Edgar Filing: SK TELECOM CO LTD

Date of

Disclosure

in Korea

Report

Reports status

October 26, 2001

Resolution on trust agreement for the acquisition of treasury shares and others

1. Signatories: Shinhan Bank, Hana Bank, Cho Hung Bank, Korea Exchange Bank
2. Contract amount: Won 1,300 billion
3. Purpose: to increase shareholder value

1. On December 24, 2003, cash surplus amount from the existing trust agreement was partially reduced (Won 318 billion).
2. On September 24, 2004, the Board of Directors extended the term of the specified monetary trust agreement for 3 years.
3. On October 16, 2007, the Board of Directors extended the term of the specified monetary trust agreement for 3 years.
4. As of September 30, 2007, the balance of specified monetary trust for treasury shares was Won 982 billion.

SK TELECOM CO., LTD.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE MONTH OF JANUARY 2008

SK Telecom Co., Ltd.

(Translation of registrant’s name into English)

11, Euljiro2-ga, Jung-gu
Seoul 100-999, Korea
(Address of principal executive offices)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

Form 20-F þ Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes o No þ

If “Yes” is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b): 82-

QUARTERLY REPORT

(From January 1, 2007 to September 30, 2007)

THIS IS A SUMMARY OF THE QUARTERLY REPORT ORIGINALLY PREPARED IN KOREAN AND IS IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SUPERVISORY COMMISSION.

IN THE TRANSLATION PROCESS, SOME PARTS OF THE REPORT WERE REFORMATTED, REARRANGED OR SUMMARIZED FOR THE CONVENIENCE OF READERS.

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A NON-CONSOLIDATED BASIS IN ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN KOREA, OR KOREAN GAAP, WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.

Contents


I.		Overview

II.		Business

III.		Financial Information

IV.		Auditor’s Opinion

V.		Management Structure

VI.		Shares

VII.		Employees

VIII.		Transactions with Interested Parties

IX.		Other Relevant Matters

Attachment: Korean GAAP Non-consolidated Financial Statements

I. OVERVIEW

1. Corporate Purpose of SK Telecom Co., Ltd. (the “Company”)

Business Objectives

1. Information and communication business

2. Handset sales and lease business

3. New media business

4. Advertisement business

5. Communication sales business

6. Personal property and real property lease business

7. Research and technology development related to Clause 1 through 4

8. Overseas business and trading business related to Clause 1 through 4

9. Manufacturing and distribution business related to Clause 1 through 4

10. Tourism

11. Other businesses related to the above

2. Company History

A. Changes Since Incorporation

(1)

Date of Incorporation

—

March 29, 1984 (date of shareholders’ meeting for the incorporation): Incorporated as Korea Mobile Communications Service Co., Ltd.

(Authorized capital: Won 500 million / Paid-in capital: Won 250 million)

(2)

Location of Headquarters

—

22 Dohwa-dong, Mapo-gu, Seoul (July 11, 1988)

—

16-49 Hangang-ro 3-ga, Yongsan-gu, Seoul (November 19, 1991)

—

267 Namdaemun-ro 5-ga, Jung-gu, Seoul (June 14, 1995)

—

99 Seorin-dong, Jongro-gu, Seoul (December 20, 1999)

—

11, Euljiro 2-ga, Jung-gu, Seoul (December 13, 2004)

B. Mergers

(1)

Target: Shinsegi Communication Co., Ltd.

	—		Date: January 13, 2002

	—		Registration: January 16, 2002

(2)

Target: SK IMT Co., Ltd.

	—		Date: May 1, 2003

	—		Registration: May 7, 2003

C. Significant Recent Business Events

N/A

3. Information Regarding Shares

A. Total number of shares


(As of June 30, 2007)					(Unit: shares)
	Share type
Classification	Common shares		—		Total		Remarks
I. Total number of issuable shares		220,000,000		—		220,000,000		—
II. Total number of shares issued to date		89,278,946		—		89,278,946		—
III. Total number of shares retired to date		8,085,235		—		8,085,235		—
1. Capital reduction		—		—		—		—
2. Share cancellation		8,085,235		—		8,085,235		—
3. Redeemed shares		—		—		—		—
4. Others		—		—		—		—
IV. Total number of shares (II-III)		81,193,711		—		81,193,711		—
V. Number of treasury shares		8,526,252		—		8,526,252		—
VI. Number of shares outstanding (IV-V)		72,667,459		—		72,667,459		—

B. Capital Stock and Price per Share


(As of June 30, 2007)												(Unit: Won, shares)
Classification	Type	Capital (total face value)						Price per share
Classification	Type	Capital amount in financial statements (a)		Total number of issued shares (IV of A×b)		Total amount of distributed shares (VI of A×b )		Par value per share (b)		Capital/ Total number of issued shares (a / IV of A.)		Capital/ Number of distributed shares (a / VI of A.)
Registered	Common shares		44,639,473,000		40,596,855,500		36,333,729,500		500		549.8		614.3
Total			44,639,473,000		40,596,855,500		36,333,729,500		500		549.8		614.3

C. Acquisition and Disposition of Treasury Shares

(1) Status of Acquisition and Disposition of Treasury Shares


Acquisition method	Type of share	Amount at the beginning of period		Acquisition (+)		Disposition (-)		Retirement (-)		Amount at the end of period
Direct acquisition pursuant to Article 189-2 (1) of the relevant Act	Common share		4,561,572		—		—		—		4,561,572
	Preferred share		—		—		—		—		—
Direct acquisition based on causes other than those stipulated in Article 189-2 (1) of the relevant Act	Common share		77,970		—		—		—		77,970
	Preferred share		—		—		—		—		—
Sub-total	Common share		4,639,542		—		—		—		4,639,542
Sub-total	Preferred share		—		—		—		—		—
Indirect acquisition through trust and other agreements	Common share		3,886,710		—		—		—		3,886,710
Indirect acquisition through trust and other agreements	Preferred share		—		—		—		—		—
Total	Common share		8,526,252		—		—		—		8,526,252
Total	Preferred share		—		—		—		—		—


Notes:

*		Of the 4,639,542 shares of treasury stocks directly acquired based on causes other than those provided in Article 189-2 (1) of the relevant Act, 1,504,657 shares were deposited with the Korea Securities Depository as of November 2, 2007 for any exchange of the Company’s overseas exchangeable bonds.

D. Employee Stock Ownership Program

(1) Transactions with the Employee Stock Ownership Program

On August 23, 1999, the Company lent Won 118.6 billion of purchase funds for employee stock ownership to the Employee Stock Ownership Program, and the Employee Stock Ownership Program re-lent the amount to the Company’s employees in accordance with its internal allotment standards.

—

Terms of the loan: 8-year installment repayment plan following a three-year grace period

—

The loan is deducted from wages for each individual to repay the Employee Stock Ownership Program, and is subsequently repaid to the company.

Repayment amount during the first to the third quarter of 2007 : Won 2,669,948,000

—

Details of the loan repayment


(As of September 30, 2007)			(Unit: in thousand Won)
Classification	Amount		Remarks
Initial loan amount		118,577,755	Lent on August 23, 1999 to 3,540 persons
Accumulated repayment amount		113,718,148	Includes Won 2.67 billion repaid during the first to the third quarter of 2007
Balance		4,859,607	Expected full repayment by June 2010

(2) Voting Rights of the Employee Stock Ownership Program

During a designated period, to be 7 days or longer, each individual member of the Program may exercise his voting rights by expressing his intention on the shareholders’ meeting agenda through a written power of attorney to a designated proxy.

(3) Shareholdings of the Employee Stock Ownership Program

(Unit: shares)

Account classification

Types of share

Balance at the beginning
of period

Balance at the end of period

E.S.O.P. account

—

Member account

Common share

197,240

163,011


*		As the relevant law requires an immediate transfer of the shares directly purchased by the employees to the account of the individual purchasers, the Company transfers and holds the employees’ stocks in separate individual accounts within the program once the number of shares for each individual member is determined.

4. Status of Voting Rights


(As of September 30, 2007)				(Unit: shares)
Classification		Number of shares		Remarks
Total outstanding shares (A)	Common share		81,193,711		—
Total outstanding shares (A)	Preferred share		—		—
Number of shares without voting right (B)	Common share		8,526,252		Treasury shares
Number of shares without voting right (B)	Preferred share		—
Shares with restricted voting right under the Stock Exchange Act and other laws (C)	Common share		—		—
Shares with reestablished voting right (D)	—		—		—
The number of shares with exercisable voting right (E = A - B - C + D)	Common share		72,667,459
	Preferred share		—		—

5. Dividends and Others


		(Unit: in million Won except per share value)
		—,
Classification		3Q 2007		2006		2005
Par value per share			500		500		500
Current net income			1,504,780		1,446,598		1,871,380
Net income per share			21,693		19,734		25,421
Income available for distribution as dividend			—		1,574,716		1,930,626
Total cash dividend			72,667		582,386		662,529
Total stock dividend			—		—		—
Percentage of cash dividend to available income (%)			—		40.3		35.4
Cash dividend yield ratio(%)	Common share		—		3.6		4.9
Cash dividend yield ratio(%)	Preferred share		—		—		—
Stock dividend yield ratio (%)	Common share		—		—		—
Stock dividend yield ratio (%)	Preferred share		—		—		—
Cash dividend per share	Common share		1,000		8,000		9,000
Cash dividend per share	Preferred share		—		—		—
Stock dividend per share	Common share		—		—		—
Stock dividend per share	Preferred share		—		—		—


*		The total amount of cash dividend for the year ended December 31, 2006 includes the interim dividend amount of Won 73,714 million, and the cash dividend amount per share of Won 8,000 for the same period includes the interim dividend amount of Won 1,000 per share.

*		The total amount of cash dividend for the year ended December 31, 2005 includes the interim dividend amount of Won 73,614 million, and the cash dividend amount per share of Won 9,000 for the same period includes the interim dividend amount of Won 1,000 per share.

II. BUSINESS

1. Business Summary

A. Industry Status

(1) Characteristics of the Industry

As of September 30, 2007, the number of domestic mobile phone subscribers reached 42.8 million and with a 88.4% penetration rate, and the Korean mobile communication market can be considered to have reached its maturation stage. However, considering the number of European countries with penetration rates exceeding 90%, additional future growth of the domestic market may be possible.

The Korean mobile communications market continues to improve with the help of advances in network-related technology evidenced by the world’s first commercialization of CDMA2000 1x, CDMA 1x EV-DO, and the development of highly advanced handsets that enables the provision of convergence services for multimedia contents, mobile commerce, telematics, satellite DMB, digital home services and other related contents.

(2) Industry Growth


								(Unit: 1,000 persons)
Classification		End of 3Q 2007		End of 2006		End of 2005		End of 2004		End of 2003
Penetration rate (%)			88.4		83.2		79.4		75.9		70.1
Number of subscribers	SK Telecom		21,606		20,271		19,530		18,783		18,313
	PCS		21,195		19,926		18,812		17,803		15,279
	Total		42,801		40,197		38,342		36,586		33,592

(Data: Ministry of Information and Communication website)

(3) Market Characteristics

The Korean mobile communication market includes the entire population of Korea with mobile communication service needs, and almost every Korean is considered a potential user. With the market penetration rate reaching as high as 88.4% (as of the end of September 2007), the customer base is continuing to expand to include elementary school and pre-school children. Although demand to date has primarily been in the domestic market, as the business territory expands to overseas market, the size of overseas sales is expected to grow in the near future. Seasonal and economic fluctuations have much less impact on the Korean mobile communication market compared to other industries.

B. Company Status

(1) Market Share

* Historical market share of the Company

(Unit: %)

Classification

End of 3Q 2007

2006

2005

Mobile phone

50.5

50.4

50.9

* Comparative market share

(As of September 30, 2007)

(Unit: %)

Classification

SK Telecom

KTF

LG Telecom

Market share

50.5

31.7

17.8

(Data: Ministry of Information and Communication website)

(2) New Business Contents and Prospects

N/A

2. Major Products

A. Status of Major Products as of September 30, 2007


			(Unit: in million Won, %)
Business field	Sales type	Item	Major trademarks	Sales amount (ratio)
Information and communication	Services	Mobile phone	June, NATE and others		8,238,525 (98.4%)
Information and communication	Services	Others	Others		131,364 (1.5%)

B. Price Trend of Major Products


Item		3Q 2007		During 2006		During 2005
Mobile phone (Based on standard call charge)	Basic fee (per month)		13,000		13,000		13,000
Mobile phone (Based on standard call charge)	Service fee (per 10 seconds)		20		20		20

* Caller ID service became free of charge beginning January 2006.

3. Investment Status

A. Investments in Progress

(Unit: Won 100 million)

Business field

Classification

Investment
period

Subject of
investment

Investment effect

Total
investments

Amount
already
invested

Future
investment

Network/Common

Upgrade/New installation

2007

Network, systems and others

Capacity increase and quality improvement; systems improvement

17.500

11,599

5,901

* Amount already invested is the cumulative amount expended through the first to the third quarter of 2007

B. Future Investment Plan

(Unit: Won 100 million)

Expected investment for

Expected investment amount

each year

Business field

Asset type

Amount

2008

2009

Investment effect

Network/Common

Network, systems and others

17,500

N/A

Upgrades to the existing services and provision of new services

Total

17,500

N/A

—

* The expected investment amount of Won 1,750.0 billion is the planned investment amount for 2007.

4. Derivative Products and Others

A. Derivatives Contracts

(1) FX Swap

	a)		Purpose of Contracts: Currency Exchange Risk Hedging

	b)		Contract Terms

—

Cross Currency Swap


(As of September 30, 2007)				(Unit: in million Won)
				Income/loss on
Contract amount	Contract party	Contract date	Proceeds payment method	valuation
US$125 million	Citibank	March 23, 2004	Exchange on the date immediately preceding the principal and interest payment date		(35,584	)
US$125 million	Credit Suisse	March 23, 2004	Same as above		(37,509	)
US$50 million	BNP Paribas	March 23, 2004	Same as above		(14,543	)
US$100 million	Calyon	October 10, 2006	Same as above		(1,261	)
US$150 million	Merrill Lynch	July 13, 2007	Same as above		2,502
US$150 million	Morgan Stanley	July 13, 2007	Same as above		2,191
US$150 million	Barclays Capital	July 16, 2007	Same as above		1,566

* Income/loss on valuation was calculated using the cash flow hedge accounting and was appropriated for capital adjustment.

— FX Swap


(As of September 30, 2007)				(Unit: in million Won)
			Proceeds payment
Contract amount	Contract party	Contract date	method	Income on valuation
US$100 million	Credit Suisse	May 27, 2004	Exchange before principal payment date		(23,929	)
US$1,000 million	Hana Bank	June , 2006	Payment of US Dollars and receipt of Korean Won on October 5, 2007		3,163
US$1,000 million	Hana Bank	September, 2007	Payment of Korean Won and receipt of US Dollars on October 5, 2007		(12,344	)
HKD 10,900 million	Calyon	September, 2007	Payment of HK Dollars and receipt of Korean Won on September 16, 2007		10,482

(2) Interest Rate Swap

	a)		Purpose of Contracts: Interest Rate Risk Hedging

	b)		Contract Terms


(As of September 30, 2007)				(Unit: in million Won)
				Income/loss on
Contract amount	Contract party	Contract date	Proceeds payment method	valuation
2,000	Shinhan Bank	June 28, 2006	Fixing of interest payment date / exchange of floating interest rate		1,972

* Income/loss on valuation was calculated using the cash flow hedge accounting and was appropriated for capital adjustment.

5. R&D Investments


					(Unit: in thousand Won)
Category		3Q 2007				2006			2005
Raw material			60,534				184,969			234,889
Labor			30,663,616				33,986,701			35,191,759
Depreciation			92,950,213				134,461,257			121,335,301
Commissioned service			67,211,250				83,751,223			86,536,635
Others			23,399,829				35,680,197			41,730,732
Total R&D costs			214,285,442				288,064,347			285,029,316
Accounting	Sales and administrative expenses		207,725,619				277,807,352			273,223,885
Accounting	Development expenses (Intangible assets)		6,559,823				10,256,995			11,805,431
R&D cost / sales amount ratio (Total R&D costs / Current sales amount×100)			2.56	%			2.70	%		2.81	%

6. Other Matters

A. External Fund Procurement Summary

* Domestic procurement


							(Unit: in million Won)
					Reduction from
Source of procurement	Beginning balance		New procurement		repayment		Ending balance		Remarks
Bank		200,000		—		—		200,000		—
Insurance company		—		—		—		—		—
Merchant banking		—		—		—		—		—
Loan specialty financial company		—		—		—		—		—
Mutual savings bank		—		—		—		—		—
Other financial institutions		9,839		—		6,578		3,261		—
Total procurement from financial institutions		209,839		—		6,578		203,261		—
Corporate bond (public offering)		2,100,000				400,000		1,700,000		—


							(Unit: in million Won)
					Reduction from
Source of procurement	Beginning balance		New procurement		repayment		Ending balance		Remarks
Corporate bond (private offering)		—		—		—		—		—
Paid-in capital increase (public offering)		—		—		—		—		—
Paid-in capital increase (private offering)		—		—		—		—		—
Asset-backed securitization (public offering)		—		—		—		—		—
Asset-backed securitization (private offering)		—		—		—		—		—
Others		—		—		—		—		—
Total procurement from capital market		2,100,000				400,000		1,700,000		—
Borrowings from shareholder, officer and affiliated company		—		—		—		—		—
Others		—		—		—		—		—
Total		2,309,839				406,578		1,903,261		—

* Overseas procurement


							(Unit: in million Won)
					Reduction in
					repayment and
Procurement source	Beginning balance		New procurement		others		Ending balance		Remarks
Financial institutions		92,960		—		890		92,070	Exchange rate adjustment
Overseas securities (Corporate bonds)		278,880		368,280		2,670		644,490	Exchange rate adjustment New procurement
Overseas securities (shares and others)		356,356		—		22,524		333,832	Exchange requirement
Asset-backed securitization		—		—		—		—		—
Others		—		—		—		—		—
Total		728,196		368,280		26,084		1,070,392		—

B. Credit Ratings

(1) Corporate Bonds


			Credit rating entity	Evaluation
Credit rating date	Subject of valuation	Credit rating	(Credit rating range)	classification
March 12, 2004	Corporate bond	AAA	Korea Ratings	Current valuation
March 15, 2004	Corporate bond	AAA	National Information on Credit Evaluation, Inc.	Current valuation
April 23, 2004	Corporate bond	AAA	Korea Investors Service, Inc.	Current valuation
April 23, 2004	Corporate bond	AAA	Korea Ratings	Current valuation
December 6, 2004	Corporate bond	AAA	Korea Investors Service, Inc.	Current valuation
December 6, 2004	Corporate bond	AAA	National Information on Credit Evaluation, Inc.	Current valuation
March 11, 2005	Corporate bond	AAA	Korea Investors Service, Inc.	Current valuation
March 11, 2005	Corporate bond	AAA	Korea Ratings	Current valuation
March 14, 2005	Corporate bond	AAA	Korea Ratings	Regular valuation
June 14, 2005	Corporate bond	AAA	National Information on Credit Evaluation, Inc.	Regular valuation
June 13, 2006	Corporate bond	AAA	National Information on Credit Evaluation, Inc.	Regular valuation
June 21, 2006	Corporate bond	AAA	Korea Ratings	Regular valuation
June 22, 2006	Corporate bond	AAA	Korea Investors Service, Inc.	Regular valuation
September 1, 2006	Corporate bond	AAA	National Information on Credit Evaluation, Inc.	Current valuation
September 1, 2006	Corporate bond	AAA	Korea Ratings	Current valuation
September 1, 2006	Corporate bond	AAA	Korea Investors Service, Inc.	Current valuation
October 27, 2006	Corporate bond	AAA	National Information on Credit Evaluation, Inc.	Current valuation
October 27, 2006	Corporate bond	AAA	Korea Ratings	Current valuation
May 29, 2007	Corporate bond	AAA	Korea Ratings	Regular valuation
June 14, 2007	Corporate bond	AAA	National Information on Credit Evaluation, Inc.	Regular valuation
June 27, 2007	Corporate bond	AAA	Korea Investors Service, Inc.	Regular valuation

* Rating definition:

“AAA” — The certainty of principal and interest payment is at the highest level with extremely low investment risk, and is stable in that there is no influence of any environmental change under reasonable expectation conditions.

(2) Commercial Paper (“CP”)


	Subject of		Credit rating entity	Evaluation
Credit rating date	valuation	Credit rating	(Credit rating range)	classification
January 26, 2004	CP	A1	National Information on Credit Evaluation, Inc.	Regular valuation
June 8, 2004	CP	A1	National Information on Credit Evaluation, Inc.	Current valuation
June 11, 2004	CP	A1	Korea Ratings	Current valuation
June 11, 2004	CP	A1	Korea Investors Service, Inc.	Current valuation
June 13, 2005	CP	A1	Korea Investors Service, Inc.	Current valuation
June 14, 2005	CP	A1	National Information on Credit Evaluation, Inc.	Current valuation
June 16, 2005	CP	A1	Korea Ratings	Current valuation
June 13, 2006	CP	A1	Korea Investors Service, Inc.	Current valuation
June 21, 2006	CP	A1	National Information on Credit Evaluation, Inc.	Current valuation
June 22, 2006	CP	A1	Korea Investors Service, Inc.	Current valuation
September 1, 2006	CP	A1	Korea Ratings	Regular valuation
December 27, 2006	CP	A1	National Information on Credit Evaluation, Inc.	Regular valuation
December 27, 2006	CP	A1	Korea Investors Service, Inc.	Regular valuation
May 29, 2007	CP	A1	Korea Ratings	Current valuation
June 14, 2007	CP	A1	National Information on Credit Evaluation, Inc.	Current valuation
June 27, 2007	CP	A1	Korea Investors Service, Inc.	Current valuation

* Rating definition:

“A1” — Timely repayment capability is at the highest level with extremely low investment risk, and is stable in that there is no influence of any environmental change under reasonable expectation conditions.

