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 2022

COMMISSION FILE NUMBER: 333-04906

SK Telecom Co., Ltd.

(Translation of registrant’s name into English)

65, Eulji-ro, Jung-gu

Seoul 04539, Korea

(Address of principal executive office)

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  ☒             Form 40-F  ☐

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):    ☐

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):    ☐

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.

SEMI-ANNUAL BUSINESS REPORT

(From January 1, 2022 to June 30, 2022)

THIS IS A SUMMARY OF THE SEMI-ANNUAL BUSINESS REPORT ORIGINALLY PREPARED IN KOREAN WHICH 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.

ALL REFERENCES TO THE “COMPANY” SHALL MEAN SK TELECOM CO., LTD. AND, UNLESS THE CONTEXT OTHERWISE REQUIRES, ITS CONSOLIDATED SUBSIDIARIES. REFERENCES TO “SK TELECOM” SHALL MEAN SK TELECOM CO., LTD., BUT SHALL NOT INCLUDE ITS CONSOLIDATED SUBSIDIARIES.

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A CONSOLIDATED BASIS IN ACCORDANCE WITH THE INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTED FOR USE IN KOREA (“K-IFRS”) WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. THE COMPANY HAS MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.

I. COMPANY OVERVIEW

1. Company Overview

The following table sets forth a summary of the Company’s consolidated subsidiaries:

	Number of Consolidated Subsidiaries
Classification	Beginning of the Reporting Period		Additions		Subtractions		End of the Reporting Period		Number of Material Subsidiaries*
Listed Companies		0		0		0		0		0
Unlisted Companies		23		3		0		26		10
Total		23		3		0		26		10

* “Material Subsidiary” means a subsidiary with total assets of Won 75 billion or more as of the end of the previous fiscal year.

Changes in subsidiaries during the six months ended June 30, 2022 are set forth below.

Change	Name	Remarks
Additions	SAPEON Korea Inc.	Newly established by parent company
	SAPEON Inc.	Newly established by parent company
	SK M&Service Co., Ltd.	Newly acquired by PS&Marketing Co., Ltd.
Exclusions	—	—

A. Corporate Legal Business Name: SK Telecom Co., Ltd.

B. Date of Incorporation: March 29, 1984

C. Location of Headquarters

(1) Address: 65 Euljiro, Jung-gu, Seoul, Korea

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

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

D. Major Businesses

The Company’s businesses consist of (1) the wireless business including cellular voice, wireless data and wireless Internet services, (2) the fixed-line business including fixed-line telephone, high speed Internet and data and network lease services, and (3) other businesses including commercial retail data broadcasting channel services, among others.

The Company’s wireless business, fixed-line business and other businesses account for 75%, 22.1% and 2.9%, respectively, of the Company’s revenue. The Company’s market shares in its key business segments were approximately 48% in the wireless business, excluding mobile virtual network operator (“MVNO”) business, and approximately 29% in the high speed Internet business.

The total number of the Company’s consolidated subsidiaries as of June 30, 2022 was 26, including SK Broadband Co., Ltd. and PS&Marketing Co., Ltd. (“PS&Marketing”).

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(1) Wireless business

Wireless telecommunications companies provide services based on competitive strengths in handheld devices, affordable pricing, network coverage and an extensive contents library. The Company continues to maintain its reputation as the unparalleled premium network operator in the 3G, 4G and 5G markets on the basis of its technological leadership and network management technology. With the world’s first commercialization of 5G technology in 2019, the Company continues to maintain its position as the top network operator in the 5G era and strives to provide differentiated services to its customers.

In order to strengthen its sales channels, the Company has been offering a variety of fixed-line and wireless telecommunication convergence products through its subsidiary, PS&Marketing. PS&Marketing provides differentiated service to customers through the establishment of new sales channels and product development. Through its subsidiaries Service Ace Co., Ltd. (“Service Ace”) and Service Top Co., Ltd., the Company operates customer service centers in Seoul and provides telemarketing services. Additionally, SK O&S Co., Ltd. (“SK O&S”), the Company’s subsidiary responsible for the operation of the Company’s networks, provides customers with quality network services and provides the Company with technological know-how in network operations.

The Company plans to maintain stable growth in the sales of its wireless business based on a solid expansion in the number of 5G subscribers, while continuously enhancing profitability by pursuing efficient investments in, and operation of, its wireless networks and the stabilization of market competition.

The Company has been providing its customers with various subscription packages in partnership with various domestic and international businesses through “T Universe,” which it launched in the second half of 2021. With more options focusing on daily membership benefits and e-commerce products, T Universe aims to enhance customer experience by making it more convenient to use. The Company also launched “ifland,” a metaverse community platform that focuses on the communal aspect of metaverse, which is expected to experience rapid growth with the expansion of online culture and technological developments in 5G, AR, and VR. In addition to strengthening social and community functions, the Company plans to sequentially introduce a metaverse economy system utilizing blockchain technology for the self-sustainability and monetization of the platform. The Company also launched “A. (Adot),” a Business-to-Consumer artificial intelligence (“AI”) service that targets a high level of personalization through deep-learning technology. The Company plans to collaborate with its subsidiaries and external service providers to expand the scope of partnership and provide services that cover the daily lives of customers.

(2) Fixed-line business

For the six months ended June 30, 2022, SK Broadband Co., Ltd. (“SK Broadband”) recorded Won 2.06 trillion in revenue on a consolidated basis, which represented a 4.8% increase from Won 1.96 trillion for the six months ended June 30, 2021. Such increase was primarily attributable to the growth of our media business resulting from an increase in subscribers and the growth of our Business-to-Business (“B2B”) business resulting from the operation of new data centers and other factors.

The Company’s business is divided into the media business segment, which provides IPTV and cable TV services, and the fixed-line business segment, which provides high-speed Internet, telecommunications, leased lines and Internet data center services. For the six months ended June 30, 2022, the media business segment recorded Won 937.6 billion in revenue, which represented a 3.4% increase compared to the six months ended June 30, 2021. For the six months ended June 30, 2022, the fixed-line business segment recorded Won 1.12 trillion in revenue, which represented an 6.1% increase compared to the six months ended June 30, 2021.

(3) Other businesses

The commercial retail data broadcasting channel business offers an interactive service that integrates television home shopping and data shopping services. Such service allows television viewers to use video-on-demand (“VOD”) services to purchase products sold on television home shopping channels, which were previously only available for purchase in real-time when such relevant programming was being broadcast.

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In order to secure core competencies at an early stage and achieve differentiation, the Company has been actively searching for high-efficiency television channels while increasing the competitiveness of its content production capacity by building the Company’s own media center and adopting a media wall with the objective of transforming it into an eco-friendly digital studio. In addition to enhancing the convenience of shopping experience by offering various media content on its mobile live platform, the Company was the first in the industry to launch a cloud-based television application service, “Stoa ON,” which provides personalized digital television shopping services. Furthermore, the Company has been establishing itself as a leading shopping channel service provider by securing a diverse product portfolio and engaging in product development in areas ranging from fashion to health food. Within three years following the spin-off of SK stoa Co., Ltd. (“SK Stoa”) into a separate entity, its commercial retail data broadcasting channel business has attained a leading position in the television commerce (“T-commerce”) market.

See “II.1. Business Overview” for more information.

E. Credit Ratings

(1) Corporate bonds and other long-term securities

Credit rating date	Subject of rating	Credit rating	Credit rating entity (Credit rating range)	Rating classification
June 16, 2020	Corporate bond	AAA (Stable)	Korea Ratings	Regular rating
June 18, 2020	Corporate bond	AAA (Stable)	Korea Investors Service, Inc.	Regular rating
June 22, 2020	Corporate bond	AAA (Stable)	NICE Investors Service, Co., Ltd.	Regular rating
September 28, 2020	Corporate bond	AAA (Stable)	NICE Investors Service, Co., Ltd.	Current rating
September 29, 2020	Corporate bond	AAA (Stable)	Korea Ratings	Current rating
September 29, 2020	Corporate bond	AAA (Stable)	Korea Investors Service, Inc.	Current rating
December 30, 2020	Corporate bond	AAA (Stable)	NICE Investors Service, Co., Ltd.	Current rating
January 4, 2021	Corporate bond	AAA (Stable)	Korea Ratings	Current rating
January 4, 2021	Corporate bond	AAA (Stable)	Korea Investors Service, Inc.	Current rating
June 15, 2021	Corporate bond	AAA (Stable)	NICE Investors Service, Co., Ltd.	Regular rating
June 16, 2021	Corporate bond	AAA (Stable)	Korea Investors Service, Inc.	Regular rating
June 25, 2021	Corporate bond	AAA (Stable)	Korea Ratings	Regular rating
October 14, 2021	Corporate bond	AAA (Stable)	Korea Investors Service, Inc.	Current rating
October 15, 2021	Corporate bond	AAA (Stable)	NICE Investors Service, Co., Ltd.	Current rating
October 15, 2021	Corporate bond	AAA (Stable)	Korea Ratings	Current rating
March 30, 2022	Corporate bond	AAA (Stable)	Korea Ratings	Regular rating
March 30, 2022	Corporate bond	AAA (Stable)	Korea Ratings	Current rating
March 30, 2022	Corporate bond	AAA (Stable)	Korea Investors Service, Inc.	Current rating
March 30, 2022	Corporate bond	AAA (Stable)	NICE Investors Service, Co., Ltd.	Current rating
March 30, 2022	Corporate bond	AAA (Stable)	NICE Investors Service, Co., Ltd.	Regular rating
June 15, 2022	Corporate bond	AAA (Stable)	Korea Investors Service, Inc.	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 such that it will not be influenced by reasonably foreseeable changes in external factors.

* Rating definition: “AA”—The certainty of principal and interest payment is extremely high with very low investment risk, but has slightly inferior factors compared to “AAA” rating.

(2) Commercial paper (“CP”) and short-term bonds

Credit rating date	Subject of rating	Credit rating	Credit rating entity (Credit rating range)	Rating classification
June 16, 2020	CP	A1	Korea Ratings	Current rating
June 16, 2020	Short-term bond	A1	Korea Ratings	Current rating
June 18, 2020	CP	A1	Korea Investors Service, Inc.	Current rating
June 18, 2020	Short-term bond	A1	Korea Investors Service, Inc.	Current rating
June 22, 2020	CP	A1	NICE Investors Service Co., Ltd.	Current rating
June 22, 2020	Short-term bond	A1	NICE Investors Service Co., Ltd.	Current rating
September 28, 2020	CP	A1	NICE Investors Service Co., Ltd.	Regular rating
September 28, 2020	Short-term bond	A1	NICE Investors Service Co., Ltd.	Regular rating
September 29, 2020	CP	A1	Korea Ratings	Regular rating
September 29, 2020	Short-term bond	A1	Korea Ratings	Regular rating

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Credit rating date	Subject of rating	Credit rating	Credit rating entity (Credit rating range)	Rating classification
September 29, 2020	CP	A1	Korea Investors Service, Inc.	Regular rating
September 29, 2020	Short-term bond	A1	Korea Investors Service, Inc.	Regular rating
June 15, 2021	CP	A1	NICE Investors Service Co., Ltd.	Current rating
June 15, 2021	Short-term bond	A1	NICE Investors Service Co., Ltd.	Current rating
June 16, 2021	CP	A1	Korea Investors Service, Inc.	Current rating
June 16, 2021	Short-term bond	A1	Korea Investors Service, Inc.	Current rating
June 25, 2021	CP	A1	Korea Ratings	Current rating
June 25, 2021	Short-term bond	A1	Korea Ratings	Current rating
October 14, 2021	CP	A1	Korea Investors Service, Inc.	Regular rating
October 14, 2021	Short-term bond	A1	Korea Investors Service, Inc.	Regular rating
October 15, 2021	Short-term bond	A1	NICE Investors Service Co., Ltd.	Regular rating
October 15, 2021	CP	A1	NICE Investors Service Co., Ltd.	Regular rating
October 15, 2021	CP	A1	Korea Ratings	Regular rating
October 15, 2021	Short-term bond	A1	Korea Ratings	Regular rating
November 3, 2021	CP	A1	Korea Investors Service, Inc.	Rating update
November 3, 2021	Short-term bond	A1	Korea Investors Service, Inc.	Rating update
June 15, 2022	CP	A1	Korea Investors Service, Inc.	Regular rating
June 15, 2022	Short-term bond	A1	Korea Investors Service, Inc.	Regular rating
June 20, 2022	CP	A1	Korea Ratings	Regular rating
June 20, 2022	Short-term bond	A1	Korea Ratings	Regular rating
June 21, 2022	CP	A1	NICE Investors Service Co., Ltd.	Regular rating
June 21, 2022	Short-term bond	A1	NICE Investors Service Co., Ltd.	Regular rating

* Rating definition: “A1”—Timely repayment capability is at the highest level with extremely low investment risk and is stable such that it will not be influenced by reasonably foreseeable changes in external factors.

(3) International credit ratings

Date of credit rating	Subject of rating		Credit rating of securities	Credit rating agency	Rating type
June 11, 2020		Bonds denominated in foreign currency	A3 (Negative)	Moody’s Investors Service	Regular rating
October 6, 2020		Bonds denominated in foreign currency	A- (Stable)	Fitch Ratings	Regular rating
March 30, 2021		Bonds denominated in foreign currency	A- (Stable)	S&P Global Ratings	Regular rating
June 16, 2021		Bonds denominated in foreign currency	A3 (Stable)	Moody’s Investors Service	Regular rating
June 21, 2021		Bonds denominated in foreign currency	A- (Stable)	Fitch Ratings	Regular rating
December 8, 2021		Bonds denominated in foreign currency	A- (Stable)	Fitch Ratings	Regular rating
February 25, 2022		Bonds denominated in foreign currency	A- (Stable)	S&P Global Ratings	Regular rating

(4) Listing (registration or designation) of Company’s shares and special listing status

Listing (registration or designation) of stock	Date of listing (registration or designation)	Special listing	Special listing and applicable regulations
KOSPI Market of Korea Exchange	November 7, 1989	Not applicable	Not applicable

2. Company History

March 1984: Establishment of Korea Mobile Telecommunications Co., Ltd.

November 1989: Listing on the KOSPI Market of the Korea Exchange

March 1997: Change of name to SK Telecom Co., Ltd.

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March 2008: Acquisition of Hanaro Telecom (the predecessor entity of SK Broadband)

October 2011: Spin-off of SK Planet Co., Ltd. (“SK Planet”)

June 2015: Comprehensive exchange of shares of SK Broadband

May 2018: Acquisition of ADT CAPS Co., Ltd. (“Former ADT CAPS”) through the acquisition of shares of Siren Holdings Korea Co., Ltd.

December 2018: Comprehensive exchange of shares of SK Infosec Co., Ltd. (“SK Infosec”)

April 2020: Merger of SK Broadband and Tbroad

December 2020: Spin-off of T map Mobility Co., Ltd. (“T Map Mobility”)

March 2021: Merger of SK Infosec and Former ADT CAPS

November 2021: Spin-off of SK Square Co., Ltd. (“SK Square”) from SK Telecom (the “Spin-off”)

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, Jongno-gu, Seoul (December 20, 1999)

- 65 Euljiro, Jung-gu, Seoul (December 13, 2004)

B. Significant Changes in Management

Date of change	Shareholder meeting classification	Appointment		Term Termination or Dismissal
		Newly appointed	Re-elected
March 21, 2018	General Meeting of Shareholders	Young Sang Ryu, Youngmin Yoon	—	—
March 26, 2019	General Meeting of Shareholders	Seok-Dong Kim	—	Dae Sik Oh
March 26, 2020	General Meeting of Shareholders	Yong-Hak Kim, Junmo Kim	Jung Ho Park, Dae Sik Cho, Jung Ho Ahn	Jae Hoon Lee, Jae Hyeon Ahn
March 25, 2021	General Meeting of Shareholders	—	Young Sang Ryu, Youngmin Yoon	—
August 25, 2021	—	—	—	Dae Sik Cho
October 12, 2021	Extraordinary Meeting of Shareholders	Kyu-Nam Choi	—	—
November 1, 2021	—	Young Sang Ryu	—	Jung Ho Park
March 25, 2022	General Meeting of Shareholders	Jong Ryeol Kang	Seok-Dong Kim	—

* On August 25, 2021, Dae Sik Cho resigned from his position as a non-executive director.

* On November 1, 2021, Jung Ho Park resigned from his position as the representative director following the Spin-off, and inside director Young Sang Ryu was appointed as representative director.

C. Change in Company Name

On March 28, 2019, in accordance with a resolution at its general meeting of shareholders, Iriver Ltd. (“Iriver”) changed its name to Dreamus Company, which has been eliminated from the Company’s consolidation scope following the Spin-off.

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On April 17, 2019, Network O&S Co., Ltd. changed its name to SK O&S Co., Ltd. pursuant to a resolution at its extraordinary meeting of shareholders.

On March 4, 2021, SK Infosec merged Former ADT CAPS with and into itself and changed its name to ADT CAPS Co., Ltd. (“ADT CAPS”) after the date of the merger. As of October 26, 2021, ADT CAPS changed its name to SK shieldus Co., Ltd., which has subsequently been eliminated from the Company’s consolidation scope following the Spin-off.

D. Mergers, Acquisitions and Restructuring

[SK Telecom]

(1) Acquisition of shares of FSK L&S Co., Ltd.

On February 6, 2016, the Company acquired 2,415,750 shares of FSK L&S Co., Ltd. at a purchase price of Won 17.8 billion from SK Inc. (formerly known as SK Holdings Co., Ltd.) to utilize its logistics sharing infrastructure with its counterparties and pursue new business opportunities. As a result of the acquisition, the Company had a 60% equity interest in FSK L&S Co., Ltd.

(2) Acquisition of shares of id Quantique SA

In order to increase the value of the Company by enhancing its position as the top mobile network operator (“MNO”) through utilizing quantum cryptography and by generating returns from its global business, the Company acquired an additional 41,157,506 shares of id Quantique SA on April 30, 2018. As a result, the Company owns a total of 58.1% of the issued and outstanding shares (44,157,506 shares), and has acquired control, of id Quantique SA.

(3) Acquisition of shares of Siren Holdings Korea Co., Ltd.

The Company acquired shares of Siren Holdings Korea Co., Ltd. (“SHK”), which wholly owned Former ADT CAPS, in order to strengthen its security business and expand its residential customer base. See “Report on Decision on Acquisition of Shares of Siren Holdings Korea Co., Ltd.” filed on May 8, 2018 for more information.

* Siren Investments Korea Co., Ltd. merged with and into SHK with SHK as the surviving entity, following which CAPSTEC Co., Ltd. (“CAPSTEC”) and ADT SECURITY Co., Ltd. (“ADT SECURITY”), which were subsidiaries of Former ADT CAPS, became subsidiaries of SHK.

* SHK changed its name to Life & Security Holdings Co., Ltd. (“Life & Security Holdings”) in accordance with a resolution at its extraordinary meeting of shareholders on October 23, 2018, and Life & Security Holdings merged with SK Infosec on December 30, 2020.

(4) Capital increase of Iriver

On July 26, 2018, the board of directors of Iriver, a subsidiary of the Company, resolved to approve a capital increase of Won 70,000 million through third-party allotment and subsequently issued 7,990,867 common shares. The Company participated in the capital increase and paid Won 65,000 million to subscribe 7,420,091 common shares of Iriver on August 10, 2018, resulting in an increase of the Company’s ownership interest from 45.9% to 53.7%.

(5) Exchange of shares of SK Infosec

On October 26, 2018, the Company announced the decision of the Board of Directors to approve the comprehensive exchange of shares of SK Infosec for shares of the Company. The share exchange ratio was one common share of the Company to 0.0997678 common share of SK Infosec. The share exchange was completed on December 27, 2018, upon which SK Infosec became a wholly-owned subsidiary of the Company.

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(6) Acquisition of shares of SK Stoa

On April 25, 2019, the Board of Directors resolved to acquire the 100% equity interest in SK Stoa owned by SK Broadband, a subsidiary of the Company, in order to expand its T-commerce business and maximize synergies with other ICT businesses of the Company. On January 3, 2020, the Company acquired 3,631,355 shares of SK Stoa after obtaining governmental approvals.

(7) Acquisition of shares of Tbroad Nowon Broadcasting Co., Ltd. (“Tbroad Nowon”)

On April 26, 2019, the Board of Directors resolved to acquire shares of Tbroad Nowon to enhance the Company’s competitiveness in the media business pursuant to a share purchase agreement with Tbroad Nowon’s largest shareholder, Tbroad. The Company acquired a 55.00% equity interest, or 627,000 shares, of Tbroad Nowon at a purchase price of Won 10.4 billion. See the report on “Amendment Regarding Decision on Acquisition of Tbroad Nowon” filed by the Company on January 28, 2020 for more information.

(8) Disposal of shares of SMC and Shopkick

On June 11, 2019, SKP America, LLC, a subsidiary of the Company, disposed of its 100% equity interest in SMC and SMC’s wholly-owned subsidiary Shopkick.

(9) Acquisition of shares of Incross Co., Ltd. (“Incross”)

On June 28, 2019, the Company acquired 2,786,455 shares of Incross in order to strengthen its digital advertising business. The Company’s equity interest in Incross following the acquisition is 34.6%. See the report on “Decision on Acquisition of Shares of Incross” filed by the Company on April 11, 2019, as amended on June 3, 2019 for more information.

(10) Capital increase of Content Alliance Platform Inc. (“Content Alliance Platform”)

On September 18, 2019, the Company participated in a capital increase by Content Alliance Platform in the amount of Won 90 billion through third-party allotment in order to provide innovative media services and contents to customers and to enhance its competitiveness as a differentiated mobile OTT platform. See the report on “Participation in Capital Increase by Content Alliance Platform” filed by the Company on April 5, 2019, as amended on June 28, 2019.

(11) Acquisition of newly-issued shares of Kakao Corp. (“Kakao”)

In order to pursue a strategic alliance with Kakao, the Company acquired newly-issued common shares of Kakao in the aggregate amount of approximately Won 300 billion through third-party allotment on November 5, 2019. Kakao acquired treasury shares of the Company. See the report on “Results of Disposal of Treasury Shares” filed by the Company on November 5, 2019 for more information.

(12) Spin-off of T Map Mobility

In order to strengthen the business expertise and enhance the efficiency of the Company’s mobility business, the Company engaged in a vertical spin-off of such business into T Map Mobility. The spin-off was a simple vertical spin-off, whereby the shareholder ownership composition remained the same, and it had no effect on the Company’s consolidated financial statements. The spin-off registration date was December 30, 2020.

* See the report on “Decision to Spin Off Mobility Business” filed by the Company on October 16, 2020, for more information.

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(13) Spin-off of SK Square

The Company engaged in the Spin-off, comprising a horizontal spin-off of its business of managing the equity interests in certain investees engaged in, among other things, semiconductor and new ICT businesses and making new investments into a newly established company, SK Square. The Spin-off was conducted in order to (i) strengthen the competitiveness of, and concentrate capabilities relating to, the spun-off investments, (ii) increase the transparency of corporate governance and management stability and (iii) efficiently allocate management resources through changes in the corporate governance structure of the Company and SK Square, thereby facilitating appropriate market valuation and ultimately enhancing the corporate and shareholder values of the Company and SK Square. The Spin-off registration date was November 2, 2021.

* See the report on “Decision on Spin-Off” filed by the Company on June 10, 2021, for more information.

(14) Transfer of AI semiconductor business

On December 21, 2021, the Board of Directors resolved to approve an agreement for the transfer of the Company’s AI semiconductor business to facilitate the commercialization of the Company’s AI semiconductor technology and to improve management efficiency. The transfer was completed on January 4, 2022.

*See the report on “Decision on Business Transfer” filed by the Company on December 22, 2021, for more information.

[SK Broadband]

(1) Transfer of business

On April 5, 2019, SK Broadband’s board of directors resolved to approve an agreement for the transfer of its OTT service, oksusu, to Content Alliance Platform (POOQ), a joint venture among KBS, MBC and SBS. The transaction was completed on September 18, 2019.

(2) Transfer of subsidiary shares

On April 24, 2019, SK Broadband’s board of directors approved the transfer of its 100% equity interest (3,631,355 shares) in SK Stoa, a subsidiary of SK Broadband, to SK Telecom. On December 30, 2019, the Ministry of Science and ICT (“MSIT”) approved the change in the largest capital contributor, and the transaction was completed on January 3, 2020.

(3) Merger of Tbroad, Tbroad Dongdaemun Broadcasting Co., Ltd. (“Tbroad Dongdaemun”) and Korea Digital Cable Media Center (“KDMC”) with and into SK Broadband (the “Tbroad Merger”)

On April 26, 2019, SK Broadband’s board of directors resolved to enter into a merger agreement pursuant to which Tbroad, Tbroad Dongdaemun and KDMC will merge with and into SK Broadband. On January 23, 2020, the parties entered into an amendment to the merger agreement due to changes in the merger timeline, and on March 26, 2020, the entry into the merger agreement was approved as proposed at the extraordinary general meeting of shareholders. The Tbroad Merger was completed as of April 30, 2020.

(4) Transfer of business

On July 30, 2020, SK Broadband’s board of directors resolved to approve a certain MVNO Business Transfer Agreement in connection with the sale of its MVNO business to Korea Cable Telecom Co., Ltd. The sale was a follow-up measure to, and a condition to MSIT’s approval of, the Tbroad Merger, and was carried out pursuant to the terms of the merger agreement for the Tbroad Merger. The transfer was completed on August 31, 2020.

(5) Acquisition of business

On December 4, 2020, SK Broadband entered into a certain business transfer agreement to acquire SK Telink’s B2B business with the purpose of strengthening the market competitiveness of the B2B business through an reorganization of such business within the wider ICT business of the SK Group. The transfer was completed on March 31, 2021.

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(6) Establishment of a subsidiary and acquisition of shares

On January 5, 2021, SK Broadband established Media S Co., Ltd., a subsidiary engaged in the production and supply of broadcasting programs, through a capital contribution of Won 23.0 billion (representing a 100% equity interest), and the subsidiary was added as a member of the SK Group by the Korea Fair Trade Commission (the “KFTC”) as of March 2, 2021. On June 22, 2022, SK Broadband acquired 5,000,000 additional shares for Won 25 billion through a capital increase by allocation to shareholders.

[SK Telink]

(1) Disposal of NSOK shares

Pursuant to the resolution of its board of directors on October 8, 2018, SK Telink entered into an agreement to sell 1,012,459 shares of NSOK (representing a 100.00% equity interest) to Life & Security Holdings. The date of sale was October 10, 2018, and the sale consideration amount was Won 100 billion. See “Report on Disposal of Shares of Related Party” filed on October 8, 2018 by SK Telink for more information about this transaction.

(2) Change in location of headquarters

As of April 20, 2020, SK Telink changed the location of its headquarters to 144 Mapo T-town, Mapo-daero, Mapo-gu, Seoul pursuant to a resolution of its board of directors on April 16, 2020.

(3) Transfer of access ID business

On May 22, 2020, the board of directors of SK Telink resolved to transfer its access ID business and related assets to Former ADT CAPS, a related party, for Won 0.4 billion, effective as of May 31, 2020.

(4) Transfer of device business

On May 22, 2020, the board of directors of SK Telink resolved to transfer its device business and related assets to SK Networks Co., Ltd., a related party, for Won 4.4 billion, effective as of July 1, 2020. As such transfer qualified as a simplified business transfer, the board resolution served as requisite approval in lieu of approval by the general meeting of shareholders.

(5) Transfer of B2B business

On December 2, 2020, SK Telink held an extraordinary general meeting of shareholders, which resolved to transfer its B2B business and related assets to its affiliated company, SK Broadband. The transfer was completed on March 31, 2021, and the value of the transfer was Won 20.3 billion.

[PS&Marketing]

(1) Acquisition of shares of SK M&Service Co., Ltd.

PS&Marketing acquired 3,099,112 shares of SK M&Service Co., Ltd. (a 100% equity interest) to strengthen its competitiveness in distribution and promote the synergy within the SKT ICT Family. The transaction was completed on February 9, 2022.

10

3. Total Number of Shares

A. Total Number of Shares

(As of June 30, 2022)			(Unit: in shares)
	Share type						Remarks
Classification	Common shares		Preferred shares		Total
I. Total number of authorized shares		670,000,000		—		670,000,000		—
II. Total number of shares issued to date		304,927,159		—		304,927,159		—
III. Total number of shares retired to date		86,094,015		—		86,094,015		—
a. reduction of capital		—		—		—		—
b. retirement with profit		86,094,015		—		86,094,015		—
c. redemption of redeemable shares		—		—		—		—
d. others		—		—		—		—
IV. Total number of issued shares (II-III)		218,833,144		—		218,833,144		—
V. Number of treasury shares		801,091		—		801,091		—
VI. Number of outstanding shares (IV-V)		218,032,053		—		218,032,053		—

* Following the stock split effective as of October 28, 2021 (the “Stock Split”), the total number of issued shares changed from 72,060,143 shares (par value of Won 500 per share) to 218,833,144 shares (par value of Won 100 per share).

* Number of treasury shares includes 54,032 treasury shares acquired relating to fractional shares from the Spin-off.    

B. Treasury Shares

(As of June 30, 2022)										(Unit: in shares)
			Type of shares	At the beginning of period		Changes						At the end of period
Acquisition methods						Acquired (+)		Disposed (-)		Retired (-)
Acquisition pursuant to the Financial Investment Services and Capital Markets Act of Korea	Direct acquisition	Direct acquisition from market	Common shares		—		—		—		—		—
			Preferred shares		—		—		—		—		—
		Direct over-the-counter acquisition	Common shares		—		—		—		—		—
			Preferred shares		—		—		—		—		—
		Tender offer	Common shares		—		—		—		—		—
			Preferred shares		—		—		—		—		—
		Sub-total (a)	Common shares		—		—		—		—		—
			Preferred shares		—		—		—		—		—
	Acquisition through trust and other agreements	Held by trustee	Common shares		—		—		—		—		—
			Preferred shares		—		—		—		—		—
		Held in actual stock	Common shares		1,196,960				395,869		—		801,091
			Preferred shares		—		—		—		—		—
		Sub-total (b)	Common shares		1,196,960		—		395,869		—		801,091
			Preferred shares		—		—		—		—		—
Other acquisition (c)			Common shares		54,032		—		54,032		—		—
			Preferred shares	—		—		—		—		—
Total (a+b+c)			Common shares		1,250,992		—		449,901		—		801,091
			Preferred shares		—		—		—		—		—

* On January 24, 2022, the Company disposed 413,080 treasury shares for bonus payment purposes.

* On February 25, 2022, the Company disposed 7,598 treasury shares for bonus payment purposes.

* On May 2, 2022, the Company disposed 5,984 treasury shares for bonus payment purposes.

* On May 13, 2022, the Company disposed 23,239 treasury shares for bonus payment purposes.

11

4. Status of Direct Acquisitions and Disposal of Treasury Shares

(As of June 30, 2022)							(Unit: in shares and percentages)
Classification	Expected Acquisition (Disposal) Period		Expected Number of Shares (A)		Executed Number of Shares (B)		Execution Ratio (B/A)			Reporting Date
	Start Date	End Date
Direct Disposal	Feb. 3, 2021	Feb. 3, 2021		604,950		604,950		100	%	Feb. 8, 2021
Direct Disposal	Jun. 21, 2021	Jun. 21, 2021		2,500		2,500		100		Jun. 22, 2021
Direct Disposal	Oct. 25, 2021	Dec. 16, 2021		2,526,553		2,526,553		100		Dec. 20, 2021
Direct Disposal	Jan. 24, 2022	Jan. 24, 2022		413,080		413,080		100		Jan. 27, 2022
Direct Disposal	Feb. 25, 2022	Feb. 25, 2022		7,598		7,598		100		Feb. 28, 2022
Direct Disposal	May 2, 2022	May 2, 2022		5,984		5,984		100		May 17, 2022
Direct Disposal	May 13, 2022	May 13, 2022		23,239		23,239		100		May 17, 2022

* The expected number of shares and executed number of shares reflect the effect of the Stock Split.

5. Status of Trust Agreement on Repurchase of Treasury Shares

(As of June 30, 2022)

(Unit: in Won, percentages and number of instances)

Classification

Agreement Period

Maximum Value of Treasury Shares to be Acquired under Agreement (A)

Actual Value of Treasury Shares Acquired under Agreement (B)

Execution Ratio (B/A)

Change of Sales Direction

Reporting Date

Start Date

End Date

Number of Instances

Date

Trust Agreement Termination

Aug. 28, 2020

Apr. 30, 2021

W

500,000,000,000

W

499,646,025,000

99.93

%

0

—

Apr. 30, 2021

6. Matters Concerning Articles of Incorporation

Date of Revision	General Meeting of Shareholders	Key Revisions	Reason for Revisions
March 26, 2020	36th General Meeting of Shareholders	Specialized safety and health planning, etc.	Changes in accordance with amendments to the Industrial Safety and Health Act of Korea and to reflect the relevant revisions to SK Group-wide management policies under SK Management System
March 25, 2021	37th General Meeting of Shareholders	Corporate governance charter, term of office of independent directors, dividends, etc.	To provide basis for adopting a corporate governance charter and quarterly dividends in the Articles of Incorporation and to reflect applicable amendments to the Korean Commercial Code
October 12, 2021	1st Extraordinary General Meeting of Shareholders	Total number of authorized shares, par value per share	Stock Split from par value of Won 500 per share to par value of Won 100 per share
March 25, 2022	38th General Meeting of Shareholders	The Company’s areas of business	To reflect the Company’s pursuit of new businesses including data and medical equipment businesses

12

II. BUSINESS

1. Business Overview

Each company in the consolidated entity is a separate legal entity providing independent services and products. The Company’s business is primarily separated into (1) the wireless business consisting of cellular voice, wireless data and wireless Internet services, (2) the fixed-line business consisting of fixed-line telephone, high-speed Internet, data and network lease services, among others and (3) other businesses consisting of commercial retail data broadcasting channel business, among others.

Set forth below is a summary description of the business of each of the Company’s material consolidated subsidiaries.

Classification	Company name	Description of business
Wireless	SK Telecom Co., Ltd.	Wireless voice and data telecommunications services via digital wireless networks
	PS&Marketing Co., Ltd.	Sale of fixed-line and wireless telecommunications products through wholesale, retail and online distribution channels
	SK O&S Co., Ltd.	Maintenance of switching stations
	Service Ace Co., Ltd.	Management and operation of customer centers
	SK M&Service Co., Ltd.	Database and online information services
Fixed-line	SK Broadband Co., Ltd.	High-speed Internet, TV, telephone, commercial data and other fixed-line services and management of the transmission system for online digital contents Various media-related services, such as channel management services including VOD
	Home & Service Co., Ltd.	System maintenance of high-speed Internet, IPTV and fixed-line services
	SK Telink Co., Ltd.	International wireless direct-dial “00700” services and MVNO business
Other business	SK stoa Co., Ltd.	Operation of commercial retail data broadcasting channel services
	Atlas Investment	Investments
	SK Telecom Innovation Fund, L.P.	Investments

[Wireless Business]

A. Industry Characteristics

The telecommunications services market can be categorized into telecommunications services (such as fixed-line, wireless, leased line and value-added services) and broadcasting and telecommunications convergence services. Pursuant to the Telecommunications Business Act, the telecommunications services market can be further classified into basic telecommunications (fixed-line and wireless telecommunications), special category telecommunications (resale of telecommunications equipment, facilities and services) and value-added telecommunications (Internet connection and management, media contents and others).

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The size of the domestic telecommunications services market is determined based on various factors specific to Korea, including size of population that uses telecommunication services and telecommunications expenditures per capita. While it is possible for Korean telecommunication service providers to provide services abroad through acquisitions or otherwise, foreign telecommunication services markets have their own characteristics depending, among others, on the regulatory environment and demand for telecommunication services.

B. Growth Potential

The Korean mobile communication market is considered to have reached its maturation stage with more than a 100% penetration rate. However, the Korean mobile communications market continues to improve in the quality of services with the help of advances in network-related technology and the development of highly advanced smartphones which enable the provision of New ICT services for advanced multimedia contents, mobile commerce, mobility and other related services. In addition, the ultra-low latency and high capacity characteristics of 5G networks as well as the advancement of AI are expected to accelerate the introduction of new services and the growth of IoT-based B2B businesses.

	(Unit: in 1,000 persons)
		As of June 30	As of December 31,
Classification		2022	2021	2020
Number of subscribers	SK Telecom	30,250	29,696	29,089
	Others (KT, LG U+)	32,304	31,869	31,341
	MVNO	11,604	10,355	9,111
	Total	74,158	71,920	69,541

* Source: Wireless telecommunications service data from the MSIT as of June 30, 2022.

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. Sales revenue related to data services has been growing due to the increasing popularity of smartphones and high-speed wireless networks. There is also a growing importance to the B2B segment, which creates added value by selling and developing various solutions. The telecommunications industry is a regulated industry requiring license and approval from the MSIT.

In the wireless business, industry players compete on the basis of the following three main competitive elements:

(i) brand competitiveness, which refers to the overall sense of recognition and loyalty experienced by customers with respect to services and values provided by a company, including the images created by a company’s comprehensive activities and communications on top of the actual services rendered;

(ii) product and service competitiveness, which refers to the fundamental criteria for wireless telecommunications services, including voice quality, service coverage, broad ranges of rate plans, diversified mobile Internet services, price and quality of devices and customer service quality, as well as the ability to develop new services that meet customer needs in a market environment defined by convergence; and

(iii) sales competitiveness, which refers to novel and diversified marketing methods and the strength of the distribution network.

Set forth below is the historical market share of the Company (excluding MVNO subscribers).

	(Unit: in percentages)
Classification	As of June 30,		As of December 31,
	2022		2021		2020
Mobile communication services		48.4		48.2		48.1

* Source: Wireless telecommunications service data from the MSIT as of June 30, 2022.

14

D. Competitive Strengths

The Company successfully completed the Spin-off of SK Square from SK Telecom in 2021 to maximize shareholder value and launched “SKT 2.0.” Concurrently, the Company reorganized its business to center around five major business areas and is seeking maximization of overall corporate value by establishing and executing strategies optimized for each business segment and pursuing growth in each segment. For the six months ended June 30, 2022, the Company recorded Won 4.29 trillion in operating revenue and Won 0.46 trillion in operating profit on a consolidated basis and Won 3.12 trillion in operating revenue and Won 0.38 trillion in operating profit for the period on a separate basis. The Company is continuing to increase its revenue and enhance its profitability by leveraging its competitiveness in the 5G market and secured 11.68 million 5G subscribers as of June 30, 2022.

SK Telink Co., Ltd. (“SK Telink”), a consolidated subsidiary of the Company, operates its MVNO service, “SK 7Mobile,” which is offered at reasonable rates and provides excellent quality. SK Telink is increasing its efforts to develop low-cost distribution channels and create niche markets through targeted marketing towards customers including foreign workers, middle-aged adults and students.

SK O&S, a subsidiary of the Company responsible for the operation of the Company’s base stations and related transmission and power facilities, offers quality fixed-line and wireless network services to customers, including mobile office products to business customers. In addition, Service Ace is developing its competence as a marketing company while providing top-quality customer service.

PS&Marketing, a subsidiary of the Company, provides a sales platform for products of the Company and SK Broadband including fixed-line and wireless telecommunication products that address customers’ needs for various convergence products. PS&Marketing provides differentiated service to clients through the establishment of new sales channels and product development.

[Fixed-line Business]

A. Industry Characteristics

The domestic telecommunication service industry displays the typical characteristics of a domestic industry given that its coverage area is limited to Korea. As a result, the size of the industry is greatly affected by the domestic economic factors including the domestic user population and the level of telecommunication service expenditures in light of the domestic income level. Domestic telecommunication companies may expand overseas through acquisitions or direct expansion, but the overseas telecommunication service industries are subject to inherently different industry characteristics from the domestic one, depending on the regulatory and demand characteristics of each country.

The broadcasting business involves the planning, programming or production of broadcasting programs and transmission to viewers through telecommunication facilities. The broadcasting market can be categorized into terrestrial broadcasting, fixed-line TV broadcasting, satellite broadcasting and programming-providing businesses, in each case pursuant to the Broadcasting Act, as well as Internet multimedia broadcasting business pursuant to the Internet Multimedia Broadcast Services Act. The Company engages in the fixed-line TV broadcasting business, which is defined as the business of managing and operating fixed-line TV broadcasting stations (including their facilities and employees for the purpose of providing multi-channel broadcasting) and providing broadcasts through transmission and line facilities. The Internet multimedia broadcasting refers to the broadcasting of programs through a combination of various contents including data, video, voice, sound and/or e-commerce, including real-time broadcasting, while guaranteeing a consistent service quality through a bidirectional Internet protocol using a broadband integrated information network.

As a result of the government’s direct and indirect control over the fixed-line telecommunications industry, ranging from service licensing to business activities, the industry’s overall growth potential and degree of competition are greatly affected by the government’s regulatory policies. The fixed-line telecommunications industry is also a technology-intensive industry that evolves rapidly and continuously through the development of communications technology and equipment, which requires proactive responses in meeting the needs of subscribers by developing new services and penetrating the market. Fixed-line telecommunications services have become universal and essential means of communication and act as the foundation for integration and convergence with various other services. The essential nature of such services provides stable demand, resulting in low sensitivity to economic conditions.

15

In addition, the Korean fixed-line services industry is marked by a high level of market concentration, as the government is highly selective in granting telecommunications business licenses. While the competitive landscape of the fixed-line and wireless services markets is dominated by its three leading operators, the Company (including SK Broadband), KT and LG U+, the intensity of competition is growing as digitalization of communication technologies and devices leads to the convergence of fixed-line and wireless services, as well as broadcasting and telecommunications, and technology for faster data communication services is developed.

In the high-speed Internet services market, the demand for faster and more reliable premium Giga Internet services is increasing due to the growth in usage of home mobile networks using Wi-Fi and an increased consumption of high-definition large media content.

With the mergers and acquisitions among IPTV service providers and multiple service operators, the paid broadcasting market has reorganized around IPTV operators, and companies are moving away from competition based on subscriber base expansion to competition based on media platform services. The transition to a contactless service society due to COVID-19 has led to increased consumption of paid content by viewers, accelerating competition through the ability to source unique contents. The Company expects new growth in the home platform domain by providing customized services using ICT convergence technologies such as AI and big data in addition to differentiated contents.

In the corporate business market, the Company is continuing its efforts to generate stable returns by securing growth drivers in new service areas such as cloud computing, while also strengthening its competitiveness in the traditional fixed line-based business through expansion of core infrastructure including Internet data centers, which have seen an increase in market demand recently.

B. Growth Potential

		(Unit: in persons)
Classification		As of June 30,		As of December 31,
		2022		2021		2020
Fixed-line Subscribers	High-speed Internet		23,264,220		22,944,268		22,330,182
	Fixed-line telephone		11,903,414		12,211,954		12,859,279
	IPTV		19,689,655		19,003,970		17,872,297
	Cable TV		12,927,463		13,044,615		13,305,796

* Source: MSIT website.

* High-speed Internet and fixed-line telephone subscribers represent the number of subscribers as of June 30, 2022, while IPTV and cable TV subscribers represent the average number of subscribers in the second half of 2021.

C. Cyclical Nature and Seasonality

High-speed Internet and fixed-line telephone services operate in mature markets that are comparatively less sensitive to cyclical economic changes as the services provided by different operators have become less differentiated. TV services have become necessities that provide broadcasting, and the market, which is subject to a subscriber-based business model, has little sensitivity to cyclical economic changes. The telecommunications services market overall is not expected to be particularly affected by economic downturns due to the low income elasticity of demand for telecommunication services.

16

D. Domestic and Overseas Market Conditions

Set forth below is the historical market share of the Company.

		(Unit: in percentages)
Classification	As of June 30,	As of December 31,
	2022	2021	2020
High-speed Internet (including resales)	28.5	28.7	29.0
Fixed-line telephone (including Voice over Internet Protocol (“VoIP”)	17.6	17.5	16.8
IPTV	30.7	30.6	30.3
Cable TV	22.2	22.2	22.5

* Source: MSIT website.

* With respect to Internet telephone, the market share was calculated based on market shares among the Company, KT and LG U+ and is based on the number of IP phone subscribers.

* Market shares of High-speed Internet and Fixed-line telephone represent the market shares as of June 30, 2022 and market shares of IPTV and Cable TV represent the average market shares in the second half of 2021.

SK Broadband is engaged in a number of business areas including high-speed Internet, home telephone, corporate business, IPTV and cable TV pursuant to the relevant communications regulations such as the Telecommunications Business Act, the Internet Multimedia Broadcast Services Act and the Broadcasting Act. In each of its principal business areas, SK Broadband principally competes on the basis of price, service quality and speed. In the IPTV business, the ability to offer complex services and differentiated contents are becoming increasingly important. General telecommunications businesses operate in a licensed industry with a high barrier of entry, which is dominated by SK Broadband, KT and LG U+.

2. Updates on Major Products and Services

(Unit: in millions of Won and percentages)
Business	Major Companies	Item	Major Trademarks	Consolidated Sales Amount		Ratio
Wireless	SK Telecom Co., Ltd., PS&Marketing Co., Ltd., Service Ace Co., Ltd. SK O&S Co., Ltd.	Mobile communication service, wireless data service, ICT service	T, 5GX, T Plan and others		6,420,713		75.0	%
Fixed-line	SK Broadband Co., Ltd., SK Telink Co., Ltd. Home & Service Co., Ltd.	Fixed-line phone, high-speed Internet, data and network lease service	B tv, 00700 international call, 7mobile and others		1,895,209		22.1	%
Other	SK stoa Co., Ltd.	Commercial retail data broadcasting channel services and others	Stoa ON		251,143		2.9	%
Total					8,567,065		100.0	%

3. Price Trends for Major Products

[Wireless Business]

As of June 30, 2022, based on the Company’s standard monthly subscription plan, the basic service fee was Won 12,100 and the usage fee was Won 1.98 per second. Among the 4G-based plans, the “T-Plan Safe 4G” provides 4 GB of data and unlimited voice calls at Won 50,000 per month (including value-added tax). Among the 5G-based plans, the “Slim Plan” provides 10 GB of data and unlimited voice calls at Won 55,000 per month (including value-added tax). The Company provides a variety of other subscription plans catered to subscriber demand.

