SK TELECOM CO LTD — Annual Report 2011

Feb 18, 2011

6-K 1 h04857e6vk.htm 6-K 6-K PAGEBREAK

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

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

FOR THE MONTH OF FEBRUARY 2011

SK Telecom Co., Ltd.

(Translation of registrant’s name into English)

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

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

Form 20-F þ Form 40-F o

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

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

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

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

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

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

Folio /Folio

PAGEBREAK

RESOLUTION TO CALL THE ANNUAL GENERAL MEETING OF SHAREHOLDERS

The Board of Directors of SK Telecom Co., Ltd. (the “Company”) has resolved to call the Annual General Meeting of Shareholders, to be held at the following time and place and the agenda of which shall be as follows:

1. Date / Time	Friday, March 11th, 2011 10:00 AM (Local time)
2. Place	SK Telecom Boramae Building, Boramae-Gil, 58, Gwanak-gu, Seoul, Korea
3. Agenda	1. Approval of Financial Statements for the 27th Fiscal Year
	2. Approval of Ceiling Amount of the Remuneration for Directors
	3. Amendment to Company Regulation on Executive Compensation as set
forth in Item 2 of the Company’s agenda enclosed herewith
	4. Approval of the Appointment of Directors as set forth in Item 3 of
the Company’s agenda enclosed herewith
	4.1	Election of Executive Directors
	4.2	Election of Independent Non-Executive Directors
	4.3	Election of Members of the Audit Committee
4. Date of the resolution
by the Board of Directors	February 10, 2011
- Attendance of external
directors	Present	4
	Absent	1
5. Other Noteworthy Matters	—

Folio /Folio

PAGEBREAK

Documents relating to the Annual Meeting of Shareholders

1. Approval of Financial Statements

(1) NON-CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2010

As of December 31, 2009

A S S E T S	Korean won — 2010		2009		Translation into U.S. dollars — 2010	2009
	(In millions)				(In thousands)
CURRENT ASSETS:
Cash and cash equivalents	W	357,470	W	420,576	$ 316,177	$ 371,994
Short-term financial instruments		299,500		178,057	264,904	157,489
Short-term investment securities		393,811		370,182	348,320	327,421
Accounts receivable — trade, net of allowance for
doubtful accounts of W 151,208 million as of December 31, 2010
and W 142,702 million as of December 31, 2009		1,453,061		1,557,514	1,285,212	1,377,600
Short-term loans, net of allowance for doubtful
accounts of W 1,077 million as of December 31, 2010
and W 933 million as of December 31, 2009		81,126		66,888	71,755	59,162
Accounts receivable — other, net of allowance for
doubtful accounts of W 34,792 million and present value of W 1,252 million as of December 31, 2010 and W 26,059 million
and W 8,478 as of December 31, 2009		2,499,969		2,032,757	2,211,188	1,797,945
Inventories		9,019		22,656	7,977	20,039
Prepaid expenses		139,129		112,762	123,058	99,736
Current deferred income tax assets, net		182,516		194,825	161,433	172,320
Accrued income and other		67,262		26,835	59,492	23,734
Total Current Assets		5,482,863		4,983,052	4,849,516	4,407,440
NON-CURRENT ASSETS:
Property and equipment, net		5,027,567		5,196,521	4,446,813	4,596,251
Intangible assets, net		2,513,723		2,665,936	2,223,353	2,357,983
Long-term financial instruments		69		6,519	61	5,766
Long-term investment securities		1,517,029		2,420,262	1,341,791	2,140,688
Equity securities accounted for using the equity method		3,424,106		2,680,872	3,028,574	2,371,194
Long-term loans, net of allowance for doubtful
accounts of W 23,730 million as of December 31, 2010
and W 24,250 million as of December 31, 2009		69,667		64,216	61,619	56,798
Long-term accounts receivable — other, net of present value		527,084		761,647	466,198	673,666
Guarantee deposits		164,983		172,021	145,925	152,150
Long-term currency swap		139,577		223,173	123,454	197,393
Long-term deposits and other		93,244		123,414	82,474	109,159
Total Non-current Assets		13,477,049		14,314,581	11,920,262	12,661,048
TOTAL ASSETS	W	18,959,912	W	19,297,633	$ 16,769,779	$ 17,068,488

