6-K 1 h00322e6vk.htm KT CORPORATION KT CORPORATION
Table of Contents

 
 
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 February 2006
KT Corporation
206 Jungja-dong
Bundang-gu, Sungnam
Kyunggi-do
463-711
Korea
(Address of principal executive offices)
(indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F þ   Form 40-F o
(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes o   No þ
 
 

 

Table of Contents

February 3rd, 2006
(KT LOGO)
4th Quarter 2005
Preliminary Earnings Commentary
(KRX : 030200 / NYSE : KTC)

 

Table of Contents

Disclaimer
This material contains estimated information of unaudited non-consolidated preliminary financial and operating data of KT Corporation (“KT” or “the company”) as of December 31, 2005 and forward-looking statements with respect to the financial condition, results of operations and business of KT. Statements that are not historical facts, including statements about KT’s beliefs and expectations are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other future results or performance expressed or implied by such forward-looking statements. Such forward-looking statements were based on current plan, estimates and perfections of KT and the political and economic environment in which KT will operate in the future and therefore you should not place undue reliance on them.
Therefore, KT does not make any representation or warranty, expressed or implied, as to the accuracy or completeness of the unaudited financial and operating data contained in this material and such information maybe materially different from the actual results or performance of KT. KT speaks only as of the date it is made, and KT undertakes no obligation to update publicly any of them in light of new information or future events.
The financial and operating data contained in this presentation have been rounded. Since affiliated companies have not finished accounting, estimated figures were used for the equity method gains/losses.
KT’s non-consolidated financial statements and report as of December 31, 2005 will be filed with the Financial Supervisory Service (FSS) and the Korea Exchange (KRX) in March 31, 2006.
If you have any questions in connection with the preliminary earnings, please contact Investor Relations Department of KT Corp.
Tel : 82-31-727-0931~4
Fax : 82-31-727-0949
E-mail: pax@kt.co.kr

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Table of Contents

1. Financial Highlights
A. Summary of Income Statement
                                                         
    2005   2005   2005 4Q / 2005 3Q   2004   2005 4Q / 2004 4Q
(KRW bn)   4Q   3Q   amount   D%   4Q   amount   D%
Operating revenue
     2,970.1       2,938.7       31.4       1.1 %     2,871.2       99.0       3.4 %
o Internet access
     630.9       635.7       -4.8       -0.8 %     629.1       1.8       0.3 %
o Internet application
     58.9       56.1       2.8       4.9 %     50.3       8.6       17.1 %
o Data
     324.2       328.1       -3.9       -1.2 %     339.4       -15.2       -4.5 %