17

[Fixed-line Business]

In January 2022, SK Broadband launched “PlayZ,” an all-in-one Playbox that allows users to access various over-the-top (“OTT”) streaming apps and entertainment contents in both the fixed-line and wireless environments, similar to smart TVs. The product features an integrated search of OTT contents and allows users to enjoy other forms of entertainment, such as games and karaoke, on a larger screen. PlayZ is available for purchase for single payment of Won 79,000 or at Won 2,200 per month for 36-month installments.

In February 2022, SK Broadband launched a “rechargeable smart remote control” that can control smart TVs and “B tv” set-up boxes in an integrated manner. The product is available for rent at Won 440 per month based on a 60-month subscription period.

In addition, SK Broadband expanded its lineup of tablet products by launching “B tv air2 Samsung,” which allows users to access IPTV services anywhere in the house, as a follow-on product of “B tv air Lenovo,” which was launched in June 2021. The product is available for purchase for single payment of Won 316,800 or at Won 8,800 per month for 36-month installments.

SK Broadband also provides a variety of other subscription plans.

4. Investment Status

[Wireless Business]

A. Investment in Progress

								(Unit: in billions of Won)
Business	Classification	Investment period	Subject of investment	Investment effect	Expected investment amount	Amount already invested		Future investment
Network/Common	Upgrade/ New installation	Year ended December 31, 2022	Network, systems and others	Capacity increase and quality improvement; systems improvement	To be determined		855		—
Total					To be determined		855		—

B. Future Investment Plan

(Unit: in billions of Won)
Business	Expected investment amount		Expected investment for each year			Investment effect
	Asset type	Amount	2022	2023	2024
Network/Common	Network, systems and others	To be determined	To be determined	To be determined	To be determined	Upgrades to the existing services and expanded provision of network services including 5G
Total		To be determined	To be determined	To be determined	To be determined

* The Company indicated during the earnings conference call held on February 9, 2022 that the level of capital expenditures for 2022 is expected to be similar to that of 2021.

18

[Fixed-line Business]

A. Investment in Progress and Future Investment Plan

(Unit: in billions of Won)
Purpose of investment	Subject of investment	Investment period	Amount already invested	Future investment	Investment effect
Coverage expansion, upgrade of media platform	Network, systems, Internet data center and others	Six months ended June 30, 2022	230	To be determined	Securing subscriber network and equipment; quality and system improvement

5. Revenues

								(Unit: in millions of Won)
Business	Sales type	Item		For the six months ended June 30, 2022		For the year ended December 31, 2021		For the year ended December 31, 2020
Wireless	Services	Mobile communication, wireless data, information communication	Export		69,704		143,149		152,518
			Domestic		6,351,009		12,575,324		12,195,445
			Subtotal		6,420,713		12,718,473		12,347,963
Fixed-line	Services	Fixed-line, high-speed Internet, data, lease line service	Export		91,444		139,846		127,618
			Domestic		1,803,765		3,537,860		3,304,600
			Subtotal		1,895,209		3,677,706		3,432,218
Other	Services	Commercial retail data broadcasting channel services	Export		—		—		—
			Domestic		251,143		352,406		307,566
			Subtotal		251,143		352,406		307,566
Total			Export		161,148		251,502		280,136
			Domestic		8,405,917		16,497,083		15,807,611
			Total		8,567,065		16,748,585		16,087,747

											(Unit: in millions of Won)
For the six months ended June 30, 2022	Wireless	Fixed-line		Other		Sub total		Consolidation adjustment			After consolidation
Total sales	7,165,743		2,424,129		268,399		9,858,271		(1,291,206	)		8,567,065
Internal sales	745,030		528,920		17,256		1,291,206		(1,291,206	)		—
External sales	6,420,713		1,895,209		251,143		8,567,065		—			8,567,065
Depreciation and amortization	1,371,269		493,126		9,840		1,874,235		(56,019	)		1,818,216
Operating profit (loss)	746,500		162,538		4,030		913,068		(21,070	)		891,998
Finance profit (loss)												(138,021	)
Gain from investments in associates and joint ventures												(24,869	)
Other non-operating profit (loss)												665
Profit before income tax												729,773

19

6. Derivative Transactions

A. Current Swap Contract Applying Cash Flow Risk Hedge Accounting

Currency and interest rate swap contracts under cash flow hedge accounting as of June 30, 2022 are as follows:

[SK Telecom]

(Unit: in millions of Won and thousands of USD)
Borrowing date	Hedged item	Hedged risk	Contract type	Financial institution	Duration of contract
July 20, 2007	Fixed rate foreign currency denominated bonds	Foreign currency risk	Cross currency swap	Morgan Stanley and four other banks	July 20, 2007 – July 20, 2027
Dec. 21, 2017	Floating rate Korean Won denominated borrowings	Interest rate risk	Interest rate swap	The Korea Development Bank	Dec. 21, 2017 – Dec. 21, 2022
Apr. 16, 2018	Fixed rate foreign currency denominated bonds	Foreign currency risk	Cross currency swap	The Export-Import Bank of Korea and three other banks	Apr. 16, 2018 – Apr. 16, 2023
Aug. 13, 2018	Fixed rate foreign currency denominated bonds	Foreign currency risk	Cross currency swap	Citibank	Aug. 13, 2018 – Aug. 13, 2023
Dec. 19, 2018	Floating rate Korean Won denominated borrowings	Interest rate risk	Interest rate swap	Credit Agricole CIB	Mar. 19, 2019 – Dec. 14, 2023
Mar. 4, 2020	Floating rate foreign currency denominated bonds	Foreign currency and interest rate risks	Cross currency interest rate swap	Citibank	Mar. 4, 2020 – June 4, 2025

[SK Broadband]

Borrowing date	Hedged item	Hedged risk	Contract type	Financial institution	Duration of contract
Dec. 21, 2017	Floating rate Korean Won denominated borrowings	Interest rate risk	Interest rate swap	The Korea Development Bank	Dec. 21, 2017 – Dec. 21, 2022
Aug. 13, 2018	Non-guaranteed foreign currency denominated bonds (face value of USD 300,000)	Foreign currency risk	Cross currency swap	Citibank Korea	Aug. 13, 2018 – Aug. 13, 2023
Dec. 19, 2018	Floating rate Korean Won denominated borrowings	Interest rate risk	Interest rate swap	Credit Agricole CIB	Mar. 19, 2019 – Dec. 14, 2023

7. Major Contracts

None.

8. R&D Investments

Set forth below are the Company’s R&D expenditures.

		(Unit: in millions of Won except percentages)
Category		For the six months ended June 30, 2022			For the year ended December 31, 2021			For the year ended December 31, 2020			Remarks
Raw material			8			48			54			—
Labor			50,305			122,445			122,906			—
Depreciation			68,780			147,249			169,872			—
Commissioned service			17,592			55,917			35,939			—
Others			33,657			48,048			35,209			—
Total R&D costs			170,342			373,707			363,980			—
Government Subsidies			—			—			—			—
Accounting	Sales and administrative expenses		166,742			347,711			353,198			—
	Development expenses (Intangible assets)		3,600			25,996			10,782			—
R&D cost / sales amount ratio (Total R&D costs / Current sales amount×100)			1.99	%		2.23	%		2.26	%		—

20

9. Other information relating to investment decisions

A. Trademark Policies

The Company manages its corporate brand and other product brands in a comprehensive way to protect and increase their value. The Company operates an intranet system called “Comm.ON” in order to implement consistent communication with consumers across various areas including branding, design, marketing and public relations, and systematically manages the development, registration and licensing of brands through such system.

B. Business-related Intellectual Property

[SK Telecom]

As of June 30, 2022, the Company held 3,274 Korean-registered patents and 1,436 foreign-registered patents. The Company holds 737 Korean-registered trademarks and owns intellectual property rights to its proprietary graphic design of the alphabet “T” representing its brand. The designed alphabet “T” is registered in all business categories for trademarks (total of 45). The number of registered patents and trademarks is subject to constant change due to the acquisition of new rights, expiration of terms, abandonments and dispositions.

[SK Broadband]

As of June 30, 2022, SK Broadband held 285 Korean-registered patents and 96 foreign-registered patents (including those held jointly with other companies). It also holds 294 Korean-registered trademarks and owns intellectual property rights to its proprietary graphic design of the alphabet “B” representing its brand. The designed alphabet “B” is registered in all business categories for trademarks (total of 45). The number of registered patents and trademarks is subject to continual change due to the acquisition of new rights, expiration of terms, abandonments and dispositions.

C. Business-related Pollutants and Environmental Protection

[SK Telecom]

The Company does not directly engage in any manufacturing and therefore does not undertake any industrial processes that emit pollutants into the air or industrial processes in which hazardous materials are used. Nevertheless, the Company clearly recognizes the severity of the climate crisis and has been diligently fulfilling its social obligations by establishing a systematic and practical environmental management strategy system. Under the vision of “realizing a sustainable future based on ICT” and to achieve Net-zero by 2050, the Company is making efforts to (1) preemptively respond to climate change, (2) improve its environmental management system and (3) create an eco-friendly green culture. To this end, the Company was one of the first IT companies in Korea to join the RE100 initiative and signed a green premium contract with Korea Electric Power Corporation. The Company has been implementing company-wide adoption of renewable energy through efforts such as installing solar power generation equipment in its office buildings and base stations. In addition, the Company leads in energy savings and environmental protections based on ICT technology, and recently became the first company in the telecommunications industry to obtain carbon emission rights by reducing greenhouse gas through integration of telecommunications equipment and technology upgrades.

[SK Broadband]

SK Broadband does not directly engage in any manufacturing processes that emit environmental pollutants, and more than 99% of its greenhouse gas emissions is indirect emissions from its use of external electricity. SK Broadband was selected as a business subject to allocation of emission permits as part of Korea’s greenhouse gas emissions trading scheme that commenced in 2015, and it actively fulfills its obligations and consistently achieves the targets set by the government. In addition, SK Broadband continues to invest in environment-friendly facilities for its data centers and improve the stability and efficiency of its services.

21

III. FINANCIAL INFORMATION

1. Summary Financial Information (Consolidated and Separate)

A. Summary Financial Information (Consolidated)

Below is the summary consolidated financial information of the Company as of June 30, 2022, December 31, 2021 and December 31, 2020 and for the six months ended June 30, 2022 and 2021 and the years ended December 31, 2021 and 2020. The Company’s consolidated financial statements as of June 30, 2022 and December 31, 2021 and for the six months ended June 30, 2022 and 2021, which are prepared in accordance with K-IFRS, are attached hereto.

(Unit: in millions of Won except number of companies)
	As of June 30, 2022			As of December 31, 2021			As of December 31, 2020
Assets
Current Assets		7,061,197			6,352,665			8,775,086
•   Cash and Cash Equivalents		1,152,914			872,731			1,369,653
•   Accounts Receivable – Trade, net		2,026,534			1,913,511			2,188,893
•   Accounts Receivable – Other, net		566,937			548,362			979,044
•   Others		3,314,812			3,018,061			4,237,496
Non-Current Assets		23,587,231			24,558,612			39,131,871
•   Long-Term Investment Securities		1,255,862			1,715,078			1,648,837
•   Investments in Associates and Joint Ventures		2,285,217			2,197,351			14,354,113
•   Property and Equipment, net		12,670,853			12,871,259			13,377,077
•   Goodwill		2,075,009			3,869,769			4,436,194
•   Intangible Assets, net		3,523,565			2,072,493			3,357,524
•   Others		1,776,725			1,832,662			1,958,126
Total Assets		30,648,428			30,911,277			47,906,957
Liabilities
Current Liabilities		7,575,948			6,960,435			8,177,967
Non-Current Liabilities		10,925,840			11,615,704			15,332,747
Total Liabilities		18,501,788			18,576,139			23,510,714
Equity
Equity Attributable to Owners of the Parent Company		11,358,296			11,579,346			23,743,894
Share Capital		30,493			30,493			44,639
Capital Surplus (Deficit) and Other Capital Adjustments		(11,549,459	)		(11,623,726	)		677,203
Retained Earnings		22,376,735			22,437,341			22,981,913
Reserves		500,527			735,238			40,139
Non-controlling Interests		788,344			755,792			652,349
Total Equity		12,146,640			12,335,138			24,396,243
Total Liabilities and Equity		30,648,428			30,911,277			47,906,957
	(Unit: in millions of Won except per share data)
	For the six months ended June 30, 2022			For the year ended December 31, 2021			For the year ended December 31, 2020
Operating Revenue		8,567,065			16,748,585			16,087,747
Operating Profit		891,998			1,387,162			1,248,578
Profit Before Income Tax		729,773			1,718,191			905,218
Profit for the Period		478,492			2,418,989			1,500,538
Profit for the Period Attributable to Owners of the Parent Company		465,115			2,407,523			1,504,352
Profit for the Period Attributable to Non-controlling Interests		13,377			11,466			(3,814	)
Basic Earnings Per Share (Won)		2,100			7,191			4,093
Diluted Earnings Per Share (Won)		2,099			7,187			4,092
Total Number of Consolidated Subsidiaries		26			23			49

22

B. Summary Financial Information (Separate)

Below is the summary separate financial information of the Company as of June 30, 2022, December 31, 2021 and December 31, 2020 and for the six months ended June 30, 2022 and 2021 and the years ended December 31, 2021 and 2020. The Company’s unaudited separate financial statements as of June 30, 2022 and December 31, 2021 and for the six months ended June 30, 2022 and 2021 and for the years ended December 31, 2021 and 2020, which are prepared in accordance with K-IFRS, are attached hereto.

	(Unit: in millions of Won)
	As of June 30, 2022			As of December 31, 2021			As of December 31, 2020
Assets
Current Assets		5,056,371			4,681,493			5,047,115
•  Cash and Cash Equivalents		142,186			158,823			329,208
•  Accounts Receivable – Trade, net		1,529,083			1,514,260			1,503,552
•  Accounts Receivable – Other, net		526,906			520,956			434,713
•  Others		2,858,196			2,487,454			2,779,642
Non-Current Assets		20,822,080			21,707,572			26,939,336
•  Long-Term Investment Securities		1,013,494			1,476,361			983,688
•  Investments in Subsidiaries and Associates		4,910,867			4,841,139			11,357,504
•  Property and Equipment, net		9,219,349			9,318,408			9,157,548
•  Goodwill		1,306,236			1,306,236			1,306,236
•  Intangible Assets, net		2,888,175			3,203,330			2,665,083
•  Others		1,483,959			1,562,098			1,469,277
Total Assets		25,878,451			26,389,065			31,986,451
Liabilities
Current Liabilities		6,031,802			5,426,477			5,076,404
Non-Current Liabilities		9,338,927			10,099,732			9,560,189
Total Liabilities		15,370,729			15,526,209			14,636,593
Equity
Share Capital		30,493			30,493			44,639
Capital Surplus and Other Capital Adjustments		(4,504,888	)		(4,576,271	)		289,134
Retained Earnings		14,717,055			14,770,618			16,684,640
Reserves		265,062			638,016			331,445
Total Equity		10,507,722			10,862,856			17,349,858
Total Liabilities and Equity		25,878,451			26,389,065			31,986,451
	For the six months ended June 30, 2022			For the year ended December 31, 2021			For the year ended December 31, 2020
Operating Revenue		6,195,625			12,102,830			11,746,630
Operating Profit		737,824			1,144,323			1,023,067
Profit Before Income Tax		667,013			1,369,347			941,455
Profit for the Period		476,480			1,073,823			758,792
Basic Earnings Per Share (Won)		2,152			3,183			2,044
Diluted Earnings Per Share (Won)		2,151			3,181			2,044

2. Dividends and Others

Omitted in semi-annual reports in accordance with applicable Korean disclosure rules due to an absence of significant changes during the year ended December 31, 2021. Please refer to the 2021 report for relevant information.

3. Use of Direct Financing

A. Use of Proceeds from Public Offerings

23

[SK Telecom]

(As of June 30, 2022) (Unit: in millions of Won)

Category	Bond Series	Payment Date	Planned Use of Proceeds			Actual Use of Proceeds			Reasons for Difference
			Use	Amount		Use	Amount
Corporate bond	78th	January 14, 2020	Repayment of debt		60,000	Repayment of debt		60,000		—
Corporate bond	78th	January 14, 2020	Working capital		360,000	Working capital		360,000		—
Corporate bond	79th	October 19, 2020	Repayment of debt		290,000	Repayment of debt		290,000		—
Corporate bond	80th	January 15, 2021	Repayment of debt		310,000	Repayment of debt		310,000		—
Corporate bond	81st	October 28, 2021	Repayment of debt		200,000	Repayment of debt		200,000		—
Corporate bond	82nd	April 12, 2022	Repayment of debt		350,000	Repayment of debt		350,000		—

[SK Broadband]

(As of June 30, 2022) (Unit: in millions of Won)

Category	Bond Series	Payment Date	Planned Use of Proceeds			Actual Use of Proceeds			Reasons for Difference
			Use	Amount		Use	Amount
Corporate bond	Series 49-1	June 11, 2020	Repayment of debt		100,000	Repayment of debt		100,000		—
Corporate bond	Series 49-2	June 11, 2020	Repayment of debt		59,200	Repayment of debt		59,200		—
Corporate bond	Series 49-2	June 11, 2020	Working capital		40,800	Working capital		40,800		—
Corporate bond	Series 50	September 25, 2020	Repayment of debt		160,000	Repayment of debt		160,000		—
Corporate bond	Series 51	July 13, 2021	Repayment of debt		100,000	Repayment of debt		100,000		—
Corporate bond	Series 52-1	January 25, 2022	Repayment of debt		100,000	Repayment of debt		100,000		—
Corporate bond (green bond)	Series 52-2	January 25, 2022	Repayment of debt		50,000	Repayment of debt		50,000		—

* Series 52-2 issued as of January 25, 2022 is an ESG bond (green bond). Series 52-2 was issued for the purpose of repayment of funds raised to be invested in the conversion of hybrid fiber-coaxial (“HFC”) network to fiber-to-the-home (“FTTH”) network, which has a positive impact on the environment, and the proceeds from the bond offering were used for the intended purpose. See the ESG bond report published in the socially responsible investment bond segment of the Korea Exchange for more information on the use of proceeds from this ESG bond offering.

B. Use of Proceeds from Private Offerings

[SK Telecom]

None.

[SK Broadband]

None.

C. Operation of Unused Proceeds

[SK Telecom]

24

None.

[SK Broadband]

None.

4. Other Matters Related to Financial Information

A. Restatement of the Financial Statements

Pursuant to the resolutions of the Board of Directors and the General Meeting of Shareholders on June 10, 2021 and October 12, 2021, respectively, the Company conducted the Spin-off effective as of November 1, 2021. K-IFRS 1105 (Non-current assets held for sale and discontinued operations) was applied, and, accordingly, the consolidated statement of profit and loss for the three months and six months ended June 30, 2021 was restated as such.

B. Loss Allowance

(1) Loss Allowance of Trade and Other Receivables

(Unit: in millions of Won)

	For the six months ended June 30, 2022
	Gross amount		Loss Allowance		Percentage
Accounts receivable – trade		2,279,122		241,147		10.6	%
Loans		139,475		45,126		32.4	%
Accounts receivable – other		821,905		45,740		5.6	%
Accrued income		1,024		—		0.0	%
Guarantee deposits		283,722		300		0.1	%
Total		3,525,248		332,313		9.4	%

(Unit: in millions of Won)

	For the year ended December 31, 2021
	Gross amount		Loss Allowance		Percentage
Accounts receivable – trade		2,160,498		238,881		11.1	%
Loans		138,181		45,385		32.8	%
Accounts receivable – other		870,225		46,625		5.4	%
Accrued income		762		0		0.0	%
Guarantee deposits		278,759		0		0.0	%
Total		3,448,425		330,891		9.6	%

(Unit: in millions of Won)

	For the year ended December 31, 2020
	Gross amount		Loss Allowance		Percentage
Accounts receivable – trade		2,478,851		264,498		10.7	%
Loans		182,721		45,024		24.6	%
Accounts receivable – other		1,366,922		55,075		4.0	%
Accrued income		3,418		166		4.9	%
Guarantee deposits		285,507		300		0.1	%
Total		4,317,419		365,063		8.5	%

25

(2) Movements in Loss Allowance of Trade and Other Receivables

	(Unit: in millions of Won)
	For the six months ended June 30, 2022			For the year ended December 31, 2021			For the year ended December 31, 2020
Beginning balance		330,891			365,063			346,399
Effect of change in accounting policy		—			—			—
Increase of loss allowance		16,816			37,547			59,184
Reversal of loss allowance		—			—			—
Write-offs		(15,789	)		(57,215	)		(57,575	)
Other		395			(14,504	)		17,055
Ending balance		332,313			330,891			365,063

(3) Policies for Loss Allowance

The Company establishes loss allowances based on the likelihood of recoverability of trade and other receivables based on their aging at the end of the period and past customer default experience for the past three years. With respect to trade receivables relating to wireless telecommunications services, the Company considers the likelihood of recovery based on past customer default experience and the length of default in connection with the type of default (e.g., whether the customer’s service has been terminated or is continued). Consistent with customary practice, the Company writes off trade and other receivables for which the prescription period has passed or that are determined to be impossible or economically too costly to collect, including receivables that are less than Won 200,000 and more than six months overdue and receivables that have been determined to be the subject of identity theft.

(4) Aging of Accounts Receivable

							(Unit: in millions of Won)
	As of June 30, 2022
	Six months or less			From six months to one year			From one year to three years			More than three years			Total
Accounts receivable – general		2,052,610			44,770			137,071			44,671			2,279,122
Percentage		90.1	%		2.0	%		6.0	%		2.0	%		100.0	%

C. Inventories

(1) Detailed Categories of Inventories

	(Unit: in millions of Won)
Account Category	For the six months ended June 30, 2022			For the year ended December 31, 2021			For the year ended December 31, 2020
Merchandise		177,976			201,126			162,196
Goods in transit		—			—			—
Other inventories		5,332			3,511			9,247
Total		183,308			204,637			171,443
Percentage of inventories to total assets [Inventories / Total assets]		0.60	%		0.66	%		0.36	%
Inventory turnover [Cost of sales / { ( Beginning balance of inventories + Ending balance of inventories ) / 2}]		5.93			6.20			7.60

(2) Reporting of Inventories

The Company holds handsets, ICT equipment for offline sales, etc. in inventory. The Company conducts physical due diligence of its inventories with external auditors at the end of each year.

26

D. Fair Value Measurement

See notes 2 and 30 of the notes to the Company’s consolidated financial statements as of June 30, 2022 and December 31, 2021 and for the six months ended June 30, 2022 and 2021 for more information.

E. Key Terms of Debt Securities

[SK Telecom]

The following are key terms and conditions of bonds issued by the Company. The compliance status is as of the date of the latest financial statements including the audit opinion of the independent auditor applicable to the determination of compliance status, except for the compliance status of the restriction on changes of ownership structure, which is as of the end of the reporting period.

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 62-2	Aug. 28, 2012	Aug. 28, 2022		140,000	Aug. 22, 2012	Meritz Securities Co., Ltd.
Unsecured Bond – Series 62-3	Aug. 28, 2012	Aug. 28, 2032		90,000	Aug. 22, 2012	Meritz Securities Co., Ltd.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 100% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed Won 2 trillion
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Not applicable
	Compliance Status	Not applicable
Submission of Compliance Certificate	Compliance Status	Submitted on March 23, 2022

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond –Series 63-1	Apr. 23, 2013	Apr. 23, 2023		230,000	Apr. 17, 2013	Korea Securities Finance Corp.
Unsecured Bond –Series 63-2	Apr. 23, 2013	Apr. 23, 2033		130,000	Apr. 17, 2013	Korea Securities Finance Corp.
Unsecured Bond – Series 64-2	May 14, 2014	May 14, 2024		150,000	April 29, 2014	Korea Securities Finance Corp.
Unsecured Bond – Series 65-3	Oct. 28, 2014	Oct. 28, 2024		190,000	Oct. 16, 2014	Korea Securities Finance Corp.
Unsecured Bond – Series 66-2	Feb. 26, 2015	Feb. 26, 2025		150,000	Feb. 11, 2015	Korea Securities Finance Corp.
Unsecured Bond – Series 66-3	Feb. 26, 2015	Feb. 26, 2030		50,000	Feb. 11, 2015	Korea Securities Finance Corp.
Unsecured Bond – Series 67-2	July 17, 2015	July 17, 2025		70,000	July 9, 2015	Korea Securities Finance Corp.
Unsecured Bond – Series 67-3	July 17, 2015	July 17, 2030		90,000	July 9, 2015	Korea Securities Finance Corp.
Unsecured Bond – Series 68-2	Nov. 30, 2015	Nov. 30, 2025		100,000	Nov. 18, 2015	Korea Securities Finance Corp.
Unsecured Bond – Series 68-3	Nov. 30, 2015	Nov. 30, 2035		70,000	Nov. 18, 2015	Korea Securities Finance Corp.

27

Unsecured Bond – Series 69-3	Mar. 4, 2016	Mar. 4, 2026	90,000	Feb. 22, 2016	Korea Securities Finance Corp.
Unsecured Bond – Series 69-4	Mar. 4, 2016	Mar. 4, 2036	80,000	Feb. 22, 2016	Korea Securities Finance Corp.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 100% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed Won 2 trillion
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Not applicable
	Compliance Status	Not applicable
Submission of Compliance Certificate	Compliance Status	Submitted on March 23, 2022

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 70-3	June 3, 2016	June 3, 2026		120,000	May 24, 2016	Korea Securities Finance Corp.
Unsecured Bond – Series 70-4	June 3, 2016	June 3, 2031		50,000	May 24, 2016	Korea Securities Finance Corp.
Unsecured Bond – Series 71-3	Apr. 25, 2017	Apr. 25, 2027		100,000	Apr. 13, 2017	Korea Securities Finance Corp.
Unsecured Bond – Series 71-4	Apr. 25, 2017	Apr. 25, 2032		90,000	Apr. 13, 2017	Korea Securities Finance Corp.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed Won 5 trillion
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Not applicable
	Compliance Status	Not applicable
Submission of Compliance Certificate	Compliance Status	Submitted on March 23, 2022

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 72-2	Nov. 10, 2017	Nov. 10, 2022		80,000	Oct. 31, 2017	Korea Securities Finance Corp.
Unsecured Bond – Series 72-3	Nov. 10, 2017	Nov. 10, 2027		100,000	Oct. 31, 2017	Korea Securities Finance Corp.
Unsecured Bond – Series 73-2	Feb. 20, 2018	Feb. 20, 2023		100,000	Feb. 6. 2018	Korea Securities Finance Corp.
Unsecured Bond – Series 73-3	Feb. 20, 2018	Feb. 20, 2028		200,000	Feb. 6. 2018	Korea Securities Finance Corp.

28

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 73-4	Feb. 20, 2018	Feb. 20, 2038		90,000	Feb. 6. 2018	Korea Securities Finance Corp.
Unsecured Bond – Series 74-2	Sept. 17, 2018	Sept. 17, 2023		150,000	Sept. 5, 2018	Korea Securities Finance Corp.
Unsecured Bond – Series 74-3	Sept. 17, 2018	Sept. 17, 2038		50,000	Sept. 5, 2018	Korea Securities Finance Corp.
Unsecured Bond – Series 75-2	Mar. 6, 2019	Mar. 6, 2024		120,000	Feb. 21, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 75-3	Mar. 6, 2019	Mar. 6, 2029		50,000	Feb. 21, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 75-4	Mar. 6, 2019	Mar. 6, 2039		50,000	Feb. 21, 2019	Korea Securities Finance Corp.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed 50% of total assets
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Restriction of cross-shareholding Exclusion from corporate group
	Compliance Status	Compliant
Submission of Compliance Certificate	Compliance Status	Submitted on March 23, 2022

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 76-1	July 29, 2019	July 29, 2022		120,000	July 17, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 76-2	July 29, 2019	July 29, 2024		60,000	July 17, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 76-3	July 29, 2019	July 29, 2029		120,000	July 17, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 76-4	July 29, 2019	July 29, 2039		50,000	July 17, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 76-5	July 29, 2019	July 29, 2049		50,000	July 17, 2019	Korea Securities Finance Corp.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed 50% of total assets
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Restriction of cross-shareholding Exclusion from corporate group
	Compliance Status	Compliant
Submission of Compliance Certificate	Compliance Status	Submitted on March 23, 2022

29

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 77-1	Oct. 22, 2019	Oct. 21, 2022		230,000	Oct. 10, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 77-2	Oct. 22, 2019	Oct. 22, 2024		70,000	Oct. 10, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 77-3	Oct. 22, 2019	Oct. 22, 2029		40,000	Oct. 10, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 77-4	Oct. 22, 2019	Oct. 22, 2039		60,000	Oct. 10, 2019	Korea Securities Finance Corp.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed 50% of total assets
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Restriction of cross-shareholding Exclusion from corporate group
	Compliance Status	Compliant
Submission of Compliance Certificate	Compliance Status	Submitted on March 23, 2022

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 78-1	Jan. 14, 2020	Jan. 13, 2023		170,000	Dec. 31, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 78-2	Jan. 14, 2020	Jan. 14, 2025		130,000	Dec. 31, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 78-3	Jan. 14, 2020	Jan. 14, 2030		50,000	Dec. 31, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 78-4	Jan. 14, 2020	Jan. 14, 2040		70,000	Dec. 31, 2019	Korea Securities Finance Corp.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed 50% of total assets
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Restriction of cross-shareholding Exclusion from corporate group
	Compliance Status	Compliant
Submission of Compliance Certificate	Compliance Status	Submitted on March 23, 2022

30

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 79-1	Oct. 19, 2020	Oct. 19, 2025		140,000	Oct. 6, 2020	Korea Securities Finance Corp.
Unsecured Bond – Series 79-2	Oct. 19, 2020	Oct. 19, 2030		40,000	Oct. 6, 2020	Korea Securities Finance Corp.
Unsecured Bond – Series 79-3	Oct. 19, 2020	Oct. 19, 2040		110,000	Oct. 6, 2020	Korea Securities Finance Corp.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed 50% of total assets
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Restriction of cross-shareholding Exclusion from corporate group
	Compliance Status	Compliant
Submission of Compliance Certificate	Compliance Status	Submitted on March 23, 2022

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 80-1	Jan. 15, 2021	Jan. 14, 2024		80,000	Jan. 5, 2021	Korea Securities Finance Corp.
Unsecured Bond – Series 80-2	Jan. 15, 2021	Jan. 15, 2026		80,000	Jan. 5, 2021	Korea Securities Finance Corp.
Unsecured Bond – Series 80-3	Jan. 15, 2021	Jan. 15, 2031		50,000	Jan. 5, 2021	Korea Securities Finance Corp.
Unsecured Bond – Series 80-4	Jan. 15, 2021	Jan. 15, 2041		100,000	Jan. 5, 2021	Korea Securities Finance Corp.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed 50% of total assets
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Restriction of cross-shareholding Exclusion from corporate group
	Compliance Status	Compliant
Submission of Compliance Certificate	Compliance Status	Submitted on March 23, 2022

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 81-1	Oct. 28, 2021	Oct. 28, 2024		90,000	Oct. 18, 2021	Korea Securities Finance Corp.
Unsecured Bond – Series 81-2	Oct. 28, 2021	Oct. 28, 2026		70,000	Oct. 18, 2021	Korea Securities Finance Corp.
Unsecured Bond – Series 81-3	Oct. 28, 2021	Oct. 28, 2041		40,000	Oct. 18, 2021	Korea Securities Finance Corp.

31

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed 50% of total assets
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Restriction of cross-shareholding Exclusion from corporate group
	Compliance Status	Compliant
Submission of Compliance Certificate	Compliance Status	Submitted on March 31, 2022

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 82-1	April 12, 2022	April 12, 2025		240,000	March 31, 2022	Korea Securities Finance Corp.
Unsecured Bond – Series 82-2	April 12, 2022	April 12, 2027		70,000	March 31, 2022	Korea Securities Finance Corp.
Unsecured Bond – Series 82-3	April 12, 2022	April 12, 2042		40,000	March 31, 2022	Korea Securities Finance Corp.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 300%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 150% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed 50% of total assets
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Restriction of cross-shareholding Exclusion from corporate group
	Compliance Status	Compliant
Submission of Compliance Certificate	Compliance Status	To be submitted following the filing of the semi-annual business report for the six months ended June 30, 2022

[SK Broadband]

The following are key terms and conditions of bonds issued by SK Broadband.

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 45-2	Oct. 11, 2017	Oct. 11, 2022		140,000	Sept. 20, 2017	Korea Securities Finance Corp.

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 400%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 200% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant

32

Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed 70% of total assets
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	—
	Compliance Status	—
Submission of Compliance Certificate	Compliance Status	Submitted on April 18, 2022

Name	Issue Date	Maturity Date	Principal Amount (millions of Won)		Date of Fiscal Agency Agreement	Fiscal Agent
Unsecured Bond – Series 46-2	Feb. 1, 2018	Feb. 1, 2023		80,000	Jan. 19, 2018	Korea Securities Finance Corp.
Unsecured Bond – Series 47-2	Mar. 26, 2019	Mar. 26, 2024		160,000	Mar. 14, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 48-1	Sept. 24, 2019	Sept. 23, 2022		80,000	Sept. 10, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 48-2	Sept. 24, 2019	Sept. 24, 2024		100,000	Sept. 10, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 48-3	Sept. 24, 2019	Sept. 23, 2026		50,000	Sept. 10, 2019	Korea Securities Finance Corp.
Unsecured Bond – Series 49-1	June 11, 2020	June 9, 2023		100,000	June 1, 2020	Korea Securities Finance Corp.
Unsecured Bond – Series 49-2	June 11, 2020	June 11, 2025		100,000	June 1, 2020	Korea Securities Finance Corp.
Unsecured Bond – Series 50	Sept. 25, 2020	Sept. 25, 2025		160,000	Sept. 15, 2020	Korea Securities Finance Corp.
Unsecured Bond – Series 51	July 13, 2021	July 12, 2024		100,000	July 1, 2021	Korea Securities Finance Corp.
Unsecured Bond – Series 52-1	Jan. 25, 2022	Jan. 24, 2025		100,000	Jan. 13, 2022	Korea Securities Finance Corp.
Unsecured Bond – Series 52-2	Jan. 25, 2022	Jan. 25, 2032		50,000	Jan. 13, 2022	Korea Securities Finance Corp.
Total	—	—		1,080,000	—	—

Maintenance of Financial Ratio	Key Term	Debt ratio no greater than 400%
	Compliance Status	Compliant
Restriction on Liens	Key Term	The total amount of secured debt not to exceed 200% of share capital as of the end of the previous fiscal year
	Compliance Status	Compliant
Restriction on Disposition of Assets	Key Term	Disposal of assets per fiscal year not to exceed 70% of total assets
	Compliance Status	Compliant
Restriction on Changes of Ownership Structure	Key Term	Restriction on changes of ownership structure
	Compliance Status	Compliant
Submission of Compliance Certificate	Compliance Status	Submitted on April 18, 2022

* Beginning with Series 47, the maintenance of financial ratio requirement has changed to a consolidated basis.

* Compliance certificates for Series 52-1 and Series 52-2 issued as of January 25, 2022 are expected to be submitted after the submission of the semi-annual business report for the first six months of fiscal year 2022.

IV. MANAGEMENT’S DISCUSSION AND ANALYSIS

Omitted in semi-annual reports in accordance with applicable Korean disclosure rules.

33

V. AUDITOR’S OPINION

1. Independent Auditors and Audit Opinions

A. Independent Auditor and Audit Opinion (Separate and Consolidated)

Period	Independent auditor	Audit opinion	Emphasis of Matter	Critical Audit Matters
Six months ended June 30, 2022	Ernst & Young Han Young	—	Disclosure of discontinued operations in the consolidated financial statements for the six months ended June 30, 2021 included for comparison purpose	N/A
Year ended December 31, 2021	KPMG Samjong Accounting Corp.	Unqualified	Spin-off and disclosure of discontinued operations in the consolidated financial statements	Revenue recognition; assessment of impairment of cash-generating unit of fixed-line telecommunication services
Year ended December 31, 2020	KPMG Samjong Accounting Corp.	Unqualified	Retroactive application of change in accounting policy related to change to determination of lease period	Revenue recognition; assessment of impairment of cash-generating unit of security services, assessment of fair value of customer relationship

Note: All consolidated subsidiaries of the Company that are subject to audits and whose audits have been completed received unqualified audit opinions.

* The audit opinion is on the consolidated and separate financial statements.

B. Audit Services Contracts with Independent Auditors

(Unit: in millions of Won except number of hours)
Period	Auditors	Contents	Audit Contract				Actual Performance
			Fee		Total number of hours		Fee		Total number of hours
Six months ended June 30, 2022	Ernst & Young Han Young	Quarterly and semi-annual review		2,700		24,100		837		7,311
		Separate financial statements audit
		Consolidated financial statements audit
		English financial statements review and other audit task
		Internal accounting system audit
Year ended December 31, 2021	KPMG Samjong Accounting Corp.	Quarterly and semi-annual review		2,450		24,500		2,450		24,500
		Separate financial statements audit
		Consolidated financial statements audit
		English financial statements review and other audit task
		Internal accounting system audit
Year ended December 31, 2020	KPMG Samjong Accounting Corp.	Quarterly and semi-annual review		2,360		23,600		2,360		23,600
		Separate financial statements audit
		Consolidated financial statements audit
		English financial statements review and other audit task
		Internal accounting system audit

34

C. Non-Audit Services Contracts with Independent Auditors

(Unit: in millions of Won)
Period	Contract date	Service provided	Service duration	Fee
Six months ended June 30, 2022	—	—	—	—
Year ended December 31, 2021	May 17, 2021	Confirmation of financial information in connection with frequency reallocation application	May 17, 2021 – May 24, 2021	2
	May 26, 2021	Audit and review of financial statements of the newly established company and subsidiaries involved in the Spin-off	May 26, 2021 – July 28, 2021	1,143
	August 5, 2021	Review of carve-out financial statements in connection with the Spin-off	August 5, 2021 – August 13,2021	10
Year ended December 31, 2020	July 23, 2020	Confirmation of financial information	July 23, 2020 – July 30, 2020	30
	December 8, 2020	Confirmation of financial information	December 8, 2020 – December 10, 2020	30
	December 30, 2020	Consulting services for new business group model research project	December 31, 2020 – February 12, 2021	90

D. Discussions between Audit Committee and Independent Auditors

Date	Attendance	Method	Key Matters Discussed
February 22, 2022	Audit Committee: 4 Independent Auditor: 1	In-person	Report on 2021 critical audit matters and results of audit of financial statements; report on results of 2021 internal accounting management system audit
April 27, 2022	Audit Committee: 4 Independent Auditor: 1	In-person	Report on 2021 Public Company Accounting Oversight Board audit results; report on 2022 audit plan and selection of critical audit matters
July 27, 2022	Audit Committee: 4 Independent Auditor: 1	In-person	Report on results of external auditors’ 2022 semi-annual review

35

VI. CORPORATE ORGANIZATION INCLUDING BOARD OF DIRECTORS

1.    Board of Directors

A. Overview of the Composition of the Board of Directors

The Board of Directors is composed of eight members: two inside directors, five independent directors and one non-executive director. The Board of Directors operates the following five committees: Independent Director Nomination Committee, Audit Committee, Future Strategy Committee, Compensation Committee, and ESG Committee.

(As of June 30, 2022)
Total number of directors	Inside directors	Non-executive director	Independent directors
8	Young Sang Ryu, Jong Ryeol Kang	Kyu-Nam Choi	Yong-Hak Kim, Seok-Dong Kim, Jung Ho Ahn, Youngmin Yoon, Junmo Kim

* At the 38th General Meeting of Shareholders held on March 25, 2022, Jong Ryeol Kang was newly elected as an inside director, and Seok-dong Kim was re-elected as an independent director and a member of the audit committee.

* Yong-Hak Kim, as a highly respected sociologist with knowledge and virtue that can contribute to the Company’s proactive pursuit of social value, has been elected as the chairman of the Board of Directors by the directors pursuant to Article 4(2) of the regulations of the Board of Directors.

B. Significant Activities of the Board of Directors

Meeting	Date	Agenda	Approval
461th (the 1st meeting of 2022)	January 17, 2022	-   2021 KPI evaluation	Approved as proposed
462th (the 2nd meeting of 2022)	January 20, 2022	-   Disposal of treasury shares -   2022 health and safety plan -   Donations for ESG management (creation of social value) -   Report for the period after the fourth quarter of 2021	Approved as proposed Approved as proposed Approved as proposed —
463th (the 3rd meeting of 2022)	February 8, 2022	-   Financial statements as of and for the year ended December 31, 2021 -   Delegation of authority to obtain funding through long-term borrowings -   Annual business report for the year ended December 31, 2021 -   Amendment of agreements for implementation of mutual cooperation among member companies -   Results of evaluation of the Board of Directors	Approved as proposed Approved as proposed Approved as proposed Approved as proposed —
464th (the 4th meeting of 2022)	February 24, 2022	-   Convocation of the 38th General Meeting of Shareholders -   Compensation of representative director and inside director -   Disposal of treasury shares -   Donations to the Korea Fencing Federation -   Report of internal accounting management -   Results of evaluation of internal accounting management system	Approved as proposed Approved as proposed Approved as proposed Approved as proposed — —
465th (the 5th meeting of 2022)	March 25, 2022	-   Election of the chairman of the Board of Directors -   Appointment of committee member -   Determination of KPIs for 2022 -   Transactions with SK Inc. in the second quarter of 2022	Approved as proposed Approved as proposed Approved as proposed Approved as proposed
466th (the 6th meeting of 2022)	April 28, 2022	-   Compensation of internal directors -   Disposal of treasury shares -   Dividends for the first quarter of 2022 -   Payment of operating expenses of SUPEX Council for 2022 -   Report for the period after the first quarter of 2022	Approved as proposed Approved as proposed Approved as proposed Approved as proposed —

36

Meeting	Date	Agenda	Approval
467th (the 7th meeting of 2022)	June 15, 2022	-   Transactions with SK Inc. in the third quarter of 2022	Approved as proposed
468th (the 8th meeting of 2022)	July 22, 2022	-   Strategic partnership with Hana Financial Group Inc.	Approved as proposed
469th (the 9th meeting of 2022)	July 28, 2022	-   Dividends for the second quarter of 2022 -   Revisions to the Audit Committee regulations -   Report for the first half of 2022 -   Report for the period after the second quarter of 2022 -   Major agenda for the first half of 2022 related to Governance Story (including key agenda for the second half of 2022)	Approved as proposed Approved as proposed — — —

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

C. Committees within Board of Directors

(1) Committee structure (as of June 30, 2022)

(a) Independent Director Nomination Committee

Total number of persons	Names of Member Directors	Task
3	Young Sang Ryu, Seok-Dong Kim, Youngmin Yoon	Nomination of independent directors

* Under the Korean Commercial Code, a majority of the members of the Independent Director Nomination Committee must be independent directors.

(b) Future Strategy Committee (as of June 30, 2022)

Total number of persons	Names of Member Directors	Task
8	Yong-Hak Kim, Seok-Dong Kim, Jung Ho Ahn, Youngmin Yoon, Junmo Kim, Young Sang Ryu, Kyu-Nam Choi, Jong Ryeol Kang	Discuss mid- to long-term strategic direction, establish management goals and evaluate performance

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

(c) Compensation Committee (as of June 30, 2022)

Total number of persons	Names of Member Directors	Task
4	Yong-Hak Kim, Seok-Dong Kim, Junmo Kim, Kyu-Nam Choi	Nomination of CEO candidate(s) and review of CEO and inside director remuneration amount

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

(d) ESG Committee (as of June 30, 2022)

Total number of persons	Names of Member Directors	Task
4	Jung Ho Ahn, Youngmin Yoon, Junmo Kim, Jong Ryeol Kang	Deliberation of plans and performance in the major areas of ESG, mandatory ESG disclosure matters and ESG stakeholder communication

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

(e) Audit Committee (as of June 30, 2022)

Total number of persons	Names of Member Directors	Task
4	Seok-Dong Kim, Yong-Hak Kim, Jung Ho Ahn, Youngmin Yoon	Review of financial statements and supervision of independent audit process, etc.

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

37

2. Audit System

The Company’s Audit Committee consists of four independent directors, Seok-Dong Kim (chairman of the Audit Committee and financial and accounting expert), Yong-Hak Kim, Youngmin Yoon and Jung Ho Ahn.

Major activities of the Audit Committee as of June 30, 2022 are set forth below.

Meeting	Date	Agenda	Approval
The 1st meeting of 2022	January 18, 2022	-   Plan for establishment of ethical management and risk management infrastructure	—
The 2nd meeting of 2022	February 7, 2022	-   Review of business and audit results for 2021 and business and audit plans for 2022 -   Audit committee’s opinion on internal monitoring controls -   Approval of services by independent auditor in 2022	— Approved as proposed Approved as proposed
The 3rd meeting of 2022	February 22, 2022	-   Evaluation of internal accounting management system operation -   Review of business and audit results for 2021 -   Review of audit results on internal accounting management system for 2021 -   Evaluation of internal accounting management system -   Review opinion of agenda and related documents for the 38th General Meeting of Shareholders -   Audit report for fiscal year 2021 -   Contract relating to gift distribution to fixed-line business customers	— — — Approved as proposed Approved as proposed Approved as proposed Approved as proposed
The 4th meeting of 2022	March 24, 2022	-   Contributions to company employee welfare fund for 2022 -   Contract for maintenance services of optical cables in 2022 -   Contract for maintenance services of transmission equipment in 2022	Approved as proposed Approved as proposed Approved as proposed
The 5th meeting of 2022	April 27, 2022	-   PCAOB audit results for fiscal year 2021 -   Audit plan for fiscal year 2022 -   Appointment of committee chairman	— — Approved
The 6th meeting of 2022	May 25, 2022	-   Recruitment of the Responsible Management Support Group -   Approval of appointment of external auditor for non-audit service	— Approved as proposed
The 7th meeting of 2022	July 27, 2022	-   Review of business and audit results for the first half of 2022 and plans for the second half of 2022 -   Evaluation of results of the 2021 external audit service -   Review of results of external auditor’s review for the first half of 2022	Approved as proposed — —

* The internal accounting manager reported in writing the plans for the evaluation of internal accounting management system operation to the audit committee in April 2022.