(Continued)

Folio /Folio

PAGEBREAK

LIABILITIES AND STOCKHOLDERS’ EQUITY	Korean won — 2010		2009		2010		2009
		(In millions)			(In thousands)
CURRENT LIABILITIES:
Accounts payable	W	1,281,423	W	1,136,475	$	1,133,401	$	1,005,196
Income tax payable		243,263		381,940		215,163		337,821
Accrued expenses		1,112,300		934,372		983,814		826,439
Withholdings		348,093		250,656		307,883		221,702
Current portion of long-term debt, net		1,208,555		513,277		1,068,950		453,986
Current portion of subscription deposits		5,611		6,804		4,963		6,018
Currency swap		7,848		35,145		6,941		31,085
Interest swap		7,546		1,173		6,674		1,038
Advanced receipts and other		45,324		34,791		40,089		30,772
Total Current Liabilities		4,259,963		3,294,633		3,767,878		2,914,057
NON-CURRENT LIABILITIES:
Bonds payable, net		2,839,751		3,349,216		2,511,720		2,962,335
Long-term borrowings		113,890		816,760		100,734		722,413
Subscription deposits		5,219		5,480		4,616		4,847
Long-term payables — other, net of present value
discount of W 2,457 million as of December 31, 2010
and W 5,837 million as of December 31, 2009		50,643		164,163		44,793		145,200
Accrued severance indemnities, net		25,048		25,155		22,155		22,249
Non-current deferred income tax liabilities, net		10,802		210,859		9,554		186,502
Long-term currency swap		9,718		18,281		8,595		16,169
Long-term interest swap		5,043		16,215		4,460		14,342
Guarantee deposits received and other		185,418		155,421		164,001		137,468
Total Non-current Liabilities		3,245,532		4,761,550		2,870,628		4,211,525
Total Liabilities		7,505,495		8,056,183		6,638,506		7,125,582
STOCKHOLDERS’ EQUITY:
Capital stock		44,639		44,639		39,483		39,483
Capital surplus		3,031,780		3,032,009		2,681,567		2,681,770
Capital adjustments:
Treasury stock		(2,202,439	)	(1,992,083	)	(1,948,027	)	(1,761,970	)
Loss on disposal of treasury stock		(716	)	(716	)	(633	)	(633	)
Equity method in capital adjustments		(88,233	)	(52,626	)	(78,041	)	(46,547	)
Other capital adjustments		(662,983	)	(662,983	)	(586,399	)	(586,399	)
Accumulated other comprehensive income (loss) :
Unrealized gains on valuation of long-term
investment securities, net		801,282		1,003,145		708,723		887,268
Equity in other comprehensive loss of affiliates, net		(92,659	)	(84,809	)	(81,956	)	(75,012	)
Gain (Loss) on valuation of currency swap, net		(60,749	)	6,516		(53,732	)	5,763
Loss on valuation of interest swap, net		(5,720	)	(10,932	)	(5,059	)	(9,669	)
Retained earnings:
Appropriated		9,350,386		8,890,053		8,270,287		7,863,128
Unappropriate		1,339,829		1,069,237		1,185,060		945,724
Total Stockholders’ Equity		11,454,417		11,241,450		10,131,273		9,942,906
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	W	18,959,912	W	19,297,633	$	16,769,779	$	17,068,488

