Edgar Filing: SK TELECOM CO LTD

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

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

FOR THE MONTH OF SEPTEMBER 2010

COMMISSION FILE NUMBER 333-04906

SK Telecom Co., Ltd.

(Translation of registrant’s name into English)

11, Euljiro2-ga, Jung-gu

Seoul 100-999, Korea

(Address of principal executive offices)

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

Form 20-F o 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-

SEMI-ANNUAL REPORT

(From January 1, 2010 to June 30, 2010)

THIS IS A SUMMARY OF THE SEMI-ANNUAL BUSINESS REPORT ORIGINALLY PREPARED IN KOREAN AND IS IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SERVICES COMMISSION.

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

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

Contents


I. Company Overview		4

II. Business		13

III. Financial Information		23

IV. Auditor’s Opinion		25

V. Management Discussion and Analysis		27

VI. Corporate Organization including Board of Directors and Affiliated Companies		27

VII. Shareholders Information		38

VIII. Employees		42

IX. Transactions with Parties Having Interests		43

X. Other Information Relating to the Protection of Investors		46

Attachment: Korean GAAP Non-consolidated Financial Statements

I. COMPANY OVERVIEW

1. Company Overview

A. Corporate Legal Business Name: SK Telecom Co., Ltd. (The “Company”)

B. Date of Incorporation: March 29, 1984

C. Location of Headquarters

(1) Address: 11 Euljiro 2-ga, Jung-gu, Seoul, Korea

(2) Phone: +82-2-6100-2114

(3) Website: http://www.sktelecom.com

D. Corporate Purpose of the Company

Business Objectives

1.		Information and communication business

2.		Handset sales and lease business

3.		New media business

4.		Advertisement business

5.		Communication sales business

6.		Real estate business(development, maintenance, leasing, etc.) and chattel leasing business

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

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

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

10.		Tourism

11.		Electronic financial business

12.		Motion picture business (Production, Importation, Distribution, Screening)

13.		Lifetime education and lifetime educational facilities management

14.		Electric related construction business

15.		Information and communication related work business

16.		Ubiquitous city construction and service business

17.		Any business or undertaking incidental or conducive to the attainment of the objects above

E. Credit Ratings

(1) Corporate Bonds


			Credit rating entity
Credit rating date	Subject of rating	Credit rating	(Credit rating range)	Rating classification
May 29, 2007	Corporate bond	AAA	Korea Ratings	Regular rating
June 14, 2007	Corporate bond	AAA	Korea Information Services, Inc.	Regular rating
June 27, 2007	Corporate bond	AAA	Korea Investors Service, Inc.	Regular rating
November 5, 2007	Corporate bond	AAA	Korea Ratings	Current rating
November 5, 2007	Corporate bond	AAA	Korea Information Services, Inc.	Current rating
November 5, 2007	Corporate bond	AAA	Korea Investors Service, Inc.	Current rating
February 20, 2008	Corporate bond	AAA	Korea Ratings	Current rating
February 21, 2008	Corporate bond	AAA	Korea Investors Service, Inc.	Current rating
February 21, 2008	Corporate bond	AAA	Korea Information Services, Inc.	Current rating
June 3, 2008	Corporate bond	AAA	Korea Ratings	Regular rating
June 17, 2008	Corporate bond	AAA	Korea Investors Service, Inc.	Regular rating
June 30, 2008	Corporate bond	AAA	Korea Information Services, Inc.	Regular rating
October 20, 2008	Corporate bond	AAA	Korea Ratings	Current rating
October 20, 2008	Corporate bond	AAA	Korea Investors Service, Inc.	Current rating
October 20, 2008	Corporate bond	AAA	Korea Information Services, Inc.	Current rating
January 13, 2009	Corporate bond	AAA	Korea Ratings	Current rating
January 13, 2009	Corporate bond	AAA	Korea Investors Service, Inc.	Current rating
January 13, 2009	Corporate bond	AAA	Korea Information Services, Inc.	Current rating
February 23, 2009	Corporate bond	AAA	Korea Ratings	Current rating
February 23, 2009	Corporate bond	AAA	Korea Investors Service, Inc.	Current rating
February 23, 2009	Corporate bond	AAA	Korea Information Services, Inc.	Current rating
June 24, 2009	Corporate bond	AAA	Korea Information Services, Inc.	Regular rating
June 26, 2009	Corporate bond	AAA	Korea Ratings	Regular rating
June 30, 2009	Corporate bond	AAA	Korea Investors Service, Inc.	Regular rating
June 22, 2010	Corporate bond	AAA	Korea Ratings	Regular rating
June 29, 2010	Corporate bond	AAA	Korea Investors Service, Inc.	Regular rating
June 29, 2010	Corporate bond	AAA	NICE Investors Service Co, Ltd.	Regular rating


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

(2) Commercial Paper (“CP”)


			Credit rating entity
Credit rating date	Subject of rating	Credit rating	(Credit rating range)	Rating classification
May 29, 2007	CP	A1	Korea Ratings	Current rating
June 14, 2007	CP	A1	Korea Information Services, Inc.	Current rating
June 27, 2007	CP	A1	Korea Investors Service, Inc.	Current rating
November 5, 2007	CP	A1	Korea Ratings	Regular rating
November 5, 2007	CP	A1	Korea Information Services, Inc.	Regular rating
November 5, 2007	CP	A1	Korea Investors Service, Inc.	Regular rating
June 3, 2008	CP	A1	Korea Ratings	Current rating
June 16, 2008	CP	A1	Korea Information Services, Inc.	Current rating
June 17, 2008	CP	A1	Korea Investors Service, Inc.	Current rating
October 20, 2008	CP	A1	Korea Ratings	Regular rating
October 20, 2008	CP	A1	Korea Investors Service, Inc.	Regular rating
October 20, 2008	CP	A1	Korea Information Services, Inc.	Regular rating
June 24, 2009	CP	A1	Korea Information Services, Inc.	Current rating
June 26, 2009	CP	A1	Korea Ratings	Current rating
June 30, 2009	CP	A1	Korea Investors Service, Inc.	Current rating
December 15, 2009	CP	A1	Korea Ratings	Regular rating
December 30, 2009	CP	A1	Korea Investors Service, Inc.	Regular rating
December 30, 2009	CP	A1	Korea Information Services, Inc.	Regular rating
June 22, 2010	CP	A1	Korea Ratings	Current rating
June 29, 2010	CP	A1	Korea Investors Service, Inc.	Current rating
June 29, 2010	CP	A1	NICE Investors Service Co, Ltd.	Current rating


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

(3) International Credit Ratings


		Credit rating	Credit rating company
Date of credit rating	Subject of rating	of securities	(Credit rating range)	Rating type
July 9, 2007	Global Bonds	A	Fitch (England)	Current rating
July 9, 2007	Global Bonds	A2	Moody’s (U.S.A.)	Current rating
July 9, 2007	Global Bonds	A	S&P (U.S.A.)	Current rating
April 7, 2009	Offshore Convertible Bonds	A	Fitch (England)	Current rating
April 7, 2009	Offshore Convertible Bonds	A2	Moody’s (U.S.A.)	Current rating
April 7, 2009	Offshore Convertible Bonds	A	S&P (U.S.A.)	Current rating

2. Company History

A. Location of Headquarters

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

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

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

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

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

B. Significant Changes in Management

At the 26th General Shareholders’ Meeting held on March 12, 2010, Cho, Ki Haeng was elected as an inside director, Chung, Jay Young was elected as a member of the audit committee and Shim, Dal Sup was re-elected as an independent director while Sung Min Ha resigned from the Board on March 12.

C. Other Important Matters related to Management Activities

(1) Interim Dividends

In accordance with the resolution of the Board of Directors on July 22, 2010, the Company decided to distribute interim dividends.

- Amount of interim dividends: Cash dividends of 1,000 Won per share (Total amount of interim dividend: 72,344,999 thousand Won)

- Market dividend rate: 0.61%

- Record date: June 30, 2010

- Dividend payment date: Within 20 days from the date of the resolution of the Board of Directors.

(2) Acquisition of Treasury Stock

In accordance with the resolution of the Board of Directors on July 22, 2010, the Company decided to buy back the shares of the Company (estimated total purchase price: 201,875,000 thousand Won, estimated purchase price per share: 161,500 Won) for the purpose of stabilizing stock price and enhancing shareholder value. The Company will acquire its shares from July 23, 2010 through October 22, 2010 and actual purchase price may be changed subject to the fluctuation of stock price in the future.

3. Total Number of Shares

A. Total number of shares


(As of June 30, 2010)							(Unit: shares)
	Share type
Classification	Common shares		—		Total		Remarks
I. Total number of authorized shares		220,000,000		—		220,000,000		—
II. Total number of shares issued to date		89,278,946		—		89,278,946		—
III. Total number of shares retired to date		8,533,235		—		8,533,235		—
a. reduction of capital		—		—		—		—
b. retirement with profit		8,533,235		—		8,533,235		—
c. redemption of redeemable shares		—		—		—		—
d. others		—		—		—		—
IV. Total number of shares (II-III)		80,745,711		—		80,745,711		—
V. Number of treasury shares		8,400,712		—		8,400,712		—
VI. Number of shares outstanding (IV-V)		72,344,999		—		72,344,999		—

On July 22, 2010, the Company publicly disclosed its decision to acquire shares of treasury stock. The Company plans to acquire 1,250,000 shares of its common stock on KRX from July 23, 2010 through October 22, 2010. As of August 15, 2010, the Company accumulatively acquired 338,000 shares of its common stock.

B. Treasury Stock

(1) Acquisitions and Dispositions of Treasury Stocks


(As of June 30, 2010)															(Unit: Shares)
			At the									At the
			beginning of			Changes						end of
Acquisition methods		Type of shares	period			Acquired (+)		Disposed (-)		Retired (-)		period			Remarks
Direct acquisition	pursuant to Article 165-2 of the Financial Investment Services and Capital Markets Act of Korea (“FSCMA”)	Common shares		4,436,028			—		—		—		4,436,028			—
		Preferred shares		—			—		—		—		—			—
	based on reasons other than those stipulated in Article 165-2 of the FSCMA	Common shares		77,974			—		—		—		77,974
		Preferred shares		—			—		—		—		—			—
Sub-total		Common shares		4,514,002	*		—		—		—		4,514,002	*		—
		Preferred shares		—			—		—		—		—			—
Indirect acquisition through trust and other agreements		Common shares		3,886,710			—		—		—		3,886,710			—
		Preferred shares		—			—		—		—		—			—
Total		Common shares		8,400,712			—		—		—		8,400,712			—
		Preferred shares		—			—		—		—		—			—


*		Among 4,514,002 shares directly acquired by the Company, 1,999,997 shares were deposited with the Korea Securities Depository as of March 31, 2010 for issuance upon conversion of the overseas convertible bonds.

(2)

Retirement of Treasury Stock



		(Unit: in millions of Won, Shares)

Monetary

Amount

Quantity

Retired

Retirement

Retired

(in millions of

Acquisition Period

Retired Date

Purpose

Type of Share

(shares)

Won)

of Retired Shares

Remarks

January 9, 2009

Stabilization of Share Price

Common

—

Total

Common

—

Preferred

—

(3)

Execution of Trust Agreements relating to Treasury Stocks, Etc.


													(Amounts: in millions of Won)
	At Start of Period				Executed (+)				Cancelled (-)				At End of Period
			No. of				No. of				No. of				No. of
Category	Amount		Transactions		Amount		Transactions		Amount		Transactions		Amount		Transactions		Remark
Specified Money Trust		982,000		4		—		—		—		—		982,000		4	1. Extension Date: Oct. 26, 2007 Extension Amount: Won 631,200 2. Extension Date: October 29, 2007 Extension Amount: Won 350,800
Trust Contracts with Asset Management Companies		—		—		—		—		—		—		—		—
Acquisition Contracts with Investment Companies		—		—		—		—		—		—		—		—

Total		982,000		4		—		—		—		—		982,000		4		—

4. Status of Voting Rights



(As of June 30, 2010)		(Unit: shares)


Classification			Number of shares		Remarks
Total shares (A)	Common share			80,745,711		—
	Preferred share			—
Number of shares without voting rights (B)	Common share			8,400,712	Treasury shares
	Preferred share			—
Shares with restricted voting rights under the Korean law (C)		—		—		—
Shares with reestablished voting rights (D)		—		—		—
The number of shares with exercisable voting right s (E = A – B – C + D)	Common share			72,344,999		—
	Preferred share			—

5. Dividends and Others

A. Dividends

	(1)		Distribution of cash dividends was approved during the 23rd General Meeting of Shareholders held on March 9, 2007.

	-		Distribution of cash dividends per share of Won 7,000 (exclusive of an interim dividend of Won 1,000) was approved.

	(2)		Distribution of interim dividends of Won 1,000 was approved during the 283rd Board of Directors’ Meeting on July 27, 2007.

	(3)		Distribution of cash dividends was approved during the 24th General Meeting of Shareholders held on March 14, 2008.

	-		Distribution of cash dividends per share Won 8,400 (exclusive of an interim dividend of Won 1,000) was approved.

	(4)		Distribution of interim dividends of Won 1,000 was approved during the 295th Board of Directors’ Meeting on July 18, 2008.

	(5)		Distribution of cash dividends was approved during the 25th General Meeting of Shareholders held on March 13, 2009.

	-		Distribution of cash dividends per share of Won 8,400 (exclusive of an interim dividend of Won 1,000) was approved.

	(6)		Distribution of interim dividends of Won 1,000 was approved during the 305th Board of Directors’ Meeting on July 23, 2009.

	(7)		Distribution of cash dividends was approved during the 26th General Meeting of Shareholders held on March 12, 2010.

	-		Distribution of cash dividends per share of Won 8,400 (exclusive of an interim dividend of Won 1,000) was approved.

	(8)		Distribution of interim dividends of Won 1,000 was approved during the 318th Board of Directors’ Meeting on July 22, 2010.

B. Dividends for the Last 3 Fiscal Years

(Unit: in millions of Won, except per share value)


	As of and for		As of and for		As of and for
	the six months		the year ended		the year ended
	ended June 30,		December 31,		December 31,
Classification	2010		2009		2008
Par value per share (Won)		500		500		500
Net income		685,726		1,288,340		1,277,658
Net income per share (Won)		9,479		17,808		17,559
Total cash dividend		72,345		680,043		681,996
Total stock dividends		—		—		—
Percentage of cash dividend to available income (%)		10.6		52.8		53.4
Cash dividend yield ratio (%)
Common share		0.61		5.6		4.5
Preferred share		—		—		—
Stock dividend yield ratio (%)
Common share		—		—		—
Preferred share		—		—		—
Cash dividend per share (Won)
Common share		1,000		9,400		9,400
Preferred share		—		—		—
Stock dividend per share (share)
Common share		—		—		—
Preferred share		—		—		—


*		Total cash dividend of Won 681,996 million for the year ended December 31, 2008 includes the total interim dividend amount of Won 72,793 million, and the cash dividend amount per share of Won 9,400 includes the interim cash dividend amount of Won 1,000.

*		Total cash dividend of Won 680,043 million for the year ended December 31, 2009 includes the total interim dividend amount of Won 72,345 million, and the cash dividend amount per share of Won 9,400 includes the interim cash dividend amount of Won 1,000.

II. BUSINESS

1. Business Overview

A. Industry Characteristics

As of June 30, 2010, the number of domestic mobile phone subscribers reached 49.61 million and, with more than 100% penetration rate, the Korean mobile communication market can be considered to have reached its maturation stage. However, the penetration rate is expected to increase further due to increased use of mobile phones by corporate users resulting from the rapid growth of smart phone markets, as well as the increasing popularity of high-tech mobile devices based on wireless data services such as tablet PC.

The Korean mobile communications market continues to improve in the quality of services 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, including various smart phones, that enable the provision of convergence services for multimedia contents, mobile commerce, telematics, satellite Digital Multimedia Broadcasting (“DMB”), digital home services, connected workforce services and other related services. In addition, through HSPA+ network to be commercialized within this year and the LTE network to be introduced from the next year, the “industry productivity enhancement” (“IPE”) business directly resulting in the enhancement of productivity, such as the corporate “connected workforce” business, is expected to grow rapidly.

B. Growth Potential


(Unit: 1,000 persons)
		As of June		As of December 31,
Classification		30, 2010		2009		2008		2007		2006
Number of subscribers	SK Telecom		25,146		24,270		23,032		21,968		20,271
	Others (KT, LGT)		24,462		23,675		22,575		21,529		19,926

	Total		49,609		47,944		45,607		43,497		40,197

(Source: Korea Communications Commission website)

C. Domestic and Overseas Market Conditions

The Korean mobile communication market includes the entire population of Korea with mobile communication service needs, and almost every Korean is considered a potential user. Although

demand has primarily been in the domestic market, as the business territory expands to overseas market, the size of overseas sales is expected to grow in the near future. In addition, sales revenue related to data services is expected to increase due to the increasing popularity of smart phones and wireless Internet. Business-to-business segment that creates added values by adding additional solutions and applications is also growing. Seasonal and economic fluctuations have much less impact on the Korean mobile communication market compared to other industries.

Historical market share of the Company:

(Unit: %)

As of

As of December 31,

Classification

June 30, 2010

2009

2008

2007

Mobile communication services

50.7

50.6

50.5

Comparative market share:

(As of June 30, 2010)

(Unit: %)

Classification

SK Telecom

LG Uplus

Market share

50.7

31.4

17.9

(Source: Korea Communications Commission website)

D. Business Overview and Competitive Strengths

The Company’s revenue in the first half of 2010 amounted to Won 6,106.8 billion, an increase of Won 162.5 billion compared to the first half of 2009. This increase in revenue was meaningful since it was achieved despite a number of negative factors, including the charging of voice calls on a per-second basis from March 2010 and the reduction of sign-up fees by 28% from December 2009. Operating income in the first half of 2010 amounted to Won 1,062.5 billion, which was lower than the same period of 2009, due among others to the increase in marketing and depreciation expenses. In the first half of 2010, however, the Company achieved meaningful business performance such as securing 25 million subscribers in May 2010 for the first time. Net income in the first half of 2010 amounted to Won 685.7 billion, an increase of Won 57.3 billion from the same period of 2009.

In June 2010, the Company met the guideline set by the Korea Communications Commission that limits marketing expenses of mobile communication business operators to 22% of their revenue. The Company will comply with the guideline going forward, which will help stabilize the competition in the mobile service markets, while maintaining its competitive advantage based on fundamental

strengths deriving from handsets, price plans, networks and contents. In addition, the “Galaxy S” handset introduced in the end of June 2010 has acquired over 500,000 subscribers in 33 days from its debut, due to the Company’s marketing superiority, and broke all historical record of Korea handset sales, which reconfirmed the competitive edge of the Company in the field of smart phones. Wide penetration of smart phones has led to the vitalization of the Company’s T-Store, which has grown rapidly in the numbers of subscribers, contents and downloads, enhancing the Company’s competitiveness in the wireless data market.

As of June 30, 2010, the Company reached a subscriber number of approximately 25,150,000 and a 50.7% market share of the wireless market in Korea in terms of the number of subscribers. The Company plans to establish its leadership among users of smart phones by introducing various mobile platforms and streamlining the subscription process and pricing structures to enable subscribers to easily access their mobile content from multiple devices. The Company also plans to maintain its leadership in wireless Internet market by providing innovative user interface for content access and through investment in data networks, network sharing and support of the content production.

In 2010, the Company intends to continue its efforts to seek growth in business-to-business markets, such as “industry productivity enhancement” (“IPE”) business in domestic and foreign markets. As IPE business creates added values by adding additional solutions and applications to the existing infrastructure, it is more cost effective compared to traditional business-to-business model. The Company’s business-to-business sales in the first half of 2010 increased meaningfully from the same period of 2009.

The Company will also continue its efforts to become a global leader in information and communication technology. It plans to actively respond to secular changes such as the growing popularity of smart phones and wireless Internet, as well as gaining competitive strengths in the IPE business. In particular, the Company intends to pursue opportunities to grow the wireless broadband and IPE businesses in Korea and abroad. In case of overseas businesses, the Company will maintain its disciplined approach under its “Start Small Scale Fast” principle.

2. Major Products & Services

A. Updates on Major Products and Services


				(Unit: in millions of Won, %)
					Sales amount
Business fields	Sales type	Item	Specific Usage	Major trademarks	(ratio)
Information and communication	Services	Mobile communication	Mobile Phone	NATE, T store and others	5,917,684(96.9%)
—	—	Others	—	Others	189,134(3.1%)

B. Price Fluctuation Trend of Major Products and Services

Previously, based on the Company’s Basic Plan for monthly subscription, the basic service fee was Won 13,000 per month and the usage fee was Won 20 per 10 seconds and based on the Company’s Standard Plan, basic service fee was Won 12,000 per month and the usage fee was Won 18 per 10 seconds. As of June 30, 2010, based on the Company’s Standard Plan, basic service fee is Won 12,000 per month and the usage fee is Won 1.8 per 1 second.

3. Investment Status

A. Investment in Progress

(Unit: in 100 millions of Won)

Amount

Investment

Subject of

Total

already

Future

Business field

Classification

period

investment

Investment effect

investments

invested

investment

Network/Common

Upgrade/New
installation

2010

Network, systems and others

Capacity increase and quality improvement; systems improvement

To be determined

3,736

To be determined

Total

—

To be determined

3,736

To be determined

B. Future Investment Plan

(Unit: in 100 millions of Won)

Expected investment amount

Expected investment for each year

Business field

Asset type

Amount

2010

2011

2012

Investment effect

Network/Common

Network, systems and others

18,500

To be determined

Upgrades to the existing services and provision of new services

Total

18,500

To be determined

Upgrades to the existing services and provision of new services


4. Revenues


				(Unit: in millions of Won)
				First Half
Business field	Sales type	Item		2010		2009		2008
Information and communication	Services	Mobile communication	Export		—		—		—
			Domestic		5,917,684		11,820,202		11,492,832
			Subtotal		5,917,684		11,820,202		11,492,832
	—	Others	Export		422		2,339		5,855
			Domestic		188,712		278,643		175,975
			Subtotal		189,134		280,982		181,830
Total			Export		422		2,339		5,855
			Domestic		6,106,396		12,098,845		11,668,807
			Total		6,106,818		12,101,184		11,674,662

5. Derivative Transactions

In order to hedge risks related to fluctuations in currency exchange rates and interest rates, the Company enters into currency swap contracts and interest rate swap contracts. The gain or loss generated from the derivatives contracts is recognized as the gains/losses for the current period or other comprehensive income/loss, in accordance with Korean GAAP. Fair value of the Company’s derivatives is calculated using the Company’s valuation models. In accordance with the derivatives contracts, the Company’s estimated gain/loss on the date of expiration is zero.