3. Shareholders’ Exercise of Voting Rights

A. Voting System and Exercise of Minority Shareholders’ Rights

  (As of June 30, 2022)

Classification of Voting System	Cumulative voting system	Written voting system	Electronic voting system
Adoption status	Selected	Not adopted	Adopted
Implementation status	—	—	Conducted during the 38th General Meeting of Shareholders

38

The Company implemented a proxy solicitation procedure for the 38th General Meeting of Shareholders, pursuant to which shareholders were permitted to provide written proxy to exercise their voting rights.

VII. SHAREHOLDERS

1. Shareholdings of the Largest Shareholder and Related Persons

A. Shareholdings of the Largest Shareholder and Related Persons

(As of June 30, 2022)					(Unit: in shares and percentages)
Name	Relationship	Type of share	Number of shares owned and ownership ratio
			Beginning of Period				End of Period
			Number of shares		Ownership ratio		Number of shares		Ownership ratio
SK Inc.	Largest Shareholder	Common share		65,668,397		30.01		65,668,397		30.01
Tae Won Chey	Officer of affiliated company	Common share		303		0.00		303		0.00
Dong Hyun Jang	Officer of affiliated company	Common share		762		0.00		762		0.00
Jung Ho Park	Officer of the Company	Common share		10,932		0.00		21,530		0.01
Young Sang Ryu	Officer of the Company	Common share		3,340		0.00		7,340		0.00
Yong-Hak Kim	Officer of the Company	Common share		303		0.00		1,711		0.00
Seok-Dong Kim	Officer of the Company	Common share		303		0.00		1,447		0.00
Youngmin Yoon	Officer of the Company	Common share		303		0.00		1,447		0.00
Jung Ho Ahn	Officer of the Company	Common share		303		0.00		1,447		0.00
Junmo Kim	Officer of the Company	Common share		303		0.00		1,447		0.00
Kyu-nam Choi	Officer of the Company	Common share		455		0.00		455		0.00
Poong Young Yoon	Officer of the Company	Common share		2,733		0.00		2,733		0.00
Jong Ryeol Kang	Officer of the Company	Common share		0		0.00		3,484		0.00
Total		Common share		65,688,437		30.02		65,712,503		30.03

B. Overview of the Largest Shareholder

As of June 30, 2022, the Company’s largest shareholder was SK Inc. SK Inc. was established on April 13, 1991 and was made public on the securities market on November 11, 2009 under the identification code “034730.” SK Inc. is located at 26, Jong-ro, Jongno-gu, Seoul, Korea. SK Inc.’s telephone number is +82-2-2121-5114 and its website is https://www.sk-inc.com/.

C. Changes in Shareholdings of the Largest Shareholder and Related Persons

39

Changes in shareholdings of the largest shareholder and its related persons are as follows:

(As of June 30, 2022)						(Unit: in shares and percentages)
Largest Shareholder	Date of the change	Shares Held*		Holding Ratio		Remarks
SK Inc.	December 27, 2018		21,625,471		26.78	SK Inc.’s interest in SK Infosec was transferred to the Company in exchange for the Company’s issuance of treasury shares to SK Inc.
	February 17, 2020		21,627,471		26.78	Jung Ho Park, CEO of the Company, purchased 1,500 additional shares; Young Sang Ryu, inside director of the Company, purchased 500 shares.
	February 4, 2021		21,628,971		26.79	Jung Ho Park, CEO of the Company, purchased 1,000 additional shares; Young Sang Ryu, inside director of the Company, purchased 500 additional shares.
	May 6, 2021		21,628,971		30.02	Changes in equity ratio due to cancellation of treasury shares
	June 21, 2021		21,629,471		30.02	Independent directors, Yong-Hak Kim, Seok-Dong Kim, Jung Ho Ahn, Youngmin Yoon and Junmo Kim, each purchased 100 shares (total of 500 shares)
	October 12, 2021		21,629,621		30.02	Kyu-Nam Choi, independent director of the Company, purchased 150 shares.
	October 25, 2021		21,629,821		30.02	Jung Ho Park, CEO of the Company, and Young Sang Ryu, inside director of the Company each purchased 100 additional shares (total of 200 shares).
	October 28, 2021		108,149,105		30.02	Changes in total number of shares due to stock-split
	November 2, 2021		65,688,437		30.02	Changes in total number of shares due to the Spin-off; Poong Young Yoon, inside director of SK Square, purchased 2,733 shares.
	January 24, 2022		65,695,437		30.02	Jung Ho Park, director of the Company’s affiliate, and Young Sang Ryu, representative director of the Company, purchased 3,000 and 4,003 shares, respectively.
	February 25, 2022		65,703,035		30.02	Jung Ho Park, director of the Company’s affiliate, purchased 7,598 shares.
	March 25, 2022		65,706,519		30.03	Jong Ryeol Kang, inside director of the Company, purchased 3,484 shares.
	May 3, 2022		65,712,503		30.03	Four independent directors of the Company, Youngmin Yoon, Jung Ho Ahn, Junmo Kim, Seok-dong Kim, each purchased 1,144 shares. Yong-Hak Kim, another independent director of the Company, purchased 1,408 shares.

40

2. Distribution of Shares

A. Shareholders with Ownership of 5% or Greater

(As of June 30, 2022)			(Unit: in shares and percentages)
Name (title)	Common share
	Number of shares		Ownership ratio			Remarks
SK Inc.		65,668,397		30.1	%		—
National Pension Service		16,429,365		7.51	%		—
Citibank ADR		15,881,938		7.26	%		—
Shareholdings under the Employee Stock Ownership Program		—		—			—

B. Minority Shareholders

(As of June 30, 2022)

(Unit: in shares and percentages)

Classification

Shareholders

Ownership

Number of minority shareholders

Total number of shareholders

Ratio (%)

Number of shares owned by minority shareholders

Total number of shares issued

Ratio (%)

Minority shareholders*

194,278

194,284

99.9

%

116,539,507

218,833,144

53.3

* Shareholders who hold less than 1% of total shares issued.

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

A. Domestic Securities Market

(Unit: in Won and shares)
Types		June 2022		May 2022		April 2022		March 2022		February 2022		January 2022
Common stock	Highest		56,600		61,000		62,500		59,300		56,400		58,300
	Lowest		50,900		56,400		56,700		54,500		53,900		55,500
	Average		53,920		58,162		59,548		57,100		55,178		56,570
Daily transaction volume	Highest		1,774,906		1,662,498		1,696,978		1,026,361		1,169,316		1,213,826
	Lowest		402,600		303,132		314,559		317,526		262,007		464,691
Monthly transaction volume			16,522,976		15,097,497		16,312,219		12,604,532		11,544,932		15,850,669

B. Foreign Securities Market (New York Stock Exchange)

(Unit : in US$ and ADRs)
Types		June 2022		May 2022		April 2022		March 2022		February 2022		January 2022
Depositary receipt	Highest		25.44		26.79		27.75		27.03		26.70		26.74
	Lowest		21.87		24.81		24.89		24.70		24.78		25.82
	Average		23.60		25.62		26.60		25.76		25.72		26.29
Daily transaction volume	Highest		844,200		694,400		633,800		692,800		437,900		893,800
	Lowest		168,200		233,900		144,400		191,800		167,500		164,900
Monthly transaction volume			7,939,600		9,410,800		8,294,800		8,552,700		5,523,400		8,370,100

41

VIII. EMPLOYEES AND DIRECTORS

1. Officers and Employees

A. Employees

(As of June 30, 2022)												(Unit: in persons and millions of Won)
Business segment	Gender	Number of employees										Average length of service (years)		Aggregate wage for the year of 2022		Average wage per person
		Employees without a fixed term of employment				Employees with a fixed term of employment				Total
		Total		Part-time employees		Total		Part-time employees
—	Male		4,161		—		110		—		4,271		13.9		369,514		87
—	Female		893		—		212		—		1,105		8.2		63,359		59
Total			5,054		—		322		—		5,376		12.7		432,873		81

B. Compensation of Unregistered Officers

(As of June 30, 2022)		(Unit: in persons and millions of Won)
Number of Unregistered Officers	Aggregate wage for the year of 2022	Average wage per person
97	37,935	391

2. Compensation of Directors

A. Amount Approved at the Shareholders’ Meeting

(As of June 30, 2022)		(Unit: in millions of Won)
Classification	Number of Directors	Aggregate Amount Approved
Directors	8	12,000

B. Amount Paid

B-1. Total Amount

(As of June 30, 2022)		(Unit: in millions of Won)
Number of Directors	Aggregate Amount Paid	Average Amount Paid Per Director	Remarks
8	2,349	336	—

* The number of directors includes one non-executive director who did not receive any compensation.

* The average amount paid per director excludes one non-executive director who did not receive any compensation.

42

B-2. Amount by Classification

(As of June 30, 2022)							(Unit: in millions of Won)
Classification	Number of Directors		Aggregate Amount Paid		Average Amount Paid Per Director		Remarks
Inside Directors		3		1,768		884		—
Independent Directors (Excluding Audit Committee Members)		1		113		113		—
Audit Committee Members		4		468		117		—
Auditor		—		—		—		—

* The number of directors includes one non-executive director who did not receive any compensation.

* The average amount paid per director excludes one non-executive director who did not receive any compensation.

3. Individual Compensation of Directors and Officers

A. Remuneration for Individual Directors (among those Paid over W500 Million per Year)

(As of June 30, 2022)		(Unit: in millions of Won)
Name	Position	Total remuneration		Payment not included in total remuneration
Young Sang Ryu	Representative Director		1,586	Stock options*

* See “VIII.4. Stock Options Granted and Exercised” below for details on the number of stock options, exercise price and exercise period.

Composition of Total Remuneration

Name	Composition
Young Sang Ryu	Total remuneration: Won 1,586 million •  Salary: Won 550 million •  Bonus: Won 1,024 million •  Other earned income: Won 12 million

B. Remuneration for the Five Highest-Paid Officers (among those Paid over W500 Million per Year)

(As of June 30, 2022)		(Unit: in millions of Won)
Name	Position	Total remuneration		Payment not included in total remuneration
Jung Ho Park	Vice Chairman		2,800	Stock options*
Jin Woo So	Vice Chairman		2,552	—
Young Sang Ryu	Representative Director		1,586	Stock options*
Yong-Seop Yum	Head		1,155	—
Yong Chul Yoon	Officer		1,065	—

* See “VIII.4. Stock Options Granted and Exercised” below for details on the number of stock options, exercise price and exercise period.

* The remuneration for Jung Ho Park includes salary paid following his resignation, which accounts for the discrepancy in his remuneration compared to that listed on “VIII.3.A. Remuneration for Individual Directors (among those Paid over W500 Million per Year).”

43

Composition of Total Remuneration

Name	Composition
Jung Ho Park	Total remuneration: Won 2,800 million •   Bonus: Won 2,106 million •   Stock options: Won 670 million •   Other earned income: Won 25 million
Jin Woo So	Total remuneration: Won 2,552 million •   Salary: Won 800 million •   Bonus: Won 1,752 million
Young Sang Ryu	Total remuneration: Won 1,586 million •   Salary: Won 550 million •   Bonus: Won 1,024 million •   Other earned income: Won 12 million
Yong-Seop Yum	Total remuneration: Won 1,155 million •   Salary: Won 413 million •   Bonus: Won 743 million
Yong Chul Yoon	Total remuneration: Won 1,065 million •   Salary: Won 225 million •   Bonus: Won 838 million •   Other earned income: Won 2 million

4. Stock Options Granted and Exercised

A. Stock Options Granted to Directors and Auditors

(As of June 30, 2022)
Classification	Number of Directors		Fair Value of Stock Options (Won)		Remarks
Inside Directors		2		580,525,427	—
Independent Directors (Excluding Audit Committee Members)		—		—	—
Audit Committee Members		—		—	—
Executives		10		223,482,271
Total		12		804,007,698	—

B. Stock Options Granted and Exercised

(As of June 30, 2022)										(Unit: in Won and shares)
Grantee	Relationship with the Company	Date of Grant	Method of Grant	Initially Granted		Changes during Reporting Period				Total Changes				Unexercised as of End of Reporting Period	Exercise Period	Exercise Price
						Exercised		Canceled		Exercised		Canceled
Young Sang Ryu	Inside Director	February 20, 2018	Issuance of treasury stock, cash settlement		4,123		—		—		—		—	4,123	February 21, 2020 – February 20, 2023	50,824
Young Sang Ryu	Inside Director	March 26, 2019	Issuance of treasury stock, cash settlement		5,265		—		—		—		—	5,265	March 27, 2021 – March 26, 2024	50,862
Young Sang Ryu	Inside Director	March 26, 2020	Issuance of treasury stock, cash settlement		7,145		—		—		—		—	7,145	March 27, 2023 – March 26, 2027	38,452
Young Sang Ryu	Inside Director	March 25, 2021	Issuance of treasury stock, cash settlement		18,190		—		—		—		—	18,190	March 26, 2023 – March 25, 2026	50,276

44

Young Sang Ryu	Inside Director	March 25, 2022	Issuance of treasury stock, cash settlement	196,850	—	—	—	—	196,850	March 26, 2025 – March 25, 2029	56,860
Young Sang Ryu	Inside Director	March 25, 2022	Issuance of treasury stock, cash settlement	98,425	—	—	—	—	98,425	March 26, 2025 – March 25, 2029	56,860
Jong Ryeol Kang	Unregistered Officer	March 26, 2020	Issuance of treasury stock, cash settlement	6,219	—	—	—	—	6,219	March 27, 2023 – March 26, 2027	38,452
Jong Ryeol Kang	Unregistered Officer	March 25, 2021	Issuance of treasury stock, cash settlement	7,136	—	—	—	—	7,136	March 26, 2023 – March 25, 2026	50,276
Jong Ryeol Kang	Unregistered Officer	March 25, 2022	Issuance of treasury stock, cash settlement	21,743	—	—	—	—	21,743	March 26, 2024 – March 25, 2027	56,860
Jung Ho Park	Unregistered Officer	March 24, 2017	Issuance of treasury stock, cash settlement	67,320	67,320	—	67,320	—	—	March 25, 2019 – March 24, 2022	49,350
Jung Ho Park	Unregistered Officer	March 24, 2017	Issuance of treasury stock, cash settlement	67,320	—	—	—	—	67,320	March 25, 2020 – March 24, 2023	53,298
Jung Ho Park	Unregistered Officer	March 24, 2017	Issuance of treasury stock, cash settlement	67,320	—	—	—	—	67,320	March 25, 2021 – March 24, 2024	57,562
Jung Ho Park	Unregistered Officer	March 26, 2020	Issuance of treasury stock, cash settlement	337,408	—	—	—	—	337,408	March 27, 2023 – March 26, 2027	38,452
Hyoung Il Ha	Officer of Affiliate	February 22, 2019	Issuance of treasury stock, cash settlement	4,749	—	—	—	—	4,749	February 23, 2021 – February 22, 2024	53,052
Hyoung Il Ha	Officer of Affiliate	March 26, 2020	Issuance of treasury stock, cash settlement	5,955	—	—	—	—	5,955	March 27, 2023 – March 26, 2027	38,452
Hyoung Il Ha	Officer of Subsidiary Company	March 25, 2021	Issuance of treasury stock, cash settlement	11,418	—	—	—	—	11,418	March 26, 2023 – March 25, 2026	50,276
Hyoung Il Ha	Officer of Affiliate	March 25, 2022	Issuance of treasury stock, cash settlement	10,737	—	10,737	—	10,737	—	March 26, 2024 – March 25, 2027	56,860
Poong Young Yoon	Officer of Affiliate	February 22, 2019	Issuance of treasury stock, cash settlement	3,777	3,777	—	3,777	—	—	February 23, 2021 – February 22, 2024	53,052
Poong Young Yoon	Officer of Affiliate	March 26, 2020	Issuance of treasury stock, cash settlement	5,293	—	—	—	—	5,293	March 27, 2023 – March 26, 2027	38,452
Poong Young Yoon	Officer of Affiliate	March 25, 2021	Issuance of treasury stock, cash settlement	10,203	—	—	—	—	10,203	March 26, 2023 – March 25, 2026	50,276

45

Seong Ho Ha	Unregistered Officer	February 22, 2019	Issuance of treasury stock, cash settlement	4,157	—	—	—	—	4,157	February 23, 2021 – February 22, 2024	53,052
Seong Ho Ha	Unregistered Officer	March 26, 2020	Issuance of treasury stock, cash settlement	5,028	—	—	—	—	5,028	March 27, 2023 – March 26, 2027	38,452
Seong Ho Ha	Unregistered Officer	March 25, 2021	Issuance of treasury stock, cash settlement	5,830	—	—	—	—	5,830	March 26, 2023 – March 25, 2026	50,276
Seong Ho Ha	Unregistered Officer	March 25, 2022	Issuance of treasury stock, cash settlement	9,341	—	—	—	—	9,341	March 26, 2024 – March 25, 2027	56,860
Dong Hwan Cho	Unregistered Officer	March 26, 2020	Issuance of treasury stock, cash settlement	4,631	—	—	—	—	4,631	March 27, 2023 – March 26, 2027	38,452
Dong Hwan Cho	Unregistered Officer	March 25, 2021	Issuance of treasury stock, cash settlement	5,375	—	—	—	—	5,375	March 26, 2023 – March 25, 2026	50,276
Dong Hwan Cho	Unregistered Officer	March 25, 2022	Issuance of treasury stock, cash settlement	8,697	—	—	—	—	8,697	March 26, 2024 – March 25, 2027	56,860
HyunA Lee	Unregistered Officer	March 26, 2020	Issuance of treasury stock, cash settlement	4,631	—	—	—	—	4,631	March 27, 2023 – March 26, 2027	38,452
HyunA Lee	Unregistered Officer	March 25, 2021	Issuance of treasury stock, cash settlement	8,746	—	—	—	—	8,746	March 26, 2023 – March 25, 2026	50,276
HyunA Lee	Unregistered Officer	March 25, 2022	Issuance of treasury stock, cash settlement	12,884	—	—	—	—	12,884	March 26, 2024 – March 25, 2027	56,860
Sang Kyu Shin	Unregistered Officer	March 25, 2021	Issuance of treasury stock, cash settlement	4,646	—	—	—	—	4,646	March 26, 2023 – March 25, 2026	50,276
Jae Seung Song	Officer of Affiliate	March 25, 2021	Issuance of treasury stock, cash settlement	8,047	—	—	—	—	8,047	March 26, 2023 – March 25, 2026	50,276
Myung Jin Han	Unregistered Officer	March 25, 2021	Issuance of treasury stock, cash settlement	4,403	—	—	—	—	4,403	March 26, 2023 – March 25, 2026	50,276
Myung Jin Han	Unregistered Officer	March 25, 2022	Issuance of treasury stock, cash settlement	11,274	—	—	—	—	11,274	March 26, 2024 – March 25, 2027	56,860
Byung Hoon Ryu	Officer of Affiliate	March 25, 2021	Issuance of treasury stock, cash settlement	3,796	—	—	—	—	3,796	March 26, 2023 – March 25, 2026	50,276
Bong Ho Lim	Unregistered Officer	March 25, 2022	Issuance of treasury stock, cash settlement	8,858	—	—	—	—	8,858	March 26, 2024 – March 25, 2027	56,860

46

Jinwon Kim	Unregistered Officer	March 25, 2022	Issuance of treasury stock, cash settlement	10,629	—	—	—	—	10,629	March 26, 2024 – March 25, 2027	56,860
Yong Joo Park	Unregistered Officer	March 25, 2022	Issuance of treasury stock, cash settlement	10,334	—	—	—	—	10,334	March 26, 2024 – March 25, 2027	56,860
Heesup Kim	Unregistered Officer	March 25, 2022	Issuance of treasury stock, cash settlement	7,086	—	—	—	—	7,086	March 26, 2024 – March 25, 2027	56,860
Jungwhan Ahn	Unregistered Officer	March 25, 2022	Issuance of treasury stock, cash settlement	8,858	—	—	—	—	8,858	March 26, 2024 – March 25, 2027	56,860
Yoon Kim	—	March 26, 2020	Issuance of treasury stock, cash settlement	5,690	—	5,690	—	5,690	—	March 27, 2023 – March 26, 2027	38,452
Yoon Kim	—	March 25, 2021	Issuance of treasury stock, cash settlement	6,407	—	6,407	—	6,407	—	March 26, 2023 – March 25, 2026	50,276
Seok Joon Huh	—	March 26, 2020	Issuance of treasury stock, cash settlement	5,624	—	5,624	—	5,624	—	March 27, 2023 – March 26, 2027	38,452
Seok Joon Huh	—	March 25, 2021	Issuance of treasury stock, cash settlement	6,863	—	6,863	—	6,863	—	March 26, 2023 – March 25, 2026	50,276

47

IX. RELATED PARTY TRANSACTIONS

1. Line of Credit Extended to the Largest Shareholder and Related Parties

None.

2. Transfer of Assets to/from the Largest Shareholder and Related Parties and Other Transactions

Purchase and Dispositions of Investments

(As of June 30, 2022)					(Unit: in millions of Won)
Name (Corporate name)	Relationship	Purchase and Dispositions of Investments									Remarks
		Type of Investment	Transaction Details
			Beginning		Increase		Decrease		Ending
Atlas Investment	Subsidiary	Shares		155,656		3,631		—		159,287	Capital increase
SAPEON Korea Inc.	Subsidiary	Shares		—		19,108		1,201		17,907	New acquisition
SAPEON Inc.	Subsidiary	Shares		—		48,228		—		48,228	New acquisition
SK Square (listed)	Subsidiary	Shares		51,371		—		307		51,064	Disposal

3. Transactions with the Largest Shareholder and Related Parties

(Unit: in millions of Won)
Counterparty	Relationship with Counterparty	Type	Transaction Period	Transaction Details	Transaction Amount
PS&Marketing	Affiliate	Purchase	January 1, 2022 – June 30, 2022	Marketing fees, etc.	619,294

4. Related Party Transactions

See note 31 of the notes to the Company’s unaudited consolidated financial statements attached hereto for more information regarding related party transactions.

5. Other Related Party Transactions (excluding Transactions with the Largest Shareholder and Related Parties listed above)

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

(As of June 30, 2022)					(Unit: in millions of Won)
Name (Corporate name)	Relationship	Account category	Change details								Accrued interest		Remarks
			Beginning		Increase		Decrease		Ending
Baekmajang and others	Agency	Long-term and short-term loans		63,561		57,791		59,287		62,065		—		—
Daehan Kanggun BCN Inc.	Investee	Long-term loans		22,147		—		—		22,147		—		—

48

X. OTHER INFORMATION RELATING TO THE PROTECTION OF INVESTORS

1. Developments in the Items Mentioned in Prior Reports on Important Business Matters

On February 9, 2022, the Company announced its strategic direction and sales target in the “Future Business and Management Plan” fair disclosure report. See “II.1. Business Overview” for more information on business progress and “III. Financial Information” for more information on business performance.

On March 30, 2022, the Company announced that SK Broadband will merge with Broadband Nowon Co., Ltd. in its “Decision on Merger” report. Such transaction is currently pending and has not been completed.

2. Contingent Liabilities

A. Legal Proceedings

[SK Telecom]

As of June 30, 2022, the Company is involved in various pending legal proceedings and the provisions recognized for these proceedings are not material. The management of the Company has determined that there are currently no present obligations in connection with proceedings for which no provision has been recognized. The management has also determined that the outcome of these proceedings will not have a significant impact on the Company’s financial position and operating performance.

[SK Broadband]

As of June 30, 2022, there were 34 pending lawsuits against SK Broadband (aggregate amount of claims of Won 13,924 million), and provisions in the amount of Won 12,934 million in connection with such lawsuits were recognized.

B. Other Contingent Liabilities

[SK Telecom]

None.

[SK Broadband]

As of June 30, 2022, SK Broadband has entered into revolving credit facilities with a limit of Won 189 billion with three financial institutions including Hana Bank in relation to its loans.

In connection with public offerings of notes, SK Broadband is subject to certain restrictions with respect to its debt ratio, third party payment guarantees and other limitations on liens.

SK Broadband has provided “geun” mortgage amounting to Won 1,513 million on certain of its buildings, including Gyeyang Guksa, in connection with leasing of such buildings.

SK Broadband has entered into a leased line contract and a resale contract for fixed-line telecommunication services with SK Telecom.

As of June 30, 2022, Seoul Guarantee Insurance Company has provided a performance guarantee of Won 30,784 million to SK Broadband in connection with the performance of certain contracts and the repair of any defects, and Korea Content Financial Cooperative has provided a performance guarantee of Won 37,111 million in connection with the performance of certain contracts.

[SK Stoa]

49

As of June 30, 2022, Kookmin Bank has provided a payment guarantee of Won 1.5 billion in connection with e-commerce transaction payables.

3.    Status of Sanctions, etc.

[SK Telecom]

1. Sanctions by Investigative or Juridical Agencies

None.

2. Sanctions by Administrative Agencies

1) Sanctions by Financial Supervisory Authorities

None.

2) Sanctions by the KFTC

Date	Authority	Subject of Action	Sanction	Reason and the Relevant Law	Status of Implementation	Company’s Measures
Mar. 18, 2021	KFTC	SK Telecom	Decision of KFTC Meeting (No. 2021-075) -  Correctional order (prohibition order against future actions) -  Fine of Won 3,198 million	Although SK Telecom and SK Broadband believe that they allocated sales commissions for sales of IPTV-bundled plans based on reasonable standard, KFTC determined that SK Telecom unfairly supported SK Broadband by paying for part of the sales commissions payable by SK Broadband (Article 23-1(7) of the Monopoly Regulation and Fair Trade Act (“MRFTA”))	Filed an administrative proceeding to challenge the KFTC decision with the Seoul High Court (Apr. 28, 2021)	Properly allocate sales commissions in accordance with court’s decision; strengthen compliance activities
Aug. 25, 2021	KFTC	SK Telecom	Decision of KFTC Meeting (No. 2021-224) -  Correctional order (prohibition order against future actions)	Unfair support to Loen by reducing the payment agent fee for “Melon” service for two years from 2010 to 2011 (Article 23-1(7) of the MRFTA)	Filed an administrative proceeding and applied for cancelation of execution of the KFTC decision with the Seoul High Court (Sept. 29, 2021)	Strengthen compliance activities (despite low possibility of recurrence and minimal impact on the Company’s business)

3) Sanctions by Tax Authorities

None.

50

4) Sanctions by Other Administrative or Public Institutions

Date	Authority	Subject of Action	Sanction	Reason and the Relevant Law	Status of Implementation	Company’s Measures
June 4, 2020	Korea Communications Commission (“KCC”)	SK Telecom	Decision of 33rd KCC Meeting of 2020 -   Correctional order -   Fine of Won 4 million	Obtaining consent from users for collection of personal location information through new contracts for mobile phones with material omissions instead of applicable terms of use for location information business (Article 18-1 of the Act on the Protection, Use, Etc. of Location Information (“Location Information Act”) and Article 22 of Enforcement Decree)	Decision confirmed; report on implementation of correctional order and payment of fine completed	Provided training to persons responsible for location information management, including representatives, and personnel handling location information
July 8, 2020	KCC	SK Telecom	Decision of 40th KCC Meeting of 2020 -  Correctional order -  Submission of implementation plan and report on implementation of correctional order including recurrence prevention plan -  Fine of Won 22.3 billion	Payment of subsidies exceeding 115% limit by dealers; payment of unreasonably discriminatory subsidies based on subscription type and rate plan; selection of certain dealers and instruction to and inducement of such subsidies by such dealers (Articles 3-1, 4-5 and 9-3 of the MDDIA)	Decision confirmed; payment of fine completed; implementation plan and report on implementation of correctional order submitted	Immediately ceased such activities; promoted measures to prevent recurrence, such as operation of voluntary consultative body regarding illegal online postings, standardization of incentive instructions/forms, establishment of record management system, development of monitoring activities of online retailers and expansion of the electronic subscription system
Sept. 9, 2020	KCC	SK Telecom	Decision of 49th KCC Meeting of 2020 -  Correctional order -  Submission of implementation plan and report on implementation of correctional order -  Fine of Won 76 million	False, exaggerated or deceptive advertising through offline and online channels that could potentially mislead users regarding key information about bundled products, such as component products and discount details, to induce subscription (Article 50(1)-5 of the TBA and Article 42(1) of Enforcement Decree)	Decision confirmed; payment of fine completed and implementation plan submitted	Immediately ceased such activities; implemented improvements to work procedures such as designation of manager for false or exaggerated advertising of bundled products, regular self-monitoring, strengthening of evaluation and employee training of dealers/agents

51

Date	Authority	Subject of Action	Sanction	Reason and the Relevant Law	Status of Implementation	Company’s Measures
Feb. 3, 2021	KCC	SK Telecom	Decision of 4th KCC Meeting of 2021 -  Submission of statistical data pursuant to Article 30 of the Location Information Act -  Establishment and submission of recurrence prevention plan -  Fine of Won 4.5 million	Delay of submission of semi-annual data on personal location information request and provision to the National Assembly’s Science, ICT, Broadcasting and Communications Committee on four occasions (Article 30(2) of the Location Information Act, Article 30(4) of Enforcement Decree)	Decision confirmed; receipt for payment of fine issued; recurrence prevention plan submitted	Specify roles and responsibilities for compiling/sending statistical data to KCC and National Assembly; establish system for submission process (within 15 days after end of second quarter); include relevant information in transition documents to prevent omission in connection with personnel/organizational change
Dec. 29, 2021	KCC	SK Telecom	Decision of 59th KCC Meeting of 2021 -  Announcement of correctional order -  Establishment and submission of recurrence prevention plan -  Fine of Won 1,490 million	Excessive financial support other than the disclosed subsidy for the sales of mobile terminal devices and discriminatory payment and payment inducement based on subscription type and rate plan (Articles 3-1, 4-5 and 15-2 of the MDDIA)	Decision confirmed; payment of fine completed and implementation plan submitted	Implement measures to prevent recurrence and establish a transparent incentive system for agents and distributors
June 15, 2022	KCC	SK Telecom	Decision of 29th KCC Meeting of 2022 -  Announcement of correctional order -  Improvement of operating procedures including fixed-line and wireless gift management system -  Establishment and submission of recurrence prevention plan -  Fine of Won 63.2 million	Unreasonably discriminatory practice based on subscription type and rate plan in providing gifts with values that are over or below 15% of the applicable limit in the Company’s sales of Internet-bundled plans (Article 50 of the TBA, Article 42-1 of Enforcement Decree and Article 4 of Standards for Unfair User Discrimination in Providing Economic Benefits)	Decision confirmed; implementation plan (to be submitted by July 14) and payment of fine (to be paid by July 20) in process; scheduling of public announcement date (in late July) in progress	Immediately ceased such activities; improved fixed-line and wireless network gift registration system and service application process

[SK BROADBAND]

1. Sanctions by Investigative or Juridical Agencies

None.

2. Sanctions by Administrative Agencies

1) Sanctions by Financial Supervisory Authorities

None.

52

2) Sanctions by the KFTC

Date	Authority	Subject of Action	Sanction	Amount of Monetary Sanction	Reason and the Relevant Law	Status of Implementation	Company’s Measures
Jan. 13, 2020	KFTC	SK Broadband	Correctional order (prohibiting acts of restricting competition, such as unilaterally raising prices, reducing the number of channels and inducing switch to high-priced products, based on post-merger market share)	—	Correctional order to prevent the post-merger entity from engaging in activities that may restrict competition in the pay TV market (Articles 7-1 and 16-1 of the MRFTA)	Submitted the implementation plan (approved by KFTC)	Implement the implementation plan
Oct. 22, 2020	KFTC	SK Broadband, Broadband Nowon	Correctional order (injunction and notice order); fine of Won 351 million	Won 351 million	1. Unilateral change of fee payment criteria (provision of disadvantage) 2. Coercion of purchase of thrift phones (coercion of purchase) 3. Coercion of change of ownership of product (extortion of economic benefit) (Article 23-1(4) of the MRFTA and Articles 7-1 and 9-1 of the Fair Agency Transactions Act)	Filed an administrative proceeding	Improve work procedures to prevent errors in the future
Mar. 29, 2021	KFTC	SK Broadband	Correctional order and fine of Won 3.198 billion	Won 3.198 billion	Although SK Telecom and SK Broadband believe that they allocated sales commissions for sales of IPTV-bundled plans based on reasonable standard, KFTC determined that SK Telecom unfairly supported SK Broadband by paying for part of the sales commissions payable by SK Broadband (Article 23-1(7) of the MRFTA)	On Apr. 28, 2021, SK Telecom filed an administrative proceeding and applied for suspension of execution of the KFTC decision (service of process delivered on Mar. 30, 2021)	To properly allocate sales commissions in accordance with court’s decision; strengthen compliance activities

53

3) Sanctions by Tax Authorities

Date	Authority	Subject of Action	Sanction	Amount of Monetary Sanction	Reason and the Relevant Law	Status of Implementation	Company’s Measures
Feb. 17, 2021	Seoul Regional Tax Office	SK Broadband	Fine	Won 596 million	Violation of tax bill collection obligation (Article 10 (1-4) and Article 18 of the Punishment of Tax Offenses Act)	Paid the fine	Provide measures against collusion and prevent further recurrences

4) Sanctions by Other Administrative or Public Institutions

Date	Authority	Subject of Action	Sanction	Amount of Monetary Sanction	Reason and the Relevant Law	Status of Implementation	Company’s Measures
Jan. 15, 2020	MSIT	SK Broadband	Correctional order (resubmission of the business report for FY2018 to MSIT with mandated revisions); fine of Won 79 million	Won 79 million	Error in the assets/profits/costs categories of the telecommunications business report for FY2018, the submission of which is mandated by the Telecommunication Account Settlement and Reporting Regulations and Telecommunications Business Accounting Separation Criteria. (Article 49 of the TBA)	Submitted the revised business report for FY2018 (Feb. 3, 2020); Paid the fine (Feb. 7, 2020)	Improve business procedures to prevent errors
Jan. 16, 2020	MSIT	Tbroad	Correctional order (resubmission of the business report for FY2018 to MSIT with mandated revisions); Fine of Won 13 million	Won 13 million	Error in the assets/profits/costs categories of the telecommunications business report for FY2018, the submission of which is mandated by the Telecommunication Account Settlement and Reporting Regulations and Telecommunications Business Accounting Separation Criteria. (Article 49 of the TBA)	Submitted the revised business report for FY2018 (Jan. 3, 2020); paid the fine (Feb. 10, 2020)	Improve business procedures to prevent errors
May 1, 2020	Central Radio Management Service	3 affiliated system operators of Tbroad	Fine of Won 6 million	Won 6 million (Won 2 million each for Namdong Broadcast, Saerom Broadcast and Seohai Broadcast)	Failed to submit monthly broadcasting results (Article 83 of the Broadcasting Act, Article 16 of the Act on Regulation of Violations of Public Order)	Paid the fine	—

54

Date	Authority	Subject of Action	Sanction	Amount of Monetary Sanction	Reason and the Relevant Law	Status of Implementation	Company’s Measures
Sept. 9, 2020	KCC	SK Broadband	Correctional order (improvement of relevant business practice); Fine of Won 251 million	Won 251 million	False, exaggerated or deceptive advertising that could potentially mislead users regarding key information about bundled products, such as component products, discount details and penalties, to induce subscription (Article 50-1(5) of the TBA, Article 42-1-Table 4-5-f of its Enforcement Decree and Article 3-1-d of Bundling Sales Prohibition Standards)	Plan to comply with the correctional order	Improvement of business practice; fine payment
Dec. 11, 2020	Central Radio Management Service	13 affiliated system operators of SK Broadband	Correctional order	—	Failure to distribute PP program fees, which was a condition for reauthorization (Article 99-1 of the Broadcasting Act)	—	Compliance with the correctional order
Dec. 21, 2020	MSIT	SK Broadband	Correctional order (resubmission of the business report for FY2019 to MSIT with mandated revisions); Fine of Won 101 million	Won 101 million	Error in the assets/profits/costs categories of the telecommunications business report for FY2019, the submission of which is mandated by the Telecommunication Account Settlement and Reporting Regulations and Telecommunications Business Accounting Separation Criteria. (Article 49 of the Telecommunications Business Act)	Submitted the revised business report for FY2019 (Jan. 15, 2021); paid the fine (Jan. 25, 2021)	Improve business procedures to prevent errors
Dec. 21, 2020	MSIT	Tbroad	Correctional order (resubmission of the business report for FY2019 to MSIT with mandated revisions); Fine of Won 11 million	Won 11 million	Error in the assets/profits/costs categories of the telecommunications business report for FY2019, the submission of which is mandated by the Telecommunication Account Settlement and Reporting Regulations and Telecommunications Business Accounting Separation Criteria. (Article 49 of the Telecommunications Business Act)	Submitted revised business report for FY2019 (Jan. 15, 2021); Paid the fine (Jan. 25, 2021)	Improve business procedures to prevent errors

55

Date	Authority	Subject of Action	Sanction	Amount of Monetary Sanction	Reason and the Relevant Law	Status of Implementation	Company’s Measures
Feb. 16, 2021	Central Radio Management Service	SK Broadband Sejong Broadcast	Fine	Won 2.8 million	Violated regulations on displaying sponsorship notice on public service advertisements (SK Broadband Sejong Broadcast) (Article 16 of the Act on Regulation of Violations of Public Order)	Paid the fine	—
Apr. 20, 2021	Central Radio Management Service	SK Broadband	Fine (Won 10 million)	Won 4 million	Illegally modified numbers were introduced during an illegal calling number modification blocking test for public and financial institutions as part of an inspection in 2020 (Failed to meet the requirements for appropriate technical measures to prevent harm to users) (Article 84-2 of the TBA)	Paid the reduced amount of the fine (Won 4 million)	Analysis of the causes for the malfunctioning of the number theft blocking system and improvement of the system
June 8, 2021	Communication office of the KCC	SK Broadband	Fine (Won 3 million)	Won 3 million	Violated the Act on the Restriction of Transmission of Advertising Information for Commercial Purposes by requiring date of birth information from customers in order to stop receiving text message advertisements (Article 50(4) of the Information and Communications Network Act and Article 61(3) of its Enforcement Decree)	Paid the fine (July 6, 2021)	Improved the system so that users will no longer be asked to enter date of birth in order to stop receiving text message advertisements (Feb. 2021)
Aug. 10, 2021	KCC	SK Broadband	Correctional order (improvement of business practice)	—	Failure to explain or notify users that its high-speed Internet service was initiated without measuring the speed or without meeting the minimum guaranteed speed (Article 50 of the TBA)	Submitted the correctional order implementation plan	Compliance with the correctional order

56

Date	Authority	Subject of Action	Sanction	Amount of Monetary Sanction	Reason and the Relevant Law	Status of Implementation	Company’s Measures
Oct. 19, 2021	KCC; Communication office of the KCC	SK Broadband	Fine (Won 8 million)	Fine (Won 8 million)	Insufficient implementation of necessary measures for addressing service vulnerabilities and insufficient follow-up response to reports of spam messages, including insufficient implementation of sanctions against companies that engage in mass texting of spam messages (Act on Promotion of Information and Communications Network Utilization and Information and Article 50-4(4) of the Broadcasting Act)	Paid the fine (November 10, 2021)	Improvement of the measures for addressing service vulnerabilities
Dec. 14, 2021	Central Radio Management Service	9 affiliated system operators of SK Broadband	Correctional order	—	Failure to execute the local channel investment plan (Article 99-1 of the Broadcasting Act)	Submitted the correctional order implementation plan	Compliance with the correctional order
Dec. 30, 2021	MSIT	SK Broadband	Correctional order (resubmi-ssion of the business report for FY2020 to MSIT with mandated revisions); Fine of Won 50 million	Won 50 million	Error in the assets/profits/costs categories of the telecommunications business report for FY2020, the submission of which is mandated by the Telecommunication Account Settlement and Reporting Regulations and Telecommunications Business Accounting Separation Criteria. (Article 49 of the Telecommunications Business Act)	Submitted the revised business report for FY2020 (Jan. 14, 2022); paid the fine (Jan. 24, 2022)	Improve business procedures to prevent errors
Dec. 30, 2021	MSIT	Tbroad	Correctional order (resubmission of the business report for FY2020 to MSIT with mandated revisions); Fine of Won 500 million	Won 500 million	Error in the assets/profits/costs categories of the telecommunications business report for FY2020, the submission of which is mandated by the Telecommunication Account Settlement and Reporting Regulations and Telecommunications Business Accounting Separation Criteria. (Article 49 of the Telecommunications Business Act)	Submitted the revised business report for FY2020 (Jan. 14, 2022); paid the fine (Jan. 24, 2022)	Improve business procedures to prevent errors

57

Date	Authority	Subject of Action	Sanction	Amount of Monetary Sanction	Reason and the Relevant Law	Status of Implementation	Company’s Measures
June 30, 2022	KCC	SK Broadband	Correctional order; Fine of Won 1.093 billion	Won 1.093 billion	Discriminatory practice in providing gifts to the Company’s users as part of its telecommunication bundle products; Article 50-1 of the TBA and Article 42-1 of Enforcement Decree	Submitted implementation plan; paid the fine (July 19)	Improve procedures; public announcement of correctional order

4. Material Events Subsequent to the Reporting Period

(1) On July 22, 2022, the Board of Directors resolved to acquire 9,129,519 shares of Hana Financial Group Inc. See the report titled “Decision on Acquisition and Disposal of Shares” filed by the Company on July 22, 2022.

(2) On July 22, 2022, the Board of Directors resolved to dispose of 39,902,323 shares of HanaCard Co., Ltd. See the report titled “Decision on Acquisition and Disposal of Shares” filed by the Company on July 22, 2022.

(3) On July 28, 2022, the Board of Directors declared an interim dividend as follows:

Classification	Content
Interim dividend amount	Cash dividend of Won 830 per share (Total: Won 180,967 million)
Dividend return rate (based on market price)	1.55%
Dividend record date	June 30, 2022
Dividend payment date	On or before August 17, 2022, in accordance with Article 165-12(3) of the Financial Investments Services and Capital Markets Act

58

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/ Heejun Chung

(Signature)
Name:	Heejun Chung
Title:	Senior Vice President

Date: SEPTEMBER 8, 2022

SK TELECOM CO., LTD. AND ITS SUBSIDIARIES

Interim Consolidated Financial Statements

For the Six-Month Period ended June 30, 2022

(With Independent Auditor’s Review Report Thereon)

Contents

	Page
Report on review of interim consolidated financial statements
Interim Consolidated Financial Statements
Interim Consolidated Statements of Financial Position	4
Interim Consolidated Statements of Profit or Loss	6
Interim Consolidated Statements of Comprehensive Income	7
Interim Consolidated Statements of Changes in Equity	8
Interim Consolidated Statements of Cash Flows	9
Notes to the Interim Consolidated Financial Statements	11

Report on review of interim consolidated financial statements

(English Translation of a Report Originally Issued in Korean)

The Shareholders and Board of Directors

SK Telecom Co., Ltd.

We have reviewed the accompanying interim consolidated financial statements of SK Telecom Co., Ltd. and its subsidiaries (the “Group”), which comprise the interim consolidated statement of financial position as of June 30, 2022, and the related interim consolidated statements of profit or loss, interim consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2022, interim consolidated statement of changes in equity and interim consolidated statement of cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the interim consolidated financial statements

Management is responsible for the preparation and fair presentation of these interim consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (“KIFRS”) 1034 Interim Financial Reporting, and for such internal controls as management determines is necessary to enable the preparation of interim consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on these interim consolidated financial statements based on our review.

We conducted our review in accordance with the Review Standards for Quarterly and Semiannual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing (“KSAs”) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim consolidated financial statements are not prepared fairly, in all material respects, in accordance with KIFRS 1034 Interim Financial Reporting.

Emphasis of matter

We draw to attention to Notes 3 and 36, which describes that pursuant to the resolution of shareholders’ meeting held on October 12, 2021, SK Telecom Co., Ltd. completed the spin-off of certain businesses as of November 1, 2021. The businesses spun off are presented as discontinued operations, and the comparative interim consolidated statement of profit or loss for the three-month and six-month periods ended June 30, 2021 and related notes have been restated to present the discontinued operations separately from continuing operations.

1

Other matters

The interim consolidated statements of profit or loss, interim consolidated statements of comprehensive income for the three-month and six-month period ended June 30, 2021, interim consolidated statement of changes in equity and interim consolidated statement of cash flows for the six-month period ended June 30, 2021, prepared in accordance with KIFRS 1034 and presented for comparative purpose, have been reviewed by KPMG Samjong Accounting Corp. whose review report dated August 13, 2021 expressed an unqualified review conclusion. The accompanying interim consolidated statements of profit or loss, interim consolidated statements of comprehensive income for the three-month and six-month period ended June 30, 2021, interim consolidated statement of changes in equity and interim consolidated statement of cash flows for the six-month period ended June 30, 2021 presented for comparative purpose except for the adjustments related to the discontinued operations as described in Notes 3 and 36 to the accompanying interim consolidated financial statements are not different, in all material respects, from the interim consolidated statements of profit or loss, interim consolidated statements of comprehensive income for the three-month and six-month period ended June 30, 2021, interim consolidated statement of changes in equity and interim consolidated statement of cash flows for the six-month period ended June 30, 2021 reviewed by KPMG Samjong Accounting Corp.

Moreover, the consolidated statement of financial position as of December 31, 2021, and the related consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended which have been audited by KPMG Samjong Accounting Corp., in accordance with KSAs (not presented herein), whose report dated March 10, 2022 expressed an unqualified opinion. The accompanying consolidated statement of financial position as of December 31, 2021 presented for comparative purpose is not different, in all material respects, from the above audited consolidated statement of financial position.

August 12, 2022

This report is effective as of August 12, 2022, the independent auditor’s review report date. Accordingly, certain material subsequent events or circumstances may have occurred during the period from the independent auditor’s review report date to the time this review report is used. Such events and circumstances could significantly affect the accompanying interim consolidated financial statements and may result in modification to this review report.

2

SK TELECOM CO., LTD. (the “Parent Company”) AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2022 AND DECEMBER 31, 2021 AND

FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

The accompanying interim consolidated financial statements, including all footnote disclosures, were prepared by, and are the responsibility of, the Parent Company.

Ryu, Young-Sang

Chief Executive Officer

SK TELECOM CO., LTD.

