issued on April&nbsp;1, 2004. The foreign currency forward
contract was settled in 2004 and as of December&nbsp;31, 2005,
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
<STRIKE>W</STRIKE>14,177&nbsp;million (excluding tax effect
totaling <STRIKE>W</STRIKE>5,377&nbsp;million and foreign
exchange translation gain arising from US dollar denominated
bonds totaling <STRIKE>W</STRIKE>40,652&nbsp;million) was
accounted for as a capital adjustment.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the Company has entered into a
<FONT style="white-space: nowrap">fixed-to</FONT>-fixed cross
currency swap contract with Credit Suisse First Boston
International to hedge foreign currency risk of US dollar
denominated convertible bonds with face amounts of
US$329,450,000 issued on May&nbsp;27, 2004. In connection with
unsettled
<FONT style="white-space: nowrap">fixed-to</FONT>-fixed cross
currency swap contract to which the cash flow hedge accounting
is not applied, a loss on valuation of currency swap of
<STRIKE>W</STRIKE>15,789&nbsp;million for the year ended
December&nbsp;31, 2004 and a gain on valuation of currency swap
of <STRIKE>W</STRIKE>2,545&nbsp;million for the year ended
December&nbsp;31, 2005 were charged to current operations. As of
December&nbsp;31, 2005, fair values of above derivatives
totaling <STRIKE>W</STRIKE>73,450&nbsp;million are recorded in
long-term liabilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of derivative instruments as of December&nbsp;31, 2005
are as follows (in&nbsp;thousands of US dollars and millions of
Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Fair Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Designated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Duration of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>as Cash</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Not</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" nowrap><B>Type</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Hedged Item</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Face Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Contract</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Flow Hedge</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Designated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fix-to-fixed cross currency swap</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    US&nbsp;dollar denominated bonds</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    March&nbsp;23, 2004- April&nbsp;1, 2011</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>60,206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>60,206</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fix-to-fixed cross currency swap</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    US dollar denominated convertible bond</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    May&nbsp;27, 2004- May&nbsp;27, 2009</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,244</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>60,206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>13,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>73,450</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The above derivative instruments designated as cash flow hedge
mature within 63&nbsp;months from December&nbsp;31, 2005 at the
longest; and the expected portion of capital adjustments as of
December&nbsp;31, 2005, related to loss on valuation of currency
swap, to be recorded in earnings within the next 12&nbsp;months
amounts to <STRIKE>W</STRIKE>6,146&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>27.</B></TD>
    <TD>
    <B>MERGERS AND ACQUISITIONS</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>a.</B></TD>
    <TD>
    <B>Merger with SK IMT Co., Ltd.</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;1, 2003, the Company merged with SK IMT Co., Ltd.,
which was a consolidated subsidiary when it merged into the
Company, in accordance with a resolution of the Company&#146;s
board of directors on December&nbsp;20, 2002 and the approval of
shareholders of SK&nbsp;IMT Co., Ltd. on February&nbsp;21, 2003.
The shareholders of SK&nbsp;IMT Co., Ltd. were entitled to
exercise dissenter&#146;s right under Korean law. Shareholders
holding 22,078,770&nbsp;shares (or 36.8% of SK&nbsp;IMT Co.,
Ltd.&#146;s issued and outstanding shares) exercised such right,
and SK&nbsp;IMT Co., Ltd. repurchased the shares of these
dissenting shareholders at a purchase price of
<STRIKE>W</STRIKE>27,400&nbsp;per share, totaling
<STRIKE>W</STRIKE>604,958&nbsp;million, before the completion of
the merger with the Company. The exchange ratio of common stock
between the Company and SK&nbsp;IMT Co., Ltd. was
0.11276&nbsp;share of the Company&#146;s common stock with a par
value of <STRIKE>W</STRIKE>500 to 1&nbsp;share of common stock
of SK IMT Co., Ltd. with a par value of <STRIKE>W</STRIKE>5,000.
Using such exchange ratio, the Company distributed
126,276&nbsp;shares of new issued common stock to minority
shareholders of SK IMT Co., Ltd. and the Company retired all
shares of SK IMT Co., Ltd. owned by the Company and SK IMT
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-57
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Co., Ltd. upon the merger. The excess of acquired net assets
over the par value (<STRIKE>W</STRIKE>63&nbsp;million) for the
distribution of 126,276&nbsp;shares of newly issued common stock
to minority shareholders of SK&nbsp;IMT Co., Ltd. upon on the
merger dated May&nbsp;1, 2003, amounting to
<STRIKE>W</STRIKE>31,809&nbsp;million, was recorded as an
increase in capital surplus in accordance with Korean GAAP.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>b.</B></TD>
    <TD>
    <B>Merger with Cyworld Co., Ltd.</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;1, 2003, SK Communications Co., Ltd., the
Company&#146;s subsidiary, merged with Cyworld Co., Ltd. in
order to start a personalized website business and strengthen
the competitive power in the internet portal service market, in
accordance with the approval of stockholders of
SK&nbsp;Communications Co., Ltd. dated on June&nbsp;16, 2003.
The exchange ratio of common stock between
SK&nbsp;Communications Co., Ltd. (par value:
<STRIKE>W</STRIKE>500) and Cyworld Co., Ltd. (par value:
<STRIKE>W</STRIKE>5,000) was 55.04697 to 1.&nbsp;Using such
exchange ratio, SK&nbsp;Communications Corp. issued
12,770,877&nbsp;shares of new common stock.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The merger with Cyworld Co., Ltd. was accounted for using the
purchase method of accounting, and generated a goodwill of
<STRIKE>W</STRIKE>9,374&nbsp;million as follows (in millions of
Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of net assets merged</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>152</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Merger cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of common stock issued</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,429</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Direct costs related to the merger (note)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,526</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,374</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>(note)&nbsp;</TD>
    <TD align="left">
    The direct costs related to the merger are the liquidation
    income tax of <STRIKE>W</STRIKE>1,067&nbsp;million paid for
    Cyworld Co., Ltd., and service fees of
    <STRIKE>W</STRIKE>30&nbsp;million related to the merger.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, SK&nbsp;Communications Co., Ltd. amortizes the
goodwill using the straight-line method over five years, and
goodwill amortization for the years ended December&nbsp;31,
2003, 2004 and 2005 was <STRIKE>W</STRIKE>781&nbsp;million,
<STRIKE>W</STRIKE>1,875&nbsp;million and
<STRIKE>W</STRIKE>1,875&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The condensed balance sheets of Cyworld Co., Ltd. as of
August&nbsp;1, 2003 and December&nbsp;31, 2002 and condensed
statements of operations for the seven months ended
July&nbsp;31, 2003 and the year ended December&nbsp;31, 2002 are
as follows (in&nbsp;millions of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Aug.&nbsp;1, 2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dec.&nbsp;31, 2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    (Condensed balance sheets)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>129</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,304</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>850</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>432</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,663</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,282</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,160</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital surplus</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,208</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deficit</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,216</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,346</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities and stockholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,304</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-58
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 24pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period from</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Jan.&nbsp;1, 2003 to</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Year Ended</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Jul.&nbsp;31, 2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dec.&nbsp;31, 2002</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    (Condensed statements of operations)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,930</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,823</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,244</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,694</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(314</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(871</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(163</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(721</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income (loss)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,555</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>c.</B></TD>
    <TD>
    <B>Acquisition of Seoul Records, Inc.</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to produce and distribute music product and secure
larger content pool, the Company acquired a 60% equity interest
in Seoul Record, Inc.&#146;s common stock on August&nbsp;11,
2005 in accordance with a resolution of the Company&#146;s board
of directors dated May&nbsp;27, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The acquisition of a 60% equity interest in Seoul Records,
Inc.&#146;s common stock is summarized as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="78%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>In Millions of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Korean&nbsp;Won</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of net assets acquired</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>23,796</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,078</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>27,874</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company amortizes the goodwill using the straight-line
method over five years, and goodwill amortization for the year
ended December&nbsp;31, 2005 was
<STRIKE>W</STRIKE>408&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>28.</B></TD>
    <TD>
    <B>NETWORK INTERCONNECTION CHARGES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s networks interconnect with the public
switched telephone networks operated by KT&nbsp;Corporation and
hanarotelecom incorporated and, through their networks, with the
international gateways of KT&nbsp;Corporation, DACOM and Onse,
as well as the networks of the other wireless telecommunications
service providers in Korea. These connections enable the
Company&#146;s subscribers to make and receive calls from
telephones outside the Company&#146;s networks. Under Korean
law, service providers are required to permit other service
providers to interconnect to their networks for purposes of
offering other services. If the new service provider desires
interconnection and the incumbent service provider is unable to
reach an agreement within 90&nbsp;days, the new service provider
can appeal to the Korean Communications Commission, a government
agency under the MIC.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the years ended December&nbsp;31, 2003, 2004 and 2005, such
interconnection revenues amounted to
<STRIKE>W</STRIKE>1,017.1&nbsp;billion,
<STRIKE>W</STRIKE>849.4&nbsp;billion and
<STRIKE>W</STRIKE>898.6&nbsp;billion, respectively, while
aggregate interconnection expenses amounted to
<STRIKE>W</STRIKE>771.5&nbsp;billion,
<STRIKE>W</STRIKE>913.7&nbsp;billion and
<STRIKE>W</STRIKE>989.4&nbsp;billion, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>29.</B></TD>
    <TD>
    <B>SUBSTANTIAL CHANGES IN THE BUSINESS ENVIRONMENT AND
    SUBSEQUENT EVENTS</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>a.</B></TD>
    <TD>
    <B>Acquisition of WiBro License</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company, together with KT Corporation and hanarotelecom
incorporated, acquired a license for WiBro, a portable internet
service which is scheduled to start commercial operations in
June 2006, as a result of the decision of the Committee of
Information and Communication Policy dated January&nbsp;20,
2005. With regard to this
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-59
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
service, the Company paid <STRIKE>W</STRIKE>117&nbsp;billion and
received the WiBro license from the Ministry of Information and
Technology in March 2005, which was recorded as an intangible
asset.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>b.</B></TD>
    <TD>
    <B>Establishment of HELIO, LLC., a Joint Venture Company in the
    U.S.</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with the resolution of the Company&#146;s board of
directors dated January&nbsp;26, 2005, the Company and
EarthLink, Inc., an internet service provider in the United
States of America, agreed to establish &#145;HELIO, LLC.&#146;,
a joint venture company, in the United States of America in
February 2005 in order to provide wireless telecommunication
service across the United States of America. The Company, via SK
Telecom USA Holdings, Inc., its wholly-owned subsidiary in the
United States of America, will invest US$220&nbsp;million for a
50% equity interest in the joint venture company from 2005
through 2007. HELIO, LLC. will launch cellular voice and data
services extensively across the United States of America during
the second quarter of 2006 by renting networks from network
operators throughout the United States of America also known as
partial mobile virtual network operator (MVNO) system.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, in order to revitalize the cellular voice and data
services in United States of America, the Company, via SK
Telecom USA Holdings, Inc., its wholly-owned subsidiary in the
United States of America, made an additional investment of
US$39.5&nbsp;million in an equity interest of HELIO, LLC. on
March&nbsp;1, 2006.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>c.</B></TD>
    <TD>
    <B>Acquisition of and Merger with Etoos Group Inc.</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to improve the competitive power in the domestic
internet service portal and educational service market,
SK&nbsp;Communications Co., Ltd., a Company&#146;s subsidiary,
acquired 20.46% equity interest of Etoos Group Inc. during 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, on March&nbsp;1, 2006, SK Communications Co., Ltd.
merged with Etoos Group Inc. in order to maximize synergy
effects through enhanced management efficiency and strengthened
competitive power in the internet portal and educational service
market, in accordance with the approval of stockholders of
SK&nbsp;Communications Co., Ltd. dated on January&nbsp;2, 2006
and issued 464,738&nbsp;shares of new common stock to former
shareholder of Etoos Group Inc.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>d.</B></TD>
    <TD>
    <B>Additional Acquisition of SLD Telecom PTE Ltd.</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;27, 2006, the Company acquired 100&nbsp;million
shares of SLD&nbsp;Telecom PTE Ltd.&#146;s unissued common stock
for US$100&nbsp;million in order to revitalize the
telecommunication services in Vietnam. As a result, the
Company&#146;s ownership increased from 55.1% to 73.3%.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>e.</B></TD>
    <TD>
    <B>Handset Subsidies to Long-term Mobile Subscribers</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective March&nbsp;27, 2006, the Telecommunication Law of
Korea was revised to allow wireless carriers to provide handset
subsidies to customers who have maintained their wireless
account with the same carrier for 18&nbsp;months or longer. The
Company commenced its handset subsidy program on the effective
date of the revised Telecommunication Law and included a clause
in the service contract which allows the Company to change the
terms of its subsidy program, including the Company&#146;s
ability to terminate the program at any time after a thirty day
notice to its customers.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>f.</B></TD>
    <TD>
    <B>Request for the conversion of the convertible bond and the
    delivery of the treasury stock</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the request of bond holders, US$310,000 and US$2,000,000 of
convertible bonds issued in May, 2004 were converted into 1,672
and 10,788&nbsp;shares of treasury stock on April&nbsp;20, 2006
and April&nbsp;26, 2006, respectively, at the conversion price
of <STRIKE>W</STRIKE>218,098 (standard foreign currency ratio of
<STRIKE>W</STRIKE>1,176.50 for US$1 based on the related
indenture).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-60
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>g.</B></TD>
    <TD>
    <B>Resolution to acquire equity interest in IHQ, Inc.</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with the resolution of the Company&#146;s board of
directors dated April&nbsp;26, 2006, the Company decided to
purchase additional 5,000,000&nbsp;shares in IHQ, Inc.&#146;s
common stock by exercising stock option at the exercise price of
<STRIKE>W</STRIKE>5,740.49 on June&nbsp;6, 2006 in order to
strengthen the Company&#146;s communication service and platform
business. As a result, the Company&#146;s ownership in IHQ, Inc.
will increase from 21.6% to 34.9%.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>h.</B></TD>
    <TD>
    <B>Fine for improper payment of handset subsidies.</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;6, 2006 and April&nbsp;18, 2006, the Communication
Commission of the Republic of Korea fined the Company
<STRIKE>W</STRIKE>&nbsp;13.8&nbsp;billion and
<STRIKE>W</STRIKE>&nbsp;7.8&nbsp;billion, respectively, for
improper payment of handset subsidies.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>30.</B></TD>
    <TD>
    <B>RECONCILIATION TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING
    PRINCIPLES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in
Korea (&#147;Korean GAAP&#148;), which differ in certain
respects from accounting principles generally accepted in the
United States of America (&#147;U.S.&nbsp;GAAP&#148;). The
significant differences are described below. Other differences
do not have a significant effect on either consolidated net
income or shareholders&#146; equity.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>a.</B></TD>
    <TD>
    <B>Deferred Income Taxes (see Note&nbsp;2)</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, deferred tax assets and liabilities are
separated into their current and non-current portions based on
the classification of related assets or liability for financial
reporting purposes. Under Korean GAAP, through 2004, deferred
income tax assets and liabilities are presented on the balance
sheet as a single non-current net number. Effective
January&nbsp;1, 2005, Korean GAAP was revised to classify
deferred income tax assets and liabilities into current and
non-current portion in a similar manner of U.S.&nbsp;GAAP.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, U.S.&nbsp;GAAP does not allow recognition of
deferred tax assets on the difference between the tax bases and
financial statement bases of investments in subsidiaries unless
it is apparent that the difference will reverse in the
foreseeable future which has generally been interpreted to be
one year. Under Korean GAAP, through 2004, there was no such
specific provision for the recognition of deferred income tax
assets on the difference between the tax bases and financial
statement bases of investments in subsidiaries. However,
effective January&nbsp;1, 2005, the Korean GAAP was revised to
recognize deferred income tax assets only when it is apparent
that the difference will reverse in the foreseeable future in a
similar manner of U.S.&nbsp;GAAP. Such deferred tax assets
totaling <STRIKE>W</STRIKE>27,030&nbsp;million and
<STRIKE>W</STRIKE>30,857&nbsp;million as of December&nbsp;31,
2003 and 2004, respectively, had been recognized for Korean GAAP
purposes.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>b.</B></TD>
    <TD>
    <B>Deferred Charges (see Note&nbsp;2)</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Korean GAAP requires that bond issuance costs be deducted from
proceeds of bonds and certain development costs be recorded as
intangible assets. Under U.S.&nbsp;GAAP, bond issuance costs are
capitalized as deferred assets and amortized over the redemption
period of the related obligation and research and development
costs are charged to expense as incurred.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>c.</B></TD>
    <TD>
    <B>Leases</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Through 1998, leases whose present value of minimum lease
payments exceed 90% of the fair value of the leased equipment
were not capitalized under Korean GAAP, but are capitalized
under U.S.&nbsp;GAAP. Therefore, with respect to lease contracts
entered into prior to January&nbsp;1, 1999, certain adjustments
for equipment, obligations under capital leases, interest on
capital leases and depreciation are required.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-61
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>d.</B></TD>
    <TD>
    <B>Marketable Securities and Investments Securities (see
    Note&nbsp;2)</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Through 2002, under Korean GAAP, debt and equity securities were
classified into marketable securities and investment securities.
Effective January&nbsp;1, 2003, Korean GAAP was revised to
classify investment in securities into three separate
categories; trading securities, available-for-sales securities
and <FONT style="white-space: nowrap">held-to</FONT>-maturity
securities in a similar manner of Statement of Financial
Accounting Standards No.&nbsp;115 (SFAS&nbsp;No.&nbsp;115),
&#147;Accounting for Certain Investments in Debt and Equity
Securities&#148;, described below. The valuation method for each
category is similar to SFAS&nbsp;No.&nbsp;115; however, the
accounting treatment for impairment of investment securities and
recoveries under Korean GAAP differ from those under
U.S.&nbsp;GAAP as described in Note&nbsp;30(e).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, SFAS&nbsp;No.&nbsp;115 requires that
equity securities with readily determinable fair values and all
debt securities be classified into three categories and
accounted for as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Debt securities that the Company has the positive intent and
    ability to hold to maturity are classified as
    <FONT style="white-space: nowrap">held-to</FONT>-maturity
    securities and reported at amortized cost.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Debt and equity securities that are bought and held principally
    for the purpose of selling them in the near term are classified
    as trading securities and reported at fair value, with
    unrealized gains and losses included in income.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Debt and equity securities not classified as either
    <FONT style="white-space: nowrap">held-to</FONT>-maturity
    securities or trading securities are classified as
    available-for-sale securities and reported at fair value, with
    unrealized gains and losses excluded from income and reported in
    other comprehensive income.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Gross proceeds from the sale of such securities were
<STRIKE>W</STRIKE>945,854&nbsp;million,
<STRIKE>W</STRIKE>343,723&nbsp;million and
<STRIKE>W</STRIKE>71,308&nbsp;million for the years ended
December&nbsp;31, 2003, 2004 and 2005, respectively. Gross
realized gains for the years ended December&nbsp;31, 2003, 2004
and 2005 were <STRIKE>W</STRIKE>2,122&nbsp;million,
<STRIKE>W</STRIKE>1,342&nbsp;million and
<STRIKE>W</STRIKE>5,638&nbsp;million, respectively. Gross
realized losses for the years ended December&nbsp;31, 2003, 2004
and 2005 were <STRIKE>W</STRIKE>614&nbsp;million,
<STRIKE>W</STRIKE>517&nbsp;million and
<STRIKE>W</STRIKE>37&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to trading securities at
December&nbsp;31, 2003, 2004 and 2005 is as follows (in millions
of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gross</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gross</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unrealized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unrealized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Amortized&nbsp;Cost)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gains</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Losses</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At December&nbsp;31, 2003:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>895,401</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,184</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>893,217</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At December&nbsp;31, 2004:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(82</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>368</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>652,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,039</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>654,411</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>652,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,039</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(82</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>654,779</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At December&nbsp;31, 2005:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>12</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777,460</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>777,471</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>777,472</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-62
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Information with respect to long-term investment securities
including the current portion affected by SFAS&nbsp;No.&nbsp;115
at December&nbsp;31, 2003, 2004 and 2005 is as follows (in
millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gross</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gross</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cost (amortized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>unrealized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>unrealized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Impairment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>cost)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>gains</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>losses</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>losses</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At December&nbsp;31, 2003:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>427,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>73,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(6,608</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(55,469</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>438,685</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,315</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>491,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>73,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(6,608</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(55,469</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>503,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At December&nbsp;31, 2004:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>470,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>137,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(63,902</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>543,985</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,655</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,302</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>536,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>137,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(74,557</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>599,287</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    At December&nbsp;31, 2005:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>465,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>173,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(9,768</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(60,838</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>568,598</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>307,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(217</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,885</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296,388</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>772,734</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>173,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(9,985</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(71,723</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>864,986</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Gross unrealized losses of <STRIKE>W</STRIKE>6,608&nbsp;million
and <STRIKE>W</STRIKE>9,985&nbsp;million at December&nbsp;31,
2003 and 2005, respectively, for which impairment has not been
recognized, have been in a continuous unrealized loss position
for less than twelve months.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The aggregate carrying amount of the Company&#146;s cost method
investments totaled <STRIKE>W</STRIKE>353,168&nbsp;million at
December&nbsp;31, 2005. Investments with an aggregate cost of
<STRIKE>W</STRIKE>85,994&nbsp;million were not evaluated for
impairment because (a)&nbsp;the Company did not estimate the
fair value of those investments in accordance with
paragraphs&nbsp;14 and 15 of Statement&nbsp;107 and (b)&nbsp;the
Company did not identify any events or changes in circumstances
that may have had a significant adverse effect on the fair value
of those investments. The Company estimated that the fair value
exceeded the cost of investments (that is, the investments were
not impaired) for the remaining
<STRIKE>W</STRIKE>267,174&nbsp;million of cost method
investments.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>e.</B></TD>
    <TD>
    <B>Impairment of Investment Securities and Recoveries</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, if the decline in fair value is judged to
be other than temporary, the cost basis of the individual
securities is written down to fair value as a new cost basis and
the amount of the write-down is included in current earnings.
Other than temporary impairment is determined based on
evidence-based judgment about a recovery of fair value up to (or
beyond) the cost of investment by considering the severity and
duration of the impairment in relation to the forecasted
recovery of fair value. Under Korean GAAP, if the collectible
value from the securities is less than acquisition costs with
objective evidence of impairment such as bankruptcy of
investees, an impairment loss is recognized. In addition, the
duration of the impairment in relation to the forecasted
recovery of fair value is not considered for Korean GAAP
purposes. Due to such differences, for U.S.&nbsp;GAAP purposes,
losses on impairment of investment securities for the years
ended December&nbsp;31, 2003, 2004 and 2005 increased by
<STRIKE>W</STRIKE>21,716&nbsp;million,
<STRIKE>W</STRIKE>8,434&nbsp;million and
<STRIKE>W</STRIKE>68&nbsp;million, respectively, when compared
to those under Korean GAAP. And, as certain available-for-sale
securities for which the impairment losses had been recognized
for the years ended December&nbsp;31, 2002 and 2004 for
U.S.&nbsp;GAAP purposes, but not for Korean GAAP purposes, were
sold in 2003 and 2005, some portion of losses of disposal of
such available-for-sale securities that were recognized for the
years ended December&nbsp;31, 2003 and 2005 for Korean GAAP
purposes, amounting to
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-63

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<STRIKE>W</STRIKE>46,443&nbsp;million and
<STRIKE>W</STRIKE>3,133&nbsp;million in 2003 and 2005,
respectively, were reversed respectively, for U.S.&nbsp;GAAP
purposes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean GAAP, the subsequent recoveries of impaired
available-for-sale securities and
<FONT style="white-space: nowrap">held-to</FONT>-maturity
securities result in an increase of their carrying amount up to
the original acquisition cost, and the recovery gains are
reported in current operations up to the previously recognized
impairment loss as reversal of loss on impairment of investment
securities. Under U.S.&nbsp;GAAP, the subsequent increase in
carrying amount of the impaired and written down
<FONT style="white-space: nowrap">held-to</FONT>-maturity
securities is not allowed. The subsequent increase in fair value
of available-for-sale securities is reported in other
comprehensive income.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>f.</B></TD>
    <TD>
    <B>Comprehensive Income</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean GAAP, there is no requirement to present
comprehensive income. Under U.S.&nbsp;GAAP, comprehensive income
and its components must be presented in the financial
statements. Comprehensive income includes all changes in
shareholders&#146; equity during a period except those resulting
from investments by, or distributions to, owners, including
certain items not included in the current results of operations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>g.</B></TD>
    <TD>
    <B>Business Combinations and Intangible Assets</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective July&nbsp;1, 2001, U.S.&nbsp;GAAP requires the use of
the purchase method of accounting for all business combinations.
In addition, for fiscal years beginning after December&nbsp;31,
2001, goodwill and intangible assets with indefinite useful life
shall not be amortized; however, they are subject to impairment
tests on an annual basis and at any other time if events occur
or circumstances indicate that the carrying amount of goodwill
or other intangible assets may not be recoverable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Circumstances that could trigger an impairment test include but
are not limited to: a significant adverse changes in the
business climate or legal factors; an adverse action or
assessment by a regulator; unanticipated competition; loss of
key personnel; the likelihood that a significant portion of a
reporting unit will be sold or otherwise disposed; results of
testing for recoverability of a significant asset group within a
reporting unit.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To test impairment of goodwill, the fair value of a reporting
unit which includes goodwill is compared with its carrying
amount of a reporting unit, including goodwill. If the carrying
amount of a reporting unit exceeds its fair value, the carrying
amount of the reporting unit goodwill is compared with the
implied fair value of goodwill. If the carrying amount of the
reporting unit goodwill exceeds the implied fair value of that
goodwill, an impairment loss is recorded in current operations.
The Company believes there is no impairment of goodwill for the
years ended December&nbsp;31, 2003, 2004 and 2005. The Company
does not have any intangible assets with indefinite lives as of
December&nbsp;31, 2003, 2004 and 2005. Intangible assets with
finite lives will continue to be amortized over their estimated
useful lives.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean GAAP, business combinations involving other than
commonly controlled entities are accounted for as either a
purchase or a pooling of interests, depending on the specific
circumstances. However, in the case of the Company, no business
combinations have been accounted for using the pooling of
interest method under Korean GAAP. In a purchase combination,
the difference between the purchase consideration and the fair
value of the net assets acquired is accounted for as goodwill or
as negative goodwill. Goodwill and all other intangible assets
are amortized over its estimated economic life, generally not to
exceed 20&nbsp;years.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>h.</B></TD>
    <TD>
    <B>Determination of Acquisition Cost of Equity Interest in
    Subsidiary</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, when a parent company acquires an equity
interest in a subsidiary in exchange for newly issued common
stock of the parent company, the acquisition cost of the equity
interest in a subsidiary is determined at the market price of
the parent company&#146;s common stock for a reasonable period
before and after the date the terms of the acquisition are
agreed to and announced. Under Korean GAAP, the acquisition cost
is determined at the closing market price of the parent
company&#146;s common stock when the common stock is
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-64
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
actually issued. In addition, there are certain other
differences in the methods of allocating cost to assets
acquired. Due to such differences, for U.S.&nbsp;GAAP purposes,
the shareholders&#146; equity as of December&nbsp;31, 2003, 2004
and 2005 increased by <STRIKE>W</STRIKE>64,052&nbsp;million,
<STRIKE>W</STRIKE>44,455&nbsp;million and
<STRIKE>W</STRIKE>28,358&nbsp;million, respectively, when
compared to those under Korean&nbsp;GAAP.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>i.</B></TD>
    <TD>
    <B>Additional Equity Investment in Subsidiaries</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean&nbsp;GAAP, when additional interest is acquired
after acquiring a majority interest in a subsidiary, the
differences between the Company&#146;s acquisition cost of the
additional interest and the corresponding carrying amount of the
acquired additional interest in a subsidiary is presented as an
adjustment to capital surplus. Under U.S.&nbsp;GAAP, the cost of
an additional interest would be allocated based on the fair
value of net assets at the time the additional interest is
acquired, with the excess allocated to goodwill. Due to such
differences, for U.S.&nbsp;GAAP purposes, the shareholders&#146;
equity as of December&nbsp;31, 2003, 2004 and 2005 increased by
<STRIKE>W</STRIKE>955,865&nbsp;million,
<STRIKE>W</STRIKE>965,102&nbsp;million and
<STRIKE>W</STRIKE>965,351&nbsp;million, respectively, when
compared to those under Korean&nbsp;GAAP.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>j.</B></TD>
    <TD>
    <B>Capitalization of Foreign Exchange Losses (or&nbsp;Gains) and
    Interest Expenses</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Through 2002, under Korean GAAP, interest expenses and foreign
exchange losses (or&nbsp;foreign exchange gains) incurred on
debt used to finance the construction of property, plant and
equipment were capitalized (or&nbsp;offset against property
additions). Effective January&nbsp;1, 2003, Korean GAAP was
revised to allow a company to charge reflect such interest
expense and foreign exchange losses (or&nbsp;foreign exchange
gains) to current operations. For Korean GAAP purposes, the
Company adopted the accounting policy not to capitalize such
financing costs prospectively. Under U.S.&nbsp;GAAP, interest
expenses incurred on debt used to finance the construction of
property, plant and equipment are capitalized, while related
foreign exchange losses (or&nbsp;gains) are charged to current
operations as incurred.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Through 2002, under Korean&nbsp;GAAP, interest expense incurred
on debt used to finance the purchase of intangible assets was
capitalized until the asset was put in use. For U.S.&nbsp;GAAP
purposes, the Company charges such interest to current
operations as incurred. Effective January&nbsp;1, 2003,
Korean&nbsp;GAAP was revised to allow a company to charge such
interest expense to current operations as incurred. For
Korean&nbsp;GAAP purposes, the Company adopted the accounting
policy not to capitalize such interest expense. And this
accounting change has been applied prospectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>k.</B></TD>
    <TD>
    <B>Nonrefundable Activation Fees</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For U.S.&nbsp;GAAP purposes, the Company defers nonrefundable
activation revenues and costs and amortizes them over the
expected term of the customer relationship, which ranges from
52&nbsp;months to 89&nbsp;months.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean GAAP, there is no specific provision for the
recognition of such activation fees and the Company recognizes
these revenues and costs when the activation service is
performed.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>l.</B></TD>
    <TD>
    <B>Gain or Loss on Disposal of Subsidiary&#146;s Stock</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean GAAP, gains or losses on disposal of investments in
common stock of subsidiaries are not recognized in the
consolidated income statements but included in capital surplus,
until such subsidiary has been excluded as a
<FONT style="white-space: nowrap">majority-owned</FONT>
subsidiary. Under U.S.GAAP, such gains or losses on disposal of
the investments in common stock of subsidiary are recognized in
the income statement at the time of disposal of such investments.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>m.</B></TD>
    <TD>
    <B>Employee Stock Option Compensation Plan</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For Korean and U.S.&nbsp;GAAP purposes, the Company charges to
expense the value of stock options granted. Korean GAAP permits
all entities to exclude the volatility factor in estimating the
value of their stock options
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-65
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<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
granted prior to December&nbsp;31, 2003, which results in
measurement at minimum value. Under U.S.&nbsp;GAAP, public
entities are not permitted to exclude the volatility factor in
estimating the value of their stock options. We accounted for
employee stock option compensation under FAS 123 for U.S. GAAP
purposes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The weighted average fair value of options granted in 2000, 2001
and 2002 was <STRIKE>W</STRIKE>210,000&nbsp;per share,
<STRIKE>W</STRIKE>120,070&nbsp;per share and
<STRIKE>W</STRIKE>48,724&nbsp;per share, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>n.</B></TD>
    <TD>
    <B>Loans Receivable for Stock Issued to Employee</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
U.S.&nbsp;GAAP requires that notes received for capital stock be
reported as a reduction of stockholder&#146;s&#146; equity,
while Korean GAAP allows for recording such receivables as an
asset.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>o.</B></TD>
    <TD>
    <B>Discount on Leasehold Deposits</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, when cash and other rights are exchanged
for notes, notes (receivables or payables that represent
contractual rights to receive money or contractual obligations
to pay money on fixed or determinable dates, whether or not
there is a stated provision for interest) should be stated at
their present value and the difference between the face amount
and the present value should be deducted from or added to the
face amount of the note as a discount or premium and amortized
over the term using effective interest method. Thus, leasehold
key money deposits are stated at their present value. Under
Korean GAAP, the leasehold key money deposits are stated at
their face amounts.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>p.</B></TD>
    <TD>
    <B>Asset Securitization Transactions</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, a transfer of financial assets in an asset
securitization is accounted for as a sale only if all three of
the following conditions are met;
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The transferred assets have been isolated from the transferor
    and put beyond the reach of the transferor, or any consolidated
    affiliated of the transferor, and their creditors even in the
    event of bankruptcy or receivership of the transferor or any
    consolidated affiliate.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The transferee is a qualifying special-purpose entity
    (&#147;QSPE&#148;) and each holder of its beneficial interests
    (including both debt and equity securities) has the right to
    pledge, or the right to exchange its interests. If the issuing
    vehicle is not a QSPE, then sale accounting is only permitted if
    the issuing vehicle itself has the right to pledge or the right
    to exchange the transferred assets.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The transferor does not effectively maintain control over the
    transferred assets either through;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;an agreement that calls for the transferor to
    repurchase the transferred assets (or to buy back securities of
    a QSPE held by third-party investors) before their
    maturity&nbsp;or</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;the ability to unilaterally cause the SPE or QSPE to
    return specific assets; other than through a cleanup call.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, under U.S.&nbsp;GAAP, unless a transferee is a
QSPE, a transferee with nominal capital investment and credit
enhancement provided by transferor is generally consolidated
into the transferor.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
However, under Korea GAAP, when a transfer of financial assets
in an asset securitization is conducted in accordance with the
Korean Asset Securitization Act, such transfer is generally
accounted for as a sale of financial assets and the
securitization vehicle is generally not consolidated into the
transferor.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>q.</B></TD>
    <TD>
    <B>Considerations for Conversion Right</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean GAAP, the proceeds from issuance of convertible
bonds are allocated between the conversion rights and the debt
issued; the portion allocable to the conversion rights is
accounted for as capital surplus, with
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-66
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
corresponding conversion right adjustment being deducted from
related bonds. Such conversion right adjustment is amortized
into interest expenses over the period of convertible bonds.
Under U.S.&nbsp;GAAP, convertible bonds are analyzed to evaluate
whether conversion option are bifurcated and valued. If an
embedded conversion option in convertible bond is net cash
settled upon the occurrence of an event which is outside of an
entity&#146;s control, it generally requires bifurcation under
US GAAP. Moreover, the change of the fair value of such embedded
conversion option is included in current earnings. The fair
value of embedded conversion option which is related US dollar
denominated convertible bonds with face amounts of
US$329,450,000 issued on May&nbsp;27, 2004 and requires
bifurcation under U.S.&nbsp;GAAP, at December&nbsp;31, 2004 and
2005 is <STRIKE>W</STRIKE>66,835&nbsp;million and
<STRIKE>W</STRIKE>52,685&nbsp;million, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>r.</B></TD>
    <TD>
    <B>Currency Swap</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean GAAP, when all critical terms of the hedging
instrument and the hedged item are the same, a hedging
relationship is considered to be highly effective without
formally assessing hedge effectiveness. Under US GAAP, unless
conditions to qualify for the shortcut method as described in
SFAS&nbsp;No.&nbsp;133, &#147;Accounting for Derivative
instruments and Hedging Activities&#148;, as amended, are met, a
formal hedge effectiveness should be assessed to qualify for a
hedge accounting at inception of the hedge. The Company&#146;s
cross currency swap, which qualified as a cash flow hedge under
Korean GAAP, did not qualify for the shortcut method under US
GAAP and was recorded as non-hedge.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>s.</B></TD>
    <TD>
    <B>Foreign Currency Translation</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, monetary assets and liabilities
denominated in foreign currencies are translated at the actual
prevailing rates of exchange on the balance sheet dates.
However, as described in Note&nbsp;2(v), monetary assets and
liabilities of the Company and its subsidiaries denominated in
foreign currency are translated at the Base Rates announced by
Seoul Money Brokerage Services, Ltd. on the balance sheet dates,
as allowed under Korean GAAP. Accordingly, the resulting
differences in the calculated foreign currency translation gain
and loss amounts are considered as a U.S.&nbsp;GAAP adjustment.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>t.</B></TD>
    <TD>
    <B>Sale of Stock by Equity Method Investee</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Through 2004, under Korean GAAP, when the Company&#146;s equity
interests in the equity method investees were diluted as a
result of the equity method investees&#146; direct sales of
their unissued shares to third parties, the changes in the
Company&#146;s proportionate equity of investees was accounted
for as capital transactions. Effective January&nbsp;1, 2005,
Korean GAAPP was revised to account for such transactions as
income statement treatment. Under U.S.&nbsp;GAAP, such
transaction can be accounted for either as income statement
treatments or as capital transactions. For U.S.&nbsp;GAAP
purpose, the Company adopted the accounting policy to account
for such transaction as capital transactions.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>u.</B></TD>
    <TD>
    <B>Subscription Payable</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean GAAP, when the Company subscribes new capital
stocks, it is not allowed to record any unpaid subscription as
investment in equity of investee until cash is contributed to
the investee, without exception. Under U.S.&nbsp;GAAP, if the
cash is contributed subsequent to the balance sheet date, but
prior to the issuance of the financial statements, it is
appropriate to classify it as investments and a subscription
payable, respectively. SK&nbsp;Telecom USA&nbsp;Holdings, Inc.,
a subsidiary of the Company, paid the related cash contribution
to HELIO, LLC on March&nbsp;1, 2006. Due to such differences,
for U.S.&nbsp;GAAP purposes, the total assets and total
liabilities as of December&nbsp;31, 2005 increased by
<STRIKE>W</STRIKE>40,014&nbsp;million, respectively, when
compared to those under Korean GAAP. However, such differences
do not have an effect on either consolidated net income or
shareholders&#146; equity.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-67
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>v.</B></TD>
    <TD>
    <B>Equity Instrument to Be Received in Conjunction with
    Providing Services</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the Korean GAAP purpose, the Company measures the fair value
of equity investments (such as stock warrants) to be received in
conjunction with providing services in the future at the date of
the agreement or the grant date. Such equity instruments are
recorded as assets and liabilities at fair value to present the
equity instruments received and the related obligations to
provide services. In addition, the fair value of such equity
investments is remeasured at each year-end and related service
income is recognized over the service period based on the
revised fair value of the equity investments. Under
U.S.&nbsp;GAAP, the service income recognition method is similar
to Korean GAAP; however when the equity instruments do not
include a disincentive for nonperformance that is sufficiently
large to make performance probable, such equity instruments are
not measured nor recorded as assets and liabilities until the
date when the performance necessary to earn the equity
instruments is complete. Due to such differences, the total
assets and liabilities under the U.S.&nbsp;GAAP as of
December&nbsp;31, 2005 decreased by
<STRIKE>W</STRIKE>2,055&nbsp;million, when compared to those
under the Korean GAAP. However, such differences do not have an
effect on either consolidated net income or shareholder&#146;s
equity.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>w.</B></TD>
    <TD>
    <B>Consolidation of Variable Interest Entities</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S. GAAP, if a business enterprise has a controlling
financial interest in a variable interest entity, which is
defined by FASB Interpretation No.&nbsp;46 Revised
(&#147;FIN&nbsp;46R&#148;), the assets, liabilities and results
of the activities of the variable interest entity should be
included in the consolidated financial statements with those of
the business enterprise. Under the Korean GAAP, there is no
specific provision for the accounting treatment of variable
interest entities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of such difference, CDMA Mobile Phone Center (which
is a joint-venture with 50% owned by SLD Telecom PTE Ltd., a
subsidiary of the Company, and recorded as equity method
investment under Korean GAAP) was included in the consolidated
financial statements for the year ended December&nbsp;31, 2005
under U.S.&nbsp;GAAP. CDMA Mobile Phone Center is a wireless
telecommunications service provider in Vietnam.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>x.</B></TD>
    <TD>
    <B>Remeasurement of Stock Option</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Korean GAAP, the remeasurement of stock option is
required when the related stock becomes publicly listed. Under
the U.S.&nbsp;GAAP, such remeasurement is not allowed. In 2005,
a certain equity method investee of the Company became publicly
listed and the value of related outstanding stock options
granted to its employees was remeasured for Korean GAAP purposes.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>y.</B></TD>
    <TD>
    <B>Presentation of Minority Interest as a Component of
    Shareholders&#146; Equity</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Korean GAAP requires the classification of minority interest in
equity of consolidated subsidiaries as a component of
shareholders&#146; equity. Under U.S.&nbsp;GAAP, minority
interest in equity of consolidated subsidiaries is presented
separately from shareholders&#146; equity.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>z.</B></TD>
    <TD>
    <B>Consolidated Subsidiary</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Korean GAAP, as explained in Note&nbsp;2(b) to the
consolidated financial statements, investments in subsidiaries
and substantially controlled entities are consolidated, except
for companies with total assets as of the prior year end of less
than <STRIKE>W</STRIKE>&nbsp;7&nbsp;billion. Generally,
substantial control is deemed to exist when the investor is the
largest shareholder and owns more than 30&nbsp;percent of total
outstanding voting stock. However, U.S.&nbsp;GAAP generally
requires that all majority-owned subsidiaries be consolidated
and that any entity of which the Company owns twenty to fifty
percent of total outstanding voting stock not be consolidated;
rather that entity should be accounted for under the equity
method. The Company&#146;s consolidated financial statements did
not reflect an adjustment in the U.S.&nbsp;GAAP reconciliation
for this difference in accounting as the impact is immaterial.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-68
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following reconciles net income for the years ended
December&nbsp;31, 2003, 2004 and 2005 and shareholders&#146;
equity as of December&nbsp;31, 2003, 2004 and 2005 under Korean
GAAP as reported in the consolidated financial statements to the
net income and shareholders&#146; equity amounts determined
under U.S.&nbsp;GAAP, giving effect to adjustments for the
differences listed above (in millions of Won, except for per
share amounts):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income based on Korean GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,966,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,491,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,872,978</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax adjustments due to difference in accounting
    principles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,342</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,827</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,857</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax effect of the reconciling items</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15,036</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,515</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,717</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(60</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,037</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(906</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,534</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(925</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(22,303</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,546</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,046</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reversal of amortization of goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>135,557</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136,694</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,389</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization of foreign exchange losses and interest expenses
    related to tangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,454</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,231</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization of interest expenses related to purchases of
    intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,272</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Nonrefundable activation fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(46,962</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(36,048</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,681</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss (gain) on disposal of subsidiary shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock option compensation plan</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,114</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,938</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on sale of accounts receivable and other in asset
    securitization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,476</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on impairment of investment securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,434</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,065</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on valuation of currency swap</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(49,452</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,898</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount on leasehold deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(286</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>230</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Considerations for conversion right</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,044</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,458</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Recovery of impaired investment securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sales of stock by the equity method investee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,637</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income based on U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,062,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,553,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,027,550</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average number of common shares outstanding</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,078,219</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,614,296</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Earnings per share based on U.S.&nbsp;GAAP:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic earnings per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>27,475</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>21,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>27,543</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Diluted earnings per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>27,475</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>20,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>27,089</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-69
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholders&#146; equity based on Korean GAAP Adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,093,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,205,744</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,327,540</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax adjustments due to difference In accounting
    principles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(45,317</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(70,067</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax effect of the reconciling items</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136,517</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159,032</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101,130</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,037</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,773</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>847</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,019,951</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,009,591</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>993,547</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reversal of amortization of goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>273,598</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>410,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>547,681</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization of foreign exchange losses and interest expenses
    related to tangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,842</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,294</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,522</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization of interest expenses related to purchase of
    intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(68,945</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(63,660</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(58,388</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Nonrefundable activation fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(239,174</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(275,222</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(309,903</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loans receivable for stock issued to employees&#146; investor
    association</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(33,788</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(22,546</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,586</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in equity of consolidated affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(155,985</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(98,198</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(108,927</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on sale of accounts receivable and other in asset
    securitization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,476</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount on leasehold deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(653</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(231</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Considerations for conversion right</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(66,263</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(52,220</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>228</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholders&#146; equity based on U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,014,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,236,997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,472,434</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-70
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Changes in shareholders&#146; equity based on U.S.&nbsp;GAAP for
the years ended December&nbsp;31, 2003, 2004 and 2005 are as
follows (in&nbsp;millions of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, beginning of the year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,356,176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,014,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,236,997</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income for the year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,062,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,553,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,027,550</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(151,739</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(478,492</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(758,227</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issuance of common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,053</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized gains on valuation of securities, net of tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,156</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,042</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in capital surplus, retained earnings and capital
    adjustments of affiliates (note&nbsp;a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,166</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,448</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(63,370</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Retirement of treasury stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,598</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Treasury stock transactions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,379,337</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign-based operations&#146; translation adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(356</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,128</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,792</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stock compensation plan</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,030</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>274</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in loans receivable for stock issued to employees&#146;
    investor association</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,960</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance, end of the year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,014,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,236,997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,472,434</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;a)&nbsp;</TD>
    <TD align="left">
    This line item consists of the adjustments to the carrying
    amount of equity method investments based on the Company&#146;s
    proportionate pickup in affiliates using the equity method of
    accounting, which are directly adjusted to stockholders&#146;
    equity of affiliates, such as unrealized gains or losses on
    valuation of available-for-sale securities, foreign-based
    operations&#146; translation adjustments in affiliates and stock
    transactions by affiliates.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-71
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A reconciliation of the significant balance sheet accounts
except for the above listed shareholders&#146; equity items to
the amounts determined under U.S.&nbsp;GAAP as of
December&nbsp;31, 2003, 2004 and 2005 is as follows
(in&nbsp;millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    As reported</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,069,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,390,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,598,580</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; loans receivable for stock issued to employees investor
    association</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,123</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,249</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; deferred tax adjustments due to difference in accounting
    principles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; tax effect of the reconciling items</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,297</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,381</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; discount on leasehold deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; asset securitization transactions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>478,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,889</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current assets based on U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,618,823</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,464,267</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,621,823</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-current assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    As reported</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,748,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,892,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,106,192</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; loans receivable for stock issued to employees&#146;
    investor association</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(33,788</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,423</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,337</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,015,801</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,004,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>988,729</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; reverse of amortization of goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>273,598</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>410,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>547,681</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; discount on leasehold deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,430</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,349</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; recovery of impaired investment securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; nonrefundable activation fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,571</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; capital lease</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,773</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>847</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; capitalization of foreign exchange losses and interest
    expense related to tangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,842</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,294</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,522</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; capitalization of interest expenses related to purchase
    of intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(68,945</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(63,660</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(58,388</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; deferred charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,933</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; subscription payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,014</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; equity instrument to be received in conjunction with
    providing services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,055</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,626</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-current assets based on U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,967,388</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,292,498</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,729,369</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets based on U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>15,586,211</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>15,756,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>16,351,192</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-72
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>December, 31</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    As reported</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,530,910</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,066,893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,863,373</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; deferred charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; nonrefundable activation fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86,082</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,111</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; asset securitization transactions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>463,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; acquisition cost of equity interest in subsidiary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>886</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; foreign currency translation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(26</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; subscription payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,014</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; equity instrument to be received in conjunction with
    providing services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(525</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,671</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current liabilities based on U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,064,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,152,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,034,644</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    As reported</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,193,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,010,721</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,513,859</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; deferred charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,970</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; nonrefundable activation fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>179,638</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>198,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>204,363</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,062</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; deferred tax adjustments due to difference in accounting
    principles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118,837</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; tax effect of the reconciling items</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(149,597</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(141,080</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(74,532</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; considerations for conversion right</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66,263</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,220</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; foreign currency translation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,432</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; equity instrument to be received in conjunction with
    providing services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,530</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>631</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term liabilities based on U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,351,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,268,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,704,981</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities based on U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,415,558</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>7,421,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,739,625</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interests:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    As reported</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>155,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>98,198</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>108,927</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &#151; consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,206</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total minority interests based on U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>155,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>98,198</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>139,133</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-73
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table reconciles cash flows from operating,
investing and financing activities for the years ended
December&nbsp;31, 2003, 2004 and 2005 and cash and cash
equivalents at December&nbsp;31, 2003, 2004 and 2005 under
Korean GAAP, as reported in the consolidated financial
statements to cash flows from operating, investing and financing
activities for the years ended December&nbsp;31, 2003, 2004 and
2005 and cash and cash equivalents at December&nbsp;31, 2003,
2004 and 2005 under U.S.&nbsp;GAAP (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash flows from operating activities based on Korean GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,329,391</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,516,807</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,404,105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Asset securitization transactions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47,496</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>469,883</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading security cash flows</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(137,618</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>240,204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(122,710</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,444</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash flows from operating activities based on US&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,144,277</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,226,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,293,839</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash flows from investing activities based on Korean GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,415,053</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,470,292</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,938,187</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Asset securitization transactions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,080</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading security cash flows</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(240,204</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>122,710</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,004</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash flows from investing activities based on US&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,285,515</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,634,149</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,816,481</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash flows from financing activities based on Korean GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,261,039</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(968,570</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,429,038</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Asset securitization transactions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(546,230</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,243</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash flows from financing activities based on US&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(2,205,463</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,514,800</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,439,281</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents at end of the year based on Korean GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>317,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>370,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>378,426</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustments:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidation of variable interest entity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,197</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents at end of the year based on US GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>317,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>370,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>379,623</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subsequent to the issuance of our consolidated financial
statements for the years ended December&nbsp;31, 2003 and 2004,
we determined that a)&nbsp;the cash inflows related to dividends
considered to be returns on investments were incorrectly
classified as cash flows from investing activities as opposed to
cash flows from operating activities and b)&nbsp;cash flows
related to trading securities were incorrectly classified as
cash flows from investing activities as opposed to cash flows
from operating activities in our statement of cash flows. As a
result, US&nbsp;GAAP reconciliation of consolidated statements
of cash flows for the years ended December&nbsp;31, 2003 and
2004 has been revised from amounts previously reported.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-74
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following shows the effect of the revisions to the cash flow
reconciliation table for the years ended December&nbsp;31, 2003
and 2004 (in millions of Korea won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash flows from operating activities based on US&nbsp;GAAP, as
    previously reported</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,281,274</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,985,935</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revision related to returns on equity securities-dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>755</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revision related to trading security cash flows</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(137,618</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>240,204</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash flows from operating activities based on US&nbsp;GAAP, as
    revised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,144,277</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,226,894</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash flows from investing activities based on US&nbsp;GAAP, as
    previously reported</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,422,512</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,393,190</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revision related to returns on equity securities-dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(621</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(755</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revision related to trading security cash flows</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(240,204</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash flows from investing activities based on US&nbsp;GAAP, as
    revised</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,285,515</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(1,634,149</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>31.</B></TD>
    <TD>
    <B>ADDITIONAL DISCLOSURES REQUIRED BY U.S.&nbsp;GAAP</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>a.</B></TD>
    <TD>
    <B>Income Taxes</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Income tax expense under U.S.&nbsp;GAAP for the years ended
December&nbsp;31, 2003, 2004 and 2005 is as follows (in millions
of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Currently payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>668,180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>551,405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>685,541</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>143,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,669</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,422</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>811,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>611,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>667,119</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The difference between the actual income tax expense and the tax
expense computed by applying the statutory Korean corporate
income tax rates to income before taxes for the years ended
December&nbsp;31, 2003, 2004 and 2005 is attributable to the
following (in&nbsp;millions of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income taxes at statutory income tax rate of 27% in 2003 and
    2004 and 25% in 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>776,030</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>584,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>670,776</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Resident surtax payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,078</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax credit for investments, technology, human resource
    development and others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(83,826</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(89,080</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(100,160</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Special surtax for agriculture and fishery industries and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,685</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,736</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,850</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Undistributed earnings of subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,909</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,846</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of change in income tax rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,943</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other permanent differences</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,719</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,705</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,637</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Change in valuation allowance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,078</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,908</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Recorded income taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>808,892</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>611,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>667,119</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effective tax rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.23</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.21</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.86</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-75
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The tax effects of temporary differences that resulted in the
deferred tax assets at December&nbsp;31, 2003, 2004 and 2005
computed under U.S.&nbsp;GAAP, and a description of the
financial statement items that created these differences are as
follows (in millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="57%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>22,039</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>19,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>39,334</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Write-off of doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,764</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,239</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Marketable trading securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(561</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,026</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,463</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,229</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net operating loss carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax credit carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued expenses and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,578</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97,454</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-current:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,371</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(58,745</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on disposition of properties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on impairment and valuation of investment securities (note)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,928</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,419</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,959</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign exchange losses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in losses (earnings) of affiliates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,593</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,671</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,471</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Undistributed earnings of subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,364</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,434</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,732</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax free reserve for technology development</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(182,518</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(195,103</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(211,208</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax free reserve for loss on disposal of treasury stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(130,373</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(130,372</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(130,372</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax credit carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net operating loss carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,108</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred charges and other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,780</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,205</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,867</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(195,269</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(288,883</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(325,130</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax assets (liabilities)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(130,046</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(212,305</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(227,676</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>(note)&nbsp;</TD>
    <TD align="left">
    Unrealized gain on valuation of investment securities as of
    December&nbsp;31, 2003, 2004 and 2005 were recorded as a
    separate component of shareholders&#146; equity, net of tax
    effect of <STRIKE>W</STRIKE>18,287&nbsp;million,
    <STRIKE>W</STRIKE>39,210&nbsp;million and
    <STRIKE>W</STRIKE>48,019&nbsp;million, respectively.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-76
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair Value of Financial
Instruments</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following methods and assumptions were used to estimate the
fair value of each class of financial instruments as of
December&nbsp;31, 2003, 2004 and 2005 for which it is
practicable to estimate that value:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U> Cash and Cash Equivalents, Accounts Receivable (trade and
other), Short-Term Loans, Accounts Payable and Short-term
Borrowings</U>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The carrying amount approximates fair value because of the short
maturity of those instruments.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Trading Securities and Long-term Investment Securities</U>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For investments in non-listed companies&#146; stock, a
reasonable estimate of fair value could not be made without
incurring excessive costs. Additional information pertinent to
these investments is provided in Note&nbsp;4. The fair value of
investments in listed companies&#146; stock, public bonds, and
other marketable securities are estimated based on quoted market
prices for those or similar investments.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Long-Term Bank Deposits</U>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The carrying amount approximates fair value as such long-term
bank deposits bear interest rates currently available for
similar deposits.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Long-Term Loans</U>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The fair value of long-term loans is estimated by discounting
the future cash flows using the current interest rate of time
deposits with similar maturities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U> Bonds Payable, Bonds with Stock Warrant, Convertible Bonds,
Long-Term Borrowings, Long-Term Payable&nbsp;&#151; Other and
Obligation under Capital Leases</U>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The fair value of these liabilities is estimated based on the
quoted market prices for the same or similar issues or on the
current interest rates offered for debt of the same remaining
maturities.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-77

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following summarizes the carrying amounts and fair values of
financial instruments as of December&nbsp;31, 2003, 2004 and
2005 (in millions of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Carrying</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Carrying</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Carrying</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;a)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;a)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair Value</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Note&nbsp;a)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Financial assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents and short-term financial instruments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>472,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>472,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>383,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>383,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>486,215</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>486,215</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trading securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>893,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>893,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>654,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>654,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777,472</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable (trade and other)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,000,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,000,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,126,754</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,126,754</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,038,936</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,038,936</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,933</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,933</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,290</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Investment securities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Listed equity and debts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>503,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>503,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>599,287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>599,287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>864,986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>864,986</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non- listed equity (note b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>352,523</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>353,168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>N/A</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term bank deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,479</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,947</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,093</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,320</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3"><FONT style="font-size: 8pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,311,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,190,305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>5,591,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Financial liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,317,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,317,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,205,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,205,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,094,855</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,094,855</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term borrowings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,236,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,236,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>425,496</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>425,496</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,614</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bonds payable, long-term borrowings, convertible bonds,
    long-term payables&nbsp;&#151; other and obligation under
    capital leases, including current portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,201,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,283,402</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,044,258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,211,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,763,135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,825,813</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3"><FONT style="font-size: 8pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>6,755,066</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,234,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>4,862,604</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
(note&nbsp;a)&nbsp;These carrying amounts represent the amounts
determined under U.S.&nbsp;GAAP.
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>(note&nbsp;b)&nbsp;</TD>
    <TD align="left">
    Investments in non&nbsp;&#151; listed equity include the
    investments in the common stock of Powercomm Co., Ltd.
    (&#147;Powercomm&#148;). Korea Electric Power Corp.
    (&#147;KEPCO&#148;), the parent company of Powercomm, sold to
    Dacom Corporation 45.5% interest in Powercomm at
    <STRIKE>W</STRIKE>12,000&nbsp;per share in 2002. Based on this
    transaction, the fair value of the Company&#146;s investments in
    the common stock of Powercomm was determinable and the
    impairment loss on the investment of
    <STRIKE>W</STRIKE>150,243&nbsp;million was recognized in 2002.
    The fair value of common stock of Powercomm as of
    December&nbsp;31, 2003, 2004 and 2005 was estimated by an
    outside professional valuation company using the present value
    of expected future cash flows; and the additional impairment
    loss of <STRIKE>W</STRIKE>21,593&nbsp;million was recognized in
    2003. As of December&nbsp;31, 2004 and 2005, unrealized gain on
    valuation of investment in Powercomm of
    <STRIKE>W</STRIKE>3,158&nbsp;million and
    <STRIKE>W</STRIKE>8,723&nbsp;million have been recorded as other
    comprehensive income, respectively.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-78
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive Income</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Comprehensive income for the years ended December&nbsp;31, 2003,
2004 and 2005 is as follows (in&nbsp;millions of
Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,062,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,553,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,027,550</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other comprehensive income:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Available-for-sale securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized gain on investment securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,738</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,645</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,915</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less impact of realized losses(gains)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,727</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,065</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax effect</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,978</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,923</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,808</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net change from available-for-sale securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,156</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,042</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign-based operations translation adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(356</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,128</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,792</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total other comprehensive income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,677</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,250</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Comprehensive income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,112,426</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,597,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,048,800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill and other intangible
assets</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;1, 2002, the Company adopted
SFAS&nbsp;No.&nbsp;142, &#147;Goodwill and Other Intangible
Assets&#148;. Under SFAS&nbsp;No.&nbsp;142, goodwill and
intangible assets with indefinite lives are no longer amortized,
however, they will be subject to periodic impairment tests as
prescribed by the statement and intangible assets that do not
have indefinite lives are amortized over their useful lives. The
following tables present the additional disclosures required by
this statement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Goodwill</U></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Changes in the carrying amount of goodwill under U.S.&nbsp;GAAP
for the years ended December&nbsp;31, 2003, 2004 and 2005 are as
follows (in&nbsp;millions of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Beginning of period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,400,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,400,155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,408,989</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill reclassifications to other intangibles assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,437</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill acquired during the period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,223</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill impairment losses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ending of period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,400,155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,408,989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>3,418,212</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-79
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>Other Intangible Assets</U></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The major components and average useful lives of other acquired
intangible assets under U.S.&nbsp;GAAP are as follows
(in&nbsp;millions of Korean&nbsp;won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31, 2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31, 2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Accumulated</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gross</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gross</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Gross</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amortization</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Carrying</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Accumulated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Carrying</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Accumulated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Carrying</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>and</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amortization</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amortization</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Impairment</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortized intangible assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IMT license (13&nbsp;years)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,188,547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(7,548</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,188,547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(98,183</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,188,547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(188,193</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Customer lists (4&nbsp;years)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99,783</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(64,088</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99,783</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(83,686</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99,783</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(99,783</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other (2 to 20&nbsp;years)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>552,279</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(258,802</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>718,291</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(354,021</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,036,165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(455,505</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>1,840,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(330,438</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,066,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(535,890</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>2,324,495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>(743,481</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Intangible asset amortization expense for the years ended
December&nbsp;31, 2003, 2004 and 2005 was
<STRIKE>W</STRIKE>103,914&nbsp;million,
<STRIKE>W</STRIKE>209,991&nbsp;million and
<STRIKE>W</STRIKE>221,275&nbsp;million respectively. It is
estimated to be <STRIKE>W</STRIKE>233,361&nbsp;million,
<STRIKE>W</STRIKE>225,199&nbsp;million,
<STRIKE>W</STRIKE>207,741&nbsp;million,
<STRIKE>W</STRIKE>175,964&nbsp;million and
<STRIKE>W</STRIKE>148,388&nbsp;million for the years ending
December&nbsp;31, 2006, 2007, 2008, 2009 and 2010, respectively,
primarily related to the IMT license, customer lists
and&nbsp;other.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>e.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other SK Group Companies</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As described in Note&nbsp;1, the Company is one of the
SK&nbsp;Group affiliated companies, based on the definition of
&#147;group&#148; under the Fair Trade Act of Korea. In early
March 2003, the Prosecutor&#146;s Office of the Republic of
Korea filed charges against several SK&nbsp;Group executives for
alleged accounting irregularities at SK&nbsp;Networks Co., Ltd.
(&#147;SK&nbsp;Networks&#148;, formerly SK&nbsp;Global Co.,
Ltd.), and other alleged illegal transactions among certain
SK&nbsp;Group affiliated companies. As a result of these
charges, there are several legal actions against certain
SK&nbsp;Group affiliated companies. On March&nbsp;19, 2003,
SK&nbsp;Networks was classified as a &#147;financially
distressed company&#148; in accordance with the Corporate
Restructuring Promotion Law of the Republic of Korea. Subsequent
to this classification, there has been a restructuring,
including cash buy-out of certain debt at less than face value
and a management change, among the creditors of SK&nbsp;Networks
and certain of its affiliates. In addition, SK&nbsp;Networks
retired all common shares which SK&nbsp;Corporation owned and,
on October&nbsp;27, 2003, SK Corporation purchased new common
shares of SK&nbsp;Networks in the amount of approximately
$718.5&nbsp;million, which have a certain disposal restriction.
As of December&nbsp;31, 2005 and for the year then ended, the
Company and its subsidiaries had certain related party balances
or transactions with SK&nbsp;Networks as disclosed in
Note&nbsp;24. Management of the Company believes that those
legal matters will not have a material adverse effect on the
Company and its subsidiaries&#146; financial position, operating
results, or liquidity.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>f.</B></TD>
    <TD>
    <B>Operating Revenue</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Operating revenue under U.S. GAAP for the years ended
December&nbsp;31, 2003, 2004 and 2005 are as follows (in
millions of Korean won):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Wireless services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,401,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>8,762,376</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>9,148,363</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interconnection</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,017,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>849,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>898,621</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Digital handset sales</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>611,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649,809</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>294,557</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>180,306</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>272,974</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>359,911</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,210,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,534,566</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"> <STRIKE>W</TD>
    <TD align="right" valign="bottom" nowrap></STRIKE>10,701,452</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-80
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>g.</B></TD>
    <TD>
    <B>Segment</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has one reportable segment, cellular telephone
communication service and all goodwill has been allocated to
this segment.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>h.</B></TD>
    <TD>
    <B>New Accounting Pronouncements</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2004, the FASB issued SFAS&nbsp;No.&nbsp;151,
&#147;Inventory Costs, an Amendment of ARB&nbsp;No.&nbsp;43,
Chapter&nbsp;4.&#148; SFAS&nbsp;No.&nbsp;151 clarifies the
accounting for abnormal amounts of idle facility expense,
freight, handling costs, and wasted material. The Statement is
effective for inventory costs incurred during fiscal year
beginning after June&nbsp;15, 2005. Management does not expect
this statement will have a material impact on the Company&#146;s
consolidated financial position or results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, the FASB issued Statement of Financial
Accounting Standards (&#147;SFAS&#148;) No.&nbsp;123
(revised&nbsp;2004), &#147;Share-Based Payments&#148;
(SFAS&nbsp;123R). This statement eliminates the option to apply
the intrinsic value measurement provisions of Accounting
Principles Board (&#147;APB&#148;) Opinion No.&nbsp;25,
&#147;Accounting for Stock Issued to Employees&#148; to stock
compensation awards issued to employees. Rather, SFAS&nbsp;123R
requires companies to measure the cost of employee services
received in exchange for an award of equity instruments based on
the grant-date fair value of the award. That cost will be
recognized over the period during which an employee is required
to provide services in exchange for the award (usually the
vesting period). SFAS&nbsp;123R applies to all awards granted
after the required effective date and to awards modified,
repurchased, or cancelled after that date. SFAS&nbsp;123R will
be effective from January&nbsp;1, 2006. Management does not
expect that adoption of this statement will have a material
impact on the Company&#146;s consolidated financial position or
results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No.&nbsp;153,
&#147;Exchanges of Nonmonetary Assets&nbsp;&#151; an amendment
of APB&nbsp;Opinion&nbsp;No.&nbsp;29&#148;
(&#147;SFAS&nbsp;153&#148;), which amends Accounting Principles
Board Opinion&nbsp;No.&nbsp;29, &#147;Accounting for Nonmonetary
Transactions&#148; to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that do
not have commercial substance. SFAS&nbsp;153 is effective for
nonmonetary assets exchanges occurring in fiscal periods
beginning after June&nbsp;15, 2005. Management does not
anticipate that the adoption of this statement will have a
material effect on the Company&#146;s consolidated financial
position or results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2006, the FASB issued SFAS&nbsp;No.&nbsp;156,
&#147;Accounting for Servicing of Financial Assets&nbsp;&#151;
an amendment of FASB Statement&nbsp;No.&nbsp;140.&#148;
SFAS&nbsp;No.&nbsp;156 requires that an entity separately
recognize a servicing asset or a servicing liability when it
undertakes an obligation to service a financial asset under a
servicing contract in certain situations. Such servicing assets
or servicing liabilities are required to be initially measured
at fair value, if practicable. SFAS&nbsp;No.&nbsp;156 also
allows an entity to choose one of two methods when subsequently
measuring its servicing assets and servicing liabilities:
(1)&nbsp;the amortization method or (2)&nbsp;the fair value
measurement method. The amortization method existed under
SFAS&nbsp;No.&nbsp;140 and remains unchanged in
(1)&nbsp;allowing entities to amortize their servicing assets or
servicing liabilities in proportion to and over the period of
estimated net servicing income or net servicing loss and
(2)&nbsp;requiring the assessment of those servicing assets or
servicing liabilities for impairment or increased obligation
based on fair value at each reporting date. The fair value
measurement method allows entities to measure their servicing
assets or servicing liabilities at fair value each reporting
date and report changes in fair value in earnings in the period
the change occurs. The Statement is effective for fiscal years
beginning after September&nbsp;15, 2006. The adoption of this
Statement is not expected to have a material impact on the
Company&#146;s financial position, operating results or cash
flows.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In February 2006, the FASB issued SFAS&nbsp;No.&nbsp;155,
&#147;Accounting for Certain Hybrid Financial
Instruments&nbsp;&#151; an amendment of FASB Statements
No.&nbsp;133 and 140,&#148; that permits fair value
remeasurement of certain hybrid financial instruments, clarifies
the scope of SFAS&nbsp;No.&nbsp;133 regarding interest-only and
principal-only
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-81

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<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>SK TELECOM CO., LTD. AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
strips, and provides further guidance on certain issues
regarding beneficial interests in securitized financial assets,
concentrations of credit risk and qualifying special purpose
entities. SFAS&nbsp;No.&nbsp;155 is effective for all
instruments acquired or issued as of the first fiscal year
beginning after September&nbsp;15, 2006 and may be applied to
certain other financial instruments held prior to the adoption
date. Earlier adoption is permitted as of the beginning of an
entity&#146;s fiscal year providing the entity has not yet
issued financial statements. The Company does not expect the
adoption of SFAS&nbsp;No.&nbsp;155 to have a material impact on
the Company&#146;s financial position, operating results or cash
flows.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In March 2004, the EITF supplemented EITF Issue
No.&nbsp;<FONT style="white-space: nowrap">03-1,</FONT>
&#147;The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments.&#148; EITF Issue
No.&nbsp;<FONT style="white-space: nowrap">03-1</FONT> provides
guidance for evaluating whether an investment is
other-than-temporarily impaired and requires disclosures about
unrealized losses on investments in debt and equity securities.
In September 2004, the FASB issued FASB Staff Position EITF
Issue&nbsp;<FONT style="white-space: nowrap">03-1</FONT>-1,
&#147;Effective Date of Paragraphs&nbsp;10-20 of EITF
Issue&nbsp;<FONT style="white-space: nowrap">03-1,&#148;</FONT>
which deferred the effective date of the recognition and
measurement provisions of the consensus until further guidance
is issued.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November 2005, the FASB issued FASB Staff Position
(&#147;FSP&#148;) No.&nbsp;FAS&nbsp;115-1, &#147;The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain
Investments,&#148; revising the recognition and measurement
provisions of EITF Issue
No.&nbsp;<FONT style="white-space: nowrap">03-1.</FONT> This FSP
clarified and reaffirmed existing guidance as to when an
investment is considered impaired, whether that impairment is
other than temporary, and the measurement of an impairment loss.
Certain disclosures about unrealized losses on
available-for-sale debt and equity securities that have not been
recognized as other-than-temporary impairments are required
under FSP No. FAS&nbsp;115-1. The FSP is effective for fiscal
years beginning after December&nbsp;15, 2005. As the FSP
reaffirms existing guidance, the Company does not expect this
FSP to have a significant impact on the Company&#146;s financial
position, operating results or cash flows.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In June 2005, the EITF of the FASB issued EITF
Issue&nbsp;No.&nbsp;04-5, &#147;Determining Whether a General
Partner, or the General Partners as a Group, Controls a Limited
Partnership or Similar Entity When the Limited Partners Have
Certain Rights.&#148; EITF Issue No.&nbsp;04-5 provides that the
general partner(s) is presumed to control the limited
partnership, unless the limited partners possess either
substantive participating rights or the substantive ability to
dissolve the limited partnership or otherwise remove the general
partner(s) without cause (&#147;kick-out rights&#148;). Kick-out
rights are substantive if they can be exercised by a simple
majority of the limited partners voting interests. The guidance
applies to general partners of all new limited partnerships
formed and for existing limited partnerships for which the
partnership agreements are modified after June&nbsp;29, 2005,
and to general partners in all other limited partnerships no
later than the beginning of the first reporting period in fiscal
years beginning after December&nbsp;15, 2005. The adoption of
this guidance is not expected to have a material impact on the
Company&#146;s financial position, operating results or cash
flows.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2005, the FASB issued SFAS&nbsp;No.&nbsp;154,
&#147;Accounting Changes and Error Corrections&nbsp;&#151; a
replacement of APB Opinion No.&nbsp;20 and FASB Statement
No.&nbsp;3.&#148; SFAS&nbsp;No.&nbsp;154 generally requires
retrospective application to prior periods&#146; financial
statements of all voluntary changes in accounting principle and
changes required when a new pronouncement does not include
specific transition provisions. This Statement applies to the
Company beginning January&nbsp;1, 2006.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-82

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<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SIGNATURES</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The registrant hereby certifies that it meets all of the
requirements for filing on
Form&nbsp;<FONT style="white-space: nowrap">20-F</FONT> and that
it has duly caused and authorized the undersigned to sign this
annual report on its behalf.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    SK TELECOM CO., LTD.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    (Registrant)</TD>
</TR>

<TR>
    <TD style="font-size: 48.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    /s/ <B>Shin Bae Kim</B></TD>
</TR>

<TR valign="top"  style="font-size: 3.0pt;color: #000000; background: #ffffff;">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid black; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    (Signature)</TD>
</TR>

<TR>
    <TD style="font-size: 12.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <B>Shin Bae Kim</B></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <B>Chief Executive Officer and</B></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <B>Representative Director</B></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    (Name/ Title)</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Date: June 30, 2006
</DIV>
<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Exhibit Index</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3" align="center" nowrap><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Description</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Memorandum and Articles of Association</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>2</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Deposit Agreement dated as of May&nbsp;31, 1996, as amended by
    Amendment No.&nbsp;1 dated as of March&nbsp;15, 1999, Amendment
    No.&nbsp;2 dated as of April&nbsp;24, 2000 and Amendment
    No.&nbsp;3 dated as of July&nbsp;24, 2002, entered into among SK
    Telecom Co., Ltd., Citibank, N.A., as Depositary, and all
    Holders and Beneficial Owners of American Depositary Shares</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Telecommunications Basic Law of 1983, as amended (English
    translation)</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Enforcement Decree of the Telecommunications Basic Law, as
    amended (English translation)</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.3</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Telecommunications Business Law of 1983, as amended (English
    translation)</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.4</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Enforcement Decree of the Telecommunications Business Law
    (English translation)***</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.5</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Korean Commercial Code (together with English translation)*</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.6</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment to Korean Commercial Code dated December&nbsp;29, 2001
    (together with English translation)**</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4</TD>
    <TD align="left" valign="top" nowrap>.7</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Korean Securities and Exchange Act, as amended (English
    translation)</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>8</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    List of Subsidiaries of SK&nbsp;Telecom Co., Ltd.</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>11</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Code of Ethics of SK Telecom Co., Ltd.***</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>12</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Principal Executive Officer Pursuant to
    Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>12</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Principal Financial Officer Pursuant to
    Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>13</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Principal Executive Officer Pursuant to
    18&nbsp;U.S.C. Section&nbsp;1350, As Adopted Pursuant to
    Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>13</TD>
    <TD align="left" valign="top" nowrap>.2</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Certification of Principal Financial Officer Pursuant to
    18&nbsp;U.S.C. Section&nbsp;1350, As Adopted Pursuant to
    Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>99</TD>
    <TD align="left" valign="top" nowrap>.1</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Deloitte Anjin LLC</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 3pt; ">

<TR style="font-size: 1pt;">
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    *</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Filed previously as exhibits to our Form&nbsp;20-F filed on
    June&nbsp;30, 2000.</TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    **</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Filed previously as exhibits to our Form&nbsp;20-F filed on
    June&nbsp;28, 2002.</TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ***</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Filed previously as exhibits to our Form&nbsp;20-F filed on
    May&nbsp;31, 2005.</TD>
</TR>

</TABLE>
</CENTER>
</BODY>
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SK TELECOM CO., LTD.
Table of Contents
As filed with the Securities and Exchange Commission on
June 30, 2006
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
o
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR
    (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
OR
o
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shall company report
For the transition period
    from          to
Commission file number 1-14418
SK Telecom Co., Ltd.
(Exact name of Registrant as specified in its charter)
SK Telecom Co., Ltd.
(Translation of Registrant's name into English)
The Republic of Korea
(Jurisdiction of incorporation or organization)
11, EULJIRO 2-GA, JUNG-GU
SEOUL, KOREA
(Address of principal executive offices)
Securities registered or to be registered pursuant to
Section 12(b) of the Act.
Title of each class
Name of each exchange on which registered
American Depositary Shares, each representing one-ninth of one
    share
New York Stock Exchange, Inc.
of Common Stock
Common Stock, par value
W
500 per share
New York Stock Exchange, Inc.*
* Not for trading, but only in connection with the
registration of the American Depositary Shares.
Securities registered or to be registered pursuant to
Section 12(g) of the Act.
None
Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act.
None
Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stock as of the close
of the period covered by the annual report.
82,276,711 shares of common stock, par value
W
500 per share
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act.
þ
Yes
o
No
If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Securities
Exchange Act of
1934.
o
Yes
þ
No
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days.
þ
Yes
o
No
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of "accelerated filer and large
accelerated filer" in
Rule
12b-2
of the
Exchange Act. (Check one):
Large accelerated filer
þ
Accelerated filer
o
Non-accelerated filer
o
Indicate by check mark which financial statement item the
registrant has elected to
follow.
o
Item 17
þ
Item 18
If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in
Rule
12b-2
of the
Exchange
Act).
o
Yes
þ
No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12,
13 or 15(d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by a
court.
o
Yes
o
No
Table of Contents
TABLE OF CONTENTS
Page
Certain Defined Terms and Conventions used
    in this Report
1
Forward-Looking Statements
2
Item 1.
Identity of Directors, Senior Managers and
    Advisers
3
Item 1A.
Directors and Senior Management
3
Item 1B.
Advisers
3
Item 1C.
Auditors
3
Item 2.
Offer Statistics and Expected Timetable
3
Item 3.
Key Information
3
Item 3A.
Selected Financial Data
3
Item 3B.
Capitalization and Indebtedness
8
Item 3C.
Reasons for the Offer and Use of
    Proceeds
8
Item 3D.
Risk Factors
8
Item 4.
Information on the Company
22
Item 4A.
History and Development of the Company
22
Item 4B.
Business Overview
27
Item 4C.
Organizational Structure
54
Item 4D.
Property, Plants and Equipment
55
Item 4.A.
Unresolved Staff Comments
55
Item 5.
Operating and Financial Review and
    Prospects
56
Item 5A.
Operating Results
56
Item 5B.
Liquidity and Capital Resources
65
Item 5C.
Research and Development
78
Item 5D.
Trend Information
80
Item 5E.
Off-Balance Sheet Arrangements
80
Item 5F.
Tabular Disclosure of Contractual
    Obligations
80
Item 6.
Directors, Senior Management and
    Employees
80
Item 6A.
Directors and Senior Management
80
Item 6B.
Compensation
83
Item 6C.
Board Practices
84
Item 6D.
Employees
87
Item 6E.
Share Ownership
88
Item 7.
Major Shareholders and Related Party
    Transactions
89
Item 7A.
Major Shareholders
89
Item 7B.
Related Party Transactions
91
Item 7C.
Interest of Experts and Counsel
92
Item 8.
Financial Information
93
Item 8A.
Consolidated Statements and Other Financial
    Information
93
Item 8B.
Significant Changes
97
i
Table of Contents
Page
Item 9.
The Offer and Listing
97
Item 9A.
Offering and Listing Details
97
Item 9B.
Plan of Distribution
97
Item 9C.
Markets
97
Item 9D.
Selling Shareholders
105
Item 9E.
Dilution
105
Item 9F.
Expenses of the Issue
105
Item 10.
Additional Information
105
Item 10A.
Share Capital
105
Item 10B.
Memorandum and Articles of Association
105
Item 10C.
Material Contracts
118
Item 10D.
Exchange Controls
119
Item 10E.
Taxation
123
Item 10F.
Dividends and Paying Agents
127
Item 10G.
Statements by Experts
127
Item 10H.
Documents on Display
127
Item 10I.
Subsidiary Information
128
Item 11.
Quantitative and Qualitative Disclosures
    about Market Risk
128
Item 12.
Description of Securities Other than Equity
    Securities
129
Item 13.
Defaults, Dividend Arrearages and
    Delinquencies
129
Item 14.
Material Modifications to the Rights of
    Security Holders and Use of Proceeds
129
Item 15.
Controls and Procedures
129
Item 16.
Reserved
Item 16A.
Audit Committee Financial Expert
130
Item 16B.
Code of Ethics
130
Item 16C.
Principal Accountant Fees and Service
130
Item 16D.
Exemptions from the Listing Standards for
    Audit Committees
131
Item 16E.
Purchases of Equity Securities by the
    Issuer and Affiliated Purchasers
131
Item 17.
Financial Statements
132
Item 18.
Financial Statements
132
Item 19.
Exhibits
133
EX-1.1 ARTICLES OF ASSOCIATION
EX-2.1 DEPOSIT AGREEMENT
EX-4.1 TELECOMMUNICATIONS BASIC LAW OF 1983
EX-4.2 ENFORCEMENT DECREE OF THE TELECOMMUNICATIONS BASIC LAW
EX-4.3 TELECOMMUNICATIONS BUSINESS LAW OF 1983
EX-4.7 KOREAN SECURITIES AND EXCHANGE ACT
EX-8.1 LIST OF SUBSIDIARIES OF SK TELECOM CO., LTD.
EX-12.1 CERTIFICATION OF CEO PURSUANT TO SECTION 302
EX-12.2 CERTIFICATION OF CFO PURSUANT TO SECTION 302
EX-13.1 CERTIFICATION OF CEO PURSUANT TO SECTION 906
EX-13.2 CERTIFICATION OF CFO PURSUANT TO SECTION 906
EX-99.1 CONSENT OF DELOITTE ANJIN LLC
ii
Table of Contents
CERTAIN DEFINED TERMS AND CONVENTIONS USED IN THIS REPORT
All references to "Korea" contained in this report
shall mean The Republic of Korea. All references to the
"Government" shall mean the government of The Republic
of Korea. All references to "we", "us",
"our" or the "Company" shall mean SK Telecom
Co., Ltd. and its consolidated subsidiaries. References to
"SK Telecom" shall mean SK Telecom Co., Ltd., but
shall not include its consolidated subsidiaries. All references
to "U.S." shall mean the United States of America.
Unless otherwise indicated, from 2001 onwards, all references to
our number of subscribers shall include subscribers attributable
to Shinsegi Telecomm, Inc. ("Shinsegi").
All references to "KHz" contained in this report shall
mean kilohertz, a unit of frequency denoting one thousand cycles
per second, used to measure band and bandwidth. All references
to "MHz" shall mean megahertz, a unit of frequency
denoting one million cycles per second. All references to
"GHz" shall mean gigahertz, a unit of frequency
denoting one billion cycles per second. All references to
"Kbps" shall mean one thousand binary digits, or bits,
of information per second. All references to "Mbps"
shall mean one million bits of information per second. Any
discrepancies in any table between totals and the sums of the
amounts listed are due to rounding.
In this report, we refer to third generation, or "3G",
technology and "3.5G" technology. Second generation,
or 2G, technology was designed primarily with voice
communications in mind. On the other hand, 3G and 3.5G
technologies are designed to transfer both voice data and
non-voice, or multimedia, data, generally at faster transmission
speeds than was previously possible.
All references to "Won", "(Won)" or
"
W
" in this report are to the
currency of Korea, all references to "Dollars",
"$" or "US$" are to the currency of the
United States of America and all references to "Yen"
or "¥" are to the currency of Japan.
Unless otherwise indicated, all financial information in this
report is presented in accordance with Korean generally accepted
accounting principles ("Korean GAAP").
Unless otherwise indicated, translations of Won amounts into
Dollars in this report were made at the noon buying rate in The
City of New York for cable transfers in Won per US$1.00 as
certified for customs purposes by the Federal Reserve Bank of
New York. Unless otherwise stated, the translations of Won into
Dollars were made at the noon buying rate in effect on
December 31, 2005, which was Won 1,010.0 to US$1.00. On
June 26, 2006, the noon buying rate was Won 959.2 to
US$1.00. See "Item 3A. Selected Financial
Data — Exchange Rates".
1
Table of Contents
FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements", as
defined in Section 27A of the U.S. Securities Act of 1933,
as amended, and Section 21E of the U.S. Securities Exchange
Act of 1934, as amended, that are based on our current
expectations, assumptions, estimates and projections about our
company and our industry. The forward-looking statements are
subject to various risks and uncertainties. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "anticipate",
"believe", "considering",
"depends", "estimate", "expect",
"intend", "plan", "planning",
"planned", "project" and similar
expressions, or that certain events, actions or results
"will", "may", "might",
"should" or "could" occur, be taken or be
achieved.
Forward-looking statements in this annual report include, but
are not limited to, statements about the following:
•
our ability to anticipate and respond to various competitive
    factors affecting the wireless telecommunications industry,
    including new services that may be introduced, changes in
    consumer preferences, economic conditions and discount pricing
    strategies by competitors;
•
our implementation of high-speed download packet access, or
    HSDPA, technology and wireless broadband internet, or WiBro,
    technology;
•
our plans to spend approximately Won 1.6 trillion for capital
    expenditures in 2006 for a range of projects, including
    expansion of our upgraded, HSDPA-ready WCDMA network, as well as
    investments in our wireless Internet-related businesses and our
    expected future capital expenditures on various initiatives;
•
our efforts to make significant investments to build, develop
    and broaden our businesses, including developing and providing
    wireless data, multimedia, mobile commerce and Internet services;
•
our ability to comply with governmental rules and regulations,
    including the regulations of the Ministry of Information and
    Communication, or the MIC, related to telecommunications
    providers, rules related to our status as a
    "market-dominating business entity" under the Korean
    Monopoly Regulation and Fair Trade Act, or the Fair Trade Act,
    and the effectiveness of steps we have taken to comply with such
    regulations;
•
our ability to manage effectively our bandwidth and to implement
    timely and efficiently new bandwidth-efficient technologies;
•
our expectations and estimates related to interconnection fees;
    tariffs charged by our competitors; regulatory fees; operating
    costs and expenditures; working capital requirements; principal
    repayment obligations with respect to long-term borrowings,
    bonds and obligations under capital leases; and research and
    development expenditures and other financial estimates;
•
the success of our various joint ventures and investments in
    other telecommunications service providers; and
•
the growth of the telecommunications industry in Korea and other
    markets in which we do business and the effect that economic,
    political or social conditions have on our number of
    subscribers, call volumes and results of operations.
We caution you that reliance on any forward-looking statement
involves risks and uncertainties, and that although we believe
that the assumptions on which our forward-looking statements are
based are reasonable, any of those assumptions could prove to be
inaccurate, and, as a result, the forward-looking statements
based on those assumptions could be incorrect. Risks and
uncertainties associated with our business, include but are not
limited to, risks related to changes in the regulatory
environment; technology changes; potential litigation and
governmental actions; changes in the competitive environment;
political changes; foreign exchange currency risks; foreign
ownership limitations; credit risks and other risks and
uncertainties that are more fully described under the heading
"Item 3. Key Information — Risk
Factors" and elsewhere in this report. In light of these
and other uncertainties, you should not conclude that we will
necessarily achieve any plans and objectives or
2
Table of Contents
projected financial results referred to in any of the
forward-looking statements. We do not undertake to release the
results of any revisions of these forward-looking statements to
reflect future events or circumstances.
Item 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
    ADVISERS
Item 1A.
Directors and Senior Management
Not applicable.
Item 1B.
Advisers
Not applicable.
Item 1C.
Auditors
Not applicable.
Item 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
Item 3.
KEY INFORMATION
Item 3A.
Selected Financial Data
You should read the selected consolidated financial and
operating data below in conjunction with the consolidated
financial statements and the related notes included elsewhere in
this report. The selected consolidated financial data for the
five years ended December 31, 2005 are derived from our
audited consolidated financial statements and related notes
thereto. Information as of and for the year ended
December 31, 2001 includes information as of and for the
year ended December 31, 2001 for Shinsegi unless otherwise
specified. Shinsegi was merged into SK Telecom in January 2002.
Our consolidated financial statements are prepared in accordance
with Korean GAAP, which differ in certain respects from U.S.
GAAP. For more detailed information you should refer to notes 30
and 31 of the notes to our audited consolidated financial
statements included in this annual report.