A. Currency Swap

(1) Purpose of Contracts: Hedging of risks related to fluctuations in currency exchange rates and interest rates

(2) Contract Terms

- Currency swap contract applying cash flow risk hedge accounting

The Company has entered into a currency swap contract with three banks including Citibank in order to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds (face amounts totaling US$300,000,000) issued on April 1, 2004. As of June 30, 2010, in connection with the unsettled foreign currency swap contract to which the cash flow risk hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to Won 5,004,645,000 (excluding tax effect totaling Won 1,952,601,000 and foreign exchange translation loss arising from unguaranteed U.S. dollar denominated bonds totaling Won 18,347,695,000) was accounted for as accumulated other comprehensive loss.

In addition, the Company has entered into a currency and interest rate swap contract with Credit Agricole Corporate & Investment Bank to hedge the foreign currency risk and the interest rate risk of U.S. dollar denominated floating rate long-term borrowings with face amounts totaling US$100,000,000 borrowed on October 10, 2006. As of June 30, 2010, in connection with this unsettled currency and interest rate swap contract, an accumulated loss on valuation of derivatives amounting to Won 5,019,112,000 (excluding tax effect totaling Won 973,790,000 and foreign exchange translation loss arising from U.S. dollar denominated long-term borrowings totaling Won 26,230 million) was accounted for as accumulated other comprehensive loss.

In addition, the Company has entered into a currency and interest rate swap contract with two banks including HSBC in order to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen dominated bonds (56-2) with face amounts totaling JPY 12,500,000,000 issued on November 13, 2007. As of June 30, 2010, in connection with this unsettled currency and interest rate swap contracts, an accumulated loss on valuation of derivatives amounting to Won 175,585,000 (excluding tax effect totaling Won 1,576,167,000 and foreign exchange translation loss arising from unguaranteed Japanese yen denominated bonds totaling Won 66,516,501,000) was accounted for as accumulated other comprehensive loss.

In addition, the Company has entered into a currency and interest rate swap contract with two banks including DBS in order to hedge the foreign currency risk and interest rate risk of U.S. dollar denominated floating rate bonds with face amounts totaling US$150,000,000 issued on November 20, 2008. As of June 30, 2010, in connection with this unsettled currency and interest rate swap contract, an accumulated gain on valuation of derivatives amounting to Won 4,557,249,000 (excluding tax effect totaling Won 1,454,952,000 and foreign exchange translation gain arising from U.S. dollar

denominated bonds totaling Won 35,560,853,000) was accounted for as accumulated other comprehensive gain.

In addition, the Company has entered into a currency and interest rate swap contract with Mizuho Corporate Bank in order to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen dominated bonds (59-2) with face amounts totaling JPY 3,000,000,000 issued on January 22, 2009. As of June 30, 2010, in connection with this unsettled currency and interest rate swap contract, an accumulated gain on valuation of derivatives amounting to Won 1,912,486,000 (excluding tax effect totaling Won 539,419,000 and foreign exchange translation gain arising from unguaranteed Japanese yen denominated bonds totaling Won 5,195,228,000) was accounted for as accumulated other comprehensive gain.

In addition, the Company has entered into a currency and interest rate swap contract with The Bank of Tokyo-Mitsubishi in order to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen dominated bonds (60-2) with face amounts totaling JPY 5,000,000,000 issued on March 5, 2009. As of June 30, 2010, in connection with this unsettled currency and interest rate swap contract, an accumulated gain on valuation of derivatives amounting to Won 308,727,000 (excluding tax effect totaling Won 87,077,000 and foreign exchange translation gain arising from unguaranteed Japanese yen denominated bonds totaling Won 10,384,862,000) was accounted for as accumulated other comprehensive gain.

In addition, the Company has entered into a currency swap contract with six banks including Morgan Stanley to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds (with face amounts totaling US$400,000,000) issued on July 20, 2007, and has applied cash flow risk hedge accounting to this foreign currency swap contract starting from May 12, 2010. Accordingly, as of June 30, 2010, in connection with this unsettled foreign currency swap contract, an accumulated gain on valuation of currency swap of Won 10,830,444,000 that has accrued since May 12, 2010 (excluding tax effect totaling Won 3,054,740,000 and foreign exchange translation loss arising from unguaranteed U.S. dollar denominated bonds totaling Won 26,142,424,000) was accounted for as accumulated other comprehensive gain. Meanwhile, a loss on valuation of currency swap of Won 17,527,578,000 incurred prior to the date of applying cash flow risk hedge accounting in the first half of 2010 and a loss on valuation of currency swap of Won 64,533,708,000 for the first half of 2009, respectively, were charged to current operations.

B. Interest Rate Swap

(1) Purpose of Contracts: Hedging of risks related to fluctuations in interest rates

(2) Contract Terms

- Interest rate swap contract to which the cash flow risk hedge accounting is applied:

The Company has entered into an interest rate swap contract with three banks including Nonghyup Bank in order to hedge the interest rate risk of long-term borrowings (totaling Won 500 billion) borrowed between July 28, 2008 and August 13, 2008. As of June 30, 2010, in connection with unsettled interest rate swap contract to which the cash flow risk hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to Won 10,575,915,000 (excluding tax effect totaling Won 2,982,950,000) was accounted for as accumulated other comprehensive loss.

- Interest rate swap contract to which the hedge accounting is not applied

The Company has entered into an interest rate swap contract with two banks including DBS in order to hedge the interest rate risk of floating rate foreign currency bonds with face amounts totaling US$220,000,000 issued on April 29, 2009. In connection with this unsettled interest rate swap contract, losses on valuation of interest rate swap of Won 2,816,075,000 and Won 2,897,336,000 for the six months ended June 30, 2010 and June 30, 2009, respectively, were charged to current operations.

C. Currency Forward

(1) Purpose of Contracts: Hedging of risks related to fluctuations in currency exchange rates

(2) Contract Terms

- Currency forward contract to which the hedge accounting is not applied

The Company has entered into a currency forward contract with DBS in order to hedge the foreign currency risk of foreign currency account receivable totaling MYR 323,000,000 that the Company expected to collect on August 2, 2010. In connection with this unsettled currency forward contract, a loss on valuation of currency forward of Won 721,471,000 for the six months ended June 30, 2010 was charged to current operations.

6. Major Contracts


			Completion	Contract	Contract Amount
Category	Vendor	Start Date	Date	Title	(Won 100M)
Construction	SK E&C	January 1, 2010	December 31, 2010	2010 Cell Site Facility Construction (Seoul Area)	694
	SK E&C	January 1, 2010	December 31, 2010	2010 RF Relay Facility Construction (Seoul Area)	420
	SK E&C	May 7, 2010	December 31, 2010	2010 N/W Facility Construction (Daegu SORO)	151

Service	SK C&C	January 1, 2010	December 31, 2010	2010 IT SM Contract	2,010
	TU Media, Ltd.	January 1, 2010	December 31, 2010	2010 Satellite DMB Collaboration Contract	916
	SK Marketing & Company	January 1, 2010	December 31, 2010	2010 Membership Collaboration Program	691

Product/ Equipment	SK Telesys	March 12, 2010	December 24, 2010	2010 1st Optical Relay Facility Investment	314
	SK Telesys	March 12, 2010	December 24, 2011	2010 1st RF Relay Facility Investment	297
	Samsung Electronics	May 31, 2010	September 20, 2010	2010 2nd Main Equipment W 5/6FA UHPA Samsung	222


		Subtotal			5,715


*		Selected among contracts exceeding Won 15 billion.

7. R&D Investments

(Unit: in millions of Won)


				For the year			For the year
	For the six			ended			ended
	months ended			December			December
Category	June 30, 2010			31, 2009			31, 2008			Remarks
Raw material		12			55			89			—
Labor		25,170			47,183			38,063			—
Depreciation		69,102			134,201			138,512			—
Commissioned service		28,121			69,750			85,837			—
Others		19,028			39,593			34,540			—
Total R&D costs		141,434			290,782			297,040			—
Accounting Sales and administrative expenses		140,471			288,997			293,443			—
Development expenses (Intangible assets)		963			1,785			3,597			—

R&D cost / sales amount ratio (Total R&D costs / Current sales amount×100)		2.32	%		2.40	%		2.54	%

8. Other information relating to investment decisions

A. Trademark Policies

The Company manages its corporate brand and other product brands such as “T” in a comprehensive way to protect and increase their value.

The Company’s ‘Brand Management Council’ in charge of overseeing its systematic corporate branding operates full time to execute decisions involving major brands and operates ‘Brandnet’, an intranet system to manage corporate brands which provides solutions including licensing of the brands and downloading of the Company logos.

B. Business-related Intellectual Properties

The Company owns intellectual property rights to the design of alphabet “T”. The rights are based on domestic trademark laws and the Company has proprietary and exclusive use of the trademark for 10 years and the rights are renewable. The designed alphabet “T” is registered in all business categories for trademarks (total of 45) and is being used as the primary brand of the Company.

III. FINANCIAL INFORMATION

1. Summary Financial Information (Non-consolidated)

(Unit: in millions of Won)


	As of and for the six
	months ended		As of and for the year ended December 31,
Classification / Fiscal Year	June 30, 2010		2009		2008		2007		2006

Current assets		5,294,568		4,983,052		3,990,503		4,094,059		4,189,325
• Quick assets		5,279,244		4,960,396		3,976,576		4,075,378		4,172,887
• Inventory		15,324		22,656		13,927		18,681		16,438
Non-current assets		13,863,549		14,314,581		14,626,992		14,038,451		11,624,728
• Investments		5,059,707		5,107,653		5,668,127		5,940,045		3,547,942
• Property and Equipment		4,825,880		5,196,521		4,698,214		4,594,413		4,418,112
• Intangible assets		2,491,155		2,665,936		2,941,592		3,174,942		3,405,158
• Other non-current assets		1,486,807		1,344,471		1,319,059		329,051		253,516

Total assets		19,158,117		19,297,633		18,617,495		18,132,510		15,814,053

Current liabilities		3,807,231		3,294,633		3,412,490		2,484,548		2,985,620
Non-current liabilities		4,155,234		4,761,550		4,475,998		4,221,016		3,522,006

Total liabilities		7,962,466		8,056,183		7,888,488		6,705,564		6,507,626

Capital		44,639		44,639		44,639		44,639		44,639
Capital surplus		3,032,916		3,032,009		2,957,095		2,954,829		2,962,699
Capital adjustment		(-)2,709,256		(-)2,708,407		(-)2,147,530		(-)2,072,486		(-)2,019,568
Other Cumulative Profit and Loss		790,034		913,919		373,784		1,594,099		473,904
Retained earnings		10,037,318		9,959,290		9,501,018		8,905,865		7,844,753

Total stockholders’ equity		11,195,652		11,241,450		10,729,007		11,426,946		9,306,427

Sales		6,106,818		12,101,184		11,674,662		11,285,900		10,650,952
Operating Income (or Loss)		1,062,532		2,179,337		2,059,896		2,171,543		2,584,370
Income (or Loss) from continuing operation		685,726		1,288,340		1,277,658		1,642,451		1,446,598
Current Period’s Net Income (or Loss)		685,726		1,288,340		1,277,658		1,642,451		1,446,598

(Unit: Won)


	For the six months
	ended		For the year ended December 31,
Classification / Fiscal Year	June 30, 2010		2009		2008		2007		2006
Earnings per share		9,479		17,808		17,559		22,607		19,734
Diluted earnings per share		9,336		17,599		17,395		22,289		19,458

2. Summary Financial Information (Consolidated)

(Unit: in millions of Won)


	As of and for the year ended December 31,
Classification / Fiscal Year	2009		2008		2007		2006		2005

Current assets		6,370,631		5,422,447		4,813,072		4,663,962		4,598,580
• Quick assets		6,250,741		5,387,473		4,766,020		4,644,184		4,590,796
• Inventory		119,890		34,974		47,052		19,778		7,784
Non-current assets		16,835,625		17,051,224		14,235,863		11,576,006		10,106,193
• Investments		3,059,902		4,025,429		5,446,711		3,236,783		1,989,934
• Property and Equipment		8,165,879		7,437,689		4,969,353		4,507,335		4,663,369
• Intangible assets		3,992,325		3,978,145		3,433,962		3,518,411		3,452,889
• Other non-current assets		1,617,519		1,609,961		385,836		313,477		—

Total assets		23,206,256		22,473,671		19,048,935		16,239,968		14,704,772

Current liabilities		4,894,936		4,628,821		3,016,874		3,208,416		2,863,373
Non-current liabilities		5,966,695		6,020,410		4,344,428		3,548,464		3,513,860

Total liabilities		10,861,631		10,649,231		7,361,302		6,756,880		6,377,233

Capital		44,639		44,639		44,639		44,639		44,639
Capital surplus		3,031,947		2,958,854		2,956,106		2,950,327		2,954,840
Capital adjustment		-2,746,885		(-)2,159,389		(-)2,072,723		(-)2,019,567		(-)2,048,515
Other Cumulative Profit/Loss		915,306		356,192		1,591,258		490,010		—
Retained earnings		9,909,752		9,448,185		8,914,970		7,847,434		7,267,649

Total stockholders’ equity		12,344,625		11,824,440		19,048,935		9,483,088		8,327,540

Sales		14,555,465		13,995,924		11,863,357		11,027,977		10,721,820
Operating Profit (or Loss)		1,878,544		1,751,227		2,101,955		2,621,132		2,670,616
Profit (or Loss) from continuing operation before tax		1,400,498		1,260,366		2,285,765		2,021,578		2,561,567
Current Period’s Net Profit		1,055,606		972,338		1,562,265		1,449,552		1,868,307
Net income attributable to majority interests		1,247,182		1,215,719		1,648,876		1,451,491		1,872,978
Number of Consolidated Companies		29		35		26		18		17


*		See the attached Korean GAAP Consolidated Financial Statements.

IV. AUDITOR’S OPINION

1. Auditor


Six months ended	Year ended December 31,
June 30, 2010	2009	2008
Deloitte Anjin LLC	Deloitte Anjin LLC	Deloitte Anjin LLC

2. Audit Opinion


Term	Auditor’s opinion	Issues noted
Six months ended June 30, 2010	—	—
Year ended December 31, 2009	Unqualified	—
Year ended December 31, 2008	Unqualified	—

3. Remuneration for Independent Auditors for the Past Three Fiscal Years

A. Audit Contracts

(Unit: in thousands of Won)


Term	Auditors	Contents	Fee	Total hours
Year ended December 31, 2010	Deloitte Anjin LLC	Semi-annual review
		Quarterly review
		Non-consolidated financial statements audit	1,470,000	16,135
		Consolidated financial statements audit
		IFRS-based financial statements review

Year ended December 31, 2009	Deloitte Anjin LLC	Semi-annual review
		Quarterly review
		Non-consolidated financial statements audit	1,308,356	13,982
		Consolidated financial statements audit

Year ended December 31, 2008	Deloitte Anjin LLC	Semi-annual review
		Quarterly review
		Non-consolidated financial statements audit	1,310,097	13,346
		Consolidated financial statements audit

B. Non-Audit Services Contract with External Auditors

(Unit: in thousands of Won)

Service

Term

Contract date

Service provided

duration

Fee

Year ended December 31, 2009

May 13, 2009

Tax consulting

30 days

40,000

May 22, 2009

Tax consulting

10 days

10,000

May 22, 2009

Tax adjustment for fiscal year 2008

20 days

34,000

May 22, 2009

Review of deferred corporate income tax for 1Q and 2Q

10 days

14,000

September 14, 2009

Review of quarterly tax adjustments

5 days

7,000

September 14, 2009

Tax consulting

20 days

20,000

December 28, 2009

Review of quarterly tax adjustments

5 days

7,000

December 28, 2009

Tax consulting

10 days

12,000

Year ended December 31, 2008

November 20, 2007

Set up services for agency tax manual

60 days

48,000

March 3, 2008

Tax adjustment for fiscal year 2007

10 days

33,000

May 15, 2008

Tax consulting

5 days

7,500

June 24, 2008

Foreign tax consulting re indirect taxes

4 days

6,000

August 13, 2008

Tax consulting

10 days

9,400

November 1, 2008

Tax consulting

4 days

5,000

November 19, 2008

Tax consulting

10 days

10,800

November 19, 2008

Review of deferred corporate income tax for 1Q and 2Q

10 days

18,000

December 24, 2008

Review of deferred corporate income tax for 3Q

3 days

6,000

December 24, 2008

Tax consulting

3 days

3,600

December 24, 2008

Tax consulting

3 days

3,000

Year ended December 31, 2007

March 30, 2007

Tax adjustment for fiscal year 2006

10 days

30,000

September 28, 2007

Tax consulting for denial of deductions for corporate income tax

1 day

2,000

September 28, 2007

Review of deferred corporate income tax for 1Q and 2Q

6 days

10,000

September 28, 2007

Tax consulting

5 days

9,000

December 31, 2007

Review of deferred corporate income tax for 3Q

2 days

5,000

December 31, 2007

Tax consulting

3 days

3,000

V. MANAGEMENT DISCUSSION AND ANALYSIS

Not required in quarterly and half year reports under the Korean disclosure rules.

VI. CORPORATE ORGANIZATION INCLUDING BOARD OF DIRECTORS AND AFFILIATED COMPANIES

1. Board of Directors

A. Overview of Board of Directors Composition

The Company’s Board of Directors is comprised of eight members: five independent directors and three inside directors. Within the Board, there are five Committees: Independent Director Nomination Committee, Audit Committee, Compensation Committee, CapEx Review Committee, and Corporate Citizenship Committee.

B. (1) Significant Activities of the Board of Directors


Meeting	Date	Agenda	Approval
312^nd (the first meeting of 2010)	January 27, 2010	- Financial Statements as of and for the year ended December 31, 2009. - Annual Business Report as of and for the year ended December 31, 2009 - Report for Internal Accounting Management System - Report for Subsequent Events following 4Q 2009	Approved as proposed Approved as proposed

313^rd (the second meeting of 2010)	February 11, 2010	- Convocation of the 26^th Annual General Meeting of Shareholders - Result of Internal Accounting Management System Evaluation	Approved as proposed

314^th (the third meeting of 2010)	March 12, 2010	- Appointment of Committee Members - Fund Management Transaction with Affiliated Financial Company (SK Securities) - Establishment of SPC and Limited Partnership Agreement between SPC and Offshore Private Equity Fund	Approved as proposed Approved as proposed Approved as proposed


Meeting	Date	Agenda	Approval
315^th (the fourth meeting of 2010)	April 26, 2010	- Establishment of SKT Customer Contact Channel Subsidiary - Establishment of SKT Cell Site Maintenance Subsidiary - Business Plan for Joint Venture with Disney - Acquisition of Additional WCDMA Frequency - Extension of KIF (Korea IT Fund) Maturity - Partial Disposition of Shares of IHQ, Inc. - Report for Subsequent Events following 1Q 2010	Approved as proposed Approved as proposed Approved as proposed Approved as proposed Approved as proposed Approved as proposed

316^th (the fifth meeting of 2010)	May 26, 2010	- Investment in Packet One Networks - Investment in Harbinger Global Wireless (HGW)	Approved as proposed Approved as proposed

317^th (the sixth meeting of 2010)	June 24, 2010	- Fund Management Transaction with Affiliated Financial Company (SK Securities) - Additional investment in network equipment in 2010	Approved as proposed Approved as proposed

318^th (the seventh meeting of 2010)	July 22, 2010	- Proposal for Interim Dividend - Proposal for acquisition of treasury stock - Financial performance during 1H 2010 - Report for Subsequent Events following 2Q 2010 - Performance review of compliance program for 1H 2010 and planning for 2H 2010	Approved as proposed Approved as proposed


*		The line items that do not show approval are for reporting purpose only.

(2) Independent Directors’ Activities at the Board of Directors’ Meetings


		Independent
Meetings	Dates	Directors Attended	Description
The first meeting of 2010	January 27, 2010	5 / 5	—
The second meeting of 2010	February 11, 2010	5 / 5	—
The third meeting of 2010	March 12, 2010	5 / 5	—
The fourth meeting of 2010	April 26, 2010	5 / 5	—
The fifth meeting of 2010	May 26, 2010	4 / 5	—
The sixth meeting of 2010	June 24, 2010	5 / 5	—
The seventh meeting of 2010	July 22. 2010	5 / 5	—

C. Committees within Board of Directors

(1) Committee Structure

a) Independent Director Nomination Committee

(As of August 16, 2010)


Number of	Members
Persons	Inside Directors	Independent Directors	Remarks
4	Man Won Jung, Ki Haeng Cho	Rak Yong Uhm, Jae Ho Cho	—


*		The Independent Director Nomination Committee is a committee established under the provisions of the Articles of Incorporation and Korean Commercial Code.

b) Audit Committee

(As of August 16, 2010)


Number of	Members
Persons	Inside Directors	Independent Directors	Remarks
4	—	Dal Sup Shim, Hyun Chin Lim, Jay Young Chung, Jae Ho Cho	—


*		The Audit Committee is a committee established under the provisions of the Articles of Incorporation and Korean Commercial Code.

c) Compensation Review Committee

(As of August 16, 2010)


Number of	Members
Persons	Inside Directors	Independent Directors
5	—	Dal Sup Shim, Rak Yong Uhm, Hyun Chin Lim, Jay Young Chung, Jae Ho Cho


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

d) Capex Review Committee

(As of August 16, 2010)


Number of	Members
Persons	Inside Directors	Independent Directors	Remarks
4	Ki Haeng Cho	Dal Sup Shim, Rak Yong Uhm, Jay Young Chung	—


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

Corporate Citizenship Committee

(As of August 16, 2010)


Number of	Members
Persons	Inside Directors	Independent Directors	Remarks
4	Ki Haeng Cho	Rak Yong Uhm, Hyun Chin Lim, Jay Young Chung	—


*		The Corporate Citizenship Committee is a committee established by the resolution of the Board of Directors.