3

SK TELECOM CO., LTD. and its Subsidiaries

Interim Consolidated Statements of Financial Position

As of June 30, 2022 and December 31, 2021

(In millions of won)	Note		June 30, 2022 (Unaudited)		December 31, 2021
Assets
Current Assets:
Cash and cash equivalents		29,30	W	1,152,914		872,731
Short-term financial instruments		29,30		688,554		508,677
Short-term investment securities		9,29,30		—		5,010
Accounts receivable – trade, net		5,29,30,31		2,026,534		1,913,511
Short-term loans, net		5,29,30		68,155		70,817
Accounts receivable – other, net		5,29,30,31,32		566,937		548,362
Contract assets		7,30		78,725		76,698
Prepaid expenses		6		2,005,491		1,987,503
Current tax assets		27		58		77
Derivative financial assets		29,30		145,782		30,110
Inventories, net		8		183,308		204,637
Non-current assets held for sale		35		8,734		8,734
Advanced payments and others		5,29,30,31		136,005		125,798
				7,061,197		6,352,665
Non-Current Assets:
Long-term financial instruments		29,30		375		375
Long-term investment securities		9,29,30		1,255,862		1,715,078
Investments in associates and joint ventures		11		2,285,217		2,197,351
Investment property, net		13		23,890		23,034
Property and equipment, net		12,14,31,32		12,670,853		12,871,259
Goodwill		10		2,075,009		2,072,493
Intangible assets, net		15		3,523,565		3,869,769
Long-term contract assets		7,30		44,805		41,580
Long-term loans, net		5,29,30,31		26,194		21,979
Long-term accounts receivable – other, net		5,29,30,31,32		209,228		275,238
Long-term prepaid expenses		6		1,053,360		1,069,148
Guarantee deposits, net		5,29,30,31		174,323		186,713
Long-term derivative financial assets		29,30		221,162		187,484
Deferred tax assets		27		128		128
Defined benefit assets		19		11,623		18,427
Other non-current assets		5,29,30		11,637		8,556
				23,587,231		24,558,612
Total Assets			W	30,648,428		30,911,277

(Continued)

4

SK TELECOM CO., LTD. and its Subsidiaries

Interim Consolidated Statements of Financial Position, Continued

As of June 30, 2022 and December 31, 2021

(In millions of won)	Note		June 30, 2022 (Unaudited)			December 31, 2021
Liabilities and Equity
Current Liabilities:
Accounts payable – trade		29,30,31	W	113,212			190,559
Accounts payable – other		29,30,31		1,896,838			2,071,870
Withholdings		29,30,31		903,982			790,489
Contract liabilities		7		166,472			166,436
Accrued expenses		29,30		1,301,747			1,295,404
Current tax liabilities		27		204,671			192,221
Derivative financial liabilities		29,30		—			52
Provisions		18,34		66,496			61,656
Short-term borrowings		16,29,30		12,998			12,998
Current portion of long-term debt, net		16,29,30		2,145,906			1,430,324
Current portion of long-term payables – other		17,29,30		395,549			398,823
Lease liabilities		29,30,31		368,004			349,568
Other current liabilities				73			35
				7,575,948			6,960,435
Non-Current Liabilities:
Debentures, excluding current portion, net		16,29,30		6,374,078			7,037,424
Long-term borrowings, excluding current portion, net		16,29,30		690,607			353,122
Long-term payables – other		17,29,30		1,228,965			1,611,010
Long-term lease liabilities		29,30,31		1,230,142			1,184,714
Long-term contract liabilities		7		51,845			36,531
Defined benefit liabilities		19		32,953			13,157
Long-term derivative financial liabilities		29,30		321,025			321,084
Long-term provisions		18		63,709			65,339
Deferred tax liabilities		27		862,814			941,301
Other non-current liabilities		29,30,31		69,702			52,022
				10,925,840			11,615,704
Total Liabilities				18,501,788			18,576,139
Equity:
Share capital		1,20		30,493			30,493
Capital surplus and others		20,21		(11,549,459	)		(11,623,726	)
Retained earnings		22		22,376,735			22,437,341
Reserves		23		500,527			735,238
Equity attributable to owners of the Parent Company				11,358,296			11,579,346
Non-controlling interests				788,344			755,792
Total Equity				12,146,640			12,335,138
Total Liabilities and Equity			W	30,648,428			30,911,277

The accompanying notes are an integral part of the interim consolidated financial statements.

5

SK TELECOM CO., LTD. and its Subsidiaries

Interim Consolidated Statements of Profit or Loss

For the three-month and six-month periods ended June 30, 2022 and 2021

(In millions of won)			2022 (Unaudited)						2021 (Unaudited/ Restated)
	Note		Three-month period ended June 30			Six-month period ended June 30			Three-month period ended June 30			Six-month period ended June 30
Operating revenue:		4,31
Revenue			W	4,289,857			8,567,065			4,125,146			8,238,243
Operating expenses:		31
Labor				593,151			1,230,264			537,652			1,118,649
Commission		6		1,370,892			2,681,131			1,351,150			2,654,489
Depreciation and amortization		4		907,332			1,818,216			913,025			1,822,131
Network interconnection				185,255			374,645			183,209			377,146
Leased lines				61,084			128,708			72,769			147,154
Advertising				54,902			104,139			54,695			85,780
Rent				27,041			69,122			40,395			86,252
Cost of goods sold		8		267,701			575,316			246,964			526,367
Others		24		362,894			693,526			329,575			650,347
				3,830,252			7,675,067			3,729,434			7,468,315
Operating profit		4		459,605			891,998			395,712			769,928
Finance income		4,26		32,087			56,404			22,986			81,804
Finance costs		4,26		(101,334	)		(194,425	)		(160,619	)		(239,225	)
Gain (loss) relating to investments in associates and joint ventures, net		4,11		13,576			(24,869	)		279,583			407,317
Other non-operating income		4,25		8,872			24,613			52,020			64,605
Other non-operating expenses		4,25		(10,041	)		(23,948	)		(12,127	)		(20,324	)
Profit before income tax		4		402,765			729,773			577,555			1,064,105
Income tax expense		27		144,618			251,281			136,891			267,618
Profit from continuing operations				258,147			478,492			440,664			796,487
Profit of discontinued operations, net of taxes		36		—			—			355,034			571,186
Profit for the period			W	258,147			478,492			795,698			1,367,673
Attributable to:
Owners of the Parent Company			W	253,862			465,115			765,785			1,324,050
Non-controlling interests				4,285			13,377			29,913			43,623
Earnings per share:		28
Basic earnings per share (in won)			W	1,147			2,100			2,142			3,700
Basic earnings per share – continuing operations (in won)				1,147			2,100			1,175			2,137
Diluted earnings per share (in won)				1,147			2,099			2,140			3,698
Diluted earnings per share – continuing operations (in won)				1,147			2,099			1,174			2,136

The accompanying notes are an integral part of the interim consolidated financial statements.

6

SK TELECOM CO., LTD. and its Subsidiaries

Interim Consolidated Statements of Comprehensive Income

For the three-month and six-month periods ended June 30, 2022 and 2021

(In millions of won)			2022 (Unaudited)						2021 (Unaudited)
	Note		Three-month period ended June 30			Six-month period ended June 30			Three-month period ended June 30			Six-month period ended June 30
Profit for the period			W	258,147			478,492			795,698			1,367,673
Other comprehensive income (loss):
Items that will never be reclassified to profit or loss in subsequent periods, net of taxes:
Remeasurement of defined benefit liabilities		19		10,805			23,495			7,830			(10,952	)
Net change in other comprehensive loss of investments in associates and joint ventures		11,23		—			—			(1,476	)		(2,979	)
Valuation gain (loss) on financial assets at fair value through other comprehensive income		23		(315,318	)		(370,842	)		529,608			699,287
Items that are or may be reclassified subsequently to profit or loss, net of taxes:
Net change in other comprehensive income of investments in associates and joint ventures		11,23		64,216			126,910			74,301			188,920
Net change in unrealized fair value of derivatives		23		502			(9,564	)		13,428			10,325
Foreign currency translation differences for foreign operations		23		14,788			18,715			1,968			18,099
Other comprehensive income (loss) for the period, net of taxes				(225,007	)		(211,286	)		625,659			902,700
Total comprehensive income			W	33,140			267,206			1,421,357			2,270,373
Total comprehensive income attributable to:
Owners of the Parent Company			W	26,786			254,194			1,389,658			2,225,562
Non-controlling interests				6,354			13,012			31,699			44,811

The accompanying notes are an integral part of the interim consolidated financial statements.

7

SK TELECOM CO., LTD. and its Subsidiaries

Interim Consolidated Statements of Changes in Equity

For the six-month periods ended June 30, 2022 and 2021

(In millions of won)
			Attributable to owners of the Parent Company														Non-controlling interests			Total equity
	Note		Share capital		Capital surplus and others			Retained earnings			Reserves			Sub-total
Balance as of January 1, 2021			W	44,639		677,203			22,981,913			40,139			23,743,894			652,349			24,396,243
Total comprehensive income:
Profit for the period				—		—			1,324,050			—			1,324,050			43,623			1,367,673
Other comprehensive income (loss)		11,19,23		—		—			(11,266	)		912,778			901,512			1,188			902,700
				—		—			1,312,784			912,778			2,225,562			44,811			2,270,373
Transactions with owners:
Annual dividends				—		—			(641,944	)		—			(641,944	)		(25,771	)		(667,715	)
Share option		21		—		226			—			—			226			592			818
Interest on hybrid bonds				—		—			(7,383	)		—			(7,383	)		—			(7,383	)
Acquisition of treasury shares		20		—		(72,982	)		—			—			(72,982	)		—			(72,982	)
Disposal of treasury shares		20		—		29,803			—			—			29,803			—			29,803
Retirement of treasury shares		20				1,965,952			(1,965,952	)		—			—			—			—
Changes in ownership in subsidiaries, etc.				—		226,273			—			—			226,273			231,369			457,642
				—		2,149,272			(2,615,279	)		—			(466,007	)		206,190			(259,817	)
Balance as of June 30, 2021 (Unaudited)			W	44,639		2,826,475			21,679,418			952,917			25,503,449			903,350			26,406,799
Balance as of January 1, 2022			W	30,493		(11,623,726	)		22,437,341			735,238			11,579,346			755,792			12,335,138
Total comprehensive income:
Profit for the period				—		—			465,115			—			465,115			13,377			478,492
Other comprehensive income (loss)		11,19,23		—		—			23,790			(234,711	)		(210,921	)		(365	)		(211,286	)
				—		—			488,905			(234,711	)		254,194			13,012			267,206
Transactions with owners:
Annual dividends				—		—			(361,186	)		—			(361,186	)		—			(361,186	)
Interim dividends				—		—			(180,942	)		—			(180,942	)		—			(180,942	)
Share option		21		—		75,490			—			—			75,490			—			75,490
Interest on hybrid bonds				—		—			(7,383	)		—			(7,383	)		—			(7,383	)
Transactions of treasury shares		20,21		—		(4,107	)		—			—			(4,107	)		—			(4,107	)
Changes in ownership in subsidiaries, etc.				—		2,884			—			—			2,884			19,540			22,424
				—		74,267			(549,511	)		—			(475,244	)		19,540			(455,704	)
Balance as of June 30, 2022 (Unaudited)			W	30,493		(11,549,459	)		22,376,735			500,527			11,358,296			788,344			12,146,640

The accompanying notes are an integral part of the interim consolidated financial statements.

8

SK TELECOM CO., LTD. and its Subsidiaries

Interim Consolidated Statements of Cash Flows

For the six-month periods ended June 30, 2022 and 2021

(In millions of won)	Note		2022 (Unaudited)			2021 (Unaudited)
Cash flows from operating activities:
Cash generated from operating activities:
Profit for the period			W	478,492			1,367,673
Adjustments for income and expenses		33		2,495,423			1,673,364
Changes in assets and liabilities related to operating activities		33		81,598			(580,097	)
				3,055,513			2,460,940
Interest received				18,438			20,152
Dividends received				15,098			183,736
Interest paid				(127,984	)		(158,140	)
Income tax paid				(224,790	)		(229,334	)
Net cash provided by operating activities				2,736,275			2,277,354
Cash flows from investing activities:
Cash inflows from investing activities:
Decrease in short-term investment securities, net				69,844			77,632
Collection of short-term loans				64,212			80,224
Decrease in long-term investment securities				—			343
Proceeds from disposals of long-term investment securities				27,287			19,927
Proceeds from disposals of investments in associates and joint ventures				6,880			100,334
Proceeds from disposals of property and equipment				2,930			9,172
Proceeds from disposals of intangible assets				9,561			6,305
Collection of long-term loans				675			2,460
Decrease in deposits				7,478			—
Proceeds from settlement of derivatives				836			726
				189,703			297,123
Cash outflows for investing activities:
Increase in short-term financial instruments, net				(244,274	)		(80,647	)
Increase in short-term loans				(59,651	)		(46,664	)
Increase in long-term loans				(7,032	)		(6,475	)
Increase in long-term financial instruments				—			(18	)
Acquisitions of long-term investment securities				(68,091	)		(90,710	)
Acquisitions of investments in associates and joint ventures				(6,671	)		(180,169	)
Acquisitions of property and equipment				(1,281,566	)		(1,309,616	)
Acquisitions of intangible assets				(33,470	)		(27,712	)
Increase in deposits				(10,519	)		(7,698	)
Cash outflow for business combinations, net				(62,312	)		(90,462	)
				(1,773,586	)		(1,840,171	)
Net cash used in investing activities			W	(1,583,883	)		(1,543,048	)

(Continued)

9

SK TELECOM CO., LTD. and its Subsidiaries

Interim Consolidated Statements of Cash Flows, Continued

For the six-month periods ended June 30, 2022 and 2021

(In millions of won)	Note	2022 (Unaudited)			2021 (Unaudited)
Cash flows from financing activities:
Cash inflows from financing activities:
Proceeds from issuance of debentures		W	497,805			308,757
Proceeds from long-term borrowings			350,000			350,000
Cash inflows from settlement of derivatives			768			10
Increase in financial liabilities at FVTPL			—			129,123
Transactions with non-controlling shareholders			31,151			444,064
			879,724			1,231,954
Cash outflows for financing activities:
Repayments of short-term borrowings, net			—			(50,005	)
Repayments of long-term payables – other			(400,245	)		(425,611	)
Repayments of debentures			(600,000	)		(330,000	)
Repayments of long-term borrowings			(22,721	)		(25,104	)
Payments of dividends			(542,104	)		(672,715	)
Payments of interest on hybrid bonds			(7,383	)		(7,383	)
Repayments of lease liabilities			(187,925	)		(203,781	)
Acquisition of treasury shares			—			(72,982	)
Transactions with non-controlling shareholders			(367	)		(13,489	)
		(1,760,745)			(1,801,070)
Net cash used in financing activities			(881,021	)		(569,116	)
Net increase in cash and cash equivalents			271,371			165,190
Cash and cash equivalents at beginning of the period			872,731			1,369,653
Effects of exchange rate changes on cash and cash equivalents			8,812			4,452
Cash and cash equivalents at end of the period		W	1,152,914			1,539,295

The accompanying notes are an integral part of the interim consolidated financial statements.

10

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

1. Reporting Entity

(1) General

SK Telecom Co., Ltd. (“the Parent Company”) was incorporated in March 1984 under the laws of the Republic of Korea (“Korea”) to provide cellular telephone communication services in Korea. The Parent Company mainly provides wireless telecommunications services in Korea. The head office of the Parent Company is located at 65, Eulji-ro, Jung-gu, Seoul, Korea.

The Parent Company’s common shares and depositary receipts (DRs) are listed on the Stock Market of Korea Exchange, the New York Stock Exchange and the London Stock Exchange. As of June 30, 2022, the Parent Company’s total issued shares are held by the following shareholders:

	Number of shares		Percentage of total shares issued (%)
SK Inc.		65,668,397		30.01
National Pension Service		16,429,365		7.51
Institutional investors and other shareholders		132,087,804		60.35
Kakao Corp.		3,846,487		1.76
Treasury shares		801,091		0.37
		218,833,144		100.00

These interim consolidated financial statements comprise the Parent Company and its subsidiaries (together referred to as the “Group” and individually as “Group entity”). SK Inc. is the ultimate controlling entity of the Parent Company.

On November 1, 2021, the date of spin-off, the Parent Company completed the spin-off of its businesses of managing investments in semiconductor, New Information and Communication Technologies(“ICT”) and other business and making new investments. (See note 36.)

11

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

1. Reporting Entity, Continued

(2) List of consolidated subsidiaries

The list of consolidated subsidiaries as of June 30, 2022 and December 31, 2021 is as follows:

				Ownership (%)(*1)
Subsidiary		Location	Primary business	June. 30, 2022		Dec. 31, 2021
Subsidiaries owned by the Parent Company	SK Telink Co., Ltd.	Korea	Telecommunication and Mobile Virtual Network Operator service		100.0		100.0
	SK Communications Co., Ltd.	Korea	Internet website services		100.0		100.0
	SK Broadband Co., Ltd.	Korea	Telecommunication services		74.3		74.3
	PS&Marketing Corporation	Korea	Communications device retail business		100.0		100.0
	SERVICE ACE Co., Ltd.	Korea	Call center management service		100.0		100.0
	SERVICE TOP Co., Ltd.	Korea	Call center management service		100.0		100.0
	SK O&S Co., Ltd.	Korea	Base station maintenance service		100.0		100.0
	SK Telecom China Holdings Co., Ltd.	China	Investment (Holdings company)		100.0		100.0
	SK Global Healthcare Business Group Ltd.	Hong Kong	Investment		100.0		100.0
	YTK Investment Ltd.	Cayman Islands	Investment association		100.0		100.0
	Atlas Investment	Cayman Islands	Investment association		100.0		100.0
	SKT Americas, Inc.	USA	Information gathering and consulting		100.0		100.0
	Quantum Innovation Fund I	Korea	Investment		59.9		59.9
	SK Telecom Japan Inc.	Japan	Information gathering and consulting		100.0		100.0
	Happy Hanool Co., Ltd.	Korea	Service		100.0		100.0
	SK stoa Co., Ltd.	Korea	Other telecommunication retail business		100.0		100.0
	Broadband Nowon Co., Ltd.	Korea	Cable broadcasting services		100.0		100.0
	SAPEON Korea Inc.(*2)	Korea	Manufacturing non-memory and other electronic integrated circuits		100.0		—
	SAPEON Inc.(*2,3)	USA	Manufacturing non-memory and other electronic integrated circuits		62.5		—
Subsidiaries owned by SK Broadband Co., Ltd.	Home & Service Co., Ltd.	Korea	Operation of information and communication facility		100.0		100.0
	Media S Co., Ltd.	Korea	Production and supply services of broadcasting programs		100.0		100.0
Subsidiaries owned by PS&Marketing Corporation	SK m&service Co., Ltd.(*2,4)	Korea	Database and Internet website service		100.0		—
Subsidiary owned by Quantum Innovation Fund I	PanAsia Semiconductor Materials LLC.	Korea	Investment		66.4		66.4
Subsidiary owned by SK Telecom Japan Inc.	SK Planet Japan, K. K.	Japan	Digital contents sourcing service		79.8		79.8
Others(*5)	SK Telecom Innovation Fund, L.P.	USA	Investment		100.0		100.0
	SK Telecom China Fund I L.P.	Cayman Islands	Investment		100.0		100.0

12

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

1. Reporting Entity, Continued

(2) List of consolidated subsidiaries, Continued

The list of consolidated subsidiaries as of June 30, 2022 and December 31, 2021 is as follows, Continued:

(*1) The ownership interest represents direct ownership interest in subsidiaries either by the Parent Company or subsidiaries of the Parent Company.

(*2) Details of changes in the consolidation scope for the six-month period ended June 30, 2022 are presented in note 1-(4).

(*3) The Parent Company newly established SAPEON Korea Inc. and SAPEON Inc., and the ownership interest of the Parent Company in SAPEON Inc. has changed from 100% to 62.5% due to unequal paid-in capital increase of SAPEON Inc. for the six-month period ended June 30, 2022.

(*4) PS&Marketing Corporation acquired 3,099,112 shares (100%) of SK m&service Co., Ltd. at W72,859 million in cash for the six-month period ended June 30, 2022 in order to strengthen the distribution competitiveness and improve the synergy within SKT ICT Family.

(*5) Others are owned by Atlas Investment and another subsidiary of the Parent Company.

(3) Condensed financial information of subsidiaries

1) Condensed financial information of significant consolidated subsidiaries as of and for the six-month period ended June 30, 2022 is as follows:

(In millions of won)	As of June 30, 2022						For the six-month period ended June 30, 2022
Subsidiary	Total assets		Total liabilities		Total equity		Revenue		Profit
SK Telink Co., Ltd.	W	181,905		53,446		128,459		150,378		10,013
SK Broadband Co., Ltd.		6,079,250		3,106,356		2,972,894		2,062,124		100,519
PS&Marketing Corporation		422,969		206,414		216,555		647,749		1,267
SERVICE ACE Co., Ltd.		82,054		55,713		26,341		96,988		2,069
SERVICE TOP Co., Ltd.		73,513		46,359		27,154		88,751		3,175
SK O&S Co., Ltd.		98,922		64,963		33,959		136,632		1,609
Home & Service Co., Ltd.		129,305		84,767		44,538		202,813		2,918
SK stoa Co., Ltd.		99,089		43,226		55,863		168,936		7,298
SK m&service Co., Ltd.(*)		138,633		77,178		61,455		76,137		1,217

(*) The financial information is the condensed financial information after the entity was included in the scope of consolidation.

13

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

1. Reporting Entity, Continued

(3) Condensed financial information of subsidiaries, Continued

2) Condensed financial information of significant consolidated subsidiaries as of and for the year ended December 31, 2021 is as follows:

(In millions of won)	As of December 31, 2021						2021
Subsidiary	Total assets		Total liabilities		Total equity		Revenue		Profit
SK Telink Co., Ltd.	W	174,837		52,821		122,016		313,404		8,846
SK Broadband Co., Ltd.		5,971,505		3,091,837		2,879,668		4,058,997		213,468
PS&Marketing Corporation		478,745		263,457		215,288		1,445,540		3,179
SERVICE ACE Co., Ltd.		99,059		66,496		32,563		197,146		2,519
SERVICE TOP Co., Ltd.		72,026		46,067		25,959		185,452		2,066
SK O&S Co., Ltd.		95,748		58,870		36,878		285,591		69
Home & Service Co., Ltd.		131,947		90,775		41,172		405,255		550
SK stoa Co., Ltd.		107,943		59,931		48,012		316,249		19,163

(4) Changes in subsidiaries

The list of subsidiaries that were newly included in consolidation for the six-month period ended June 30, 2022 is as follows:

Subsidiary	Reason
SAPEON Korea Inc.	Established by the Parent Company
SAPEON Inc.	Established by the Parent Company
SK m&service Co., Ltd.	Acquired by PS&Marketing Corporation

14

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

1. Reporting Entity, Continued

(5) The financial information of significant non-controlling interests of the Group as of and for the six-month period ended June 30, 2022 and as of and for the year ended December 31, 2021 are as follows:

(In millions of won)
	SK Broadband Co., Ltd.
Ownership of non-controlling interests (%)		25.3
	As of June 30, 2022
Current assets	W	1,530,231
Non-current assets		4,573,414
Current liabilities		(1,439,068	)
Non-current liabilities		(1,700,004	)
Net assets		2,964,573
Fair value adjustment and others		—
Net assets on the consolidated financial statements		2,964,573
Carrying amount of non-controlling interests		750,069
	For the six-month period ended June 30, 2022
Revenue	W	2,058,787
Profit for the period		103,862
Depreciation of the fair value adjustment and others		—
Profit for the period on the consolidated financial statements		103,862
Total comprehensive income		97,016
Profit attributable to non-controlling interests		25,249
Net cash provided by operating activities	W	650,990
Net cash provided in investing activities		(272,650	)
Net cash used in financing activities		(137,315	)
Effects of exchange rate changes on cash and cash equivalents		738
Net increase in cash and cash equivalents		241,763
Dividends paid to non-controlling interests for the six-month period ended June 30, 2022	W	—

(*) The condensed financial information above is the consolidated financial information of subsidiaries.

15

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

1. Reporting Entity, Continued

(5) The financial information of significant non-controlling interests of the Group as of and for the six-month period ended June 30, 2022 and as of and for the year ended December 31, 2021 are as follows, Continued:

(In millions of won)
	SK Broadband Co., Ltd.
Ownership of non-controlling interests (%)		25.1
	As of December 31, 2021
Current assets	W	1,252,935
Non-current assets		4,744,905
Current liabilities		(1,433,800	)
Non-current liabilities		(1,696,357	)
Net assets		2,867,683
Fair value adjustment and others		(10,230	)
Net assets on the consolidated financial statements		2,857,453
Carrying amount of non-controlling interests		740,771
	2021
Revenue	W	4,049,156
Profit for the year		198,268
Depreciation of the fair value adjustment and others		—
Profit for the year on the consolidated financial statements		198,268
Total comprehensive income		214,003
Profit attributable to non-controlling interests		52,935
Net cash provided by operating activities	W	1,072,307
Net cash used in investing activities		(615,510	)
Net cash used in financing activities		(248,139	)
Effects of exchange rate changes on cash and cash equivalents		(59	)
Net increase in cash and cash equivalents		208,599
Dividends paid to non-controlling interests for the year ended December 31, 2021	W	—

(*) The condensed financial information above is the consolidated financial information of subsidiaries.

16

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

2. Basis of Preparation

(1) Statement of compliance

These interim condensed consolidated financial statements were prepared in accordance with International Financial Reporting Standard as adopted by the Republic of Korea (“KIFRS”) 1034 Interim Financial Reporting as part of the period covered by the Group’s KIFRS annual financial statements. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since December 31, 2021. These interim consolidated financial statements do not include all of the disclosures required for full annual financial statements. The accompanying interim consolidated financial statements have been translated into English from the Korean language financial statements. In the event of any differences in interpreting the financial statements or the independent auditors’ review report thereon, the Korean version, which is used for regulatory reporting purposes, shall prevail.

(2) Use of estimates and judgments

1) Critical judgments, assumptions and estimation uncertainties

The preparation of the interim consolidated financial statements in conformity with KIFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these interim consolidated financial statements, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as of and for the year ended December 31, 2021.

17

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

2. Basis of Preparation, Continued

(2) Use of estimates and judgments, Continued

2) Fair value measurement

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Group has established policies and processes with respect to the measurement of fair values, including Level 3 fair values, and the measurement of fair values is reviewed and is directly reported to the finance executives.

The Group regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the Group assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of KIFRS, including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Information about assumptions used for fair value measurements are included in note 30.

18

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

3. Significant Accounting Policies

The significant accounting policies applied by the Group in these interim consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as of and for the year ended December 31, 2021. The Group has not early applied the new and revised KIFRS and interpretations that have been issued but are not yet effective.

The following new and amended KIFRS and interpretations are effective from January 1, 2022, initially, but these amended standards are not expected to have a significant impact on the Group’s interim consolidated financial statements.

• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to KIFRS 1037).

• Reference to Conceptual Framework (Amendments to KIFRS 1103).

• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to KIFRS 1016).

• Annual Improvements to KIFRS 2018-2020.

Meanwhile, as described in note 36, the Parent Company carried out spin-off of its businesses of managing investments in semiconductor, New Information and Communication Technologies(“ICT”) and other businesses and making new investments pursuant to the resolution of the Board of Directors on June 10, 2021 and approval of shareholders’ meeting on October 12, 2021. The Group has applied KIFRS 1105 Non-current Assets Held for Sale and Discontinued Operations, and accordingly, presented profit or loss of the spin-off business as discontinued operations. The comparative interim consolidated statement of profit or loss for the three and six-month period ended June 30, 2021 and related notes have been restated to present the discontinued operations separately from continuing operations.

19

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

4. Operating Segments

The Group’s operating segments have been identified to be each business unit, by which the Group provides different services and merchandise. The Group’s reportable segments include: cellular services, which include cellular voice service, wireless data service and wireless internet services; fixed-line telecommunication services, which include telephone services, internet services, and leased line services; and all other businesses, which include providing shopping channel and digital platform for selling products and other immaterial operations, each of which does not meet the quantitative threshold to be considered as a reportable segment and are presented collectively as others.

(1) Segment information for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended June 30, 2022
	Cellular services		Fixed-line telecommunication services		Others		Sub-total		Adjustments			Total
Total revenue	W	7,165,743		2,424,129		268,399		9,858,271		(1,291,206	)		8,567,065
Inter-segment revenue		745,030		528,920		17,256		1,291,206		(1,291,206	)		—
External revenue		6,420,713		1,895,209		251,143		8,567,065		—			8,567,065
Depreciation and amortization		1,371,269		493,126		9,840		1,874,235		(56,019	)		1,818,216
Operating profit (loss)		746,500		162,538		4,030		913,068		(21,070	)		891,998
Finance income and costs, net													(138,021	)
Loss relating to investments in associates and joint ventures, net													(24,869	)
Other non-operating income and expense, net													665
Profit before income tax													729,773

(In millions of won)
	For the six-month period ended June 30, 2021 (Restated)
	Continuing operations														Discontinued operations
	Cellular services		Fixed-line telecommunication services		Others (*)		Sub-total		Adjustments			Total
Total revenue	W	6,990,516		2,342,955		175,342		9,508,813		(1,270,570	)		8,238,243			1,621,815
Inter-segment revenue		737,053		529,008		4,509		1,270,570		(1,270,570	)		—			261,325
External revenue		6,253,463		1,813,947		170,833		8,238,243		—			8,238,243			1,360,490
Depreciation and amortization		1,404,539		467,882		5,259		1,877,680		(55,549	)		1,822,131			172,170
Operating profit (loss)		641,364		153,912		6,186		801,462		(31,534	)		769,928			15,450
Finance income and costs, net													(157,421	)		(29,114	)
Gain relating to investments in associates and joint ventures, net													407,317			572,774
Other non-operating income and expense, net													44,281			70,835
Profit before income tax													1,064,105			629,945

20

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

4. Operating Segments, Continued

(1) Segment information for the six-month periods ended June 30, 2022 and 2021 are as follows, Continued:

(*) The Parent Company carried out spin-off of its businesses of managing investments in semiconductor, New Information and Communication Technologies(“ICT”) and other business and making new investments for the year ended December 31, 2021. Accordingly, the Group reclassified SK stoa Co., Ltd. from Commerce Services segment to Others segment.

The Group has restated the previously reported segment information for the six-month period ended June 30, 2021 to reflect reclassification of operating segments due to the spin-off.

Since there are no intersegment sales of inventories or depreciable assets, there is no unrealized intersegment profit to be eliminated on consolidation. The Group principally operates its businesses in Korea, and the revenue amounts earned outside of Korea are immaterial. Therefore, no entity-wide geographical information is presented.

No single customer contributed 10% or more to the Group’s total revenue for the six-month periods ended June 30, 2022 and for the year ended December 31, 2021.

(2) Disaggregation of operating revenues considering the economic factors that affect the amounts, timing and uncertainty of the Group’s revenue and future cash flows is as follows:

(In millions of won)		For the six-month period ended
		June 30, 2022		June 30, 2021 (Restated)
Goods and Services transferred at a point in time:
Cellular revenue	Goods and others(*1)	W	438,562		435,461
Fixed-line telecommunication revenue	Goods and others		43,408		44,466
Other revenue	Others(*2)		218,129		157,479
			700,099		637,406
Goods and Services transferred over time:
Cellular revenue	Wireless service(*3)		5,102,309		5,000,714
	Cellular interconnection		254,400		242,563
	Other(*4)		625,442		574,725
Fixed-line telecommunication revenue	Fixed-line service		87,235		95,235
	Cellular interconnection		11,944		39,773
	Internet Protocol Television(*5)		902,037		894,500
	International calls		88,326		83,302
	Internet service and miscellaneous(*6)		762,259		656,671
Other revenue	Miscellaneous(*2)		33,014		13,354
			7,866,966		7,600,837
Discontinued operations			—		1,360,490
		W	8,567,065		9,598,733

21

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

4. Operating Segments, Continued

(2) Disaggregation of operating revenues considering the economic factors that affect the amounts, timing and uncertainty of the Group’s revenue and future cash flows is as follows, Continued:

(*1) Cellular revenue includes revenue from sales of handsets and other electronic accessories.

(*2) Miscellaneous other revenue includes revenue from considerations received for the product sales-type data broadcasting channel use and sales of goods through data broadcasting.

(*3) Wireless service includes revenue from wireless voice and data transmission services principally derived from usage charges to wireless subscribers.

(*4) Other revenue includes revenue from billing and collection services as well as other miscellaneous services.

(*5) Internet Protocol Television (“IPTV”) service revenue includes revenue from IPTV services principally derived from usage charges to IPTV subscribers.

(*6) Internet service includes revenue from the high speed broadband internet service principally derived from usage charges to subscribers as well as other miscellaneous services.

22

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

5. Trade and Other Receivables

(1) Details of trade and other receivables as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)	June 30, 2022
	Gross amount		Loss allowance			Carrying amount
Current assets:
Accounts receivable – trade	W	2,267,652		(241,118	)		2,026,534
Short-term loans		68,773		(618	)		68,155
Accounts receivable – other(*)		610,799		(43,862	)		566,937
Accrued income		1,024		—			1,024
Guarantee deposits (Other current assets)		109,099		—			109,099
		3,057,347		(285,598	)		2,771,749
Non-current assets:
Long-term loans		70,702		(44,508	)		26,194
Long-term accounts receivable – other(*)		211,106		(1,878	)		209,228
Guarantee deposits		174,623		(300	)		174,323
Long-term accounts receivable – trade (Other non-current assets)		11,470		(29	)		11,441
		467,901		(46,715	)		421,186
	W	3,525,248		(332,313	)		3,192,935

(*) Gross and carrying amounts of accounts receivable – other as of June 30, 2022 include W353,068 million of financial instruments classified as FVTPL.

(In millions of won)	December 31, 2021
	Gross amount		Loss allowance			Carrying amount
Current assets:
Accounts receivable – trade	W	2,152,358		(238,847	)		1,913,511
Short-term loans		71,750		(933	)		70,817
Accounts receivable – other(*)		593,109		(44,747	)		548,362
Accrued income		762		—			762
Guarantee deposits (Other current assets)		92,046		—			92,046
		2,910,025		(284,527	)		2,625,498
Non-current assets:
Long-term loans		66,431		(44,452	)		21,979
Long-term accounts receivable – other(*)		277,116		(1,878	)		275,238
Guarantee deposits		186,713		—			186,713
Long-term accounts receivable – trade (Other non-current assets)		8,140		(34	)		8,106
		538,400		(46,364	)		492,036
	W	3,448,425		(330,891	)		3,117,534

(*) Gross and carrying amounts of accounts receivable – other as of December 31, 2021 include W459,959 million of financial instruments classified as FVTPL.

23

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

5. Trade and Other Receivables, Continued

(2) Changes in the loss allowance on trade and other receivables measured at amortized cost for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	January 1, 2022		Impairment		Write-offs(*)			Collection of receivables previously written- off		Business combination		June 30, 2022
Accounts receivable – trade	W	238,881		15,373		(18,936	)		5,826		3		241,147
Accounts receivable – other, etc.		92,010		1,443		(3,627	)		948		392		91,166
	W	330,891		16,816		(22,563	)		6,774		395		332,313

(In millions of won)
	January 1, 2021		Impairment		Write-offs(*)			Collection of receivables previously written- off		Business combination		June 30, 2021
Accounts receivable – trade	W	264,498		14,863		(29,536	)		7,255		823		257,903
Accounts receivable – other, etc.		100,565		209		(9,887	)		6,049		358		97,294
	W	365,063		15,072		(39,423	)		13,304		1,181		355,197

(*) The Group writes off trade and other receivables that are determined to be uncollectable due to reasons, such as termination of operations or bankruptcy.

(3) The Group applies the practical expedient that allows the Group to estimate the loss allowance for accounts receivable – trade at an amount equal to the lifetime expected credit losses. The expected credit losses include the forward-looking information. To make the assessment, the Group uses its historical credit loss experience over the past three years and classifies accounts receivable – trade by their credit risk characteristics and days overdue.

As the Group is a wireless and fixed-line telecommunications service provider, the Group’s financial assets measured at amortized cost primarily consist of receivables from numerous individual customers, and, therefore, no significant credit concentration risk arises.

Receivables related to other revenue mainly consist of receivables from corporate customers. The Group transacts only with corporate customers with credit ratings that are considered to be low at credit risk. In addition, the Group is not exposed to significant credit concentration risk as the Group regularly assesses their credit risk by monitoring their credit ratings. While the contract assets are subject to the impairment requirements, no significant expected credit loss has been identified.

24

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

6. Prepaid Expenses

The Group pays commissions to its retail stores and authorized dealers, primarily for wireless and fixed-line telecommunication services. The Group capitalized certain costs associated with commissions paid to retail stores and authorized dealers to obtain new and retained customer contracts as prepaid expenses. These prepaid expenses are amortized on a straight-line basis over the periods that the Group expects to maintain its customers.

(1) Details of prepaid expenses as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Current assets:
Incremental costs of obtaining contracts	W	1,894,674		1,886,680
Others		110,817		100,823
	W	2,005,491		1,987,503
Non-current assets:
Incremental costs of obtaining contracts	W	973,910		977,236
Others		79,450		91,912
	W	1,053,360		1,069,148

(2) Incremental costs of obtaining contracts

The amortization and impairment losses in connection with incremental costs of obtaining contracts recognized for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021(*)
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Amortization and impairment losses recognized	W	620,496		1,245,726		661,923		1,316,164

(*) Includes amounts related to discontinued operations.

25

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

7. Contract Assets and Liabilities

In case of providing both wireless telecommunication services and sales of handsets, the Group allocated the consideration based on relative stand-alone selling prices and recognized unbilled receivables from handset sales as contract assets. The Group recognized receipts in advance for prepaid telecommunications services and unearned revenue for customer loyalty programs as contract liabilities.

(1) Details of contract assets and liabilities as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Contract assets:
Allocation of consideration between performance obligations	W	123,530		118,278
Contract liabilities:
Wireless service contracts		18,350		18,397
Customer loyalty programs		8,874		12,699
Fixed-line service contracts		128,949		118,600
Others		62,144		53,271
	W	218,317		202,967

(2) The amount of revenue recognized for the six-month periods ended June 30, 2022 and 2021 related to the contract liabilities carried forward from the previous year are W80,586 million and W94,357 million, respectively.

8. Inventories

(1) Details of inventories as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022							December 31, 2022
	Acquisition cost		Valuation allowance			Carrying amount		Acquisition cost		Valuation allowance			Carrying amount
Merchandise	W	180,948		(2,972	)		177,976		204,545		(3,419	)		201,126
Supplies		5,332		—			5,332		3,511		—			3,511
	W	186,280		(2,972	)		183,308		208,056		(3,419	)		204,637

(2) Cost of inventories recognized as operating expenses for the six-month periods ended June 30, 2022 and 2021 are W575,316 million and W660,212 million, respectively, which are included in cost of goods sold. In addition, valuation losses on inventories which are included in cost of goods sold amount to W1,109 million and W1,367 million for the six-month periods ended June 30, 2022 and 2021, respectively. Write-downs included in other operating expenses for the six-month periods ended June 30, 2022 and 2021 are W977 million and W358 million, respectively. Those amounts include profit or loss of discontinued operations for the six-month period ended June 30, 2021.

26

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

9. Investment Securities

(1) Details of short-term investment securities as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	Category	June 30, 2022		December 31, 2021
Beneficiary certificates	FVTPL	W	—		5,010

(2) Details of long-term investment securities as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	Category	June 30, 2022		December 31, 2021
Equity instruments	FVOCI(*)	W	1,061,846		1,510,428
	FVTPL		38,542		57,830
			1,100,388		1,568,258
Debt instruments	FVOCI		1,284		1,177
	FVTPL		154,190		145,643
			155,474		146,820
		W	1,255,862		1,715,078

(*) The Group designated investments in equity instruments that are not held for trading as financial assets at FVOCI, and the amounts of those equity instruments as of June 30, 2022 and December 31, 2021 are W1,061,846 million and W1,510,428 million, respectively.

27

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

10. Business Combinations

(1) 2022

1) Acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation:

PS&Marketing Corporation obtained control over SK m&service Co., Ltd. by acquiring its 3,099,112 shares (100%) for the six-month period ended June 30, 2022. As this transaction is a business combination under common control, the assets acquired and liabilities assumed were recognized at the carrying amounts in the ultimate controlling entity’s consolidated financial statements, and the difference between the consideration transferred and the carrying amounts of net assets was recognized as capital surplus and others. Subsequent to the acquisition of control, SK m&service Co., Ltd. recognized revenue of W76,137 million and net profit of W1,217 million. Meanwhile, assuming that business combination has occurred as of January 1, 2022, the Group would have recognized revenue of W115,164 million and net profit of W1,755 million.

(i) Summary of the acquiree

	Information of Acquiree
Corporate name	SK m&service Co., Ltd.
Location	16th floor, 34, Supyo-ro, Jung-gu, Seoul, Korea
CEO	Park, Jeong-Min
Industry	Database and Internet website service

(ii) Considerations transferred and identifiable assets acquired and liabilities assumed at the acquisition date are as follows:

(In millions of won)
	Amounts
I. Consideration transferred:
Cash and cash equivalents	W	72,859
II. Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		10,547
Accounts receivable – trade and other, net		76,035
Inventories, net		3,349
Property and equipment, net		27,138
Intangible assets, net		12,462
Goodwill		2,515
Other assets		10,395
Accounts payable – trade and other		(53,894	)
Income tax payable		(399	)
Lease liabilities		(6,503	)
Provisions		(991	)
Defined benefit liabilities		(2,739	)
Other liabilities		(18,337	)
		59,578
III. Capital surplus and others (I - II)	W	13,281

28

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

10. Business Combinations, Continued

(2) 2021

1) Merger of ADT CAPS Co., Ltd. by SK Shieldus Co., Ltd.(Formerly, ADT CAPS Co, Ltd., at the time of merger, SK Infosec Co., Ltd.):

On March 4, 2021, SK Infosec Co., Ltd. merged with ADT CAPS Co., Ltd., a subsidiary of SK Infosec Co., Ltd., to improve management efficiency. As this transaction is a business combination under common control, the assets acquired and liabilities assumed were recognized at the carrying amounts in the ultimate controlling entity’s consolidated financial statements, and there is no effect on the assets and liabilities of the consolidated financial statements. After the date of the merger, SK Infosec Co., Ltd. changed its name to ADT CAPS Co., Ltd. and then again, in October 2021, ADT CAPS Co., Ltd. changed its name to SK Shieldus Co., Ltd.

Identifiable assets acquired and liabilities assumed were transferred to the spin-off company.

29

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

10. Business Combinations, Continued

(2) 2021, Continued

2) Acquisition of Studio Dolphin Co., Ltd. by Dreamus Company:

Dreamus Company obtained control over Studio Dolphin Co., Ltd. by acquiring its 10,000 shares (100%) for the year ended December 31, 2021. The consideration transferred was W1,500 million in cash, and the difference between the fair value of net assets acquired and the consideration transferred amounting to W1,465 million was recognized as goodwill.

Identifiable assets acquired and liabilities assumed and goodwill were transferred to the spin-off company.

(i) Summary of the acquiree

	Information of Acquiree
Corporate name	Studio Dolphin Co., Ltd.
Location	3rd floor, 10, Jandari-ro 7an-gil, Mapo-gu, Seoul, Korea
CEO	Kim, Dong-Hee
Industry	Music and sound recording business

(ii) Considerations transferred and identifiable assets acquired and liabilities assumed at the acquisition date are as follows:

(In millions of won)
	Amounts
I. Consideration transferred:
Cash and cash equivalents	W	1,500
II. Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		20
Accounts receivable – trade and other, net		31
Other assets		7
Accounts payable – trade and other		(4	)
Short-term borrowings		(2	)
Other liabilities		(17	)
		35
III. Goodwill(I - II)	W	1,465

30

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

10. Business Combinations, Continued

(2) 2021, Continued

3) Acquisition of YLP Inc. by T map Mobility Co., Ltd.:

T map Mobility Co., Ltd. obtained control over YLP Inc. by acquiring its 168,012 shares(100%). during the year ended December 31, 2021. The consideration transferred was W79,000 million, among which W55,598 million was paid in cash to acquire 118,242 shares (70.4%) and on June 29, 2021, T map Mobility Co., Ltd. issued 267,700 of its new common shares (with a fair value of W23,402 million) to the shareholders of YLP Inc. in exchange for the remaining 49,770 shares(29.6%) owned by those shareholders. The difference between the fair value of net assets acquired and the consideration transferred amounting to W69,516 million was recognized as goodwill.

Identifiable assets acquired and liabilities assumed and goodwill were transferred to the spin-off company.

(i) Summary of the acquiree

	Information of Acquiree
Corporate name	YLP Inc.
Location	1740, Cheongwon-ro, Pyeongtaek-si, Gyeonggi-do, Korea
CEO	Lee, Hyeok-Ju
Industry	Freight forwarders and cargo agents

(ii) Considerations transferred and identifiable assets acquired and liabilities assumed at the acquisition date are as follows:

(In millions of won)
	Amounts
I. Consideration transferred:
Cash and cash equivalents	W	55,598
Fair value of shares of T map Mobility Co., Ltd.		23,402
II. Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		1,897
Financial instruments		4,000
Accounts receivable – trade and other, net		4,480
Property and equipment, net		431
Intangible assets, net		3,595
Other assets		325
Borrowings		(1,000	)
Accounts payable – trade and other		(3,542	)
Lease liabilities		(327	)
Other liabilities		(48	)
Deferred tax liabilities		(327	)
		9,484
III. Goodwill(I - II)	W	69,516

31

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

10. Business Combinations, Continued

(2) 2021, Continued

4) Acquisition of Rokmedia Co., Ltd. by One Store Co., Ltd.:

One Store Co., Ltd. obtained control over Rokmedia Co., Ltd. by acquiring its 60,000 shares (100%) for the year ended December 31, 2021. The consideration transferred was W40,000 million in cash, and the difference between the fair value of net assets acquired and the consideration transferred amounting to W33,641 million was recognized as goodwill.

Identifiable assets acquired and liabilities assumed and goodwill were transferred to the spin-off company.