As of or for the Year Ended December 31,
2001
2002
2003
2004
2005
2005
(In billions of won and millions of dollars, except per share and percentage data)
INCOME STATEMENT DATA
Korean GAAP:
Total Operating Revenue(1)
W
8,371.9
W
9,324.0
W
10,272.1
W
10,570.6
W
10,721.8
US$
10,615.6
Cellular Service(1)
8,203.0
9,156.8
10,091.8
10,297.6
10,361.9
10,259.3
Paging Service(2)
8.8
—
—
—
—
—
Other(3)
160.1
167.2
180.3
273.0
359.9
356.3
Operating Expenses
6,047.4
6,526.4
7,167.0
8,130.9
8,051.2
7,971.5
Operating Income
2,324.5
2,797.6
3,105.1
2,439.7
2,670.6
2,644.2
Income before Income Taxes and Minority Interest
1,976.7
2,218.8
2,754.3
2,123.2
2,561.6
2,536.2
Income before Minority Interest
1,126.4
1,520.3
1,965.3
1,493.4
1,868.3
1,849.8
Net Income
1,146.0
1,487.2
1,966.1
1,491.5
1,873.0
1,854.5
Income per Share of Common Stock(4)
13,242
17,647
26,187
20,261
25,443
25.19
Diluted Net Income per Share of Common Stock(4)
13,242
17,647
26,187
20,092
25,036
24.79
Dividends Declared per Share of Common Stock(5)
690
1,800
5,500
10,300
9,000
8.91
Weighted Average Number of Shares
86,545,041
84,270,450
75,078,219
73,614,297
73,614,296
73,614,296
3
Table of Contents
As of or for the Year Ended December 31,
2001
2002
2003
2004
2005
2005
(In billions of won and millions of dollars, except per share and percentage data)
U.S. GAAP:
Total Operating Revenue
W
8,307.1
W
9,219.7
W
10,225.1
W
10,534.6
W
10,701.4
US$
10,595.5
Operating Expenses
6,235.0
6,643.4
7,044.5
8,137.6
7,847.7
7,770.0
Operating Income
2,072.1
2,576.3
3,180.6
2,397.0
2,853.7
2,825.5
Net Income
1,111.6
1,301.1
2,062.7
1,553.1
2,027.6
2,007.5
Income per Share of Common Stock(4)
12,844
15,440
27,475
21,097
27,543
27.27
Diluted Net Income per Share of Common Stock(4)
12,844
15,439
27,475
20,918
27,089
26.82
BALANCE SHEET DATA
Korean GAAP:
Working Capital (Deficiency)(6)
W
668.2
W
(189.7
)
W
(461.4
)
W
1,323.8
W
1,735.2
US$
1,718.0
Fixed Assets — Net
4,174.7
4,569.4
4,641.5
4,703.9
4,663.4
4,617.2
Total Assets
13,326.3
14,228.7
13,818.2
14,283.4
14,704.8
14,559.2
Long-term Liabilities(7)
3,498.4
3,693.4
3,193.5
4,010.7
3,513.9
3,479.1
Total Shareholders' Equity
6,149.3
6,231.9
6,093.8
7,205.7
8,327.5
8,245.1
U.S. GAAP:
Working Capital (Deficiency)
729.6
(108.2
)
(445.5
)
1,311.3
1,587.2
1,571.5
Total Assets
13,841.0
15,720.7
15,586.2
15,576.8
16,351.2
16,189.3
Total Shareholders' Equity
5,820.1
6,356.2
7,014.7
8,237.0
9,472.4
9,378.6
OTHER FINANCIAL DATA
Korean GAAP:
EBITDA(8)
W
3,932.4
W
3,954.1
W
4,706.4
W
4,085.8
W
4,434.2
US$
4,390.3
Capital Expenditures(9)
1,382.1
2,024.7
1,647.6
1,631.9
1,416.6
1,402.6
R&D Expenses(10)
153.7
253.3
300.7
336.1
321.1
317.9
Internal R&D
130.7
194.3
235.8
267.1
252.0
249.5
External R&D
23.0
59.0
64.9
69.0
69.1
68.4
Depreciation and Amortization
1,759.6
1,543.3
1,646.3
1,752.5
1,675.5
1,658.9
Cash Flow from Operating Activities
2,424.5
4,268.4
3,329.4
2,516.8
3,404.1
3,370.4
Cash Flow from Investing Activities
(1,973.4
)
(3,064.0
)
(1,415.1
)
(1,470.3
)
(1,938.2
)
(1,919.0
)
Cash Flow from Financing Activities
331.2
(1,418.2
)
(2,261.0
)
(968.6
)
(1,429.0
)
(1,414.9
)
Margins (% of total sales):
EBITDA Margin(8)
47.0
%
42.4
%
45.8
%
38.7
%
41.4
%
41.4
%
Operating Margin
27.8
30.0
30.2
23.1
24.9
24.9
Net Margin
13.7
15.9
19.1
14.1
17.5
17.5
U.S. GAAP:
EBITDA(8)
3,859.1
3,620.7
4,679.1
3,970.4
4,412.2
4,368.5
Capital Expenditures(9)
1,382.1
2,024.7
1,668.0
1,656.9
1,429.3
1,415.1
Cash Flow from Operating Activities
2,428.3
3,606.2
3,144.3
3,228.9
3,293.8
3,261.2
Cash Flow from Investing Activities
(1,977.3
)
(2,892.5
)
(1,285.5
)
(1,634.1
)
(1,816.5
)
(1,798.5
)
Cash Flow from Financing Activities
331.2
(927.5
)
(2,205.5
)
(1,514.8
)
(1,439.3
)
(1,425.1
)
4
Table of Contents
As of or for the Year Ended December 31,
2001
2002
2003
2004
2005
SELECTED OPERATING DATA
Population of Korea (millions)(11)
47.4
47.6
47.9
48.2
48.3
Our Wireless Penetration(12)
32.0
36.1
38.2
39.0
40.4
Number of Employees(13)
5,693
6,241
6,286
7,353
6,646
Total Sales per Employee (millions)
W
1,470.6
W
1,494.0
W
1,634.1
W
1,437.6
W
1,613.3
Wireless Subscribers(14)
15,179,163
17,219,562
18,313,315
18,783,338
19,530,117
Average Monthly Outgoing Voice Minutes per Subscriber(15)
172
191
197
194
197
Average Monthly Revenue per Subscriber(16)
W
36,400
W
38,383
W
39,739
W
39,689
W
40,205
Average Monthly Churn Rate(17)
1.4
%
1.4
%
1.2
%
1.7
%
1.8
%
Digital Cell Sites(18)
6,056
7,384
8,309
9,458
10,142
*
The conversion into Dollars was made at the rate of Won 1,010.0
    to US$1.00. See note 2(a) of the notes to our consolidated
    financial statements.
(1)
Includes revenues from SK Teletech Co., Ltd. of
    Won 702.4 billion for 2001, Won 534.0 billion for
    2002, Won 612.0 billion for 2003,
    Won 649.8 billion for 2004 and Won 294.6 billion
    for 2005 from the sale of digital handsets and Won
    1,339.9 billion for 2001, Won 1,043.2 billion for
    2002, Won 1,017.1 billion for 2003, Won
    849.4 billion for 2004 and Won 898.6 billion for 2005
    of interconnection revenue. Following our sale of a 60% equity
    interest in SK Teletech to Pantech & Curitel in
    July 2005, our equity interest in the company was reduced to
    29.1% (which subsequently became a 22.7% interest in Pantech
    following the merger of SK Teletech into Pantech in
    December 2005) and SK Teletech ceased to be our
    consolidated subsidiary. See "Item 4B. Business
    Overview — Interconnection".
(2)
In March 2001, we transferred our paging business to Real
    Telecom Co., Ltd. (formerly known as INTEC Telecom Co., Ltd.) in
    exchange for 9.9% of Real Telecom's newly issued shares and
    bonds with a principal amount of Won 9.5 billion that can
    be converted into an additional 7.8% interest in Real Telecom.
    Consequently, the results of the paging business are no longer
    included in our revenues after such date.
(3)
For more information about our other revenue, see
    "Item 5. Operating and Financial Review and
    Prospects" and "Item 4B. Business Overview".
(4)
Income per share of common stock is calculated by dividing net
    income by the weighted average number of shares outstanding
    during the period. Diluted net income per share of common stock
    is calculated by dividing adjusted net income by adjusted
    weighted average number of shares outstanding during the period,
    taking into account the dilutive effect of stock options in 2002
    and issuance of convertible bonds in 2004 and 2005.
(5)
On January 1, 2002, we adopted Statement of Korea
    Accounting Standards ("SKAS") No. 6, "Events
    Occurring after Balance Sheet Date". This statement
    requires that proposed cash dividends be reflected on the
    balance sheet when the appropriations are approved by
    shareholders which is similar to U.S. GAAP. In order to reflect
    this accounting change, our 2001 financial statements have been
    restated accordingly.
(6)
Working capital means current assets minus current liabilities.
(7)
Our monetary assets and liabilities denominated in foreign
    currencies are valued at the exchange rate of Won 1,326 to
    US$1.00 as of December 31, 2001, Won 1,200 to US$1.00 as of
    December 31, 2002, Won 1,198 to US$1.00 as of
    December 31, 2003, Won 1,044 to US$1.00 as of
    December 31, 2004 and Won 1,013.0 to US$1.00 as of
    December 31, 2005, the rates of exchange permitted under
    Korean GAAP as of those dates. See note 2(w) of the notes
    to our consolidated financial statements.
5
Table of Contents
(8)
EBITDA refers to income before interest income, interest
    expense, taxes, depreciation and amortization. EBITDA is
    commonly used in the telecommunications industry to analyze
    companies on the basis of operating performance, leverage and
    liquidity. Since the telecommunications business is a very
    capital intensive business, capital expenditures and level of
    debt and interest expenses may have a significant impact on net
    income for companies with similar operating results. Therefore,
    for a telecommunications company such as ourselves, we believe
    that EBITDA provides a useful reflection of our operating
    results. We use EBITDA as a measurement of operating performance
    because it assists us in comparing our performance on a
    consistent basis as it removes from our operating results the
    impact of our capital structure, which includes interest expense
    from our outstanding debt, and our asset base, which includes
    depreciation and amortization of our property and equipment.
    However, EBITDA should not be construed as an alternative to
    operating income or any other measure of performance determined
    in accordance with Korean GAAP or U.S. GAAP or as an indicator
    of our operating performance, liquidity or cash flows generated
    by operating, investing and financing activities. Other
    companies may define EBITDA differently than we do. EBITDA under
    U.S. GAAP is computed using interest income, interest expense,
    depreciation, amortization and income taxes under U.S. GAAP
    which may differ from Korean GAAP for these items.
(9)
Consists of investments in property, plant and equipment. Under
    U.S. GAAP, interest costs incurred during the period
    required to complete an asset or ready an asset for its intended
    use are capitalized based on the interest rates a company pays
    on its outstanding borrowings. Under Korean GAAP, beginning
    January 1, 2003, such interest costs are expensed as
    incurred. Through the end of 2002, the accounting treatment for
    capitalizing interest costs under Korean GAAP was consistent
    with that under U.S. GAAP.
(10)
Includes donations to Korean research institutes and educational
    organizations. See "Item 5C. Research and Development,
    Patents and Licenses, etc.".
(11)
Population estimates based on historical data published by the
    National Statistical Office of Korea.
(12)
Wireless penetration is determined by dividing our subscribers
    by total estimated population, as of the end of the period.
(13)
Includes regular employees and temporary employees. See
    "Item 6D. Employees". Includes 1,332 Shinsegi
    employees as of December 31, 2001.
(14)
Wireless subscribers include those subscribers who are
    temporarily deactivated, including (1) subscribers who
    voluntarily deactivate temporarily for a period of up to three
    months no more than twice a year and (2) subscribers with
    delinquent accounts who may be involuntarily deactivated up to
    two months before permanent deactivation, which we determine
    based on various factors, including prior payment history.
    Wireless subscribers also include 3,311,874 Shinsegi subscribers
    as of December 31, 2001.
(15)
The average monthly outgoing voice minutes per subscriber is
    computed by dividing the total minutes of outgoing voice usage
    for the period by the monthly weighted average number of
    subscribers for the period and dividing the quotient by the
    number of months in the period. The monthly weighted average
    number of subscribers is the sum of the average number of
    subscribers for the month, calculated by taking the simple
    average number of subscribers at the beginning of the month and
    at the end of the month, divided by the number of months in the
    period. Shinsegi's subscribers and outgoing voice minutes
    are included from 2001.
(16)
The average monthly revenue per subscriber excludes
    interconnection revenue and is computed by dividing total
    initial connection fees, monthly access fees, usage charges for
    voice and data, international charges, value-added service fees;
    and interest on overdue accounts (net of telephone tax) for the
    period by the monthly weighted average number of subscribers for
    the period and dividing the quotient by the number of months in
    the period. Including interconnection revenue, consolidated
    average monthly revenue per subscriber was Won 45,441 for 2001,
    Won 43,958 for 2002, Won 44,546 for 2003, Won 43,542 for 2004
    and Won 44,167 for 2005. For information about the average
    monthly revenue per subscriber of SK Telecom and Shinsegi
    on a stand-alone basis, see "Item 5A. Operating
    Results — Overview".
(17)
The average monthly churn rate for a period is the number
    calculated by dividing the sum of voluntary and involuntary
    deactivations during the period by the simple average of the
    number of subscribers at the beginning and end of the period and
    dividing the quotient by the number of months in the period.
    Churn
6
Table of Contents
includes subscribers who upgrade to CDMA lxRTT or CDMA 1xEV/
    DO-capable handsets by terminating their service and opening a
    new subscriber account.
(18)
Includes 1,685 cell sites of Shinsegi as of December 31,
    2001.
As a measure of our operating performance, we believe that the
most directly comparable U.S. and Korean GAAP measure to EBITDA
is net income. The following table reconciles our net income
under U.S. GAAP to our definition of EBITDA on a consolidated
basis for the five years ended December 31, 2001, 2002,
2003, 2004 and 2005.
As of or for the Year Ended December 31,
2001
2002
2003
2004
2005
2005
(In billions of won and millions of dollars)
Net Income
W
1,111.6
W
1,301.1
W
2,062.7
W
1,553.1
W
2,027.6
US$
2,007.5
ADD: Interest income
(101.8
)
(90.8
)
(93.9
)
(86.7
)
(62.6
)
(62.0
)
Interest expense
274.4
396.6
387.1
291.0
226.8
224.6
Taxes
791.3
585.0
811.5
611.1
667.1
660.5
Depreciation and Amortization
1,783.6
1,428.8
1,511.7
1,601.9
1,553.3
1,537.9
EBITDA
W
3,859.1
W
3,620.7
W
4,679.1
W
3,970.4
W
4,412.2
US$
4,368.5
The conversion into Dollars was made at the rate of Won 1,010.0
to US$1.00. See note 2(a) of the notes to our consolidated
financial statements.
The following table reconciles our net income under Korean GAAP
to our definition of EBITDA on a consolidated basis for the five
years ended December 31, 2001, 2002, 2003, 2004 and 2005.
As of or for the Year Ended December 31,
2001
2002
2003
2004
2005
2005
(In billions of won and millions of dollars)
Net Income
W
1,146.0
W
1,487.2
W
1,966.1
W
1,491.5
W
1,873.0
US$
1,854.5
ADD: Interest income
(97.4
)
(86.0
)
(86.5
)
(80.5
)
(61.1
)
(60.5
)
Interest expense
273.9
311.1
391.5
303.4
253.5
251.0
Taxes
850.3
698.5
789.0
629.8
693.3
686.4
Depreciation and Amortization
1,759.6
1,543.3
1,646.3
1,741.6
1,675.5
1,658.9
EBITDA
W
3,932.4
W
3,954.1
W
4,706.4
W
4,085.8
W
4,434.2
US$
4,390.3
Exchange Rates
The following table sets forth, for the periods and dates
indicated, certain information concerning the noon buying rate
in The City of New York for cable transfers in Won per US$1.00
as certified for customs purposes by the Federal Reserve Bank of
New York. We make no representation that the Won or Dollar
amounts we refer to in this report could have been or could be
converted into Dollars or Won, as the case may be, at any
particular rate or at all.
At End
Average
Year Ended December 31,
of Period
Rate(1)
High
Low
2001
1,314
1,293
1,369
1,234
2002
1,186
1,250
1,332
1,161
2003
1,192
1,193
1,262
1,146
2004
1,035
1,145
1,195
1,035
2005
1,010
1,023
1,060
997
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Past Six Months
High
Low
(Won per
US$1.00)
January 2006
1,003
959
February 2006
976
962
March 2006
982
967
April 2006
970
940
May 2006
952
927
June 2006 (through June 26, 2006)
962
943
(1)
The average rates for the annual periods were calculated based
    on the average noon buying rate on the last day of each month
    (or portion thereof) during the period. The average rate for the
    monthly periods were calculated based on the average noon buying
    rate of each day of the month (or portion thereof).
On June 26, 2006, the noon buying rate was Won 959.2 to
US$1.00.
Item 3B.
Capitalization
and Indebtedness
Not applicable
Item 3C.
Reasons for the
Offer and Use of Proceeds
Not applicable
Item 3D.
Risk
Factors
Competition may reduce our market share and harm our
    results of operations and financial condition.
We face substantial competition in the wireless
telecommunications sector in Korea. We expect competition to
intensify as a result of consolidation of market leaders and the
development of new technologies, products and services. We
expect that such trends will continue to put downward pressure
on the prevailing tariffs we can charge our subscribers. Also,
continued competition from the other wireless and fixed-line
service providers has resulted in, and may continue to result
in, a substantial level of deactivations among our subscribers.
Subscriber deactivations, or churn, may significantly harm our
business and results of operations. In addition, increased
competition may cause our marketing expenses to increase as a
percentage of sales, reflecting higher advertising expenses and
other costs of new marketing activities, which may need to be
introduced to attract and retain subscribers.
Prior to April 1996, we were the only wireless
telecommunications service provider in Korea. Since then,
several new providers have entered the market, offering wireless
voice and data services that compete directly with our own.
Together, these providers had a market share of approximately
49.1%, in terms of numbers of wireless service subscribers, as
of December 31, 2005. Furthermore, in 2001, the Government
awarded to three companies licenses to provide high-speed third
generation, or 3G, wireless telecommunications services. In
Korea, this 3G license is also known as the "IMT-2000"
license. IMT-2000 is the global standard for 3G wireless
communications, as defined by the International
Telecommunication Union, an organization established to
standardize and regulate international radio and
telecommunications. One of these licenses was awarded to
SK Telecom's former subsidiary, SK IMT Co., Ltd.,
which was merged into SK Telecom on May 1, 2003, and the
other two licenses were awarded to consortia led by or
associated with KT Corporation, Korea's principal
fixed-line operator and the parent of KTF, one of our principal
wireless competitors, and to LG Telecom, Ltd., or LGT. In
addition, our wireless voice businesses compete with
Korea's fixed-line operators, and our Wireless Internet
businesses compete with providers of fixed-line data and
Internet services.
Beginning in 2000, there has been considerable consolidation in
the wireless telecommunications industry resulting in the
emergence of stronger competitors. In 2000, KT Corporation
acquired a 47.9% interest in Hansol M.Com (formerly Hansol PCS
Co., Ltd.), which was the fifth largest wireless operator in
terms of numbers of wireless service subscribers at such time.
Hansol M.Com subsequently changed its name to KT M.Com and
8
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merged into KTF in May 2001. In May 2002, the Government sold
its remaining 28.4% stake in KT Corporation. KT Corporation had
a 44.6% interest in KTF as of December 31, 2005. Such
consolidation has created large, well-capitalized competitors
with substantial financial, technical, marketing and other
resources to respond to our business offerings. Future business
combinations and alliances in the telecommunications industry
may also create significant new competitors and could harm our
business and results of operations.
In addition, in March 2006, the MIC lifted the prohibition on
the provision of handset subsidies, which had been in place
since June 2000. See "Our businesses are subject to
extensive government regulation and any changes in government
policy relating to the telecommunications industry could have a
material adverse effect on our results of operations and
financial condition". This recent decision by the MIC has
intensified competition among mobile service providers and
increased our marketing expenses, which could, in turn,
adversely affect our results of operations.
We expect competition to intensify as a result of such
consolidation and as a result of the rapid development of new
technologies, products and services. Our ability to compete
successfully will depend on our ability to anticipate and
respond to various competitive factors affecting the industry,
including new services that may be introduced, changes in
consumer preferences, economic conditions and discount pricing
strategies by competitors.
Inability to successfully implement or adapt our network
    and technology to meet the continuing technological advancements
    affecting the wireless industry will likely have a material
    adverse effect on our financial condition, results of operation
    and business.
The telecommunications industry has been characterized by
continuous improvement and advances in technology and this trend
is expected to continue. For example, we and our competitors
have introduced new network technology upgrades from our basic
CDMA network to a more advanced high-speed wireless
telecommunications network based on CDMA 1xRTT and CDMA 1xEV/ DO
technology. Korean wireless telecommunications companies,
including us, have also implemented newer technologies such as
wide-band code division access, or WCDMA, which is the 3G
technology implemented by us, and CDMA2000, which is the
3G technology implemented by certain of our competitors,
all of which are commonly referred to as 3G technology and
is also known as IMT-2000 in Korea. Our new WCDMA network is
expected to support data transmission services with more
advanced features at significantly higher data transmission
speeds than our basic CDMA, CDMA 1xRTT and CDMA 1xEV/ DO
networks.
We commenced provision of WCDMA services on a limited basis in
Seoul at the end of 2003 and continued to expand and improve our
WCDMA services in the Seoul metropolitan area in 2004. In 2005,
we completed commercial development of HSDPA technology, also
known as 3.5G technology. HSDPA is a new mobile telephony
protocol that represents an evolution of the WCDMA standard and,
among others, supports higher data capacity and allows faster
data transmissions than previous WCDMA-based protocols. HSDPA
upgrades to our existing WCDMA network do not require hardware
upgrades and may be accomplished through software upgrades at
virtually no cost. By May 2006, we had expanded HSDPA service to
25 cities, including Busan and Incheon. We are continuing
expansion of an upgraded, HSDPA-ready version of our WCDMA
network to other metropolitan areas of Korea. By the end of
2006, we expect that HSDPA service will be available in 84
cities nationwide. The successful introduction and operation of
a 3G or 3.5G network by a competitor could materially and
adversely affect our existing wireless businesses as well as the
returns on future investments we may make in our 3G network or
our other businesses. We could be harmed if we fail to adapt to
technological or other changes in the telecommunications sector
in a timely manner. For a description of some of the
difficulties that we are facing with respect to HSDPA, see
"— HSDPA technology may require significant
capital and other expenditures for implementation which we may
not recoup and such technology may be difficult to integrate
with our existing technology and business."
In March 2005, we obtained a license from the MIC to provide
wireless broadband internet, or WiBro, services, which will
offer high-speed and large-packet data services at competitive
prices and complement our other wireless communication services,
such as HSDPA. WiBro service enables wireless broadband Internet
access to portable computers, mobile phones and other portable
devices. We conducted pilot testing of WiBro
9
Table of Contents
service in limited areas of metropolitan Seoul in May 2006 and
began commercial service to those limited areas in June 2006. In
addition to a license fee of Won 17.0 billion paid to the
MIC in March 2005, we are planning to spend Won 170 billion
in capital expenditures in 2006 to build and expand our WiBro
network, and we may spend additional amounts to expand our WiBro
service in the future; however, our investment plans may change
depending on the market demand for such services, competitors
offering similar services and development of competing
technologies. We cannot assure you, however, that there will be
sufficient demand for our WiBro services as a result of
competition or otherwise.
HSDPA technology may require significant capital and other
    expenditures for implementation which we may not recoup and such
    technology may be difficult to integrate with our existing
    technology and business.
HSDPA, an evolution of our WCDMA standard, is a high-speed
wireless communication technology that we believe will allow us
to offer even more sophisticated wireless data transmission
services at faster speeds than previously available on our WCDMA
network. Under the terms of our WCDMA license received in 2001
from the MIC, we were required to commence provision of WCDMA
services by the end of 2003. We commenced provision of our WCDMA
services on a limited basis in Seoul at the end of 2003 and
continued to improve our WCDMA services in the Seoul
metropolitan area in 2004.
We first deployed HSDPA technology in 2006. HSDPA is a new
mobile telephony protocol that represents an evolution of the
WCDMA standard and, among others, supports higher data capacity
and allows faster data transmissions than previous WCDMA-based
protocols. HSDPA upgrades to our existing WCDMA network do not
require hardware upgrades and may be accomplished through
software upgrades at virtually no cost. We are continuing
expansion of an upgraded, HSDPA-ready version of our WCDMA
network in other metropolitan areas of Korea. By May 2006, we
had expanded HSDPA service to 25 cities, including Busan and
Incheon. By the end of 2006, we expect HSDPA service to be
available in 84 cities nationwide. In March 2005, we developed
and launched dual band/dual mode handsets, which can be used in
both CDMA and WCDMA networks, to offer seamless nationwide 3G
service, an important factor for a nationwide deployment of
HSDPA. However, the actual scope and timing of the full
nationwide roll-out of our HSDPA service will depend on various
other factors, including the availability of required equipment,
our ability to overcome technical problems currently affecting
HSDPA performance, our assessment of the market opportunities
for HSDPA technology-based services and the competitive
landscape in the Korean wireless market.
We cannot assure you that we will be able to construct a
nationwide WCDMA network or provide HSDPA services in a timely,
effective and cost-efficient manner. Several companies in other
countries have announced delays in the roll-out of their 3G and
3.5G services as a result of technological problems and
difficulties with software, equipment and handset supply. We
believe that we may be vulnerable to similar problems, and if
such problems are not resolved effectively as they arise, our
financial condition or results of operations could be adversely
affected. In addition, the MIC is empowered to take various
measures against us ranging from the suspension of our business
to the revocation of our WCDMA license if we fail to comply with
the terms of our WCDMA license. We believe that we are currently
in compliance with all material terms of the license. Also, even
if we complete our WCDMA network on a timely basis, we cannot
assure you that there will be sufficient demand for our HSDPA
services, as a result of competition or otherwise, to permit us
to recoup or profit from our investment in the WCDMA license and
network. In addition, demand for our HSDPA services will depend
in part on the availability of attractive content and services.
We cannot assure you that such content and services will become
available in a timely manner, or at all.
We expect that the build-out of our WCDMA network may require
external financing, and we cannot assure you that such financing
will be available at a cost acceptable to us, or at all. Also,
we cannot assure you that we will be able to successfully
integrate WCDMA services into our existing businesses in a
timely or cost-effective manner or that the WCDMA business will
not adversely affect our existing wireless businesses, including
the services currently provided on our existing networks.
10
Table of Contents
Our growth strategy calls for significant investments in
    new businesses and regions, including businesses and regions in
    which we have limited experience.
As a part of our growth strategy, we plan to selectively seek
business opportunities abroad. For example, in March 2005, we
established a joint venture with EarthLink, a major Internet
service provider in the United States, to provide voice and data
services as a mobile virtual network operator in the United
States. We also have ongoing projects in Vietnam and Mongolia.
In addition, in February 2005, we established a joint venture
company with China Unicom, China's second largest mobile
operator, called UNISK Information Technology Co., Ltd., to
market and offer wireless Internet service in China. In
addition, in June 2006, our board of directors approved plans to
subscribe for up to US$1 billion of convertible bonds
issued by China Unicom, convertible into 899,745,075 common
shares of China Unicom, which represents an approximate 6.67%
equity interest in that company. We expect the subscription to
be consummated in July 2006. We will continue to seek other
opportunities to expand our business abroad, particularly in
Asia, as circumstances present themselves.
In addition, we believe that we must continue to make
significant investments to build, develop and broaden our
existing businesses, including by developing and improving our
wireless data, multimedia, mobile commerce and Internet
services. We will need to respond to market and technological
changes and the development of services which we may have little
or no experience in providing. Entering these new businesses and
regions, in which we have limited experience, may require us to
make substantial investments and no assurance can be given that
we will be successful in our efforts.
Due to the existing high penetration rate of wireless
    services in Korea, we are unlikely to maintain our subscriber
    growth rate, which could adversely affect our results of
    operations.
According to data published by the MIC and our population
estimates based on historical data published by the National
Statistical Office of Korea, the penetration rate for the Korean
wireless telecommunications service industry as of
December 31, 2005 was approximately 79.4%, which is high
compared to many industrialized countries. It is unlikely that
the penetration rates for wireless telecommunications service
will grow at the same pace as it has in the past given such high
penetration rates. As a result of the already high penetration
rates in Korea for wireless services coupled with our large
market share, we expect our subscriber growth rate to decrease.
Slowed growth in penetration rates without a commensurate
increase in revenues through the introduction of new services
and increased use of our services by existing subscribers would
likely have a material adverse effect on our financial condition
and results of operations.
Our business and results of operations may be adversely
    affected if we fail to acquire adequate additional spectrum or
    use our bandwidth efficiently to accommodate subscriber growth
    and subscriber usage.
One of the principal limitations on a wireless network's
subscriber capacity is the amount of spectrum available for use
by the system. We have been allocated 2 x 25 MHz of spectrum in
the 800 MHz band. As a result of bandwidth constraints, our CDMA
1xRTT network is currently operating near its capacity in the
Seoul metropolitan area, and although capacity constraints are
not as severe on our CDMA 1xEV/ DO network, this network
generally operates at high utilization rates. While we believe
that we can address this issue through system upgrades and
efficient allocation of bandwidth, inability to address such
capacity constraints in a timely manner may adversely affect our
business and results of operations.
The growth of our wireless data businesses has increased our
utilization of our bandwidth, since wireless data applications
are generally more bandwidth-intensive than voice services. This
trend has been offset in part by the implementation of our CDMA
1xEV/ DO network and, more recently, our WCDMA network, which
use bandwidth more efficiently for voice and data traffic than
our basic CDMA networks. If the current trend of increased data
transmission use by our subscribers continues, our bandwidth
capacity requirements are likely to increase. Growth of our
wireless business will depend in part upon our ability to manage
effectively our bandwidth capacity and to implement efficiently
and in a timely manner new bandwidth-efficient technologies if
they become available. We cannot assure you that bandwidth
constraints will not adversely affect the growth of our wireless
business.
11
Table of Contents
We may have to make further financing arrangements to meet
    our capital expenditure requirements and debt payment
    obligations.
As a network-based wireless telecommunications provider, we have
had in the past, and expect to continue to have, significant
capital expenditure requirements, as we continue to build-out
and maintain our networks. We estimate that we will spend
approximately Won 1.6 trillion for capital expenditures in 2006
for a range of projects, including expansion and improvement of
our wireless networks, investments in our Internet-related
businesses and expansion of our WCDMA network. We currently plan
to invest Won 570 billion on expansion of our WCDMA network
and HSDPA service and Won 170 billion to build and expand
our WiBro network in 2006. For a more detailed discussion of our
capital expenditure plans and a discussion of other factors
which may affect our future capital expenditures, see
"Item 5B. Liquidity and Capital, Resources". At
December 31, 2005, we had approximately Won 814.4 billion
in contractual payment obligations due in 2006 of which almost
all involve repayment of debt obligations. See
"Item 5F. Tabular Disclosure of Contractual
Obligations".
We have not arranged firm financing for all of our current or
future capital expenditure plans and contractual payment
obligations. We have in the past obtained funds for our proposed
capital expenditure and payment obligations from various
sources, including our cash flow from operations as well as from
financings, primarily debt and equity financings. Although we
believe that we have sufficient capital resources from
operations and financings to meet our capital expenditure
requirements and debt payment obligations in the near term,
inability to fund such capital expenditure requirements may have
a material adverse effect on our financial condition, results of
operations and business. In addition, although we currently
anticipate that the capital expenditure levels estimated by us
will be adequate to meet our business needs, such estimates may
need to be adjusted based on developments in technology and
markets. No assurance can be given that we will be able to meet
any such increased expenditure requirements or obtain adequate
financing for such requirements, on terms acceptable to us, or
at all.
Termination or impairment of our relationship with a small
    number of key suppliers for network equipment and for lease
    lines could adversely affect our results of operations.
We purchase wireless network equipment from a small number of
suppliers. We purchase our principal wireless network equipment
from Samsung Electronics Co., Ltd. and LG Electronics Inc. To
date, we have purchased substantially all of the equipment for
our CDMA 1xRTT and CDMA 1xEV/ DO networks from Samsung
Electronics and substantially all of the equipment for our WCDMA
network from Samsung Electronics and LG Electronics. Samsung
Electronics also currently manufactures more than 40% of the
wireless handsets sold to our subscribers. Although other
manufacturers sell the equipment we require, sourcing such
equipment from other manufacturers could result in unanticipated
costs in maintenance and upkeep of the CDMA 1xRTT and CDMA 1xEV/
DO networks or delays and additional costs in our expansion of
the WCDMA network. With respect to the introduction of 3G and
3.5G services, various wireless telecommunications service
providers globally have had difficulty in obtaining adequate
quantities of various types of 3G and 3.5G equipment from
suppliers. Inability to obtain the needed equipment for our
networks in a timely manner may have an adverse effect on our
business, financial condition and results of operations.
In addition, we rely on KT Corporation and SK Networks to
provide a substantial majority of our leased lines used for our
wireless services. In 2005, KT Corporation and SK Networks
provided approximately 16.0% and 62.0%, respectively, of our
leased lines. We cannot assure you that we will be able to
continue to obtain the necessary equipment from one or more of
our suppliers. Any discontinuation or interruption in the
availability of equipment from our suppliers for any reason
could have an adverse effect on our results of operations.
Inability to lease adequate lines at commercially reasonable
rates may impact the quality of the services we offer and may
result in damage to our reputation and our business.
Our businesses are subject to extensive government
    regulation and any change in government policy relating to the
    telecommunications industry could have a material adverse effect
    on our results of operations and financial condition.
All of our businesses are subject to extensive government
supervision and regulation. The MIC has periodically reviewed
the tariffs charged by wireless operators and has, from time to
time, suggested tariff
12
Table of Contents
reductions. Although these suggestions are not binding, we have
in the past implemented some level of tariff reductions in
response to these suggestions. After discussions with the MIC,
effective January 1, 2003, we reduced our standard rate
plan's monthly access fee by Won 1,000, increased our free
air time from 7 minutes to 10 minutes per month and reduced our
peak usage charges from Won 21 to Won 20 per minute. After
discussions with the MIC, in October 2003, we reduced our
monthly charges for caller ID service from Won 2,000 to Won
1,000. In addition, after discussions with the MIC, effective
September 1, 2004, we reduced our monthly basic charge by
7.1% from Won 14,000 to Won 13,000. Commencing January 1,
2006, we began to provide caller ID service to our customers
free of charge.
The Korean government plays an active role in the selection of
technology to be used by telecommunications operators in Korea.
The MIC has adopted the WCDMA and CDMA2000 technologies as the
only standards available in Korea for implementing 3G services.
The MIC may impose similar restrictions on the choice of
technology used in future telecommunications services and we can
give no assurance that the technologies promoted by the
Government will provide the best commercial returns for us.
Our wireless telecommunications services depend, in part, on our
interconnection arrangements with domestic and international
fixed-line and other wireless networks. Charges for
interconnection affect our revenues and operating results. The
MIC determines the basic framework for interconnection
arrangements, including interconnection policies relating to
interconnection rates in Korea and has changed this framework
several times in the past. We cannot assure you that we will not
be adversely affected by future changes in the MIC's
interconnection policies. See "Item 4B. Business
Overview — Interconnection — Domestic
Calls".
In January 2003, the MIC announced its plan to implement number
portability with respect to wireless telecommunications service
in Korea. The number portability system allows wireless
subscribers to switch wireless service operators while retaining
the same mobile phone number. In accordance with the plan
published by the MIC, the number portability system was adopted
by SK Telecom first, starting from January 1, 2004. KTF and
LGT were required to introduce number portability starting from
July 1, 2004 and January 1, 2005, respectively. In
addition, in order to manage the availability of phone numbers
efficiently and to secure phone number resources for the new
services, the MIC has required all new subscribers to be given
numbers with the '010' prefix starting January 2004,
and it has been gradually retracting the mobile service
identification numbers which had been unique to each wireless
telecommunications service provider, including '011'
for our cellular services.
We believe that the use of the common prefix identification
system may pose a greater risk to us compared to the other
wireless telecommunications providers because '011'
has very high brand recognition in Korea as the premium wireless
telecommunications service. The MIC's adoption of the
number portability system has resulted in and could continue to
result in a deterioration of our market share as a result of
weakened customer loyalty, increased competition among wireless
service providers and higher costs of marketing as a result of
maintaining the number portability system, increased subscriber
deactivations and increased churn rate, all of which had, and
may continue to have, an adverse effect on our results of
operations. See "Item 5. Operating and Financial
Review and Prospects" and "Item 4B. Business
Overview — Law and Regulation — Number
Portability".
In the past, wireless telecommunications service providers
provided handsets at below retail prices to attract new
subscribers, offsetting a significant portion of the cost of
handsets. The rapid growth in penetration rate in past years
can, at least in part, be attributed to such subsidies on
handsets given to new subscribers. The MIC prohibited all
wireless telecommunications service providers, subject to
certain exceptions stipulated in the Telecommunications Business
Act, from providing any such handset subsidies beginning
June 1, 2000. The MIC has, on several occasions between
March 2002 and June 2006, imposed various types of sanctions and
fines against us and the other wireless service providers for
violating restrictions on providing handset subsidies and other
activities which were deemed to be disruptive to fair
competition. We paid the fines and believe that we have complied
in all material respects with the other sanctions imposed by the
MIC. For details on these and other government penalties, see
"Item 8A. Consolidated Statements and Other Financial
Information — Legal Proceedings". Beginning on
March 27, 2006 the MIC allowed mobile service providers to
grant subsidies to certain qualifying subscribers who purchase
new handsets. We currently provide subsidies of between Won
70,000 and Won 240,000 to subscribers meeting certain
subscription requirements. As a result of the MIC's
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recent decision to allow handset subsidies, we may face
increased competition from other mobile service providers. In
order to compete more effectively, we have begun providing such
handset subsidies, which may increase our marketing expenses,
which, in turn, may have a material adverse effect on our
results of operations.
In December 2002, the MIC implemented a wireless Internet
network co-share system that permits the wireless application
protocol gateway, or WAP gateway, of a fixed-line operator to
connect to a wireless network service provider's
inter-working function, or IWF, device. IWF is a device that
connects a cellular network with an Internet Protocol, or IP,
network while WAP gateway converts hypertext transfer protocol,
or HTTP protocol, into WAP protocol. This co-share system would
allow subscribers of a wireless network service provider to have
access to wireless Internet content provided by a fixed-line
operator. In December 2002, KT Corporation connected to our IWF
but has not yet commenced service. In July 2003, the MIC
approved the basic terms regarding the implementation of a
network co-share system. In January 2004, we entered into a
memorandum of understanding with Onse to establish a co-share
system, under which we launched these services in June 2005.
Currently, our subscribers can access portals provided by
outside parties. In addition, the MIC has requested that a third
party oversee wireless operators' customer billing
procedures with respect to third-party content providers who are
seeking to provide their content directly to subscribers without
going through an individual operator's portal, as
third-party content providers have experienced difficulties in
the past in providing their content service directly to
subscribers due to the lack of resources for billing users. We
believe that such a co-share system, if widely adopted, will
have the effect of giving our users access to a wide variety of
content using their handsets which may in turn increase revenues
attributable to our data services. However, this system could
also place significant competitive pressure on the revenues and
profits attributable to our NATE wireless portal.
We are subject to additional regulation as a result of our
    market position, which could harm our ability to compete
    effectively.
The MIC's policy is to promote competition in the Korean
telecommunications markets through measures designed to prevent
the dominant service provider in a telecommunications market
from exercising its market power to prevent the emergence and
development of viable competitors. We are currently designated
by the MIC as a "market dominant service provider" in
respect of our wireless telecommunications business. As such, we
are subject to additional regulation to which our competitors
are not subject. For example, under current government
regulations, we must obtain prior approval from the MIC to
change our existing rates or introduce new rates while our
competitors may generally change their rates or introduce new
rates at their discretion. See "Item 4B. Business
Overview — Law and Regulation — Rate
Regulation". As of December 31, 2005, our standard
peak usage charge rate was approximately 11.1% higher than those
charged by our competitors. We could also be required by the MIC
to charge higher usage rates than our competitors for future
services. In addition, we were required to introduce number
portability earlier than our competitors, KTF and LGT. The MIC
also awarded the IMT-2000 license to provide 3G services to LGT
at a fee lower than our license fee and on terms generally more
favorable than the terms of our license.
In addition, when the MIC approved the merger of Shinsegi into
us in January 2002, the MIC imposed certain conditions on us.
The MIC periodically reviews our compliance with the conditions
related to our merger with Shinsegi. On May 25, 2004, a
policy advisory committee to the MIC announced the results of
its review and stated that the committee believed that our
market dominance may significantly restrict competition in the
telecommunications market and that we had violated the
conditions related to our merger with Shinsegi by providing
subsidies to handset buyers. In June 2004, the MIC imposed a Won
11.9 billion fine on us and extended the post-merger
monitoring period until January 2007 pursuant to the policy
advisory committee's recommendation. On May 25, 2004,
we voluntarily undertook to limit our market share through the
end of 2005 to 52.3% of the wireless telecommunications market,
the level of our market share at the time of the approval of our
merger with Shinsegi in January 2002. On July 6, 2005, we
voluntarily extended such market share limitation through the
end of 2007. We can give no assurance that the MIC will not take
action that may have a material adverse effect on our business,
operations and financial condition. See "— Our
businesses are subject to extensive government regulation and
any change in government policy relating to the
telecommunications industry could have a material adverse effect
on our results of operations and financial condition."
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In addition, we qualify as a "market-dominating business
entity" under the Fair Trade Act. The Fair Trade Commission
of Korea, or the FTC, approved our acquisition of Shinsegi on
various conditions, one of which was that SK Telecom's and
Shinsegi's combined market share of the wireless
telecommunications market, based on numbers of subscribers, be
less than 50.0% as of June 30, 2001. In order to satisfy
this condition, we reduced the level of our subscriber
activations and adopted more stringent involuntary subscriber
deactivation policies beginning in 2000 and ceased accepting new
subscribers from April 1, 2001 through June 30, 2001.
We complied with this requirement by reducing our market share
to approximately 49.7% as of June 30, 2001. We are not
currently subject to any market share limitations; however, on
May 25, 2004, we voluntarily undertook to limit our market
share through the end of 2005 to 52.3% of the wireless
telecommunications market, the level of our market share at the
time of the approval of our merger with Shinsegi in January
2002. On July 6, 2005, we voluntarily extended such market
share limitation through the end of 2007. We can give no
assurance that the Government will not impose restrictions on
our market share in the future or that we will not undertake to
voluntarily restrict our market share in the future. If we are
subject to market share limitations in the future, our ability
to compete effectively will be impeded.
The FTC is also currently conducting an antitrust investigation
into alleged price collusion among KTF, LGT and us. In May 2006,
the FTC imposed fines of Won 660 million on KTF and us and
Won 462 million on LGT for collusion in terminating
optional flat-rate subscription plans. We expect the FTC to
announce additional rulings on alleged collusive practices among
mobile service providers. We cannot predict the ultimate outcome
of the FTC's investigation, and there can be no assurance
that we will not be subject to additional fines or other
sanctions, or that the eventual outcome will not have a material
adverse effect on our financial condition or results of
operations.
The additional regulation to which we are subject has affected
our competitiveness in the past and may hurt our profitability
and impede our ability to compete effectively against our
competitors in the future.
Financial difficulties and charges of financial statement
    irregularities at our affiliate, SK Networks (formerly SK
    Global), may cause disruptions in our business.
Charges of financial statement irregularities by certain
directors and executives at SK Networks culminated in the
resignation of four of our board members and executives in March
2004, although none of these resignations were related to any
allegations of wrongdoing in connection with their role in our
business. SK Telecom was not implicated in any of the
charges against SK Networks' management. However,
continuing financial difficulties at SK Networks could result in
our having to look for alternative sources for handset
distribution and fixed network line needs. In February 2004,
Mr. Kil Seung Son and Mr. Tae Won Chey, who both
received prison terms of three years in the court of first
instance and appealed to the Seoul High Court in connection with
allegations of financial misconduct at SK Networks, resigned
from our board of directors, along with Mr. Moon Soo Pyo,
our president at the time, and Mr. Jae Won Chey, our
executive vice president at the time. See "Item 6A.
Directors and Senior Management — Involvement In
Certain Legal Proceedings".
The financial future of SK Networks remains uncertain. In
March 2003, the principal creditor banks of SK Networks
commenced corporate restructuring procedures against SK Networks
after the company announced that its financial statements
understated its total debt by Won 1.1 trillion and overstated
its profits by Won 1.5 trillion. These banks agreed to a
temporary rollover of approximately Won 6.6 trillion of SK
Networks' debt until June 18, 2003 and subsequently
decided to put SK Networks into corporate restructuring. In
October 2003, SK Networks' foreign and domestic
creditors agreed to a restructuring plan which, among other
things, allowed the foreign creditors to have their debts repaid
at a buyout rate of 43% of the face value of the outstanding
debt owed to them. In November 2003, SK Networks underwent a
capital reduction and sold approximately Won 1 trillion of its
assets as part of its restructuring plan, and SK Corporation
approved a Won 850 billion debt-for-equity swap.
SK Networks is still under the joint management of its
domestic creditors in accordance with its business normalization
plan.
SK Networks also serves as a distributor of handsets
manufactured by third parties to our nationwide network of
dealers. SK Networks was also the exclusive distributor of all
of the handsets sold by our former subsidiary, SK Teletech,
prior to our sale of the company to Pantech & Curitel in
July 2005. Samsung Electronics
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Co. Ltd., LG Electronics Inc., Motorola Korea, Inc. and Pantech
& Curital suspended their supply handsets to
SK Networks from the beginning of April 2003 for two to
three weeks because of the credit risk of SK Networks. In May
2003, all suppliers resumed their supply of handsets on the
condition that payment on their mobile phones be made in cash
within one week of delivery. Although we believe that handset
manufacturers will be able to find another distributor to
replace SK Networks in the event SK Networks is no long able to
distribute handsets, there may be difficulties in efficiently
distributing handsets to our subscribers and other customers in
the short term.
In addition, in 2005, we leased approximately 62.0% of our fixed
network lines, which connect our various cell sites and
switching stations, from SK Networks. If there is a material
disruption of SK Networks' ability to maintain and operate
this business due to its financial difficulties, we may need to
seek alternative sources. Although we do not believe that this
will have a materially adverse effect on our business, this may
result in a disruption of our services in the short term.
Concerns that radio frequency emissions may be linked to
    various health concerns could adversely affect our business and
    we could be subject to litigation relating to these health
    concerns.
In the past, allegations that serious health risks may result
from the use of wireless telecommunications devices or other
transmission equipment have adversely affected share prices of
some wireless telecommunications companies in the United States.
We cannot assure you that these health concerns will not
adversely affect our business. Several class action and personal
injury lawsuits have been filed in the United States against
several wireless phone manufacturers and carriers, asserting
product liability, breach of warranty and other claims relating
to radio transmissions to and from wireless phones. Certain of
these lawsuits have been dismissed. We could be subject to
liability or incur significant costs defending lawsuits brought
by our subscribers or other parties who claim to have been
harmed by or as a result of our services. In addition, the
actual or perceived risk of wireless telecommunications devices
could have an adverse effect on us by reducing our number of
subscribers or our usage per subscriber.
Our businesses may be adversely affected by developments
    affecting the Korean economy.
We generate substantially all of our revenue from operations in
Korea. Our future performance will depend in large part on
Korea's future economic growth. Adverse developments in
Korea's economy or in political or social conditions in
Korea may have an adverse effect on our number of subscribers,
call volumes and results of operations, which could have an
adverse effect on our business.
From early 1997 until 1999, Korea experienced a significant
financial and economic downturn, from which it is widely
believed the country has now recovered to a significant extent.
However, the economic indicators in the past three years have
shown mixed signs of recovery and uncertainty, and future
recovery or growth of the economy is subject to many factors
beyond our control. Events related to the terrorist attacks in
the United States on September 11, 2001, recent
developments in the Middle East including the war in Iraq,
higher oil prices, the general weakness of the global economy
and the outbreak of severe acute respiratory syndrome, or SARS,
in Asia and other parts of the world have increased the
uncertainty of global economic prospects and may continue to
adversely affect the Korean economy. Any future deterioration of
the Korean or global economy could adversely affect our
financial condition and results of operations.
Developments that could have an adverse impact on Korea's
economy include:
•
financial problems or lack of progress in restructuring of
    chaebols, or Korean conglomerates, other large troubled
    companies, their suppliers or the financial sector;
•
loss of investor confidence arising from corporate accounting
    irregularities and corporate governance issues of certain
    chaebols;
•
a slowdown in consumer spending;
•
adverse changes or volatility in foreign currency reserve
    levels, commodity prices, exchange rates, interest rates or
    stock markets;
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•
adverse developments in the economies of countries that are
    important export markets for Korea, such as the United States,
    Japan and China, or in emerging market economies in Asia or
    elsewhere;
•
the continued emergence of the Chinese economy, to the extent
    its benefits (such as increased exports to China) are outweighed
    by its costs (such as competition in export markets or for
    foreign investment and the relocation of manufacturing base from
    Korea to China);
•
social and labor unrest;
•
substantial decrease in market price of the Korean real estate
    market;
•
a decrease in tax revenues and a substantial increase in the
    Korean government's expenditures for unemployment
    compensation and other social programs that, together, would
    lead to an increased government budget deficit;
•
geo-political uncertainty and risk of further attacks by
    terrorist groups around the world;
•
the recurrence of SARS or avian flu in Asia and other parts of
    the world;
•
deterioration in economic or diplomatic relations between Korea
    and its trading partners or allies, including deterioration
    resulting from trade disputes or disagreements in foreign policy;
•
political uncertainty or increasing strife among or within
    political parties in Korea;
•
hostilities involving oil producing countries in the Middle East
    and any material disruption in the supply of oil or increase in
    the price of oil; and
•
an increase in the level of tension or an outbreak of
    hostilities between North Korea and Korea or the United States.
Depreciation of the value of the Won against the Dollar
    and other major foreign currencies may have a material adverse
    effect on our results of operations and on the prices of our
    common stock and the ADSs.
Substantially all of our revenues are denominated in Won.
Depreciation of the Won may materially affect our results of
operations because, among other things, it causes:
•
an increase in the amount of Won required by us to make interest
    and principal payments on our foreign currency-denominated debt,
    which accounted for approximately 9.6% of our total consolidated
    long-term debt, including current portion, as of
    December 31, 2005; and
•
an increase, in Won terms, of the costs of equipment that we
    purchase from overseas sources which we pay for in Dollars or
    other foreign currencies.
Fluctuations in the exchange rate between the Won and the Dollar
will affect the Dollar equivalent of the Won price of the shares
of our common stock on the Stock Market Division of the Korea
Exchange, on the KRX Stock Market. These fluctuations also
will affect:
•
the amounts a registered holder or beneficial owner of ADSs will
    receive from the ADR depositary in respect of dividends, which
    will be paid in Won to the ADR depositary and converted by the
    ADR depositary into Dollars;
•
the Dollar value of the proceeds that a holder will receive upon
    sale in Korea of the shares; and
•
the secondary market price of the ADSs.
For historical exchange rate information, see
"Item 3A. Selected Financial Data — Exchange
Rate".
Increased tensions with North Korea could have an adverse
    effect on us and the prices of our common stock and the
    ADSs.
Relations between Korea and North Korea have been tense over
most of Korea's history. The level of tension between Korea
and North Korea has fluctuated and may increase or change
abruptly as a result of current and
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future events, including ongoing contacts at the highest levels
of the governments of Korea and North Korea and increasing
hostility between North Korea and the United States. In December
2002, North Korea removed the seals and surveillance equipment
from its Yongbyon nuclear power plant and evicted inspectors
from the United Nations International Atomic Energy Agency,
and has reportedly resumed activity at its Yongbyon power plant.
In January 2003, North Korea announced its intention to withdraw
from the Nuclear Non-Proliferation Treaty, demanding that the
United States sign a non-aggression pact as a condition to North
Korea dismantling its nuclear program. In August 2003,
representatives of Korea, the United States, North Korea, China,
Japan and Russia held multilateral talks in an effort to resolve
issues relating to North Korea's nuclear weapons program.
In February 2005, North Korea declared that it had developed and
is in possession of nuclear weapons. In September 2005, North
Korea agreed to abandon all nuclear weapons and programs, and
the six participating nations signed a draft preliminary accord
pursuant to which North Korea agreed to dismantle its existing
nuclear weapons, abandon efforts to produce new future weapons
and readmit international inspectors to its nuclear facilities.
In return, the other five nations participating in the talks,
China, Japan, Korea, Russia and the United States, expressed
willingness to provide North Korea with energy assistance and
other economic support. The six parties agreed to hold further
talks in November 2005. However, one day after the joint
statement was released, North Korea announced that it would not
dismantle its nuclear weapons program unless the United States
agreed to provide civilian nuclear reactors in return, a demand
that the United States rejected. We cannot assure you that
future negotiations will result in a final agreement on North
Korea's nuclear program, including critical details such as
implementation and timing, or that the level of tensions between
Korea and North Korea will not escalate. In addition, in recent
years, there have been heightened security concerns stemming
from North Korea's nuclear weapon and long-range missile
programs and increased uncertainty regarding North Korea's
actions and possible responses from the international community.
Any further increase in tensions, resulting for example from a
break-down in contacts, test of long-range nuclear missiles
coupled with continuing nuclear programs by North Korea or an
outbreak in military hostilities, could adversely affect our
business, prospects, results of operations and financial
condition and could lead to a decline in the market value of our
common stock and the ADSs.
If SK Corporation causes us to breach the foreign
    ownership limitations on shares of our common stock, we may
    experience a change of control.
There is currently a 49% limit on the aggregate foreign
ownership of our issued shares. Under a newly adopted amendment
to the Telecommunications Business Law, which became effective
on May 9, 2004, a Korean entity, such as SK Corporation, is
deemed to be a foreign entity if its largest shareholder
(determined by aggregating the shareholdings of such shareholder
and its related parties) is a foreigner and such shareholder
(together with the shareholdings of its related parties) holds
15% or more of the issued voting stock of the Korean entity. As
of December 31, 2005, SK Corporation owned 17,663,127
shares of our common stock, or approximately 21.5%, of our
issued shares. If SK Corporation were considered a foreign
shareholder of SK Telecom, then its shareholding in SK
Telecom would be included in the calculation of the aggregate
foreign shareholding of SK Telecom and the aggregate foreign
shareholding in SK Telecom (based on our foreign ownership level
as of December 31, 2005, which we believe was 48.7%) would
exceed the 49% ceiling on foreign shareholding. As of
December 31, 2005, a foreign investment fund and its
related parties collectively held a 5.03% stake in SK
Corporation. We could breach the foreign ownership limitations
if the number of shares of our common stock or ADSs owned by
other foreign persons significantly increases.
If the aggregate foreign shareholding limit in SK Telecom is
exceeded, the MIC may issue a corrective order to SK Telecom,
the breaching shareholder (including SK Corporation if the
breach is caused by an increase in foreign ownership of SK
Corporation) and the foreign investment fund and its related
parties who own in the aggregate 15% or more of SK Corporation.
Furthermore, if SK Corporation is considered a foreign
shareholder, it may not exercise its voting rights with respect
to the shares held in excess of the 49% ceiling, which may
result in a change in control of us. In addition, the MIC may
refuse to grant us licenses or permits necessary for entering
into new telecommunications businesses until the aggregate
foreign shareholding of SK Telecom is reduced to below 49%. If a
corrective order is issued to us by the MIC arising from the
violation of the foregoing foreign ownership limit, and we do
not comply within the prescribed period under such corrective
order, the MIC may (1) suspend all or part of our business,
or (2) if the suspension of business is deemed to result in
significant inconvenience to our customers or be detrimental to
the public interest, impose a one-time administrative penalty
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of up to 3% of our sales revenues. The amendment to the
Telecommunications Business Law in May 2004 also authorizes the
MIC to assess monetary penalties of up to 0.3% of the purchase
price of the shares for each day the corrective order is not
complied with, as well as a prison term of up to one year and a
penalty of Won 50 million. For a description of further
actions that the MIC could take, see "Item 4B.
Business Overview — Law and Regulation —
Foreign Ownership and Investment Restrictions and
Requirements".
If our convertible notes are converted by foreign holders
    and the conversion would cause a violation of the foreign
    ownership restrictions of the Telecommunications Business Law,
    or in certain other circumstances, we may sell common stock in
    order to settle the converting holders' conversion rights
    in cash in lieu of delivering common stock to them, and these
    sales might adversely affect the market price of our common
    stock or ADRs.
In May 2004, we sold US$329.5 million in zero coupon
convertible notes due 2009. These convertible notes are
convertible by the holders into shares of our common stock at
the rate of Won 218,098 per share. These notes are held
principally by foreign holders. If (1) the exercise by the
holder of the conversion right would be prohibited by Korean law
or we reasonably conclude that the delivery of common stock upon
conversion of these notes would result in a violation of
applicable Korean law or (2) we do not have a sufficient
number of shares of our common stock to satisfy the conversion
right, then we will pay a converting holder a cash settlement
payment. In such situations, we may sell such number of treasury
shares held in trust for us that corresponds to the number of
shares of common stock that would have been deliverable in the
absence of the 49% foreign shareholding restrictions imposed by
the Telecommunications Law or other legal restrictions. The
number of shares sold in these circumstances might be
substantial. We cannot assure you that such sales would not
adversely affect the market prices of our common stock or ADSs.
Sales of SK Telecom shares by companies in the SK Group,
    POSCO and/or other large shareholders may adversely affect the
    prices of SK Telecom's common stock and the ADSs.
Sales of substantial amounts of shares of our common stock, or
the perception that such sales may occur, could adversely affect
the prevailing market price of the shares of our common stock or
the ADSs or our ability to raise capital through an offering of
our common stock.
As of December 31, 2005, POSCO owned 3.64% of our issued
common stock. POSCO has not agreed to any restrictions on its
ability to dispose of our shares. See "Item 7A.
Major Shareholders". Companies in the SK Group, which
collectively owned 22.79% of our issued common stock as of
December 31, 2005, may sell their shares of our common
stock in order to comply with the Fair Trade Act's limits
on the total investments that companies in a large business
group, such as the SK Group, may hold in other domestic
companies. See "Item 4B. Business Overview —
Law and Regulation — Competition Regulation". We
understand that SK Networks, which owned 1.32% of our
shares as of December 31, 2005, has agreed with its
creditors in connection with its corporate restructuring to sell
certain of its assets, which may include our shares. We can make
no prediction as to the timing or amount of any sales of our
common stock. We cannot assure you that future sales of shares
of our common stock, or the availability of shares of our common
stock for future sale, will not adversely affect the market
prices of the shares of our common stock or ADSs prevailing from
time to time.
Korea's new legislation allowing class action suits
    related to securities transactions may expose us to additional
    litigation risk.
A new law enacted on January 20, 2004 allows class action
suits to be brought by shareholders of companies (including us)
listed on the KRX Stock Market for losses incurred in connection
with purchases and sales of securities and other securities
transactions arising from (i) false or inaccurate
statements provided in the registration statements,
prospectuses, business reports and audit reports and omission of
material information in such documents; (ii) insider
trading and (iii) market manipulation. This law became
effective starting from January 1, 2005 with respect to
companies (including us) whose total assets are equal to or
greater than Won 2.0 trillion as of the end of the fiscal year
immediately preceding January 1, 2005. However, in the
event that certain elements of a financial statement for the
fiscal year ended before January 1, 2005, were not in
compliance with the then effective accounting standards, this
law does not apply, if such non-compliance is cured or addressed
in the financial
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statements for the fiscal year ending on December 31, 2006,
and such corrected information is submitted to the Financial
Supervisory Commission or the Korea Exchange Inc., or the KRX,
or made publicly available. This law permits 50 or more
shareholders who collectively hold 0.01% of the shares of a
company to bring a class action suit against, among others, the
issuer and its directors and officers. It is uncertain how the
courts will apply this law. Litigation can be time-consuming and
expensive to resolve, and can divert management time and
attention from the operation of a business. We are not aware of
any basis under which such suit may be brought against us, nor
are any such suits pending or threatened. Any such litigation
brought against us could have a material adverse effect on our
business, financial condition and results of operations.
If an investor surrenders his ADSs to withdraw the
    underlying shares, he may not be allowed to deposit the shares
    again to obtain ADSs.
Under the deposit agreement, holders of shares of our common
stock may deposit those shares with the ADR depositary's
custodian in Korea and obtain ADSs, and holders of ADSs may
surrender ADSs to the ADR depositary and receive shares of our
common stock. However, under the terms of the deposit agreement,
as amended, the depositary bank is required to obtain our prior
consent to any such deposit if, after giving effect to such
deposit, the total number of shares of our common stock on
deposit, which was 1,777,173 shares as of April 30, 2006,
exceeds a specified maximum, subject to adjustment under certain
circumstances. In addition, the depositary bank or the custodian
may not accept deposits of our common shares for issuance of
ADSs under certain circumstances, including (1) if it has
been determined by us that we should block the deposit to
prevent a violation of applicable Korean laws and regulations or
our articles of incorporation or (2) if a person intending
to make a deposit has been identified as a holder of at least 3%
of our common stock on October 7, 2002. See
"Item 10B. Memorandum and Articles of
Incorporation — Description of American Depositary
Shares". It is possible that we may not give the consent.
Consequently, an investor who has surrendered his ADSs and
withdrawn the underlying shares may not be allowed to deposit
the shares again to obtain ADSs.
An investor in our ADSs may not be able to exercise
    preemptive rights for additional shares and may suffer dilution
    of his equity interest in us.
The Korean Commercial Code and our articles of incorporation
require us, with some exceptions, to offer shareholders the
right to subscribe for new shares in proportion to their
existing ownership percentage whenever new shares are issued. If
we offer any rights to subscribe for additional shares of our
common stock or any rights of any other nature, the ADR
depositary, after consultation with us, may make the rights
available to an ADS holder or use reasonable efforts to dispose
of the rights on behalf of the ADS holder and make the net
proceeds available to the ADS holder. The ADR depositary,
however, is not required to make available to an ADS holder any
rights to purchase any additional shares unless it deems that
doing so is lawful and feasible and:
•
a registration statement filed by us under the U.S. Securities
    Act of 1933, as amended, is in effect with respect to those
    shares; or
•
the offering and sale of those shares is exempt from, or is not
    subject to, the registration requirements of the U.S. Securities
    Act.
We are under no obligation to file any registration statement
with respect to any ADSs. If a registration statement is
required for an ADS holder to exercise preemptive rights but is
not filed by us, the ADS holder will not be able to exercise his
preemptive rights for additional shares. As a result, ADS
holders may suffer dilution of their equity interest in us.
Short selling of our ADSs by purchasers of securities
    convertible or exchangeable into our ADSs could materially
    adversely affect the market price of our ADSs.
SK Corporation, through one or more special purpose vehicles,
has engaged and may in the future engage in monetization
transactions relating to its ownership interest in us. These
transactions have included and may include offerings of
securities that are convertible or exchangeable into our ADSs.
Many investors in convertible or exchangeable securities seek to
hedge their exposure in the underlying equity securities at the
time of acquisition of the convertible or exchangeable
securities, often through short selling of the underlying equity
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securities or through similar transactions. Since a monetization
transaction could involve debt securities linked to a
significant number of our ADSs, we expect that a sufficient
quantity of ADSs may not be immediately available for borrowing
in the market to facilitate settlement of the likely volume of
short selling activity that would accompany the commencement of
a monetization transaction. This short selling and similar
hedging activity could place significant downward pressure on
the market price of our ADSs, thereby having a material adverse
effect on the market value of ADSs owned by you.
After the exchange of ADSs into the underlying common
    shares of SK Telecom, seller or purchasers of the underlying
    common shares may have to pay securities transaction tax upon
    the transfer of the shares.
Under Korean tax law, transfer of a company's common shares
after the exchange of ADSs into the underlying common shares of
SK Telecom will be subject to securities transaction tax
(including an agricultural and fishery special tax) at the rate
of 0.3% of the sales price if traded on the KRX Stock Market.
Securities transaction tax, if applicable, generally must be
paid by the transferor of the shares or the person transferring
rights to subscribe to such shares. When the transfer is
effected through a securities settlement company, such
settlement company is generally required to withhold and pay the
tax to the tax authority. When such transfer is made through a
securities company, such securities company is required to
withhold and pay the tax. In case the sale takes place outside
the KRX Stock Market, without going through a securities
settlement company or a securities company, between two
non-residents or between a non-resident seller and a Korean
resident purchaser, the purchaser will have to withhold
securities transaction tax at the rate of 0.5% of the sales
price of the common shares.
Failing to accurately report the securities transaction tax will
result in a penalty of 10% of the tax amount due. The failure to
pay the securities transaction tax due will result in imposition
of interest at 10.95% per annum on the unpaid tax amount for the
period from the day immediately following the last day of the
tax payment period to the day of the issuance of the tax notice.
The penalty is imposed on the party responsible for paying the
securities transaction tax or, if the securities transaction tax
is to be paid via withholding, the penalty is imposed on the
party that has the withholding obligation. See
"Item 10E. Taxation — Korean Taxation".
A holder of our ADSs may not be able to enforce a judgment
    of a foreign court against us.
We are a corporation with limited liability organized under the
laws of Korea. Substantially all of our directors and officers
and other persons named in this document reside in Korea, and
all or a significant portion of the assets of our directors and
officers and other persons named in this document and
substantially all of our assets are located in Korea. As a
result, it may not be possible for holders of our ADSs to effect
service of process within the United States, or to enforce
against them or us in the United States judgments obtained
in United States courts based on the civil liability
provisions of the federal securities laws of the United States.
There is doubt as to the enforceability in Korea, either in
original actions or in actions for enforcement of judgments of
United States courts, of civil liabilities predicated on
the United States federal securities laws.
We are generally subject to Korean corporate governance
    and disclosure standards, which may differ from those in other
    countries.
Companies in Korea, including us, are subject to corporate
governance standards applicable to Korean public companies,
which may differ in some respects from standards applicable in
other countries, including the United States. As a
reporting company registered with the Securities and Exchange
Commission and listed on the New York Stock Exchange, we
are, and in the future will be, subject to certain corporate
governance standards as mandated by the Sarbanes-Oxley Act of
2002. However, foreign private issuers, including us, are exempt
from certain corporate governance requirements under the
Sarbanes-Oxley Act or under the rules of the New York Stock
Exchange. There may also be less publicly available information
about Korean companies, such as us, than is regularly made
available by public or non-public companies in other countries.
Such differences in corporate governance standards and less
public information could result in corporate governance
practices or disclosures that are perceived as less than
satisfactory by investors in certain countries.
21
Table of Contents
Item 4.
INFORMATION ON
THE COMPANY
Item 4A.
History and
Development of the Company
We are Korea's leading wireless telecommunications services
provider and a pioneer in the commercial development and
provision of high-speed Wireless Internet services. We served
approximately 19.8 million subscribers throughout Korea as
of April 30, 2006, including 19.2 million subscribers
who owned data-capable handsets. As of April 30, 2006, our
share of the Korean wireless market was approximately 50.7%,
based on the number of subscribers.
We provide our services principally through networks using CDMA
technology. In October 2000, we became the world's first
wireless operator to commercially launch CDMA 1xRTT, a
CDMA-based advanced radio transmission technology for high-speed
wireless data and wireless Internet services. CDMA 1xRTT allows
transmission of data at speeds of up to 144 Kbps, compared to
the 64 Kbps possible over our CDMA network. In addition to
higher data transfer speeds, CDMA 1xRTT technology uses
packet-based data transmission, which permits more efficient use
of wireless spectrum and packet-based pricing of data services.
As of April 30, 2006, approximately 18.9 million of
our subscribers had handsets capable of accessing our CDMA 1xRTT
network.
In the first half of 2002, we launched an upgrade of our CDMA
1xRTT network in 26 cities in Korea to CDMA 1xEV/ DO. CDMA 1xEV/
DO is a more advanced CDMA-based technology which enables data
to be transmitted at speeds of up to 2.4 Mbps. CDMA 1xEV/ DO
technology also allows us to provide advanced wireless data
services such as streaming video and audio services. CDMA 1xEV/
DO-capable handsets became available in Korea in June 2002. As
of December 31, 2004, the CDMA 1xEV/ DO network upgrade was
complete, with service available in 84 cities in Korea.
In December 2000, the MIC awarded a consortium we led, the right
to acquire a license to develop, construct and operate a WCDMA
network using 2 X 20 MHz of spectrum in the 2 GHz band. WCDMA is
a high-speed wireless communication technology that allows us to
offer even more sophisticated data transmission services at
speeds faster than our CDMA 1xRTT and CDMA 1xEV/ DO networks. In
March 2001, we incorporated SK IMT to hold the license and
develop our WCDMA business and we, together with Shinsegi,
invested Won 985.2 billion for a 61.6% interest in SK IMT.
In December 2001, we disposed of 144,000 shares of SK IMT worth
Won 3.9 billion. In May 2003, SK IMT merged into SK
Telecom. The WCDMA license was awarded by the MIC to SK IMT in
December 2000, at a total license cost to SK IMT of Won 1.3
trillion. SK IMT paid Won 650 billion of this amount in
March 2001, and we are required to pay the remainder of the
license cost in annual installments from 2007 through 2011. For
more information, see note 2(j) of the notes to our
consolidated financial statements.
In January 2002, we also acquired the remaining 29.6% interest
in Shinsegi, the second wireless operator to introduce wireless
voice services in Korea, which we did not yet own, and merged
Shinsegi into SK Telecom. As a result of this merger, we have a
combined 2 × 25 MHz of spectrum in the 800 MHz
range.
We commenced construction of our WCDMA network in 2003 and began
provision of our WCDMA-based services on a limited basis in
Seoul at the end of 2003. We continued to expand and improve our
WCDMA services in the Seoul metropolitan area in 2004. In 2005,
we completed commercial development of HSDPA technology, also
known as 3.5G technology. HSDPA technology is a more advanced
mobile telephony protocol that represents an evolution of the
WCDMA standard. By May 2006, we had expanded HSDPA service to
25 cities, including Busan and Incheon. We expect to
complete expansion of an upgraded, HSDPA ready version of our
WCDMA network to 84 cities nationwide by the end of 2006.
In March 2004, we were assigned by the MIC, frequency for
satellite DMB. In October 2004, we granted the right to use such
satellite, satellite orbit and frequency to TU Media Corp., one
of our affiliates, which received a license from the MIC as a
satellite DMB provider on December 30, 2004. On May 1,
2005, TU Media Corp. began to provide satellite DMB services. As
of April 30, 2006, TU Media had over 500,000 subscribers.
In March 2005, we obtained a license from the MIC to provide
WiBro services, which will complement our other wireless
communication services, such as HSDPA. WiBro will offer wireless
Internet services at competitive prices in metropolitan areas
where there is a high demand for high-speed and large packet data
22
Table of Contents
services. In April 2005, we were assigned by the MIC, a
27 MHz of spectrum in the 2.3GHz (2,300 - 2,327MHz)
range in connection with WiBro services. We conducted pilot
testing of WiBro service in limited areas of metropolitan Seoul
starting in May 2006 and began commercial service in those
limited areas in June 2006. We intend to expand coverage of our
WiBro service to other areas of metropolitan Seoul in 2006.
On May 31, 2006, we had a market capitalization of
approximately Won 18.6 trillion (US$19.4 billion, as
translated at the noon buying rate of June 26, 2006) or
approximately 2.61% of the total market capitalization on the
KRX Stock Market, making us the fifth largest company listed on
the KRX Stock Market based on market capitalization on that
date. Our ADSs, each representing one-ninth of one share of our
common stock, have traded on the New York Stock Exchange since
June 27, 1996.
We established our telecommunications business in March 1984
under the name of Korea Mobile Telecommunications Co., Ltd.,
under the laws of Korea. We changed our name to SK Telecom Co.,
Ltd., effective March 21, 1997.
Our registered office is at 11, Euljiro 2-ga, Jung-gu,
Seoul 100-999, Korea and our telephone number is
82-2
-6100-1639.
Our Business Strategy
We believe that trends in the Korean telecommunications industry
during the next decade will mirror those in the global market
and that the industry will be characterized by rapid
technological change, reduced regulatory barriers and increased
competition. Our business strategy is to enhance shareholder
value by maintaining and consolidating our leading position in
the Korean market for wireless services, including voice, data
and Internet services. As the Korean market continues to mature,
we will continue to focus on these core businesses in order to
expand and enhance the range and quality of our wireless
telecommunications services. Our principal strategies are to:
•
Enhance the technical capabilities of our wireless networks
    to improve data transmission rates and service quality and to
    enable us to offer an increased range of services, including in
    connection with our development of new and improved wireless
    technologies.
We have completed expanding the geographic
    coverage and subscriber capacity of our existing CDMA 1xRTT and
    CDMA 1xEV/ DO networks and are currently upgrading our existing
    WCDMA network to support HSDPA service, as well as expanding an
    HSPDA-ready version of our WCDMA network nationwide. In
    addition, we began to offer WiBro service to limited areas
    of metropolitan Seoul in June 2006, and intend to continue to
    expand our WiBro service coverage area. We believe we are a
    leader in the development and implementation of wireless
    technologies in Korea and that convergence among communications
    technologies, as well as between telecommunications and other
    industries, creates growth opportunities for incumbent
    telecommunications service providers, like us, whose existing
    infrastructure and know-how will provide a competitive
    advantage. We also pursue a research and development program
    designed to allow us to implement new wireless technologies as
    market opportunities arise. As a part of such program, we
    operate a network research and development center which is
    focused on wireless network design, digital cellular
    technologies and wireless telecommunications applications.
•
Retain and capitalize on our large, high-quality wireless
    subscriber base.
With approximately 19.8 million
    subscribers as of April 30, 2006, we have the largest
    wireless subscriber base in Korea. We focus on maintaining and
    expanding our high-quality subscriber base through the provision
    of enhanced wireless services, particularly advanced Wireless
    Internet-based applications, at higher speeds than previously
    available.
•
Offer a broad range of new and innovative Wireless Internet
    contents and services.
Through our integrated wireless and
    on-line portal, NATE, we plan to continue expanding the range of
    our Wireless Internet contents and services, with a view to
    increasing revenue from these services to complement our core
    cellular revenues. Our strategy includes the introduction of
    sophisticated multimedia services (such as June, a premium
    wireless data service that provides streaming multimedia video
    content through our
23
Table of Contents
CDMA 1xEV/ DO and HSDPA technologies, as well as MelOn, our
    music portal service, GXG, our mobile gaming portal, and Cizle,
    our wireless Internet movie portal); mobile commerce services
    (such as Moneta, a wireless credit and payment system);
    community portal and mobile community portal services (such as
    Mobile Cyworld, which allows subscribers to access Cyworld, our
    on-line community portal service, using their cellular phone);
    and mobile finance services (such as M BANK, M-Stock and Moneta
    Card) that can be accessed using handsets and other devices,
    including personal computers, personal digital assistants and
    vehicle mounted terminals.
•
Create new opportunities that arise from an increasingly
    convergent and ubiquitous era in mobile communications,
    including by pioneering new businesses.
We seek to offer our
    customers a variety of innovative "convergent"
    services that create value and convenience for our customers.
    For example, we have launched new services, such as Telematics,
    Digital Home and mobile banking, that provide access to content
    and services previously available only through traditional media
    or requiring direct personal interface. In particular, we are
    focusing on new businesses that provide synergies with our
    existing services. For example, in May 2005, TU Media Corp., one
    of our affiliates, successfully launched satellite DMB service,
    which provides broadcasting of multimedia content by satellite
    to various portable and handheld devices.
•
Continue to seek opportunities in overseas markets.
We
    continue to seek opportunities into various overseas markets,
    particularly to Asia. In March 2005, we established a joint
    venture with EarthLink, Inc., the third largest Internet service
    provider in the United States, and, in May 2006 we launched our
    Mobile Virtual Network Operator, or MVNO, service, under the
    brand name "HELIO", to provide wireless voice and data
    services across the United States. We have also been providing
    CDMA cellular service, under the brand name, "S-Fone",
    in Vietnam since 2003 and plan to expand our network coverage to
    all of Vietnam. In February 2004, through the launch of a joint
    venture company with China Unicom, we also began extending our
    wireless Internet service to China. In addition, in June 2006,
    our board of directors approved plans to subscribe for up to
    US$1 billion of convertible bonds issued by China Unicom
    convertible into 899,745,075 common shares of China Unicom. We
    expect the subscription to be consummated in July 2006. In the
    event all of such convertible bonds are converted into common
    shares, our equity interest in China Unicom would be 6.67%.
Merger with Shinsegi
In a series of transactions between December 1999 and April
2000, we acquired a 51.2% interest in the common stock of
Shinsegi. In subsequent transactions between March and September
2001, we increased our interest to 70.4%. On January 13,
2002, we acquired the remaining 29.6% interest in Shinsegi and
Shinsegi merged into SK Telecom.
The attractiveness of our merger with Shinsegi derived in large
measure from the synergies, growth opportunities and cost
savings we hoped to achieve by integrating Shinsegi's
operations and customer base with those of SK Telecom and our
plans to reallocate the spectrum used by Shinsegi to SK
Telecom's networks.
In 2001, we began integrating Shinsegi's operations with
those of SK Telecom. In 2002, we completed the following steps
to realize additional benefits from our merger with Shinsegi:
•
Decommissioned Shinsegi's former network and transferred
    Shinsegi's subscribers to SK Telecom's networks. We
    have allowed transferred subscribers to continue receiving
    services under their existing rate plans. However, after the
    merger, no new subscribers have been accepted under
    Shinsegi's plans and further marketing efforts have been
    limited to the SK Telecom brands. Shinsegi's subscribers do
    not have to purchase new handsets, are allowed to use the same
    mobile telephone numbers and have access to the same services as
    before the merger.
•
Re-allocated the spectrum formerly used by Shinsegi's
    network to SK Telecom's CDMA and CDMA 1xRTT networks.
•
Redeployed a portion of Shinsegi's former network equipment
    to SK Telecom's CDMA network or sold it to wireless
    operators outside of Korea. The remainder of Shinsegi's
    network equipment was discarded and written off and we recorded
    an impairment loss of Won 185.8 billion in 2002.
24
Table of Contents
We also identified and implemented other cost saving measures,
such as the elimination of redundant distribution centers.
Shinsegi's business has been fully integrated into our
business.
Korean Telecommunications Industry
Until April 1996, we were the sole provider of wireless
telecommunications services in Korea. Beginning in the early
1990's, the Government began to introduce competition into
the fixed-line and wireless telecommunications services markets.
In the early 1990's, the Government allowed new competitors
to enter the fixed-line sector, sold a controlling stake in us
to the SK Group, and granted a cellular license to our first
competitor, Shinsegi. In October 1997, three additional
companies, KTF, LGT, and Hansol PCS, began providing wireless
services under government licenses granting them the right to
provide wireless telecommunications services.
In 2000 and 2001, the Korean wireless telecommunications market
experienced significant consolidation. In January 2002, Shinsegi
was merged into SK Telecom. Additionally, two of the other
wireless telecommunications services operators merged. See
"Item 4B. Business Overview —
Competition". Thus, there are currently three providers of
wireless voice telecommunications services in Korea, ourselves
(including Shinsegi), KTF, which is a subsidiary of KT
Corporation, and LGT. As of April 30, 2006, SK Telecom had
50.7% market share of the Korean wireless telecommunications
market in terms of subscribers, while KTF and LGT had market
shares of 32.2% and 17.1%, respectively.
On December 15, 2000, the MIC awarded to two companies the
right to receive a license to provide 3G services using
WCDMA, an extension of the Global System for Mobile
Communication standard for wireless telecommunications, which is
the most widely used wireless technology globally. These rights
were awarded to two consortia of companies, one led by SK
Telecom's former subsidiary, SK IMT Co., Ltd., and the
other to a consortium that included KT Corporation (formerly
known as Korea Telecom Corp.). SK IMT Co., Ltd. was merged into
SK Telecom on May 1, 2004. The right to acquire an
additional license to operate a network using CDMA2000
technology was awarded to LGT in August 2001.
A one-way mobile number portability, or MNP, system was first
implemented in the beginning of January 2004 when our
subscribers were allowed to transfer to KTF and LGT. From July
2004, a two-way MNP was implemented so that KTF subscribers
could transfer to SK Telecom and LGT. A three-way MNP has been
in effect since January 2005 so that subscribers from each of
the wireless service providers may transfer to any other
wireless service provider. During 2004 and 2005, approximately
2.1 million and 2.2 million, respectively, of our
subscribers transferred to our competitors. Approximately
700,000 of LGT's subscribers in 2005 and approximately
600,000 and 1.5 million in 2004 and 2005, respectively, of
KTF's subscribers moved to our service.
In January 2005, the government granted KT Corporation and us a
license to offer a new high-speed wireless Internet service
called WiBro, which will provide wireless Internet connection at
speeds which are much higher than currently available. According
to the MIC report entitled "Introduction and Use of WiBro
Service," published on March 11, 2005, the number of
WiBro subscribers is expected to rise to more than
9 million subscribers within the next six years.
Telecommunications industry growth in Korea has been among the
most rapid in the world, with fixed-line penetration increasing
from under five lines per 100 population in 1978 to 47.5 lines
per 100 population as of December 31, 2005, and wireless
penetration increasing from 7.0 subscribers per 100 population
in 1996 to 79.4
25
Table of Contents
subscribers per 100 population as of December 31, 2005. The
table below sets forth certain subscription and penetration
information regarding the Korean telecommunications industry as
of the dates indicated:
As of December 31,
2001
2002
2003
2004
2005
(In thousands, except for per population amounts)
Population of Korea(1)
47,354
47,615
47,849
48,082
48,294
Wireless Subscribers(2)
29,046
32,342
33,592
36,586
38,342
Wireless Subscribers per 100 Population
61.3
67.9
70.2
76.1
79.4
Telephone Lines in Service(2)
22,725
23,490
22,877
22,871
22,920
Telephone Lines per 100 Population
48.0
49.3
47.8
47.6
47.5
(1)
Source: National Statistical Office of Korea
(2)
Source: MIC
The Korean telecommunications industry is one of the most
developed in Asia in terms of wireless penetration, and in terms
of the growth of the Wireless Internet services markets. The
wireless penetration rate, which is calculated by dividing the
number of wireless subscribers by the population, is 79.4% as of
December 31, 2005 and the number of wireless subscribers
has increased from approximately 3.2 million in 1996 to
approximately 38.3 million as of December 31, 2005.
The following graph sets forth the wireless penetration rates
for countries in the Asia/ Pacific region as of
December 31, 2005.
Asia/ Pacific wireless penetration rates as of December 31,
2005(1)
Source: Merrill Lynch Global Wireless Matrix 4Q05.
(1)
Percentages may differ depending on method selected for
    determining population.
Since the introduction of short text messaging in 1998,
Korea's wireless data market has grown rapidly. Wireless
Internet service in Korea has grown rapidly since its
introduction in the second half of 1999. All of the Korean
wireless operators have developed extensive Wireless Internet
service portals. In Korea, SK Telecom launched the world's
first CDMA 1xRTT network, which enabled it to provide advanced
data services, in November 2000. As of April 30, 2006,
approximately 18.9 million of Korean wireless subscribers
owned Internet-enabled handsets capable of accessing advanced
Wireless Internet services. The table below sets forth
26
Table of Contents
certain penetration information regarding the ownership of
Internet-enabled handsets by Korean wireless subscribers as of
the dates indicated:
2001
2002
2003
2004
2005
(In thousands)
Wireless Internet Enabled Handsets
23,874
29,085
31,431
35,016
37,202
WAP/ ME Type
18,190
25,981
29,804
34,220
36,713
I-SMS Type
5,684
3,104
1,627
797
489
Total Number of Wireless Subscribers
29,046
32,342
33,592
36,586
38,342
Penetration of Advanced Handsets
82.2
%
89.9
%
93.6
%
95.7
%
97.0
%
Source: MIC.
In addition to its well-developed wireless telecommunications
sector, Korea has one of the largest Internet markets in the
Asia/ Pacific region. According to the Korean Network
Information Center (KNIC), the number of Internet subscribers in
Korea increased from approximately 3.1 million at the end
of 1998 to approximately 33.0 million at the end of 2005, a
40.0% compound annual growth rate. From the end of 2001 to the
end of 2005, the number of broadband Internet access subscribers
increased from approximately 7.8 million to approximately
12.2 million, a 11.8% annual growth rate. The table below
sets forth certain information regarding Internet users and
broadband subscribers as of the dates indicated:
2001.12
2002.12
2003.12
2004.12
2005.12
Number of Internet Users(1)
24,380
26,270
29,220
31,580
33,010
Number of Broadband Subscribers(2)
7,806
10,405
11,172
11,921
12,191
(1)
Source: Korea Network Information Center (KRNIC).
(2)
Source: MIC. Broadband service includes xDSL (Digital Subscriber
    Line), Cable Modem, Apartment LAN (Local Area Network) and
    Satellite.
Item 4B.
Business Overview
Overview
We are Korea's leading wireless telecommunications services
provider and a pioneer in the commercial development and
provision of high-speed Wireless Internet services. We had
approximately 19.8 million subscribers as of April 30,
2006 and our share of the Korean wireless market was
approximately 50.7%, based on the number of subscribers. We
currently provide the following core services:
•
Cellular services
— we provide digital cellular
    services to our subscribers using CDMA (code division multiple
    access) technology, with our network covering approximately 99%
    of the Korean population;
•
Wireless Internet services
— under our
    "NATE" brand name, we allow our wireless subscribers
    to access various websites designed for cellular use, such as
    access to entertainment-related contents and services and
    on-line financial services; and
•
Digital convergence and new businesses
— we
    have pioneered new services that reflect the growing convergence
    between the telecommunications sector and other industries,
    including our provision of satellite DMB service, which enables
    satellite broadcasting to mobile devices; telematics service,
    which makes use of GPS technology; and our "Digital
    Home" service, which brings home maintenance and security
    into the mobile digital era.
In addition, we provide various services outside of Korea,
including in the United States, China, Vietnam and Mongolia.
We provide our core services through our CDMA networks,
including our basic CDMA network, our CDMA 1x RTT and CDMA 1x
EV/ DO networks and, most recently, our WCDMA network. We also
recently
27
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launched our WiBro service to complement our existing core
networks and technologies. For more information on our backbone
networks, see "— Digital Cellular Network".
We established our telecommunications business in March 1984
under the name of Korea Mobile Telecommunications Services Co.,
Ltd. We changed our name to Korea Mobile Telecommunications Co.,
Ltd. in 1988. We changed our name to SK Telecom Co., Ltd.
effective March 21, 1997. Our registered office is
at 11, Euljiro 2-ga, Jung-gu, Seoul 100-999, Korea and our
telephone number is 82-2-6100-1563.
Cellular Services
SK Telecom was the sole provider of cellular services in Korea
from 1988, when we began network operations, to April 1996, when
Shinsegi began operating a digital cellular system in several
regions of Korea. In October 1997, three additional companies
commenced providing wireless telecommunications services. As a
result of consolidation in the wireless telecommunications
industry in Korea since 2000, there are currently three
providers of wireless telecommunications services in Korea,
namely us, KTF and LGT.
We introduced our digital cellular service using CDMA technology
in the Seoul metropolitan area in January 1996 and substantially
completed the geographic build-out of our network in 1998. On
December 31, 1999, we terminated our analog service. Our
digital network provides wireless telecommunications service to
an area covering approximately 99% of the Korean population. We
continue to increase the capacity of our wireless networks to
keep pace with the growth of our subscriber base and increased
usage of voice and wireless data services by our subscribers.
As of April 30, 2006, approximately 18.9 million out
of 19.8 million subscribers owned handsets capable of
accessing our CDMA 1xRTT network. Beginning in 2002, we launched
an upgrade of our CDMA 1xRTT network in 26 cities in Korea
to a more advanced technology called CDMA 1xEV/ DO. CDMA 1xEV/
DO technology enables data to be transmitted to CDMA 1xEV/
DO-capable handsets, which became available in Korea in June
2002, at speeds up to 2.4 Mbps, which is 16 times faster
than CDMA 1xRTT's maximum transmission speed. CDMA 1xEV/ DO
technology allows us to provide advanced wireless data services
such as streaming video and audio services and also allows us to
use our spectrum more efficiently. As of December 31, 2004,
we had completed our CDMA 1xEV/ DO network upgrade with services
available in 84 cities in Korea.
We commenced provision of our WCDMA services on a limited basis
in Seoul at the end of 2003 and continued to improve our WCDMA
services in the Seoul metropolitan area in 2004. In 2005, we
completed development of HSDPA technology, which represents an
evolution of the WCDMA standard and, among others, supports
higher data capacity and allows faster data transmissions than
previous WCDMA-based protocols. HSDPA upgrades to our existing
WCDMA network do not require hardware upgrades and may be
accomplished through software upgrades at virtually no cost. By
May 2006, we had expanded HSDPA service to 25 cities,
including Busan and Incheon. We expect to expand our WCDMA
network and HSDPA service to 84 cities nationwide by the
end of 2006. For a more complete discussion of our CDMA-based
networks, see "— Digital Cellular Network"
below.
We seek to continue to strengthen our market leadership and
diversify our revenue base by introducing a broad range of
subscriber-oriented "value-added" services. Our most
popular value-added services in 2005 included:
•
Call Keeper service, which provides a record of missed calls in
    the event a subscriber's mobile phone is engaged or
    switched off;
•
COLORing service, which plays a "ring back" melody in
    lieu of a conventional dial tone when callers dial a COLORing
    subscriber's mobile phone;
•
Auto COLORing service, which periodically changes the default
    ring-back melody according to the subscriber's music
    category selection; and
•
Perfect Call service, which combines Call Keeper service with a
    new service that alerts subscribers when a dialed number that
    was engaged when first dialed, is no longer engaged.
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As of December 31, 2005, 8.5 million users had
subscribed to our COLORing service, 4.6 million users to
our Perfect Call service and 3.5 million users to our Call
Keeper service. In aggregate, revenues attributable to
value-added service fees were Won 339.9 billion in 2005.
To complement the services we provide to our subscribers in
Korea, we have also entered into roaming service agreements with
various foreign wireless telecommunications service providers.
We provide global roaming services based on three basic
technologies in part depending on which mobile phone standards
are available in a particular region: CDMA, GSM and WCDMA
roaming. As of May 31, 2006, we offered CDMA roaming
services in 18 countries including the U.S., Japan, China,
Thailand, Canada, New Zealand and Australia. Our GSM roaming
services are available in 78 countries, including countries in
Europe and Africa. Our WCDMA voice roaming service is currently
available in Japan, Hong Kong, Singapore, Italy, France and
Germany. The WCDMA voice roaming service area will be expanded
to include the United Kingdom, Spain and the Netherlands in
2006. In addition, our global data roaming service is available
in six countries, including China, Japan and Thailand. We have
approximately 2 million global roaming service users, in
aggregate, as of December 31, 2005.
Wireless Internet Services
Our wireless Internet services represent a key and growing
business area. We currently offer a wide variety of Internet
content and services, in addition to providing our wireless
subscribers access to the Internet. Through such wireless
Internet content and service offerings, we believe we are also
building greater loyalty among our subscribers. We intend to
continue to build our wireless Internet services as a platform
for growth, extending our portfolio of offerings and developing
new content for our subscribers.
Under our brand name "NATE", we offer our wireless
subscribers access to the Internet, where subscribers can access
a wide variety of content including current news, stock quotes
and other information, as well as gain access to a wide variety
of services including securities trading and on-line banking
services. Subscribers can purchase goods and services through
their wireless devices, send and receive
e-mail
and gain access
to various third party Internet websites configured to work with
wireless technology. Subscribers access NATE using
WAP technology. WAP technology allows wireless data
transmission and has been adopted by over 200 major
telecommunications operators worldwide. As of April 30,
2006, approximately 19.1 million, or 96.5%, of our
subscribers owned WAP-enabled handsets capable of accessing our
CDMA 1xRTT network.
Multimedia
In November 2002, we introduced June, a wireless data service
that provides streaming content, primarily using our CDMA 1xEV/
DO technology. Content provided through the June service
includes Video on Demand, or VOD and Music on Demand, or MOD;
television programs, which can be viewed real-time; and
multimedia messaging. In addition, June subscribers can access
the Internet through NATE, our integrated wired and wireless
Internet platform. As of December 31, 2005, June had
6.7 million subscribers.
Music Portal Service
In November 2004, we introduced a music portal service called
MelOn, a new music service concept from a combined wireless and
wired network. This service allows subscribers to access digital
music through cellular phones on a wireless network, while
paying airtime charges and monthly flat rates. This service also
offers access to real-time streaming from on-line websites and
digital music downloads to MP3 players and MP3 phones. In
addition, the service protects the rights of music copyright
holders by preventing the illegal distribution and use of
digital music content through the application of Digital Right
Management technology. As of December 31, 2005, we had
4.2 million subscribers to our MelOn Service. We expect
demand for this service to continue to grow.