o Telephone
     1,084.7       1,087.8       -3.0       -0.3 %     1,111.8       -27.0       -2.4 %
o LM
     450.7       445.0       5.7       1.3 %     446.3       4.4       1.0 %
o Wireless
     262.8       285.5       -22.7       -8.0 %     193.3       69.5       35.9 %
o Satellite
     28.3       29.4       -1.1       -3.6 %     29.3       -0.9       -3.1 %
o Real estate
     29.0       21.6       7.5       34.6 %     20.0       9.1       45.5 %
o Others
     100.6       49.6       51.0       102.7 %     51.8       48.8       94.3 %
o SI
     103.4       44.2       59.2       134.0 %     48.9       54.4       111.2 %
Operating expenses
     2,702.8       2,486.8       216.1       8.7 %     2,583.9       118.9       4.6 %
o Labor
     637.8       624.0       13.8       2.2 %     572.7       65.2       11.4 %
o Commissions
     178.5       175.2       3.3       1.9 %     174.8       3.7       2.1 %
o Sales commission
     48.8       73.3       -24.4       -33.3 %     68.2       -19.3       -28.4 %
o Sales promotion
     86.1       89.7       -3.6       -4.0 %     105.7       -19.6       -18.5 %
o Advertising
     47.7       25.1       22.6       90.0 %     37.8       9.9       26.2 %
o Provision for doubtful accounts
     9.8       9.8       -0.1       -0.8 %     100.7       -91.0       -90.3 %
o Depreciation
     629.0       564.5       64.5       11.4 %     628.7       0.3       0.0 %
o Repairs & maintenance
     113.6       137.5       -23.9       -17.4 %     102.8       10.8       10.5 %
o Cost of goods sold
     102.7       91.1       11.5       12.6 %     77.5       25.2       32.5 %
o Cost of service provided
     557.2       464.9       92.3       19.9 %     473.8       83.4       17.6 %
o R&D
     86.3       63.1       23.2       36.7 %     85.9       0.4       0.5 %
o Others
     205.3       168.5       36.8       21.8 %     155.4       49.9       32.1 %
Operating income
     267.3       452.0       -184.7       -40.9 %     287.2       -20.0       -6.9 %
Operating margin
     9.0 %     15.4 %     -6.4 % P           10.0 %     -1.0 % P      
EBITDA(1)
     896.3       1,016.4       -120.1       -11.8 %     915.9       -19.7       -2.1 %
EBITDA margin
     30.2 %     34.6 %     -4.4 % P           31.9 %     -1.7 % P      
Non-operating income
     48.9       89.6       -40.6       -45.4 %     659.6       -610.7       -92.6 %
Non-operating expenses
     232.9       172.7       60.2       34.9 %     389.8       -156.9       -40.2 %
Ordinary income
     83.3       368.8       -285.5       -77.4 %     557.1       -473.8       -85.0 %
Income tax expenses
     -19.7       63.4       -83.1       N/A       160.9       -180.6       N/A  
Effective tax rate
     -23.6 %     17.2 %     N/A               28.9 %     N/A          
Net income
     103.0       305.4       -202.4       -66.3 %     396.2       -293.2       -74.0 %
EPS (won)
     483       1,063       -580       -54.5 %     1,443       -960       -66.5 %
 