(2)

Activities of the Committees of the Board of Directors (As of August 16, 2010)


				Independent Directors
				Rak Yong
				Uhm	Jae Ho Cho
	Date of			(Attendance:	(Attendance:
Committee Name	Activity	Agenda	Approval	100%)	100%)
				Vote
Independent Director Nomination Committee	February 11, 2010	26th General Meeting of Shareholders: Proposal to nominate an Independent Director Dal Sup Shim	Approved as Proposed	For	For

	April 26, 2010	Election of Chairman of Committee — Man Won Jung	Approved as Proposed	For	For

Independent Directors

Dal Sup

Rak Yong

Jay Yung

Shim

Uhm

Chung

Date of

(Attendance:

Committee Name

Activity

Agenda

Approval

100%)

Vote

CapEx Committee

February 10, 2010

Business plan and pending agenda for major investment

—

March 11, 2010

Business plan and pending agenda for major investment

—

April 26, 2010

Election of Chairman of Committee — Rak Yong Uhm

Approved as proposed

For


*		Agendas filled in with hyphens are for reporting purpose only

Independent Directors

Rak

Hyun

Jay

Dal Sup

Yong

Chin

Yung

Jae Ho

Shim

Uhm

Lim

Chung

Cho

Date of

(Attendance:

Committee Name

Activity

Agenda

Approval

100%)

Vote

Compensation Review
Committee

April 26, 2010

Election of Chairman of Committee — Hyun Chin Lim

Approved as proposed

For

July 21, 2010

Committee administration

—

Independent Directors

Rak Yong

Hyun Chin

Jay Yung

Uhm

Lim

Chung

Committee

Date of

(Attendance:

Name

Activity

Agenda

Approval

100%)

67%)

100%)

Vote

Corporate
Citizenship
Committee

March 12, 2010

Environment
Friendly Business
Plan

—

Result of Social Contribution Expenditures

—

Result and Plan for Win-Win Business Strategy

—

April 23, 2010

Election of Chairman of Committee — Jay Young Chung

Approved as proposed

For

Absence

For

Status of Customer Protection

—

2010 Ethical
Management Plan

—

July 21, 2010

Preparation of Greenhouse Gas Inventory

—

Operating System for
Sustainability Index

—


*		Agendas filled in with hyphens are for reporting purpose only

Directors’ Independence

On February 11, 2010, in the notice of the annual General Meeting of Shareholders, background information on Cho, Ki Haeng, a candidate for inside director, and Shim, Dal Sup and Chung, Jay Young, candidates for independent directors, was publicly disclosed. There was no other nomination by shareholders. For the election of independent directors, the Company has established the Independent Director Nomination Committee, which is currently in operation. In the meeting of the Independent Director Nomination Committee held on February 11, 2010, the Committee nominated the independent director candidates.

The Independent Director Nomination Committee. (As of August 16, 2010)


Name	Independent Director	Remarks
Man Won Jung	No
Ki Haeng Cho	No	o During the 314^th meeting of the Board of the Directors held on March 12, 2010, the Independent Director Nomination Committee was established.
Rak Yong Uhm	Yes	o Director Sung Min Ha submitted his resignation on March 12, 2010.
Jae Ho Cho	Yes	o Director Ki Haeng Cho was elected on March 12, 2010.

2. Audit System

The Company’s Audit Committee consists of four independent directors, Dal Sup Shim, Hyun Chin Lim, Jae Ho Cho and Jay Yung Chung.

Major activities of the Audit Committee are as follows.


Meeting	Date	Agenda	Approval	Remarks
The first		o 2^nd half 2009 Management Audit Results	—
meeting of 2010	January 26, 2010	o Evaluation of Internal Accounting Controls based on the Opinion of the Members of the Audit Committee	Approved as proposed
		o Reports on Internal Accounting Management System	—

The second		o Reports on 2009 Korean GAAP Audit	—
meeting of 2010	February 10, 2010	o Report on Review of 2009 Internal Accounting Management System	—
		o Evaluation of Internal Accounting Management System Operation	Approved as proposed
		o Auditor’s Report for Fiscal Year 2009	Approved as proposed

The third		o 2Q 2010 Transactions with SK C&C Co., Ltd.	Approved as proposed
meeting of 2010	March 11, 2010	o Construction of Mobile Phone Facilities for 2010	Approved as proposed
		o Construction of Network Facilities	Approved as proposed
		o Purchase of Mobile Phone Relay Devices for 2010	Approved as proposed
		o Resale of Fixed-line Telephone Services of SK Broadband	Approved as proposed
		o Plan for Fund Management Transaction with Affiliated Company (SK Securities)	—
		o 2010 Management Audit Plan	—


Meeting	Date	Agenda	Approval	Remarks
The fourth		o Election of the Chairman of Audit Committee	Approved as proposed
meeting of 2010	April 26, 2010	o Approval of Entire Auditor Services for 2010	Approved as proposed
		o Audit Plan for 2010	—
		o Auditor Fees for 2010	Approved as proposed

The fifth		o Purchase of Mobile Phone Relay Devices for 2010	Approved as proposed
meeting of 2010	May 26, 2010	o Construction of Mobile Phone Facilities for 2010	Approved as proposed
		o Construction of Transmission Network Facilities for 2010	Approved as proposed
		o Outsourcing Mobile NATE business	Approved as proposed

The sixth		o 3Q 2010 Transactions with SK C&C Co., Ltd	Approved as proposed
meeting of 2010	June 23, 2010	o Consulting Service regarding Customer Contact Channel	Approved as proposed
		o Base Station Maintenance Service	Approved as proposed
		o Fund Management Transaction with Affiliated Company (SK Securities)	Approved as proposed
		o Reports on 2009 US GAAP Audit	—

The seventh		o 1^st half 2010 Financial Results	—
meeting of 2010	July 21, 2010	o Report on Review on the 1^st half of 2010 Korean GAAP	—


*		The line items that do not show approval are for reporting purpose only.

3. Shareholders’ Exercises of Voting Rights

A. Voting System and Exercise of Minority Shareholders’ Rights

Pursuant to the Articles of Incorporation as shown below, the cumulative voting system was first introduced in the General Meeting of Shareholders in 2003.


Articles of Incorporation		Description
Article 32 (3) (Election of Directors)		Cumulative voting under Article 382-2 of the Korean 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.

Also, neither written or electronic voting system nor minority shareholder rights is applicable.

4. Affiliated Companies

A. Capital Investments between Affiliated Companies



(As of July 1, 2010)		* Based on common shares


	Invested companies
	SK			SK			SK			SK			SK						SK			SK			SK			SK			SK
Investing company	Corporation			Energy			Telecom			Networks			Chemicals			SKC			C&C			E&C			Shipping			E&S			Gas
SK Corporation					33.4	%		23.2	%		39.1	%					42.5	%					40.0	%		89.8	%		67.5	%		45.5	%
SK Energy
SK Telecom																				9.0	%
SK Networks
SK Chemicals																							18.0	%
SKC																										10.2	%
SK C&C		31.8	%																										32.5	%
SK E&C
SK E&S
SK Gas
SK Marketing & Company
SK D&D
SK Communications
SK Broadband
SK Lubricant
SK Securities
SK Petrochemical
Entec
Total affiliated companies		31.8	%		33.4	%		23.2	%		39.1	%		0.0	%		42.5	%		9.0	%		58.0	%		100.0	%		100.0	%		45.5	%


	Invested companies
	SK						SK Marketing									YN			Daehan			SK			SK			SK
Investing company	Securities			K-Power			& Company			DOPCO			CCES			Energy			City Gas			Sci-tech			NJC			Telink
SK Corporation					100.0	%
SK Energy								50.0	%		38.3	%
SK Telecom								50.0	%																				90.8	%
SK Networks		22.7	%								4.6	%
SK Chemicals																							50.0	%		60.0	%
SKC		7.7	%
SK C&C
SK E&C
SK E&S														100.0	%		100.0	%		47.6	%
SK Gas
SK Marketing & Company
SK D&D
SK Communications
SK Broadband
SK Lubricant
SK Securities
SK Petrochemical
Entec
Total affiliated companies		30.4	%		100.0	%		100.0	%		42.9	%		100.0	%		100.0	%		47.6	%		50.0	%		60.0	%		90.8	%


	Invested companies
	Jeonnam			Gangwon						M &			Chungnam			SK						MRO						Encar
Investing company	City Gas			City Gas			JBES			Service			City Gas			Wyverns			Infosec			Korea			SK Telesys			network
SK Corporation
SK Energy																													87.5	%
SK Telecom																	100.0	%
SK Networks																							51.0	%
SK Chemicals
SKC																										77.1	%
SK C&C																				100.0	%
SK E&C
SK E&S		100.0	%		100.0	%		100.0	%					100.0	%
SK Gas
SK Marketing & Company											100.0	%
SK D&D
SK Communications
SK Broadband
SK Lubricant
SK Securities
SK Petrochemical
Entec
Total affiliated companies		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		51.0	%		77.1	%		87.5	%


	Invested companies
				TU			SK						Loen						SK			SK Mobile			SKC
Investing company	Paxnet			Media			D&D			Natruck			Entertainment			Independence			Petrochemical			Energy			Media			IHQ
SK Corporation
SK Energy											33.7	%								100.0	%		100.0	%
SK Telecom		59.7	%		44.2	%								63.5	%														37.1	%
SK Networks
SK Chemicals
SKC																										100.0	%
SK C&C																	67.8	%
SK E&C								45.0	%
SK E&S
SK Gas
SK Marketing & Company
SK D&D
SK Communications
SK Broadband
SK Lubricant
SK Securities
SK Petrochemical
Entec
Total affiliated companies		59.7	%		44.2	%		45.0	%		33.7	%		63.5	%		67.8	%		100.0	%		100.0	%		100.0	%		37.1	%


	Invested companies
																															SKC
	NTREEV			SK			SK			SK						SKC Air			SKN			Nuri			Commerce						Solmics
Investing company	Soft			I-Media			Communications			Lubricant			I Platform			Gas			Service			Solution			Planet			RealVest			Co., Ltd.
SK Corporation
SK Energy											100.0	%
SK Telecom		63.7	%					64.8	%																	100.0	%
SK Networks														66.7	%					85.0	%
SK Chemicals
SKC																	80.0	%														48.7	%
SK C&C																							46.3	%
SK E&C																													100.0	%
SK E&S
SK Gas
SK Marketing & Company
SK D&D
SK Communications					100.0	%
SK Broadband
SK Lubricant
SK Securities
SK Petrochemical
Entec
Total affiliated companies		63.7	%		100.0	%		64.8	%		100.0	%		66.7	%		80.0	%		85.0	%		46.3	%		100.0	%		100.0	%		48.7	%


	Invested companies
																												Namwon
																			PyongTaek									Sarang
	Sumray			SK			Broadband			Broadband			Broadband						Energy			Pana Blu			WS			Electric
Investing company	Corporation			Broadband			Media			D&M			CS			UB Care			Service			Co., Ltd.			Commerce			Power			Incyto
SK Corporation
SK Energy
SK Telecom					50.6	%
SK Networks																										100.0	%
SK Chemicals																	44.0	%
SKC		53.7	%																													100.0	%
SK C&C
SK E&C
SK E&S																				100.0	%
SK Gas																							80.4	%
SK Marketing & Company
SK D&D																													100.0	%
SK Communications
SK Broadband								100.0	%		100.0	%		100.0	%
SK Lubricant
SK Securities
SK Petrochemical
Entec
Total affiliated companies		53.7	%		50.6	%		100.0	%		100.0	%		100.0	%		44.0	%		100.0	%		80.4	%		100.0	%		100.0	%		100.0	%

Invested companies

Jeju United

Daejeon

MKS

PS &

Gwangju

Korea Sleep

Investing company

Pure Water

Guarantee

Zicos

Marketing

SK Forest

Green Bio

SK Seentec

Pure Water

Network

SK Corporation

SK Energy

100.0

SK Telecom

100.0

SK Networks

SK Chemicals

100.0

43.2

SKC

SK C&C

SK E&C

32.0

100.0

31.7

SK E&S

SK Gas

69.0

SK Marketing & Company

SK D&D

100.0


	Invested companies
	Jeju United			Daejeon			MKS						PS &												Gwangju			Korea Sleep
Investing company	FC			Pure Water			Guarantee			Zicos			Marketing			SK Forest			Green Bio			SK Seentec			Pure Water			Network
SK Communications
SK Broadband
SK Lubricant											100.0	%
SK Securities
SK Petrochemical																													10.7	%
Entec
Total affiliated companies		100.0	%		32.0	%		100.0	%		100.0	%		100.0	%		100.0	%		69.0	%		100.0	%		31.7	%		53.9	%

Invested companies

Television

Yeosu Expo

Media

Investing company

Entec

Environment

SKW

Korea

SK Corporation

SK Energy

SK Telecom

49.0

SK Networks

SK Chemicals

25.0

SKC

60.0

SK C&C

SK E&C

25.0

SK E&S

SK Gas

SK Marketing & Company

SK D&D

SK Communications

SK Broadband

SK Lubricant

SK Securities

SK Petrochemical

Entec

58.7

Total affiliated companies

50.0

58.7

60.0

49.0

VII. SHAREHOLDERS INFORMATION

1. Shareholdings of the Largest Shareholder and Related Persons

A. Shareholdings of the Largest Shareholder and Related Persons



(As of June 30, 2010)		(Unit: Shares, %)


			Number of shares owned and ownership ratio
			Beginning of Period				End of Period
			Number of		Ownership		Number of		Ownership
Name	Relationship	Type of share	shares		ratio		shares		ratio
SK Corporation	Largest Shareholder	Common share		18,748,452		23.22		18,748,452		23.22
Tae Won Chey	Officer of affiliated company	Common share		100		0.00		100		0.00
Shin Won Chey	Officer of affiliated company	Common share		500		0.00		500		0.00
Shin Bae Kim	Officer of affiliated company	Common share		1,270		0.00		1,270		0.00
Man Won Jung	Officer of affiliated company	Common share		4,000		0.00		5,500		0.01
Sung Min Ha	Officer of affiliated company	Common share		738		0.00		738		0.00
Bang Hyung Lee	Officer of affiliated company	Common share		200		0.00		200		0.00
Total	—	Common share		18,755,260		23.23		18,756,760		23.23

On July 20, 2010, Man Won Jung, the CEO of the Company, purchased additional 100 common shares, increasing his total shareholding to 5,600 common shares.

B. Overview of the Largest Shareholder

SK Corporation is a holding company and as of June 30, 2010, has nine subsidiaries: SK Energy Co., Ltd., SK Telecom Co., Ltd., SK Networks Co., Ltd., SK E&C Co., Ltd., SK E&S Co., Ltd., K-Power Co., Ltd., SK Shipping Co., Ltd., SKC Co., Ltd. and SK Gas Co., Ltd. SK Corporation also operates a life science business division within its holding company to nurture the division for future growth.

Details of SK Corporation’s subsidiaries are as follows:

Affiliates

Share Holdings

Book Value

Industry

Description

SK Energy Co., Ltd.

33.40

4,068,131

Energy

Publicly Listed

SK Telecom Co., Ltd.

23.22

2,799,156

Telecommunication

Publicly Listed

SK Networks Co., Ltd.

39.12

1,194,173

Trading, Energy Sale

Publicly Listed


Affiliates	Share Holdings			Book Value		Industry	Description
SK E&S Co., Ltd.		67.55	%		421,899	Gas Company Holdings	Privately Held
SK E&C Co., Ltd.		40.02	%		399,858	Construction	Privately Held
SK Shipping Co., Ltd.		89.80	%		337,730	Ocean Freight	Privately Held
K-Power Co., Ltd.		100.00	%		505,798	Power Generation	Privately Held
SKC Co., Ltd.		42.50	%		271,614	Synthetic Resin Manufacturing	Publicly Listed
SK Gas Co., Ltd.		45.53	%		235,428	Gas	Publicly Listed


*		The above share holdings are based on common stock holdings as of June 30, 2010.

SK Corporation is a publicly listed company and is required to submit a report of its significant business activities in accordance with Article 161 of the Financial Investment Services and Capital Markets Act. Also as a holding company, SK Corporation is required to report key management activities of its subsidiaries in accordance with Article 8 of KOSPI Market Disclosure Regulation. The rule is applicable to subsidiaries whose book value of the holding company’s shareholding exceeds 10% of its total assets based on the financial statements as of December 31, 2009. SK Energy Co., Ltd., SK Telecom Co., Ltd. and SK Networks Co., Ltd. are three such subsidiaries.

2. Changes in shareholdings of the Largest Shareholder

Changes in shareholdings of the largest shareholder are as follows.

(Unit: Shares, %)

Date of the change in the

largest shareholder/

Largest

Date of change in

Shares

Shareholder

shareholding

Held

Holding Ratio

Remarks

SK Corporation

March 7, 2008

18,751,260

23.09

Purchased 1,085,325 shares from SK Networks on March 7, 2008

March 13, 2009

18,751,360

23.22

At the 25^th General Meeting of Shareholders, elected the CEO, Man Won Jung (who owned 100 shares of the Company stock)

December 30, 2009

18,755,260

23.23

Man Won Jung, the CEO, purchased 3,900 shares.

May 26, 2010

18,756,760

23.23

Man Won Jung, the CEO, purchased 1,500 shares

On July 20, 2010, Man Won Jung, the CEO of the Company, purchased additional 100 common shares, increasing his total shareholding to 5,600 common shares.


*		Shares held are the sum of shares held by SK Corporation and its related parties.

3. Distribution of Shares

A. Shareholders with ownership of 5% or more



(As of June 30, 2010)		(Unit: shares, %)


		Common share				Preferred share				Sub-total
		Number of		Ownership		Number of		Ownership		Number of		Ownership
Rank	Name (title)	shares		ratio		shares		ratio		shares		ratio
1	Citibank ADR		24,321,893		30.12		—		—		24,321,893		30.12
2	SK Corporation		18,748,452		23.22		—		—		18,748,452		23.22
3	SK Telecom		8,400,712		10.40		—		—		8,400,712		10.40
	Total		51,471,077		63.74		—		—		51,471,077		63.74

B. Shareholdings under the Employee Stock Ownership Program

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



(As of June 30, 2010)		(Unit: Shares)

Account

Balance at the

Balance at the end

Classification

classification

Type of share

beginning of period

of period

8th

Employee Stock Ownership Program Member Account

Common shares

350,268

346,322

Total

350,268

346,322

C. Shareholder Distribution

(As of June 30, 2010)


	Number of		Ratio		Number of		Ratio
Classification	shareholders		(%)		shares		(%)		Remarks
Total minority shareholders		43,030		99.98		24,746,975		30.64		—
Minority shareholders (corporate)		877		2.04		6,342,398		7.85		—
Minority shareholders (individual)		42,153		97.94		18,404,577		22.79		—
Minority shareholders (Largest Shareholder and Related Persons)		—		—		—		—		—
Major shareholders		—		—		—		—		—
Total other shareholders		9		0.02		55,998,736		69.35		—
Other shareholders (corporate)		6		0.01		12,110,715		15.00		—
Other shareholders (individual)		2		0.01		25,139,569		31.13		—
Other shareholders (Largest Shareholder and Related Persons)		1		0.00		18,748,452		23.22		—
Total		43,039		100		80,745,711		100		—

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

A. Domestic Securities Market

(Unit: Won, shares)


		June		May		April		March		February		January
Types		2010		2010		2010		2010		2010		2010
Common stock	Highest		169,500		173,500		178,000		181,000		179,500		188,000
	Lowest		160,500		158,500		171,500		170,500		172,500		168,500
Monthly transaction volume			4,026,382		3,964,993		4,547,803		5,930,499		4,069,784		8,158,161

B. Overseas Securities Market



New York Stock Exchange		(Unit: US$, ADR)


		June		May		April		March		February		January
Types		2010		2010		2010		2010		2010		2010
Depository	Highest		16.24		18.44		18.51		17.78		17.33		18.33
Receipt	Lowest		14.73		15.27		17.45		16.66		16.32		16.48
Monthly transaction volume			35,760,628		31,223,014		26,691,304		31,245,982		25,609,380		29,907,572

VIII. EMPLOYEES



(As of June 30, 2010)		(Unit: persons, in millions of Won)


	Number of employees
	Office								Average		Aggregate		Average
	managerial		Production						service		wage for		wage per
Classification	positions		positions		Others		Total		year		2010 1H		person		Remarks
Male		3,844		—		—		3,844		12.1		129,976		34		—
Female		619		—		—		619		10.0		16,693		26		—
Total		4,463		—		—		4,463		11.8		146,669		33		—

IX. TRANSACTIONS WITH PARTIES WITH INTERESTS

1. Loans to the Largest Shareholder and Related Persons



(As of June 30, 2010)		(Unit: in millions of Won)

Name

(Corporate

Account

Change details

Accrued

name)

Relationship

category

Beginning

Increase

Decrease

Ending

interest

Remarks

SK Wyverns

Affiliated
company

Long-term and
short-term loans

2,982

—

2,982

133

—

(Unit: in millions of Won)


		Investment and Disposal Details
Name			Transaction Details
(Corporate		Types of	Beginning						End of
Name)	Relationship	Investment	of Period		Increase		Decrease		Period		Remarks
PS&Marketing	Affiliated company	Common Shares		150,000		80,000		—		230,000		—
SKT Americas, Inc.	Affiliated company	Common Shares		30,457		28,036		—		58,493		—
SK Telecom China Holdings Co., Ltd.	Affiliated company	—		29,595		4,656		—		34,251		—
Service Ace	Affiliated company	Common Shares		0		21,927		—		21,927		—
Service Top	Affiliated company	Common Shares		0		14,281		—		14,281		—
Network O&S	Affiliated company	Common Shares		0		15,000		—		15,000		—
YTK Investment Ltd.	Affiliated company	—		0		28,000		—		28,000		—
	Total			210,052		191,900		—		401,952		—

2. Transfer of Assets to/from the Largest Shareholder

A. Transfer of Assets

(Units: in millions of Won)

Details

Amount

Transferred

Amount

Name

From

Transferred

(Corporate

Relation-

Transferred

Purpose of

Date of

Largest

to Largest

Name)

Ship

Objects

Transfer

Shareholder

Remarks

Encar Network Co., Ltd.