(3) International Credit Ratings


		Credit rating of	Credit rating company
Date of credit rating	Subject of valuation	securities	(Credit rating range)	Evaluation type
June 14, 2005	Issuer Rating	A	Fitch (England)	Current valuation
July 14, 2005	Global Bonds	A2	Moody’s (U.S.A.)	Current valuation
July 14, 2005	Exchangeable Bonds	A2	Moody’s (U.S.A.)	Current valuation
July 27, 2005	Global Bonds	A	S&P (U.S.A.)	Current valuation
July 27, 2005	Exchangeable Bonds	A	S&P (U.S.A.)	Current valuation
July 9, 2007	Global Bonds	A	Fitch (England)	Current valuation
July 9	Global Bonds	A2	Moody’s (U.S.A.)	Current valuation

III. FINANCIAL INFORMATION

1. Summary Financial Statements


							(Unit: in million Won)
Classification	Year ended December 31,
	3Q 2007			2006			2005			2004			2003
Current assets		4,019,508			4,189,325			4,172,485			3,854,345			3,460,706
• Quick assets		4,001,851			4,172,887			4,166,500			3,843,384			3,452,682
• Inventory		17,657			16,438			5,985			10,961			8,024
Fixed assets		13,360,990			11,624,728			10,349,191			10,166,360			9,915,253
• Investments		5,438,895			3,547,942			2,366,760			2,112,488			1,763,359
• Tangible assets		4,468,605			4,418,112			4,595,884			4,605,253			4,551,626
• Intangible assets		3,180,135			3,405,158			3,386,547			3,448,619			3,600,268
• Other non-current assets		273,355			253,516			—			—			—		—
Total assets		17,380,498			15,814,053			14,521,676			14,020,705			13,375,959
Current liabilities		2,518,951			2,985,620			2,747,268			2,859,711			4,231,974
Fixed liabilities		3,843,063			3,522,006			3,516,528			4,033,902			3,202,147
Total liabilities		6,362,013			6,507,626			6,263,796			6,893,613			7,434,121
Capital		44,639			44,639			44,639			44,639			44,639
Capital surplus		2,947,698			2,962,699			2,966,198			2,983,166			2,915,964
Capital adjustment		(2,022,478	)		(2,019,568	)		(2,022,817	)		(2,057,422	)		(2,159,114	)
Accumulated comprehensive income		1,208,809			473,904			—			—			—		—
Retained earnings		8,839,816			7,844,753			7,269,861			6,156,708			5,140,349		—
Total capital		11,018,485			9,306,427			8,257,881			7,127,091			5,941,838
Sales		8,369,889			10,650,952			10,161,129			9,703,681			9,520,244
Operation income		1,860,824			2,584,370			2,653,570			2,359,581			3,080,660
Ordinary income		2,174,304			2,021,643			2,554,613			2,115,778			2,714,194
Current net income		1,576,403			1,446,598			1,871,380			1,494,852			1,942,750

* See the attached Korean GAAP Non-consolidated Financial Statements.

IV. AUDITOR’S OPINION

1. Auditor


3Q 2007	2006	2005	2004
Deloitte Anjin LLC	Deloitte Anjin LLC	Deloitte Anjin LLC	Deloitte Hana Anjin LLC

2. Audit Opinion


Term	Auditor’s opinion	Issues noted
3Q 2007	Appropriate	—
3Q 2006	Appropriate	—
Year ended December 31, 2006	Appropriate	—
Year ended December 31, 2005	Appropriate	—

3. Remuneration for Independent non-executive Auditors for the Past Three Fiscal Years

A. Audit Contracts

(Unit: in thousand Won)

Term

Auditors

Contents

Fee

Total hours

3Q 2007

Deloitte Anjin LLC

Semi-annual review

941,000

10,441

Quarterly review

Non-consolidated financial statements audit

Consolidated financial statements audit

Year ended December
31, 2006

Deloitte Anjin LLC

Semi-annual review

656,000

7,637

Quarterly review

Non-consolidated financial statements audit

Consolidated financial statements audit

Year ended December
31, 2005

Deloitte Anjin LLC

Semi-annual review

447,000

5,177

Quarterly review

Non-consolidated financial statements audit

Consolidated financial statements audit

Year ended December
31, 2004

Deloitte Hana Anjin LLC

Semi-annual review

360,000

4,808

Quarterly review

(Unit: in thousand Won)

Term

Auditors

Contents

Fee

Total hours

3Q 2007

Deloitte Anjin
LLC

Semi-annual review

941,000

10,441

Quarterly review

Non-consolidated financial statements audit

Consolidated financial statements audit

Non-consolidated financial statements audit

Consolidated financial statements audit

V. MANAGEMENT STRUCTURE

1. Summary of Management Structure

A. Board of Directors

(1) Authority of the Board of Directors

Authority of the board of directors under Article 7 of the Regulations of the Board of Directors

	—		Convocation of shareholders’ meeting and submission of agenda

	—		Prior approval of financial statements

	—		Decisions on issuance of new shares

	—		Long-term borrowings, issuance of corporate bonds and redemptions

	—		Capital transfer of reserves

	—		Election of CEO and representatives

	—		Appointment of executive directors

	—		Establishment, transfer or closure of branches

	—		Enactment of and revision to the Regulations for the Board of Directors

	—		Annual business plan and budgeting

	—		Approval of investments of Won 15 billion or above

	—		Planned budget increases and changes for investments or Won 15 billion or above

	—		Diversification into new businesses

	—		Investments and joint ventures of Won 15 billion or above (excluding matters subject to prior approval by independent non-executive directors)

	—		Establishment of subsidiaries

	—		Guarantees of Won 15 billion or above (excluding matters subject to prior approval by independent non-executive directors)

	—		Transactions undertaken with related parties equal to or above the lesser of an amount equivalent to 10% of capital or Won 10 billion, and any material changes to such transactions in accordance with the Anti-trust Law and Fair Trade Act

	—		Enactment of and amendment to the Internal Trading Procedures

	—		Other matters considered necessary by the Board of Directors and those requiring Board of Directors’ approval under applicable laws

Reporting items under Article 7.2 of the Regulations of the Board of Directors

—

The representative director must report the following to the Board of Directors within two months after the date of occurrence:

	•		Results for the six months ended June 30 of each year

	•		Execution of investments between Won 5 billion and Won 15 billion

	•		New investments and joint ventures under Won 15 billion

	•		Acquisition of non-operational fixed assets

	•		Disposition of fixed assets of Won 15 billion or above

	•		Matters related to guarantees of under Won 15 billion

	•		Internal trading not subject to approval by the Board of Directors

	•		Matters delegated to the representative director that the Board of Directors requires to be reported

(2) Publication of Information on Director Candidates Prior to the Shareholders’ Meeting for the Election of Directors and Shareholders’ Nomination

	a)		On February 15, 2007, in the notice of the annual general meeting of shareholders, information on Jung Nam Cho, Sung Min Ha and Dal Sup Shim, candidates for the Board of Directors, was publicly disclosed.

	b)		There was no nomination by the shareholders.

(3) Significant Activities of the Board of Directors


Meeting	Date	Agenda		Approval
276^th (the first meeting of 2007)	January 25, 2007	—	Financial statements for the year ended December 31, 2006	Approved as proposed
276^th (the first meeting of 2007)	January 25, 2007	—	Annual business report for the year ended December 31, 2006	Approved as proposed


Meeting	Date	Agenda		Approval
277^th (the second meeting of 2007)	February 13, 2007	—	Organization of Independent Non-executive Director Nomination Committee	Approved as proposed
278^th (the third meeting of 2007)	February 13, 2007	—	Convocation of the 23^rd General Meeting of Shareholders	Approved as proposed
278^th (the third meeting of 2007)	February 13, 2007	—	Change in the Fair Trade Voluntary Compliance Program manager	Approved as proposed
279^th (the fourth meeting of 2007)	March 9, 2007	—	Election of the representative director and appointments of executive directors	Approved as proposed
279^th (the fourth meeting of 2007)	March 9, 2007	—	Election of committee members	Approved as proposed
280^th (the fifth meeting of 2007)	April 27, 2007	—	Entry into UN Global Compact	Approved as proposed
281^th (the sixth meeting of 2007)	May 29, 2007	—	WCDMA Investment Plan	Approved as proposed
282^th (the seventh meeting of 2007)	June 29, 2007	—	Capital Investment in AD Chips & Acquisition of Convertible Bond	Disapproval
		—	Capital Investment in iHQ	Approved as proposed
		—	Capital Investment in NTREEV	Approved as proposed
		—	Issuance of Global Bond	Approved as proposed
		—	Capital Injection into USA Holdings Inc.	Approved as proposed
283^th (the eighth meeting of 2007)	July 27, 2007	—	Interim Dividend	Approved as proposed
284^th (the ninth meeting of 2007)	September 20, 2007	—	Capital Increase Review on SK Telecom USA Holdings	Approved
		—	New Corporate Establishment and Equity Participation in the USA	Approved as proposed
		—	Transactions with SK C&C during 4Q 2007	Approved as proposed
285^th (the tenth meeting of 2007)	October 16, 2007	—	Extension of Stock Buyback Trust Contract	Approved as proposed

(4) Committee Structure and Activities of the Board of Directors

Independent non-executive Director Nomination Committee

—

Organization


(As of September 30, 2007)
Number of Persons	Members
Number of Persons	Company Directors	Independent non-executive Directors
4	Shin Bae Kim, Sung Min Ha	Seung Taik Yang, Sang Jin Lee

—

Activities


Meeting	Date	Number of Attendees	Details
8^th Meeting (the first meeting of 2007)	February 13, 2007	4 persons /4 persons	— Election of the Chairman: Seung Taik Yang — 23^nd General Meeting of Shareholders: Nomination of Independent non-executive director candidates Dal Sup Shim

* The Independent Non-executive Director Nomination Committee is a committee established under the provisions of the Articles of Incorporation.

Compensation Review Committee

—

Organization


(As of September 30, 2007)
	Members
Number of Persons	Company Directors	Independent non-executive Directors
8 persons	—	Dae Sik Kim, Yong Woon Kim, Dae Kyu Byun, Dal Sup Shim, Seung Taik Yang, Jae Seung Yoon, Sang Jin Lee, Hyun Chin Lim

—

Activities


Meeting	Date	Number of Attendees	Details
The first meeting of 2007	April 26, 2007	7 persons/ 8 persons	Election of chairman
The second meeting of 2007	July 27, 2007	7 persons/ 8 persons	Compensation System Review

The Compensation Review Committee is a committee established by the resolution of the Board of Directors.

Capex Review Committee

—

Organization


(As of September 30, 2007)
	Members
Number of Persons	Company Directors	Independent non-executive Directors
5 persons	Lee Bang Hyung	Dae Kyu Byun, Seung Taik Yang, Jae Seung Yoon, Sang Chin Lee

—

Activities


Meeting	Date	Number of Attendees	Details
The first meeting of 2007	April 26, 2007	4 persons/5 persons	— Election of chairman
The second meeting of 2007	June 28, 2007	5 persons/5 persons	— Capital Investment in AD Chips & Acquisition of Convertible Bond
			— Capital Investment in iHQ
			— Capital Investment in NTREEV
The third meeting of 2007	September 19, 2007	5 persons/5 persons	—

The Capex Review Committee is a committee established by the resolution of the Board of Directors.

Globalization Committee

—

Organization


(As of September 30, 2007)
	Members
Number of Persons	Company Directors	Independent non-executive Directors
4 persons	Ha Sung Min	Dae Sik Kim, Dae Kyu Byun, Sang Chin Lee

—

Activities


Meeting	Date	Number of Attendees	Details
The first meeting of 2007	June 28, 2007	5 persons/5 persons	— Capital Injection into USA Holdings Inc.

The Globalization Committee is a committee established by the resolution of the Board of Directors.

Audit Committee: See “B. Audit System” below.

The Audit Committee is a committee established under the provisions of the Articles of Incorporation.

B. Audit System

(1) Establishment and Organization of the Audit Committee

The Audit Committee is composed of three or more directors. However, independent non-executive directors must account for 2/3 or more, and the members are elected by the resolution of the Board of Directors each year.

The Audit Committee is convened when deemed necessary by the chairman or is requested by two or more of the committee members.

The quorum for resolution is majority attendance with majority consent of the attending members.

(2) Authority of the Audit Committee

Includes authority to inquire on the subsidiary companies, right to investigate the business operations and asset conditions, and right to request for a business status report pursuant to the Audit Committee Regulations.

(3) Members of the Audit Committee

Audit Committee Members are directors Dae Sik Kim, Yong Woon Kim, Dal Sup Shim and Hyun Chin Lim.

(4) Major Activities of the Audit Committee


Meeting	Date	Agenda	Approval	Remarks
The first meeting of 2007	January 24, 2007	— Financial statements for the year ended December 31, 2006	—	—
		— Annual business report for the year ended December 31, 2006
		— Report on operation of internal accounting controls
The second meeting of 2007	February 12, 2007	— Report on K GAAP audit of the financial statements for the year ended December 31, 2006	— —	—
		— Report on the review of internal accounting controls for the year ended December 31, 2006	— —
		— Report on the 2006 second-half management audit and the 2007 plan	— —
		— Auditor’s opinion on internal controls	Approved as proposed
		— Audit report for the year ended December 31, 2005	Approved as proposed
		— Evaluation of internal accounting controls	Approved as proposed
The third meeting of 2007	April 26, 2007	— Election of committee chairman	Approved as proposed	—
		— Reaffirmation of services to be provided by external auditors for fiscal year 2007	To be re-proposed at subsequent meeting
		— Report on internal audit regarding the appropriateness of imposition of certain fines	— —
The fourth meeting of 2007	May 28, 2007	— Accounting audit schedule for 2007	—	—
		— Remuneration for outside auditor for 2007	Approved as proposed
		— Collective re-approval of outside auditor’s service schedule for 2007	Approved as proposed
The fifth meeting of 2007	June 28, 2007	— Issuance of Global Bond plan	—
The fifth meeting of 2007	June 28, 2007	— Report on US-GAAP audit of the financial statements for the year ended December 31, 2007	—	—
The sisth meeting of 2007	July 26, 2007	— Interim dividend plan	—
		— Financial results for the first half of 2007	—
		— Report on K-GAAP audit of the financial statements for the first half of 2007	—	—
		— Management audit results for the first half of 2007	—
The seventh meeting of 2007	September 19, 2007	— Evaluation of internal accounting controls	—	—

C. Exercise of Voting Rights by the Shareholders

(1) Use of the Cumulative Voting System

	a)		Pursuant to the Articles of Incorporation, the cumulative voting system was first introduced in the General Meeting of Shareholders in 2003.


	b)		Articles of Incorporation

—

Article 32 (3) (Election of Directors): Cumulative voting under Article 382-2 of the Commercial Code will not be applied for the election of directors.

—

Article 4 of the 12^th Supplement to the Articles of Incorporation (Interim Regulation): Article 32 (3) of the Articles of Incorporation shall remain effective until the day immediately preceding the date of the general shareholders’ meeting of 2003.

D. Compensation of Officers and Others

(1) Compensation of Directors (including Independent non-executive Directors) and Members of the Audit Committee


							(Unit: in million Won)
Classification	Total payment		Total amount approved by the Meeting of Shareholders		Average payment per person		Remarks
Company directors		4,360		12,000		1,090	—
Independent non-executive directors		465		12,000		60	Including members of the Audit Committee

(2) Granting and Exercise of Stock Options

All of the options granted by the Company in or after 2001, in the total amount of 109,550 shares, have expired and there are no options that remain outstanding. The exercise period for the stock options granted on March 8, 2002 (for 65,730 shares) was from March 8, 2005 to March 7, 2007, and all such options have expired without exercise.

2. Affiliated Companies

(1) Summary of Corporate Group

— Name: SK Group

(2) Capital Investments between Affiliated Companies


(As of October 15, 2007)																			* Based on common shares
	Invested companies
Investing company	SK Corporation			SK Energy			SK Networks			SK Telecom			SKC			SK E&C			SK Shipping			SK Securities
SK Corporation					17.34	%		40.55	%		21.75	%		42.50	%					72.13	%
SK Energy
SK Networks											1.34	%					0.02	%		17.71	%		22.71	%
SK Telecom
SK Chemicals																	58.03	%
SKC																				10.16	%		12.41	%
SK E&C
SK Shipping
SK Securities
Walkerhill
SK C&C		11.16	%		11.16	%
SK incheon oil
Daehan City Gas
SK Telink
SK E&S
SK Communications
iHQ
Empas
Total affiliated companies		11.16	%		28.50	%		40.55	%		23.09	%		42.50	%		58.05	%		100.00	%		35.12	%


	Invested companies
Investing companies	Walkerhill			SK E&S			SK Gas			SK C&C			DOPCO			CCES			YNES			Pohang Gas
SK Corporation					51.00	%
SK Energy														32.38	%
SK Networks		50.37	%								15.00	%		4.61	%
SK Telecom											30.00	%
SK Chemicals		0.25	%
SKC		7.50	%
SK E&C
SK Shipping
SK Securities
Walkerhill
SK C&C
SK incheon oil														5.23	%
Daehan City Gas
SK Telink
SK E&S								45.53	%								100.00	%		100.00	%		100.00	%
SK Communications
iHQ
Empas
Total affiliated companies		58.12	%		51.00	%		45.53	%		45.00	%		42.22	%		100.00	%		100.00	%		100.00	%


	Invested companies
	Daehan City			Daehan															Busan City
Investing companies	Gas			Engineering			SK Sci-tech			K-Power			SK NJC			SK Telink			Gas
SK Corporation											65.00	%
SK Eenrgy
SK Networks
SK Telecom																	90.77	%
SK Chemicals								50.00	%					60.00	%
SKC
SK E&C
SK Shipping
SK Securities
Walkerhill
SK C&C
SK incheon oil
Daehan City Gas					100.00	%
SK Telink
SK E&S		40.00	%																	40.00	%
SK Communications
iHQ
Empas
Total affiliated companies		40.00	%		100.00	%		50.00	%		65.00	%		60.00	%		90.77	%		40.00	%


	Invested companies
	Jeonnam City			Gangwon City						OK Cashbag			Chungnam			SK
Investing companies	Gas			Gas			GBES			Service			City Gas			Wyverns
SK Corporation
SK Eenrgy											96.67	%
SK Networks
SK Telecom											1.19	%					99.99	%
SK Chemicals
SKC
SK E&C
SK Shipping
SK Securities
Walkerhill
SK C&C
SK incheon oil
Daehan City Gas
SK Telink
SK E&S		100.00	%		100.00	%		100.00	%					100.00	%
SK Communications
iHQ
Empas
Total affiliated companies		100.00	%		100.00	%		100.00	%		97.86	%		100.00	%		99.99	%


	Invested companies
							SK
Investing companies	Infosec			MRO Korea			Communications			SK Telesys			Innoace			AirCROSS
SK Corporation
SK Energy
SK Networks					51.00	%								43.08	%
SK Telecom								85.90	%					14.25	%		100.00	%
SK Chemicals
SKC		20.63	%								77.13	%
SK E&C
SK Shipping
SK Securities
Walkerhill
SK C&C		48.14	%
SK incheon oil
Daehan City Gas
SK Telink								1.18	%
SK E&S
SK Communications
iHQ
Empas
Total affiliated companies		68.77	%		51.00	%		87.08	%		77.13	%		57.33	%		100.00	%


	Invested companies
Investing companies	Encar network			Global C&I			Paxnet			TU Media			SK D&D			SK Utis			SK CTA
SK Corporation
SK Energy		50.00	%																	33.67	%
SK Networks
SK Telecom					50.00	%		59.74	%		32.70	%
SK Chemicals																	60.00	%
SKC
SK E&C														44.98	%
SK Shipping
SK Securities					40.00	%
Walkerhill
SK C&C
SK incheon oil
Daehan City Gas
SK Telink
SK E&S
SK Communications
iHQ
Empas
Total affiliated companies		50.00	%		90.00	%		59.74	%		32.70	%		44.98	%		60.00	%		33.67	%


	Invested companies
										SK			SK Mobile						SK Incheon
Investing companies	Seoul Records			In2Gen			Independence			Petrochemical			Energy			SKC Media			Oil
SK Corporation
SK Energy														88.34	%					90.63	%
SK Networks
SK Telecom		60.00	%
SK Chemicals					84.19	%					100.00	%
SKC														11.66	%		100.00	%
SK E&C
SK Shipping
SK Securities
Walkerhill
SK C&C								67.78	%
SK incheon oil
Daehan City Gas
SK Telink
SK E&S
SK Communications
iHQ
Empas
Total affiliated companies		60.00	%		84.19	%		67.78	%		100.00	%		100.00	%		100.00	%		90.63	%


	Invested companies
Investing companies	iHQ			YTN Media			I Film Co.			NTREEV Soft			SK I-Media			Empas			Ecolgreen
SK Corporation
SK Energy
SK Networks																				55.00	%
SK Telecom		37.09	%								66.69	%
SK Chemicals
SKC
SK E&C
SK Shipping
SK Securities
Walkerhill
SK C&C														40.00	%
SK incheon oil
Daehan City Gas
SK Telink
SK E&S
SK Communications														60.00	%		24.43	%
IHQ					51.42	%		45.00	%
Empas
Total affiliated companies		37.09	%		51.42	%		45.005			66.69	%		100.00	%		24.43	%		55.00	%

Invested companies

SKN

Investing companies

Pullbbang

Island

SKC Air Gas

Service

SK Corporation

SK Energy

SK Networks

58.33

100.00

SK Telecom

SK Chemicals

SKC

80.00

SK E&C

SK Shipping

SK Securities

Walkerhill

SK C&C

SK incheon oil

50.00

Daehan City Gas

SK Telink

SK E&S

SK Communications

IHQ

Empas

Total affiliated companies

58.33

50.00

80.00

100.00

VI. SHARES

1. Distribution of Shares

A. Shareholdings of Major Shareholders and other Related Parties


(As of September 30, 2007)													(Unit: share, %)
			Number of shares owned (equity rate)
			Beginning				Increase		Decrease		Ending
Name	Relationship	Types of shares	Number of shares		Ownership ratio		Number of shares		Number of shares		Number of shares		Ownership ratio		Cause of change
SK Corporation	Parent company	Common stock		17,663,127		21.75		—		—		17,663,127		21.75		—
SK Networks	Affiliated company	Common stock		1,085,325		1.34		—		—		1,085,325		1.34		—
Tae Won Choi	Officer of affiliated company	Common stock		100		0.00		—		—		100		0.00		—
Shin Won Choi	Officer of affiliated company	Common stock		770		0.00		—		770		—		0.00		—
Shin Bae Kim	Director	Common stock		1,270		0.00		—		—		1,270		0.00		—
Dae Kyu Byun	Director	Common stock		50		0.00		—		—		50		0.00		—
Jae Seung Yoon	Director	Common stock		200		0.00		—		—		200		0.00		—
Bang Hyung Lee	Director	Common stock		400		0.00		—		—		400		0.00		—
Sung Min Ha	Director	Common stock		738		0.00		—		—		738		0.00		—
Total		Common stock		18,751,980		23.10		—		—		18,751,210		23.09		—
		Preferred stock		0		0		—		—		0		0
		Total		18,751,980		23.10		—		—		18,751,210		23.09

Largest shareholder: SK Corporation			Number of related parties: 8 persons

B. Shareholders with More than 5% Shareholding


(As of June 30, 2007)										(Unit: share, %)
		Common share				Preferred share				Sub-total
Rank	Name (title)	Number of shares		Ownership ratio		Number of shares		Ownership ratio		Number of shares		Ownership ratio
1	Citibank ADR		24,321,893		29.96		—		—		24,321,893		29.96
2	SK Corporation		17,663,127		21.75		—		—		17,663,127		21.75
3	SK Telecom		8,526,252		10.50		—		—		8,526,252		10.50
Total			50,511,272		62.21		—		—		50,511,272		62.21

C. Shareholder Distribution


(As of June 30, 2007)
Classification	Number of shareholders		Ratio (%)		Number of shares		Ratio (%)		Remarks
Total minority shareholders		23,259		99.96		26,207,534		32.27		—
Minority shareholders (corporate)		883		3.79		9,912,469		12.20		—
Minority shareholders (individual)		22,376		96.16		16,295,065		20.06		—
Largest shareholder		1		0.00		17,663,127		21.75		—
Major shareholders		—		—		—		—		—
Other shareholders		9		0.03		54,986,177		67.72		—
Other shareholders (corporate)		7		0.03		29,293,172		36.07		—
Other shareholders (individual)		2		0.00		25,693,005		31.64		—
Total		23,268		100.00		81,193,711		100.00		—