In August 2005, we also acquired a 60% stake in YBM Seoul
Records Inc., Korea's largest music recording company in
terms of records released and revenues, for Won
27.9 billion. Through our acquisition of YBM, we are able
to offer customers of our MelOn service access to an expanded
digital music contents pool. Also, in July and October 2005, we
and certain other Korean investment companies invested an
aggregate Won 40 billion to
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establish three funds to invest in the music industry and seek
strategic partnerships with recording companies. As of
December 31, 2005, our contribution to the funds amounted
to Won 39.6 billion. Furthermore, in September, October and
December 2005, we and our co-investors invested an aggregate Won
55.8 billion in four movie production funds to strengthen
our ability to obtain movie contents. We had invested Won
20 billion in such movie production funds as of
December 31, 2005.
Community Portal Service
"Cyworld", which is offered by our subsidiary, SK
Communications, is one of the most popular on-line community
portal services in Korea. As of December 31, 2005, our
Cyworld portal service had 16.6 million subscribers. In
March 2004, we launched "Mobile Cyworld", allowing our
subscribers to access the Cyworld portal community site through
their cellular phones. In 2005, approximately 1.25 million
subscribers accessed Mobile Cyworld service, with the average
number of monthly users reaching 585,000.
Wireless Entertainment Services
In April 2005, we launched "GXG", a 3D mobile game
portal, through which subscribers can download mobile games to
their cellular phones. The games offered through our GXG portal
feature advanced 3D graphics and high-speed action, which, we
believe, represent a new standard of mobile gaming. In order to
download and access the 3D mobile games available through our
GXG portal, subscribers must own handsets equipped with a mobile
gaming-specific chip. As of December 31, 2005, GXG offered
62 mobile games from leading domestic and foreign game
publishers and more than 300,000 of our subscribers owned
handsets equipped with a mobile gaming-specific chip.
In November 2003, we launched "Cizle", a wireless
Internet movie portal. Cizle allows subscribers to purchase
movie tickets using their cellular phones, as well as to view
information about currently-playing movies. Cizle subscribers
may also receive discounts on their ticket purchases.
M-Commerce
In April 2002, we introduced Moneta, a wireless credit and
payment system, which allows subscribers to make credit card
payments using their cellular phones. The Moneta service is
activated by installing an integrated circuit chip in the
subscriber's cellular phone which transmits transaction
information to the merchant's reader system. As of
December 31, 2005, 4.3 million Moneta-enabled handsets
had been sold in Korea. Moneta users do not need to manually
enter their credit card number when they make payments. The
system is based on an international technological standard
developed by Europay, Mastercard and Visa. We receive a fee from
the card issuer for each card issued and a transaction fee,
based on the transaction value, for each transaction effected
using the Moneta payment system. In May 2002, we entered into a
technological cooperation agreement with Visa pursuant to which
Visa has agreed to adopt our wireless credit and payment system
as the international standard for Visa's worldwide
operations. In addition, we have established payment systems
with major department stores and discount stores (such as Family
Mart) and affiliated merchant stores (such as Starbucks and
TGI). We are also developing other uses for mobile payment
technology to provide other services, such as payment for
transportation services and to serve as a means of
identification.
In October 2002, we acquired Paxnet, an on-line financial portal
offering services related to securities trading. We expect to
expand our services provided through Paxnet to include an array
of financial services relating to insurance, real estate,
personal asset management and investment trust funds.
In August and November 2003, we launched Mobile Trading System
and Stock Investment Information Service, respectively. Unlike
other trading services where customers have to use stock trading
programs and terminals designated by securities firms, the
Mobile Trading System service provides a program that permits
customers to carry out a variety of stock trading, including
futures, options and ECN trading transactions.
As of December 31, 2005, we provided chip-based mobile
banking services, under the brand name
"M-Bank",
in
conjunction with 17 commercial banks in Korea. M-Bank offers a
range of mobile banking services, allowing subscribers to
conduct a variety of banking transactions, including money
transfers and
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account inquiries, through their mobile phones. As of
December 31, 2005, M-Bank had approximately 760,000
subscribers.
Under our "NATE.com" brand name, we offer a portal
service at our website, www.NATE.com. NATE.com includes
information and content formerly offered under our Netsgo brand
as well as the content and services formerly available on Lycos
Korea, which our subsidiary, SK Communications Co., Ltd.,
acquired in 2002. NATE.com offers a wide variety of content and
services, including an Internet search engine as well as access
to free
e-mail
accounts. During the month of May 2006, approximately
25.7 million unique users visited this website.
We offer an instant messaging service to our Nate.com and NATE
users. This service, which we call "NATE-ON", allows
users to chat on-line through a variety of devices, including
personal computers, wireless handsets and personal digital
assistants. As of December 31, 2005, the number of NATE-ON
subscribers reached approximately 10.3 million, surpassing
that of MSN Messenger of Microsoft Corporation in Korea, making
us the market leader in terms of number of subscribers in Korea
in the instant messaging service market according to a survey
conducted by an independent consulting firm. We continue to seek
to introduce new wireless data services and innovations with a
view to increasing revenue from these businesses.
Under our "NATE Auction" brand name, launched in June
2006, we offer our wireless subscribers access to a real-time
auction platform, where subscribers can sell or bid on items
using their cellular phones. Subscribers can also upload images
of the items for sale. During the bidding process, each bidder
is notified through text message alerts on real-time basis
whenever higher competitive bids are made. We charge successful
bidders a commission of 2% of the sale price.
Digital Convergence and New Businesses
Digital convergence is the new paradigm in telecommunications.
While we acknowledge the increasing equivocation of conventional
industry boundaries as a potential threat, given the entrance of
non-traditional players into the mobile communications space, we
also view convergence as significant growth opportunity. We
believe that incumbent telecommunications service providers,
like us, with existing advanced infrastructure, technical
know-how and a large subscriber base, are especially well
positioned to pioneer new "convergent" businesses. In
recent years, we have focused on developing cross-over services
that provide synergies with our existing business.
Satellite DMB
In September 2003, we invested in a satellite-based DMB
business. DMB technology allows broadcasting of multimedia
content through transmission by satellite to various mobile
devices. For example, DMB technology allows users to view
satellite television broadcasts on portable handsets or
vehicle-mounted televisions enabled to receive DMB transmission.
We launched a DMB satellite in March 2004. In October 2004, we
granted the right to use our satellite, satellite orbit and
frequency to TU Media, an affiliate in which we held a 29.6%
equity stake as of December 31, 2005. TU Media received a
license from the MIC as a satellite DMB provider on
December 30, 2004. In May 2005, TU Media began to provide
commercial satellite DMB service, offering 7 video and 20
audio channels. Currently, TU Media offers a range of broadcast
content including education, games, drama, music, news and
culture over more than 37 channels, 11 video and 26 audio. As of
April 30, 2006, TU Media had over 500,000 subscribers. We
believe that this business will enable us to improve the breadth
of services that we already offer and remain competitive in the
face of increasing convergence in the telecommunications and
broadcasting industries.
Telematics Service
In February 2002, we introduced a Telematics service called NATE
Drive. NATE Drive is an interactive navigation service that
provides driving directions, real-time traffic updates and
emergency rescue assistance through voice and graphic messaging.
It combines the global positioning system, or GPS, with our
cellular phone wireless network. In December 2004, we also added
new services to NATE Drive, including a tourist guide and
cultural information. As of December 31, 2005, we had
approximately 285,000 NATE Drive subscribers.
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In April 2002, we also entered into an agreement with Renault
Samsung Motors and Samsung Electronics to jointly develop a
Telematics business. Pursuant to the agreement, we provide the
cellular phone network and NATE Drive service, Samsung
Electronics provides Telematics-enabled terminals for vehicles
and Renault Samsung Motors installs the Telematics-enabled
terminals in certain vehicles it sells. In February 2005, we
entered into a memorandum of understanding with Renault Samsung
Motors, under which we and Renault Samsung agreed to focus on
improving the Telematics service platform and infrastructure.
In December 2004, we launched Telematics service on Jeju Island
and, in August 2005, were selected as the pilot Telematics
service provider for Jeju Island as part of the MIC and Jeju
Island's joint effort to showcase the island as a model for
Telematics service. In connection with this program, more than
80,000 tourists have used Nate Drive.
Digital Home
In April 2004, we, along with 40 other companies, formed the SKT
Digital Home Consortium, sponsored by the MIC to offer pilot
service in certain metropolitan areas within Seoul and Busan by
December of 2007. The consortium plans to initially offer
digital home services, which allow homeowners to access, monitor
and control certain electronic-based home appliances and other
functions remotely through their mobile phones, to a limited
test pool of households in those areas.
Global Business
Provision of Wireless Internet Platforms and Cellular
    Network Solutions to Foreign CDMA Network Operators
We are seeking to expand our global business through sales of
our wireless Internet platforms and cellular network solutions,
as well as sales of consulting services in the field of mobile
communications. In April 2002, we entered into an agreement with
Pelephone Communications Ltd., an Israeli CDMA operator, to
supply our NATE wireless Internet platform to Pelephone on a
turnkey basis. In May 2002, we entered into a memorandum of
understanding with Openwave of the United States, a wireless
Internet-based communication software and application provider,
to form a strategic alliance in order to carry out co-marketing
of our NATE wireless Internet platform solutions in overseas
markets. In December 2002, we entered into an agreement with
Asia Pacific Broadband Wireless Communications
("APBW"), one of five companies licensed to offer 3G
mobile services in Taiwan, to provide a wireless Internet
solution on a turn-key basis. Under the agreement, APBW was
granted a license to use certain of our software and wireless
Internet solutions for mobile Internet access and multimedia
services. We also signed a contract with TA Orange, a GSM-based
mobile communications operator in Thailand, in July 2004 to
provide wireless Internet platforms, including the NATE portal
platform and NATE service solutions and contents. We completed
the build-out of this network in June 2005. In addition, we have
also been successful in sales of our other cellular network
solutions, such as our color mail solution, which is a messaging
service that allows subscribers to send messages containing
various multimedia files such as background music, phone camera
photos and videos to other handsets.
Overseas Operations
We have been expanding our business operations in overseas
markets, including the United States, China, Vietnam and
Mongolia.
United States.
On March 24, 2005, we and EarthLink
completed the formation of SK-EarthLink to market wireless voice
and data services in the United States. In October 2005, SK
EarthLink changed its name to HELIO. We have committed to invest
$220 million over the next three years, of which
$161.5 million has been invested as of March 31, 2006,
and EarthLink has committed to invest $220 million over the
next three years, of which $161.5 million has been invested
as of the same date. HELIO is a non-facilities-based nationwide
mobile virtual network operator ("MVNO") offering
cellular voice and data services to wireless consumers located
in the United States and commercially launched its MVNO services
in May 2006. HELIO taps into the previously under-served but
rapidly growing wireless data, entertainment, and voice market
in the United States, also leverages our expertise in developing
and implementing 3G technology and other cutting-edge
applications and
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EarthLink's established sales channels, Wi-Fi experience,
network data centers and billing capabilities. We and EarthLink
each have a 50 percent voting and economic ownership
interest in HELIO.
Since December 2004, we have been offering our COLORing solution
to Verizon Wireless, a major mobile phone service provider in
the United States. As an application service provider, we
receive an agreed percentage of Verizon's COLORing service
related revenues.
China.
In February 2004, we and China Unicom, the second
largest telecom operator and the only CDMA service provider in
China, established a joint venture company called "UNISK
Information Technology Co., Ltd." ("UNISK"), with
an aggregate initial investment of approximately
$6 million. We own a 49% stake of UNISK and China Unicom
holds a 51% stake. UNISK offers wireless Internet service in
China under a brand name that means "community of young
elites" in Chinese. In June 2006, our board of directors
approved plans to subscribe for up to US$1 billion of
convertible bonds issued by China Unicom convertible into
899,745,075 common shares of China Unicom. We expect the
subscription to be consummated in July 2006. The convertible
bonds have a three-year maturity and our conversion rights with
respect to such securities are exercisable commencing on the
first anniversary of the issue date until seven days prior to
the maturity date. In the event all of such convertible bonds
are converted into common shares, our equity interest in China
Unicom would be 6.67%.
In July 2004, we acquired ViaTech, an Internet portal service
and mobile contents provider in China, to enhance our wireless
Internet contents and expand our service area. Through ViaTech,
we offer a Chinese-language version of Cyworld to subscribers in
China. ViaTech had approximately 1.3 million Cyworld
subscribers as of January 31, 2006. ViaTech generated
US$4.5 million in revenues in 2005.
Vietnam.
In October 2000, with an aim toward
commercializing CDMA cellular service in Vietnam, we, LG
Electronics and Dongah Elecomm established a joint venture
company SLD Telecom PTE. In July 2003, SLD Telecom entered
into a business cooperation contract with Saigon Postal
Telecommunication Services Corporation to establish a joint
venture company, S-Telecom, to provide cellular mobile
communications services and commercial CDMA cellular service,
the first of its kind in Vietnam under the brand name
"S-Fone". The
"S-Fone"
service is now being offered in 39 major provinces in Vietnam,
including HoChiMin and Hanoi, and has been increasing its
subscriber base through clear call quality, customized tariff
plans and value-added services. The number of S-Fone subscribers
had surpassed 370,000 as of December 2005. In November 2005, our
board of directors approved an additional $280 million
investment in SLD Telecom to fund expansion of our network
coverage to all of Vietnam in order to meet the needs of a
growing subscriber base. As of January 31, 2006, we had
invested $100 million in this expansion project. As only
approximately 11.8% of Vietnam's population of
approximately 83.2 million had subscribed to cellular
service as of December 31, 2005, we believe that the
Vietnamese mobile communication market offers significant
opportunity for future growth.
Mongolia.
In July 1999, we acquired a 27.8% equity
interest in Skytel, Mongolia's second-largest cellular
service provider, by providing approximately Won
1.5 billion worth of analog infrastructure. As of
May 31, 2006, Skytel had approximately 100,000 subscribers.
We, together with Skytel, have been providing cellular service
in Mongolia since July 1999, and CDMA service since February
2001. In April 2001, we completed installation of the equipment
necessary to provide WAP service. In December 2002, we increased
our equity interest in Skytel to 28.6% through the subscription
of newly issued common shares in return for an additional
investment of approximately $500,000. As of December 31,
2005, our equity interest in Skytel was 28.6%.
As we have in the past, we expect to continue to seek
opportunities to create value utilizing our core competencies
abroad. We are currently studying various opportunities
overseas, particularly in Asia.
Other Products and Services
Handset Manufacturing
Until our sale of a controlling interest in the company in July
2005, we designed, marketed and sold digital handsets through
our former consolidated subsidiary, SK Teletech, under the brand
name "SKY". The handsets were principally manufactured
by third parties under contracts with SK Teletech. We
established SK Teletech together with Kyocera Corporation of
Japan, which held a significant minority interest in SK Teletech
before
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selling all of its interest in SK Teletech to us in March 2004.
We increased our stake in SK Teletech to 89.1% in March 2004. On
May 3, 2005, our board of directors approved the sale of
60% of the total issued and outstanding shares common stock of
SK Teletech to Pantech & Curitel, a handset maker in
Korea. The sale was consummated in July 2005, reducing our
ownership in SK Teletech from 89.1% to 29.1%, which subsequently
became a 22.7% equity interest in Pantech following the merger
of SK Teletech (later renamed SKY Teletech) into Pantech in
December 2005. Until such sale, all of SK Teletech's
domestic sales of digital handsets were to our affiliate,
SK Networks, which distributed them principally to our
network of dealers for sale to our subscribers and other
consumers. Due to an FTC-imposed condition to our acquisition of
Shinsegi, which remained in effect through the end of 2005, SK
Teletech was unable to sell more than 1,200,000 handsets
(excluding WCDMA handsets) per year to SK Telecom and its
affiliates.
International Calling Services
Through our 90.8% owned subsidiary, SK Telink Co., Ltd., we
provide international telecommunications services, including
direct-dial as well as pre-and post-paid card calling services,
bundled services for corporate customers, voice services using
Internet protocol,
Web-to
-phone services,
and data services. SK Telink handled approximately
960 million total call minutes in 2005, which generated Won
138.7 billion in revenues. SK Telink obtained a domestic
long distance telephone service business license in July 2004
and began commercial service of providing domestic long distance
service in Korea in February 2005. SK Telink provides affordable
international call services under the brand name
"00700" and has been offering commercial long-distance
telephony service since February 2005. SK Telink's efforts
are directed at continuing to reinforce its existing core
businesses such as international and domestic long distance
telephone service and seeking to create new sources of revenue.
For example, SK Telink offers Voice over Internet Protocol, or
VoIP, service through the Internet. VoIP is an advanced
technology that transmits voice data through an Internet
Protocol network. SK Telink also acquired licenses to operate
value-added domestic telephone service and Internet telephone
service in July 2005.
In 2000, we established SK Telink America, Inc., to extend our
international telecommunications service to the United States.
We closed down business operations at SK Telink America, Inc. in
June 2003 because the business proved to be unprofitable. We
recorded US$1.2 million in losses relating to impairment of
our investment in common stock of SK Telink America, Inc. in our
consolidated financial statements for 2003. We dissolved the
company as of May 28, 2004.
Revenues, Rates and Facility Deposits
Our wireless revenues are generated principally from initial
connection fees, monthly access fees, usage charges for outgoing
calls and wireless data, interconnection fees and access fees
for value-added services. The
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following table sets forth information regarding our cellular
revenues (net of taxes) and facility deposits for the periods
indicated:
As of and for the Year Ended December 31,
2003
2004
2005
(In billions of won)
Initial Connection Fees
W
176.6
W
198.4
W
232.3
Monthly Access Fees
3,132.2
3,266.1
3,365.1
Usage Charges
3,615.1
5,300.7
5,538.8
Interconnection Revenue
1,017.1
849.4
898.6
Revenue from Sales of Digital Handsets(1)
612.0
649.8
294.6
Other Revenue(2)
1,538.8
33.2
32.5
Total
W
10,091.8
W
10,297.6
W
10,361.9
Additional Facility Deposits
W
5.0
W
31.8
W
3.4
Refunded Facility Deposits
7.7
44.6
11.0
Facility Deposits at Period End
44.2
31.4
23.8
(1)
Until its sale to Pantech & Curitel in July 2005, our
    revenue from handset sales consisted of sales by our former
    subsidiary, SK Teletech.
(2)
Other revenue includes revenue from value-added services,
    including voice-activated dialing, caller ID, call forwarding,
    call waiting and three-way calling.
On their initial subscription, we charge our new customers an
initial connection fee for service activation. After their
initial connection, we require our customers to pay a monthly
access fee and usage, or airtime, charges for outgoing calls and
access to wireless data services. Prior to April 1, 1999,
all network service providers had mandatory subscription
periods. However, since April 1, 1999, in accordance with
MIC guidelines, new wireless service subscribers cannot be
subjected to any mandatory subscription periods. We do not
charge our customers for incoming calls, although we do receive
interconnection charges from KT Corporation and other companies
for calls from the fixed-line network terminating on our
networks and, since 2000, interconnection revenues from other
wireless network operators. See
"— Interconnection". Monthly access fees for
some plans include free airtime and/or discounts for designated
calling numbers.
SK Telecom currently offers four basic types of service plans:
the Standard rate plans, the TTL plans, the Ting plans and the
long-term contract discount plans. We also offer Date Free
plans, designed for multimedia wireless data service using CDMA
1xEV/ DO technology.
Higher rate plans generally include a fixed monthly amount of
usage time while the lower rate plans are generally usage-based.
The monthly access fees for the Standard plans range from Won
11,000 to Won 22,000, and generally target the adult market
segment. The monthly access fees for the TTL plans range from
Won 15,000 to Won 25,000 and target young adults between
the ages of 19 and 24. The monthly access fees for the Ting
plans range from Won 13,500 to Won 26,000 and generally target
youths between the ages of 13 and 18. We also offer five
long-term discount plans, ranging from a monthly rate of Won
15,000 to Won 90,000.
In February 2005, we simplified our 26 different types of Data
Free plans into four types of flat fee based plans. The monthly
access fees range from Won 3,500 to Won 26,000.
In January 2004, we introduced discount plans for subscribers
committing to long-term contracts with a duration of
18 months or 24 months based on usage levels.
Subscribers with the highest usage per month (whose monthly
charges are above Won 70,000) and on a two-year contract benefit
from the highest level of discount.
With the approval of the MIC, effective from January 1,
2003, we reduced our Speed011 Standard rate plan's monthly
access fee by Won 1,000, included 10 minutes of free air time
per month and reduced our peak usage charges from Won 21 to Won
20 per minute. Subsequently, in October 2003, we reduced
our monthly charges for caller ID service from Won 2,000 to Won
1,000. We began to provide the caller ID service to
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customers free of charge starting January 1, 2006. Also,
effective September 1, 2004, we reduced our tariffs by 3.7%
and reduced our monthly basic charges from Won 14,000 to Won
13,000. See "Item 5A. Operating Results —
Overview".
For all calls made from our subscribers' handsets in Korea
to any destination in Korea, we charge usage fees based on the
subscriber's cellular rate plan (as described in the table
below). The fees are the same whether the call is local or long
distance. With respect to international calls placed by a
subscriber, we bill the subscriber the international rate
charged by the Korean international telephone service provider
through which the call is routed. We remit to that provider the
international charge less our usage charges. See
"— Interconnection".
The following table summarizes some of SK Telecom's
cellular rate plans as of April 30, 2006:
Peak Usage
Off-Peak Usage
Night-Time Usage
Included Airtime/
Charges
Charges
Charges
Monthly Access Fee
Discount
(Per 10 Seconds)
(Per 10 Seconds)(2)
(Per 10 Seconds)
Standard
Regular
W
13,000
10 minutes
W
20
W
13
W
10
Slim
12,500
19
19
19
Family
13,000
5 minutes
18
12
9
Designated Number Discount
16,000
20
20
20
Three-Three(3)
14,500
—
—
—
Time
16,000
7 minutes
21
17
12
Pink Couple
22,000
500 minutes
20
20
20
Silver(4)
11,000
30 minutes
38
38
38
i-Kids(5)
11,000
70 minutes
20
20
20
Welfare 160/220(6)
16,000
Won 10,000
30
30
30
22,000
Won 22,000
30
30
30
TTL Plans
Standard
15,000
20
20
20
SMS
25,000
19
19
19
Regional
15,500
7 minutes
21
16
9
Designated Number
16,000
20
20
20
Pink Couple
22,000
20
20
20
Couple
16,500
150 minutes
20
20
9
Ting Plans
Text Premium
26,000
30
30
30
Buddy
15,000
70 minutes
Ting 500
15,000
60 minutes
12
12
12
Ting 100 (Normal Rate)
13,500
60 minutes
35
18
9
Ting 100 (Vacation Rate)
13,500
60 minutes
24
24
9
Ting Start
18,000
30
30
30
Data Free Plan
(7)
26,000
—
—
—
"Free Plans"
Free Holiday(8)
—
—
—
—
Free Everyday(9)
—
—
—
—
Free Plan for Calls Over 3 Minutes(10)
—
—
—
—
(1)
Discounts may include free text messages, ring tone downloads,
    coloring and NATE minutes.
(2)
Excludes a 5% discount on domestic calls for customers who have
    subscribed to our cellular services for over 1 year; a 10%
    discount for customers who have subscribed to our cellular
    services over 2 years; a 15%
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discount for customers who have subscribed to our cellular
    services over 3 years and a 20% discount for customers who
    have subscribed to our cellular services over 5 years.
(3)
Under this plan, for the first three minutes of airtime we
    charge Won 20 per 10 seconds; we offer the fourth to sixth
    minutes free of charge; and charge Won 15 per 10 seconds
    for airtime thereafter.
(4)
Subscribers must be 65 years old or older and each
    subscriber is limited to enrolling in one Silver Plan.
(5)
Subscribers must be 12 years old or younger and each
    subscriber is limited to enrolling one i-Kid Plan.
(6)
This plan is limited to mentally or physically challenged
    subscribers.
(7)
Includes unlimited use of data service. This plan is offered
    from September 30, 2005 through September 30, 2006.
(8)
11 hours of airtime on Sundays and public holidays, for an
    additional Won 10,000 per month.
(9)
11 hours of airtime in excess of the average number of
    minutes used during the previous two months, for an additional
    Won 15,000 per month.
(10)
11 hours of domestic airtime for any airtime exceeding the
    first three minutes, for an additional Won 15,000 per month.
We offer a variety of value-added services including
voice-activated calling, voice mail, short text messaging,
caller ID and call waiting. Depending on the rate plan selected
by the subscriber, the monthly fee may or may not include these
value-added services, except caller ID and call waiting
services, which are offered free of charge to all beginning
subscribers.
We offer wireless data services to our subscribers through NATE.
Subscribers using SK Telecom's CDMA network may elect to
pay a monthly fee, which includes a fixed amount of airtime or
data packets, or may elect to pay on a per-use basis. Standard
rates for NATE range from Won 7 to Won 15 for ten seconds of
airtime. Since April 23, 2001, subscribers using our CDMA
1xRTT and CDMA 1xEV/ DO networks are charged based on the amount
of data that is transmitted to the subscriber's handset.
Subscribers using our WCDMA network are also charged based on
the amount of data transmitted. The data transmitted is measured
in packets of 512 bytes. We charge Won 6.5 per text packet
and Won 1.3 per multimedia packet. Prior to April 23,
2001, our CDMA 1xRTT subscribers were charged time-based fees.
We offer wireless multimedia data services through June. In
February 2005, we simplified our 26 different types of Data Free
plans into four types of flat fee based plans. The monthly
access fees range from Won 3,500 to Won 26,000. Also, through
September 30, 2006, we are offering a temporary promotional
WCDMA Data Free plan, which allows up to a 50% discount on all
services used by subscribers.
We generally require new subscribers (other than some corporate
and government subscribers) to pay a non-interest bearing
facility deposit of Won 200,000, which we may utilize to offset
a defaulting subscriber's outstanding account balance. In
lieu of paying the facility deposit, subscribers who meet the
credit qualifications required by the Seoul Guarantee Insurance
Company may elect to be covered under insurance provided by the
Seoul Guarantee Insurance Company. We pay a Won 10,000 premium
to the Seoul Guarantee Insurance Company on behalf of such
subscribers. Seoul Guarantee Insurance Company reimburses us up
to Won 350,000 for each insured subscriber that defaults on any
payment obligations. We refund the facility deposit to any
existing subscriber who had initially made a facility deposit
and later elects the facility insurance option. We bill
subscribers on a monthly basis and subscribers may make payment
at a bank, post office, any of our regional headquarters or
sales offices, or at any of our authorized dealers. As a result
of the facility insurance program, we have refunded a
substantial amount of facility deposits, and facility deposits
decreased from Won 61.8 billion as of December 31,
2000 to Won 23.8 billion as of December 31, 2005. We
do not expect to have to refund a significant amount of facility
deposits in the future, because we believe that most of our
subscribers who wish to be covered by the Seoul Guarantee
Insurance Company have already elected to so.
Because we have been designated by the MIC as a "market
dominant service provider", our establishment or amendment
of fees, charges, and terms and conditions of service, including
promotional rates and facility deposits, requires prior approval
by the MIC.
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In December 2000, with effect from September 1, 2001, the
National Assembly abolished the 10.0% telephone tax previously
charged to our customers as part of their monthly service
charges. Since September 1, 2001, we have instead charged
our customers a 10.0% value-added tax. We can offset the
value-added tax we collect from our customers against
value-added tax refundable to us by the Korean tax authorities.
We remit taxes we collect from our customers to the Korean tax
authorities. We record revenues in our financial statements net
of such taxes.
Subscribers
We had 19.8 million subscribers as of April 30, 2006,
representing a market share of 50.7%, the largest market share
among Korean wireless service providers. We believe that,
historically, our subscriber growth has been due to many
factors, including:
•
our expansion and technical enhancement of our digital network,
    including with high-speed data capabilities;
•
increasing consumer awareness of the benefits of wireless
    telecommunications;
•
an effective marketing strategy;
•
our focus on customer service;
•
the introduction of new, value-added services, such as voicemail
    services, call-forwarding, caller ID, three-way calling and
    Wireless Internet services provided by NATE; and
•
our acquisition of Shinsegi.
The following table sets forth selected historical information
about our subscriber base for the periods indicated:
As of or for the Year Ended December 31,
2003
2004
2005
Subscribers
18,313,153
18,783,338
19,530,117
Subscribers Growth Rate
6.4
%
2.6
%
4.0
%
Activations
3,688,312
4,407,087
5,057,176
Deactivations
2,594,721
3,936,884
4,310,397
Average Monthly Churn Rate(1)
1.2
%
1.7
%
1.8
%
(1)
Average monthly churn rate for a period is the number calculated
    by dividing the sum of deactivations during the period by the
    simple average of the number of subscribers at the beginning and
    end of the period and dividing the quotient by the number of
    months in the period. Churn includes subscribers who upgrade to
    CDMA 1xRTT or CDMA lxEV/ DO-capable handsets by terminating
    their service and opening a new subscriber account.
We had 19,530,117 subscribers as of December 31, 2005. For
the year ended December 31, 2005, we had 5,057,176
activations and 4,310,397 deactivations, representing an average
monthly churn rate of 1.8% during the same period. Our
subscribers include those subscribers who are temporarily
deactivated, including (1) subscribers who voluntarily
deactivate temporarily for a period of up to three months no
more than twice a year and (2) subscribers with delinquent
accounts who may be involuntarily deactivated up to two months
before permanent deactivation, which we determine based on
various factors, including prior payment history.
Our subscriber growth rate was adversely affected by actions we
took to comply with certain requirements of the FTC regarding
our acquisition of Shinsegi. The FTC approved our acquisition of
Shinsegi on the condition that SK Telecom's and
Shinsegi's combined market share of the wireless
telecommunications market, based on numbers of subscribers, be
less than 50.0% as of June 30, 2001. In order to satisfy
this condition, we reduced the level of our subscriber
activations and adopted more stringent involuntary subscriber
deactivation policies beginning in 2000 and ceased accepting new
subscribers from April 1, 2001 through June 30, 2001.
We complied
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with this requirement by reducing our market share to
approximately 49.7% as of June 30, 2001. We are not
currently subject to any market share limitations; however, on
May 25, 2004, we voluntarily undertook to limit our market
share through the end of 2005 to 52.3% of the wireless
telecommunications market, which was the combined market share
held by SK Telecom and Shinsegi at the time of the approval of
SK Telecom's merger with Shinsegi in January 2002. On
July 6, 2005, we voluntarily extended such market share
limitation through the end of 2007. We can give no assurances
that the Government will not impose restrictions on our market
share in the future. If we are subject to market share
limitations in the future, our ability to compete effectively
will be impeded, and our subscriber growth rate may decline.
Prior to January 2003, Korea's wireless telecommunications
system was based on a network-specific prefix system, in which a
unique prefix was assigned to all the phone numbers of a
specific network operator. We were assigned the "011"
prefix, and all of our subscriber's mobile phone numbers
began with "011" (former Shinsegi subscribers use the
"017" prefix) and our subscribers could not change
their wireless phone service to another wireless operator and
keep their existing numbers. In January 2003, the MIC announced
its plan to implement number portability with respect to
wireless telecommunications services in Korea, which allows
wireless subscribers to switch wireless service operators while
retaining the same mobile phone number. However, subscribers who
switch operators must purchase a new handset, as we use
different frequencies than KTF and LGT. Subscribers who switch
between KTF and LGT need not purchase a new handset, as KTF and
LGT use the same frequencies. In accordance with the plan
published by the MIC, the number portability system was adopted
by SK Telecom starting from January 1, 2004. We were
required to adopt the number portability system earlier than our
competitors, allowing our customers to transfer their numbers to
our competitors but not allowing our competitors' customers
to transfer their number to our service. KTF and LGT introduced
number portability beginning July 1, 2004 and
January 1, 2005, respectively. Subscribers who choose to
transfer to a different wireless operator have the right to
return to their original service provider without paying any
penalties within 14 days of their initial transfer.
The following table sets forth the number of subscribers of the
three wireless mobile telecommunications operators who
transferred from one operator to another during each month
following the implementation of the number portability system:
Period
SKT→KTF
SKT→LGT
KTF→SKT
KTF→LGT
LGT→SKT
LGT→KTF
Total
2004
First Quarter
417,212
286,163
—
—
—
—
703,375
Second Quarter
444,225
287,660
—
—
—
—
731,885
Third Quarter
173,384
133,315
351,238
109,223
—
—
767,160
Fourth Quarter
236,251
149,939
216,175
133,276
—
—
735,641
2005
First Quarter
391,386
148,486
354,672
156,394
213,179
220,322
1,484,439
Second Quarter
355,300
178,550
372,621
170,378
159,662
131,246
1,367,757
Third Quarter
395,070
170,604
392,104
154,723
161,308
128,472
1,402,281
Fourth Quarter
344,941
178,560
367,998
164,114
149,887
112,711
1,318,211
2006
January
155,588
60,465
154,166
60,741
63,112
58,552
552,624
February
164,413
62,672
166,271
67,880
60,338
61,534
583,108
March
172,963
59,056
165,979
62,168
60,016
65,694
585,876
April
81,071
37,869
91,112
35,164
41,186
34,884
321,286
Total
3,331,804
1,753,339
2,632,336
1,114,061
908,688
813,415
10,553,643
In addition, in order to manage the availability of phone
numbers efficiently and to secure phone number resources for the
services, the MIC has begun to integrate mobile telephone
identification numbers into a common prefix identification
number "010" and to gradually retract the current
mobile service identification numbers which had been unique to
each wireless telecommunications service provider, including
"011" for our cellular services, starting from 2004.
All new subscribers were given the "010" prefix
starting January 2004.
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The following table sets forth, based on data from the MIC, new
subscribers for each major wireless cellular provider following
the adoption of the "010" prefix in January 2004:
New Wireless Subscribers
SK Telecom
KTF
LGT
Number of
Percentage
Number of
Percentage
Number of
Percentage
Period
Subscribers
of Total
Subscribers
of Total
Subscribers
of Total
2004
First Quarter
1,210,435
41.5
%
1,060,250
36.4
%
644,709
22.1
%
Second Quarter
1,276,659
44.3
%
989,318
34.4
%
613,341
21.3
%
Third Quarter
547,146
39.4
%
501,154
36.1
%
341,810
24.6
%
Fourth Quarter
795,359
45.9
%
552,618
31.9
%
384,825
22.2
%
2005
First Quarter
739,056
42.3
%
670,187
38.3
%
338,911
19.4
%
Second Quarter
713,151
46.2
%
516,628
33.4
%
314,811
20.4
%
Third Quarter
707,228
43.1
%
607,024
37.0
%
328,133
20.0
%
Fourth Quarter
662,731
42.1
%
528,244
33.6
%
381,800
24.3
%
2006
January
245,324
43.9
%
186,804
33.5
%
126,092
22.6
%
February
262,623
45.4
%
191,535
33.1
%
124,525
21.5
%
March
250,407
46.0
%
171,461
31.5
%
122,587
22.5
%
April
164,076
44.5
%
118,983
32.2
%
85,964
23.3
%
May
196,569
43.4
%
140,814
31.1
%
115,273
25.5
%
Marketing and Service Distribution
We market our services and provide after-sales service support
to customers through 29 sales centers, 45 branch offices
and a network of 1,378 authorized exclusive dealers located
throughout Korea. Our dealers are connected via computer to our
database and are capable of assisting customers with account
information. In addition, approximately 200,000 independent
retailers (principally handset dealers) assist new subscribers
to complete activation formalities, including processing
subscription applications and accepting facility deposits or
arranging for insurance with Seoul Guarantee Insurance Company.
Currently, authorized dealers are entitled to an initial
commission for each new subscriber registered by the dealer as
well as an average ongoing commission calculated as a percentage
of that subscriber's monthly access and usage charges from
domestic calls for the first four years. In order to strengthen
our relationships with our exclusive dealers, we offer a dealer
financing plan, pursuant to which we provide to each authorized
dealer an interest-free or low-interest loan of up to Won
1.5 billion with a repayment period of up to three years.
We operate a customer information system designed to provide us
with an extensive customer database. Our customer information
system includes a billing system which provides us with
comprehensive account information for internal purposes and
enables us to efficiently respond to customer requests. In May
2000, we launched
011e-station.co.kr,
a
website through which SK Telecom customers can change their
service plans, verify the charges accrued on their accounts,
receive their bills on-line and send text messages to our other
subscribers.
When we were the only cellular service provider in Korea, we
were able to maintain a low level of marketing and advertising
expenses. Over the last several years, competition in the
wireless telecommunications business has caused us to increase
significantly our marketing and advertising expenses and, with
continuing competition, we expect that such expenses will remain
high. We have implemented a range of marketing measures,
including more extensive promotions to attract new customers as
well as to encourage loyalty of our existing subscribers and
discourage migration to other service providers. In 2001,
advertising expenditures as a percentage of revenues amounted to
4.1%, principally for promotion of our voice and wireless data
services. Our
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marketing expenses were lowered during the first half of 2001
due to the elimination of handset subsidies and our efforts to
satisfy the FTC-imposed condition that SK Telecom's and
Shinsegi's combined market share of the wireless
telecommunications market, based on numbers of subscribers, be
less than 50.0% as of June 30, 2001. We complied with this
requirement by reducing our market share to approximately 49.7%
as of June 30, 2001, and this market share limitation no
longer applies, although we voluntarily limited our market share
through the end of 2005 to 52.3% of the wireless
telecommunications market. On July 6, 2005, we voluntarily
extended such market share limitation through the end of 2007.
In 2003, 2004 and 2005, advertising expenditures amounted to
3.7%, 3.3% and 2.6% of our revenues, respectively.
In March 2004, we entered into a Won 120 billion agreement
with IBM Business Consulting Services for a term of two years in
connection with our efforts to improve our marketing system. IBM
has been implementing a new process and application
infrastructure consisting of a new customer relationship
management system, as well as billing, partner relationship
management and content management systems. In May 2005, we and
IBM agreed to terminate the March 2004 agreement for a total
aggregate payment to IBM of Won 79.7 billion for services
provided through the termination date, with an understanding
that another system integration company is better suited for our
needs in light of the enhanced features of the new systems to
cover data for our customers of newly launched services. On
June 1, 2005, we entered into an agreement with SK C&C
to develop our "Next Generation Marketing" project,
under which SK C&C has agreed to develop and deliver
infrastructure necessary to implement our Next Generation
Marketing strategies, for Won 53.5 billion. The agreement
will terminate on July 1, 2006.
Interconnection
Our networks interconnect with the public switched telephone
networks operated by KT Corporation, Hanaro Telecom, DACOM and
Onse, as well as the networks of the other wireless
telecommunications service providers in Korea. These connections
enable our subscribers to make and receive calls from telephones
outside our networks. Under Korean law, service providers are
required to permit other service providers to interconnect to
their networks. If a new service provider desires
interconnection with the networks of an existing service
provider but the parties are unable to reach an agreement within
90 days, the new service provider can appeal to the Korea
Communications Commission, a government agency under the MIC. We
estimate that approximately 37.9% in 2003, approximately 34.0%
in 2004 and approximately 34.6% in 2005 of our incoming and
outgoing calls originated from or were routed to the networks of
KT Corporation and Hanaro Telecom or the international gateways
of KT Corporation, DACOM and Onse.
With respect to the interconnection arrangement for calls from
fixed-line networks to wireless networks, for the years 2000
through 2001, fixed-line operators' payments to wireless
network service providers were calculated based on the actual
imputed costs in 1998 of the leading wireless network service
provider, which was us. For 2002, these payments were calculated
based on each wireless operator's actual imputed costs in
2001. This change reduced the interconnection revenue we
received from each call made from a fixed-line network
terminating on our network, adversely affecting our
interconnection revenue compared to previous years. For 2003,
pursuant to a new MIC policy, an operator's interconnection
fees were derived from that operator's actual
interconnection fees for 2001 and actual imputed costs for 2001.
Interconnection charges for calls between wireless service
providers, first implemented by the MIC beginning in January
2000, were also reduced beginning in January 2002 and in January
2003, affecting both our revenue and our expenses. On
July 9, 2004, the MIC introduced a new method of
calculating interconnection payments, based on the
terminator's long-run incremental cost in 2004 and the
competitive market situation in the telecommunication service
industry of Korea. The long-run incremental cost method has been
adopted by other countries such as the United States, the United
Kingdom and Japan. The new interconnection rates paid to each
wireless network service provider are as follows:
Year
SK Telecom
KTF
LGT
(Won/Minute)
2003
41.02
47.99
52.89
2004
31.81
47.66
58.55
2005
31.19
46.70
54.98
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The new rates had a negative impact on our operations in 2005 in
the amount of approximately Won 124.9 billion,
resulting in an estimated Won 49.2 billion reduction in
revenue and Won 75.7 billion increase in interconnection
expenses. The Won 75.7 billion increase in interconnection
expenses include the increase in the
land-to
-mobile
interconnection expenses that were paid to fixed-line service
providers. In 2005, we received Won 898.6 billion in
interconnection revenue and incurred Won 989.4 billion in
interconnection expense. See "Item 5A. Operating
Results — Overview — Revenue".
For 2003, our total interconnection revenues were
Won 1,017.1 billion and our total interconnection
expenses were Won 771.5 billion. For 2004, our total
interconnection revenues were Won 849.4 billion and
our total interconnection expenses were
Won 913.7 billion. For 2005, our total interconnection
revenues were Won 898.6 billion and our total
interconnection expenses were Won 989.4 billion.
Domestic Calls
Guidelines issued by the MIC require that all interconnection
charges levied by a regulated carrier take into account
(i) the actual costs to that carrier of carrying a call or
(ii) imputed costs. The interconnecting parties are
required to calculate the relevant imputed costs on an annual
basis. In the event of a dispute regarding the imputed costs,
the Korea Communications Commission is empowered to act as
arbitrator.
Wireless-to
-Fixed-line.
According to our interconnection arrangement with KT
Corporation, for a call from our wireless network to KT
Corporation's fixed-line network, we collect the usage rate
from our wireless subscriber and in turn pay KT Corporation the
interconnection charges based on KT Corporation's imputed
costs.
Fixed
-line-to
-Wireless.
The MIC determines interconnection arrangements for calls from a
fixed-line network to a wireless network. For a call initiated
by a fixed-line user to one of our wireless service subscribers,
the fixed-line network operator collects our usage fee from the
fixed-line user and pay us an interconnection charge.
Interconnection with KT Corporation accounts for substantially
all of our
fixed
-line-to
-wireless
interconnection revenue and expenses.
In April 2002, the MIC announced new interconnection
arrangements effective January 1, 2002 which reduced the
interconnection fees payable among Korean wireless operators by
between 10.2% and 28.1%, depending upon the operators involved.
For 2002, KT Corporation's payments to network service
providers were calculated based on a discount of 28.1% to our
actual imputed costs for 2000. According to this calculation,
KT Corporation was required to pay interconnection charges
of Won 45.7 per minute (exclusive of value-added taxes).
This was reduced to Won 41.0 per minute for 2003. On
July 9, 2004, the MIC introduced a new method of
calculating interconnection payments, based on the terminating
network's long-term incremental cost for 2004 and the
competitive market situation in the telecommunication service
industry of Korea. The new interconnection rates for us under
the new method are Won 31.8 per minute for 2004 and Won
31.2 per minute for 2005. The MIC determines the charges
and notifies the wireless operators.
Wireless-to
-Wireless.
The MIC did not determine interconnection charges for calls
between wireless telephone networks in Korea prior to 2000;
instead, the interconnection charges were negotiated among the
operators. The MIC implemented interconnection charges for such
calls starting in January 2000. Under these arrangements, the
operator originating the call pays an interconnection charge to
the operator terminating the call. For all operators, the amount
of the charge is derived from SK Telecom's imputed cost,
which was Won 45.7 per minute for 2002. This was reduced to
Won 41.0 per minute for 2003 and further reduced to Won
31.8 per minute and Won 31.2 per minute for 2004 and
2005, respectively. Our revenues from the
wireless-to
-wireless
charge Won 435.2 billion (including Won 86.6 billion
for Shinsegi) in 2001, Won 350.9 billion in 2002,
Won 412.2 billion in 2003, Won 426.6 billion in
2004 and Won 502.7 billion in 2005. Our expenses from these
charges were Won 496.0 billion (including Won
105.5 billion for Shinsegi) in 2001, Won 482.7 billion
in 2002, Won 518.2 billion in 2003, Won
644.6 billion in 2004 and Won 748.8 billion in 2005.
The charges above were agreed among the parties involved and
confirmed by the MIC.
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International Calls
With respect to international calls, if a call is initiated by a
wireless subscriber, we bill the wireless subscriber for the
international charges of KT Corporation, DACOM or Onse, and we
receive interconnection charges from such operators. If an
international call is received by our subscriber, KT
Corporation, DACOM or Onse pays interconnection charges to us
based on our imputed costs.
International Roaming Arrangements
To complement the services we provide to our subscribers in
Korea, we have entered into roaming service agreements with
various foreign wireless telecommunications service providers.
We provide global roaming services based on three basic
technologies, in part, depending on which mobile phone standards
are available in a particular region: CDMA, GSM and WCDMA
roaming. As of May 31, 2006, we offered CDMA roaming
services in 18 countries including the U.S., Japan, China,
Thailand, Canada, New Zealand and Australia. Our GSM roaming
services are available in 78 countries, including countries in
Europe and Africa. Our WCDMA voice roaming service is currently
available in Japan, Hong Kong, Singapore, Italy, France and
Germany. The WCDMA voice roaming service area will be expanded
to include the United Kingdom, Spain and the Netherlands in
2006. In addition, our global data roaming service is available
in six countries, including China, Japan and Thailand. We have
approximately 2 million global roaming service users, in
aggregate, as of December 31, 2005.
Digital Cellular Network
We offer wireless voice and data telecommunications services
throughout Korea using digital wireless networks. SK Telecom
operates a CDMA network, which currently reaches approximately
99% of the population, a CDMA 1xRTT and CDMA 1xEV/ DO networks,
which currently reaches approximately 90% of the population, and
WCDMA network. Shinsegi operated a CDMA network prior to its
merger into SK Telecom that we completely decommissioned by July
2002.
CDMA Networks
In January 1996, SK Telecom introduced a digital wireless
network based on CDMA technology. This network has been the core
platform for our wireless telecommunications business. CDMA
technology is a continuous digital transmission technology that
accommodates higher throughput than analog technology by using
various coding sequences to allow concurrent transmission of
voice and data signals for wireless communication. CDMA
technology provides customers with a high degree of call quality
and security.
CDMA technology is currently in commercial operation in several
countries including Korea, Hong Kong and the United States. A
majority of the digital wireless networks currently in use
around the world are based on either the European Global System
for Mobile Communication standard or other time division
multiple access technologies. Unlike the continuous digital
transmission method of CDMA technology, these technologies break
voice signals into sequential pieces of a defined length, place
each piece into an information conduit at specific intervals and
then reconstruct the pieces at the end of the conduit.
CDMA 1xRTT Network
In October 2000, we began offering wireless voice and data
services on our CDMA 1xRTT network. CDMA 1xRTT is an advanced
CDMA-based technology which allows transmission of data at
speeds of up to 144 Kbps (compared to a maximum of
64 Kbps for our CDMA networks) and constitutes what is
sometimes referred to as a 2.5G network. As of December 31,
2005, our CDMA 1xRTT network covered 84 cities in Korea, or
approximately 90% of the population. In areas where the CDMA
1xRTT network is currently unavailable, CDMA 1xRTT-enabled
handsets are capable of accessing the CDMA network.
Unlike our CDMA network, our CDMA 1xRTT network has been
designed to be upgraded in step with advances in wireless
technology. In the first half of 2002, we launched an upgrade of
our CDMA 1xRTT network in 26 cities in Korea to an advanced
technology called CDMA 1xEV/ DO. CDMA 1xEV/ DO is a CDMA-based
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technology, similar to CDMA 1xRTT, which enables data to be
transmitted at speeds of up to 2.4 Mbps. This speed permits
interactive transmission of data required for videophone
services, a high-speed wireless Internet connection, as well as
a multitude of multimedia services. CDMA 1xEV/ DO-capable
handsets became available in Korea in June 2002. We are
expanding our CDMA 1xEV/ DO network and completed the upgrades,
available in 84 cities in Korea, or approximately 90% of
the population, as of the end of 2004. This network permits
3G capabilities. For details of our capital expenditure
plans relating to CDMA 1xRTT and CDMA 1xEV/ DO, see
"Item 5B. Liquidity and Capital Resources".
WCDMA Network
WCDMA is a 3G-level, high capacity wireless communication system
that enables us to offer a wider range of telecommunications
services, including cellular voice communications, video
telephony, data communications, multimedia services, wireless
Internet connection, automatic roaming and satellite
communications. We commenced provision of our WCDMA services
based on our WCDMA network on a limited basis in Seoul at the
end of 2003. We developed and launched in March 2005 dual
band/dual mode handsets, to offer seamless nationwide 3G
service, an important factor for a nationwide deployment of
WCDMA services. We commenced provision of our WCDMA services on
a limited basis in Seoul at the end of 2003 and continued to
improve our WCDMA services in 2004.
In 2005, we introduced HSDPA technology under the brand name
"3G+", also known as 3.5G technology, which represents
an evolution of the WCDMA standard and, among others, supports
higher data capacity and allows faster data transmission, for
example, at speeds up to three times faster than CDMA 1xEV/ DO.
HSDPA upgrades to our existing WCDMA network do not require
hardware upgrades and may be accomplished through software
upgrades at virtually no cost. By May 2006, we had expanded
HSDPA service to 25 cities, including Busan and Incheon. We
are continuing expansion of an upgraded, HSDPA-ready version of
our WCDMA network to other metropolitan areas of Korea. By the
end of 2006, we expect that HSDPA service will be available in
84 cities nationwide. For more information about our
capital expenditure plans relating to WCDMA and HSDPA, see
"Item 5B. Liquidity and Capital Resources", and
for more information about risks relating to WCDMA and HSDPA,
see "Item 3D. Risk Factors — HSDPA
technology may require significant capital and other
expenditures for implementation which we may not recoup and such
technology may be difficult to integrate with our existing
technology and business".
WiBro
We have also received a license from the MIC to provide wireless
broadband, or WiBro services, which we believe will complement
our existing networks and technologies. WiBro service enables
wireless broadband access to portable computers, mobile phones
and other portable devices. We conducted pilot testing of WiBro
service in limited areas of metropolitan Seoul in May 2006 and
began commercial service in such limited areas in June 2006. We
plan to expand our WiBro service to other areas of metropolitan
Seoul in 2006.
Network infrastructure
The principal components of our wireless networks are:
•
cell sites
, which are physical locations equipped with
    transmitters, receivers and other equipment that communicate by
    radio signals with wireless handsets within range of the cell
    (typically a 3 to 40 kilometer radius);
•
base station transceiver subsystems
, which manage the
    radio transmission by the equipment located at one or more cell
    sites, including radio-channel management, message transport and
    hand-off of calls between cell sites;
•
switching stations
, which switch calls to the proper
    destinations; and
•
leased lines, microwave links or other connections
which
    link the switching stations, the cell sites and the public
    switched telephone networks of KT Corporation and Hanaro Telecom.
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The following table sets forth some basic information about our
wireless networks at December 31, 2005:
Switching
Cell Sites
Stations
CDMA Network (excluding CDMA lxRTT and CDMA 1xEV/ DO)
4.878
55
CDMA 1xRTT Network and CDMA 1xEV/ DO
3.718
60
WCDMA
1.546
6
WiBro(1)
—
—
(1)
We first launched WiBro service in May 2006.
We purchase our principal digital wireless equipment for our
CDMA networks from LG Electronics and Samsung Electronics. We
have purchased from Samsung Electronics substantially all of the
equipment for our CDMA 1xRTT and CDMA 1xEV/ DO networks and have
purchased from Samsung Electronics and LG Electronics
substantially all of the equipment for our WCDMA network.
Several manufacturers, including Samsung Electronics,
Pantech & Curitel, LG Electronics and Motorola Korea,
Inc., currently produce handsets for use on our CDMA, CDMA
1xRTT, CDMA 1xEV/ DO and WCDMA networks. We are currently
considering various equipment manufacturers to determine which
supplier will best match our needs.
Under applicable Korean law, Korean fixed-line operators may not
decline to provide leased line services to us without reasonable
cause. We have completed installation of substantially all
optical fiber lines between our switching stations. In addition,
we own several microwave links in areas to serve certain
sections of the network formerly owned and operated by Shinsegi.
We have also installed optical fiber lines linking base stations
with switching stations and other base stations. Where we have
not installed optical fiber lines, we continue to use lines
leased by us from SK Networks and KT Corporation. KT
Corporation's fixed charges for the leased lines are based
on line capacity, length and type.
We use a cellular network surveillance system. This system
oversees the operation of cell sites and allows us to monitor
our main equipment located throughout the country from one
monitoring station. The automatic inspection and testing
provided to the cell sites lets the system immediately rebalance
to the most suitable setting, and the surveillance system
provides automatic dispatch of repair teams and quick recovery
in emergency situations.
Other Investments and Relationships
We have investments in several other businesses and companies
and have entered into various business arrangements with other
companies. Our principal investments fall into the following
categories:
Wireless Application Developers and Content
    Providers
As part of our strategy to develop additional applications and
content for our wireless data services, we invest in companies
which develop wireless applications and provide Internet
content, including content accessible by users of our wireless
networks. These investments include:
•
Information Technology and Content Providers.
We hold
    investments in approximately 40 companies, with an
    aggregate book value of approximately Won 22.4 billion as
    of December 31, 2005. Such companies develop technology and
    content for use in our fixed-line and Wireless Internet
    businesses and help enable us to further develop of our
    multimedia platforms and networks.
•
Joint Ventures.
Pursuant to an agreement entered into on
    March 20, 2003, we established UNISK, a joint venture
    company with China Unicom in December 2003. See
    "— Global Business — Overseas
    Operations". In September 2003, we reached a business
    cooperation agreement with Teliasonera for the purpose of
    jointly developing and commercializing new businesses,
    cross-licensing, partnership exchange and joint advancement into
    overseas markets. On September 16, 2003, we signed a
    memorandum of understanding with Alcatel for joint development
    of a Mobile Payment Service by combining our Nemo with
    Alcatel's Prepayment Instant Billing System.
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•
Mobile Broadcasting Corporation.
In September 2003, we
    entered into an agreement with Mobile Broadcasting Corporation,
    or MBCO, a wireless multi-media company in Japan, for the
    purpose of co-owning and launching a satellite for the satellite
    DMB business. MBCO is a developer and provider of content and
    technology related to wireless multimedia services and has
    developed new services in satellite DMB. Under the terms of
    the agreement, SK Telecom is committed to fund 34.7% of the cost
    of launching and maintaining the operations of the satellite,
    which is approximately Won 96.9 billion. As of
    December 31, 2005, we had invested a total of Won
    27.3 billion and had a 7.3% interest in MBCO. We launched
    the satellite in March 2004. In March 2004, the MIC assigned us
    a frequency for satellite DMB. In October 2004, we granted the
    right to use our satellite, satellite orbit and frequency to TU
    Media Corp., one of our affiliates, which received a license
    from the MIC as a satellite DMB provider on December 30,
    2004. On May 1, 2005, TU Media Corp. began to provide
    satellite DMB services. As of April 30, 2006, TU Media had
    over 500,000 subscribers. See "— Multimedia".
•
Mobile Data and Digital Content Market.
In order to
    generate new revenue from the growing mobile data and digital
    content market, we plan to increase our investment in the
    entertainment sector, particularly in music and movies. As
    mobile data and digital content market has become increasingly
    important in the growth of our business, we are seeking to
    secure valuable mobile data and digital contents by making
    equity investments in various content providers. In March 2005,
    we acquired 8 million shares, or 21.7% equity interest in
    iHQ Inc., for Won 14.46 billion, with an option to
    purchase 5 million additional shares from
    Mr. Hun-Tak Jeong, a majority shareholder of iHQ Inc. iHQ
    Inc. is an entertainment management firm producing films,
    managing entertainers and operating on-line game services. We
    exercised the option to purchase 5 million shares of
    iHQ on April 26, 2006, which purchase is expected to be
    consummated in July 2006. Following such purchase we will hold a
    34.91% equity interest in iHQ. In August 2005, we also acquired
    a 60% stake in YBM Seoul Records Inc., Korea's largest
    music recording company in terms of records released and
    revenues, for Won 27.9 billion. Through our acquisition of
    YBM, we are able to offer customers of our MelOn service access
    to an expanded digital music contents pool. Also, in July and
    October 2005, we and certain other Korean investment companies
    invested an aggregate Won 40 billion to establish three
    funds to invest in the music industry and seek strategic
    partnerships with recording companies. As of December 31,
    2005, our contribution to the funds amounted to Won
    39.6 billion. Furthermore, in September, October and
    December 2005, we and co-investors invested an aggregate Won
    55.8 billion to establish four movie-production funds to
    strengthen our ability to obtain movie contents. We had invested
    Won 20 billion in the funds as of December 31, 2005.
    Such investments reflect our business strategy of
    diversification into new areas, such as media and entertainment.
Other Investments
Our other investments include:
•
Hanaro Telecom.
As of December 31, 2005, we owned a
    4.8% interest in the outstanding capital stock of Hanaro
    Telecom. On September 2, 2003, we purchased Won
    120.0 billion of Hanaro Telecom commercial paper in order
    to provide Hanaro Telecom with short-term liquidity while it
    attempted to secure a foreign investor that would inject new
    capital into the company. The decision to provide liquidity
    support to Hanaro Telecom was made to protect the value of our
    stake in Hanaro Telecom. Following an investment in Hanaro
    Telecom by a consortium led by AIG and Newbridge, we disposed of
    the Hanaro Telecom commercial paper in December 2003. In May
    2004, we purchased from Samsung Electronics Co., Ltd.
    13,870,000 shares of Hanaro Telecom, representing 3.0% of
    the outstanding shares of Hanaro, for Won 39.3 billion as
    part of our strategic efforts in consideration of increasing
    convergence between wireless and fixed-line services. As a
    result of the acquisition, our equity interest in Hanaro had
    increased to 4.8% as of December 31, 2004, up from 1.8% as
    of December 31, 2003. Following Hanaro's merger with
    Korea Thrunet in January 2006, we continue to hold a 4.8% equity
    interest in Hanaro.
•
Powercomm.
We currently own a 5.0% interest in Powercomm
    Corporation, with a book value as of December 31, 2005, of
    Won 77.1 billion. For more information, see note 4 of
    the notes to our consolidated financial statements. Powercomm is
    an operator of fixed-line networks that provides
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wholesale fixed-line network services, such as leased lines, to
    telecommunications, Internet and cable television service
    providers in Korea. We have no current plans to either increase
    or decrease our investment in Powercomm.
•
SKC&C.
We currently own a 30.0% equity interest in
    SKC&C Co., Ltd., with a book value as of December 31,
    2005 of Won 168.2 billion. SKC&C is an information
    technologies services provider. Substantially all of
    SKC&C's revenue is generated from services provided to
    member companies of the SK Group, including us. We are party to
    several service contracts with SKC&C related to development
    and maintenance of our information technologies systems. See
    "Item 7B. Related Party Transactions".
We have from time to time engaged in discussions with several
wireless telecommunications services providers including KDDI
Corporation and Sprint PCS about strategic relationships of
various types.
Competition
SK Telecom was Korea's only provider of cellular
telecommunications services until April 1996, when Shinsegi
began offering its CDMA service using 10 MHz of spectrum in
the 800 MHz band under a license issued in 1994. In 1996,
the Government issued three additional licenses to KTF, LGT and
Hansol PCS to operate CDMA services, each using 10 MHz of
spectrum in the 1700-1800 MHz band. Each of KTF, LGT and
Hansol PCS commenced operation of its CDMA service in October
1997.
Beginning in 2000, there has been considerable consolidation in
the wireless telecommunications industry, resulting in the
emergence of stronger competitors. In 2000, KT Corporation
acquired 47.9% of Hansol M.Com's outstanding shares and
renamed the company KT M.Com. KT M.Com merged into KTF in May
2001. In May 2002, the Government sold its remaining 28.4% stake
in KT Corporation.
Significant advances in technology are occurring that may affect
our businesses, including the roll-out or the planned roll-out
by us and our competitors of advanced high-speed wireless
telecommunications networks based on CDMA 1xEV/ DO technology
and other technologies such as WCDMA and CDMA2000. In October
2000, we launched the world's first CDMA 1xRTT network,
which enables us to provide advanced data services. Since then
one of our two principal competitors, KTF, has also launched a
network using CDMA 1xRTT technology. As of December 31,
2004, our CDMA 1xEV/ DO network upgrade had been completed in
84 cities in Korea. KTF has expanded its CDMA 1xEV/ DO
network to cover 75 cities in Korea as of December 31,
2005. In addition, we and our competitors also have licenses to
provide 3G services using WCDMA technology (in the case of us
and KTF) or CDMA2000 technology (in the case of LGT). Such
networks support data transmission services with more advanced
features and significantly higher data transmission rates than
our principal data networks, which use CDMA 1xRTT and CDMA 1xEV/
DO technologies. We commenced provision of our W-CDMA-based
services on a limited basis in Seoul at the end of 2003 and
continued to improve our WCDMA services in the Seoul
metropolitan area in 2004. In 2005, we completed development of
HSDPA technology, also known as 3.5G. HSDPA technology, a more
advanced telephony protocol that supports higher data capacity
and allows faster data transmissions than previous WCDMA-based
protocols. By May 2006, we had expanded HSDPA service to
25 cities including Busan and Incheon. We expect to
complete expansion of our WCDMA network and HSDPA service to
84 cities nationwide by the end of 2006. KTF began trial
service of its 3G services in metropolitan Seoul and parts
of Gyunggi Province in December 2003. We understand KTF intends
to upgrade its WCDMA network to support HSDPA service to
45 cities by the end of June 2006 and 84 cities by the
end 2006.
We and certain other telecommunications service providers have
also received a license from the MIC to provide wireless
broadband, or WiBro services. WiBro service enables wireless
broadband access to portable computers, mobile phones and other
portable devices. We conducted pilot testing of WiBro service in
limited areas of metropolitan Seoul in May 2006 and began
commercial service in such limited areas in June 2006. We plan
to expand our WiBro service to other areas of metropolitan Seoul
in 2006.
See "Item 3D, Risk Factors —
Competition may reduce our market share and harm our results of
operations and financial condition."
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As of April 30, 2006, according to the MIC, KTF and LGT had
12.6 million and 6.7 million subscribers,
respectively, representing approximately 32.2% and 17.1%,
respectively, of the total number of wireless subscribers in
Korea on such date. As of April 30, 2006, we had
19.8 million subscribers, representing a market share of
approximately 50.7%. On May 25, 2004, we voluntarily
undertook to limit our market share through the end of 2005 to
52.3% of the wireless telecommunications market, the level of
our market share at the time of the approval of our merger with
Shinsegi in January 2002.
For a description of the risks associated with the competitive
environment in which we operate, see "Item 3D. Risk
Factors — Competition may reduce our market share and
harm our results of operations and financial condition."
Under current government regulations, as the designated market
dominant service provider for wireless network services, we must
obtain prior MIC approval for any change in our wireless
telecommunications service rates, although our competitors may
change their rates at their discretion. The MIC gave new
entrants similar price advantages when DACOM started competing
with KT Corporation in international long distance service in
1991 and domestic long distance service in 1996. On
April 9, 2003, the MIC announced its plan to adopt a
"reserved reporting" system for setting new rates as a
measure to relax the stringent regulation on pricing. Under the
"reserved reporting" system, we would have to report
our proposed new rate plan with the MIC in order to change our
rates. Unless the MIC objects to the proposed rate plan within a
certain period of time, such rates would be automatically
adopted. We believe that this system, if implemented, would give
us greater flexibility in setting our wireless communications
service rates in response to market conditions in a timely
manner, but we can give no assurance that such a system will be
adopted as currently contemplated, or at all, or that the rates
allowed by such a system will allow us to remain profitable.
For a description of our rates and subscription plans, see
"— Revenues, Rates and Facility Deposits".
In addition, the FTC approved our acquisition of Shinsegi on two
conditions. First, the FTC required that SK Telecom's
and Shinsegi's combined market share of the wireless
telecommunications market, based on numbers of subscribers, be
less than 50.0% as of June 30, 2001. As a result, we
reduced the level of our subscriber activations and adopted more
stringent involuntary subscriber deactivation policies beginning
in 2000 and ceased accepting new subscribers for three months,
from April 1, 2001 through June 30, 2001. We complied
with this requirement by reducing our market share to
approximately 49.7% as of June 30, 2001, and this market
share limitation no longer applies. On May 25, 2004, we
voluntarily undertook to limit our market share through the end
of 2005 to 52.3% of the wireless telecommunications market, the
level of our market share at the time of the approval of our
merger with Shinsegi in January 2002. On July 6, 2005, we
voluntarily extended such market share limitation through the
end of 2007.
In February 1997, member governments of the World Trade
Organization, or WTO, reached the WTO Agreement on Basic
Telecommunications Services, which became effective in November
1997. As part of this agreement and to expedite the opening of
the telecommunications market and promote competition, the
Government has amended the Telecommunications Business Law
several times to, among other things, increase the allowed
foreign shareholding ownership threshold (up to an aggregate of
49.0%) and participation in telecommunications service
providers, including us.
While we believe that these measures will enable us to more
easily take advantage of opportunities for investments in
overseas telecommunications projects, they have increased and
may in the future increase competition and the financial and
technological resources of our competitors in the domestic
market.
Law and Regulation
Overview
Korea's telecommunications industry is subject to
comprehensive regulation by the MIC, which is responsible for
information and telecommunications policies, radio and
broadcasting management, postal
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services and postal finances. The MIC regulates and supervises a
broad range of communications issues, including:
•
entry into the telecommunications industry;
•
scope of services provided by telecommunications service
    providers;
•
allocation of radio spectrum;
•
setting of technical standards and promotion of technical
    standardization;
•
rates, terms and practices of telecommunications service
    providers;
•
customer complaints;
•
interconnection and revenue-sharing between telecommunications
    service providers;
•
disputes between telecommunications service providers;
•
research and development budgeting and objectives of
    telecommunications service providers; and
•
competition among telecommunications service providers.
Telecommunications service providers are currently classified
into three categories: network service providers, value-added
service providers, and specific service providers. We are
classified as a network service provider because we provide
telecommunications services with our own telecommunications
networks and related facilities. As a network service provider,
we are required to obtain a license from the MIC for each of the
services we provide. Our licenses permit us to provide cellular
services and third generation wireless services using WCDMA
technology. Our cellular license does not provide for a fixed
term and our WCDMA license is valid for 15 years starting
from 1999.
The MIC may revoke our licenses or suspend any of our businesses
if we fail to comply with its rules, regulations and corrective
orders, including the rules restricting beneficial ownership and
control and corrective orders issued in connection with any
violation of rules restricting beneficial ownership and control
or any violation of the conditions of our licenses.
Alternatively, in lieu of suspension of our business, the MIC
may levy a monetary penalty of up to 3% of our revenues. A
network services provider that wants to cease its business or
dissolve must obtain MIC approval.
The MIC has stated that its policy is to promote competition in
the Korean telecommunications market through measures designed
to prevent the dominant service provider in any such market from
exercising its market power in such a way as to prevent the
emergence and development of viable competitors. While all
network service providers are subject to MIC regulation, we are
subject to increased regulation because of our position as the
dominant wireless telecommunications services provider in Korea.
Rate Regulation
Most network service providers must report to the MIC the rates
and contractual terms for each type of service they provide, but
generally they may set rates at their discretion. However, as
the dominant network services provider for specific services
(based on having the largest market share in terms of number of
subscribers and meeting certain revenue thresholds), we must
obtain prior approval of our rates and terms of service from the
MIC. In each of the years in which this requirement has been
applicable, the MIC has designated us for wireless
telecommunications service and KT Corporation for local
telephone and Internet services, as dominant network service
providers subject to this approval requirement. As a condition
to its approval of SK Telecom's merger with SK IMT, the MIC
required that we submit the rates for our third generation
mobile services using WCDMA technology to the MIC for approval
prior to the launch of such services. The MIC's policy is
to approve rates if they are appropriate, fair and reasonable
and if they are calculated in a transparent and appropriate
manner. It may order changes if it deems the rates to be
significantly unreasonable or against public policy.
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Interconnection
Dominant network service providers such as ourselves that own
essential infrastructure facilities or that possess a certain
market share are required to provide interconnection of their
telecommunications network facilities to other service providers
upon request. The MIC sets and announces the standards for
determining the scope, procedures, compensation and other terms
and conditions of such provision, interconnection or co-use. We
have entered into interconnection agreements with KT
Corporation, DACOM, Onse and other network service providers
permitting these entities to interconnect with our network. We
expect that we will be required to enter into additional
agreements with new operators as the MIC grants permits to
additional telecommunications service providers.
Wireless Internet Network Co-Share
In December 2002, the MIC implemented a wireless Internet
network co-share system that permits the WAP Gateway of a
fixed-line operator to connect to a wireless network service
provider's IWF (inter-working function) device. IWF is a
device that connects a cellular network with an IP (Internet
Protocol) network, while WAP Gateway converts HTTP protocol into
WAP protocol. This co-share system would allow subscribers of a
wireless network service provider to have access to wireless
Internet content provided by a fixed-line operator. In December
2002, KT Corporation connected to our IWF in December 2002 but
has not yet commenced service. In July 2003, the MIC approved
the basic terms regarding the implementation of a network
co-share system. In January 2004, we entered into a memorandum
of understanding with Onse to establish a co-share system, under
which we launched these services in June 2005. Currently, our
subscribers can access portals provided by outside parties. In
addition, the MIC has requested that a third party oversee
wireless operators' customer billing procedures with
respect to third-party content providers who are seeking to
provide their content directly to subscribers without going
through an individual operator's portal, as third-party
content providers have experienced difficulties in providing
their content service directly to subscribers due to the lack of
resources for billing users. We believe that such a co-share
system, if widely adopted, will have the effect of giving our
users access to a wide variety of content using their handsets,
which may in turn increase revenues attributable to our data
services. However, this system could also place significant
competitive pressure on the services available on our NATE
platform.
Contributions to the Fund for Development of Information
    Telecommunications
The MIC has the authority to recommend to network service
providers that they provide funds for national research and
development of telecommunications technology and related
projects. For 2005, the MIC recommends that we contribute 0.75%
of budgeted revenues (calculated pursuant to MIC guidelines that
differ from our accounting practices) to the Fund for
Development of Information Telecommunications operated by the
MIC. Although these recommendations were not mandatory prior to
2002, we have in the past contributed the recommended amounts.
Our contribution to this fund in 2001 was Won 23.0 billion
(including nil for Shinsegi) based on the MIC-recommended
minimum level of contribution of 1.0% of MIC-calculated revenues
for 2001.
In May 2002, the MIC announced significant changes to the
government contribution system. Starting from 2002, the
contributions became mandatory, and the annual contribution
which was set at 1.0% of total revenues for the previous year
was lowered to 0.5% (0.75% for market dominant service providers
like us) of total revenues for the previous year, and will be
applicable only to those network service providers who have
Won 30 billion in total sales for the previous year
and have recorded no net loss in the current period. Under the
policy, the maximum amount of the annual contribution to be made
cannot exceed 70% of the net profit for the corresponding period
of each company. Our contribution to this fund in 2003, 2004 and
2005 was Won 64.9 billion, Won 69.0 billion and Won
69.1 billion, respectively, based on the new MIC
requirement of 0.75% of MIC-calculated revenues.
Universal Service Obligation
All telecommunications service providers other than value-added
service providers, specific service providers and regional
paging service providers or any telecommunications service
providers whose net annual
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revenue is less than an amount determined by the MIC (currently
set at Won 30 billion) are required to provide
"universal" telecommunications services including
local telephone services, local public telephone services,
telecommunications services for remote islands and wireless
communication services for ships and telephone services for the
handicapped and low-income citizens, or contribute toward the
supply of such universal services. The MIC designates universal
services and the service provider who is required to provide
each service. Currently, we are required to offer free
subscription fee and 30% discount of our monthly fee for
cellular services to the handicapped and the low-income
citizens. In addition to such universal services for the
handicapped and low-income citizens, we are also required to
make certain monetary contributions to compensate for other
service providers' costs for the universal services. The
size of a service provider's contribution is based on its
net annual revenue (calculated pursuant to MIC guidelines which
differ from our accounting practices). In 2003, our contribution
amount was Won 80.7 billion for our fiscal year 2002. In
2004, our contribution amount was Won 46.6 billion for
our fiscal year 2003. In 2005, our contribution amount was Won
25.5 billion for our fiscal year 2004. As a wireless
telecommunications services provider, we are not considered a
provider of universal telecommunications services and do not
receive funds for providing universal service. Other network
service providers that do provide universal services make all or
a portion of their "contribution" in the form of
expenses related to the universal services they provide.
Frequency Allocation
The MIC has the discretion to allocate and adjust the frequency
band for each type of service. Upon allocation of new frequency
bands or adjustment of frequency bands, the MIC is required to
give a public notice. The MIC also regulates the frequency to be
used by each radio station, including our base stations, by the
terms of its approval for each radio station. All of our
frequency allocations are for an indefinite term. We pay fees to
the MIC for our frequency usage which are determined based upon
our number of subscribers, frequency usage by our networks and
other factors. For 2003, 2004 and 2005 the fee amounted to Won
129.5 billion, Won 143.0 billion and Won
156.1 billion, respectively.
In addition, we have paid Won 650 billion of the Won 1.3
trillion cost of the WCDMA license in March 2001. We are
required to pay the remainder of the license cost in annual
installments for a five-year period from 2007 through 2011. For
more information, see note 2(i) of the notes to our
consolidated financial statements for the years ended
December 31, 2003, 2004 and 2005.
Competition Regulation
The Korea Communications Commission is charged with ensuring
that network service providers engage in fair competition and
has broad powers to carry out this goal. If a network service
provider is found to be in violation of the fair competition
requirement, the Korea Communications Commission may take
corrective measures it deems necessary, including, but not
limited to, prohibiting further violations, requiring amendments
to the articles of incorporation or to service contracts with
customers, and requiring the execution or performance of, or
amendments to, interconnection agreements with other network
service providers.
In addition, we qualify as a market-dominating business entity
under the Fair Trade Act. Accordingly, we are prohibited from
engaging in any act of abuse, such as unreasonably determining,
maintaining or altering service rates, unreasonably controlling
the rendering of services, unreasonably interfering with
business activities of other business entities, hindering
unfairly the entry of newcomers or substantially restricting
competition to the detriment of the interests of consumers.
Under the Fair Trade Act, a company that is a member of a large
business group as designated by the FTC, such as ourselves, as a
company in the SK Group, is generally required to limit its
total investments in other domestic companies to 25% of its
non-consolidated net assets. Investment in companies engaging in
similar business is not included in calculating the 25% limit.
Depending on the time frame in which such a company acquired
shares in excess of the 25% ceiling, the FTC may issue
corrective orders requiring, for example, the disposition of the
shares held in excess of the 25% ceiling or imposing limitations
on the voting rights for such shares and/or monetary sanctions.
SK Telecom's total investments in other domestic companies
(excluding
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investments in Hanaro Telecom, Powercomm, SK Telink, Enterprise
Networks and Real Telecom, companies engaging in similar
business) amounted to Won 794.3 billion as of
March 31, 2006.
Number Portability
Previously, Korea's wireless telecommunications system was
based on a network-specific prefix system in which a unique
prefix was assigned to all the phone numbers of a network
operator. We were assigned the "011" prefix, and all
of our subscriber's mobile phone numbers began with
"011" (former Shinsegi subscribers use the
"017" prefix). Our subscribers could not change their
wireless phone service to another wireless operator and keep
their existing numbers. In January 2003, the MIC announced its
plan to implement number portability with respect to wireless
telecommunications services in Korea. The number portability
system allows wireless subscribers to switch wireless service
operators while retaining the same mobile phone number. However,
subscribers who switch operators must purchase a new handset, as
we use a different frequency than KTF and LGT. In accordance
with the plan published by the MIC, the number portability
system was adopted by SK Telecom starting from
January 1, 2004. KTF and LGT introduced number portability
beginning on July 1, 2004 and January 1, 2005,
respectively. For details of the number of subscribers who
transferred to the services of our competitors following the
implementation of the number portability system, see
"— Subscribers".
In addition, in order to manage the availability of phone
numbers efficiently and to secure phone number resources for the
new services, the MIC has begun to integrate mobile telephone
identification numbers into a common prefix identification
number "010" and to gradually retract the current
mobile service identification numbers which had been unique to
each wireless telecommunications service provider, including
"011" for our cellular services, starting from
January 1, 2004. All new subscribers have been given the
"010" prefix starting January 2004. For details of the
number of new subscribers for each of the major wireless
cellular providers following the adoption of the "010"
prefix January 2004, see "— Subscribers".
For risks relating to number portability, see
"Item 3D. Risk Factors — Our businesses are
subject to extensive government regulation and any change in
government policy relating to the telecommunications industry
could have a material adverse effect on our results of
operations and financial condition."
Contribution to 114 Directory Service
The MIC has been negotiating with network service providers on
sharing the cost of providing 114 directory services
through KT Corporation. Prior to 1998, this cost was shared
among service providers through the NTS (Nontraffic Sensitive)
Participation Program. The NTS Participation Program included
both the Universal Service Provider Program and contributions
for 114 directory services before it came to a halt due to
disagreements between network service providers and the MIC. The
MIC has determined SK Telecom's share of such costs for the
period between 1998 and 2001 to be Won 40.6 billion and Won
18.3 billion for the period between 2002 and 2004, based on
the number of calls made to the 114 directory service
through its network. We paid the entire amount in April 2006.
Contributions for the 114 directory service for 2005 have
not been determined yet.
Foreign Ownership and Investment Restrictions and
    Requirements
Because we are a network service provider, foreign governments,
individuals, and entities (including Korean entities that are
deemed foreigners, as discussed below) are prohibited from
owning more than 49% of our voting stock. Effective from
May 9, 2004, Korean entities where a foreign government or
a foreigner (together with any of its related parties)
(i) is the largest shareholder and (ii) owns 15% or
more of the outstanding voting stock are deemed foreigners. If
this 49% ownership limitation is violated, certain of our
foreign shareholders will not be permitted to exercise voting
rights in excess of the limitation and the MIC may require other
corrective action.
As of December 31, 2005, SK Corporation owned
17,663,127 shares of our common stock, or approximately
21.47% of our issued shares. As of December 31, 2005, a
foreign investment fund and its related parties collectively
held a 5.03% stake in SK Corporation. Effective from May 9,
2004, if the foreign investment fund and its related parties
increase their shareholdings in SK Corporation to 15% or more
and such foreign investment fund and its related parties
collectively constitute the largest shareholder of SK
Corporation, SK Corporation will be considered a foreign
shareholder of SK Telecom, and its shareholding in SK Telecom
would be included in the
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calculation of the aggregate foreign shareholding of SK Telecom.
If SK Corporation's shareholding in SK Telecom is
included in the calculation of the aggregate foreign
shareholding of SK Telecom, then the aggregate foreign
shareholding in SK Telecom, assuming the foreign ownership level
as of December 31, 2005 (which we believe was 48.74%),
would reach 70.21%, exceeding the 49% ceiling on foreign
shareholding.
If the aggregate foreign shareholding limit in SK Telecom is
exceeded, the MIC may issue a corrective order to SK Telecom,
the breaching shareholder (including SK Corporation if the
breach is caused by an increase in foreign ownership of SK
Corporation) and the foreign investment fund and its related
parties who own in the aggregate 15% or more of SK Corporation.
Furthermore, SK Corporation may not exercise its voting rights
with respect to the shares held in excess of the 49% ceiling,
which may result in a change in control of us. In addition, the
MIC may refuse to grant us licenses or permits necessary for
entering into new telecommunications businesses until the
aggregate foreign shareholding of SK Telecom is reduced to below
49%. If a corrective order is issued to us by the MIC arising
from the violation of the foregoing foreign ownership limit, and
we do not comply within the prescribed period under such
corrective order, the MIC may (1) suspend all or part of
our business, or (2) if the suspension of business is
deemed to result in significant inconvenience to our customers
or be detrimental to the public interest, impose a one-time
administrative penalty of up to 3% of our sales revenues.
Additionally, an amendment to the Telecommunications Business
Law in May 2004 also authorizes the MIC to assess monetary
penalties of up to 0.3% of the purchase price of the shares for
each day the corrective order is not complied with, as well as a
prison term of up to one year and a penalty of Won
50 million. See "Item 3D. Risk
Factors — If SK Corporation causes us to breach the
foreign ownership limitations on shares of our common stock, we
may experience a change of control."
We are required under the Foreign Exchange Transaction Act to
file a report with a designated foreign exchange bank or with
the Ministry of Finance and Economy, or the MOFE, in connection
with any issue of foreign currency denominated securities by us
in foreign countries. Issuances of US$30 million or less
require the filing of a report with a designated foreign
exchange bank, and issuances that are over US$30 million
require the filing of a report with the MOFE.
A newly adopted amendment to the Telecommunications Business Law
effective from May 9, 2004 provides for the creation of a
Public Interest Review Committee under the MIC to review
investments in or changes in the control of network services
providers. The following events would be subject to review by
the Public Interest Review Committee: (i) the acquisition
by an entity (and its related parties) of 15% or more of the
equity of a network services provider, (ii) a change in the
largest shareholder of a network services provider,
(iii) agreements by a network service provider or its
shareholders with foreign governments or parties regarding
important business matters of such network services provider,
such as the appointment of officers and directors and transfer
of businesses and (iv) a change in the entity that actually
controls a network services provider. If the Public Interest
Review Committee determines that any of the foregoing
transactions or events would be detrimental to the public
interest, then the MIC may issue orders to stop the transaction,
amend any agreements, suspend voting rights, or divest the
shares of the relevant network services provider. Additionally,
effective from May 9, 2004, if a dominant network services
provider (which would currently include us and KT Corporation),
together with its specially related persons (as defined under
the Korean Securities and Exchange Act) holds more than 5% of
the equity of another dominant network services provider, the
voting rights on the shares held in excess of the 5% limit
may not be exercised.
Handset Subsidy Payments
Until March 26, 2006, telecommunications service providers
had been prohibited from providing handset subsidies to attract
new subscribers under the Telecommunications Business Act.
Pursuant to an amendment to the Telecommunications Business Act,
which came into effect on March 27, 2006, the prohibition
on handset subsidies will continue until March 26, 2008,
subject to the following exceptions: (i) a
telecommunications service provider may provide subsidies to
subscribers who have maintained their subscription with the same
telecommunications service provider for at least 18 months,
provided
that no separate subsidy is provided to the same
subscriber for two years thereafter; or (ii) a
telecommunications service provider that has provided a
particular telecommunications service for less than six years
may provide subsidies to subscribers of such service.
Accordingly, we may provide handset subsidies to our subscribers
who have been using our services
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uninterruptedly for at least 18 months, or to our
subscribers who are subscribing to our HSDPA or WiBro services.
The Telecommunications Business Act requires any
telecommunications service provider seeking to provide handset
subsidies to report to the MIC the qualifying criteria and range
of subsidy payments no later than 30 days prior to the
effective date of the applicable subsidy payment. Also, the
Telecommunications Business Act requires the telecommunications
service providers to include information regarding proposed
subsidies in their subscriber agreements. Under the amended
Telecommunications Business Act, fines for violators are
calculated based on only the sales amount directly related to
the illegal subsidies, instead of the total sales amount, as had
been the case prior to the amendment. However, violators may
face higher fines because dominant telecommunications services
providers and repeat offenders will be charged with fines
calculated with a multiplier under the amendment.
Patents and Licensed Technology
Access to the latest relevant technology is critical to our
ability to offer the most advanced wireless services and to
design and manufacture competitive products. In addition to
active internal and external research and development efforts as
described in "Operating and Financial Review and
Prospects — Research and Development", our
success depends in part on our ability to obtain patents,
licenses and other intellectual property rights covering our
products. We own numerous patents and trademarks worldwide, and
have applications for patents pending in many countries,
including Korea, Japan, China, the United States, and Europe.
Our patents are mainly related to CDMA technology and wireless
Internet applications. We also acquired a number of patents
related to WCDMA technology.
We also license a number of patented processes and trademarks
under cross-licensing, technical assistance and other
agreements. The most important agreement is with Qualcomm Inc.
and relates mainly to CDMA applications technology. This
agreement generally grants us a non-exclusive license to
manufacture handsets in return for royalty payment or a
sub-license to manufacture and sell certain products both in
Korea and overseas during a fixed, but usually renewable term.
We consider our technical assistance and licensing agreements to
be important to our business and believe that we will be able to
renew this agreement on commercially reasonable terms that will
not adversely affect our ability to use the relevant
technologies.
We are not currently involved in any material litigation
regarding patent infringement.
Organizational Structure
We are a member of the SK Group, based on the definition of
"group" under the Fair Trade Act of Korea. As of
December 31, 2005, SK Group members owned in aggregate
22.79% of the shares of our issued common stock as of
December 31, 2005. The SK Group is a diversified group of
companies incorporated in Korea with interests in, among other
things, telecommunications, trading, energy, chemicals,
engineering and leisure industries. Until mid-1994, our largest
shareholder was KT Corporation (formerly known as
Korea Telecom Corp.), Korea's principal fixed-line
operator and the parent of KTF, one of our principal wireless
competitors.
Significant Subsidiaries
For information regarding our subsidiaries, see note 2(b)
of the notes to our consolidated financial statements.
Item 4C.
Organizational Structure
These matters are discussed under Item 4B. where relevant.
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Item 4D.
Property, Plants And Equipment
The following table sets forth certain information concerning
our principal properties as of December 31, 2005:
Approximate Area
Location
Primary Use
in Square Feet
Seoul Metropolitan Area
Corporate Headquarters
988,455
Regional Headquarters
1,095,992
Customer Service Centers
384,223
Training Centers
397,574
Central Research and Development Center
482,725
Others
547,061
Busan
Regional Headquarters
363,272
Others
237,056
Daegu
Regional Headquarters
153,573
Others
317,440
Cholla and Jeju Provinces
Regional Headquarters
265,595
Others
359,784
Choongchung Province
Regional Headquarters
459,240
Others
481,978
Others
Seoul National University Research Center
108,530
KAIST SUPEX Management Center
10,817
Ewha University SK Telecom Center
7,117
In December 2004, we constructed a new building with an area of
approximately 82,624 square feet, in which we have full
ownership, for use as our corporate headquarters. We relocated
our corporate offices into the new building in January 2005. In
addition, we own or lease various locations for cell sites and
switching equipment. We do not anticipate that we will need a
significant number of new cell sites in connection with the
expansion of our CDMA networks which is planned for 2005, and we
expect to lease or acquire new sites as needed. We do expect
that we will need new cell sites in constructing our WCDMA
network. Our current plan is to share sites with our existing
network, and therefore, we do not at this time expect to have to
obtain a significant number of new cell site locations. We do
not anticipate that we will encounter material difficulties in
meeting our future needs for any existing or prospective leased
space for our cell sites. See "Item 4B. Business
Overview — Cellular Services".
In October 2004, we purchased certain land and building
(including incidental movables) of SK Life Insurance Co., Ltd.
accounting for 589,625 square feet for Won 30 billion
in order to secure stable training facilities to enhance
expertise and leadership of SK Telecom's employees as
required by its campaign of new value management.
We maintain a range of insurance policies to cover our assets
and employees, including our directors and officers. We are
insured against business interruption, fire, lightening,
flooding, theft, vandalism, public liability and certain other
risks that may affect our assets and employees. We believe that
the types and amounts of our insurance are in accordance with
general business practices in Korea.
Item 4.A.
UNRESOLVED STAFF COMMENTS
We do not have any unresolved comments from the Securities and
Exchange Commission staff regarding our periodic reports under
the Exchange Act of 1934.
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Item 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following discussion together with our
consolidated financial statements and the related notes thereto
which appear elsewhere in this annual report. We prepare our
financial statements in accordance with Korean GAAP, which
differs in some respects from U.S. GAAP. Notes 30 and
31 of the notes to our consolidated financial statements provide
a description of the significant differences between Korean GAAP
and U.S. GAAP as they relate to us and provide a
reconciliation to U.S. GAAP of our net income and
shareholders' equity for fiscal years 2003, 2004 and 2005.
In addition, you should read carefully the section titled
"— Critical Accounting Policies, Estimates and
Judgments" as well as note 2 of the notes to our
consolidated financial statements which provide summaries of
certain critical accounting policies that require our management
to make difficult, complex or subjective judgments relating to
matters which are highly uncertain and that may have a material
impact on our financial conditions and results of operations.
Item 5A.
Operating Results
Overview
Revenue
We earn revenue principally from initial connection fees and
monthly access fees; usage charges and value-added service fees
paid by subscribers to our wireless services; interconnection
fees paid to us by other telecommunications operators for use of
our network by their customers and subscribers; and until our
sale of a controlling interest in the company in July 2005,
sales of wireless handsets by our former consolidated
subsidiary, SK Teletech. The amount of our revenue depends
principally upon the number of our wireless subscribers, the
rates we charge for our services, subscriber usage of our
services and the terms of our interconnection with other
telecommunications operators. Government regulation also affects
our revenues.