(1) EBITDA = Operating income + Depreciation
o   Revenue
  -   Revenue increased compared to the previous quarter due to increased SI revenue for receiving more SI project orders such as government IT center, increased estate rental revenues and increased LM traffic.
 
  -   Revenue increased compared to the corresponding period of 2004 due to PCS sub increase and increased SI project orders.
o   Operating expenses
  -   Operating expenses increased compared to the previous quarter due to an increase in cost of service provided (cost of providing PCS service and cost of providing SI service), R&D and advertising expenses.
 
  -   Operating expenses increased compared to the corresponding period of 2004 due to an increase in cost of service provided, labor, cost of goods sold, repairs & maintenance and commissions as the number of PCS and broadband subscribers increases.
o   Income tax expenses
  -   Income tax expenses decreased compared to the previous quarter due to a decrease in ordinary income and increase in temporary tax credit from government for making new investments.

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B. Summary of Balance Sheet
                                                         
    2005   2005   2005 4Q / 2005 3Q   2004   2005 4Q / 2004 3Q
(KRW bn)   4Q   3Q   amount   D%   4Q   amount   D%
Total assets
     17,912.9       18,048.5       -135.6       -0.8 %     20,114.0       -2,201.1       -10.9 %
o Current assets
     3,402.9       3,838.3       -435.3       -11.3 %     5,295.7       -1,892.7       -35.7 %
o Quick assets
     3,287.1       3,706.4       -419.3       -11.3 %     5,195.0       -1,907.9       -36.7 %
- Cash & Cash equivalents
     1,155.5       1,419.8       -264.3       -18.6 %     3,126.2       -1,970.7       -63.0 %
o Inventories
     115.9       131.9       -16.0       -12.1 %     100.7       15.2       15.1 %
o Non-current assets
     14,510.0       14,210.2       299.7       2.1 %     14,818.4       -308.4       -2.1 %
o Investments
     3,655.3       3,494.2       161.2       4.6 %     3,882.2       -226.9       -5.8 %
- KTF shares
     2,551.8       2,446.2       105.6       4.3 %     2,428.1       123.8       5.1 %
- Long-term loans
     311.3       341.2       -29.9       -8.8 %     443.2       -131.9       -29.8 %
- Others
     792.2       706.7       85.4       12.1 %     1,010.9       -218.8       -21.6 %
o Tangible assets
     10,411.5       10,324.8       86.7       0.8 %     10,637.1       -225.5       -2.1 %
o Intangible assets
     443.1       391.2       51.9       13.3 %     299.1       144.0       48.1 %
Total liabilities
     9,903.9       10,253.7       -349.8       -3.4 %     12,667.5       -2,763.6       -21.8 %
o Current liabilities
     3,091.8       3,329.5       -237.7       -7.1 %     6,144.0       -3,052.2       -49.7 %
o Interest-bearing debts
     800.5       1,293.4       -492.9       -38.1 %     3,995.9       -3,195.4       -80.0 %
o Accounts payable
     728.6       609.3       119.3       19.6 %     683.5       45.0       6.6 %
o Others
     1,562.8       1,426.8       136.0       9.5 %     1,464.6       98.2       6.7 %
o Long-term liabilities
     6,812.1       6,924.2       -112.2       -1.6 %     6,523.5       288.6       4.4 %
o Interest-bearing debts
     5,372.6       5,412.4       -39.8       -0.7 %     5,038.8       333.8       6.6 %
o Installation deposit
     958.9       982.5       -23.6       -2.4 %     1,087.3       -128.4       -11.8 %
o Others
     480.6       529.3       -48.7       -9.2 %     397.4       83.2       20.9 %
Total shareholders’ equity
     8,009.0       7,794.7       214.3       2.7 %     7,446.5       562.5       7.6 %
o Common stock
     1,561.0       1,561.0       0.0       0.0 %     1,561.0       0.0       0.0 %
o Capital surplus
     1,440.3       1,440.3       0.0       0.0 %     1,440.3       0.0       0.0 %
o Retained earnings
     8,764.2       8,661.2       103.0       1.2 %     8,399.1       365.0       4.3 %
o Capital adjustments
     -3,756.4       -3,867.7       111.3       N/A     -3,953.9       197.4       N/A
o Treasury stock
     -3,840.5       -3,840.5       0.0       N/A     -3,962.6       122.1       N/A
o Gain (loss) on valuation of investmento
     0.0       -0.4       0.4       N/A     3.1       -3.1       N/A
o Others
     84.0       -26.8       110.8       N/A     5.6       78.4       1391.6 %
Total interest-bearing debt
     6,173.1       6,705.8       -532.8       -7.9 %     9,034.7       -2,861.6       -31.7 %
Net debt
     5,017.6       5,286.1       -268.4       -5.1 %     5,908.5       -890.9       -15.1 %
Net debt / Total shareholders’ equity
     62.6 %     67.8 %     -5.2 % P   79.3 %     -16.7 % P              
 
    o Assets
 
   
- Cash & cash equivalents decreased compared to the corresponding period of 2004 due to redemption of domestic bond and foreign debt, and investments decreased during the same period due to:
 
         · decrease in long-term loans for purchasing treasury shares
 
   
· classifying and recognizing deferred tax assets/liabilities in current or non-current portion in accordance with amended corporate accounting standards
 
       - Tangible assets increased compare to the previous quarter as CAPEX increased.
 
    o Liabilities
 
       - Reduction of 349.8 billion from the previous quarter was due to redemption of bonds and debts.
 
    o Shareholders’ Equity
 
       - Recorded slightly higher than previous quarter aided by net income of KRW 103 billion from the current quarter.