(i) Summary of the acquiree

	Information of Acquiree
Corporate name	Rokmedia Co., Ltd.
Location	3rd floor, 330, Seongam-ro, Mapo-gu, Seoul, Korea
CEO	Kang, Jun-Gyu / Kim, Jeong-Su
Industry	Publishing and telecommunications retail business

(ii) Considerations transferred and identifiable assets acquired and liabilities assumed at the acquisition date are as follows:

(In millions of won)
	Amounts
I. Consideration transferred:
Cash and cash equivalents	W	40,000
II. Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		719
Financial instruments		2,170
Accounts receivable – trade and other, net		1,374
Inventories		933
Other assets		3,212
Short-term loans, net		30
Property and equipment, net		792
Intangible assets, net		2,677
Accounts payable – trade and other		(1,885	)
Contract liabilities		(1,401	)
Borrowings		(1,485	)
Provisions		(385	)
Lease liabilities		(56	)
Other liabilities		(111	)
Deferred tax liabilities		(135	)
Income tax payable		(90	)
		6,359
III. Goodwill(I - II)	W	33,641

32

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

10. Business Combinations, Continued

(2) 2021, Continued

5) Acquisition of GOOD SERVICE Co., Ltd. by T map Mobility Co., Ltd.:

T map Mobility Co., Ltd. obtained control by acquiring 2,000 shares (100%) of GOOD SERVICE Co., Ltd. for the year ended December 31, 2021. The consideration transferred was W10,000 million in cash and the difference between the fair value of net assets acquired and the consideration transferred amounting to W4,844 million was recognized as goodwill.

Identifiable assets acquired, liabilities assumed and goodwill were transferred to spin-off company.

(i) Summary of the acquiree

	Information of Acquiree
Corporate name	GOOD SERVICE Co., Ltd.
Location	4th floor, 54, Daeheung-ro, Mapo-gu, Seoul, Korea
CEO	Kim, Seung-Wook
Industry	Surrogate driving service business and related business

(ii) Considerations transferred, identifiable assets acquired and liabilities assumed at the acquisition date are as follows:

(In millions of won)
	Amounts
I. Consideration transferred:
Cash and cash equivalents	W	10,000
II. Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		1,328
Financial instruments		116
Accounts receivable – trade and other, net		1,881
Property and equipment, net		116
Intangible assets, net		3,492
Accounts payable – trade and other		(883	)
Other liabilities		(85	)
Deferred tax liabilities		(696	)
Lease liabilities		(113	)
		5,156
III. Goodwill(I - II)	W	4,844

33

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

11. Investments in Associates and Joint Ventures

(1) Investments in associates and joint ventures accounted for using the equity method as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)			June 30, 2022				December 31, 2021
	Country		Ownership (%)		Carrying amount		Ownership (%)		Carrying amount
Investments in associates:
SK China Company Ltd.		China		27.3	W	864,480		27.3	W	793,754
Korea IT Fund(*1)		Korea		63.3		329,508		63.3		339,976
HanaCard Co., Ltd.(*2)		Korea		15.0		368,389		15.0		349,866
UniSK		China		49.0		20,315		49.0		19,156
SK Technology Innovation Company		Cayman Islands		49.0		63,260		49.0		86,301
SK MENA Investment B.V.		Netherlands		32.1		16,635		32.1		15,343
SK Latin America Investment S.A.		Spain		32.1		13,204		32.1		14,004
SK South East Asia Investment Pte. Ltd.		Singapore		20.0		383,074		20.0		348,782
Pacific Telecom Inc.(*2)		USA		15.0		47,826		15.0		43,789
S.M. Culture & Contents Co., Ltd.		Korea		23.1		58,396		23.1		60,261
Digital Games International Pte. Ltd.(*2,3)		Singapore		16.3		722		33.3		2,208
Invites Healthcare Co., Ltd.		Korea		27.1		15,942		27.1		26,474
Nam Incheon Broadcasting Co., Ltd.		Korea		27.3		12,954		27.3		12,525
Home Choice Corp.(*2)		Korea		17.8		2,731		17.8		3,052
CMES Inc.(*2,4)		Korea		7.7		900		—		—
12CM JAPAN and others(*2,5)		—		—		79,116		—		72,605
					W	2,277,452			W	2,188,096
Investments in joint ventures:
Finnq Co., Ltd.(*7)		Korea		49.0		3,840		49.0		7,255
UTC Kakao-SK Telecom ESG Fund(*6,7)		Korea		48.2		3,925		48.2		2,000
						7,765				9,255
					W	2,285,217			W	2,197,351

(*1) Investment in Korea IT Fund was classified as investment in associates as the Group does not have control over the investee under the contractual agreement with other shareholders.

(*2) These investments were classified as investments in associates as the Group can exercise significant influence through its right to appoint the members of the Board of Directors even though the Group has less than 20% of equity interests.

(*3) The Group disposed the shares of Digital Games International Pte. Ltd. (W1,118 million) for the six-month period ended June 30, 2022.

(*4) As the Group obtained significant influence over the investee, W900 million of financial assets at FVOCI are reclassified to investments in associates for the six-month period ended June 30, 2022.

34

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

11. Investments in Associates and Joint Ventures, Continued

(1) Investments in associates and joint ventures accounted for using the equity method as of June 30, 2022 and December 31, 2021 are as follows, Continued:

(*5) The Group additionally contributed W2,000 million in cash to Smart SKT Infinitum Game Fund for the six-month period ended June 30, 2022. In addition, the Group disposed the shares of Start-up Win-Win Fund (W4,850 million) at W5,800 million in cash from which it recognized W950 million of gain relating to investments in associates and disposed the shares of Daekyo Wipoongdangdang Contents Korea Fund (W1,080 million) at W1,080 million in cash. Also, the Group newly invested W2,000 million in cash to KB ESG Fund of three telecommunications companies the for the six-month period ended June 30, 2022.

(*6) The Group additionally contributed W2,000 million in cash for the six-month period ended June 30, 2022, but there is no change in the ownership interest.

(*7) These investments were classified as investments in joint ventures as the Group has a joint control pursuant to the agreement with the other shareholders.

(2) The market value of investments in listed associates as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won, except for share data)

June 30, 2022

December 31, 2021

Market price per share (in won)

Number of shares

Market value

Market price per share (in won)

Number of shares

Market value

S.M.Culture & Contents Co.,Ltd.

W

3,100

22,033,898

68,305

4,485

22,033,898

98,822

.

35

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

11. Investments in Associates and Joint Ventures, Continued

(3) The financial information of significant associates as of and for the six-month period ended June 30, 2022 and as of and for the year ended December 31, 2021 are as follows:

(In millions of won)
	HanaCard Co., Ltd.		Korea IT Fund			SK China Company Ltd.			SK South East Asia Investment Pte. Ltd.
	As of June 30, 2022
Current assets	W	9,801,017		95,176			1,105,168			140,381
Non-current assets		431,125		425,100			2,124,379			3,204,396
Current liabilities		1,585,436		—			51,464			467,913
Non-current liabilities		6,485,854		—			313,867			—
	For the six-month period ended June 30, 2022
Revenue	W	624,344		15,777			26,444			22,695
Profit (loss) for the period		126,685		7,878			(12,721	)		(10,748	)
Other comprehensive income		3,589		(4,812	)		(18,086	)		(17,734	)
Total comprehensive income (loss)		130,274		3,066			(30,807	)		(28,482	)
(In millions of won)
	HanaCard Co., Ltd.		Korea IT Fund			SK China Company Ltd.			SK South East Asia Investment Pte. Ltd.
	As of December 31, 2021
Current assets	W	9,130,044		117,172			1,124,219			133,110
Non-current assets		465,333		419,632			1,849,102			2,853,184
Current liabilities		1,281,783		—			53,199			412,962
Non-current liabilities		6,284,587		—			316,470			—
	2021
Revenue	W	1,270,568		58,741			80,241			9,945
Profit (loss) for the year		250,484		50,107			933,475			(188,678	)
Other comprehensive income (loss)		909		(6,847	)		326,661			304,700
Total comprehensive income		251,393		43,260			1,260,136			116,022

36

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

11. Investments in Associates and Joint Ventures, Continued

(4) Reconciliations of financial information of significant associates to carrying amounts of investments in associates in the consolidated financial statements as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022
	Net assets		Ownership interests (%)		Net assets attributable to the ownership interests		Cost-book value differentials		Carrying amount
HanaCard Co., Ltd.	W	2,160,852		15.0		324,128		44,261		368,389
Korea IT Fund		520,276		63.3		329,508		—		329,508
SK China Company Ltd.(*)		2,860,853		27.3		781,013		83,467		864,480
SK South East Asia Investment Pte. Ltd.(*)		1,915,370		20.0		383,074		—		383,074
(In millions of won)
	December 31, 2021
	Net assets		Ownership interests (%)		Net assets attributable to the ownership interests		Cost-book value differentials		Carrying amount
HanaCard Co., Ltd.	W	2,029,007		15.0		304,351		45,515		349,866
Korea IT Fund		536,804		63.3		339,976		—		339,976
SK China Company Ltd.(*)		2,603,336		27.3		709,961		83,793		793,754
SK South East Asia Investment Pte. Ltd.(*)		1,743,908		20.0		348,782		—		348,782

(*) Net assets of these entities represent net assets excluding those attributable to their non-controlling interests.

37

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

11. Investments in Associates and Joint Ventures, Continued

(5) Changes in investments in associates and joint ventures accounted for using the equity method for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	For the six-month period ended June 30, 2022
	Beginning balance		Acquisition and Disposal			Share of profit (loss)			Other compre- hensive income (loss)			Other increase (decrease)			Ending balance
Investments in associates:
SK China Company Ltd.	W	793,754		—			(15,161	)		85,887			—			864,480
Korea IT Fund(*1)		339,976		—			4,989			(3,047	)		(12,410	)		329,508
HanaCard Co., Ltd.		349,866		—			17,749			774			—			368,389
UniSK		19,156		—			608			551			—			20,315
SK Technology Innovation Company		86,301		—			(29,051	)		6,010			—			63,260
SK MENA Investment B.V.		15,343		—			(6	)		1,298			—			16,635
SK Latin America Investment S.A.		14,004		—			(817	)		17			—			13,204
SK South East Asia Investment Pte. Ltd.		348,782		—			3,319			30,973			—			383,074
Pacific Telecom Inc.		43,789		—			1,415			2,622			—			47,826
S.M. Culture & Contents Co., Ltd.		60,261		30			(1,895	)		—			—			58,396
Digital Games International Pte. Ltd.		2,208		(1,118	)		(429	)		61			—			722
Invites Healthcare Co., Ltd.		26,474		—			(10,500	)		(32	)		—			15,942
Nam Incheon Broadcasting Co., Ltd.		12,525		—			565			—			(136	)		12,954
Home Choice Corp.		3,052		—			(322	)		1			—			2,731
CMES Inc.(*2)		—		—			—			—			900			900
12CM JAPAN and others(*3)		72,605		3,567			1,342			1,602			—			79,116
		2,188,096		2,479			(28,194	)		126,717			(11,646	)		2,277,452
Investments in joint ventures:
Finnq Co., Ltd.		7,255		—			(3,617	)		202			—			3,840
UTC Kakao-SK Telecom ESG Fund		2,000		2,000			(75	)		—			—			3,925
		9,255		2,000			(3,692	)		202			—			7,765
	W	2,197,351		4,479			(31,886	)		126,919			(11,646	)		2,285,217

(*1) Dividends received from the associates are deducted from the carrying amount for the six-month period ended June 30, 2022.

(*2) As the Group obtained significant influence over the investee, W900 million of financial assets at FVOCI are reclassified to investments in associates for the six-month period ended June 30, 2022.

(*3) The acquisition for the six-month period ended June 30, 2022 includes W2,000 million of cash investment in Smart SKT Infinitum Game Fund, W2,000 million of cash investment in KB ESG Fund of three telecommunications companies and W12 million of cash investment in SK VENTURE CAPITAL, LLC. The disposal for the six-month period ended June 30, 2022 includes W4,850 million relating to disposal of the part of shares of Start-up Win-Win Fund and W1,080 million relating to disposal of the part of shares of Daekyo Wipoongdangdang Contents Korea Fund.

38

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

11. Investments in Associates and Joint Ventures, Continued

(5) Changes in investments in associates and joint ventures accounted for using the equity method for the six-month periods ended June 30, 2022 and 2021 are as follows, Continued:

(In millions of won)	For the six-month period ended June 30, 2021
	Beginning balance		Acquisition and Disposal			Share of profit (loss)(*4)			Other compre- hensive income (loss)			Other increase (decrease)			Ending balance
Investments in associates:
SK China Company Ltd.	W	555,133		—			263,057			28,102			—			846,292
Korea IT Fund(*1)		323,294		—			12,642			(2,953	)		(10,716	)		322,267
HanaCard Co., Ltd.		314,930		—			20,044			(181	)		—			334,793
SK Telecom CS T1 Co., Ltd.		53,010		4,888			(6,260	)		(22	)		—			51,616
NanoEnTek, Inc.		43,190		—			1,289			(35	)		—			44,444
UniSK		15,700		—			664			700			—			17,064
SK Technology Innovation Company		41,579		—			19,855			1,723			—			63,157
SK MENA Investment B.V.		14,043		—			(2	)		513			—			14,554
SK hynix Inc.(*1)		12,251,861		—			609,537			123,408			(170,938	)		12,813,868
SK Latin America Investment S.A.		13,930		—			(49	)		55			—			13,936
Grab Geo Holdings PTE. LTD.		30,063		—			—			—			—			30,063
SK South East Asia Investment Pte. Ltd.		311,990		—			6,430			26,614			—			345,034
Pacific Telecom Inc.		39,723		—			388			952			—			41,063
S.M. Culture & Contents Co., Ltd.		62,248		—			(2,304	)		456			—			60,400
Content Wavve Co., Ltd.		75,803		100,000			(13,021	)		—			—			162,782
Hello Nature Co., Ltd.(*2)		11,969		9,980			(6,147	)		(1	)		(1,730	)		14,071
Digital Games International Pte. Ltd.		6,449		—			(2,475	)		122			—			4,096
Invites Healthcare Co., Ltd.		25,536		7,000			(3,614	)		(26	)		—			28,896
Nam Incheon Broadcasting Co., Ltd.		10,902		—			896			—			—			11,798
NANO-X IMAGING LTD.		28,484		(46	)		(2,025	)		—			1,077			27,490
Home Choice Corp.		3,585		—			(223	)		—			—			3,362
Carrot General Insurance Co., Ltd.		13,469		10,000			(5,531	)		(125	)		—			17,813
Bertis Inc.		—		15,000			—			—			—			15,000
UT LLC		—		86,319			(3,309	)		—			—			83,010
12CM JAPAN and others(*3)		65,750		4,660			(4,383	)		8,583			(1,546	)		73,064
		14,312,641		237,801			885,459			187,885			(183,853	)		15,439,933
Investments in joint ventures:
Dogus Planet, Inc.		15,071		—			(2,434	)		(1,895	)		—			10,742
Finnq Co., Ltd.		13,342		—			(2,868	)		(118	)		—			10,356
NEXTGEN BROADCAST SERVICES CO., LLC		5,850		5,589			(1,261	)		—			273			10,451
NEXTGEN ORCHESTRATION, LLC		1,600		—			—			—			62			1,662
Techmaker GmbH		5,609		—			(20	)		21			—			5,610
Korea Content Platform, Inc.		—		29,837			—			—			327			30,164
		41,472		35,426			(6,583	)		(1,992	)		662			68,985
	W	14,354,113		273,227			878,876			185,893			(183,191	)		15,508,918

39

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

11. Investments in Associates and Joint Ventures, Continued

(5) Changes in investments in associates and joint ventures accounted for using the equity method for the six-month periods ended June 30, 2022 and 2021 are as follows, Continued:

(*1) Dividends received from the associates are deducted from the carrying amount for the six-month period ended June 30, 2021.

(*2) The Group recognized W1,730 million of impairment loss for the investments in Hello Nature Co., Ltd. for the six-month period ended June 30, 2021.

(*3) The acquisition for the six-month period ended June 30, 2021 includes W1,000 million of cash investment in Studio Yesone Co., Ltd., W1,000 million of cash investment in SONNORI Corp. and W334 million relating to contribution of WALDEN SKT VENTURE FUND. The disposal for the six-month period ended June 30, 2021 includes W334 million relating to disposal of the part of shares of KDX Korea Data Exchange.

(*4) Includes amounts related to discontinued operations.

(6) The Group discontinued the application of equity method to the following investees due to their carrying amounts being reduced to zero. The details of cumulative unrecognized equity method losses as of June 30, 2022 are as follows:

(In millions of won)	Unrecognized loss				Unrecognized change in equity
	For the six-month period ended June 30, 2022		Cumulative loss		For the six-month period ended June 30, 2022		Cumulative loss
Wave City Development Co., Ltd.	W	70		8,613		—		—
Daehan Kanggun BcN Co., Ltd. and others		—		5,780		—		(124	)
	W	70		14,393		—		(124	)

40

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

12. Property and Equipment

Changes in property and equipment for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended June 30, 2022
	Beginning balance		Acquisition		Disposal			Transfer			Depreciation			Business combination(*)		Ending balance
Land	W	972,800		79		(94	)		28,566			—			2,789		1,004,140
Buildings		794,453		818		(541	)		23,758			(27,148	)		8,583		799,923
Structures		291,279		611		(20	)		8,337			(19,084	)		—		281,123
Machinery		7,997,927		152,490		(37,464	)		791,359			(1,146,799	)		—		7,757,513
Other		487,716		326,014		(492	)		(295,857	)		(49,420	)		8,554		476,515
Right-of-use assets		1,559,333		279,176		(28,153	)		(10,203	)		(204,658	)		6,331		1,601,826
Construction in progress		767,751		581,986		(704	)		(600,101	)		—			881		749,813
	W	12,871,259		1,341,174		(67,468	)		(54,141	)		(1,447,109	)		27,138		12,670,853

(*) Includes assets from the acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation, a subsidiary of the Parent Company.

(In millions of won)
	For the six-month period ended June 30, 2021
	Beginning balance		Acquisition		Disposal			Transfer			Depre- ciation(*)			Reclassified as held for sale			Business combina- tion		Ending balance
Land	W	1,039,323		192		(63	)		20,118			—			(20,507	)		—		1,039,063
Buildings		858,606		948		(280	)		34,410			(27,843	)		(8,669	)		639		857,811
Structures		317,403		757		(10	)		10,985			(19,084	)		(6,104	)		—		303,947
Machinery		8,376,212		174,686		(18,455	)		765,527			(1,207,663	)		—			—		8,090,307
Other		653,616		367,704		(657	)		(278,676	)		(98,747	)		—			190		643,430
Right-of-use assets		1,472,035		527,274		(274,509	)		—			(215,932	)		—			394		1,509,262
Construction in progress		659,882		703,933		(115	)		(563,760	)		—			—			—		799,940
	W	13,377,077		1,775,494		(294,089	)		(11,396	)		(1,569,269	)		(35,280	)		1,223		13,243,760

(*) Includes amounts related to discontinued operations.

41

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

13. Investment Property

(1) Changes in investment property for the six-month period ended June 30, 2022 are as follows:

(In millions of won)
	For the six-month period ended June 30, 2022
	Beginning balance		Transfer		Depreciation			Ending balance
Land	W	6,071		24		—			6,095
Buildings		7,353		87		(356	)		7,084
Right-of-use assets		9,610		1,845		(744	)		10,711
	W	23,034		1,956		(1,100	)		23,890

(2) The Group recognized lease income of W2,462 million for the six-month period ended June 30, 2022 from investment property.

14. Leases

(1) Details of the right-of-use assets as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Land, buildings and structures	W	1,415,397		1,392,925
Others		186,429		166,408
	W	1,601,826		1,559,333

(2) Details of amounts recognized in the interim consolidated statements of profit or loss for the six-month periods ended June 30, 2022 and 2021 as a lessee are as follows:

(In millions of won)
	For the six-month period ended
	June 30, 2022		June 30, 2021(*)
Depreciation of right-of-use assets:
Land, buildings and structures	W	177,251		160,018
Others		27,407		55,914
		204,658		215,932
Interest expense on lease liabilities	W	13,530		11,608

(*) Includes amounts related to discontinued operations.

Expenses related to short-term leases and leases of low-value assets the Group recognized are not material.

(3) The total cash outflows due to lease payments for the six-month periods ended June 30, 2022 and 2021 amounted to W207,074 million and W230,115 million, respectively. Meanwhile, the amounts for the six-month period ended June 30, 2021 include cash flows from discontinued operations.

42

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

15. Intangible Assets

(1) Changes in intangible assets for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended June 30, 2022
	Beginning balance		Acquisition		Disposal			Transfer			Amortization			Business combination(*)		Ending balance
Frequency usage rights	W	2,559,689		—		—			—			(238,390	)		—		2,321,299
Land usage rights		2,732		—		—			—			(864	)		—		1,868
Industrial rights		55,954		7,471		—			(103	)		(2,222	)		3		61,103
Development costs		200		—		—			—			(251	)		657		606
Facility usage rights		17,874		432		(1	)		49			(2,423	)		—		15,931
Customer relations		327,257		—		—			—			(13,541	)		—		313,716
Club memberships(*1)		88,494		2,126		(6,527	)		—			—			1,389		85,482
Other(*2)		817,569		17,923		—			58,750			(181,095	)		10,413		723,560
	W	3,869,769		27,952		(6,528	)		58,696			(438,786	)		12,462		3,523,565

(*) Includes assets from the acquisition of SK m&service Co., Ltd. by PS&Marketing Corporation, a subsidiary of the Parent Company.

(In millions of won)
	For the six-month period ended June 30, 2021
	Beginning balance		Acquisition		Disposal			Transfer		Amortization(*3)			Business  combination		Ending balance
Frequency usage rights	W	1,932,765		—		—			—		(255,873	)		—		1,676,892
Land usage rights		4,720		35		(3	)		—		(1,121	)		—		3,631
Industrial rights		71,442		2,295		(1	)		63		(2,985	)		—		70,814
Development costs		9,364		536		—			—		(1,905	)		—		7,995
Facility usage rights		21,880		513		(3	)		66		(3,053	)		—		19,403
Customer relations		919,863		302		(185	)		—		(28,441	)		—		891,539
Club memberships(*1)		106,865		2,578		(4,407	)		—		—			—		105,036
Brands(*1)		374,096		—		—			—		—			—		374,096
Other(*2)		995,199		21,065		(4,154	)		85,936		(207,086	)		2,117		893,077
	W	4,436,194		27,324		(8,753	)		86,065		(500,464	)		2,117		4,042,483

(*1) Club memberships and brands are classified as intangible assets with indefinite useful lives and are not amortized.

(*2) Other intangible assets primarily consist of computer software and others.

(*3) Includes amounts related to discontinued operations.

43

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

15. Intangible Assets, Continued

(2) Details of frequency usage rights as of June 30, 2022 are as follows:

(In millions of won)
	As of June 30, 2022
	Amount		Description		Commencement of amortization		Completion of amortization
800MHz license	W	175,662		LTE service		Jul. 2021		Jun. 2026
1.8GHz license		467,208		LTE service		Dec. 2021		Dec. 2026
2.6GHz license		546,380		LTE service		Sept. 2016		Dec. 2026
2.1GHz license		351,131		W-CDMA and LTE service		Dec. 2021		Dec. 2026
3.5GHz license		772,814		5G service		Apr. 2019		Nov. 2028
28GHz license		8,104		5G service		Jan. 2021		Nov. 2023
	W	2,321,299

16. Borrowings and Debentures

(1) Short-term borrowings as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	Lender	Annual interest rate (%)		Maturity	June 30, 2022	December 31, 2021
Short-term borrowings(*)	Hana Financial Investment Co., Ltd.		4.50	Nov. 28, 2022	4,642		4,642
	DB Financial Investment Co., Ltd.		4.50	Aug. 29, 2022	2,785		2,785
	Shinhan Investment Corp.		4.45	Nov. 28, 2022	5,571		5,571
					W12,998		12,998

(*) PanAsia Semiconductor Materials LLC., a subsidiary of the Parent Company, has pledged its W18,345 million of equity instruments at FVTPL on W12,998 million of short-term loans as of June 30, 2022.

44

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

16. Borrowings and Debentures, Continued

(2) Changes in long-term borrowings for the six-month period ended June 30, 2022 are as follows:

(In millions of won, thousands of other currencies)
	Lender		Annual interest rate (%)		Maturity		Book value
Current							W	41,065
Non-current								353,122
As of January 1, 2022								394,187
New long-term borrowings:
		DBS Bank Ltd.		2.68		Mar. 10, 2025		200,000
		Credit Agricole CIB		3.30		Apr. 29, 2024		50,000
		Mizuho Bank, Ltd.		3.29		Nov. 27, 2023		100,000
								350,000
Repayments of long-term borrowings:
		Korea Development Bank(*1)		3M CD + 0.71		Dec. 21, 2022		(6,250	)
		Credit Agricole CIB(*1)		3M CD + 0.82		Dec. 14, 2023		(6,250	)
		Korea Development Bank		1.87		Feb. 10, 2026		(3,125	)
		Export Kreditnamnden		1.70		Apr. 29, 2022		(7,096	)
								(22,721	)
Other changes(*2)								385
Current(*3)								31,244
Non-current(*3)								690,607
As of June 30, 2022							W	721,851

(*1) As of June 30, 2022, 3M CD rate is 2.04%.

(*2) Other changes include the effects on foreign currency translation of long-term borrowings and changes in present value discount for the six-month period ended June 30, 2022.

(*3) W12,533 million were reclassified from non-current to current for the six-month period ended June 30, 2022.

45

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

16. Borrowings and Debentures, Continued

(3) Changes in debentures for the six-month period ended June 30, 2022 are as follows:

(In millions of won)
	Purpose	Annual interest rate (%)		Maturity		Face value			Book value
Current						W	1,390,000			1,389,259
Non-current							7,058,250			7,037,424
As of January 1, 2022							8,448,250			8,426,683
Debentures newly issued:
Unsecured corporate bonds(*1)	Refinancing fund		2.58		Jan. 24, 2025		100,000			99,545
			2.92		Jan. 25, 2032		50,000			49,757
Unsecured corporate bonds	Debt repaying fund		3.80		Apr. 12, 2025		240,000			238,999
			3.84		Apr. 12, 2027		70,000			69,694
			3.78		Apr. 12, 2042		40,000			39,810
							500,000			497,805
Debentures repaid:
Unsecured corporate bonds	Operating and refinancing fund		2.40		Feb. 26, 2022		(100,000	)		(100,000	)
Unsecured corporate bonds	Operating fund		2.03		Mar. 6, 2022		(180,000	)		(180,000	)
Unsecured corporate bonds(*1)	Operating fund		2.26		Feb. 3, 2022		(150,000	)		(150,000	)
Unsecured corporate bonds(*1)	Refinancing fund		2.00		Mar. 26, 2022		(50,000	)		(50,000	)
Unsecured corporate bonds	Refinancing fund		2.17		Apr. 25, 2022		(120,000	)		(120,000	)
							(600,000	)		(600,000	)
Other changes(*2)							161,100			164,252
Current(*3)							2,116,450			2,114,662
Non-current(*3)							6,392,900			6,374,078
As of June 30, 2022						W	8,509,350			8,488,740

(*1) Unsecured corporate bonds were issued by SK Broadband Co., Ltd., a subsidiary of the Parent Company.

(*2) Other changes include the effects on foreign currency translation of debentures and changes in discount on issuance of debentures for the six-month period ended June 30, 2022.

(*3) W1,325,403 million were reclassified from non-current to current for the six-month period ended June 30, 2022.

46

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

17. Long-term Payables—other

(1) As of June 30, 2022 and December 31, 2021, details of long-term payables—other which consist of payables related to the acquisition of frequency usage rights are as follows (See note 15):

(In millions of won)
	June 30, 2022			December 31, 2021
Long-term payables—other	W	1,690,470			2,090,715
Present value discount on long-term payables—other		(65,956	)		(80,882	)
Current installments of long-term payables—other		(395,549	)		(398,823	)
Carrying amount at period end	W	1,228,965			1,611,010

(2) The principal amounts of long-term payables—other repaid for the six-month periods ended June 30, 2022 and 2021 are W400,245 and W425,349 million, respectively. The repayment schedule of the principal amount of long-term payables —other related to acquisition of frequency usage rights as of June 30, 2022 is as follows:

(In millions of won)
	Amount
Less than 1 year	W	400,245
1~3 years		738,300
3~5 years		460,538
More than 5 years		91,387
	W	1,690,470

47

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

18. Provisions

Changes in provisions for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended June 30, 2022																	As of June 30, 2022
	Beginning balance		Increase		Utilization			Reversal			Other			Business combination		Ending balance		Current		Non-current
Provision for restoration	W	114,731		3,068		(3,330	)		(250	)		13			991		115,223		64,448		50,775
Emission allowance		1,885		1,186		—			(1,545	)		—			—		1,526		1,526		—
Other provisions		10,379		3,181		(2	)		(60	)		(42	)		—		13,456		522		12,934
	W	126,995		7,435		(3,332	)		(1,855	)		(29	)		991		130,205		66,496		63,709

(In millions of won)
	For the six-month period ended June 30, 2021																As of June 30, 2021
	Beginning balance		Increase		Utilization			Reversal			Other		Business combination		Ending balance		Current		Non-current
Provision for restoration	W	113,653		6,919		(3,516	)		(342	)		55		—		116,769		56,506		60,263
Emission allowance		7,424		487		(1,091	)		(5,678	)		—		—		1,142		1,142		—
Other provisions(*)		29,800		2,154		(14,540	)		(337	)		—		385		17,462		5,207		12,255
	W	150,877		9,560		(19,147	)		(6,357	)		55		385		135,373		62,855		72,518

(*) W4,041 million of current provisions are included in other provisions relating to SK Planet Co., Ltd.’s onerous contracts.

48

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

19. Defined Benefit Liabilities (Assets)

(1) Details of defined benefit liabilities (assets) as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022			December 31, 2021
Present value of defined benefit obligations	W	1,070,832			1,035,016
Fair value of plan assets		(1,049,502	)		(1,040,286	)
Defined benefit assets(*)		(11,623	)		(18,427	)
Defined benefit liabilities		32,953			13,157

(*) Since the Group entities neither have legally enforceable right nor intention to settle the defined benefit obligations of the Group entities with defined benefit assets of other Group entities, defined benefit assets of the Group entities have been separately presented from defined benefit liabilities.

(2) Changes in present value of defined benefit obligations for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	For the six-month period ended
	June 30, 2022			June 30, 2021
Beginning balance	W	1,035,016			1,278,550
Current service cost		68,126			97,530
Interest cost		15,048			14,543
Remeasurement
- Demographic assumption		(5,672	)		—
- Financial assumption		(41,426	)		—
- Adjustment based on experience		7,078			13,047
Business combinations		29,357			—
Benefit paid		(42,981	)		(59,746	)
Others		6,286			622
Ending balance	W	1,070,832			1,344,546

(3) Changes in fair value of plan assets for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	For the six-month period ended
	June 30, 2022			June 30, 2021
Beginning balance	W	1,040,286			1,127,163
Interest income		14,853			12,547
Remeasurement		(9,570	)		(1,873	)
Contributions		26,652			29,909
Benefit paid		(54,781	)		(63,833	)
Business combinations		26,618			—
Others		5,444			(569	)
Ending balance	W	1,049,502			1,103,344

49

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

19. Defined Benefit Liabilities (Assets), Continued

(4) Total cost of defined benefit plan, which is recognized in profit or loss for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	For the six-month period ended
	June 30, 2022		June 30, 2021(*)
Current service cost	W	68,126		97,530
Net interest cost		195		1,996
	W	68,321		99,526

(*) Includes amounts related to discontinued operations.

20. Share Capital and Capital Surplus and Others

(1) The Parent Company’s outstanding share capital consists entirely of common shares with a par value of W100. The number of authorized, issued and outstanding common shares and the details of capital surplus and others as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won, except for share data)
	June 30, 2022			December 31, 2021
Number of authorized shares		670,000,000			670,000,000
Number of issued shares(*1)		218,833,144			218,833,144
Share capital:
Common share(*2)	W	30,493			30,493
Capital surplus and others:
Paid-in surplus		1,771,000			1,771,000
Treasury shares		(36,702	)		(57,314	)
Hybrid securities(*3)		398,759			398,759
Share option(Note 21)		2,043			47,166
Others(*4)		(13,684,559	)		(13,783,337	)
	W	(11,549,459	)		(11,623,726	)

(*1) As a result of stock split and spin-off for the year ended December 31, 2021, the number of shares that the Parent Company is allowed to issue under article of incorporation changed from 220,000,000 shares with a par value of W500 to 670,000,000 shares with a par value of W100.

(*2) The Parent Company’s share capital decreased by W14,146 million as a result of spin-off for the year ended December 31, 2021. In addition, the Parent Company retired 8,685,568 treasury shares with reduction of its retained earnings before appropriation; as a result, the Parent Company’s issued shares have decreased without change in share capital for the year ended December 31, 2021. Meanwhile, in 2002 and 2003, the Parent Company retired treasury shares with reduction of its retained earnings before appropriation. As a result, the Parent Company’s issued shares have decreased without change in share capital.

(*3) As there is no contractual obligation to deliver financial assets to the holders of hybrid bonds, the Group classified the hybrid bonds as equity. When in liquidation or bankruptcy, these hybrid bonds are senior only to common shares.

50

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

20. Share Capital and Capital Surplus and Others, Continued

(1) The Parent Company’s outstanding share capital consists entirely of common shares with a par value of W100. The number of authorized, issued and outstanding common shares and the details of capital surplus and others as of June 30, 2022 and December 31, 2021 are as follows, Continued:

(*4) Others primarily consist of the excess of the consideration paid by the Group over the carrying amount of net assets acquired from entities under common control.

(2) There were no changes in share capital for the six-month periods ended June 30, 2022 and 2021, and details of shares outstanding as of June 30, 2022 and 2021 are as follows:

(In shares)

June 30, 2022

June 30, 2021

Issued shares

Treasury shares

Outstanding shares

Issued shares

Treasury shares

Outstanding shares

Shares outstanding

218,833,144

801,091

218,032,053

72,060,143

899,500

71,160,643

(3) Details of treasury shares as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won, except for share data)
	June 30, 2022		December 31, 2021
Number of shares(*)		801,091		1,250,992
Acquisition cost	W	36,702		57,314

(*) The Parent Company distributed 449,901 treasury shares (acquisition cost: W20,612 million) as bonus payment to the employees, resulting in gain on disposal of treasury shares of W4,460 million and loss on disposal of treasury shares of W1,065 million for the six-month period ended June 30, 2022.

51

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

21. Share-based Payment

(1) The terms and conditions related to the grants of the share-based payment arrangement are as follows:

1) Equity-settled share-based payment arrangement

Series

1-2

1-3

2

3

4

5(*2)

6(*2)

Grant date

March 24, 2017

February 20, 2018

February 22, 2019

March 26, 2019

March 26, 2020

March 25, 2021

Types of shares to be issued

Registered common shares

Grant method

Reissue of treasury shares, Cash settlement

Number of shares(*1) (in share)

67,320

67,320

4,124

8,907

5,266

376,313

87,794

Exercise price(*1) (in won)

53,298

57,562

50,824

53,052

50,862

38,452

50,276

Exercise period

Mar. 25, 2020

Mar. 25, 2021

Feb. 21, 2020

Feb. 23, 2021

Mar. 27, 2021

Mar. 27, 2023

Mar. 26, 2023

~

~

~

~

~

~

~

Mar. 24, 2023

Mar. 24, 2024

Feb. 20, 2023

Feb. 22, 2024

Mar. 26, 2024

Mar. 26, 2027

Mar. 25, 2026

Vesting conditions

3 years’ service from the grant date

4 years’ service from the grant date

2 years’ service from the grant date

2 years’ service from the grant date

2 years’ service from the grant date

3 years’ service from the grant date

2 years’ service from the grant date

Series

7-1

7-2

Grant date

March 25, 2022

Types of shares to be issued

Registered common shares

Grant method

Reissue of treasury shares, Cash settlement

Number of shares (in share)

295,275

120,441

Exercise price (in won)

56,860

56,860

Exercise period

Mar. 26, 2025

Mar. 26, 2024

~

~

Mar. 25, 2029

Mar. 25, 2027

Vesting conditions

3 years’ service from the grant date

2 years’ service from the grant date

52

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

21. Share-based Payment, Continued

(1) The terms and conditions related to the grants of the share-based payment arrangement are as follows, Continued:

2) Cash-settled share-based payment arrangement

	Share appreciation rights of SK Telecom Co., Ltd.(*3)			Share appreciation rights of SK Square Co., Ltd.(*3)
Grant date		January 1, 2021	January 1, 2022		January 1, 2021
Grant method		Cash settlement
Number of shares (in shares)(*1)		183,246	338,525		118,456
Exercise price (in won)(*1)		50,276	56,860		50,276
Exercise period		Jan. 1, 2023~ Mar. 28, 2024	Jan. 1, 2024~ Mar. 25, 2025		Jan. 1, 2023~ Mar. 28, 2024
Vesting conditions		2 years’ service from the grant date	2 years’ service from the grant date		2 years’ service from the grant date

(*1) Number of shares granted and exercise price are adjusted as a result of stock split and spin-off for the year ended December 31, 2021, and the remaining part of 1-1st share option and 3rd share option were fully and partially exercised for the six-month period ended June 30, 2022.

(*2) Parts of the grant that have not met the vesting conditions have been forfeited for the six-month period ended June 30, 2022 and for the year ended December 31, 2021.

(*3) The Parent Company newly established the long-term incentive policy as part of the compensation related to the growth of corporate value on the beginning of the prior year and granted cash settled share appreciation rights to executives. Meanwhile, parts of the grant that have not met the vesting conditions have been forfeited for the six-month period ended June 30, 2022.

As a result of spin-off during the year ended December 31, 2021, there are no share options granted by subsidiaries of the Parent Company as of June 30, 2022.

(2) Share compensation expense recognized for the six-month period ended June 30, 2022 and the remaining share compensation expense to be recognized in subsequent periods are as follows:

(In millions of won)
	Share compensation expense
As of December 31, 2021	W	76,979
For the six-month period ended June 30, 2022		76,190
In subsequent periods		5,337
	W	158,506

As of June 30, 2022, the carrying amount of liabilities recognized by the Group in relation to the cash-settled share-based payment arrangement is W1,368 million.

53

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

21. Share-based Payment, Continued

(3) The Parent Company used binomial option pricing model in the measurement of the fair value of the share options at grant date, and the inputs used in the model are as follows:

1) Equity-settled share-based payment arrangement

(In won)	Parent Company
	1-2			1-3			2			3			4			5			6			7-1			7-2
Risk-free interest rate		1.95	%		2.07	%		2.63	%		1.91	%		1.78	%		1.52	%		1.55	%		2.80	%		2.68	%
Estimated option’s life		6 years			7 years			5 years			5 years			5 years			7 years			5 years			7 years			5 years
Share price (Closing price on the preceding day)(*)		52,500			52,500			48,700			51,800			50,600			34,900			49,800			57,300			57,300
Expected volatility		13.38	%		13.38	%		16.45	%		8.30	%		7.70	%		8.10	%		25.70	%		24.20	%		24.20	%
Expected dividends		3.80	%		3.80	%		3.70	%		3.80	%		3.90	%		5.70	%		4.00	%		3.40	%		3.40	%
Exercise price(*)		53,298			57,562			50,824			53,052			50,862			38,452			50,276			56,860			56,860
Per-share fair value of the option(*)		4,048			3,096			4,798			1,720			1,622			192			8,142			11,772			10,435

2) Cash-settled share-based payment arrangement

(In won)	Share appreciation rights of SK Telecom Co., Ltd.						Share appreciation rights of SK Square Co., Ltd.
	Granted in 2021			Granted in 2022
Risk-free interest rate		3.40	%		3.56	%		3.40	%
Estimated option’s life		3.25 years			3.25 years			3.25 years
Share price on the remeasurement date		52,000			52,000			39,050
Expected volatility		25.10	%		25.10	%		25.10	%
Expected dividends		6.30	%		6.30	%		0.00	%
Exercise price(*)		50,276			56,860			50,276
Per-share fair value of the option		5,714			4,437			2,417

(*) Share price (closing price on the preceding day), exercise price and per-share fair value of the option are adjusted as a result of stock split and spin-off during the year ended December 31, 2021.

Meanwhile, the Board of Directors of the Parent Company resolved to dispose its treasury shares for the purpose of allotment of shares as bonus payment on October 12, 2021. The transaction is equity-settled share-based payment transactions in accordance with KIFRS 1102, and 505,350 shares (before stock split) were granted on October 12, 2021(grant date). 7,700 shares (before stock split) out of 505,350 shares (before stock split) were transferred to the spin-off company on November 1, 2021. Vesting conditions are 6 months from the grant date, and per-share fair value on the grant date are measured at W300,500 that is closing price of common shares on the grant date before stock split and spin-off. The fair value of these share-based payment on the grant date is W151,858 million, among which the awards with a fair value of W9,935 million were transferred to the spin-off company.

54

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

22. Retained Earnings

Retained earnings as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Appropriated:
Legal reserve	W	22,320		22,320
Reserve for business expansion		9,631,138		11,631,138
Reserve for technology development		4,365,300		4,365,300
		13,996,438		15,996,438
Unappropriated retained earnings		8,357,977		6,418,583
	W	22,376,735		22,437,341

23. Reserves

(1) Details of reserves, net of taxes, as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Valuation gain on financial assets at FVOCI	W	262,398		633,240
Other comprehensive income of investments in associates and joint ventures		180,680		53,770
Valuation gain on derivatives		25,791		33,918
Foreign currency translation differences for foreign operations		31,658		14,310
	W	500,527		735,238

(2) Changes in reserves for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	Valuation gain (loss) on financial assets at FVOCI			Other comprehensive income (loss) of investments in associates and joint ventures			Valuation gain (loss) on derivatives			Foreign currency translation differences for foreign operations			Total
Balance as of January 1, 2021	W	438,979			(392,333	)		17,615			(24,122	)		40,139
Changes, net of taxes		698,661			185,941			10,133			18,043			912,778
Balance as of June 30, 2021	W	1,137,640			(206,392	)		27,748			(6,079	)		952,917
Balance as of January 1, 2022	W	633,240			53,770			33,918			14,310			735,238
Changes, net of taxes		(370,842	)		126,910			(8,127	)		17,348			(234,711	)
Balance as of June 30, 2022	W	262,398			180,680			25,791			31,658			500,527

55

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

24. Other Operating Expenses

Details of other operating expenses for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021 (Restated)
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Communication	W	8,030		15,579		8,030		16,534
Utilities		88,039		183,252		77,526		165,023
Taxes and dues		27,712		35,611		19,533		26,057
Repair		107,856		204,128		104,471		200,456
Research and development		88,661		166,742		82,649		166,148
Training		7,508		14,558		7,257		13,421
Bad debt for accounts receivable—trade		6,178		15,373		6,577		13,453
Travel		3,524		6,277		1,603		3,166
Supplies and others		25,386		52,006		21,929		46,089
	W	362,894		693,526		329,575		650,347

25. Other Non-Operating Income and Expenses

Details of other non-operating income and expenses for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021 (Restated)
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Other non-operating Income:
Gain on disposal of property and equipment and intangible assets	W	3,854		8,777		4,048		6,577
Others		5,018		15,836		47,972		58,028
	W	8,872		24,613		52,020		64,605
Other non-operating Expenses:
Loss on disposal of property and equipment and intangible assets	W	1,737		3,856		3,863		6,226
Donations		4,911		10,161		6,199		9,767
Bad debt for accounts receivable—other		1,335		1,443		314		398
Others		2,058		8,488		1,751		3,933
	W	10,041		23,948		12,127		20,324

56

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

26. Finance Income and Costs

(1) Details of finance income and costs for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021 (Restated)
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Finance Income:
Interest income	W	11,462		21,272		8,701		17,216
Gain on sale of accounts receivable—other		—		1,043		6,345		14,266
Dividends		1,035		2,552		938		1,977
Gain on foreign currency transactions		6,594		7,945		900		1,754
Gain on foreign currency translations		10,235		12,939		—		5,183
Gain relating to financial instruments at FVTPL		2,761		10,653		6,102		41,408
	W	32,087		56,404		22,986		81,804
(In millions of won)	2022				2021 (Restated)
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Finance Costs:
Interest expenses	W	75,876		149,801		68,844		137,209
Loss on sale of accounts receivable—trade		5,169		8,006		—		—
Loss on foreign currency transactions		5,610		6,755		2,589		3,108
Loss on foreign currency translations		1,330		11,329		264		4,931
Loss relating to financial instruments at FVTPL		13,349		18,534		88,922		93,977
	W	101,334		194,425		160,619		239,225

(2) Details of interest income included in finance income for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021(*)
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Interest income on cash equivalents and short-term financial instruments	W	4,934		8,610		5,521		10,731
Interest income on loans and others		6,528		12,662		7,213		14,253
	W	11,462		21,272		12,734		24,984

(*) Includes amounts related to discontinued operations.

57

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

26. Finance Income and Costs, Continued

(3) Details of interest expenses included in finance costs for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021(*)
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Interest expenses on borrowings	W	6,718		9,940		19,509		37,925
Interest expenses on debentures		53,998		106,436		55,716		111,772
Others		15,160		33,425		12,079		24,102
	W	75,876		149,801		87,304		173,799

(*) Includes amounts related to discontinued operations.

(4) Details of impairment losses for financial assets for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021(*)
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Accounts receivable—trade	W	6,178		15,373		7,388		14,863
Other receivables		1,335		1,443		264		209
	W	7,513		16,816		7,652		15,072

(*) Includes amounts related to discontinued operations.

27. Income Tax Expense

Income tax expense was calculated by considering current tax expense, adjusted to changes in estimates related to prior periods, and deferred tax expense due to origination and reversal of temporary differences.

58

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Earnings per Share

The Parent Company carried out stock split on October 28, 2021. Basic and diluted earnings per share for the six-month period ended June 30, 2021 has been retroactively adjusted to reflect the effect of the stock split.