Folio /Folio

PAGEBREAK

(2) NON-CONSOLIDATED STATEMENTS OF INCOME

From January 1, 2010 to December 31, 2010

From January 1, 2009 to December 31, 2009

	Korean won
	2010		2009		2010		2009
	(In millions except for per share data)				(In thousands except for per share data)
OPERATING REVENUE	W	12,459,990	W	12,101,184	$	11,020,688	$	10,703,329
OPERATING EXPENSES :
Labor cost		(497,079	)	(460,906	)	(439,659	)	(407,665	)
Commissions paid		(4,960,782	)	(4,594,727	)	(4,387,743	)	(4,063,972	)
Depreciation and amortization		(2,042,681	)	(1,895,880	)	(1,806,723	)	(1,676,880	)
Network interconnection		(1,030,380	)	(1,068,243	)	(911,357	)	(944,846	)
Leased line		(189,060	)	(332,824	)	(167,221	)	(294,378	)
Advertising		(258,737	)	(265,498	)	(228,849	)	(234,829	)
Research and development		(264,417	)	(233,469	)	(233,873	)	(206,500	)
Rent		(295,226	)	(277,018	)	(261,123	)	(245,019	)
Frequency usage		(176,890	)	(157,400	)	(156,457	)	(139,218	)
Repair		(181,263	)	(160,571	)	(160,325	)	(142,023	)
Cost of goods sold		(108,870	)	(35,979	)	(96,294	)	(31,823	)
Other		(419,613	)	(439,332	)	(371,142	)	(388,583	)
Sub-total		(10,424,998	)	(9,921,847	)	(9,220,766	)	(8,775,736	)
OPERATING INCOME		2,034,992		2,179,337		1,799,922		1,927,593
OTHER INCOME:
Interest income		210,248		157,104		185,961		138,956
Foreign exchange and translation gains		22,885		99,080		20,241		87,635
Equity in earnings of affiliates		74,318		63,804		65,733		56,434
Gain on valuation of short-term investment
securities		—		14,086		—		12,459
Gain on disposal of property and equipment and
intangible assets		7,774		24,547		6,876		21,711
Gain on valuation of derivative		7,951		109,306		7,033		96,680
Other		237,905		318,517		210,424		281,724
Sub-total		561,081		786,444		496,268		695,599

(Continued)

Folio 5 /Folio

PAGEBREAK

	Korean won						Translation into U.S. dollars
	2010			2009			2010			2009
	(In millions except for per share data)						(In thousands except for per share data)
OTHER EXPENSES:
Interest and discounts	( W	275,790	)	( W	304,569	)	($	243,932	)	($	269,387	)
Donations		(122,987	)		(70,765	)		(108,780	)		(62,591	)
Foreign exchange and translation losses		(11,393	)		(176,076	)		(10,077	)		(155,737	)
Equity in losses of affiliates		(181,077	)		(295,332	)		(160,160	)		(261,217	)
Loss on disposal of account receivable — other		—			(28,711	)		—			(25,394	)
Loss on disposal of property, equipment and
intangible assets		(55,982	)		(83,034	)		(49,515	)		(73,442	)
Loss on valuation of derivative		(19,198	)		(119,696	)		(16,980	)		(105,869	)
External research and development cost		(80,474	)		(55,528	)		(71,178	)		(49,114	)
Other		(32,318	)		(174,726	)		(28,585	)		(154,543	)
Sub-total		(779,219	)		(1,308,437	)		(689,207	)		(1,157,294	)
ORDINARY INCOME		1,816,854			1,657,344			1,606,983			1,465,898
INCOME BEFORE INCOME TAX		1,816,854			1,657,344			1,606,983			1,465,898
PROVISION FOR INCOME TAX		(405,886	)		(369,004	)		(359,001	)		(326,379	)
NET INCOME	W	1,410,968		W	1,288,340		$	1,247,982		$	1,139,519
NET INCOME PER SHARE (In Korean won and U.S. dollars)	W	19,612		W	17,808		$	17.347		$	15.751
DILUTED NET INCOME PER SHARE (In Korean won and U.S. dollars)	W	19,312		W	17,599		$	17.081		$	15.566