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2. Operating Results
A. Internet Revenue
                                                         
    2005   2005   2005 4Q / 2005 3Q   2004   2005 4Q / 2004 3Q
(KRW bn)   4Q   3Q   amount   D%   4Q   amount   D%
Internet access
     630.9       635.7       -4.8       -0.8 %     629.1       1.8       0.3 %
o Broadband
     558.7       560.2       -1.6       -0.3 %     558.9       -0.3       0.0 %
o Megapass
     536.3       536.4       -0.1       0.0 %     529.4       6.9       1.3 %
o Nespot
     22.4       23.8       -1.4       -6.1 %     29.5       -7.2       -24.2 %
o Kornet
     71.8       74.9       -3.2       -4.2 %     69.3       2.5       3.6 %
o Others
     0.4       0.5       -0.1       -14.4 %     0.9       -0.5       -51.1 %
Internet application
     58.9       56.1       2.8       4.9 %     50.3       8.6       17.1 %
o IDC
     24.9       20.3       4.5       22.4 %     25.3       -0.4       -1.5 %
o Bizmeka
     15.8       22.0       -6.2       -28.1 %     12.9       2.9       22.5 %
o Others
     18.2       13.8       4.4       31.8 %     12.2       6.1       50.1 %
 
   
o Compare to the previous quarter, Internet access revenue decreased mainly due to a decrease in Kornet service for corporate users.
 
   
o Internet application revenue increased due to increased demand for IDC(Internet Data Center) and medical information solution service.
B. Data Revenue
                                                         
    2005     2005     2005 4Q / 2005 3Q     2004     2005 4Q / 2004 3Q  
(KRW bn)   4Q     3Q     amount     D%   4Q     amount     D%
Data
     324.2       328.1       -3.9       -1.2 %     339.4       -15.2       -4.5 %
o Leased line
     284.9       291.6       -6.7       -2.3 %     294.1       -9.1       -3.1 %
o Local
     123.4       126.9       -3.5       -2.8 %     126.8       -3.4       -2.7 %
o Domestic long distance
     86.3       89.3       -3.0       -3.4 %     85.5       0.8       0.9 %
o International long distance
     3.5       4.1       -0.6       -14.8 %     4.6       -1.2       -25.1 %
o Broadcasting & others
     71.8       71.3       0.5       0.7 %     77.2       -5.4       -7.0 %
o Other data
     39.2       36.4       2.8       7.7 %     45.3       -6.1       -13.4 %
o Packet data
     2.6       3.1       -0.5       -16.1 %     4.4       -1.8       -41.9 %
o National network ATM
     19.3       17.6       1.7       9.5 %     21.3       -2.1       -9.6 %
o Others
     17.4       15.8       1.6       10.3 %     19.6       -2.2       -11.1 %
 
    o Leased line revenue decreased due to a decrease in demand for local and domestic long distance leased line service.

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C. Telephone Revenue
                                                         
    2005   2005   2005 4Q / 2005 3Q   2004   2005 4Q / 2004 3Q
(KRW bn)   4Q   3Q   amount   D%   4Q   amount   D%
Telephone revenue
     1,084.7       1,087.8       -3.0       -0.3 %     1,111.8       -27.0       -2.4 %
o Subscriber connection
     351.8       348.0       3.8       1.1 %     394.1       -42.3       -10.7 %
o Subscription fee
     14.7       14.7       0.0       0.2 %     17.0       -2.3       -13.3 %
o Basic monthly fee
     281.4       282.0       -0.6       -0.2 %     282.4       -1.0       -0.4 %
o Installation
     10.1       9.2       1.0       10.6 %     10.2       -0.1       -0.7 %
o Interconnection
     45.6       42.2       3.4       8.2 %     84.5       -39.0       -46.1 %
o Local
     270.2       267.1       3.2       1.2 %     270.1       0.1       0.1 %
o Usage
     186.9       186.2       0.7       0.4 %     205.3       -18.4       -9.0 %
o Interconnection
     36.4       35.0       1.4       4.1 %     23.4       13.0       55.6 %
o Others
     46.9       45.9       1.0       2.2 %     41.4       5.6       13.4 %
o Domestic long distance
     186.3       184.1       2.1       1.2 %     180.3       5.9       3.3 %
o Usage
     177.9       176.5       1.4       0.8 %     196.5       -18.6       -9.5 %
o Interconnection
     8.1       7.4       0.7       9.6 %     -16.5       24.6       N/A  
o Others
     0.3       0.3       0.0       1.1 %     0.4       -0.1       -14.4 %
o International long distance
     52.1       58.8       -6.6       -11.3 %     61.6       -9.5       -15.4 %
o International settlement
     42.9       43.5       -0.6       -1.4 %     44.5       -1.6       -3.6 %
o VoIP
     6.8       5.7       1.1       20.2 %     4.1       2.7       64.5 %
o VAS
     96.4       95.0       1.4       1.4 %     88.5       7.8       8.9 %
o Public telephone
     5.4       9.7       -4.3       -44.3 %     11.1       -5.7       -51.2 %
o 114 phone directory service
     31.0       31.1       0.0       -0.1 %     31.6       -0.6       -1.9 %
o Others
     41.8       44.9       -3.1       -6.9 %     25.8       16.0       61.9 %
 