(1) Basic earnings per share

1) Basic earnings per share for the six-month periods ended June 30, 2022 and 2021 are calculated as follows:

(In millions of won, except for share data and basic earnings per share)	2022						2021(Restated)
	Three-month period ended June 30			Six-month period ended June 30			Three-month period ended June 30			Six-month period ended June 30
Basic earnings per share attributable to owners of the Parent Company:
Profit from continuing operations attributable to owners of the Parent Company	W	253,862			465,115			421,873			767,929
Interest on hybrid bonds		(3,691	)		(7,383	)		(3,691	)		(7,383	)
Profit from continuing operation attributable to owners of the Parent Company on common shares		250,171			457,732			418,182			760,546
Profit of discontinued operations attributable to owners of the Parent Company on common shares		—			—			343,912			556,121
Weighted average number of common shares outstanding		218,019,289			217,956,305			355,800,990			355,814,870
Basic earnings per share (in won)
Continuing operations	W	1,147			2,100			1,175			2,137
Discontinued operations		—			—			967			1,563

59

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Earnings per Share, Continued

(1) Basic earnings per share, Continued

2) The weighted average number of common shares outstanding for the six-month periods ended June 30, 2022 and 2021 are calculated as follows:

(In shares)	Number of common shares			Weighted average number of common shares
				Three-month period ended June 30			Six-month period ended June 30
Issued shares as of January 1, 2022		218,833,144			218,833,144			218,833,144
Treasury shares as of January 1, 2022		(1,250,992	)		(1,250,992	)		(1,250,992	)
Disposal of treasury shares		449,901			437,137			374,153
Weighted average number of common shares outstanding as of June 30, 2022		218,032,053			218,019,289			217,956,305

(In shares)	Number of common shares			Weighted average number of common shares
				Three-month period ended June 30			Six-month period ended June 30
Issued shares as of January 1, 2021		403,728,555			403,728,555			403,728,555
Treasury shares as of January 1, 2021		(47,092,790	)		(47,092,790	)		(47,092,790	)
Acquisition of treasury shares		(1,440,000	)		(1,440,000	)		(1,315,690	)
Disposal of treasury shares		607,450			605,225			494,795
Weighted average number of common shares outstanding as of June 30, 2021		355,803,215			355,800,990			355,814,870

(2) Diluted earnings per share

1) Diluted earnings per share for the six-month periods ended June 30, 2022 and 2021 are calculated as follows:

(In millions of won, except for share data and diluted earnings per share)	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Profit from continuing operations attributable to owners of the Parent Company on common shares	W	250,171		457,732		418,182		760,546
Profit of discontinued operations attributable to owners of the Parent Company on common shares		—		—		343,912		556,121
Adjusted weighted average number of common shares outstanding		218,156,534		218,090,261		356,113,180		356,041,670
Diluted earnings per share (in won)
Continuing operations	W	1,147		2,099		1,174		2,136
Discontinued operations		—		—		966		1,562

60

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Earnings per Share, Continued

2) The adjusted weighted average number of common shares outstanding for the six-month periods ended June 30, 2022 and 2021 are calculated as follows:

(2) Diluted earnings per share, Continued

(In shares)	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30			Six-month period ended June 30
Outstanding shares as of January 1		217,582,152		217,582,152		356,635,765			356,635,765
Effect of treasury shares		437,137		374,153		(834,775	)		(820,895	)
Effect of share option		137,245		133,956		312,190			226,800
Adjusted weighted average number of common shares outstanding		218,156,534		218,090,261		356,113,180			356,041,670

29. Categories of Financial Instruments

(1) Financial assets by category as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)	June 30, 2022
	Financial assets at FVTPL		Equity instruments at FVOCI		Debt instruments at FVOCI		Financial assets at amortized cost		Derivatives hedging instrument		Total
Cash and cash equivalents	W	799,010		—		—		353,904		—		1,152,914
Financial instruments		576,511		—		—		112,418		—		688,929
Long-term investment securities(*)		192,732		1,061,846		1,284		—		—		1,255,862
Accounts receivable—trade		—		—		—		2,037,975		—		2,037,975
Loans and other receivables		353,068		—		—		801,892		—		1,154,960
Derivative financial assets		41,382		—		—		—		325,562		366,944
	W	1,962,703		1,061,846		1,284		3,306,189		325,562		6,657,584

(*) The Group designated W1,061,846 million of equity instruments that are not held for trading as financial assets at FVOCI.

(In millions of won)	December 31, 2021
	Financial assets at FVTPL		Equity instruments at FVOCI		Debt instruments at FVOCI		Financial assets at amortized cost		Derivatives hedging instrument		Total
Cash and cash equivalents	W	505,578		—		—		367,153		—		872,731
Financial instruments		389,368		—		—		119,684		—		509,052
Short-term investment securities		5,010		—		—		—		—		5,010
Long-term investment securities(*)		203,473		1,510,428		1,177		—		—		1,715,078
Accounts receivable—trade		—		—		—		1,921,617		—		1,921,617
Loans and other receivables		459,959		—		—		735,958		—		1,195,917
Derivative financial assets		34,933		—		—		—		182,661		217,594
	W	1,598,321		1,510,428		1,177		3,144,412		182,661		6,436,999

(*) The Group designated W1,510,428 million of equity instruments that are not held for trading as financial assets at FVOCI.

61

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

29. Categories of Financial Instruments, Continued

(2) Financial liabilities by category as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)	June 30, 2022
	Financial liabilities   at FVTPL		Financial liabilities at amortized cost		Total
Accounts payable – trade	W	—		113,212		113,212
Derivative financial liabilities		321,025		—		321,025
Borrowings		—		734,849		734,849
Debentures		—		8,488,740		8,488,740
Lease liabilities(*)		—		1,598,146		1,598,146
Accounts payable—other and others		—		4,908,220		4,908,220
	W	321,025		15,843,167		16,164,192

(In millions of won)	December 31, 2021
	Financial liabilities   at FVTPL		Financial liabilities at amortized cost		Derivatives hedging instrument		Total
Accounts payable—trade	W	—		190,559		—		190,559
Derivative financial liabilities		321,025		—		111		321,136
Borrowings		—		407,185		—		407,185
Debentures		—		8,426,683		—		8,426,683
Lease liabilities(*)		—		1,534,282		—		1,534,282
Accounts payable—other and others		—		5,524,692		—		5,524,692
	W	321,025		16,083,401		111		16,404,537

(*) Lease liabilities are not applicable on category of financial liabilities but are classified as financial liabilities measured at amortized cost on consideration of nature for measurement of liabilities.

62

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

30. Financial Risk Management

(1) Financial risk management

The Group is exposed to credit risk, liquidity risk and market risk. Market risk is the risk related to the changes in market prices, such as foreign exchange rates and interest rates. The Group implements a risk management system to monitor and manage these specific risks.

The Group’s financial assets consist of cash and cash equivalents, financial instruments, investment securities and accounts receivable—trade and other receivables, etc. Financial liabilities consist of accounts payable—trade and other, borrowings, debentures, lease liabilities and others.

1) Market risk

(i) Currency risk

The Group incurs exchange position due to revenue and expenses from its global operations. Major foreign currencies where the currency risk occur are USD, EUR and JPY. The Group determines the currency risk management policy after considering the nature of business and the presence of methods that mitigate the currency risk for each Group entities. Currency risk occurs on forecasted transactions and recognized assets and liabilities which are denominated in a currency other than the functional currency of each Group entity. The Group manages currency risk arising from business transactions by using currency forwards, etc.

Monetary assets and liabilities denominated in foreign currencies as of June 30, 2022 are as follows:

(In millions of won, thousands of foreign currencies)	Assets				Liabilities
	Foreign currencies		Won equivalent		Foreign currencies		Won equivalent
USD		69,210	W	89,481		1,514,340	W	1,957,891
EUR		5,486		7,406		1		2
Others		—		244		—		72
			W	97,131			W	1,957,965

In addition, the Group has entered into currency swaps to hedge against currency risk related to foreign currency borrowings and debentures.

As of June 30, 2022, a hypothetical change in exchange rates by 10% would have increased (decreased) the Group’s profit before income tax as follows:

(In millions of won)	If increased by 10%		If decreased by 10%
USD	W	6,365		(6,365	)
EUR		740		(740	)
Others		17		(17	)
	W	7,122		(7,122	)

63

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

30. Financial Risk Management, Continued

(1) Financial risk management, Continued

1) Market risk, Continued

(ii) Interest rate risk

The interest rate risk of the Group arises from borrowings, debentures and long-term payables—other. Since the Group’s interest bearing assets are mostly fixed-interest bearing assets, the Group’s revenue and operating cash flows from the interest-bearing assets are not influenced by the changes in market interest rates.

The Group performs various analysis to reduce interest rate risk and to optimize its financing. To minimize risks arising from changes in interest rates, the Group takes various measures such as refinancing, renewal, alternative financing and hedging.

As of June 30, 2022, floating-rate borrowings and debentures amount to W25,000 million and W387,870 million, respectively, and the Group has entered into interest rate swaps to hedge interest rate risk related to the floating-rate borrowings and debentures. Therefore, profit before income taxes for the six-month period ended June 30, 2022 would not have been affected by the changes in interest rates of floating-rate borrowings and debentures.

As of June 30, 2022, the floating-rate long-term payables—other are W1,690,470 million. If the interest rate increases (decreases) 1%p with all other variables held constant, profit before income taxes for the six-month period ended June 30, 2022, would change by W8,452 million in relation to the floating-rate long-term payables—other that are exposed to interest rate risk.

Interest rate benchmark reform and associated risks

A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as ‘IBOR reform’). Especially, in the case of LIBOR, all of the calculations were suspended as of December 31, 2021, except for the overnight, one month, three months, six months, and 12 months of USD LIBOR, and the aforementioned five USD LIBORs will also be suspended as of June 30, 2023. The alternative interest rate benchmark of USD LIBOR is the Secured Overnight Financing Rate(“SOFR”). Meanwhile, in case of Korean CD rate, the alternative interest rate benchmark has selected as Korea Overnight Financing Repo Rate(“KOFR”), and as part of interest rate benchmark reform, the interest rate has been disclosed through Korea Securities Depository since November 26, 2021. KOFR is calculated using the overnight RP rate as collateral for government bonds and monetary stabilization bonds. However, unlike LIBOR, calculation of CD rate will not be suspended, and it is unclear when and how the transition to KOFR will take place, accordingly.

The Group plans to include fallback clauses into financial instruments relating to LIBOR to which calculation has not been suspended yet or change their LIBOR directly to alternative interest rates before the calculation is suspended. Moreover, the Group is closely monitoring market trends for CD interest rate-related financial products for which the calculation of interest rate indicators is not scheduled to be suspended.

64

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

30. Financial Risk Management, Continued

(1) Financial risk management, Continued

1) Market risk, Continued

(ii) Interest rate risk, Continued

The Group’s financial instruments exposed to the risk arising from interest rate benchmark reform as of June 30, 2022 are indexed to the USD LIBOR. The Group is exposed to legal risk to amend the terms of contracts on the financial instruments subject to interest rate benchmark reform as well as process and operation risks to manage such amendments. In addition, the Group is exposed to the risk of monitoring the market trend regarding the alternative interest rate and establishing the corresponding risk management strategy. If the IBOR is designated as the hedged item, the Group is required to replace it to an alternative benchmark interest and review the effects on the hedging relationship. In addition, the Group is exposed to the risk of minimizing hedge ineffectiveness by aligning the method and timing of the transition to the alternative benchmark interest applied to the hedged item and the hedging instrument.

In order to manage and monitor such risk factors, the Group evaluates the extent to which contracts refer to IBOR cash flows, whether such contracts will need to be amended as a result of IBOR reform and how to manage communication about IBOR reform with counterparties.

Non-derivative financial liabilities

The Parent Company’s non-derivative financial liabilities subject to interest rate benchmark reform as of December 31, 2021 were floating-rate bonds indexed to USD LIBOR. As explained above, the Group is discussing with the counterparty about including the fallback clauses as of June 30, 2022.

Derivatives

The Group’s most derivative instruments designated as cash flow hedge are governed by contracts based on the International Swaps and Derivatives Association (ISDA)’s master agreements. As part of interest rate benchmark reform, ISDA has included a new fallback clause regarding which alterative benchmark interest rate to be applied when the calculation of major IBOR is suspended in the master agreement. The master agreement is applied to derivative contracts after January 25, 2021, and the transaction parties is required to adhere to ISDA protocol to include the same fallback clause to derivative contracts before January 25, 2021. The Group has adhered to ISDA protocol for transition to the alternative benchmark interest rate, and the fallback clause will be included when counterparties adhere to the protocol to include. The Group’s counterparties have adhered to ISDA protocol and agreed to include the fallback clause.

Hedge accounting

The Group’s hedged items and hedging instruments as of June 30, 2022 are indexed to USD LIBOR. These benchmark rates are quoted each day, and the IBOR cash flows are exchanged with counterparties as usual.

65

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

30. Financial Risk Management, Continued

(1) Financial risk management, Continued

2) Credit risk

The maximum credit exposure as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Cash and cash equivalents	W	1,152,702		872,550
Financial instruments		688,929		509,052
Investment securities		2,184		2,077
Accounts receivable—trade		2,037,975		1,921,617
Contract assets		123,530		118,278
Loans and other receivables		1,154,960		1,195,917
Derivative financial assets		366,944		217,594
	W	5,527,224		4,837,085

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. To manage credit risk, the Group evaluates the credit worthiness of each customer or counterparty considering the party’s financial information, its own trading records and other factors. Based on such information, the Group establishes credit limits for each customer or counterparty.

The Group establishes a loss allowance in respect of accounts receivable—trade. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that are expected to occur. The collective loss allowance is determined based on historical data of collection statistics for similar financial assets. Also, the Group’s credit risk can arise from transactions with financial institutions related to its cash and cash equivalents, financial instruments and derivatives. To minimize such risk, the Group has a policy to deal only with financial institutions with high credit ratings. The amount of maximum exposure to credit risk of the Group is the carrying amount of financial assets as of June 30, 2022.

66

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

30. Financial Risk Management, Continued

(1) Financial risk management, Continued

3) Liquidity risk

The Group’s approach to managing liquidity is to ensure that it will always maintain sufficient cash and cash equivalents balances and have enough liquidity through various committed credit lines. The Group maintains enough liquidity within credit lines through active operating activities.

Contractual maturities of financial liabilities as of June 30, 2022 are as follows:

(In millions of won)
	Carrying amount		Contractual cash flows		Less than 1 year		1—5 years		More than 5 years
Accounts payable —trade	W	113,212		113,212		113,212		—		—
Borrowings(*)		734,849		769,474		59,767		709,707		—
Debentures(*)		8,488,740		9,578,870		2,336,483		4,314,591		2,927,796
Lease liabilities		1,598,146		1,725,993		377,538		1,050,679		297,776
Accounts payable—other and others(*)		4,908,220		4,997,224		3,682,445		1,222,894		91,885
	W	15,843,167		17,184,773		6,569,445		7,297,871		3,317,457

(*) Includes interest payables.

The Group does not expect that the cash flows included in the maturity analysis could occur significantly earlier or at different amounts.

As of June 30, 2022, periods in which cash flows from cash flow hedge derivatives are expected to occur are as follows:

(In millions of won)
	Carrying amount		Contractual cash flows		Less than 1 year		1—5 years		More than 5 years
Assets	W	325,562		347,997		149,332		140,619		58,046

67

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

30. Financial Risk Management, Continued

(2) Capital management

The Group manages its capital to ensure that it will be able to continue as a business while maximizing the return to shareholders through the optimization of its debt and equity structure. The overall strategy of the Group is the same as that of the Group as of and for the year ended December 31, 2021.

The Group monitors its debt-equity ratio as a capital management indicator. This ratio is calculated as total liabilities divided by total equity from the consolidated financial statements.

Debt-equity ratio as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022			December 31, 2021
Total liabilities	W	18,501,788			18,576,139
Total equity		12,146,640			12,335,138
Debt-equity ratios		152.32	%		150.60	%

(3) Fair value

1) Fair value and carrying amount of financial assets and liabilities including fair value hierarchy as of June 30, 2022 are as follows:

(In millions of won)	June 30, 2022
	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets that are measured at fair value:
FVTPL	W	1,962,703		37,081		1,728,589		197,033		1,962,703
Derivative hedging instruments		325,562		—		325,562		—		325,562
FVOCI		1,061,846		849,548		—		212,298		1,061,846
	W	3,350,111		886,629		2,054,151		409,331		3,350,111
Financial liabilities that are measured at fair value:
FVTPL	W	321,025		—		—		321,025		321,025
Financial liabilities that are not measured at fair value:
Borrowings	W	734,849		—		705,145		—		705,145
Debentures		8,488,740		—		8,156,250		—		8,156,250
Long-term payables—other		1,624,514		—		1,552,763		—		1,552,763
	W	10,848,103		—		10,414,158		—		10,414,158

68

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

30. Financial Risk Management, Continued

(3) Fair value, Continued

2) Fair value and carrying amount of financial assets and liabilities including fair value hierarchy as of December 31, 2021 are as follows:

(In millions of won)	December 31, 2021
	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets that are measured at fair value:
FVTPL	W	1,598,321		55,455		1,359,915		182,951		1,598,321
Derivative hedging instruments		182,661		—		182,661		—		182,661
FVOCI		1,511,605		1,344,434		—		167,171		1,511,605
	W	3,292,587		1,399,889		1,542,576		350,122		3,292,587
Financial liabilities that are measured at fair value:
FVTPL	W	321,025		—		—		321,025		321,025
Derivative hedging instruments		111		—		111		—		111
	W	321,136		—		111		321,025		321,136
Financial liabilities that are not measured at fair value:
Borrowings	W	407,185		—		392,237		—		392,237
Debentures		8,426,683		—		8,679,472		—		8,679,472
Long-term payables—other		2,009,833		—		2,010,852		—		2,010,852
	W	10,843,701		—		11,082,561		—		11,082,561

The above information does not include fair values of financial assets and liabilities of which fair values have not been measured as carrying amounts are reasonable approximation of fair values.

Fair value of the financial instruments that are traded in an active market (financial assets at FVOCI and financial assets at FVTPL) is measured based on the bid price at the end of the reporting date.

The Group uses various valuation methods for determination of fair value of financial instruments that are not traded in an active market. Derivative financial contracts and long-term liabilities are measured using the discounted present value methods. Other financial assets are determined using the methods, such as discounted cash flow and market approach. Inputs used to such valuation methods include swap rate, interest rate, and risk premium, and the Group performs valuation using the inputs which are consistent with natures of assets and liabilities measured.

Interest rates used by the Group for the fair value measurement as of June 30, 2022 are as follows:

	Interest rate
Derivative instruments	0.32% ~ 4.24%
Borrowings and debentures	4.10% ~ 4.18%
Long-term payables—other	3.20% ~ 4.18%

69

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

30. Financial Risk Management, Continued

(3) Fair value, Continued

3) There have been no transfers between Level 2 and Level 1 for the six-month period ended June 30, 2022. The changes of financial assets classified as Level 3 for the six-month period ended June 30, 2022 are as follows:

(In millions of won)
	Balance as of January 1, 2022			Profit or loss		OCI		Acquisition		Disposal			Transfer			Balance as of June 30, 2022
Financial assets
FVTPL	W	182,951			10,202		3,086		24,459		(23,665	)		—			197,033
FVOCI		167,171			—		9,260		41,168		(4,401	)		(900	)		212,298
	W	350,122			10,202		12,346		65,627		(28,066	)		(900	)		409,331
Financial liabilities
FVTPL	W	(321,025	)		—		—		—		—			—			(321,025	)

(4) Enforceable master netting agreement or similar agreement

Carrying amounts of financial instruments recognized of which offset agreements are applicable as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)	June 30, 2022
	Gross financial instruments recognized		Amount offset			Net financial instruments presented on the interim consolidated statement of financial position
Financial assets:
Accounts receivable—trade and others	W	212,947		(204,246	)		8,701
Financial liabilities:
Accounts payable—other and others	W	208,538		(204,246	)		4,292

(In millions of won)	December 31, 2021
	Gross financial instruments recognized		Amount offset			Net financial instruments presented on the consolidated statement of financial position
Financial assets:
Accounts receivable—trade and others	W	197,828		(189,424	)		8,404
Financial liabilities:
Accounts payable—other and others	W	200,849		(189,424	)		11,425

70

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

31. Transactions with Related Parties

(1) List of related parties

Relationship	Company
Ultimate Controlling Entity	SK Inc.
Joint ventures	Finnq Co., Ltd. and another
Associates	SK China Company Ltd. and 45 others
Others	The Ultimate Controlling Entity’s subsidiaries and associates, etc.

As of June 30, 2022, the Group belongs to SK Group, a conglomerate in accordance with the Monopoly Regulation and Fair Trade Act of the Republic of Korea. In this regard, all of the other entities included in SK Group other than aforementioned ones are considered related parties of the Group.

(2) Compensation for the key management

The Parent Company considers registered directors (3 executive and 5 non-executive directors) who have substantial role and responsibility in planning, operations, and relevant controls of the business as key management. The compensation given to such key management for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Salaries	W	910		2,349		952		4,432
Defined benefits plan expenses		92		405		209		2,024
Share option		514		581		40		72
	W	1,516		3,335		1,201		6,528

Compensation for the key management includes salaries, non-monetary salaries, and retirement benefits made in relation to the pension plan and compensation expenses related to share options granted.

71

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

31. Transactions with Related Parties, Continued

(3) Transactions with related parties for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)			For the period ended June 30, 2022
			Operating revenue and others				Operating expense and others(*1)				Acquisition of property and equipment and others
Scope	Company		Three- month		Six-month		Three- month		Six-month		Three- month		Six-month
Ultimate Controlling Entity		SK Inc.(*2)	W	5,254		9,999		148,916		346,780		11,897		15,692
Associates		F&U Credit information Co., Ltd.		749		1,490		12,450		24,512		—		—
		HanaCard Co., Ltd.		3,322		8,932		735		1,820		20		22
		Daehan Kanggun BcN Co., Ltd.		2,461		4,906		—		—		—		—
		Others(*3)		12,454		12,505		1,254		2,318		—		—
				18,986		27,833		14,439		28,650		20		22
		SK Innovation Co., Ltd.		6,502		9,288		4,294		9,245		—		—
		SK Networks Co., Ltd.(*4)		1,709		2,684		156,671		395,032		—		—
		SK Networks Service Co., Ltd.		1,439		2,978		16,866		33,827		784		859
		SK Energy Co., Ltd.		1,184		2,014		434		458		—		—
		Content Wavve Corp.		432		435		21,215		44,731		—		—
		SK Shieldus Co., Ltd.		7,169		13,504		39,961		78,057		4,814		6,498
		Eleven Street Co., Ltd.		8,450		15,513		6,479		12,986		—		—
		SK Planet Co., Ltd.		4,480		7,538		22,221		45,066		2,607		3,193
		SK hynix Inc.		12,755		22,904		13		52		—		—
		Dreamus Company		1,278		2,047		20,535		43,769		—		—
		One Store Co., Ltd.		4,136		8,284		4		6		—		—
		T map Mobility Co., Ltd.		6,447		10,512		1,308		2,569		—		—
		UbiNS Co., Ltd.		23		46		11,009		21,953		6,296		10,625
		SK Geo Centric Co., Ltd.		269		417		—		—		—		—
		SK Ecoplant Co., Ltd.		869		1,500		69		69		—		—
		SK RENT A CAR Co., Ltd.		3,858		5,723		3,890		7,705		—		—
		SK Magic Co., Ltd.		758		1,346		256		523		—		—
		Happy Narae Co., Ltd.		707		707		8,564		11,942		36,964		40,075
		Others		8,151		13,115		8,541		10,805		2,654		2,850
				70,616		120,555		322,330		718,795		54,119		64,100
			W	94,856		158,387		485,685		1,094,225		66,036		79,814

(*1) Operating expenses and others include lease payments by the Group.

(*2) Operating expenses and others include W163,514 million of dividends declared to be paid by the Parent Company.

(*3) Operating revenue and others include W12,410 million of dividends received from Korea IT Fund which was deducted from the investment in associates.

(*4) Operating expenses and others include costs for handset purchases amounting to W370,876 million.

72

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

31. Transactions with Related Parties, Continued

(3) Transactions with related parties for the six-month periods ended June 30, 2022 and 2021 are as follows, Continued:

(In millions of won)			For the period ended June 30, 2021
			Operating revenue and others				Operating expense and others(*1)				Acquisition of property and equipment and others
Scope	Company		Three- month		Six-month		Three- month		Six-month		Three- month		Six-month
Ultimate Controlling Entity		SK Inc.(*2)	W	9,048		18,140		96,905		382,271		24,741		26,909
Associates		F&U Credit information Co., Ltd.		759		1,545		12,489		25,204		—		—
		SK hynix Inc.(*3)		29,598		229,981		39		173		—		—
		HanaCard Co., Ltd.		1,663		1,683		669		1,511		—		—
		SK Wyverns Corp.(*4)		—		202		—		8,203		—		—
		Content Wavve Co., Ltd.		65		84		32,974		33,669		—		—
		Others(*5)		15,874		29,146		3,946		4,378		—		—
				47,959		262,641		50,117		73,138		—		—
Others		SK Ecoplant Co., Ltd. (Formerly, SK Engineering & Construction Co., Ltd.)		3,517		6,278		—		—		—		—
		SK Innovation Co., Ltd.		18,828		30,929		4,291		8,922		—		—
		SK Networks Co., Ltd.(*6)		4,286		7,271		200,041		501,512		—		24
		SK Networks Service Co., Ltd.		1,841		3,587		19,947		37,172		475		487
		SK Telesys Co., Ltd.		77		147		2,719		4,085		9,142		10,704
		SK TNS Co., Ltd.(*4)		16		75		2,531		6,868		35,525		57,903
		SK Energy Co., Ltd.		7,332		9,742		311		719		—		—
		SK hynix Semiconductor (China) Ltd.		10,448		26,371		—		—		—		—
		SK Battery Hungary Kft.		10,599		19,903		—		—		—		—
		SK Geo Centric Co., Ltd.		9,989		12,768		—		8		—		—
		SK Global Chemical International Trading (Shanghai) Co., Ltd.		4,263		7,769		—		—		—		—
		Happy Narae Co., Ltd.		2,461		4,542		6,376		10,980		38,619		43,560
		Others		25,496		57,195		38,725		76,549		22,125		27,718
				99,153		186,577		274,941		646,815		105,886		140,396
			W	156,160		467,358		421,963		1,102,224		130,627		167,305

(*1) Operating expense and others include lease payments by the Group.

(*2) Operating expense and others include W194,617 million of dividends paid by the Parent Company.

(*3) Operating revenue and others include W170,937 million of dividends received from SK hynix Inc. which was deducted from the investment in associates.

(*4) Transactions occurred before disposal.

(*5) Operating revenue and others include W10,716 million of dividends received from Korea IT Fund which was deducted from the investment in associates.

(*6) Operating expenses and others include costs for handset purchases amounting to W478,924 million.

73

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

31. Transactions with Related Parties, Continued

(4) Account balances with related parties as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)			June 30, 2022
			Receivables				Payables
Scope	Company		Loans		Accounts receivable– trade, etc.		Accounts payable –other, etc.
Ultimate Controlling Entity		SK Inc.	W	—		1,368		46,081
Associates		F&U Credit information Co., Ltd.		—		7		5,306
		Wave City Development Co., Ltd.(*1)		—		1,475		—
		Daehan Kanggun BcN Co., Ltd.(*2)		22,148		2,572		—
		HanaCard Co., Ltd.		—		1,071		11,333
		SK USA, Inc.		—		—		2,348
		Others		—		—		105
				22,148		5,125		19,092
		SK hynix Inc.		—		10,687		169
		SK Planet Co., Ltd.		—		1,785		30,389
		Eleven Street Co., Ltd.		—		4,272		12,278
		SK Shieldus Co., Ltd.		—		1,576		25,089
		SK Innovation Co., Ltd.		—		9,004		33,183
		SK Networks Co., Ltd.		—		1,404		129,492
		SK RENT A CAR Co., Ltd.		—		1,222		21,408
		Incross Co., Ltd.		—		3,241		11,451
		UbiNS Co., Ltd.		—		—		8,594
		Mintit Co., Ltd.		—		35,835		30
		Happy Narae Co., Ltd.		—		81		15,989
		Content Wavve Corp.		—		556		1,474
		Others		—		12,112		32,304
				—		81,775		321,850
			W	22,148		88,268		387,023

(*1) As of June 30, 2022, the Parent Company recognized loss allowance amounting to W620 million on accounts receivable—trade.

(*2) As of June 30, 2022, the Parent Company recognized full loss allowance for the balance of loans to Daehan Kanggun BcN Co., Ltd.

74

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

31. Transactions with Related Parties, Continued

(4) Account balances with related parties as of June 30, 2022 and December 31, 2021 are as follows, Continued:

(In millions of won)			December 31, 2021
			Receivables				Payables
Scope	Company		Loans		Accounts receivable– trade, etc.		Accounts payable –other, etc.
Ultimate Controlling Entity		SK Inc.	W	—		2,092		69,652
Associates		F&U Credit information Co., Ltd.		—		4		5,265
		Wave City Development Co., Ltd.(*1)		—		2,623		—
		Daehan Kanggun BcN Co., Ltd.(*2)		22,147		3,857		—
		HanaCard Co., Ltd.		—		529		48,020
		Others		—		84		1,197
				22,147		7,097		54,482
Others		SK Innovation Co., Ltd.		—		3,022		38,022
		SK Networks Co., Ltd.		—		241		198,631
		Mintit Co., Ltd.		—		17,929		131
		SK hynix Inc.		—		11,526		166
		Happy Narae Co., Ltd.		—		6		49,349
		SK m&service Co., Ltd.		—		1,453		18,921
		SK Shieldus Co., Ltd.		—		2,649		24,593
		Content Wavve Corp.		—		183		9,873
		Incross Co., Ltd.		—		3,610		11,829
		Eleven Street Co., Ltd.		—		2,851		7,782
		SK Planet Co., Ltd.		—		668		31,652
		SK RENT A CAR Co., Ltd.		—		116		16,715
		UbiNS Co., Ltd.		—		24		14,932
		Others		—		8,307		29,106
				—		52,585		451,702
			W	22,147		61,774		575,836

(*1) As of December 31, 2021, the Parent Company recognized loss allowance amounting to W1,102 million on accounts receivable—trade.

(*2) As of December 31, 2021, the Parent Company recognized full loss allowance for the balance of loans to Daehan Kanggun BcN Co., Ltd.

(5) The Group has granted SK REIT Co., Ltd. the right of first offer regarding the disposal of real estate owned by the Group. Whereby, the negotiation period is within 3 to 5 years from June 30, 2021, date of agreement, and the Group has been granted the right by SK REIT Co., Ltd. to lease the real estate in preference to a third party if SK REIT Co., Ltd. purchases the real estate from the Group.

(6) The details of additional investments and disposal of associates and joint ventures for the six-month period ended June 30, 2022 are as presented in note 11.

75

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

32. Commitments and Contingencies

(1) Collateral assets and commitments

SK Broadband Co., Ltd., a subsidiary of the Parent Company, has pledged its properties as collateral for leases on buildings in the amount of W1,513 million as of June 30, 2022.

Meanwhile, PanAsia Semiconductor Materials LLC., a subsidiary of the Parent Company, has pledged its W18,345 million of equity instruments at FVTPL on W12,998 million of short-term loans as of June 30, 2022.

(2) Legal claims and litigations

As of June 30, 2022, the Group is involved in various legal claims and litigation. Provision recognized in relation to these claims and litigation is immaterial. In connection with those legal claims and litigation for which no provision was recognized, management does not believe the Group has a present obligation, nor is it expected any of these claims or litigation will have a significant impact on the Group’s financial position or operating results in the event an outflow of resources is ultimately necessary.

(3) Accounts receivable from sale of handsets

The sales agents of the Parent Company sell handsets to the Parent Company’s subscribers on an installment basis. The Parent Company entered into comprehensive agreements to purchase accounts receivable from handset sales with retail stores and authorized dealers and to transfer the accounts receivable from handset sales to special purpose companies which were established with the purpose of liquidating receivables, respectively.

Accounts receivable from sales of handsets amounting to W381,759 million and W493,277 million as of June 30, 2022 and December 31, 2021, respectively, which the Parent Company purchased according to the relevant comprehensive agreement are recognized as accounts receivable—other and long-term accounts receivable—other.

76

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

33. Statements of Cash Flows

(1) Adjustments for income and expenses from operating activities for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	For the six-month period ended
	June 30, 2022			June 30, 2021
Interest income	W	(21,272	)		(24,984	)
Dividend income		(2,552	)		(2,083	)
Gain on foreign currency translations		(12,939	)		(7,239	)
Gain on sale of accounts receivable—other		(1,043	)		(14,266	)
Loss (gain) relating to investments in associates and joint ventures, net		24,869			(980,091	)
Gain on disposal of property and equipment and intangible assets		(8,777	)		(7,178	)
Gain on business transfer		—			(82,248	)
Gain relating to financial instruments at FVTPL		(10,653	)		(59,235	)
Other income		(4,566	)		(6,153	)
Interest expenses		149,801			173,799
Loss on foreign currency translations		11,329			5,749
Loss on sale of accounts receivable—other		8,006			—
Income tax expense		251,281			326,377
Expense related to defined benefit plan		68,321			99,526
Share compensation expense		75,783			2,882
Bonus paid by treasury shares		24,007			29,642
Depreciation and amortization		1,886,995			2,069,733
Bad debt expenses		15,373			14,863
Loss on disposal of property and equipment and intangible assets		3,856			16,960
Other bad debt expenses		1,443			209
Loss relating to financial instruments at FVTPL		18,534			112,792
Loss on impairment on other investment securities		—			281
Other expenses		17,627			4,028
	W	2,495,423			1,673,364

77

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

33. Statements of Cash Flows, Continued

(2) Changes in assets and liabilities from operating activities for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	For the six-month period ended
	June 30, 2022			June 30, 2021
Accounts receivable—trade	W	(83,058	)		(113,099	)
Accounts receivable—other		20,647			35,829
Advanced payments		10,464			(90,341	)
Prepaid expenses		49			16,739
Inventories		25,464			(39,949	)
Long-term accounts receivable—other		79,337			67,389
Contract assets		(11,661	)		(9,496	)
Guarantee deposits		11,119			11,772
Accounts payable—trade		(86,939	)		(65,690	)
Accounts payable—other		66,425			(235,354	)
Withholdings		72,678			(7,599	)
Contract liabilities		(219	)		9,548
Deposits received		255			(4,073	)
Accrued expenses		(38,623	)		(111,088	)
Provisions		(173	)		(15,155	)
Long-term provisions		(53	)		(59	)
Plan assets		28,129			33,924
Retirement benefits paid		(42,981	)		(59,746	)
Others		30,738			(3,649	)
	W81,598			(580,097)

(3) Significant non-cash transactions for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	For the six-month period ended
	June 30, 2022			June 30, 2021
Decrease in accounts payable—other relating to the acquisition of property and equipment and intangible assets	W	(260,588	)		(61,784	)
Increase of right-of-use assets		279,176			527,274
Contribution in kind for investments		—			11,070
Retirement of treasury shares		—			1,965,952

78

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

34. Emissions Liabilities

(1) The quantity of emissions rights allocated free of charge for each implementation year as of June 30, 2022 are as follows:

(In tCO2-eQ)
	Quantities allocated in 2020		Quantities allocated in 2021		Quantities allocated in 2022		Total
Emissions rights allocated free of charge		814,842		1,033,764		1,033,764		2,882,370

(2) Changes in emissions rights quantities the Parent Company held are as follows:

(In tCO2-eQ)
	Quantities allocated in 2020			Quantities allocated in 2021			Quantities allocated in the six-month period ended June 30, 2022			Total
Beginning		(60,977	)		—			(19,854	)		(80,831	)
Allocation at no cost		814,842			1,033,764			1,033,764			2,882,370
Additional allocation		217,643			—			—			217,643
Other changes		—			(2,238	)		(2,238	)		(4,476	)
Purchase		68,471			—			—			68,471
Surrender or shall be surrendered		(1,039,979	)		(1,051,380	)		(1,140,316	)		(3,231,675	)
Borrowed		—			19,854			—			19,854
Ending		—			—			(128,644	)		(128,644	)

(3) As of June 30, 2022, the estimated annual greenhouse gas emissions quantities of the Parent Company are 1,140,316 tCO2-eQ.

35. Non-current Assets Held for Sale

On February 25, 2021, the Parent Company has decided to dispose of the investments in an associate engaged in mobility business to T map Mobility Co., Ltd. pursuant to the approval of the Board of Directors and reclassified entire shares of the investments in associates as non-current assets held for sale. The disposal of the investments in associates is expected to take place in 2022 after approval by the Financial Services Commission.

(In millions of won)
		June 30, 2022
Investments in associates	Carrot General Insurance Co., Ltd.		W8,734

79

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

36. Spin-off

(1) In accordance with the resolution of the Board of Directors held on June 10, 2021 and approval from shareholders’ meeting held on October 12, 2021, the Parent Company completed the spin-off of its businesses of managing investments in semiconductor, New Information and Communication Technologies(“ICT”) and other business and making new investments on November 1, 2021, and the registration of the spin-off was completed as of November 2, 2021. The details of the spin-off are as follows:

Method of spin-off	Horizontal spin-off
Company	SK Telecom Co., Ltd. (Surviving Company)
	SK Square Co., Ltd. (Spin-off Company)
Effective date of spin-off	November 1, 2021

(2) The details of financial information due to the spin-off of its businesses of managing investments in semiconductor, New ICT and other business and making new investments are as follows:

1) Statements of Profit or Loss

The details of profit or loss of discontinued operations for the six-month period ended June 30, 2021 are as follows:

(In millions of won)
	For the six-month period ended June 30, 2021
Operating revenue	W	1,360,490
Operating expenses:		1,345,040
Labor		489,073
Commission		185,043
Depreciation and amortization		172,170
Network interconnection		495
Advertising		87,231
Rent		737
Cost of goods sold		227,621
Others		182,670
Operating profit		15,450
Finance income		29,129
Finance costs		58,243
Gain relating to investments in associates and joint ventures,		572,774
Other non-operating income		84,505
Other non-operating expenses		13,670
Profit before income tax		629,945
Income tax benefit		58,759
Profit for the period	W	571,186

80

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

36. Spin-off, Continued

(2) The details of financial information due to the spin-off of its businesses of managing investments in semiconductor, New ICT and other business and making new investments are as follows, Continued:

2) Statements of Cash Flows

The details of cash flows from discontinued operations for the six-month period ended June 30, 2021 are as follows:

(In millions of won)
	For the six-month period ended June 30, 2021
Cash flows from operating activities	W	61,545
Cash flows from investing activities		(676,533	)
Cash flows from financing activities		520,149

(3) Subsequent to the spin-off, the Parent Company lost control over the related businesses. The spin-off was accounted for by derecognizing all related assets and liabilities. The net assets of the spin-off business as of spin-off date was recognized in capital surplus and others. The details of assets and liabilities derecognized from the consolidated financial statements due to the spin-off of its businesses of managing investments in semiconductor, New ICT and other business and making new investments are as follows:

(In millions of won)
	December 31, 2021
Current assets	W	2,608,601
Non-current assets		19,269,615
Total assets	W	21,878,216
Current liabilities	W	2,161,458
Non-current liabilities		4,676,324
Total liabilities	W	6,837,782
Net assets	W	15,040,434

(4) As of November 1, 2021, the Parent Company has split the business division for the purpose of new investment and management of shares in related investee companies belong to semiconductors and New ICT sector. The Parent Company has obligation to jointly and severally reimburse the Parent Company’s liabilities incurred prior to the spin-off with SK Square Co., Ltd., the spin-off company, in accordance with Article 530-9 (1) of Korean Commercial Act.

37. Subsequent Events

(1) The Board of Directors of the Parent Company resolved to pay interim dividend at the Board’s meeting on July 28, 2022, and the details are as follows:

Classification	Description
Interim dividend amount	W830 per share (Total amount: W180,967 million)
Dividend rate	1.55%
Dividend date	June 30, 2022
Date of distribution	According to Article 165 of Capital Market and Financial Investment Business Act 12-3, the Parent Company plans to distribute dividends by August 17, 2022.

81

SK TELECOM CO., LTD. and its Subsidiaries

Notes to the Interim Consolidated Financial Statements

June 30, 2022 and 2021 (Unaudited)

37. Subsequent Events, Continued

(2) The Board of Directors of the Parent Company resolved the acquisition and disposal of certain shares in order to strengthen the strategic alliance with Hana Financial Group Inc.(“HFG”) at the Board’s meeting on July 22, 2022.

In accordance with the resolution, on July 27, 2022, the Parent Company disposed of entire common shares of HanaCard Co., Ltd. (39,902,323 shares) and entire common shares of Finnq Co., Ltd. (6,370,000 shares) to HFG at W330,032 million and W5,733 million, respectively. Through the agreement with HFG, the Parent Company is obligated to acquire HFG’s common shares from July 27, 2022 to January 31, 2024, after depositing W330,032 million in a specific money trust.

Meanwhile, the Parent Company disposed of entire common shares of SK Square Co., Ltd. (767,011 shares) on July 27, 2022 to HanaCard Co., Ltd. at W31,563 million, and HanaCard Co., Ltd. is obligated to acquire the Parent Company’s common shares from July 27, 2022 to January 31, 2024, after depositing W68,437 million in a specific money trust.

The shares acquired by the Parent Company, HFG, and HanaCard Co., Ltd. through the aforementioned transaction cannot be disposed until March 31, 2025.

82

SK TELECOM CO., LTD.

Interim Separate Financial Statements

For the Six-Month Period ended June 30, 2022

(With Independent Auditor’s Review Report Thereon)

Contents

	Page
Report on review of interim separate financial statements
Interim Separate Financial Statements
Interim Separate Statements of Financial Position		4
Interim Separate Statements of Profit or Loss		6
Interim Separate Statements of Comprehensive Income (Loss)		7
Interim Separate Statements of Changes in Equity		8
Interim Separate Statements of Cash Flows		9
Notes to the Interim Separate Financial Statements		11

Report on review of interim separate financial statements

(English Translation of a Report Originally Issued in Korean)

The Shareholders and Board of Directors

SK Telecom Co., Ltd.

We have reviewed the accompanying interim separate financial statements of SK Telecom Co., Ltd. (the “Company”), which comprise the interim separate statement of financial position as of June 30, 2022, and the related interim separate statements of profit or loss and interim separate statements of comprehensive income (loss) for the three-month and six-month periods ended June 30, 2022, interim separate statement of changes in equity and interim separate statement of cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the interim separate financial statements

Management is responsible for the preparation and fair presentation of these interim separate financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea(“KIFRS”) 1034 Interim Financial Reporting, and for such internal controls as management determines is necessary to enable the preparation of interim separate financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on these interim separate financial statements based on our review.

We conducted our review in accordance with the Review Standards for Quarterly and Semiannual Financial Statements established by the Securities and Futures Commission of Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing (“KSAs”)and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim separate financial statements are not prepared fairly, in all material respects, in accordance with KIFRS 1034 Interim Financial Reporting.

1

Other matters

The interim separate statements of profit or loss and interim separate statements of comprehensive income for the three-month and six-month period ended June 30, 2021, interim separate statement of changes in equity and interim separate statement of cash flows for the six-month period ended June 30, 2021, prepared in accordance with K-IFRS 1034 and presented for comparative purpose, have been reviewed by KPMG Samjong Accounting Corp. whose review report dated August 13, 2021 expressed an unqualified review conclusion.

Moreover, the separate statement of financial position as of December 31, 2021, and the related separate statement of profit or loss, separate statement of comprehensive income, separate statement of changes in equity and separate statement of cash flows for the year then ended which have been audited by KPMG Samjong Accounting Corp., in accordance with KSAs (not presented herein), whose report dated March 10, 2022 expressed an unqualified opinion. The accompanying separate statement of financial position as of December 31, 2021 presented for comparative purpose is not different, in all material respects, from the above audited separate statement of financial position.

August 12, 2022

This report is effective as of August 12, 2022, the independent auditor’s review report date. Accordingly, certain material subsequent events or circumstances may have occurred during the period from the independent auditor’s review report date to the time this review report is used. Such events and circumstances could significantly affect the accompanying interim separate financial statements and may result in modification to this review report.

2

SK TELECOM CO., LTD. (the “Company”)

INTERIM SEPARATE FINANCIAL STATEMENTS

AS OF JUNE 30, 2022 AND DECEMBER 31, 2021 AND

FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2022 AND 2021

The accompanying interim separate financial statements, including all footnote disclosures, were prepared by, and are the responsibility of, the Company.

Ryu, Young-Sang

Chief Executive Officer

SK TELECOM CO., LTD.

3

SK TELECOM CO., LTD.

Interim Separate Statements of Financial Position

As of June 30, 2022 and December 31, 2021

(In millions of won)	Note		June 30, 2022 (Unaudited)		December 31, 2021
Assets
Current Assets:
Cash and cash equivalents		27,28	W	142,186		158,823
Short-term financial instruments		27,28		598,511		379,000
Accounts receivable – trade, net		4,27,28,29		1,529,083		1,514,260
Short-term loans, net		4,27,28		61,191		62,724
Accounts receivable – other, net		4,27,28,29,30		526,906		520,956
Contract assets		6,28		11,374		10,078
Prepaid expenses		5		1,935,726		1,913,419
Guarantee deposits		4,27,28,29		57,811		51,739
Derivative financial assets		27,28		141,582		25,428
Inventories, net				16,044		8,962
Non-current assets held for sale		33		20,000		20,000
Advanced payments and others		4,27,28		15,957		16,104
				5,056,371		4,681,493
Non-Current Assets:
Long-term financial instruments		27,28		354		354
Long-term investment securities		7,27,28		1,013,494		1,476,361
Investments in subsidiaries, associates and joint ventures		8,33		4,910,867		4,841,139
Property and equipment, net		9,11,29		9,219,349		9,318,408
Investment property, net		10		53,990		45,100
Goodwill				1,306,236		1,306,236
Intangible assets, net		12		2,888,175		3,203,330
Long-term loans, net		4,27,28,29		253		201
Long-term accounts receivable – other		4,27,28,30		216,767		287,179
Long-term contract assets		6,28		20,458		19,399
Long-term prepaid expenses		5		931,201		951,441
Guarantee deposits		4,27,28,29		95,486		106,091
Long-term derivative financial assets		27,28		161,589		152,084
Defined benefit assets		16		3,612		—
Other non-current assets				249		249
				20,822,080		21,707,572
Total Assets			W	25,878,451		26,389,065

(Continued)

4

SK TELECOM CO., LTD.