The following table sets forth certain revenue information about
our operations during the periods indicated:
Year Ended December 31,
2003
2004
2005
Percentage
Percentage
Percentage
of Total
of Total
of Total
Revenue
Revenue
Revenue
Revenue
Revenue
Revenue
(In billions of won, except percentages)
Cellular Revenue:
Wireless Services(1)
W
8,462.7
82.4
W
8,798.4
83.2
W
9,168.7
85.5
Interconnection
1,017.1
9.9
849.4
8.0
898.6
8.4
Digital Handset Sales(2)
612.0
5.9
649.8
6.2
294.6
2.7
Total Cellular Revenue
10,091.8
98.2
10,297.6
97.4
10,361.9
96.6
Other Revenue:
International Calling Service(3)
97.4
1.0
126.3
1.2
138.7
1.3
Portal Service(4)
42.0
0.4
85.0
0.8
126.9
1.2
Miscellaneous
40.9
0.4
61.7
0.6
94.3
0.9
Total Other Revenue:
180.3
1.8
273.0
2.6
359.9
3.4
Total Operating Revenue:
W
10,272.1
100.0
W
10,570.6
100.0
W
10,721.8
100.0
Total Operating Revenue Growth
10.2
%
2.9
%
1.4
%
(1)
Wireless services revenue includes initial connection fees,
    monthly access fees, usage charges, international charges,
    wireless Internet service fees, value-added-service fees and
    interest on overdue subscriber accounts (net of telephone tax).
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(2)
Until July 2005, we consolidated revenues derived from sales of
    digital handsets made through our former subsidiary, SK
    Teletech. In July 2005, we sold 4,542,000 shares of SK
    Teletech owned by us to Pantech & Curitel, Inc., a
    Korean mobile handset manufacturer, reducing our equity interest
    in SK Teletech from 89.1% to 29.1%, which became a 22.7% equity
    interest in Pantech following the merger of SK Teletech (renamed
    SKY Teletech following our sale of the company to
    Pantech & Curitel) into Pantech in December 2005.
(3)
Provided by SK Telink Co.
(4)
Portal service revenue attributable to SK Communications Co.,
    Ltd. and, since 2003, SK Communications and Paxnet Co., Ltd.,
    and since 2005, SK Communications, Paxnet Co., Ltd. and U-Land
    Company Limited.
We have had a dominant market share position in terms of
subscribers throughout our history and we continue to be the
market leader in terms of number of subscribers. Our wireless
subscriber base has continued to increase over the years,
growing from approximately 10.1 million subscribers at the
end of 1999 to approximately 14.5 million subscribers
(including approximately 3.5 million Shinsegi subscribers),
15.2 million subscribers (including approximately
3.3 million Shinsegi subscribers), 17.2 million
subscribers, 18.3 million subscribers, 18.8 million
subscribers and 19.5 million subscribers at the end of
2000, 2001, 2002, 2003, 2004 and 2005, respectively.
As a condition to its approval of our acquisition of Shinsegi,
the FTC required that SK Telecom's and Shinsegi's
combined market share of the wireless telecommunications market,
based on numbers of subscribers, be less than 50% as of
June 30, 2001. As a result, we reduced the level of our
subscriber activations and adopted more stringent involuntary
subscriber deactivation policies beginning in 2000 and ceased
accepting new subscribers for three months, from April 1,
2001 through June 30, 2001. We complied with this
requirement by reducing our market share to approximately 49.7%
as of June 30, 2001. On May 25, 2004, a policy
advisory committee to the MIC announced the results of its
review and stated that the committee believed that our market
dominance may significantly restrict competition in the
telecommunications market and that we have violated a merger
condition related to our acquisition of Shinsegi by providing
subsidies to handset buyers. On the same day, we voluntarily
undertook to limit our market share through the end of 2005 to
52.3% of the wireless telecommunications market, which was the
level of our market share at the time of the approval of our
merger with Shinsegi in January 2002. On June 7, 2004, the
MIC fined us Won 11.9 billion and extended our post-merger
monitoring period until January 2007 pursuant to the policy
advisory committee's recommendation. On July 6, 2005,
we voluntarily extended such market share limitation through the
end of 2007. As of December 31, 2005, we had approximately
19.5 million subscribers, representing a market share of
approximately 50.9%.
Prior to June 2000, wireless telecommunications service
providers provided handsets at below retail prices to attract
new subscribers, offsetting a significant portion of the cost of
handsets. The MIC prohibited all wireless telecommunications
service providers, subject to certain exceptions stipulated in
the Telecommunications Business Act, from providing handset
subsidies beginning June 1, 2000. In February 2004, the MIC
imposed upon us a fine of Won 21.7 billion with respect to
incentive payments that were deemed by the MIC to constitute
improper handset subsidies and thereby disrupt fair competition.
We paid the fine in March 2004. In February 2004, KTF and KT
Corporation were also fined Won 7.5 billion and Won
4.1 billion, respectively, in respect of such incentive
payments. On March 21, 2005, the MIC ordered us, KTF and
LGT, to pay fines of Won 1.4 billion, Won 360 million
and Won 230 million, respectively, for changing calling
plans and adding value-added services to the subscribers without
obtaining express consents of such subscribers. We paid such
fine in April 2005 and September 2005. In May 2005, the MIC
ordered us to pay a fine of Won 23.1 billion and Won
9.3 billion, respectively, with respect to our payment of
improper handset subsidies. In May 2005, LGT and KTF were also
fined Won 2.7 billion and Won 1.1 billion,
respectively, and in September 2005, KTF was fined Won
5.3 billion, in respect of such subsidy payments. We were
fined more heavily than KTF and LGT as the MIC found that our
efforts to take corrective measures were not sufficient and that
such incentive payments were a violation of a merger condition
related to our acquisition of Shinsegi in January 2002.
Beginning in March 2006, the MIC lifted the prohibition on the
provision of handset subsidies. In June 2006, the MIC ordered
us, LGT, KTF and KT to pay fines of Won 42.6 billion, Won
15.0 billion, Won 12.0 billion and Won
0.4 billion, respectively, with respect to payments of
improper handset subsidies. We plan to pay such fines in July
2006.
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Prior to January 2003, Korea's wireless telecommunications
system was based on a network-specific prefix system in which a
unique prefix was assigned to all the phone numbers of a
specific network operator. We were assigned the "011"
prefix, and all of our subscriber's mobile phone numbers
began with "011" (former Shinsegi subscribers use the
"017" prefix) and our subscribers could not change
their wireless phone service to another wireless operator and
keep their existing numbers. In January 2003, the MIC announced
its plan to implement number portability with respect to
wireless telecommunications services in Korea, which allows
wireless subscribers to switch wireless service operators while
retaining the same mobile phone number. However, subscribers who
switch operators must purchase a new handset, as each operator
utilizes a different frequency. In accordance with the plan
published by the MIC, the number portability system was adopted
by SK Telecom starting from January 1, 2004. We were
required to adopt the number portability system earlier than our
competitors, allowing our customers to transfer their numbers to
our competitors but not allowing our competitors' customers
to transfer their number to our service. KTF and LGT introduced
number portability beginning July 1, 2004 and
January 1, 2005, respectively. Subscribers who choose to
transfer to a different wireless operator have the right to
return to their original service providers without paying any
penalties within 14 days of their initial transfer.
In addition, in order to manage the availability of phone
numbers efficiently and to secure phone number resources for the
new services, the MIC integrate mobile telephone identification
numbers into a common prefix identification number
"010" and to gradually retract the current mobile
service identification numbers which had been unique to each
wireless telecommunications service provider, including
"011" for our cellular services, starting from
January 1, 2004. All new subscribers have been given the
"010" prefix starting January 2004. For details of the
number of new subscribers for each of the major wireless
cellular providers following the adoption of the "010"
prefix beginning January 2004, see "Item 4B. Business
Overview — Subscribers".
We believe that the adoption of the common prefix identification
system has had, and may continue to have, a greater negative
effect on us than on other wireless telecommunications providers
because "011" has a very high brand recognition in
Korea as the premium wireless telecommunications service.
Adoption of the number portability system could also result in a
deterioration of our market share as a result of weakened
customer loyalty, increased competition among wireless service
providers and higher costs as a result of maintaining the number
portability system, increased subscriber deactivations,
increased churn rate and higher marketing costs. For 2005, our
churn rate has ranged from 1.7% to 2.3%, with an average churn
rate of 1.8% for 2005, compared to an average churn rate of 1.7%
in 2004. We cannot assure you that our churn rates will not
increase in the future. See "Item 3D. Risk
Factors — Our businesses are subject to extensive
government regulation and any change in government policy
relating to the telecommunications industry could have a
material adverse effect on our results of operations and
financial condition." In February 2004, the MIC imposed a
total fine of Won 2.0 billion on us in connection with our
marketing efforts related to the number portability system. For
details, see "Item 8A. Consolidated Statements and
Other Financial Information — Legal
Proceedings — MIC Proceedings".
For cellular services, we charge initial connection fees,
monthly access fees, usage charges, wireless Internet service
fees and monthly charges for value-added services. Under current
regulations, we must obtain prior MIC approval of the terms on
which we may offer our services, including all rates and fees
charged for these services. See "Item 4B. Business
Overview — Law and Regulation — Rate
Regulation" and "Item 3D. Risk
Factors — We are subject to additional regulation as a
result of our market position, which could harm our ability to
compete effectively". Generally, the rates we charge for
our services have been declining. After discussions with the
MIC, effective January 1, 2003, we reduced our Standard
rate plan's monthly access fee by Won 1,000, included 10
minutes of free air time per month and reduced our peak usage
charges from Won 21 to Won 20 per minute. After discussions
with the MIC, in October 2003, we reduced our monthly charges
for caller ID service from Won 2,000 to Won 1,000. Since January
2006, we have provided caller ID service to our subscribers free
of charge to heighten customer satisfaction. As of
December 31, 2005, our standard peak usage rate was
approximately 11.1% higher than those charged by our
competitors. We can give no assurance that these rate changes
will not negatively affect our results of operations. For more
information about the rates we charge, see "Item 4B.
Business Overview — Revenues, Rates and Facility
Deposits".
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Our wireless telecommunications services depend, in part, on our
interconnection arrangements with domestic and international
fixed-line and other wireless networks. Charges for
interconnection affect our revenues and operating results. The
MIC determines the basic framework for interconnection
arrangements in Korea and has changed this framework several
times in the past. We cannot assure you that we will not be
adversely affected by future changes in the MIC's
interconnection policies. Under our interconnection agreements,
we are required to make payments in respect of calls which
originate from our networks and terminate in the networks of
other Korean telecommunications operators, and the other
operators are required to make payments to us in respect of
calls which originate in their networks and terminate in our
network. See "Item 4B. Business Overview —
Interconnection". With respect to the interconnection
arrangement for calls from fixed-line networks to wireless
networks, for 2003, pursuant to a new MIC policy, an
operator's interconnection fees are derived from that
operator's actual interconnection fees for 2001 and actual
imputed costs for 2001. The MIC also implemented interconnection
charges for calls between wireless network service providers
beginning in January 2000, affecting both our revenue and our
expenses. These charges were reduced beginning in January 2003.
On July 9, 2004, the MIC introduced a new method of
calculating interconnection payments, based on the
terminator's long-run incremental cost in 2004 and the
competitive market situation in the telecommunication service
industry of Korea. The long-run incremental cost method has been
adopted by other countries such as the United States, the United
Kingdom and Japan. The new rates had a negative impact on our
operations in 2005 in the amount of approximately Won
124.9 billion, resulting in an estimated Won
49.2 billion reduction in revenue and Won 75.7 billion
increase in interconnection expenses. The Won 75.7 billion
increase in interconnection expenses include the increase in the
land-to
-mobile
interconnection expenses that were paid to fixed-line service
providers. In 2005, we received Won 898.6 billion in
interconnection revenue and incurred Won 989.4 billion in
interconnection expense. For more information about our
interconnection revenue and expenses, see "Item 4B.
Business Overview — Interconnection".
The following table sets forth selected information concerning
our wireless telecommunications network during the periods
indicated:
Year Ended December 31,
2003
2004
2005
Outgoing Voice Minutes (In Thousands):(1)
42,175,874
43,184,944
45,241,348
Average Monthly Outgoing Voice Minutes Per Subscriber:(2)
197
194
197
Average Monthly Revenue Per Subscriber:(3)(4)
W
39,739
W
39,689
W
40,205
(1)
Does not include minutes of incoming calls or minutes of use
    relating the use of short text messaging and data services.
(2)
The average monthly outgoing voice minutes per subscriber is
    computed by dividing the total minutes of outgoing voice usage
    for the period by the monthly weighted average number of
    subscribers for the period and dividing the quotient by the
    number of months in the period. The monthly weighted average
    number of subscribers is the sum of the average number of
    subscribers for the months calculated by taking the simple
    average number of subscribers at the beginning of the month and
    at the end of the month, divided by the number of months in the
    period.
(3)
The average monthly revenue per subscriber excludes
    interconnection revenue and is computed by dividing total
    initial connection fees, monthly access fees, usage charges for
    voice and data, international charges, value-added service fees
    and interest on overdue subscriber accounts (net of telephone
    tax) for the period by the monthly weighted average number of
    subscribers for the period and dividing the quotient by the
    number of months in the period.
(4)
Including interconnection revenue, consolidated average monthly
    revenue per subscriber was Won 44,546 for 2003, Won 43,542 for
    2004 and Won 44,167 for 2005.
Our average monthly outgoing minutes of voice traffic increased
by 2.4% in 2004 and 4.8% in 2005. We believe that this trend
principally reflects generally lower overall tariff levels and
increased use of wireless telecommunications as a substitute for
fixed-line communications. Due to the existing high penetration
rate of
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wireless services in Korea, as well as subscribers'
increasing use of data communications, including short text
messaging, or SMS, in place of conventional voice
communications, we expect the rate of increase to slow in the
near future.
Our consolidated average monthly revenue per subscriber
decreased by 0.13% to Won 39,689 in 2004 compared to Won 39,739
in 2003. Our consolidated average monthly revenue per subscriber
increased by 1.3% to Won 40,205 in 2005 compared to Won 39,689
in 2004. These changes reflect the net effect of several
offsetting trends, including increases in wireless Internet
sales and value-added services sales, partially offset by the
tariff reduction on monthly fees beginning in September 2004.
Operating Expenses and Operating Margins.
Our operating
expenses consist principally of depreciation, commissions paid
to authorized dealers, network interconnection and leased line
expenses, advertising expenses, labor costs and, until July
2005, the cost of manufacturing handsets. Operating income
represented 30.2% of operating revenue in 2003, 23.1% in 2004
and 24.9% in 2005. The decrease in our operating margin in 2004
was primarily due to an increase in our marketing expenses and
interconnection charges we paid. In 2005, our operating margin
increased, primarily due to decreases in cost of goods sold and,
to a lesser extent, decreases in advertising expenses and
depreciation and amortization. We cannot assure you that our
operating margin will not decrease in future periods.
Industry Consolidation.
Beginning in 2000, there has been
considerable consolidation in the wireless telecommunications
industry resulting in the emergence of stronger competitors. In
July 2000, KT Corporation acquired a 47.9% interest in KT M.Com
and merged KT M.Com into KTF in May 2001. In May 2002, the
Government sold its remaining 28.4% stake in KT Corporation.
Such consolidations have created large, well-capitalized
competitors with substantial financial, technical, marketing and
other resources to respond to our business offerings. See
"Item 3D. Risk Factors — Competition may
reduce our market share and harm our results of operations and
financial condition.".
On May 1, 2003, we merged with SK IMT, in accordance with a
resolution of our board of directors on December 20, 2002
and the approval of shareholders of SK IMT on February 21,
2003. The exchange ratio of common stock between us and SK IMT
was 0.11276 share of our common stock with a par value of
Won 500 shares to 1 share of common stock of SK
IMT with a par value of Won 5,000. Using such exchange ratio, we
distributed 126,276 shares of new issued common stock to
minority shareholders of SK IMT and we cancelled all shares of
SK IMT owned by us and SK IMT upon the merger. The assets and
liabilities transferred from SK IMT were accounted for at the
carrying amounts of SK IMT. The SK IMT merger resulted in an
increase in our cash and cash equivalents by Won
328.9 billion and had no impact on our liabilities. Until
the date of the merger, SK IMT was not generating any
revenue.
On May 23, 2002, we acquired a 9.6% equity interest
(29,808,333 shares of common stock) in KT Corporation
for Won 1,609 billion. Pursuant to the terms of an
agreement between us and KT Corporation dated November 14,
2002, we sold all of our shares of KT Corporation. Under the
terms of the agreement, we exchanged the 29,808,333 shares
of KT Corporation's common stock for 8,266,923 shares
of our common stock that KT Corporation owned and settled the
difference in the price in cash on December 30, 2002 and
January 10, 2003. The exchange was made at Won
50,900 per share of KT Corporation's common stock and
Won 224,000 per share of our common stock. As a result
of the stock swap transaction, we no longer own any interest in
KT Corporation.
On September 2, 2003, we purchased Won 120.0 billion
of Hanaro Telecom commercial paper in order to provide Hanaro
Telecom with short-term liquidity while it attempted to secure a
foreign investor that would inject new capital into the company.
The decision to provide liquidity support to Hanaro Telecom was
made to protect the value of our stake in Hanaro Telecom, as we
held a 1.8% stake in Hanaro Telecom as of December 31,
2003. Following an investment in Hanaro Telecom by a consortium
led by AIG and Newbridge, we disposed of the Hanaro Telecom
commercial paper in December 2003. In May 2004, we purchased
from Samsung Electronics Co., Ltd. 13,870,000 shares of
Hanaro Telecom, representing 3.0% of the outstanding shares of
Hanaro for Won 39.3 billion as part of our strategic
efforts in consideration of increasing convergence between
wireless and fixed-line services. As a result of the
acquisition, our equity interest in Hanaro increased to 4.8% as
of
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Table of Contents
December 31, 2004. Following Hanaro's merger with
Korea Thrunet in January 2006, we continue to hold a 4.8% equity
interest in Hanaro.
Operating Results
The following table sets forth selected income statement data,
including data expressed as a percentage of operating revenue,
for the periods indicated:
For the Year Ended December 31,
2003
2004
2005
(In billions of won, except percentage data)
Operating Revenue
W
10,272.1
100.00
%
W
10,570.6
100.00
%
W
10,721.8
100.00
%
Operating Expenses
7,167.0
69.77
8,130.9
76.92
8,051.2
75.09
Operating Income
3,105.1
30.23
2,439.7
23.08
2,670.6
24.91
Other Income
261.4
2.54
199.4
1.89
392.6
3.66
Other Expenses
612.2
5.96
516.0
4.88
501.6
4.68
Income Before Income Taxes and Minority Interest
2,754.3
26.81
2,123.1
20.09
2,561.6
23.89
Income Taxes
789.0
7.68
629.7
5.96
693.3
6.47
Minority Interest
0.8
0.01
(1.9
)
(0.02
)
4.7
0.04
Net Income
W
1,966.1
19.14
%
W
1,491.5
14.10
%
W
1,873.0
17.47
%
Depreciation and Amortization(1)
W
1,510.5
14.70
%
W
1,607.5
15.20
%
W
1,546.3
14.42
%
(1)
Excludes the depreciation and amortization allocated to internal
    research and development costs of Won 135.8 billion,
    Won 134.1 billion and Won 126.9 billion for the years
    ended December 31, 2003, 2004 and 2005, respectively.
2005 Compared to 2004
Operating Revenue.
Our operating revenue increased by
1.4% to Won 10,721.8 billion from
Won 10,570.6 billion in 2004, principally due to a
0.6% increase in our cellular revenue to Won
10,361.9 billion in 2005 from Won 10,297.6 billion in
2004, a 49.3% increase in portal service revenues to Won
126.9 billion in 2005 from Won 85.0 billion in 2004
and, to a lesser extent, a 9.8% increase in international call
service revenues to Won 138.7 billion in 2005 from Won
126.3 billion in 2004.
The increase in our cellular revenue was principally due to an
increase in our wireless services revenue and, to a lesser
extent, an increase in our interconnection revenue, which
increase was offset, in part, by a decrease in revenue
attributable to handset sales. Wireless services revenue
increased 4.2% to Won 9,168.7 billion in 2005 from Won
8,798.4 billion in 2004, as a result of a 3.7% increase in
the number of our wireless subscribers to approximately
19.5 million subscribers as of December 31, 2005 from
approximately 18.8 million subscribers as of
December 31, 2004, as well as a slight increase in our
consolidated average monthly revenue per subscriber (excluding
interconnection revenue) from Won 39,689 in 2004 to Won 40,205
in 2005. Such increase was principally due to increases in
average monthly revenue per subscriber from wireless Internet
services and, to a lesser extent, increases in average revenue
per subscriber from value-added services and
sign-up
fees, which
were partially offset by a decrease in monthly fee and call
charges. Our consolidated average monthly revenue per subscriber
from wireless Internet services sales increased by 30.6% to Won
10,689 in 2005 from Won 8,182 in 2004, primarily due to
increased purchases of our contents products and increased
subscriptions to our new rate plans. Our consolidated average
monthly revenue per subscriber from value-added services such as
international roaming services, caller ID, Auto COLORing and
Perfect Call service and other sales increased by 10.0% to
Won 1,753 in 2005 from Won 1,594 in 2004. Our consolidated
average monthly revenue per subscriber from
sign-up
fees increased
13.5% to Won 1,010 in 2005 from Won 890 in 2004. Our
consolidated average monthly revenue per subscriber increased by
1.4% to Won 44,167 in 2005 from Won 43,542 in 2004. Our
consolidated
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Table of Contents
average monthly revenue per subscriber from monthly fee and call
charges decreased by 7.8% to Won 26,754 in 2005 from Won 29,023
in 2004.
Portal service revenues increased to Won 126.9 billion in
2005 from Won 85.0 billion in 2004, primarily due to
increased use by our subscribers of our wireless Internet
contents services, such as NATE and Cyworld.
International call service revenues increased to Won
138.7 billion in 2005 from Won 126.3 billion in 2004
as a result of general increases in traffic volume.
Interconnection revenue also increased to Won 898.6 billion
in 2005 from Won 849.4 billion in 2004. The increase was
primarily due to an increase in
mobile-to
-mobile
interconnection traffic volume, which was partially offset by a
slight decrease in
mobile-to
-land traffic
volume. See "Item 4B. Business Overview —
Interconnection".
Such increases in wireless Internet service revenue, value-added
services revenue, portal service revenue, international call
service revenue and interconnection revenue were partly offset
by a decrease in revenue attributable to sales of digital
handsets by 54.7% to Won 294.6 billion in 2005 from Won
649.8 billion in 2004, primarily as a result of our sale in
July 2005, of shares representing 60% of the issued and
outstanding common shares of SK Teletech, our former
consolidated subsidiary, to Pantech & Curitel.
Operating Expenses.
Our operating expenses in 2005
decreased by 1.0% to Won 8,051.2 billion in 2005 from Won
8,130.9 billion in 2004, primarily due to decreases in cost
of goods sold, advertising expenses, depreciation and
amortization and research and development expenses, which more
than offset increases in provision for bad debts, network
interconnection costs, commissions paid and leased line expenses.
Cost of goods sold decreased by 49.8% to Won 240.7 billion
in 2005 from Won 479.3 billion in 2004, primarily due to
the decrease in handset sales attributable to the sale of our
controlling interest in SK Teletech and its exclusion, as
discussed above, from consolidation beginning in July 2005.
Advertising expenses decreased by 20.8% to Won
279.4 billion in 2005 from Won 352.9 billion in 2004.
As the negative impact of the introduction of number portability
decreased, we were able to shift our marketing efforts away from
mitigating the effects of number portability, and plan and
execute more cost-effective marketing activities. Also in 2005,
we continued to shift our marketing strategy away from mass
advertising toward a more targeted campaign focused on
attracting and retaining high-end, high-volume user customers,
which also reduced marketing costs.
Depreciation and amortization expenses decreased 3.8% to
Won 1,546.3 billion in 2005 from
Won 1,607.5 billion in 2004. The decrease in
depreciation and amortization expenses was primarily due to a
decline in capital expenditures in 2005 compared to 2004.
Research and development expenses decreased 5.7% to Won
252.0 billion in 2005 from Won 267.1 billion in 2004,
as a result of a decrease in our internal research and
development expenses in 2005, primarily attributable to the
exclusion of SK Teletech from consolidation beginning
July 1, 2005. Prior to SK Teletech's elimination from
consolidation, SK Teletech's research and development
expenses accounted for approximately 18.7% of our consolidated
internal research and development expenses.
Network interconnection expenses increased by 8.3% to Won
989.4 billion in 2005 from Won 913.7 billion in 2004,
primarily due to the interconnection rate adjustments beginning
in September 2004, an increase in the level of interconnection
fees that we paid to other operators for calls using their
networks due to increased traffic volume.
Mobile-to
-mobile
interconnection expenses increased by 16.2% to Won
748.8 billion in 2005 from Won 644.6 billion in
2004, primarily due to higher traffic volume.
Mobile-to
-land
interconnection expenses decreased by 14.5% to Won
183.2 billion in 2005 compared to Won 214.2 billion in
2004.
Commissions paid, including to our authorized dealers, increased
by 1.7% to Won 2,859.6 billion in 2005 from Won
2,812.3 billion in 2004, primarily due to our continued
efforts to retain existing subscribers and to acquire new
subscribers, as well as increases in non-marketing related
commissions paid to our Internet content providers, in line with
increased wireless Internet usage. Such increases were partially
offset by slight decreases in marketing related monthly
commissions paid due to our more efficient marketing strategy.
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Table of Contents
Leased line expenses increased by 8.5% to Won 407.0 billion
in 2005 compared to Won 375.2 billion in 2004, primarily
due to an increase in the number of leased lines to accommodate
our increasing subscriber base and data traffic volume, as well
as to enhance overall call quality.
Operating Income.
Our operating income increased by 9.5%
to Won 2,670.6 billion in 2005 from
Won 2,439.7 billion in 2004, increased while operating
expenses decreased, as discussed above.
Other Income.
Other income consists primarily of interest
income, dividend income and commission income, as well as gains
on disposal of consolidated subsidiaries and gains on disposal
of investment assets. Other income increased by 96.9% to Won
392.6 billion in 2005 from Won 199.4 billion in 2004,
primarily due to gains on the sale of a 60% equity interest in
SK Teletech, our former consolidated subsidiary, to
Pantech & Curitel in July 2005 of Won
178.7 billion and, to a lesser extent, gain on disposal of
investment assets and increased equity earnings of affiliates
primarily attributable to earnings of SK C&C Co., Ltd. Such
increase was offset, in part, by decreases in interest income
and foreign exchange and translation gains primarily reflecting
the slower pace of appreciation of the Won against the Dollar,
in which a significant portion of our debt is denominated in
2005 as compared to such pace in 2004.
Other Expenses.
Other expenses primarily include interest
and discount expenses, donations and equity losses of
affiliates. Other expenses decreased by 2.8% to Won
501.6 billion in 2005 from Won 516.0 billion in 2004.
The decrease was primarily due to decreases in interest and
discounts, loss on impairment of long-term investment
securities, loss on transactions and valuation of currency
forward and swap transactions and loss on disposal and
impairment of property, equipment and intangible assets. Such
decreases were offset, in part, by increases in donations and
equity in losses of affiliates. As a percentage of operating
revenue, other expenses slightly decreased to 4.7% in 2005 from
4.9% in 2004.
Income Tax.
Provision for income taxes increased by 10.1%
to Won 693.3 billion in 2005 from
Won 629.7 billion in 2004. Our effective tax rate in
2005 decreased to 27.1% from an effective tax rate of 29.7% in
2004, mainly due to a decrease in the statutory tax rate to
27.5% from 29.7%, effective January 1, 2005. See
note 18 of the notes to our consolidated financial
statements.
Net Income.
Principally as a result of the factors
discussed above, our net income increased by 25.6% to Won
1,873.0 billion in 2005 from Won 1,491.5 billion in
2004. Net income as a percentage of operating revenues was 17.5%
in 2005 compared to 14.1% in 2004.
2004 Compared to 2003
Operating Revenue.
Our operating revenue increased by
2.9% to Won 10,570.6 billion in 2004 from
Won 10,272.1 billion in 2003 principally due to a 2.0%
increase in our cellular revenue to Won 10,297.6 billion in
2004 from Won 10,091.8 billion in 2003 and to a lesser
extent due to a 102.4% increase in portal service revenues to
Won 85.0 billion in 2004 from Won 42.0 billion in 2003
and a 29.7% increase in international call service revenues to
Won 126.3 billion in 2004 from Won 97.4 billion in
2003.
The increase in our cellular revenue was principally due to an
increase in our wireless services revenue and to a lesser extent
due to an increase in revenue attributable to sales of digital
handsets, which increases were offset in part by a decrease in
interconnection revenue. Wireless services revenue increased
4.0% to Won 8,798.4 billion in 2004 from Won
8,462.7 billion in 2003 as a result of a 2.7% increase in
the number of our wireless subscribers to approximately
18.8 million subscribers as of December 31, 2004 from
approximately 18.3 million subscribers as of
December 31, 2003, which was partially offset by a slight
decrease in our consolidated average monthly revenue per
subscriber (excluding interconnection revenue) from Won 39,739
in 2003 to Won 39,689 in 2004. Such decrease was principally due
to decreases in average monthly revenue per subscriber from call
charges and value-added services, which was mostly offset by an
increase in average monthly revenue per subscriber from wireless
Internet services. Our consolidated average monthly revenue per
subscriber from monthly fee and call charges decreased by 5.6%
to Won 29,023 for the year ended December 31, 2004 from Won
30,748 in the corresponding period in 2003. The decrease was
primarily due to the reduction in monthly fee effective
September 1, 2004. Our consolidated average monthly revenue
per subscriber from wireless Internet services sales increased
by 32.5% to Won 8,182 in 2004 from Won 6,177 in 2003. Our
consolidated
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Table of Contents
average monthly revenue per subscriber from value-added services
such as caller ID services and ring tone service and other sales
decreased by 19.8% to Won 1,594 in 2004 from Won 1,988 in 2003.
Value-added services and other sales decreased by 16.4% to Won
355.2 billion in 2004 from Won 424.8 billion in
2003 primarily due to a decrease in caller ID rates from Won
2,000 to Won 1,000 that took effect in October 2003. Wireless
Internet services sales increased by 38.1% to Won
1,823.4 billion in 2004 (representing 17.7% of our cellular
revenue) from Won 1,320.1 billion in 2003, primarily due to
the increased number of subscribers who use wireless
Internet-enabled handsets.
Revenues attributable to sales of digital handsets increased by
6.2% to Won 649.8 billion in 2004 from
Won 612.0 billion in 2003 as a result of an increase
in volume of handsets sold and a higher portion of sales of
high-end digital handsets, which generally are sold at higher
retail prices.
Such increases in wireless service revenue and revenues
attributable to sales of digital handsets were partially offset
by a 16.5% decrease in interconnection revenue to Won
849.4 billion in 2004 from Won 1,017.1 billion in
2003. The decrease was due in part to the new adjusted
interconnection rates announced by the MIC on July 9, 2004,
which were applied retroactively beginning January 1, 2004,
which was partially offset by an increase in the NATE service
revenue and the phone mail service revenue. See
"Item 4B. Business Overview —
Interconnection".
Our international calling service revenues increased as a result
of increases in traffic volume and our portal service revenues
increased as a result of increased use by our subscribers of our
wireless Internet contents services, such as NATE and Cyworld.
Operating Expenses.
Our operating expenses in 2004
increased by 13.4% to Won 8,130.9 billion compared to Won
7,167.0 billion in 2003 primarily due to increases in
commissions paid, network interconnection expenses, depreciation
and amortization expenses, labor costs, leased line expenses,
and miscellaneous operating expenses, which more than offset
decreases in cost of goods sold and advertising expenses.
Commissions paid, including to our authorized dealers, increased
by 21.5% to Won 2,812.3 billion in 2004 compared to Won
2,314.6 billion in 2003, primarily due our efforts to
retain existing subscribers and to acquire new subscribers.
Commissions paid also increased due to our efforts to counter
the effects of number portability. In addition, commissions paid
to our Internet content providers increased as the wireless
Internet usage increased.
Network interconnection expenses increased by 18.4% to Won
913.7 billion in 2004 compared to
Won 771.6 billion in 2003, primarily due to an
increase in interconnection rates and an increase in the level
of interconnection fees that we must pay to other operators for
calls using their networks.
Mobile-to
-mobile
interconnection expenses increased by 22.7% to Won
644.6 billion in 2004, compared to Won 525.4 billion
in 2003 primarily due to increased interconnection rates.
Mobile-to
-land
interconnection expenses increased by 0.6% to Won
214.2 billion in 2004, compared to Won 212.9 billion
in 2003.
Depreciation and amortization expenses increased by 6.4% to Won
1,607.5 billion in 2004 compared to
Won 1,510.5 billion in 2003. The increase in
depreciation and amortization expenses was primarily due to the
continued expansion of our CDMA 1xRTT and 1xEV/ DO networks.
Labor costs increased by 14.1% to Won 464.8 billion in 2004
compared to Won 407.2 billion in 2003. The increase was
primarily due to an increase in performance bonuses and an
increase in salaries due to improving business performance over
the period.
Leased line expenses increased by 22.4% to Won
375.2 billion in 2004 compared to Won 306.5 billion in
2003 primarily due to an increase in the number of leased lines
to handle higher call volumes.
Miscellaneous operating expenses increased by 22.4% to Won
1,125.2 billion in 2004 compared to
Won 919.3 billion in 2003 primarily due to increases
in taxes and other dues and rent expenses.
Cost of goods sold decreased by 14.5% to Won 479.3 billion
in 2004 compared to Won 560.9 billion in 2003. The decrease
was primarily due to a decrease in sales of wireless Internet
solutions (including software, hardware and service) following
the completion of our obligation to provide wireless Internet
solutions to Asia Pacific Broadband Wireless Communications
(APBW) at the end of 2003.
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Table of Contents
Advertising expenses decreased by 6.2% to Won 352.9 billion
in 2004 compared to Won 376.4 billion in 2003, as we
changed our focus from a mass advertising campaign to a
marketing strategy focused on certain high end, high volume user
customers in order to mitigate the negative impact of number
portability on our subscriber base.
Operating Income.
Our operating income decreased by 21.4%
to Won 2,439.7 billion in 2004 from
Won 3,105.1 billion in 2003 because the increase in
our operating expenses was greater than the increase in our
operating revenue.
Other Income.
Other income consists primarily of interest
income, dividend income, commission income and foreign exchange
and translation gains. Other income decreased by 23.7% to Won
199.4 billion in 2004 compared to Won 261.4 billion in
2003, primarily due to decreases in commissions and to a lesser
extent due to decreases in interest income and dividend income.
Such decrease was offset in part by an increase in foreign
exchange and translation gains due to the depreciation of the
US Dollar against the Won.
Other Expenses.
Other expenses include interest and
discount expenses, donations, loss in impairment of long-term
investment securities and loss on disposal of property,
equipment and intangible assets and loss on translation and
valuation of currency swap. Other expenses decreased by 15.7% to
Won 516.0 billion in 2004, compared to Won
612.2 billion in 2003. The decrease was primarily due to
decreases in interest and discounts and loss on disposal of
investment assets and to a lesser extent due to decreases in
donations, foreign exchange and translation losses and loss on
disposal and valuation of trading securities. Such decreases
were offset in part by increases in loss on impairment of
long-term investment securities and loss on translation and
valuation of currency swaps and equity in losses of affiliates.
As a percentage of operating revenue, other expenses decreased
to 4.9% in 2004 from 6.0% in 2003.
Income Tax.
Provision for income taxes decreased by 20.2%
to Won 629.7 billion in 2004 from
Won 789.0 billion in 2003. Our effective tax rate in
2004 increased to 29.7% from an effective tax rate of 28.7% in
2003. See note 18 of the notes to our consolidated
financial statements.
Net Income.
Principally as a result of the factors
discussed above, our net income decreased by 24.1% to Won
1,491.5 billion in 2004 from Won 1,966.1 billion in
2003. Net income as a percentage of operating revenues was 14.1%
in 2004 as compared to 19.1% in 2003.
Item 5B.
Liquidity and Capital Resources
Liquidity
We had a working capital (current assets minus current
liabilities) deficit of Won 461.4 billion as of
December 31, 2003, a working capital surplus of Won
1,323.8 billion as of December 31, 2004 and a working
capital surplus of Won 1,735.2 billion as of
December 31, 2005.
We had cash, cash equivalents, short-term financial instruments
and trading securities of Won 1,365.1 billion as of
December 31, 2003, 1,038.1 billion as of
December 31, 2004 and Won 1,262.5 billion as of
December 31, 2005. We had outstanding short-term borrowings
of Won 786.1 billion as of December 31, 2003,
Won 425.5 billion as of December 31, 2004 and Won
1.0 billion as of December 31, 2005. As of
December 31, 2005, we had availability under unused credit
lines of approximately Won 835.3 billion.
Management believes all the above-mentioned sources provide
adequate liquidity to SK Telecom to meet its operation needs in
the foreseeable future.
Operating cash flow and debt financing have been our principal
sources of liquidity. Cash and cash equivalents increased by Won
7.8 billion to Won 378.4 billion in 2005 from Won
370.6 billion in 2004.
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Table of Contents
Cash Flow Analysis
Year Ended December 31,
Change
2003
2004
2005
2003 to 2004
2004 to 2005
(In billions of won, except percentages)
Net Cash Flow from Operating Activities
W
3,329.4
W
2,516.8
W
3,404.1
W
(812.6
)
(24.4
)%
W
887.3
35.3
%
Net Cash Used in Investing Activities
(1,415.1
)
(1,470.3
)
(1,938.2
)
(55.2
)
(3.9
)
(467.9
)
(31.8
)
Net Cash Used in Financing Activities
(2,261.0
)
(968.6
)
(1,429.0
)
1,292.4
57.2
(460.4
)
(47.5
)
Net Cash Flow due to Changes in Consolidated Subsidiaries
0.1
(24.8
)
(29.1
)
(24.9
)
(249.0
)
(4.3
)
(17.3
)
Equivalents
W
(346.6
)
W
53.1
W
7.8
W
399.7
115.3
W
(45.3
)
(85.3
)
Cash and Cash Equivalents at Beginning of Period
664.1
317.5
370.6
(346.6
)
(52.2
)
53.1
16.7
Cash and Cash Equivalents at End of Period
W
317.5
W
370.6
W
378.4
W
53.1
16.7
%
W
7.8
2.1
%
Net Cash Flow from Operating Activities.
Net cash flow
provided by operations was Won 3,329.4 billion in 2003, Won
2,516.8 billion in 2004 and Won 3,404.1 billion in
2005. Depreciation and amortization were
Won 1,649.9 billion in 2003, Won 1,752.5 billion
in 2004 and Won 1,675.5 billion in 2005.
On May 2, 2003, September 4, 2003 and
December 15, 2003, we sold Won 577.3 billion, Won
549.3 billion and Won 498.4 billion of accounts
receivable resulting from our mobile phone dealer financing plan
to Nate Third Special Purpose Company, Nate Fourth Special
Purpose Company and Nate Fifth Special Purpose Company,
respectively, in asset-backed securitization transactions and
recorded a loss on disposal of accounts receivable-other of
Won 10.8 billion, Won 12.9 billion and Won
9.9 billion, respectively. Such special purpose companies
have all been liquidated.
Net Cash from Investing Activities.
Net cash used in
investing activities was Won 1,415.1 billion in 2003, Won
1,470.3 billion in 2004 and Won 1,938.2 billion in
2005. Cash inflows from investing activities were
Won 1,126.0 billion in 2003, Won 649.0 billion in
2004 and Won 666.1 billion in 2005. The primary contributor
to such inflows in 2003 related to proceeds from the sale of
long-term investment securities which resulted from sales of our
shares and convertible bonds of KT Corporation, while cash
inflow from investing activities in 2004 and 2005, respectively,
related to a decrease in trading securities of Won
240.2 billion and proceeds from the sale of consolidated
subsidiaries of Won 291.0 billion in 2005. Cash outflows
for investing activities were Won 2,541.1 billion in
2003, Won 2,119.3 billion in 2004 and Won
2,604.3 billion in 2005. The primary contributors to the
overall cash outflows for investing activities were expenditures
related to the acquisition of property and equipment, which were
Won 1,647.6 billion in 2003, Won 1,631.9 billion in
2004, and Won 1,416.6 billion in 2005, all generally
relating to expenditures in connection with the maintenance and
build-out of our wireless network, including upgrades to and
expansion of our WCDMA network, acquisition of long-term
investment securities, which were Won 437.1 billion in
2003, Won 54.1 billion in 2004 and
Won 319.1 billion in 2005 and acquisition of equity
securities accounted for using the equity method, which were
Won 7.2 billion in 2003, Won 21.1 billion in
2004 and Won 231.8 billion in 2005.
Net Cash from Financing Activities.
Net cash used in
financing activities was Won 2,261.0 billion in 2003, Won
968.6 billion in 2004 and Won 1,429.0 billion in 2005.
Cash inflows from financing activities were primarily driven by
issuances of bonds payable, which provided cash of Won
688.7 billion in 2003, Won 1,205.7 billion in
2004 and Won 193.7 billion in 2005. Cash outflows for
financing activities included payment of short-term borrowings,
payments of current portion of long-term debt and payment of
dividends, among other items. Payment of short-term borrowings
were Won 12.1 billion in 2003, Won 359.1 billion in
2004 and Won 376.9 billion in 2005. Payments of
current portion of long-term debt were
Won 939.2 billion in 2003,
Won 1,370.6 billion in 2004 and Won 500.0 billion
in 2005. Payment of dividends were Won 151.7 billion in
2003, Won 478.3 billion in 2004 and Won 758.2 billion
in 2005. Also, as a result of the issuance of convertible
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bonds in 2004 by us in the amount of Won 385.9 billion, net
increase in treasury stock was Won 2 million in 2004
compared to Won 1,379.3 billion in 2003. We recorded no net
increase in treasury stock in 2005.
As of December 31, 2003, we had total long-term debt
(excluding current portion and facility deposits) outstanding of
Won 2,263.5 billion. Our long-term debt as of
December 31, 2003 included bonds in the amount of Won
2,261.9 billion and bank and institutional borrowings in
the amount of Won 1.6 billion. We had long-term facility
deposits of Won 44.2 billion as of December 31, 2003.
As of December 31, 2004, we had total long-term debt
(excluding current portion and facility deposits) outstanding of
Won 2,891.8 billion and we did not have any bank or
institutional borrowings. We had facility deposits of Won
31.4 billion as of December 31, 2004. As of
December 31, 2005, we had total long-term debt (excluding
current portion and facility deposits) outstanding of Won
2,314.4 billion, which included bonds in the amount of Won
2,314.2 billion and bank and institutional borrowings in
the amount of Won 0.2 billion. We had long-term facility
deposits of Won 23.8 billion as of December 31, 2005.
For a description of our long-term liabilities, see
notes 9, 10 and 11 of the notes to our consolidated
financial statements.
As of December 31, 2005, substantially all of our foreign
currency-denominated long-term debt, which amounted to
approximately 9.6% of our total outstanding long-term debt,
including current portion as of such date, was denominated in
Dollars. Appreciation of the Won against the Dollar will result
in net foreign exchange and translation gains. Changes in
foreign currency exchange rates will also affect our liquidity
because of the effect of such changes on the amount of funds
required for us to make interest and principal payments on our
foreign currency-denominated debt.
We issued Won-denominated bonds with a principal amount of Won
300.0 billion, Won 150.0 billion and Won
250.0 billion in March, August and November 2003,
respectively. These bonds mature in March 2008, August 2006 and
November 2006, respectively, and have an annual interest rate of
5.0%. In March, May and December 2004, we issued Won-denominated
bonds with a principal amount of Won 150.0 billion,
Won 150.0 billion and Won 200 billion,
respectively. These bonds will mature in April 2009, May 2009
and December 2011, respectively, and have an annual interest
rates of 5.0%, 5.0% and 3.0%, respectively. The proceeds of the
Won-denominated note offering in March, May and December 2004
were used for our operations. In March 2005, we issued
Won-denominated bonds with a principal amount of Won
200.0 billion. These bonds will mature in March 2010 and
have an annual interest rate of 4.0%. The proceeds of these
bonds were primarily used for repayment of maturing long-term
debt. See note 9 of the notes to our consolidated financial
statements.
In April 2004, we issued notes in the principal amount of
US$300,000,000 with a maturity of seven years and an interest
rate of 4.25%. The proceeds from the offering in April 2004 were
used to pay maturing debt.
In late May 2004, we issued zero coupon convertible notes with a
maturity of five years in the principal amount of
US$329,450,000, with an initial conversion price of Won
235,625 per share of our common stock, subject to certain
redemption rights. In connection with the issuance of the zero
coupon convertible notes, we deposited 1,645,000 shares of
our common stock with Korea Securities Depository to be reserved
and used to satisfy the note holders' conversion rights. On
March 11, 2005, our shareholders approved a cash dividend
of Won 9,300 per common share at the general shareholders'
meeting. On March 14, 2005, we filed a report with the
Financial Supervisory Service to disclose that we adjusted the
conversion price of the convertible notes issued in late
May 2004 in the principal amount of US$329,450,000 from Won
235,625 to Won 226,566 and made an additional deposit of
our common stock accordingly, so that the total number of shares
of common stock deposited with Korea Securities Depository to
satisfy the note holders' conversion rights increased from
1,644,978 to 1,710,750. On July 29, 2005, our board of
directors resolved to recommend an interim cash dividend of
Won 1,000 per common share. On August 1, 2005, we
filed a report with the Financial Supervisory Service to
disclose that we adjusted the conversion price from
Won 226,566 to Won 225,518 and made an additional
deposit of our common stock accordingly, so that the total
number of shares of common stock deposited increased from
1,710,750 to 1,718,700. On March 10, 2006, our shareholders
approved a cash dividend of Won 8,000 per common share. On
March 13, 2006, we filed a report with the Financial
Supervisory Service to disclose that we adjusted the conversion
price from Won 225,518 to Won 218,098 and made an
additional deposit of our common stock accordingly, so that the
total number of shares of common stock deposited increased from
1,718,700 to 1,777,173.
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We also have long-term liabilities in respect of facility
deposits received from subscribers, which stood at Won
44.2 billion at December 31, 2003, Won
31.4 billion at December 31, 2004 and Won
23.8 billion at December 31 2005. These non-interest
bearing deposits are collected from some subscribers when they
initiate service and returned (less unpaid amounts due from the
subscriber for our services) when the subscriber's service
is deactivated. See "Item 4B. Business
Overview — Revenues, Rates and Facility Deposits".
Capital Requirements and Resources
The following table sets forth our actual capital expenditures
for 2003, 2004 and 2005:
Year Ended (Ending) December 31,
2003
2004
2005
(In billions of won)
CDMA (95A/B, 1xRTT and EV-DO) Network3
W
737
W
728
W
376
WCDMA Network
204
220
575
WiBro(1)
—
—
—
Others(2)
707
684
466
Total(3)
W
1,648
W
1,632
W
1,417
(1)
We commenced WiBro service in May 2006.
(2)
Includes investments in infrastructure consisting of equipment
    necessary for the provision of data services and marketing.
(3)
Also, see note 7 of the notes to our consolidated financial
    statements.
We set our capital expenditure budget for an upcoming year on an
annual basis. Our actual capital expenditures in 2003 were Won
1,647.6 billion, primarily for the expansion and upgrading
of our CDMA 1xRTT network, for our initial investment in the
satellite-based digital multimedia broadcasting
("DMB") business and for the development and
introduction of wireless data services. Our actual capital
expenditures in 2004 were Won 1,631.9 billion. Our
actual capital expenditures in 2005 were Won
1,416.6 billion, primarily related to investment in our
WCDMA network. Of such amount, we spent approximately Won
574.5 billion on capital expenditures related to expansion
of our WCDMA network and development of HSDPA services,
Won 375.8 billion related to general upkeep of our
CDMA 1xRTT and CMDA EV/ DO networks and
Won 466.3 billion on other capital expenditures and
projects. We are required to pay the remainder of the cost of
our WCDMA license in annual installments for a five-year period
from 2007 through 2011. For more information, see note 2(i)
of the notes to our consolidated financial statements for the
years ended December 31, 2003, 2004 and 2005.
We estimate that we will spend approximately Won 1.6 trillion
for capital expenditures in 2006 for a range of projects,
including primarily for the expansion and improvement of our
WCDMA network build out of our WiBro network and investments in
our wireless Internet-related businesses. We may also make
additional capital expenditure investments as opportunities
arise. In addition, we may increase, reduce or suspend our
planned capital expenditures for 2006 or change the timing and
area of our capital expenditure spending from the estimates
reflected in the table above in response to market conditions or
for other reasons.
We currently plan to spend up to Won 570 billion in 2006 on
capital expenditures related to expansion of our WCDMA network
and provision of HSDPA service. We commenced provision of our
WCDMA services on a limited basis in Seoul at the end of 2003
and continued to improve our WCDMA services in the Seoul
metropolitan area in 2004. In 2005, we completed development of
HSDPA technology, which represents an evolution of the WCDMA
standard and, among others, supports higher data capacity and
allows faster data transmissions than previous WCDMA-based
protocols. HSDPA upgrades to our existing WCDMA network do not
require hardware upgrades and may be accomplished through
software upgrades at virtually no cost. By May 2006, we had
expanded HSDPA service to 25 cities, including Busan and
Incheon. We expect to expand our WCDMA network and HSDPA service
to 84 cities nationwide by the end of 2006. Our actual
capital expenditures for the construction of the WCDMA network
will depend upon many factors, including network
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roll-out, whether WCDMA-based technology is widely implemented
worldwide (which could lower the cost of network equipment) and
other factors.
In March 2005, we obtained a license from the MIC to provide
WiBro services. We conducted pilot testing of WiBro service in
limited areas of metropolitan Seoul in May 2006 and began
commercial service to those limited areas in June 2006. In
addition to a license fee of Won 117.0 billion paid to the
MIC in March 2005, we are planning to spend approximately Won
170 billion in capital expenditures in 2006 to build and
expand our WiBro network, and we may spend additional amounts to
expand our WiBro service in the future. However, our investment
plans may change depending on the market demand for such
services, competitors offering similar services and development
of competing technologies.
In September 2003, we entered into an agreement with Mobile
Broadcasting Corporation for the purposes of co-owning and
launching a satellite for the satellite DMB business. Under the
terms of the agreement, SK Telecom is committed to fund
34.7% of the cost of launching and maintaining the operations of
the satellite. The total cost is expected to be approximately
Won 92.0 billion, of which SK Telecom's committed
amount is approximately Won 31.9 billion. We launched the
satellite in March 2004. In March 2004, we were assigned by the
MIC frequency for satellite DMB. In October 2004, we granted the
right to use our satellite, satellite orbit and frequency to TU
Media Corp., one of our affiliates, which received a license
from the MIC as a satellite DMB provider on December 30,
2004. In May 2005, TU Media Corp. began to provide satellite DMB
services and had surpassed 500,000 subscribers by April 2006.
On March 24, 2005, EarthLink and we completed the formation
of HELIO, LLC. (formerly named
SK-EarthLink
LLC.), a
Delaware limited liability company, to provide wireless voice
and data services in the United States. We, via SK Telecom
USA Holdings, Inc., our wholly-owned subsidiary in the United
States, and EarthLink plan to each invest $220 million in
HELIO from 2005 to 2007. The joint-venture is a
non-facilities-based nationwide mobile virtual network operator
("MVNO") offering cellular voice and data services to
U.S. consumers. HELIO commercially launched its MVNO
service in May 2006. HELIO expects to enter into a previously
under-served, but rapidly growing wireless data, entertainment,
and voice market and will leverage our expertise in developing
and implementing 3G technology and other cutting-edge
applications and EarthLink's established sales channels,
Wi-Fi experience, network data centers and billing capabilities.
We and EarthLink each have a 50 percent voting and economic
ownership interest in HELIO. As of March 31, 2006 we and
EarthLink had each invested $161.5 million in HELIO.
In July 2005, we sold a 60% equity interest in SK Teletech to
Pantech & Curitel, reducing our equity interest in the
company from 89.1% to 29.1% and recording a Won
178.7 billion gain. Effective December 1, 2005,
SK Teletech (which was renamed SKY Teletech following our
sale to Pantech & Curitel) was merged into Pantech and
our equity interest in Pantech became 22.7%.
We have been providing CDMA cellular service in Vietnam since
2003 through our overseas subsidiary, SLD Telecom PTE Ltd. In
November 2005, our board of directors approved an additional
US$280 million investment to expand our network coverage to
all of Vietnam. As of January 31, 2006, we had invested
US$100 million in this expansion project through the
acquisition of 100 million additional shares of
SLD Telecom PTE's unissued common stock for such
amount.
In May 2002, the Government sold its remaining 28.4% stake in KT
Corporation. By participating in this privatization, we acquired
9.6% of KT Corporation's common stock and Won
332.0 billion aggregate principal amount of exchangeable
bonds issued by KT Corporation exchangeable at our option for
1.8% of KT Corporation's common stock. We purchased
29,808,333 shares of common stock of KT Corporation for Won
1.6 trillion and bonds exchangeable into 5,589,666 shares
of such common stock for Won 332.0 billion. We funded our
investment in shares and bonds of KT Corporation in May 2002
with Won 901.7 billion of cash and by incurring Won
1,040.0 billion of short-term debt. On July 16, 2002,
we sold all of the exchangeable bonds of KT Corporation
which we owned to several Korean institutional investors for an
aggregate sale price of Won 340.3 billion. We used the
proceeds of the sale to repay our short-term debt and for
general corporate purposes. We exchanged 29,808,333 shares
of KT Corporation's common stock at Won 50,900 per
share for 8,266,923 shares of our common stock at Won
224,000 per share and settled the difference of Won
334.5 billion between the aggregate sale and purchase
prices in cash on December 30, 2002 and January 10,
2003, under a
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mutual agreement on stock exchange between us and KT Corporation
dated November 14, 2002. Related to these stock exchanges,
a loss on exchange of investments in 15,454,659 shares of
KT Corporation for 4,457,635 shares of our common stock on
December 31, 2002, amounting to Won 47.9 billion, was
recorded as a loss on disposal of investments during the year
ended December 31, 2002. An impairment loss amounting to
Won 44.5 billion, which was related to the investments in
14,353,674 shares of KT Corporation's common stock as
of December 31, 2002, was also recorded during the year
ended December 31, 2002. All impairment loss in respect of
this transaction was recorded in 2002. 4,457,635 shares
were subsequently cancelled and 3,809,288 shares were
designated as treasury stock for use in future mergers and
acquisitions transactions and strategic alliances or for other
corporate purposes to be determined by us. As a result of the
share swap, all cross-shareholdings between KT Corporation and
us have been completely eliminated.
On July 22, 2003, we acquired 2,481,310 shares of
POSCO common stock held by SK Corporation at a price of Won
134,000 per share in accordance with a resolution of our
board of directors dated July 22, 2003. We elected to
purchase the shares for strategic reasons in order to address
the potentially negative impact on the price of our shares of
common stock available for sale in the marketplace arising from
POSCO's ownership of our shares. As of December 31,
2005, POSCO owned 3.64% of our shares.
From time to time, we may make other investments in
telecommunications or other businesses, in Korea or abroad,
where we perceive attractive opportunities for investment. From
time to time, we may also dispose of existing investments when
we believe that doing so would be in our best interest.
As of December 31, 2005, our principal repayment
obligations with respect to long-term borrowings, bonds and
obligations under capital leases outstanding were as follows for
the periods indicated:
Year Ending December 31,
Total
(In billions of won)
2006
W
814.4
2007
708.6
2008
301.7
After 2008
1,389.8
Our research and development expenses have been influenced by
the MIC, which makes annual recommendations concerning the level
of our research and development spending. Our research and
development expenses (including donations to research institutes
and educational organizations) equaled 2.9% in 2003, 3.2% in
2004 and 3.0% in 2005, respectively, of operating revenue. See
"Item 5C. Research and Development".
We anticipate that capital expenditures, repayment of
outstanding debt and research and development expenditures will
represent our most significant use of funds in 2006 and
thereafter. To fund our scheduled debt repayment and planned
capital expenditures over the next several years, we intend to
rely primarily on funds provided by operations, as well as bank
and institutional borrowings, and offerings of debt or equity in
the domestic or international markets. We believe that these
sources will be sufficient to fund our planned capital
expenditures for 2006. Our ability to rely on these alternatives
could be affected by the liquidity of the Korean financial
markets or by government policies regarding Won and foreign
currency borrowings and the issuance of equity and debt. Our
failure to make needed expenditures would adversely affect our
ability to sustain subscriber growth and provide quality
services and, consequently, our results of operations.
No commercial bank in Korea may extend credit (including loans,
guarantees and purchase of bonds) in excess of 20% of its
shareholders' equity to any one borrower. In addition, no
commercial bank in Korea may extend credit exceeding 25% of the
bank's shareholders' equity to any one borrower and to
any person with whom the borrower shares a credit risk.
We generally collect refundable, non-interest bearing deposits
from our customers as a condition to activating their service.
Subject to the approval of the MIC, we set the amounts to be
collected for deposits for cellular services. Effective
February 1, 1996, we generally require cellular subscribers
to pay a facility deposit of Won 200,000. These deposits were an
important source of interest-free capital for us and
historically funded a substantial portion of our capital
expenditures. Since 1997, we have been offering existing and new
cellular
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subscribers the option of obtaining facility insurance from the
Seoul Guarantee Insurance Company, instead of paying the
facility deposit. In order to obtain this facility insurance,
subscribers must meet Seoul Guarantee Insurance Company's
credit requirements and pay a Won 10,000 premium for three years
of coverage. After three years, we pay the cost of such
insurance on the subscriber's behalf. For each defaulting
insured subscriber, Seoul Guarantee Insurance Company reimburses
us up to Won 350,000. We refund the facility deposit to any
existing subscriber who elects to have facility insurance. As a
result of the facility insurance program, we have refunded a
substantial amount of facility deposits, and facility deposits
decreased from Won 44.2 billion as of December 31,
2003 to Won 31.4 billion as of December 31, 2004 and
Won 23.8 billion as of December 31, 2005. We do not
expect to have a significant amount of facility deposits
available for capital expenditures in the future.
On August 11, 2003, we concluded a stock buyback program
which we commenced on June 30, 2003. We acquired a total of
2,544,600 shares of our outstanding common stock, all of
which were cancelled on August 20, 2003. The total purchase
price for the stock buyback was Won 525.2 billion (or an
average of approximately Won 206,388 per share), with
the price per share ranging from Won 192,000 (on July 24,
2003) to Won 216,000 (on July 15 and16, 2003). As a result of
the stock buyback and subsequent cancellation of shares, the
total number of our outstanding common stock declined from
82,993,404 as of December 31, 2001 to 73,614,308 as of
December 31, 2003. On February 20, 2004, we
additionally acquired fractional shares totaling 12 shares
for Won 2 million, which resulted from the merger of
SK IMT Co., Ltd. into SK Telecom in May 2003.
In October 2001, in accordance with the approval of our board of
directors, we established trust funds with four Korean banks
with a total funding of Won 1.3 trillion for the purpose of
acquiring our shares at market prices plus or minus five
percent. Each of the trust funds has an initial term of three
years but is terminable at our option six months after the
establishment of the trust fund and at the end of each
succeeding six-month period thereafter. While held by the trust
funds, our shares are not entitled to voting rights or
dividends. Upon termination of the trust funds, we are required
to resell the shares acquired by the trust funds. On
November 6, 2001, these funds purchased an aggregate of
2,674,580 of our shares of common stock, or approximately 3.0%
of our issued shares, from KT Corporation. On January 31,
2002, these funds purchased from SK Networks an aggregate of
1,367,180 shares of our common stock, or approximately 1.5%
of our issued shares. In December 2003, we terminated trust
funds in the amount of Won 318 billion. In October 2004, we
extended trust funds with a balance of Won 982 billion, for
another three years.
The total accrued and unpaid retirement and severance benefits
for all of our employees as of December 31, 2005 of Won
71.3 billion was reflected in our consolidated financial
statements as a liability, which is net of deposits with
insurance companies totaling Won 191.4 billion to fund a
portion of the employees' severance indemnities. See
"Item 6D. Employees" and note 2(o) of the
notes to our consolidated financial statements.
Dividends declared on our common stock amounted to Won
404.9 billion, Won 758.2 billion and
Won 662.5 billion, respectively, in 2003, 2004 and
2005. In 2004, we amended our articles of incorporation to
permit payment of interim dividends in accordance with relevant
laws. On July 29, 2005, our board of directors approved the
interim dividend rate of Won 1,000 per common share for the
first half of fiscal year 2005. The shareholders who are
registered in our shareholders registry as of July 30, 2005
were entitled to receive the interim dividend. The interim
dividend was paid in August 2005. The total amount of the
interim dividend paid was Won 73.6 billion. At the
ordinary shareholder's meeting in March, 10, 2006, our
shareholders approved a cash dividend of Won 8,000 per
common share (excluding interim dividend). The cash dividend was
paid in March 2006. The overall dividend payout ratio with
respect to dividends to be paid for 2006 is currently expected
to be up to 40% of net income from 2006.
Substantially all of our revenue and operating expenses are
denominated in Won. We generally pay for imported capital
equipment in Dollars.
We did not have any outstanding swap or derivative transactions
as of December 31, 2005 other than fixed-to-fixed currency
swap agreements entered into in the first quarter of 2004 to
reduce our foreign currency exposure with respect to our
issuance of US$300 million notes on April 1, 2004 and
a
fixed-to
-fixed cross
currency swap contract with Credit Suisse First Boston
International to hedge the foreign currency risk of Dollar
denominated convertible bonds with face amounts of
US$329.5 million issued on May 27, 2004. See
note 26 of the notes to our consolidated financial
statements.
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For a discussion of debt securities and convertible notes we
have issued in connection with our financing activities, see
"— Cash Flow Analysis" above.
We may consider in the future entering into additional currency
swap agreements, currency forward contracts transactions and
other arrangements solely for hedging purposes.
Contractual Obligations and Commitments
The following summarizes our contractual cash obligations at
December 31, 2005, and the effect such obligations are
expected to have on liquidity and cash flow in future periods:
Payments Due by Period
(1)
Less Than
After
Total
1 Year
1-3 Years
4-5 Years
5 Years
(In billions of won)
Bonds
Principal
W
3,189.8
W
800.0
W
1,000.0
W
885.9
W
503.9
Interest
334.0
132.0
136.0
54.0
12.0
Long-term borrowings
0.2
0.1
0.1
0.0
Capital lease obligations
24.5
14.3
10.2
—
—
Operating leases
—
—
—
—
Purchase obligations
53.5
53.5
—
—
Facility deposits
38.7
14.9
—
—
23.8
Derivatives
73.0
—
—
13.0
60.0
Investment commitment to HELIO
99.3
79.5
19.8
—
—
Other long-term payables(2)
Principal
650.0
—
200.0
280.0
170.0
Interest
138.4
32.0
60.0
38.0
8.4
Total contractual cash obligations(3)
W
4,601.4
W
1,126.3
W
1,426.1
W
1,270.9
W
778.1
(1)
We are contractually obligated to make severance payments to
    eligible employees we have employed for more than one year, upon
    termination of their employment, regardless of whether such
    termination is voluntary or involuntary. Accruals for severance
    indemnities are recorded based on the amount we would be
    required to pay in the event the employment of all our employees
    were to terminate at the balance date. However, we have not yet
    estimated cash flows for future periods. Accordingly, payments
    due in connection with severance indemnities have been excluded
    from this table.
(2)
Related to acquisition of IMT license. See note 2(j) of the
    notes to our consolidated financial statements.
(3)
This amount does not include our future investments in the CDMA
    market in Vietnam, which we expect to make through our overseas
    subsidiary SLD Telecom PTE. Ltd. under a business cooperation
    contract with Saigon Post & Telecommunication Service
    Corporation. See "Item 4B. Business
    Overview — Other Investments and Relationships"
    and "— Critical Accounting Policies, Estimates
    And Judgments —
Off-Balance
Sheet
    Arrangements".
See note 22 of the notes to our consolidated financial
statements for details related to our other commitments and
contingencies.
Inflation
We do not consider that inflation in Korea has had a material
impact on our results of operations in recent years. According
to data published by The Bank of Korea, annual inflation in
Korea was 3.6% in 2003, 3.0% in 2004 and 2.7% in 2005.
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U.S. GAAP Reconciliation
Our consolidated financial statements are prepared in accordance
with Korean GAAP, which differs in certain significant respects
from U.S. GAAP. For a discussion of significant differences
between Korean GAAP and U.S. GAAP, see notes 30 and 31
of our notes to consolidated financial statements.
Our net income in 2003 under U.S. GAAP is higher than under
Korean GAAP by Won 96.6 billion, primarily due to reversal
of goodwill amortization under U.S. GAAP and the differing
treatment of loss on impairment of investment securities and
capitalization under U.S. GAAP of foreign exchange loss and
interest expense related to tangible assets, which were offset
in part by difference in treatment of non-refundable activation
fees, intangible assets and deferred income taxes. Our net
income in 2004 under U.S. GAAP is higher than under Korean
GAAP by Won 61.6 billion, primarily due to reversal of
goodwill amortization under U.S. GAAP, the differing
treatment of loss on impairment of investment securities and the
tax effect of the reconciling items which were partially offset
by the differing treatment of loss on valuation of currency swap
and nonrefundable activation fees. Our net income in 2005 under
U.S. GAAP is higher than under Korean GAAP by Won
154.6 billion, primarily due to reversal of goodwill
amortization under U.S. GAAP, deferred income tax
adjustments due to the difference in accounting principles and
the differing treatment of loss on valuation of currency swap,
partially offset by the differing treatment of nonrefundable
activation fees and intangible assets.
Our shareholders' equity at December 31, 2003 under
U.S. GAAP is higher than under Korean GAAP by Won
920.8 billion primarily due to increases from differing
treatment of intangible assets, reversal of goodwill
amortization and tax effect of the reconciling items, partially
offset by decreases from the differing treatment of
nonrefundable activation fees and minority interest of equity in
consolidated affiliates. Our shareholders' equity at
December 31, 2004 under U.S. GAAP is higher than under
Korean GAAP by Won 1,031.3 billion primarily due to the
same reasons as in 2003: increases from the differing treatment
of intangible assets, reversal of goodwill amortization and tax
effect of the reconciling items, partially offset by decreases
from the differing treatment of nonrefundable activation fees
and minority interest of equity in consolidated affiliates. Our
shareholders' equity at December 31, 2005 under
U.S. GAAP is higher than under Korean GAAP by
Won 1,144.9 billion primarily due to the same reasons
as in 2003 and 2004: increases from the differing treatment of
intangible assets, reversal of goodwill amortization and tax
effect of the reconciling items, partially offset by decreases
from the differing treatment of nonrefundable activation fees
and minority interest of equity in consolidated affiliates.
New Accounting Pronouncements under U.S. GAAP
In March 2004, the EITF supplemented EITF Issue
No.
03-1,
"The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments." EITF Issue
No.
03-1
provides
guidance for evaluating whether an investment is
other-than-temporarily impaired and requires disclosures about
unrealized losses on investments in debt and equity securities.
In September 2004, the FASB issued FASB Staff Position
EITF Issue
03-1
-1,
"Effective Date of Paragraphs 10-20 of EITF
Issue
03-1,"
which deferred the effective date of the recognition and
measurement provisions of the consensus until further guidance
is issued.
In November 2004, the FASB issued Statement of Financial
Accounting Standards ("SFAS") No. 151,
"Inventory Costs, an Amendment of ARB No. 43,
Chapter 4." SFAS No. 151 clarifies the
accounting for abnormal amounts of idle facility expense,
freight, handling costs, and wasted material. The Statement is
effective for inventory costs incurred during fiscal year
beginning after June 15, 2005. Management does not expect
this statement will have a material impact on our consolidated
financial position or results of operations.
In December 2004, the FASB issued SFAS No. 123
(revised 2004), "Share-Based Payments"
("SFAS 123R"). This statement eliminates the
option to apply the intrinsic value measurement provisions of
Accounting Principles Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to
Employees" to stock compensation awards issued to
employees. Rather, SFAS 123R requires companies to measure
the cost of employee services received in exchange for an award
of equity instruments based on the grant-data fair value of the
award. That cost will be recognized over the period during which
an employee is required to provide services in exchange for the
award (usually the vesting period). SFAS 123R applies to
all awards granted after the required effective date and to
awards modified, repurchased, or cancelled after that date.
SFAS 123R will be effective for
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our fiscal year ending December 31, 2006. Management does
not expect that adoption of this statement will have a material
impact on our consolidated financial position or results of
operations.
In December 2004, the FASB issued SFAS No. 153,
"Exchanges of Non-monetary Assets — an amendment
of APB Opinion No. 29" ("SFAS 153"),
which amends Accounting Principles Board Opinion No. 29,
"Accounting for Non-monetary Transactions" to
eliminate the exception for non-monetary exchanges of similar
productive assets and replaces it with a general exception for
exchanges of non-monetary assets that do not have commercial
substance. SFAS 153 is effective for non-monetary assets
exchanges occurring in fiscal periods beginning after
June 15, 2005. Management does not anticipate that the
adoption of this statement will have a material effect on our
consolidated financial position or results of operations.
In May 2005, the FASB issued SFAS No. 154,
"Accounting Changes and Error Corrections"
("SFAS 154") which replaces Accounting Principles
Board Opinions No. 20 "Accounting Changes" and
SFAS No. 3, "Reporting Accounting Changes in
Interim Financial Statements — An Amendment of APB
Opinion No. 28." SFAS 154 provides guidance on
the accounting for and reporting of accounting changes and error
corrections. It establishes retrospective application, to the
extent practicable, as the required method for reporting a
change in accounting principle and the reporting of a correction
of an error. SFAS 154 is effective for accounting changes
and corrections of errors made in fiscal years beginning after
December 15, 2005 and is required to be adopted by us in
2006. We are currently evaluating the effect that the adoption
of SFAS 154 will have on our consolidated results of
operations and financial condition but does not expect it to
have a material impact.
In June 2005, the Emerging Issues Task Force ("EITF")
of the FASB issued EITF Issue No. 04-5, "Determining
Whether a General Partner, or the General Partners as a Group,
Controls a Limited Partnership or Similar Entity When the
Limited Partners Have Certain Rights." EITF Issue
No. 04-5 provides that the general partner(s) is presumed
to control the limited partnership, unless the limited partners
possess either substantive participating rights or the
substantive ability to dissolve the limited partnership or
otherwise remove the general partner(s) without cause
("kick-out rights"). Kick-out rights are substantive
if they can be exercised by a simple majority of the limited
partners voting interests. The guidance applies to general
partners of all new limited partnerships formed and for existing
limited partnerships for which the partnership agreements are
modified after June 29, 2005, and to general partners in
all other limited partnerships no later than the beginning of
the first reporting period in fiscal years beginning after
December 15, 2005. Management does not expect adoption of
this guidance to have a material impact on our consolidated
financial position, operating results or cash flows.
In November 2005, the FASB issued FASB Staff Position
("FSP") No. FAS 115-1, "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain
Investments," revising the recognition and measurement
provisions of EITF Issue
No.
03-1.
This FSP
clarified and reaffirmed existing guidance as to when an
investment is considered impaired, whether that impairment is
other than temporary, and the measurement of an impairment loss.
Certain disclosures about unrealized losses on
available-for-sale debt and equity securities that have not been
recognized as other-than-temporary impairments are required
under FSP No. FAS 115-1. The FSP is effective for
fiscal years beginning after December 15, 2005. As the FSP
reaffirms existing guidance, management does not expect this FSP
to have a significant impact on our consolidated financial
position, operating results or cash flows.
In February 2006, the FASB issued SFAS No. 155,
"Accounting for Certain Hybrid Financial
Instruments — an amendment of FASB Statements
No. 133 and 140," ("SFAS 155") that
permits fair value remeasurement of certain hybrid financial
instruments, clarifies the scope of SFAS No. 133
regarding interest-only and principal-only strips, and provides
further guidance on certain issues regarding beneficial
interests in securitized financial assets, concentrations of
credit risk and qualifying special purpose entities.
SFAS 155 is effective for all instruments acquired or
issued as of the first fiscal year beginning after
September 15, 2006 and may be applied to certain other
financial instruments held prior to the adoption date. Earlier
adoption is permitted as of the beginning of an entity's
fiscal year providing the entity has not yet issued financial
statements. Management does not expect the adoption of
SFAS 155 to have a material impact on our consolidated
financial position, operating results or cash flows.
In March 2006, the FASB issued SFAS No. 156,
"Accounting for Servicing of Financial Assets —
an amendment of FASB Statement No. 140."
("SFAS 156"). SFAS 156 requires that an
entity separately recognize
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a servicing asset or a servicing liability when it undertakes an
obligation to service a financial asset under a servicing
contract in certain situations. Such servicing assets or
servicing liabilities are required to be initially measured at
fair value, if practicable. SFAS 156 also allows an entity
to choose one of two methods when subsequently measuring its
servicing assets and servicing liabilities: (1) the
amortization method or (2) the fair value measurement
method. The amortization method existed under
SFAS No. 140 and remains unchanged in
(1) allowing entities to amortize their servicing assets or
servicing liabilities in proportion to and over the period of
estimated net servicing income or net servicing loss and
(2) requiring the assessment of those servicing assets or
servicing liabilities for impairment or increased obligation
based on fair value at each reporting date. The fair value
measurement method allows entities to measure their servicing
assets or servicing liabilities at fair value each reporting
date and report changes in fair value in earnings in the period
the change occurs. SFAS 156 is effective for fiscal years
beginning after September 15, 2006. Management does not
expect the adoption of this SFAS 156 to have a material
impact on our consolidated financial position, operating results
or cash flows.
Significant Changes in Korean GAAP
On January 1, 2003, we and our subsidiaries adopted SKAS
No. 2 through No. 9, except for SKAS No. 6, which
was early adopted in 2002. As a result, we reclassified the
accounts relating to securities as explained in note 2(g)
of our consolidated financial statements for the years ended
2003, 2004 and 2005, and changed the accounting policy for
capitalization of interest and other financing costs to charge
such interest expense and other financing cost to current
operations as incurred as explained in notes 2(i) and 2(j)
to our consolidated financial statements for the years ended
December 31, 2003, 2004 and 2005. If financing costs had
been capitalized, our consolidated net income for the year ended
December 31, 2003 would have increased by Won
32.3 billion (net of income tax effect of Won
13.6 billion). In addition, in accordance with the
application of SKAS No. 3, "Intangible Assets",
effective from January 1, 2003 organization costs which
were recorded in intangible assets through 2002, are charged to
expenses as incurred and the cumulative effect of this
accounting change was charged to beginning retained earnings as
of January 1, 2003.
On January 1, 2004, we adopted SKAS No. 10,
No. 12 and No. 13. Such adoptions of new SKAS did not
have an effect on our consolidated financial position as of
December 31, 2004 or our consolidated ordinary income and
net income for the year ended December 31, 2004.
On January 1, 2005, we and our subsidiaries adopted SKAS
No. 15 through No. 17. The adoption of such accounting
standards did not have an effect on our consolidated financial
position as of December 31, 2005, except as follows:
•
Through 2004, when our equity interests in the equity method
    investees were diluted as a result of the equity method
    investees' direct sales of their unissued shares to third
    parties, the changes in the our proportionate equity of
    investees were accounted for as capital transactions. Effective
    January 1, 2005, such transactions are accounted for as
    income statement treatment, pursuant to adoption of SKAS
    No. 15, "Investments: Equity Method". As a result
    of adopting SKAS No. 15, net income for the year ended
    December 31, 2005 increased by Won 6.3 billion (net of
    tax effect of Won 2.4 billion).
•
Through 2004, tax effects of temporary differences related to
    capital surplus or capital adjustments were excluded in
    determining the deferred tax assets or liabilities. Effective
    January 1, 2005, such tax effects of temporary differences
    are included in determining the deferred tax assets or
    liabilities, pursuant to adoption of SKAS No. 16
    "Income Taxes". Accordingly, adjustments made directly
    to capital surplus or capital adjustments, which result in
    temporary differences, are recorded net of related tax effects.
    In addition, effective January 1, 2005, deferred income tax
    assets and liabilities which were presented on the balance sheet
    as a single non-current net number through 2004, are separated
    into current and non-current portions. As a result of adopting
    SKAS No. 16, total assets and total liabilities as of
    December 31, 2005 increased by Won 67.6 billion and
    Won 97.8 billion, respectively, and total
    stockholders' equity as of December 31, 2005 decreased
    by Won 30.2 billion, which was directly reflected in
    capital surplus or capital adjustments. See note 18 of the
    notes to our consolidated financial statements.
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•
Through 2004, provisions were recorded at nominal value.
    Effective January 1, 2005, provisions are recorded at the
    present value when the effect of the time value of money is
    material, pursuant to adoption of SKAS No. 17
    "Provisions, Contingent Liabilities and Contingent
    Assets". SKAS No. 17 is prospectively applied and as a
    result of adopting such accounting standard, total liabilities
    as of December 31, 2005 decreased by Won 7.4 billion
    and ordinary income and net income for the year ended
    December 31, 2005 increased by Won 5.4 billion. See
    note 25 of the notes to our consolidated financial
    statements.
Such newly adopted accounting standards are prospectively
applied as allowed by SKAS No. 15 through No. 17. As a
result, our consolidated balance sheets as of December 31,
2004 and 2003 and our consolidated statements of income and cash
flows for the years ended December 31, 2004 and 2003 were
not adjusted to reflect the effect of adoption of SKAS
No. 15 through No. 17.
As SKAS No. 11 is not effective until the fiscal year
ending December 31, 2006 and SKAS No. 14 is related to
exceptions to accounting for small and medium-sized entities,
they do not apply to us.
Critical Accounting Policies, Estimates And Judgments
Our consolidated financial statements are prepared in accordance
with Korean GAAP. The preparation of these financial statements
requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenue and expenses as
well as the disclosure of contingent assets and liabilities. We
continually evaluate our estimates and judgments including those
related to revenue recognition, allowances for doubtful
accounts, inventories, useful lives of property and equipment,
investments, employee stock option compensation plans and income
taxes. We base our estimates and judgments on historical
experience and other factors that are believed to be reasonable
under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions. We also
provide a summary of significant differences between accounting
principles followed by us and our subsidiaries and
U.S. GAAP. We believe that of our significant accounting
policies, the following may involve a higher degree of judgment
or complexity:
Allowances for Doubtful Accounts
An allowance for doubtful accounts is provided based on a review
of the status of individual receivable accounts at the end of
the year. We maintain allowances for doubtful accounts for
estimated losses that result from the inability of our customers
to make required payments. We base our allowances on the
likelihood of recoverability of accounts receivable based on
past experience and taking into account current collection
trends that are expected to continue. If economic or specific
industry trends worsen beyond our estimates, we increase our
allowances for doubtful accounts by recording additional
expenses.
Inventories
Inventories are stated at the lower of cost, determined using
the moving average method, or market value. Inventories consist
of supplies for wireless telecommunications facilities, handsets
and raw materials for handsets.
Estimated Useful Lives
We estimate the useful lives of long-lived assets in order to
determine the amount of depreciation and amortization expense to
be recorded during any reporting period. The useful lives are
estimated at the time the asset is acquired and are based on
historical experience with similar assets as well as taking into
account anticipated technological or other changes. If
technological changes were to occur more rapidly than
anticipated or in a different form than anticipated, the useful
lives assigned to these assets may need to be shortened,
resulting in the recognition of increased depreciation and
amortization expense in future periods.
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Impairment of Long-lived Assets Including the WCDMA
    Frequency Usage Right
Long-lived assets generally consist of property, plant and
equipment and intangible assets. We review long-lived assets for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not recoverable. In
addition, we evaluate our long-lived assets for impairment each
year as part of our annual forecasting process. An impairment
loss would be considered when estimated undiscounted future net
cash flow expected to result from the use of the asset and its
eventual disposition are less than its carrying amount. If such
assets are considered to be impaired, the impairment to be
recognized is measured as the amount by which the carrying
amount of the assets exceeds the fair value of the assets.
Our intangible assets include the WCDMA frequency usage right,
which has a contractual life of 15 years and is amortized
from the date commercial service is initiated through the end of
its contractual life, which is December 15, 2015. We
started to amortize this frequency usage right on
December 1, 2003. Because WCDMA presents risks and
challenges to our business, any or all of which, if realized or
not properly addressed, may have a material adverse effect on
our financial condition and results of operations, we review the
WCDMA frequency usage right for impairment on an annual basis.
In connection with our review, we utilize the estimated
long-term revenue and cash flow forecasts. The use of different
assumptions within our cash flow model could result in different
amounts for the WCDMA frequency usage right. The results of our
review using the testing method described above did not indicate
any need to impair the WCDMA frequency usage right for 2005.
Impairment of Investment Securities
When the declines in fair value of individual available-for-sale
and
held-to
-maturity
securities below their acquisition cost are other than temporary
and there is objective evidence of impairment, the carrying
value of the securities is adjusted to their fair value with the
resulting valuation loss charged to current operations.
As part of this review, the investee's operating results,
net asset value and future performance forecasts as well as
general market conditions are taken into consideration. If we
believe, based on this review, that the market value of an
equity security or a debt security may realistically be expected
to recover, the loss will continue to be classified as
temporary. If economies or specific industry trends worsen
beyond our estimates, valuation losses previously determined to
be recoverable may need to be charged as an impairment loss in
current operations.
Significant management judgment is involved in the evaluation of
declines in value of individual investments. The estimates and
assumptions used by management to evaluate declines in value can
be impacted by many factors, such as our financial condition,
earnings capacity and near-term prospects in which we have
invested and, for publicly-traded securities, the length of time
and the extent to which fair value has been less than cost. The
evaluation of these investments is also subject to the overall
condition of the economy and its impact on the capital markets.
Employee Stock Option Compensation Plan
We adopted the fair value based method of accounting for the
employee stock option compensation plan. The plan was
established, effective as of March 17, 2000, to reward the
performance of management who have contributed, or have the
ability to contribute, significantly to our company. Under the
fair value based method, compensation cost is measured at the
grant date based on the value of the award and is recognized
over the service period. For stock options, fair value is
determined using an option-pricing model that takes into account
the stock price at the grant date, the exercise price, the
expected life of the option, the volatility of the underlying
stock, expected dividends and the current risk-free interest
rate for the expected life of the option. However, as permitted
under Korean GAAP, we exclude the volatility factor in
estimating the value of our stock options, which results in
measurement at minimum value. The total compensation cost of an
option estimated at the grant date is not subsequently adjusted
for changes in the price of the underlying stock or its
volatility, the life of the option, dividends on the stock, or
the risk-free interest rate.
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Income Taxes
We are required to estimate the amount of tax payable or
refundable for the current year and the deferred income tax
liabilities and assets for the future tax consequences of events
that have been reflected in our financial statements or tax
returns. This process requires management to make assessments
regarding the timing and probability of the tax impact. Actual
income taxes could vary from these estimates due to future
changes in income tax law or unpredicted results from the final
determination of each year's liability by taxing
authorities.
We believe that the accounting estimate related to establishing
tax valuation allowances is a "critical accounting
estimate" because (i) it requires management to make
assessments about the timing of future events, including the
probability of expected future taxable income and available tax
planning opportunities, and (ii) the impact that changes in
actual performance versus these estimates could have on the
realization of tax benefits as reported in our results of
operations could be material. Management's assumptions
require significant judgment because actual performance has
fluctuated in the past and may continue to do so.
Off-Balance Sheet Arrangements
We have sold certain receivables in 2002 and 2003 in five
separate transactions described under
"— Liquidity and Capital Resources —
Liquidity" to Nate First Special Purpose Company, Nate
Second Special Purpose Company, Nate Third Special Purpose
Company, Nate Fourth Special Purpose Company and Nate Fifth
Special Purpose Company in asset-backed securitization
transactions. Under Korean GAAP, we accounted for these
transactions as sales of the receivables to the special purpose
companies. See note 4 of the notes to our consolidated
financial statements. Under U.S. GAAP, we are required to
consolidate these entities as these entities do not meet the
qualifications for a qualifying special purpose entity. See
"— U.S. GAAP Reconciliation" and
note 30 of our notes to consolidated financial statements.
SLD Telecom, our overseas subsidiary, entered into a business
cooperation contract with Saigon Post &
Telecommunication Services Corporation to establish cellular
mobile communication services and provide CDMA service
throughout Vietnam. In accordance with this contract, in the
event that the cash inflow for the business is insufficient to
cover the cash outflow necessary to cover the joint expenditure
of the business ("cash shortfall"), SLD Telecom and
Saigon Post & Telecommunication Services Corporation
will contribute the necessary funds to the business and bear
additional cash shortfalls according to their gross profit
sharing ratios at that time. With respect to our involvement in
the business, our maximum exposure to loss was approximately Won
54.6 billion as of December 31, 2005.
In March 2005, we and EarthLink, an Internet service provider in
the U.S. established HELIO (formerly named SK-Earthlink), a
joint venture company, to provide wireless voice and data
services across the U.S. We have committed to invest
$220 million over the next three years, of which
$161.5 million has been invested as of March 31, 2006,
and EarthLink has committed to invest $220 million over the
next three years, of which $161.5 million had been invested
as of the same date.
Item 5C.
Research and
Development
Overview
In conformity with the MIC's guidance, we have maintained a
high level of spending on research and development activity.
Prior to 1996, the majority of our research and development
expense consisted of MIC-directed donations to several Korean
research institutes and educational organizations. More
recently, we have sharply increased our spending for our
internal research activity, resulting in such amounts exceeding
our spending on external research. We believe that we must
maintain a substantial in-house technology capability to achieve
our strategic goals.
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The following table sets forth our annual research and
development expenses:
As of and for the Year Ended
December 31,
2003
2004
2005
(In billions of won)
Internal R&D Expenses
W
235.8
W
267.1
W
252.0
External R&D Expenses
64.9
69.0
69.1
Total R&D Expenses
W
300.7
W
336.1
W
321.1
The MIC has the statutory power to recommend levels of spending
by telecommunications service providers on research and
development activity and the allocation of expenditures between
internal and external research. In practice, the MIC has issued
guidelines regarding the amount and allocation of research
spending. In its May 1995 guidelines, the MIC recommended that
that we observe the following minimum levels of total research
and development spending (set as a percentage of budgeted
revenue and calculated according to MIC guidelines which differ
from our accounting treatment of such expenses): 9.0% from 1995
through 1997; 9.5% for 1998; and 10.0% for 1999 through 2001.
With respect to the level of contribution specifically for
external research and development, in July 1998, the MIC reduced
the recommended minimum level of contribution to the MIC-run
Fund for Development of Information and Telecommunications from
2.0% to 1.5%. In 2001, the recommended minimum level of
contribution was further reduced to 1.0%. In 2002, the
contribution became mandatory, and the required minimum level of
contribution was further reduced to 0.75%. In 2003, 2004 and
2005, the required minimum level of contribution was 0.75%, the
same as 2002. We are not obligated to make donations to any
other external research institutes.
Internal Research and Development
The main focus of our internal research and development activity
is the development of 3G and 3.5G technologies and services
and value-added technologies and services for our CDMA network,
such as wireless data communications, as well as development of
new technologies that reflect the growing convergence between
telecommunications and other industries. We spent approximately
Won 252.0 billion on internal research and development in
2005.
Our internal research and development activity is centered at a
research center with
state-of
-the-art
facilities and equipment established in January 1999 in
Bundang-gu, Sungnam-si, Kyunggi-do, Korea. As of
December 31, 2005, our research center housed 552 research
engineers (including both full time and temporary research
engineers). Their work focuses on planning of cell sites,
network management, digital wireless technologies, multimedia,
information processing and other wireless telecommunications
areas. Although the technology is at its very early stages, our
research center includes a team that is helping to develop what
is known as 4G wireless technology, which if successfully
completed is expected to enable wireless data transmissions at
speeds of up to 155 Mbps, which would be faster than the
current WCDMA technology.
Each business unit has its own research team that can
concentrate on specific short-term research needs. Such research
teams permit our research center to concentrate on long-term,
technology-intensive research projects. We aim to establish
strategic alliances with selected domestic and foreign companies
with a view to exchanging or jointly developing technologies,
products and services.
External Research and Development
In addition to conducting research in our own facilities, we
have been a major financial supporter of other Korean research
institutes, and we have helped coordinate the Government's
effort to commercialize the CDMA digital technology. We do not
independently own intellectual property rights in the
technologies or products developed by any external research
institute.
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Item 5D.
Trend Information
These matters are discussed under Item 5A. and
Item 5B. above where relevant.
Item 5E.
Off-Balance Sheet Arrangements
These matters are discussed under Item 5B. above where
relevant.
Item 5F.
Tabular Disclosure of Contractual Obligations
These matters are discussed under Item 5B. above where
relevant.
Item 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Item 6A.
Directors and Senior Management
Our board of directors has ultimate responsibility for the
management of our affairs. Under our articles of incorporation,
our board is to consist of at least three but no more than
twelve directors, more than a half of whom must be independent
non-executive directors. We currently have a total of eleven
directors, seven of whom are independent non-executive
directors. We elect our directors at a general meeting of
shareholders with the approval of at least a majority of those
shares present or represented at such meeting. Such majority
must represent at least one-fourth of our total issued and
outstanding shares with voting rights.
As required under relevant Korean laws and our articles of
incorporation, we have a committee for recommendation of
independent non-executive directors within the board of
directors, the Recommendation Committee. Independent
non-executive directors are appointed from among those
candidates recommended by the Recommendation Committee.
The term of offices for directors is until the close of the
third annual general shareholders meeting convened after he or
she commences his or her term. Our directors may serve
consecutive terms. Our shareholders may remove them from office
by a resolution at a general meeting of shareholders adopted by
the holders of at least two-thirds of the voting shares present
or represented at the meeting, and such affirmative votes also
represent at least one-third of our total voting shares then
issued and outstanding.
Representative directors are directors elected by the board of
directors with the statutory power to represent our company.
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The following are the names and positions of our standing and
non-standing directors. The business address of all of our
directors is the address of our registered office at 11,
Euljiro 2-ga, Jung-gu, Seoul 100-999, Korea.