Affiliated Company

Automobiles

Sale of automobiles not in use

February 25, 2010

—

236

—

SK Telesys

Affiliated Company

2G devices not in use

Sale of devices not in use

March 31, 2010

—

381

—

PS & Marketing Co., Ltd.

Affiliated Company

Network asset

Sale of asset not in use

March 31, 2010

—

SK Broadband

Affiliated Company

Used asset

Sale of asset not in use

April 23, 2010

—

Encar Network Co., Ltd.

Affiliated Company

Automobiles

Sale of automobiles not in use

May 19, 2010

—

101

—

SK Telesys

Affiliated Company

2G devices not in use

Sale of devices not in use

June 30, 2010

—

SK Networks

Affiliated Company

Handset devices not in use

Sale of asset not in use

June 23, 2010

—

144

—

Total

—

1,017

—

B. Transfer of Business

(Units: in millions of Won)

Details

Amount

Name

Transferred

(Corporate

Relation

Transferred

Purpose of

Date of

From Largest

to Largest

Name)

-ship

Objects

Transfer

Shareholder

Remarks

—

Total

—

3. Transactions with Parties with Interests (excluding the Largest Shareholder and Related Persons)

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



Agents		(Unit: in millions of Won)

Name

(Corporate

Account

Change details

Accrued

name)

Relationship

category

Beginning

Increase

Decrease

Ending

interest

Remarks

Hong Eun and others

Agency

Long-term and short-term loans

73,490

137,454

122,314

88,630

—



Overseas Investment Companies		(Unit: in millions of Won)

Name

(Corporate

Account

Change details

Accrued

name)

Relationship

category

Beginning

Increase

Decrease

Ending

interest

Remarks

Daehan Kanggun BcN Co., Ltd.

Overseas Investment company

Long-term loans

—

17,592

—

17,592

—

B. Equity Investments

(Unit: in millions of Won)


		Investment and Disposition Details
			Transaction Details
Name (Corporate			Beginning						End of
Name)	Relation-ship	Category	of Period		Increase		Decrease		Period		Remarks
HanaSK Card Co., Ltd.	Investee under equity method	Common shares		—		402,476		—		402,476		—
SK Telecom Smart City Management Co., Ltd.	Investee under equity method	Common shares		—		1,709		—		1,709		—
SK Fans Co., Ltd.	Investee under equity method	Common shares		—		1,125		—		1,125		—
Translink Capital L.L.C.	Investee	Common shares		—		233		—		233		—


		Investment and Disposition Details
			Transaction Details
Name (Corporate			Beginning						End of
Name)	Relation-ship	Category	of Period		Increase		Decrease		Period		Remarks
Skylake Global Incubest Fund #1	Investee	Common shares -		1,679		25		—		1,704		—
Sprint Nextel Corp.	Investee	Common shares		75,363		—		38,621		36,742		—
Infinity Telecom	Investee	Common shares		—		240		—		240		—
Job Creating PEF (#1)	Investee	Common shares		—		1		—		1		—
Total				77,042		405,809		38,621		444,230		—

X. OTHER INFORMATION RELATING TO THE PROTECTION OF INVESTORS

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

A. Status and Progress of Major Management Events


Date of
Disclosure	Title	Report	Reports status
October 26, 2001	Resolution on trust agreement for the acquisition of treasury shares and others	1. Signatories: Shinhan Bank, Hana Bank, Chohung Bank, Korea Exchange Bank 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 December 31, 2008, the balance of specified monetary trust for treasury shares was Won 982 billion.

B. Summary Minutes of the General Meeting of Shareholders


Date	Agenda	Resolution
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 inside directors - Election of independent 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)


Date	Agenda	Resolution
24^th Fiscal Year Meeting of Shareholders (March 14, 2008)	1. Approval of the Financial Statements for the year ended December 31, 2007 2. Amendment to Articles of Incorporation 3. Approval of Remuneration Limit for Directors 4. Election of Directors - Election of inside directors - Election of independent directors - Election of independent directors as Audit Committee member	Approved (Cash dividend, Won 8,400 per share) Approved Approved (Won 12 billion) Approved (Shin Bae Kim, Young Ho Park) Approved (Rak Yong Uhm, Jay Young Chung) Approved (Jae Ho Cho)

25^th Fiscal Year Meeting of Shareholders (March 13, 2009)	1. Approval of the financial statements for the year ended December 31, 2008 2. Approval of Remuneration Limit for Directors 3. Amendment to Company Regulation on Executive Compensation 4. Election of Directors - Election of inside directors - Election of independent directors - Election of independent directors as Audit Committee member	Approved (Cash dividend, Won 8,400 per share) Approved (Won 12 billion) Approved Approved (Jae Won Chey, Man Won Jung) Approved (Hyun Chin Lim) Approved (Hyun Chin Lim)

26^th Fiscal Year Meeting of Shareholders (March 12, 2010)	1. Approval of the financial statements for the year ended December 31, 2009 2. Amendment to Articles of Incorporation 3. Approval of Remuneration Limit for Directors 4. Election of Directors - Election of inside directors - Election of independent directors - Election of independent directors as Audit Committee member	Approved (Cash dividend, Won 8,400 per share) Approved Approved (Won 12 billion) Approved (Ki Haeng Cho) Approved (Dal Sup Shim) Approved (Dal Sup Shim, Jay Young Chung)

2. Contingent Liabilities

A. Material Legal Proceedings

- Not applicable

B. Other Matters

The Company has no other blank bills, mortgage bills, assumption of debt agreement or other contingent liabilities.

3. Status of sanctions, etc.

A. Status of sanctions

The Company was sanctioned with a fine of Won 50 million on December 30, 2008 for a violation of Telecommunications Law involving its mismanagement of privacy policy. The Company continues to improve related system security and is implementing system enhancements, such as introduction of scanning devices, to avoid unnecessary keeping of applications at the distributor level.

Due to the Company’s ineffective measures taken with respect to phone numbers that are used for sending illegal unsolicited bulk messages, the Korea Communications Commission, on April 23, 2009, ordered the Company to improve its work procedures. The Company completed the upgrade of the related computer system to prevent illegal messages on October 10, 2009.

On September 2, 2009, the Korea Communications Commission ordered the Company to improve its work procedures in a case relating to the obstruction of subscribers’ utilization of wireless internet services. The Company completed the improvement of the procedures in consultation with the Korea Communications Commission by December 8, 2009.

On October 13, 2009, the Korea Communications Commission imposed on the Company a fine of Won 140 million and a newspaper notice order in a case relating to the subscription for mobile telephone services using national identification numbers of the deceased and the Company’s failure to verify the required documents. The Company implemented the improved work procedures to strengthen identification process at the time of subscription for mobile telephone services in January 2010.

In addition, on January 21, 2009, the Company was sanctioned for unfair business practices with a fine of Won 1,268 million by the Fair Trade Commission of Korea along with a correctional order of its policy of restricting certain rate plan subscribers from using third party portal contents. The Company has paid the fine and has taken efforts to educate applicable divisions of the issue and to improve the level of the voluntary compliance program to comply with fair trade laws to prevent a repeat of the same violation.

Also on February 3, 2009, the Company received a correctional order and a fine of Won 500 million from the Fair Trade Commission of Korea involving an unfair trade interference practice including refusal of applications for subscription for certain PDA phones distributed by third party manufacturers. The Company filed a suit at the Seoul High Court, which found in favor of the

Company and cancelled the Fair Trade Commission’s correctional order and fine. The Fair Trade Commission of Korea filed an appeal from the judgment on May 26, 2010 and the suit is currently pending at the Supreme Court of Korea.

On April 8, 2010, the Company received a correctional order from the Fair Trade Commission of Korea for a violation of the Act on Fair Labeling and Advertising relating to 11^th Street (the Company’s online shopping mall). In response thereto, the Company has been taking efforts to prevent a repetitive violation including thorough pre-review of the advertisement and marketing activities of 11^th Street and appropriate education for relevant employees.

SK TELECOM CO., LTD.

NON-CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS
ENDED JUNE 30, 2010 AND 2009
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 statement of financial position of SK Telecom Co., Ltd. (the “Company”) as of June 30, 2010, the related non-consolidated statements of income for the three months and six months ended June 30, 2010 and 2009, and non-consolidated statements of changes in stockholders’ equity and cash flows for the six months ended June 30, 2010 and 2009, all expressed in Korean won. These non-consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to issue a report on these non-consolidated financial statements based on our reviews.

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

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

We have previously audited, in accordance with auditing standards generally accepted in the Republic of Korea, the non-consolidated statement of financial position of the Company as of December 31, 2009, and the related non-consolidated statements of income, appropriations of retained earnings, changes in stockholders’ equity and cash flows for the year then ended (not presented herein); and in our report dated February 17, 2010, we expressed an unqualified opinion on those non-consolidated financial statements. The accompanying non-consolidated statement of financial position as of December 31, 2009, which is comparatively presented, does not differ in material respects from such audited non-consolidated statement of financial position.

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

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

August 5, 2010

Notice to Readers

This report is effective as of August 5, 2010, 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 STATEMENTS OF FINANCIAL POSITION
JUNE 30, 2010 AND DECEMBER 31, 2009


	Korean won				Translation into U.S. dollars (Note 2)
	June 30,		December 31,		June 30,		December 31,
ASSETS	2010		2009		2010		2009
	(In millions)				(In thousands)
CURRENT ASSETS:
Cash and cash equivalents (Note 14)	W	292,307	W	420,576	$	239,429	$	344,494
Short-term financial instruments (Note 14)		337,666		178,057		276,583		145,847
Short-term investment securities (Note 3)		339,044		370,182		277,711		303,217
Accounts receivable — trade, net of allowance for doubtful accounts of W149,067 million as of June 30, 2010 and W142,702 million as of December 31, 2009 (Note 15)		1,354,136		1,557,514		1,109,175		1,275,762
Short-term loans, net of allowance for doubtful accounts of W1,184 million as of June 30, 2010 and W933 million as of December 31, 2009 (Notes 5 and 15)		91,042		66,888		74,573		54,788
Accounts receivable — other, net of allowance for doubtful accounts of W29,472 million and present value of W1,010 million as of June 30, 2010 and W26,059 million and W8,478 as of December 31, 2009 (Note 15)		2,468,915		2,032,757		2,022,292		1,665,034
Inventories		15,324		22,656		12,552		18,558
Prepaid expenses		124,527		112,762		102,000		92,364
Current deferred income tax assets, net (Note 11)		236,470		194,825		193,693		159,581
Currency swap (Note 17)		11,390		—		9,330		—
Accrued income and other		23,747		26,835		19,450		21,980


Total Current Assets		5,294,568		4,983,052		4,336,788		4,081,625


NON-CURRENT ASSETS:
Property and equipment, net (Notes 6 and 15)		4,825,880		5,196,521		3,952,885		4,256,478
Intangible assets, net (Note 7)		2,491,155		2,665,936		2,040,509		2,183,672
Long-term financial instruments (Note 14)		19		6,519		16		5,340
Long-term investment securities (Note 3)		1,809,669		2,420,262		1,482,302		1,982,440
Equity securities accounted for using the equity method (Notes 4)		3,250,019		2,680,872		2,662,095		2,195,906
Long-term loans, net of allowance for doubtful accounts of W24,251 million as of June 30, 2010 and W24,250 million as of December 31, 2009 (Notes 5 and 15)		64,287		64,216		52,658		52,599
Long-term accounts receivable — other		866,463		761,647		709,721		623,866
Guarantee deposits (Note 15)		179,710		172,021		147,201		140,903
Long-term currency swap (Note 17)		254,835		223,173		208,736		182,801
Long-term deposits and other		121,512		123,414		99,530		101,089


Total Non-current Assets		13,863,549		14,314,581		11,355,653		11,725,094


TOTAL ASSETS	W	19,158,117	W	19,297,633	$	15,692,441	$	15,806,719

(Continued)

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED)
JUNE 30, 2010 AND DECEMBER 31, 2009


	Korean won						Translation into U.S. dollars (Note 2)
	June 30,			December 31,			June 30,			December 31,
LIABILITIES AND STOCKHOLDERS’ EQUITY	2010			2009			2010			2009
	(In millions)						(In thousands)

CURRENT LIABILITIES:
Accounts payable (Note 15)	W	1,045,934		W	1,136,475		$	856,726		$	930,888
Income tax payable		276,133			381,940			226,181			312,848
Accrued expenses (Note 16)		1,004,231			934,372			822,567			765,345
Withholdings		434,839			250,656			356,177			205,313
Current portion of long-term debt, net (Notes 8 and 9)		960,275			513,277			786,563			420,426
Current portion of subscription deposits		5,827			6,804			4,773			5,573
Currency swap (Note 17)		29,549			35,145			24,204			28,787
Currency forward (Note 17)		721			—			591			—
Interest swap (Note 17)		—			1,173			—			961
Advanced receipts and other		49,722			34,791			40,726			28,498


Total Current Liabilities		3,807,231			3,294,633			3,118,508			2,698,639


NON-CURRENT LIABILITIES:
Bonds payable, net (Note 8)		3,060,341			3,349,216			2,506,730			2,743,348
Long-term borrowings (Note 9)		621,030			816,760			508,687			669,009
Subscription deposits		6,213			5,480			5,088			4,489
Long-term payables — other, net of present value discount of W2,979 million as of June 30, 2010 and W5,837 million as of December 31, 2009		50,121			164,163			41,054			134,466
Accrued severance indemnities, net		38,875			25,155			31,843			20,604
Non-current deferred income tax liabilities, net (Note 11)		146,221			210,859			119,770			172,715
Long-term currency swap (Note 17)		12,732			18,281			10,429			14,974
Long-term interest swap (Note 17)		19,747			16,215			16,175			13,282
Guarantee deposits received and other (Notes 15 and 16)		199,954			155,421			163,782			127,305


Total Non-current Liabilities		4,155,234			4,761,550			3,403,558			3,900,192


Total Liabilities		7,962,465			8,056,183			6,522,066			6,598,831


STOCKHOLDERS’ EQUITY:
Capital stock (Notes 1 and 10)		44,639			44,639			36,564			36,564
Capital surplus (Notes 4, 8 and 10)		3,032,916			3,032,009			2,484,266			2,483,523
Capital adjustments:
Treasury stock (Note 1)		(1,992,083	)		(1,992,083	)		(1,631,718	)		(1,631,718	)
Loss on disposal of treasury stock		(716	)		(716	)		(586	)		(586	)
Equity method in capital adjustments (Note 4)		(53,474	)		(52,626	)		(43,801	)		(43,106	)
Other capital adjustments		(662,983	)		(662,983	)		(543,050	)		(543,050	)
Accumulated other comprehensive income (loss) (Note 12):
Unrealized gain on valuation of long-term investment securities, net (Note 3)		860,640			1,003,145			704,951			821,678
Equity in other comprehensive loss of affiliates, net (Note 4)		(67,439	)		(84,809	)		(55,239	)		(69,467	)
Gain on valuation of currency swap, net (Note 17)		7,410			6,516			6,070			5,336
Loss on valuation of interest swap, net (Note 17)		(10,576	)		(10,932	)		(8,664	)		(8,955	)
Retained earnings:
Appropriated		9,350,386			8,890,053			7,658,915			7,281,855
Unappropriated		686,932			1,069,237			562,667			875,814


Total Stockholders’ Equity		11,195,652			11,241,450			9,170,375			9,207,888


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	W	19,158,117		W	19,297,633		$	15,692,441		$	15,806,719

See accompanying notes to non-consolidated financial statements.

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009


	Korean won												Translation into U.S. dollars (Note 2)
	2010						2009						2010						2009
	Three months			Six months			Three months			Six months			Three months			Six months			Three months			Six months
	ended June 30			ended June 30			ended June 30			ended June 30			ended June 30			ended June 30			ended June 30			ended June 30
	(In millions except for per share data)												(In thousands except for per share data)

OPERATING REVENUE (Note 15)	W	3,088,572		W	6,106,818		W	3,067,899		W	5,944,360		$	2,529,854		$	5,002,103		$	2,512,921		$	4,869,034


OPERATING EXPENSES:
Labor cost		(95,786	)		(295,901	)		(81,597	)		(271,048	)		(78,458	)		(242,373	)		(66,836	)		(222,016	)
Commissions paid (Note 15)		(1,230,690	)		(2,442,592	)		(1,279,186	)		(2,280,673	)		(1,008,060	)		(2,000,731	)		(1,047,783	)		(1,868,103	)
Depreciation and amortization (Notes 6 and 7)		(470,602	)		(928,383	)		(426,941	)		(827,657	)		(385,471	)		(760,440	)		(349,708	)		(677,935	)
Network interconnection		(267,777	)		(530,758	)		(267,725	)		(523,781	)		(219,337	)		(434,745	)		(219,294	)		(429,030	)
Leased line		(45,528	)		(91,570	)		(93,225	)		(191,315	)		(37,292	)		(75,005	)		(76,361	)		(156,706	)
Advertising		(79,570	)		(122,472	)		(62,604	)		(106,681	)		(65,176	)		(100,317	)		(51,279	)		(87,383	)
Research and development		(54,627	)		(115,973	)		(55,023	)		(114,394	)		(44,745	)		(94,994	)		(45,069	)		(93,700	)
Rent		(70,739	)		(143,723	)		(66,182	)		(129,942	)		(57,942	)		(117,724	)		(54,210	)		(106,436	)
Frequency usage		(40,285	)		(79,672	)		(38,956	)		(78,136	)		(32,998	)		(65,259	)		(31,909	)		(64,001	)
Repair		(40,866	)		(77,288	)		(35,189	)		(64,090	)		(33,473	)		(63,307	)		(28,823	)		(52,496	)
Cost of goods sold		(16,352	)		(31,938	)		(8,887	)		(16,195	)		(13,394	)		(26,160	)		(7,279	)		(13,265	)
Other		(93,688	)		(184,016	)		(98,984	)		(223,041	)		(76,740	)		(150,727	)		(81,079	)		(182,693	)


Sub-total		(2,506,510	)		(5,044,286	)		(2,514,499	)		(4,826,953	)		(2,053,086	)		(4,131,782	)		(2,059,630	)		(3,953,764	)


OPERATING INCOME		582,062			1,062,532			553,400			1,117,407			476,768			870,321			453,291			915,270


OTHER INCOME (Note 18):
Interest income (Note 3)		46,408			91,653			35,053			77,573			38,013			75,073			28,712			63,540
Foreign exchange and translation gains (Note 2)		1,891			12,748			47,863			64,964			1,549			10,442			39,205			53,212
Equity in earnings of affiliates (Note 4)		25,328			40,790			14,536			25,733			20,746			33,411			11,906			21,078
Gain on valuation of short-term investment securities (Note 3)		—			—			1,966			7,810			—			—			1,610			6,397
Gain on disposal of property and equipment and intangible assets		1,196			7,140			153			445			980			5,848			125			365
Gain on valuation of derivatives (Note 17)		—			—			110,196			1,014			—			—			90,262			831
Other		4,751			38,384			14,290			89,273			3,891			31,441			11,705			73,123


Sub-total		79,574			190,715			224,057			266,812			65,179			156,215			183,525			218,546

(Continued)

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009


	Korean won												Translation into U.S. dollars (Note 2)
	2010						2009						2010						2009
	Three months			Six months			Three months			Six months			Three months			Six months			Three months			Six months
	ended June 30			ended June 30			ended June 30			ended June 30			ended June 30			ended June 30			ended June 30			ended June 30
	(In millions except for per share data)												(In thousands except for per share data)

OTHER EXPENSES (Note 15):
Interest and discounts		(W70,279	)		(W140,908	)		(W76,431	)		(W147,755	)		($57,566	)		($115,418	)		($62,605	)		($121,026	)
Donations		(20,477	)		(52,477	)		(10,272	)		(22,693	)		(16,773	)		(42,984	)		(8,414	)		(18,588	)
Foreign exchange and translation loss (Note 2)		(24,749	)		(13,517	)		(133,852	)		(61,056	)		(20,272	)		(11,071	)		(109,638	)		(50,011	)
Loss on valuation of short-term investment securities (Note 3)		(2,560	)		(5,999	)		—			—			(2,097	)		(4,914	)		—			—
Equity in losses of affiliates (Note 4)		(29,451	)		(78,250	)		(50,759	)		(98,755	)		(24,123	)		(64,095	)		(41,577	)		(80,890	)
Loss on disposal of account receivable — other		—			—			(28,711	)		(28,711	)		—			—			(23,517	)		(23,517	)
Loss on disposal of property, equipment and intangible assets		(1,412	)		(3,717	)		(16,021	)		(16,181	)		(1,157	)		(3,045	)		(13,123	)		(13,254	)
Loss on valuation of derivatives (Note 17)		(989	)		(21,065	)		(35,116	)		(138,623	)		(810	)		(17,254	)		(28,764	)		(113,546	)
External research and development cost		(14,059	)		(24,497	)		(13,913	)		(27,818	)		(11,516	)		(20,066	)		(11,396	)		(22,786	)
Other		(4,274	)		(10,478	)		(7,572	)		(14,520	)		(3,500	)		(8,582	)		(6,202	)		(11,894	)


Sub-total		(168,250	)		(350,908	)		(372,647	)		(556,112	)		(137,814	)		(287,429	)		(305,236	)		(455,512	)


INCOME BEFORE INCOME TAX		493,386			902,339			404,810			828,107			404,133			739,107			331,580			678,304

PROVISION FOR INCOME TAX (Note 11)		(129,415	)		(216,613	)		(93,167	)		(199,715	)		(106,004	)		(177,428	)		(76,313	)		(163,587	)


NET INCOME	W	363,971		W	685,726		W	311,643		W	628,392		$	298,129		$	561,679		$	255,267		$	514,717


NET INCOME PER SHARE
(In Korean won and U.S. dollars) (Note 13)	W	5,031		W	9,479		W	4,308		W	8,686		$	4.121		$	7.764		$	3.529		$	7.115


DILUTED NET INCOME PER SHARE
(In Korean won and U.S. dollars) (Note 13)	W	4,947		W	9,336		W	4,234		W	8,567		$	4.052		$	7,647		$	3.468		$	7.017

See accompanying notes to non-consolidated financial statements.