2. Share Price and Trading Volume in the Last Six Months

A. Domestic Securities Market


										(Unit: Won, shares)
		September		August		July		June		May		April
Types		2007		2007		2007		2007		2007		2007
Common share	Highest		212,000		206,500		221,000		213,000		215,000		197,000
Common share	Lowest		206,000		192,000		200,000		200,000		200,500		188,500
Monthly transaction volume			2,494,024		4,408,098		5,311,253		4,251,318		4,493,840		4,900,458

B. Overseas Securities Market


New York Stock Exchange												(Unit: US$, ADR)
		September		August		July		June		May		April
Types		2007		2007		2007		2007		2007		2007
Depository receipt	Highest		29.70		29.33		30.30		28.02		27.76		24.83
Depository receipt	Lowest		28.05		26.15		27.41		26.11		25.46		23.41
Monthly transaction volume			20,339,291		42,018,148		32,018,574		23,520,924		39,284,124		31,587,540

VII. EMPLOYEES


(As of September 30, 2007)															(Unit: persons, in million Won)
	Number of employees
Classification	Office managerial positions		Production positions		Others		Total		Average service year		Total half year wage		Average wage per person		Remarks
Male		3,802		—		—		3,802		9.15		175,847		46		—
Female		570		—		—		570		7.39		21,076		37		—
Total		4,372		—		—		4,372		8.27		196,923		45		—

VIII. TRANSACTIONS WITH RELATED PARTIES

1. Transactions with the Largest Shareholder

A. Provisional Payment and Loans (including loans on marketable securities)

(As of September 30, 2007)

(Unit: in million Won)

Name

(Corporate

Account

Change details

Accrued

name)

Relationship

category

Beginning

Increase

Decrease

Ending

interest

Remarks

SK Wyverns

Affiliated company

Long-term and short-term loans

5,282

—

575

4,707

317

—

B. Equity Investments



(As of September 30, 2007)					(Unit: in million Won)
		Details
Name (Corporate name)	Relationship	Types of Investment	Beginning		Increase		Decrease		Ending		Note
SKT U.S.A. Holdings	Affiliated company	Common share		199,047		73,536		—		272,583		—
AirCROSS	Affiliated company	Common share		300		2,140		—		2,440		—
TU Media	Affiliated company	Common share		64,611		32,368		—		96,979
China STC	Affiliated company	Common share		1,343		5,646		—		6,989
SK Telecom(CHINA) Holding Co.,Ltd.	Affiliated company	Common share		—		4,168		—		4,168
iHQ	Affiliated company	Common share		41,846		10,000		—		51,846
Pillio	Affiliated company	Common share		—		6,276		—		6,276
Baba.com	Affiliated company	Common share		—		1,975		—		1,975
ENTREEV	Affiliated company	Common share		—		17,720		—		17,720
Total				307,147		153,829		—		460,976		—

2. Transactions with Shareholders (excluding the largest shareholder and others), Officers, Employees and other Interested Parties

A. Provisional Payment and Loans (including loans on marketable securities)

* Agents

(Unit: in million Won)

Name (Corporate

Account

Change details

Accrued

name)

Relationship

category

Beginning

Increase

Decrease

Ending

interest

Remarks

Hong Eun and others

Agency

Long-term and short-term loans

64,984

193,751

135,021

123,714

—

* Overseas investment companies

(Unit: in million Won)

Name

(Corporate

Account

Change details

Accrued

name)

Relationship

category

Beginning

Increase

Decrease

Ending

interest

Remarks

DSS Mobile Com. (India)

Overseas Investment
company

Long-term loans

18,887

—

18,887

—

Payment guarantee

B. Equity Investments


							(Unit: in million Won)
			Details
			Types of
Name (Corporate name)	Relationship		Investment		Beginning			Increase		Decrease		Ending		Remarks
Nayio Media, Inc.		—	Common share			248			—		248		—		—
DCM V.L.P.		—		—		—			4,692		—		4,692		—
Sky Lake Fund		—		—		—			352		—		352		—
Centurion IT Investment Group		—		—		3,000			—		900		2,100		—
KTB Investment Group		—		—		1,060			—		371		689		—
Bridge Mobile Alliance		—		—		—			1,392		—		1,392		—
KINX		—	Common share			54			—		54		—		—
NTS Company		—	Common share			95			—		95		—		—


						(Unit: in million Won)
			Details
			Types of
Name (Corporate name)	Relationship		Investment	Beginning			Increase		Decrease		Ending		Remarks
JS Tech		—	Common share		95			—		95		—		—
P&T Telecom		—	Common share		95			—		95		—		—
GN Solitech		—	Common share		95			—		95		—		—
RF Solution		—	Common share		95			—		95		—		—
Kyoungseo Telecom		—	Common share		95			—		95		—		—
PWNT		—	Common share		95			—		95		—		—
WithNet		—	Common share		95			—		95		—		—
NS Tech		—	Common share		95			—		95		—		—
Hangil Telecom		—	Common share		95			—		95		—		—
M-Cube works		—	Common share		188			—		188		—		—
Stic Investment		—	Common share		8,000			—		8,000				—
Helio.com		—	Common share		1,100			242		—		1,342		—
China Unicom		—	Common share		—			1,333,009		—		1,333,009		—
Total					14,695			1,339,687		10,806		1,343,576		—

IX. OTHER RELEVANT MATTERS

1. Developments in the Items mentioned in prior Reports on Important Business Matters

A. Status and Progress of Major Management Events

2. Summary Minutes of the Shareholders’ Meeting


Date	Agenda	Resolution
22^nd Fiscal Year Meeting of Shareholders (March 10, 2006)	1. Approval of the financial statements for the year ended December 31, 2005 2. Amendment of the Articles of Incorporation 3. Remuneration limit for Directors 4. Election of Directors (Election of Independent non-executive directors as Audit Committee members)	Approved (Cash dividend, Won 8,000 per share) Approved (Addition of business objective: travel business) Approved (Won 12 billion) Approved (Kim Yong Woon and Im Hyun Jin)
23^rd Fiscal Year Meeting of Shareholders (March 9, 2007)	1. Approval of the financial statements for the year ended December 31, 2006 2. Remuneration limit for Directors 3. Election of Directors — Election of executive directors — Election of independent non-executive directors as Audit Committee members	Approved (Cash dividend, Won 7,000 per share) Approved (Won 12 billion) Approved (Jung Nam Cho, Sung Min Ha) Approved (Dal Sup Shim)

3. Contingent Liabilities

A. Material Legal Proceedings

(1) Action for Monetary Damages

	a)		Parties to the litigation: G.Mate Inc. (plaintiff) vs. the Company (defendant)

	b)		Overview: G.Mate alleged that the Company had engaged G.Mate to develop and deliver certain PDA units, but that the Company subsequently refused to take delivery of such units. G.Mate sought approximately Won 4.5 billion in damages.

	c)		Progress: An initial mediation process, which was requested by G.Mate, was terminated in January 2007. G.Mate commenced a lawsuit, which is currently pending at the Seoul Central District Court.

	d)		Impact on business: In the event that the case is decided against the Company, there is a risk that the Company will be obligated to pay up to Won 4.5 billion in damages. But as G.Mate, to date, has been unable to produce detailed evidence in support of its claim and calculation of requested damages, the Company expects that the likelihood of a ruling against the Company to be low and the estimated impact on the Company’s operations and finances should not be large; however, the actual results of the litigation and actual impact on impact on the Company’s operations and finances may differ depending on future events.

(2) Actions for the Cancellation of Key Communication Business Licenses and Allotment of Satellite DMB Frequency

	a)		Parties to the litigation: Korea Multinet vs. MIC (the Company is participating in the action on behalf of MIC)

	b)		Overview: Korea Multinet brought an administrative action against MIC to cancel the Company’s key communication business licenses and the allotment of the Company’s satellite DMB frequency.

	c)		Progress: The Seoul Administrative Court dismissed the claim in July 2006, and Korea Multinet has appealed to the Seoul Appellate Court where the lawsuit is currently pending.

	d)		Impact on business: The Company plans to provide full support to MIC in the action although no significant impact to the Company’s business is expected; however, the actual impact may differ depending on future events.

SK TELECOM CO., LTD.

NON-CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
AND INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

Independent Accountants’ Review Report

English Translation of a Report Originally Issued in Korean

To the Stockholders and Board of Directors of
SK Telecom Co., Ltd.

We have reviewed the accompanying non-consolidated balance sheet of SK Telecom Co., Ltd. (the “Company”) as of September 30, 2007, the related non-consolidated statements of income for the three months and nine months ended September 30, 2007 and 2006, the non-consolidated statement of cash flows for nine months ended September 30, 2007 and 2006, and the non-consolidated statement of changes in stockholders’ equity for nine months ended September 30, 2007, all expressed in Korean won. These financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these financial statements based on our reviews.

We conducted our reviews in accordance with standards for review of interim financial statements in the Republic of Korea. Those standards require that we plan and perform the review to obtain moderate assurance as to whether the non-consolidated financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data, and this provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Based on our reviews, nothing has come to our attention that causes us to believe that the financial statements referred to above are not presented fairly, in all material respects, in conformity with accounting principles generally accepted in the Republic of Korea.

We have previously audited, in accordance with auditing standards generally accepted in the Republic of Korea, the non-consolidated balance sheet of the Company as of December 31, 2006, and the related non-consolidated statements of income, appropriations of retained earnings and cash flows for the year then ended (not presented herein); and in our report dated February 14, 2007, we expressed an unqualified opinion on those non-consolidated financial statements. The accompanying balance sheet as of December 31, 2006, which is comparatively presented, does not differ in material respects from such audited non-consolidated balance sheet.

Our reviews also comprehended the translation of the Korean won amounts into U.S. dollar amounts and nothing has come to our attention that causes us to believe that such translation has not been made in conformity with the basis stated in Note 2(a). Such U.S. dollar amounts are presented solely for the convenience of readers of the financial statements.

Accounting principles and review standards and their application in practice vary among countries. The accompanying financial statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries other than the Republic of Korea. In addition, the procedures and practices utilized in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying financial statements are for use by those knowledgeable about Korean accounting principles and practices and review standards and their application in practice.

November 2, 2007

Notice to Readers

This report is effective as of November 2, 2007, the accountants’ review report date. Certain subsequent events or circumstances may have occurred between the accountants’ review report date and the time the accountants’ review report is read. Such events or circumstances could significantly affect the accompanying financial statements and may result in modification to the accountants’ review report.

SK TELECOM CO., LTD.
NON-CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2007 AND DECEMBER 31, 2006


	Korean won				Translation into U.S. dollars (Note 2)
	September 30,		December 31,		September 30,		December 31,
ASSETS	2007		2006		2007		2006
	(In millions)				(In thousands)

CURRENT ASSETS:
Cash and cash equivalents (Notes 2 and 12)	W	368,439	W	241,100	$	403,283	$	263,901
Trading securities (Notes 2 and 3)		525,114		665,299		574,775		728,217
Short-term financial instruments (Note 20)		168,759		61,953		184,719		67,812
Current portion of long-term investment securities (Notes 2 and 3)		79,906		156		87,463		171
Accounts receivable — trade, net of allowance for doubtful accounts of W87,714 million as of September 30, 2007 and W88,285 million as of December 31, 2006 (Notes 2, 12 and 23)		1,669,990		1,700,650		1,827,923		1,861,482
Short-term loans, net of allowance for doubtful accounts of W792 million as of September 30, 2007 and W9,212 million as of December 31, 2006 (Notes 2, 5 and 23)		78,446		61,967		85,865		67,827
Accounts receivable — other, net of allowance for doubtful accounts of W24,915 million as of September 30, 2007 and W26,708 million as of December 31, 2006 (Notes 2, 12 and 23)		952,745		1,257,244		1,042,847		1,376,143
Inventories (Note 2)		17,657		16,439		19,327		17,994
Prepaid expenses		107,567		113,256		117,740		123,967
Current deferred income tax assets, net (Notes 2 and 17)		27,798		40,113		30,427		43,907
Currency swap (Notes 2 and 25)		13,751		16,660		15,051		18,236
Accrued income and other		9,336		14,488		10,217		15,857


Total Current Assets		4,019,508		4,189,325		4,399,637		4,585,514


NON-CURRENT ASSETS:
Property and equipment, net (Notes 2, 6, 11, 22 and 23)		4,468,605		4,418,112		4,891,205		4,835,937
Intangible assets, net (Notes 2, 7 and 11)		3,180,135		3,405,159		3,480,883		3,727,188
Long-term financial instruments (Notes 20)		10,019		10,024		10,967		10,972
Long-term investment securities (Notes 2 and 3)		4,008,861		2,376,268		4,387,983		2,600,994
Equity securities accounted for using the equity method (Notes 2 and 4)		1,411,784		1,161,651		1,545,298		1,271,509
Long-term loans, net of allowance for doubtful accounts of W24,097 million as of September 30, 2007 and W23,148 million as of December 31, 2006 (Notes 2, 5 and 23)		51,812		12,828		56,712		14,041
Guarantee deposits, net of allowance for doubtful accounts of W163 million as of September 30, 2007 and December 31, 2006 (Notes 2, 12 and 23)		116,449		120,006		127,462		131,355
Long-term currency swap (Notes 2 and 25)		6,258		—		6,850		—
Long-term interest rate swap (Notes 2 and 25)		1,972		—		2,158		—
Long-term deposits and other		105,095		120,680		115,033		132,093


Total Non-current Assets		13,360,990		11,624,728		14,624,551		12,724,089


TOTAL ASSETS	W	17,380,498	W	15,814,053	$	19,024,188	$	17,309,603

(Continued)

SK TELECOM CO., LTD.
NON-CONSOLIDATED BALANCE SHEETS (CONTINUED)
SEPTEMBER 30, 2007 AND DECEMBER 31, 2006


	Korean won						Translation into U.S. dollars (Note 2)
	September 30,			December 31,			September 30,			December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY	2007			2006			2007			2006
	(In millions)						(In thousands)

CURRENT LIABILITIES:
Accounts payable (Notes 12 and 23)	W	875,518		W	1,107,786		$	958,317		$	1,212,550
Income tax payable (Note 17)		262,635			331,496			287,473			362,846
Accrued expenses (Notes 2 and 24)		362,153			373,865			396,402			409,222
Dividend payable		299			268			327			293
Withholdings		265,508			327,895			290,617			358,904
Current portion of long-term debt, net (Notes 2, 8 and 11)		705,427			794,186			772,140			869,293
Current portion of subscription deposits (Note 10)		8,242			15,760			9,021			17,250
Currency swap (Notes 2 and 25)		13,201			—			14,449			—
Advanced receipts and other		25,968			34,364			28,425			37,615


Total Current Liabilities		2,518,951			2,985,620			2,757,171			3,267,973


NON-CURRENT LIABILITIES:
Bonds payable, net (Notes 2 and 8)		2,035,127			1,978,874			2,227,591			2,166,018
Long-term borrowings (Note 9)		292,070			292,960			319,691			320,665
Subscription deposits (Note 10)		10,770			21,140			11,789			23,139
Long-term payables — other, net of present value discount of W25,218 million as of September 30,2007 and W42,461 million as of December 31, 2006 (Note 2)		424,782			517,539			464,954			566,483
Obligations under capital lease (Notes 2 and 11)		—			1,642			—			1,797
Accrued severance indemnities, net (Note 2)		31,022			9,568			33,956			10,473
Non-current deferred income tax liabilities, net (Notes 2 and 17)		896,081			530,454			980,824			580,620
Long-term currency swap (Notes 2 and 25)		112,825			112,970			123,495			123,654
Long-term interest rate swap (Notes 2 and 25)		—			454			—			497
Guarantee deposits received and other (Notes 2, 23 and 24)		40,385			56,404			44,204			61,738


Total Non-current Liabilities		3,843,062			3,522,005			4,206,504			3,855,084


Total Liabilities		6,362,013			6,507,625			6,963,675			7,123,057


STOCKHOLDERS’ EQUITY:
Capital stock (Notes 1 and 13)		44,639			44,639			48,861			48,861
Capital surplus (Notes 2, 8, 13,16 and 17)		2,947,698			2,962,699			3,226,465			3,242,884
Capital adjustments:
Treasury stock (Notes 1 and 15)		(2,014,927	)		(2,014,927	)		(2,205,481	)		(2,205,481	)
Loss on disposal of treasury stock (Notes 15 and 17)		(7,550	)		(7,887	)		(8,264	)		(8,633	)
Stock options (Notes 2 and 16)		—			3,246			—			3,553
Accumulated other comprehensive income (loss) (Note 18):
Unrealized gain on valuation of long-term investment securities, net (Notes 2, 3 and 17)		1,130,060			408,521			1,236,931			447,155
Equity in other comprehensive income of affiliates, net (Notes 2, 4 and 17)		88,692			82,200			97,080			89,974
Loss on valuation of currency swap, net (Notes 2, 17 and 25)		(11,373	)		(16,487	)		(12,449	)		(18,046	)
Gain (loss) on valuation of interest rate swap, net (Notes 2, 17 and 25)		1,430			(329	)		1,565			(360	)
Retained earnings:
Appropriated (Note 14)		7,335,037			6,679,234			8,028,718			7,310,895
unappropriated		1,504,779			1,165,519			1,647,087			1,275,744


Total Stockholders’ Equity		11,018,485			9,306,428			12,060,513			10,186,546


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	W	17,380,498		W	15,814,053		$	19,024,188		$	17,309,603

See accompanying notes to non-consolidated financial statements.

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006


	Korean won												Translation into U.S. dollars (Note 2)
	2007						2006						2007						2006
	Three months			Nine months			Three months			Nine months			Three months			Nine months			Three months			Nine months
	ended September 30			ended September 30			ended September 30			ended September 30			ended September 30			ended September 30			ended September 30			ended September 30
	(In millions)												(In thousands)
OPERATING REVENUE (Notes 2 and 23)	W	2,815,566		W	8,369,888		W	2,712,531		W	7,891,177		$	3,081,837		$	9,161,436		$	2,969,058		$	8,637,453


OPERATING EXPENSES (Note 2):
Labor cost		(102,514	)		(323,731	)		(100,339	)		(320,169	)		(112,209	)		(354,347	)		(109,828	)		(350,448	)
Commissions paid (Notes 2 and 23)		(1,008,563	)		(2,877,487	)		(806,258	)		(2,397,787	)		(1,103,944	)		(3,149,614	)		(882,507	)		(2,624,548	)
Depreciation and amortization (Notes 6 and 7)		(443,319	)		(1,215,252	)		(383,545	)		(1,057,068	)		(485,244	)		(1,330,180	)		(419,817	)		(1,157,036	)
Network interconnection		(250,221	)		(737,919	)		(207,954	)		(712,292	)		(273,885	)		(807,705	)		(227,620	)		(779,654	)
Leased line		(95,287	)		(291,550	)		(99,339	)		(296,950	)		(104,298	)		(319,122	)		(108,734	)		(325,033	)
Advertising		(70,027	)		(197,454	)		(68,453	)		(206,116	)		(76,650	)		(216,127	)		(74,927	)		(225,609	)
Research and development (Note 2)		(53,388	)		(151,782	)		(51,539	)		(153,294	)		(58,437	)		(166,136	)		(56,413	)		(167,791	)
Rent		(52,046	)		(148,788	)		(47,948	)		(141,588	)		(56,968	)		(162,859	)		(52,482	)		(154,978	)
Frequency usage		(41,427	)		(122,750	)		(40,174	)		(118,484	)		(45,345	)		(134,359	)		(43,973	)		(129,689	)
Repair		(39,049	)		(109,038	)		(34,844	)		(97,785	)		(42,742	)		(119,350	)		(38,139	)		(107,033	)
Cost of goods sold		(19,885	)		(46,836	)		(11,666	)		(24,286	)		(21,766	)		(51,265	)		(12,769	)		(26,583	)
Other		(103,229	)		(286,477	)		(102,352	)		(319,848	)		(112,990	)		(313,568	)		(112,033	)		(350,095	)


Sub-total		(2,278,955	)		(6,509,064	)		(1,954,411	)		(5,845,667	)		(2,494,478	)		(7,124,632	)		(2,139,242	)		(6,398,497	)


OPERATING INCOME		536,611			1,860,824			758,120			2,045,510			587,359			2,036,804			829,816			2,238,956


OTHER INCOME:
Interest income (Note 3)		19,587			54,415			12,917			49,275			21,439			59,561			14,139			53,935
Dividends		6,203			21,096			4,969			20,345			6,790			23,091			5,439			22,269
Commissions (Note 23)		4,357			27,245			9,261			27,220			4,769			29,822			10,137			29,794
Reversal of allowance for doubtful accounts		37			476			—			—			40			521			—			—
Foreign exchange and translation gains (Note 2)		2,551			2,879			288			2,332			2,792			3,151			315			2,553
Equity in earnings of affiliates (Notes 2 and 4)		254,871			271,166			14,415			47,831			278,974			296,810			15,778			52,354
Gain on disposal of investment assets		72			2,002			2,494			4,915			79			2,191			2,730			5,380
Gain on disposal of property, equipment and intangible assets		712			6,430			302			1,056			779			7,038			331			1,156
Gain on transaction and valuation of currency swap (Notes 2 and 25)		22,645			22,645			4,930			4,358			24,787			24,787			5,396			4,770
Gain on conversion of convertible bonds (Note 3)		373,140			373,140			—			—			408,428			408,428			—			—
Gain on repayment of bonds		3,346			3,346			—			—			3,662			3,662			—			—
Other		11,960			30,376			13,686			35,978			13,092			33,250			14,980			39,381

Sub-total		699,481			815,216			63,262			193,310			765,631			892,312			69,245			211,592

(Continued)

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006


	Korean won												Translation into U.S. dollars (Note 2)
	2007						2006						2007						2006
	Three months			Nine months			Three months			Nine months			Three months			Nine months			Three months			Nine months
	ended September 30			ended September 30			ended September 30			ended September 30			ended September 30			ended September 30			ended September 30			ended September 30
	(In millions)												(In thousands)
OTHER EXPENSES:
Interest and discounts (Note 2)	(W	54,020	)	(W	162,432	)	(W	61,744	)	(W	178,534	)	($	59,129	)	($	177,793	)	($	67,583	)	($	195,418	)
Donations		(4,722	)		(32,298	)		(20,960	)		(42,479	)		(5,169	)		(35,352	)		(22,942	)		(46,496	)
Foreign exchange and translation losses (Note 2)		(14,887	)		(15,333	)		(1,197	)		(2,637	)		(16,295	)		(16,783	)		(1,310	)		(2,886	)
Equity in losses of affiliates (Notes 2 and 4)		(63,984	)		(174,069	)		(55,762	)		(112,054	)		(70,035	)		(190,531	)		(61,035	)		(122,651	)
Impairment loss on investment securities		(2,036	)		(4,386	)		—			—			(2,229	)		(4,801	)		—			—
Loss on disposal of investment assets		—			(9	)		(489	)		(3,194	)		—			(10	)		(535	)		(3,496	)
Loss on disposal of property, equipment and intangible assets		(7,371	)		(21,149	)		(1,385	)		(15,019	)		(8,068	)		(23,149	)		(1,516	)		(16,439	)
Impairment loss on assets (Note 2)		(369	)		(369	)		—			—			(404	)		(404	)		—			—
Loss on transaction and valuation of currency swap (Notes 2 and 25)		(17,791	)		(19,559	)		—			(8,553	)		(19,474	)		(21,409	)		—			(9,362	)
Special severance indemnities (Note 2)		—			—			—			(144,021	)		—			—			—			(157,641	)
External research and development cost (Note 2)		(17,769	)		(55,956	)		(16,354	)		(49,702	)		(19,449	)		(61,248	)		(17,901	)		(54,402	)
Other		(1,955	)		(16,176	)		(17,556	)		(31,990	)		(2,139	)		(17,706	)		(19,218	)		(35,016	)

Sub-total		(184,904	)		(501,736	)		(175,447	)		(588,183	)		(202,391	)		(549,186	)		(192,040	)		(643,807	)

INCOME BEFORE INCOME TAX		1,051,188			2,174,304			645,935			1,650,637			1,150,599			2,379,930			707,021			1,806,741
PROVISION FOR INCOME TAX (Notes 2 and 17)		(274,369	)		(597,901	)		(189,133	)		(483,337	)		(300,316	)		(654,445	)		(207,019	)		(529,047	)

NET INCOME (Note 18)	W	776,819		W	1,576,403		W	456,802		W	1,167,300		W	850,283		W	1,725,485		W	500,002		W	1,277,694

NET INCOME PER SHARE (In Korean won and U.S. dollars) (Note 19)	W	10,690		W	21,693		W	6,231		W	15,875		$	11,701		$	23,745		$	6,820		$	17,376

DILUTED NET INCOME PER SHARE (In Korean won and U.S. dollars) (Note 19)	W	10,502		W	21,338		W	6,135		W	15,641		$	11,495		$	23,356		$	6,715		$	17,120

See accompanying notes to non-consolidated financial statements.