Standing directors are our full-time employees and executive
officers, and they also comprise the senior management, or the
key personnel who manage us. Their names, dates of birth and
positions at our company and other positions are set forth below:
Other Principal
Director
Expiration
Directorships and
Name
Date of Birth
Since
of Term
Position
Positions
Business Experience
Jung Nam Cho
Nov. 20, 1941
1995
2007
Vice-Chairman and Representative Director
President & COO, SK Telecom
Shin Bae Kim
Oct. 15, 1954
2002
2008
CEO and Representative Director
Chairman, Korea Association of RFID/USN
Head of Strategic Planning Group, Shinsegi Telecomm, Inc.;
    Director, SK Telecom; Senior Vice President, SK Telecom;
    Director, KORMS
Bang Hyung Lee
Aug. 20, 1955
2005
2008
Executive Vice- President, Chief Marketing Officer and Head of
    Business Center
Head of Internet Business Group, SK Telecom; Head of Marketing
    Group, SK Telecom; Senior Accountant, Deloitte Haskin &
    Sells, USA
Sung Min Ha
Mar. 24, 1957
2004
2007
Senior Vice President and Chief Financial Officer
Representative Director, SK Capital
Head of Strategic Planning Group, SK Telecom; Director, SK
    Telink; Auditor, SK C&C; Chairman and Representative
    Director, SLD Telecom; Auditor, SK Teletech
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Our current non-standing directors are as set forth below:
Other Principal
Director
Expiration
Directorships and
Name
Date of Birth
Since
of Term
Position
Positions
Business Experience
Dae Sik Kim
Jan. 11, 1955
2005
2008
Independent Non- executive Director
Professor, Hanyang University; Committee Member, MOFE Advisory
    Committee on Financial Development
University of Pennsylvania, MBA (1981), Ph.D. (1987)
Yong Woon Kim
Oct. 4, 1943
2003
2006
Independent Non- executive Director
Non-Standing Auditor, Pohang University of Science and Technology
Senior Executive Vice President (Legal Department, Seoul Office,
    Investment and Finance) and Director, POSCO; Standing Advisor,
    POSCO Research Institute
Dae Kyu Byun
Mar. 8, 1960
2005
2008
Independent Non- executive Director
CEO & Representative Director, Humax Co., Ltd.; Head
    Vice-President, Korea Venture Business Association
Director, the Federation of Korea Information Industries;
    Representative Director, Guin Co.; Co-founder, Venture Leaders
    Club
Seung Taik Yang
Oct. 24, 1939
2005
2008
Independent Non- executive Director
President, Tong- Myung University of Information Technology
Polytechnic Institute of Brooklyn, Ph.D.;
    7th Minister, Ministry of Information and Communication
Jae Seung Yoon
Nov. 9, 1962
2002
2008
Independent Non- executive Director
CEO & Representative Director; Daewoong Pharmaceutical
    Co., Ltd.; Vice-president, Insung Information Co., Ltd.
Public Prosecutor, The Seoul/Busan District Public
    Prosecutors' Office; Auditor and Vice President, Daewoong
    Pharmaceutical Co., Ltd.
Sang C. Lee
Jan. 24, 1941
1999
2008
Independent Non- executive Director
IT Consultant
Chairman, Communication Network Interface, Inc.; Chairman and
    CEO, Spectron Corp.; President, Scovill Fasteners, Inc.;
    Director of Organization, ITT Worldwide Corp.; Vice President,
    ITT Asia Pacific Corp.
Hyun Chin Lim
Apr. 26, 1949
2006
2009
Independent Non- executive Director
Dean, Seoul National University, Professor, Central Officials
    Training Institute; Chairman, Korea Association of Sociology
Professor, Seoul National University
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Involvement In Certain Legal Proceedings
In February 2004, certain members of our board of directors and
executive officers resigned following a finding of accounting
misconduct at SK Networks and the resulting movement to improve
corporate governance in companies in the SK Group. The
resignations were tendered by Mr. Tae Won Chey, former
non-standing director of SK Telecom and chairman and CEO of SK
Corporation, Mr. Kil Seung Son, former Chairman, Chief
Executive Officer and Representative Director of SK Telecom and
representative director of SK Networks and non-standing director
of SK Corporation, Mr. Jae Won Chey, executive vice
president of SK Telecom at the time and Mr. Moon Soo Pyo,
president of SK Telecom at the time. None of these resignations
were related to any allegations of wrongdoing in connection with
their role in our business, and SK Telecom was not implicated in
any of the charges against SK Network's management. For
details of the charges against Mr. Tae Won Chey and
Mr. Kil Seung Son, see "Item 3D. Risk
Factors — Financial difficulties and charges of
financial statement irregularities at our affiliate, SK Networks
(formerly SK Global), may cause disruptions in our
business."
Item 6B.
Compensation
The aggregate of the remuneration paid and in-kind benefits
granted to the directors (both standing directors, who also
serve as our executive officers, and non-standing directors)
during the year ended December 31, 2005 totaled
approximately Won 3.9 billion.
Remuneration for the directors is determined by shareholder
resolutions. Severance allowances for directors are determined
by the board of directors in accordance with our regulation on
severance allowances for officers, which was adopted by
shareholder resolutions. The regulation provides for monthly
salary, performance bonus, severance payment and fringe
benefits. The amount of performance bonuses is independently
decided by a resolution of the board of directors.
In March 2001 and 2002, pursuant to resolutions of the
shareholders, and in accordance with our articles of
incorporation, certain of our directors and officers were
granted options to purchase our common shares. In 2001 and 2002,
42 and 70 officers, respectively, were granted options to
purchase 43,820 and 65,730 common shares. The exercise
price for the shares are Won 211,000 and Won 267,000,
respectively, for 2001 and 2002. Each stock option agreement
also provides for adjustments to the amount and exercise price
of the shares in cases where the share price may become diluted
as a result of issuance of new shares, stock dividends or
mergers. The officers may exercise their options during a
two-year period starting from March 2004 for shares granted in
2001. No officer exercised his option to purchase for shares
granted in 2002. The board of directors may, by resolution,
cancel any director's or officer's stock options under
certain circumstances. Since 2003, none of our directors and
officers have been granted options to purchase our common shares.
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The following table shows the share allotment for the directors
under our 2001 and 2002 stock option program. There has been no
stock option program since 2003.
Number of
Shares Allotted
Number of
Options
Name
Position
2003
2004
2005
Exercised
Jung Nam Cho
Director
0
0
0
0
Shin Bae Kim
Director
0
0
0
0
Bang Hyung Lee
Director
0
0
0
0
Sung Min Ha
Director
0
0
0
0
Dae Sik Kim
Independent Non-executive Director
0
0
0
0
Yong Woon Kim
Independent Non-executive Director
0
0
0
0
Dae Kyu Byun
Independent Non-executive Director
0
0
0
0
Seung Taik Yang
Independent Non-executive Director
0
0
0
0
Jae Seung Yoon
Independent Non-executive Director
0
0
0
0
Sang C. Lee
Independent Non-executive Director
0
0
0
0
Hyun Chin Lim
Independent Non-executive Director
0
0
0
0
Other Officers
0
0
0
0
Total
0
0
0
0
Item 6C.
Board Practices
Termination of Directors, Services
Directors are given a retirement and severance payment upon
termination of employment in accordance with our internal
regulations on severance payments. Upon retirement, directors
who have made significant contributions to our company during
their term may be appointed to serve either as an advisor to us
or as an officer of an affiliate company.
Audit Committee
Under relevant Korean laws and our articles of incorporation, we
are required to have an audit committee under the board of
directors. The committee is composed of at least three members,
two-thirds of whom must be independent non-executive directors
independent with respect to applicable rules. The members of the
audit committee are appointed annually by a resolution of the
board of directors. They are required to:
•
examine the agenda for the general meeting of shareholders;
•
examine financial statements and other reports to be submitted
    by the board of directors to the general meeting of shareholders;
•
review the administration by the board of directors of our
    affairs; and
•
examine the operations and asset status of us and our
    subsidiaries.
In addition, the audit committee must appoint independent
certified public accountants to examine our financial
statements. An audit and review by certified public accountants
of our financial statements is required for the purposes of a
securities report. Listed companies must provide such report on
an annual, semi-annual and quarterly basis to the Financial
Supervisory Commission of Korea and the KRX Stock Market.
Our audit committee is composed of three independent
non-executive directors: Dae Sik Kim, Yong Woon Kim and Hyun
Chin Lim, each of whom must be financially literate and
independent under the rules of the New York Stock Exchange as
applicable. The board of directors has determined that Dae Sik
Kim is an "audit committee financial expert" as
defined under the applicable rules of the Securities and
Exchange Commission. See "Item 16A. Audit Committee
Financial Expert".
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Independent Non-executive Director Nomination Committee
This committee is devoted to recommending independent
non-executive directors for the board of directors. The
objective of the committee is to help promote fairness and
transparency in the nomination of candidates for these
positions. The board of directors decides from time to time who
will comprise the members of this committee.
Capex Review Committee
This committee is responsible for reviewing our business plan
(including the budget). It also examines major capital
expenditure revisions, and routinely monitors capital
expenditure decisions that have already been executed. The board
of directors decides from time to time who will comprise the
members of this committee.
Compensation Review Committee
This committee oversees our overall compensation scheme for the
Chief Executive Officer and directors. The committee consists of
three independent non-executive directors and is in charge of
reviewing the criteria for and levels of directors'
compensation packages and benefits. The board of directors
decides from time to time who will comprise the members of this
committee. We do not have an independent internal remuneration
committee. Remuneration for the directors and officers is
determined by shareholder resolutions. Severance allowances for
directors are determined by the board of directors in accordance
with our internal regulation on remuneration of officers, which
was also adopted by shareholder resolutions and provides for
monthly salary, performance bonus, severance payment and fringe
benefits. The amount of performance bonuses is independently
decided by a resolution of the board of directors in accordance
with internal regulations. The regulation on payment of
remuneration to company officers also provides for a special
contribution bonus upon retirement, in addition to the basic
severance package, for any officer or director who during his or
her term of service makes special contributions to the company.
We may also reimburse our independent non-executive directors
for expenses they incurred in performance of their services. See
"Item 6B. Compensation". We are currently
receiving consulting services on creating a remuneration
committee under the Board of Directors.
Global Committee
This committee is a temporary committee consisting of four
directors, established on July 29, 2005 for a period of one
year to establish and advise on our core global strategies and
business areas.
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Differences in Corporate Governance Practices
Pursuant to the rules of the New York Stock Exchange applicable
to foreign private issuers like us that are listed on the New
York Stock Exchange, we are required to disclose significant
differences between the New York Stock Exchange's
corporate governance standards and those that we follow under
Korean law. The following is a summary of such significant
differences.
NYSE Corporate Governance Standards
SK Telecom Corporate Governance Practice
Director Independence
Listed companies must have a majority of independent directors.
Of the 11 members of our board of directors, 7 are independent
    directors.
Executive Session
Listed companies must hold meetings solely attended by
    non-management directors to more effectively check and balance
    management directors.
Our Audit Committee, which is comprised solely of three
    independent directors, holds meetings whenever there are matters
    related to management directors, and such meetings are generally
    held once every month.
Nomination/ Corporate Governance Committee
Listed companies must have a nomination/corporate governance
    committee composed entirely of independent directors.
Although we do not have a separate nomination/ corporate
    governance committee, we maintain an Independent Director
    Recommendation Committee composed of independent directors and
    management directors.
NYSE Corporate Governance Standards
SK Telecom Corporate Governance Practice
Audit Committee
Listed companies must have an audit committee that satisfies the
    requirements of Rule 10A-3 under the Exchange Act.
We maintain an Audit Committee comprised solely of three
    independent directors.
Audit Committee Additional Requirements
Listed companies must have an audit committee that is composed
    of more than three directors.
Our Audit Committee has three independent directors.
Shareholder Approval of Equity Compensation Plan
Listed companies must allow its shareholders to exercise their
    voting rights with respect to any material revision to the
    company's equity compensation plan.
We currently have two equity compensation plans: a stock option
    plan for officers and directors and employee stock ownership
    plan for employees ("ESOP"). We manage such
    compensation plans in compliance with the applicable laws and
    our articles of incorporation, provided that, under certain
    limited circumstances, the grant of stock options or matters
    relating to ESOP are not subject to shareholders' approval
    under Korean law.
Corporate Governance Guidelines
Listed companies must adopt and disclose corporate governance
    guidelines.
Although we do not maintain separate corporate governance
    guidelines, we are in compliance with the Korean Commercial Law
    in connection with such matters, including the governance of the
    board of directors.
Code of Business Conduct and Ethics
Listed companies must adopt and disclose a code of business
    conduct and ethics for directors, officers and employees and
    promptly disclose any waivers of the code for directors or
    executive officers.
We have adopted a Code of Business Conduct and Ethics for all of
    our directors, officers and employees, and such code is also
    available on our website at www.sktelecom.com.
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Item 6D.
Employees
The following table sets forth the numbers of our regular
employees, temporary employees and total employees as of the
dates indicated:
Regular
Temporary
Employees
Employees
Total
December 31, 2003
5,447
1,474
6,921
December 31, 2004
6,421
932
7,353
December 31, 2005
5,727
919
6,646
The number of our regular employees decreased in 2005 due to our
divestiture of SK Teletech.
The following table sets forth numbers of our regular employees
and temporary employees by categories of activity as of
December 31, 2005:
New
Marketing
Production
Research
Support
Business
Total
Regular Employees
1,613
1,880
552
1,011
691
5,727
Temporary Employees
669
148
6
80
16
919
Total
2,282
2,028
558
1,091
687
6,646
As of December 31, 2005, we had a company union comprised
of 5,727 regular employees. We have never experienced a work
stoppage of a serious nature. Every two years, the union and
management negotiate and enter into a new collective bargaining
agreement that has a two-year duration, which is focused on
employee benefits and welfare, except for employee wages, which
are separately negotiated on an annual basis. Our wage
negotiations completed on May 24, 2004 resulted in an
average wage rate increase of 3.0% for 2005 from 2004. We plan
to begin wage discussions with the Company's union for 2006
in June 2006.
Since April 1999, we have been required to contribute an amount
equal to 4.5% of employee wages toward a national pension plan.
Employees are eligible to participate in an employee stock
ownership association. We are not required to, and we do not,
make any contributions to the employee stock ownership
association, although through the Employee Welfare Fund we
subsidize the employee stock ownership association by providing
low interest rate loans to employees desiring to purchase our
stock through the plan in the case of a capitalization by the
association. As of December 31, 2005, the employee stock
ownership association owned approximately 0.36% of our issued
common stock.
We are required to pay a severance amount to eligible employees
who voluntarily or involuntarily cease working for us, including
through retirement. This severance amount is based upon the
employee's length of service with us and the
employee's salary level at the time of severance. As of
December 31, 2005, the accrued and unpaid retirement and
severance benefits of Won 256.3 billion for all of our
employees are reflected in our non-consolidated financial
statements as a liability, of which a total of Won
187.1 billion was funded. Under Korean laws and
regulations, we are prevented from involuntarily terminating a
full-time employee except under certain limited circumstances.
In September 2002, we entered into an employment stabilization
agreement with the union. Among other things, this agreement
provides for a one-year guarantee of the same wage level in the
event that we reorganize a department into a separate entity or
we outsource an employee to a separate entity where the wage is
lower. If the new entity is a subsidiary of which we own at
least a 50% stake, employment is guaranteed for three years.
Under the Korean Intra-Company Labor Welfare Fund Law, we
may also contribute up to 5% of our annual earnings before tax
for employee welfare. We contributed 3% of our revenues annually
for years prior to 2002. Beginning in 2003, we have decided to
negotiate an exact amount each year as necessary. In 2003 and
2004, we did not negotiate contribution amounts for year 2002
and 2003, respectively. We negotiated the contribution amount
for 2004 in the latter half of 2005, which amounts to 0.93% of
our annual earnings before tax, or Won 23.8 billion.
We consider our relations with our employees to be good.
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Item 6E.
Share Ownership
The following table sets forth the share ownership by our
standing and non-standing directors as of April 30, 2006:
Percentage
Number
of Total
Special
of Shares
Shares
Voting
Name
Position
Owned
Outstanding
Rights
Options
Standing Directors
:
Jung Nam Cho
Vice-Chairman and Representative
0
0
None
6,150
Director
Shin Bae Kim
CEO and Representative Director
1,270
*
None
1,650
Bang Hyung Lee
Executive Vice-President
1,630
*
None
1,620
Sung Min Ha
Chief Financial Officer
738
*
None
690
Non-Standing Directors
:
Dae Sik Kim
Independent Non-executive Director
0
0
None
1,000
Yong Woon Kim
Independent Non-executive Director
0
0
None
0
Dae Kyu Byun
Independent Non-executive Director
50
*
None
1,000
Seung Taik Yang
Independent Non-executive Director
0
0
None
0
Jae Seung Yoon
Independent Non-executive Director
200
*
None
1,000
Sang C. Lee
Independent Non-executive Director
0
0
None
1,000
Hyun Chin Lim
Independent Non-executive Director
0
0
None
0
*
Less than 1.0%
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Item 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
Item 7A.
Major Shareholders
As of December 31, 2005, approximately 51.3% of our issued
shares were held in Korea by approximately
20,000 shareholders. The following table sets forth certain
information as of the close of our shareholders' registry
on December 31, 2005 with respect to any person known to us
to be the beneficial owner of more than 5.0% of the shares of
our common stock and with respect to the total amount of such
shares owned by our employees and our officers and directors, as
a group:
Percentage
Percentage
Total
Total
Number of
Shares
Shares
Shareholder/Category
Shares
Issued
Outstanding
Domestic Shareholders
SK Group(1)
18,748,459
22.79
%
25.47
%
POSCO
2,991,496
3.64
4.06
Employees(2)
297,246
0.36
0.40
Treasury shares(3)
8,662,415
10.53
N/A
Officers and Directors
4,688
0.01
0.01
Other Domestic Shareholders
11,466,681
13.93
15.58
Foreign Shareholders
40,105,726
48.74
54.48
Total Issued Shares
82,276,711
100.00
%
100.00
%
(1)
The SK Group's ownership interest consists of the following
    as of December 31, 2005:
Percentage
Percentage
Total
Total
Number of
Shares
Shares
SK Group Member
Shares
Issued
Outstanding
SK Corporation
17,663,127
21.47
%
24.00
%
SK Securities Co., Ltd.
7
0.00
0.00
SK Networks
1,085,325
1.32
1.47
18,748,459
22.79
%
25.47
%
(1)
The SK Group is a group of affiliated entities. As of
    December 31, 2005, the ownership interests among the SK
    Group included, among others:
•
SK Corporation owned: 21.47% of SK Telecom Co., Ltd., 40.97% of
    SK Networks, 46.22% of SKC and 72.13% of SK Shipping Co., Ltd.
•
SK Networks owned 1.32% of SK Telecom Co., Ltd., 17.71% of SK
    Shipping, 15% of SK Computer & Communications Co.,
    Ltd., and 22.71% of SK Securities Co., Ltd.
•
SK Chemicals owned 0.83% of SK Corporation and 39.40% of SK
    Engineering and Construction.
•
SKC owned 6.2% of SK Chemicals, 10.16% of SK Shipping Co., Ltd.
    and 12.41% of SK Securities Co., Ltd.
•
SK Shipping Co., Ltd. owned 30.94% of SK Engineering and
    Construction.
•
SK Computer & Communications Co., Ltd. owned 11.16% of
    SK Corporation.
•
We owned 30.0% of SK Computer & Communications Co., Ltd.
(2)
Represents shares owned by our employee stock ownership
    association. See "Item 6D. Employees".
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(3)
Treasury shares do not have any voting rights; includes
    1,777,173 treasury shares that were deposited with Korea
    Securities Depository to be reserved and used to satisfy the
    conversion rights of the holders of US$329.5 million in
    zero coupon convertible notes that were sold in May 2004.
The following table sets forth significant changes in the
percentage ownership held by our major shareholders during the
past three years:
As of December 31,
Shareholder
2003
2004
2005
(As a percentage of total
issued shares)(1)
SK Group
24.60
%
24.03
%
22.79
%
SK Corporation
21.47
21.47
21.47
SK Networks(2)
3.06
2.55
1.32
POSCO(3)
4.98
4.98
3.64
(1)
Includes 8,662,403, 8,662,415 and 8,662,415 shares held in
    treasury as of December 31, 2003, 2004 and 2005,
    respectively.
(2)
SK Networks sold 418,000 shares in January 2004 and
    currently owns 1,085,325 shares.
(3)
POSCO acquired these shares in connection with our acquisition
    of a 27.7% equity interest in Shinsegi.
Other than companies in the SK Group and POSCO, no other persons
or entities known by us to be acting in concert, directly or
indirectly, jointly or severally, own in excess of 5.0% of our
total shares outstanding or exercise control or could exercise
control over our business.
On April 30, 2006, SK Corporation held 21.47% of our shares
of common stock. For a description of our foreign ownership
limitation, see "Item 3D. Risk Factors — If
SK Corporation causes us to breach the foreign ownership
limitations on shares of our common stock, we may experience a
change of control." and "Item 4B. Business
Overview — Law and Regulation — Foreign
Ownership and Investment Restrictions and Requirements". As
a result of significant financial difficulties and
prosecutors' discovery of alleged fraudulent accounting
practices at SK Networks, SK Networks sold 418,000 of the shares
it owns in SK Telecom in January 2004. In December 2005, SK
Networks disposed of additional shares of our common stock. As a
result of such sale, SK Networks currently owns 1.32% of our
shares. In the event that either SK Corporation or SK Networks
announces plans of a sale of our shares, we expect to be able to
discuss the details of such sale with them in advance and will
endeavor to minimize any adverse effects on our share prices as
a result of such sale.
There is currently a 49% limit on the aggregate foreign
ownership of our issued shares. As of December 31, 2005, SK
Corporation owns 17,663,127 shares of our common stock, or
approximately 21.47%, of our issued shares. As of
December 31, 2005, a foreign investment fund and its
related parties collectively held a 5.03% stake in SK
Corporation. Under a newly adopted amendment to the
Telecommunications Business Law, which became effective on
May 9, 2004, a Korean entity, such as SK Corporation, is
deemed to be a foreign entity if its largest shareholder
(determined by aggregating the shareholdings of such shareholder
and its related parties) is a foreigner and such shareholder
(together with the shareholdings of its related parties) holds
15% or more of the outstanding voting stock of the Korean
entity. Thus, effective from May 9, 2004, if the foreign
investment fund and its related parties increased their
shareholdings in SK Corporation to 15% or more and such foreign
investment fund and its related parties collectively constituted
the largest shareholder of SK Corporation, SK Corporation
would have been considered a foreign shareholder of SK Telecom,
and its shareholding in SK Telecom would have been included
in the calculation of the aggregate foreign shareholding of SK
Telecom.
If SK Corporation's shareholding in SK Telecom were
included in the calculation of the aggregate foreign
shareholding of SK Telecom, then the aggregate foreign
shareholding in SK Telecom assuming foreign ownership level as
of December 31, 2005 (which we believe was 48.74%), would
have reached 70.21%, exceeding the 49% ceiling on foreign
shareholding. If the aggregate foreign shareholding limit in SK
Telecom is exceeded, the MIC may issue a corrective order to SK
Telecom, the breaching shareholder (including SK Corporation if
the breach is caused by an increase in foreign ownership of SK
Corporation) and any foreign investment fund and its related
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parties who may own in the aggregate 15% or more of SK
Corporation. Furthermore, SK Corporation may not exercise its
voting rights with respect to the shares held in excess of the
49% ceiling, which may result in a change in control of us. In
addition, the MIC may refuse to grant us licenses or permits
necessary for entering into new telecommunications businesses
until the aggregate foreign shareholding of SK Telecom is
reduced to below 49%.
If a corrective order is issued to us by the MIC arising from
the violation of the foregoing foreign ownership limit, and we
do not comply within the prescribed period under such corrective
order, the MIC may (1) suspend all or part of our business,
or (2) if the suspension of business is deemed to result in
significant inconvenience to our customers or be detrimental to
the public interest, impose a one-time administrative penalty of
up to 3% of our sales revenues. The amendment to the
Telecommunications Business Law in May 2004 also authorizes the
MIC to assess monetary penalties of up to 0.3% of the purchase
price of the shares for each day the corrective order is not
complied with, as well as a prison term of up to one year and a
penalty of Won 50 million. See "Item 3D. Risk
Factors — If SK Corporation causes us to breach the
foreign ownership limitations on shares of our common stock, we
may experience a change of control." and
"Item 4B. Business Overview — Law and
Regulation — Foreign Ownership and Investment
Restrictions and Requirements".
On August 11, 2003 we concluded a stock buyback program
which we had commenced on June 30, 2003. We acquired a
total of 2,544,600 shares of our then-outstanding common
stock, all of which were cancelled on August 20, 2003. The
total purchase price for the stock buyback was Won
525.2 billion (or an average of approximately Won
206,388 per share), with the price per share ranging from
Won 192,000 (on July 24, 2003) to Won 216,000 (on July 15
and 16, 2003). As a result of the stock buyback and
subsequent cancellation of shares, the total number of our
outstanding common stock declined from 82,993,404 as of
December 31, 2001 to 73,614,308 as of December 31,
2003. On February 20, 2004, we additionally acquired
fractional shares totaling 12 shares for Won
12 million, which resulted from the merger of
SK IMT Co., Ltd. into SK Telecom in May
2003. As of April 30, 2006, the total number of shares of
our common stock outstanding was 73,614,296.
Other than as disclosed herein, there are no other arrangements,
to the best of our knowledge, which would result in a material
change in the control of us. Our major shareholders do not have
different voting rights.
Item 7B.
Related Party Transactions
SK Networks
We are a party to several contracts with SK Networks, including
a series of sale and purchase agreements pursuant to which we
and our former subsidiary, SK Teletech, sell handsets to SK
Networks. The aggregate sales to SK Networks pursuant to these
contracts were Won 481.2 billion in 2003, Won
581.6 billion in 2004 and Won 279.2 billion in
the first half of 2005 until our divestiture of SK Teletech.
If SK Networks is required to sell off its leased line business,
this may result in a disruption of the service provided to us.
However, we currently believe that it is not likely that its
creditors will require SK Networks to sell this business unit.
In 2005, KT Corporation and SK Networks provided approximately
16% and 62%, respectively, of our leased lines.
SK Networks also serves as our distributor of handsets to a
network of dealers. Samsung Electronics Co., Ltd., LG
Electronics Inc, Motorola Korea, Inc. and Pantech &
Curitel suspended their supply of handsets to SK Networks
on April 7, 2003. In May 2003, all suppliers resumed their
supply of handsets on the condition that payment on their mobile
phones be made in cash within one week of delivery. Previously,
SK Networks issued three-month promissory notes for payment to
handset suppliers.
As of December 31, 2005, we had Won 1.8 billion of
accounts receivables from SK Network. As of the same date, we
had Won 22.2 billion of accounts payable to SK Networks,
mainly consisting of leased line charges and commissions to
dealers owned by SK Networks. For more information on SK
Networks, see "Item 3D. Risk Factors —
Financial difficulties and charges of financial statement
irregularities at our affiliate, SK Networks (formerly SK
Global), may cause disruption in our business."
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Other Related Parties
We are party to several contracts with SK Engineering and
Construction related to the construction of our new
headquarters. The construction of our new headquarters was
completed at the end of 2004. The total paid to SK
Engineering & Construction Co., Ltd., for the
demolition of buildings on the site on which our new
headquarters was constructed and the construction of our new
headquarters was Won 209 billion.
On July 22, 2003, we acquired 2,481,310 shares of
POSCO common stock held by SK Corporation at a price of Won
134,000 per share in accordance with a resolution of our
board of directors dated July 22, 2003. We decided to
purchase the shares for strategic reasons in order to address
overhang concerns arising from POSCO's ownership of our
shares. As of December 31, 2005, POSCO owned 3.64% of our
shares.
We are party to an agreement with SKC&C pursuant to which
SKC&C provides us with information technology services. This
agreement will expire on December 31, 2009 but may be
terminated by us at any time without cause on six months'
prior notice. The agreement provides that the parties will agree
annually on the specific services to be provided and the monthly
fees to be paid by us. We also enter into agreements with
SKC&C from time to time for specific information
technology-related projects. The aggregate fees we paid to
SKC&C for information technology services amounted to Won
284.3 billion for 2003, Won 295.6 billion for 2004 and
Won 322.9 billion for 2005. We also purchase various
information technology-related equipment from SKC&C from
time to time. The total amount of such purchases was Won
182.8 billion for 2003, Won 130.2 billion for
2004 and Won 249.6 billion for 2005.
We are part of the SK Group of affiliated companies. See
"Item 7A. Major Shareholders" As disclosed in
note 24 of our consolidated financial statements, we had
related party transactions with a number of affiliated companies
of the SK Group during the year ended December 31, 2005. In
October 2003, the FTC ordered us to pay a fine of Won
5.1 billion in connection with our payment of
advertisements on behalf of certain companies in the SK Group.
We paid the fine in December 2003.
In September 1994, we provided DSS Mobile Communications, Ltd.,
a guarantee of a loan from Sumitomo Bank in the amount of
US$18,118,863. We paid the loan obligation of DSS Mobile
Communications, Ltd. to Sumitomo Bank in 2001 and have a claim
against DSS Mobile Communications, Ltd. for such payment.
All other loans were made in the ordinary course of business, on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with unrelated persons and did not involve more
than the normal risks of non-collection or present other
unfavorable features.
In September 2005, we sold all of our shares of Cowon Systems,
Inc. ("Cowon") in the public market for Won
2.6 billion. Prior to such disposition, our equity interest
in Cowon was 6.2%.
In October 2005, we invested Won 25.6 billion to acquire an
additional 5,122,266 shares of common stock of TU Media to
increase our equity interest to 29.6%.
We have been providing CDMA cellular service in Vietnam since
2003 through our overseas subsidiary, SLD Telecom PTE Ltd. In
November 2005, our board of directors approved an additional
US$280 million investment to expand our network coverage to
all Vietnam. As of January 31, 2006, we had invested
US$100 million in this expansion project through the
acquisition of 100 million additional shares of SLD Telecom
PTE's unissued common stock for such amount.
Item 7C.
Interest of Experts and Counsel
Not applicable
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Item 8.
FINANCIAL INFORMATION
Item 8A.
Consolidated Statements and Other Financial
    Information
See "Item 18. Financial Statements" and pages F-1
through F-82.
Legal Proceedings
FTC Proceedings
In October 2003, the FTC ordered us, SK Corporation and
SKC&C to pay fines of Won 1.0 billion,
Won 0.9 billion and Won 0.9 billion,
respectively, in connection with loans extended to SK Life. FTC
charged that the interest on the loans was below market-price.
We paid the fine in December 2003. The Seoul High Court, an
appellate court, also found in favor of the FTC, but we have
filed an appeal at the Supreme Court of Korea, as we believe
that the interest on the loans was not below the interest rates
customarily charged in the market. The appeal is currently
pending.
In October 2003, the FTC ordered us to pay a fine of Won
4.1 billion in connection with our payment of
advertisements on behalf of certain companies in the SK Group.
We paid the fine in December 2003.
In March 2004, the FTC ordered us to pay a fine of Won
228 million for certain allegedly misleading advertisements
made by us with respect to our competition and the nature of our
services, which we paid in full in May 2004. LGT and KTF were
also fined in connection with related offenses.
In May 2006, the FTC ordered us to pay a fine of Won
660 million for price collusion with KTF and LGT. The FTC
charged that we, along with KTF and LGT, engaged in unfair
business practices in 2004 by agreeing to discontinue flat-rate
services. KTF and LGT were also fined Won 660 million and
Won 462 million, respectively. We expect the FTC to
announce additional rulings on alleged collusion among mobile
service providers. We cannot predict the ultimate outcome of the
investigation.
MIC Proceedings
On March 26, 2003, we were ordered by the MIC to pay a fine
of Won 300 million and to make public announcements in four
major newspapers for violating certain provisions of the
Telecommunications Business Act by not entering into written
contracts with and checking personal identification of
subscribers for subscription of pre-paid wireless handsets,
which is required to prevent handsets from being used for
criminal purposes. KTF and LGT were also fined Won
200 million and Won 120 million, respectively, for the
same violations. We made such payment and such public
announcements in April 2003.
In February 2004, the MIC imposed a total fine of Won
2.0 billion on us in connection with our marketing efforts
related to the number portability system that was adopted by us
in January 2004. The fine was imposed in response to
(i) the adoption of a voice recording identifying our
network upon connection of each outgoing call made on our
network without the consent of our subscribers and
(ii) "reverse-marketing" calls made between
January 1, 2004 and January 9, 2004 informing our
subscribers of benefits that they would lose by switching to
another operator. We were ordered to make public announcements
of these violations in major newspapers in Korea. In February
2004, the MIC also imposed fines of Won 250 million and Won
150 million on KTF and LGT, respectively, for their failure
to accept cancellations of service by certain of their
subscribers. We made such payment in March 2004.
In February 2004, the MIC imposed upon us a fine of Won
21.7 billion with respect to other incentive payments that
were deemed by the MIC to constitute improper handset subsidies
and thereby disrupt fair competition. We paid the fine in March
2004. In February 2004, KTF and KT Corporation were also fined
Won 7.5 billion and Won 4.1 billion, respectively, in
respect of such incentive payments. We filed an appeal, but the
MIC upheld the fine in April 2004.
In April 2004, the MIC ordered us, KTF, KT Corporation and LGT,
to pay fines of Won 650 million, Won 170 million, Won
20 million and Won 100 million, respectively, for
failing to establish sufficient safeguards against the execution
of telecommunications service contracts by users using false
names. We were found to have
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conveyed payment delinquency information to credit rating
companies without confirming that the names on the service
contracts belonged to the actual users of our services. We,
along with KTF, KT Corporation and LGT, were ordered to publish
the violations in newspapers. We complied with such order and
made such payment.
In addition, when the MIC approved the merger of Shinsegi into
us in January 2002, the MIC imposed certain conditions on us.
The MIC periodically reviews our compliance with the conditions
related to our merger with Shinsegi. On May 25, 2004, a
policy advisory committee to the MIC announced the results of
its review and stated that the committee believed that our
market dominance may significantly restrict competition in the
telecommunications market and that we have violated the
conditions related to our merger with Shinsegi by providing
subsidies to handset buyers. In June 2004, the MIC imposed a Won
11.9 billion fine on us and extended the post-merger
monitoring period until January 2007 pursuant to the policy
advisory committee's recommendation. On May 25, 2004,
we voluntarily undertook to limit our market share through the
end of 2005 to 52.3% of the wireless telecommunications market,
the level of our market share at the time of the approval of our
merger with Shinsegi in January 2002. We can give no assurance
that the MIC will not take action that may have a material
adverse effect on our business, operations and financial
condition. See "Item 3D. Risk Factors — Our
businesses are subject to extensive government regulation and
any change in government policy relating to the
telecommunications industry could have a material adverse effect
on our results of operations and financial condition.".
On June 7, 2004, the MIC prohibited us from acquiring new
subscribers for a period of 40 days beginning on
August 20, 2004. The MIC also prohibited other
telecommunications companies from acquiring new subscribers for
periods ranging from 20 to 30 days. KTF was issued a
30-day
suspension
beginning on July 21, 2004; LGT was issued a
30-day
suspension
beginning on June 21, 2004; and KT Corporation was issued a
20-day
suspension
beginning on July 21, 2004. These suspensions resulted from
MIC's determination that we violated the ban on providing
subsidies to handset purchasers. During the suspensions, each
company was able to continue regular business activities,
including replacement of handsets, changes in user names,
changes in mobile phone numbers and changes in tariff plans
applicable to the existing subscribers.
On December 29, 2004, the MIC ordered us, KTF and LGT to
pay fines of Won 7.5 billion, Won 2 billion and Won
600 million, respectively, with respect to our payment of
improper handset subsidies. We were more heavily fined than the
other two companies as the FTC found that our efforts to remedy
such violations were not sufficient and that our payment of such
subsidies was in violation of the conditions related to our
merger with Shinsegi in January 2002. We made such payment in
January 2005.
On March 21, 2005, the MIC ordered us, KTF and LGT to pay
fines of Won 1.4 billion, Won 360 million and Won
230 million, respectively, for changing calling plans and
adding value-added services to the subscribers without obtaining
express consents of such subscribers. We paid such fine in April
2005.
In May 2005 and September 2005, the MIC ordered us to pay fines
of Won 23.1 billion and Won 9.3 billion, respectively,
with respect to our payment of improper handset subsidies. In
May 2005, LGT and KTF were also fined Won 2.7 billion and
Won 1.1 billion, respectively, and in September 2005, KTF
was fined Won 5.3 billion, in respect of improper subsidy
payments. We were more heavily fined than the other two
companies as the FTC found that our efforts to remedy such
violations were not sufficient and that our payment of such
subsidies was in violation of the conditions related to our
merger with Shinsegi in January 2002.
In October 2005, the MIC ordered us to pay fines of Won
1.5 billion, alleging that we have denied our competitors
equal access to our wireless Internet network. We paid such
fines in November 2005.
In November 2005, the MIC ordered us to pay fines of Won
540 million, alleging that our wireless Internet NATE
service menu was overly complex. KTF and LGT were also fined Won
140 million and Won 90 million on the same grounds. We
paid such fines in December 2005.
In March 2006 and April 2006, the MIC ordered us to pay fines of
Won 13.8 billion and Won 7.8 billion, respectively,
with respect to our payment of improper handset subsidies. In
March 2006 and April 2006, KTF and LGT were also fined Won
3.7 billion and Won 1.5 billion and Won
2.1 billion and Won 700 million, respectively, in
respect of improper subsidy payments. We paid Won
13.8 billion in March 2006 and Won 7.8 billion in May
2006.
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In May 2006, the MIC ordered us to pay fines of Won
1.1 billion, alleging that we had improperly solicited
subscribers to our
value-added
services.
KTF and LGT were also fined Won 290 million and Won
130 million, respectively on the same grounds. We paid such
fines in June 2006.
In June 2006, the MIC ordered us, LGT, KTF and KT to pay fines
of Won 42.6 billion, Won 15.0 billion, Won
12.0 billion and Won 0.4 billion, respectively, with
respect to payments of improper handset subsidies. We plan to
pay such fines in July 2006.
Multinet Litigation
In October 2002, Korea Multinet Inc. ("Multinet")
filed a lawsuit against the MIC in the Seoul Administrative
Court to revoke the MIC's registration with the
International Telecommunication Union for the frequency spectrum
necessary for DMB businesses. Multinet had been previously
granted the right to use this frequency by the MIC, but their
right had been granted on the condition that Multinet would
renounce its right to use the frequency upon implementation of a
DMB business (to the extent necessary for the operation of our
DMB business) and that Multinet would comply with any directive
of the MIC to reallocate the frequency. The Seoul Administrative
Court ruled in favor of the MIC in December 2002. Multinet filed
an appeal with the Seoul High Court, but the Seoul High Court
ruled in favor of the MIC in June 2004. Multinet again appealed
the case and the case is now pending in the Supreme Court of
Korea.
In March 2004, the MIC released a public notice announcing its
allotments of frequency for satellite DMB. In accordance with
such announcement, we were assigned a frequency and a license to
run a DMB business as a network service operator. In June 2004,
Multinet filed a lawsuit against the MIC in the Seoul
Administrative Court demanding revocation of the public notice.
In September 2004, Multinet also filed a lawsuit against the MIC
in the Seoul Administrative Court seeking revocation of our
assigned satellite DMB frequency to us, as well as revocation of
our satellite DMB business license. In July 2005, these two
lawsuits were consolidated by the Seoul Administrative Court and
are currently pending in the court of first instance.
In November 2004, in connection with the above lawsuits,
Multinet sought injunctive relief in the Seoul Administrative
Court to suspend the MIC's allocation of satellite DMB
frequency and granting of the satellite DMB business license to
us. The court of first instance ruled against Multinet, which
decision was upheld in the appellate court following
Multinet's appeal. In June 2005, the Supreme Court upheld
the prior rulings against Multinet.
Coloring Litigation
In November 2002, in connection with certain technology we use
to provide our coloring service, Mr. Park Won-Seop filed a
lawsuit against us in the Seoul Central District Court. In the
lawsuit, Mr. Park alleged that our coloring service
infringed upon his patent rights. While the lawsuit is currently
pending before the Seoul Central District Court, we sought an
administrative action to nullify Mr. Park's patent
rights in the Intellectual Property Tribunal. The Tribunal
upheld the nullification of Mr. Park's patent rights.
Mr. Park withdrew his appeal before the Patent Court in
January 2006, and the case has been abandoned.
GNI Enterprise Litigation
On October 18, 2002, GNI Enterprise Inc. filed a lawsuit
against SK Communications, our subsidiary, asserting that Lycos
Korea, which was subsequently merged into SK Communications in
December 2002, had illegally terminated a license agreement
granting GNI Enterprise the right to use the Lycos brand name in
Korea. The court of first instance ruled against GNI, which
decision was upheld in the appellate court following GNI's
appeal. The case is currently pending before the Supreme Court.
In addition, in a lawsuit filed on November 15, 2002, GNI
asserted that the merger of Netsgo Co., Ltd. into SK
Communications was invalid. On January 11, 2004, GNI
withdrew its claims and the suit was terminated.
Except as described above, neither we nor any of our
subsidiaries are involved in any litigation, arbitration or
administrative proceedings relating to claims which may have, or
have had during the twelve months preceding the date hereof, a
significant effect on our financial position or the financial
position of our subsidiaries taken as a
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whole, and, so far as we are aware, no such litigation,
arbitration or administrative proceedings are pending or
threatened.
Dividends
Annual dividends, if any, on our outstanding shares must be
approved at the annual general meeting of shareholders. This
meeting is generally held in March of the following year, and
the annual dividend is generally paid shortly after the meeting.
Since our shareholders have discretion to declare annual
dividends, we cannot give any assurance as to the amount of
dividends per share or that any dividends will be declared at
all. Interim dividends, if any, can be approved by a resolution
of our board of directors. Once declared, dividends must be
claimed within five years, after which the right to receive the
dividends is extinguished.
We pay cash dividends to the ADR depositary in Won. Under
the terms of the deposit agreement, cash dividends received by
the ADR depositary generally are to be converted by the ADR
depositary into Dollars and distributed to the holders of the
ADSs, less withholding tax, other governmental charges and the
ADR depositary's fees and expenses. The ADR
depositary's designated bank in Korea must approve this
conversion and remittance of cash dividends. See
"Item 10D. Exchange Controls — Korean
Foreign Exchange Controls and Securities Regulations" and
"Item 10E. Taxation — Korean Taxation".
The following table sets forth the dividend per share, the
aggregate total amount of dividends, as well as the number of
outstanding shares entitled to dividends to the shareholders of
record on December 31 of the years indicated. The dividends
set out for each of the years below were paid in the immediately
following year.
Number of Shares
Dividend
Total Amount of
Entitled to
Year Ended December 31,
per Share
Dividends
Dividend
(In won)(1)
(In billions of won)
1997
W
90
W
5.6
62,169,720
1998
118
7.6
64,258,670
1999
185
15.4
83,284,110
2000
540
48.1
89,079,034
2001
690
57.3
82,993,404
2002
1,800
151.7
84,299,698
2003
5,500
404.9
73,614,308
2004
10,300
758.2
73,614,296
2005
9,000
662.5
73,614,296
(1)
Dividend per share and amount of shares entitled to dividend
    have been adjusted to give effect to the
10-for-1
stock split of
    our common shares which became effective on April 21, 2000.
We distribute dividends to our shareholders in proportion to the
number of shares owned by each shareholder. The common shares
represented by the ADSs have the same dividend rights as other
outstanding common shares.
Holders of non-voting shares are entitled to receive dividends
in priority to the holders of common shares. The dividend on the
non-voting shares is between 9.0% and 25.0% of the par value as
determined by the board of directors at the time of their
issuance. If the dividends for common shares exceed the
dividends for non-voting shares, the holders of non-voting
shares will be entitled to participate in the distribution of
such excess amount with the holders of common shares. If the
amount available for dividends is less than the aggregate amount
of the minimum required dividend, holders of non-voting shares
will be entitled to receive such accumulated unpaid dividend
from dividends payable in the next fiscal year before holders of
common shares. There are no non-voting shares issued or
outstanding.
Under the Korean Commercial Code, we may pay an annual dividend
only out of the excess of our net assets, on a non-consolidated
basis, over the sum of (1) our stated capital and
(2) the total amount of our capital surplus reserve and
legal reserve accumulated up to the end of the relevant dividend
period. In addition, we may
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not pay an annual dividend unless we have set aside as a legal
reserve an amount equal to at least 10% of the cash portion of
the annual dividend or until we have accumulated a legal reserve
of not less than one-half of our stated capital. As a KRX Stock
Market-listed company, we are also required under the relevant
laws and regulations to set aside in reserve a certain amount
each fiscal year until the ratio of our own capital to total
assets is at least 30%. We may not use our legal reserve to pay
cash dividends but may transfer amounts from our legal reserve
to capital stock or use our legal reserve to reduce an
accumulated deficit.
In addition, the Korean Commercial Code and our articles of
incorporation provide that, in addition to annual dividends, we
may pay interim dividends once during each fiscal year. Unlike
annual dividends, the decision to pay interim dividends can be
made by a resolution of the board of directors and is not
subject to shareholder approval. Any interim dividends must be
paid in cash to the shareholders of record as of June 30 of
the relevant fiscal year. In August 2005, we distributed such
interim dividends at Won 1,000 per share to our
shareholders for a total amount of Won 73.6 billion.
Under the Korean Securities and Exchange Act, the total amount
of interim dividends payable in a fiscal year shall not be more
than the net assets on the balance sheet of the immediately
preceding fiscal year, after deducting (1) a company's
capital in the immediately preceding fiscal year, (2) the
aggregate amount of its capital reserves and legal reserves
accumulated up to the immediately preceding fiscal year,
(3) the amount of earnings for dividend payments confirmed
at the general shareholders' meeting with respect to the
immediately preceding fiscal year and (4) the amount of
legal reserve that should be set aside for the current fiscal
year following the interim dividend payment. Furthermore, the
rate of interim dividends for non-voting shares must be the same
as that for our common shares.
Our obligation to pay interim dividends expires if no claims to
such dividends are made for a period of five years from the
payment date.
Item 8B.
Significant Changes
Not applicable
Item 9.
THE OFFER AND LISTING
Item 9A.
Offering and Listing Details
These matters are described under Item 9C below where
relevant.
Item 9B.
Plan of
Distribution
Not applicable
Item 9C.
Markets
The principal trading market for our common stock is the KRX
Stock Market. As of December 31, 2005,
73,614,296 shares of our common stock were outstanding.
The ADSs are traded on the New York Stock Exchange and the
London Stock Exchange. The ADSs have been issued by the ADR
depositary and are traded on the New York Stock Exchange under
the symbol "SKM". Each ADS represents one-ninth of one
share of common stock. As of December 31, 2005, ADSs
representing 22,491,046 shares of our common stock were
outstanding.
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Shares of Common Stock
The following table sets forth the high, low and closing prices
and the average daily trading volume of the shares of common
stock on the KRX Stock Market since January 1, 2001:
Prices(1)
Average Daily
Trading Volume
Calendar Year
High(1)
Low(1)
Close
(Number of Shares)
(Won per share)
2001
295,000
165,000
268,000
242,254
First Quarter
293,500
182,000
183,000
253,393
Second Quarter
235,500
165,000
191,500
312,070
Third Quarter
233,000
184,500
208,000
154,785
Fourth Quarter
295,000
220,000
268,000
250,676
2002
299,000
209,500
229,000
261,482
First Quarter
299,000
242,000
290,000
263,168
Second Quarter
292,000
239,000
269,500
227,115
Third Quarter
279,500
209,500
237,000
241,154
Fourth Quarter
252,500
220,000
229,000
314,019
2003
235,000
142,000
199,000
327,689
First Quarter
235,000
142,000
153,000
497,115
Second Quarter
210,000
157,500
204,000
298,346
Third Quarter
216,000
183,000
184,000
267,821
Fourth Quarter
212,500
185,000
199,000
247,332
2004
238,500
154,500
197,000
179,712
First Quarter
238,500
207,500
214,500
243,681
Second Quarter
213,000
179,000
190,000
188,095
Third Quarter
186,000
154,500
175,500
137,559
Fourth Quarter
205,000
174,500
197,000
151,903
2005
216,500
163,500
181,000
187,053
First Quarter
200,500
171,000
171,000
203,869
Second Quarter
192,500
163,500
182,000
137,021
Third Quarter
216,500
178,500
202,500
156,019
Fourth Quarter
209,500
181,000
181,000
249,550
2006 (through June 26)
237,500
176,000
201,000
197,780
First Quarter
204,500
176,000
192,500
177,491
January
192,000
176,000
192,000
221,563
February
204,500
189,500
202,500
201,075
March
203,000
187,500
192,500
113,984
Second Quarter (through June 26)
237,500
188,500
201,000
220,204
April
222,500
188,500
221,500
262,914
May
237,000
207,500
225,500
182,659
June (through June 26)
234,000
193,000
201,000
214,127
Source: KRX
(1)
Both high and low prices are based on the daily closing prices
    for the period.
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American Depositary Shares
The following table sets forth the high, low and closing prices
and the average daily trading volume of the ADSs on the New York
Stock Exchange since January 1, 2001:
Prices(1)
Average Daily
Trading Volume
Calendar Year
High(1)
Low(1)
Close
(Number of Shares)
(US$ per ADS)
(Number of ADSs)
2001
28.94
13.50
21.62
710,410
First Quarter
28.94
15.18
15.18
743,602
Second Quarter
21.05
13.50
16.90
817,532
Third Quarter
20.21
16.15
18.44
655,302
Fourth Quarter
25.29
18.26
21.62
623,611
2002
26.75
19.25
21.35
684,421
First Quarter
24.70
20.30
24.60
488,958
Second Quarter
26.75
20.20
24.40
555,865
Third Quarter
26.36
19.25
21.23
963,578
Fourth Quarter
22.81
19.30
21.35
717,859
2003
21.85
12.83
18.65
743,316
First Quarter
21.85
12.83
13.62
971,259
Second Quarter
19.40
14.07
18.86
723,959
Third Quarter
20.83
17.71
17.84
724,406
Fourth Quarter
19.90
17.46
18.65
564,023
2004
25.01
17.28
22.25
911,823
First Quarter
25.01
19.43
21.30
1,331,177
Second Quarter
21.83
19.15
20.99
832,175
Third Quarter
20.76
17.28
19.45
768,117
Fourth Quarter
23.10
19.30
22.25
727,683
2005
23.14
18.96
20.29
882,342
First Quarter
22.19
19.41
19.72
798,390
Second Quarter
21.84
18.96
20.40
618,870
Third Quarter
23.14
20.06
21.84
1,071,227
Fourth Quarter
21.95
19.74
20.29
1,039,398
2006 (through June 26)
27.70
20.62
22.54
983,033
First Quarter
24.56
20.62
23.59
952,819
January
23.23
20.62
23.23
1,123,040
February
24.51
23.06
24.15
1,096,226
March
24.56
23.00
23.59
686,335
Second Quarter (through June 26)
27.70
22.54
22.54
1,015,329
April
26.70
23.31
26.70
874,747
May
27.70
24.91
26.10
1,073,577
June (through June 26)
26.75
22.54
22.54
1,097,071
Source: New York Stock Exchange
(1)
Both high and low prices are based on the daily closing prices
    for the period.
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The Korean Securities Market
The Korea Exchange Inc.
With the enactment of the Korea Stock and Futures Exchange Act,
which came into effect on January 27, 2005, the three
existing spot and futures exchanges (which were the Korea Stock
Exchange, Korean Futures Exchange, and KOSDAQ) and KOSDAQ
Committee, a sub-organization of Korea Securities Dealers
Association, were merged and integrated into the Korea Exchange,
Inc. (the "KRX") as a joint stock company. There are
three different markets run by the KRX: the KRX Stock Market,
the KRX KOSDAQ Market, and the Futures Market (the "KRX
Futures Market"). The KRX has two trading floors located in
Seoul, one for the KRX Stock Market and one for the KRX KOSDAQ
Market, and one trading floor in Busan for the KRX Futures
Market. Currently, the KRX is the only stock exchange in Korea
and is run by membership, having most of Korean securities
companies and some Korean branches of foreign securities
companies as its members.
As of May 31, 2006, the aggregate market value of equity
securities listed on the KRX Stock Market was approximately Won
642.4 trillion. The average daily trading volume of equity
securities for 2005 was approximately 467.5 million shares
with an average transaction value of Won 3,157.0 billion
and for the period from January 1, 2006 through
May 31, 2006 was approximately 356.3 million shares
with an average transaction value of Won 4,275.0 billion.
The KRX has the power in some circumstances to suspend trading
in the shares of a given company or to de-list a security. The
KRX also restricts share price movements. All listed companies
are required to file accounting reports annually, semi-annually
and quarterly and to release immediately all information that
may affect trading in a security.
The Government has in the past exerted, and continues to exert,
substantial influence over many aspects of the private sector
business community which can have the intention or effect of
depressing or boosting the market. In the past, the Government
has informally both encouraged and restricted the declaration
and payment of dividends, induced mergers to reduce what it
considers excess capacity in a particular industry and induced
private companies to offer publicly their securities.
The KRX publishes the Korea Composite Stock Price Index, or
KOSPI, every ten seconds, which is an index of all equity
securities listed on the KRX Stock Market. On January 1,
1983, the method of computing KOSPI was changed from the Dow
Jones method to the aggregate value method. In the new method,
the market capitalizations of all listed companies are
aggregated, subject to certain adjustments, and this aggregate
is expressed as a percentage of the aggregate market
capitalization of all listed companies as of the base date,
January 4, 1980.
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Movements in KOSPI are set out in the following table together
with the associated dividend yields and price to earnings ratios:
Period Average
Price
Dividend
Earnings
Year
Opening
High
Low
Closing
Yield(1)(%)
Ratio(2)
1980
100.00
119.36
100.00
106.87
20.9
2.6
1981
97.95
165.95
93.14
131.37
13.2
3.1
1982
123.60
134.49
106.00
127.31
10.5
3.4
1983
122.52
134.46
115.59
121.21
6.9
3.8
1984
116.73
142.46
114.37
142.46
5.1
4.5
1985
139.53
163.37
131.40
163.37
5.3
5.2
1986
161.40
279.67
153.85
272.61
4.3
7.6
1987
264.82
525.11
264.82
525.11
2.6
10.9
1988
532.04
922.56
527.89
907.20
2.4
11.2
1989
919.61
1,007.77
844.75
909.72
2.0
13.9
1990
908.59
928.77
566.27
696.11
2.2
12.8
1991
679.75
763.10
586.51
610.92
2.6
11.2
1992
624.23
691.48
459.07
678.44
2.2
10.9
1993
697.41
874.10
605.93
866.18
1.6
12.7
1994
879.32
1,138.75
860.47
1,027.37
1.2
16.2
1995
1,013.57
1,016.77
847.09
882.94
1.2
16.4
1996
888.85
986.84
651.22
651.22
1.3
17.8
1997
653.79
792.29
350.68
376.31
1.5
17.0
1998
385.49
579.86
280.00
562.46
1.9
10.8
1999
587.57
1,028.07
498.42
1,028.07
1.1
13.5
2000
1,059.04
1,059.04
500.60
504.62
2.1
12.9
2001
520.95
704.50
468.76
693.70
1.7
16.4
2002
724.95
937.61
584.04
829.44
1.6
15.2
2003
635.17
822.16
515.24
810.71
2.0
11.8
2004
821.26
936.06
719.59
895.92
2.0
13.8
2005
893.71
1,379.37
870.84
1,379.37
1.8
10.6
2006 (though June 26)
1,383.32
1,469.70
1,192.09
1,238.05
N/A
N/A
Source: KRX
(1)
Dividend yields are based on daily figures. Before 1983,
    dividend yields were calculated at the end of each month.
    Dividend yields after January 3, 1984 include cash
    dividends only.
(2)
The price to earnings ratio is based on figures for companies
    that record a profit in the preceding year.
(3)
Starting in April 2000, dividend yield and price earnings ratio
    of KOSPI 200, an index of 200 equity securities listed on the
    KRX Stock Market. Starting in April 2000, excludes classified
    companies, companies which did not submit annual reports to the
    KRX, and companies which received disqualified opinion from
    external auditors.
Shares are quoted "ex-dividend" on the first trading
day of the relevant company's accounting period. Since the
calendar year is the accounting period for the majority of
listed companies, this may account for the drop in KOSPI between
its closing level at the end of one calendar year and its
opening level at the beginning of the following calendar year.
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With certain exceptions, principally to take account of a share
being quoted "ex-dividend" and "ex-rights",
permitted upward and downward movements in share prices of any
category of shares on any day are limited under the rules
of the KRX to 15.0% of the previous day's closing price of
the shares, rounded down as set out below:
Rounded Down
Previous Day's Closing Price
W
to
W
Less than 5,000
W
5
5,000 to less than 10,000
10
10,000 to less than 50,000
50
50,000 to less than 100,000
100
100,000 to less than 500,000
500
500,000 or more
1,000
As a consequence, if a particular closing price is the same as
the price set by the fluctuation limit, the closing price may
not reflect the price at which persons would have been prepared,
or would be prepared to continue, if so permitted, to buy and
sell shares. Orders are executed on an auction system with
priority rules to deal with competing bids and offers.
Due to a recent deregulation of restrictions on brokerage
commission rates, the brokerage commission rate on equity
securities transactions may be determined by the parties,
subject to commission schedules being filed with the KRX by the
securities companies. In addition, a securities transaction tax
of 0.15% of the sales price will generally be imposed on the
transfer of shares or certain securities representing rights to
subscribe for shares. A special agricultural and fishery tax of
0.15% of the sales prices will also be imposed on transfer of
these shares and securities on the KRX Stock Market. See
"Item 10E. Taxation — Korean Taxation".
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The following table sets forth the number of companies listed on
the KRX Stock Market, the corresponding total market
capitalization and the average daily trading volume at the end
of the periods indicated:
Market Capitalization
on the Last Day of Each Period
Average Trading Volume & Value
Number of
Listed
(Millions of
(Thousands of
Thousands of
(Millions of
(Thousands of
Year
Companies
Won)
Dollars)(1)
Shares
Won)
Dollars)(1)
1980
352
W
2,526,553
US $
3,828,691
5,654
W
3,897
US $
5,905
1981
343
2,959,057
4,224,207
10,565
8,708
12,433
1982
334
3,000,494
4,407,711
9,704
6,667
8,904
1983
328
3,489,654
4,386,743
9,325
5,941
7,468
1984
336
5,148,460
6,222,456
14,847
10,642
12,862
1985
342
6,570,404
7,380,818
18,925
12,315
13,834
1986
355
11,994,233
13,924,115
31,755
32,870
38,159
1987
389
26,172,174
33,033,162
20,353
70,185
88,584
1988
502
64,543,685
94,348,318
10,367
198,364
289,963
1989
626
95,476,774
140,489,660
11,757
280,967
414,431
1990
669
79,019,676
110,301,055
10,866
183,692
256,500
1991
686
73,117,833
96,182,364
14,022
214,263
281,850
1992
688
84,711,982
107,502,515
24,028
308,246
391,175
1993
693
112,665,260
139,419,948
35,130
574,048
676,954
1994
699
151,217,231
191,729,721
36,862
776,257
984,223
1995
721
141,151,399
182,201,367
26,130
487,762
629,614
1996
760
117,369,988
139,031,021
26,571
486,834
575,733
1997
776
70,988,897
50,161,742
41,525
555,759
392,707
1998
748
137,798,451
114,090,455
97,716
660,429
471,432
1999
725
349,503,966
305,137,040
278,551
3,481,620
3,039,654
2000
704
188,041,490
150,162,898
306,163
2,602,211
2,078,028
2001
689
225,850,076
194,784,979
473,241
1,997,420
1,520,685
2002
683
258,680,756
218,167,122
851,242
3,041,592
2,414,362
2003
684
355,362,626
297,960,530
542,010
2,216,636
1,858,580
2004
683
412,588,138
427,069,982
372,894
2,232,108
2,310,455
2005
702
655,074,595
648,588,707
467,629
3,157,662
3,126,398
2006 (through June 26)
717
604,501,659
598,516,494
336,721
4,105,713
4,065,062
Source: KRX
(1)
Converted at the noon buying rate in The City of New York for
    cable transfers in Won per US$1.00 as certified for customs
    purposes by the Federal Reserve Bank of New York.
The Korean securities markets are principally regulated by the
Financial Supervisory Commission of Korea and the Korean
Securities and Exchange Act. The Korean Securities and Exchange
Act was amended fundamentally numerous times in recent years to
broaden the scope and improve the effectiveness of official
supervision of the securities markets. As amended, the law
imposes restrictions on insider trading and price manipulation,
requires specified information to be made available by listed
companies to investors and establishes rules regarding margin
trading, proxy solicitation, takeover bids, acquisition of
treasury shares and reporting requirements for shareholders
holding substantial interests.
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Further Opening of the Korean Securities Market
A stock index futures market was opened on May 3, 1996 and
a stock index option market was opened on July 7, 1997, in
each case at the Korea Stock Exchange. Remittance and
repatriation of funds in connection with investment in stock
index futures and options are subject to regulations similar to
those that govern remittance and repatriation in the context of
foreign investment in Korean stocks.
In addition, the Korea Stock Exchange opened new option markets
for stocks of seven companies including our shares of common
stock and common stock of six other companies on
January 28, 2002. Foreigners will be permitted to invest in
such options for individual stocks subject to certain procedural
requirements.
Starting from May 1, 1996, foreign investors were permitted
to invest in warrants representing the right to subscribe for
shares of a company listed on the Korea Stock Exchange or
registered on the KOSDAQ, subject to certain investment
limitations. A foreign investor may not acquire such warrants
with respect to shares of a class of a company for which the
ceiling on aggregate investment by foreigners has been reached
or exceeded.
As of December 30, 1997, foreign investors were permitted
to invest in all types of corporate bonds, bonds issued by
national or local governments and bonds issued in accordance
with certain special laws without being subject to any aggregate
or individual investment ceiling. The Financial Supervisory
Commission of Korea sets forth procedural requirements for such
investments. The Government announced on February 8, 1998
its plans for the liberalization of the money market with
respect to investment in money market instruments by foreigners
in 1998. According to the plan, foreigners have been permitted
to invest in money market instruments issued by corporations,
including commercial paper, starting February 16, 1998 with
no restrictions as to the amount. Starting May 25, 1998,
foreigners have been permitted to invest in certificates of
deposit and repurchase agreements.
Currently, foreigners are permitted to invest in securities
including shares of all Korean companies which are not listed on
the KRX Stock Market nor the KRX KOSDAQ Market and in bonds
which are not listed.
Protection of Customer's Interest in Case of
    Insolvency of Securities Companies
Under Korean law, the relationship between a customer and a
securities company in connection with a securities sell or buy
order is deemed to be consignment and the securities acquired by
a consignment agent (i.e., the securities company) through such
sell or buy order are regarded as belonging to the customer in
so far as the customer and the consignment agent's
creditors are concerned. Therefore, in the event of a bankruptcy
or reorganization procedure involving a securities company, the
customer of the securities company is entitled to the proceeds
of the securities sold by the securities company.
When a customer places a sell order with a securities company
which is not a member of the KRX and this securities company
places a sell order with another securities company which is a
member of the KRX, the customer is still entitled to the
proceeds of the securities sold received by the non-member
company from the member company regardless of the bankruptcy or
reorganization of the non-member company.
Under the Korean Securities and Exchange Act, the KRX is obliged
to indemnify any loss or damage incurred by a counterparty as a
result of a breach by its members. If a securities company which
is a member of the KRX breaches its obligation in connection
with a buy order, the KRX is obliged to pay the purchase price
on behalf of the breaching member.
When a customer places a buy order with a non-member company and
the non-member company places a buy order with a member company,
the customer has the legal right to the securities received by
the non-member company from the member company because the
purchased securities are regarded as belonging to the customer
in so far as the customer and the non-member company's
creditors are concerned.
As the cash deposited with a securities company is regarded as
belonging to the securities company, which is liable to return
the same at the request of its customer, the customer cannot
take back deposited cash from the securities company if a
bankruptcy or reorganization procedure is instituted against the
securities company and, therefore, can suffer from loss or
damage as a result. However, the Depositor Protection Act
provides that Korea Deposit Insurance Corporation will, upon the
request of the investors, pay investors up to Won
50 million per
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investor in case of the securities company's bankruptcy,
liquidation, cancellation of securities business license or
other insolvency events. Pursuant to the Korean Securities and
Exchange Act, as amended, subject to certain exceptions,
securities companies are required to deposit the cash received
from its customers with the Korea Securities Finance
Corporation, a special entity established pursuant to the Korean
Securities and Exchange Act. Set-off or attachment of cash
deposits by securities companies is prohibited. The premiums
related to this insurance under the Depositor Protection Act are
paid by securities companies.
Item 9D.
Selling Shareholders
Not applicable
Item 9E.
Dilution
Not applicable
Item 9F.
Expenses of the Issue
Not applicable
Item 10.
ADDITIONAL INFORMATION
Item 10A.
Share Capital
Not applicable
Item 10B.
Memorandum and Articles of Association
Description of Capital Stock
This section provides information relating to our capital stock,
including brief summaries of material provisions of our articles
of incorporation, the Korean Securities and Exchange Act, the
Korean Commercial Code and related laws of Korea, all as
currently in effect. The following summaries are subject to, and
are qualified in their entirety by reference to, our articles of
incorporation and the applicable provisions of the Korean
Securities and Exchange Act and the Korean Commercial Code. We
have filed or incorporated by reference copies of our articles
of incorporation and these laws as exhibits to our most recently
filed annual report.
General
The name of our company is SK Telecom Co., Ltd. We are
registered under the laws of Korea under the commercial registry
number of 110111-0371346. As specified in Article 2
(Objectives) of our articles of incorporation, the
company's objectives are the rational management of the
telecommunications business, development of telecommunications
technology, and contribution to public welfare and convenience.
In order to achieve these objectives, we are engaged in the
following:
•
information and communication business;
•
sale and lease of subscriber handsets;
•
new media business;
•
advertising business;
•
mail order business;
•
business of leasing available and real estate property;
•
research and technology development relating to the first four
    items above;
•
overseas and import/export business relating to the first four
    items above;
•
manufacture and distribution business relating to the first four
    items above;
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Table of Contents
•
tourism; and
•
any business or undertaking incidental or conducive to the
    attainment of the objectives stated above.
Currently, our authorized share capital is
220,000,000 shares, which consists of shares of common
stock, par value Won 500 per share, and shares of
non-voting stock, par value Won 500 per share (common
shares and non-voting shares together are referred to as
"shares"). Under our articles of incorporation, we are
authorized to issue up to 5,500,000 non-voting preferred shares.
As of December 31, 2005, 82,276,711 common shares were
issued, of which 8,662,415 shares were held by us in
treasury. We have never issued any non-voting preferred shares.
All of the issued and outstanding common shares are fully-paid
and non-assessable and are in registered form. We issue share
certificates in denominations of 1, 5, 10, 50, 100,
500, 1,000 and 10,000 shares.
Board of Directors
Meetings of the board of directors are convened by the
representative director as he or she deems necessary or upon the
request of three or more directors. The board of directors
determines all important matters relating to our business. In
addition, the prior approval of the majority of the independent
non-executive directors is required for certain matters, which
include:
•
investment by us or any of our subsidiaries in a foreign company
    or equity or other overseas assets in an amount equal to 5.0% or
    more of our shareholders' equity under our most recent
    balance sheet; and
•
contribution of capital, loans or guarantees, acquisition of our
    subsidiaries' assets or similar transactions with our
    affiliated companies in excess of Won 10 billion through
    one or a series of transactions.
Resolutions of the board are adopted in the presence of a
majority of the directors in office and by the affirmative vote
of a majority of the directors present. No director who has an
interest in a matter for resolution may exercise his or her vote
upon such matter.
There are no specific shareholding requirements for
director's qualification. Directors are elected at a
general meeting of shareholders if the approval of a majority
vote of the shareholders present at such meeting is obtained,
and such majority also represents at least one-fourth of the
total number of shares outstanding. Under the Korean Securities
and Exchange Act, unless stated otherwise in the articles of
incorporation, holders of an aggregate of 1% or more of the
outstanding shares with voting rights may request cumulative
voting in any election for two or more directors. Our articles
of incorporation permit cumulative voting starting from the
ordinary general meeting of shareholders in 2003.
The term of office for directors shall be until the close of the
third annual general shareholders' meeting convened after
he or she commences his or her term. Our directors may serve
consecutive terms and our shareholders may remove them from
office at any time by a special resolution adopted at a general
meeting of shareholders.
Dividends
We distribute dividends to our shareholders in proportion to the
number of shares owned by each shareholder. The common shares
represented by the ADSs have the same dividend rights as other
outstanding common shares.
Holders of non-voting shares are entitled to receive dividends
in priority to the holders of common shares. The dividend on the
non-voting shares is between 9.0% and 25.0% of the par value as
determined by the board of directors at the time of their
issuance. If the dividends for common shares exceed the
dividends for non-voting shares, the holders of non-voting
shares will be entitled to participate in the distribution of
such excess amount with the holders of common shares. If the
amount available for dividends is less than the aggregate amount
of the minimum required dividend, holders of non-voting shares
will be entitled to receive such accumulated unpaid dividend
from dividends payable in the next fiscal year before holders of
common shares. There are no non-voting shares issued or
outstanding.
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We declare dividends annually at the annual general meeting of
shareholders which is generally held within three months after
the end of the fiscal year. We pay the annual dividend shortly
after the annual general meeting to the shareholders of record
or registered pledges as of the end of the preceding fiscal
year. We may distribute the annual dividend in cash or in
shares. However, a dividend of shares must be distributed at par
value. If the market price of the shares is less than their par
value, dividends in shares may not exceed one-half of the annual
dividend. Our obligation to pay dividend expires if no claim to
dividend is made for five years from the payment date.
Under the Korean Commercial Code, we may pay an annual dividend
only out of the excess of our net assets, on a non-consolidated
basis, over the sum of (1) our stated capital and
(2) the total amount of our capital surplus reserve and
legal reserve accumulated up to the end of the relevant dividend
period. In addition, we may not pay an annual dividend unless we
have set aside as legal reserve an amount equal to at least
10.0% of the cash portion of the annual dividend or until we
have accumulated a legal reserve of not less than one-half of
our stated capital. As a KRX Stock Market-listed company, we are
also required under the relevant laws and regulations to set
aside in reserve a certain amount each fiscal year until the
ratio of our own capital to total assets is at least 30%. We may
not use legal reserve to pay cash dividends but may transfer
amounts from legal reserve to capital stock or use legal reserve
to reduce an accumulated deficit.
In addition, the Korean Commercial Code and our articles of
incorporation provide that, in addition to annual dividends, we
may pay interim dividends once during each fiscal year. Unlike
annual dividends, the decision to pay interim dividends can be
made by a resolution of the board of directors and is not
subject to shareholder approval. Any interim dividends must be
paid in cash to the shareholders of record as of June 30 of
the relevant fiscal year. In August 2005, we distributed such
interim dividends at Won 1,000 per share to our
shareholders for a total amount of Won 73.6 billion.
Under the Korean Securities and Exchange Act, the total amount
of interim dividends payable in a fiscal year shall not be more
than the net assets on the balance sheet of the immediately
preceding fiscal year, after deducting (1) a company's
capital in the immediately preceding fiscal year, (2) the
aggregate amount of its capital reserves and legal reserves
accumulated up to the immediately preceding fiscal year,
(3) the amount of earnings for dividend payments confirmed
at the general shareholders' meeting with respect to the
immediately preceding fiscal year and (4) the amount of
legal reserve that should be set aside for the current fiscal
year following the interim dividend payment. Furthermore, the
rate of interim dividends for non-voting shares must be the same
as that for our common shares.
Our obligation to pay interim dividends expires if no claims to
such dividends are made for a period of five years from the
payment date.
Distribution of Free Shares
In addition to paying dividends in shares out of our retained or
current earnings, we may also distribute to our shareholders an
amount transferred from our capital surplus or legal reserve to
our stated capital in the form of free shares. We must
distribute such free shares to all our shareholders in
proportion to their existing shareholdings.
Preemptive Rights and Issuance of Additional Shares
We may at times issue authorized but unissued shares, unless
otherwise provided in the Korean Commercial Code, on terms
determined by our board of directors. All our shareholders are
generally entitled to subscribe to any newly-issued shares in
proportion to their existing shareholdings. We must offer new
shares on uniform terms to all shareholders who have preemptive
rights and are listed on our shareholders' registry as of
the relevant record date. We must give public notice of the
preemptive rights regarding new shares and their transferability
at least two weeks before the relevant record date. Our board of
directors may determine how to distribute shares for which
preemptive rights have not been exercised or where fractions of
shares occur.
Under the Korean Commercial Code and our articles of
incorporation, we may issue new shares pursuant to a board
resolution to persons other than existing shareholders only if
(1) the new shares are issued for the purpose
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of issuing depositary receipts in accordance with the relevant
regulations or through an offering to public investors and
(2) the purpose of such issuance is deemed necessary by us
to achieve a business purpose, including, but not limited to,
the introduction of new technology or the improvement of our
financial condition. Under our articles of incorporation, only
our board of directors is authorized to set the terms and
conditions with respect to such issuance of new shares.
In addition, under our articles of incorporation, we may issue
convertible bonds or bonds with warrants, each up to an
aggregate principal amount of Won 400 billion, to persons
other than existing shareholders, where such issuance is deemed
necessary by us to achieve a business purpose, including, but
not limited to, the introduction of new technology or the
improvement of our financial condition.
Members of our employee stock ownership association, whether or
not they are our shareholders, generally have a preemptive right
to subscribe for up to 20.0% of the shares publicly offered
pursuant to the Korean Securities and Exchange Act. This right
is exercisable only to the extent that the total number of
shares so acquired and held by members of our employee stock
ownership association does not exceed 20.0% of the sum of the
number of shares then outstanding and the number of newly-issued
shares. As of December 31, 2005, approximately 0.36% of the
issued shares were held by members of our employee stock
ownership association.
General Meeting of Shareholders
We generally hold the annual general meeting of shareholders
within three months after the end of each fiscal year. Subject
to a board resolution or court approval, we may hold an
extraordinary general meeting of shareholders:
•
as necessary;
•
at the request of holders of an aggregate of 3.0% or more of our
    outstanding common shares;
•
at the request of shareholders holding an aggregate of 3.0% or
    more of our outstanding shares for at least six months; or
•
at the request of our audit committee.
Holders of non-voting shares may request a general meeting of
shareholders only after the non-voting shares become entitled to
vote or "enfranchised," as described under
"— Voting Rights" below.
We must give shareholders written notice setting out the date,
place and agenda of the meeting at least two weeks before the
date of the general meeting of shareholders. However, for
holders of less than 1.0% of the total number of issued and
outstanding voting shares, we may give notice by placing at
least two public notices in at least two daily newspapers at
least two weeks in advance of the meeting. Currently, we use The
Korea Economic Daily News and Mail Business Newspaper, both
published in Seoul, for this purpose. Shareholders who are not
on the shareholders' registry as of the record date are not
entitled to receive notice of the general meeting of
shareholders or attend or vote at the meeting. Holders of
non-voting shares, unless enfranchised, are not entitled to
receive notice of or vote at general meetings of shareholders.
Our general meetings of shareholders have historically been held
in or near Seoul.
Voting Rights
Holders of our common shares are entitled to one vote for each
common share, except that voting rights of common shares held by
us (including treasury shares and shares held by bank trust
funds controlled by us), or by a corporate shareholder that is
more than 10.0% owned by us either directly or indirectly, may
not be exercised. Under the Korean Securities and Exchange Act,
unless stated otherwise in the articles of incorporation,
holders of an aggregate of 1% or more of the outstanding shares
with voting rights may request cumulative voting in any election
for two or more directors. Our articles of incorporation have
permitted cumulative voting since our annual shareholders
meeting in March 2003. Cumulative voting provides each
shareholder with multiple voting rights corresponding to the
number of directors to be appointed in a particular election
allows each shareholder to exercise all his or her voting rights
cumulatively to elect a director.
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Our shareholders may adopt resolutions at a general meeting by
an affirmative majority vote of the voting shares present or
represented at the meeting if the proportion of affirmative
votes also represent at least one-fourth of our total voting
shares then issued and outstanding. However, under the Korean
Commercial Code and our articles of incorporation, the following
matters, among others, require approval by the holders of at
least two-thirds of the voting shares present or represented at
a meeting, and such affirmative votes also represent at least
one-third of our total voting shares then issued and outstanding:
•
amending our articles of incorporation;
•
removing a director;
•
effecting any dissolution, merger or consolidation of us;
•
transferring the whole or any significant part of our business;
•
effecting our acquisition of all of the business of any other
    company or a part of the business of any other company having a
    material effect on our business;
•
reducing our capital; or
•
issuing any new shares at a price lower than their par value.
In general, holders of non-voting shares are not entitled to
vote on any resolution or receive notice of any general meeting
of shareholders.
However, in the case of amendments to our articles of
incorporation, or any merger or consolidation of us, or in some
other cases which affect the rights or interests of the
non-voting shares, approval of the holders of non-voting shares
is required. We may obtain the approval by a resolution of
holders of at least two-thirds of the non-voting shares present
or represented at a class meeting of the holders of non-voting
shares, where the affirmative votes also represent at least
one-third of our total issued and outstanding non-voting shares.
In addition, if we are unable to pay dividends on non-voting
shares as provided in our articles of incorporation, the holders
of non-voting shares will become enfranchised and will be
entitled to exercise voting rights beginning at the next general
meeting of shareholders to be held after the declaration of
non-payment of dividends is made until such dividends are paid.
The holders of enfranchised non-voting shares have the same
rights as holders of common shares to request, receive notice
of, attend and vote at a general meeting of shareholders.
Shareholders may exercise their voting rights by proxy. A
shareholder may give proxies only to another shareholder, except
that a corporate shareholder may give proxies to its officers or
employees.
Holders of ADRs exercise their voting rights through the ADR
depositary, an agent of which is the record holder of the
underlying common shares. Subject to the provisions of the
deposit agreement, ADR holders are entitled to instruct the ADR
depositary how to vote the common shares underlying their ADSs.
Rights of Dissenting Shareholders
In some limited circumstances, including the transfer of all or
a significant part of our business or our merger or
consolidation with another company (with certain exceptions),
dissenting shareholders have the right to require us to purchase
their shares. To exercise this right, shareholders, including
holders of non-voting shares, must submit to us a written notice
of their intention to dissent before the general meeting of
shareholders. Then, within 20 days after the relevant
resolution is passed at a meeting, the dissenting shareholders
must request us in writing to purchase their shares. We are
obligated to purchase the shares of such dissenting shareholders
within one month after the expiration of the
20-day
period. The
purchase price for the shares is required to be determined
through negotiation between the dissenting shareholders and us.
If we cannot agree on a price through negotiation, the purchase
price will be the average of (1) the weighted average of
the daily share prices on the KRX Stock Market for the two-month
period before the date of the adoption of the relevant board
resolution, (2) the weighted average of the daily share
price on the KRX Stock Market for the one month period before
the date of the adoption of the relevant resolution and
(3) the weighted average of the daily share price on the
KRX Stock Market for the one week period before such date
of the adoption of the relevant resolution. However, the
Financial Supervisory Commission of Korea may adjust this price
if we or shareholders collectively holding
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30.0% or more of the total number of the shares held by
dissenting shareholders do not accept the purchase price.
Holders of ADSs will not be able to exercise dissenter's
rights unless they have withdrawn the underlying common stock
and become our direct shareholders.
Registry of Shareholders and Record Dates
Our transfer agent, Kookmin Bank, maintains the registry of our
shareholders at its office in Seoul, Korea. It records and
registers transfers of shares on the registry of shareholders
upon presentation of the share certificates.
The record date for annual dividends is December 31. For
the purpose of determining the shareholders entitled to annual
dividends, the registry of shareholders is closed for the period
from January 1 to January 31 of the following year. Further, for
the purpose of determining the shareholders entitled to some
other rights pertaining to the shares, we may, on at least two
weeks' public notice, set a record date and/or close the
register of shareholders for not more than three months. The
trading of shares and the delivery of share certificates may
continue while the register of shareholders is closed.
Annual Report
At least one week before the annual general meeting of
shareholders, we must make our annual reports and audited
non-consolidated financial statements available for inspection
at our principal office and at all of our branch offices. In
addition, copies of annual reports, the audited non-consolidated
financial statements and any resolutions adopted at the general
meeting of shareholders will be available to our shareholders.
Under the Korean Securities and Exchange Act, we must file with
the Financial Supervisory Commission of Korea and the KRX
(1) an annual securities report within 90 days after
the end of our fiscal year, (2) a half-year report within
45 days after the end of the first six months of our fiscal
year, and (3) quarterly reports within 45 days after
the end of the third month and the ninth month of our fiscal
year. Copies of these reports are or will be available for
public inspection at the Financial Supervisory Commission of
Korea and the KRX.
Transfer of Shares
Under the Korean Commercial Code, the transfer of shares is
effected by the delivery of share certificates. However, to
assert shareholders' rights against us, the transferee must
have his or her name, seal and address registered on our
registry of shareholders, maintained by our transfer agent. A
non-Korean shareholder may file a sample signature in place of a
seal, unless he or she is a citizen of a country with a sealing
system similar to that of Korea. In addition, a non-resident
shareholder must appoint an agent in Korea authorized to receive
notices on his or her behalf and file his or her mailing address
in Korea. These requirements do not apply to holders of ADSs.
Under current Korean regulations, Korean securities companies
and banks, including licensed branches of non-Korean securities
companies and banks, asset management companies, futures trade
companies, internationally recognized foreign custodians and the
Korea Securities Depository may act as agents and provide
related services for foreign shareholders. Certain foreign
exchange controls and securities regulations apply to the
transfer of shares by non-residents or non-Koreans. See
"Item 10D. Exchange Controls — Korean
Foreign Exchange Controls and Securities Regulations".
Our transfer agent is Kookmin Bank, located at 24-3, Yoido-dong,
Yongdungpo-ku, Seoul, Korea.
Restrictions Applicable to Shares
Pursuant to the Telecommunications Business Law, the maximum
aggregate foreign shareholding in us is limited to 49.0%. See
"Item 4B. Business Overview — Law and
Regulation — Foreign Ownership and Investment
Restrictions and Requirements". In addition, certain
foreign exchange controls and securities regulations apply to
the acquisition of securities by non-residents or non-Koreans.
See "Item 10D. Exchange Controls — Korean
Foreign Exchange Controls and Securities Regulations".
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Acquisition of Shares by Us
Under the Korean Commercial Code, we may not acquire our own
shares except in limited circumstances, such as a reduction in
capital. However, we may acquire our own shares under the
relevant provisions of the Korean Securities and Exchange Act.
In such cases, we may acquire shares through purchases on the
KRX Stock Market or through a tender-offer after filing the
required report with the Financial Supervisory Commission of
Korea and the KRX. We may also acquire interests in our own
shares through agreements with trust companies and asset
management companies after filing a report with the Financial
Supervisory Commission and the KRX. The aggregate purchase price
for the shares may not exceed the total amount available for
distribution of dividends, subject to certain procedural
requirements.
Under the Korean Commercial Code, except in the case of a
reduction in capital, we must resell or transfer any shares we
acquire to a third party within a reasonable time. In general,
corporate entities in which we own more than 50% equity interest
may not acquire our shares. Under the Korean Securities and
Exchange Act, we are subject to certain selling restrictions for
the shares we acquire. In the case of a reduction in capital, we
must immediately cancel the shares we acquire. On
October 26, 2001, in accordance with the approval of our
board of directors, we announced plans to establish trust funds
with four Korean banks with a total funding of Won 1.3 trillion
for the purpose of acquiring our shares at market prices or
within a range of five percent of market prices. For more
details on the trust funds, see "Item 5B. Liquidity
and Capital Resources".
Liquidation Rights
In the event of our liquidation, assets remaining after payment
of all debts, liquidation expenses and taxes will be distributed
among shareholders in proportion to their shareholdings. Holders
of non-voting shares have no preference in liquidation. Holders
of debt securities have no preference over other creditors in
the event of liquidation.
Description of American Depositary Shares
The following is a summary of the deposit agreement dated as of
May 31, 1996, as amended by amendment no. 1 dated as of
March 15, 1999, amendment no. 2 dated as of April 24,
2000 and amendment no. 3 dated as of July 24, 2002, among
us, Citibank, N.A., as ADR depositary, and all holders and
beneficial owners of ADSs. The deposit agreement is governed by
the laws of the State of New York. Because it is a summary, this
description does not contain all the information that may be
important to you. For more complete information, you should read
the entire deposit agreement and the ADR. The deposit agreement
has been filed as an exhibit to our registration statement on
Form
F-3
(File
No.
333-91304)
filed with the United States Securities and Exchange Commission.
Copies of the deposit agreement are available for inspection at
the principal New York office of the ADR depositary, currently
located at 388 Greenwich Street, 14th Floor, New York, New
York 10013, United States of America, and at the principal
London office of the ADR depositary, currently located at Canada
Square, Canary Wharf, London, E14 5LB, England.
American Depositary Receipts
The ADR depositary will execute and deliver the ADRs evidencing
the ADSs. Each ADR evidences a specified number of ADSs, each
ADS representing one-ninth of one share of our common stock to
be deposited with the ADR depositary's custodian in Seoul,
or the Custodian. The Custodian is Korea Securities Depository,
located at 1328 Paeksok-Dong, Ilsan-Ku, Koyang, 411-770,
Kyunggi-Do, Seoul, 150-884, Korea. Korea Securities Depository
is also the institution authorized under applicable law to
effect book-entry transfers of our common shares, known as the
"Custodian". An ADR may represent any number of ADSs.
We and the ADR depositary will treat only persons in whose names
ADRs are registered on the books of the registrar as holders of
ADRs.
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Deposit and Withdrawal of Shares of Common Stock
Notwithstanding the provisions described below, under the terms
of the deposit agreement, as supplemented by a side letter dated
as of October 1, 2002, the deposit of shares and issuance
of ADSs may only be made if the total number of shares
represented by ADRs after such deposit does not exceed a
specified maximum, 13,598,544 shares as of October 1,
2002. This limit will be adjusted in certain circumstances,
including (1) increases upon the cancellation of existing
ADRs (up to a maximum of 5,605,839 shares),
(2) increases upon future offerings of ADSs by us or our
shareholders, (3) increases upon issuances of ADSs upon the
exchange of outstanding exchangeable bonds issued by Momenta
(Cayman) (a special purpose vehicle incorporated in the Cayman
Islands, which sold bonds exchangeable initially into such ADSs,
see "Item 6E. Share Ownership"),
(4) increases for rights offerings and (5) adjustments
for share reclassifications. The limit also may be decreased in
certain circumstances, including in connection with purchases of
ADSs by Momenta (Cayman) in accordance with the terms of its
exchangeable bonds. Notwithstanding the foregoing, the ADR
depositary and the custodian may not accept deposits of shares
of common stock for issuance of ADSs (other than in the case of
an exercise of the exchange rights of the exchangeable bonds
issued by Momenta (Cayman)) (i) if it has been notified by
us in writing that we block deposits to prevent a violation of
applicable Korean laws or regulations or a violation of our
articles of incorporation or (ii) from a person intending
to make a deposit that identifies itself to the depositary and
that has been identified in writing by us as a holder of at
least 3% of our shares of common stock on October 7, 2002.
The shares of common stock underlying the ADSs are delivered to
the ADR depositary's custodian in book-entry form.
Accordingly, no share certificates will be issued for them, and
the ADR depositary will hold the shares of common stock through
the book-entry settlement system of the Custodian. The delivery
of the shares of common stock pursuant to the deposit agreement
will take place through the facilities of the Custodian in
accordance with its applicable settlement procedures. The ADR
depositary will execute and deliver ADRs if you or your broker
deposit shares or evidence of rights to receive shares of common
stock with the Custodian. Upon payment of its fees and expenses
and of any taxes or charges, such as stamp taxes or stock
transfer taxes or fees, the ADR depositary will register the
appropriate number of ADSs in the names you designate and will
deliver an ADR or ADRs for those ADSs to the persons you
designate. The ADR depositary and the ADR depositary's
custodian will refuse to accept shares of common stock for
deposit whenever we restrict transfer of shares of common stock
to comply with ownership restrictions under applicable law or
our articles of incorporation or whenever the deposit would
cause the total number of shares of common stock deposited to
exceed a level we determine from time to time. We may instruct
the ADR depositary to take certain actions with respect to a
holder of ADSs who holds in excess of the ownership limitation
set forth in the deposit agreement, including the mandatory sale
or disposition of the shares represented by the ADSs in excess
of such ownership limitations if, and to the extent, permitted
by applicable law.
You may surrender your ADRs to the ADR depositary to withdraw
the underlying shares of our common stock. Upon payment of the
fees and any governmental charges and taxes provided in the
deposit agreement, and subject to applicable laws and
regulations of Korea and our articles of incorporation, you will
be entitled to physical delivery or electronic delivery to an
account in Korea or, if permissible under applicable Korean law,
outside the United States, of the shares of common stock
evidenced by the ADRs and any other property at the time
represented by ADRs you surrendered. If you surrender an ADR
evidencing a number of ADSs not evenly divisible by nine, the
ADR depositary will deliver the appropriate whole number of
shares of common stock represented by the surrendered ADSs and
will execute and deliver to you a new ADR evidencing ADSs
representing any remaining fractional shares of common stock.
If you request withdrawal of shares of common stock, you must
deliver to the ADR depositary a written order directing the ADR
depositary to cause the shares of common stock being withdrawn
to be delivered to or upon the written order of the person
designated in your order, subject to applicable Korean laws and
the provisions of the deposit agreement.