o   Telephone revenue decreased compared to the previous quarter because:
 
   -   decrease in international long distance and public telephone revenue due to overall decline in traffic volume.
 
   -   decrease in Ann handset sales which led to decline in other telephone revenue.
 
o   Telephone revenue decreased compared to the corresponding period of 2004
 
   -   Even though sales of Ann handset in other telephone revenue increased, there was a bigger decline in usage revenue as local and domestic long distance traffic declined.

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D. LM (Land to Mobile) Interconnection Revenue
                                                         
    2005   2005   2005 4Q / 2005 3Q   2004   2005 4Q / 2004 3Q
(KRW bn)   4Q   3Q   amount   D%   4Q   amount   D%
LM Revenue
     450.7       445.0       5.7       1.3 %     446.3       4.4       1.0 %
LM interconnection cost
     231.0       207.9       23.0       11.1 %     241.3       -10.3       -4.3 %
 
o   LM revenue increased compare to the previous quarter and the same period of last year mainly due to expiration of monthly offering of 5-minute free LM calls as of November 30, 2005.
 
o   It takes approximately two months for operators to verify the actual volume of LM traffic. KT estimates LM interconnection cost reflecting historical traffic at the time of quarterly closing and makes appropriate adjustments in the following quarter. This is the reason why LM interconnection cost is not directly related to the volatility of LM traffic.
E. Wireless Revenue
                                                         
    2005   2005   2005 4Q / 2005 3Q   2004   2005 4Q / 2004 3Q
(KRW bn)   4Q   3Q   amount   D%   4Q   amount   D%
Wireless revenue
     262.8       285.5       -22.7       -8.0 %     193.3       69.5       35.9 %
o PCS resale
     240.7       274.1       -33.4       -12.2 %     190.1       50.7       26.7 %
o PCS service
     215.3       217.3       -1.9       -0.9 %     186.1       29.2       15.7 %
o Handset sales
     25.4       56.8       -31.5       -55.4 %     3.9       21.4       545.8 %
o Others
     22.1       11.4       10.7       93.4 %     3.3       18.8       577.2 %
 
o   Wireless revenue decrease was due to decline in handset sales.