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006


	Korean won						Translation into U.S. dollars (Note 2)
	2007			2006			2007			2006
	(In millions)						(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income	W	1,576,403		W	1,167,300		$	1,725,485		$	1,277,694


Expenses not involving cash payments:
Provision for severance indemnities		23,207			33,710			25,402			36,898
Depreciation and amortization		1,308,202			1,155,994			1,431,920			1,265,317
Allowance for doubtful accounts		35,128			47,479			38,450			51,969
Foreign translation loss		14,521			1,237			15,894			1,354
Equity in losses of affiliates		174,069			112,054			190,531			122,651
Impairment loss on investment securities		4,386			—			4,801			—
Loss on disposal of investment assets		9			3,194			10			3,496
Loss on disposal of property, equipment and intangible assets		21,149			15,019			23,149			16,439
Impairment loss on assets		369			—			404			—
Loss on transaction and valuation of currency swap		19,559			8,553			21,409			9,362
Donations		199			—			218			—
Amortization of discounts on bonds and other		32,612			36,513			35,695			39,967


Sub-total		1,633,410			1,413,753			1,787,883			1,547,453


Income not involving cash receipts:
Foreign translation gain		(94	)		(312	)		(103	)		(342	)
Reversal of allowance for doubtful accounts		(476	)		—			(521	)		—
Equity in earnings of affiliates		(271,166	)		(47,831	)		(296,810	)		(52,354	)
Gain on disposal of investment assets		(2,002	)		(4,915	)		(2,191	)		(5,380	)
Gain on disposal of property, equipment and intangible assets		(6,430	)		(1,056	)		(7,038	)		(1,156	)
Gain on transaction and valuation of currency swap		(22,645	)		(4,358	)		(24,787	)		(4,770	)
Gain on conversion of convertible bonds		(373,140	)		—			(408,428	)		—
Gain on repayment of bonds		(3,346	)		—			(3,662	)		—
Other		(298	)		(1,580	)		(327	)		(1,729	)


Sub-total		(679,597	)		(60,052	)		(743,867	)		(65,731	)


Changes in assets and liabilities related to operating activities:
Accounts receivable — trade		(669	)		(3,275	)		(732	)		(3,585	)
Accounts receivable — other		301,113			9,315			329,590			10,196
Inventories		118			(10,425	)		129			(11,411	)
Prepaid expenses		53,622			48,332			58,693			52,903
Advanced payments and other		(6,876	)		10,895			(7,526	)		11,925
Accounts payable		(232,244	)		73,094			(254,208	)		80,007
Income tax payable		(72,543	)		(106,941	)		(79,403	)		(117,055	)
Accrued expenses		(22,140	)		(33,909	)		(24,234	)		(37,116	)
Withholdings		(62,387	)		92,750			(68,287	)		101,521
Current portion of subscription deposits		(7,518	)		893			(8,229	)		977
Advanced receipts and other		(8,396	)		6,988			(9,190	)		7,649
Deferred income taxes		99,970			(60,696	)		109,424			(66,436	)
Severance indemnity payments		(3,514	)		(257,989	)		(3,846	)		(282,387	)
Deposits for group severance indemnities		1,175			183,685			1,285			201,056
Dividends received from affiliate		7,134			1,318			7,809			1,443


Sub-total		46,845			-45,965			51,275			-50,313


Net Cash Provided by Operating Activities		2,577,061			2,475,036			2,820,776			2,709,103

(Continued)

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006


	Korean won						Translation into U.S. dollars (Note 2)
	2007			2006			2007			2006
	(In millions)						(In thousands)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash inflows from investing activities:
Decrease in trading securities, net	W	140,186		W	262,246		$	153,444			287,047
Decrease in current portion of long-term investment securities		94			—			103			—
Collection of short-term loans		59,306			80,292			64,915			87,885
Decrease in long-term financial instruments		5			—			5			—
Proceeds from sales of long-term investment securities		3,303			304,621			3,615			333,429
Proceeds from sales of equity securities accounted for using the equity method		9,707			5,079			10,625			5,559
Decrease in guarantee deposits		17,969			24,526			19,668			26,845
Decrease in other non-current assets		7,843			9,970			8,584			10,914
Proceeds from disposal of property and equipment		21,848			2,283			23,914			2,499
Proceeds from disposal of intangible assets		5,832			124			6,384			136
Cash inflows from transaction of currency swap		17,242			—			18,873			—


Sub-total		283,335			689,141			310,130			754,314


Cash outflows for investing activities:
Acquisition of short-term financial instruments		(106,806	)		(48,405	)		(116,907	)		(52,983	)
Extension of short-term loans		(49,246	)		(73,942	)		(53,903	)		(80,935	)
Extension of long-term loans		(65,486	)		(7,902	)		(71,679	)		(8,649	)
Acquisition of long-term investment securities		(362,642	)		(960,250	)		(396,937	)		(1,051,062	)
Acquisition of equity securities accounted for using the equity method		(175,564	)		(213,634	)		(192,167	)		(233,838	)
Increase in guarantee deposits and other non-current assets		(54,581	)		(110,129	)		(59,743	)		(120,543	)
Acquisition of property and equipment		(1,129,597	)		(714,441	)		(1,236,424	)		(782,006	)
Increase in intangible assets		(29,697	)		(15,815	)		(32,505	)		(17,311	)


Sub-total		(1,973,619	)		(2,144,518	)		(2,160,265	)		(2,347,327	)


Net Cash Used in Investing Activities		(1,690,284	)		(1,455,377	)		(1,850,135	)		(1,593,013	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Cash inflows from financing activities:
Issuance of bonds		359,574			197,362			393,579			216,027
Proceeds from long-term borrowings		—			200,000			—			218,914
Increase in guarantee deposits received and other		1,843			1,241			2,018			1,358
Cash inflows from transaction of currency swap		2,054			—			2,248			—


Sub-total		363,471			398,603			397,845			436,299


Cash outflows for financing activities:
Repayment of current portion of long-term debt		(496,577	)		(10,889	)		(543,539	)		(11,919	)
Repayment of bonds		(22,286	)		(350,000	)		(24,394	)		(383,100	)
Payment of dividends		(581,309	)		(662,815	)		(636,284	)		(725,498	)
Decrease in subscription deposits		(10,370	)		(2,103	)		(11,351	)		(2,302	)
Acquisition of treasury stock		—			(209,077	)		—			(228,850	)
Cash outflows from transaction of currency swap		(4,931	)		—			(5,397	)		—
Decrease in guarantee deposits and other		(7,436	)		(3,624	)		(8,139	)		(3,966	)


Sub-total		(1,122,909	)		(1,238,508	)		(1,229,104	)		(1,355,635	)


Net Cash Used in Financing Activities		(759,438	)		(839,905	)		(831,259	)		(919,336	)


NET INCREASE IN CASH AND CASH EQUIVALENTS		127,339			179,754			139,382			196,754

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD		241,100			151,766			263,901			166,119


CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	W	368,439		W	331,520		$	403,283		$	362,873

See accompanying notes to non-consolidated financial statements.

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007


									Accumulated
									other					Total
	Common		Capital			Capital			comprehensive		Retained			Stockholders’
	stock		surplus			adjustments			income		earnings			equity

(In millions of Korean won)
Balance, January 1, 2007	W	44,639	W	2,962,699		(W	2,019,568	)	W	473,905	W	7,844,753		W	9,306,428
Cash dividends		—		—			—			—		(508,672	)		(508,672	)
Interim dividends (Note 21)		—		—			—			—		(72,668	)		(72,668	)
Net income		—		—			—			—		1,576,403			1,576,403
Conversion of convertible bonds		—		(2,847	)		—			—		—			(2,847	)
Stock options (Notes 2 and 16)		—		3,246			(3,246	)		—		—			—
Adjustment due to acquisition of equity interest of subsidiaries		—		(15,400	)		—			—		—			(15,400	)
Loss on disposal of treasury stock (Notes 2 and 15)		—		—			337			—		—			337
Unrealized gain on valuation of long-term investment securities, net (Notes 2, 3, 17 and 18)		—		—			—			721,539		—			721,539
Equity in other comprehensive income changes of affiliates, net (Notes 2, 4, 17 and 18)		—		—			—			6,492		—			6,492
Gain on valuation of currency swap, net (Notes 2, 17, 18 and 25)		—		—			—			5,114		—			5,114
Gain on valuation of interest rate swap, net (Notes 2, 17, 18 and 25)		—		—			—			1,759		—			1,759


Balance, September 30, 2007	W	44,639	W	2,947,698		(W	2,022,477	)	W	1,208,809	W	8,839,816		W	11,018,485


(In thousands of U.S. dollars) (Note 2)
Balance, January 1, 2007	$	48,861	$	3,242,884		($	2,210,560	)	$	518,723	$	8,586,638		$	10,186,546
Cash dividends		—		—			—			—		(556,778	)		(556,778	)
Interim dividends		—		—			—			—		(79,540	)		(79,540	)
Net income		—		—			—			—		1,725,485			1,725,485
Conversion of convertible bonds		—		(3,116	)		—			—		—			(3,116	)
Stock options (Notes 2 and 16)		—		3,553			(3,553	)		—		—			—
Adjustment due to acquisition of equity interest of subsidiaries		—		(16,856	)		—			—		—			(16,856	)
Loss on disposal of treasury stock (Notes 2 and 15)		—		—			368			—		—			368
Unrealized gain on valuation of long-term investment securities, net (Notes 2, 3, 17 and 18)		—		—			—			789,775		—			789,775
Equity in other comprehensive income changes of affiliates, net (Notes 2, 4, 17 and 18)		—		—			—			7,106		—			7,106
Gain on valuation of currency swap, net (Notes 2, 17, 18 and 25)		—		—			—			5,598		—			5,598
Gain on valuation of interest rate swap, net (Notes 2, 17, 18 and 25)		—		—			—			1,925		—			1,925


Balance, September 30, 2007	$	48,861	$	3,226,465		($	2,213,745	)	$	1,323,127	$	9,675,805		$	12,060,513

See accompanying notes to non-consolidated financial statements.

SK TELECOM CO., LTD.
NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

1.		GENERAL

		SK Telecom Co., Ltd. (the “Company”) was incorporated in March 1984 under the laws of Korea to engage in providing nationwide cellular telephone communication services in the Republic of Korea. The Company’s common shares and depositary receipts (DRs) are listed on the Stock Market of Korea Exchange (formerly “Korea Stock Exchange”) and the New York and London Stock Exchanges. As of September 30, 2007, the Company’s total issued shares are held by the following:


			Percentage of
	Number of shares		total shares issued (%)

SK Group		18,748,452		23.09
POSCO Corp.		2,341,569		2.88
Institutional investors and other minority shareholders		51,577,438		63.53
Treasury stock		8,526,252		10.50

		81,193,711		100.00

2.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

		The accompanying non-consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the Republic of Korea, using the same accounting policies which were adopted in preparing the annual financial statements. Significant accounting policies followed in preparing the accompanying non-consolidated financial statements are summarized as follows:

	a.		Basis of Presentation

			The Company maintains its official accounting records in Korean won and prepares statutory non-consolidated financial statements in Korean language (Hangul) in conformity with the accounting principles generally accepted in the Republic of Korea (“Korean GAAP”). Certain accounting principles applied by the Company that conform with financial accounting standards and accounting principles in the Republic of Korea may not conform with accounting principles generally accepted in other countries. Accordingly, these financial statements are intended for use by those who are informed about Korean accounting principles and practices. The accompanying financial statements have been condensed, restructured and translated into English with certain expanded descriptions from the Korean language financial statements. Certain information included in the Korean language financial statements, but not required for a fair presentation of the Company’s financial position, results of operations, changes in stockholders’ equity or cash flows, is not presented in the accompanying financial statements.

			The accompanying financial statements are stated in Korean won, the currency of the country in which the Company is incorporated and operates. The translation of Korean won amounts into U.S. dollar amounts is included solely for the convenience of readers of financial statements and has been made at the rate of W913.60 to US$1.00, the Noon Buying Rate in the City of New York for cable transfers in Korean won as certified for customs purposes by the Federal Reserve Bank of New York on the last business day of the period ended September 30, 2007. Such translations into U.S. dollars should not be construed as representations that the Korean won amounts could be converted into U.S. dollars at that or any other rate.

	b.		Adoptions of New Statements of Korea Accounting Standards (“SKAS”)

			On January 1, 2007, the Company adopted SKAS No. 11 and SKAS No. 21 through No. 24. The adoption of such accounting standards did not have an effect on the financial position of the Company as of September 30, 2007 and the ordinary income and net income of the Company for the three months and nine months ended September 30, 2007. Details of primary change due to such adoption of SKAS are as follows:

			Pursuant to adoption of SKAS No. 21, “Preparation and Presentation of Financial Statements”, a statement of changes in stockholders’ equity was prepared for the nine months ended June 30, 2007. Certain amounts classified as capital adjustments through 2006 are classified as accumulated other comprehensive income (loss); such amounts include unrealized gain/loss on available-for-sale securities, equity in capital adjustments of affiliates and gain/loss on valuation of derivative instruments. In addition, certain amounts classified as investment assets through 2006 are classified as other non-current assets; such amounts include long-term loans, guarantee deposits, long-term deposits and others. The accompanying balance sheet as of December 31, 2006, which is comparatively presented, was reclassified in accordance with SKAS No. 21 and the statement of changes in stockholders’ equity for the nine months ended September 30, 2006 was not prepared as allowed in accordance with the transitional provision of SKAS No. 21.

	c.		Early adoption of revised SKAS No.2, “Interim Financial Reporting”

			The Company early adopted SKAS No. 2 — “Interim Financial Reporting” revised in May 2007, which requires company to prepare the statements of cash flows and changes in stockholders’ equity only for the accumulated interim period. Therefore, the statements of cash flows and changes in stockholders’ equity for the three months ended September 30, 2007 and 2006 have not been prepared.

	d.		Cash Equivalents

			Cash equivalents are highly liquid investments and short term financial instruments, which are readily convertible without significant transaction cost, do not have significant risk of changes in interest rates, and with original maturities of three months or less.

	e.		Allowance for Doubtful Accounts

			Allowance for doubtful accounts is provided based on the estimated collectibility of individual accounts and historical bad debt experience.

	f.		Inventories

			Inventories, which consist mainly of replacement units for wireless telecommunication facilities and supplies for sales promotion, are stated at the lower of cost or market value, with cost determined using the moving average method. The Company maintains perpetual inventory systems, which are adjusted to physical inventory counts performed at fiscal year end. When the market value of inventories is less than the acquisition cost, the carrying amount is reduced to the market value and any difference is charged to current operations as operating expenses. There was no such loss for the three months and nine months ended September 30, 2007 and 2006.

	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 accumulated other comprehensive income (loss) and the unrealized gains or losses are reflected in net income when the securities are sold or if there is an objective evidence of impairment such as bankruptcy of investees. Equity securities are stated at acquisition cost if fair value cannot be reliably measured.

			Held-to-maturity securities are presented at acquisition cost after premiums or discounts are amortized or accreted, respectively. The Company recognizes write-downs resulting from 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.		Equity Securities Accounted for Using the Equity Method

			Investment securities of affiliated companies, in which the Company has 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 stockholders’ equity of the investee. Differences between the purchase cost and net asset fair value of the investee are amortized over 5 to 20 years using the straight-line method. When applying the equity method of accounting, unrealized inter-company gains and losses are eliminated (See Note 4). In addition, the Company provides for additional losses for those investments accounted for using the equity method that are reduced to zero to the extent that the Company has other investment assets related to the equity method investees.

			When the Company’s share of equity interest in the equity method investees increases as a result of capital transactions of the investees with (or without) consideration, the increase in the Company’s proportionate shares in the investees are treated as goodwill or negative goodwill and when the Company’s share of equity interest in the equity method investees decreases as a result of capital transactions of the investees with (or without) consideration, the decrease in the Company’s proportionate shares in the investees are accounted for as gain or loss on disposal. However, if equity method investees are subsidiaries, such differences in the Company’s proportionate shares in the investees are accounted for as capital adjustments of affiliates in the Company’s stockholders’ equity.

			In translating the foreign currency statements of the Company’s foreign-based investees, the Company applies (a) the current rate of exchange at the balance sheet date to the investee’s balance sheet items (except historical rates applied for stockholders’ equity), and (b) the average rate for the current period for income statement items. After translating the balance sheet and income statement items as noted above, the Company’s portion of the amount after deducting the translated total liabilities from translated total assets and equity is recorded as capital adjustment of affiliates in the Company’s stockholders’ equity.

	i.		Troubled Debt Restructuring

			In cases where contractual terms such as the face amount, interest rate, or maturity are changed to alleviate the debtor’s burdens in accordance with an agreement between the Company and the debtor or initiation of corporate reorganization procedures under court trustee or under debtor’s management, the Company recognizes the restructured receivables at present value of the expected future cash flows discounted by a reasonable interest rate and amortizes the difference between face value and present value to interest income using the effective interest rate method.

	j.		Property and Equipment

			Property and equipment are stated at cost less accumulated depreciation. 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 the straight-line method) over the estimated useful lives (4~30 years) of the related assets (See Note 6).

			Interest expense and other financing charges for borrowings related to the manufacture or construction of property and equipment are charged to current operations as incurred.

	k.		Intangible Assets

			Intangible assets are recorded at cost, less amortization computed using the straight-line method over 5 to 20 years. The amortization for the nine months ended September 30, 2007 and 2006 were W325,475 million and W260,627 million, respectively, and for the three months ended September 30, 2007 and 2006 were W109,033 million and W89,367 million, respectively.

			With its application for a license to provide IMT 2000 service, the Company has a commitment to pay W1,300,000 million to the Ministry of Information Communication (“MIC”). W650,000 million was paid in March 2001 by SK IMT Co., Ltd. (a former subsidiary of the Company), which was merged into the Company on May 1, 2003, and the remainder is required to be paid over 10 years with an annual interest rate equal to the 3-year-maturity government bond rate minus 0.75% (4.44% as of September 30, 2007). The future payment obligations are W110,000 million (related present value discount: W6,908 million) in 2008, W130,000 million in 2009, W150,000 million in 2010 and W170,000 million in 2011. On December 4, 2001, SK IMT Co., Ltd. received the IMT 2000 license from MIC, and recorded the total license cost (measured at present value) as an intangible asset. As a result of the merger with SK IMT Co., Ltd., the Company acquired such IMT license of W1,259,253 million and assumed the related long-term payable with principal amount of W650,000 million on May 1, 2003 (the date of merger). 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. As of September 30, 2007, the present value discount related to the current portion and long-term portion of payments to be made to MIC totaled W6,908 million and W25,218 million, respectively.

	l.		Impairment Losses

			When the recoverable amount of assets (that are not recorded at fair value) including investment assets (except for trading and available for sale investments in listed companies), property and equipment, and intangible assets is significantly less than the carrying value due to obsolescence, physical damage, decline in market value or other causes, the carrying value is reduced to the recoverable amount and any difference is charged to current operation as an impairment loss. The impairment loss for the nine months ended September 30, 2007 and 2006 were W369 million and nil, respectively.

	m.		Convertible Bonds

			The proceeds from issuance of convertible bonds are allocated between the conversion rights and the debt issued; and the portion allocable to the conversion rights is accounted for as capital surplus with a corresponding conversion right adjustment 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.

	n.		Discounts on Bonds

			Discounts on bonds are amortized to interest expense using the effective interest rate method over the redemption period of the bonds.

	o.		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.

	p.		Provisions, Contingent Liabilities and Contingent Assets

			The Company recognizes 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 24). When a possible range of loss in connection with a probable loss contingency as of the balance sheet date is estimable with reasonable certainty, and some amount within that range appears to be a better estimate than any other amount within the range, the Company accrues such amount. When no amount within the range appears to be a better estimate than any other amount, the minimum in that range is recorded.

			The Company does 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.

—

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 does 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 events or events outside the control of the Company.

	q.		Accrued Severance Indemnities

			In accordance with the Company’s policy, all employees with more than one year of service are entitled to receive severance indemnities upon termination of their employment based on length of service and rate of pay. 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 has 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 deposits with outside insurance companies, where the beneficiaries are the Company’s employees, totaling W22,721 million and W23,895 million as of September 30, 2007 and December 31, 2006, respectively, are deducted from accrued severance indemnities.

			In accordance with the Korean National Pension Fund Law, the Company transferred a portion of its accrued severance indemnities to the National Pension Fund through March 1999. Such transfers, amounting to W50 million as of September 30, 2007 and December 31, 2006, respectively, are deducted from accrued severance indemnities.

			Actual payment of severance indemnities amounted to W3,514 million and W257,989 million for the nine months ended September 30, 2007 and 2006, respectively.