Folio 6 /Folio

PAGEBREAK

(3) NON-CONSOLIDATED STATEMENTS OF APPROPRIATIONS OF RETAINED EARNINGS

From January 1, 2010 to December 31, 2010

From January 1, 2009 to December 31, 2009

	Korean won
	2010		2009		2010		2009
	(In millions)				(In thousands)
RETAINED EARNINGS BEFORE APPROPRIATIONS:
Beginning of year	W	1,206	W	1,762	$	1,067	$	1,558
Interim dividends		(72,345	)	(72,345	)	(63,988	)	(63,988	)
Retirement of treasury stock		—		(92,477	)	—		(81,795	)
Changes in retained earning from equity method accounting		—		(56,043	)	—		(49,569	)
Net income		1,410,968		1,288,340		1,247,982		1,139,519
End of year		1,339,829		1,069,237		1,185,061		945,725
TRANSFER FROM VOLUNTARY RESERVES:
Reserve for research and manpower development		123,334		376,667		109,087		333,157
		123,334		376,667		109,087		333,157
APPROPRIATIONS:
Reserve for research and manpower development		—		(363,000	)	—		(321,068	)
Reserve for business expansion		(490,000	)	(474,000	)	(433,398	)	(419,246	)
Reserve for technology development		(374,000	)	—		(330,798	)	—
Cash dividends		(597,198	)	(607,698	)	(528,213	)	(537,500	)
		(1,461,198	)	(1,444,698	)	(1,292,409	)	(1,277,814	)
UNAPPROPRIATED RETAINED EARNINGS TO BE
CARRIED FORWARD TO SUBSEQUENT YEAR	W	1,965	W	1,206	$	1,738	$	1,067

Folio 7 /Folio

PAGEBREAK

1. Approval of Ceiling Amount of the Remuneration of Directors

The number of directors and total amount and maximum authorized amount of compensation of directors are as follows:

Classification	Fiscal year 2010	Fiscal year 2011
Number of directors
(Number of independent
non-executive directors)	8 persons (5 persons)	8 persons (5 persons)
Total amount and maximum
authorized amount of
compensation of directors	Won 12 billion	Won 12 billion

1. Amendment to Company Regulation on Executive Compensation

The proposed amendment combines the previously bifurcated severance pay and special rewards regulations into a single regulation on executive severance pay.

The proposed amendment is as follows:

Current	Amendments (Proposed)
Article 4 (Severance Pay)	Article 4 (Severance Pay)
(1) Method for determining the amount
of executive severance pay shall be
separately stipulated (amended as of
2001.3.1). (2) The amount of severance pay to be
paid by the Company to an executive
shall be the amount that is
calculated by multiplying the base
wage applicable to his/her last post
as determined in accordance with
Article 9 and the rate of payment
applicable to the duration of each
post held by him/her as determined in
accordance with Article 6. (3) Notwithstanding paragraph 2 above,
in respect of an executive whose
employment is resolved by the
Executive Management Committee to be
terminated for reasons attributable
to his/her violation of the Code of
Ethics or other rules and regulations
of the Company or contract(s) with
the Company to which s/he is a party,
the Company may reduce the amount of
severance pay set forth in paragraph (2)
above down to the statutorily
prescribed amount.	(1) Unamended (2) Unamended (3) Unamended (4) (Newly adopted) In respect of
executives who have made a
significant contribution to the
advancement of the Company during
the term of their service or whose
employment is terminated due to
death or other special
circumstances, the amount of
severance pay may be increased up
to the amount calculated pursuant
to paragraph (2) above.

Folio 8 /Folio

PAGEBREAK

Current	Amendments (Proposed)
Article 10 (Special Rewards)	Deleted
(1) Where a resigning executive has
made a significant contribution to
the advancement of the Company
during the term of his/her service,
a special reward may be paid in
addition to the severance pay set
forth in Article 4. (2) Candidacy for and the amount of
the special reward to be paid in
accordance with paragraph (1) above
shall be determined by a resolution
of the Board of Directors.

4 . Approval of the Appointment of Directors

(1) Candidates for Executive Directors

Name	Term	Profile	Remarks
HA, SUNG MIN	3Years	- B.A., Sung Kyun Kwan University (Business Administration)	New Appointment
		- Head of Strategic Planning Office, SK Telecom
		- Head of Management Supporting Division, SK Telecom
		- President, Mobile Network Operator Business, SK Telecom
		- President & CEO, SK Telecom (Current)
SO, JIN WOO	3Years	- B.A., Seoul National University (Electrical Engineering)	New Appointment
		- M.B.A., University of Iowa
		- CEO, SK Communications
		- Head of New/Global Business Strategy Division, SK Telecom
		- President, Global Business, SK Telecom
		- President, Global Management Service, SK Telecom
		- President, Convergence & Internet Business, SK Telecom
		- President, Platform Business & Co-CEO, SK Telecom (Current)