NON-CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009

SK TELECOM CO., LTD.


									Accumulated
									other						Total
	Common		Capital			Capital			comprehensive			Retained			stockholders’
(In millions of Korean won)	stock		surplus			adjustments			income			earnings			equity
Balance, January 1, 2009	W	44,639	W	2,957,095			(W2,147,530	)	W	373,785		W	9,501,018		W	10,729,007
Cash dividends		—		—			—			—			(609,203	)		(609,203	)
Net income		—		—			—			—			628,392			628,392
Conversion right		—		73,622			—			—			—			73,622
Treasury stock		—		—			63,538			—			(92,477	)		(28,939	)
Loss on disposal of treasury stock		—		(721	)		(716	)		—			—			(1,437	)
Unrealized loss on valuation of long-term investment securities, net (Notes 3 and 12)		—		—			—			189,697			—			189,697
Equity in other comprehensive income changes of affiliates, net (Notes 4 and 12)		—		2,003			16,373			(16,101	)		(56,043	)		(53,768	)
Loss on valuation of currency swap, net (Notes 12 and 17)		—		—			—			(2,394	)		—			(2,394	)
Gain on valuation of interest swap, net (Notes 12 and 17)		—		—			—			7,424			—			7,424


Balance, June 30, 2009	W	44,639	W	3,031,999			(W2,068,335	)	W	552,411		W	9,371,687		W	10,932,401


Balance, January 1, 2010	W	44,639	W	3,032,009			(W2,708,408	)	W	913,920		W	9,959,290		W	11,241,450
Cash dividends		—		—			—			—			(607,698	)		(607,698	)
Net income		—		—			—			—			685,726			685,726
Unrealized loss on valuation of long-term investment securities, net (Notes 3 and 12)		—		—			—			(142,505	)		—			(142,505	)
Equity in other comprehensive income changes of affiliates, net (Notes 4 and 12)		—		907			(848	)		17,370			—			17,429
Loss on valuation of currency swap, net (Notes 12 and 17)		—		—			—			894			—			894
Loss on valuation of interest swap, net (Notes 12 and 17)		—		—			—			356			—			356


Balance, June 30, 2010	W	44,639	W	3,032,916			(W2,709,256	)	W	790,035		W	10,037,318		W	11,195,652


(Continued)

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009


									Accumulated
									other						Total
	Common		Capital			Capital			comprehensive			Retained			stockholders’
(In thousands of U.S. dollars)	stock		surplus			adjustments			income			earnings			equity
Balance, January 1, 2009	$	36,564	$	2,422,161			($1,759,045	)	$	306,168		$	7,782,297		$	8,788,145
Cash dividends		—		—			—			—			(499,000	)		(499,000	)
Net income		—		—			—			—			514,717			514,717
Conversion right		—		60,304						—			—			60,304
Treasury stock		—		—			52,044			—			(75,748	)		(23,704	)
Loss on disposal of treasury stock		—		(591	)		(586	)		—			—			(1,177	)
Unrealized loss on valuation of long-term investment securities, net (Notes 3)		—		—			—			155,381			—			155,381
Equity in other comprehensive income changes of affiliates, net (Note 4)		—		1,641			13,411			(13,188	)		(45,905	)		(44,041	)
Loss on valuation of currency swap, net (Notes 12 and 17)		—		—			—			(1,961	)		—			(1,961	)
Gain on valuation of interest swap, net (Notes 12 and 17)		—		—			—			6,081			—			6,081

Balance, June 30, 2009	$	36,564	$	2,483,515			($1,694,176	)	$	452,481		$	7,676,361		$	8,954,745

Balance, January 1, 2010	$	36,564	$	2,483,523			($2,218,460	)	$	748,592		$	8,157,669		$	9,207,888
Cash dividends		—		—			—			—			(497,766	)		(497,766	)
Net income		—		—			—			—			561,679			561,679
Unrealized loss on valuation of long-term investment securities, net (Notes 3 and 12)		—		—			—			(116,727	)		—			(116,727	)
Equity in other comprehensive income changes of affiliates, net (Notes 4 and 12)		—		743			(695	)		14,228			—			14,276
Loss on valuation of currency swap, net (Notes 12 and 17)		—		—			—			734			—			734
Loss on valuation of interest swap, net (Notes 12 and 17)		—		—			—			291			—			291

Balance, June 30, 2010	$	36,564	$	2,484,266			($2,219,155	)	$	647,118		$	8,221,582		$	9,170,375

See accompanying notes to non-consolidated financial statements.

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009


	Korean won						Translation into U.S. dollars (Note 2)
	2010			2009			2010			2009
				(In millions)						(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	W	685,726		W	628,392		$	561,679		$	514,717

Expenses not involving cash payments:
Provision for severance indemnities		18,136			18,181			14,855			14,892
Depreciation and amortization		997,485			891,277			817,041			730,046
Allowance for doubtful accounts		32,607			76,933			26,708			63,016
Foreign translation loss		9,867			11,641			8,082			9,535
Loss on valuation of short-term investment securities		5,999			—			4,914			—
Equity in losses of affiliates		78,250			98,755			64,095			80,890
Loss on disposal of property, equipment and intangible assets		3,933			16,181			3,222			13,254
Loss on valuation of derivatives		21,065			115,337			17,254			94,473
Amortization of discounts on bonds		18,179			20,558			14,890			16,839
Other		1			5,606			2			4,592


Sub-total		1,185,522			1,254,469			971,063			1,027,537

Income not involving cash receipts:
Foreign translation gain		(9,609	)		(46,477	)		(7,871	)		(38,068	)
Equity in earnings of affiliates		(40,790	)		(25,733	)		(33,411	)		(21,078	)
Gain on valuation of short-term investment securities		—			(7,810	)		—			(6,397	)
Gain on disposal of property, equipment and intangible assets		(7,140	)		(445	)		(5,848	)		(365	)
Gain on valuation of derivatives		—			(1,014	)		—			(831	)
Other		(13,966	)		(611	)		(11,440	)		(500	)


Sub-total		(71,505	)		(82,090	)		(58,570	)		(67,239	)

Changes in assets and liabilities related to operating activities:
Accounts receivable — trade		175,842			(89,251	)		144,032			-73,106
Accounts receivable — other		(441,106	)		(249,984	)		(361,311	)		(204,762	)
Inventories		7,332			(4,851	)		6,006			(3,973	)
Prepaid expenses		8,383			39,402			6,867			32,274
Accrued income and other		54,903			8,533			44,971			6,989
Long-term accounts receivable — other		(104,816	)		16,285			(85,855	)		13,339
Accounts payable		(91,040	)		13,389			(74,571	)		10,967
Income tax payable		(124,286	)		(105,782	)		(101,803	)		(86,646	)
Accrued expenses		81,686			140,016			66,909			114,687
Withholdings		132,366			72,930			108,421			59,737
Current portion of subscription deposits		(977	)		(25	)		(800	)		(20	)
Advanced receipts and other		14,931			5,814			12,230			4,762
Deferred income taxes		(54,608	)		(22,022	)		(44,729	)		(18,038	)
Severance indemnities payments		(8,171	)		(15,407	)		(6,693	)		(12,620	)
Deposits for group severance indemnities and other deposits		3,421			9,440			2,802			7,732
Dividends received from affiliate		9,513			6,817			7,792			5,584


Sub-total		(336,627	)		(174,696	)		(275,732	)		(143,094	)

Net Cash Provided by Operating Activities		1,463,116			1,626,075			1,198,440			1,331,921


(Continued)

SK TELECOM CO., LTD.
NON-CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009


	Korean won						Translation into U.S. dollars (Note 2)
	2010			2009			2010			2009
	(In millions)						(In thousands)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash inflows from investing activities:
Proceeds from disposal of property and equipment	W	16,320		W	1,492		$	13,368		$	1,222
Proceeds from disposal of intangible assets		4,173			65			3,418			53
Disposal of short-term investment securities, net		220,057			25,153			180,249			20,603
Collection of short-term loans		123,021			184,144			100,767			150,833
Proceeds from sales of long-term investment securities		252,657			1,865			206,952			1,528
Proceeds from sales of equity securities accounted for using the equity method		—			6,444			—			5,278
Collection of long-term loans		7,328			8,119			6,002			6,650
Decrease in guarantee deposits		18,223			12,360			14,926			10,124
Decrease in other non-current assets		8,776			27,594			7,189			22,602

Sub-total		650,555			267,236			532,871			218,893

Cash outflows for investing activities:
Acquisition of short-term financial instruments		(153,110	)		(198,226	)		(125,413	)		(162,367	)
Acquisition of long-term investment securities, net		(259	)		(125,538	)		(212	)		(102,828	)
Extension of short-term loans		(137,454	)		(138,223	)		(112,589	)		(113,219	)
Acquisition of property and equipment		(414,325	)		(647,652	)		(339,374	)		(530,493	)
Increase in intangible assets		(6,426	)		(6,795	)		(5,264	)		(5,566	)
Acquisition of long-term financial instruments		—			(6,500	)		—			(5,324	)
Acquisition of equity securities accounted for using the equity method		(597,210	)		(168,301	)		(489,176	)		(137,856	)
Extension of long-term loans		(17,592	)		(6,972	)		(14,410	)		(5,711	)
Increase in guarantee deposits and other		(52,903	)		(87,026	)		(43,332	)		(71,282	)


Sub-total		(1,379,279	)		(1,385,233	)		(1,129,770	)		(1,134,646	)

Net Cash Used in Investing Activities		(728,724	)		(1,117,997	)		(596,899	)		(915,753	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash inflows from financing activities:
Increase in guarantee deposits received and other		38,520			5,830			31,552			4,775
Proceeds from short-term borrowings		—			100,000			—			81,910
Issuance of bonds		—			1,114,898			—			913,215
Cash inflows from transaction of currency swap		—			8,236			—			6,746
Cash inflows from transaction of currency option		—			1,014			—			831


Sub-total		38,520			1,229,978			31,552			1,007,477

Cash outflows for financing activities:
Repayment of short-term borrowings		—			(123,200	)		—			(100,913	)
Repayment of current portion of long-term debts		(290,000	)		(715,672	)		(237,539	)		(586,208	)
Payment of dividends		(607,667	)		(604,162	)		(497,741	)		(494,870	)
Decrease in other non-current liabilities		(3,514	)		(1,206	)		(2,878	)		(988	)
Acquisition of treasury stock		—			(28,938	)		—			(23,703	)


Sub-total		(901,181	)		(1,473,178	)		(738,158	)		(1,206,682	)

Net Cash Used in Financing Activities		(862,661	)		(243,200	)		(706,606	)		(199,205	)

NET INCREASE IN CASH AND CASH EQUIVALENTS		(128,269	)		264,878			(105,065	)		216,963
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD		420,576			434,177			344,494			355,635

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	W	292,307		W	699,055		$	239,429		$	572,598

See accompanying notes to non-consolidated financial statements.

SK TELECOM CO., LTD.
NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009

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 and the New York and London Stock Exchanges, respectively. As of June 30, 2010, the Company’s total issued shares are held by the following:


			Percentage of
	Number of shares		total shares issued (%)

SK Group		18,748,452		23.22
POSCO Corp.		2,341,569		2.90
Institutional investors and other minority shareholders		51,254,978		63.48
Treasury stock		8,400,712		10.40


		80,745,711		100.00

2.		SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

		The accompanying non-consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the Republic of Korea (“Korean GAAP”) and with the accounting policies for annual financial statements for the year ended December 31, 2009.

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

		The accompanying non-consolidated financial statements are stated in Korean won, the currency of the country in which the Company is incorporated and operates. The translation of Korean won amounts into U.S. dollar amounts is included solely for the convenience of readers of financial statements and has been made at the rate of W1,220.85 to US$1.00, the Noon Buying Rate in the City of New York for cable transfers in Korean won as certified for customs purposes by the Federal Reserve Bank of New York on the last business day of the period ended June 30, 2010. 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.

INVESTMENT SECURITIES

a. Short-term Investment Securities

Short-term investment securities as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won):

December 31,

June 30, 2010

2009

Acquisition

Carrying

Fair value and

cost

Fair value

amount

carrying amount

Trading securities (Note)

145,000

144,127

370,126

Current portion of long-term investment securities

192,798

194,917

Total

337,798

339,044

370,182

(Note)

The Company’s trading securities as of June 30, 2010 are all beneficiary certificates, and the difference between the fair value and acquisition cost was recorded in other income (expenses) as gain (loss) on valuation of short-term investment securities

b. Long-term Investment Securities

Long-term investment securities as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won):


	June 30, 2010			December 31, 2009

Available-for-sale equity securities	W	1,809,506		W	2,026,921
Available-for-sale debt securities		195,080			393,397


Total		2,004,586			2,420,318
Less: current portion		(194,917	)		(56	)


Long-term portion	W	1,809,669		W	2,420,262

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

Available-for-sale equity securities as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won):


	June 30, 2010										Carrying amount
	Number of		Percentage		Acquisition						June 30,			December
	shares		(%)		cost			Fair value			2010			31, 2009
(Investments in listed companies)
SK C&C Co., Ltd.		4,500,000		9.0	W	150,495		W378,000		(Note a)	W	378,000		W	201,600
Digital Chosunilbo Co., Ltd.		2,890,630		7.8		5,781			6,547			6,547			6,995
KRTnet Corporation		234,150		4.4		1,171			1,564			1,564			1,573
POSCO Corp.		2,481,310		2.8		332,662			1,157,531			1,157,531			1,533,450
nTels Co., Ltd.		205,200		6.2		34			919			919			1,161
Sprint Nextel		8,467,646		0.3		36,743		43,457		(Note b)		43,457			74,215

Sub-total						526,886			1,588,018			1,588,018			1,818,994


(Investments in non-listed companies)
The Korea Economic Daily		2,585,069		13.8		13,964		(Note c)				13,964			13,964
Others						122,099		(Notes b, c & d)				5,841			5,601

Sub-total						136,063						19,805			19,565


(Investments in funds)
Global Opportunities Breakaway Fund						186,390		188,203		(Note e)		188,203			175,140
Others						13,480		(Note c)				13,480			13,222

Sub-total						199,870						201,683			188,362


Total						862,819						1,809,506			2,026,921
Less: current portion						(240	)					(240	)		—


Long-term portion					W	862,579					W	1,809,266		W	2,026,921

(Note a)		As the common stocks of SK C&C were listed on the Stock Market of Korea Exchange during the year ended December 31, 2009, the Company sold 10,500,000 shares through initial public offering and recorded the residual investment at its market value as of December 31, 2009. In addition, the Company recorded unrealized gain on valuation of investments of W207,763 million (net of tax effect W66,331 million) as of June 30, 2010.

(Note b)		The investment in common stock of Sprint Nextel and others were sold during the six months ended June 30, 2010 and the difference between the disposal price and acquisition cost was recorded as loss on disposal of long term investment securities.

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

(Note d)		Due to the impairment of the investment of Mobinex Inc. and others, the Company recorded W6,246 million of impairment loss on investment securities for the year ended December 31, 2009.

(Note e)		For the year ended December 31, 2009, the Company entered into limited partnership agreement with overseas private fund. In accordance with the partnership agreement, the Company has contributed US$150 million out of total capital commitment of US$200 million. In addition, the difference between the fair value and acquisition cost of W1,414 million (net of tax effect of W399 million) was recorded as unrealized gain on valuation of long-term investment securities in other comprehensive income.

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

Available-for-sale debt securities as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won):


					Carrying amount
					June			December
	Maturity	Acquisition cost			30, 2010			31, 2009

Public bonds	(Note a)	W	401		W	401		W	457
Closed beneficiary certificates	October 2011		59			2			8
Bond-type beneficiary certificates	June 2011		100,000			101,879			300,134
Subordinated bonds (Note b)			90,980			90,980			90,980
Convertible bonds of Magic Tech Network Co., Ltd. (Note c)	March 2011		1,818			1,818			1,818


Total			193,258			195,080			393,397
Less current portion			(192,798	)		(194,677	)		(56	)


Long-term available-for-sale debt securities		W	460		W	403		W	393,341

The interest income incurred from available-for-sale debt securities for the six months ended June 30, 2010 and 2009, and for the three months ended June 30, 2010 and 2009, were W7 million and W161 million, W3 million and W90 million, respectively.

(Note a)

The maturities of public bonds as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won):


Maturity	June 30, 2010		December 31, 2009

Within one year	W	—	W	57
After one year but within five years		401		400


	W	401	W	457

(Note b)		The Company purchased subordinated bonds issued by a special purpose company as part of the asset-backed securitization of accounts receivable-other resulting from its mobile phone financing plan.

(Note c)		On September 3, 2009, the Company purchased convertible bonds of Magic Tech Network Co., Ltd. for US$1,458,065. Such convertible bonds have a conversion price of US$274.75 per share of common stock of Magic Tech Network Co., Ltd..

b-(3). Changes in Unrealized Gains (Losses) on Investments in Common Stock

The changes in unrealized gains (losses) on investments in common stock for the six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):


	For the six months ended June 30, 2010
				Increase
	Beginning balance			(decrease)			Ending balance
Available-for-sales securities:
Unrealized gain on valuation of long-term Investment securities	W	1,301,359			(W189,946	)	W	1,111,413
Unrealized loss on valuation of long-term Investment securities		(12,520	)		12,463			(57	)


Sub-total		1,288,839			(177,483	)		1,111,356
Less tax effect		(285,694	)		34,978			(250,716	)


Total	W	1,003,145			(W142,505	)	W	860,640


	For the six months ended June 30, 2009
				Increase
	Beginning balance			(decrease)			Ending balance
Available-for-sales securities:
Unrealized gain on valuation of long-term Investment securities	W	941,096		W	100,169		W	1,041,265
Unrealized loss on valuation of long-term Investment securities		(401,945	)		142,712			(259,233	)


Sub-total		539,151			242,881			782,032
Less tax effect		(125,881	)		(53,184	)		(179,065	)


Total	W	413,270		W	189,697		W	602,967

4.		EQUITY SECURITIES ACCOUNTED FOR USING THE EQUITY METHOD

		Equity securities accounted for using the equity method of accounting as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won):


	June 30, 2010									Carrying Amount
			Ownership
	Number		percentage		Acquisition		Net asset			June 30,		December
	of shares		(%)		cost		value			2010		31, 2009

SK Broadband Co., Ltd.		149,638,354		50.6	W	1,450,804	W	680,802		W	1,194,669	W	1,242,247
SK Communications Co., Ltd.		28,029,945		64.7		175,441		141,823			152,606		148,831
SK Telink Co., Ltd.		943,997		90.8		5,296		141,841			141,841		133,029
SK Marketing & Company Co., Ltd.		5,000,000		50.0		190,000		113,579			113,579		112,531
HanaSK Card Co., Ltd.		57,647,058		49.0		402,476	326,827		(Note a)		396,360		—
PS&Marketing Corporation		30,000,000		100.0		230,000	202,341		(Note b)		202,341		133,934
SK Wyverns Baseball Club Co., Ltd.		199,997		100.0		1,000		—			—		—
Paxnet Co., Ltd.		5,590,452		59.7		26,563		15,766			29,175		30,611
F&U Credit Information Co., Ltd.		300,000		50.0		2,410		3,935			4,375		4,481
TU Media Corp.		28,538,064		44.2		151,980		11,240			11,240		11,710
IHQ, Inc.		14,960,784		37.1		51,846	10,412		(Note c)		17,295		20,178
Ntreev Soft Co., Ltd.		2,064,970		63.7		33,196		9,470			9,470		7,708
Commerce Planet Co., Ltd.		29,396		100.0		8,251		360			360		139
Loen Entertainment, Inc.		16,054,812		63.5		57,874		46,049			46,049		40,234
Harex Info Tech, Inc.		225,000		21.2		3,375		62			62		62
SK Mobile		—		20.0		4,930		2,111			2,111		2,111
SKT Vietnam PTE Ltd.		180,476,700		73.3		191,273		24,540			24,540		26,264
Skytel Co., Ltd.		1,951,777		29.3		2,159		18,148			18,148		14,958
SK China Company Ltd.		94,960		29.7		6,159		5,004			3,919		3,919
SK Telecom China Co., Ltd.		—		100.0		7,340		9,443			9,443		9,443
TR Entertainment		—		42.2		10,953		2,317			6,754		7,560
ULand Company Ltd.		14,100,100		70.1		17,511		3,829			3,829		3,819
SKT Americas, Inc.		122		100.0		58,494	50,054		(Note b)		50,054		26,131
SK Telecom China Holding Co., Ltd.		—		100.0		34,251	29,617		(Note b)		29,617		23,396
SK USA, Inc.		49		49.0		3,184		5,498			5,498		5,498
Helio, Inc.		79,437		14.3		134		12			12		12
Korea IT Fund		190		63.3		190,000		227,972			227,972		220,957
1st Music Investment Fund of SK-PVC		1,385		69.3		6,925		4,695			4,695		4,695
2nd Music Investment Fund of SK-PVC		1,585		79.3		7,925		7,487			7,487		8,036
SK-KTB Music Investment Fund		14,850,000,000		74.2		14,850		14,894			14,894		13,538
Stonebridge Cinema Fund		120		45.6		12,000		8,193			8,193		8,255
Michigan Global Cinema Fund		40		36.4		4,000		3,585			3,585		3,651
3rd Fund of Isu Entertainment		25		31.3		2,500		1,635			1,635		1,635
SK Telecom Advanced Tech & Service Center		—		100.0		6,989		9,536			9,536		9,536
Cyworld China Holdings		10,500,000		53.8		10,272		—			—		—
Magic Tech Network Co., Ltd.		4,500		30.0		8,494		941			4,649		5,267
SK Telecom Global Investment B.V.		18,000		100.0		39,319		42,504			42,504		41,013
SKY Property Mgmt. Ltd.		22,980		60.0		283,368		279,855			279,855		264,850
Wave City Development Co. Ltd.		382,000		19.1		1,967		1,532			1,532		1,532


	June 30, 2010									Carrying Amount
			Ownership
	Number		percentage		Acquisition		Net asset			June 30,		December
	of shares		(%)		cost		value			2010		31, 2009
Prmaxsoftware Tech. Co., Ltd.		—		97.2		11,665		2,432			2,432		2,432
Benex Digital Cultural Contents Fund		50		19.9		5,000		4,694			4,694		4,912
Benex Focus Limited Partnership II		200		66.7		20,000		19,509			19,509		19,782
K-net Culture & Contents Venture Fund		118		59.0		11,800		10,845			10,845		11,157
Open Innovation Fund		200		98.5		20,000		19,743			19,743		19,938
UniSK		49		49.0		3,475		4,247			4,247		4,247
SK Beijing Industrial Development Co., Ltd.		19,843,800		100.0		23,709		18,009			18,009		18,009
Cyworld Japan		375,000		30.0		3,141		66			66		66
Cyworld Inc.		2,850,000		30.0		2,672		—			—		—
Daehan Kanggun BcN Co., Ltd.		1,461,486		29.0		7,307		7,262			7,262		7,272
SK Telecom Europe Limited		690,000		100.0		1,286	1,286		(Note d)		1,286		1,286
SK Fans Co., Limited		—		51.0		1,125	1,125		(Note e)		1,125		—
SK Telecom Smart City Management Co., Ltd.		—		60.0		1,709	1,709		(Note e)		1,709		—
Service Ace Co., Ltd.		4,385,400		100.0		21,927	21,927		(Note e)		21,927		—
Service Top Co., Ltd.		2,856,200		100.0		14,281	14,281		(Note e)		14,281		—
Network O&S Co., Ltd.		3,000,000		100.0		15,000	15,000		(Note e)		15,000		—
YTK Investment Ltd.		—		100.0		28,000	28,000		(Note e)		28,000		—


					W	3,907,606				W	3,250,019	W	2,680,872

(Note a)		The Company acquired 57,647,058 shares of HanaSK Card Co., Ltd. during the six months ended June 30, 2010. As a result, the Company holds 49.0% ownership in HanaSK Card Co., Ltd.