			Effective March 31, 2006, the Company changed its policy for the severance indemnities applicable to those employees who joined the Company before or on December 31, 2002 from cumulative method, where employees are entitled to get paid more than one month of salary each year depending on the length of service, to simple multiplier method, where employees are paid one month of salary each year regardless of their service period in accordance with the resolution of the Company’s joint labor-management conference held on March 16, 2006. As a result of such policy change, the Company distributed early settlements to those eligible employees on their accumulated severance indemnities as of September 30, 2006 on a mandatory basis. In addition, the Company paid the additional bonuses of W125,890 million for those employees who received the mandatory distribution for their early settlement as compensation for those employees. The Company recorded such settlements as compensation costs as special severance indemnities in other expenses for the nine months ended September 30, 2006. In addition, the Company executed the early retirement program and the related special bonus of W18,131 million was paid to eligible employees and accounted for as special severance indemnities in other expenses for the nine months ended September 30, 2006.

	r.		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 16). 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. In addition, recognized compensation costs related to stock options expired due to such stock options not being exercised within the exercisable period are transferred to other capital surplus from capital adjustments (See Note 13).

	s.		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.

	t.		Research and Development Costs

			The Company charges substantially all research and development costs to expense as incurred. The Company incurred internal research and development costs of W151,782 million and W153,294 million for the nine months ended September 30, 2007 and 2006, respectively, and W53,388 million and W51,539 million for the three months ended September 30, 2007 and 2006, respectively. In addition, external research and development costs were W55,956 million and W49,702 million for the nine months ended September 30, 2007 and 2006, respectively, and W17,769 million and W16,354 million for the three months ended September 30, 2007 and 2006, respectively.

	u.		Accounting for Foreign Currency Transactions and Translation

			Transactions denominated in foreign currencies are recorded in Korean won based on the prevailing rate of exchange at the date of the transactions. Monetary assets and liabilities denominated in foreign currency are translated into Korean won at the Base Rates announced by Seoul Money Brokerage Services, Ltd. on the balance sheet date, which were W920.70 and W929.60 to US$1.00 at September 30, 2007 and December 31, 2006, respectively. The resulting gains or losses arising from the translation or settlement of such assets and liabilities are included in current operations.

	v.		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 portions of the gains or losses on the hedging instruments are recorded as accumulated other comprehensive income (loss) and credited/charged to operations at the time the hedged transactions affect earnings, and the ineffective portions of the gains or losses are credited/charged immediately to operations.

	w.		Revenue Recognition

			Operating revenue is recognized when cellular telephone communication and related services are provided.

	x.		Income Tax

			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. Deferred income tax assets and liabilities are classified into current and non-current based on the classification of related assets or liabilities for financial reporting purposes (See Note 17).

	y.		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 and who have not received such subsidies within the last two years to acquire new or renewed customer relationships. The Company commenced its handset subsidy program on the effective date of the revised Telecommunications 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. The Company charges such handset subsidies to commissions paid as the related payments are made.

	z.		Reclassifications

			Certain reclassifications have been made in prior period’s financial statements to conform to classifications used in the current period. Such reclassifications did not have an effect on the previously reported net assets as of December 31, 2006 and net income for the three months and nine months ended September 30, 2006.

INVESTMENT SECURITIES

	a.		Trading Securities

			Trading securities as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):

September 30, 2007

December 31, 2006

Fair value and

Acquisition cost

Fair value

Carrying amount

carrying amount

Beneficiary certificates

525,114

665,299

	b.		Long-term Investment Securities

			Long-term investment securities as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


	September 30, 2007			December 31, 2006

Available-for-sale equity securities	W	3,627,082		W	992,455
Available-for-sale debt securities		461,685			1,383,969


Total		4,088,767			2,376,424
Less : current portion		(79,906	)		(156	)


Long-term portion	W	4,008,861		W	2,376,268

	b-(1).		Available-for-sale Equity Securities

			Available-for-sale equity securities as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


	September 30, 2007									Carrying amount
	Number of		Percentage		Acquisition					September		December
	shares		(%)		cost		Fair value			30, 2007		31, 2006
(Investments in listed companies)
Digital Chosunilbo Co., Ltd.		2,890,630		7.8	W	5,781	W	6,793		W	6,793	W	5,897
hanarotelecom incorporated		11,045,000		4.8		121,677		98,300			98,300		88,581
KRTnet Corporation		234,150		4.4		1,171		2,833			2,833		2,517
POSCO		2,481,310		2.8		332,662		1,669,922			1,669,922		766,725
Comas Interactive Co., Ltd. (Formerly INNOTG Co., Ltd.)		59,473		0.4		1,695		193			193		83
Extended Computing Environment Co., Ltd.		133,333		3.3		10		836			836		876
China Unicom Ltd.		899,745,075		6.6		1,333,009		1,716,906	(note a)		1,716,906		—

Sub-total						1,796,005		3,495,783			3,495,783		864,679


	September 30, 2007										Carrying amount
	Number of		Percentage		Acquisition						September		December
	shares		(%)		cost			Fair value			30, 2007		31, 2006
(Investments in non-listed companies)
LG Powercomm Co., Ltd. (Formerly Powercomm Co., Ltd.)		7,500,000		5.0	W	240,243			80,370	(note b)	W	80,370	W	80,370
Japan MBCO		54,000		7.3		27,332	(note c)					—		—
Eonex Technologies Inc.		144,000		12.3		3,600	(note d)					4,593		4,593
The Korea Economic Daily		2,585,069		13.8		13,964	(note d)					13,964		13,964
Others						146,424	(note d)					19,490		25,411

Sub-total						431,563						118,417		124,338


(Investments in funds)
Others						12,882	(note d)					12,882		3,438

Sub-total						12,882						12,882		3,438

Total					W	2,240,450					W	3,627,082	W	992,455


(note a)		In accordance with the resolution of the Company’s board of directors dated August 20, 2007, convertible bonds of China Unicom Ltd. were converted into its common stocks and reclassified to available-for sale equity securities from available-for-sale debt securities.

(note b)		The Company recorded its investments in common stock of LG Powercomm Co., Ltd. at its fair value, which was estimated with the assistance of an outside professional valuation company using the present value of expected future cash flows. The unrealized loss on valuation of investments amounting to W115,908 million (net of tax effect of W43,965 million) as of December 31, 2006 was recorded as accumulated other comprehensive loss. Based in part, on the opinion of the outside professional valuation company, there was no significant change in LG Powercomm Co., Ltd.’s operation and financial results, which have an effect on the fair value of the investment, for the nine months ended September 30, 2007. Accordingly, no additional unrealized loss or recovery on valuation of such investments was recorded.

(note c)		Due to the impairment of the Company’s investments in common stock of Japan MBCO, the Company recorded impairment loss on such investments of W27,332 million for the year ended December 31, 2006.

(note d)		As a reasonable estimate of fair value could not be made, the investment is stated at acquisition cost.

	b-(2).		Available-for-sale Debt Securities

			Available-for-sale debt securities as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


					Carrying amount
					September 30,			December 31,
	Maturity	Acquisition cost			2007			2006
Public bonds	(note a)	W	51,474		W	51,279		W	51,300
Currency stabilization bonds	(note b)		49,931			49,729			49,894
Closed beneficiary certificates (note c)	October, 2009		5,000			5,070			5,072
Bond-type beneficiary certificates	(note d)		350,000			354,607			—
Convertible bonds of Real Telecom Co., Ltd. (note e)	March, 2007		10,656			—			—
Convertible bonds of China Unicom Ltd. (note f)	July, 2009		—			—			1,276,703
Convertible bonds of Eonex Technologies, Inc. (note g)	October, 2008		1,000			1,000			1,000


Total			468,061			461,685			1,383,969
Less: current portion			(80,202	)		(79,906	)		(156	)


Long-term available-for-sale debt securities		W	387,859		W	381,779		W	1,383,813

The interest income incurred from available-for-sale debt securities for the nine months ended September 30, 2007 and 2006 were W3,585 million and W6,904 million, respectively, and for the three months ended September 30, 2007 and 2006 were W1,233 million and W18 million, respectively.


(note a)		The maturities of public bonds as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


Maturity	September 30, 2007		December 31, 2006
One year or less	W	50,032	W	156
More than one year and within five years		1,247		51,144

	W	51,279	W	51,300


(note b)		The maturities of currency stabilization bonds as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


Maturity	September 30, 2007		December 31, 2006
One year or less	W	29,874	W	—
More than one year and within five years		19,855		49,894

	W	49,729	W	49,894


(note c)		Returns on the closed beneficiary certificates were accounted for as interest income.

(note d)		The maturities of bond-type beneficiary certificates as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


Maturity	September 30, 2007		December 31, 2006
More than one year and within five years	W	354,607	W	—


(note e)		Due to the impairment of such bonds, the Company recorded an impairment loss of W10,656 million prior to December 31, 2004 and as of September 30, 2007, the principal amount of the bond has not been redeemed at its maturity.

(note f)		In accordance with the resolution of the Company’s board of directors dated August 20, 2007, convertible bonds of China Unicom Ltd. were converted into its common stocks and reclassified to available-for sale equity securities from available-for-sale debt securities. As a result of such conversion, the Company recorded gain on conversion of convertible bonds of W373,140 million for the nine months ended September 30, 2007.

(note g)		On October 11, 2006, the Company purchased convertible bonds of Eonex Technologies, Inc. at face value of W1,000 million. Such convertible bonds can be converted into 7,142 shares of common stock of Eonex Technologies, Inc. at W140,000 per share during the period from April 1, 2007 to October 11, 2008. Unless either previously redeemed or converted, the notes are redeemable at 106% of the principal amount at maturity. If all such bonds are converted, the Company’s equity interest in Eonex Technologies, Inc. will increase to 12.9%.

	b-(3).		Changes in Unrealized Gains (Losses) on Investments in Available-for-sale Securities

			The changes in unrealized gains (losses) on investments in available-for-sales securities for the nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):


	For the nine months ended September 30, 2007
							Transferred to
	Beginning			Increase/			realized			Ending
	balance			(decrease)			gain (loss)			balance
Available-for-sales securities:
Digital Chosunilbo Co., Ltd.	W	116		W	896		W	—		W	1,012
hanarotelecom incorporated		(33,096	)		9,720			—			(23,376	)
KRTnet Corporation		1,346			316			—			1,662
POSCO		434,063			903,197			—			1,337,260
Comas Interactive Co., Ltd. (Formerly INNOTG Co., Ltd.)		(1,611	)		110			—			(1,501	)
Extended Computing Environment Co., Ltd.		866			(40	)		—			826
China Unicom Ltd.		—			396,474						396,474
LG Powercomm Co., Ltd.		(159,873	)		—			—			(159,873	)
Eonex Technologies Inc.		2,011			—			—			2,011
Currency stabilization bonds		12			(214	)		—			(202	)
Public bonds		(5	)		(190	)		—			(195	)
Convertible bonds of China Unicom Ltd.		319,648			208,095			(527,743	)		—
Beneficiary certificates		—			4,606			—			4,606


Sub-total		563,477			1,522,970			(527,743	)		1,558,704
Less: tax effect		(154,956	)		(418,817	)		145,129			(428,644	)



Total	W	408,521		W	1,104,153		(W	382,614	)	W	1,130,060


	For the nine months ended September 30, 2006
							Transferred to
	Beginning			Increase/			realized			Ending
	balance			(decrease)			gain (loss)			balance
Available-for-sales equity securities:
Digital Chosunilbo Co., Ltd.	W	14		(W	1,358	)	W	—		(W	1,344	)
hanarotelecom incorporated		(65,237	)		20,764			—			(44,473	)
KRTnet Corporation		1,475			(281	)		—			1,194
POSCO		168,563			106,696			—			275,259
Comas Interactive Co., Ltd. (Formerly INNOTG Co., Ltd.)		(1,611	)		(13	)		—			(1,624	)
eXtended Computing Environment Co., Ltd.		—			907			—			907
LG Powercomm Co., Ltd.		(163,113	)		—			—			(163,113	)
Eonex Technologies Inc.		2,011			—			—			2,011
Currency stabilization bonds		(218	)		895			(677	)		—
Convertible bonds of China Unicom Ltd.		—			54,961			—			54,961


Sub-total		(58,116	)		182,571			(677	)		123,778
Less: tax effect		15,982			(50,207	)		186			(34,039	)



Total	(W	42,134	)	W	132,364		(W	491	)	W	89,739

4.		EQUITY SECURITIES ACCOUNTED FOR USING THE EQUITY METHOD

		Equity securities accounted for using the equity method of accounting as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


	September 30, 2007									Carrying Amount
			Ownership				Net
	Number		percentage		Acquisition		asset			September		December
	of shares		(%)		cost		value			30, 2007		31, 2006

Pantech Co., Ltd.		1,278,515		0.5	W	—	W	—	(note a)	W	—	W	—
SK Communications Co., Ltd.		7,844,454		85.9		175,441		158,338			177,294		177,913
SK Telink Co., Ltd.		943,997		90.8		5,296		91,047			91,047		86,284
SK C&C Co., Ltd.		6,000,000		30.0		19,071		524,636	(note b)		528,796		272,554
SK Wyverns Baseball Club Co., Ltd.		199,997		100.0		1,000		—			—		—
STIC Ventures Co., Ltd.		—		—		—		—	(note c)		—		8,651
Paxnet Co., Ltd.		5,590,452		59.7		26,563		13,833			30,193		30,807
Global Credit & Information Co., Ltd.		300,000		50.0		2,410		3,118			3,673		3,704
TU Media Corp.		17,538,064		32.7		96,980		12,974	(note d)		22,248		7,016
Aircross Co., Ltd.		1,575,000		100.0		2,440		3,617	(note e)		3,617		1,713
IHQ, Inc.		14,960,784		37.1		51,846		21,439	(note f)		42,089		38,938
Ntreev Soft Co., Ltd.		2,064,970		66.7		17,720		12,487	(note g)		12,487		—
Baba Club		200,000		100.0		1,975		—	(note h)		1,731		—
Philio Co., Ltd.		26,396		100.0		6,276		1,674	(note i)		5,844		—
Seoul Records, Inc.		9,582,321		60.0		27,874		20,499			22,741		25,995
Harex Info Tech, Inc.		225,000		21.2		3,375		753			1,542		1,835
SK Mobile				42.5		10,322		3,793			3,793		4,643
SKT Vietnam PTE Ltd. (Formerly SLD Telecom PTE. Ltd).		180,476,700		73.3		191,273		105,947			106,316		118,463
Skytel Co., Ltd.		1,756,400		26.4		2,159		5,169			5,169		6,009
SK China Company Ltd.				20.7		3,195		1,086			—		93
SK Telecom China Co., Ltd.				100.0		7,340		6,512			6,512		6,536
SK Telecom China Holding Co., Ltd.				100.0		4,168		4,168	(note j)		4,168		—
SK USA, Inc.		49		49.0		3,184		3,016			3,016		2,969
ULand Company Ltd.		14,100,100		70.1		17,511		4,227			4,485		6,761
SK Telecom USA Holdings, Inc.		1,000		100.0		272,538		46,079	(note k)		46,079		77,786
SK Telecom International, Inc.		1,099		100.0		17,467		25,682			25,683		25,146
Helio, Inc.		794,375		0.8		1,341		—			—		1,100
Korea IT Fund		190		63.3		190,000		198,153			198,153		193,060
Centurion IT Investment Association		30		37.5		2,100		1,821			1,821		3,262
1st Music Investment Fund of SK-PVC		1,385		69.3		6,925		7,186			7,186		7,186
2nd Music Investment Fund of SK-PVC		1,385		79.3		7,925		8,238			8,238		8,238
SK-KTB Music Investment Fund		297		74.3		14,850		13,728			13,729		15,311
IMM Cinema Fund		120		45.6		12,000		10,379			10,379		11,569
Michigan Global Cinema Fund		40		36.4		4,000		3,773			3,773		3,773
3rd Fund of Isu Entertainment		25		31.3		2,500		2,419			2,419		2,419
Other investments in affiliates						17,576			(note l)		17,563		11,917


Total					W	1,226,641				W	1,411,784	W	1,161,651


(Note a)		Pantech Co., Ltd. (“Pantech”) requested its creditor banks for a debt restructuring due to deterioration of its liquidity on December 11, 2006. On December 15, 2006, Pantech entered into creditor banks agreement (the “Agreement”) with its eight creditor banks including Korea Development Bank (“KDB”), its main creditor bank. Currently, the creditor banks’ association, which was organized according to the Agreement and represented by KDB, has been supervising Pantech’s debt repayment schedule and operations. In the first half of 2007, the Company’s shares of Pantech were reduced to 1,278,515 shares from 25,570,306 shares in accordance with the Pantech’s 20 to 1 stock consolidation. In accordance with debt-equity swap, the Company’s ownership decreased from 22.7% to 0.5% for the three months ended September 30, 2007. As a result, the investment in common stock of Pantech was reclassified to available-for-sale equity securities during the 3^rd quarter of 2007 as the Company no longer exercise significant influence over the investee.

(Note b)		During the nine months ended September 30, 2007, the Company’s shares of SK C&C Co., Ltd. were increased to 6,000,000 shares from 300,000 shares as a result of SK C&C Co., Ltd.’s 20 to 1 stock split.

(Note c)		During the nine months ended September 30, 2007, the Company disposed all of its 1,600,000 shares of Stick Ventures Co., Ltd.

(Note d)		During the nine months ended September 30, 2007, the Company additionally invested W32,368 million in TU Media Corp. which increased the Company’s ownership from 29.6% to 32.7%.

(Note e)		During the nine months ended September 30, 2007, the Company acquired 975,000 shares of Air cross Co., Ltd.’s common stock from WiderThan Co., Ltd. and others, which increased the Company’s ownership from 38.1% to 100.0%.

(Note f)		During the nine months ended September 30, 2007, the Company additionally invested W10,000 million in IHQ, Inc. which increased the Company’s ownership from 34.8% to 37.1%.

(Note g)		During the nine months ended September 30, 2007, the Company acquired 1,440,720 shares of Ntreev Soft Co., Ltd.‘s common stock from IHQ, Inc. and others at W23,120 million with additional investment of W10,000 million in Ntreev Soft Co., Ltd. Therefore, the Company holds 66.7% ownership % in Ntreev Soft Co., Ltd.

(Note h)		During the nine months ended September 30, 2007, the Company acquired 200,000 shares of Baba Club‘s common stock. Therefore, the Company holds 100% ownership in Baba Club.

(Note i)		During the nine months ended September 30, 2007, the Company acquired 26,396 shares of Philio Co., Ltd.‘s common stock. Therefore, the Company holds 100% ownership in Philio Co., Ltd.


(Note j)		During the nine months ended September 30, 2007, the Company incorporated SK Telecom China Holdings Co, Ltd. with an initial investment of W4,168 million.

(Note k)		In 2005, the Company incorporated SK Telecom USA Holdings, Inc. with an investment of US$122 million in order to invest in and manage Helio, Inc., 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. In addition, the Company invested additional US$79.5 million and US$ 19.5 million in SK USA Holdings, Inc. for the nine months ended September 30, 2007 and 2006, respectively (See Note 30).

(Note l)		As allowed under Korean GAAP, investments in equity securities of SK Telecom Europe Limited and others were not accounted for using the equity method of accounting, as changes in the Company’s portion of stockholders’ equity of such investees were not expected to be material.

Details of the changes in investments in affiliates accounted for using the equity method for the three months and nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):


		For the nine months ended September 30, 2007
									Equity in
						Equity in			capital surplus						Other
		Beginning				earnings			and capital			Dividend			increase			Ending
		balance		Acquisition		(losses)			adjustments			received			(decrease)			balance

SK Communications Co., Ltd	(note a)	W	177,913	W	—	(W	21,630	)	W	21,011		W	—		W	—		W	177,294
SK Telink Co., Ltd.	(notes a and c)		86,284		—		9,454			(198	)		(4,493	)		—			91,047
SK C&C Co., Ltd.	(notes a and c)		272,554		—		253,111			4,391			(1,260	)		—			528,796
STIC Ventures Co., Ltd.	(note b)		8,651		—		(40	)		(239	)		—			(8,372	)		—
Paxnet Co., Ltd.	(notes a and c)		30,807		—		107			6			(727	)		—			30,193
Global Credit & Information Co., Ltd.	(note b)		3,704		—		(31	)		—			—			—			3,673
TU Media Corp.	(notes a and d)		7,016		32,368		(17,434	)		(36	)		—			334			22,248
Aircross Co., Ltd.	(note b)		1,713		2,140		(235	)		—			—			—			3,617
IHQ, Inc.	(notes a and e)		38,938		10,000		(7,894	)		1,047			—			(2	)		42,089
Ntreev Soft Co., Ltd.	(notes a and g)		—		33,120		1,593			(6,826	)		—			(15,400	)		12,487
Baba Club	(notes b and h)		—		3,970		(245	)		—			—			(1,994	)		1,731
Philio Co., Ltd.	(notes b and h)				10,373		(431	)		—			—			(4,098	)		5,844
Seoul Records, Inc.	(note a)		25,995		—		(2,984	)		(270	)		—			—			22,741
Harex Info Tech, Inc.	(note b)		1,835		—		(293	)		—			—			—			1,542
SK Mobile	(note a)		4,643		—		(956	)		106			—			—			3,793
SKT Vietnam PTE Ltd. (Formerly SLD Telecom PTE Ltd).	(note a)		118,463		—		(11,136	)		(1,012	)		—			—			106,315
Skytel Co., Ltd.	(notes b and c)		6,009		—		170			(356	)		(654	)		—			5,169
SK China Company Ltd.	(note b)		93		—		(112	)		19			—			—			—
SK Telecom China Co., Ltd.	(note a)		6,536		—		(24	)		—			—			—			6,512
SK Telecom China Holding Co., Ltd.	(note b)		—		4,168		—			—			—			—			4,168
SK USA, Inc.	(note b)		2,969		—		48			(1	)		—			—			3,016
ULand Company Limited.	(note a)		6,761		—		(2,565	)		289			—			—			4,485
SK Telecom USA Holdings, inc.	(note a)		77,786		73,536		(105,142	)		(101	)		—			—			46,079
SK Telecom International, Inc.	(note a)		25,146		—		831			(294	)		—			—			25,683
Helio, Inc.	(notes a and e)		1,100		242		(1,412	)		2			—			68			—
Korea IT Fund	(note a)		193,060		—		5,854			(761	)		—			—			198,153
Centurion IT Investment Association	(notes b and f)		3,262		—		(64	)		(477	)		—			(900	)		1,821
1st Music Investment Fund of SK-PVC	(note b)		7,186		—		—			—			—			—			7,186
2nd Music Investment Fund of SK-PVC	(note b)		8,238		—		—			—			—			—			8,238
SK-KTB Music Investment Fund	(note a)		15,311		—		(226	)		(1,356	)		—			—			13,729
IMM Cinema Fund	(note a)		11,569		—		(1,217	)		27			—			—			10,379
Michigan Global Cinema Fund	(note b)		3,773		—		—			—			—			—			3,773
3rd Fund of Isu Entertainment	(note b)		2,419		—		—			—			—			—			2,419

Total		W	1,149,734		169,917		97,097			14,971			(7,134	)		(30,364	)	W	1,394,220

Less: six months ended June 30, 2007					52,793		(93,790)	)		188,606			(7,134	)		(376	)


Three months ended September 30, 2007				W	117,124	W	190,887		(W	173,635	)	W	—		(W	29,988	)


(Note a)		Investments were recorded using the equity method of accounting based on unaudited and unreviewed financial statements as of and for the nine months ended September 30, 2007 In order to verify the reliability of such unaudited and unreviewed financial statements, the Company has performed the following procedures and found no significant errors:


	i)		obtained the signature from the chief executive officer of the equity method investee asserting that the unaudited and unreviewed financial statements are accurate

	ii)		checked whether the major transactions identified by the Company, including public disclosures, were appropriately reflected in the unaudited and unreviewed financial statements

	iii)		performed an analytical review on the unaudited and unreviewed financial statements


(Note b)		Investments in equity securities are carried using the equity method of accounting based on the financial statements as of December 31, 2006 as information as of September 30, 2007 was not available and the change in the Company’s portion of stockholders’ equity of the investee for the nine months ended September 30, 2007 was immaterial.

(Note c)		The Company received dividends from SK Telink Co., Ltd., SK C&C Co., Ltd. and Skytel Co., Ltd., and the corresponding amount was deducted from the carrying amount of equity method securities.

(Note d)		Other increase in investments in TU Media Corp. represents realization of equity in other comprehensive income of affiliates as TU Media Corp. became the Company’s subsidiary as a result of the Company’s additional investment in TU Media Corp. for the nine months ended September 30, 2007.