Under the provisions of the deposit agreement, the ADR
depositary may not lend shares of common stock or ADSs. However,
subject to the provisions of the deposit agreement and
limitations established by the ADR depositary, the ADR
depositary may execute and deliver ADSs before deposit of the
underlying shares of
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common stock. This is called a pre-release of the ADS. The ADR
depositary may also deliver shares of common stock upon
cancellation of pre-released ADSs (even if the cancellation
occurs before the termination of the pre-release). The ADR
depositary may pre-release ADSs only under the following
circumstances:
•
before or at the time of the pre-release, the person to whom the
    pre-release is being made must represent to the ADR depositary
    in writing that it or its customer owns the shares of common
    stock or ADSs to be deposited and show evidence of the ownership
    to the ADR depositary's satisfaction;
•
before or at the time of such pre-release, the person to whom
    the pre-release is being made must agree in writing that he will
    hold the shares of common stock or ADSs in trust for the ADR
    depositary until their delivery to the ADR depositary or
    custodian, reflect on his records the ADR depositary as owner of
    such shares of common stock or ADSs and deliver such shares of
    common stock upon the ADR depositary's request;
•
the pre-release must be fully collateralized with cash or
    U.S. government securities;
•
the ADR depositary must be able to terminate the pre-release on
    not more than five business day's notice; and
•
the pre-release is subject to further indemnities and credit
    regulations as the ADR depositary deems appropriate.
The ADR depositary may retain for its own account any
compensation received by it in connection with the pre-release,
such as earnings on the collateral.
If you want to withdraw the shares of common stock from the
depositary facility, you must register your identity with the
Financial Supervisory Service of Korea before you acquire the
shares of common stock unless you intend to sell the shares of
common stock within three months. See "Item 10D.
Exchange Controls — Korean Foreign Exchange Controls
and Securities Regulations — Restrictions Applicable
to Shares".
Dividends, Other Distributions and Rights
If the ADR depositary can, in its judgment and pursuant to
applicable law, convert Won (or any other foreign currency) into
Dollars on a reasonable basis and transfer the resulting Dollars
to the United States, the ADR depositary will as promptly as
practicable convert all cash dividends and other cash
distributions received by it on the deposited shares of common
stock into Dollars and distribute the Dollars to you in
proportion to the number of ADSs representing shares of common
stock held by you, after deduction of the fees and expenses of
the ADR depositary. If the ADR depositary determines that in its
judgment any currency other than Dollars it receives from us
cannot be converted and distributed on a reasonable basis, the
ADR depositary may distribute the currency it receives to the
extent permitted under applicable law or hold the currency for
your account if you are entitled to receive the distribution.
The ADR depositary will not be liable for any interest. Before
making a distribution, the ADR depositary will deduct any
withholding taxes that must be paid.
In the event that the ADR depositary or the ADR
depositary's custodian receives any distribution upon any
deposited shares of common stock in property or securities
(other than shares of common stock, non-voting shares or rights
to receive shares of common stock or non-voting shares), the ADR
depositary will distribute the property or securities to you in
proportion to your holdings in any manner that the ADR
depositary deems, after consultation with us, equitable and
practicable. If the ADR depositary determines that any
distribution of property or securities (other than shares of
common stock, non-voting shares or rights to receive shares of
common stock or non-voting shares) cannot be made
proportionally, or if for any other reason the ADR depositary
deems the distribution not to be feasible, the ADR depositary
may, after consultation with us, dispose of all or a portion of
the property or securities in such amounts and in such manner,
including by public or private sale, as the ADR depositary deems
equitable or practicable. The ADR depositary will distribute to
you the net proceeds of any such sale, or the balance of the
property or securities, after the deduction of the fees and
expenses of the ADR depositary.
If a distribution by us consists of a dividend in, or free
distribution of, our shares of common stock, the ADR depositary
may, with our approval, and will, if we request, deposit the
shares of common stock and either
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(1) distribute to you, in proportion to your holdings,
additional ADSs representing those shares of common stock, or
(2) reflect on the records of the ADR depositary the
increase in the aggregate number of ADSs representing those
number of shares of common stock, in both cases, after the
deduction of the fees and expenses of the ADR depositary. If the
ADR depositary deems that such distribution for any reason is
not feasible, the ADR depositary may adopt, after consultation
with us, any method as it may deem equitable and practicable,
including by public or private sale of all or part of the shares
of common stock received. The ADR depositary will distribute to
you the net proceeds of any such sale in the same way as it does
with cash. The ADR depositary will only distribute whole ADSs.
If the ADR depositary does not distribute additional ADSs, then
each outstanding ADS will also represent the new shares so
distributed.
If a distribution by us consists of a dividend in, or free
distribution of, non-voting shares, the ADR depositary will
deposit the non-voting shares under a non-voting shares deposit
agreement to be entered into among us, the ADR depositary and
all holders and beneficial owners of depositary shares. The ADR
depositary will deliver to you, in proportion to your holdings
of ADSs, depositary shares issued under the non-voting shares
deposit agreement representing the number of non-voting shares
received as such dividend or distribution. If the ADR depositary
deems such distribution for any reason is not feasible, the ADR
depositary may adopt, after consultation with us, any method as
it may deem equitable and practicable, including by public or
private sale of all or part of the nonvoting shares received.
The ADR depositary will distribute to you the net proceeds of
any such sale in the same way as it does with cash. The ADR
depositary will only distribute whole depositary shares. We are
not obligated to list depositary shares representing non-voting
shares on any exchange.
If we offer holders of our securities any rights to subscribe
for additional shares of common stock or any other rights, the
ADR depositary may make these rights available to you. The ADR
depositary must first determine whether it is lawful and
feasible to do so. If the ADR depositary determines that it is
not lawful or feasible to make these rights available to you,
then upon our request, the ADR depositary will sell the rights
and distribute the proceeds in the same way as it would do with
cash. The ADR depositary may allow these rights that are not
distributed or sold to lapse. In that case, you will receive no
value for these rights.
If we issue any rights with respect to non-voting shares, the
securities issuable upon any exercise of such rights by holders
or beneficial owners will be depositary shares representing
those non-voting shares issued under the provisions of a
non-voting share deposit agreement.
If a registration statement under the U.S. Securities Act
is required with respect to the securities to which any rights
relate in order for us to offer the rights to you and to sell
the securities represented by these rights, the ADR depositary
will not offer such rights to you until such a registration is
in effect, or unless the offering and sale of such securities
and such rights to you are exempt from the registration
requirements of the U.S. Securities Act or any required
filing, report, approval or consent has been submitted, obtained
or granted. We or the ADR depositary will not be obligated to
register the rights or securities under the U.S. Securities
Act or to submit, obtain or request any filing, report, approval
or consent.
The ADR depositary may not be able to convert any currency or to
sell or dispose of any distributed or offered property or rights
in a timely manner or at a specified price, or at all.
Record Dates
The ADR depositary will fix a record date, after consultation
with us, in each of the following situations:
•
any cash dividend or other cash distribution becomes payable;
•
any distribution other than cash is made;
•
rights are issued with respect to deposited shares of common
    stock;
•
the ADR depositary causes a change in the number of shares of
    common stock that are represented by each ADS; or
•
the ADR depositary receives notice of any shareholders'
    meeting.
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The record date will, to the extent practicable, be as near as
the record date fixed by us for the shares of common stock. The
record date will determine (1) the ADR holders who are
entitled to receive the dividend, distribution or rights, or the
net proceeds of the sale of the rights; or (2) the ADR
holders who are entitled to receive notices or exercise rights.
Voting of the Underlying Shares of Common Stock
We will give the ADR depositary a notice of any meeting or
solicitation of shareholder proxies immediately after we
finalize the form and substance of such notice but not less than
14 days before the meeting. As soon as practicable after it
receives our notice, the ADR depositary will fix a record date,
and upon our written request, the ADR depositary will mail to
you a notice that will contain the following:
•
the information contained in our notice to the ADR depositary
    including an English translation, or, if requested by us, a
    summary of the information provided by us;
•
a statement that the ADR holders as of the close of business on
    a specified record date will be entitled to instruct the ADR
    depositary as to how to exercise their voting rights for the
    number of shares of deposited shares of common stock, subject to
    the provisions of applicable Korean law and our articles of
    incorporation, which provisions, if any, will be summarized in
    the notice to the extent that they are material; and
•
a statement as to the manner in which the ADR holders may give
    their instructions.
Upon your written request received on or before the date set by
the ADR depositary for this purpose, the ADR depositary will
endeavor, in so far as practicable, to vote or cause to be voted
the deposited shares of common stock in accordance with the
instructions set forth in your written requests. The ADR
depositary may not itself exercise any voting discretion over
any deposited shares of common stock. You may only exercise the
voting rights in respect of 9 ADSs or multiples of 9 ADSs. ADR
holders may not be entitled to give instruction to vote the
shares represented by the ADSs if, and to the extent, the total
number of shares represented by the ADSs of an ADR holder
exceeds the limit set under applicable law. We can give no
assurance to you, however, that we will notify the ADR
depositary sufficiently in advance of the scheduled date of a
meeting or solicitation of consents or proxies to enable the ADR
depositary to make a timely mailing of notices to you, or that
you will receive the notices sufficiently in advance of a
meeting or solicitation of consents or proxies to give
instructions to the ADR depositary.
Inspection of Transfer Books
The ADR depositary will keep books at its principal New York
office, which is currently located at 388 Greenwich Street,
14th Floor, New York, New York 10013, for the registration
and transfer of ADRs. You may inspect the books of the ADR
depositary as long as the inspection is not for the purpose of
communicating with holders in the interest of a business or
object other than our business or a matter related to the
deposit agreement or the ADRs.
Reports and Notices
On or before the first date on which we give notice, by
publication or otherwise, of any meeting of shareholders, or of
any adjourned meeting of shareholders, or of the taking of any
action in respect of any cash or other distributions or the
offering of any rights in respect of the shares of common stock,
we will transmit to the Custodian and the ADR depositary
sufficient copies of the notice in English in the form given or
to be given to shareholders. We will furnish to the ADR
depositary English language versions of any reports, notices and
other communications that we generally transmit to holders of
our common stock, including our annual reports, with annual
audited consolidated financial statements prepared in conformity
with Korean GAAP and, if prepared pursuant to the Securities
Exchange Act of 1934, as amended, a reconciliation of net
earnings for the year and stockholders' equity to
U.S. GAAP, and unaudited non-consolidated semiannual
financial statements prepared in conformity with Korean GAAP.
The ADR depositary will arrange for the prompt mailing of copies
of these documents, or, if we request, a summary of any such
notice provided by us to you or, at our request, make
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notices, reports (other than the annual reports and semiannual
financial statements) and other communications available to you
on a basis similar to that for the holders of our common stock
or on such other basis as we may advise the ADR depositary
according to any applicable law, regulation or stock exchange
requirement.
Notices to you under the deposit agreement will be deemed to
have been duly given if personally delivered or sent by mail or
cable, telex or facsimile transmission, confirmed by letter,
addressed to you at your address as it appears on the transfer
books of the ADR depositary or at such other address as you have
notified the ADR depositary.
In addition, the ADR depositary will make available for
inspection by holders at its principal New York office and its
principal London office any notices, reports or communications,
including any proxy soliciting materials, received from us that
we generally transmit to the holders of our common stock or
other deposited securities, including the ADR depositary. The
ADR depositary will also send to you copies of reports and
communications we will provide as provided in the deposit
agreement.
Changes Affecting Deposited Shares of Common Stock
In case of a change in the par value, or a split-up,
consolidation or any other reclassification of shares of our
common stock or upon any recapitalization, reorganization,
merger or consolidation or sale of assets affecting us, any
securities received by the ADR depositary or the Custodian in
exchange for, in conversion of or in respect of deposited shares
of our common stock will be treated as new deposited shares of
common stock under the deposit agreement. In that case, ADSs
will, subject to the terms of the deposit agreement and
applicable laws and regulations, including any registration
requirements under the U.S. Securities Act, represent the
right to receive the new deposited shares of common stock,
unless additional ADRs are issued, as in the case of a stock
dividend, or unless the ADR depositary calls for the surrender
of outstanding ADRs to be exchanged for new ADRs.
Amendment and Termination of the Deposit Agreement
We may agree with the ADR depositary to amend the deposit
agreement and the ADSs without your consent for any reason. If
the amendment adds or increases fees or charges, except for
taxes and other governmental charges or certain expenses of the
ADR depositary, or prejudices any substantial existing right of
ADR holders, it will only become effective 30 days after
the ADR depositary notifies you of the amendment. If you
continue to hold your ADSs at the time an amendment becomes
effective, you will be considered to have agreed to the
amendment and to be bound by the deposit agreement as amended.
Except as otherwise required by any mandatory provisions of
applicable law, no amendment may impair your right to surrender
your ADSs and to receive the underlying deposited securities.
The ADR depositary will terminate the deposit agreement if we
ask it to do so with 90 days' prior written notice.
The ADR depositary may also terminate the deposit agreement if
the ADR depositary has notified us at least 90 days in
advance that it would like to resign and we have not appointed a
new depositary. In both cases, the ADR depositary must notify
you at least 30 days before the termination date.
If any ADRs remain outstanding after the date of termination,
the ADR depositary will stop performing any further acts under
the deposit agreement, except:
•
to collect dividends and other distributions pertaining to the
    deposited shares of common stock;
•
to sell property and rights and the conversion of deposited
    shares of common stock into cash as provided in the deposit
    agreement; and
•
to deliver deposited shares of common stock, together with any
    dividends or other distributions received with respect to the
    deposited shares of common stock and the net proceeds of the
    sale of any rights or other property represented by those ADSs
    in exchange for surrendered ADRs.
At any time after the expiration of six months from the date of
termination, the ADR depositary may sell any remaining deposited
shares of common stock and hold uninvested the net proceeds in
an unsegregated account, together with any other cash or
property then held, without liability for interest, for the pro
rata benefit of the holders of ADSs that have not been
surrendered by then.
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Charges of ADR Depositary
The fees and expenses of the ADR depositary as agreed between us
and the ADR depositary include:
•
taxes and other governmental charges;
•
registration fees applicable to transfers of shares of common
    stock on our shareholders' register, or that of any entity
    acting as registrar for the shares, to the name of the ADR
    depositary or its nominee, or the Custodian or its nominee, when
    making deposits or withdrawals under the deposit agreement;
•
cable, telex and facsimile transmission expenses that are
    expressly provided in the deposit agreement;
•
expenses incurred by the ADR depositary in the conversion of
    foreign currency into Dollars under the deposit agreement;
•
a fee of up to US$5.00 per 100 ADSs, or portion thereof,
    for execution and delivery of ADSs and the surrender of ADRs
    under the deposit agreement; and
•
a fee of up to US$0.02 per ADS held for cash distributions,
    a sale or exercise of rights or the taking of any other
    corporate action involving distributions to shareholders.
General
Neither we nor the ADR depositary will be liable to you if
prevented or delayed by law, governmental authority, any
provision of our articles of incorporation or any circumstances
beyond our or its control in performing our or its obligations
under the deposit agreement. The deposit agreement provides that
the ADR depositary will hold the shares of common stock for your
sole benefit. Our obligations and those of the ADR depositary
under the deposit agreement are expressly limited to performing,
in good faith and without negligence, our and its respective
duties specified in the deposit agreement.
The ADSs are transferable on the books of the ADR depositary;
provided, however, that the ADR depositary may, after
consultation with us, close the transfer books at any time or
from time to time, when deemed expedient by it in connection
with the performance of its duties. As a condition precedent to
the execution and delivery of any ADSs, registration of
transfer, split-up, combination of any ADR or surrender of any
ADS for the purpose of withdrawal of deposited shares of common
stock, the ADR depositary or the Custodian may require payment
from the depositor of the shares of common stock or a holder of
ADSs of a sum sufficient to reimburse the ADR depositary for any
tax or other governmental charge and any stock transfer or
registration fee and payment of any applicable fees payable by
the holders of ADSs.
Any person depositing shares of common stock, any holder of an
ADS or any beneficial owner may be required from time to time to
file with the ADR depositary or the Custodian a proof of
citizenship, residence, exchange control approval, payment of
applicable Korean or other taxes or governmental charges, or
legal or beneficial ownership and the nature of their interest,
to provide information relating to the registration on our
shareholders' register (or our appointed agent for the
transfer and registration of shares of common stock) of the
shares of common stock presented for deposit or other
information, to execute certificates and to make representations
and warranties as we or the ADR depositary may deem necessary or
proper or to enable us or the ADR depositary to perform our and
its obligations under the deposit agreement. The ADR depositary
may withhold the execution or delivery or registration of
transfer of all or part of any ADR or the distribution or sale
of any dividend or other distribution of rights or of the
proceeds from their sale or the delivery of any shares deposited
under the deposit agreement and any other securities, property
and cash received by the ADR depositary or the Custodian until
the proof or other information is filed or the certificates are
executed or the representations and warranties are made. The ADR
depositary shall provide us, unless otherwise instructed by us,
in a timely manner, with copies of any these proofs and
certificates and these written representations and warranties.
The delivery and surrender of ADSs and transfer of ADSs
generally may be suspended during any period when our or the ADR
depositary's transfer books are closed or, if that action
is deemed necessary or advisable by us or the ADR depositary, at
any time or from time to time in accordance with the deposit
agreement. We may
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restrict, in a manner as we deem appropriate, transfers of
shares of common stock where the transfers may result in
ownership of shares of common stock in excess of limits under
applicable law. Except as described in "Deposit and
Withdrawal of Shares of Common Stock" above,
notwithstanding any other provision of the deposit agreement,
the surrender of outstanding ADRs and withdrawal of Deposited
Securities (as defined in the deposit agreement) represented by
the ADRs may be suspended, but only as required in connection
with (1) temporary delays caused by closing the transfer
books of the ADR depositary or the issuer of any Deposited
Securities (or the appointed agent or agents for such issuer for
the transfer and registration of such Deposited Securities) in
connection with voting at a shareholders' meeting or the
payment of dividends, (2) payment of fees, taxes and
similar charges, or (3) compliance with any United States
or foreign laws or governmental regulations relating to the ADRs
or to the withdrawal of the Deposited Securities.
Governing Law
The deposit agreement and the ADRs will be interpreted under,
and all rights under the deposit agreement or the ADRs are
governed by, the laws of the State of New York.
We have irrevocably submitted to the non-exclusive jurisdiction
of New York State or United States Federal Courts located in New
York City and waived any objection to legal actions or
proceedings in these courts whether on the ground of venue or on
the ground that the proceedings have been brought in an
inconvenient forum.
This submission was made for the benefit of the ADR depositary
and the holders and shall not limit the right of any of them to
take legal actions or proceedings in any other court of
competent jurisdiction nor shall the taking of legal actions or
proceedings in one or more jurisdictions preclude the taking of
legal actions or proceedings in any other jurisdiction (whether
concurrently or not), to the extent permitted under applicable
law.
Information Relating to the ADR Depositary
Citibank, N.A. has been appointed as ADR depositary pursuant to
the deposit agreement. Citibank is a wholly-owned subsidiary of
Citicorp, a Delaware corporation whose principal office is
located in New York, New York, which in turn is a
wholly-owned subsidiary of Citigroup Inc. Citibank is a global
financial services organization serving individuals, businesses,
governments and financial institutions in approximately
100 countries around the world.
Citibank was originally organized on June 16, 1812, and now
is a national banking association organized under the National
Bank Act of 1864 of the United States of America. Citibank is
primarily regulated by the United States Office of the
Comptroller of the Currency. Its principal office is at 399 Park
Avenue, New York, NY 10022.
The consolidated balance sheets of Citibank are set forth in
Citicorp's Annual Reports on
Form
10-K
and in
Citicorp's quarterly financial reviews and
Forms
10-Q.
Citicorp's Annual Reports on
Form
10-K
and
quarterly financial reviews and
Forms
10-Q
are
filed periodically with the United States Securities and
Exchange Commission, or SEC.
Citibank's Articles of Association and By-laws, each as
currently in effect, together with Citicorp's most recent
annual and quarterly reports will be available for inspection at
the Depositary Receipt office of Citibank, N.A., 388 Greenwich
Street, 14th Floor, New York, New York 10013.
Item 10C.
Material
Contracts
We have not entered into any material contracts since
January 1, 2003, other than in the ordinary course of our
business. For information regarding our agreements and
transactions with entities affiliated with the SK Group see
"Item 6E. Share Ownership". For a description of
certain agreements entered into during the past three years
related to our capital commitments and obligations, see
"Item 5B. Liquidity and Capital Resources —
Capital Requirements and Resources".
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Item 10D.
Exchange
Controls
Korean Foreign Exchange Controls and Securities
Regulations
General
The Foreign Exchange Transaction Act and the Presidential Decree
and regulations under that Act and Decree, collectively referred
to as the Foreign Exchange Transaction Laws, regulate investment
in Korean securities by non-residents and issuance of securities
outside Korea by Korean companies. Under the Foreign Exchange
Transaction Laws, non-residents may invest in Korean securities
only to the extent specifically allowed by these laws. The
Financial Supervisory Commission of Korea has also adopted,
pursuant to its authority under the Securities and Exchange Act,
regulations that restrict investment by foreigners in Korean
securities and regulate issuance of securities outside Korea by
Korean companies.
Subject to certain limitations, the MOFE has authority to take
the following actions under the Foreign Exchange Transaction
Laws:
•
if the Government deems it necessary on account of war, armed
    conflict, natural disaster or grave and sudden and significant
    changes in domestic or foreign economic circumstances or similar
    events or circumstances, the MOFE may temporarily suspend
    performance under any or all foreign exchange transactions, in
    whole or in part, to which the Foreign Exchange Transaction Laws
    apply (including suspension of payment and receipt of foreign
    exchange) or impose an obligation to deposit, safe-keep or
•
sell any means of payment to The Bank of Korea or certain other
    governmental agencies or financial institutions; and
•
if the Government concludes that the international balance of
    payments and international financial markets are experiencing or
    are likely to experience significant disruption or that the
    movement of capital between Korea and other countries are likely
    to adversely affect the Won, exchange rate or other
    macroeconomic policies, the MOFE may take action to require any
    person who intends to effect or effects a capital transaction to
    deposit all or a portion of the means of payment acquired in
    such transactions with The Bank of Korea or certain other
    governmental agencies or financial institutions.
Government Review of Issuances of ADSs
In order for us to issue ADSs in excess of US$30 million,
we are required to submit a report to the MOFE with respect to
the issuance of the ADSs prior to and after such issuance. The
MOFE may at its discretion direct us to take necessary measures
to avoid exchange rate fluctuation in connection with its
acceptance of report of the issuance of the ADSs.
•
Under current Korean laws and regulations, the depositary is
    required to obtain our prior consent for any proposed deposit of
    common shares if the number of shares to be deposited in such
    proposed deposit exceeds the number of common shares initially
    deposited by us for the issuance of ADSs (including deposits in
    connection with the initial and all subsequent offerings of ADSs
    and stock dividends or other distributions related to the ADSs).
•
We can give no assurance that we would grant our consent, if our
    consent is required. In addition to such restrictions under
    Korean laws and regulations, there are also restrictions on the
    deposits of our common shares for issuance of ADSs. See
    "Item 10B. Memorandum and Articles of
    Incorporation — Description of American Depositary
    Shares". Therefore, a holder of ADRs who surrenders ADRs
    and withdraws shares may not be permitted subsequently to
    deposit those shares and obtain ADRs.
Reporting Requirements for Holders of Substantial
Interests
Under the Korean Securities and Exchange Act, any person whose
direct or beneficial ownership of shares with voting rights,
whether in the form of shares or ADSs, certificates representing
the rights to subscribe for shares and equity-related debt
securities including convertible bonds and bonds with warrants
(collectively referred to as "Equity Securities"),
together with the Equity Securities beneficially owned by
certain related
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persons or by any person acting in concert with the person,
accounts for 5.0% or more of the total outstanding Equity
Securities is required to report the status and purpose (in
terms of whether the purpose of shareholding is to affect
control over management of the issuer) of the holdings to the
Financial Supervisory Commission of Korea and the KRX within
five business days after reaching the 5.0% ownership interest
threshold. In addition, any change (i) in the ownership
interest subsequent to the report which equals or exceeds 1.0%
of the total outstanding Equity Securities, or (ii) in the
shareholding purpose is required to be reported to the Financial
Supervisory Commission of Korea and KRX within five business
days from the date of the change. However, reporting deadline of
such reporting requirement is extended to institutional
investors who hold shares for purposes other than management
control by the tenth day of the month immediately following the
month of share acquisition or change in their shareholding.
Those who reported the purpose of shareholding is to affect
control over management of the issuer are prohibited from
exercising their voting rights and acquiring additional shares
for five days subsequent to the report under the recently
amended Korean Securities and Exchange Act.
Violation of these reporting requirements may subject a person
to criminal sanctions such as fines or imprisonment and may
result in a loss of voting rights with respect to the ownership
of unreported Equity Securities exceeding 5.0%. Furthermore, the
Financial Supervisory Commission of Korea may issue an order to
dispose of such non-reported Equity Securities.
In addition to the reporting requirements described above, any
person whose direct or beneficial ownership of our common shares
accounts for 10% or more of the total issued and outstanding
shares with voting rights (a "major shareholder") must
report the status of his/her shareholding to the Securities and
Futures Commission and the KRX by the tenth day of the calendar
month immediately following the month in which any changes in
shareholding have occurred. Violations of these reporting
requirements may subject a person to criminal sanctions, such as
fines or imprisonment.
Under the Financial Supervisory Commission Regulations newly
amended on March 2005, (i) if a company listed on the Stock
Market (the "KRX Stock Market") or a company listed on
the KOSDAQ Market (the "KRX KOSDAQ Market") has
reported material matters regarding management which have not
been disclosed to KRX to a foreign exchange pursuant to the laws
of the jurisdiction in which the foreign exchange is located,
then it must submit a Korean translation of the material matters
regarding management that have been reported to the foreign
exchange to the FSC and KRX, and (ii) if a KRX Stock
Market-listed company or KRX KOSDAQ Market-listed company has
submitted business reports or similar documents to a foreign
exchange, then it must submit a Korean summary thereof to the
FSC and KRX.
Restrictions Applicable to ADSs
No Korean governmental approval is necessary for the sale and
purchase of ADSs in the secondary market outside Korea or for
the withdrawal of shares underlying ADSs and the delivery of
shares in Korea in connection with the withdrawal, provided that
a foreigner who intends to acquire the shares must obtain an
investment registration card from the Financial Supervisory
Service, as described below. The acquisition of the shares by a
foreigner must be reported by the foreigner or his standing
proxy in Korea immediately to the Governor of the Financial
Supervisory Service.
Persons who have acquired shares as a result of the withdrawal
of shares underlying the ADSs may exercise their preemptive
rights for new shares, participate in free distributions and
receive dividends on shares without any further governmental
approval.
Restrictions Applicable to Shares
As a result of amendments to the Foreign Exchange Transaction
Laws and the regulations of Financial Supervisory Commission of
Korea, together referred to as the Investment Rules, adopted in
connection with the stock market opening from January 1992 and
after that date, foreigners may invest, with limited exceptions
and subject to procedural requirements, in all shares of Korean
companies, whether listed on the KRX Stock Market or the KRX
KOSDAQ Market, unless prohibited by specific laws. Foreign
investors may trade shares listed on the
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KRX Stock Market or the KRX KOSDAQ Market only through the KRX
Stock Market or the KRX KOSDAQ Market, except in limited
circumstances, including, among others:
•
odd-lot trading of shares;
•
acquisition of shares by a foreign company as a result of a
    merger;
•
acquisition or disposal of shares in connection with a tender
    offer;
•
acquisition of shares by exercise of warrant, conversion right
    under convertible bonds, exchange right under exchangeable bonds
    or withdrawal right under depositary receipts issued outside of
    Korea by a Korean company ("Converted Shares");
•
acquisition of shares through exercise of rights under
    securities issued outside of Korea;
•
acquisition of shares as a result of inheritance, donation,
    bequest or exercise of shareholders' rights, including
    preemptive rights or rights to participate in free distributions
    and receive dividends;
•
over-the
-counter
    transactions between foreigners of a class of shares for which
    the ceiling on aggregate acquisition by foreigners, as explained
    below, has been reached or exceeded; and
•
acquisition of shares by direct investment under the Foreign
    Investment Promotion Law.
For
over-the
-counter
transactions of shares between foreigners outside the KRX Stock
Market or the KRX KOSDAQ Market for shares with respect to which
the limit on aggregate foreign ownership has been reached or
exceeded, a securities company licensed in Korea must act as an
intermediary. Odd-lot trading of shares outside the KRX Stock
Market or the KRX KOSDAQ Market must involve a licensed
securities company in Korea as the other party. Foreign
investors are prohibited from engaging in margin transactions
through borrowing shares from securities companies with respect
to shares which are subject to a foreign ownership limit.
The Investment Rules require a foreign investor who wishes to
invest in shares for the first time on the KRX Stock Market or
the KRX KOSDAQ Market (including Converted Shares) and shares
being publicly offered for initial listing on the KRX Stock
Market or the KRX KOSDAQ Market to register its identity with
the Financial Supervisory Service prior to making any such
investment; however, the registration requirement does not apply
to foreign investors who acquire Converted Shares with the
intention of selling such Converted Shares within three months
from the date of acquisition of the Converted Shares or who
acquire the shares in an
over-the
-counter
transaction or dispose of shares where such acquisition or
disposal is deemed to be a foreign direct investment pursuant to
the Foreign Investment Promotion Law. Upon registration, the
Financial Supervisory Service will issue to the foreign investor
an investment registration card which must be presented each
time the foreign investor opens a brokerage account with a
securities company or financial institution in Korea. Foreigners
eligible to obtain an investment registration card include
foreign nationals who are individuals residing in Korea for six
months or longer, foreign governments, foreign municipal
authorities, foreign public institutions, international
financial institutions or similar international organizations,
corporations incorporated under foreign laws and any person in
any additional category designated by decree of the MOFE. All
Korean offices of a foreign corporation as a group are treated
as a separate foreigner from the offices of the corporation
outside Korea for the purpose of investment registration.
However, a foreign corporation or depositary issuing depositary
receipts may obtain one or more investment registration cards in
its name in certain circumstances as described in the relevant
regulations.
Upon a foreign investor's purchase of shares through the
KRX Stock Market or the KRX KOSDAQ Market, no separate report by
the investor is required because the investment registration
card system is designed to control and oversee foreign
investment through a computer system. However, where a foreign
investor acquires or sells shares outside the KRX Stock Market
and the KRX KOSDAQ Market, such acquisition or sale of shares
must be reported by the foreign investor or his standing proxy
to the Governor at the time of each such acquisition or sale;
provided, however, that a foreign investor must ensure that any
acquisition or sale by it of shares outside the KRX Stock Market
or the KRX KOSDAQ Market in the case of trades in connection
with a tender offer, odd-lot trading of shares or trades of a
class of shares for which the aggregate foreign ownership limit
has been reached or exceeded, is reported to the Governor by the
securities company engaged to facilitate such transaction. In
the event a foreign investor desires to acquire or sell shares
outside the KRX Stock Market or
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the KRX KOSDAQ Market and the circumstances in connection with
such sale or acquisition do not fall within the exceptions made
for certain limited circumstances described above, then the
foreign investor must obtain the prior approval of the Governor.
In addition, in the event a foreign investor acquires or sells
shares outside the KRX Stock Market or the KRX KOSDAQ Market, a
prior report to the Bank of Korea may also be required in
certain circumstances. A foreign investor must appoint one or
more standing proxies from among the Korea Securities
Depository, foreign exchange banks, including domestic branches
of foreign banks, securities companies, including domestic
branches of foreign securities companies, asset management
companies, futures trading companies and internationally
recognized custodians which will act as a standing proxy to
exercise shareholders' rights, or perform any matters
related to the foregoing activities if the foreign investor does
not perform these activities himself. However, a foreign
investor may be exempted from complying with these standing
proxy rules with the approval of the Governor in cases deemed
inevitable by reason of conflict between laws of Korea and the
home country of the foreign investor.
Certificates evidencing shares of Korean companies must be kept
in custody with an eligible custodian in Korea. Only foreign
exchange banks, including domestic branches of foreign banks,
securities companies, including domestic branches of foreign
securities companies, the Korea Securities Depository, asset
management companies, futures trading companies and
internationally recognized custodians are eligible to act as a
custodian of shares for a non-resident or foreign investor. A
foreign investor must ensure that his custodian deposits its
shares with the Korea Securities Depository. However, a foreign
investor may be exempted from complying with this deposit
requirement with the approval of the Governor in circumstances
where compliance with that requirement is made impracticable,
including cases where compliance would contravene the laws of
the home country of such foreign investor.
Under the Investment Rules, with certain exceptions, foreign
investors may acquire shares of a Korean company without being
subject to any foreign investment ceiling. As one such
exception, designated public corporations are subject to a 40.0%
ceiling on the acquisition of shares by foreigners in the
aggregate. Designated public corporations may set a ceiling on
the acquisition of shares by a single person within 3.0% of the
total number of shares in their articles of incorporation.
Currently, Korea Electric Power Corporation is the only
designated public corporation which has set such a ceiling.
Furthermore, an investment by a foreign investor of not less
than 10.0% of the outstanding shares with voting rights of a
Korean company is defined as a direct foreign investment under
the Foreign Investment Promotion Law, which is, in general,
subject to the report to, and acceptance by, the Ministry of
Commerce, Industry and Energy of Korea, which delegates its
authority to foreign exchange banks or the Korea
Trade-Investment Promotion Agency under the relevant
regulations. The acquisition of our shares by a foreign investor
is also subject to the restrictions prescribed in the
Telecommunications Business Law. The Telecommunications Business
Law generally limits the maximum aggregate foreign shareholdings
in us to 49.0% of the outstanding shares. A foreigner who has
acquired shares in excess of such restriction described above
may not exercise its voting rights with respect to the shares
exceeding such limitations, and may be subject to corrective
orders.
Under the Foreign Exchange Transaction Laws, a foreign investor
who intends to make a portfolio investment in shares of a Korean
company listed on the KRX Stock Market or the KRX KOSDAQ Market
must designate a foreign exchange bank at which he must open a
foreign currency account and a Won account exclusively for stock
investments. No approval is required for remittance into Korea
and deposit of foreign currency funds in the foreign currency
account. Foreign currency funds may be transferred from the
foreign currency account at the time required to place a deposit
for, or settle the purchase price of, a stock purchase
transaction to a Won account opened at a securities company.
Funds in the foreign currency account may be remitted abroad
without any governmental approval.
Dividends on shares are paid in Won. No governmental approval is
required for foreign investors to receive dividends on, or the
Won proceeds of the sale of, any such shares to be paid,
received and retained in Korea. Dividends paid on, and the Won
proceeds of the sale of, any such shares held by a non-resident
of Korea must be deposited either in a Won account with the
investor's securities company or the investor's Won
account. Funds in the investor's Won account may be
transferred to his foreign currency account or withdrawn for
local living expenses, provided that any withdrawal of local
living expenses in excess of a certain amount is reported to the
tax authorities by the foreign exchange bank at which the Won
account is maintained. Funds in the investor's
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Won account may also be used for future investment in shares or
for payment of the subscription price of new shares obtained
through the exercise of preemptive rights.
Securities companies and asset management companies are allowed
to open foreign currency accounts with foreign exchange banks
exclusively for accommodating foreign investors' stock
investments in Korea. Through these accounts, these securities
companies and asset management companies may enter into foreign
exchange transactions on a limited basis, such as conversion of
foreign currency funds and Won funds, either as a counterparty
to or on behalf of foreign investors, without the investors
having to open their own accounts with foreign exchange banks.
Item 10E.
Taxation
United States Taxation
This summary describes certain material U.S. federal income
tax consequences for a U.S. holder (as defined below) of
acquiring, owning, and disposing of common shares or ADSs. This
summary applies to you only if you hold the common shares or
ADSs as capital assets for tax purposes. This summary does not
apply to you if you are a member of a class of holders subject
to special rules, such as:
•
a dealer in securities or currencies;
•
a trader in securities that elects to use a
mark-to
-market method
    of accounting for securities holdings;
•
a bank;
•
a life insurance company;
•
a tax-exempt organization;
•
a person that holds common shares or ADSs that are a hedge or
    that are hedged against interest rate or currency risks;
•
a person that holds common shares or ADSs as part of a straddle
    or conversion transaction for tax purposes;
•
a person whose functional currency for tax purposes is not the
    U.S. dollar; or
•
a person that owns or is deemed to own 10% or more of any class
    of our stock.
This summary is based on the Internal Revenue Code of 1986, as
amended, its legislative history, existing and proposed
regulations promulgated thereunder, and published rulings and
court decisions, all as currently in effect. These laws are
subject to change, possibly on a retroactive basis.
Please consult your own tax advisers concerning the
U.S. federal, state, local, and other tax consequences of
purchasing, owning, and disposing of common shares or ADSs in
your particular circumstances.
For purposes of this summary, you are a
"U.S. holder" if you are the beneficial owner of
a common share or an ADS and are:
•
a citizen or resident of the United States;
•
a U.S. domestic corporation; or
•
otherwise subject to U.S. federal income tax on a net
    income basis with respect to income from the common share or ADS.
In general, if you are the beneficial owner of ADSs, you will be
treated as the beneficial owner of the common shares represented
by those ADSs for U.S. federal income tax purposes, and no
gain or loss will be recognized if you exchange an ADS for the
common share represented by that ADS.
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Dividends
The gross amount of cash dividends that you receive (prior to
deduction of Korean taxes) generally will be subject to
U.S. federal income taxation as foreign source dividend
income and will not be eligible for the dividends received
deduction. Dividends paid in Won will be included in your income
in a U.S. dollar amount calculated by reference to the
exchange rate in effect on the date of your receipt of the
dividend, in the case of common shares, or the depositary's
receipt, in the case of ADSs, regardless of whether the payment
is in fact converted into U.S. dollars. If such a dividend
is converted into U.S. dollars on the date of receipt, you
generally should not be required to recognize foreign currency
gain or loss in respect of the dividend income.
Subject to certain exceptions for short-term and hedged
positions, the U.S. dollar amount of dividends received by
an individual prior to January 1, 2011 with respect to the
ADSs will be subject to taxation at a maximum rate of 15% if the
dividends are "qualified dividends." Dividends paid on
the ADSs will be treated as qualified dividends if (i) the
ADSs are readily tradable on an established securities market in
the United States and (ii) the Company was not, in the year
prior to the year in which the dividend was paid, and is not, in
the year in which the dividend is paid, a passive foreign
investment company ("PFIC"). The ADSs are listed on
the New York Stock Exchange, and will qualify as readily
tradable on an established securities market in the United
States so long as they are so listed. Based on the
Company's audited financial statements and relevant market
and shareholder data, the Company believes that it was not
treated as a PFIC for U.S. federal income tax purposes with
respect to its 2004 or 2005 taxable year. In addition, based on
the Company's audited financial statements and its current
expectations regarding the value and nature of its assets, the
sources and nature of its income, and relevant market and
shareholder data, the Company does not anticipate becoming a
PFIC for its 2006 taxable year.
Distributions of additional shares in respect of common shares
or ADSs that are made as part of a pro-rata distribution to all
of our stockholders generally will not be subject to
U.S. federal income tax.
Sale or Other Disposition
For U.S. federal income tax purposes, gain or loss you
realize on a sale or other disposition of common shares or ADSs
generally will be treated as U.S. source capital gain or
loss, and will be long-term capital gain or loss if the common
shares or ADSs were held for more than one year. Your ability to
offset capital losses against ordinary income is limited.
Long-term capital gain recognized by an individual
U.S. holder generally is subject to taxation at reduced
rates.
Foreign Tax Credit Considerations
You should consult your own tax advisers to determine whether
you are subject to any special rules that limit your ability to
make effective use of foreign tax credits, including the
possible adverse impact of failing to take advantage of benefits
under the income tax treaty between the United States and Korea.
If no such rules apply, you may claim a credit against your
U.S. federal income tax liability for Korean taxes withheld
from dividends on the common shares or ADSs, so long as you have
owned the common shares or ADSs (and not entered into specified
kinds of hedging transactions) for at least a
16-day
period that
includes the ex-dividend date. Instead of claiming a credit, you
may, if you so elect, deduct such Korean taxes in computing your
taxable income, subject to generally applicable limitations
under U.S. tax law. Korean taxes withheld from a
distribution of additional shares that is not subject to
U.S. tax may be treated for U.S. federal income tax
purposes as imposed on "general limitation" income.
Such treatment could affect your ability to utilize any
available foreign tax credit in respect of such taxes.
Any Korean securities transaction tax or agriculture and fishery
special surtax that you pay will not be creditable for foreign
tax credit purposes.
Foreign tax credits will not be allowed for withholding taxes
imposed in respect of certain short-term or hedged positions in
securities and may not be allowed in respect of arrangements in
which a U.S. holder's expected economic profit is
insubstantial.
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The calculation of foreign tax credits and, in the case of a
U.S. holder that elects to deduct foreign taxes, the
availability of deductions involve the application of complex
rules that depend on a U.S. holder's particular
circumstances. You should consult your own tax advisers
regarding the creditability or deductibility of such taxes.
U.S. Information Reporting and Backup Withholding
Rules
Payments of dividends and sales proceeds that are made within
the United States or through certain
U.S.-related
financial
intermediaries are subject to information reporting and may be
subject to backup withholding unless the holder (i) is a
corporation or other exempt recipient and demonstrates this when
required or (ii) provides a taxpayer identification number
and certifies that no loss of exemption from backup withholding
has occurred. Holders that are not U.S. persons generally
are not subject to information reporting or backup withholding.
However, such a holder may be required to provide a
certification of its
non-U.S.
status in
connection with payments received within the United States or
through a
U.S.-related
financial intermediary.
Korean Taxation
The following summary of Korean tax considerations applies to
you so long as you are not:
•
a resident of Korea;
•
a corporation organized under Korean law; or
•
engaged in a trade or business in Korea through a permanent
    establishment or a fixed base to which the relevant income is
    attributable or with which the relevant income is effectively
    connected.
Dividends on the Shares or ADSs
We will deduct Korean withholding tax from dividends paid to you
at a rate of 27.5% (including resident surtax). If you are a
qualified resident in a country that has entered into a tax
treaty with Korea, you may qualify for a reduced rate of Korean
withholding tax. For example, if you are a qualified resident of
the United States for purposes of the income tax treaty between
the United States and Korea, and you are the "beneficial
owner" of a dividend, generally, a reduced withholding tax
at the rate of 16.5%, will apply. However, in the event the
recipient is a corporation (the "recipient
corporation"), a withholding tax rate of 11.0% will apply,
provided that
(i) during any part of the taxable
year of the company making the dividend payment (the
"paying corporation") that precedes the dividend
payment date, and during the entirety of the prior taxable year
(if any), at least 10% of the outstanding shares of the voting
stock of the paying corporation was owned by the recipient
corporation, and (ii) not more than 25% of the gross income
of the paying corporation for such prior taxable year (if any)
consisted of interest or dividends (other than interest derived
from the operation of a banking, insurance, or financing
business and dividends or interest received from subsidiary
corporation, 50% or more of the outstanding shares of the voting
stock of which is owned by the paying corporation at the time
such dividends or interest is received).
In order to obtain the benefits of a reduced withholding tax
rate under the treaty, you must submit to us, prior to the
dividend payment date, such evidence of residence as may be
required by the Korean tax authorities. Evidence of residence
may be submitted to us through the ADR depositary. Excess taxes
withheld are generally not recoverable, even if you subsequently
produce evidence that you were entitled to have tax withheld at
a lower rate.
If we distribute to you shares representing a transfer of
certain capital reserves or asset revaluation reserves into
paid-in capital, that distribution may be regarded as dividend
and, as such, subject to Korean withholding tax.
Taxation of Capital Gains
You may be exempt from Korean taxation on capital gains from the
shares, if you have owned, together with certain related
parties, less than 25.0% of our total issued and outstanding
shares at any time during the year of sale and the five calendar
years before the year of sale, and the sale is made through the
KRX Stock Market or the KRX KOSDAQ Market. As for the ADSs,
according to a ruling issued by Korean taxation authorities,
capital gains earned by a non-resident holder from the transfer
of ADSs outside Korea are not subject to Korean taxation,
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Table of Contents
irrespective of whether or not such holder has a permanent
establishment in Korea. Under the Tax Benefit Limitation Law,
capital gains earned by a non-resident holder (whether or not
such holder has a permanent establishment in Korea) from the
transfer outside Korea of securities issued outside Korea by a
Korean company, which are denominated in foreign currency or
satisfy certain criteria established by the Ministry of Finance
and Economy are exempt from Korean taxation. The Korean tax
authorities have issued a tax ruling confirming that receipts
(which would include the ADSs) are deemed to be securities
issued outside Korea by the issuer of the underlying stock.
Further, capital gains earned by a non-resident from the
transfer of stocks issued by a Korean company are also exempt
from Korean taxation, if listed or registered and sold through
an overseas securities exchange having functional similarity to
the KRX Stock Market or the KRX KOSDAQ Market under the Korean
Securities and Futures Exchange Act.
If you are subject to tax on capital gains with respect to the
sale of ADSs, or of shares which you acquired as a result of a
withdrawal, your gain will be calculated based on your cost of
acquiring the ADSs representing such shares, although there are
no specific Korean tax provisions or rulings on this issue. In
the absence of the application of a tax treaty which exempts or
reduces the rate of tax on capital gains, the amount of Korean
tax imposed on your capital gains will be the lesser of 11.0%
(including resident surtax) of the gross realization proceeds
or, subject to production of satisfactory evidence of
acquisition cost and transfer expenses of the ADSs, 27.5% of the
net capital gains. Under the Korea-United States Tax Treaty, a
U.S. resident is generally exempt from Korean taxation on
gains from the sale, exchange or other disposition of our Shares
or ADSs, subject to certain exceptions.
If you sell your shares or ADSs, the purchaser or, in the case
of the sale of shares on the KRX Stock Market or through a
licensed securities company in Korea, the licensed securities
company, is required to withhold Korean tax from the sales price
in an amount equal to 11.0% of the gross realization proceeds
and to make payment of such amounts to the Korean tax authority,
unless you establish your entitlement to an exemption or lower
rate of taxation under an applicable tax treaty or produce
satisfactory evidence of your acquisition and transfer costs for
the ADSs. To obtain the benefit of an exemption or reduced rate
of tax pursuant to a tax treaty, you must submit to the
purchaser or the securities company (or through the ADR
depositary), as the case may be, prior to or at the time of
payment, such evidence of your tax residence as the Korean tax
authorities may require in support of your claim for treaty
protection. In addition, Korean tax law requires a non-resident
seller to submit to the relevant tax office (through the payer
of the income, subject to certain exceptions) an application for
exemption by the 9th day of the month following the month
in which the first payment date falls, with a certificate of tax
residence of the seller issued by a competent authority of the
seller's residence country, to obtain the benefit of a tax
treaty exemption available under applicable tax treaties.
However, this requirement will not apply to exemptions under
Korean tax law. Excess taxes withheld are generally not
recoverable even if you subsequently produce evidence that you
were entitled to have taxes withheld at a lower rate.
Inheritance Tax And Gift Tax
If you die while holding an ADS or transfer an ADS as a gift, it
is unclear whether you will be treated as the owner of the
shares underlying the ADSs for Korean inheritance and gift tax
purposes. If you are treated as the owner of the shares, the
heir or the donee (or in certain circumstances, you as the
donor) will be subject to Korean inheritance or gift tax
presently at the rate of 10.0% to 50.0%.
If you die while holding a share or donate a share, the heir or
donee (or in certain circumstances, you as the donor) will be
subject to Korean inheritance or gift tax at the same rate as
indicated above.
Securities Transaction Tax
You will not pay a securities transaction tax on your transfer
of ADSs. If you transfer shares, you will be subject to a
securities transaction tax at the rate of 0.15% and an
agricultural and fishery special tax at the rate of 0.15% of the
sale price of the share when traded on the KRX Stock Market. If
you transfer shares through the KRX KOSDAQ Market, you will be
subject to a securities transaction tax at the rate of 0.3% of
the sales price of the shares. If your transfer is not made on
the KRX Stock Market or the KRX KOSDAQ Market, subject to
126
Table of Contents
certain exceptions, you will be subject to a securities
transaction tax at the rate of 0.5% and will not be subject to
an agricultural and fishery special tax.
According to a tax ruling issued by the Korean tax authorities,
foreign shareholders will not be subject to a securities
transaction tax upon the deposit of underlying shares and
receipt of depositary shares or upon the surrender of depositary
shares and withdrawal of originally deposited underlying shares.
Moreover, to date, the imposition of securities transaction tax
has not been enforced on the transfers of ADSs. However, the
Ministry of Finance and Economy recently issued a ruling on
February 25, 2004 to the Korean National Tax Service,
holding that depositary shares fall under the meaning of share
certificates that are subject to the securities transaction tax.
In the ruling, the Ministry of Finance and Economy treats the
transfers of depositary shares the same as the transfer of the
underlying Korean shares. Under Korean tax laws, transfers of
depositary shares listed or registered on the New York Stock
Exchange, NASDAQ National Market, or other foreign exchanges
designated by the Ministry of Finance and Economy (which are the
(i) Tokyo Stock Exchange, (ii) London Stock Exchange,
(iii) Deutsche Stock Exchange, and a stock exchange with
functions similar to (i), (ii) or (iii) above, on
which trading is done by standardized procedure as set forth in
the Enforcement Regulation of the Korean Securities and Exchange
Act) will be exempted from the securities transaction tax.
Securities transaction tax, if applicable, must be paid in
principle by the transferor of the shares or the rights to
subscribe to such shares. When the transfer is effected through
a securities settlement company, the settlement company is
generally required to withhold and pay the tax to the tax
authority. When the transfer is made through a securities
company, the securities company is required to withhold and pay
the tax. Where the transfer is effected by a non-resident
without a permanent establishment in Korea, other than through a
securities settlement company or a securities company, the
transferee is required to withhold the securities transaction
tax.
Failing to report (or under-report) the securities transaction
tax will result in a penalty of 10% of the tax amount due. The
failure to pay the securities transaction tax due will result in
imposition of interest at 10.95% per annum on the unpaid
tax amount for the period from the day immediately following the
last day of tax payment period to the day of issuance of tax
notice. The penalty is imposed on the party responsible for
paying the securities transaction tax or, if the securities
transaction tax is to be withheld, the penalty is imposed on the
party that has the withholding obligation.
Item 10F.
Dividends and
Paying Agents
Not applicable
Item 10G.
Statements by
Experts
Not applicable
Item 10H.
Documents on
Display
We file reports, including annual reports on
Form
20-F,
and
other information with the SEC pursuant to the rules and
regulations of the SEC that apply to foreign private issuers.
You may read and copy any materials filed with the SEC at the
Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.
Any
filings we make electronically will be available to the public
over the Internet at the SEC's Website at
http://www.sec.gov.
Documents filed with annual reports and documents filed or
submitted to the SEC are also available for inspection at our
principal business office during normal business hours. Our
principal business office is located at 11, Euljiro 2-ga,
Jung-gu, Seoul 100-999, Korea.
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Table of Contents
Item 10I.
Subsidiary
Information
Not applicable
Item 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK
Exchange Rate and Interest Rate Risks
We are exposed to foreign exchange rate and interest rate risk
primarily associated with underlying liabilities. In the first
quarter of 2004, we entered into fixed-to-fixed currency swap
agreements and currency forward contracts with three banks to
reduce our foreign currency exposure with respect to our
issuance of US$300 million notes on April 1, 2004. In
addition, we have entered into a currency swap contract with a
bank to hedge the foreign currency risk of Dollar denominated
convertible bonds with face amount of US$329.5 million
issued on May 27, 2004. See note 26 of the notes to
our consolidated financial statements. We may consider in the
future entering into other such transactions solely for hedging
purposes.
The following discussion and tables, which constitute
"forward looking statements" that involve risks and
uncertainties, summarize our market-sensitive financial
instruments including fair value, maturity and contract terms.
These tables address market risk only and do not present other
risks which we face in the normal course of business, including
country risk, credit risk and legal risk.
Exchange Rate Risk
Korea is our main market and, therefore, substantially all of
our cash flow is denominated in Won. We are exposed to foreign
exchange risk related to foreign currency denominated
liabilities. These liabilities relate primarily to foreign
currency denominated debt, all in Dollars and Yen. A 10% change
in the exchange rate between the Won and all foreign currencies
would result in a change in net liabilities (total monetary
liabilities minus total monetary assets) of approximately 3.69%
or Won 23.7 billion as of December 31, 2005.
Interest Rate Risk
We are also subject to market risk exposure arising from
changing interest rates. The following table summarizes the
carrying amounts and fair values, maturity and contract terms of
our exchange rate and interest sensitive short-term and
long-term liabilities as of December 31, 2005:
Maturities
2006
2007
2008
2009
2010
Thereafter
Total
Fair Value
(In billions of won, except for percentage data)
Local currency:
Fixed rate
W
795.2
W
692.0
W
297.9
W
297.8
W
194.6
W
189.3
W
2,466.7
W
2,509.5
Average weighted rate(1)
5.53
%
5.57
%
5.00
%
5.00
%
4.00
%
3.00
%
Variable rate
—
—
—
—
—
—
Average weighted rate(1)
—
—
—
—
—
—
—
—
Sub-total
W
795.2
W
692.0
W
297.9
W
297.8
W
194.6
W
189.3
W
2,466.7
W
2,509.5
Foreign currency:
Fixed rate
—
—
—
341.7
—
301.0
642.7
647.5
Average weighted rate(1)
—
—
—
0.00
%
—
4.25
%
Variable rate
1.1
0.1
—
—
—
—
1.2
1.2
Average weighted rate(1)
3.34
%
3.39
%
3.39
%
3.39
%
—
—
Sub-total
W
1.1
W
0.1
W
—
W
341.7
W
—
W
301.0
W
643.9
W
648.7
Total
W
796.3
W
692.1
W
297.9
W
639.5
W
194.6
W
490.3
W
3,110.6
W
3,158.2
(1)
Weighted average rates of the portfolio at the period end.
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A 1.0% change in interest rates would result in a change of
approximately 2.24% in the fair value of our liabilities
resulting in a Won 70.7 billion change in their value as of
December 31, 2005 and a Won 12.1 million annualized
change in interest expenses.
Item 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES
Not applicable.
Item 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
Item 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
    AND USE OF PROCEEDS
None.
Item 15.
CONTROLS AND PROCEDURES
We have evaluated, with the participation of our management,
including our Chief Executive Officer and Chief Financial
Officer, the effectiveness of the design and operation of our
disclosure controls and procedures as of December 31, 2005.
There are inherent limitations to the effectiveness of any
system of disclosure controls and procedures, including the
possibility of human error and the circumvention or overriding
of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can only provide reasonable
assurance of achieving their control objectives. Based upon our
evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures as
of December 31, 2005 were effective to provide reasonable
assurance that information required to be disclosed by us in the
reports that we file or submit under the Securities Exchange Act
of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the applicable
rules and forms, and that it is accumulated and communicated to
our management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions
regarding required disclosure
.
As a company with ADSs listed on the New York Stock Exchange, we
are required to comply with the Sarbanes-Oxley Act of 2002.
Section 404 of the Act and the applicable rules of the
Securities and Exchange Commission require foreign private
issuers such as us to assess and report on internal controls
over financial reporting on an annual basis, commencing with the
fiscal year ending December 31, 2006. We are in the process
of evaluating the requirements of Section 404 and are
making preparations to comply with such requirements when they
become applicable to us.
Subsequent to the issuance of our consolidated financial
statements for the years ended December 31, 2003 and 2004,
we determined that (a) the cash inflows related to
dividends considered to be returns on investments were
incorrectly classified as cash flows from investing activities
as opposed to cash flows from operating activities and
(b) cash flows related to trading securities were
incorrectly classified as cash flows from investing activities
as opposed to cash flows from operating activities in our
statement of cash flows. As a result, U.S. GAAP
reconciliation of consolidated statement of cash flows for the
years ended December 31, 2003 and 2004 has been revised
from amounts previously reported. Notwithstanding such revision
to our U.S. GAAP reconciliation of consolidated statement of
cash flows for the years ended December 31, 2003 and 2004,
we believe that our disclosure of controls and procedures as of
December 31, 2005 were effective in the manner described in
the second preceding paragraph. In order to prevent future
errors in classification, we will implement measures to improve
our U.S. GAAP reconciliation procedures as part of our
preparations to comply with the requirements of Section 404.
There has been no change in our internal control over financial
reporting during 2005 that has materially affected, or is
reasonably likely to materially affect, our internal control
over financial reporting.
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Table of Contents
Item 16A.
Audit
Committee Financial Expert
The board of directors has determined that Dae Sik Kim is an
"audit committee financial expert" and
"independent" as defined under the applicable rules of
the Securities and Exchange Commission. See "Item 6C.
Board Practices — Audit Committee" for additional
information regarding our Audit Committee.
Item 16B.
Code of
Ethics
Code of Ethics for Chief Executive Officer, Chief Financial
Officer and Controller
We have a code of ethics that applies to our Chief Executive
Officer, senior accounting officers and employees. We also have
internal control and disclosure policy designed to promote full,
fair, accurate, timely and understandable disclosure in all of
our reports and publicly filed documents. A copy of the
Company's code of ethics is attached to this annual report
as Exhibit 11.1.
Item 16C.
Principal
Accountant Fees and Services
The table sets forth the fees we paid to our independent
registered public accounting firm: Deloitte Anjin LLC (formerly
"Deloitte HanaAnjin LLC" or "Deloitte &
Touche LLC (Hana)") for the year ended December 31,
2005 and 2004, respectively:
Years Ended
December 31,
2005
2004
(In millions of won)
Audit
W
838.9
W
841.3
Audit Related
W
86.7
W
127.7
Tax
W
139.4
W
110.1
All Other Fees
W
900.0
W
2,418.0
Total
W
1,965.0
W
3,497.1
"Audit Fees" are the aggregate fees billed by Deloitte
Anjin LLC in 2005 and 2004, respectively, for the audit of our
consolidated annual financial statements, reviews of interim
financial statements and attestation services that are provided
in connection with statutory and regulatory filings or
engagements.
"Audit-Related Fees" are fees charged by Deloitte
Anjin LLC in 2005 and 2004, respectively, for assurance and
related services that are reasonably related to the performance
of the audit or review of our financial statements and are not
reported under "Audit Fees". This category comprises
fees billed for advisory services associated with our financial
reporting.
"Tax Fees" are fees for professional services rendered
by Deloitte Anjin LLC in 2005 and 2004, respectively, for tax
compliance, tax advice on actual or contemplated transactions.
Fees disclosed under the category "All Other Fees" are
fees for professional services rendered by Deloitte Anjin LLC in
2005 and 2004, respectively, primarily for business consulting.
Pre-Approval of Audit and Non-Audit Services Provided by
Independent Registered Public Accounting Firm
Our audit committee pre-approves all audit services to be
provided by Deloitte Anjin LLC, our independent registered
public accounting firm. Our audit committee's policy
regarding the pre-approval of non-audit services to be provided
to us by our independent auditors is that all such services
shall be pre-approved by the Audit Committee. Non-audit services
that are prohibited to be provided to us by our independent
auditors under the rules of the Securities and Exchange
Commission and applicable law may not be pre-approved. In
addition, prior to the granting of any pre-approval, our audit
committee must be satisfied that the performance of the services
in question will not compromise the independence of our
independent registered public accounting firm.
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Our audit committee did not pre-approve any non-audit services
under the
de minimis
exception of
Rule
2-01
(c)(7)(i)(C) of
Regulation
S-X
as
promulgated by the Securities and Exchange Commission.
Item 16D.
Exemptions
from the Listing Standards for Audit Committees
Not applicable.
Item 16E.
Purchases of
Equity Securities by the Issuer and Affiliated Purchasers
On August 11, 2003, we concluded a stock buyback program
which we commenced on June 30, 2003. We acquired a total of
2,544,600 shares of our outstanding common stock, all of
which were cancelled on August 20, 2003. The total purchase
price for the stock buyback was Won 525.2 billion (or an
average of approximately Won 206,388 per share), with the
price per share ranging from Won 192,000 (on July 24, 2003)
to Won 216,000 (on July 15-16, 2003). As a result of the stock
buyback and subsequent cancellation of shares, the total number
of our outstanding common stock declined from 82,993,404 as of
December 31, 2001 to 73,614,308 as of December 31,
2003. On February 20, 2004, we additionally acquired
fractional shares totaling 12 shares for Won
2 million, which resulted from the merger of SK IMT Co.,
Ltd. into SK Telecom in May 2003. As of April 30, 2006, the
total number of shares of our common stock outstanding was
73,614,296. In 2006, we intend to purchase up to Won
200 billion of our common shares pursuant to open market
purchases.
Set forth in the following table is information with respect to
purchases made by or on behalf of the issuer or any
"affiliated purchaser" (as defined in
Rule
10b-18(a)(3)
of the Exchange Act) of our common shares.
Total Number of
Shares Purchased
Maximum Number of
Total Number of
Average
as Part of Publicly
Shares That May yet
Shares
Price Paid
Announced Plans or
be Purchased Under
Period
Purchased
per Share
Program
the Plans or Program
2004
January
—
W
—
—
—
February
12
W
173,500
—
—
March
—
W
—
—
—
April
—
W
—
—
—
May
—
W
—
—
—
June
—
W
—
—
—
July
—
W
—
—
—
August
—
W
—
—
—
September
—
W
—
—
—
October
—
W
—
—
—
November
—
W
—
—
—
December
—
W
—
—
—
Total
12
W
173,500
—
—
We exchanged 29,808,333 shares of KT Corporation's
common stock at Won 50,900 per share for
8,266,923 shares of our common stock at Won
224,000 per share and settled the difference of Won
334.5 billion between the aggregate sale and purchase
prices in cash on December 30, 2002 and January 10,
2003, under a mutual agreement on stock exchange between us and
KT Corporation dated November 14, 2002. Of the
8,266,923 shares of our common stock exchanged,
4,457,635 shares of our common stock were subsequently
cancelled and 3,809,288 shares were designated as treasury
stock for use in future mergers and acquisitions transactions
and strategic alliances or for other corporate purposes to be
determined by us. As a result of the share swap, all
cross-shareholdings between KT Corporation and us have been
completely eliminated.
In late May 2004, we sold US$329.5 million in zero coupon
convertible notes due 2009. These convertible notes are
convertible by the holders into shares of our common stock at
the rate of Won 218,098 per share as of May 31, 2006.
In connection with the issuance of the zero coupon convertible
notes, we deposited
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Table of Contents
1,645,000 shares of our common stock with Korea Securities
Depository to be reserved and used to satisfy the note
holders' conversion rights. This will be deemed as the
repurchase of treasury stock and cancellation thereof for the
purposes of Korean law. On March 11, 2005 our shareholders
approved a cash dividend of Won 9,300 per common share at
the general shareholders' meeting. On March 14, 2005,
we filed a report with the Financial Supervisory Service to
disclose that we adjusted the conversion price of the
convertible notes issued in late May 2004 in the principal
amount of US$329,450,000 from Won 235,625 to
Won 226,566 and made an additional deposit of our common
stock accordingly, so that the total number of shares of common
stock deposited with Korea Securities Depository to satisfy the
note holders' conversion rights increased from 1,644,978 to
1,710,750. On July 29, 2005, our board of directors
resolved to recommend an interim cash dividend of Won 1,000
per common share. On August 1, 2005, we filed a report with
the Financial Supervisory Service to disclose that we adjusted
the conversion price from Won 226,566 to Won 225,518
and made an additional deposit of our common stock accordingly,
so that the total number of shares of common stock deposited
increased from 1,710,750 to 1,718,700. On March 10, 2006,
our shareholders approved a cash dividend of Won 8,000 per
common share. On March 13, 2006, we filed a report with the
Financial Supervisory Service to disclose that we adjusted the
conversion price from Won 225,518 to Won 218,098 and
made an additional deposit of our common stock accordingly, so
that the total number of shares of common stock deposited
increased from 1,718,700 to 1,777,173.
Item 17.
FINANCIAL STATEMENTS
Not applicable.
Item 18.
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
F-3
Consolidated balance sheets as of December 31, 2004 and 2005
F-4
Consolidated statements of income for the years ended
    December 31, 2003, 2004 and 2005
F-6
Consolidated statements of changes in stockholders' equity
    for the years ended December 31, 2003, 2004 and 2005
F-8
Consolidated statements of cash flows for the years ended
    December 31, 2003, 2004 and 2005
F-10
Notes to consolidated financial statements
F-14
132
Table of Contents
Item 19.
EXHIBITS
Number
Description
1
.1
Memorandum and Articles of Association
2
.1
Deposit Agreement dated as of May 31, 1996, as amended by
    Amendment No. 1 dated as of March 15, 1999, Amendment
    No. 2 dated as of April 24, 2000 and Amendment
    No. 3 dated as of July 24, 2002, entered into among SK
    Telecom Co., Ltd., Citibank, N.A., as Depositary, and all
    Holders and Beneficial Owners of American Depositary Shares
4
.1
Telecommunications Basic Law of 1983, as amended (English
    translation)
4
.2
Enforcement Decree of the Telecommunications Basic Law, as
    amended (English translation)
4
.3
Telecommunications Business Law of 1983, as amended (English
    translation)
4
.4
Enforcement Decree of the Telecommunications Business Law
    (English translation)***
4
.5
Korean Commercial Code (together with English translation)*
4
.6
Amendment to Korean Commercial Code dated December 29, 2001
    (together with English translation)**
4
.7
Korean Securities and Exchange Act, as amended (English
    translation)
8
.1
List of Subsidiaries of SK Telecom Co., Ltd.
11
.1
Code of Ethics of SK Telecom Co., Ltd.***
12
.1
Certification of Principal Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002
12
.2
Certification of Principal Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002
13
.1
Certification of Principal Executive Officer Pursuant to
    18 U.S.C. Section 1350, As Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002
13
.2
Certification of Principal Financial Officer Pursuant to
    18 U.S.C. Section 1350, As Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002
99
.1
Consent of Deloitte Anjin LLC
*
Filed previously as exhibits to our Form 20-F filed on
    June 30, 2000.
**
Filed previously as exhibits to our Form 20-F filed on
    June 28, 2002.
***
Filed previously as exhibits to our Form 20-F filed on
    May 31, 2005.
133
Table of Contents
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
F-3
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2004 AND 2005
F-4
CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED
    DECEMBER 31, 2003, 2004 AND 2005
F-6
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
    FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005
F-8
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
    DECEMBER 31, 2003, 2004 AND 2005
F-10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-14
F-1
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005
AND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
F-2
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
SK Telecom Co., Ltd.
Seoul, Republic of Korea
We have audited the accompanying consolidated balance sheets of
SK Telecom Co., Ltd. (the "Company") and its
subsidiaries as of December 31, 2003, 2004 and 2005, and
the related consolidated statements of income,
shareholders' equity, and cash flows for the years then
ended (all expressed in Korean won). These consolidated
financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of SK
Telecom Co., Ltd. and its subsidiaries at December 31,
2003, 2004 and 2005, and the results of their operations and
their cash flows for the years then ended, in conformity with
accounting principles generally accepted in the Republic of
Korea.
Our audits also comprehended the translation of the Korean won
amounts into U.S. dollar amounts and, in our opinion, such
translation has been made in conformity with the basis stated in
Note 2(a) to the accompanying consolidated financial
statements. Such U.S. dollar amounts are presented solely
for the convenience of readers outside of the Republic of Korea.
As discussed in Note 2(y) to the accompanying consolidated
financial statements, in 2005 the Company changed its method of
accounting for income taxes to conform to Statement of Korean
Accounting Standards No. 16.
Accounting principles generally accepted in the Republic of
Korea vary in certain significant respects from accounting
principles generally accepted in the United states of America.
Information relating to the nature and effect of such
differences is presented in Notes 30 and 31 to the
consolidated financial statements.
May 19, 2006
/s/ Deloitte Anjin LLC
Seoul, Republic of Korea
F-3
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2003, 2004 and 2005
2003
2004
2005
2005
(In millions of Korean won)
(In thousands of
U.S. dollars
(Note 2(a)))
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Notes 2 and 13)
W
317,488
W
370,630
W
378,426
$
374,679
Short-term financial instruments (Notes 13, 21 and 22)
154,922
12,730
106,592
105,537
Trading securities (Notes 2 and 4)
893,217
654,779
777,472
769,774
Current portion of long-term investment securities (Notes 2
    and 4)
85,861
3,709
1
1
Accounts receivable — trade, net of allowance for
    doubtful accounts of
W
65,327 million,
W
71,090 million and
W
133,499 million at December 31, 2003, 2004
    and 2005, respectively (Notes 2,13 and 24)
1,579,153
1,720,201
1,684,119
1,667,445
Short-term loans, net of allowance for doubtful accounts of
W
516 million,
W
564 million and
W
1,350 million at December 31, 2003, 2004 and
    2005, respectively (Notes 2 and 6)
48,849
55,355
65,539
64,890
Accounts receivable — other, net of allowance for
    doubtful accounts of
W
16,768 million,
W
15,622 million and
W
17,526 million at December 31, 2003, 2004
    and 2005, respectively (Notes 2, 13 and 24)
867,120
1,406,553
1,369,691
1,356,130
Inventories, net (Notes 2, 3, 23 and 24)
31,516
52,321
7,784
7,707
Prepaid expenses
68,256
84,933
104,124
103,093
Current deferred income tax assets (Notes 2 and 18)
—
—
66,117
65,462
Accrued income and other
23,143
29,482
38,715
38,331
Total Current Assets
4,069,525
4,390,693
4,598,580
4,553,049
NON-CURRENT ASSETS:
Property and equipment, net (Notes 2, 7, 12, 22,
    23 and 24)
4,641,547
4,703,922
4,663,369
4,617,197
Intangible assets, net (Notes 2 and 8)
3,674,944
3,522,903
3,452,889
3,418,702
Long-term investment securities (Notes 2 and 4)
879,193
948,101
1,220,208
1,208,127
Equity securities accounted for using the equity method
    (Notes 2 and 5)
183,709
304,028
471,879
467,207
Long-term bank deposits (Note 21)
352
10,351
1,479
1,464
Long-term loans, net of allowance for doubtful accounts of
W
19,552 million,
W
19,273 million and
W
19,130 million at December 31, 2003, 2004
    and 2005, respectively (Notes 2 and 6)
40,819
30,442
18,430
18,248
Guarantee deposits (Notes 13 and 24)
270,255
289,015
168,559
166,890
Non-current deferred income tax assets (Notes 2 and 18)
—
—
1,495
1,480
Other
57,873
83,903
107,884
106,816
Total Non-Current Assets
9,748,692
9,892,665
10,106,192
10,006,131
TOTAL ASSETS
W
13,818,217
W
14,283,358
W
14,704,772
$
14,559,180
F-4
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS — (Continued)
December 31, 2003, 2004 and 2005
2003
2004
2005
2005
(In millions of Korean won)
(In thousands of
U.S. dollars
(Note 2(a)))
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable (Notes 13, 22 and 24)
W
1,317,162
W
1,205,682
W
1,047,779
$
1,037,405
Short-term borrowings (Notes 13 and 22)
786,096
425,496
972
962
Income taxes payable
402,559
273,495
370,822
367,150
Accrued expenses (Notes 2, 13 and 25)
420,995
394,354
364,830
361,218
Dividend payable
88
263
298
295
Withholdings
184,304
196,534
216,622
214,477
Current portion of long-term debt, net (Notes 9, 10 and 12)
1,364,264
498,278
809,573
801,557
Current portion of subscription deposits (Note 11)
12,881
13,405
14,875
14,728
Current deferred income tax liabilities (Notes 2 and 18)
—
—
44
44
Other
42,561
59,386
37,558
37,187
Total Current Liabilities
4,530,910
3,066,893
2,863,373
2,835,023
LONG-TERM LIABILITIES:
Bonds payable, net (Notes 2 and 9)
2,261,868
2,891,843
2,314,208
2,291,295
Long-term borrowings (Notes 10 and 22)
1,633
—
155
153
Subscription deposits (Note 11)
44,197
31,440
23,770
23,535
Long-term payables — other, net of present value
    discount of
W
85,881 million,
W
72,663 million and
W
58,413 million at December 31, 2003, 2004
    and 2005, respectively (Note 2)
564,119
577,337
591,587
585,730
Obligations under capital leases (Notes 2, 12 and 13)
—
—
10,204
10,103
Accrued severance indemnities, net (Note 2)
67,824
80,984
71,284
70,578
Non-current deferred income tax liabilities (Notes 2 and 18)
226,029
306,052
401,156
397,184
Long-term currency swap (Notes 2 and 26)
—
96,743
73,450
72,723
Guarantee deposits received and other (Notes 22 and 24)
27,790
26,322
28,045
27,767
Total Long-Term Liabilities
3,193,460
4,010,721
3,513,859
3,479,068
Total Liabilities
7,724,370
7,077,614
6,377,232
6,314,091
COMMITMENTS AND CONTINGENCIES (Note 22)
SHAREHOLDERS' EQUITY:
Capital stock (Notes 1 and 14)
44,639
44,639
44,639
44,197
Capital surplus (Note 14)
2,911,556
2,968,301
2,954,840
2,925,584
Retained earnings (Note 15)
5,139,911
6,152,898
7,267,649
7,195,692
Capital adjustments:
Treasury stock (Note 16)
(2,047,103
)
(2,047,105
)
(2,047,105
)
(2,026,837
)
Unrealized profit (loss) on valuation of long-term investment
    securities, net (Notes 2 and 4)
(160,622
)
(92,975
)
(42,093
)
(41,676
)
Equity in capital adjustment of affiliates, net (Notes 2
    and 5)
42,581
134,376
61,368
60,760
Loss on valuation of currency swap, net (Notes 2 and 26)
—
(49,452
)
(14,177
)
(14,037
)
Stock options (Notes 2 and 17)
3,741
4,833
3,480
3,446
Foreign-based operations' translation adjustment
    (Note 2)
3,159
(7,969
)
(9,988
)
(9,889
)
Minority interest in equity of consolidated subsidiaries
    (Note 2)
155,985
98,198
108,927
107,849
Total Shareholders' Equity
6,093,847
7,205,744
8,327,540
8,245,089
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
W
13,818,217
W
14,283,358
W
14,704,772
$
14,559,180
See accompanying Notes to Consolidated Financial Statements.
F-5
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 2003, 2004 AND 2005
2003
2004
2005
2005
(In thousands of
U.S. dollars, except
(In millions of Korean won,
for income per share
except for income per share)
(Note 2(a)))
OPERATING REVENUE (Notes 2, 24 and 28)
W
10,272,081
W
10,570,615
W
10,721,820
$
10,615,663
OPERATING EXPENSES (Notes 2, 22 and 24)
Labor cost
(407,243
)
(464,778
)
(464,764
)
(460,162
)
Commissions paid
(2,314,558
)
(2,812,318
)
(2,859,638
)
(2,831,325
)
Depreciation and amortization (Notes 7 and 8)
(1,510,545
)
(1,607,478
)
(1,546,285
)
(1,530,975
)
Network interconnection (Note 28)
(771,553
)
(913,688
)
(989,417
)
(979,621
)
Leased line
(306,527
)
(375,227
)
(407,043
)
(403,013
)
Advertising
(376,424
)
(352,877
)
(279,390
)
(276,624
)
Research and development (Note 2)
(235,551
)
(267,107
)
(252,046
)
(249,550
)
Rent
(144,509
)
(178,310
)
(190,134
)
(188,251
)
Frequency usage
(129,525
)
(143,047
)
(156,098
)
(154,552
)
Repair
(96,464
)
(112,094
)
(131,719
)
(130,415
)
Provision for bad debts
(22,378
)
(29,181
)
(112,792
)
(111,675
)
Cost of goods sold
(560,859
)
(479,257
)
(240,746
)
(238,362
)
Other
(290,838
)
(395,504
)
(421,132
)
(416,964
)
Sub-total
(7,166,974
)
(8,130,866
)
(8,051,204
)
(7,971,489
)
OPERATING INCOME
3,105,107
2,439,749
2,670,616
2,644,174
OTHER INCOME:
Interest income (Note 4)
86,485
80,459
61,143
60,538
Dividends
25,923
23,843
26,515
26,252
Commissions
80,180
26,891
32,738
32,414
Equity in earnings of affiliates (Notes 2 and 5)
—
—
20,949
20,742
Foreign exchange and translation gains (Note 2)
6,131
20,559
4,167
4,126
Reversal of allowance for doubtful accounts
1,555
759
450
446
Gain on disposal and valuation of trading securities
    (Note 2)
188
2,548
1
1
Gain on disposal of investment assets (Notes 4 and 5)
1,259
2,004
24,613
24,369
Gain on disposal of consolidated subsidiary (Note 5)
—
—
178,689
176,920
Gain on disposal of property, equipment and intangible assets
2,750
2,067
4,693
4,647
Gain on transactions and valuation of currency forward and swap
    (Notes 2 and 26)
—
2,850
2,578
2,552
Other
56,973
37,439
36,016
35,659
Sub-total
261,444
199,419
392,552
388,666
F-6
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME — (Continued)
Years Ended December 31, 2003, 2004 AND 2005
2003
2004
2005
2005
(In thousands of
U.S. dollars, except
(In millions of Korean won,
for income per share
except for income per share)
(Note 2(a)))
OTHER EXPENSES:
Interest and discounts
(391,482
)
(303,410
)
(253,472
)
(250,962
)
Donations
(91,487
)
(89,232
)
(145,325
)
(143,886
)
Equity in losses of affiliates (Notes 2 and 5)
(6,975
)
(11,954
)
(71,825
)
(71,114
)
Foreign exchange and translation losses (Note 2)
(10,230
)
(9,074
)
(4,178
)
(4,137
)
Loss on disposal and valuation of trading securities
    (Note 2)
(3,974
)
(232
)
(16
)
(16
)
Loss on disposal of investment assets
(45,403
)
(1,539
)
(4,017
)
(3,977
)
Loss on disposal and impairment of property, equipment and
    intangible assets (Note 2)
(13,784
)
(19,208
)
(6,783
)
(6,716
)
Loss on impairment of long-term investment securities
    (Notes 2 and 4)
(5,749
)
(33,654
)
(3,422
)
(3,388
)
Loss on transactions and valuation of currency forward and swap
    (Notes 2 and 26)
—
(15,818
)
—
—
Other
(43,131
)
(31,872
)
(12,564
)
(12,440
)
Sub-total
(612,215
)
(515,993
)
(501,602
)
(496,636
)
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST
2,754,336
2,123,175
2,561,566
2,536,204
INCOME TAXES (Notes 2 and 18)
(789,059
)
(629,761
)
(693,259
)
(686,395
)
INCOME BEFORE MINORITY INTEREST
1,965,277
1,493,414
1,868,307
1,849,809
MINORITY INTEREST IN NET LOSS (GAIN) OF CONSOLIDATED SUBSIDIARIES
823
(1,935
)
4,671
4,625
NET INCOME
W
1,966,100
W
1,491,479
W
1,872,978
$
1,854,434
NET INCOME PER SHARE (Notes 2 and 19) (In Korean
    won and U.S. dollars)
W
26,187
W
20,261
W
25,443
$
25.19
DILUTED NET INCOME PER SHARE (Notes 2 and 19) (In Korean
    won and U.S. dollars)
W
26,187
W
20,092
W
25,036
$
24.79
See accompanying Notes to Consolidated Financial Statements.
F-7
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years Ended December 31, 2003, 2004 AND 2005
Total
Common
Capital
Retained
Capital
Minority
Shareholders'
Stock
Surplus
Earnings
Adjustments
Interest
Equity
(In millions of Korean won)
Balance, January 1, 2003
W
44,576
W
2,884,382
W
4,873,205
W
(2,295,770
)
W
725,507
W
6,231,900
Net income
—
—
1,966,100
—
(823
)
1,965,277
Acquisition of treasury stock (Note 16)
—
—
—
(1,379,337
)
—
(1,379,337
)
Retirement of treasury stock (Note 16)
—
—
(1,545,281
)
1,524,683
—
(20,598
)
Cash dividends paid (Note 20)
—
—
(151,739
)
—
—
(151,739
)
Excess unallocated purchase price (Note 14)
—
(230
)
—
—
—
(230
)
Issuance of common stock for the merger with SK IMT Co., Ltd.
    (Note 14)
63
31,809
—
—
—
31,872
Gain on disposal of investments in common stock of subsidiary
—
58
—
—
—
58
Equity in beginning retained earnings change of affiliates
    (Notes 2 and 5)
—
—
(33
)
—
—
(33
)
Cumulative effect of an accounting change (Note 2)
—
—
(2,341
)
—
(515
)
(2,856
)
Unrealized loss on valuation of long-term investment securities
    (Notes 2 and 4)
—
—
—
(56,505
)
—
(56,505
)
Equity in capital surplus and capital adjustment changes of
    affiliates (Note 2)
—
(4,463
)
—
47,752
—
43,289
Stock compensation plans (Notes 2 and 17)
—
—
—
1,289
—
1,289
Foreign-based operations' translation adjustment
    (Note 2)
—
—
—
(356
)
—
(356
)
Decrease in minority interest in equity of consolidated
    subsidiaries
—
—
—
—
(568,184
)
(568,184
)
Balance, December 31, 2003
W
44,639
W
2,911,556
W
5,139,911
W
(2,158,244
)
W
155,985
W
6,093,847
Net income
—
—
1,491,479
—
1,935
1,493,414
Cash dividends paid (Note 20)
—
—
(404,878
)
—
—
(404,878
)
Interim cash dividends paid (Note 20)
—
—
(73,614
)
—
—
(73,614
)
Excess unallocated purchase price (Note 14)
—
(77
)
—
—
—
(77
)
Consideration for conversion rights (Notes 2 and 14)
—
67,279
—
—
—
67,279
Acquisition of treasury stock (Note 16)
—
—
—
(2
)
—
(2
)
Equity in capital surplus and capital adjustment changes of
    affiliates (Note 2)
—
(10,457
)
—
91,795
—
81,338
Unrealized gain on valuation of long-term investment securities
    (Notes 2 and 4)
—
—
—
67,647
—
67,647
Loss on valuation of currency swap (Note 2)
—
—
—
(49,452
)
—
(49,452
)
Stock compensation plans (Notes 2 and 17)
—
—
—
1,092
—
1,092
Foreign-based operations' translation adjustment
    (Note 2)
—
—
—
(11,128
)
—
(11,128
)
Decrease in minority interest in equity of consolidated
    subsidiaries
—
—
—
—
(59,722
)
(59,722
)
Balance, December 31, 2004
W
44,639
W
2,968,301
W
6,152,898
W
(2,058,292
)
W
98,198
W
7,205,744
F-8
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY — (Continued)
Years Ended December 31, 2003, 2004 AND 2005
Total
Common
Capital
Retained
Capital
Minority
Shareholders'
Stock
Surplus
Earnings
Adjustments
Interest
Equity
(In millions of Korean won)
Balance, January 1, 2005
W
44,639
W
2,968,301
W
6,152,898
W
(2,058,292
)
W
98,198
W
7,205,744
Net income
—
—
1,872,978
—
(4,671
)
1,868,307
Cash dividends paid (Note 20)
—
—
(684,613
)
—
—
(684,613
)
Interim cash dividends paid (Note 20)
—
—
(73,614
)
—
—
(73,614
)
Deferred tax effect of temporary differences related to
    conversion rights (Note 14)
—
(18,502
)
—
—
—
(18,502
)
Transfer of stock option from capital adjustments to capital
    surplus (Notes 14 and 17)
—
1,533
—
(1,533
)
—
—
Equity in capital surplus and capital adjustment changes of
    affiliates (Notes 2 and 5)
—
3,508
—
(73,008
)
—
(69,500
)
Unrealized gain on valuation of long-term investment securities
    (Notes 2 and 4)
—
—
—
50,882
—
50,882
Gain on valuation of currency swap (Note 2)
—
—
—
35,276
—
35,276
Stock compensation plans (Notes 2 and 17)
—
—
—
180
—
180
Foreign-based operations' translation adjustment
    (Note 2)
—
—
—
(2,020
)
—
(2,020
)
Decrease in minority interest in equity of consolidated
    subsidiaries
—
—
—
—
15,400
15,400
Balance, December 31, 2005
W
44,639
W
2,954,840
W
7,267,649
W
(2,048,515
)
W
108,927
W
8,327,540
(In thousands of U.S. dollars) (Note 2(a))
Balance, January 1, 2005
$
44,197
$ 2,938,912
$ 6,091,978
$ (2,037,913
)
$   97,226
$ 7,134,400
Net income
—
—
1,854,434
—
(4,625
)
1,849,809
Cash dividends paid
—
—
(677,835
)
—
—
(677,835
)
Interim cash dividends paid
—
—
(72,885
)
—
—
(72,885
)
Deferred tax effect of temporary differences related to
    conversion rights
—
(18,319
)
—
—
—
(18,319
)
Transfer of stock option from capital adjustments to capital
    surplus
—
1,518
—
(1,518
)
—
—
Equity in capital surplus and capital adjustment changes of
    affiliates
—
3,473
—
(72,285
)
—
(68,812
)
Unrealized gain on valuation of long-term investment securities
—
—
—
50,378
—
50,378
Gain on valuation of currency swap
—
—
—
34,927
—
34,927
Stock compensation plans
—
—
—
178
—
178
Foreign-based operations' translation adjustment
—
—
—
(2,000
)
—
(2,000
)
Decrease in minority interest in equity of consolidated
    subsidiaries
—
—
—
—
15,248
15,248
Balance, December 31, 2005
$
44,197
$ 2,925,584
$ 7,195,692
$ (2,028,233
)
$ 107,849
$  8,245,089
See accompanying Notes to Consolidated Financial Statements.
F-9
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2003, 2004 AND 2005
2003
2004
2005
2005
(In thousands
of U.S. dollars
(In millions of Korean won)
(Note 2(a)))
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
W
1,966,100
W
1,491,479
W
1,872,978
$
1,854,434
Expenses not involving cash payments:
Depreciation and amortization
1,649,902
1,752,530
1,675,528
1,658,939
Provision for severance indemnities
65,375
58,151
47,073
46,607
Provision for bad debts
23,304
43,144
115,731
114,585
Foreign currency translation loss
2,546
2,179
981
971
Loss on disposal and valuation of trading securities
3,974
232
16
16
Loss on disposal and impairment of property, equipment and
    intangible assets
13,784
19,208
6,783
6,716
Loss on impairment of long-term investment securities
5,749
33,654
3,422
3,388
Loss on disposal of investment assets
45,403
1,539
4,017
3,977
Loss on transaction and valuation of currency forward and swap
—
15,818
—
—
Equity in losses of affiliates
6,975
11,954
71,825
71,114
Minority interest in net gain of consolidated subsidiaries
—
1,935
—
—
Amortization of discounts on bonds and other
73,655
46,274
51,846
51,333
Sub-total
1,890,667
1,986,618
1,977,222
1,957,646
Income not involving cash receipts:
Reversal of allowance for doubtful accounts
(1,555
)
(759
)
(450
)
(446
)
Foreign currency translation gain
(668
)
(3,367
)
(658
)
(651
)
Gain on disposal and valuation of trading securities
(188
)
(2,548
)
(1
)
(1
)
Gain on disposal of investment assets
(1,555
)
(2,004
)
(24,613
)
(24,369
)
Gain on disposal of consolidated subsidiary
—
—
(178,689
)
(176,920
)
Gain on disposal of property, equipment and intangible assets
(2,750
)
(2,067
)
(4,693
)
(4,647
)
Gain on transactions and valuation of currency forward and swap
—
(2,850
)
(2,578
)
(2,552
)
Equity in earnings of affiliates
—
—
(20,949
)
(20,742
)
Minority interest in net loss of consolidated subsidiaries
(823
)
—
(4,671
)
(4,625
)
Other
(12,491
)
(12,129
)
(3,769
)
(3,731
)
Sub-total
(20,030
)
(25,724
)
(241,071
)
(238,684
)
F-10
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS — (Continued)
Years Ended December 31, 2003, 2004 AND 2005
2003
2004
2005
2005
(In thousands
of U.S. dollars
(In millions of Korean won)
(Note 2(a)))
Changes in assets and liabilities related to operating
    activities:
Accounts receivable — trade
(159,160
)
(170,891
)
(210,957
)
(208,868
)
Accounts receivable — other
(48,789
)
(552,343
)
22,284
22,063
Inventories
(4,056
)
(20,982
)
8,297
8,215
Other current assets
(30,417
)
(5,549
)
(15,922
)
(15,764
)
Accounts payable
(396,700
)
(90,977
)
(34,441
)
(34,100
)
Income taxes payable
(11,597
)
(125,430
)
88,477
87,601
Accrued expenses
24,385
(26,622
)
(12,944
)
(12,816
)
Other current liabilities
45,776
25,188
(1,009
)
(999
)
Deferred income taxes
120,879
78,356
7,640
7,564
Severance indemnity payments
(24,516
)
(27,582
)
(24,365
)
(24,124
)
Dividends received from affiliates
621
755
785
777
Deposits for group severance indemnities and other deposits
(24,727
)
(19,489
)
(32,869
)
(32,543
)
Transfer of accrued severance indemnities from affiliates and
    related companies
955
—
—
—
Sub-total
(507,346
)
(935,566
)
(205,024
)
(202,994
)
Net Cash Provided by Operating Activities
3,329,391
2,516,807
3,404,105
3,370,402
F-11
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS — (Continued)
Years Ended December 31, 2003, 2004 AND 2005
2003
2004
2005
2005
(In thousands
of U.S. dollars
(In millions of Korean won)
(Note 2(a)))
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in short-term financial instruments
W
95,123
W
90,034
W
(75,261
)
$
(74,516
)
Decrease (increase) in trading securities
(137,618
)
240,204
(122,710
)
(121,495
)
Decrease in short-term loans
51,612
89,447
60,530
59,931
Decrease in long-term bank deposits
—
50,006
2
2
Proceeds from sale of current portion of long-term investment
    securities
70,267
85,861
53,608
53,077
Proceeds from sale of long-term investment securities
762,896
17,658
40,889
40,484
Proceeds from sale of equity securities accounted for using the
    equity method
2,889
268
7,539
7,464
Proceeds from sale of consolidated subsidiary
—
—
290,966
288,085
Decrease in long-term loans
9,980
4,746
57
56
Decrease in guarantee deposits
67,410
22,096
142,131
140,724
Decrease in other non-current assets
50,758
36,287
36,110
35,753
Proceeds from disposal of property and equipment
12,828
10,116
34,179
33,841
Proceeds from disposal of intangible assets
2,248
2,291
107
106
Increase in long-term loans
(60,145
)
(56,428
)
(59,008
)
(58,424
)
Increase in long-term bank deposits
(350
)
(60,005
)
(1,140
)
(1,129
)
Acquisition of long-term investment securities
(437,076
)
(54,132
)
(319,061
)
(315,902
)
Acquisition of equity securities accounted for using the equity
    method
(7,158
)
(21,086
)
(231,793
)
(229,498
)
Increase in long-term loans
(15,578
)
(35,291
)
(5,766
)
(5,709
)
Increase in guarantee deposits
(88,223
)
(40,957
)
(75,295
)
(74,550
)
Increase in other non-current assets
(54,090
)
(82,843
)
(86,803
)
(85,943
)
Acquisition of property and equipment
(1,647,639
)
(1,631,941
)
(1,416,622
)
(1,402,596
)
Acquisition of intangible assets
(56,745
)
(72,376
)
(199,494
)
(197,519
)
Acquisition of minority interest
(36,442
)
(64,247
)
(11,352
)
(11,240
)
Net Cash Used in Investing Activities
(1,415,053
)
(1,470,292
)
(1,938,187
)
(1,918,998
)
F-12
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS — (Continued)
Years Ended December 31, 2003, 2004 AND 2005
2003
2004
2005
2005
(In thousands
of U.S. dollars
(In millions of Korean won)
(Note 2(a)))
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in short-term borrowings
W
108,669
W
—
W
—
$
—
Issuance of bonds payable
688,737
1,205,727
193,683
191,765
Increase in long-term borrowings
13,532
—
—
—
Payment of short-term borrowings
(12,087
)
(359,133
)
(376,929
)
(373,197
)
Payment of current portion of long-term debt
(939,176
)
(1,370,611
)
(500,033
)
(495,082
)
Repayment of bonds payable
—
(5,068
)
—
—
Payment of dividends
(151,739
)
(478,318
)
(758,192
)
(750,685
)
Decrease in facility deposits
(2,654
)
(12,757
)
(7,670
)
(7,594
)
Transaction of currency forward and swap
—
2,821
—
—
Net increase in treasury stock
(1,379,337
)
(2
)
—
—
Increase in minority interest in equity of consolidated
    subsidiaries
22,278
45,065
21,243
21,033
Other
(609,262
)
3,706
(1,140
)
(1,129
)
Net Cash Used in Financing Activities
(2,261,039
)
(968,570
)
(1,429,038
)
(1,414,889
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS DUE TO
    CHANGES IN CONSOLIDATED SUBSIDIARIES
72
(24,803
)
(29,084
)
(28,796
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(346,629
)
53,142
7,796
7,719
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR
664,117
317,488
370,630
366,960
CASH AND CASH EQUIVALENTS AT END OF THE YEAR
W
317,488
W
370,630
W
378,426
$
374,679
Cash paid for interest (net of amounts capitalized)
W
328,890
W
264,224
W
203,259
$
201,247
Cash paid for income taxes
W
675,122
W
679,262
W
588,296
$
582,471
See accompanying Notes to Consolidated Financial Statements.