(Note b)		During the six months ended June 30, 2010, the Company made an additional investment of W80,000 million, W4,656 million and W28,036 million in PS&Marketing Corporation, SK Telecom China Holdings Co., Ltd. and SKT Americas, Inc., respectively.

(Note c)		On July 15, 2010, the Company disposed of its 10,930,844 shares of IHQ, Inc for W1,700 per share.

(Note d)		As allowed under Korean GAAP, investments in equity securities of SK Telecom Europe Limited and others were stated at their acquisition cost instead of amount valued using the equity method of accounting, as changes in the Company’s portion of stockholders’ equity of such investees were not expected to be material.

(Note e)		During the six months ended June 30, 2010, the Company incorporated SK Fans Co., Limited, SK Telecom Smart City management Co., Ltd., Service Ace Co., Ltd., Service Top Co., Ltd., Network O&S Co., Ltd. and YTK Investment Ltd.

Details of the changes in investments in affiliates accounted for using the equity method for the six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):


		For the six months ended June 30, 2010
									Equity in
									other com-					Equity
						Equity in			prehen-					method in						Other
		Beginning		Acquisi		earnings			sive			Capital		capital			Dividend			increase		Ending
		balance		-tion		(losses)			income			Surplus		adjustments			received			(decrease)		balance

SK Broadband Co., Ltd.	(Note a)	W	1,242,247	W	—		(W44,953	)		(W2,761	)	W	—	W	136		W	—		W	—	W	1,194,669
SK Communications Co., Ltd.	(Note a)		148,831		—		3,661			(357	)		907		(436	)		—			—		152,606
SK Telink Co., Ltd.	(Notes a and c)		133,029		—		16,148			27			—		—			(7,363	)		—		141,841
SK Marketing & Company Co., Ltd.	(Note a)		112,531		—		1,095			(47	)		—		—			—			—		113,579
HanaSK Card Co., Ltd.	(Note a)		—		402,476		(6,101	)		(15	)		—		—			—			—		396,360
PS&Marketing Corporation	(Note a)		133,934		80,000		(11,593	)		—			—		—			—			—		202,341
SK Wyverns Baseball Club Co., Ltd.	(Note b)		—		—		(221	)		—			—		—			—			221		—
Paxnet Co., Ltd.	(Notes a and c		30,611		—		(357	)		—			—		—			(1,079	)		—		29,175
F&U Credit information Co., Ltd.	(Note b)		4,481		—		(106	)		—			—		—			—			—		4,375
TU Media Corp.	(Note a)		11,710		—		(470	)		—			—		—			—			—		11,240
IHQ, Inc.	(Note a)		20,178		—		(2,867	)		(16	)		—		—			—			—		17,295
Ntreev Soft Co., Ltd.	(Note a)		7,708		—		1,764			(2	)		—		—			—			—		9,470
Commerce Planet Co., Ltd.	(Note b)		139		—		221			—			—		—			—			—		360
Loen Entertainment, Inc.	(Notes a and c		40,234		—		6,215			226			—		—			(626	)		—		46,049
Harex Info Tech, Inc.	(Note b)		62		—		—			—			—		—			—			—		62
SK Mobile	(Note b)		2,111		—		—			—			—		—			—			—		2,111
SKT Vietnam PTE Ltd.	(Note a)		26,264		—		(818	)		(906	)		—		—			—			—		24,540
Skytel Co., Ltd.	(Notes a and c)		14,958		—		1,862			1,772			—		—			(444	)		—		18,148
SK China Company Ltd.	(Note b)		3,919		—		—			—			—		—			—			—		3,919
SK Telecom China Co., Ltd.	(Note b)		9,443		—		—			—			—		—			—			—		9,443
TR Entertainment	(Note b)		7,560		—		(806	)		—			—		—			—			—		6,754
ULand Company Ltd.	(Note a)		3,819		—		(138	)		148			—		—			—			—		3,829
SKT Americas, Inc.	(Note a)		26,131		28,036		(7,497	)		3,384			—		—			—			—		50,054
SK Telecom China Holding Co., Ltd.	(Note a)		23,396		4,656		2,493			(928	)		—		—			—			—		29,617
SK USA, Inc.	(Note b)		5,498		—		—			—			—		—			—			—		5,498
Helio, Inc.	(Note b)		12		—		—			—			—		—			—			—		12
Korea IT Fund	(Note a)		220,957		—		6,061			954			—		—			—			—		227,972
1st Music Investment Fund of SK-PVC	(Note b)		4,695		—		—			—			—		—			—			—		4,695
2nd Music Investment Fund of SK-PVC	(Note b)		8,036		—		(549	)		—			—		—			—			—		7,487
SK-KTB Music Investment Fund	(Note a)		13,538		—		431			925			—		—			—			—		14,894
Stonebridge Cinema Fund	(Note a)		8,255		—		(62	)		—			—		—			—			—		8,193
Michigan Global Cinema Fund	(Note b)		3,651		—		(66	)		—			—		—			—			—		3,585
3rd Fund of Isu Entertainment	(Note b)		1,635		—		—			—			—		—			—			—		1,635
SK Telecom Advanced Tech & Service Center	(Note b)		9,536		—		—			—			—		—			—			—		9,536
Cyworld China Holdings	(Note b)		—		—		(11	)		11			—		—			—			—		—
Magic Tech Network Co., Ltd.	(Note b)		5,267		—		(618	)		—			—		—			—			—		4,649
SK Telecom Global Investment B.V.	(Note a)		41,013		—		(8	)		1,499			—		—			—			—		42,504
SKY Property Mgmt. Ltd.	(Note a)		264,850		—		838			14,167			—		—			—			—		279,855
Wave City Development Co. Ltd.	(Note b)		1,532		—		—			—			—		—			—			—		1,532
Prmaxsoftware Tech. Co., Ltd.	(Note b)		2,432		—		—			—			—		—			—			—		2,432
Benex Digital Cultural Contents Fund	(Note b)		4,912		—		(218	)		—			—		—			—			—		4,694
Benex Focus Limited Partnership II	(Note a)		19,782		—		(273	)		—			—		—			—			—		19,509


		For the six months ended June 30, 2010
									Equity in
									other com-						Equity
						Equity in			prehen-						method in						Other
		Beginning		Acquisi		earnings			sive			Capital			capital			Dividend			increase		Ending
		balance		-tion		(losses)			income			Surplus			adjustments			received			(decrease)		balance

K-net Culture & Contents Venture Fund	(Note b)		11,157		—		(312	)		—			—			—			—			—		10,845
Open Innovation Fund	(Note a)		19,938		—		(195	)		—			—			—			—			—		19,743
UniSK	(Note b)		4,247		—		—			—			—			—			—			—		4,247
SK Beijing Industrial Development Co., Limited	(Note b)		18,009		—		—			—			—			—			—			—		18,009
Cyworld Japan	(Note b)		66		—		—			—			—			—			—			—		66
Cyworld Inc.	(Note b)		—		—		—			—			—			—			—			—		—
Daehan Kanggun BcN Co., Ltd.	(Note b)		7,272		—		(10	)		—			—			—			—			—		7,262
SK Telecom Europe Limited	(Note b)		1,286		—		—			—			—			—			—			—		1,286
SK Fans Co., Limited	(Note b)		—		1,125		—			—			—			—			—			—		1,125
SK Telecom Smart City Management Co., Ltd.	(Note b)		—		1,709		—			—			—			—			—			—		1,709
Service Ace Co., Ltd.	(Note b)		—		21,927		—			—			—			—			—			—		21,927
Service Top Co., Ltd.	(Note b)		—		14,281		—			—			—			—			—			—		14,281
Network O&S Co., Ltd.	(Note b)		—		15,000		—			—			—			—			—			—		15,000
YTK Investment, Ltd.	(Note b)		—		28,000		—			—			—			—			—			—		28,000

Total		W	2,680,872		597,210		(37,460	)		18,081			907			(300	)		(9,512	)		221	W	3,250,019

Less: three months ended March 31, 2010					420,584		(33,338	)		(9,178	)		(62	)		679			(9,016	)		221

Three months ended June 30, 2010				W	176,626		(W4,122	)	W	27,259		W	969			(W979	)		(W496	)	W	—

(Note a)

Investments were recorded using the equity method of accounting based on unaudited and unreviewed financial statements as of and for the six months ended June 30, 2010. 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)		examined whether the major transactions specifically identified by the Company, and 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, 2009 as information as of June 30, 2010 was not available. The expected change in the Company’s portion of stockholders’ equity of the investee for the six months ended June 30, 2010 is immaterial.

(Note c)		The Company received dividends from SK Telink Co., Ltd., Paxnet Co., Ltd., Loen Entertainment, Inc., and Skytel Co., Ltd. and the corresponding amounts were deducted from the carrying amount of equity securities accounted for using the equity method.


		For the six months ended June 30, 2009
									Equity in						Equity			Equity
						Equity in			other com-						method in			method in						Other
		Beginning		Acquisi		earnings			prehensive			Capital			retained			capital			Dividend			increase			Ending
		balance		-tion		(losses)			income			surplus			earnings			adjustments			received			(decrease)			balance

SK Broadband Co., Ltd.	(Note a)	W	1,146,736	W	—		(W36,415	)	W	662		W	—			(W56,043	)		(W4,999	)	W	—		W	—		W	1,049,941
SK Communications Co., Ltd.	(Note a)		147,392		—		(7,273	)		(18,629	)		2,039			—			18,202			—			—			141,731
SK Telink Co., Ltd.	(Notes a and c)		112,358		—		13,353			270			—			—			—			(6,325	)		—			119,656
SK Marketing & Company Co., Ltd.	(Note a)		101,345		—		7,082			(4,877	)		—			—			—			—			—			103,550
PS&Marketing Corporation	(Note a)		—		150,000		(9,628	)		—			—			—			—			—			—			140,372
SK Wyverns Baseball Club Co., Ltd.	(Note b)		—		—		(1	)		—			—			—			—			—			—			—
Paxnet Co., Ltd.	(Notes a and c)		30,086		—		773			(281	)		—			—			281			(492	)		—			30,367
F&U Credit Information Co., Ltd.	(Note b)		4,244		—		(87	)		—			—			—			—			—			—			4,157
TU Media Corp.	(Note a)		14,847		—		(2,254	)		36			(36	)		—			—			—			—			12,593
Aircross Co., Ltd.	(Note d)		7,289		—		—			—			—			—			—			—			(7,289	)		—
IHQ, Inc.	(Note a)		26,957		—		(3,819	)		(5,103	)		—			—			5,970			—			—			24,005
Ntreev Soft Co., Ltd.	(Note a)		9,575		—		(637	)		8			—			—			49			—			—			8,995
Commerce Planet Co., Ltd.	(Note b)		1,535		—		(428	)		—			—			—			—			—			—			1,107
Loen Entertainment, Inc.	(Note a)		35,895		—		421			2,989			—			—			(322	)		—			—			38,983
Harex Info Tech, Inc.	(Note b)		598		—		(177	)		—			—			—			—			—			—			421
SK Mobile	(Note b)		2,111		—		—			—			—			—			—			—			—			2,111
SKT Vietnam PTE Ltd.	(Note a)		112,160		—		(13,683	)		2,675			—			—			—			—			—			101,152
Skytel Co., Ltd.	(Note a)		12,381		—		3,709			(1,355	)		—			—			—			—			—			14,735
SK China Company Ltd.	(Note b)		3,657		—		(176	)		(11	)		—			—			—			—			—			3,470
SK Telecom China Co., Ltd.	(Note b)		7,157		—		5			3,096			—			—			—			—			—			10,258
TR Entertainment	(Note a)		9,626		—		(932	)		65			—			—			—			—			—			8,759
ULand Company Ltd.	(Note a)		5,401		—		(935	)		105			—			—			—			—			—			4,571
Virgin Mobile USA, Inc.	(Note a)		62,096		—		(9,216	)		(154	)		—			—			—			—			—			52,726
SKT Americas, Inc.	(Note a)		36,126		—		(4,629	)		(77	)		—			—			—			—			—			31,420
SK Telecom China Holding Co., Ltd.	(Note a)		30,780		6,302		(3,518	)		521			—			—			—			—			—			34,085
SK USA, Inc.	(Note b)		5,041		—		182			26			—			—			—			—			—			5,249
Helio, Inc.	(Note b)		116		—		—			(26	)		—			—			26			—			—			116
Korea IT Fund	(Note a)		210,725		—		(734	)		175			—			—			—			—			—			210,166
1st Music Investment Fund of SK-PVC	(Note b)		5,688		—		(1,181	)		153			—			—			—			—			—			4,660
2nd Music Investment Fund of SK-PVC	(Note b)		8,441		—		(547	)		—			—			—			—			—			—			7,894
SK-KTB Music Investment Fund	(Note a)		13,954		—		(600	)		133			—			—			1			—			—			13,488
IMM Cinema Fund	(Note a)		8,435		—		(194	)		—			—			—			—			—			—			8,241
Michigan Global Cinema Fund	(Note b)		3,577		—		—			—			—			—			—			—			—			3,577
3rd Fund of Isu Entertainment	(Note b)		1,568		—		—			—			—			—			—			—			—			1,568
SK Telecom Advanced Tech & Service Center	(Note b)		10,053		—		(194	)		(31	)		—			—			—			—			—			9,828
Cyworld China Holdings	(Note b)		2,117		—		179			(193	)		—			—			(928	)		—			—			1,175
Magic Tech Network	(Note b)		7,725		—		(618	)		—			—			—			—			—			—			7,107
SK Telecom Global Investment B.V.	(Note a)		31,866		7,030		17			(239	)		—			—			—			—			—			38,674
SKY Property Mgmt. Ltd.	(Note a)		287,405		—		(487	)		7,154			—			—			—			—			—			294,072
Wave City Development Co. Ltd.	(Note b)		1,908		—		—			—			—			—			—			—			—			1,908
Prmaxsoftware Tech. Co., Ltd.	(Note b)		7,127		—		(345	)		—			—			—			—			—			—			6,782
Benex Digital Cultural Contents Fund	(Note b)		5,068		—		—			—			—			—			—			—			—			5,068
Benex Focus Limited Partnership II	(Note a)		20,089		—		(46	)		—			—			—			—			—			—			20,043
K-net Culture & Contents Venture Fund	(Note b)		5,856		—		—			—			—			—			—			—			—			5,856
Open Innovation Fund	(Note a)		20,044		—		11			—			—			—			—			—			—			20,055


Total		W	2,577,155		163,332		(73,022	)		(12,908	)		2,003			(56,043	)		18,280			(6,817	)		(7,289	)	W	2,604,692

Less: three months ended March 31, 2009					7,030		(36,800	)		16,418			1,758			(56,043	)		17,921			(6,817	)		(7,289	)

Three months ended June 30, 2009				W	156,302		(W36,222	)		(W29,326	)	W	245		W	—		W	359		W	—		W	—

(Note a)

Investments were recorded using the equity method of accounting based on unaudited and unreviewed financial statements as of and for the six months ended June 30, 2009. In order to examine 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)		examined whether the major transactions specifically identified by the Company, and public disclosures, were appropriately reflected in the unaudited and unreviewed financial statements

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

(Note b)		Investments in equity securities are carried using the equity method of accounting based on the financial statements as of December 31, 2008 as information as of June 30, 2009 was not available. The expected change in the Company’s portion of stockholders’ equity of the investee for the six months ended June 30, 2009 is immaterial.

(Note c)		The Company received dividends from SK Telink Co., Ltd. and Paxnet Co., Ltd., and the corresponding accounts were deducted from the carrying amount of equity method securities.

(note d)		Other decrease in investments in Aircross Co., Ltd. represents the collection of the Company’s investment resulting from the full liquidation of Aircross Co., Ltd.

Details of changes in the differences between the acquisition cost and net asset value of equity method investees at the acquisition date for the six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):


	For the six months ended June 30, 2010
	Beginning		Increase/					Ending
	balance		(Decrease)		Amortization			balance
SK Broadband Co., Ltd.	W	534,955	W	—		(W21,088	)	W	513,867
SK Communications Co., Ltd.		11,229		—		(446	)		10,783
HanaSK Card Co., Ltd.		—		70,690		(1,157	)		69,533
Paxnet Co., Ltd.		13,946		—		(536	)		13,410
F&U Credit information Co., Ltd.		461		—		(21	)		440
IHQ, Inc.		8,260		—		(1,377	)		6,883
Loen Entertainment, Inc.		408		—		(408	)		—
TR Entertainment		5,243		—		(807	)		4,436
Magic Tech Network Co., Ltd.		4,326		—		(618	)		3,708
Daehan Kanggun BcN Co., Ltd.		—		9		(9	)		—


Total	W	578,828		70,699		(26,467	)	W	623,060

Less: three months ended March 31, 2010				70,094		(13,634	)

Three months ended June 30, 2010			W	605		(W12,833	)


	For the six months ended June 30, 2009
	Beginning			Increase/					Ending
	balance			(decrease)		Amortization			balance
SK Broadband Co., Ltd.	W	534,051		W	—		(W5,062	)	W	528,989
SK Communications Co., Ltd.		12,122			—		(446	)		11,676
Paxnet Co., Ltd.		15,018			—		(536	)		14,482
F&U Credit Information Co., Ltd.		503			—		(11	)		492
IHQ, Inc.		13,767			—		(2,753	)		11,014
Ntreev Soft Co., Ltd.		595			—		(297	)		298
Loen Entertainment, Inc.		1,223			—		(408	)		815
Harex Info Tech, Inc.		351			—		(176	)		175
Skytel Co., Ltd.		(1,387	)		—		1,387			—
SK China Company Ltd.		106			—		(106	)		—
TR Entertainment		6,856			—		(807	)		6,049
Virgin mobile USA, Inc.		125,930			—		(13,256	)		112,674
Magic Tech Network		5,562			—		(618	)		4,944
Prmaxsoftware Tech. Co., Ltd.		691			—		(345	)		346


Total	W	715,388			—		(23,434	)	W	691,954

Less: three months ended March 31, 2009					—		(4,019	)

Three months ended June 30, 2009				W	—		(W19,415	)

Details of changes in unrealized inter-company gains incurred from sales of assets for the six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):


	For the six months ended June 30, 2010
	Beginning							Ending
	balance		Increase		Decrease			balance

SK Communications Co., Ltd.	W	128	W	—		(W128	)	W	—
SK China Company Ltd.		1,086		—		—			1,086


Total	W	1,214		—		(128	)	W	1,086

Less: three months ended March 31, 2010				—		(128	)
Three months ended June 30, 2010			W	—	W	—


	For the six months ended June 30, 2009
	Beginning							Ending
Subsidiary	balance		Increase		Decrease			balance

SK Communications Co., Ltd.	W	269	W	—		(W70	)	W	199
SK China Company Ltd.		1,086		—		—			1,086


Total	W	1,355		—		(70	)	W	1,285

Less: three months ended March 31, 2009				—		(35	)

Three months ended June 30, 2009			W	—		(W35	)

Details of market price of the equity securities accounted for using the equity method as of June 30, 2010 are as follows (In millions of Korean won, except for market price per share):


	Market price		Number of
	per share		shares owned by the
	(In Korean won)		Company		Market price
SK Broadband Co., Ltd.	W	6,010		149,638,354	W	899,327
SK Communications Co., Ltd.		20,100		28,029,945		563,402
IHQ, Inc.		875		14,960,784		13,091
Loen Entertainment, Inc.		5,300		16,054,812		85,091

The condensed financial information of the investees as of and for the six months ended June 30, 2010 is as follows (In millions of Korean won):


	Total		Total				Net
	assets		liabilities		Revenue		income (loss)
SK Broadband Co., Ltd.	W	3,045,030	W	1,698,519	W	1,001,483		(W48,158	)
SK Communications Co., Ltd.		302,477		83,153		112,288		4,353
SK Telink Co., Ltd.		233,362		77,096		156,810		20,061
SK Marketing & Company Co., Ltd.		645,337		418,179		189,652		8,529
HanaSK Card Co., Ltd.		2,283,037		1,616,043		219,729		243,318
PS&Marketing Corporation		364,797		162,456		320,509		(11,505	)
Paxnet Co., Ltd.		38,793		12,401		16,800		249
TU Media Corp.		235,813		210,358		63,383		(1,289	)
IHQ, Inc.		46,490		18,419		19,357		(2,212	)
Ntreev Soft Co., Ltd.		29,362		14,495		11,151		2,991
Loen Entertainment, Inc.		116,506		43,963		68,531		11,131
SKT Vietnam PTE Ltd.		49,212		15,742		120		(864	)
Skytel Co., Ltd.		69,667		7,821		15,007		7,036
ULand Company Limited		8,196		2,738		1,424		(197	)
SKT Americas, Inc		52,751		2,697		9,216		(6,671	)
SK Telecom China Holdings Co., Ltd.		33,382		3,765		11,961		1,103
Korea IT Fund		359,956		—		15,519		11,542
SKT-KTB Music Investment Fund		20,132		53		849		581
Stonebridge Cinema Fund		18,071		115		71		27
SK Telecom Global Investment B.V.		42,569		65		54		(8	)
SKY Property Mgmt. Ltd.		581,952		115,527		19,921		1,628
2nd Benex Focus investment Fund		29,265		1		180		(409	)
K-net Culture & Contents Venture Fund		18,386		4		110		(528	)
Open Innovation Fund		20,039		—		198		(200	)

LOANS TO EMPLOYEES

Short-term and long-term loans to employees as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won):


	June 30, 2010						December 31,
	Short-term		Long-term		Total		2009

Loans to employees’ stock ownership Association (Note)	W	12,033	W	38,642	W	50,675	W	58,198
Loans to employees for housing and other		17		2		19		45


Total	W	12,050	W	38,644	W	50,694	W	58,243

(Note)

The Company loaned the amount above to Employees’ Stock Ownership Association to help fund employees’ acquisition of the Company’s treasury stocks. The loan will be repaid over a period of five years, beginning on the second anniversary of each loan date and will expire on December 25, 2014.