(Note e)		Other increase (decrease) in investments in equity securities of IHQ, Inc. and Helio, Inc. represent gains on disposal of investments in equity securities, which have resulted from the dilution of the Company’s ownership as a result of capital transactions of the investees. .

(Note f)		Other decrease in investments in Centurion IT Investment Association resulted from the collection of a portion of the Company’s investment.

(Note g)		Other decrease in investments in Ntreev Soft Co., Ltd. represents the difference between the purchase cost and net asset value of the investee, which is offset against the Company’s capital surplus as Ntreev Soft Co., Ltd. is the Company’s subsidiary (See Note 13).

(Note h)		Other decrease in investments in Baba Club and Philio Co., Ltd. represents the goodwill recognized, which resulted from the Company’s acquisition of a portion of BaBa Club and Philio Co., Ltd.’s assets and operational business units after the investment in equity securities of Baba Club and Philio Co., Ltd., respectively.


		For the nine months ended September 30, 2006
									Equity in
						Equity in			capital surplus						Other
		Beginning				earnings			and capital			Dividend			increase			Ending
		balance		Acquisition		(losses)			adjustments			received			(decrease)			balance

Pantech Co., Ltd.		W	55,634	W	—	(W	12,654	)	W	1,949		W	—		W	—		W	44,929
SK Capital Co., Ltd.	(Note a)		37,501		—		5			—			—			—			37,506
SK Communications Co., Ltd			158,170		—		13,079			1,959			—			—			173,208
SK Telink Co., Ltd.			70,863		—		11,729			37			—			—			82,629
SK C&C Co., Ltd.			198,251		—		17,234			3,870			(990	)		—			218,365
SK Wyverns Baseball Club Co., Ltd.			—		—		—			—			—			—			—
STIC Ventures Co., Ltd.	(Note a)		8,308		—		71			—			—			—			8,379
Paxnet Co., Ltd.			27,372		—		1,178			255			—			—			28,805
Global Credit & Information Co., Ltd.	(Note a)		3,276		—		(31	)		—			—			—			3,245
TU Media Corp.			32,393		—		(19,305	)		—			—			—			13,088
Aircross Co., Ltd.	(Note a)		970		—		(4	)		—			—			—			966
WiderThan Co., Ltd.			12,827		—		(500	)		(54	)		—			(770	)		11,503
IHQ, Inc.			13,935		27,352		(2,332	)		793			—			1,098			40,846
Seoul Records, Inc.			27,242		—		(839	)		—			—			—			26,403
Harex Info Tech, Inc.			2,568		—		(301	)		—			—			—			2,267
SK Mobile			—		10,322		(1,117	)		(115	)		—			—			9,090
SKT Vietnam PTE Ltd. (Formerly SLD Telecom PTE Ltd).			55,358		97,285		(11,816	)		(14,659	)		—			—			126,168
Skytel Co., Ltd.	(Note a)		4,872		—		111			197			(328	)		—			4,852
SK China Company Ltd.	(Note a)		483		—		2			—			—			—			485
SK Telecom China Co., Ltd.	(Note a)		6,927		—		(301	)		(62	)		—			—			6,564
ULand Company Limited.			12,564		—		(4,967	)		1,026			—			—			8,623
SK Telecom USA Holdings, inc.			103,751		75,499		(57,197	)		(8,056	)		—			—			113,997
SK Telecom International, Inc.	(Note a)		25,957		—		695			(1,674	)		—			—			24,978
SK USA, Inc.	(Note a)		3,353		—		(75	)		74			—			—			3,352
Korea IT Fund			—		—		3,395			2,174			—			190,000			195,569
Centurion IT Investment Association	(Note a)		3,635		—		(615	)		56			—			—			3,076
1st Music Investment Fund of SK-PVC	(Note a)		6,990		—		5			—			—			—			6,995
2nd Music Investment Fund of SK-PVC	(Note a)		7,966		—		—			—			—			—			7,966
SK-KTB Music Investment Fund			14,999		—		249			—			—			—			15,248
IMM Cinema Fund			11,884		—		60			—			—			—			11,944
SKT-HP Ventures, LLC	(Note a)		5,272		—		18			—			—			(5,290	)		—


Total		W	913,321		210,458		(64,223	)		(12,230	)		(1,318	)		185,038		W	1,231,046

Less: six months ended June 30, 2006					145,888		(22,876	)		(13,852	)		(1,318	)		(597	)

Three months ended September 30, 2006				W	64,570	(W	41,347	)	W	1,622		(W	—	)	W	185,635


(Note a)		Investments in equity securities are carried using the equity method of accounting based on the financial statements as of December 31, 2005 as information as of September 30, 2006 was not available and the change of the Company’s portion of shareholders’ equity of the investee for the nine months ended September 30, 2006 was not expected to be material.

Details of changes in the differences between the acquisition cost and net asset value of equity method investees at the acquisition date for the three months and nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):


	For the nine months ended September 30, 2007
	Beginning							Ending
	balance		Increase		Amortization			balance

SK Communications Co., Ltd.	W	22,417	W	—	W	(1,048	)	W	21,369
SK C&C Co., Ltd.		4,464		—		(304	)		4,160
Paxnet Co., Ltd.		17,164		—		(804	)		16,360
Global Credit & Information Co., Ltd.		587		—		(31	)		556
TU Media Corp.		784		9,572		(1,083	)		9,273
IHQ, Inc.		24,780		—		(4,130	)		20,650
Baba Club (note)		—		2,888		(245	)		2,643
Philio Co., Ltd.		—		4,601		(431	)		4,170
Seoul Records, Inc.		2,855		—		(612	)		2,243
Harex Info Tech, Inc.		1,051		—		(263	)		788
SKT Vietnam PTE Ltd. (Formerly SLD Telecom PTE. Ltd).		384		—		(16	)		368
ULand Company Ltd.		4,502		—		(193	)		4,309
Helio, Inc.		—		38		(38	)		—


Total	W	78,988		17,099		(9,198	)	W	86,889

Less: six months ended June 30, 2007				9,610		(5,540	)

Three months ended September 30, 2007			W	7,489	(W	3,658	)


(note)		Baba Club’s negative capital of W912 million was included in the difference between the acquisition cost and net asset value of equity method investees at the acquisition date.


	For the nine months ended September 30, 2006
	Beginning							Ending
	balance		Increase		Amortization			balance

Pantech Co., Ltd.	W	793	W	—	(W	32	)	W	761
SK Communications Co., Ltd.		23,814		—		(1,048	)		22,766
SK C&C Co., Ltd.		4,870		—		(304	)		4,566
Paxnet Co., Ltd.		18,237		—		(805	)		17,432
Global Credit & Information Co., Ltd.		628		—		(31	)		597
TU Media Corp.		993		—		(157	)		836
IHQ, Inc.		6,267		21,948		(2,108	)		26,107
Seoul Records, Inc.		3,670		—		(612	)		3,058
Harex Info Tech, Inc.		1,402		—		(263	)		1,139
SK Mobile		—		3,192		(319	)		2,873
SKT Vietnam PTE Ltd. (Formerly SLD Telecom PTE Ltd).		406		—		(16	)		390
ULand Company Ltd.		3,628		1,131		(193	)		4,566


Total	W	64,708		26,271		(5,888	)	W	85,091

Less: six months ended June 30, 2006				4,252		(3,201	)

Three months ended September 30, 2006			W	22,019	(W	2,687	)

Details of changes in unrealized inter-company gains incurred from sales of assets for the three months and nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):


	For the nine months ended September 30, 2007
	Beginning							Ending
Subsidiary	balance		Increase		Decrease			balance

SK Communications Co., Ltd.	W	2,913	W	263	(W	764	)	W	2,412
ULand Company Ltd.		—		4,051		—			4,051
SK China Company Ltd.		1,086		—		—			1,086


Total	W	3,999		4,314		(764	)	W	7,549

Less: six months ended June 30, 2007				4,314		(545	)

Three months ended September 30, 2007			W	—	(W	219	)


	For the nine months ended September 30, 2006
	Beginning							Ending
Subsidiary	balance		Increase		Decrease			balance

Pantech Co., Ltd.	W	—	W	270	W	—		W	270
SK Communications Co., Ltd.		4,016		—		(894	)		3,122
SK China Company Ltd.		1,086		—		—			1,086


Total	W	5,102		270		(894	)	W	4,478

Less: six months ended June 30, 2006				270		(686	)

Three months ended September 30, 2006			W	—	(W	208	)

Details of market price of the equity securities accounted for using the equity method as of September 30, 2007 are as follows (In millions of Korean won, except for market price per share):


	Market price		Number of
	per share		shares owned by
	(In Korean won)		the Company		Market price
IHQ, Inc.		3,860		14,960,784		57,749
Seoul Records, Inc.		3,125		9,582,321		29,945

The condensed financial information of the investees as of and for the nine months ended September 30, 2007 is as follows (In millions of Korean won):


	Total		Total				Net
	assets		liabilities		Revenue		income (loss)

SK Communications Co., Ltd.		304,967		106,304		137,636		(24,130	)
SK Telink Co., Ltd.		156,783		56,476		174,165		11,952
SK C&C Co., Ltd.		3,205,204		1,456,417		458,554		859,002
Paxnet Co., Ltd.		33,024		9,265		27,081		1,633
TU Media Corp.		374,912		336,257		89,085		(52,491	)
IHQ, Inc.		87,097		26,683		30,737		(10,049	)
Ntreev Soft Co., Ltd.		22,407		3,421		10,592		2,969
Seoul Records, Inc.		41,433		7,268		24,056		(3,953	)
SK Mobile		11,067		2,083		2,244		(2,304	)
SKT Vietnam PTE Ltd. (Formerly SLD Telecom PTE Ltd.)		169,312		24,811		1,398		(16,149	)
ULand Company Ltd.		6,203		178		2,324		1,511
SK Telecom USA Holdings, Inc.		46,222		143		—		(106,633	)
SK Telecom International, Inc.		27,204		1,521		4,806		941
Korea IT Fund		312,873		—		12,589		9,242
SKT-KTB Music Investment Fund		18,590		82		347		(305	)
IMM Cinema Fund		22,748		—		1,237		(1,631	)
Helio, Inc.		69,025		85,679		107,410		(222,832	)

5.		LOANS TO EMPLOYEES

		Short-term and long-term loans to employees as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


	September 30, 2007						December 31,
	Short-term		Long-term		Total		2006

Loans to employees’ stock ownership association	W	1,787	W	3,067	W	4,854	W	7,526
Loans to employees for housing and other		77		143		220		277


Total	W	1,864	W	3,210	W	5,074	W	7,803

6.		PROPERTY AND EQUIPMENT

		Property and equipment as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


	Useful lives
	(years)		September 30, 2007			December 31, 2006

Land		—	W	449,496		W	462,393
Buildings and structures		30,15		1,492,334			1,488,824
Machinery		6		11,841,626			11,235,472
Vehicles		4		21,408			21,136
Other		4		1,020,298			956,670
Construction in progress		—		266,776			130,667


				15,091,938			14,295,162
Less accumulated depreciation				(10,623,333	)		(9,877,050	)


Property and equipment, net			W	4,468,605		W	4,418,112

		The standard value of land declared by the government as of September 30, 2007 and December 31, 2006 is W550,087 million and W506,831 million, respectively.

		Details of change in property and equipment for the three months and nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):


	For the nine months ended September 30, 2007
	Beginning													Ending
	balance		Acquisition		Disposal			Transfer			Depreciation			balance

Land	W	462,393	W	451	W	(14,695	)	W	1,347		W	—		W	449,496
Buildings and structures		1,101,232		2,357		(1,178	)		2,900			(41,928	)		1,063,383
Machinery		2,346,517		45,785		(5,908	)		769,845			(863,558	)		2,292,681
Vehicles		2,341		1,550		(66	)		91			(1,341	)		2,575
Other		374,962		731,533		(12,640	)		(624,261	)		(75,900	)		393,694
Construction in progress		130,667		347,921		(369	)		(211,443	)		—			266,776

Total	W	4,418,112		1,129,597		(34,856	)		(61,521	)		(982,727	)	W	4,468,605

Less: six months ended June 30, 2007				698,023		(31,930	)		(50,671	)		(616,878	)

Three months ended September 30, 2007			W	431,574	(W	2,926	)	(W	10,850	)	(W	365,849	)


	For the nine months ended September 30, 2006
	Beginning													Ending
	balance		Acquisition		Disposal			Transfer			Depreciation			balance

Land	W	461,513	W	7	(W	344	)	W	1,411		W	—		W	462,587
Buildings and structures		1,145,497		1,969		(607	)		1,755			(41,596	)		1,107,018
Machinery		2,429,564		8,755		(1,704	)		487,220			(791,570	)		2,132,265
Vehicles		2,786		994		(113	)		—			(1,286	)		2,381
Other		292,214		423,457		(13,548	)		(369,599	)		(60,915	)		271,609
Construction in progress		264,309		279,259		—			(147,530	)		—			396,038


Total	W	4,595,883		714,441		(16,316	)		(26,743	)		(895,367	)	W	4,371,898

Less six months ended June 30, 2006				431,132		(14,730	)		(15,896	)		(567,954	)

Three months ended September 30, 2006			W	283,309	(W	1,586	)	(W	10,847	)	(W	327,413	)

7.		INTANGIBLE ASSETS

		Intangible assets as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


	September 30, 2007							December 31, 2006
	Acquisition		Accumulated			Carrying		Acquisition		Accumulated			Carrying
	cost		amortization			amounts		cost		amortization			amounts

Goodwill	W	2,341,625	(W	739,908	)	W	1,601,717	W	2,335,532	(W	643,310	)	W	1,692,222
Frequency use rights		1,385,120		(395,685	)		989,435		1,385,120		(308,287	)		1,076,833
Software development costs		213,947		(194,470	)		19,477		231,318		(190,611	)		40,707
Computer software		929,496		(405,492	)		524,004		858,375		(303,272	)		555,103
Other		117,976		(72,474	)		45,502		109,753		(69,459	)		40,294


	W	4,988,164	(W	1,808,029	)	W	3,180,135	W	4,920,098	(W	1,514,939	)	W	3,405,159

Details of changes in intangible assets for the three months and nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):


	For the nine months ended September 30, 2007
	Beginning													Ending
	balance		Increase		Decrease			Transfer			Amortization			balance
Goodwill	W	1,692,222	W	—	W	—		W	6,093	(note)	(W	96,598	)	W	1,601,717
Frequency use rights		1,076,833		—		—			—			(87,398	)		989,435
Software development costs		40,707		—		(2,755	)		957			(19,432	)		19,477
Computer software		555,103		18,988		(4,734	)		71,503			(116,856	)		524,004
Other		40,294		10,709		(423	)		113			(5,191	)		45,502

Total	W	3,405,159		29,697		(7,912	)		78,666			(325,475	)	W	3,180,135

Less: six months ended June 30, 2007				12,999		(262	)		50,793			(216,443	)

Three months ended September 30, 2007			W	16,698	(W	7,650	)	W	27,873		(W	109,032	)

(note)

The amount represents the goodwill that resulted from the purchase of Baba Club’s and Philio Co., Ltd’s business for the nine months ended September 30, 2007.


	For the nine months ended September 30, 2006
	Beginning												Ending
	balance		Increase		Decrease			Transfer		Amortization			balance

Goodwill	W	1,820,884	W	—	W	—		W	—	(W	96,496	)	W	1,724,388
Frequency use rights		1,184,292		—		—			—		(78,974	)		1,105,318
Software development costs		61,256		—		—			7,208		(22,902	)		45,562
Computer software		279,757		12,019		(1	)		20,189		(57,668	)		254,296
Other		40,358		3,796		(53	)		275		(4,587	)		39,789


Total	W	3,386,547		15,815		(54	)		27,672		(260,627	)	W	3,169,353

Less: six months ended June 30, 2006				5,650		(20	)		17,053		(171,260	)

Three months ended September 30, 2006			W	10,165	(W	34	)	W	10,619	(W	89,367	)

The book value as of September 30, 2007 and residual useful lives of major intangible assets are as follows (In millions of Korean won):


	Amount		Description	Residual useful lives
Goodwill	W	1,595,624	Goodwill related to acquisition of Shinsegi Telecomm, Inc.	12 years and 6 months
IMT license		892,391	Frequency use rights relating to W-CDMA Service	(Note a)
WiBro license		90,854	WiBro Service	(Note b)
DMB license		6,190	DMB Service	8 years and 9 months


(note a)		Amortization of the IMT license commenced when the Company started its commercial IMT 2000 service in December 2003, using the straight-line method over the estimated useful life (13 years) of the IMT license which expires in December 2016.


(note b)		The Company purchased the WiBro license from MIC on March 30, 2005. The license period is seven years from the purchase date. Amortization of the WiBro license commenced when the Company started its commercial WiBro services on June 30, 2006 using the straight line basis over the remaining useful life.

8.		BONDS PAYABLE

		Bonds payable as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won and thousands of U.S. dollars):


			Annual
			interest		September 30,			December 31,
	Maturity year		rate (%)		2007			2006
Domestic general bonds		2007		5.0 - 6.0	W	300,000		W	700,000
²		2008		5.0		300,000			300,000
²		2009		5.0		300,000			300,000
²		2010		4.0		200,000			200,000
²		2011		3.0		200,000			200,000
²		2013		4.0		200,000			200,000
²		2016		5.0		200,000			200,000
Dollar denominated bonds (US$300,000)		2011		4.25		276,210			278,880
Dollar denominated bonds (US$400,000)		2027		6.63		368,280			—
Convertible bonds (US$304,240)		2009		—		333,832			356,356


Total						2,678,322			2,735,236
Less: discounts on bonds						(36,899	)		(39,097	)
Less: conversion right adjustments						(28,684	)		(43,629	)
Add: long-term accrued interest						21,462			22,910


Net						2,634,201			2,675,420
Less: current portion						(599,074	)		(696,546	)


Long-term portion					W	2,035,127		W	1,978,874

On May 27, 2004, the Company issued zero coupon convertible bonds with a maturity of five years and principal amount of US$329,450,000 for US$324,923,469, with an initial conversion price of W235,625 per share of the Company’s common stock, which was greater than market value at the date of issuance. Subsequently, the initial conversion price was changed to W211,099 per share in accordance with anti-dilution protection. The Company may redeem the principal amount after 3 years from the issuance date if the market price exceeds 130% of the conversion price during a predetermined period. On the other hand, the bond holders may redeem their notes at 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 as of December 31, 2006 is 1,649,014 shares. During the nine months ended September 30, 2007, the conversion price was changed from W211,943 to

		W211,099 and the number of shares to be converted was changed from 1,688,842 shares to 1,695,593 shares due to the payment of interim dividends in accordance with the resolution of the Company’s board of directors dated July 1, 2007.

		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, the Company will pay a bond holder as cash settlement determined at the average price of one day after a holder exercises its conversion right or the weighted average price for the following five business days at the discretion of bond holders. [should they say how the choice is made between these two options? Refer to revised notes]. 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.

		During the year ended December 31, 2006, the convertible bonds with a principal amount of US$25,210,000 were converted into 136,163 shares of treasury stock (See Note 15), and the principal amount of the convertible bonds decreased from US$329,450,000 to US$304,240,000. In addition, the consideration for conversion right (capital surplus) decreased by W3,733 million (net of tax effect of W1,416 million).

		During the nine months ended September 30, 2007, the conversion rights for the convertible bond with principal amount of US$19,230,000 were exercised and W22,286 million of cash was paid to bond holders without delivering the Company’s common stocks due to the 49% ownership limitation as explained above. Therefore, the principal amount of the convertible bonds decreased from US$304,240,000 to US$285,010,000. In addition, the consideration for conversion right (capital surplus) decreased by W2,847 million (net of tax effect of W1,080 million).

9.		LONG-TERM BORROWINGS

		Long-term borrowings as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won and thousands of U.S. dollars):

Final

Annual interest

September 30,

December 31,

Lender

maturity year

rate (%) (note)

2007

2006

Long-term floating rate discount bill

Shinhan Bank

June 29, 2010

91 days CD yield + 0.25%

200,000

Long-term floating rate borrowings

Calyon Bank

October 10, 2013

6M LIBOR + 0.29%

US$

50,000

US$

50,000

DBS Bank

US$

25,000

US$

25,000

SMBC

US$

25,000

US$

25,000

Total

US$

100,000

US$

100,000

200,000

Equivalent in Korean won

292,070

292,960

Less: current portion

—

Long-term borrowings

292,070

292,960

The above long-term floating rate discount bill is classified as long-term borrowing as the borrowing is to be rolled-over exceeding 1 year from September 30, 2007 in accordance with the loan agreement.

(note)

At September 30, 2007, the 91 days CD yield and the 6M LIBOR rate are 5.35% and 5.14%, respectively.

10.		SUBSCRIPTION DEPOSITS

		The Company receives subscription deposits from customers of cellular services at the subscription date. The Company has no obligation to pay interest on subscription deposits but is required to return them to subscribers upon termination of the subscription contract.

		Long-term subscription deposits held as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won except deposit per subscriber amounts):

Deposit

Service type

per subscriber

September 30, 2007

December 31, 2006

Cellular

200,000

10,770

21,140

The Company offers existing and new cellular subscribers the option of obtaining credit insurance from Seoul Guarantee Insurance Company (“SGIC”) in lieu of the subscription deposits. Existing subscribers who elect this option are refunded their subscription deposits. As a result, the balance of subscription deposits has been decreasing.