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F. Operating Expenses
                                                         
    2005   2005   2005 4Q / 2005 3Q   2004   2005 4Q / 2004 3Q
(KRW bn)   4Q   3Q   amount   D%   4Q   amount   D%
Labor
     637.8       624.0       13.8       2.2 %     572.7       65.2       11.4 %
o Salaries & wages
     462.1       438.2       24.0       5.5 %     411.8       50.4       12.2 %
o Employee benefits
     132.3       131.0       1.3       1.0 %     116.1       16.2       13.9 %
o Provision for retirement
     43.4       54.8       -11.5       -20.9 %     44.7       -1.3       -3.0 %
Commissions
     178.5       175.2       3.3       1.9 %     174.8       3.7       2.1 %
Marketing expenses
     182.7       188.1       -5.4       -2.9 %     211.7       -29.0       -13.7 %
o Sales commission
     48.8       73.3       -24.4       -33.3 %     68.2       -19.3       -28.4 %
o Sales promotion
     86.1       89.7       -3.6       -4.0 %     105.7       -19.6       -18.5 %
o Advertising
     47.7       25.1       22.6       90.0 %     37.8       9.9       26.2 %
Provision for doubtful accounts
     9.8       9.8       -0.1       -0.8 %     100.7       -91.0       -90.3 %
Depreciation
     629.0       564.5       64.5       11.4 %     628.7       0.3       0.0 %
Repairs and Maintenance
     113.6       137.5       -23.9       -17.4 %     102.8       10.8       10.5 %
Cost of goods sold
     102.7       91.1       11.5       12.6 %     77.5       25.2       32.5 %
o PCS handset cost
     61.2       41.5       19.8       47.6 %     43.8       17.5       39.9 %
o PDA, WLAN card, others
     41.4       49.7       -8.2       -16.6 %     33.7       7.7       22.9 %
Cost of service provided
     557.2       464.9       92.3       19.9 %     473.8       83.4       17.6 %
o Cost of service
     272.2       209.2       63.0       30.1 %     182.1       90.1       49.5 %
o PCS resale network cost to KTF
     111.8       105.2       6.6       6.3 %     68.2       43.6       63.9 %
o SI service cost
     99.4       42.2       57.3       135.9 %     56.2       43.2       76.9 %
o Others
     60.9       61.9       -0.9       -1.5 %     57.7       3.2       5.6 %
o International settlement cost
     54.1       47.8       6.3       13.2 %     50.4       3.7       7.3 %
o LM interconnection cost
     231.0       207.9       23.0       11.1 %     241.3       -10.3       -4.3 %
R&D
     86.3       63.1       23.2       36.7 %     85.9       0.4       0.5 %
Others
     205.3       168.5       36.8       21.8 %     155.4       49.9       32.1 %
* CAPEX
     794.8       578.5       216.3       37.4 %     699.7       95.1       13.6 %
 
o   Compare to the same period of last year, increase in labor expense is caused by increase in salaries and wages reflecting collective bargain agreement made in August of 2005.
 
o   Marketing expenses decreased compared to the previous quarter and the same quarter of 2004 as KT efficiently controls outside sales channels.
 
o   Repairs and Maintenance for quality of service improvement decreased compare to the previous quarter as KT maximized efficiency.
 
o   Cost of goods sold increased compared to the previous quarter and the same period of 2004 as KT adjusted the value of old PCS handsets according to current market value and recognized the difference as cost of goods sold.
 
o   Cost of service provided compared to the previous quarter and the same period of 2004 increased because KT has recognized more SI service cost as SI revenue increased.
 
o   Other operating expenses increased because comprehensive real estate tax (approximately 29.7 billion won) was recognized in the current quarter

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G. Non-operating Income
                                                         
    2005   2005   2005 4Q / 2005 3Q   2004   2005 4Q / 2004 3Q
(KRW bn)   4Q   3Q   amount   D%   4Q   amount   D%
Non-operating income
     48.9       89.6       -40.6       -45.4 %     659.6       -610.7       -92.6 %
o Gains on disposition of investments
     0.0       0.4       -0.4       N/A     7.8       -7.8       N/A
o Gains on disposition of tangible assets
     8.5       1.8       6.6       362.6 %     0.7       7.7       1047.0 %
o Interest income
     20.5       15.6       4.8       30.8 %     36.5       -16.0       -43.9 %
o FX transaction gain
     5.9       3.5       2.4       68.6 %     7.7       -1.8       -23.3 %
o FX translation gain
     38.3       -20.4       58.6       N/A     513.8       -475.5       -92.6 %
o USO fund
     -49.8       20.3       -70.2       N/A     62.3       -112.2       N/A
o Gain on equity method
     20.0       32.6       -12.7       -38.8 %     0.0       20.0       N/A
o Others
     5.7       35.6       -29.8       -83.9 %     30.8       -25.0       -81.3 %
 
