39.

Statements of Cash Flows

(1)	Adjustments for income and expenses from operating activities for the years ended December 31, 2018, 2017 and 2016 are as follows:


(In millions of won)
	2018			2017			2016
Interest income	￦	(69,936	)		(76,045	)		(54,353	)
Dividend		(35,143	)		(12,416	)		(19,161	)
Gain on foreign currency translation		(2,776	)		(7,110	)		(5,085	)
Gain on disposal of long-term investment securities		—			(4,890	)		(459,349	)
Gain on valuation of derivatives		(6,532	)		(223,943	)		(4,132	)
Gain on settlement of derivatives		(20,399	)		—			—
Gain relating to investments in associates and joint ventures, net		(3,270,912	)		(2,245,732	)		(544,501	)
Gain on sale of accounts receivable — other		(20,023	)		(18,548	)		(18,638	)
Gain on disposal of property and equipment and intangible assets		(38,933	)		(13,991	)		(6,908	)
Gain relating to financial assets at FVTPL		(83,636	)		(33	)		(25	)
Gain related to financial liabilities at FVTPL		—			—			(121	)
Reversal of loss on impairment of available-for-sale financial assets		—			(9,900	)		—
Other income		(952	)		(1,129	)		(2,123	)
Interest expenses		307,319			299,100			290,454
Loss on foreign currency translation		2,397			8,419			3,991
Loss on disposal of long-term investment securities		—			36,024			2,919
Other finance costs		—			14,519			5,255
Loss on sale of accounts receivable — other		—			9,682			—
Loss on settlement of derivatives		12,554			10,031			3,428
Income tax expense		843,978			745,654			436,038
Expense related to defined benefit plan		147,722			127,696			118,143
Share option		789			414			—
Depreciation and amortization		3,284,339			3,247,519			3,068,558
Bad debt expense		38,211			34,584			37,820
Loss on disposal of property and equipment and intangible assets		87,257			60,086			63,797
Loss on impairment of property and equipment and intangible assets		255,839			54,946			24,506
Loss relating to financial liabilities at FVTPL		1,535			678			4,018
Loss relating to financial assets at FVTPL		22,507			—			—
Bad debt for accounts receivable — other		7,718			5,793			40,312
Loss on disposal of investment assets		3			—			—
Loss on impairment of investment assets		3,157			9,003			24,033
Other expenses		102,836			46,353			30,685

	￦	1,568,919			2,096,764			3,039,561

(2)	Changes in assets and liabilities from operating activities for the years ended December 31, 2018, 2017 and 2016 are as follows:


(In millions of won)
	2018			2017			2016
Accounts receivable — trade	￦	175,841			46,144			88,549
Accounts receivable — other		319,913			(159,960	)		(446,286	)
Accrued income		—			14			445
Advance payments		13,393			(1,269	)		47,615
Prepaid expenses		(3,597	)		(28,362	)		(30,311	)
Value-Added Tax refundable		(3,318	)		(3,080	)		(4,587	)
Inventories		(13,429	)		(17,958	)		798
Long-term accounts receivable — other		11,064			(137,979	)		(147,117	)
Guarantee deposits		(258	)		14,696			4,844
Contract assets		9,161			—			—
Accounts payable — trade		(58,487	)		(26,151	)		75,585
Accounts payable — other		(271,128	)		134,542			316,464
Advanced receipts		—			(13,470	)		37,429
Contract liabilities		11,328			—			—
Withholdings		129,492			(13,041	)		107,516
Deposits received		(333	)		(4,916	)		(2,153	)
Accrued expenses		(102,246	)		116,065			173,072
Value-Added Tax payable		3,102			7,505			(4,072	)
Unearned revenue		—			(339	)		(36,209	)
Provisions		(4,298	)		(20,488	)		20,235
Long-term provisions		1,193			(2,449	)		4,115
Plan assets		(123,075	)		(95,828	)		(125,440	)
Retirement benefit payment		(63,957	)		(60,883	)		(55,350	)
Others		(4,412	)		5,739			(11,378	)

	￦	25,949			(261,468	)		13,764

(3)	Significant non-cash transactions for the years ended December 31, 2018, 2017 and 2016 are as follows:


(In millions of won)
	2018		2017		2016
Increase in accounts payable — other relating to acquisition of property and equipment and intangible assets	￦	1,162,301		44,214		1,511,913
Investment in subsidiary from comprehensive stock exchange		129,595		—		—

(4)	Reconciliation of liabilities arising from financing activities for the years ended December 31, 2018 and 2017 is as follows:


(In millions of won)
	January 1, 2018			Cash flows			Non-cash transactions										December 31, 2018
	January 1, 2018			Cash flows			Exchange rate changes		Fair value changes			Business Combinations		Other changes			December 31, 2018
Total liabilities from financing activities
Short-term borrowings	￦	130,000			(87,701	)		—		—			36,201		1,500			80,000
Long-term borrowings		252,817			139,406			2,281		—			1,708,638		1,854			2,104,996
Debentures		7,086,187			321,671			55,523		1,911			—		1,560			7,466,852
Long-term payables — other		1,641,081			(305,644	)		—		—			—		1,057,590			2,393,027
Derivative financial liabilities		39,470			(4,031	)		13,595		(7,163	)		—		(37,687	)		4,184
Derivative financial assets		(253,213	)		(2,000	)		2,000		(19,849	)		—		217,605			(55,457	)

	￦	8,896,342			61,701			73,399		(25,101	)		1,744,839		1,242,422			11,993,602
Other cash flows from financing activities
Payments of cash dividends				￦	(706,091	)
Issuance of hybrid bonds					398,759
Repayment of hybrid bonds					(400,000	)
Payments of interest on hybrid bonds					(15,803	)
Capital increase by subsidiaries and others					499,926
Transactions with the non-controlling shareholders					(76,805	)
					(300,014	)

				￦	(238,313	)


(In millions of won)
	January 1, 2017			Cash flows			Non-cash transactions								December 31, 2017
	January 1, 2017			Cash flows			Exchange rate changes			Fair value changes			Other changes		December 31, 2017
Total liabilities from financing activities
Short-term borrowings	￦	2,614			127,386			—			—			—		130,000
Long-term borrowings		172,906			87,299			(7,898	)		—			510		252,817
Debentures		7,194,207			130,558			(245,456	)		—			6,878		7,086,187
Long-term payables-other		1,918,024			(305,476	)		—			—			28,533		1,641,081
Derivative financial liabilities		87,153			(105,269	)		13,281			39,267			5,038		39,470
Derivative financial assets		(214,770	)		188			922			(40,235	)		682		(253,213	)

	￦	9,160,134			(65,314	)		(239,151	)		(968	)		41,641		8,896,342

Other cash flows from financing activities
Payments of cash dividends				￦	(706,091	)
Payments of interest on hybrid bond					(16,840	)
Transactions with non-controlling shareholders					(38,373	)

					(761,304	)

				￦	(826,618	)