11.		LEASES

		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. Details of capital lease assets acquired and liabilities assumed from SK C&C Co., Ltd. as of and for the nine months ended September 30, 2007 and as of and for the year ended December 31, 2006 are as follows (In millions of Korean won):


		September 30, 2007		December 31, 2006

Acquisition cost	Office equipment	W	8,271	W	15,784
	Computer software		5,728		7,180


		W	13,999	W	22,964


Accumulated depreciation	Office equipment	W	6,017	W	8,662
	Computer software		2,100		1,555


		W	8,117	W	10,217


Carrying amounts	Office equipment	W	2,254	W	7,122
	Computer software		3,628		5,625


		W	5,882	W	12,747


Depreciation expenses	Office equipment	W	1,478	W	8,071
	Computer software		859		1,437


		W	2,337	W	9,508

The Company’s minimum future lease payments as of September 30, 2007 are as follows (In millions of Korean won):


	Annual lease payments		Interest			Principal

2008	W	3,328	(W	67	)	W	3,261

Less: current portion							(3,261	)


Capital lease liabilities						W	—

12.		MONETARY 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 8 and 9, respectively) as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won, thousands of U.S. dollars, thousands of HK dollars, thousands of Japanese yen, thousands of Great Britain pounds, thousands of Singapore dollars, thousands of Swiss Franc, thousands of Euros and thousands of Chinese yuan):


	September 30, 2007				December 31, 2006
	Foreign		Korean won		Foreign		Korean won
	currencies		equivalent		currencies		equivalent

Cash and cash equivalents	US$	282,423	W	260,027	US$	959	W	892
²	EUR	472		614	EUR	2		2
²	GBP	51		95		—		—
²	SG$	16		10		—		—
Accounts receivable — trade	US$	4,628		4,261	US$	16,534		15,370
²	EUR	248		323	EUR	248		303
²	CNY	5,620		689		—		—
Accounts receivable — other	US$	1,144		1,053	US$	1,657		1,541
Guarantee deposits	US$	12		11	US$	17		16
²	JPY	21,712		173	JPY	21,536		168


			W	267,256			W	18,292


Accounts payable	US$	8,445		7,775	US$	16,046		14,916
²	EUR	588		765	EUR	813		993
²	JPY	11,474		91	JPY	18,704		146
²	GBP	636		1,187	GBP	48		88
²	HK$	131		16	HK$	190		23
²	SG$	16		10	SG$	6		3
²	CNY	2		1	CNY	2		1
²		—		—	CHF	250		190

			W	9,845			W	16,360

13.		CAPITAL STOCK AND CAPITAL SURPLUS

		The Company’s capital stock consists entirely of common stock with a par value of W500. The number of authorized and issued shares as of September 30, 2007 and December 31, 2006 are as follows:


	September 30, 2007		December 31, 2006

Authorized shares		220,000,000		220,000,000
Issued shares		81,193,711		81,193,711
Outstanding shares, net of treasury stock		72,667,459		72,667,459

Significant changes in capital stock and capital surplus for the nine months ended September 30, 2007 and for the year ended December 31, 2006 are as follows (In millions of Korean won except for share data):


	Number of shares
	issued			Capital stock		Capital surplus

At January 1, 2006		82,276,711		W	44,639	W	2,966,198
Consideration for conversion right (note a)		—			—		(3,733	)
Transferred from stock options in capital adjustment (note b)		—			—		234
Retirement of treasury stock (note c)		(1,083,000	)		—		—


At December 31, 2006		81,193,711			44,639		2,962,699
Transferred from stock options in capital adjustment (note d)		—			—		3,246
Consideration for conversion right (note e)		—			—		(2,847	)
Offset against capital surplus by equity security accounted for using the equity method (note f)		—			—		(15,400	)


At September 30, 2007		81,193,711		W	44,639	W	2,947,698


(note a)		During the year ended December 31, 2006, the convertible bonds with face value of US$25,210,000 were converted and the capital surplus amount (in connection with the related conversion rights) decreased by W3,733 million (net of tax effect of W1,416 million).

(note b)		During the year ended December 31, 2006, the exercisable period for the stock options representing 43,390 shares, of which recognized compensation costs were W234 million, expired and the related stock options of W234 million in capital adjustments were transferred to capital surplus in accordance with Korean GAAP [See Note 2 (r)].

(note c)		The Company retired 491,000 shares and 592,000 shares of treasury stock on August 17, 2006 and September 29, 2006, respectively, and reduced retained earnings before appropriations in accordance with Korean Commercial laws.

(note d)		During the nine months ended September 30, 2007, the exercisable period for the stock options representing 65,730 shares, for which the Company recognized compensation costs of W3,246 million, expired and the related stock options of W3,246 million in capital adjustments were transferred to capital surplus in accordance with Korean GAAP [See Note 2 (r)].

(note e)		During the nine months ended September 30, 2007, the conversion rights for the convertible bonds with face value of US$19,230,000 were exercised and the capital surplus amount (in connection with the related conversion rights) decreased by W2,847 million (net of tax effect of $1,080 million).


(note f)		During the nine months ended September 30, 2007, the Company acquired Ntreev Soft Co., Ltd’s common stocks from IHQ, Inc. its subsidiary. The difference between the acquisition cost and the net book value of Ntreev Soft Co., Ltd was offset against the Company’s capital surplus.

14.		APPROPRIATED RETAINED EARNINGS

		Details of appropriated retained earnings as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


	September 30, 2007		December 31, 2006

Legal reserve	W	22,320	W	22,320
Reserve for improvement of financial structure		33,000		33,000
Reserve for loss on disposal of treasury stock		255,984		477,182
Reserve for research and manpower development		872,595		880,594
Reserve for business expansion		6,151,138		5,266,138


Total	W	7,335,037	W	6,679,234

	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 gain (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 for tax purposes. These reserves will be reversed from appropriated retained earnings in accordance with the relevant tax laws. Such reversal will be included in taxable income in the year of reversal.

	d.		Reserve for Business Expansion

			The reserve for business expansion is voluntary and was approved by the board of directors and stockholders.

15.		TREASURY STOCK

		Upon 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 77,970 shares for W6,110 million through 2005. In addition, the Company acquired 8,584,445 shares of treasury stock in the market or through the trust funds for W2,040,995 million through 2005 in order to stabilize the market price of its stock. In addition, during the year ended December 31, 2006, the convertible bonds with principal amount of US$25,210,000 were converted into 136,163 shares of common stock. Such conversion was settled by the Company by using its treasury stock with carrying value totaling W32,178 million, which resulted in loss on disposal of treasury stock of W7,887 million. In addition, the losses on disposal of treasury stock decreased by W337 million for the nine months ended September 30, 2007 to reflect the change in accumulated temporary differences related to treasury stock based on the prior year tax return.

		On August 17, 2006, the Company retired 491,000 shares of treasury stock, which were acquired by the Company during the period from August 1, 2006 through August 14, 2006 for W92,518 million in accordance with a resolution of the board of directors dated July 28, 2006. On September 29, 2006, the Company retired 592,000 shares of treasury stock, which were acquired by the Company during the period from September 4, 2006 through September 27, 2006 for W116,559 million in accordance with a resolution of the board of directors dated August 31, 2006. In connection with the retired treasury stocks discussed above, the Company reduced its retained earnings before appropriations by W209,077 million in accordance with the Korean Commercial law.

		There was no change in the shares of treasury stock for the nine months ended September 30, 2007.

16.		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 W424,000 per share, 43,820 shares at an exercise price of W211,000 per share and 65,730 shares at an exercise price of W267,000 per share, respectively. 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 employees leave the Company within three years after the grant of stock options, such employees forfeit their unvested stock options awarded. Stock options representing 530 shares for which total compensation cost was W3 million were forfeited during the year ended December 31, 2004.

		The value of stock options granted was 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 W500 per share for 2000, 2001 and 2002. Under these assumptions, total compensation cost, the recognized compensation cost (included in labor cost) for the three months and nine months ended September 30, 2007 and 2006 and the outstanding balance of stock options in capital adjustments as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


			Recognized				Recognized
			compensation cost				compensation cost
			for the three months				for the nine months				Stock options in
	Total		ended September 30,				ended September 30,				capital adjustments
	Compensation										September 30,		December 31,
Grant date	cost		2007		2006		2007		2006		2007		2006

March 17, 2000(Note a)	W	1,533	W	—	W	—	W	—	W	—	W	—	W	—
March 16, 2001(Note b)		234		—		—		—		—		—		—
March 8, 2002(Note c)		3,246		—		—		—						3,246


	W	5,013	W	—	W	—	W	—	W	—	W	—	W	3,246


(note a)		During the year ended December 31, 2005, the exercisable period expired for stock options representing 17,800 shares, for which the Company had recognized compensation cost of W1,533 million. The related capital adjustment of W1,533 million was transferred to capital surplus.

(note b)		During the year ended December 31, 2006, the exercisable period expired for stock options representing 43,820 shares, for which the Company had recognized compensation cost of W234 million. The related capital adjustment of W234 million was transferred to capital surplus.

(note c)		During the year ended December 31, 2006, the exercisable period expired for stock options representing 65,730 shares, for which the Company had recognized compensation cost of W3,246 million. The related capital adjustment of W3,246 million was transferred to capital surplus.

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), the pro forma total compensation cost would be W15,967 million (W3,738 million, W3,617 million and W8,613 million for options granted in 2000, 2001 and 2002, respectively) and the recognized compensation cost for the three months and nine months ended September 30, 2007 would be nil, and the pro forma net income and net income per common share for the three months and nine months ended September 30, 2007, 2006 and 2005 are as follows:


	For the three months ended September 30,
	(In millions of Korean won,
	except for net income per share)
	2007		2006		2005

Pro forma income before income tax	W	1,051,188	W	645,935	W	789,591
Pro forma net income		776,819		456,802		587,878
Pro forma net income per share (In Korean Won)		10,690		6,231		7,986


	For the nine months ended September 30,
	(In millions of Korean won,
	except for net income per share)
	2007		2006		2005

Pro forma income before income tax	W	2,174,304	W	1,650,637	W	1,987,193
Pro forma net income		1,576,403		1,167,300		1,423,107
Pro forma net income per share (In Korean Won)		21,693		15,875		19,332

17.

INCOME TAX

	a.		Details of income tax expense

			Income tax expense for the nine months ended September 30, 2007 and 2006 consists of the following (In millions of Korean won):


	2007			2006

Current	W	497,931		W	544,033
Deferred (note a)		99,970			(60,696	)


Income tax expenses		597,901			483,337
Less: six months ended June 30,		(323,532	)		(294,204	)


Three months ended September 30,	W	274,369		W	189,133


(note a)		Changes in net deferred tax liabilities for the nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):


	2007			2006

Ending balance of net deferred tax liabilities	W	868,284		W	324,490
Beginning balance of net deferred tax liabilities		(490,341	)		(348,563	)
Adjustment to the beginning net deferred income tax liabilities based on tax return filed		3,444			10,453
Tax effect of temporary differences charged or credited directly to related components of stockholders’ equity		(281,417	)		(47,076	)


	W	99,970		(W	60,696	)

	b.		Reconciling items between accounting income and taxable income

			Reconciling items between accounting income and taxable income for the nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):


	2007			2006
(Temporary Differences)
Additions:
Allowance for doubtful accounts	W	37,644		W	149,075
Accrued interest income — prior period		4,576			3,931
Reserves for research and manpower development		157,500			141,000
Reserves for loss on disposal of treasury stock		—			177,675
Equity in losses of affiliates		—			64,373
Equity in other comprehensive income of affiliates		—			9,562
Unrealized loses on valuation of long-term investment securities		320,093			47,442
Accrued expenses		1,668			15,300
Depreciation		40,554			40,973
Loss on impairment of other assets		5,051			1,488
Loss on valuation of currency swap		12,577			4,195
Loss on valuation of currency swap (other comprehensive income)		—			9,807
Accrued severance indemnities		16,031			23,960
Deposits for severance indemnities		1,175			148,610
Consideration of conversion right		14,945			16,246
Interest expense of convertible bond		14,975			—
Other		26,787			35,757

Sub-total		653,576			889,394


Deductions:
Reserves for research and manpower development		—			(135,000	)
Allowance for doubtful accounts — prior period		(43,975	)		(124,184	)
Depreciation — prior period		(18,971	)		(14,867	)
Accrued interest income		(6,162	)		(7,287	)
Accrued expenses		(27,519	)		(21,906	)
Equity in earnings of affiliates		(98,087	)		—
Equity in other comprehensive income of affiliates		(14,971	)		(9,562	)
Unrealized gains on valuation of long-term investment securities		(1,315,319	)		(229,335	)
Accrued severance indemnities		(1,175	)		(155,633	)
Deposits for severance indemnities		(3,837	)		(3,424	)
Loss on impairment of other assets — prior period		(971	)		(5,109	)
Gain on conversion of convertible bond		(373,140	)		—
Other		(19,398	)		(37,700	)

Sub-total		(1,923,525	)		(744,007	)


Total Temporary Differences		(1,269,949	)		145,387


(Permanent Differences)		1,113,076			328,066


Total	(W	156,873	)	W	473,453

	c.		Change in cumulative temporary differences and deferred tax liabilities

			Changes in cumulative temporary differences for the nine months ended September 30, 2007 and 2006, and deferred tax assets and liabilities as of September 30, 2007 and 2006 are as follows (In millions of Korean won):

			For the nine months ended September 30, 2007


	January 1,			Increase			Decrease			September 30,
Description	2007			(note a)			(note a)			2007

Current:
Allowance for doubtful accounts	W	50,824		W	29,186		W	43,974		W	36,036
Accrued interest income		(4,574	)		(4,191	)		(4,575	)		(4,190	)
Accrued expenses		56,001			3,619			27,519			32,101
Other		172,168			(1,315	)		5,164			165,689


Total		274,419		W	27,299		W	72,082			229,636

Temporary differences unlikely to be realized		128,554									128,554


Total current cumulative temporary differences-net	W	145,865								W	101,082


Current deferred tax assets-net (Note b)	W	40,113								W	27,798


Non-current:
Property and equipment	(W	188,535	)	(W	2,920	)	(W	30,146	)	(W	161,309	)
Loss on impairment of long-term investment securities		108,145			30,218			—			138,363
Loss on impairment of other assets		971			5,051			971			5,051
Reserves for research and manpower development		(760,000	)		—			(157,500	)		(602,500	)
Reserves for loss on disposal of treasury stock		(255,984	)		—			—			(255,984	)
Equity in (earnings) losses of affiliates		116,407			(4,783	)		98,087			13,537
Equity in other comprehensive income of affiliates		(123,206	)		(445	)		14,971			(138,622	)
Unrealized gain on valuation of long-term investment securities, net (other comprehensive income)		(563,477	)		(1,315,319	)		(320,093	)		(1,558,703	)
Accrued severance indemnities		20,058			16,031			1,174			34,915
Deposits for severance indemnities		(20,058	)		(3,837	)		(1,174	)		(22,721	)
Loss on valuation of currency swap		22,503			12,577			—			35,080
Loss on valuation of currency swap (other comprehensive income)		24,249			—			—			24,249
Loss on valuation of interest rate swap (other comprehensive income)		454			—			2,426			(1,972	)
Gain on conversion of convertible bond		—			(373,140	)		—			(373,140	)
Considerations for conversion right		(62,131	)		—			(3,927	)		(58,204	)
Other		22,370			41,320			12,607			51,083


Total		(1,658,234	)	(W	1,595,247	)	(W	382,604	)		(2,870,877	)

Temporary differences unlikely to be realized		(270,688	)								(387,601	)


Total non-current cumulative temporary differences-net	(W	1,928,922	)							(W	3,258,478	)


Total non-current deferred tax liabilities-net (Note b)	(W	530,454	)							(W	896,081	)


	(note a)		These changes include adjustment to reflect the change in accumulated temporary differences based on the prior year tax return.

	(note b)		The tax rate used in measuring deferred tax assets and liabilities is 27.5%.

For the nine months ended September 30, 2006


	January 1,			Increase			Decrease			September 30,
Description	2006			(note a)			(note a)			2006

Current:
Allowance for doubtful accounts	W	122,561		W	129,119		W	124,184		W	127,496
Accrued interest income		(3,931	)		(3,987	)		(3,931	)		(3,987	)
Accrued expenses		61,967			15,514			21,906			55,575
Other		189,548			10,710			4,834			195,424


Total		370,145			151,356			146,993			374,508
Temporary differences unlikely to be realized		(147,774	)		—			(19,219	)		(128,555	)


Total current cumulative temporary differences-net	W	222,371		W	151,356		W	127,774		W	245,953


Current deferred tax assets-net (Note b)	W	61,152								W	67,637


Non-current:
Property and equipment	(W	196,446	)	W	12,228		W	10,964		(W	195,182	)
Loss on impairment of long-term investment securities		108,145			—			—			108,145
Loss on impairment of other long-term assets		7,461			—			5,973			1,488
Reserves for research and manpower development		(768,000	)		(135,000	)		(141,000	)		(762,000	)
Reserves for loss on disposal of treasury stock		(474,081	)		—			(177,675	)		(296,406	)
Equity in (earnings) losses of affiliates		(5,025	)		56,156			328			50,803
Equity in other comprehensive income of affiliates		(109,468	)		—			(10,862	)		(98,606	)
Unrealized loss on valuation of long-term investment securities		58,116			219			182,113			(123,778	)
Accrued severance indemnities		148,465			24,106			155,633			16,938
Deposits for severance indemnities		(148,465	)		(3,568	)		(148,610	)		(3,423	)
Loss on valuation of currency swap		13,244			4,195			—			17,439
Loss on valuation of currency swap (capital adjustment)		19,554			9,807			—			29,361
Loss on valuation of interest rate swap (capital adjustment)		—			2,747			—			2,747
Considerations for conversion right		(67,279	)		—			(3,762	)		(63,517	)
Other		(10,647	)		60,117			(1,911	)		51,381


Total		(1,424,426	)		31,007			(128,809	)		(1,264,610	)
Temporary differences unlikely to be realized		(65,447	)		(97,197	)		(1,336	)		(161,308	)


Total non-current cumulative temporary differences-net	(W	1,489,873	)	(W	66,190	)	(W	130,145	)	(W	1,425,918	)


Total non-current deferred tax liabilities-net (Note b)	(W	409,715	)							(W	392,128	)


(note a)		These changes include adjustment to reflect the change in accumulated temporary differences based on the tax return for the year before the prior year.

(note b)		The tax rate used in measuring deferred tax assets and liabilities is 27.5%.

Deferred tax assets and liabilities before offsetting each other are as follows (In millions of Korean won):


	September 30, 2007			December 31, 2006

Deferred tax assets	W	39,713		W	93,697
Deferred tax liabilities		(907,996	)		(584,038	)


Deferred tax assets (liabilities), net	(W	868,283	)	(W	490,341	)


Current, net	W	27,798		W	40,113
Non-current, net	(W	896,081	)	(W	530,454	)

	d.		Deferred tax assets (liabilities) added to (deducted from) capital surplus, capital adjustments or accumulated other comprehensive income (loss)

			Deferred tax assets (liabilities) added to (deducted from) capital surplus, capital adjustments or accumulated other comprehensive income (loss) as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):


	September 30, 2007			December 31, 2006

Gains on disposal of treasury stock	(W	38,004	)	(W	38,341	)
Considerations for conversion right		(16,006	)		(17,086	)
Unrealized loss on valuation of long-term investment Securities, net		(428,643	)		(154,956	)
Equity in capital adjustment of affiliates, net		(49,920	)		(41,441	)
Loss on valuation of currency swap, net		6,668			6,668
Gain (loss) on valuation of interest rate swap		(542	)		125


Total	(W	526,447	)	(W	245,031	)

	e.		Effective tax rate

			Effective tax rates for the three months and nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):


	For the						For the
	three months ended						nine months ended
	September 30,			September 30,			September 30,			September 30,
	2007			2006			2007			2006

Income before income tax	W	1,051,188		W	645,935		W	2,174,304		W	1,650,637
Income tax expense		274,369			189,133			597,901			483,337


Effective tax rate		26.10	%		29.28	%		27.50	%		29.28	%

18.		COMPREHENSIVE INCOME

		Details of comprehensive income for the three months and nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):

		For the three and nine months ended September 30, 2007


	For the three months						For the nine months
	Profit and						Profit and
	loss effect			Tax effect			loss effect		Tax effect

Net income	W	776,819					W	1,576,403

Other comprehensive income:
Unrealized gain on valuation of long-term investment securities, net		318,496		(W	120,809	)		721,539	(W	273,687	)
Equity in capital adjustments of affiliates, net		(129,630	)		44,005			6,492		(8,479	)
Gain on valuation of currency swap, net		1,910			293			5,114		—
Gain on valuation of interest rate swap, net		303			(114	)		1,759		(667	)

Sub-total		191,079		(W	76,625	)		734,904	(W	282,833	)


Comprehensive income	W	967,898					W	2,311,307

For the three and nine months ended September 30, 2006


	For the three months						For the nine months
	Profit and						Profit and
	loss effect			Tax effect			loss effect			Tax effect

Net income	W	456,802					W	1,167,300

Other comprehensive income:
Unrealized gain on valuation of long-term investment securities, net		35,516		(W	13,472	)		131,873		(W	50,021	)
Equity in capital adjustments of affiliates, net		248			(1,372	)		(12,765	)		(1,893	)
Gain (Loss) on valuation of currency swap, net		5,218			(1,979	)		(7,110	)		2,697
(Loss) on valuation of interest rate swap, net		(1,410	)		535			(1,991	)		756

Sub-total		39,572		(W	16,288	)		110,007		(W	48,461	)


Comprehensive income	W	496,374					W	1,277,307

19.		NET INCOME AND ORDINARY INCOME PER SHARE

		The Company’s net income and ordinary income per share amounts for the three months and nine months ended September 30, 2007 and 2006 are computed as follows (In millions of Korean won, except for per share income per share):

Net income and ordinary income per share


	For the				For the
	three months ended				nine months ended
	September 30,		September 30,		September 30,		September 30,
	2007		2006		2007		2006

Net income and ordinary income	W	776,819	W	456,802	W	1,576,403	W	1,167,300
Weighted average number of common shares outstanding		72,667,459		73,314,653		72,667,459		73,531,415


Net income and ordinary income per share	W	10,690	W	6,231	W	21,693	W	15,875

	Net income and ordinary income per share for the year ended December 31, 2006 are W19,734 and net income and ordinary income per share for the three months ended March 31, 2007 and 2006 are W5,454 and W4,580, respectively, and for the three months ended June 30, 2007 and 2006 are W5,550 and W5,068, respectively.

	The weighted average number of common shares outstanding for the three months and nine months ended September 30, 2007 and 2006 is calculated as follows:


	Number of			Weighted		Weighted
	shares			number of days		number of shares

For the three months ended September 30, 2007
At July 1, 2007		81,193,711			92 / 92		81,193,711
Treasury stock, at the beginning		(8,526,252	)		92 / 92		(8,526,252	)


Total		72,667,459					72,667,459


For the nine months ended September 30, 2007
At January 1, 2007		81,193,711			273 / 273		81,193,711
Treasury stock, at the beginning		(8,526,252	)		273 / 273		(8,526,252	)


Total		72,667,459					72,667,459


	Number of			Weighted		Weighted
	shares			number of days		number of shares

For the three months ended September 30, 2006
At July 1, 2006		82,276,711			92 / 92		82,276,711
Treasury stocks at July 1, 2006		(8,563,054	)		92 / 92		(8,563,054	)
Retirement of treasury stock (note a)		(1,083,000	)	34 / 92 (Note a)			(399,004	)


Total		72,630,657					73,314,653


For the nine months ended September 30, 2006
At January 1, 2006		82,276,711			273 / 273		82,276,711
Treasury stocks at January 1, 2006		(8,662,415	)		273 / 273		(8,662,415	)
Conversion of convertible bonds into treasury stock (note b)		99,361		142 / 273 (Note b)			51,582
Retirement of treasury stock (note a)		(1,083,000	)	34 / 273 (Note a)			(134,463	)


Total		72,630,657					73,531,415

(note a)		The Company retired treasury stocks which were acquired on two different dates during the nine months ended September 30, 2006, and weighted number of shares was calculated considering each transaction date.

(note b)		Treasury stocks were used to settle the conversion of the convertible bonds on several different dates during the nine months ended September 30, 2006 and weighted number of shares was calculated considering each transaction date.

	Diluted net income and ordinary income per share amounts for the three months and nine months ended September 30, 2007 and 2006 are computed as follows (In millions of won, except for share data):

	Diluted net income and ordinary income per share


	For the				For the
	three months ended				nine months ended
	September 30,		September 30,		September 30,		September 30,
	2007		2006		2007		2006

Adjusted net income and ordinary income	W	780,119	W	460,152	W	1,586,219	W	1,177,231
Adjusted weighted average number of common shares outstanding		74,284,990		75,000,469		74,336,745		75,265,373


Diluted net income and ordinary income per share	W	10,502	W	6,135	W	21,338	W	15,641

	Diluted net income and ordinary income per share for the year ended December 31, 2006 are W19,458 and diluted net income and ordinary income per share for the three months ended March 31, 2007 and 2006 are W5,373 and W4,516, respectively, and for the three months ended June 30, 2007 and 2006 are W5,468 and W4,996, respectively.