Interim Separate Statements of Financial Position, Continued

As of June 30, 2022 and December 31, 2021

(In millions of won)	Note		June 30, 2022 (Unaudited)			December 31, 2021
Liabilities and Equity
Current Liabilities:
Accounts payable – other		27,28,29	W	1,862,825			2,072,195
Contract liabilities		6		71,408			72,624
Withholdings		27,28		668,506			608,069
Accrued expenses		27,28		742,974			764,863
Current tax liabilities		25		165,223			158,837
Provisions		15,32		58,282			54,137
Current portion of long-term debt, net		13,27,28		1,714,906			976,195
Lease liabilities		27,28,29		339,480			316,169
Current portion of long-term payables – other		14,27,28		395,549			398,823
Other current liabilities		27,28		12,649			4,565
			6,031,802			5,426,477
Non-Current Liabilities:
Debentures, excluding current portion, net		13,27,28		5,169,499			5,835,400
Long-term borrowings, excluding current portion, net		13,27,28		650,000			300,000
Long-term payables – other		14,27,28		1,228,965			1,611,010
Long-term contract liabilities		6		14,387			9,149
Long-term derivative financial liabilities		27,28		321,025			321,025
Long-term lease liabilities		27,28,29		1,065,132			1,045,926
Long-term provisions		15		37,571			42,432
Deferred tax liabilities		25		807,101			883,311
Defined benefit liabilities		16		—			6,902
Other non-current liabilities		27,28		45,247			44,577
			9,338,927			10,099,732
Total Liabilities				15,370,729			15,526,209
Equity:
Share capital		1,17		30,493			30,493
Capital surplus and others		17,18		(4,504,888	)		(4,576,271	)
Retained earnings		19		14,717,055			14,770,618
Reserves		20		265,062			638,016
Total Equity				10,507,722			10,862,856
Total Liabilities and Equity			W	25,878,451			26,389,065

The accompanying notes are an integral part of the interim separate financial statements.

5

SK TELECOM CO., LTD.

Interim Separate Statements of Profit or Loss

For the three-month and six-month periods ended June 30, 2022 and 2021

(In millions of won, except for earnings per share)
			2022 (Unaudited)						2021 (Unaudited)
	Note		Three-month period ended June 30			Six-month period ended June 30			Three-month period ended June 30			Six-month period ended June 30
Operating revenue:		21,29
Revenue			W	3,118,232			6,195,625			3,021,605			6,002,323
Operating expenses:		29
Labor				237,698			529,561			208,606			456,151
Commission		5		1,177,640			2,332,372			1,201,858			2,375,218
Depreciation and amortization				671,179			1,349,043			692,938			1,381,306
Network interconnection				140,420			284,466			137,323			278,592
Leased lines				47,075			92,957			54,724			109,720
Advertising				34,944			51,823			21,041			34,243
Rent				27,841			55,936			26,987			56,542
Cost of goods sold				133,741			258,768			113,126			216,023
Others		22		266,811			502,875			236,642			458,866
				2,737,349			5,457,801			2,693,245			5,366,661
Operating profit				380,883			737,824			328,360			635,662
Finance income		24		22,666			68,398			25,875			259,718
Finance costs		24		(72,316	)		(139,566	)		(150,101	)		(208,465	)
Other non-operating income		23		5,671			19,302			27,730			31,259
Other non-operating expenses		23		(8,518	)		(19,895	)		(10,563	)		(16,008	)
Gain (loss) relating to investments in subsidiaries and associates, net		8		—			950			(662	)		99,338
Profit before income tax				328,386			667,013			220,639			801,504
Income tax expense		25		103,924			190,533			36,628			151,480
Profit for the period			W	224,462			476,480			184,011			650,024
Earnings per share:		26
Basic earnings per share (in won)			W	1,013			2,152			507			1,806
Diluted earnings per share (in won)				1,012			2,151			506			1,805

The accompanying notes are an integral part of the interim separate financial statements.

6

SK TELECOM CO., LTD.

Interim Separate Statements of Comprehensive Income (Loss)

For the three-month and six-month periods ended June 30, 2022 and 2021

(In millions of won)
			2022 (Unaudited)						2021 (Unaudited)
	Note		Three-month period ended June 30			Six-month period ended June 30			Three-month period ended June 30		Six-month period ended June 30
Profit for the period			W	224,462			476,480			184,011		650,024
Other comprehensive income (loss):
Items that will never be reclassified to profit or loss, net of taxes:
Remeasurement of defined benefit plans		16		4,681			19,208			4,998		(11,731	)
Valuation gain (loss) on financial assets at fair value through other comprehensive income		20		(311,600	)		(368,821	)		528,206		699,526
Items that are or may be reclassified subsequently to profit or loss, net of taxes:
Net change in unrealized fair value of derivatives		20		(765	)		(3,873	)		11,190		9,560
Other comprehensive income (loss) for the period, net of taxes				(307,684	)		(353,486	)		544,394		697,355
Total comprehensive income (loss)			W	(83,222	)		122,994			728,405		1,347,379

The accompanying notes are an integral part of the interim separate financial statements.

7

SK TELECOM CO., LTD.

Interim Separate Statements of Changes in Equity

For the six-month periods ended June 30, 2022 and 2021

(In millions of won)			Share capital		Capital surplus and others																Retained earnings			Reserves			Total equity
	Note				Paid-in surplus		Treasury shares			Hybrid bonds		Share option			Other			Sub-total
Balance as of January 1, 2021			W	44,639		2,915,887		(2,123,661	)		398,759		1,481			(903,332	)		289,134			16,684,640			331,445			17,349,858
Total comprehensive income:
Profit for the period				—		—		—			—		—			—			—			650,024			—			650,024
Other comprehensive income (loss)		16,20		—		—		—			—		—			—			—			(11,731	)		709,086			697,355
				—		—		—			—		—			—			—			638,293			709,086			1,347,379
Transactions with owners:
Annual dividends				—		—		—			—		—			—			—			(641,944	)		—			(641,944	)
Share option		18		—		—		—			—		226			—			226			—			—			226
Interest on hybrid bonds				—		—		—			—		—			—			—			(7,383	)		—			(7,383	)
Acquisition of treasury shares		17		—		—		(72,982	)		—		—			—			(72,982	)		—			—			(72,982	)
Disposal of treasury shares		17		—		—		27,096			—		—			2,707			29,803			—			—			29,803
Retirement of treasury shares		17		—		—		1,965,952			—		—			—			1,965,952			(1,965,952	)		—			—
				—		—		1,920,066			—		226			2,707			1,922,999			(2,615,279	)		—			(692,280	)
Balance as of June 30, 2021 (Unaudited)			W	44,639		2,915,887		(203,595	)		398,759		1,707			(900,625	)		2,212,133			14,707,654			1,040,531			18,004,957
Balance as of January 1, 2022			W	30,493		1,771,000		(57,314	)		398,759		47,166			(6,735,882	)		(4,576,271	)		14,770,618			638,016			10,862,856
Total comprehensive income (loss):
Profit for the period				—		—		—			—		—			—			—			476,480			—			476,480
Other comprehensive income (loss)		16,20		—		—		—			—		—			—			—			19,468			(372,954	)		(353,486	)
				—		—		—			—		—			—			—			495,948			(372,954	)		122,994
Transactions with owners:
Annual dividends				—		—		—			—		—			—			—			(361,186	)		—			(361,186	)
Interim dividends				—		—		—			—		—			—			—			(180,942	)		—			(180,942	)
Share option		18		—		—		—			—		47,111			28,379			75,490			—			—			75,490
Interest on hybrid bonds				—		—		—			—		—			—			—			(7,383	)		—			(7,383	)
Transactions of treasury shares		17,18		—		—		20,612			—		(92,234	)		67,515			(4,107	)		—			—			(4,107	)
				—		—		20,612			—		(45,123	)		95,894			71,383			(549,511	)		—			(478,128	)
Balance as of June 30, 2022 (Unaudited)			W	30,493		1,771,000		(36,702	)		398,759		2,043			(6,639,988	)		(4,504,888	)		14,717,055			265,062			10,507,722

The accompanying notes are an integral part of the interim separate financial statements.

8

SK TELECOM CO., LTD.

Interim Separate Statements of Cash Flows

For the six-month periods ended June 30, 2022 and 2021

(In millions of won)
	Note		2022 (Unaudited)			2021 (Unaudited)
Cash flows from operating activities:
Cash generated from operating activities:
Profit for the period			W	476,480			650,024
Adjustments for income and expenses		31		1,821,131			1,511,444
Changes in assets and liabilities related to operating activities		31		39,912			(302,543	)
				2,337,523			1,858,925
Interest received				11,632			11,484
Dividends received				49,637			195,315
Interest paid				(105,538	)		(102,678	)
Income tax paid				(169,301	)		(162,058	)
Net cash provided by operating activities				2,123,953			1,800,988
Cash flows from investing activities:
Cash inflows from investing activities:
Decrease in short-term financial instruments, net				—			202,000
Collection of short-term loans				59,287			77,046
Proceeds from disposals of long-term investment securities				689			8,192
Proceeds from disposals of investments in subsidiaries, associates and joint ventures				6,348			130,626
Proceeds from disposals of property and equipment				1,118			6,366
Proceeds from disposals of intangible assets				2,600			632
				70,042			424,862
Cash outflows for investing activities:
Increase in short-term financial instruments, net				(219,511	)		—
Increase in short-term loans				(57,791	)		(44,652	)
Acquisitions of long-term investment securities				(36,640	)		(13,399	)
Acquisitions of investments in subsidiaries, associates and joint ventures				(66,230	)		(372,618	)
Acquisitions of property and equipment				(1,003,383	)		(872,523	)
Acquisitions of intangible assets				(11,951	)		(5,766	)
				(1,395,506	)		(1,308,958	)
Net cash used in investing activities			W	(1,325,464	)		(884,096	)

(Continued)

9

SK TELECOM CO., LTD.

Interim Separate Statements of Cash Flows, Continued

For the six-month periods ended June 30, 2022 and 2021

(In millions of won)
	Note	2022 (Unaudited)			2021 (Unaudited)
Cash flows from financing activities:
Cash inflows from financing activities:
Proceeds from long-term borrowings		W	350,000			300,000
Proceeds from issuance of debentures			348,503			308,757
Cash inflows from settlement of derivatives			768			10
			699,271			608,767
Cash outflows for financing activities:
Repayments of long-term borrowings			(7,096	)		(6,417	)
Repayments of long-term payables – other			(400,245	)		(425,349	)
Repayments of debentures			(400,000	)		(260,000	)
Payments of dividends			(542,104	)		(641,944	)
Payments of interest on hybrid bonds			(7,383	)		(7,383	)
Repayments of lease liabilities			(157,571	)		(155,424	)
Acquisition of treasury shares			—			(72,982	)
			(1,514,399	)		(1,569,499	)
Net cash used in financing activities			(815,128	)		(960,732	)
Net decrease in cash and cash equivalents			(16,639	)		(43,840	)
Cash and cash equivalents at beginning of the period			158,823			329,208
Effects of exchange rate changes on cash and cash equivalents			2			9
Cash and cash equivalents at end of the period		W	142,186			285,377

The accompanying notes are an integral part of the interim separate financial statements.

10

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

1. Reporting Entity

SK Telecom Co., Ltd. (“the Company”) was incorporated in March 1984 under the laws of the Republic of Korea (“Korea”) to provide cellular telephone communication services in Korea. The Company mainly provides wireless telecommunications services in Korea. The head office of the Company is located at 65, Eulji-ro, Jung-gu, Seoul, Korea.

The Company’s common shares and depositary receipts(“DRs”) are listed on the Stock Market of Korea Exchange, the New York Stock Exchange and the London Stock Exchange. As of June 30, 2022, the Company’s total issued shares are held by the following shareholders:

	Number of shares		Percentage of total shares issued (%)
SK Inc.		65,668,397		30.01
National Pension Service		16,429,365		7.51
Institutional investors and other shareholders		132,087,804		60.35
Kakao Corp.		3,846,487		1.76
Treasury shares		801,091		0.37
		218,833,144		100.00

On November 1, 2021, the date of spin-off, the Company completed the spin-off of its businesses of managing investments in semiconductor, New Information and Communication Technologies(“ICT”) and other businesses and making new investments.

2. Basis of Preparation

(1) Statement of compliance

These interim condensed separate financial statements were prepared in accordance with Korean International Financial Reporting Standard (“K-IFRS”) 1034 Interim Financial Reporting as part of the period covered by the Company’s K-IFRS annual financial statements. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since December 31, 2021. These interim separate financial statements do not include all of the disclosures required for full annual financial statements. The accompanying interim separate financial statements have been translated into English from the Korean language financial statements. In the event of any differences in interpreting the financial statements or the independent auditors’ review report thereon, the Korean version, which is used for regulatory reporting purposes, shall prevail.

These interim financial statements are interim separate financial statements prepared in accordance with K-IFRS 1027 Separate Financial Statements presented by a parent, an investor with joint control of or significant influence over an investee, in which the investments are accounted for at cost.

11

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

2. Basis of Preparation, Continued

(2) Use of estimates and judgments

1) Critical judgments, assumptions and estimation uncertainties

The preparation of the interim separate financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these interim separate financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the separate financial statements as of and for the year ended December 31, 2021.

2) Fair value measurement

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has established policies and processes with respect to the measurement of fair values, including Level 3 fair values, and the measurement of fair values is reviewed and is directly reported to the finance executives.

The Company regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the Company assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of K-IFRS, including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Information about assumptions used for fair value measurements is included in note 28.

12

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

3. Significant Accounting Policies

The significant accounting policies applied by the Company in these interim separate financial statements are the same as those applied by the Company in its separate financial statements as of and for the year ended December 31, 2021, except for the adoption of new and revised K-IFRS applied from January 1, 2022, which are summarized below. The Company has not early applied the new and revised K-IFRS and interpretations that have been issued but are not yet effective.

The following new and amended K-IFRS and interpretations are effective from January 1, 2022, initially, but these amended standards are not expected to have a significant impact on the Company’s interim separate financial statements.

• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to K-IFRS 1037).

• Reference to Conceptual Framework (Amendments to K-IFRS 1103).

• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to K-IFRS 1016).

• Annual Improvements to K-IFRS 2018-2020.

13

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

4. Trade and Other Receivables

(1) Details of trade and other receivables as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)	June 30, 2022
	Gross amount		Loss allowance			Carrying amount
Current assets:
Accounts receivable – trade	W	1,620,598		(91,515	)		1,529,083
Short-term loans		61,809		(618	)		61,191
Accounts receivable – other(*)		561,003		(34,097	)		526,906
Guarantee deposits		57,811		—			57,811
Accrued income		557		—			557
		2,301,778		(126,230	)		2,175,548
Non-current assets:
Long-term loans		41,290		(41,037	)		253
Long-term accounts receivable – other(*)		216,767		—			216,767
Guarantee deposits		95,486		—			95,486
		353,543		(41,037	)		312,506
	W	2,655,321		(167,267	)		2,488,054

(*) Gross and carrying amounts of accounts receivable – other as of June 30, 2022 include W353,068 million of financial instruments classified as fair value through profit or loss (“FVTPL”).

(In millions of won)	December 31, 2021
	Gross amount		Loss allowance			Carrying amount
Current assets:
Accounts receivable – trade	W	1,607,022		(92,762	)		1,514,260
Short-term loans		63,358		(634	)		62,724
Accounts receivable – other(*)		556,141		(35,185	)		520,956
Guarantee deposits		51,739		—			51,739
Accrued income		331		—			331
		2,278,591		(128,581	)		2,150,010
Non-current assets:
Long-term loans		41,238		(41,037	)		201
Long-term accounts receivable – other(*)		287,179		—			287,179
Guarantee deposits		106,091		—			106,091
		434,508		(41,037	)		393,471
	W	2,713,099		(169,618	)		2,543,481

(*) Gross and carrying amounts of accounts receivable – other as of December 31, 2021 include W459,959 million of financial instruments classified as fair value through profit or loss (“FVTPL”).

14

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

4. Trade and Other Receivables, Continued

(2) Changes in the loss allowance on trade and other receivables measured at amortized cost for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	January 1, 2022		Impairment		Write-offs(*)			Collection of receivables previously written-off		June 30, 2022
Accounts receivable – trade	W	92,762		9,519		(15,503	)		4,737		91,515
Accounts receivable – other, etc.		76,856		1,112		(3,059	)		843		75,752
	W	169,618		10,631		(18,562	)		5,580		167,267

(In millions of won)
	January 1, 2021		Impairment		Write-offs(*)			Collection of receivables previously written-off		June 30, 2021
Accounts receivable – trade	W	102,308		4,101		(16,712	)		5,031		94,728
Accounts receivable – other, etc.		76,170		823		(2,634	)		933		75,292
	W	178,478		4,924		(19,346	)		5,964		170,020

(*) The Company writes off trade and other receivables that are determined to be uncollectable due to reasons such as termination of operations or bankruptcy.

(3) The Company applies the practical expedient that allows the Company to estimate the loss allowance for accounts receivable – trade at an amount equal to the lifetime expected credit losses. The expected credit losses include the forward-looking information. To make the assessment, the Company uses its historical credit loss experience over the past three years and classifies accounts receivable – trade by their credit risk characteristics and days overdue.

As the Company is a wireless telecommunications service provider, the Company’s financial assets measured at amortized cost primarily consist of receivables from numerous individual customers, and, therefore, no significant credit concentration risk arises.

Receivables related to other revenue mainly consist of receivables from corporate customers. The Company transacts only with corporate customers with credit ratings that are considered to be low at credit risk. In addition, the Company is not exposed to significant credit concentration risk as the Company regularly assesses their credit risk by monitoring their credit ratings. While the contract assets are subject to the impairment requirements, no significant expected credit loss has been identified.

15

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

5. Prepaid Expenses

The Company pays commissions to its retail stores and authorized dealers for wireless telecommunications services. The Company capitalized certain costs associated with commissions paid to retail stores and authorized dealers to obtain new and retained customer contracts as prepaid expenses. These prepaid expenses are amortized on a straight-line basis over the periods that the Company expects to maintain its customers.

(1) Details of prepaid expenses as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Current assets:
Incremental costs of obtaining contracts	W	1,890,592		1,878,149
Others		45,134		35,270
	W	1,935,726		1,913,419
Non-current assets:
Incremental costs of obtaining contracts	W	908,912		931,655
Others		22,289		19,786
	W	931,201		951,441

(2) Incremental costs of obtaining contracts

The amortization in connection with incremental costs of obtaining contracts recognized for the three and six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Amortization recognized	W	599,939		1,204,736		655,959		1,296,499

16

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

6. Contract Assets and Liabilities

In case of providing both wireless telecommunication services and sales of handsets, the Company allocated the consideration based on relative stand-alone selling prices and recognized unbilled receivables from handset sales as contract assets. The Company recognized receipts in advance for prepaid telecommunications services and unearned revenue for customer loyalty programs as contract liabilities.

(1) Details of contract assets and liabilities as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Contract assets:
Allocation of consideration between performance obligations	W	31,832		29,477
Contract liabilities:
Wireless service contracts		18,350		18,397
Customer loyalty programs		8,874		12,699
Others		58,571		50,677
	W	85,795		81,773

(2) The amount of revenue recognized for the six-month periods ended June 30, 2022 and 2021 related to the contract liabilities carried forward from the previous year are W31,906 million and W41,902 million, respectively.

17

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

7. Investment Securities

(1) There were no short-term investment securities as of June 30, 2022 and December 31, 2021.

(2) Details of long-term investment securities as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	Category		June 30, 2022		December 31, 2021
Equity instruments		FVOCI(*)	W	909,260		1,383,223
Debt instruments		FVTPL		104,234		93,138
			W	1,013,494		1,476,361

(*) The Company designated investments in equity instruments that are not held for trading as financial assets at FVOCI, and the amounts of those equity instruments as of June 30, 2022 and December 31, 2021 are W909,260 million and W1,383,223 million, respectively.

18

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

8. Investments in Subsidiaries, Associates and Joint Ventures

(1) Investments in subsidiaries, associates and joint ventures as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Investments in subsidiaries	W	3,218,198		3,148,741
Investments in associates and joint ventures		1,692,669		1,692,398
	W	4,910,867		4,841,139

(2) Details of investments in subsidiaries as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won, except for share data)
	June 30, 2022						December 31, 2021
	Number of shares		Ownership (%)		Carrying amount		Carrying amount
SK Telink Co., Ltd.		1,432,627		100.0	W	243,988		243,988
SK Broadband Co., Ltd.		298,460,212		74.3		2,195,452		2,195,452
SK Communications Co., Ltd.		43,427,530		100.0		24,927		24,927
PS&Marketing Corporation		66,000,000		100.0		313,934		313,934
SERVICE ACE Co., Ltd.		4,385,400		100.0		21,927		21,927
SK Telecom China Holdings Co., Ltd.		—		100.0		48,096		48,096
SK Telecom Americas, Inc.		122		100.0		31,203		31,203
Atlas Investment(*1)		—		100.0		159,287		155,656
SK stoa Co., Ltd.		3,631,355		100.0		40,029		40,029
Broadband Nowon Co., Ltd.		1,140,000		100.0		19,975		19,975
Quantum Innovation Fund I(*2)		—		59.9		11,626		11,935
SAPEON Korea Inc.(*3)		200,000		100.0		17,907		—
SAPEON Inc.(*3)		4,000		62.5		48,228		—
SK O&S Co., Ltd. and others		—		—		41,619		41,619
					W	3,218,198		3,148,741

(*1) The Company additionally acquired shares for the six-month period ended June 30, 2022, but there is no change in the ownership interest.

(*2) The Company additionally contributed W240 million in cash for the six-month period ended June 30, 2022, and W549 million of investment was returned to the Company after the additional contribution, but there is no change in the ownership interest.

(*3) The Company newly established SAPEON Korea Inc. and SAPEON Inc., and the ownership interest of the Company in SAPEON Inc. has changed from 100% to 62.5% due to unequal paid-in capital increase of SAPEON Inc. for the six-month period ended June 30, 2022.

19

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

8. Investments in Subsidiaries, Associates and Joint Ventures, Continued

(3) Details of investments in associates and joint ventures as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won, except for share data)
	June 30, 2022						December 31, 2021
	Number of shares		Ownership (%)		Carrying amount		Carrying amount
Investments in associates:
SK China Company Ltd.		10,928,921		27.3	W	601,192		601,192
Korea IT Fund(*1)		190		63.3		220,957		220,957
HanaCard Co., Ltd.(*2)		39,902,323		15.0		253,739		253,739
SK Technology Innovation Company		14,700		49.0		45,864		45,864
S.M. Culture & Contents Co., Ltd.		22,033,898		23.1		65,341		65,341
SK South East Asia Investment Pte. Ltd.		300,000,000		20.0		344,240		344,240
Pacific Telecom Inc.(*2)		1,734,109		15.0		36,487		36,487
Digital Games International Pte. Ltd.(*2,3)		4,900,000		16.3		2,224		4,539
Invites Healthcare Co., Ltd.		489,999		27.1		35,000		35,000
CMES Inc.(*2,4)		42,520		7.7		900		—
12CM JAPAN and others(*2,5)		—		—		75,550		75,864
						1,681,494		1,683,223
Investments in joint ventures:
Finnq Co., Ltd.(*7)		6,370,000		49.0		7,175		7,175
UTC Kakao-SK Telecom ESG Fund(*6,7)		—		48.2		4,000		2,000
						11,175		9,175
					W	1,692,669		1,692,398

(*1) Investments in Korea IT Fund was classified as investment in associates as the Company does not have control over the investee under the contractual agreement with other shareholders.

20

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

8. Investments in Subsidiaries, Associates and Joint Ventures, Continued

(3) Details of investments in associates and joint ventures as of June 30, 2022 and December 31, 2021 are as follows, Continued:

(*2) These investments were classified as investments in associates as the Company can exercise significant influence through its right to appoint the members of the Board of Directors even though the Company has less than 20% of equity interests.

(*3) The Company disposed the shares of Digital Games International Pte. Ltd. (W2,315 million) for the six-month period ended June 30, 2022.

(*4) As the Company obtained significant influence over the investee, W900 million of financial assets at FVOCI are reclassified to investments in associates for the six-month period ended June 30, 2022.

(*5) The Company additionally contributed W2,000 million in cash to Smart SKT-Infinitum Game Fund for the six-month period ended June 30, 2022. Meanwhile, the Company disposed the shares of Start-up Win-Win Fund (W4,850 million) at W5,800 million in cash from which it recognized W950 million of gain relating to investments in associates for the six-month period ended June 30, 2022. In addition, the Company newly contributed W2,000 million in cash to KB ESG Fund of the three telecommunications companies for the six-month period ended June 30, 2022.

(*6) The Company additionally contributed W2,000 million in cash for the six-month period ended June 30, 2022, but there is no change in the ownership interest.

(*7) These investments were classified as investments in joint ventures as the Company has a joint control pursuant to the agreement with the other shareholders.

(4) The market value of investments in listed associates as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won, except for share data)

June 30, 2022

December 31, 2021

Market price per share (in won)

Number of shares

Market value

Market price per share (in won)

Number of shares

Market value

S.M.Culture & Contents Co., Ltd.

W

3,100

22,033,898

68,305

4,485

22,033,898

98,822

21

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

9. Property and Equipment

Changes in property and equipment for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended June 30, 2022
	Beginning balance		Acquisition		Disposal			Transfer			Depreciation			Ending balance
Land	W	621,614		—		(8	)		14,943			—			636,549
Buildings		564,976		237		(112	)		25,076			(20,513	)		569,664
Structures		290,813		21		(20	)		8,340			(19,044	)		280,110
Machinery		5,331,485		18,001		(35,854	)		727,039			(792,703	)		5,247,968
Right-of-use assets		1,370,897		226,978		(19,982	)		(15,440	)		(175,639	)		1,386,814
Other		439,982		317,911		(363	)		(296,213	)		(37,817	)		423,500
Construction in progress		698,641		490,631		(703	)		(513,825	)		—			674,744
	W	9,318,408		1,053,779		(57,042	)		(50,080	)		(1,045,716	)		9,219,349

(In millions of won)
	For the six-month period ended June 30, 2021
	Beginning balance		Acquisition		Disposal			Transfer			Depreciation			Reclassified as held for sale			Ending balance
Land	W	638,371		192		(63	)		20,118			—			(20,507	)		638,111
Buildings		587,958		1,587		(280	)		34,023			(21,033	)		(8,669	)		593,586
Structures		316,895		236		(10	)		10,985			(19,053	)		(6,104	)		302,949
Machinery		5,354,992		45,319		(3,921	)		644,291			(792,657	)		—			5,248,024
Right-of-use assets		1,323,111		223,726		(35,754	)		—			(182,088	)		—			1,328,995
Other		405,140		312,859		(520	)		(281,080	)		(40,975	)		—			395,424
Construction in progress		531,081		518,054		—			(396,621	)		—			—			652,514
	W	9,157,548		1,101,973		(40,548	)		31,716			(1,055,806	)		(35,280	)		9,159,603

22

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

10. Investment Property

(1) Changes in investment property for the six-month period ended June 30, 2022 are as follows:

(In millions of won)
	For the six-month period ended June 30, 2022
	Beginning balance		Transfer			Depreciation			Ending balance
Land	W	17,084		(647	)		—			16,437
Buildings		21,768		(1,090	)		(970	)		19,708
Right-of-use assets		6,248		15,268			(3,671	)		17,845
	W	45,100		13,531			(4,641	)		53,990

(2) The Company recognized lease income of W11,026 million for the six-month period ended June 30, 2022 from investment property.

11. Leases

(1) Details of the right-of-use assets as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Land, buildings and structures	W	1,158,598		1,139,024
Others		228,216		231,873
	W	1,386,814		1,370,897

(2) Details of amounts recognized in the interim separate statements of profit or loss for the six-month periods ended June 30, 2022 and 2021 as a lessee are as follows:

(In millions of won)
	For the six-month period ended
	June 30, 2022		June 30, 2021
Depreciation of right-of-use assets:
Land, buildings and structures	W	139,282		145,226
Others		36,357		36,862
	W	175,639		182,088
Interest expense on lease liabilities	W	11,499		9,053

Expenses related to short-term leases and leases of low-value assets the Company recognized are not material.

(3) The total cash outflows due to lease payments for the six-month periods ended June 30, 2022 and 2021 amounted to W169,176 million and W164,517 million, respectively.

23

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

12. Intangible Assets

(1) Changes in intangible assets for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended June 30, 2022
	Beginning balance		Acquisition		Disposal			Transfer			Amortization			Ending balance
Frequency usage rights	W	2,559,689		—		—			—			(238,390	)		2,321,299
Land usage rights		2,449		—		—			—			(761	)		1,688
Industrial rights		10,934		7,471		—			(111	)		(2,217	)		16,077
Facility usage rights		14,355		432		(1	)		58			(1,386	)		13,458
Club memberships(*1)		51,356		412		(572	)		—			—			51,196
Other(*2)		564,547		3,636		—			40,987			(124,713	)		484,457
	W	3,203,330		11,951		(573	)		40,934			(367,467	)		2,888,175
(In millions of won)
	For the six-month period ended June 30, 2022
	Beginning balance		Acquisition		Disposal			Transfer			Amortization			Ending balance
Frequency usage rights	W	1,932,765		—		—			—			(255,873	)		1,676,892
Land usage rights		4,103		—		(3	)		—			(909	)		3,191
Industrial rights		9,659		2,137		—			—			(1,269	)		10,527
Facility usage rights		15,061		514		(3	)		69			(1,337	)		14,304
Club memberships(*1)		50,698		33		(120	)		—			—			50,611
Other(*2)		652,797		3,082		(62	)		31,583			(137,166	)		550,234
	W	2,665,083		5,766		(188	)		31,652			(396,554	)		2,305,759

(*1) Club memberships are classified as intangible assets with indefinite useful lives and are not amortized.

(*2) Other intangible assets primarily consist of computer software and others.

(2) Details of frequency usage rights as of June 30, 2022 are as follows:

(In millions of won)
	Amount		Description	Commencement of amortization		Completion of amortization
800 MHz license	W	175,662	LTE service		Jul. 2021		Jun. 2026
1.8 GHz license		467,208	LTE service		Dec. 2021		Dec. 2026
2.6 GHz license		546,380	LTE service		Sept. 2016		Dec. 2026
2.1 GHz license		351,131	W-CDMA and LTE service		Dec. 2021		Dec. 2026
3.5 GHz license		772,814	5G service		Apr. 2019		Nov. 2028
28 GHz license		8,104	5G service		Jan. 2021		Nov. 2023
	W	2,321,299

24

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

13. Borrowings and Debentures

(1) Changes in long-term borrowings for the six-month period ended June 30, 2022 are as follows:

(In millions of won)
	Lender		Annual interest rate (%)		Maturity	Book value
Current						W	6,728
Non-current							300,000
As of January 1, 2022							306,728
New long-term borrowings:		DBS Bank Ltd.		2.6//8	Mar. 10, 2025		200,000
		Credit Agricole CIB		3.30	Apr. 29, 2024		50,000
		Mizuho Bank, Ltd.		3.29	Nov. 27, 2023		100,000
							350,000
Repayments of long-term borrowings:		Export Kreditnamnden		1.70	Apr. 29, 2022		(7,096	)
Other changes(*)							368
Non-current							650,000
As of June 30, 2022						W	650,000

(*) Other changes include the effects on foreign currency translation of long-term borrowings and changes in present value discount on long-term borrowings for the six-month period ended June 30, 2022.

25

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

13. Borrowings and Debentures, Continued

(2) Changes in debentures for the six-month period ended June 30, 2022 are as follows:

(In millions of won)
	Purpose		Annual interest rate (%)		Maturity		Face value			Book value
Current							W	970,000			969,467
Non-current								5,852,600			5,835,400
As of January 1, 2022								6,822,600			6,804,867
Debentures newly issued:
Unsecured corporate bonds		Refinancing fund		3.80		Apr. 12, 2025		240,000			238,999
				3.84		Apr. 12, 2027		70,000			69,694
				3.78		Apr. 12, 2042		40,000			39,810
								350,000			348,503
Debentures repaid:
Unsecured corporate bonds		Operating and refinancing fund		2.40		Feb. 26, 2022		(100,000	)		(100,000	)
		Operating fund		2.03		Mar. 6, 2022		(180,000	)		(180,000	)
		Refinancing fund		2.17		Apr. 25, 2022		(120,000	)		(120,000	)
								(400,000	)		(400,000	)
Other changes(*1)								128,880			131,035
Current(*2)								1,716,450			1,714,906
Non-current(*2)								5,185,030			5,169,499
As of June 30, 2022							W	6,901,480			6,884,405

(*1) Other changes include the effects on foreign currency translation of debentures and changes in discount on issuance of debentures for the six-month period ended June 30, 2022.

(*2) W1,145,439 million were reclassified from non-current to current for the six-month period ended June 30, 2022.

26

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

14. Long-Term Payables – Other

(1) As of June 30, 2022 and December 31, 2021, details of long-term payables – other related to the acquisition of frequency usage rights are as follows (See note 12):

(In millions of won)
	June 30, 2022			December 31, 2021
Long-term payables – other	W	1,690,470			2,090,715
Present value discount on long-term payables – other		(65,956	)		(80,882	)
Current installments of long-term payables – other		(395,549	)		(398,823	)
Carrying amount at period end	W	1,228,965			1,611,010

(2) The principal amount of long-term payables – other repaid for the six-month periods ended June 30, 2022 and 2021 are W400,245 million and W425,349 million, respectively. The repayment schedule of the principal amount of long-term payables – other as of June 30, 2022 is as follows:

(In millions of won)
	Amount
Less than 1 year	W	400,245
1 ~ 3 years		738,300
3 ~ 5 years		460,538
More than 5 years		91,387
	W	1,690,470

15. Provisions

Changes in provisions for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	For the six-month period ended June 30, 2022												As of June 30, 2022
	Beginning balance		Increase		Utilization			Reversal			Ending balance		Current		Non-current
Provision for restoration	W	94,684		2,992		(3,160	)		(189	)		94,327		56,756		37,571
Emission allowance		1,885		1,186		—			(1,545	)		1,526		1,526		—
	W	96,569		4,178		(3,160	)		(1,734	)		95,853		58,282		37,571
(In millions of won)	For the six-month period ended June 30, 2021												As of June 30, 2021
	Beginning balance		Increase		Utilization			Reversal			Ending balance		Current		Non-current
Provision for restoration	W	91,966		5,244		(3,410	)		—			93,800		50,514		43,286
Emission allowance		7,424		487		(1,091	)		(5,678	)		1,142		1,142		—
	W	99,390		5,731		(4,501	)		(5,678	)		94,942		51,656		43,286

27

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

16. Defined Benefit Liabilities (Assets)

(1) Details of defined benefit liabilities (assets) as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022			December 31, 2021
Present value of defined benefit obligations	W	473,400			483,001
Fair value of plan assets		(477,012	)		(476,099	)
	W	(3,612	)		6,902

(2) Changes in present value of defined benefit obligations for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended
	June 30, 2022			June 30, 2021
Beginning balance	W	483,001			464,846
Current service cost		25,968			28,476
Interest cost		6,903			5,549
Remeasurement
- Demographic assumption		(5,672	)		—
- Financial assumption		(31,830	)		—
- Adjustment based on experience		4,967			15,231
Benefit paid		(15,901	)		(18,652	)
Others		5,964			2,281
Ending balance	W	473,400			497,731

(3) Changes in fair value of plan assets for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended
	June 30, 2022			June 30, 2021
Beginning balance	W	476,099			457,425
Interest income		6,894			5,383
Remeasurement		(6,101	)		32
Contribution		20,000			21,500
Benefit paid		(25,146	)		(24,263	)
Others		5,266			1,481
Ending balance	W	477,012			461,558

28

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

16. Defined Benefit Liabilities (Assets), Continued

(4) Total cost of defined benefit plan, which is recognized in profit or loss for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended
	June 30, 2022		June 30, 2021
Current service cost	W	25,968		28,476
Net interest cost		9		166
	W	25,977		28,642

17. Share Capital and Capital Surplus and Others

(1) The Company’s outstanding share capital consists entirely of common shares with a par value of W100. The number of authorized, issued and outstanding common shares and the details of capital surplus and others as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won, except for share data)
	June 30, 2022			December 31, 2021
Number of authorized shares		670,000,000			670,000,000
Number of issued shares(*1)		218,833,144			218,833,144
Share capital:
Common share(*2)	W	30,493			30,493
Capital surplus and others:
Paid-in surplus		1,771,000			1,771,000
Treasury shares		(36,702	)		(57,314	)
Hybrid bonds(*3)		398,759			398,759
Share option(Note 18)		2,043			47,166
Others		(6,639,988	)		(6,735,882	)
	W	(4,504,888	)		(4,576,271	)

(*1) As a result of stock split and the spin-off for the year ended December 31, 2021, the number of shares that the Company is allowed to issue under its article of incorporation has changed from 220,000,000 shares with a par value of W500 to 670,000,000 shares with a par value of W100.

(*2) The Company’s share capital decreased by W14,146 million as a result of the spin-off for the year ended December 31, 2021. In addition, the Company retired 8,685,568 treasury shares with reduction of its retained earnings before appropriation, as a result, the Company’s issued shares have decreased without change in share capital for the year ended December 31, 2021. Meanwhile, in 2002 and 2003, the Company retired treasury shares with reduction of its retained earnings before appropriation. As a result, the Company’s issued shares have decreased without change in share capital.

(*3) As there is no contractual obligation to deliver financial assets to the holders of hybrid bonds, the Company classified the hybrid bonds as equity. When in liquidation or bankruptcy, these hybrid bonds are senior only to common shares.

29

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

17. Share Capital and Capital Surplus and Others, Continued

(2) There were no changes in share capital for the six-month periods ended June 30, 2022 and 2021, and details of shares outstanding as of June 30, 2022 and 2021 are as follows:

(In shares)

June 30, 2022

June 30, 2021

Issued shares

Treasury shares

Outstanding shares

Issued shares

Treasury shares

Outstanding shares

Shares outstanding

218,833,144

801,091

218,032,053

72,060,143

899,500

71,160,643

(3) Treasury shares as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won, except for share data)
	June 30, 2022		December 31, 2021
Number of shares(*)		801,091		1,250,992
Acquisition cost	W	36,702		57,314

(*) The Company distributed 449,901 treasury shares (acquisition cost: W20,612 million) as bonus payment to the employee, resulting in gain and loss on disposal of treasury shares of W4,460 million and W1,065 million, respectively, for the six-month period ended June 30, 2022.

30

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

18. Share-based Payment

(1) The terms and conditions related to the grants of the share-based payment arrangement are as follows:

1) Equity-settled share-based payment arrangement

	Series
	1-2	1-3	2	3	4	5(*2)	6(*2)
Grant date	March 24, 2017		February 20, 2018	February 22, 2019	March 26, 2019	March 26, 2020	March 25, 2021
Types of shares to be issued	Registered common shares
Grant method	Reissue of treasury shares, Cash settlement
Number of shares(*1) (in share)	67,320	67,320	4,124	8,907	5,266	376,313	87,794
Exercise price(*1) (in won)	53,298	57,562	50,824	53,052	50,862	38,452	50,276
Exercise period	Mar. 25, 2020 ~ Mar. 24, 2023	Mar. 25, 2021 ~ Mar. 24, 2024	Feb. 21, 2020 ~ Feb. 20, 2023	Feb. 23, 2021 ~ Feb. 22, 2024	Mar. 27, 2021 ~ Mar. 26, 2024	Mar. 27, 2023 ~ Mar. 26, 2027	Mar. 26, 2023 ~ Mar. 25, 2026
Vesting conditions	3 years’ service from the grant date	4 years’ service from the grant date	2 years’ service from the grant date	2 years’ service from the grant date	2 years’ service from the grant date	3 years’ service from the grant date	2 years’ service from the grant date

	Series
	7-1	7-2
Grant date	March 25, 2022
Types of shares to be issued	Registered common shares
Grant method	Reissue of treasury shares, Cash settlement
Number of shares (in share)	295,275	120,441
Exercise price (in won)	56,860	56,860
Exercise period	Mar. 26, 2025 ~ Mar. 25, 2029	Mar. 26, 2024 ~ Mar. 25, 2027
Vesting conditions	3 years’ service from the grant date	2 years’ service from the grant date

31

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

18. Share-based Payment, Continued

(1) The terms and conditions related to the grants of the share-based payment arrangement are as follows, Continued:

2) Cash-settled share-based payment arrangement

	2021		2022
	Share appreciation rights of SK Telecom Co., Ltd.(*3)	Share appreciation rights of SK Square Co., Ltd.(*3)	Share appreciation rights of SK Telecom Co., Ltd.(*3)
Grant date	January 1, 2021		January 1, 2022
Grant method	Cash settlement
Number of shares(*1) (in share)	183,246	118,456	338,525
Exercise price(*1) (in won)	50,276		56,860
Exercise period	Jan. 1, 2023 ~ Mar. 28, 2024		Jan. 1, 2024 ~ Mar. 25, 2025
Vesting conditions	2 years’ service from the grant date		2 years’ service from the grant date

(*1) Number of shares granted and exercise price are adjusted as a result of stock split and the spin-off for the year ended December 31, 2021, and the remaining part of 1-1st share option and 3rd share option were fully and partially exercised for the six-month period ended June 30, 2022, respectively.

(*2) Parts of the grant that have not met the vesting conditions have been forfeited for the six-month period ended June 30, 2022 and for the year ended December 31, 2021.

(*3) The Company newly established the long-term incentive policy as part of the compensation related to the growth of corporate value on the beginning of the prior year and granted cash settled share appreciation rights to executives. Meanwhile, parts of the grant that have not met the vesting conditions have been forfeited for the six-month period ended June 30, 2022.

(2) Share compensation expense recognized for the six-month period ended June 30, 2022 and the remaining share compensation expense to be recognized in subsequent periods are as follows:

(In millions of won)
	Share compensation expense
As of December 31, 2021	W	76,979
For the six-month period ended June 30, 2022		76,190
In subsequent periods		5,337
	W	158,506

As of June 30, 2022, the carrying amount of liabilities recognized by the Company in relation to the cash-settled share-based payment arrangement is W1,368 million.

32

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

18. Share-based Payment, Continued

(3) The Company used binomial option-pricing model in the measurement of the fair value of share options at the grant date, and the inputs used in the model are as follows:

1) Equity-settled share-based payment arrangement

(In won)	Series
	1-2			1-3			2			3			4			5			6
Risk-free interest rate		1.95	%		2.07	%		2.63	%		1.91	%		1.78	%		1.52	%		1.55	%
Estimated option’s life		6 years			7 years			5 years			5 years			5 years			7 years			5 years
Share price (Closing price on the preceding day)(*)		52,500			52,500			48,700			51,800			50,600			34,900			49,800
Expected volatility		13.38	%		13.38	%		16.45	%		8.30	%		7.70	%		8.10	%		25.70	%
Expected dividends		3.80	%		3.80	%		3.70	%		3.80	%		3.90	%		5.70	%		4.00	%
Exercise price(*)		53,298			57,562			50,824			53,052			50,862			38,452			50,276
Per-share fair value of the option(*)		4,048			3,096			4,798			1,720			1,622			192			8,142

(In won)	Series
	7-1			7-2
Risk-free interest rate		2.80	%		2.68	%
Estimated option’s life		7 years			5 years
Share price (Closing price on the preceding day)		57,300			57,300
Expected volatility		24.20	%		24.20	%
Expected dividends		3.40	%		3.40	%
Exercise price		56,860			56,860
Per-share fair value of the option		11,772			10,435

2) Cash-settled share-based payment arrangement

(In won)	2021						2022
	Share appreciation rights of SK Telecom Co., Ltd.			Share appreciation rights of SK Square Co., Ltd.			Share appreciation rights of SK Telecom Co., Ltd.
Risk-free interest rate		3.40	%		3.40	%		3.56	%
Estimated option’s life		3.25 years			3.25 years			3.25 years
Share price on the remeasurement date		52,000			39,050			52,000
Expected volatility		25.10	%		25.10	%		25.10	%
Expected dividends		6.30	%		0.00	%		6.30	%
Exercise price(*)		50,276			50,276			56,860
Per-share fair value of the option		5,714			2,417			4,437

(*) Share price (closing price on the preceding day), exercise price and per-share fair value of the option are adjusted as a result of stock split and spin-off for the year ended December 31, 2021.

Meanwhile, the Board of Directors of the Company resolved to dispose its treasury shares for the purpose of allotment of shares as bonus payment on October 12, 2021. The transaction is equity-settled share-based payment transactions in accordance with K-IFRS 1102, and 505,350 shares (before stock split) were granted on October 12, 2021(grant date). 7,700 shares (before stock split) out of 505,350 shares (before stock split) were transferred to the spin-off company on November 1, 2021. Vesting conditions are 6 months from the grant date and per-share fair value on the grant date are measured at W300,500 that is closing price of common shares on the grant date before stock split and spin-off. The fair value of these share-based payment on the grant date is W151,858 million, among which the awards with a fair value of W9,935 million were transferred to the spin-off company.

33

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

19. Retained Earnings

Retained earnings as of as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Appropriated:
Legal reserve	W	22,320		22,320
Reserve for business expansion		9,631,138		11,631,138
Reserve for technology development		4,365,300		4,365,300
		13,996,438		15,996,438
Unappropriated retained earnings		698,297		(1,248,140	)
	W	14,717,055		14,770,618

20. Reserves

(1) Details of reserves, net of taxes, as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Valuation gain on financial assets at FVOCI	W	243,929		613,010
Valuation gain on derivatives		21,133		25,006
	W	265,062		638,016

(2) Changes in reserves for the six-month periods ended June 30, 2022 and 2021 as follows:

(In millions of won)
	Valuation gain on financial assets at FVOCI			Valuation gain on derivatives			Total
Balance at January 1, 2021	W	323,246			8,199			331,445
Changes, net of taxes		699,526			9,560			709,086
Balance at June 30, 2021		1,022,772			17,759			1,040,531
Balance at January 1, 2022		613,010			25,006			638,016
Changes, net of taxes		(369,081	)		(3,873	)		(372,954	)
Balance at June 30, 2022	W	243,929			21,133			265,062

34

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

21. Operating Revenue

Disaggregation of operating revenues considering the economic factors that affect the amounts, timing and uncertainty of the Company’s revenue and future cash flows is as follows:

(In millions of won)	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Products transferred at a point in time:
Product sales	W	27,399		50,823		21,881		31,795
Services transferred over time:
Wireless service revenue(*1)		2,615,957		5,203,033		2,560,679		5,092,437
Cellular interconnection revenue		129,317		261,705		125,965		253,715
Other(*2)		345,559		680,064		313,080		624,376
		3,090,833		6,144,802		2,999,724		5,970,528
	W	3,118,232		6,195,625		3,021,605		6,002,323

(*1) Wireless service revenue includes revenue from wireless voice and data transmission services principally derived through usage charges collected from the wireless subscribers.