Folio 9 /Folio

PAGEBREAK

(2) Candidates for Independent Non-Executive Directors

Name	Term	Profile	Remarks
UHM, RAK YONG	3Years	- B.A., Seoul National University (Law)	Current Director
		- M.A., Harvard University, Kennedy School of Government
		- Commissioner, Korea Customs Service
		- Vice Minister, Ministry of Finance and Economy
		- President, Korea Development Bank
		- Non-Standing Director, KOTRA
		- Visiting Professor, Graduate School of Public Administration, Seoul
National University
		- Advisory Management Professor, Korea Banking Institute
		- Independent Non-Executive Director, Tong Yang Life Insurance Co.,
Ltd. (Current)
		- Visiting Professor, Chung-Ang University (Current)
CHUNG, JAY	3Years	- B.A., Sung Kyun Kwan University (Business Administration)	Current Director
YOUNG		- Master of Commerce, School of Commerce, Waseda University
		- Doctor of Commerce, School of Commerce, Waseda University
		- Independent Non-Executive Director, POSCO
		- Vice President, Sung Kyun Kwan University
		- Chairman, Asia-Pacific Economics Association
		- Chairman, The Korean Association of Trade and Industry Studies
		- Chairman, The Korean-Japanese Economics & Management Association
		- Professor, Graduate School of Business Administration, Sung Kyun
Kwan University
		- Honorary Professor, Sung Kyun Kwan University (Current)
CHO, JAE HO	3Years	- B.A., Seoul National University (Business Administration)	Current Director
		- M.B.A., The Wharton School, University of Pennsylvania
		- Ph.D., The Wharton School, University of Pennsylvania
		- Assistant Professor of Finance, Baruch College, The City University
of New York
		- Managing Director, Seoul National University Foundation
		- Visiting Scholar, The Wharton School, University of Pennsylvania
		- Visiting Professor, Graduate School of Economics, University of Tokyo
		- Deputy Director, SNU Institute of Research in Finance and Economics
		- Director, Kyung Hee Foundation (Current)
		- Chair, Sub-committee for Capital Market Development, Financial Services Commission (Current)
		- Professor of Finance, College of Business Administration, Seoul
National University (Current)

Folio 10 /Folio

PAGEBREAK

(3) Candidates for Independent Non-Executive Directors who will be members of the Audit Committee

Name	Term	Profile	Remarks
CHUNG, JAY	3Years	- B.A., Sung Kyun Kwan University (Business Administration)	Current Director
YOUNG		- Master of Commerce, School of Commerce, Waseda University
		- Doctor of Commerce, School of Commerce, Waseda University
		- Independent Non-Executive Director, POSCO
		- Vice President, Sung Kyun Kwan University
		- Chairman, Asia-Pacific Economics Association
		- Chairman, The Korean Association of Trade and Industry Studies
		- Chairman, The Korean-Japanese Economics & Management Association
		- Professor, Graduate School of Business Administration, Sung Kyun
Kwan University
		- Honorary Professor, Sung Kyun Kwan University (Current)
CHO, JAE HO	3Years	- B.A., Seoul National University (Business Administration)	Current Director
		- M.B.A., The Wharton School, University of Pennsylvania
		- Ph.D., The Wharton School, University of Pennsylvania
		- Assistant Professor of Finance, Baruch College, The City University
of New York
		- Managing Director, Seoul National University Foundation
		- Visiting Scholar, The Wharton School, University of Pennsylvania
		- Visiting Professor, Graduate School of Economics, University of Tokyo
		- Deputy Director, SNU Institute of Research in Finance and Economics
		- Director, Kyung Hee Foundation (Current)
		- Chair, Sub-committee for Capital Market Development, Financial Services Commission (Current)
		- Professor of Finance, College of Business Administration, Seoul
National University (Current)

Folio 11 /Folio

PAGEBREAK

Forward-Looking Statement Disclaimer

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

Folio 12 /Folio

PAGEBREAK

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/ Kiwook Lee
( Signature )
Name:	Kiwook Lee
Title:	Senior Vice President

Date: February 18, 2011

Folio 13 /Folio