PROPERTY AND EQUIPMENT

Property and equipment as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won):


	Useful lives
	(years)		June 30, 2010			December 31, 2009

Land		—	W	409,916		W	416,732
Buildings and structures		30,15		1,575,145			1,577,119
Machinery		6		13,591,129			14,236,456
Vehicles		4		52,543			54,189
Other		4		1,091,037			1,004,183
Construction in progress		—		452,129			336,835


				17,171,899			17,625,514
Less: accumulated depreciation				(12,346,019	)		(12,428,993	)


Property and equipment, net			W	4,825,880		W	5,196,521

Details of change in property and equipment for the six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):


	For the six months ended June 30, 2010
	Beginning													Ending
	balance		Acquisition		Disposal			Transfer			Depreciation			balance

Land	W	416,732	W	104		(W6,920	)	W	—		W	—		W	409,916
Buildings and structures		1,011,127		85		(1,231	)		228			(35,327	)		974,882
Machinery		3,101,103		6,361		(3,386	)		156,125			(655,040	)		2,605,163
Vehicles		34,249		174		(102	)		—			(1,980	)		32,341
Other		296,476		251,208		(1,119	)		(152,166	)		(42,950	)		351,449
Construction in progress		336,834		156,393		(58	)		(41,040	)		—			452,129


Total	W	5,196,521	W	414,325		(W12,816	)		(W36,853	)		(W735,297	)	W	4,825,880


	For the six months ended June 30, 2009
	Beginning													Ending
	balance		Acquisition		Disposal			Transfer			Depreciation			balance

Land	W	447,088	W	8,431		(W70	)	W	518		W	—		W	455,967
Buildings and structures		1,012,226		940		—			151			(28,241	)		985,076
Machinery		2,594,086		7,513		(1,629	)		408,653			(578,833	)		2,429,790
Vehicles		2,035		43		(41	)		—			(556	)		1,481
Other		361,205		500,215		(15,327	)		(479,935	)		(46,740	)		319,418
Construction in progress		281,574		130,510		—			14,302			—			426,386


Total	W	4,698,214	W	647,652		(W17,067	)		(W56,311	)		(W654,370	)	W	4,618,118

7.		INTANGIBLE ASSETS

		Intangible assets as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won):


	June 30, 2010							December 31, 2009
	Acquisition		Accumulated			Carrying		Acquisition		Accumulated			Carrying
	cost		amortization			amounts		cost		amortization			amounts

Goodwill	W	2,340,495		(W1,096,814	)	W	1,243,681	W	2,340,495		(W1,032,073	)	W	1,308,422
Frequency use rights		1,385,120		(716,146	)		668,974		1,385,120		(657,880	)		727,240
Software development costs		192,040		(182,124	)		9,916		192,040		(179,512	)		12,528
Computer software		1,427,487		(913,577	)		513,910		1,370,128		(807,854	)		562,274
Other		151,944		(97,270	)		54,674		148,947		(93,475	)		55,472


	W	5,497,086		(W3,005,931	)	W	2,491,155	W	5,436,730		(W2,770,794	)	W	2,665,936

Details of changes in intangible assets for the six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):


	For the six months ended June 30, 2010
	Beginning												Ending
	balance		Increase		Decrease			Transfer		Amortization			balance

Goodwill	W	1,308,422	W	—	W	—		W	—		(W64,741	)	W	1,243,681
Frequency use rights		727,240		—		—			—		(58,266	)		668,974
Software development costs		12,528		—		—			—		(2,612	)		9,916
Computer software		562,274		3,273		(4,458	)		83,407		(130,586	)		513,910
Other		55,472		3,153		(12	)		2,044		(5,983	)		54,674


Total	W	2,665,936	W	6,426		(W4,470	)	W	85,451		(W262,188	)	W	2,491,155


	For the six months ended June 30, 2009
	Beginning												Ending
	balance		Increase		Decrease			Transfer		Amortization			balance

Goodwill	W	1,439,366	W	—	W	—		W	—		(W64,940	)	W	1,374,426
Frequency use rights		843,771		—		—			—		(58,266	)		785,505
Software development costs		13,489		—		—			—		(2,277	)		11,212
Computer software		588,254		1,804		(138	)		56,563		(106,180	)		540,303
Other		56,712		4,991		(87	)		50		(5,244	)		56,422


Total	W	2,941,592	W	6,795		(W225	)	W	56,613		(W236,907	)	W	2,767,868

The book value as of June 30, 2010 and residual useful lives of major intangible assets are as follows (In millions of Korean won):

Amount

Description

Residual useful lives

Goodwill

1,241,905

Goodwill related to acquisition
of Shinsegi Telecomm, Inc.

9 years
and 9 months

IMT license

629,207

Frequency use rights relating to
W-CDMA Service

(Note a)

WiBro license

35,512

WiBro Service

(Note b)

DMB license

4,255

DMB Service

6 years

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

		In addition, the Company purchased W-CDMA frequency use right for W102,432 million during May, 2010, which is recognized as construction in progress and will be amortized starting from its expected usable period in October 2010.

(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 June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won and thousands of Foreign Currency):


	Maturity	Annual interest		June			December
	Year	rate (%)		30, 2010			31, 2009

Domestic general bonds	2010		4.0	W	—		W	140,000
”	2010		6.77		50,000			50,000
”	2011		3.0		200,000			200,000
”	2013		4.0		200,000			200,000
”	2013		6.92		250,000			250,000
”	2014		5.0		200,000			200,000
”	2015		5.0		200,000			200,000
”	2016		5.0		200,000			200,000
”	2016		5.54		40,000			40,000
”	2016		5.92		230,000			230,000
”	2018		5.0		200,000			200,000
Dollar denominated bonds (US$300,000)	2011		4.25		363,090			350,280
Dollar denominated bonds (US$400,000)	2027		6.63		484,120			467,040
Yen denominated bonds		3-month Euro Yen
(JPY 12,500,000)	2012	LIBOR rate +0.55 (Note a)			170,570			157,852
Yen denominated bonds		3-month Euro Yen
(JPY 5,000,000)	2012	TIBOR rate +2.5 (Note b)			68,228			63,141
Yen denominated bonds		3-month Euro Yen
(JPY 3,000,000)	2012	LIBOR rate +2.5 (Note a)			40,937			37,885
Convertible bonds (US$332,528)	2014		1.75		437,673			437,673
Floating rate notes		3-month
(US$150,000,000)	2010	LIBOR rate +3.05 (Note c)			181,545			175,140
Floating rate notes		3-month
(U S$220,000,000)	2012	LIBOR rate +3.15 (Note c)			266,266			256,872


Total					3,782,429			3,855,883
Less discounts on bonds					(55,149	)		(61,227	)
Less conversion right adjustments					(73,160	)		(81,235	)


Net					3,654,120			3,713,421
Less portion due within one year					(593,779	)		(364,205	)


Long-term portion				W	3,060,341		W	3,349,216

(Note a)		The 3-months Euro Yen LIBOR rate as of June 30, 2010 is 0.24%.

(Note b)		The 3-months Euro Yen TIBOR rate as of June 30, 2010 is 0.38%.

(Note c)		The 3-months LIBOR rate as of June 30, 2010 is 0.53%.

All of the above bonds will be paid in full at maturity.

		On April 7, 2009, the Company issued convertible bonds with a maturity of five years in the principal amount of US$332,528,000 for US$326,397,463 with an initial conversion price of W221,370 per share of the Company’s common stock, which was greater than market value at the date of issuance. The Company may redeem the principal amount after 3 years from the issuance date if the market price exceeds 130% of the conversion price during a predetermined period. On the other hand, the bond holders may redeem their notes at 100% of the principal amount on April 7, 2012 (3 years from the issuance date). The conversion right may be exercised during the period from May 18, 2009 to March 24, 2014 and the number of common shares to be converted as of June 30, 2010 is 2,078,055 shares.

		Conversion of notes to common shares may be prohibited under the Telecommunications Law or other legal restrictions which restrains foreign governments, individuals and entities from owning more than 49% of the Company’s voting stock, if this 49% ownership limitation is violated due to the exercise of conversion rights. In this case, the Company will pay a bond holder as cash settlement determined at the average price of one day after a holder exercises its conversion right or the weighted average price for the following five or twenty business days. The Company intends to sell treasury shares held in trust by the Company that corresponds to the number of shares of common stock that would have been delivered in the absence of the 49% foreign shareholding restrictions. Unless either previously redeemed or converted, the notes are redeemable at 100% of the principal amount at maturity.

		During the six months ended June 30, 2010, no conversion was made.

LONG-TERM BORROWINGS

Long-term borrowings as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won and thousands of U.S. dollars):

Final

Annual interest

June 30,

December 31,

Lender

maturity year

rate (%) (Note)

2010

2009

Long-term floating rate discount bill

Shinhan Bank

June 29, 2011

91 days CD yield + 0.25%

200,000

Long-term floating rate borrowings

KDB

July 28, 2011

91 days CD yield + 1.02%

100,000

”

Citibank

July 29, 2011

91 days CD yield + 1.20%

100,000

”

Nonghyup

July 30, 2011

91 days CD yield + 1.30%

100,000

”

Hana Bank

July 31, 2011

91 days CD yield + 1.50%

150,000

”

Nonghyup

August 12, 2011

91 days CD yield + 1.50%

50,000

”

Calyon Bank

October 10, 2013

6M LIBOR + 0.29%

US$

50,000

US$

50,000

”

DBS Bank

October 10, 2013

6M LIBOR + 0.29%

US$

25,000

US$

25,000

”

SMBC

October 10, 2013

6M LIBOR + 0.29%

US$

25,000

US$

25,000

700,000

Total

US$

100,000

US$

100,000

Equivalent in Korean won

821,030

816,760

Less current portion

(200,000

)

—

Long-term borrowings

621,030

816,760

(Note)

At June 30, 2010, the 91 days CD yield and the 6M LIBOR rate are 2.46% and 0.75%, respectively.

10.

CAPITAL STOCK AND CAPITAL SURPLUS

The Company’s capital stock consists entirely of common stock with a par value of W500. The number of authorized and issued shares as of June 30, 2010 and December 31, 2009 are as follows:


	June 30, 2010		December 31, 2009

Authorized shares		220,000,000		220,000,000
Issued shares		80,745,711		80,745,711
Outstanding shares, net of treasury stock		72,344,999		72,344,999

Significant changes in capital stock and capital surplus for the six months ended June 30, 2010 and for the year ended December 31, 2009 are as follows (In millions of Korean won except for share data):

Number of shares

Additional paid in

issued (Note)

Capital stock

capital

For the year ended December 31, 2009

80,745,711

44,639

2,915,887

For the six months ended June 30, 2010

80,745,711

44,639

2,915,887

(Note)

During the year ended December 31, 2003, 2006 and 2009, the Company retired 7,002,235 shares, 1,083,000 shares and 448,000 shares, respectively, and reduced retained earnings before appropriations in accordance with Korean Commercial Laws. As a result, the total par value of outstanding capital stock does not agree to the capital balance of capital stock. In addition, there are no changes in capital stock for the six months ended June 30, 2010 and the year ended December 31, 2009.

11.

INCOME TAX

Details of income tax expense

Income tax expense for the three months and the six months ended June 30, 2010 and 2009 consists of the following (In millions of Korean won):


	For six months ended June 30,
	2010			2009

Current	W	271,221		W	221,736
Changes in net deferred tax liabilities (note a)		(54,608	)		(22,021	)


Income tax expense		216,613			199,715
Less three months ended March 31		(87,198	)		(106,548	)


Three months ended June 30	W	129,415		W	93,167

(Note a)

Changes in net deferred tax liabilities for the six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):


	For six months ended June 30,
	2010			2009

Ending balance of net deferred tax liabilities (assets)		(W90,250	)	W	307,549
Beginning balance of net deferred tax liabilities		(16,033	)		(257,939	)
Adjustment to the beginning net deferred tax liabilities based on tax return filed		18,479			5,319
Tax effect of temporary differences charged or credited directly to related components of stockholders’ equity		33,196			(76,950	)

		(W54,608	)		(W22,021	)

An explanation of the relationship between income tax expense and accounting income before income tax expense for the six months ended June 30, 2010 and 2009 is as follows (In millions of Korean won):


	For six months ended June 30,
	2010			2009

Income before income tax	W	902,339		W	828,107
Income tax expense at statutory income tax rate (12.1% of taxable income less than W200 million and 24.2% of taxable income exceeding W200 million)		218,342			200,377
Differences (Note)		(1,729	)		(662	)


Income tax expense	W	216,613		W	199,715


Effective tax rates		24.01	%		24.12	%

(Note)

The differences between income tax computed using the statutory corporate income tax rates and the recorded income tax for the six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):


	For six months ended June 30,
	2010			2009

Permanent difference	W	20,427		W	21,861
Changes in deferred income tax assets (liabilities) recognized related to equity method investment securities		2,991			19,008
Tax credit for investment		(20,086	)		(40,693	)
Other tax credits		(1,549	)		(1,794	)
Sur tax on exempted income		4,030			7,412
Tax refund for prior periods		(7,542	)		(6,456	)


		(W1,729	)		(W662	)

	12.		COMPREHENSIVE INCOME

			Details of comprehensive income for the three months and six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):

			For the six months ended June 30, 2010


	For the						For the
	three months ended						six months ended
	Profit and loss						Profit and loss
	effect			Tax effect			effect			Tax effect

Net income	W	363,971					W	685,726
Other comprehensive income (loss):
Unrealized loss on valuation of long-term investment securities, net		(1,361	)		(W2,553	)		(142,505	)	W	34,978
Equity in other comprehensive income of affiliates, net		26,088			(1,172	)		17,370			(711	)
Loss on valuation of currency swap, net		2,266			(635	)		894			(422	)
Loss on valuation of interest rate swap, net		2,311			(683	)		356			(101	)

Sub-total		29,304			(W5,043	)		(123,885	)	W	33,744


Comprehensive income	W	393,275					W	561,841


			For the six months ended June 30, 2009


	For the						For the
	three months ended						six months ended
	Profit and loss						Profit and loss
	effect			Tax effect			effect			Tax effect

Net income	W	311,643					W	628,392
Other comprehensive income (loss):
Unrealized gain on valuation of long-term investment securities, net		407,946			(W116,662	)		189,697			(W53,183	)
Equity in other comprehensive income of affiliates, net		(23,077	)		6,249			(16,101	)		(3,192	)
Gain (loss) on valuation of currency swap, net		18,987			(5,355	)		(2,394	)		675
Loss on valuation of interest swap, net		5,760			(1,625	)		7,424			(2,094	)

Sub total		409,616			(W117,393	)		178,626			(W57,794	)


Comprehensive income	W	721,259					W	807,018

13.

NET INCOME PER SHARE

The Company’s net income per share amounts for the three months and six months ended June 30, 2010 and 2009 is computed as follows (In millions of Korean won, except for per share income per share):

Net income per share


	For the				For the
	three months ended				six months ended
	June 30,		June 30,		June 30,		June 30,
	2010		2009		2010		2009
Net income	W	363,971	W	311,643	W	685,726	W	628,392
Weighted average number of common shares outstanding		72,344,999		72,345,003		72,344,999		72,348,552

Net income per share	W	5,031	W	4,308	W	9,479	W	8,686

Net income and ordinary income per share for the year ended December 31, 2009 is W17,808 and net income per share for the three months ended March 31, 2010 and 2009 is W4,448 and W4,378, respectively.

The weighted average numbers of common shares outstanding for the three months and six months ended June 30, 2010 and 2009 are calculated as follows:


	Number of			Weighted		Weighted
	shares			number of days		number of shares
For the three months ended June 30, 2010
Outstanding common stocks at January 1, 2010		80,745,711			91 / 91		80,745,711
Treasury stocks at January 1, 2010		(8,400,712	)		91 / 91		(8,400,712	)

Total		72,344,999					72,344,999

For the six months ended June 30, 2010
Outstanding common stocks at January 1, 2010		80,745,711			181 / 181		80,745,711
Treasury stocks at January 1, 2010		(8,400,712	)		181 / 181		(8,400,712	)

Total		72,344,999					72,344,999


	Number of			Weighted		Weighted
	shares			number of days		number of shares
For the three months ended June 30, 2009
Outstanding common stocks at January 1, 2009		81,193,711			91 / 91		81,193,711
Treasury stocks at January 1, 2009		(8,707,696	)		91 / 91		(8,707,696	)
Acquisition of treasury stock		(141,012	)		91 / 91		(141,012	)

Total		72,345,003					72,345,003

For the six months ended June 30, 2009
Outstanding common stocks at January 1, 2009		81,193,711			181 / 181		81,193,711
Treasury stocks at January 1, 2009		(8,707,696	)		181 / 181		(8,707,696	)
Acquisition of treasury stock		(141,012	)	(note)			(137,463	)

Total		72,345,003					72,348,552

(Note)

The Company acquired treasury stocks on various dates, and the weighted number of shares was calculated considering such various transaction dates:

Diluted net income per share amounts for the three months and six months ended June 30, 2010 and 2009 is computed as follows (In millions of won, except for share data):

Diluted net income per share


	For the				For the
	three months ended				six months ended
	June 30,		June 30,		June 30,		June 30,
	2010		2009		2010		2009

Adjusted net income	W	368,218	W	317,733	W	694,842	W	637,294
Adjusted weighted average number of common shares outstanding		74,423,054		75,050,417		74,423,054		74,390,846


Diluted net income per share	W	4,947	W	4,234	W	9,336	W	8,567

Diluted net income per share for the year ended December 31, 2009 was W17,599 and diluted net income per share for the three months ended March 31, 2010 and 2009 is W4,389 and W4,335, respectively.

Adjusted net income per share and the adjusted weighted average number of common shares outstanding for the three months and six months ended June 30, 2010 and 2009 are calculated as follows:


	For the				For the
	three months ended				six months ended
	June 30,		June 30,		June 30,		June 30,
	2010		2009		2010		2009
Net income	W	363,971	W	311,643	W	685,726	W	628,392
Effect of convertible bonds (Note)		4,247		6,090		9,116		8,902

Adjusted net income	W	368,218	W	317,733	W	694,842	W	637,294


Weighted average number of common shares outstanding		72,344,999		72,345,003		72,344,999		72,348,552
Effect of exchangeable bonds (Note)		2,078,055		2,705,414		2,078,055		2,042,294

Adjusted weighted average number of common shares outstanding		74,423,054		75,050,417		74,423,054		74,390,846

(Note)

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

14.

RESTRICTED CASH AND CASH EQUIVALENTS

As of June 30, 2010, the Company has guarantee deposits restricted for checking accounts totaling W19 million and deposits restricted for a charitable trust for small businesses in

cooperation with SK Group amounting to W50,000 million of which due date is June 2, 2011 and for the public amounting to W6,500 million of which due date is May 4, 2011.

15.