F-13
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2003, 2004 AND 2005
1.
GENERAL
SK Telecom Co., Ltd. (the "Company") was incorporated
in March 1984 under the laws of Korea to engage in providing
cellular telephone communication services in the Republic of
Korea. The Company mainly provides wireless telecommunications
in the Republic of Korea and recently acquired foreign wireless
telecommunications operators in Vietnam, Mongolia, and the
United States of America. The Company's common shares and
depositary receipts (DRs) are listed on the Korea Stock Exchange
and the New York and London Stock Exchanges, respectively. As of
December 31, 2005, the Company's total issued shares
are held by the following:
Percentage of
Number of
Total Shares
Shares
Issued (%)
SK Group
18,748,459
22.79
POSCO
2,991,496
3.64
Institutional investors and other minority shareholders
51,874,341
63.04
Treasury stock
8,662,415
10.53
82,276,711
100.00
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements of the
Company have been prepared in accordance with Korean Financial
Accounting Standards and Statements of Korean Accounting
Standards ("SKAS") No. 1 through No. 17
(except for No. 11 and No. 14). As SKAS No. 11 is not
effective until the fiscal year ending December 31, 2006
and SKAS No. 14 is related to exceptions to accounting for small
and medium-sized entities, they do not apply to the Company.
Significant accounting policies followed in preparing the
accompanying consolidated financial statements are summarized as
follows.
a.
Basis of Presentation
The official accounting records of the Company are expressed in
Korean won and are maintained in accordance with the relevant
laws and regulations of the Republic of Korea. The accounting
principles and reporting practices followed by the Company and
generally accepted in Korea ("Korean GAAP") may differ
in certain respects from accounting principles and reporting
practices generally accepted in other countries and
jurisdictions. To conform more closely to presentations
customary in filings with the Securities and Exchange Commission
of the United States of America, the accompanying consolidated
financial statements have been condensed, restructured and
translated into English. The conversion into U.S. dollars
was made at the rate of W1,010.00 to US$1, the Noon Buying Rate
in the City of New York for cable transfers in Korean won as
certified for customs purposes by the Federal Reserve Bank of
New York on the last business day of the year ended
December 31, 2005. Such conversion into U.S. dollars
should not be construed as representations that the Korean won
amounts could be converted into U.S. dollars at the above
or any other rate. Certain supplementary information included in
the statutory Korean language consolidated financial statements,
not required for a fair presentation of the Company and its
subsidiaries' financial position or results of operations,
is not presented in the accompanying consolidated financial
statements.
b.
Principles of Consolidation
The consolidated financial statements include the accounts of
the Company and the following controlled subsidiaries as of
December 31, 2003, 2004 and 2005. Controlled subsidiaries
include (a) majority-owned entities by the Company or its
controlled subsidiary and (b) other entities where the
Company or its controlled subsidiary
F-14
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
owns more than 30% of total outstanding common stock and is the
largest shareholder. Significant intercompany accounts and
transactions have been eliminated in consolidation.
Ownership Percentage (%)
Year of
Subsidiary
Establishment
Primary Business
2003
2004
2005
SK Teletech Co., Ltd.
61.66
89.13
—
SK Capital Co., Ltd.
1995
Finance
100.00
100.00
100.00
SK Telink Co., Ltd.
1998
Telecommunication services
90.77
90.77
90.77
SK Communications Co., Ltd.
1999
Internet website services
92.69
93.44
92.37
SK Wyverns Baseball Club Co., Ltd.
2000
Business related sports
99.99
99.99
99.99
Centurion IT Investment Association
2001
Investment association
37.50
37.50
37.50
Global Credit & information Corp.
1998
Credit and collection services
50.00
50.00
50.00
PAXNet Co., Ltd.
1999
Internet website services
67.10
67.10
67.10
Seoul Records, Inc.
1982
Release of music disc
—
—
60.00
SK Telecom International Inc.
1995
Internet website services
100.00
100.00
100.00
SLD Telecom PTE Ltd.
2000
Telecommunication services
53.80
55.10
55.10
SK Telecom China Co., Ltd.
2002
Telecommunication services
100.00
100.00
100.00
TU Media Corp.
2003
Digital multi media
broadcasting service
100.00
28.50
29.60
U-Land Company Limited
2004
Telecommunication services
—
100.00
100.00
SK Telecom USA Holdings, Inc.
2005
Telecommunication services
—
—
100.00
The First Music Investment Fund of SK-PVC
2005
Investment association
—
—
99.00
The Second Music Investment Fund of SK-PVC
2005
Investment association
—
—
99.00
SK-KTB Music Investment Fund
2005
Investment association
—
—
99.00
IMM Cinema Fund
2005
Investment association
—
—
48.39
Effective January 1, 2004, TU Media Corp. that was included
in the consolidated financial statements for the year ended
December 31, 2003 is excluded from the consolidation as the
Company's equity interest in TU Media Corp. decreased from
100% to 46.1%, effective January 1, 2004 and to 28.5%,
effective May 21, 2004. As of December 31, 2005, the
Company's equity interest in TU Media corp. is 29.6%.
Effective January 1, 2004, SK Telecom China., Ltd. is
included in the consolidation of the accompanying financial
statements as its total assets at the beginning of the fiscal
year were more than
W
7 billion, in
accordance with Korean GAAP.
Effective July 1, 2005, SK Teletech Co., Ltd. that had been
included in the accompanying consolidated financial statements
for the years ended December 31, 2003 and 2004 is excluded
from the consolidation as the Company sold 60% equity interest
in SK Teletech Co., Ltd. to Curitel Communications, Inc. in July
2005. Effective December 1, 2005, SK Teletech Co., Ltd. was
merged into Pantech Co., Ltd. and the Company's equity
interest in Pantech Co., Ltd. became 22.7%.
F-15
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
In August 2005, the Company purchased a 60.0% equity interest in
Seoul Records, Inc. and included it in the consolidation of the
accompanying financial statements from the date of acquisition.
Effective January 1, 2005, U-Land Company Limited is
included in the consolidation of the accompanying consolidated
financial statements as its total assets at the beginning of the
fiscal year were more than
W
7 billion, in
accordance with Korean GAAP.
c.
Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in Korea and the United
States of America requires management to make estimates and
assumptions. These estimates and assumptions affect the reported
amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the
consolidated financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from these estimates.
d.
Cash and Cash Equivalents
Cash and cash equivalents are cash in banks and short-term
highly liquid investments with an original maturity of three
months or less at the date of purchase, which are readily
convertible without significant transaction cost on risk or
changes in interest rates.
e.
Allowance for Doubtful Accounts
An allowance for doubtful accounts is provided based on the
estimated collectibility of individual accounts and historical
bad debt experience.
Activity in the allowance for doubtful accounts
receivable — trade for 2003, 2004 and 2005 is as
follows (in millions of Korean won):
2003
2004
2005
Beginning balance
W
60,542
W
65,327
W
71,090
Write-offs
(17,593
)
(23,418
)
(49,181
)
42,949
41,909
21,909
Provision for bad debt
22,378
29,181
112,792
Decrease from changes in consolidated subsidiaries
—
—
(1,202
)
End of year
W
65,327
W
71,090
W
133,499
f.
Inventories
Inventories, which consist mainly of replacement units for
wireless telecommunication facilities, handsets, raw material
for handsets, supplies for sales promotion and music CDs, are
stated at the lower of cost or market value, with cost
determined using the moving average method. During the year,
perpetual inventory systems are used to value inventories, which
are adjusted to physical inventory counts performed at the end
of the year. When the market value of inventories is less than
the acquisition cost, carrying amount is reduced to the market
value and any difference is charged to current operations as
operating expenses. A valuation loss of
W
639 million was recorded for the year
ended December 31, 2005 (nil for the years ended
December 31, 2003 and 2004).
F-16
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
g.
Securities (excluding securities accounted for using the
    equity method of accounting)
Debt and equity securities are initially recorded at their
acquisition costs (fair value of considerations paid) including
incidental cost incurred in connection with acquisition of the
related securities and classified into trading,
available-for-sale and
held-to
-maturity
securities depending on the acquisition purpose and nature.
Trading securities are stated at fair value with gains or losses
on valuation reflected in current operations.
Securities classified as available-for-sale are reported at fair
value. Unrealized gains or losses on valuation of
available-for-sale securities are included in capital
adjustments and the unrealized gains or losses are reflected in
net income when the securities are sold or if an impairment is
other than temporary as discussed below. Equity securities are
stated at acquisition cost if fair value cannot be reliably
measured. If the declines in the fair value of individual
available-for-sale securities below their acquisition or
amortized cost are other than temporary and there is objective
evidence of impairment, write-downs of the individual securities
are recorded to reduce the carrying value to their fair value.
The related write-downs are recorded in current operations as a
loss on impairment of investment securities.
Held-to
-maturity
securities are presented at acquisition cost after premiums or
discounts for debt securities are amortized or accreted,
respectively. The Company and its subsidiaries recognize
write-downs resulting from the other-than-temporary declines in
the fair value below its book value on the balance sheet date if
there is objective evidence of impairment. The related
write-downs are recorded in current operations as a loss on
impairment of investment securities.
Trading securities are presented in the current asset section of
the balance sheet, and available-for-sales and
held-to
-maturity
securities are presented in the current asset section of the
balance sheet if their maturities are within one year; otherwise
such securities are recorded in the non-current section of the
balance sheet.
h.
Investment Securities with 20% or More
    Ownership Interest
Investment securities of affiliated companies, in which the
Company has a 20% or more ownership interest and/or the ability
to exercise significant influence, are carried using the equity
method of accounting, whereby the Company's initial
investment is recorded at cost and the carrying value is
subsequently increased or decreased to reflect the
Company's portion of shareholders' equity of the
investee. Differences between the purchase cost and net asset
value of the investee are amortized over 5 to 20 years
using the straight-line method. When applying the equity method
of accounting, unrealized intercompany gains and losses are
eliminated.
i.
Property and Equipment
Property and equipment are stated at cost. Major renewals and
betterments, which prolong the useful life or enhance the value
of assets, are capitalized; expenditures for maintenance and
repairs are charged to expense as incurred.
Depreciation is computed using the declining balance method
(except for buildings and structures acquired on or after
January 1, 1995 which are depreciated using straight-line
method) over the estimated useful lives
(3 – 30 years) of the related assets.
Interest expenses and other financing charges for borrowings
related to the manufacture or construction of property and
equipment are charged to current operations as incurred.
j.
Intangible Assets
Intangible assets are stated at cost less amortization computed
using the straight-line method over 2 to 20 years.
F-17
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
With its application for a license to provide IMT services, the
Company has a commitment to pay
W
1,300,000 million to the Ministry of
Information Communication ("MIC"). SK IMT Co., Ltd.,
which was merged into the Company on May 1, 2003, paid
W
650,000 million in March 2001 and the
Company is required to pay the remainder over 10 years with
an annual interest rate equal to the
3-year
-maturity
government bond rate minus 0.75% (3.58% as of December 31,
2005). The future payment obligations are
W
90,000 million in 2007,
W
110,000 million in 2008,
W
130,000 million in 2009,
W
150,000 million in 2010 and
W
170,000 million in 2011. On
December 4, 2001, SK IMT Co., Ltd. received the IMT license
from the MIC, and recorded the total license cost as an
intangible asset. 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 of the IMT license which expires in December 2016. The
Company determined the IMT license has a finite life,
considering that renewal cost is expected to be substantial.
The Company capitalizes the cost of internal-use software which
has a useful life in excess of one year. Capitalized
internal-use software costs are amortized using the
straight-line method over 5 years and are recorded in
intangible assets.
k.
Convertible Bonds
The proceeds from issuance of convertible bonds are allocated
between the conversion rights and the debt issued; the portion
allocable to the conversion rights is accounted for as capital
surplus with a corresponding conversion right adjustment which
is deducted from the related bonds. Such conversion right
adjustment is amortized to interest expense using the effective
interest rate method over the redemption period of the
convertible bonds. The portion allocable to the conversion
rights is measured by deducting the present value of the debt at
time of issuance from the gross proceeds from issuance of
convertible bonds, with the present value of the debt being
computed by discounting the expected future cash flows
(including call premium, if any) using the effective interest
rate applied to ordinary or straight debt of the Company at the
issue date.
l.
Discounts on Bonds
Discounts on bonds are amortized to interest expense using the
effective interest rate method over the redemption period of the
bonds.
m.
Valuation of Long-Term Payables
Long-term payables resulting from long-term installment
transactions are stated at the present value of the expected
future cash flows. Imputed interest amounts are recorded in
present value discount accounts which are deducted directly from
the related nominal payable balances. Such imputed interest is
included in operations using the effective interest rate method
over the redemption period.
n.
Provisions, Contingent Liabilities and Contingent Assets
The Company and its subsidiaries recognize a provision when
i) it has a present obligation as a result of a past
event, ii) it is probable that a disbursement of economic
resources will be required to settle the obligation, and
iii) a reliable estimate can be made of the amount of the
obligation (see Note 25).
The Company and its subsidiaries do not recognize the following
contingent obligations as liabilities;
—
Possible obligations related to past events, for which the
    existence of a liability can only be confirmed upon occurrence
    of uncertain future event or events outside the control of the
    Company and certain subsidiaries.
F-18
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
—
Present obligations arising out of past events or transactions,
    for which i) a disbursement of economic resources to
    fulfill such obligations is not probable or ii) a
    disbursement of economic resources is probable, but the related
    amount cannot be reasonably estimated.
In addition, the Company and its subsidiaries do not recognize
potential assets related to past events or transactions, for
which the existence of an asset or future benefit can only be
confirmed upon occurrence of uncertain future event or events
outside the control of the Company and its subsidiaries.
o.
Accrued Severance Indemnities
In accordance with the policies of the Company and its
subsidiaries, all employees with more than one year of service
are entitled to receive severance indemnities, based on length
of service and rate of pay, upon termination of their
employment. Accruals for severance indemnities are recorded to
approximate the amount required to be paid if all employees were
to terminate at the balance sheet date.
The Company and certain subsidiaries have deposits with
insurance companies to fund the portion of the employees'
severance indemnities which is in excess of the tax deductible
amount allowed under the Corporate Income Tax Law, in order to
take advantage of the additional tax deductibility for such
funding. Such funding of severance indemnities in outside
insurance companies, where the beneficiaries are their
employees, totaling
W
144,861 million,
W
164,643 million and
W
191,354 million as of December 31,
2003, 2004 and 2005, respectively, were deducted from accrued
severance indemnities in accordance with Korean GAAP.
In accordance with the Korean National Pension Fund Law,
the Company and its domestic subsidiaries transferred a portion
of its accrued severance indemnities to the National Pension
Fund through March 1999. Such transfers, amounting to
W
6,229 million,
W
5,687 million and
W
5,217 million as of December 31,
2003, 2004 and 2005, respectively, are deducted from accrued
severance indemnities.
Changes in accrued severance indemnities for 2003, 2004 and 2005
are as follows (in millions of Korean won):
2003
2004
2005
Beginning net balance
W
48,519
W
67,824
W
80,984
Provision
65,375
58,151
47,073
Payments to employees
(24,516
)
(27,582
)
(24,365
)
Transfer from affiliated and related companies
955
—
—
Net increase due to the changes in consolidated subsidiaries
2,395
2,372
594
Deposits for severance indemnities
(24,904
)
(19,781
)
(33,002
)
Ending net balance
W
67,824
W
80,984
W
71,284
Ending balance:
Accrued severance indemnities
W
218,914
W
251,314
W
267,855
Deposits with insurance companies
(144,861
)
(164,643
)
(191,354
)
Transfer to the National Pension Fund
(6,229
)
(5,687
)
(5,217
)
Net balance
W
67,824
W
80,984
W
71,284
F-19
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
In addition, the Company and certain subsidiaries expect to pay
the following future benefits for the next 10 years to
their employees upon their normal retirement age as follows (in
millions of Korean won):
Year ending December 31,
2006
W
248,710
(note)
2007
9
2008
629
2009
400
2010
808
2011Y2015
10,661
Total
W
261,217
(note)
The future benefits in 2006 include early settlement of
    retirement benefit of
W
243,847 million
    which is paid in April 2006, in accordance with a resolution of
    the Company's a joint labor-management conference dated
    March 16, 2006. These amounts do not include additional
    bonuses for early settlement and voluntary early retirement
    amounting to
W
125,890 million and
W
14,705 million, respectively, which is
    paid in April 2006.
The above amounts were determined based on the employees'
current salary rates and the number of service years that will
be accumulated upon their retirement date. These amounts do not
include amounts that might be paid to employees that will cease
working with the Company before their normal retirement age.
p.
Accounting for Leases
Lease agreements that include a bargain purchase option, result
in the transfer of ownership at the end of the lease term, have
a lease term equal to 75% or more of the estimated economic life
of the leased property or where the present value of minimum
lease payments equals or exceeds 90% of the fair value of the
leased property, are accounted for as capital leases. All other
leases are accounted for as operating leases.
Assets and liabilities related to capital leases are recorded as
property and equipment and obligations under capital leases,
respectively, and the related interest is calculated using the
effective interest rate method and charged to expense. For
operating leases, the future minimum lease payments are expensed
ratably over the lease term while contingent rentals are
expensed as incurred.
q.
Research and Development Costs
The Company and its subsidiaries charge substantially all
research and development costs to expense as incurred. The
Company and its subsidiaries incurred internal research and
development costs of
W
235,551 million,
W
267,107 million and
W
252,046 million for the years ended
December 31, 2003, 2004 and 2005, respectively, and
external research and development costs of
W
64,893 million,
W
69,016 million and
W
69,140 million for the years ended
December 31, 2003, 2004 and 2005, respectively.
r.
Derivative Instruments
The Company records rights and obligations arising from
derivative instruments as assets and liabilities, which are
stated at fair value. The gains and losses that result from the
change in the fair value of derivative instruments are reported
in current earnings. However, for derivative instruments
designated as hedging the exposure of variable cash flows, the
effective portion of the gains or losses on the hedging
instruments are recorded as a separate component of
shareholders' equity and credited/ charged to operations at
the time the
F-20
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
hedged transactions affect earnings, and the ineffective
portions of the gains or losses is credited/ charged immediately
to operations.
s.
Revenue Recognition
The revenues of the Company and its subsidiaries are principally
derived from telecommunication service revenue including data
services, and telephone sales. Telecommunication service
consists of fixed monthly charges, usage-related charges and
non-refundable activation fees. Fixed monthly charges are
recognized in the period earned. Usage-related charges are
recognized at the time services are rendered. Non-refundable
activation fees and costs are recognized when the activation
service was performed.
The Company's subsidiaries also sell telephones to
customers and telephone sales are recognized at the time
products are delivered.
t.
Income Taxes
Income tax expense is determined by adding or deducting the
total income tax and surtaxes to be paid for the current period
and the changes in deferred income tax assets and liabilities.
Deferred tax is recognized on differences between the carrying
amounts of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of
taxable profits. Deferred tax liabilities are generally
recognized for all taxable temporary differences with some
exceptions and deferred tax assets are recognized to the extent
that it is probable that taxable profits will be available
against which the deductible temporary differences can be
utilized. The carrying amount of deferred tax assets is reduced
to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the
assets to be recovered. Effective January 1, 2005 deferred
income tax assets and liabilities, which were presented on the
balance sheet as a single non-current net amount through 2004,
are classified into current and non-current based on the
classification of related assets or liabilities for financial
reporting purposes.
u.
Net Income Per Share and Dilutive Net Income Per Share
Net income per share is computed by dividing net income by the
weighted average number of common shares outstanding during the
period. Diluted net income per share of common stock is
calculated by dividing adjusted net income by adjusted weighted
average number of shares outstanding during the period, taking
into account the dilutive effect of stock options in 2002 and
issuance of convertible bonds in 2004 and 2005.
v.
Foreign-Based Operations' Translation Adjustment
In translating the foreign currency financial statements of the
Company's overseas subsidiaries into Korean won, the
Company presents the translation gain or loss as a foreign-based
operations' translation adjustment in the capital
adjustment section of the balance sheet. The translation gain or
loss arises from the application of different exchange rates;
the year-end rate for balance sheet items except
shareholders' equity, the historical rate for
shareholders' equity and the daily average rate for
statement of income items.
w.
Accounting for Foreign Currency Transactions and
    Translation
The Company and its domestic subsidiaries maintain their
accounts in Korean won. Transactions in foreign currencies are
recorded in Korean won based on the prevailing rate of exchange
at the dates of transactions. As allowed under Korean GAAP,
monetary assets and liabilities denominated in foreign
currencies are translated in the accompanying consolidated
financial statements at the Base Rates announced by Seoul Money
Brokerage Services, Ltd. on the balance sheet dates, which, for
U.S. dollars, were
W
1,197=US$1,
W
1,043=US$1 and
W
1,013=US$1 at
December 31, 2003, 2004 and 2005, respectively. The
resulting gains and losses arising from the translation or
settlement of such assets and liabilities are included in
current operations.
F-21
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
x.
Accounting for Employee Stock Option Compensation Plan
The Company adopted the fair value based method of accounting
for its employee stock option compensation plan (see
Note 17). Under the fair value based method, compensation
cost is measured at the grant date based on the value of the
award and is recognized over the service period. For stock
options, fair value is determined using an option-pricing model
that takes into account the stock price at the grant date, the
exercise price, the expected life of the option, the volatility
of the underlying stock, expected dividends and the current
risk-free interest rate for the expected life of the option.
However, as permitted under Korean GAAP, the Company excludes
the volatility factor in estimating the value of its stock
options granted before December 31, 2003, which results in
measurement at minimum value. The total compensation cost of an
option estimated at the grant date is not subsequently adjusted
for changes in the price of the underlying stock or its
volatility, the actual life of the option, dividends on the
stock, or the risk-free interest rate.
y.
Adoption of New Statements of Korea Accounting Standards
    ("SKAS")
On January 1, 2004, the Company and its subsidiaries
adopted SKAS No. 10, No. 12 and No. 13. Such
adoptions of new SKAS did not have an effect on the consolidated
financial position of the Company and its subsidiaries as of
December 31, 2004 or consolidated ordinary income and net
income of the Company and its subsidiaries for the year ended
December 31, 2004.
On January 1, 2005, the Company and its subsidiaries
adopted SKAS No. 15 through No. 17. The adoption of
such accounting standards did not have an effect on the
consolidated financial position of the Company and its
subsidiaries as of December 31, 2005 or consolidated
ordinary income and net income of the Company and its
subsidiaries for the year ended December 31, 2005 except as
follows:
—
Through 2004, when the Company's equity interests in the
    equity method investees were diluted as a result of the equity
    method investees' direct sales of their unissued shares to
    third parties, the changes in the Company's proportionate
    equity of investees were accounted for as capital transactions.
    Effective January 1, 2005, such transactions are accounted
    for as income statement treatment, pursuant to adoption of SKAS
    No. 15, "Investments: Equity Method". As a result
    of adopting SKAS No. 15, net income for the year ended
    December 31, 2005 increased by
W
6,262 million (net of tax effect of
W
2,375 million).
—
Through 2004, tax effects of temporary differences related to
    capital surplus or capital adjustments were excluded in
    determining the deferred tax assets or liabilities. Effective
    January 1, 2005, such tax effects of temporary differences
    are included in determining the deferred tax assets or
    liabilities, pursuant to adoption of SKAS No. 16
    "Income Taxes". Accordingly, adjustments made directly
    to capital surplus or capital adjustments, which result in
    temporary differences, are recorded net of related tax effects.
    In addition, effective January 1, 2005, deferred income tax
    assets and liabilities which were presented on the balance sheet
    as a single non-current net number through 2004, are separated
    into current and non-current portions. As a result of adopting
    SKAS No. 16, total assets and total liabilities as of
    December 31, 2005 increased by
W
67,612 million and
W
97,768 million, respectively, and total
    stockholders' equity as of December 31, 2005 decreased
    by
W
30,156 million, which was directly
    reflected in capital surplus or capital adjustments
    (see Note 18).
—
Through 2004, provisions were recorded at nominal value.
    Effective January 1, 2005, provisions are recorded at the
    present value when the effect of the time value of money is
    material, pursuant to adoption of SKAS No. 17
    "Provisions, Contingent Liabilities and Contingent
    Assets". SKAS No. 17 is prospectively applied and as a
    result of adopting such accounting standard, total liabilities
    as of December 31, 2005 decreased by
W
7,415 million and ordinary income and net
    income for the year ended December 31, 2005 increased by
W
5,376 million (see Note 25).
Such newly adopted accounting standards are prospectively
applied as allowed by SKAS No. 15 through No. 17. As a
result, the consolidated balance sheets as of December 31,
2004 and 2003 and the consolidated
F-22
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
statements of income and cash flows for the years ended
December 31, 2004 and 2003, which are comparatively
presented herein, were not adjusted to reflect the effect of
adoption of SKAS No. 15 through No. 17.
z.
Reclassifications
Certain reclassifications have been made in prior years'
consolidated financial statements to conform to classifications
used in the current year. Such reclassifications did not have an
effect on the previously reported financial position as of
December 31, 2003 and 2004 and ordinary income and net
income for the years ended December 31, 2003 and 2004.
3.
INVENTORIES
Inventories as of December 31, 2003 and 2004 and 2005
consist of the following (in millions of Korean won):
2003
2004
2005
Merchandise
W
494
W
164
W
863
Finished goods
11,319
19,286
766
Semi-finished goods
4,216
7,019
—
Raw materials
7,442
14,791
493
Supplies
8,045
11,061
6,301
Total
31,516
52,321
8,423
Less allowance for valuation loss
—
—
(639
)
Net
W
31,516
W
52,321
W
7,784
4.
INVESTMENT SECURITIES
a.
Trading Securities
Trading securities as of December 31, 2003, 2004 and 2005
are as follows (in millions of Korean won):
Acquisition Cost
Fair Value at
Carrying Amount
at December 31,
December 31,
2005
2005
2003
2004
2005
Stocks
W
11
W
12
W
—
W
368
W
12
Public bonds
—
—
18,499
—
—
Corporate bonds
—
—
4,383
—
—
Beneficiary certificates
777,460
777,460
870,335
654,411
777,460
Total
W
777,471
W
777,472
W
893,217
W
654,779
W
777,472
F-23
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
b.
Long-term Investment Securities
Long-term investment securities at of December 31, 2003,
2004 and 2005 are as follows (in millions of Korean won):
2003
2004
2005
Available-for-sale equity securities
W
824,392
W
896,508
W
923,821
Available-for-sale debt securities
14,315
5,158
296,273
Held-to-maturity securities
126,347
50,144
115
Total
965,054
951,810
1,220,209
Less current portion
(85,861
)
(3,709
)
(1
)
Long-term portion
W
879,193
W
948,101
W
1,220,208
F-24
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
b-(1). Available-for-sale Equity Securities
Available-for-sale equity securities as of December 31,
2003, 2004 and 2005 are as follows (in millions of Korean won,
except for share data):
Ownership
Acquisition
Percentage (%)
Cost at
Fair Value
Carrying Amount
Number of
at Dec. 31,
Dec. 31,
at Dec. 31,
Shares
2005
2005
2005
2003
2004
2005
(Investments in listed companies)
Digital Chosunilbo Co., Ltd.
2,890,630
7.8
W
5,781
W
5,796
W
2,847
W
2,023
W
5,796
hanarotelecom incorporated
22,090,000
4.8
121,677
56,440
26,838
71,019
56,440
KRTnet Corporation (formerly Korea Radio Wave Basestation
    Management)
234,150
4.4
1,171
2,646
2,669
2,178
2,646
POSCO
2,481,310
2.9
332,662
501,225
404,454
464,005
501,225
INNOTG Co., Ltd.
59,473
0.4
1,695
83
—
152
83
HB Entertainment Co., Ltd.
752,692
3.8
2,258
2,408
—
—
2,408
SK SECURITIES CO., Ltd.
—
—
—
(note a
)
1,877
2,418
—
SINJISOFT Corporation
—
—
—
(note a
)
—
590
—
Cowon System, Inc.
—
—
—
(note a
)
—
1,600
—
sub-total
465,244
438,685
543,985
568,598
(Investments in non-listed companies)
Powercomm Co., Ltd. (note b)
7,500,000
5.0
240,243
77,130
68,407
71,565
77,130
Japan MBCO
54,000
7.3
27,332
(note d
)
42,517
27,332
27,332
Real Telecom Co., Ltd.
398,722
8.3
5,981
(note c
)
5,981
—
—
Enterprise Networks Co., Ltd.
423,244
4.0
14,438
(note c
)
14,438
—
—
Mirae Asset Life Insurance Co., Ltd. (formerly SK Life Insurance
    Co., Ltd.)
—
—
—
(note a
)
14,890
14,890
—
Eonex Technologies Inc.
144,000
14.1
3,600
(note d
)
4,593
4,593
4,593
WideThan Co., Ltd.
—
—
—
(note e
)
3,188
3,188
—
The Korea Economic Daily
2,792,759
13.8
13,964
(note d
)
2,077
2,077
13,964
Other
121,290
(notes d and f
)
33,210
32,472
32,212
sub-total
426,848
189,301
156,117
155,231
(Investments in funds)
Korea IT Fund
(note d
)
190,000
190,000
190,000
Others
(notes d and g
)
6,406
6,406
9,992
sub-total
196,406
196,406
199,992
Total
W
824,392
W
896,508
W
923,821
(note a)
The investments in common stock of SK Securities Co., Ltd.,
    SINJISOFT Corporation, Cowon Systems, Inc. and Mirae Asset Life
    Insurance Co., Ltd. were all sold for the year ended
    December 31, 2005.
(note b)
The Company recorded its investments in common stock of
    Powercomm Co., Ltd. at its fair value, which was estimated by an
    outside professional valuation company using the present value
    of expected future cash flow, and the unrealized loss on
    valuation of investments amounting to
W
171,836 million,
W
168,678 million and
W
163,113 million as of December 31,
    2003, 2004 and 2005, respectively, were recorded as a capital
    adjustment.
F-25
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(note c)
Due to the impairment of the Company's investments in
    common stock of Real Telecom Co., Ltd. and Enterprise
    Networks Co., Ltd., the Company recorded impairment losses
    of
W
20,419 million for the year ended
    December 31, 2004.
(note d)
As a reasonable estimate of fair value could not be made, the
    investment is stated at acquisition cost. The investments in
    common stock of Eonex Technologies Inc. was reclassified to
    available-for-sale securities from equity securities accounted
    for using the equity method during 2003, as the Company's
    ownership in such investees decreased to less than 20% and the
    Company lost significant influence. Such securities were
    transferred to available-for-sale securities at the carrying
    amount valued using the equity method of accounting prior to the
    reclassification.
(note e)
The investment in common stock of WiderThan Co., Ltd. was
    reclassified to equity securities accounted for using the equity
    method during 2005. Although the Company's ownership in
    WiderThan Co., Ltd. is less than 20%, the Company exercises
    significant influence on the selection of directors and the
    investee has significant transactions with the Company.
(note f)
Due to the impairment of their investments in common stock of
    CCK Van, Biznet Tech, Hanse Telecom, Cybird Korea and Venture
    Korea in 2003, Mobilewelcom Co., Ltd., CXP Inc., LoveHunt Inc.
    and others in 2004 and TeleMerc.com, Fibernett Co., Ltd.
    and others in 2005, the Company and certain subsidiaries
    recorded impairment losses of
W
5,749 million,
W
2,580 million and
W
3,057 million for the years ended
    December 31, 2003, 2004 and 2005, respectively.
(note g)
Due to the impairment of their investments in cinema projects,
    the Company and certain subsidiaries recorded impairment losses
    of
W
235 million for the year ended
    December 31, 2005.
b-(2). Available-for-sale Debt Securities
Available-for-sale debt securities as of December 31, 2003,
2004 and 2005 are as follows (in millions of Korean won):
Acquisition
Cost at
Carrying Amount
December 31,
Maturity
2005
2003
2004
2005
Public bonds
(note a
)
W
1,599
W
971
W
1,328
W
1,599
Currency stabilization bonds
(note b
)
294,891
—
—
294,674
Convertible bonds of Real Telecom Co., Ltd. (note c)
March 2004
10,655
9,514
—
—
Convertible bonds of Eonex Technologies, Inc. (note d)
January 2005
—
3,600
3,600
—
Other
—
230
230
—
Total
14,315
5,158
296,273
Less current portion of available-for-sale debt securities
(9,514
)
(3,700
)
—
Long-term available-for-sale debt securities
W
4,801
W
1,458
W
296,273
The Interest income incurred from available-for-sale debt
securities for the years ended December 31, 2003, 2004 and
2005 were
W
735 million,
W
391 million and
W
914 million, respectively.
F-26
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(note a)
The maturities of public bonds as of December 31, 2003,
    2004 and 2005 are as follows (in millions of Korean won):
Maturity
2003
2004
2005
Within five years
W
857
W
904
W
1,238
Within ten years
114
424
361
W
971
W
1,328
W
1,599
(note b)
The maturities of currency stabilization bonds as of
    December 31, 2003, 2004 and 2005 are as follows (in
    millions of Korean won):
Maturity
2003
2004
2005
Within five years
W
—
W
—
W
294,674
(note c)
The convertible bonds of Real Telecom Co., Ltd. with a principal
    amount of
W
10,655 million can be converted
    into 371,018 shares of common stock of Real Telecom Co.,
    Ltd. at
W
28,721 per share over the period
    from September 29, 2004 to March 28, 2007. Due to the
    impairment in such bonds, the Company recorded an impairment
    loss of
W
10,655 million for the year ended
    December 31, 2004.
(note d)
The convertible bonds of Eonex Technologies, Inc. were all
    settled in cash during the year ended December 31, 2005.
b-(3).
Held-to
-maturity
Securities
Held-to
-maturity
securities as of December 31, 2003, 2004 and 2005 are as
follows (in millions of Korean won):
Acquisition
Cost at
Carrying Amount
December 31,
Maturity
2005
2003
2004
2005
Public bonds
(note a
)
W
115
W
—
W
144
W
115
Subordinated bonds of Mirae Asset Life Insurance Co., Ltd.
    (formerly SK Life Insurance Co., Ltd.)
(note b
)
—
50,000
50,000
—
Subordinated bonds of Nate Third Special Purpose Company
May 2004
—
27,464
—
—
Subordinated bonds of Nate Fourth Special Purpose Company
September 2004
—
25,393
—
—
Subordinated bonds of Nate Fifth Special Purpose Company
December 2004
—
23,490
—
—
Total
126,347
50,144
115
Less current portion of held-to-maturity securities
(76,347
)
(9
)
(1
)
Long-term held-to-maturity securities
W
50,000
W
50,135
W
114
The Interest income incurred from
held-to
-maturity
securities for the years ended December 31, 2003, 2004 and
2005 were
W
6,504 million,
W
15,692 million and
W
3,755 million, respectively.
F-27
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(note a)
The maturities of public bonds as of December 31, 2005 is
    as follows (in millions of Korean won):
Maturity
2005
Within one year
W
1
Within five years
82
Within ten years
32
W
115
(note b)
The Subordinated bonds of Mirae Asset Life Insurance Co., Ltd.
    (formerly SK Life Insurance Co., Ltd.) were all early repaid
    during 2005.
On May 2, 2003, September 4, 2003 and
December 15, 2003, the Company sold
W
577,253 million,
W
549,256 million and
W
498,426 million, respectively, of
accounts receivable resulting from its mobile phone dealer
financing plan to Nate Third Special Purpose Company, Nate
Fourth Special Purpose Company and Nate Fifth Special Purpose
Company, respectively, in asset-backed securitization
transactions. In the course of these transactions, the Company
acquired subordinate bonds issued by such special purpose
companies, in order to supplement the creditworthiness of bonds
issued by them. All such subordinated bonds were repaid in 2004.
b-(4). Changes in Unrealized Gains (Losses) on Valuation
on Long-term Investment Securities
The changes in unrealized gains (losses) on valuation on
long-term investment securities during the years ended
December 31, 2003, 2004 and 2005 are as follows (in
millions of Korean won):
For the Year Ended December 31, 2003
Beginning
Increase/
Transferred to
Ending
Balance
(Decrease)
Realized Gain (Loss)
Balance
Digital Chosunilbo Co., Ltd.
W
(3,353
)
W
419
W
—
W
(2,934
)
hanarotelecom incorporated
(101,788
)
46,320
—
(55,468
)
KRTnet Corporation
1,522
(24
)
—
1,498
POSCO
—
71,792
—
71,792
Powercomm Co., Ltd.
—
(171,836
)
—
(171,836
)
SK Securities Co., Ltd.
(498
)
(3,176
)
—
(3,674
)
Total
W
(104,117
)
W
(56,505
)
W
—
W
(160,622
)
F-28
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
For the Year Ended December 31, 2004
Beginning
Increase/
Transferred to
Ending
Balance
(Decrease)
Realized Gain (Loss)
Balance
Digital Chosunilbo Co., Ltd.
W
(2,934
)
W
(824
)
W
—
W
(3,758
)
hanarotelecom incorporated
(55,468
)
4,811
—
(50,657
)
KRTnet Corporation
1,498
(491
)
—
1,007
POSCO
71,792
59,551
—
131,343
INNOTG Co., Ltd.
—
(1,543
)
—
(1,543
)
SINJISOFT Corporation
—
460
—
460
Powercomm Co., Ltd.
(171,836
)
3,158
—
(168,678
)
Eonex Technologies Inc.
—
2,011
—
2,011
WiderThan Co., Ltd.
—
(27
)
—
(27
)
SK Securities Co., Ltd.
(3,674
)
541
—
(3,133
)
Total
W
(160,622
)
W
67,647
W
—
W
(92,975
)
For the Year Ended December 31, 2005
Transferred
Minority Interest in
Beginning
Increase/
to Realized
Equity of Consolidated
Tax Effect
Ending
Balance
(Decrease)
Gain (Loss)
Subsidiaries
(Note)
Balance
Digital Chosunilbo Co., Ltd.
W
(3,758
)
W
3,772
W
—
W
—
W
(4
)
W
10
hanarotelecom incorporated
(50,657
)
(14,580
)
—
—
17,940
(47,297
)
KRTnet Corporation
1,007
468
—
—
(406
)
1,069
POSCO
131,343
37,220
—
—
(46,355
)
122,208
INNOTG Co., Ltd.
(1,543
)
(68
)
—
—
443
(1,168
)
HB Entertainment Co., Ltd.
—
150
—
(94
)
(15
)
41
SK Securities Co., Ltd.
(3,133
)
3,610
(477
)
—
—
—
SINJISOFT Corporation
460
—
(460
)
—
—
—
Cowon Systems, Inc.
—
585
(585
)
—
—
—
Powercomm Co., Ltd.
(168,678
)
5,565
—
—
44,856
(118,257
)
Eonex Technologies Inc.
2,011
—
—
—
(553
)
1,458
WiderThan Co., Ltd.
(27
)
27
—
—
—
—
Currency stabilization bonds
—
(217
)
—
—
60
(157
)
Total
W
(92,975
)
W
36,532
W
(1,522
)
W
(94
)
W
15,966
W
(42,093
)
(note)
Represents adjustments to reflect the tax effect of temporary
    differences directly charged or credited to unrealized gains
    (losses) on valuation of long-term investment securities, which
    are capital adjustment items, in accordance with SKAS
    No. 16 "Income Taxes", which is effective
    January 1, 2005.
F-29
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
5.
EQUITY SECURITIES ACCOUNTED FOR USING THE EQUITY METHOD
Equity securities accounted for using the equity method as of
December 31, 2003, 2004 and 2005 are as follows (in
millions of Korean won, except for share data):
Number of
Ownership
Acquisition
Net Asset
Shares at
Percentage (%)
Cost at
Value at
Carrying Amount
December 31,
at December 31,
December 31,
December 31,
2005
2005
2005
2005
2003
2004
2005
Pantech Co., Ltd.
(formerly SK Teletech Co., Ltd.)
25,570,306
22.7
W
26,309
W
54,939
(note a)
W
—
W
—
W
55,732
SK C&C Co., Ltd.
300,000
30.0
19,071
163,374
92,844
201,484
168,244
STIC Ventures Co., Ltd.
1,600,000
21.9
8,000
8,379
7,086
7,477
8,379
TU Media Corp.
12,922,266
29.6
64,611
31,350
(note b)
—
34,592
32,343
VCASH Co., Ltd.
—
—
—
—
(note c)
1,048
—
—
Aircross Co., Ltd.
600,000
38.1
300
966
(note  d)
300
940
966
WiderThan Co., Ltd.
2,000,000
10.1
1,000
11,503
(note e)
3,188
—
11,503
IHQ, Inc.
8,000,000
21.6
14,440
8,488
(note f)
—
—
14,755
Harex Info Tech, Inc.
225,000
21.2
3,375
1,128
(note g)
—
3,375
2,530
Skytel Co., Ltd.
1,756,000
28.6
2,159
4,786
3,401
3,713
4,786
SK China Company Ltd.
28,160
20.7
3,195
1,571
1,683
830
485
HELIO, LLC
50,000,000
50.0
163,600
102,272
(note h)
—
—
102,272
SK USA, Inc.
49
49.0
3,184
3,279
(note d)
3,184
3,056
3,279
SKT-QC Wireless Development Fund
—
—
—
5,901
5,146
—
SKT-HP Ventures, LLC
50.0
6,415
5,290
5,960
5,281
5,290
CDMA Mobile Phone Center
40,286,825
50.0
75,680
40,810
49,444
25,117
40,810
SK Mobile
—
—
—
—
—
1,151
—
Cyworld Japan Co., Ltd.
500,000
100.0
4,466
3,252
(note i)
—
—
726
Etoos Group Inc.
3,036,353
20.5
3,095
1,005
—
—
2,586
Other investments in affiliates
17,709
(note j)
9,670
11,866
17,193
Total
W
416,609
W
183,709
W
304,028
W
471,879
(note a)
60% equity interest in SK Teletech Co., Ltd. were sold to
    Curitel Communications, Inc. and the Company recorded a gain of
W
178,689 million for the year ended
    December 31, 2005. As the Company's ownership in SK
    Teletech Co., Ltd. decreased from 89.1% to 29.1%, SK Teletech
    Co., Ltd. was excluded from the consolidation, effective
    July 1, 2005. And, the investments in common stock of SK
    Teletech Co., Ltd. were accounted for using the equity method of
    accounting for the six months ended December 31, 2005. In
    addition, effective December 1, 2005, SK Teletech Co., Ltd
    was merged into Pantech Co., Ltd. and the Company's
    ownership interest decreased from 29.1% to 22.7%. The difference
    between the Company's portion of the merged company's
    equity and the carrying amount at the date of merger of
W
269 million was recorded as a loss on
    disposal of investment assets.
(note b)
As the Company's ownership in TU Media Corp. decreased
    from 100% to 28.5% in 2004, TU Media Corp. was excluded
    from the consolidation, effective January 1, 2004. And, the
    investments in common stock of TU Media Corp. are accounted
    for using the equity method of accounting.
(note c)
The investments in common stock of VCASH Co., Ltd. were
    sold to Korea Railway Transportation Promotion Foundation
    in 2004.
F-30
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(note d)
Effective January 1, 2004, the Company recorded its
    investments in Aircross Co., Ltd. and SK USA, Inc. using
    the equity method of accounting as changes in the Company's
    portion of such investees' equity amounts resulting from
    applying the equity method of accounting is material.
(note e)
Effective January 1, 2005, the investment in common stock
    of WiderThan Co., Ltd. was reclassified to equity securities
    accounted for using the equity method. Although the
    Company's ownership in WiderThan Co., Ltd. is less than
    20%, the Company exercises significant influences on the
    selection of directors and the investee has significant
    transactions with the Company.
(note f)
In February 2005, the Company acquired 8,000,000 shares of
    IHQ, Inc., an entertainment management company, for
W
1,805 per share with an option to
    purchase an additional 5,000,000 shares at the previously
    agreed upon price during the period from March 15, 2006 to
    April 30, 2006, in order to secure high-quality content for
    the Company's wireless internet services.
(note g)
Effective January 1, 2005, the Company recorded its
    investments in Harex Info Tech, Inc. using the equity method of
    accounting as changes in the Company's portion of such
    investees' equity amounts resulting from applying the
    equity method of accounting is material.
(note h)
In the first quarter of 2005, the Company incorporated
    SK Telecom USA Holdings, Inc. with an initial investment of
    US$83 million in order to invest in and manage
    HELIO, LLC, a joint venture company in the Untied States of
    America, which was established in order to provide wireless
    telecommunication services in the United States of America (see
    Note 29. (b)).
(note i)
Even though the Company and its subsidiary's ownership
    interest is 100%, Cyworld Japan Co., Ltd. is excluded from the
    consolidation and accounted for using the equity method as its
    total assets at the beginning of the fiscal year were less than
W
7 billion, in accordance with Korean GAAP.
(note j)
As allowed under Korean GAAP, investments in equity securities
    of SK Telecom Europe Limited and certain others were not
    accounted for using the equity method of accounting, as changes
    in the Company's portion of shareholders' equity of
    such investees were not expected to be material.
Details of changes in investments in affiliates accounted for
using the equity method for the years ended December 31,
2003, 2004 and 2005 are as follows (in millions of Korean won):
For the Year Ended December 31, 2003
Equity in
Equity in
Equity in
Capital Surplus
Beginning
Earnings
Retained
and Capital
Dividend
Other
Ending
Balance
Acquisition
(Losses)
Earning
Adjustments
Received
Decrease
Balance
SK C&C Co., Ltd.
W
39,687
W
—
W
7,962
W
—
W
45,795
W
(600
)
W
—
W
92,844
STIC Ventures Co., Ltd.
(note a)
6,884
—
44
(3
)
161
—
—
7,086
Eonex Technologies, Inc.
(note b)
4,615
—
(22
)
—
—
—
(4,593
)
—
VCASH Co., Ltd.
(note a)
2,232
—
(1,353
)
(30
)
199
—
—
1,048
WiderThan Co., Ltd.
1,750
—
1,465
—
(27
)
—
—
3,188
Skytel Co., Ltd.
2,576
—
694
—
152
(21
)
—
3,401
SK China Co., Ltd.
3,482
—
(1,864
)
—
65
—
—
1,683
SK-QC Wireless Development Fund
5,993
—
(79
)
—
(13
)
—
—
5,901
SKT-HP Ventures, LLC
5,990
—
17
—
(47
)
—
—
5,960
CDMA Mobile Phone Center
(note c)
63,354
—
(13,839
)
—
—
—
(71
)
49,444
W
136,563
W
—
W
(6,975
)
W
(33
)
W
46,285
W
(621
)
W
(4,664
)
W
170,555
(note a)
Effective January 1, 2003, the Company's investees
    including STIC Ventures Co., Ltd. and VCASH Co., Ltd., adopted
    SKAS No. 3, "Intangible Assets". This statement
    requires that organization cost be
F-31
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
charged to expenses as incurred and the unamortized organization
    costs at January 1, 2003 be offset against the beginning
    retained earnings. To reflect the Company's portion of the
    decrease in the beginning retained earnings of the investees,
    the Company reduced its beginning retained earnings of 2003.
(note b)
Investments in common stock of Eonex Technologies, Inc. were
    reclassified to available-for-sale securities as the
    Company's ownership in Eonex Technologies, Inc. decreased
    to 16.1% from 22.5% during the first quarter of 2003.
(note c)
The other decrease in investments in equity securities of CDMA
    Mobile Phone Center represents a translation loss incurred from
    translating the foreign currency financial statements of SLD
    Telecom PTE Ltd., an overseas subsidiary of the Company, which
    makes investments in CDMA Mobile Phone Center, into Korean won.
For the Year Ended December 31, 2004
Equity in
Equity in
Capital Surplus
Beginning
Earnings
and Capital
Dividend
Other
Ending
Balance
Acquisition
(Losses)
Adjustments
Received
Decrease
Balance
SK C&C Co., Ltd.
W
92,844
W
—
W
13,322
W
95,918
W
(600
)
W
—
W
201,484
STIC Ventures Co., Ltd.
7,086
—
(123
)
514
—
—
7,477
TU Media Corp.
38,681
—
(4,213
)
124
—
—
34,592
VCASH Co., Ltd.
1,048
—
(657
)
—
—
(391
)
—
Aircross Co., Ltd.
(note a)
300
—
659
(19
)
—
—
940
WiderThan Co., Ltd.
(note b)
3,188
—
—
—
—
(3,188
)
—
Skytel Co., Ltd.
3,401
—
1,070
(603
)
(155
)
—
3,713
SK China Co., Ltd.
1,683
—
(595
)
(258
)
—
—
830
SK USA, Inc.
(note a)
3,184
—
168
(296
)
—
—
3,056
SK-QC Wireless Development Fund
5,901
—
4
(759
)
—
—
5,146
SKT-HP Ventures, LLC
5,960
—
62
(741
)
—
—
5,281
CDMA Mobile Phone Center
(note c)
49,444
5,979
(21,651
)
—
—
(8,655
)
25,117
W
212,720
W
5,979
W
(11,954
)
W
93,880
W
(755
)
W
(12,234
)
W
287,636
(note a)
As their total assets at the beginning of 2004 were over
W
7 billion, effective January 1,
    2004, investments in equity securities of SK USA, Inc. and
    Aircross Co., Ltd. are accounted for using the equity method of
    accounting.
(note b)
As the Company's ownership in WiderThan Co., Ltd. decreased
    to 14.3% form 20% in 2004, investments in common stock of
    WiderThan Co., Ltd. are reclassified to available-for-sale
    securities in 2004.
(note c)
SLD Telecom PTE Ltd. ("SLD"), an oversea subsidiary of
    the Company, accounted for the in-kind contribution of network
    equipment to CDMA Mobile Phone Center as an increase in the
    investment securities and the reimbursement in the amount equal
    to depreciation of such network equipment in accordance with the
    Business Co-Operation Contract between SLD and Saigon Post and
    Telecommunication Service Corp., a Vietnamese counterparty, was
    accounted for as a decrease in the investment. During the year
    ended December 31, 2004, SLD got such reimbursement of
W
4,046 million from CDMA Mobile Phone
    Center and decreased the investment in CDMA Mobile Phone Center
    by the same amount. In addition, translation loss of
W
4,609 million incurred from translating
    the foreign currency financial statement of SLD Telecom PTE Ltd.
    into Korean won was accounted for as a decrease in the
    investment in CDMA Mobile Phone Center.
F-32
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
For the Year Ended December 31, 2005
Equity in
Capital
Equity in
Surplus and
Other
Beginning
Earnings
Capital
Dividend
Increase
Ending
Balance
Acquisition
(Losses)
Adjustments
Received
(Decrease)
Balance
Pantech Co., Ltd.
(note a)
W
—
W
—
W
93
W
(183
)
W
—
W
55,822
W
55,732
SK C&C Co., Ltd.
(note b)
201,484
—
18,102
(50,742
)
(600
)
—
168,244
STIC Ventures Co., Ltd.
(note c)
7,477
—
(779
)
317
—
1,364
8,379
TU Media Corp.
34,592
25,611
(27,852
)
(8
)
—
—
32,343
Aircross Co., Ltd.
940
—
26
—
—
—
966
WiderThan Co., Ltd.
(note d)
—
—
868
7
—
10,628
11,503
IHQ, Inc.
(note c)
—
14,440
(197
)
410
—
102
14,755
Harex Info Tech, Inc.
(note e)
3,375
—
(845
)
—
—
—
2,530
Skytel Co., Ltd.
(note b)
3,713
—
1,377
(120
)
(184
)
—
4,786
SK China Company Ltd.
830
—
(295
)
(50
)
—
—
485
HELIO, LLC
(note f)
—
123,586
(21,550
)
—
—
236
102,272
SK USA, Inc.
3,056
—
316
(93
)
—
—
3,279
SKT-QC Wireless Development Fund
(note g)
5,146
—
—
—
—
(5,146
)
—
SKT-HP Ventures, LLC
5,281
—
167
(158
)
—
—
5,290
CDMA Mobile Phone Center
(note h)
25,116
33,950
(13,376
)
—
—
(4,880
)
40,810
SK Mobile
(note i)
1,151
14,213
(2,566
)
(22
)
—
(12,776
)
—
Cyworld Japan Co., Ltd.
—
4,466
(3,867
)
127
—
—
726
Etoos Group Inc.
—
3,095
(498
)
(11
)
—
—
2,586
W
292,161
W
219,361
W
(50,876
)
W
(50,526
)
W
(784
)
W
45,350
W
454,686
(note a)
The other increase in investments in equity securities of
    Pantech Co., Ltd. is net of the carrying amount of the
    investment in equity securities of SK Teletech Co., Ltd.
    amounting to
W
56,091 million reclassified
    to equity securities accounted for using the equity method as a
    result of the decrease in the Company's ownership in SK
    Teletech Co., Ltd. to less than 50% and the dilution of the
    Company's equity portion of
W
269 million as a result of the merger
    between Pantech Co., Ltd. and SK Teletech Co., Ltd.
(note b)
The Company received dividends from SK C&C Co., Ltd. and
    Skytel Co., Ltd. and the corresponding amount was deducted from
    its equity method securities.
(note c)
The other increases in investments in equity securities of STIC
    Ventures Co., Ltd. and IHQ, Inc. represent gains on disposal of
    investments in equity securities resulting from the dilution of
    the Company's ownership as a result of the fact that
    investees sold its unissued shares to third parties directly.
(note d)
The other increase in investments in equity securities of
    WiderThan Co., Ltd. represents the carrying amount of the
    investment in equity securities of WiderThan Co., Ltd. amounting
    to
W
3,188 million reclassified to equity
    securities accounted for using the equity method from
    available-for-sale securities and gains on disposal of
    investments in equity method investee of
W
7,440 million resulting from the dilution
    of the Company's ownership as a result of the fact that
    investees sold its unissued shares to third parties directly.
(note e)
Effective January 1, 2005, the Company recorded its
    investments in Harex Info Tech, Inc. using the equity method of
    accounting as changes in the Company's portion of such
    investees' equity amounts resulting from applying the
    equity method of accounting is material.
F-33
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(note f)
The increase in investments in equity securities of HELIO, LLC
    represents a translation gain incurred from translating the
    financial statements of SK Telecom USA Holdings, Inc.
    denominated in foreign currency, which makes investments in
    HELIO, LLC, into Korean won.
(note g)
Investment was fully liquidated due to dissolution of SKT-QC
    Wireless Development Fund during the year ended
    December 31, 2005.
(note h)
During the year ended December 31, 2005, SLD got the
    reimbursement of
W
3,956 million from CDMA
    Mobile Phone Center and decreased the investment in CDMA Mobile
    Phone Center by the same amount. In addition, translation loss
    of
W
924 million incurred from translating
    the foreign currency financial statement of SLD Telecom
    PTE Ltd. into Korean won was accounted for as a decrease in
    the investment in CDMA Mobile Phone Center.
(note i)
Effective January 1, 2005, SK Mobile became an equity
    method investee of SK Teletech Co., Ltd., a former
    subsidiary of the Company as changes in SK Teletech Co.,
    Ltd.'s portion of such investee's equity amounts
    resulting from applying the equity method of accounting was
    material. Effective July 1, 2005, the investment in equity
    securities of SK Teletech Co., Ltd. was reclassified to
    equity securities accounted for using the equity method, which
    resulted in the exclusion of SK Mobile from equity
    securities accounted for using the equity method.
Details of changes in the differences between the acquisition
cost and net asset value of equity method investees at the
acquisition date for the years ended December 31, 2003,
2004 and 2005 are as follows (in millions of Korean won):
For the Year Ended December 31, 2003
Beginning
Ending
Balance
Increase
Amortization
Balance
SK C&C Co., Ltd.
W
6,088
W
—
W
(406
)
W
5,682
For the Year Ended December 31, 2004
Beginning
Ending
Balance
Increase
Amortization
Balance
SK C&C Co., Ltd.
W
5,682
W
—
W
(406
)
W
5,276
For the Year Ended December 31, 2005
Beginning
Ending
Balance
Increase
Amortization
Balance
Pantech Co., Ltd.
W
—
W
820
W
(27
)
W
793
SK C&C Co., Ltd.
5,276
—
(406
)
4,870
TU Media Corp.
—
1,045
(52
)
993
IHQ, Inc.
—
7,377
(1,110
)
6,267
Harex Info Tech, Inc.
—
1,752
(350
)
1,402
Etoos Group Inc.
—
1,914
(333
)
1,581
Total
W
5,276
W
12,908
W
(2,278
)
W
15,906
F-34
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Details of changes in unrealized intercompany gains incurred
from sales of assets for the year ended December 31, 2004
and 2005 are as follows and there was no unrealized intercompany
gain for the year ended December 31, 2003 (in millions of
Korean won):
For the Year Ended December 31, 2004
Beginning
Ending
Balance
Increase
Decrease
Balance
SK China Company Ltd.
W
—
W
1,086
W
—
W
1,086
For the Year Ended December 31, 2005
Beginning
Ending
Balance
Increase
Decrease
Balance
SK China Company Ltd.
W
1,086
W
—
W
—
W
1,086
Cyworld Japan Co., Ltd.
—
2,569
(43
)
2,526
Total
W
1,086
W
2,569
W
(43
)
W
3,612
Details of market price of the equity securities of the listed
equity method investees as of December 31, 2005 are as
follows (in millions of Korean won, except for market price per
share):
Market Price
per Share (in
Shares Owned
Market
Korean Won)
by the Company
Price
Pantech Co., Ltd.
W
5,900
25,570,306
W
150,865
WiderThan Co., Ltd.
15,408
2,000,000
30,816
IHQ, Inc.
9,220
8,000,000
73,760
The condensed financial information of the investees as of and
for the year ended December 31, 2005 are as follows (in
millions of Korean won):
Total
Net Income
Total Assets
Liabilities
Revenue
(Loss)
Pantech Co., Ltd.
W
843,996
W
604,118
W
655,089
W
(21,745
)
SK C&C Co., Ltd.
1,544,980
1,000,400
1,002,668
61,693
STIC Ventures Co., Ltd.
57,040
18,755
11,845
(3,347
)
TU Media Corp.
393,945
287,966
21,550
(96,487
)
Aircross Co., Ltd.
12,178
9,642
15,240
69
WiderThan Co., Ltd.
155,388
37,773
78,467
4,052
IHQ, Inc.
65,487
24,661
50,123
6,235
Harex Info Tech, Inc.
5,977
648
1,173
(2,337
)
Skytel Co., Ltd.
23,812
6,387
13,580
4,824
SK China Company Ltd.
8,121
536
1,849
(1,423
)
HELIO, LLC
225,322
20,733
24,812
(43,100
)
SK USA, Inc.
8,387
1,695
8,139
646
SKT-HP Ventures, LLC
10,584
5
342
333
CDMA Mobile Phone Center
110,468
28,847
27,359
(26,750
)
Cyworld Japan Co., Ltd.
4,689
1,914
9
(1,594
)
Etoos Group Inc.
14,814
9,898
14,042
(5,739
)
F-35
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
6.   LOANS TO EMPLOYEES
Short-term and long-term loans to employees as of
December 31, 2003, 2004 and 2005 are as follows (in
millions of Korean won):
2003
2004
2005
Loans to employees' stock ownership association
W
33,788
W
22,546
W
14,586
Loans to employees for housing and other (3 - 4%)
8,587
8,859
4,799
W
42,375
W
31,405
W
19,385
7.   PROPERTY AND EQUIPMENT
Property and equipment as of December 31, 2003, 2004 and
2005 are as follows (in millions of Korean won):
Useful
Lives
(Years)
2003
2004
2005
Land
W
449,377
W
466,459
W
466,562
Buildings and structures
15, 30
1,081,134
1,445,593
1,484,360
Machinery
3-6
8,440,624
9,584,526
10,510,486
Vehicles
3-4
19,741
21,710
21,680
Other
3-4
794,495
791,829
825,133
Construction in progress
323,490
138,002
264,309
Total
11,108,861
12,448,119
13,572,530
Less accumulated depreciation
(6,467,314
)
(7,744,197
)
(8,909,161
)
Property and equipment, net
W
4,641,547
W
4,703,922
W
4,663,369
The government's declared standard value of land owned as
of December 31, 2003, 2004 and 2005 are
W
396,103 million,
W
404,385 million and
W
419,698 million, respectively.
Details of changes in property and equipment for the years ended
December 31, 2003, 2004 and 2005 are as follows (in
millions of Korean won):
For the Year Ended December 31, 2003
Beginning
Ending
Balance
Acquisition
Disposal
Transfer
Depreciation
Balance
Land
W
439,915
W
6,381
W
(4,793
)
W
7,874
W
—
W
449,377
Buildings and structures
778,832
9,393
(4,599
)
100,341
(40,166
)
843,801
Machinery
2,475,663
125,332
(4,996
)
1,360,240
(1,285,271
)
2,670,968
Vehicles
6,353
1,012
(123
)
63
(3,137
)
4,168
Other
515,722
861,333
(4,329
)
(916,464
)
(106,519
)
349,743
Construction in progress
352,932
644,188
—
(673,630
)
—
323,490
Total
W
4,569,417
W
1,647,639
W
(18,840
)
W
(121,576
)
W
(1,435,093
)
W
4,641,547
F-36
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
For the Year Ended December 31, 2004
Beginning
Ending
Balance
Acquisition
Disposal
Transfer
Depreciation
Balance
Land
W
449,377
W
3,395
W
(2,684
)
W
16,372
W
—
W
466,460
Buildings and structures
843,801
7,239
(7,849
)
366,296
(42,945
)
1,166,542
Machinery
2,670,968
108,238
(8,098
)
1,143,335
(1,271,336
)
2,643,107
Vehicles
4,168
3,744
(425
)
674
(3,370
)
4,791
Other
349,743
740,752
(5,481
)
(697,135
)
(102,859
)
285,020
Construction in progress
323,490
768,573
(756
)
(953,305
)
—
138,002
Total
W
4,641,547
W
1,631,941
W
(25,293
)
W
(123,763
)
W
(1,420,510
)
W
4,703,922
For the Year Ended December 31, 2005
Beginning
Ending
Balance
Acquisition
Disposal
Transfer
Depreciation
Balance
Land
W
466,460
W
723
W
(4,698
)
W
4,077
W
—
W
466,562
Buildings and structures
1,166,542
12,581
(8,095
)
35,472
(55,406
)
1,151,094
Machinery
2,643,107
54,681
(18,990
)
983,489
(1,182,664
)
2,479,623
Vehicles
4,791
1,620
(250
)
(232
)
(2,530
)
3,399
Other
285,020
766,708
(3,741
)
(657,328
)
(92,277
)
298,382
Construction in progress
138,002
580,309
—
(454,002
)
—
264,309
Total
W
4,703,922
W
1,416,622
W
(35,774
)
W
(88,524
)
W
(1,332,877
)
W
4,663,369
8.
INTANGIBLE ASSETS
Intangible assets as of December 31, 2003, 2004 and 2005
are as follows (in millions of Korean won):
Acquisition
Accumulated
Accumulated
Cost at
Amortization at
Impairment at
Carrying Amounts
December 31,
December 31,
December 31,
2005
2005
2005
2003
2004
2005
Goodwill
W
2,409,303
W
(540,301
)
W
(70
)
W
2,129,980
W
1,994,339
W
1,868,932
Frequency use rights
1,384,433
(200,141
)
—
1,251,278
1,163,319
1,184,292
Software development costs
230,439
(163,947
)
(501
)
137,810
105,955
65,991
Other
623,545
(288,445
)
(1,426
)
155,876
259,290
333,674
W
4,647,720
W
(1,192,834
)
W
(1,997
)
W
3,674,944
W
3,522,903
W
3,452,889
F-37
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Details of changes in intangible assets for the years ended
December 31, 2003, 2004 and 2005 are as follows (in
millions of Korean won):
For the Year Ended December 31, 2003
Beginning
Ending
Balance
Acquisition
Disposal
Transfer
Amortization
Balance
Goodwill
W
2,255,868
W
9,374
W
—
W
(111
)
W
(135,151
)
W
2,129,980
Software development costs
91,337
26,665
—
56,512
(36,704
)
137,810
Frequency use rights
1,259,253
—
—
—
(7,975
)
1,251,278
Other
114,777
28,982
(7,275
)
54,371
(34,979
)
155,876
W
3,721,235
W
65,021
W
(7,275
)
W
110,772
W
(214,809
)
W
3,674,944
For the Year Ended December 31, 2004
Beginning
Ending
Balance
Acquisition
Disposal
Transfer
Amortization
Impairment
Balance
Goodwill
W
2,129,980
W
647
W
—
W
—
W
(136,288
)
W
—
W
1,994,339
Software development costs
137,810
6,235
(3,349
)
10,545
(45,244
)
(42
)
105,955
Frequency use rights
1,251,278
—
—
7,800
(95,759
)
—
1,163,319
Other
155,876
65,494
(865
)
93,514
(54,729
)
—
259,290
W
3,674,944
W
72,376
W
(4,214
)
W
111,859
W
(332,020
)
W
(42
)
W
3,522,903
For the Year Ended December 31, 2005
Beginning
Ending
Balance
Acquisition
Disposal
Transfer
Amortization
Impairment
Balance
Goodwill
W
1,994,339
W
—
W
—
W
9,223
W
(134,630
)
W
—
W
1,868,932
Frequency use rights
1,163,319
117,380
—
—
(96,407
)
—
1,184,292
Software development costs
105,955
1,472
—
—
(41,436
)
—
65,991
Other
259,290
80,642
(342
)
64,522
(70,178
)
(260
)
333,674
W
3,522,903
W
199,494
W
(342
)
W
73,745
W
(342,651
)
W
(260
)
W
3,452,889
The book value and residual useful lives of major intangible
assets as of December 31, 2005 are as follows (in millions
of Korean won):
Amount
Description
Residual Useful Lives
Goodwill
W
1,820,884
Goodwill related to acquisition of Shinsegi Telecomm, Inc.
14 years and 3  months
IMT license
1,059,871
Frequency use rights relating to WCDMA Service
(note a
)
WiBro license
117,000
WiBro Service
(note b
)
DMB license
7,421
DMB Service
10 years and 6  months
Software development costs
65,991
Software for business use
1-5 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 20, 2005. The license period is seven years from that
    date. Amortization of the WiBro license will be on a straight
    line basis over the remaining useful life from the commencement
    date of the Company's commercial WiBro services.
F-38
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
9.     BONDS PAYABLE
Bonds payable as of December 31, 2003, 2004 and 2005 are as
follows (in millions of Korean won and thousands of
U.S. dollars):
Maturity
Annual Interest
Year
Rate (%)
2003
2004
2005
Domestic general bonds
2004
5.0-7.0
W
1,120,000
W
—
W
—
"
2005
6.0
500,000
500,000
—
"
2006
5.0-6.0
800,000
800,000
800,000
"
2007
5.0-6.0
700,000
700,000
700,000
"
2008
5.0
300,000
300,000
300,000
"
2009
5.0
—
300,000
300,000
"
2010
4.0
—
—
200,000
"
2011
3.0
—
200,000
200,000
Dollar denominated bonds
(US$200,078)
2004
7.75
239,653
—
—
(US$300,000)
2011
4.25
—
313,140
303,900
Convertible bonds (US$329,450)
2009
—
—
385,885
385,885
Bonds with stock purchase
warrants (US$4,000)
2006
6M Libor-0.3
4,791
—
—
3,664,444
3,499,025
3,189,785
Less discounts on bonds
(47,553
)
(51,467
)
(40,016
)
Less conversion right adjustments
—
(82,245
)
(65,218
)
Add long-term accrued interest
491
24,808
24,808
Net
3,617,382
3,390,121
3,109,359
Less portion due within one year
(1,355,514
)
(498,278
)
(795,151
)
Long-term portion
W
2,261,868
W
2,891,843
W
2,314,208
All of the above bonds will be paid in full at maturities.
The bonds with stock purchase warrants were issued on
December 11, 2001 by PAXNet Co., Ltd., in which the Company
purchased a 67.1% interest in December 2002. The stock purchase
warrants are detachable and the bonds are unsecured oversea
public bonds. These bonds were in full redeemed for cash at the
option of the bondholders in 2004, at 114.79% of the principal
amount. The stock purchase warrants, however, are still
effective and may be exercised at any time after 3 months
from the issuance date and up to 1 month before the
original maturity date of the bonds. As of December 31,
2005, the exercise price per common stock of PAXNet Co., Ltd. is
W
5,000.
On May 27, 2004, the Company issued zero coupon convertible
bonds with a maturity of five years in the principal amount of
US$329,450,000 for US$324,923,469, with an initial conversion
price of
W
235,625 per share of the
Company's common stock which was greater than market value
at the date of issuance and do not change, except under
antidilution protection, subject to certain redemption rights.
Subsequently, the initial conversion price was changed to
W
225,518 per share in accordance with
antidilution protection. The Company may redeem their principal
amount after 3 years from the issuance date if the market
price exceeds 130% of the conversion price during a
predetermined period. On the other hand, the bond holders may
redeem their notes at 103.81% of the principal amount on
May 27, 2007 (3 years from the issuance date). The
conversion right may be exercised during the period from
July 7, 2004 to May 13, 2009 and the number of common
shares to be converted
F-39
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
as of December 31, 2005 is 1,718,700 shares.
Conversion of notes to common shares may be prohibited under the
Telecommunications Law or other legal restrictions which
restrains foreign governments, individuals and entities from
owning more than 49% of the Company's voting stock, if this
49% ownership limitation is violated due to the exercise of
conversion rights. In this case, the Company will pay a bond
holder a 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 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. The Company entered into an agreement
with Credit Suisse First Boston International to reduce the
effect of fluctuation with respect to cash settlement payments
that may be more or less than the proceeds from sales of
treasury shares held in trust. Unless either previously redeemed
or converted, the notes are redeemable at 106.43% of the
principal amount at maturity.
10.     LONG-TERM BORROWINGS
Long-term borrowings denominated in foreign currency as of
December 31, 2003, 2004 and 2005 are as follows (in
millions of Korean won, thousands of U.S. dollars and
thousands of Japanese yen):
Final
Maturity
Annual Interest Rate
Lender
Year
(%)
2003
2004
2005
Korea Development Bank
2004
3M Libor + 3.45
US$4,478
US$—
US$—
Woori Bank
2005
Floating rate + 0.2
4,089
—
—
Fine Bank
2008
3.50~3.90
¥—
¥—
¥14,802
Fine Bank
2009
3.11
—
—
12,800
Total in foreign currency
US$8,567
US$—
US$—
¥—
¥—
¥27,602
Equivalent in Korean won
W
10,262
W
—
W
237
Less portion due within one year
(8,629
)
—
(82
)
Long-term portion
W
1,633
W
—
W
155
11.
SUBSCRIPTION DEPOSITS
The Company receives facility guarantee deposits from customers
of cellular services at the subscription date. The Company has
no obligation to pay interest on these deposits and returns all
amounts to subscribers upon termination of the subscription
contract.
Long-term subscription guarantee deposits by service type held
as of December 31, 2003, 2004 and 2005 are as follows (in
millions of Korean won, except deposit per subscriber amounts):
Deposit per
Service type
Subscriber
2003
2004
2005
Cellular
W
200,000
W
44,197
W
31,440
W
23,770
The Company offers existing and new cellular subscribers the
option of obtaining credit insurance from Seoul Guarantee
Insurance company ("SGIC") in lieu of the facility
deposit. Existing subscribers who elect this option are refunded
their subscription deposits. As a result of this arrangement,
the balance of facility guarantee deposits has been decreasing.
F-40
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
12.
LEASES
The Company and its subsidiaries leases certain machinery and
equipment under capital leases. The Company and its subsidiaries
have an option to acquire the leased machinery and equipment,
free of charge, upon termination of the lease period.
Depreciation expense for the years ended December 31, 2003,
2004 and 2005 were
W
250 million,
W
37 million and nil, respectively. For the
year ended December 31, 2005, all capital leases were
terminated and the Company acquired the related leased machinery
free of charge.
In addition, in 2005 the Company acquired certain computer
equipment and software from SK C&C Co., Ltd. and succeeded
certain capital lease agreements between SK C&C Co., Ltd.
and HP Financial Service. The acquisition cost of such leased
computer equipment and software is
W
24,543 million. Depreciation expense for
the year ended December 31, 2005 was
W
871 million. The Company's minimum
future lease payments as of December 31, 2005 are as
follows (in millions of Korean won):
Annual Lease
Payments
Interest
Principal
2006
W
15,328
W
989
W
14,339
2007
8,846
352
8,494
2008
1,734
24
1,710
Total
W
25,908
W
1,365
24,543
Less portion due within one year
(14,339
)
Capital lease liabilities
W
10,204
The Company and its subsidiaries leased certain machinery and
equipment under an operating lease and the related lease
expenses for the years ended December 31, 2003 and 2004
were
W
1,774 million and
W
261 million, respectively. All the
operating leases were terminated in 2004.
13.
ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
The details of monetary assets and liabilities denominated in
foreign currencies (except for bonds payable and long-term
borrowings denominated in foreign currencies described in
Notes 9 and 10) as of December 31, 2003, 2004 and
2005 are as follows (in millions of Korean won, thousands of
U.S. dollars, thousands of HK dollars, thousands of
Japanese yen, thousands of Singaporean dollars, thousands of
Euros, thousands of Great Britain pounds, thousands of Swiss
francs, thousands of Chinese yuan, thousands of Vietnam dongs,
thousands of Canadian dollars and thousands of Australian
dollars):
Foreign Currencies
Korean Won Equivalent
2003
2004
2005
2003
2004
2005
Cash and cash equivalents
US$24,407
US$4,875
US$11,826
W
29,234
W
5,088
W
11,980
¥8
¥6
—
—
—
—
EUR17
—
EUR3
26
—
3
GBP5
—
—
10
—
—
—
—
VND902,819
—
—
58
—
—
SG$30
—
—
18
Short-term financial instruments
US$31,492
—
—
37,721
—
—
Accounts receivable — trade
US$8,627
US$19,284
US$31,334
10,333
20,129
31,741
SG$743
—
—
522
—
—
—
—
EUR248
—
—
298
F-41
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Foreign Currencies
Korean Won Equivalent
2003
2004
2005
2003
2004
2005
Accounts receivable — other
US$12,844
US$2,989
US$3,364
15,385
3,120
3,408
—
—
VND6,173,479
—
—
394
Guarantee deposits
US$193
US$142
—
232
149
—
¥16,337
¥15,756
¥16,156
183
159
139
Total assets
W
93,646
W
28,645
W
48,039
Accounts payable — trade
S$15,432
US$17,406
US$28,360
W
18,485
W
18,169
W
28,728
¥555,277
¥26,240
—
6,217
266
—
Short-term borrowings
US$26,853
US$19,392
—
32,164
20,241
—
¥2,255,431
¥438,499
—
25,252
4,438
—
EUR 7
EUR 207
—
10
294
—
—
GBP260
—
—
522
—
Accounts payable — other
US$35,759
US$13,539
US$15,737
42,832
14,132
15,942
¥20,606
¥60,678
¥8,498
231
614
73
HK$267
HK$217
HK$254
41
29
33
CNY140
CNY1
—
20
—
—
GBP304
GBP 118
GBP453
648
237
791
SG$5
SG$5
SG$22
3
3
13
EUR10
EUR348
EUR504
15
495
604
AU$1
—
—
1
—
—
CHF4
—
CHF19
4
—
15
—
—
CAD2
—
—
2
—
—
VND11,823,640
—
—
755
Accrued expenses
US$71
US$84
—
86
88
—
¥1,300
—
—
15
—
—
EUR 23
—
—
1
—
—
Obligation under capital leases including current portion
US$101
—
—
121
—
—
Total liabilities
W
126,146
W
59,528
W
46,956
14.
CAPITAL STOCK AND CAPITAL SURPLUS
The Company's outstanding capital stock consists entirely
of common stock with a par value of
W
500. The
number of authorized, issued and outstanding common shares as of
December 31, 2003, 2004 and 2005 are as follows:
2003
2004
2005
Authorized shares
220,000,000
220,000,000
220,000,000
Issued shares
82,276,711
82,276,711
82,276,711
Outstanding shares, net of treasury stock
73,614,308
73,614,296
73,614,296
The number of authorized shares of preferred stock as of
December 31, 2005 is 5,500,000 shares, none of which
is outstanding as of December 31, 2005.
F-42
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Significant changes in common stock and capital surplus in 2003,
2004 and 2005 are as follows (in millions of Korean won, except
for share data):
Number of
Capital
Shares Issued
Common Stock
Surplus
At January 1, 2003
89,152,670
W
44,576
W
2,884,382
Excess unallocated purchase price (note a)
—
—
(230
)
Retirement of treasury stock (note b)
(7,002,235
)
—
—
Issuance of common stock for the merger with SK IMT Co., Ltd.
    (note c)
126,276
63
31,809
Gain on disposal of investments In common stock of subsidiary
—
—
58
Equity in capital surplus changes of affiliates
—
—
(4,463
)
At December 31, 2003
82,276,711
44,639
2,911,556
Excess unallocated purchase price (note a)
—
—
(77
)
Considerations for conversion right (note d)
—
—
67,279
Equity in capital surplus changes of affiliates
—
—
(10,457
)
At December 31, 2004
82,276,711
44,639
2,968,301
Deferred tax effect of temporary difference related to
    conversion rights (note e)
—
—
(18,502
)
Transfer of stock option from capital adjustment (note f)
—
—
1,533
Equity in capital surplus changes of affiliates
—
—
3,508
At December 31, 2005
82,276,711
W
44,639
W
2,954,840
(note a)
During the years ended December 31, 2003 and 2004, the
    Company paid
W
230 million and
W
77 million, respectively, to certain
    former shareholders of Shinsegi Telecomm, Inc. in accordance
    with the ruling of the court and deducted it from capital
    surplus in accordance with Korean GAAP.
(note b)
The Company retired 4,457,635 shares and
    2,544,600 shares of treasury stock on January 3, 2003
    and August 20, 2003, respectively, and reduced
    unappropriated retained earnings in accordance with the Korean
    Commercial Laws.
(note c)
The excess of acquired net assets over the par value of
W
63 million for the issuance of
    126,276 shares of new common stock to minority shareholders
    of SK IMT Co., Ltd. upon the merger dated May 1, 2003, was
    added to capital surplus in accordance with Korean GAAP.
(note d)
The Company issued zero coupon convertible bonds in the
    principal amount of US$329,450,000 at US$324,923,469 with an
    initial conversion price of
W
235,625 per
    share of the Company's common stock on May 27, 2004
    and the considerations for conversion right of
W
67,279 million was added to capital
    surplus in accordance with Korean GAAP (see Note 2(j)).
(note e)
The tax effect of temporary difference related to consideration
    for conversion rights was deducted directly from related
    components of stockholders' equity, pursuant to adoption of
    SKAS No. 16 for the year ended December 31, 2005 (see
    Note 2(x)).
(note f)
During the year ended December 31, 2005, the exercisable
    period for the stock options representing 17,800 shares, of
    which recognized compensation costs was
W
1,533 million, expired and the related
    stock options of
W
1,533 million in capital
    adjustments were transferred to capital surplus in accordance
    with Korean GAAP.
F-43
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
15.
RETAINED EARNINGS
Retained earnings as of December 31, 2003, 2004 and 2005
are as follows (in millions of Korean won):
2003
2004
2005
Appropriated
W
4,743,822
W
4,733,936
W
5,470,701
Unappropriated
396,089
1,418,962
1,796,948
W
5,139,911
W
6,152,898
W
7,267,649
The details of appropriated retained earnings as of
December 31, 2003, 2004 and 2005 are as follows
(in millions of Korean won):
2003
2004
2005
Legal reserve
W
22,288
W
22,320
W
22,320
Reserve for improvement of financial structure
33,000
33,000
33,000
Reserve for loss on disposal of treasury stock
221,197
477,182
477,182
Reserve for research and manpower development
559,198
776,296
822,061
Reserve for business expansion
3,908,139
3,425,138
4,116,138
W
4,743,822
W
4,733,936
W
5,470,701
a.
Legal Reserve
The Korean Commercial Code requires the Company to appropriate
as a legal reserve at least 10% of cash dividends for each
accounting period until the reserve equals 50% of outstanding
capital stock. The legal reserve may not be utilized for cash
dividends, but may only be used to offset a future deficit, if
any, or may be transferred to capital stock.
b.
Reserve for Improvement of Financial Structure
The Financial Control Regulation for listed companies in Korea
requires that at least 10% of net income (net of accumulated
deficit), and an amount equal to net gains (net of related
income taxes, if any) on the disposal of property and equipment
be appropriated as a reserve for improvement of financial
structure until the ratio of stockholders' equity to total
assets reaches 30%. The reserve for improvement of financial
structure may not be utilized for cash dividends, but may only
be used to offset a future deficit, if any, or may be
transferred to capital stock.
c.
Reserves for Loss on Disposal of Treasury Stock and Research
    and Manpower Development
Reserves for loss on disposal of treasury stock and research and
manpower development were appropriated in order to recognize
certain tax deductible benefits through the early recognition of
future expenditures. These reserves will be unappropriated from
appropriated retained earnings in accordance with the relevant
tax laws. Such unappropriation will be included in taxable
income in the year of unappropriation.
d.
Reserve for Business Expansion
The reserve for business expansion is voluntary and was approved
by the board of directors and shareholders.
F-44
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
16.
TREASURY STOCK
Upon the issuances of stock dividends and new common stock and
the merger with Shinsegi Telecomm, Inc. and SK IMT Co., Ltd.,
the Company acquired fractional shares totaling
77,958 shares for
W
6,108 million
through 2003. In addition, the Company acquired
7,452,810 shares of treasury stock in the market or through
the trust funds for
W
1,771,507 million
through 2003 in order to stabilize the market price of its stock.
Under the Mutual Agreement on Stock Exchange between the Company
and KT Corporation, on December 30, 2002 and
January 10, 2003, the Company acquired
8,266,923 shares of the Company's common stock from KT
Corporation for
W
1,853,643 million.
On January 13, 2002, the Company merged with Shinsegi
Telecomm, Inc. and distributed 2,677,653 shares of treasury
stock to minority shareholders of Shinsegi Telecomm, Inc., of
which the cost was
W
584,646 million.
On January 6, 2003, the Company retired
4,457,635 shares of treasury stock that were purchased from
KT Corporation as mentioned above in accordance with a
resolution of the board of directors dated December 26,
2002 and reduced unappropriated retained earnings by
W
1,008,882 million including the tax
effect of
W
9,373 million, in accordance
with the Korean Commercial Laws.
On June 30, 2003, in accordance with a resolution of the
board of directors dated June 24, 2003, the Company
announced a stock repurchase program to acquire
2,544,600 shares of common stock in the market in order to
enhance stockholders' interest and to stabilize the stock
price. Pursuant to the program, the Company acquired a total of
2,544,600 shares of Company's outstanding common stock
for
W
525,174 million during the period
from June 30, 2003 to August 11, 2003 and retired such
treasury shares on August 20, 2003, which reduced the
unappropriated retained earnings by
W
537,138 million including the tax effect
of
W
11,964 million, in accordance with
Korean Commercial Laws.
On February 20, 2004, the Company additionally acquired
fractional shares totaling 12 shares for
W
2 million which resulted from the merger
with SK IMT Co., Ltd.
17.
STOCK OPTIONS
On March 17, 2000, March 16, 2001 and March 8,
2002, in accordance with the approval of its stockholders or its
board of directors, the Company granted stock options to its
management, representing 17,800 shares at an exercise price
of
W
424,000 per share, 43,820 shares
at an exercise price of
W
211,000 per share
and 65,730 shares at an exercise price of
W
267,000 per share. The stock options will
become exercisable after three years from the date of grant and
shall be exercisable for two years from the first exercisable
date. Upon exercise of stock options, the Company will issue its
common stock. If the employee leaves the Company within three
years after the grant of stock options, such employee forfeits
the unvested stock options awarded. During the year ended
December 31, 2004, stock options representing
530 shares, of which total compensation cost was
W
3 million, were forfeited.
The value of stock options granted is determined using the
Black-Scholes option-pricing model, without considering the
volatility factor in estimating the value of its stock options,
as permitted under Korean GAAP. The following assumptions are
used to estimate the fair value of options granted in 2000, 2001
and 2002; risk-free interest rate of 9.1% for 2000, 5.9% for
2001 and 6.2% for 2002; expected life of three years for 2000,
2001 and 2002; expected dividend of
W
500 per share for 2000, 2001 and 2002.
Under these assumptions, total compensation cost, the recognized
compensation cost (included in labor cost) for the years ended
December 31, 2003, 2004 and 2005, the compensation cost to
be recognized for the following period after December 31,
2005
F-45
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
and the outstanding balance of stock option in capital
adjustment as of December 31, 2005 and 2004 are as follows
(in millions of Korean won):
Recognized
Total
Compensation Cost
Compensation
Stock Option in Capital Adjustment
Compensation
Cost to be
Grant Date
Cost
2003
2004
2005
Recognized
2003
2004
2005
March 17, 2000 (note a)
W
1,533
W
128
W
—
W
—
W
—
W
1,533
W
1,533
W
—
March 16, 2001
234
79
10
—
—
224
234
234
March 8, 2002
3,246
1,082
1,082
180
—
1,984
3,066
3,246
W
5,013
W
1,289
W
1,092
W
180
W
—
W
3,741
W
4,833
W
3,480
(note a)
During the year ended December 31, 2005, the exercisable
    period for stock options representing 17,800 shares, for
    which the Company had recognized compensation cost of
W
1,533 million, expired and the related
    stock options of
W
1,533 million in capital
    adjustments were transferred to capital surplus.
The pro forma net income and net income per common share, if the
Company had not excluded the volatility factor (expected
volatility of 66.8% for options granted in 2000, 67.5% for
options granted in 2001 and 63.0% for options granted in 2002)
in estimating the value of its stock options, for years ended
December 31, 2003, 2004 and 2005 are as follows:
2003
2004
2005
Pro forma ordinary income (in millions of Korean won)
W
2,751,221
W
2,121,238
W
2,561,268
Pro forma ordinary income per common shares
26,145
20,234
25,439
Pro forma net income (in millions of Korean won)
1,962,986
1,489,542
1,872,680
Pro forma net income per common shares
26,145
20,234
25,439
18.