(*2) Other revenue includes revenue from billing and collection services as well as other miscellaneous services.

The Company has a right to consideration from a customer in an amount that corresponds directly with the value to the subscriber of the Company’s performance completed; thus, as a practical expedient, the Company recognizes revenue in the amount to which the Company has a right to invoice.

Most of the Company’s transactions are occurring in Korea as it principally operates its businesses in Korea.

35

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

22. Other Operating Expenses

Details of other operating expenses for the three and six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Communication	W	7,013		13,663		7,051		14,147
Utilities		67,335		139,346		58,741		124,257
Taxes and dues		23,129		25,649		16,724		18,951
Repair		62,927		117,279		61,250		110,029
Research and development		88,661		166,742		82,644		166,143
Training		4,966		9,925		5,270		9,581
Bad debt expenses		3,625		9,519		2,013		4,101
Others		9,155		20,752		2,949		11,657
	W	266,811		502,875		236,642		458,866

36

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

23. Other Non-Operating Income and Expenses

Details of other non-operating income and expenses for the three and six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Other non-operating Income:
Gain on disposal of property and equipment and intangible assets	W	2,819		7,172		2,770		3,495
Others		2,852		12,130		24,960		27,764
	W	5,671		19,302		27,730		31,259
Other non-operating Expenses:
Loss on disposal of property and equipment and intangible assets	W	1,239		2,968		2,569		3,687
Donations		4,377		9,377		5,783		9,032
Other bad debt expenses		1,203		1,112		714		823
Others		1,699		6,438		1,497		2,466
	W	8,518		19,895		10,563		16,008

37

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

24. Finance Income and Costs

(1) Details of finance income and costs for the three and six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022					2021
	Three-month period ended June 30			Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Finance Income:
Interest income	W	6,703			13,060		6,448		13,328
Gain on sale of accounts receivable – other		—			1,043		6,345		14,266
Dividend income		12,410			49,637		10,716		195,315
Gain on foreign currency transactions		1,817			2,638		485		1,066
Gain on foreign currency translations		441			725		—		125
Gain relating to financial instruments at FVTPL		1,295			1,295		1,881		35,618
	W	22,666			68,398		25,875		259,718
Finance Costs:
Interest expense	W	65,577			129,092		58,806		116,853
Loss on sale of accounts receivable – trade		5,169			8,006		—		—
Loss on foreign currency transactions		1,526			2,248		2,222		2,547
Loss on foreign currency translations		(109	)		60		171		119
Loss relating to financial instruments at FVTPL		153			160		88,902		88,946
	W	72,316			139,566		150,101		208,465

(2) Details of interest income included in finance income for the three and six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Interest income on cash equivalents and short-term financial instruments	W	2,256		3,676		1,066		2,028
Interest income on loans and others		4,447		9,384		5,382		11,300
	W	6,703		13,060		6,448		13,328

(3) Details of interest expenses included in finance costs income for the three and six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Interest expense on borrowings	W	5,096		8,663		1,751		2,552
Interest expense on debentures		45,400		88,951		46,814		93,815
Others		15,081		31,478		10,241		20,486
	W	65,577		129,092		58,806		116,853

38

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

24. Finance Income and Costs, Continued

(4) Details of impairment losses for financial assets for the three and six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Accounts receivable – trade	W	3,625		9,519		2,013		4,101
Other receivables		1,203		1,112		714		823
	W	4,828		10,631		2,727		4,924

25. Income Tax Expense

Income tax expense was calculated by considering current tax expense, adjusted to changes in estimates related to prior periods, and deferred tax expense due to origination and reversal of temporary differences.

39

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

26. Earnings per Share

The Company carried out stock split on October 28, 2021. Basic and diluted earnings per share for the three and six-month period ended June 30, 2021 has been retroactively adjusted to reflect the effect of the stock split.

(1) Basic earnings per share

1) Basic earnings per share for the three and six-month periods ended June 30, 2022 and 2021 are calculated as follows:

(In millions of won, except for share data and basic earnings per share)
	2022						2021
	Three-month period ended June 30			Six-month period ended June 30			Three-month period ended June 30			Six-month period ended June 30
Profit for the period	W	224,462			476,480			184,011			650,024
Interest on hybrid bonds		(3,691	)		(7,383	)		(3,691	)		(7,383	)
Profit for the period on common shares		220,771			469,097			180,320			642,641
Weighted average number of common shares outstanding		218,019,289			217,956,305			355,800,990			355,814,870
Basic earnings per share (in won)	W	1,013			2,152			507			1,806

2) The weighted average number of common shares outstanding for the three and six-month periods ended June 30, 2022 and 2021 are calculated as follows:

(In shares)				Weighted average number of common shares
	Number of common shares			Three-month period ended June 30			Six-month period ended June 30
Issued shares as of January 1, 2022		218,833,144			218,833,144			218,833,144
Treasury shares as of January 1, 2022		(1,250,992	)		(1,250,992	)		(1,250,992	)
Disposal of treasury shares		449,901			437,137			374,153
		218,032,053			218,019,289			217,956,305

(In shares)				Weighted average number of common shares
	Number of common shares			Three-month period ended June 30			Six-month period ended June 30
Issued shares as of January 1, 2021		403,728,555			403,728,555			403,728,555
Treasury shares as of January 1, 2021		(47,092,790	)		(47,092,790	)		(47,092,790	)
Acquisition of treasury shares		(1,440,000	)		(1,440,000	)		(1,315,690	)
Disposal of treasury shares		607,450			605,225			494,795
		355,803,215			355,800,990			355,814,870

40

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

26. Earnings per Share, Continued

(2) Diluted earnings per share

1) Diluted earnings per share for the three and six-month periods ended June 30, 2022 and 2021 are calculated as follows:

(In millions of won, except for share data and basic earnings per share)
	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Profit for the period on common shares	W	220,771		469,097		180,320		642,641
Adjusted weighted average number of common shares outstanding		218,156,534		218,090,261		356,113,180		356,041,670
Diluted earnings per share (in won)	W	1,012		2,151		506		1,805

2) The adjusted weighted average number of common shares outstanding for the three and six-month periods ended June 30, 2022 and 2021 are calculated as follows:

(In shares)	2022
	Three-month period  ended June 30		Six-month period ended  June 30
Outstanding shares as of January 1, 2022		217,582,152		217,582,152
Effect of treasury shares		437,137		374,153
Effect of share option		137,245		133,956
Adjusted weighted average number of common shares outstanding		218,156,534		218,090,261

(In shares)	2021
	Three-month period  ended June 30			Six-month period ended  June 30
Outstanding shares as of January 1, 2021		356,635,765			356,635,765
Effect of treasury shares		(834,775	)		(820,895	)
Effect of share option		312,190			226,800
Adjusted weighted average number of common shares outstanding		356,113,180			356,041,670

41

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

27. Categories of Financial Instruments

(1) Financial assets by category as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022
	Financial assets at FVTPL		Equity instruments at FVOCI		Financial assets at amortized cost		Derivatives hedging instrument		Total
Cash and cash equivalents	W	65,489		—		76,697		—		142,186
Financial instruments		519,511		—		79,354		—		598,865
Long-term investment securities(*)		104,234		909,260		—		—		1,013,494
Accounts receivable – trade		—		—		1,529,083		—		1,529,083
Loans and other receivables		353,068		—		605,903		—		958,971
Derivative financial assets		32,287		—		—		270,884		303,171
	W	1,074,589		909,260		2,291,037		270,884		4,545,770

(*) The Company designated W909,260 million of equity instruments that are not held for trading as financial assets at FVOCI.

(In millions of won)
	December 31, 2021
	Financial assets at FVTPL		Equity instruments at FVOCI		Financial assets at amortized cost		Derivatives hedging instrument		Total
Cash and cash equivalents	W	25,000		—		133,823		—		158,823
Financial instruments		290,000		—		89,354		—		379,354
Long-term investment securities(*)		93,138		1,383,223		—		—		1,476,361
Accounts receivable – trade		—		—		1,514,260		—		1,514,260
Loans and other receivables		459,959		—		569,262		—		1,029,221
Derivative financial assets		25,001		—		—		152,511		177,512
	W	893,098		1,383,223		2,306,699		152,511		4,735,531

(*) The Company designated W1,383,223 million of equity instruments that are not held for trading as financial assets at FVOCI.

42

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

27. Categories of Financial Instruments, Continued

(2) Financial liabilities by category as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022
	Financial liabilities at FVTPL		Financial liabilities at amortized cost		Total
Derivative financial liabilities	W	321,025		—		321,025
Borrowings		—		650,000		650,000
Debentures		—		6,884,405		6,884,405
Lease liabilities(*)		—		1,404,612		1,404,612
Accounts payable – other and others		—		4,480,067		4,480,067
	W	321,025		13,419,084		13,740,109

(In millions of won)
	December 31, 2021
	Financial liabilities at FVTPL		Financial liabilities at amortized cost		Total
Derivative financial liabilities	W	321,025		—		321,025
Borrowings		—		306,728		306,728
Debentures		—		6,804,867		6,804,867
Lease liabilities(*)		—		1,362,095		1,362,095
Accounts payable – other and others		—		5,070,674		5,070,674
	W	321,025		13,544,364		13,865,389

(*) Lease liabilities are not applicable on category of financial liabilities, but are classified as financial liabilities measured at amortized cost on consideration of nature for measurement of liabilities.

43

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Financial Risk Management

(1) Financial risk management

The Company is exposed to market risk, credit risk and liquidity risk. Market risk is the risk related to the changes in market prices, such as foreign exchange rates and interest rates. The Company implements a risk management system to monitor and manage these specific risks.

The Company’s financial assets consist of cash and cash equivalents, financial instruments, investment securities, accounts receivable – trade and other receivables, etc. Financial liabilities consist of accounts payable – other, borrowings, debentures, lease liabilities and others.

1) Market risk

(i) Currency risk

The Company is exposed to currency risk mainly on exchange rate fluctuations on forecasted transactions and recognized assets and liabilities which are denominated in a currency other than the functional currency of the Company.

Monetary assets and liabilities denominated in foreign currencies as of June 30, 2022 are as follows:

(In millions of won, thousands of foreign currencies)
	Assets				Liabilities
	Foreign currencies		Won equivalent		Foreign currencies		Won equivalent
USD		22,569	W	29,179		1,197,983	W	1,548,873
EUR		176		238		1		2
Others		—		244		—		—
			W	29,661			W	1,548,875

In addition, the Company has entered into currency swaps to hedge against currency risk related to foreign currency debentures.

As of June 30, 2022, a hypothetical change in exchange rates by 10% would have increased (decreased) the Company’s profit before income tax as follows:

(In millions of won)
	If increased by 10%		If decreased by 10%
USD	W	2,562		(2,562	)
EUR		24		(24	)
Others		24		(24	)
	W	2,610		(2,610	)

44

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Financial Risk Management, Continued

(1) Financial risk management, Continued

1) Market risk, Continued

(ii) Interest rate risk

The interest rate risk of the Company arises from borrowings, debentures and long-term payables – other. Since the Company’s interest-bearing assets are mostly fixed-interest bearing assets, the Company’s revenue and operating cash flows from the interest-bearing assets are not influenced by the changes in market interest rates.

The Company performs various analysis to reduce interest rate risk and to optimize its financing. To minimize risks arising from changes in interest rates, the Company takes various measures, such as refinancing, renewal, alternative financing and hedging.

As of June 30, 2022, floating-rate debentures amount to W387,870 million, and the Company has entered into interest rate swaps to hedge interest rate risk related to the floating-rate debentures. Therefore, profit before income taxes for the six-month period ended June 30, 2022 would not have been affected by the changes in interest rates of floating-rate debentures.

As of June 30, 2022, the floating-rate long-term payables – other are W1,690,470 million. If the interest rate increases (decreases) 1%p with all other variables held constant, profit before income taxes for the six-month period ended June 30, 2022, would change by W8,452 million in relation to the floating-rate long-term payables – other that are exposed to interest rate risk.

Interest rate benchmark reform and associated risks

A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as ‘IBOR reform’). Especially, in the case of LIBOR, all of the calculations were suspended as of December 31, 2021, except for the overnight, one month, three months, six months, and 12 months of USD LIBOR, and the aforementioned five USD LIBORs will also be suspended as of June 30, 2023. The alternative interest rate of USD LIBOR is the Secured Overnight Financing Rate(“SOFR”).

The Company plans to include fallback clauses into financial instruments relating to LIBOR to which calculation has not been suspended yet or change their LIBOR directly to alternative interest rates before the calculation is suspended.

45

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Financial Risk Management, Continued

(1) Financial risk management, Continued

1) Market risk, Continued

(ii) Interest rate risk, Continued

Interest rate benchmark reform and associated risks, Continued

The Company’s financial instruments exposed to the risk arising from interest rate benchmark reform as of June 30, 2022 are indexed to the USD LIBOR. The Company is exposed to legal risk to amend the terms of contracts on the financial instruments subject to interest rate benchmark reform as well as process and operation risks to manage such amendments. In addition, the Company is exposed to the risk of monitoring the market trend regarding the alternative interest rate and establishing the corresponding risk management strategy. If the IBOR is designated as the hedged item, the Company is required to replace it to an alternative benchmark interest and review the effects on the hedging relationship. In addition, the Company is exposed to the risk of minimizing hedge ineffectiveness by aligning the method and timing of the transition to the alternative benchmark interest applied to the hedged item and the hedging instrument.

In order to manage and monitor such risk factors, the Company evaluates the extent to which contracts refer to IBOR cash flows, whether such contracts will need to be amended as a result of IBOR reform and how to manage communication about IBOR reform with counterparties.

Non-derivative financial liabilities

The Company’s non-derivative financial liabilities subject to interest rate benchmark reform as of December 31, 2021 were floating-rate bonds indexed to USD LIBOR. As explained above, the Company is discussing with the counterparty about including the fallback clauses as of June 30, 2022.

Derivatives

The Company’s derivative instruments designated as cash flow hedge are governed by contracts based on the International Swaps and Derivatives Association (ISDA)’s master agreements. As part of interest rate benchmark reform, ISDA has included a new fallback clause regarding which alterative benchmark interest rate to be applied when the calculation of major IBOR is suspended in the master agreement. The master agreement is applied to derivative contracts after January 25, 2021, and the transaction parties is required to adhere to ISDA protocol to include the same fallback clause to derivative contracts before January 25, 2021. The Company has adhered to ISDA protocol for transition to the alternative benchmark interest rate, and the fallback clause will be included when counterparties adhere to the protocol to include. The Company’s counterparties have adhered to ISDA protocol and agreed to include the fallback clause.

Hedge accounting

The Company’s hedged items and hedging instruments as of June 30, 2022 are indexed to USD LIBOR. These benchmark rates are quoted each day, and the IBOR cash flows are exchanged with counterparties as usual.

46

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Financial Risk Management, Continued

(1) Financial risk management, Continued

2) Credit risk

The maximum credit exposure as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022		December 31, 2021
Cash and cash equivalents	W	142,150		158,791
Financial instruments		598,865		379,354
Investment securities		900		900
Accounts receivable – trade		1,529,083		1,514,260
Contract assets		31,832		29,477
Loans and other receivables		958,971		1,029,221
Derivative financial assets		303,171		177,512
	W	3,564,972		3,289,515

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. To manage credit risk, the Company evaluates the credit worthiness of each customer or counterparty considering the party’s financial information, its own trading records and other factors. Based on such information, the Company establishes credit limits for each customer or counterparty.

The Company establishes a loss allowance in respect of accounts receivable – trade. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that are expected to occur. The collective loss allowance is determined based on historical data of collection statistics for similar financial assets. Also, the Company’s credit risk can arise from transactions with financial institutions related to its cash and cash equivalents, financial instruments and derivatives. To minimize such risk, the Company has a policy to deal only with financial institutions with high credit ratings.

The Company’s maximum exposure to credit risk is equal to each financial asset’s carrying amount as of June 30, 2022.

47

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Financial Risk Management, Continued

(1) Financial risk management, Continued

3) Liquidity risk

The Company’s approach to managing liquidity is to ensure that it will always maintain sufficient cash and cash equivalents balances and have enough liquidity through various committed credit lines. The Company maintains enough liquidity within credit lines through active operating activities.

Contractual maturities of financial liabilities as of June 30, 2022 are as follows:

(In millions of won)
	Carrying amount		Contractual cash flows		Less than 1 year		1 – 5 years		More than 5 years
Borrowings(*)	W	650,000		682,341		14,289		668,052		—
Debentures(*)		6,884,405		7,903,035		1,907,755		3,124,421		2,870,859
Lease liabilities		1,404,612		1,491,689		342,107		941,957		207,625
Accounts payable -other and others(*)		4,480,067		4,569,071		3,251,115		1,226,123		91,833
	W	13,419,084		14,646,136		5,515,266		5,960,553		3,170,317

(*) Includes interest payables.

The Company does not expect that the cash flows included in the maturity analysis could occur significantly earlier or at different amounts.

As of June 30, 2022, periods in which cash flows from cash flow hedge derivatives are expected to occur are as follows:

(In millions of won)
	Carrying amount		Contractual cash flows		Less than 1 year		1 – 5 years		More than 5 years
Assets	W	270,884		291,511		142,015		91,450		58,046

(2) Capital management

The Company manages its capital to ensure that it will be able to continue as a business while maximizing the return to shareholders through the optimization of its debt and equity structure. The overall strategy of the Company is the same as that for the year ended December 31, 2021.

The Company monitors its debt-equity ratio as a capital management indicator. This ratio is calculated as total liabilities divided by total equity from the separate financial statements.

Debt-equity ratio as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022			December 31, 2021
Total liabilities	W	15,370,729			15,526,209
Total equity		10,507,722			10,862,856
Debt-equity ratios		146.28	%		142.93	%

48

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Financial Risk Management, Continued

(3) Fair value

1) Fair value and carrying amount of financial assets and liabilities including fair value hierarchy as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)	June 30, 2022
	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets that are measured at fair value:
FVTPL	W	1,074,589		—		938,069		136,520		1,074,589
Derivative hedging instruments		270,884		—		270,884		—		270,884
FVOCI		909,260		842,870		—		66,390		909,260
	W	2,254,733		842,870		1,208,953		202,910		2,254,733
Financial liabilities that are measured at fair value:
Derivative financial liabilities	W	321,025		—		—		321,025		321,025
Financial liabilities that are not measured at fair value:
Borrowings	W	650,000		—		628,230		—		628,230
Debentures		6,884,405		—		6,602,519		—		6,602,519
Long-term payables – other		1,624,514		—		1,552,763		—		1,552,763
	W	9,158,919		—		8,783,512		—		8,783,512

(In millions of won)	December 31, 2021
	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets that are measured at fair value:
FVTPL	W	893,098		—		774,960		118,138		893,098
Derivative hedging instruments		152,511		—		152,511		—		152,511
FVOCI		1,383,223		1,340,791		—		42,432		1,383,223
	W	2,428,832		1,340,791		927,471		160,570		2,428,832
Financial liabilities that are measured at fair value:
Derivative financial liabilities	W	321,025		—		—		321,025		321,025
Financial liabilities that are not measured at fair value:
Borrowings	W	306,728		—		301,232		—		301,232
Debentures		6,804,867		—		7,058,585		—		7,058,585
Long-term payables – other		2,009,833		—		2,010,852		—		2,010,852
	W	9,121,428		—		9,370,669		—		9,370,669

49

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Financial Risk Management, Continued

(3) Fair value, Continued

1) Fair value and carrying amount of financial assets and liabilities including fair value hierarchy as of June 30, 2022 and December 31, 2021 are as follows, Continued:

The above information does not include fair values of financial assets and liabilities of which fair values have not been measured as carrying amounts are reasonable approximation of fair values.

Fair value of the financial instruments that are traded in an active market (financial assets at FVOCI) is measured based on the bid price at the end of the reporting date.

The Company uses various valuation methods for determination of fair value of financial instruments that are not traded in an active market. Derivative financial contracts and long-term liabilities are measured using the discounted present value methods. Other financial assets are determined using the methods, such as discounted cash flow and market approach. Inputs used to such valuation methods include swap rate, interest rate and risk premium, and the Company performs valuation using the inputs which are consistent with natures of assets and liabilities measured.

Interest rates used by the Company for the fair value measurement as of June 30, 2022 are as follows:

	Interest rate
Derivative instruments	0.32% ~ 4.24%
Borrowings and debentures	4.10% ~ 4.17%
Long-term payables – other	3.20% ~ 4.18%

2) There have been no transfers between Level 2 and Level 1 for the six-month period ended June 30, 2022. The changes of financial assets and liabilities classified as Level 3 for the six-month period ended June 30, 2022 are as follows:

(In millions of won)
	Balance as of January 1, 2022			Profit or loss		OCI		Acquisition		Disposal			Transfer			Balance as of June 30, 2022
Financial assets:
FVTPL	W	118,138			1,280		—		18,786		(1,684	)		—			136,520
FVOCI		42,432			—		356		25,140		(638	)		(900	)		66,390
	W	160,570			1,280		356		43,926		(2,322	)		(900	)		202,910
Financial liabilities:
FVTPL	W	(321,025	)		—		—		—		—			—			(321,025	)

50

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

28. Financial Risk Management, Continued

(4) Enforceable master netting agreement or similar agreement

Carrying amount of financial instruments recognized of which offset agreements are applicable as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)
	June 30, 2022
	Gross financial instruments recognized		Amount offset			Net financial instruments     presented on the interim separate statement of financial position
Financial assets:
Accounts receivable – trade and others	W	76,049		(76,037	)	12
Financial liabilities:
Accounts payable – other and others	W	76,037		(76,037	)	—

(In millions of won)
	December 31, 2021
	Gross financial instruments recognized		Amount offset			Net financial instruments presented on the separate statement of financial position
Financial assets:
Accounts receivable – trade and others	W	86,838		(86,838	)	—
Financial liabilities:
Accounts payable – other and others	W	91,522		(86,838	)	4,684

51

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

29. Transactions with Related Parties

(1) List of related parties

Relationship	Company
Ultimate Controlling Entity	SK Inc.
Subsidiaries	SK Broadband Co., Ltd. and 25 others(*)
Joint ventures	Finnq Co., Ltd. and another
Associates	SK China Company Ltd. and 45 others
Others	The Ultimate Controlling Entity’s subsidiaries and associates, etc.

(*) As of June 30, 2022, subsidiaries of the Company are as follows:

Subsidiary		Ownership percentage(%)(*1)		Primary business
Subsidiaries owned by the Company	SK Telink Co., Ltd.		100.0	Telecommunication and Mobile Virtual Network Operator service
	SK Communications Co., Ltd.		100.0	Internet website services
	SK Broadband Co., Ltd.		74.3	Telecommunication services
	PS&Marketing Corporation		100.0	Communications device retail business
	SERVICE ACE Co., Ltd.		100.0	Call center management service
	SERVICE TOP Co., Ltd.		100.0	Call center management service
	SK O&S Co., Ltd.		100.0	Base station maintenance service
	SK Telecom China Holdings Co., Ltd.		100.0	Investment (Holdings company)
	SK Global Healthcare Business Group., Ltd.		100.0	Investment
	YTK Investment Ltd.		100.0	Investment association
	Atlas Investment		100.0	Investment association
	SK Telecom Americas, Inc		100.0	Information gathering and consulting
	Quantum Innovation Fund I		59.9	Investment
	SK Telecom Japan Inc.		100.0	Information gathering and consulting
	Happy Hanool Co., Ltd.		100.0	Service
	SK stoa Co., Ltd.		100.0	Other telecommunication retail business
	Broadband Nowon Co., Ltd.		100.0	Cable broadcasting services
	SAPEON Korea Inc.(*2)		100.0	Manufacturing non-memory and other electronic integrated circuits
	SAPEON Inc.(*2)		62.5	Manufacturing non-memory and other electronic integrated circuits
Subsidiaries owned by SK Broadband Co., Ltd.	Home & Service Co., Ltd.		100.0	Operation of information and communication facility
	Media S Co., Ltd.		100.0	Production and supply services of broadcasting programs
Subsidiary owned by PS&Marketing Corporation	SK m&service Co., Ltd.(*3)		100.0	Database and internet website service
Subsidiary owned by Quantum Innovation Fund I	PanAsia Semiconductor Materials LLC.		66.4	Investment
Subsidiary owned by SK Telecom Japan Inc.	SK Planet Japan, K. K.		79.8	Digital Contents sourcing service
Others(*4)	SK Telecom Innovation Fund, L.P.		100.0	Investment
	SK Telecom China Fund I L.P.		100.0	Investment

(*1) The ownership interest represents direct ownership interest in subsidiaries either by the Company or subsidiaries of the Company.

52

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

29. Transactions with Related Parties, Continued

(1) List of related parties, Continued:

(*2) The Company newly established SAPEON Korea Inc. and SAPEON Inc. for the six-month period ended June 30, 2022.

(*3) PS&Marketing Corporation acquired shares (100%) of SK m&service Co., Ltd. for the six-month period ended June 30, 2022.

(*4) Others are owned by Atlas Investment and another subsidiary of the Company.

As of June 30, 2022, the Company is included in SK Group, a conglomerate as defined in the Monopoly Regulation and Fair Trade Act. All of the other entities included in SK Group are considered related parties of the Company.

(2) Compensation for the key management

The Company considers registered directors (3 executive and 5 non-executive directors) who have substantial role and responsibility in planning, operations and relevant controls of the business as key management. The compensation given to such key management for the three and six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	2022				2021
	Three-month period ended June 30		Six-month period ended June 30		Three-month period ended June 30		Six-month period ended June 30
Salaries	W	910		2,349		952		4,432
Retirement benefits		92		405		209		2,024
Share compensation expense		514		581		40		72
	W	1,516		3,335		1,201		6,528

Compensation for the key management includes salaries, non-monetary salaries and retirement benefits made in relation to the pension plan and compensation expenses related to share options granted.

53

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

29. Transactions with Related Parties, Continued

(3) Transactions with related parties for the three and six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)		For the period ended June 30, 2022
		Operating revenue and others				Operating expenses and others (*1)				Acquisition of property and equipment and others
Scope	Company	Three- month		Six- month		Three- month		Six- month		Three- month		Six- month
Ultimate Controlling Entity	SK Inc.(*2)	W	3,032		5,725		128,353		306,528		8,011		9,780
Subsidiaries	SK Broadband Co., Ltd.		30,255		58,136		140,868		281,277		902		902
	PS&Marketing Corporation(*3)		2,375		4,766		277,941		614,288		240		240
	SK O&S Co., Ltd.(*4)		721		4,568		58,467		116,387		15,123		16,398
	SK Telink Co., Ltd.(*5)		25,563		53,318		3,457		8,702		—		—
	SERVICE ACE Co., Ltd.(*6)		3,096		13,981		30,062		61,489		—		—
	SERVICE TOP Co., Ltd.(*7)		2,051		12,225		31,840		63,154		—		—
	SK Communications Co., Ltd.		319		674		961		1,519		740		1,033
	Broadband Nowon Co., Ltd.(*8)		4		13,725		—		—		—		—
	Others		978		1,896		3,644		10,609		249		249
			65,362		163,289		547,240		1,157,425		17,254		18,822
Associates	F&U Credit information Co., Ltd.		191		381		10,899		21,433		—		—
	SK USA, Inc.		—		—		1,189		2,198		—		—
	HanaCard Co., Ltd.		104		2,629		394		1,133		20		22
	Daehan Kanggun BcN Co., Ltd.		2,461		4,906		—		—		—		—
	Others(*9)		12,411		12,411		—		—		—		—
			15,167		20,327		12,482		24,764		20		22
Others	SK Innovation Co., Ltd.		3,535		5,230		3,050		6,523		—		—
	SK Networks Co., Ltd.		377		633		2,483		6,344		—		—
	SK Networks Service Co., Ltd.		149		345		10,031		20,280		773		773
	SK Energy Co., Ltd.		549		1,073		175		185		—		—
	Content Wavve Corp.		421		424		21,215		44,731		—		—
	Happy Narae Co., Ltd.		44		70		2,305		4,988		35,498		38,411
	SK Shieldus Co., Ltd.		5,223		9,916		25,668		49,952		2,013		3,532
	Eleven Street Co., Ltd.		3,126		4,628		5,898		11,912		—		—
	SK Planet Co., Ltd.		1,869		3,604		20,313		40,193		1,766		1,876
	SK hynix Inc.		10,399		18,688		13		52		—		—
	T Map Mobility Co., Ltd.		4,310		6,708		1,300		2,549		—		—
	Dreamus Company		1,228		1,955		20,506		43,601		—		—
	One Store Co., Ltd.		3,996		8,008		—		—		—		—
	UbiNS Co., Ltd.		—		—		434		569		991		4,071
	Others		7,027		12,149		7,949		11,462		2,654		2,850
			42,253		73,431		121,340		243,341		43,695		51,513
		W	125,814		262,772		809,415		1,732,058		68,980		80,137

(*1) Operating expenses and others include lease payments by the Company.

54

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

29. Transactions with Related Parties, Continued

(3) Transactions with related parties for the three and six-month periods ended June 30, 2022 and 2021 are as follows, Continued:

(*2) Operating expenses and others include W163,514 million of dividends paid by the Company.

(*3) Operating expenses and others include W310,564 million paid to PS&Marketing Corporation relating to purchase of accounts receivable resulting from sale of handsets.

(*4) Operating revenue and others include W3,000 million of dividend income received.

(*5) Operating revenue and others include W3,009 million of dividend income received.

(*6) Operating revenue and others include W8,003 million of dividend income received.

(*7) Operating revenue and others include W8,000 million of dividend income received.

(*8) Operating revenue and others include W13,721 million of dividend income received.

(*9) Operating revenue and others include W12,410 million of dividend income received from Korea IT Fund.

55

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

29. Transactions with Related Parties, Continued

(3) Transactions with related parties for the three and six-month periods ended June 30, 2022 and 2021 are as follows, Continued:

(In millions of won)		For the period ended June 30, 2021
		Operating revenue and others				Operating expenses and others (*1)				Acquisition of property and equipment and others
Scope	Company	Three- month		Six- month		Three- month		Six- month		Three- month		Six- month
Ultimate Controlling Entity	SK Inc.(*2)	W	3,273		6,448		70,640		334,516		11,092		12,542
Subsidiaries	SK Broadband Co., Ltd.		24,843		48,231		135,847		270,969		770		770
	PS&Marketing Corporation(*3)		2,186		5,535		288,391		638,479		280		296
	SK O&S Co., Ltd.		925		1,770		56,751		112,447		9,959		10,764
	SK Planet Co., Ltd.		1,164		2,244		20,856		41,598		2,670		2,670
	SK Telink Co., Ltd.(*4)		16,422		36,957		9,159		19,370		—		—
	SERVICE ACE Co., Ltd.		2,478		5,416		30,812		62,690		—		—
	SERVICE TOP Co., Ltd.		2,174		4,277		32,927		68,152		—		—
	Eleven Street Co., Ltd.		915		1,824		3,578		6,851		—		—
	One Store Co., Ltd.		4,027		7,662		—		—		—		—
	ADT CAPS Co., Ltd. (Formerly, SK Infosec Co., Ltd.)(*5)		4,920		18,887		21,701		38,038		2,223		2,551
	Dreamus Company		754		1,453		25,975		47,556		—		—
	Others		3,029		5,287		9,772		16,304		715		754
			63,837		139,543		635,769		1,322,454		16,617		17,805
Associates	F&U Credit information Co., Ltd.		192		382		10,570		21,327		—		—
	SK hynix Inc.(*6)		7,839		186,637		14		53		—		—
	HanaCard Co., Ltd.		1,663		1,683		669		1,511		—		—
	SK Wyverns Co., Ltd.(*7)		—		199		—		8,203		—		—
	Content Wavve Corp.		33		40		32,974		33,669		—		—
	Others(*8)		18,191		25,308		3,724		3,862		—		—
			27,918		214,249		47,951		68,625		—		—
Others	SK Ecoplant Co., Ltd. (Formerly, SK Engineering & Construction Co., Ltd.)		557		1,037		—		—		—		—
	SK Innovation Co., Ltd.		3,276		5,477		3,304		6,813		—		—
	SK Networks Co., Ltd.		451		828		2,170		4,281		—		24
	SK Networks Service Co., Ltd.		172		341		9,656		18,693		403		403
	SK Telesys Co., Ltd.		40		73		22		98		8,703		9,683
	SK TNS Co., Ltd.(*7)		13		52		2,377		5,856		18,213		38,169
	SK Energy Co., Ltd.		539		913		143		163		—		—
	SKC Infra Service Co., Ltd.		7		11		2,167		4,745		91		91
	SK ENS Co., Ltd.		513		917		—		—		—		—
	UbiNS Co., Ltd.		—		—		532		728		9,597		10,375
	Happy Narae Co., Ltd.		36		64		2,968		6,688		36,372		40,794
	Others		3,747		6,104		2,659		5,749		4,049		4,166
			9,351		15,817		25,998		53,814		77,428		103,705
		W	104,379		376,057		780,358		1,779,409		105,137		134,052

(*1) Operating expenses and others include lease payments by the Company.

56

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

29. Transactions with Related Parties, Continued

(3) Transactions with related parties for the three and six-month periods ended June 30, 2022 and 2021 are as follows, Continued:

(*2) Operating expenses and others include W194,617 million of dividends paid by the Company.

(*3) Operating expenses and others include W325,617 million paid to PS&Marketing Corporation relating to purchase of accounts receivable resulting from sale of handsets.

(*4) Operating revenue and others include W3,009 million of dividend income received.

(*5) Operating revenue and others include W9,637 million of dividend income received.

(*6) Operating revenue and others include W170,937 million of dividend income received.

(*7) Transactions occurred before disposal.

(*8) Operating revenue and others include W10,716 million of dividend income received from Korea IT Fund.

57

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

29. Transactions with Related Parties, Continued

(4) Account balances with related parties as of June 30, 2022 and December 31, 2021 are as follows:

(In millions of won)		June 30, 2022
		Receivables				Payables
Scope	Company	Loans		Accounts receivable – trade, etc.		Accounts payable – other, etc.
Ultimate Controlling Entity	SK Inc.	W	—		1,266		39,284
Subsidiaries	SK Broadband Co., Ltd.		—		8,915		209,636
	PS&Marketing Corporation		—		1,240		66,783
	SK O&S Co., Ltd.		—		90		43,802
	SK Telink Co., Ltd.		—		17,121		23,990
	SERVICE ACE Co., Ltd.		—		310		20,431
	SERVICE TOP Co., Ltd.		—		8		20,098
	SK Communications Co., Ltd.		—		27		8,552
	Others		—		2,071		19,869
			—		29,782		413,161
Associates	F&U Credit information Co., Ltd.		—		6		4,459
	Wave City Development Co., Ltd.(*1)		—		1,475		—
	Daehan Kanggun BcN Co., Ltd.(*2)		22,148		2,572		—
	HanaCard Co., Ltd.		—		734		6,822
	SK USA, Inc.		—		—		2,348
			22,148		4,787		13,629
Others	SK hynix Inc.		—		10,552		169
	SK Planet Co., Ltd.		—		590		20,351
	Eleven Street Co., Ltd.		—		1,179		5,829
	One Store Co., Ltd.		—		520		13,057
	SK Shieldus Co., Ltd.		—		1,050		15,191
	SK Innovation Co., Ltd.		—		3,079		32,822
	SK Networks Co., Ltd.		—		388		31,484
	SK Networks Services Co., Ltd.		—		12		6,737
	SK RENT A CAR Co., Ltd.		—		68		10,644
	Incross Co., Ltd.		—		1,892		10,449
	UbiNS Co., Ltd.		—		—		393
	Mintit Co., Ltd.		—		35,757		—
	Happy Narae Co., Ltd.		—		—		15,834
	Content Wavve Corp.		—		556		1,470
	Dreamus Company		—		504		3,734
	Others		—		7,446		6,847
			—		63,593		175,011
		W	22,148		99,428		641,085

(*1) As of June 30, 2022, the Company recognized loss allowance amounting to W620 million on accounts receivable – trade.

(*2) As of June 30, 2022, the Company recognized full loss allowance for the balance of loans to Daehan Kanggun BcN Co., Ltd.

58

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

29. Transactions with Related Parties, Continued

(4) Account balances with related parties as of June 30, 2022 and December 31, 2021 are as follows, Continued:

(In millions of won)		December 31, 2021
		Receivables				Payables
Scope	Company	Loans		Accounts receivable – trade, etc.		Accounts payable – other, etc.
Ultimate Controlling Entity	SK Inc.	W	—		2,059		50,054
Subsidiaries	SK Broadband Co., Ltd.		—		7,374		273,875
	PS&Marketing Corporation		—		1,247		66,097
	SK O&S Co., Ltd.		—		59		52,609
	SK Telink Co., Ltd.		—		15,765		20,826
	SERVICE ACE Co., Ltd.		—		466		24,791
	SERVICE TOP Co., Ltd.		—		2		24,859
	SK Communications Co., Ltd.		—		28		12,113
	Others		—		39		2,324
			—		24,980		477,494
Associates	F&U Credit information Co., Ltd.		—		3		4,394
	Wave City Development Co., Ltd.(*1)		—		2,623		—
	Daehan Kanggun BcN Co., Ltd.(*2)		22,147		3,857		—
	HanaCard Co., Ltd.		—		433		42,110
	Others		—		71		1,104
			22,147		6,987		47,608
Others	SK hynix Inc.		—		11,526		166
	SK Planet Co., Ltd.		—		661		25,337
	Eleven Street Co., Ltd.		—		486		7,555
	One Store Co., Ltd.		—		8		13,325
	SK m&service Co., Ltd.		—		1,363		17,754
	SK Shieldus Co., Ltd.		—		1,068		16,172
	SK Innovation Co., Ltd.		—		3,020		37,136
	SK Networks Co., Ltd.		—		108		33,613
	SK Networks Services Co., Ltd.		—		—		7,374
	SK RENT A CAR Co., Ltd.		—		116		11,069
	Incross Co., Ltd.		—		1,687		10,904
	UbiNS Co., Ltd.		—		1		9,886
	Mintit Co., Ltd.		—		17,868		131
	Happy Narae Co., Ltd.		—		—		48,484
	Content Wavve Corp.		—		183		9,865
	Others		—		7,529		7,198
			—		45,624		255,969
		W	22,147		79,650		831,125

(*1) As of December 31, 2021, the Company recognized loss allowance amounting to W1,102 million on accounts receivable – trade.

(*2) As of December 31, 2021, the Company recognized full loss allowance for the balance of loans to Daehan Kanggun BcN Co., Ltd.

59

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

29. Transactions with Related Parties, Continued

(5) The Company has granted SK REIT Co., Ltd. the right of first offer regarding the disposal of real estate owned by the Company. Whereby, the negotiation period is within 3 to 5 years from June 30, 2021, date of agreement, and the Company has been granted the right by SK REIT Co., Ltd. to lease the real estate in preference to a third party if SK REIT Co., Ltd. purchases the real estate from the Company.

(6) There were additional investments and disposal transactions in subsidiaries, associates and joint ventures for the six-month period ended June 30, 2022 are as presented in note 8.

30. Commitments and Contingencies

(1) Accounts receivable from sale of handsets

The sales agents of the Company sell handsets to the Company’s subscribers on an installment basis. The Company entered into comprehensive agreements to purchase accounts receivable from handset sales with retail stores and authorized dealers and to transfer the accounts receivable from handset sales to special-purpose companies which were established with the purpose of liquidating receivables, respectively.

Accounts receivable from sales of handsets amounting to W381,759 million and W493,277 million as of June 30, 2022 and December 31, 2021, respectively, which the Company purchased according to the relevant comprehensive agreement, are recognized as accounts receivable – other and long-term accounts receivable – other.

(2) Legal claims and litigations

As of June 30, 2022, the Company is involved in various legal claims and litigations. Provision recognized in relation to these claims and litigations is immaterial. In connection with those legal claims and litigations for which no provision was recognized, management does not believe the Company has a present obligation, nor is it expected that any of these claims or litigations will have a significant impact on the Company’s financial position or operating results in the event an outflow of resources is ultimately necessary.

(3) Obligation relating to spin-off

The Company carried out the spin-off of its business of managing investments in semiconductor, New Information and Communication Technologies(“ICT”) and other businesses and making new investments on November 1, 2021. The Company has obligation to jointly and severally reimburse the Company’s liabilities incurred prior to the spin-off with SK Square Co., Ltd., the spin-off company, in accordance with Article 530-9 (1) of Korean Commercial Act.

60

SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

31. Statements of Cash Flows

(1) Adjustments for income and expenses from operating activities the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended
	June 30, 2022			June 30, 2021
Gain on foreign currency translations	W	(725	)		(125	)
Interest income		(13,060	)		(13,328	)
Dividend income		(49,637	)		(195,315	)
Gain relating to investments in subsidiaries, associates and joint ventures		(950	)		(99,338	)
Gain relating to financial instruments at FVTPL		(1,295	)		(35,618	)
Gain on disposal of property and equipment and intangible assets		(7,172	)		(3,495	)
Gain on sale of accounts receivable – other		(1,043	)		(14,266	)
Other income		(4,227	)		(5,340	)
Loss on foreign currency translations		60			119
Bad debt expenses		9,519			4,101
Other Bad debt expenses		1,112			823
Loss relating to financial instruments at FVTPL		160			88,946
Depreciation and amortization		1,417,824			1,452,360
Loss on disposal of property and equipment and intangible assets		2,968			3,687
Loss on sale of accounts receivable – other		8,006			—
Interest expense		129,092			116,853
Expense related to defined benefit plan		25,977			28,642
Bonus paid by treasury shares		24,007			29,642
Share compensation expense		75,783			226
Income tax expense		190,533			151,480
Other expenses		14,199			1,390
	W	1,821,131			1,511,444

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SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

31. Statements of Cash Flows, Continued

(2) Changes in assets and liabilities from operating activities for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended
	June 30, 2022			June 30, 2021
Accounts receivable – trade	W	(23,700	)		(85,355	)
Accounts receivable – other		(2,517	)		45,770
Advanced payments		5,067			(48,401	)
Prepaid expenses		(22,307	)		67,292
Inventories		(7,082	)		(1,417	)
Long-term accounts receivable – other		66,224			55,680
Long-term prepaid expenses		18,520			(27,192	)
Guarantee deposits		6,458			8,887
Contract assets		(2,354	)		(39	)
Accounts payable – other		1,965			(252,041	)
Withholdings		60,437			(2,707	)
Deposits received		(4,166	)		(2,585	)
Accrued expenses		(40,695	)		(38,493	)
Plan assets		5,146			2,763
Retirement benefits paid		(15,901	)		(18,652	)
Contract liabilities		(3,264	)		(1,436	)
Others		(1,919	)		(4,617	)
	W	39,912			(302,543	)

(3) Significant non-cash transactions for the six-month periods ended June 30, 2022 and 2021 are as follows:

(In millions of won)
	For the six-month period ended
	June 30, 2022			June 30, 2021
Increase (decrease) in accounts payable – other relating to the acquisition of property and equipment and intangible assets	W	(212,085	)		5,724
Increase of right-of-use assets		226,978			223,726
Retirement of treasury shares		—			1,965,952
Transfer from property and equipment to investment property		13,531			—

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SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

32. Emissions Liabilities

(1) The quantity of emissions rights allocated free of charge for each implementation year as of June 30, 2022 are as follows:

(In tCO2-eQ)
	Quantities allocated in 2020			Quantities allocated  in 2021			Quantities allocated in 2022			Total
Emissions rights allocated free of charge		814,842			1,033,764			1,033,764			2,882,370
(2)       Changes in emissions rights quantities the Company held are as follows:
(In tCO2-eQ)
	Quantities allocated in 2020			Quantities    allocated in 2021			Quantities allocated in the six- month period ended June  30, 2022			Total
Beginning		(60,977	)		—			(19,854	)		(80,831	)
Allocation at no cost		814,842			1,033,764			1,033,764			2,882,370
Additional allocation		217,643			—			—			217,643
Other changes		—			(2,238	)		(2,238	)		(4,476	)
Purchase		68,471			—			—			68,471
Surrendered or shall be surrendered		(1,039,979	)		(1,051,380	)		(1,140,316	)		(3,231,675	)
Borrowed		—			19,854			—			19,854
Ending		—			—			(128,644	)		(128,644	)

(3) As of June 30, 2022, the estimated annual greenhouse gas emissions quantities of the Company are 1,140,316 tCO2-eQ.

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SK TELECOM CO., LTD.

Notes to the Interim Separate Financial Statements

June 30, 2022 and 2021 (Unaudited)

33. Non-current Assets Held for Sale

On February 25, 2021, the Company has decided to dispose of the investments in an associate engaged in mobility business to T map Mobility Co., Ltd. pursuant to the approval of the Board of Directors and reclassified entire shares of the investments in associates as non-current assets held for sale. The disposal of the investments in associates is expected to take place in 2022 after the approval of the Financial Services Commission.

(In millions of won)
		June 30, 2022
Investments in associates	Carrot General Insurance Co., Ltd.	W	20,000

34. Subsequent Events

(1) The Board of Directors of the Company resolved to pay interim dividend at the Board’s meeting on July 28, 2022, and the details are as follows:

Classification	Description
Interim dividend amount	W830 per share (Total amount: W180,967 million)
Dividend rate	1.55%
Dividend date	June 30, 2022
Date of distribution	According to Article 165 of Capital Market and Financial Investment Business Act 12-3, the Company plans to distribute dividends by August 17, 2022.

(2) The Board of Directors of the Company resolved the acquisition and disposal of certain shares in order to strengthen the strategic alliance with Hana Financial Group Inc.(“HFG”) at the Board’s meeting on July 22, 2022. In accordance with the resolution, on July 27, 2022, the Company disposed of entire common shares of HanaCard Co., Ltd. (39,902,323 shares) and entire common shares of Finnq Co., Ltd. (6,370,000 shares) to HFG at W330,032 million and W5,733 million, respectively. Through the agreement with HFG, the Company is obligated to acquire HFG’s common shares from July 27, 2022 to January 31, 2024, after depositing W330,032 million in a specific money trust. Meanwhile, the Company disposed of entire common shares of SK Square Co., Ltd. (767,011 shares) on July 27, 2022 to HanaCard Co., Ltd. at W31,563 million, and HanaCard Co., Ltd. is obligated to acquire the Company’s common shares from July 27, 2022 to January 31, 2024, after depositing W68,437 million in a specific money trust. The shares acquired by the Company, HFG, and HanaCard Co., Ltd. through the above transaction cannot be disposed until March 31, 2025.

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