RELATED PARTY TRANSACTIONS

As of June 30, 2010 and December 31, 2010, the parent company and subsidiaries of the Company are as follows:

a. Holding company and subsidiaries


		Ownership
Type	Company	percentage (%)			Types of business
Ultimate parent company	SK C&C Co., Ltd.		31.8	(Note a)	Information technology and software production
Parent company	SK Holdings Co., Ltd.		23.2	(Note b)	Holding company
Subsidiary	SK Broadband Co., Ltd.		50.6		Internet website services and telecommunication service
”	SK Communications Co., Ltd.		64.8		Internet website services
”	SK Telink Co., Ltd.		90.8		Telecommunication service
”	PS&Marketing Corporation		100.0		Retail
”	PAXNet Co., Ltd.		59.7		Internet website services
”	F&U Credit Information Co., Ltd.		50.0		Credit and collection services
”	TU Media Corp.		44.2		Digital multimedia broadcasting service
”	IHQ, Inc.		37.1		Entertainment management
”	Ntreev Soft Co., Ltd.		63.7		Game software production
”	Commerce Planet Co., Ltd.		100.0		Cosmetic wholesale
”	Loen Entertainment, Inc.		63.5		Release of music disc
”	SKT Vietnam PTE Ltd.		73.3		Telecommunication service
”	SKT Americas, Inc.		100.0		Telecommunication service
”	SK Telecom China Holdings		100.0		Equity investment (Holding company)
”	SK-KTB Music Investment Fund		74.2		Investment association
”	Stonebridge Cinema Fund		45.6		Investment association
”	SK Telecom Global Investment B.V.		100.0		Equity investment
”	SKY Property Mgmt. Ltd.		60.0		Equity investment
”	Benex Digital Cultural Contents Fund		19.9		Investment association
”	2^nd Benex Focus Investment Fund		66.7		Investment association
”	K-net Culture & Contents Venture Fund		59.0		Investment association
”	Open Innovation Fund		98.5		Investment association
”	Service Ace Co., Ltd.		100.0		Customer center management service
”	Service Top Co., Ltd.		100.0		Customer center management service
”	Network O&S Co., Ltd.		100.0		Base station maintenance service
”	YTK Investment, Ltd.		100.0		Investment
”	SK I-Media Co., Ltd.		100.0	(Note c)	Game software production
”	Broadband media Co., Ltd.		100.0	(Note c)	Multimedia TV portal service
”	Broadband CS Co., Ltd.		100.0	(Note c)	Customer Q&A and Service
”	Benex Movie Investment Fund		46.6	(Note c)	Investment association
”	Shenzhen E-eye High Tech Co., Ltd.		65.5	(Note c)	GPS manufacturing and selling

(Note a)		The ownership percentage represents ultimate parent Company’s ownership over the parent company

(Note b)		The ownership percentage represents parent company’s ownership over the Company.

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

b. Transactions and balances with related companies

Significant related party transactions for the three months and six months ended June 30, 2010 and 2009, and account balances as of June 30, 2010 and December 31, 2009 are as follows (In millions of Korean won):

b-(1) Transactions


	For three months ended June 30, 2010						For six months ended June 30, 2010
	Purchases of		Commissions		Commissions		Purchases of		Commissions		Commissions
	property and		paid and		earned and		property and		paid and		earned and
	equipment		other expenses		other income		Equipment		Other expenses		other income

Ultimate parent company:
SK C&C Co., Ltd.	W	23,759	W	60,833	W	1,649	W	29,915	W	119,624	W	4,958

Parent Company:
SK Holdings Co., Ltd.		70		6,425		295		70		12,327		390

Subsidiaries:
SK Broadband Co., Ltd.		—		30,808		15,051		—		59,425		31,335
SK Communications Co., Ltd.		229		2,177		2,588		229		5,042		5,342
SK Telink Co., Ltd.		—		4,334		10,558		—		8,415		20,965
PS&Marketing Corporation		1		80,535		476		1		161,799		995
F&U Credit Information Co., Ltd.		—		12,228		551		—		20,562		1,091
TU Media Corp.		—		24,538		6,149		—		48,157		12,884
Commerce Planet Co., Ltd.		2,240		26,044		2,433		3,426		49,514		3,921
Loen Entertainment, Inc		—		9,239		792		—		16,838		1,858
SKT Americas, Inc.		—		—		—		—		3,200		—
SK Telecom China Holdings		—		—		—		—		5,270		—
Others		—		6,272		328		—		11,772		754

Equity Method Investees:
SK Marketing & Company Co., Ltd.		2,009		59,299		1,464		2,009		83,516		2,974
SK Wyverns Baseball Club Co., Ltd.		—		1,900		12		—		8,400		35
Others		—		2,410		—		—		4,832		—

Others:
SK Energy Co., Ltd.		—		218		1,428		—		437		2,175
SK Engineering & Construction Co., Ltd.		27,735		1,119		494		27,735		1,119		3,856
SK Networks Co., Ltd.		506		117,925		4,913		524		238,533		8,636
SK Networks Service Co., Ltd.		—		8,866		70		—		11,377		135
SK Telesys Co., Ltd.		68,473		2,240		247		86,870		2,454		803
MRO Korea Co., Ltd.		2,406		632		11		3,882		1,254		24
Others		1,723		1,795		906		1,723		5,765		2,233


Total	W	129,151	W	459,837	W	50,415	W	156,384	W	879,632	W	105,364


	For three months ended June 30, 2009						For six months ended June 30, 2009
	Purchases of		Commissions		Commissions		Purchases of		Commissions		Commissions
	property and		paid and		earned and		property and		paid and		earned and
	equipment		other expenses		other income		equipment		Other expenses		other income

Ultimate parent company:
SK C&C Co., Ltd.	W	35,042	W	55,869	W	939	W	41,345	W	115,852	W	2,518

Parent Company:
SK Holdings Co., Ltd.		—		6,406		208		—		12,184		263

Subsidiaries:
SK Broadband Co., Ltd.		—		11,605		13,597		—		19,270		27,354
SK Communications Co., Ltd.		—		2,583		1,970		—		8,312		3,826
SK Telink Co., Ltd.		—		3,042		10,408		—		6,744		16,608
PS&Marketing Corporation		—		55,632		191		—		55,632		191
F&U Credit Information Co., Ltd.		—		12,335		334		—		23,241		662
TU Media Corp.		211		22,480		9,445		211		37,188		18,363
Commerce Planet Co., Ltd.		700		16,730		1,075		700		32,222		1,276
Loen Entertainment, Inc		—		8,232		1,336		—		15,183		2,399
SKT Americas, Inc.		—		4,447		—		—		11,030		—
SK Telecom China Holdings		—		8,864		—		—		17,179		—
Others		—		6,925		1,072		—		11,768		1,262

Equity Method Investees:
SK Marketing & Company Co., Ltd.		—		24,215		1,025		—		57,696		2,151
SK Wyverns Baseball Club Co., Ltd.		—		4,200		181		—		11,414		181
Wave City Development Co. Ltd.		—		—		21,280		—		—		21,280
Others		—		2,384		693		—		5,364		889

Others:
SK Energy Co., Ltd.		—		231		1,135		—		545		1,658
SK Engineering & Construction Co., Ltd.		32,966		5,504		625		51,990		8,020		1,093
SK Networks Co., Ltd.		5,432		227,636		6,715		5,530		397,984		11,826
SK Networks Service Co., Ltd.		—		5,569		—		—		11,287		—
Innoace Co., Ltd.		4,208		4,175		64		4,532		5,374		117
SK Telesys Co., Ltd.		62,354		1,955		432		75,803		2,291		489
Others		2,126		13,750		1,994		3,573		17,568		2,775


Total	W	143,039	W	504,769	W	74,719	W	183,684	W	883,348	W	117,181

b-(2) Account balances


	As of June 30, 2010
											Guarantee
	Accounts		Short-term		Long-term		Guarantee		Accounts		deposits
	receivable		loans		loans		deposits		payable		received

Ultimate parent company:
SK C&C Co., Ltd.	W	298	W	—	W	—	W	—	W	45,228	W	197

Parent Company:
SK Holdings Co., Ltd.		32		—		—		—		—		—

Subsidiaries:
SK Broadband Co., Ltd.		244		—		—		1,486		7,244		39,222
SK Communications Co., Ltd.		2,296		—		—		—		2,276		5,524
SK Telink Co., Ltd.		2,317		—		—		—		2,074		1,022
PS&Marketing Corporation		285		—		—		—		50,379		5,877
F&U Credit Information Co., Ltd.		34		—		—		—		5,646		—
TU Media Corp.		3,617		—		—		—		9,759		2,417
IHQ, Inc.		355		—		—		—		906		—
Ntreev Soft Co., Ltd.		73		—		—		—		2,240		—
Commerce Planet Co., Ltd.		9,793		—		—		—		10,405		—
Loen Entertainment, Inc.		439		—		—		—		4,260		—
SKT Vietnam PTE Ltd		4,205		—		—		—		—		—
SK Telecom China Holdings		—		—		—		—		5,270		—
Others		93		—		—		—		513		150

Equity Method Investees:
SK Marketing & Company Co., Ltd.		4,159		—		—		—		33,224		—
SK Wyverns Baseball Club Co., Ltd.		5		575		2,407		—		—		—
Wave City Development Co. Ltd.		38,412		—		—		—		—		—
Others		—		—		—		—		2,598		—

Others:
SK Energy Co., Ltd.		445		—		—		96		18		23
SK Engineering & Construction Co., Ltd.		3,307		—		—		—		16,886		82
SK Networks Co., Ltd.		2,195		—		—		5,512		72,843		1,147
SK Telesys Co., Ltd.		126		—		—		—		46,601		—
MRO Korea, Co., Ltd.		2		—		—		—		1,173		—
Others		1,044		—		—		—		5,875		49


Total	W	73,776	W	575	W	2,407	W	7,094	W	325,418	W	55,710


	As of December 31, 2009
											Guarantee
	Accounts		Short-term		Long-term		Guarantee		Accounts		deposits
	receivable		loans		loans		Deposits		payable		received

Ultimate parent company:
SK C&C Co., Ltd.	W	758	W	—	W	—	W	—	W	89,318	W	—

Parent Company:
SK Holdings Co., Ltd.		248		—		—		—		1		—

Subsidiaries:
SK Broadband Co., Ltd.		2,356		—		—		1,216		374		5,114
SK Communications Co., Ltd.		1,785		—		—		—		12,738		5,524
SK Telink Co., Ltd.		797		—		—		—		700		1,023
PS&Marketing Co., Ltd.		159		—		—		—		32,400		5,084
F&U Credit Information Co., Ltd.		8		—		—		—		3,617		—
TU Media Corp.		4,051		—		—		—		114		2,709
IHQ, Inc.		51		—		—		—		—		—
Ntreev Soft Co., Ltd.		3,988		—		—		—		3,210		—
Commerce Planet Co., Ltd.		8,331		—		—		—		10,258		—
Loen Entertainment, Inc.		272		—		—		—		652		—
SKT Vietnam PTE Ltd.		3,835		—		—		—		—		—
SKT Americas, Inc.		—		—		—		—		5,567		—
SK Telecom China Holdings		—		—		—		—		8,500		—
Others		7		—		—		—		19		150

Equity Method Investees:
SK Marketing & Company Co., Ltd.		2,403		—		—		—		25,921		249
SK Wyverns Baseball Club Co., Ltd.		59		575		2,407		—		—		—
Wave City Development Co. Ltd.		38,412		—		—		—		—		—
Others		—		—		—		—		2,288		—

Others:
SK Energy Co., Ltd.		1,313		—		—		96		66		23
SK Engineering & Construction Co., Ltd.		182		—		—		—		991		82
SK Networks Co., Ltd.		890		—		—		112		109,900		1,256
SK Telesys Co., Ltd.		236		—		—		—		15,422		—
SK Networks Co., Ltd. Walkerhill		72		—		—		5,400		3,246		—
Others		1,036		—		—		—		5,425		—


Total	W	71,249	W	575	W	2,407	W	6,824	W	330,727	W	21,214

c. Compensation for the key management

The Company considers registered directors who have substantial roles and responsibility for planning, operating, and controlling of the business as key management, and the considerations given to the key management for the three months and six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):

For the three months ended

For the six months ended

June 30, 2010

Severance

Payee

Payroll

indemnities

Total

Payroll

indemnities

Total

8 Registered directors (including outside directors)

329

398

2,293

443

2,736

For the three months ended

For the six months ended

June 30, 2009

Severance

Payee

Payroll

indemnities

Total

Payroll

indemnities

Total

8 Registered directors (including outside directors)

282

299

956

991

16.

PROVISION

	a.		Provision for point program

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

			Details of change in the provisions for such mileage points for the six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):


	For six months ended June 30
	2010			2009

Beginning balance	W	18,856		W	24,889
Increase		5,064			7,248
Decrease (used points)		(4,435	)		(11,433	)


Ending balance	W	19,485		W	20,704

Points expire after 5 years. The expected year when unused points as of Jun 30, 2010 are expected to be used and the respective estimated monetary amount to be paid in a given year are as follows (In millions of Korean won):


Expected usage	Estimated amount to be paid
for the year ended June 30,	in nominal value (Note a)		Current value (Note b)

2011	W	9,328	W	8,880
2012		5,606		5,081
2013		3,369		2,907
2014		2,025		1,664
2015		1,218		953


Ending balance	W	21,546	W	19,485

(Note a)

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

	b.		Provision for handset subsidy

			The Company provides provision for handset subsidies to be provided to the subscribers who purchase handsets on an installment basis. Such provision is recorded as accrued expenses or non-current liabilities in accordance with the expected points when the subsidies are paid. Details of change in the provision for handset subsidies for the six months ended June 30, 2010 and 2009 are as follows (In millions of Korean won):


	For six months ended June 30
	2010			2009

Beginning balance	W	609,733		W	339,696
Increase (provision)		550,304			274,157
Decrease (subsidy payment)		(388,318	)		(167,099	)


Ending balance	W	771,719		W	446,754

The estimated amount to be paid in a given year is as follows (In millions of Korean won):


Expected payment	Estimated amount to be paid
for the year ended June 30,	in nominal value		Present value

2011	W	682,370	W	668,362
2012		108,387		103,357


Ending balance	W	790,757	W	771,719

17.

DERIVATIVE INSTRUMENTS

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

			The Company has entered into a fixed-to-fixed cross currency swap contract with Citibank, BNP Paribas and Credit Suisse First Boston International to hedge the foreign currency risk of unguaranteed U.S. dollar denominated bonds with face amounts totaling US$300,000,000 at annual fixed interest rate of 4.25% issued on April 1, 2004. As of June 30, 2010, 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 W5,005 million (net of tax effect totaling W1,953 million and foreign exchange translation loss arising from unguaranteed U.S. dollar denominated bonds totaling W18,348 million) was

			accounted for as accumulated other comprehensive loss.

			The Company has entered into a floating-to-fixed cross currency swap contract with Credit Agricole Corporate & Investment bank to hedge the foreign currency risk and the interest rate risk of U.S. dollar denominated long-term borrowings with face amounts totaling US$100,000,000 borrowed on October 10, 2006. As of June 30, 2010, in connection with unsettled cross currency interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to W5,020 million (net of tax effect totaling W974 million and foreign exchange translation loss arising from U.S. dollar denominated long-term borrowings totaling W26,230 million) is accounted for as accumulated other comprehensive loss.

			The Company has entered into a floating-to-fixed cross currency swap contract with HSBC and SMBC Bank to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen denominated bonds with face amounts totaling JPY12,500,000,000 issued on November 13, 2007. As of June 30, 2010, in connection with unsettled cross currency interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to W175 million (net of tax effect totaling W1,576 million and foreign exchange translation loss arising from unguaranteed Japanese yen denominated bonds totaling W66,516 million) is accounted for as accumulated other comprehensive income.

			The Company has entered into a floating-to-fixed cross currency swap contract with DBS and Credit Agricole Corporate & Investment bank to hedge the foreign currency risk and the interest rate risk of U.S. dollar denominated notes with face amounts totaling US$150,000,000 borrowed on November 20, 2008. As of June 30, 2010, 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 W4,557 million (net of tax effect totaling W1,455 million and foreign exchange translation gain arising from U.S. dollar denominated bonds totaling W35,561 million) is accounted for as accumulated other comprehensive income.

			The Company has entered into a floating-to-fixed cross currency swap contract with Mizuho Corporate Bank to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen denominated bonds with face amounts totaling JPY3,000,000,000 issued on January 22, 2009. As of June 30, 2010, 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 W1,913 million (net of tax effect totaling W539 million and foreign exchange translation gain arising from unguaranteed Japanese yen denominated bonds totaling W5,195 million) is accounted for as accumulated other comprehensive income.

			The Company has entered into a floating-to-fixed cross currency swap contract with Bank of Tokyo-Misuboshi Bank to hedge the foreign currency risk and the interest rate risk of unguaranteed Japanese yen denominated bonds with face amounts totaling JPY5,000,000,000 issued on March 5, 2009. As of June 30, 2010, 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 W309 million (net of tax effect totaling W87 million and foreign exchange translation gain arising from unguaranteed Japanese yen denominated bonds totaling W10,385 million) is accounted for as accumulated other comprehensive income.

			The Company has entered into fixed-to-fixed cross currency swap contract with Morgan Stanley Bank and five 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 and entered into cash flow hedge accounting since May 12, 2010. In connection with unsettled foreign currency swap contract to which the hedge accounting is applied, an accumulated gain on valuation of derivatives amounting to W10,830 million (net of tax effect totaling W3,055 million and foreign exchange translation loss arising from U.S. dollar denominated bonds totaling W26,142 million) was accounted for as accumulated other comprehensive income. And the related loss on valuation of currency swap incurred before applying the hedge accounting of W17,528 million and W64,534 million for the six months ended June 30, 2010 and 2009, respectively, is charged to current operations.

	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 Nonghyup Bank and other two banks to hedge the interest rate risk of long-term floating rate borrowings with face amounts totaling W500,000 million borrowed from July 28, 2008 to August 12, 2011. As of June 30, 2010, in connection with unsettled interest rate swap contract to which the cash flow hedge accounting is applied, an accumulated loss on valuation of derivatives amounting to W10,576 million (net of tax effect totaling W2,983 million) was accounted for as accumulated other comprehensive loss.

	c.		Interest rate swap contract to which the hedge accounting is not applied

			The Company has entered into a floating-to-fixed interest rate swap contract with DBS and Calyon Bank the interest rate risk of floating rate U.S. dollar denominated bonds with face amounts totaling US$220,000,000 issued on April 29, 2009. In connection with unsettled interest rate swap contract to which the hedge accounting is not applied, loss on valuation of interest rate swap of W2,816 million and W2,897 million for the six months ended June 30, 2010 and 2009, respectively, was charged to current operations.

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

			The Company has entered into the cross currency forward contract with DBS Bank to hedge the foreign currency risk of Ringgit Malaysia denominated account-receivable with face amounts totaling MYR 323,000,000. In connection with unsettled foreign currency forward contract to which the hedge accounting is not applied, loss on valuation of currency forward of W721 million for the six months ended June 30, 2010 was charged to current operations.

As of June 30, 2010, fair values of the above derivatives recorded in assets or liabilities and details of the derivative instruments as of June 30, 2010 are as follows (In thousands of U.S. dollars, Japanese yen, Ringgit Malaysia and millions of Korean won):

Fair value

Designated

Duration

as cash

Not

Type

Hedged item

Amount

of contract

flow hedge

designated

Total

Non-current assets:

Fix-to-fixed cross currency swap

U.S. dollar denominated Bonds

US$

300,000

Mar. 23, 2004 ~ March. 31, 2011

11,390

—

11,390

Non-current assets:

Floating-to-fixed cross currency interest rate swap

U.S. dollar denominated long-term borrowings

US$

100,000

Oct 10, 2006 ~ Oct 10, 2013

20,236

—

20,236

Fix-to-fixed cross currency swap

U.S. dollar denominated Bonds

US$

400,000

Jul. 20, 2007 ~ Jul. 20, 2027

40,028

129,806

169,834

Floating-to-fixed cross currency interest rate swap

Japanese yen denominated bonds

JPY

12,500,000

Nov. 13, 2007 ~ Nov. 13, 2012

64,765

—

64,765

Total assets

136,419

129,806

266,225

Current liabilities:

Floating-to-fixed cross currency interest rate swap

U.S. dollar denominated Bonds

US$

150,000

Nov 20, 2008 ~ Nov 20, 2010

29,549

—

29,549

Cross currency forward

MYR denominated account receivable

MYR

323,000

Jun. 23, 2010 ~ Aug. 2, 2010

—

721

Non-current liabilities:

Floating-to-fixed cross currency interest rate swap

Japanese yen denominated bonds

JPY

3,000,000

Jan. 22, 2009 ~ Jan. 22, 2012

2,743

—

2,743

Floating-to-fixed cross currency interest rate swap

Japanese yen denominated bonds

JPY

5,000,000

Mar. 5, 2009 ~ Mar. 5, 2012

9,989

—

9,989

Floating-to-fixed interest rate swap

Long-term borrowings

500,000

July 28, 2008 ~ August 12, 2011

13,559

—

13,559

Floating-to-fixed interest rate swap

Long-term borrowings

US$

220,000

April 29, 2009 ~ April 29, 2012

—

6,188

Total liabilities

55,840

6,909

62,749

18.		RECLASSIFICATION IN THE PRIOR YEAR’S FINANCIAL STATEMENTS

		For the purpose of improving the quality of reporting, certain reclassification have been made in the prior year’s financial statements to conform to the classifications used in the current year. The reclassification of prior year’s financial statements had no impact on equity or net income.

19.		SUBSEQUENT EVENTS

	a.		Interim dividend

			On July 22, 2010, the board of directors of the Company resolved to pay interim cash dividends of W1,000 per share totaling W72,345 million. The ex-dividend date was June 30, 2010 and the interim dividends are expected to be paid within twenty days after the date of the board of directors’ resolution.

	b.		Acquisition of treasury stock

			In accordance with the resolution of board of directors dated July 22, 2010, the Company acquired 1,250,000 shares of treasury stocks for W201,875 million from July 23, 2010 through October 22, 2010.

20.		K-IFRS ADOPTION PLAN AND STATUS

		In accordance with IFRS adoption roadmap released by the Financial Supervisory Commission in March 2007, the Company is required to prepare financial statements under K-IFRS from fiscal year of 2011. In April 2008, the Company set up a task force for the adoption and hired an outside consulting firm to evaluate the impact that K-IFRS may have on the Company’s financial statements as well as to educate the relevant employees.

		At June 30, 2010, the Company is currently performing an analysis on the major GAAP differences between K-IFRS and the Company’s current accounting policies. It is also setting up an action plan to decide the Company’s accounting policies under K-IFRS and the changes in operating procedures to comply with K-IFRS.

SIGNATURES

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


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

Date: September 13, 2010