o   As of September 2005, our foreign currency net debt exposure (total borrowings in foreign currency of US$ 1,611 million — total foreign currency deposit of US$ 57 million) stood at US$ 1,554 million. The US$ depreciated by 25 won (1,038.0 won per dollar at the end of June ® 1,013.0 won per dollar at the end of September), resulting in FX translation gain of 31.5 billion (FX translation gain of 38.3 billion won — FX translation loss of 6.8 billion won = FX translation gain of 31.5 billion won).
 
o   Negative amount was recognized by adjusting the over-estimated USO fund until the 3rd quarter of 2005 as the USO fund was finalized in January 2006.
<Equity Method>
                                                         
    2005   2005   2005 4Q / 2005 3Q   2004   2005 4Q / 2004 3Q
(KRW bn)   4Q   3Q   amount   D%   4Q   amount   D%
o Gain on equity method
     20.0       32.6       -12.7       -38.8 %     0.0       20.0       N/A
o Loss on equity method
     5.4       -6.8       12.2       N/A     40.5       -35.1       -86.7 %
Gain or loss on equity method
     14.6       39.5       -24.9       -63.1 %     -40.5       55.0       N/A
                                                         
Gain or loss on equity method
                                                        
o Gain or loss from KTF
     52.1       68.1       -16.0       -23.5 %     46.0       6.1       13.3 %
o Amortization on goodwill from KTF
     -45.6       -45.6       0.0       N/A     -48.8       3.2       N/A
o Other subsidiaries
     8.1       17.0       -8.9       -52.5 %     -37.7       45.7       N/A
<Schedule for Amortization on Goodwill>
                                                         
(KRW bn)   2004     2005     2006     2007     2008     2009     2010  
Total
     326.0       181.7       181.9       154.5       141.1       141.1       76.0  

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H. Non-operating Expenses
                                                         
    2005   2005   2005 4Q / 2005 3Q   2004   2005 4Q / 2004 3Q
(KRW bn)   4Q   3Q   amount   D%   4Q   amount   D%
Non-operating expenses
     232.9       172.7       60.2       34.9 %     389.8       -156.9       -40.2 %
o Interest expense
     109.4       100.6       8.9       8.8 %     114.1       -4.6       -4.1 %
o FX transaction loss
     1.8       7.0       -5.3       -74.9 %     16.2       -14.4       -89.1 %
o FX translation loss
     6.8       -4.9       11.7       N/A     54.3       -47.5       -87.4 %
o Loss on equity method
     5.4       -6.8       12.2       N/A     40.5       -35.1       -86.7 %
o Loss on disposition of fixed assets
     17.2       11.8       5.4       45.9 %     26.2       -9.0       -34.3 %
o Others
     92.2       65.0       27.2       41.9 %     138.5       -46.3       -33.4 %
 
o   Compare to the same period of last year, other non-operating expenses increased because there was derivatives translation loss of approximately KRW 110 billion for hedging foreign currency fluctuations.

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Appendix 1: Factsheet
Broadband
                             
    Dec-04   Mar-05   Jun-05   Sep-05   Oct-05   Nov-05   Dec-05
Broadband Subs
   6,077,694   6,133,293   6,172,475   6,241,213   6,240,185   6,245,295   6,242,592
Net Addition
   12,372   26,022   13,917   12,454   -3,855   5,110   -2,703
o Megapass Lite
   4,888,980   4,862,075   4,821,986   4,834,442   4,820,625   4,810,788   4,789,363
o Megapass Premium
   662,841   688,997   717,099   724,032   722,302   721,421   718,017
o Megapass Special (1)
   2,765   4,970   5,973   7,206   7,518   7,844   8,192
o Megapass Ntopia
   523,108   577,251   627,417   675,533   689,740   705,242   727,020
Broadband M/S
                            