	Adjusted net income and ordinary income per share and the adjusted weighted average number of common shares outstanding for the three months and nine months ended September 30, 2007 and 2006 are calculated as follows (In millions of Korean won, except for share data):


	For the				For the
	three months ended				nine months ended
	September 30,		September 30,		September 30,		September 30,
	2007		2006		2007		2006

Net income and ordinary income	W	776,819	W	456,802	W	1,576,403	W	1,167,300
Effect of stock options (note a)		—		—		—		—
Effect of convertible bonds (note b)		3,300		3,350		9,816		9,931


Adjusted net income and ordinary income	W	780,119	W	460,152	W	1,586,219	W	1,177,231


Weighted average number of common shares outstanding		72,667,459		73,314,653		72,667,459		73,531,415
Effect of stock options (note a)		—		—		—		—
Effect of convertible bonds (note b)		1,617,531		1,685,816		1,669,286		1,733,958

Adjusted weighted average number of common shares outstanding	W	74,284,990	W	75,000,469	W	74,336,745	W	75,265,373

(note a)		For the three months and nine months ended September 30, 2007 and 2006, the outstanding stock options did not have a dilutive effect because the exercise price exceeded the average market price of common stock for the three months and nine months ended September 30, 2007 and 2006 and for the year ended December 31, 2006, respectively.

(note b)		The effect of convertible bonds increased net income related to interest expenses that would not have been incurred, and increase in the weighted average number of common shares outstanding related to common shares that would have been issued, assuming that the conversion of convertible bonds was made on the beginning of the period.

20.

RESTRICTED DEPOSITS

	a.		At September 30, 2007, the Company has guarantee deposits restricted for its checking accounts totaling W19 million and deposits restricted for a charitable trust for the public totaling W10,000 million of which due date is February 8, 2009.

	b.		The Company entered into a contract with First Data Corporation to sell the investment in common stock of KMPS Corporation, which was held by the Company and accounted for as available-for-sale securities. At September 30, 2007, certain portion of proceeds from sales of such investment totaling W1,137 million is kept in escrow accounts in accordance with the Escrow Agreement, which is restricted for use until November 16, 2007, the final settlement date, and recorded as short-term deposits.

21.

INTERIM DIVIDENDS

In accordance with the resolution of the Company’s board of directors dated July 27, 2007, the Company declared and paid cash dividends during the three months ended September 30, 2007 based on outstanding number of common shares at June 30, 2007 as follows (in millions of Korean won except for per share data):

Number of shares

outstanding as of June 30, 2007

Par value per share

Dividend ratio

Dividends

72,667,459

W500

200%

W72,667

22.

INSURANCE

As of September 30, 2007, certain Company’s assets are insured with local insurance companies as follows (In millions of Korean won and thousands of U.S. dollars):

Insured

Risk

Carrying value

Coverage

US$

59,115

Property and equipment

Fire and comprehensive liability

3,498,212

7,617,737

In addition, the Company carries directors and officers liability coverage insurance totaling W50,000 million.

23. RELATED PARTY TRANSACTIONS

As of September 30, 2007 and December 31, 2006, the parent company and subsidiaries of the Company are as follows:

Holding company and subsidiaries


		Ownership
Type	Company	percentage (%)		Types of business

Parent company	SK Corporation	21.8 (note a)		Manufacturing and selling petrochemicals
Subsidiary	SK Telink Co., Ltd.		90.8	Telecommunication service
²	SK Communications Co., Ltd.		85.9	Internet website services
²	SK Wyverns Baseball Club Co., Ltd.		100.0	Business related sports
²	Global Credit & Information Co., Ltd.		50.0	Credit and collection services
²	PAXNet Co., Ltd.		59.7	Internet website services
²	Seoul Records, Inc.		60.0	Release of music disc
²	Aircross Co., Ltd.		100.0	Wireless marketing related business
²	TU Media Corp.		32.7	Digital multi media broadcasting service
²	SKT Vietnam PTE Ltd. (Formerly SLD Telecom PTE Ltd.)		73.3	Telecommunication service
²	SK Telecom China Co., Ltd.		100.0	Telecommunication service
²	SK Telecom China Holding Co., Ltd.		100.0	Holding company in China
²	ULand Company Ltd.		70.1	Network and mobile value added service
²	IHQ, Inc.		37.1	Entertainment management
²	Philio Co., Ltd.		100.0	Cosmetics wholesale
²	Baba Club		100.0	Electronic commerce
²	SK Telecom USA Holdings, Inc.		100.0	Telecommunication service
²	SK Telecom International Inc.		100.0	Telecommunication service
²	Centurion IT Investment Association		37.5	Investment association
²	The First Music Investment Fund of SK-PVC		69.3	Investment association
²	The Second Music Investment Fund of SK-PVC		79.3	Investment association
²	SK-KTB Music Investment Fund		74.3	Investment association
²	IMM Cinema Fund		45.6	Investment association
²	Cyworld, Inc.	100.0 (note b)		Internet website services
²	Cyworld Japan Co., Ltd.	100.0 (note b)		Internet website services
²	SK Cyberpass Inc.	70.5 (note c)		Telecommunication service
²	YTN Media Inc.	51.4 (note c)		Broadcasting program production
²	Ntreev Soft Co., Ltd.		66.7	Game program production
²	IHQ USA, Inc.	100.0 (note c)		Surveying marketing information
²	SK Telecom Europe Ltd.		100.0	Wireless telecommunication related business
²	SK Telecom Advanced Tech & Service Center		100.0	Research & development
²	Cyworld Europe GmbH	50.2 (note c)		Internet website services
²	Cyworld China Ltd.	100.0 (note c)		Internet website services
²	SK I-Media Co., Ltd.	60.0 (note c)		Game software production

(note a)		The ownership percentage represents parent company’s ownership over the Company.

(note b)		The ownership percentage represents the total sum of the percentage ownership held by the Company and its subsidiaries.

(note c)		The ownership percentage represents subsidiaries’ ownership over their subsidiaries, in which the Company has no direct investment.

Transactions and balances with related parties

Significant related party transactions for the three months and nine months ended September 30, 2007 and 2006, and account balances as of September 30, 2007 and December 31, 2006 are as follows (In millions of Korean won):

b-(1) Transactions


	For three months ended September 30, 2007						For nine months ended September 30, 2007
	Purchases of		Commissions		Commissions		Purchases of		Commissions		Commissions
	property and		paid and		earned and		property and		paid and		earned and
	equipment		other expenses		other income		equipment		Other expenses		other income
Parent Company:

SK Corporation	W	—	W	2,527	W	111	W	—	W	17,722	W	10,731

Subsidiaries:
SK Communications Co., Ltd.		—		9,234		1,543		156		27,590		4,873
TU Media Corp.		—		1,186		17,007		11		1,850		42,584
Global Credit & Information Co., Ltd.		—		13,486		313		—		41,046		1,178
PAXNet Co., Ltd.		—		3,193		2,532		—		9,388		3,177
SK Telink Co., Ltd.		—		3,508		6,014		—		9,995		15,935
SK Wyverns Baseball Club Co., Ltd.		—		4,200		—		—		14,877		17
Aircross Co., Ltd.		3		6,181		529		227		14,501		1,052
SK Telecom China Co., Ltd.		—		4,302		—		—		12,481		684
SK Telecom International Inc.		—		1,427		—		—		4,533		—
Others		—		1,766		2,776		1,000		5,536		3,602

Equity Method Investees:
Helio, LLC		—		—		283		—		—		1,761
SK C&C Co., Ltd.		77,907		67,908		1,810		104,164		166,687		6,235
Others		107		1,899		17,758		586		2,763		18,174

Others :
SK Engineering & Construction Co., Ltd.		46,449		1,788		660		181,873		4,420		2,474
SK Networks Co., Ltd.		8,846		184,259		3,937		22,305		509,359		9,159
Innoace Co., Ltd.		5,087		1,074		46		9,267		4,339		155
SK Telesys Co., Ltd.		37,448		1,756		440		174,740		5,250		2,264
Others		234		10,200		800		1,821		18,129		3,004

Total	W	176,081	W	319,894	W	56,559	W	496,150	W	870,466	W	127,059


	For three months ended September 30, 2006						For nine months ended September 30, 2006
	Purchases of		Commissions		Commission		Purchases of		Commissions		Commission
	property and		paid and		and		property and		paid and		and
	equipment		other expenses		other income		equipment		Other expenses		other income

Parent Company:
SK Corporation	W	5	W	9,274	W	1,663	W	859	W	25,233	W	6,759

Subsidiaries:
SK Communications Co., Ltd.		40		10,884		541		51		30,984		1,949
TU Media Corp.		—		414		14,500		528		1,055		36,394
Global Credit & Information Co., Ltd.		—		10,043		292		—		26,413		927
PAXNet Co., Ltd.		—		1,726		322		—		6,539		1,176
SK Telink Co., Ltd.		—		2,684		4,268		—		10,998		12,724
SK Wyverns Baseball Club Co., Ltd.		—		3,300		—		—		12,900		—
Aircross Co., Ltd.		780		5,178		217		830		11,848		420
Others		8		2,357		2		11		4,928		2

Equity Method Investees:
WiderThan Co., Ltd.:		374		29,795		9		1,341		77,791		981
Helio, LLC		—		—		15,123		—		—		28,044
SK C&C Co., Ltd.		41,493		68,729		1,770		87,269		210,607		5,637
Others		170		667		7,220		3,111		1,305		7,220

Others :
SK Engineering & Construction Co., Ltd.		76,868		2,224		520		123,072		3,299		1,911
SK Networks Co., Ltd.		821		118,703		3,049		2,705		336,834		8,514
Innoace Co., Ltd.		3,010		579		49		4,394		3,445		156
SK Telesys Co., Ltd.		49,920		1,020		758		133,659		2,187		1,807
Others		147		3,099		920		177		6,351		2,270


Total	W	173,636	W	270,676	W	51,223	W	358,007	W	772,717	W	116,891

b-(2) Account balances


	As of September 30, 2007
											Guarantee
	Accounts		Short-term		Long-term		Guarantee		Accounts		deposits
	receivable		loans		loans		deposits		payable		received
Parent Company:
SK Corporation	W	13	W	—	W	—	W	—	W	139	W	—

Subsidiaries:
SK Communications Co., Ltd.		2,272		—		—		—		3,631		5,606
TU Media Corp.		5,718		—		—		—		339		3,016
Global Credit & Information Co., Ltd.		65		—		—		—		4,393		—
PAXNet Co., Ltd.		11		—		—		—		1,168		150
SK Telink Co., Ltd.		1,792		—		—		—		468		1,198
SK Wyverns Baseball Club Co., Ltd.		317		575		4,132		—		—		—
Aircross Co., Ltd.		1,045		—		—		—		3,852		255
SK Telecom China Co., Ltd.		684		—		—		—		—		—
SKT Vietnam PTE Ltd. (Formerly SLD Telecom PTE Ltd.)		4,176		—		—		—		—		—
Others		—		—		—		—		674		—

Equity Method Investees:
SK C&C Co., Ltd.		118		—		—		—		83,912		346
Helio, LLC.		682		—		—		—		—		—
Others		297		—		—		—		36		—

Others:
SK Engineering & Construction Co., Ltd.		208		—		—		—		48		1,135
SK Networks Co., Ltd.		1,555		—		—		113		45,838		3,508
Innoace Co., Ltd.		—		—		—		—		1,644		2,291
SK Telesys Co., Ltd.		1,788		—		—		—		33,484		—
Others		597		—		—		1,204		1,402		248


Total	W	21,338	W	575	W	4,132	W	1,317	W	181,028	W	17,753


	As of December 31, 2006
											Guarantee
	Accounts		Short-term		Long-term		Guarantee		Accounts		deposits
	receivable		loans		loans		deposits		payable		received
Parent Company:
SK Corporation	W	3,560	W	—	W	—	W	291	W	7,962	W	6,174

Subsidiaries:
SK Communications Co., Ltd.		535		—		—		—		7,255		5,459
SK Wyverns Baseball Club Co., Ltd.		475		1,150		4,132		—		—		—
Global Credit & Information Co., Ltd.		82		—		—		—		7,645		—
PAXNet Co., Ltd.		121		—		—		—		913		—
SK Telink Co., Ltd.		4,352		—		—		—		2,209		955
SKT Vietnam PTE Ltd. (Formerly SLD Telecom PTE Ltd.)		10,948		—		—		—		—		—
SK Telecom International Inc.		—		—		—		—		1,673		—
Others		16		—		—		—		564		—

Equity Method Investees:
SK C&C Co., Ltd.		650		—		—		—		86,332		346
Helio, LLC.		13,335		—		—		—		—		—
TU Media Corp.		6,369		—		—		—		886		3,016
Others		4,316		—		—		—		4,053		226

Others:
SK Engineering & Construction Co., Ltd.		258		—		—		—		1,635		942
SK Networks Co., Ltd.		771		—		—		113		69,546		3,010
Innoace Co., Ltd.		1		—		—		—		13,574		2,291
SK Telesys Co., Ltd.		12		—		—		—		51,531		—
Others		847		—		—		900		12,078		—


Total	W	46,648	W	1,150	W	4,132	W	1,304	W	267,856	W	22,419

c. Compensation for the key management

The Company considers registered directors who have substantial roles and responsibility for planning, operating, and controlling of the business as key management, and the considerations given to the key management for the three months and nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):

For the three months ended

For the nine months ended

September 30, 2007

Severance

Payee

Payroll

indemnities

Total

Payroll

indemnities

Total

12 Registered directors (including outside directors)

532

141

673

4,243

581

4,824

For the three months ended

For the nine months ended

September 30, 2006

Severance

Payee

Payroll

indemnities

Total

Payroll

indemnities

Total

12 Registered directors (including outside directors)

507

136

643

3,687

799

4,486

In addition, on March 8, 2002, the Company granted stock options to its nine key members of the management, representing 15,110 shares at an exercise price of W267,000 per share. The stock options fully vested after three years from the date of grant and are exercisable for two years upon vesting. During the nine months ended September 30, 2007, the exercisable period elapsed and those stock options representing 15,110 shares have expired.

24.

PROVISION FOR MILEAGE POINTS

		The Company, for its marketing purposes, grants certain mileage points (“Rainbow Points and Point Box”) to its subscribers based on their usage of the Company’s services. Mileage points’ provision was provided based on the historical usage experience and the Company’s marketing policy. Such provision was recorded as accrued expenses or other non-current liabilities in accordance with the expected points’ usage duration since balance sheet date.

		Details of change in the provisions for such mileage points for the nine months ended September 30, 2007 and 2006 are as follows (In millions of Korean won):


	September 30, 2007			September 30, 2006
	(note a)			(note a)

Beginning balance	W	52,593		W	52,172
Increase		11,479			9,679
Decrease (used points)		(8,521	)		(9,381	)
Decrease (reversal of provision for mileage points)		(27,151	)		—


Ending balance	W	28,400		W	52,470

(note a)

Effective January 1, 2005, pursuant to adoption of SKAS No.17 [See Note 2(p)], Mileage points’ provision is recorded at the present value.

Mileage points expire after 5 years. The expected year when unused mileage points as of September 30, 2007 are expected to be used and the respective estimated monetary amount to be paid in a given year are as follows (In millions of Korean won):


Expected year of the usage (note b)	Estimated amount to be paid In nominal value (Note b)		Current value (note b)

Within September 2008	W	12,387	W	11,691
Within September 2009		8,203		7,308
Within September 2010		5,479		4,607
Within September 2011		3,686		2,925
Within September 2012		2,495		1,869


Ending balance	W	32,250	W	28,400

(note b)

The above expected year of the usage and the current value of the estimated amount to be paid are estimated based on the historical usage experience.

25.

DERIVATIVE INSTRUMENTS

	a.		Currency swap contract to which the cash flow hedge accounting is applied

			The Company has entered into a fixed-to-fixed cross currency swap contract with Citibank, BNP Paribas and Credit Suisse First Boston International to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds with face amounts totaling US$300,000,000 at annual fixed interest rate of 4.25% issued on April 1, 2004. As of September 30, 2007, 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 W12,843 million (excluding tax effect totaling W6,668 million and foreign exchange translation gain arising from unguaranteed U.S. dollar denominated bonds totaling W68,124 million) was accounted for as accumulated other comprehensive loss.

			In addition, the Company has entered into a floating-to-fixed cross currency swap contract with Calyon bank to hedge the foreign currency risk and the interest rate risk of U.S. dollar denominated long-term borrowings with face amounts totaling US$100,000,000 borrowed on October 10, 2006. As of September 30, 2007, in connection with unsettled cross currency interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to W1,469 million (excluding foreign exchange translation gain arising from U.S. dollar denominated long-term borrowings totaling W2,730 million) was accounted for as accumulated other comprehensive income.

	b.		Interest rate swap contract to which the cash flow hedge accounting is applied

			The Company has entered into a floating-to-fixed interest rate swap contract with Shinhan Bank to hedge the interest rate risk of floating rate discounted bill with face amounts totaling W200,000 million borrowed on June 29, 2006. As of September 30, 2007, in connection with unsettled interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to W1,430 million (excluding tax effect totaling W542 million) was accounted for as accumulated other comprehensive income.

	c.		Currency swap contract to which the fair value hedge accounting is applied

			The Company has entered into a fixed-to-fixed cross currency swap contract with Hana Bank and other 8 banks to hedge the foreign currency risk of U.S. dollar denominated equity securities of China Unicom. In connection with unsettled foreign currency swap contract to which the fair value hedge accounting is applied, gain on valuation of currency swap of W10,482 million for the nine months ended September 30, 2007 were charged to current operations.

	d.		Currency swap contract to which the hedge accounting is not applied

			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 unguaranteed U.S. 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 hedge accounting is not applied, loss on valuation of currency swap of W1,427 million and ?8,553 million for the nine months ended September 30, 2007 and 2006 were charged to current operations.

			Also, the Company has entered into fixed-to-fixed cross currency swap contract with Morgan Stanley Bank and two other banks to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds with face amounts totaling US$400,000,000 issued on July 20, 2007. In connection with unsettled foreign currency swap contract to which the hedge accounting is not applied, gain on valuation of currency swap of W6,258 million for the nine months ended September 30, 2007 was charged to current operations.

			In addition, the Company has entered into a fixed-to-fixed cross currency swap contract with Hana Bank and five other banks to hedge foreign currency risk of unguaranteed U.S. dollar denominated convertible bonds issued by China Unicom Ltd. which was acquired on July 5, 2006. However, as the Company converted the convertible bonds into the common stock of China Unicom in September 2007, the Company has entered into another fixed-to-fixed cross currency swap contract with Hana Bank and five other banks to liquidate the existing currency swap contract. In connection with unsettled foreign currency swap contract to which the hedge accounting is not applied, gain and loss on valuation of currency swap of W3,194 million and W12,364 million, respectively, for the nine months ended September 30, 2007 were charged to current operations.

			Furthermore, the Company has entered into a fixed-to-fixed cross currency swap contract with Calyon Bank and other 2 banks to hedge foreign currency risk of U.S. dollar denominated MMDA totaling US$220,000,000. In connection with unsettled foreign currency swap contract to which the hedge accounting is not applied, gain and loss on valuation of currency swap of W75 million and W837 million, respectively, for the nine months ended September 30, 2007 were charged to current operations.

As of September 30, 2007, fair values of above derivatives recorded in assets or liabilities and details of derivative instruments as of September 30, 2007 are as follows (In thousands of U.S. dollars, H.K. dollars and millions of Korean won):

Fair value

Designated

Duration

as cash

as fair

Not

Type

Hedged item

Amount

of contract

flow hedge

value hedge

designated

Total

Current assets:

Fix-to-fixed cross currency swap

U.S. dollar denominated convertible bond issued by China Unicom

US$1,000,000

Jul. 5, 2007~
Oct. 5, 2007

—

3,194

Fix-to-fixed cross currency swap

U.S. dollar denominated MMDA

US$40,000

Sep. 28, 2007~
Oct. 31,2007

—

Fix-to-fixed cross currency swap

U.S. dollar denominated China Unicom Equity Securities

HK$10,940,900

Sep. 11, 2007~
Sep. 16, 2008

—

10,482

—

10,482

Non-current assets:

Fix-to-fixed cross currency swap

U.S. dollar denominated bonds

US$400,000

Jul. 20, 2007~
Jul. 20, 2017

—

6,258

Floating-to-fixed Interest rate swap

Long-term floating rate discounted bill

W200,000

Jun. 29, 2006~
Jun. 29, 2010

1,972

—

1,972

Total assets

1,972

10,482

9,527

21,981

Current liabilities:

Fix-to-fixed cross currency swap

U.S. dollar denominated MMDA

US$180,000

July 26, 2007~
Dec 31, 2007

—

837

Fix-to-fixed cross currency swap

U.S. dollar denominated convertible bond issued by China Unicom

US$1,000,000

Sep. 11, 2007~
Oct. 5, 2007

—

12,364

Non-current liabilities:

Fix-to-fixed cross currency swap

U.S. dollar denominated bonds

US$300,000

Mar. 23, 2004~
Apr. 1, 2011

87,635

—

87,635

Fix-to-fixed cross currency swap

U.S. dollar denominated convertible bond

US$100,000

May 27, 2004~
May 27, 2009

—

23,929

Floating-to-fixed cross currency interest rate swap

U.S. dollar denominated long-term borrowings

US$100,000

Oct. 10, 2006~
Oct. 10, 2013

1,261

—

1,261

Total liabilities

88,896

—

37,130

126,026

26.		COMMITMENTS

		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, has invested US$220 million from 2005 through September 30, 2007 (to maintain 50% of equity interest in the Joint venture Company). In addition, the Company has invested US$30,000,000 in SK Telecom USA Holdings, Inc. on July 25, 2007 in accordance with the resolution of the Company’s board of directors dated June 29, 2007, of which additional investment of up to US$100,000 million was approved. In addition, the Company has invested US$30,000,000 in SK Telecom USA Holdings, Inc. on September 21, 2007, in accordance with the resolution of the Company’s board of directors dated September 20, 2007, of which additional investment of up to US$200,000 million in SK Telecom USA Holdings, Inc was approved. Helio, LLC extensively launched cellular voice and data services across the United States of America in May 2006 by renting networks from network operators throughout the United States of America also known as partial mobile virtual network operator (MVNO) system.

27.		STATEMENTS OF CASH FLOWS

		The statements of cash flows are prepared using the indirect method and there was no significant non-cash transaction for the three months and nine months ended September 30, 2007.

		Significant non-cash transactions for the three months and nine months ended September 30, 2006 are as follows (In millions of Korean won):


	For the three months		For the nine months
	ended September 30, 2006		ended September 30, 2006

Conversion of convertible bonds	W	—	W	21,575
Retirement of treasury stock		209,077		209,077

28.

SUBSEQUENT EVENTS

	a.		Acquisition of treasury stock

			In accordance with the resolution of board of directors dated November 2, 2007, the Board approves the plan to acquire 471,000 shares of treasury stock in the market for the period from November 9, 2007 to February 27, 2008, in order to enhance the value of stockholders and stabilize the stock price.

Forward-Looking Statement Disclaimer

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	SK Telecom Co., Ltd. (Registrant)
	By: /s/ Tae Jin Park
	(Signature)
	Name:	Tae Jin Park
	Title:	Vice President

Date: January 4, 2008