INCOME TAXES
Income tax expenses for the years ended December 31, 2003,
2004 and 2005 consist of the following (in millions of Korean
won):
2003
2004
2005
Currently
W
668,180
W
551,405
W
685,541
Changes in net deferred tax liabilities
120,879
78,356
7,718
Income tax expenses
W
789,059
W
629,761
W
693,259
F-46
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The difference between income taxes computed using the statutory
corporate income tax rates and the recorded income taxes for the
years ended December 31, 2003, 2004 and 2005 is
attributable to the following (in millions of
Korean won):
2003
2004
2005
Income taxes at statutory income tax rate of 27% in 2003 and
    2004 and 25% in 2005
W
743,671
W
573,257
W
640,391
Resident surtax payable
74,367
57,326
64,039
Tax credit for investments, technology and human resource
    development and others
(83,826
)
(89,080
)
(100,160
)
Special surtax for agriculture and fishery industries and other
13,685
13,736
18,838
Goodwill amortization not deductible for tax purpose
38,213
35,382
35,382
Undistributed earnings (unrecognized deficit) of subsidiaries
(5,909
)
11,011
4,846
Effect of the change in income tax rate (note a)
(20,204
)
—
—
Other permanent differences
15,327
28,581
12,973
Increase (decrease) in valuation allowance
13,735
(452
)
16,950
Recorded income taxes
W
789,059
W
629,761
W
693,259
Effective tax rate
28.65
%
29.66
%
27.06
%
(note a)
Pursuant to a revision in the Korean Corporate Income Tax Law
    during 2003, statutory corporate income tax rate including
    resident surtax is changed from 29.5% to 27.5%, effective
    January 1, 2005. Such change in statutory corporate income
    tax rate resulted in a decrease in deferred tax liabilities as
    of December 31, 2003 by
W
20,204 million.
F-47
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The tax effects of each type of temporary difference that gave
rise to a significant portion of the deferred tax assets and
liabilities at December 31, 2003, 2004 and 2005 are as
follows (in millions of Korean won):
2003
2004
2005
Current (note a):
Allowance for doubtful accounts
W
—
W
—
W
39,334
Write-off of doubtful accounts
—
—
9,239
Accrued interest income
—
—
(1,229
)
Net operating loss carryforwards
—
—
17
Tax credit carryforwards
—
—
89
Other
—
—
18,623
Net deferred tax assets — current
—
—
66,073
Non-Current (note a):
Allowance for doubtful accounts
22,039
19,649
—
Write-off doubtful accounts
9,587
9,764
—
Accrued interest income
(2,026
)
(2,463
)
—
Trading securities
1
(561
)
—
Depreciation
3,712
(40,220
)
(47,472
)
Loss on impairment of investment securities
30,757
32,851
32,959
Loss on disposition of properties
—
11,480
—
Foreign currency translation loss
774
—
—
Equity in losses of affiliates
(6,593
)
(12,671
)
(10,244
)
Unrecognized deficit (undistributed earnings) of subsidiaries
(3,364
)
(9,434
)
13,732
Tax free reserve for research and manpower development
(182,518
)
(195,103
)
(211,208
)
Tax free reserve for loss on disposal of treasury stock
(130,373
)
(130,372
)
(130,372
)
Loss on valuation of foreign currency swap
—
—
3,642
Loss on valuation of derivatives (capital adjustment)
—
—
5,377
Considerations for conversion right
—
—
(18,502
)
Equity in Capital Adjustments of Affiliates
—
—
(21,967
)
Net operating loss carryforwards
29,575
25,371
24,108
Tax credit carryforwards
1,162
5,003
—
Other
39,693
18,510
15,091
Total deferred tax liabilities
(187,574
)
(268,196
)
(344,856
)
Valuation allowance for:
Depreciation
—
(5,321
)
(6,022
)
Net operating loss carryforwards
(29,575
)
(24,980
)
(23,523
)
Other
(8,880
)
(7,555
)
(25,260
)
Net deferred tax assets liabilities — non-current
W
(226,029
)
W
(306,052
)
W
(399,661
)
(note a)
Effective January 1, 2005, deferred income tax assets and
    liabilities which were presented on the balance sheet as a
    single non-current net number through 2004, are separated into
    current and non-current portions, pursuant to adoption of SKAS
    No. 16 "Income Taxes". Such newly adopted
    accounting
F-48
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
standards are prospectively applied as allowed by SKAS
    No. 16. As a result, the deferred income tax liabilities at
    December 31, 2003 and 2004 were not separated into current
    and non-current portions to reflect the effect of such new
    adoption of SKAS No. 16.
The net operating loss carryforwards and tax credit
carryforwards of the Company's certain subsidiaries as of
December 31, 2005 will expire as follows (in millions
of Korean won):
Net Operating Loss
Tax Credit
Year Ending December 31,
Carryforwards
Carryforwards
2006
W
62
W
89
2007
2,302
—
2008
14,520
—
2009
52,892
—
2010
19,542
—
Total
W
89,318
W
89
Deferred tax assets (liabilities) added to (deducted from)
capital surplus or capital adjustments as of December 31,
2005 are as follows (in millions of Korean won):
Considerations for conversion right
W
(18,502
)
Unrealized loss on valuation of long-term investment securities
15,966
Equity in capital adjustment of affiliates, net
(24,119
)
Loss on valuation of currency swap
5,377
Foreign-based operations' translation adjustment
2
Total
W
(21,276
)
19.
INCOME PER SHARE
Net income and ordinary income per share for the years ended
December 31, 2003, 2004 and 2005 are computed as follows
(in millions of Korean won, except for share data):
Net income and ordinary income per share
2003
2004
2005
Net income
W
1,966,100
W
1,491,479
W
1,872,978
Weighted average number of common shares outstanding
75,078,219
73,614,297
73,614,296
Net income per share
W
26,187
W
20,261
W
25,443
F-49
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The weighted average number of common shares outstanding for
2003, 2004 and 2005 is calculated as follows:
Weighted
Weighted
Number of
Number of
Number of
Date
Shares
Days
Shares
For 2003:
At January 1, 2003
—
89,152,670
365/365
89,152,670
Treasury stock, at the beginning
—
(9,310,607
)
365/365
(9,310,607
)
Purchase of treasury stock
Jan. 10
(3,809,288
)
356/365
(3,715,360
)
Purchase of fractional shares
Feb. 3
(52
)
332/365
(47
)
Purchase of fractional shares
May 1
(91
)
233/365
(58
)
Issuance of common stock
May 1
126,276
233/365
80,609
Treasury stock
(note a)
(2,544,600
)
—
(1,128,988
)
Total
73,614,308
75,078,219
For 2004:
At January 1, 2004
—
82,276,711
366/366
82,276,711
Treasury stock, at the beginning
—
(8,662,403
)
366/366
(8,662,403
)
Purchase of fractional shares
Feb. 20
(12
)
316/366
(11
)
Total
73,614,296
73,614,297
For 2005:
At January 1, 2005
—
82,276,711
365/365
82,276,711
Treasury stock, at the beginning
—
(8,662,415
)
365/365
(8,662,415
)
Total
73,614,296
73,614,296
(note a)
Such treasury stock was acquired or disposed of on several
    different dates in 2003, and the weighted number of shares was
    calculated according to each transaction date.
Diluted net income and ordinary income per share amounts for the
years ended December 31, 2003, 2004 and 2005 are computed
as follows (in millions of Korean won except for share data):
Diluted net income and ordinary income per share
2003
2004
2005
Adjusted net income
W
1,966,100
W
1,498,797
W
1,886,033
Adjusted weighted average number of common shares outstanding
75,078,219
74,596,777
75,332,996
Diluted net income per share
W
26,187
W
20,092
W
25,036
F-50
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The numerator and denominator of basic and diluted income per
share for the years ended December 31, 2003, 2004 and 2005
are as follows:
Diluted net income and ordinary income per share
Average Weighted
Per-share
Net Income
Number of Shares
Amount
(In millions of
(In Korean Won)
Korean Won)
For 2003
Basic net income per share
W
1,966,100
75,078,219
W
26,187
Effect of stock option (note a)
—
—
Diluted net income per share
W
1,966,100
75,078,219
W
26,187
For 2004
Basic net income per share
W
1,491,479
73,614,297
W
20,261
Effect of stock option (note a)
—
—
Effect of convertible bonds (note b)
7,318
982,480
Diluted net income per share
W
1,498,797
74,596,777
W
20,092
For 2005
Basic net income per share
W
1,872,978
73,614,296
W
25,443
Effect of stock option (note a)
—
—
Effect of convertible bonds (note b)
13,055
1,718,700
Diluted net income per share
W
1,886,033
75,332,996
W
25,036
(note a)
In the years ended December 31, 2003, 2004 and 2005, the
    assumed exercise of stock options was not reflected in diluted
    earnings per share because the exercise of stock options would
    not dilute the earnings per share.
(note b)
The effect of convertible bonds are increase in net income
    related to interest expense that would not have incurred, and
    increase in the weighted average number of common shares
    outstanding related to common shares that would have been
    issued, assuming the conversion of convertible bonds issued on
    May 27, 2004 (see Note 9).
F-51
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
20.     DIVIDEND DISCLOSURE
Details of dividends which were declared for the years ended
December 31, 2003, 2004 and 2005 are as follows (in
millions of Korean won except for share data):
Fiscal
Number of
Face
Dividend
Year
Dividend Type
Shares Outstanding
Value
Ratio
Dividends
2003
Cash dividends
73,614,308
W
500
1,100%
W
404,878
2004
Cash dividends (interim)
73,614,308
W
500
200%
W
73,614
Cash dividends (year-end)
73,614,296
W
500
1,860%
W
684,613
Total
W
758,227
2005
Cash dividends (interim)
73,614,296
W
500
200%
W
73,614
Cash dividends (year-end)
73,614,296
W
500
1,600%
W
588,915
Total
W
662,529
Dividends payout ratios for the years ended December 31,
2003, 2004 and 2005 are as follows (in millions of Korean won
and %):
2003
2004
2005
Dividends
W
404,878
W
758,227
W
662,529
Net income
1,966,100
1,491,479
1,872,978
Dividends payout ratio
20.59
%
50.84
%
35.37
%
Dividends yield ratios for the years ended December 31,
2003, 2004 and 2005 are as follows (in Korean won and %):
2003
2004
2005
Dividend per share
W
5,500
W
10,300
W
9,000
Stock price at the year-end
199,000
197,000
181,000
Dividends yield ratio
2.76
%
5.23
%
4.97
%
21.     RESTRICTED DEPOSITS
a. At December 31, 2005, the Company and its
subsidiaries have guarantee deposits restricted for their
checking accounts totaling
W
43 million,
and deposits totaling
W
10,000 million from
which the interest incurred is restricted for use for the
interest of the public until August 10, 2006 (due date).
b. The Company entered into a contract to sell the
investment in common stock of KPMS Corporation, which was
held by the Company and accounted for as available-for-sale
securities, with First Data Corporation. Some portion of
proceeds from sales of such investment totaling
W
1,137 million is kept in escrow accounts
in accordance with the Escrow Agreement, which is restricted for
use until November 16, 2007 (final settlement date) and
recorded as long-term bank deposits.
22.     COMMITMENTS AND
CONTINGENCIES
a. The Company and its subsidiaries have credit lines with
several local banks that provide for borrowings of up to
W
323,000 million. At December 31,
2005, the borrowings under these credit lines were nill and the
net availability under these credit lines was
W
323,000 million. In addition, Seoul
Records, Inc., a subsidiary of the Company, has credit lines
with Kiup Bank related to opening the letter of credit up to
US$750,000.
F-52
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
b. At December 31, 2005, certain short-term financial
instruments amounting to
W
7,384 million
are secured for payment guarantee of short-term borrowing,
accounts payable and other.
c. PAXNet Co., Ltd., a subsidiary of the Company, has
guaranteed the repayment of borrowings for Finger Co., Ltd.,
which is a related company. The outstanding balance of such
guarantees as of December 31, 2005 approximated
W
332 million.
d. Seoul Records, Inc., a subsidiary of the Company, has
provided Kiup Bank with its lands, buildings and machineries of
which the carrying amount at December 31, 2005 is totaling
W
4,118 million as a collateral for its
foreign currency long-term borrowings. In addition, Seoul
Record, Inc. has provided Universal Music Ltd. with a note
amounting to
W
292 million as a collateral
for its leasehold key money received from Universal Music Ltd.
e. SK Communications Co., Ltd., which is the Company's
subsidiary, had entered into a license agreement with Lycos
Intangibles, LLC to use technology and pay royalties related to
the Lycos License and TRIPOD for two years from August 14,
2002. In accordance with this agreement, SK Communications Co.,
Ltd. paid US$2,313,098 in royalty fees for the years ended
December 31, 2003 and 2004, respectively. The license
agreement expired on August 13, 2004. SK Communications
Co., Ltd. entered into a new
e-mail
service and
license agreement with Lycos Intangible, LLC to pay royalties
totaling US$700,000 for two years from August 14, 2004 for
the exclusive right to offer
e-mail
services to
existing
e-mail
users
who have Lycos
e-mail
accounts in the Republic of Korea. In accordance with this new
agreement, SK Communications Corp. paid US$400,000 in advance on
August 14, 2004 and the rest of royalties of US$300,000 is
recorded as accounts payable as of December 31, 2005.
f. On October 18, 2002 and November 15, 2002, GNI
Enterprise Inc. filed lawsuits against SK Communications Co.,
Ltd., which is the Company's subsidiary. In the lawsuit
filed on October 18, 2002, GNI Enterprise Inc. asserted
that the contract for usage of Lycos brand between GNI
Enterprise Inc. and SK Communications Co., Ltd. was effective. A
judgment in the first trial and the second trial was made in
favor of SK Communications Co., Ltd.; however, GNI Enterprise
Inc. appealed the judgment and the appeal is in process. In
addition, Synnara Music Co., Ltd. and others filed a lawsuit
against Seoul Records, Inc., a subsidiary of the Company, to
claim damages totaling
W
760 million. A
judgement is in process. The ultimate outcome of the above
lawsuit cannot presently be determined. SK Communications Co.,
Ltd. and Seoul Records, Inc. believe that any liability that may
be subject to thereunder will not be material.
g. Under the Service Agreement dated on November 17,
2005 between SK Telecom International Inc. ("SKTI"), a
subsidiary of the Company, and HELIO, LLC ("HELIO"),
of which SK Telecom USA Holdings, Inc., a subsidiary of the
Company, has 50% ownership interest, SKTI has been retained to
provide a minimum of level of qualified employees (each, an
"Employee" and collectively, the
"Employees"), and for the first four years of this
Agreement, if any Employee's employment with HELIO ceases
or is terminated for any reason, then, upon HELIO'S written
request, SKTI is obligated to replace the employee of like-level
and experience at no cost to, and full discretion of, HELIO. In
consideration of such services, HELIO granted the time-based
warrant to purchase up to 1,995,000 shares of HELIO'S
stock at a vesting rate of 25% per year over next four
years, at a purchase price of $1.71 per share and the
performance-based warrant to purchase up to
1,800,000 shares at a purchase price of $1.71 per
share, which are earned upon HELIO reaching certain scheduled
performance milestones, to SKTI.
h. SLD Telecom, a subsidiary of the Company, entered into a
business cooperation contract with Saigon Post &
Telecommunication Services Corporation to establish cellular
mobile communication services and provide CDMA service
throughout Vietnam. In accordance with this contract, in the
event that the cash inflow for the business is insufficient to
cover the cash outflow necessary to cover the joint expenditure
of the business ("cash shortfall"), SLD Telecom and
Saigon Post & Telecommunication Services Corporation
will contribute the necessary funds to the business and bear
additional cash shortfalls according to their gross profit
sharing ratios at
F-53
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
the time. With respect to the Company's involvement in the
business, the maximum exposure to loss was approximately Won
54.6 billion as of December 31, 2005.
23.     INSURANCE
At December 31, 2005, certain of the Company and its
subsidiaries' assets are insured with local insurance
companies as follows (in million of Korean won and thousands of
U.S. dollars):
Asset
Risk
Book Value
Coverage
Inventories and property and
US$68,000
equipment
Fire and comprehensive liability
W
3,754,241
W
7,395,950
24.     TRANSACTIONS WITH AFFILIATED
COMPANIES
Significant related party transactions and balances with
affiliated companies as of and for the years ended
December 31, 2003, 2004 and 2005 were as follows (in
millions of Korean won):
Description
2003
2004
2005
Transactions
SK Engineering & Construction Co., Ltd.:
Construction (note a)
324,260
419,871
257,823
Commissions paid and other expense
7,662
6,148
6,593
Commission income and other income
776
1,348
2,580
SK Networks (formerly known as SK Global):
Purchases of property and equipment
3,853
3,144
7,220
Purchases of inventory
—
—
2,800
Commissions paid, leased line and other expense
214,101
411,053
432,967
Sales of handsets and other income
491,978
1,177,249
279,197
SK Corporation:
Purchases of property and equipment
3,831
4,071
1,302
Commissions paid and other expense
35,612
55,921
48,266
Commission income and other income
5,370
8,826
9,243
SK Telesys:
Purchases of property and equipment
188,111
188,822
294,829
Commissions paid and other expenses
1,717
3,102
7,410
Commission income and other income
385
879
575
SKC:
Purchases of inventories
204,694
899,260
219,767
Disposal of inventories and other
18
—
—
Commissions paid and other expenses
3,120
2,192
13,316
Commission income and other income
747
584
32
Innoace:
Purchases of property and equipment
35,225
23,776
13,652
Commissions paid and other expenses
314
4,337
2,109
Commission income and other income
8,969
296
218
F-54
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Description
2003
2004
2005
WiderThan Co., Ltd.:
Purchases of property and equipment
22,643
3,780
13,248
Commissions paid and other expenses
49,939
82,380
98,211
Commission income and other income
665
2,216
2,277
SK C&C Co., Ltd.:
Purchases of property and equipment
182,774
130,243
249,633
Commissions paid and other expenses (note b)
284,319
295,562
322,856
Commission income and other income
8,200
7,918
7,853
Balances
SK Engineering & Construction Co., Ltd.:
Accounts receivable
92
76
97
Accounts payable
63,442
135,213
21,326
Guarantee deposits received
90
408
942
SK Networks (formerly known as SK Global):
Accounts receivable
107,782
216,412
1,787
Guarantee deposits
113
113
113
Accounts payable
63,641
20,047
22,237
Guarantee deposits received
719
955
2,700
SK Corporation:
Accounts receivable
1,571
4,843
1,643
Guarantee deposits (note c)
103,720
103,720
37,703
Accounts payable
2,911
20,165
6,914
Guarantee deposits received
10,194
10,194
6,174
SK Telesys:
Accounts receivable
50
53
3
Accounts payable
33,904
51,954
65,819
SKC:
Accounts receivable
53,680
15,549
—
Guarantee deposits
—
10,266
—
Accounts payable
93,383
115,839
—
Innoace:
Accounts payable
25,640
15,199
6,100
Guarantee deposits received
1,069
2,138
2,138
Widerthan Co., Ltd.:
Accounts receivable
30
102
61
Accounts payable
9,762
9,847
17,398
SK C&C Co., Ltd.:
Accounts receivable
245
480
91
Accounts payable
72,715
77,871
174,884
Guarantee deposits received
346
346
346
F-55
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(note a)
The Company is a party to several contracts with SK Engineering
    and Construction Co., Ltd. related to the construction of its
    new corporate headquarters in Ulchiro 2-ga, Chongro-gu, Seoul.
    Construction of its new headquarters was completed at the end of
    2004. The total payment to SK Engineering &
    Construction Co., Ltd. for the demolition of existing buildings
    on the site and construction of the new building was
W
209 billion.
(note b)
The Company and certain subsidiaries are party to an agreement
    with SK C&C Co., Ltd., pursuant to which SK C&C Co.,
    Ltd. provides them with information technology services, dated
    as of December 28, 1998 and amended as of November 1,
    1999. This agreement will expire on December 31, 2009, but
    may be terminated by the Company and certain subsidiaries
    without cause on a six months notice. The agreement provides
    that the parties will agree annually on the specific services to
    be provided and the monthly fees to be paid by the Company and
    certain subsidiaries. The Company and certain subsidiaries also
    enter into agreements with SK C&C Co., Ltd. from time
    to time for specific information technology-related projects.
(note c)
On December 19, 2000, the Company entered into an agreement
    with SK Corporation for the sale and leaseback of the
    Company's head office with the lease period from
    December 19, 2000 to March 31, 2004. Under the lease
    agreement, in January 2001 the Company deposited refundable
    leasehold key money of
W
80,113 million
    and, as a result there will be no rent payment for the remaining
    lease period. On January 30, 2003, the Company prolonged
    the lease term to February 28, 2005 and deposited
    additional refundable leasehold key money of
W
20,027 million. In addition, in December
    2003, the Company deposited additional refundable leasehold key
    money of
W
3,580 million. When such lease
    agreement was terminated in February 2005, the Company collected
    all leasehold key money of
W
103,720 million. Under another lease
    agreement with SK Corporation, the Company deposited refundable
    leasehold key money of
W
768 million in
    2005. And SK Communications Co., Ltd., a subsidiary of the
    Company, has entered into an agreement with SK Corporation Co.,
    Ltd. for the lease of its head office with the lease period from
    January 13, 2005 to January 31, 2007 and deposited
    refundable leasehold key money of
W
36,935 million. As a result, the
    refundable leasehold key money to SK Corporation as of
    December 31, 2005 totaled
W
37,703 million.
25.     PROVISION FOR MILEAGE
POINTS
The Company, for its marketing purposes, grant certain mileage
points ("Rainbow Points") to its subscribers based on
their usage of the Company's services. Rainbow Points
provision was provided based on the historical usage experience
and the Company's marketing policy. Such provision as of
December 31, 2003, 2004 and 2005 totaled
W
103,679 million,
W
61,596 million and
W
52,172 million, respectively, and was
recorded as accrued expenses.
Details of change in the provisions for such mileage points for
the years ended December 31, 2005 and 2004 are as follows
(in millions of Korean won):
2003
2004
2005
Beginning balance
W
86,139
W
103,679
W
61,596
Present value discount (note a)
—
—
(7,415
)
Increase
32,145
34,283
7,265
Decrease
(14,605
)
(76,366
)
(9,274
)
Ending Balance
W
103,679
W
61,596
W
52,172
(note a)
Effective January 1, 2005, pursuant to adoption of SKAS
    No. 17 (see Note 2(m)), Rainbow Points provision is
    recorded at the present value, which was recorded at nominal
    value through 2004.
F-56
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
26.     DERIVATIVE INSTRUMENTS
The Company has entered into a foreign currency forward contract
and a
fixed-to
-fixed
cross currency swap contract with Citi Bank, BNP Paribas and
Credit Suisse First Boston International to hedge the foreign
currency risk of US dollar denominated bonds with face amounts
totaling US$300,000,000 at annual fixed interest rate of 4.25%
issued on April 1, 2004. The foreign currency forward
contract was settled in 2004 and as of December 31, 2005,
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
W
14,177 million (excluding tax effect
totaling
W
5,377 million and foreign
exchange translation gain arising from US dollar denominated
bonds totaling
W
40,652 million) was
accounted for as a capital adjustment.
In addition, the Company has entered into a
fixed-to
-fixed cross
currency swap contract with Credit Suisse First Boston
International to hedge foreign currency risk of US dollar
denominated convertible bonds with face amounts of
US$329,450,000 issued on May 27, 2004. In connection with
unsettled
fixed-to
-fixed cross
currency swap contract to which the cash flow hedge accounting
is not applied, a loss on valuation of currency swap of
W
15,789 million for the year ended
December 31, 2004 and a gain on valuation of currency swap
of
W
2,545 million for the year ended
December 31, 2005 were charged to current operations. As of
December 31, 2005, fair values of above derivatives
totaling
W
73,450 million are recorded in
long-term liabilities.
Details of derivative instruments as of December 31, 2005
are as follows (in thousands of US dollars and millions of
Korean won):
Fair Value
Designated
Duration of
as Cash
Not
Type
Hedged Item
Face Amount
Contract
Flow Hedge
Designated
Total
Fix-to-fixed cross currency swap
US dollar denominated bonds
US$
300,000
March 23, 2004- April 1, 2011
W
60,206
W
—
W
60,206
Fix-to-fixed cross currency swap
US dollar denominated convertible bond
US$
100,000
May 27, 2004- May 27, 2009
—
13,244
13,244
W
60,206
W
13,244
W
73,450
The above derivative instruments designated as cash flow hedge
mature within 63 months from December 31, 2005 at the
longest; and the expected portion of capital adjustments as of
December 31, 2005, related to loss on valuation of currency
swap, to be recorded in earnings within the next 12 months
amounts to
W
6,146 million.
27.
MERGERS AND ACQUISITIONS
a.
Merger with SK IMT Co., Ltd.
On May 1, 2003, the Company merged with SK IMT Co., Ltd.,
which was a consolidated subsidiary when it merged into the
Company, in accordance with a resolution of the Company's
board of directors on December 20, 2002 and the approval of
shareholders of SK IMT Co., Ltd. on February 21, 2003.
The shareholders of SK IMT Co., Ltd. were entitled to
exercise dissenter's right under Korean law. Shareholders
holding 22,078,770 shares (or 36.8% of SK IMT Co.,
Ltd.'s issued and outstanding shares) exercised such right,
and SK IMT Co., Ltd. repurchased the shares of these
dissenting shareholders at a purchase price of
W
27,400 per share, totaling
W
604,958 million, before the completion of
the merger with the Company. The exchange ratio of common stock
between the Company and SK IMT Co., Ltd. was
0.11276 share of the Company's common stock with a par
value of
W
500 to 1 share of common stock
of SK IMT Co., Ltd. with a par value of
W
5,000.
Using such exchange ratio, the Company distributed
126,276 shares of new issued common stock to minority
shareholders of SK IMT Co., Ltd. and the Company retired all
shares of SK IMT Co., Ltd. owned by the Company and SK IMT
F-57
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Co., Ltd. upon the merger. The excess of acquired net assets
over the par value (
W
63 million) for the
distribution of 126,276 shares of newly issued common stock
to minority shareholders of SK IMT Co., Ltd. upon on the
merger dated May 1, 2003, amounting to
W
31,809 million, was recorded as an
increase in capital surplus in accordance with Korean GAAP.
b.
Merger with Cyworld Co., Ltd.
On August 1, 2003, SK Communications Co., Ltd., the
Company's subsidiary, merged with Cyworld Co., Ltd. in
order to start a personalized website business and strengthen
the competitive power in the internet portal service market, in
accordance with the approval of stockholders of
SK Communications Co., Ltd. dated on June 16, 2003.
The exchange ratio of common stock between
SK Communications Co., Ltd. (par value:
W
500) and Cyworld Co., Ltd. (par value:
W
5,000) was 55.04697 to 1. Using such
exchange ratio, SK Communications Corp. issued
12,770,877 shares of new common stock.
The merger with Cyworld Co., Ltd. was accounted for using the
purchase method of accounting, and generated a goodwill of
W
9,374 million as follows (in millions of
Korean won):
Fair value of net assets merged
W
152
Merger cost
Fair value of common stock issued
W
8,429
Direct costs related to the merger (note)
1,097
9,526
Goodwill
W
9,374
(note)
The direct costs related to the merger are the liquidation
    income tax of
W
1,067 million paid for
    Cyworld Co., Ltd., and service fees of
W
30 million related to the merger.
In addition, SK Communications Co., Ltd. amortizes the
goodwill using the straight-line method over five years, and
goodwill amortization for the years ended December 31,
2003, 2004 and 2005 was
W
781 million,
W
1,875 million and
W
1,875 million, respectively.
The condensed balance sheets of Cyworld Co., Ltd. as of
August 1, 2003 and December 31, 2002 and condensed
statements of operations for the seven months ended
July 31, 2003 and the year ended December 31, 2002 are
as follows (in millions of Korean won):
Aug. 1, 2003
Dec. 31, 2002
(Condensed balance sheets)
Current assets
W
1,200
W
129
Non-current assets
615
1,175
Total assets
W
1,815
W
1,304
Current liabilities
W
1,586
W
850
Long-term liabilities
77
432
Total liabilities
1,663
1,282
Common stock
1,160
1,160
Capital surplus
4,208
4,208
Deficit
(5,216
)
(5,346
)
Total equity
152
22
Total liabilities and stockholders' equity
W
1,815
W
1,304
F-58
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Period from
Jan. 1, 2003 to
Year Ended
Jul. 31, 2003
Dec. 31, 2002
(Condensed statements of operations)
Operating revenue
W
1,930
W
1,823
Operating expenses
(2,244
)
(2,694
)
Operating loss
(314
)
(871
)
Other income
606
37
Other expenses
(163
)
(721
)
Net income (loss)
W
129
W
(1,555
)
c.
Acquisition of Seoul Records, Inc.
In order to produce and distribute music product and secure
larger content pool, the Company acquired a 60% equity interest
in Seoul Record, Inc.'s common stock on August 11,
2005 in accordance with a resolution of the Company's board
of directors dated May 27, 2005.
The acquisition of a 60% equity interest in Seoul Records,
Inc.'s common stock is summarized as follows:
In Millions of
Korean Won
Fair value of net assets acquired
W
23,796
Goodwill
4,078
Acquisition cost
W
27,874
The Company amortizes the goodwill using the straight-line
method over five years, and goodwill amortization for the year
ended December 31, 2005 was
W
408 million.
28.
NETWORK INTERCONNECTION CHARGES
The Company's networks interconnect with the public
switched telephone networks operated by KT Corporation and
hanarotelecom incorporated and, through their networks, with the
international gateways of KT Corporation, DACOM and Onse,
as well as the networks of the other wireless telecommunications
service providers in Korea. These connections enable the
Company's subscribers to make and receive calls from
telephones outside the Company's networks. Under Korean
law, service providers are required to permit other service
providers to interconnect to their networks for purposes of
offering other services. If the new service provider desires
interconnection and the incumbent service provider is unable to
reach an agreement within 90 days, the new service provider
can appeal to the Korean Communications Commission, a government
agency under the MIC.
For the years ended December 31, 2003, 2004 and 2005, such
interconnection revenues amounted to
W
1,017.1 billion,
W
849.4 billion and
W
898.6 billion, respectively, while
aggregate interconnection expenses amounted to
W
771.5 billion,
W
913.7 billion and
W
989.4 billion, respectively.
29.
SUBSTANTIAL CHANGES IN THE BUSINESS ENVIRONMENT AND
    SUBSEQUENT EVENTS
a.
Acquisition of WiBro License
The Company, together with KT Corporation and hanarotelecom
incorporated, acquired a license for WiBro, a portable internet
service which is scheduled to start commercial operations in
June 2006, as a result of the decision of the Committee of
Information and Communication Policy dated January 20,
2005. With regard to this
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SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
service, the Company paid
W
117 billion and
received the WiBro license from the Ministry of Information and
Technology in March 2005, which was recorded as an intangible
asset.
b.
Establishment of HELIO, LLC., a Joint Venture Company in the
    U.S.
In accordance with the resolution of the Company's board of
directors dated January 26, 2005, the Company and
EarthLink, Inc., an internet service provider in the United
States of America, agreed to establish 'HELIO, LLC.',
a joint venture company, in the United States of America in
February 2005 in order to provide wireless telecommunication
service across the United States of America. The Company, via SK
Telecom USA Holdings, Inc., its wholly-owned subsidiary in the
United States of America, will invest US$220 million for a
50% equity interest in the joint venture company from 2005
through 2007. HELIO, LLC. will launch cellular voice and data
services extensively across the United States of America during
the second quarter of 2006 by renting networks from network
operators throughout the United States of America also known as
partial mobile virtual network operator (MVNO) system.
In addition, in order to revitalize the cellular voice and data
services in United States of America, the Company, via SK
Telecom USA Holdings, Inc., its wholly-owned subsidiary in the
United States of America, made an additional investment of
US$39.5 million in an equity interest of HELIO, LLC. on
March 1, 2006.
c.
Acquisition of and Merger with Etoos Group Inc.
In order to improve the competitive power in the domestic
internet service portal and educational service market,
SK Communications Co., Ltd., a Company's subsidiary,
acquired 20.46% equity interest of Etoos Group Inc. during 2005.
In addition, on March 1, 2006, SK Communications Co., Ltd.
merged with Etoos Group Inc. in order to maximize synergy
effects through enhanced management efficiency and strengthened
competitive power in the internet portal and educational service
market, in accordance with the approval of stockholders of
SK Communications Co., Ltd. dated on January 2, 2006
and issued 464,738 shares of new common stock to former
shareholder of Etoos Group Inc.
d.
Additional Acquisition of SLD Telecom PTE Ltd.
On January 27, 2006, the Company acquired 100 million
shares of SLD Telecom PTE Ltd.'s unissued common stock
for US$100 million in order to revitalize the
telecommunication services in Vietnam. As a result, the
Company's ownership increased from 55.1% to 73.3%.
e.
Handset Subsidies to Long-term Mobile Subscribers
Effective March 27, 2006, the Telecommunication Law of
Korea was revised to allow wireless carriers to provide handset
subsidies to customers who have maintained their wireless
account with the same carrier for 18 months or longer. The
Company commenced its handset subsidy program on the effective
date of the revised Telecommunication Law and included a clause
in the service contract which allows the Company to change the
terms of its subsidy program, including the Company's
ability to terminate the program at any time after a thirty day
notice to its customers.
f.
Request for the conversion of the convertible bond and the
    delivery of the treasury stock
At the request of bond holders, US$310,000 and US$2,000,000 of
convertible bonds issued in May, 2004 were converted into 1,672
and 10,788 shares of treasury stock on April 20, 2006
and April 26, 2006, respectively, at the conversion price
of
W
218,098 (standard foreign currency ratio of
W
1,176.50 for US$1 based on the related
indenture).
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SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
g.
Resolution to acquire equity interest in IHQ, Inc.
In accordance with the resolution of the Company's board of
directors dated April 26, 2006, the Company decided to
purchase additional 5,000,000 shares in IHQ, Inc.'s
common stock by exercising stock option at the exercise price of
W
5,740.49 on June 6, 2006 in order to
strengthen the Company's communication service and platform
business. As a result, the Company's ownership in IHQ, Inc.
will increase from 21.6% to 34.9%.
h.
Fine for improper payment of handset subsidies.
On March 6, 2006 and April 18, 2006, the Communication
Commission of the Republic of Korea fined the Company
W
13.8 billion and
W
7.8 billion, respectively, for
improper payment of handset subsidies.
30.
RECONCILIATION TO UNITED STATES GENERALLY ACCEPTED ACCOUNTING
    PRINCIPLES
The consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in
Korea ("Korean GAAP"), which differ in certain
respects from accounting principles generally accepted in the
United States of America ("U.S. GAAP"). The
significant differences are described below. Other differences
do not have a significant effect on either consolidated net
income or shareholders' equity.
a.
Deferred Income Taxes (see Note 2)
Under U.S. GAAP, deferred tax assets and liabilities are
separated into their current and non-current portions based on
the classification of related assets or liability for financial
reporting purposes. Under Korean GAAP, through 2004, deferred
income tax assets and liabilities are presented on the balance
sheet as a single non-current net number. Effective
January 1, 2005, Korean GAAP was revised to classify
deferred income tax assets and liabilities into current and
non-current portion in a similar manner of U.S. GAAP.
In addition, U.S. GAAP does not allow recognition of
deferred tax assets on the difference between the tax bases and
financial statement bases of investments in subsidiaries unless
it is apparent that the difference will reverse in the
foreseeable future which has generally been interpreted to be
one year. Under Korean GAAP, through 2004, there was no such
specific provision for the recognition of deferred income tax
assets on the difference between the tax bases and financial
statement bases of investments in subsidiaries. However,
effective January 1, 2005, the Korean GAAP was revised to
recognize deferred income tax assets only when it is apparent
that the difference will reverse in the foreseeable future in a
similar manner of U.S. GAAP. Such deferred tax assets
totaling
W
27,030 million and
W
30,857 million as of December 31,
2003 and 2004, respectively, had been recognized for Korean GAAP
purposes.
b.
Deferred Charges (see Note 2)
Korean GAAP requires that bond issuance costs be deducted from
proceeds of bonds and certain development costs be recorded as
intangible assets. Under U.S. GAAP, bond issuance costs are
capitalized as deferred assets and amortized over the redemption
period of the related obligation and research and development
costs are charged to expense as incurred.
c.
Leases
Through 1998, leases whose present value of minimum lease
payments exceed 90% of the fair value of the leased equipment
were not capitalized under Korean GAAP, but are capitalized
under U.S. GAAP. Therefore, with respect to lease contracts
entered into prior to January 1, 1999, certain adjustments
for equipment, obligations under capital leases, interest on
capital leases and depreciation are required.
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SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
d.
Marketable Securities and Investments Securities (see
    Note 2)
Through 2002, under Korean GAAP, debt and equity securities were
classified into marketable securities and investment securities.
Effective January 1, 2003, Korean GAAP was revised to
classify investment in securities into three separate
categories; trading securities, available-for-sales securities
and
held-to
-maturity
securities in a similar manner of Statement of Financial
Accounting Standards No. 115 (SFAS No. 115),
"Accounting for Certain Investments in Debt and Equity
Securities", described below. The valuation method for each
category is similar to SFAS No. 115; however, the
accounting treatment for impairment of investment securities and
recoveries under Korean GAAP differ from those under
U.S. GAAP as described in Note 30(e).
Under U.S. GAAP, SFAS No. 115 requires that
equity securities with readily determinable fair values and all
debt securities be classified into three categories and
accounted for as follows:
•
Debt securities that the Company has the positive intent and
    ability to hold to maturity are classified as
held-to
-maturity
    securities and reported at amortized cost.
•
Debt and equity securities that are bought and held principally
    for the purpose of selling them in the near term are classified
    as trading securities and reported at fair value, with
    unrealized gains and losses included in income.
•
Debt and equity securities not classified as either
held-to
-maturity
    securities or trading securities are classified as
    available-for-sale securities and reported at fair value, with
    unrealized gains and losses excluded from income and reported in
    other comprehensive income.
Gross proceeds from the sale of such securities were
W
945,854 million,
W
343,723 million and
W
71,308 million for the years ended
December 31, 2003, 2004 and 2005, respectively. Gross
realized gains for the years ended December 31, 2003, 2004
and 2005 were
W
2,122 million,
W
1,342 million and
W
5,638 million, respectively. Gross
realized losses for the years ended December 31, 2003, 2004
and 2005 were
W
614 million,
W
517 million and
W
37 million, respectively.
Information with respect to trading securities at
December 31, 2003, 2004 and 2005 is as follows (in millions
of Korean won):
Gross
Gross
Cost
Unrealized
Unrealized
(Amortized Cost)
Gains
Losses
Fair Value
At December 31, 2003:
Debt securities
W
895,401
W
—
W
(2,184
)
W
893,217
At December 31, 2004:
Equity securities
W
450
W
—
W
(82
)
W
368
Debt securities
652,372
2,039
—
654,411
Total
W
652,822
W
2,039
W
(82
)
W
654,779
At December 31, 2005:
Equity securities
W
11
W
1
W
—
W
12
Debt securities
777,460
—
—
777,460
Total
W
777,471
W
1
W
—
W
777,472
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SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Information with respect to long-term investment securities
including the current portion affected by SFAS No. 115
at December 31, 2003, 2004 and 2005 is as follows (in
millions of Korean won):
Gross
Gross
Cost (amortized
unrealized
unrealized
Impairment
cost)
gains
losses
losses
Fair value
At December 31, 2003:
Equity securities
W
427,472
W
73,290
W
(6,608
)
W
(55,469
)
W
438,685
Debt securities
64,315
—
—
—
64,315
W
491,787
W
73,290
W
(6,608
)
W
(55,469
)
W
503,000
At December 31, 2004:
Equity securities
W
470,266
W
137,621
W
—
W
(63,902
)
W
543,985
Debt securities
65,957
—
—
(10,655
)
55,302
W
536,223
W
137,621
W
—
W
(74,557
)
W
599,287
At December 31, 2005:
Equity securities
W
465,244
W
173,960
W
(9,768
)
W
(60,838
)
W
568,598
Debt securities
307,490
—
(217
)
(10,885
)
296,388
W
772,734
W
173,960
W
(9,985
)
W
(71,723
)
W
864,986
Gross unrealized losses of
W
6,608 million
and
W
9,985 million at December 31,
2003 and 2005, respectively, for which impairment has not been
recognized, have been in a continuous unrealized loss position
for less than twelve months.
The aggregate carrying amount of the Company's cost method
investments totaled
W
353,168 million at
December 31, 2005. Investments with an aggregate cost of
W
85,994 million were not evaluated for
impairment because (a) the Company did not estimate the
fair value of those investments in accordance with
paragraphs 14 and 15 of Statement 107 and (b) the
Company did not identify any events or changes in circumstances
that may have had a significant adverse effect on the fair value
of those investments. The Company estimated that the fair value
exceeded the cost of investments (that is, the investments were
not impaired) for the remaining
W
267,174 million of cost method
investments.
e.
Impairment of Investment Securities and Recoveries
Under U.S. GAAP, if the decline in fair value is judged to
be other than temporary, the cost basis of the individual
securities is written down to fair value as a new cost basis and
the amount of the write-down is included in current earnings.
Other than temporary impairment is determined based on
evidence-based judgment about a recovery of fair value up to (or
beyond) the cost of investment by considering the severity and
duration of the impairment in relation to the forecasted
recovery of fair value. Under Korean GAAP, if the collectible
value from the securities is less than acquisition costs with
objective evidence of impairment such as bankruptcy of
investees, an impairment loss is recognized. In addition, the
duration of the impairment in relation to the forecasted
recovery of fair value is not considered for Korean GAAP
purposes. Due to such differences, for U.S. GAAP purposes,
losses on impairment of investment securities for the years
ended December 31, 2003, 2004 and 2005 increased by
W
21,716 million,
W
8,434 million and
W
68 million, respectively, when compared
to those under Korean GAAP. And, as certain available-for-sale
securities for which the impairment losses had been recognized
for the years ended December 31, 2002 and 2004 for
U.S. GAAP purposes, but not for Korean GAAP purposes, were
sold in 2003 and 2005, some portion of losses of disposal of
such available-for-sale securities that were recognized for the
years ended December 31, 2003 and 2005 for Korean GAAP
purposes, amounting to
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SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
W
46,443 million and
W
3,133 million in 2003 and 2005,
respectively, were reversed respectively, for U.S. GAAP
purposes.
Under Korean GAAP, the subsequent recoveries of impaired
available-for-sale securities and
held-to
-maturity
securities result in an increase of their carrying amount up to
the original acquisition cost, and the recovery gains are
reported in current operations up to the previously recognized
impairment loss as reversal of loss on impairment of investment
securities. Under U.S. GAAP, the subsequent increase in
carrying amount of the impaired and written down
held-to
-maturity
securities is not allowed. The subsequent increase in fair value
of available-for-sale securities is reported in other
comprehensive income.
f.
Comprehensive Income
Under Korean GAAP, there is no requirement to present
comprehensive income. Under U.S. GAAP, comprehensive income
and its components must be presented in the financial
statements. Comprehensive income includes all changes in
shareholders' equity during a period except those resulting
from investments by, or distributions to, owners, including
certain items not included in the current results of operations.
g.
Business Combinations and Intangible Assets
Effective July 1, 2001, U.S. GAAP requires the use of
the purchase method of accounting for all business combinations.
In addition, for fiscal years beginning after December 31,
2001, goodwill and intangible assets with indefinite useful life
shall not be amortized; however, they are subject to impairment
tests on an annual basis and at any other time if events occur
or circumstances indicate that the carrying amount of goodwill
or other intangible assets may not be recoverable.
Circumstances that could trigger an impairment test include but
are not limited to: a significant adverse changes in the
business climate or legal factors; an adverse action or
assessment by a regulator; unanticipated competition; loss of
key personnel; the likelihood that a significant portion of a
reporting unit will be sold or otherwise disposed; results of
testing for recoverability of a significant asset group within a
reporting unit.
To test impairment of goodwill, the fair value of a reporting
unit which includes goodwill is compared with its carrying
amount of a reporting unit, including goodwill. If the carrying
amount of a reporting unit exceeds its fair value, the carrying
amount of the reporting unit goodwill is compared with the
implied fair value of goodwill. If the carrying amount of the
reporting unit goodwill exceeds the implied fair value of that
goodwill, an impairment loss is recorded in current operations.
The Company believes there is no impairment of goodwill for the
years ended December 31, 2003, 2004 and 2005. The Company
does not have any intangible assets with indefinite lives as of
December 31, 2003, 2004 and 2005. Intangible assets with
finite lives will continue to be amortized over their estimated
useful lives.
Under Korean GAAP, business combinations involving other than
commonly controlled entities are accounted for as either a
purchase or a pooling of interests, depending on the specific
circumstances. However, in the case of the Company, no business
combinations have been accounted for using the pooling of
interest method under Korean GAAP. In a purchase combination,
the difference between the purchase consideration and the fair
value of the net assets acquired is accounted for as goodwill or
as negative goodwill. Goodwill and all other intangible assets
are amortized over its estimated economic life, generally not to
exceed 20 years.
h.
Determination of Acquisition Cost of Equity Interest in
    Subsidiary
Under U.S. GAAP, when a parent company acquires an equity
interest in a subsidiary in exchange for newly issued common
stock of the parent company, the acquisition cost of the equity
interest in a subsidiary is determined at the market price of
the parent company's common stock for a reasonable period
before and after the date the terms of the acquisition are
agreed to and announced. Under Korean GAAP, the acquisition cost
is determined at the closing market price of the parent
company's common stock when the common stock is
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SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
actually issued. In addition, there are certain other
differences in the methods of allocating cost to assets
acquired. Due to such differences, for U.S. GAAP purposes,
the shareholders' equity as of December 31, 2003, 2004
and 2005 increased by
W
64,052 million,
W
44,455 million and
W
28,358 million, respectively, when
compared to those under Korean GAAP.
i.
Additional Equity Investment in Subsidiaries
Under Korean GAAP, when additional interest is acquired
after acquiring a majority interest in a subsidiary, the
differences between the Company's acquisition cost of the
additional interest and the corresponding carrying amount of the
acquired additional interest in a subsidiary is presented as an
adjustment to capital surplus. Under U.S. GAAP, the cost of
an additional interest would be allocated based on the fair
value of net assets at the time the additional interest is
acquired, with the excess allocated to goodwill. Due to such
differences, for U.S. GAAP purposes, the shareholders'
equity as of December 31, 2003, 2004 and 2005 increased by
W
955,865 million,
W
965,102 million and
W
965,351 million, respectively, when
compared to those under Korean GAAP.
j.
Capitalization of Foreign Exchange Losses (or Gains) and
    Interest Expenses
Through 2002, under Korean GAAP, interest expenses and foreign
exchange losses (or foreign exchange gains) incurred on
debt used to finance the construction of property, plant and
equipment were capitalized (or offset against property
additions). Effective January 1, 2003, Korean GAAP was
revised to allow a company to charge reflect such interest
expense and foreign exchange losses (or foreign exchange
gains) to current operations. For Korean GAAP purposes, the
Company adopted the accounting policy not to capitalize such
financing costs prospectively. Under U.S. GAAP, interest
expenses incurred on debt used to finance the construction of
property, plant and equipment are capitalized, while related
foreign exchange losses (or gains) are charged to current
operations as incurred.
Through 2002, under Korean GAAP, interest expense incurred
on debt used to finance the purchase of intangible assets was
capitalized until the asset was put in use. For U.S. GAAP
purposes, the Company charges such interest to current
operations as incurred. Effective January 1, 2003,
Korean GAAP was revised to allow a company to charge such
interest expense to current operations as incurred. For
Korean GAAP purposes, the Company adopted the accounting
policy not to capitalize such interest expense. And this
accounting change has been applied prospectively.
k.
Nonrefundable Activation Fees
For U.S. GAAP purposes, the Company defers nonrefundable
activation revenues and costs and amortizes them over the
expected term of the customer relationship, which ranges from
52 months to 89 months.
Under Korean GAAP, there is no specific provision for the
recognition of such activation fees and the Company recognizes
these revenues and costs when the activation service is
performed.
l.
Gain or Loss on Disposal of Subsidiary's Stock
Under Korean GAAP, gains or losses on disposal of investments in
common stock of subsidiaries are not recognized in the
consolidated income statements but included in capital surplus,
until such subsidiary has been excluded as a
majority-owned
subsidiary. Under U.S.GAAP, such gains or losses on disposal of
the investments in common stock of subsidiary are recognized in
the income statement at the time of disposal of such investments.
m.
Employee Stock Option Compensation Plan
For Korean and U.S. GAAP purposes, the Company charges to
expense the value of stock options granted. Korean GAAP permits
all entities to exclude the volatility factor in estimating the
value of their stock options
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SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
granted prior to December 31, 2003, which results in
measurement at minimum value. Under U.S. GAAP, public
entities are not permitted to exclude the volatility factor in
estimating the value of their stock options. We accounted for
employee stock option compensation under FAS 123 for U.S. GAAP
purposes.
The weighted average fair value of options granted in 2000, 2001
and 2002 was
W
210,000 per share,
W
120,070 per share and
W
48,724 per share, respectively.
n.
Loans Receivable for Stock Issued to Employee
U.S. GAAP requires that notes received for capital stock be
reported as a reduction of stockholder's' equity,
while Korean GAAP allows for recording such receivables as an
asset.
o.
Discount on Leasehold Deposits
Under U.S. GAAP, when cash and other rights are exchanged
for notes, notes (receivables or payables that represent
contractual rights to receive money or contractual obligations
to pay money on fixed or determinable dates, whether or not
there is a stated provision for interest) should be stated at
their present value and the difference between the face amount
and the present value should be deducted from or added to the
face amount of the note as a discount or premium and amortized
over the term using effective interest method. Thus, leasehold
key money deposits are stated at their present value. Under
Korean GAAP, the leasehold key money deposits are stated at
their face amounts.
p.
Asset Securitization Transactions
Under U.S. GAAP, a transfer of financial assets in an asset
securitization is accounted for as a sale only if all three of
the following conditions are met;
•
The transferred assets have been isolated from the transferor
    and put beyond the reach of the transferor, or any consolidated
    affiliated of the transferor, and their creditors even in the
    event of bankruptcy or receivership of the transferor or any
    consolidated affiliate.
•
The transferee is a qualifying special-purpose entity
    ("QSPE") and each holder of its beneficial interests
    (including both debt and equity securities) has the right to
    pledge, or the right to exchange its interests. If the issuing
    vehicle is not a QSPE, then sale accounting is only permitted if
    the issuing vehicle itself has the right to pledge or the right
    to exchange the transferred assets.
•
The transferor does not effectively maintain control over the
    transferred assets either through;
(a) an agreement that calls for the transferor to
    repurchase the transferred assets (or to buy back securities of
    a QSPE held by third-party investors) before their
    maturity or
(b) the ability to unilaterally cause the SPE or QSPE to
    return specific assets; other than through a cleanup call.
In addition, under U.S. GAAP, unless a transferee is a
QSPE, a transferee with nominal capital investment and credit
enhancement provided by transferor is generally consolidated
into the transferor.
However, under Korea GAAP, when a transfer of financial assets
in an asset securitization is conducted in accordance with the
Korean Asset Securitization Act, such transfer is generally
accounted for as a sale of financial assets and the
securitization vehicle is generally not consolidated into the
transferor.
q.
Considerations for Conversion Right
Under Korean GAAP, the proceeds from issuance of convertible
bonds are allocated between the conversion rights and the debt
issued; the portion allocable to the conversion rights is
accounted for as capital surplus, with
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SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
corresponding conversion right adjustment being deducted from
related bonds. Such conversion right adjustment is amortized
into interest expenses over the period of convertible bonds.
Under U.S. GAAP, convertible bonds are analyzed to evaluate
whether conversion option are bifurcated and valued. If an
embedded conversion option in convertible bond is net cash
settled upon the occurrence of an event which is outside of an
entity's control, it generally requires bifurcation under
US GAAP. Moreover, the change of the fair value of such embedded
conversion option is included in current earnings. The fair
value of embedded conversion option which is related US dollar
denominated convertible bonds with face amounts of
US$329,450,000 issued on May 27, 2004 and requires
bifurcation under U.S. GAAP, at December 31, 2004 and
2005 is
W
66,835 million and
W
52,685 million, respectively.
r.
Currency Swap
Under Korean GAAP, when all critical terms of the hedging
instrument and the hedged item are the same, a hedging
relationship is considered to be highly effective without
formally assessing hedge effectiveness. Under US GAAP, unless
conditions to qualify for the shortcut method as described in
SFAS No. 133, "Accounting for Derivative
instruments and Hedging Activities", as amended, are met, a
formal hedge effectiveness should be assessed to qualify for a
hedge accounting at inception of the hedge. The Company's
cross currency swap, which qualified as a cash flow hedge under
Korean GAAP, did not qualify for the shortcut method under US
GAAP and was recorded as non-hedge.
s.
Foreign Currency Translation
Under U.S. GAAP, monetary assets and liabilities
denominated in foreign currencies are translated at the actual
prevailing rates of exchange on the balance sheet dates.
However, as described in Note 2(v), monetary assets and
liabilities of the Company and its subsidiaries denominated in
foreign currency are translated at the Base Rates announced by
Seoul Money Brokerage Services, Ltd. on the balance sheet dates,
as allowed under Korean GAAP. Accordingly, the resulting
differences in the calculated foreign currency translation gain
and loss amounts are considered as a U.S. GAAP adjustment.
t.
Sale of Stock by Equity Method Investee
Through 2004, under Korean GAAP, when the Company's equity
interests in the equity method investees were diluted as a
result of the equity method investees' direct sales of
their unissued shares to third parties, the changes in the
Company's proportionate equity of investees was accounted
for as capital transactions. Effective January 1, 2005,
Korean GAAPP was revised to account for such transactions as
income statement treatment. Under U.S. GAAP, such
transaction can be accounted for either as income statement
treatments or as capital transactions. For U.S. GAAP
purpose, the Company adopted the accounting policy to account
for such transaction as capital transactions.
u.
Subscription Payable
Under Korean GAAP, when the Company subscribes new capital
stocks, it is not allowed to record any unpaid subscription as
investment in equity of investee until cash is contributed to
the investee, without exception. Under U.S. GAAP, if the
cash is contributed subsequent to the balance sheet date, but
prior to the issuance of the financial statements, it is
appropriate to classify it as investments and a subscription
payable, respectively. SK Telecom USA Holdings, Inc.,
a subsidiary of the Company, paid the related cash contribution
to HELIO, LLC on March 1, 2006. Due to such differences,
for U.S. GAAP purposes, the total assets and total
liabilities as of December 31, 2005 increased by
W
40,014 million, respectively, when
compared to those under Korean GAAP. However, such differences
do not have an effect on either consolidated net income or
shareholders' equity.
F-67
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
v.
Equity Instrument to Be Received in Conjunction with
    Providing Services
For the Korean GAAP purpose, the Company measures the fair value
of equity investments (such as stock warrants) to be received in
conjunction with providing services in the future at the date of
the agreement or the grant date. Such equity instruments are
recorded as assets and liabilities at fair value to present the
equity instruments received and the related obligations to
provide services. In addition, the fair value of such equity
investments is remeasured at each year-end and related service
income is recognized over the service period based on the
revised fair value of the equity investments. Under
U.S. GAAP, the service income recognition method is similar
to Korean GAAP; however when the equity instruments do not
include a disincentive for nonperformance that is sufficiently
large to make performance probable, such equity instruments are
not measured nor recorded as assets and liabilities until the
date when the performance necessary to earn the equity
instruments is complete. Due to such differences, the total
assets and liabilities under the U.S. GAAP as of
December 31, 2005 decreased by
W
2,055 million, when compared to those
under the Korean GAAP. However, such differences do not have an
effect on either consolidated net income or shareholder's
equity.
w.
Consolidation of Variable Interest Entities
Under U.S. GAAP, if a business enterprise has a controlling
financial interest in a variable interest entity, which is
defined by FASB Interpretation No. 46 Revised
("FIN 46R"), the assets, liabilities and results
of the activities of the variable interest entity should be
included in the consolidated financial statements with those of
the business enterprise. Under the Korean GAAP, there is no
specific provision for the accounting treatment of variable
interest entities.
As a result of such difference, CDMA Mobile Phone Center (which
is a joint-venture with 50% owned by SLD Telecom PTE Ltd., a
subsidiary of the Company, and recorded as equity method
investment under Korean GAAP) was included in the consolidated
financial statements for the year ended December 31, 2005
under U.S. GAAP. CDMA Mobile Phone Center is a wireless
telecommunications service provider in Vietnam.
x.
Remeasurement of Stock Option
Under the Korean GAAP, the remeasurement of stock option is
required when the related stock becomes publicly listed. Under
the U.S. GAAP, such remeasurement is not allowed. In 2005,
a certain equity method investee of the Company became publicly
listed and the value of related outstanding stock options
granted to its employees was remeasured for Korean GAAP purposes.
y.
Presentation of Minority Interest as a Component of
    Shareholders' Equity
Korean GAAP requires the classification of minority interest in
equity of consolidated subsidiaries as a component of
shareholders' equity. Under U.S. GAAP, minority
interest in equity of consolidated subsidiaries is presented
separately from shareholders' equity.
z.
Consolidated Subsidiary
Under Korean GAAP, as explained in Note 2(b) to the
consolidated financial statements, investments in subsidiaries
and substantially controlled entities are consolidated, except
for companies with total assets as of the prior year end of less
than
W
7 billion. Generally,
substantial control is deemed to exist when the investor is the
largest shareholder and owns more than 30 percent of total
outstanding voting stock. However, U.S. GAAP generally
requires that all majority-owned subsidiaries be consolidated
and that any entity of which the Company owns twenty to fifty
percent of total outstanding voting stock not be consolidated;
rather that entity should be accounted for under the equity
method. The Company's consolidated financial statements did
not reflect an adjustment in the U.S. GAAP reconciliation
for this difference in accounting as the impact is immaterial.
F-68
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following reconciles net income for the years ended
December 31, 2003, 2004 and 2005 and shareholders'
equity as of December 31, 2003, 2004 and 2005 under Korean
GAAP as reported in the consolidated financial statements to the
net income and shareholders' equity amounts determined
under U.S. GAAP, giving effect to adjustments for the
differences listed above (in millions of Won, except for per
share amounts):
Year Ended December 31,
2003
2004
2005
Net income based on Korean GAAP
W
1,966,100
W
1,491,479
W
1,872,978
Adjustments:
Deferred income tax adjustments due to difference in accounting
    principles
(7,342
)
(3,827
)
30,857
Tax effect of the reconciling items
(15,036
)
22,515
(4,717
)
Deferred charges
2,660
(60
)
(2,037
)
Capital leases
(906
)
1,534
(925
)
Intangible assets
(22,303
)
(18,546
)
(16,046
)
Reversal of amortization of goodwill
135,557
136,694
137,389
Capitalization of foreign exchange losses and interest expenses
    related to tangible assets
21,617
24,454
3,231
Capitalization of interest expenses related to purchases of
    intangible assets
427
5,285
5,272
Nonrefundable activation fees
(46,962
)
(36,048
)
(34,681
)
Loss (gain) on disposal of subsidiary shares
58
—
—
Stock option compensation plan
(3,114
)
(1,938
)
49
Loss on sale of accounts receivable and other in asset
    securitization
7,437
(14,476
)
—
Loss on impairment of investment securities
24,727
(8,434
)
3,065
Loss on valuation of currency swap
—
(49,452
)
29,898
Discount on leasehold deposits
(286
)
422
230
Considerations for conversion right
—
1,016
14,044
Foreign currency translation
—
2,458
(2,458
)
Recovery of impaired investment securities
115
—
—
Sales of stock by the equity method investee
—
—
(8,637
)
Consolidation of variable interest entity
—
—
38
Net income based on U.S. GAAP
W
2,062,749
W
1,553,076
W
2,027,550
Weighted average number of common shares outstanding
75,078,219
73,614,297
73,614,296
Earnings per share based on U.S. GAAP:
Basic earnings per share
W
27,475
W
21,097
W
27,543
Diluted earnings per share
W
27,475
W
20,918
W
27,089
F-69
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December 31,
2003
2004
2005
Shareholders' equity based on Korean GAAP Adjustments:
W
6,093,847
W
7,205,744
W
8,327,540
Deferred income tax adjustments due to difference In accounting
    principles
(45,317
)
(70,067
)
—
Tax effect of the reconciling items
136,517
159,032
101,130
Deferred charges
60
—
(2,037
)
Capital leases
239
1,773
847
Intangible assets
1,019,951
1,009,591
993,547
Reversal of amortization of goodwill
273,598
410,292
547,681
Capitalization of foreign exchange losses and interest expenses
    related to tangible assets
19,842
44,294
47,522
Capitalization of interest expenses related to purchase of
    intangible assets
(68,945
)
(63,660
)
(58,388
)
Nonrefundable activation fees
(239,174
)
(275,222
)
(309,903
)
Loans receivable for stock issued to employees' investor
    association
(33,788
)
(22,546
)
(14,586
)
Minority interest in equity of consolidated affiliates
(155,985
)
(98,198
)
(108,927
)
Loss on sale of accounts receivable and other in asset
    securitization
14,476
—
—
Discount on leasehold deposits
(653
)
(231
)
—
Considerations for conversion right
—
(66,263
)
(52,220
)
Foreign currency translation
—
2,458
—
Consolidation of variable interest entity
—
—
228
Shareholders' equity based on U.S. GAAP
W
7,014,668
W
8,236,997
W
9,472,434
F-70
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Changes in shareholders' equity based on U.S. GAAP for
the years ended December 31, 2003, 2004 and 2005 are as
follows (in millions of Korean won):
Year Ended December 31,
2003
2004
2005
Balance, beginning of the year
W
6,356,176
W
7,014,668
W
8,236,997
Net income for the year
2,062,749
1,553,076
2,027,550
Dividends
(151,739
)
(478,492
)
(758,227
)
Issuance of common stock
31,053
—
—
Unrealized gains on valuation of securities, net of tax
50,033
55,156
23,042
Equity in capital surplus, retained earnings and capital
    adjustments of affiliates (note a)
50,166
89,448
(63,370
)
Retirement of treasury stock
(20,598
)
—
—
Treasury stock transactions
(1,379,337
)
(2
)
—
Foreign-based operations' translation adjustments
(356
)
(11,128
)
(1,792
)
Stock compensation plan
4,403
3,030
274
Decrease in loans receivable for stock issued to employees'
    investor association
12,118
11,241
7,960
Balance, end of the year
W
7,014,668
W
8,236,997
W
9,472,434
(note a)
This line item consists of the adjustments to the carrying
    amount of equity method investments based on the Company's
    proportionate pickup in affiliates using the equity method of
    accounting, which are directly adjusted to stockholders'
    equity of affiliates, such as unrealized gains or losses on
    valuation of available-for-sale securities, foreign-based
    operations' translation adjustments in affiliates and stock
    transactions by affiliates.
F-71
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
A reconciliation of the significant balance sheet accounts
except for the above listed shareholders' equity items to
the amounts determined under U.S. GAAP as of
December 31, 2003, 2004 and 2005 is as follows
(in millions of Korean won):
December 31,
2003
2004
2005
Current assets:
As reported
W
4,069,525
W
4,390,693
W
4,598,580
U.S. GAAP adjustments:
— loans receivable for stock issued to employees investor
    association
—
(4,123
)
(3,249
)
— deferred tax adjustments due to difference in accounting
    principles
73,500
51,344
—
— tax effect of the reconciling items
(8,297
)
25,234
31,381
— discount on leasehold deposits
5,777
1,119
—
— asset securitization transactions
478,298
—
—
— consolidation of variable interest entity
—
—
(4,889
)
Current assets based on U.S. GAAP
4,618,823
4,464,267
4,621,823
Non-current assets:
As reported
9,748,692
9,892,665
10,106,192
U.S. GAAP adjustments:
— loans receivable for stock issued to employees'
    investor association
(33,788
)
(18,423
)
(11,337
)
— intangible assets
1,015,801
1,004,774
988,729
— reverse of amortization of goodwill
273,598
410,292
547,681
— discount on leasehold deposits
(6,430
)
(1,349
)
—
— recovery of impaired investment securities
34
34
34
— nonrefundable activation fees
9,129
9,129
8,571
— capital lease
3,301
1,773
847
— capitalization of foreign exchange losses and interest
    expense related to tangible assets
19,842
44,294
47,522
— capitalization of interest expenses related to purchase
    of intangible assets
(68,945
)
(63,660
)
(58,388
)
— deferred charges
6,154
12,969
7,933
— subscription payable
—
—
40,014
— equity instrument to be received in conjunction with
    providing services
—
—
(2,055
)
— consolidation of variable interest entity
—
—
53,626
Non-current assets based on U.S. GAAP
10,967,388
11,292,498
11,729,369
Total assets based on U.S. GAAP
W
15,586,211
W
15,756,765
W
16,351,192
F-72
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
December, 31
2003
2004
2005
Current liabilities:
As reported
W
4,530,910
W
3,066,893
W
2,863,373
U.S. GAAP adjustments:
— deferred charges
31
—
—
— nonrefundable activation fees
68,665
86,082
114,111
— asset securitization transactions
463,822
—
—
— acquisition cost of equity interest in subsidiary
886
—
—
— foreign currency translation
—
(26
)
—
— subscription payable
—
—
40,014
— equity instrument to be received in conjunction with
    providing services
—
—
(525
)
— consolidation of variable interest entity
—
—
17,671
Current liabilities based on U.S. GAAP
5,064,314
3,152,949
3,034,644
Long-term liabilities:
As reported
3,193,460
4,010,721
3,513,859
U.S. GAAP adjustments:
— deferred charges
5,844
12,969
9,970
— nonrefundable activation fees
179,638
198,269
204,363
— capital leases
3,062
—
—
— deferred tax adjustments due to difference in accounting
    principles
118,837
123,911
—
— tax effect of the reconciling items
(149,597
)
(141,080
)
(74,532
)
— considerations for conversion right
—
66,263
52,220
— foreign currency translation
—
(2,432
)
—
— equity instrument to be received in conjunction with
    providing services
—
—
(1,530
)
— consolidation of variable interest entity
—
—
631
Long-term liabilities based on U.S. GAAP
3,351,244
4,268,621
3,704,981
Total liabilities based on U.S. GAAP
W
8,415,558
W
7,421,570
W
6,739,625
Minority interests:
As reported
W
155,985
W
98,198
W
108,927
U.S. GAAP adjustments:
— consolidation of variable interest entity
—
—
30,206
Total minority interests based on U.S. GAAP
W
155,985
W
98,198
W
139,133
F-73
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following table reconciles cash flows from operating,
investing and financing activities for the years ended
December 31, 2003, 2004 and 2005 and cash and cash
equivalents at December 31, 2003, 2004 and 2005 under
Korean GAAP, as reported in the consolidated financial
statements to cash flows from operating, investing and financing
activities for the years ended December 31, 2003, 2004 and
2005 and cash and cash equivalents at December 31, 2003,
2004 and 2005 under U.S. GAAP (in millions of Korean won):
2003
2004
2005
Cash flows from operating activities based on Korean GAAP
W
3,329,391
W
2,516,807
W
3,404,105
Adjustments:
Asset securitization transactions
(47,496
)
469,883
—
Trading security cash flows
(137,618
)
240,204
(122,710
)
Consolidation of variable interest entity
—
—
12,444
Cash flows from operating activities based on US GAAP
W
3,144,277
W
3,226,894
W
3,293,839
Cash flows from investing activities based on Korean GAAP
W
(1,415,053
)
W
(1,470,292
)
W
(1,938,187
)
Adjustments:
Asset securitization transactions
(8,080
)
76,347
—
Trading security cash flows
137,618
(240,204
)
122,710
Consolidation of variable interest entity
—
—
(1,004
)
Cash flows from investing activities based on US GAAP
W
(1,285,515
)
W
(1,634,149
)
W
(1,816,481
)
Cash flows from financing activities based on Korean GAAP
W
(2,261,039
)
W
(968,570
)
W
(1,429,038
)
Adjustments:
Asset securitization transactions
55,576
(546,230
)
—
Consolidation of variable interest entity
—
—
(10,243
)
Cash flows from financing activities based on US GAAP
W
(2,205,463
)
W
(1,514,800
)
W
(1,439,281
)
Cash and cash equivalents at end of the year based on Korean GAAP
W
317,488
W
370,630
W
378,426
Adjustments:
Consolidation of variable interest entity
—
—
1,197
Cash and cash equivalents at end of the year based on US GAAP
W
317,488
W
370,630
W
379,623
Subsequent to the issuance of our consolidated financial
statements for the years ended December 31, 2003 and 2004,
we determined that a) the cash inflows related to dividends
considered to be returns on investments were incorrectly
classified as cash flows from investing activities as opposed to
cash flows from operating activities and b) cash flows
related to trading securities were incorrectly classified as
cash flows from investing activities as opposed to cash flows
from operating activities in our statement of cash flows. As a
result, US GAAP reconciliation of consolidated statements
of cash flows for the years ended December 31, 2003 and
2004 has been revised from amounts previously reported.
F-74
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following shows the effect of the revisions to the cash flow
reconciliation table for the years ended December 31, 2003
and 2004 (in millions of Korea won):
2003
2004
Cash flows from operating activities based on US GAAP, as
    previously reported
W
3,281,274
W
2,985,935
Revision related to returns on equity securities-dividends
621
755
Revision related to trading security cash flows
(137,618
)
240,204
Cash flows from operating activities based on US GAAP, as
    revised
W
3,144,277
W
3,226,894
Cash flows from investing activities based on US GAAP, as
    previously reported
W
(1,422,512
)
W
(1,393,190
)
Revision related to returns on equity securities-dividends
(621
)
(755
)
Revision related to trading security cash flows
137,618
(240,204
)
Cash flows from investing activities based on US GAAP, as
    revised
W
(1,285,515
)
W
(1,634,149
)
31.
ADDITIONAL DISCLOSURES REQUIRED BY U.S. GAAP
a.
Income Taxes
Income tax expense under U.S. GAAP for the years ended
December 31, 2003, 2004 and 2005 is as follows (in millions
of Korean won):
Year Ended December 31,
2003
2004
2005
Currently payable
W
668,180
W
551,405
W
685,541
Deferred
143,257
59,669
(18,422
)
W
811,437
W
611,074
W
667,119
The difference between the actual income tax expense and the tax
expense computed by applying the statutory Korean corporate
income tax rates to income before taxes for the years ended
December 31, 2003, 2004 and 2005 is attributable to the
following (in millions of Korean won):
Year Ended December 31,
2003
2004
2005
Income taxes at statutory income tax rate of 27% in 2003 and
    2004 and 25% in 2005
W
776,030
W
584,843
W
670,776
Resident surtax payable
77,603
58,484
67,078
Tax credit for investments, technology, human resource
    development and others
(83,826
)
(89,080
)
(100,160
)
Special surtax for agriculture and fishery industries and other
13,685
13,736
18,850
Undistributed earnings of subsidiaries
(5,909
)
11,011
4,846
Effect of change in income tax rate
(7,943
)
—
—
Other permanent differences
20,719
28,705
19,637
Change in valuation allowance
21,078
3,375
(13,908
)
Recorded income taxes
W
808,892
W
611,074
W
667,119
Effective tax rate
28.23
%
28.21
%
24.86
%
F-75
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The tax effects of temporary differences that resulted in the
deferred tax assets at December 31, 2003, 2004 and 2005
computed under U.S. GAAP, and a description of the
financial statement items that created these differences are as
follows (in millions of Korean won):
December 31,
2003
2004
2005
Current:
Allowance for doubtful accounts
W
22,039
W
19,649
W
39,334
Write-off of doubtful accounts
9,587
9,764
9,239
Marketable trading securities
1
(561
)
—
Accrued income
(2,026
)
(2,463
)
(1,229
)
Net operating loss carryforwards
—
—
17
Tax credit carryforwards
—
—
89
Accrued expenses and other
35,622
50,189
50,004
65,223
76,578
97,454
Non-current:
Depreciation
3,935
(34,371
)
(58,745
)
Loss on disposition of properties
—
11,480
—
Loss on impairment and valuation of investment securities (note)
74,928
58,419
32,959
Foreign exchange losses
774
—
—
Equity in losses (earnings) of affiliates
(6,593
)
(12,671
)
(7,471
)
Undistributed earnings of subsidiaries
(3,364
)
(9,434
)
13,732
Tax free reserve for technology development
(182,518
)
(195,103
)
(211,208
)
Tax free reserve for loss on disposal of treasury stock
(130,373
)
(130,372
)
(130,372
)
Tax credit carryforwards
1,162
5,003
—
Net operating loss carryforwards
—
25,371
24,108
Deferred charges and other
46,780
(7,205
)
11,867
(195,269
)
(288,883
)
(325,130
)
Total deferred tax assets (liabilities)
W
(130,046
)
W
(212,305
)
W
(227,676
)
(note)
Unrealized gain on valuation of investment securities as of
    December 31, 2003, 2004 and 2005 were recorded as a
    separate component of shareholders' equity, net of tax
    effect of
W
18,287 million,
W
39,210 million and
W
48,019 million, respectively.
F-76
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
b.     Fair Value of Financial
Instruments
The following methods and assumptions were used to estimate the
fair value of each class of financial instruments as of
December 31, 2003, 2004 and 2005 for which it is
practicable to estimate that value:
Cash and Cash Equivalents, Accounts Receivable (trade and
other), Short-Term Loans, Accounts Payable and Short-term
Borrowings
The carrying amount approximates fair value because of the short
maturity of those instruments.
Trading Securities and Long-term Investment Securities
For investments in non-listed companies' stock, a
reasonable estimate of fair value could not be made without
incurring excessive costs. Additional information pertinent to
these investments is provided in Note 4. The fair value of
investments in listed companies' stock, public bonds, and
other marketable securities are estimated based on quoted market
prices for those or similar investments.
Long-Term Bank Deposits
The carrying amount approximates fair value as such long-term
bank deposits bear interest rates currently available for
similar deposits.
Long-Term Loans
The fair value of long-term loans is estimated by discounting
the future cash flows using the current interest rate of time
deposits with similar maturities.
Bonds Payable, Bonds with Stock Warrant, Convertible Bonds,
Long-Term Borrowings, Long-Term Payable — Other and
Obligation under Capital Leases
The fair value of these liabilities is estimated based on the
quoted market prices for the same or similar issues or on the
current interest rates offered for debt of the same remaining
maturities.
F-77
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following summarizes the carrying amounts and fair values of
financial instruments as of December 31, 2003, 2004 and
2005 (in millions of Korean won):
2003
2004
2005
Carrying
Carrying
Carrying
Amount
Amount
Amount
(Note a)
Fair Value
(Note a)
Fair Value
(Note a)
Fair Value
Financial assets:
Cash and cash equivalents and short-term financial instruments
W
472,410
W
472,410
W
383,360
W
383,360
W
486,215
W
486,215
Trading securities
893,217
893,217
654,779
654,779
777,472
777,472
Accounts receivable (trade and other)
3,000,918
3,000,918
3,126,754
3,126,754
3,038,936
3,038,936
Short-term loans
41,933
41,933
51,232
51,232
62,290
62,290
Investment securities:
Listed equity and debts
503,000
503,000
599,287
599,287
864,986
864,986
Non- listed equity (note b)
385,707
N/A
352,523
N/A
353,168
N/A
Long-term bank deposits
352
352
10,351
10,351
1,479
1,479
Long-term loans
13,947
10,460
12,019
9,014
7,093
5,320
W
5,311,484
W
5,190,305
W
5,591,639
Financial liabilities:
Accounts payable
W
1,317,162
W
1,317,162
W
1,205,682
W
1,205,682
W
1,094,855
W
1,094,855
Short-term borrowings
1,236,197
1,236,197
425,496
425,496
4,614
4,614
Bonds payable, long-term borrowings, convertible bonds,
    long-term payables — other and obligation under
    capital leases, including current portion
4,201,707
4,283,402
4,044,258
4,211,926
3,763,135
3,825,813
W
6,755,066
W
9,234,563
W
4,862,604
(note a) These carrying amounts represent the amounts
determined under U.S. GAAP.
(note b)
Investments in non — listed equity include the
    investments in the common stock of Powercomm Co., Ltd.
    ("Powercomm"). Korea Electric Power Corp.
    ("KEPCO"), the parent company of Powercomm, sold to
    Dacom Corporation 45.5% interest in Powercomm at
W
12,000 per share in 2002. Based on this
    transaction, the fair value of the Company's investments in
    the common stock of Powercomm was determinable and the
    impairment loss on the investment of
W
150,243 million was recognized in 2002.
    The fair value of common stock of Powercomm as of
    December 31, 2003, 2004 and 2005 was estimated by an
    outside professional valuation company using the present value
    of expected future cash flows; and the additional impairment
    loss of
W
21,593 million was recognized in
    2003. As of December 31, 2004 and 2005, unrealized gain on
    valuation of investment in Powercomm of
W
3,158 million and
W
8,723 million have been recorded as other
    comprehensive income, respectively.
F-78
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
c.     Comprehensive Income
Comprehensive income for the years ended December 31, 2003,
2004 and 2005 is as follows (in millions of
Korean won):
2003
2004
2005
Net income
W
2,062,749
W
1,553,076
W
2,027,550
Other comprehensive income:
Available-for-sale securities
Unrealized gain on investment securities
93,738
67,645
34,915
Less impact of realized losses(gains)
(24,727
)
8,434
(3,065
)
Tax effect
(18,978
)
(20,923
)
(8,808
)
Net change from available-for-sale securities
50,033
55,156
23,042
Foreign-based operations translation adjustments
(356
)
(11,128
)
(1,792
)
Total other comprehensive income
49,677
44,028
21,250
Comprehensive income
W
2,112,426
W
1,597,104
W
2,048,800
d.     Goodwill and other intangible
assets
On January 1, 2002, the Company adopted
SFAS No. 142, "Goodwill and Other Intangible
Assets". Under SFAS No. 142, goodwill and
intangible assets with indefinite lives are no longer amortized,
however, they will be subject to periodic impairment tests as
prescribed by the statement and intangible assets that do not
have indefinite lives are amortized over their useful lives. The
following tables present the additional disclosures required by
this statement.
Goodwill
Changes in the carrying amount of goodwill under U.S. GAAP
for the years ended December 31, 2003, 2004 and 2005 are as
follows (in millions of Korean won):
2003
2004
2005
Beginning of period
W
3,400,110
W
3,400,155
W
3,408,989
Goodwill reclassifications to other intangibles assets
(16,437
)
—
—
Goodwill acquired during the period
16,482
8,834
9,223
Goodwill impairment losses
—
—
—
Ending of period
W
3,400,155
W
3,408,989
W
3,418,212
F-79
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Other Intangible Assets
The major components and average useful lives of other acquired
intangible assets under U.S. GAAP are as follows
(in millions of Korean won):
December 31, 2003
December 31, 2004
December 31, 2005
Accumulated
Gross
Gross
Gross
Amortization
Carrying
Accumulated
Carrying
Accumulated
Carrying
and
Amount
Amortization
Amount
Amortization
Amount
Impairment
Amortized intangible assets:
IMT license (13 years)
W
1,188,547
W
(7,548
)
W
1,188,547
W
(98,183
)
W
1,188,547
W
(188,193
)
Customer lists (4 years)
99,783
(64,088
)
99,783
(83,686
)
99,783
(99,783
)
Other (2 to 20 years)
552,279
(258,802
)
718,291
(354,021
)
1,036,165
(455,505
)
Total
W
1,840,609
W
(330,438
)
W
2,066,621
W
(535,890
)
W
2,324,495
W
(743,481
)
Intangible asset amortization expense for the years ended
December 31, 2003, 2004 and 2005 was
W
103,914 million,
W
209,991 million and
W
221,275 million respectively. It is
estimated to be
W
233,361 million,
W
225,199 million,
W
207,741 million,
W
175,964 million and
W
148,388 million for the years ending
December 31, 2006, 2007, 2008, 2009 and 2010, respectively,
primarily related to the IMT license, customer lists
and other.
e.     Other SK Group Companies
As described in Note 1, the Company is one of the
SK Group affiliated companies, based on the definition of
"group" under the Fair Trade Act of Korea. In early
March 2003, the Prosecutor's Office of the Republic of
Korea filed charges against several SK Group executives for
alleged accounting irregularities at SK Networks Co., Ltd.
("SK Networks", formerly SK Global Co.,
Ltd.), and other alleged illegal transactions among certain
SK Group affiliated companies. As a result of these
charges, there are several legal actions against certain
SK Group affiliated companies. On March 19, 2003,
SK Networks was classified as a "financially
distressed company" in accordance with the Corporate
Restructuring Promotion Law of the Republic of Korea. Subsequent
to this classification, there has been a restructuring,
including cash buy-out of certain debt at less than face value
and a management change, among the creditors of SK Networks
and certain of its affiliates. In addition, SK Networks
retired all common shares which SK Corporation owned and,
on October 27, 2003, SK Corporation purchased new common
shares of SK Networks in the amount of approximately
$718.5 million, which have a certain disposal restriction.
As of December 31, 2005 and for the year then ended, the
Company and its subsidiaries had certain related party balances
or transactions with SK Networks as disclosed in
Note 24. Management of the Company believes that those
legal matters will not have a material adverse effect on the
Company and its subsidiaries' financial position, operating
results, or liquidity.
f.
Operating Revenue
Operating revenue under U.S. GAAP for the years ended
December 31, 2003, 2004 and 2005 are as follows (in
millions of Korean won):
2003
2004
2005
Wireless services
W
8,401,021
W
8,762,376
W
9,148,363
Interconnection
1,017,056
849,407
898,621
Digital handset sales
611,981
649,809
294,557
Other
180,306
272,974
359,911
Total operating revenue
W
10,210,364
W
10,534,566
W
10,701,452
F-80
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
g.
Segment
The Company has one reportable segment, cellular telephone
communication service and all goodwill has been allocated to
this segment.
h.
New Accounting Pronouncements
In November 2004, the FASB issued SFAS No. 151,
"Inventory Costs, an Amendment of ARB No. 43,
Chapter 4." SFAS No. 151 clarifies the
accounting for abnormal amounts of idle facility expense,
freight, handling costs, and wasted material. The Statement is
effective for inventory costs incurred during fiscal year
beginning after June 15, 2005. Management does not expect
this statement will have a material impact on the Company's
consolidated financial position or results of operations.
In December 2004, the FASB issued Statement of Financial
Accounting Standards ("SFAS") No. 123
(revised 2004), "Share-Based Payments"
(SFAS 123R). This statement eliminates the option to apply
the intrinsic value measurement provisions of Accounting
Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees" to stock
compensation awards issued to employees. Rather, SFAS 123R
requires companies to measure the cost of employee services
received in exchange for an award of equity instruments based on
the grant-date fair value of the award. That cost will be
recognized over the period during which an employee is required
to provide services in exchange for the award (usually the
vesting period). SFAS 123R applies to all awards granted
after the required effective date and to awards modified,
repurchased, or cancelled after that date. SFAS 123R will
be effective from January 1, 2006. Management does not
expect that adoption of this statement will have a material
impact on the Company's consolidated financial position or
results of operations.
In December 2004, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 153,
"Exchanges of Nonmonetary Assets — an amendment
of APB Opinion No. 29"
("SFAS 153"), which amends Accounting Principles
Board Opinion No. 29, "Accounting for Nonmonetary
Transactions" to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that do
not have commercial substance. SFAS 153 is effective for
nonmonetary assets exchanges occurring in fiscal periods
beginning after June 15, 2005. Management does not
anticipate that the adoption of this statement will have a
material effect on the Company's consolidated financial
position or results of operations.
In March 2006, the FASB issued SFAS No. 156,
"Accounting for Servicing of Financial Assets —
an amendment of FASB Statement No. 140."
SFAS No. 156 requires that an entity separately
recognize a servicing asset or a servicing liability when it
undertakes an obligation to service a financial asset under a
servicing contract in certain situations. Such servicing assets
or servicing liabilities are required to be initially measured
at fair value, if practicable. SFAS No. 156 also
allows an entity to choose one of two methods when subsequently
measuring its servicing assets and servicing liabilities:
(1) the amortization method or (2) the fair value
measurement method. The amortization method existed under
SFAS No. 140 and remains unchanged in
(1) allowing entities to amortize their servicing assets or
servicing liabilities in proportion to and over the period of
estimated net servicing income or net servicing loss and
(2) requiring the assessment of those servicing assets or
servicing liabilities for impairment or increased obligation
based on fair value at each reporting date. The fair value
measurement method allows entities to measure their servicing
assets or servicing liabilities at fair value each reporting
date and report changes in fair value in earnings in the period
the change occurs. The Statement is effective for fiscal years
beginning after September 15, 2006. The adoption of this
Statement is not expected to have a material impact on the
Company's financial position, operating results or cash
flows.
In February 2006, the FASB issued SFAS No. 155,
"Accounting for Certain Hybrid Financial
Instruments — an amendment of FASB Statements
No. 133 and 140," that permits fair value
remeasurement of certain hybrid financial instruments, clarifies
the scope of SFAS No. 133 regarding interest-only and
principal-only
F-81
Table of Contents
SK TELECOM CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
strips, and provides further guidance on certain issues
regarding beneficial interests in securitized financial assets,
concentrations of credit risk and qualifying special purpose
entities. SFAS No. 155 is effective for all
instruments acquired or issued as of the first fiscal year
beginning after September 15, 2006 and may be applied to
certain other financial instruments held prior to the adoption
date. Earlier adoption is permitted as of the beginning of an
entity's fiscal year providing the entity has not yet
issued financial statements. The Company does not expect the
adoption of SFAS No. 155 to have a material impact on
the Company's financial position, operating results or cash
flows.
In March 2004, the EITF supplemented EITF Issue
No.
03-1,
"The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments." EITF Issue
No.
03-1
provides
guidance for evaluating whether an investment is
other-than-temporarily impaired and requires disclosures about
unrealized losses on investments in debt and equity securities.
In September 2004, the FASB issued FASB Staff Position EITF
Issue
03-1
-1,
"Effective Date of Paragraphs 10-20 of EITF
Issue
03-1,"
which deferred the effective date of the recognition and
measurement provisions of the consensus until further guidance
is issued.
In November 2005, the FASB issued FASB Staff Position
("FSP") No. FAS 115-1, "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain
Investments," revising the recognition and measurement
provisions of EITF Issue
No.
03-1.
This FSP
clarified and reaffirmed existing guidance as to when an
investment is considered impaired, whether that impairment is
other than temporary, and the measurement of an impairment loss.
Certain disclosures about unrealized losses on
available-for-sale debt and equity securities that have not been
recognized as other-than-temporary impairments are required
under FSP No. FAS 115-1. The FSP is effective for fiscal
years beginning after December 15, 2005. As the FSP
reaffirms existing guidance, the Company does not expect this
FSP to have a significant impact on the Company's financial
position, operating results or cash flows.
In June 2005, the EITF of the FASB issued EITF
Issue No. 04-5, "Determining Whether a General
Partner, or the General Partners as a Group, Controls a Limited
Partnership or Similar Entity When the Limited Partners Have
Certain Rights." EITF Issue No. 04-5 provides that the
general partner(s) is presumed to control the limited
partnership, unless the limited partners possess either
substantive participating rights or the substantive ability to
dissolve the limited partnership or otherwise remove the general
partner(s) without cause ("kick-out rights"). Kick-out
rights are substantive if they can be exercised by a simple
majority of the limited partners voting interests. The guidance
applies to general partners of all new limited partnerships
formed and for existing limited partnerships for which the
partnership agreements are modified after June 29, 2005,
and to general partners in all other limited partnerships no
later than the beginning of the first reporting period in fiscal
years beginning after December 15, 2005. The adoption of
this guidance is not expected to have a material impact on the
Company's financial position, operating results or cash
flows.
In May 2005, the FASB issued SFAS No. 154,
"Accounting Changes and Error Corrections — a
replacement of APB Opinion No. 20 and FASB Statement
No. 3." SFAS No. 154 generally requires
retrospective application to prior periods' financial
statements of all voluntary changes in accounting principle and
changes required when a new pronouncement does not include
specific transition provisions. This Statement applies to the
Company beginning January 1, 2006.
F-82
Table of Contents
SIGNATURES
The registrant hereby certifies that it meets all of the
requirements for filing on
Form
20-F
and that
it has duly caused and authorized the undersigned to sign this
annual report on its behalf.
SK TELECOM CO., LTD.
(Registrant)
/s/
Shin Bae Kim
(Signature)
Shin Bae Kim
Chief Executive Officer and
Representative Director
(Name/ Title)
Date: June 30, 2006
Table of Contents
Exhibit Index
Number
Description
1
.1
Memorandum and Articles of Association
2
.1
Deposit Agreement dated as of May 31, 1996, as amended by
    Amendment No. 1 dated as of March 15, 1999, Amendment
    No. 2 dated as of April 24, 2000 and Amendment
    No. 3 dated as of July 24, 2002, entered into among SK
    Telecom Co., Ltd., Citibank, N.A., as Depositary, and all
    Holders and Beneficial Owners of American Depositary Shares
4
.1
Telecommunications Basic Law of 1983, as amended (English
    translation)
4
.2
Enforcement Decree of the Telecommunications Basic Law, as
    amended (English translation)
4
.3
Telecommunications Business Law of 1983, as amended (English
    translation)
4
.4
Enforcement Decree of the Telecommunications Business Law
    (English translation)***
4
.5
Korean Commercial Code (together with English translation)*
4
.6
Amendment to Korean Commercial Code dated December 29, 2001
    (together with English translation)**
4
.7
Korean Securities and Exchange Act, as amended (English
    translation)
8
.1
List of Subsidiaries of SK Telecom Co., Ltd.
11
.1
Code of Ethics of SK Telecom Co., Ltd.***
12
.1
Certification of Principal Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002
12
.2
Certification of Principal Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002
13
.1
Certification of Principal Executive Officer Pursuant to
    18 U.S.C. Section 1350, As Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002
13
.2
Certification of Principal Financial Officer Pursuant to
    18 U.S.C. Section 1350, As Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002
99
.1
Consent of Deloitte Anjin LLC
*
Filed previously as exhibits to our Form 20-F filed on
    June 30, 2000.
**
Filed previously as exhibits to our Form 20-F filed on
    June 28, 2002.
***
Filed previously as exhibits to our Form 20-F filed on
    May 31, 2005.