KT
   51.0 % 50.7 % 50.3 % 51.8 % 51.7 % 51.4 % 51.2 %
Hanaro
   23.1 % 22.7 % 22.7 % 23.0 % 22.9 % 22.7 % 22.7 %
Thrunet
   10.8 % 10.6 % 10.4 % 7.7 % 7.5 % 7.3 % 6.9 %
Others
  15.1 % 16.0 % 16.6 % 17.5 % 17.9 % 18.6 % 19.2 %
WLAN
                             
    Dec-04   Mar-05   Jun-05   Sep-05   Oct-05   Nov-05   Dec-05
WLAN Subs
   418,451   455,958   482,098   513,844   499,932   497,223   492,588
o NESPOT Family
   238,526   243,902   245,719   242,976   237,008   234,754   233,481
o NESPOT Solo
   29,914   32,189   34,155   37,218   35,652   36,057   36,382
o NESPOT Pop
   131,882   154,364   171,113   189,955   181,584   180,745   177,396
o NESPOT Biz
   18,129   25,503   31,111   43,695   45,688   45,667   45,329
Leased Lines
                               
    Dec-04   Mar-05   Jun-05   Sep-05   Oct-05   Nov-05   Dec-05
Leased Lines
   426,633   422,728   417,312   412,145   409,821   410,088   410,036
o Local leased line
   390,085   387,080   382,946   378,615   376,403   376,671   376,620
o DLD leased line
   36,233   35,404   34,119   33,300   33,200   33,203   33,217
o International leased line
   110   105   111   101   89   89   86
o Broadcasting leased line
   205   139   136   129   129   125   114
Internet Leased Lines
   38,775   39,603   40,995   42,523   42,935   43,281   43,818
Leased Line M/S
   67.6 % 67.1 % 66.5 % 66.1 % 66.0 % 65.9 % 65.8 %
Fixed-line
                             
    Dec-04   Mar-05   Jun-05   Sep-05   Oct-05   Nov-05   Dec-05
Fixed-line Subs (‘000)
   21,091   21,107   21,056   21,013   20,982   20,927   20,837
Residential users (%)
   72 % 72 % 72 % 72 % 72 % 72 % 72 %
Non-refundable users(%)
   72 % 72 % 72 % 72 % 72 % 72 % 72 %
Caller ID Users (‘000)
   4,043   4,057   4,049   4,123   4,155   4,200   4,222
VAS users (‘000)
   12,803   13,062   13,255   13,209   13,167   13,174   13,138
Fixed-line M/S
                            
Local M/S (subscriber base)
   93.8 % 93.8 % 93.5 % 93.2 % 93.1 % 93.1 % 93.2 %
DLD (revenue base) (3)
   83.7 % 83.5 % 83.5 % 85.7 % 85.4 % 85.5 %  
ILD (revenue base) (4)
   45.1 % 45.3 % 45.1 % 44.6 % 44.8 % 44.6 %  
Reference Data
                             
    Dec-04   Mar-05   Jun-05   Sep-05   Oct-05   Nov-05   Dec-05
Population (‘000)
   48,199   48,294   48,294   48,294   48,294   48,294   48,294
Number of Household
   15,538   15,789   15,789   15,789   15,789   15,789   15,789
 
Company data except Braodband Market Share and Population
 
*   Source of Population, No of Household: Korea National Statistical Office
 
*   Broadband ARPU: excluding revenue from WLAN
 
(1)   Special: Broadband service providing speed up to 20Mbps & 50Mbps.
 
(2)   The number of VDSL technology applied subscribers among Megapass service
 
(3)   Special telecom service providers are included in DLD M/S calculation.
 
(4)   Special telecom service providers are included in ILD M/S calculation.

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Appendix 2: Summary of Annual Income Statement
                                 
(Unit: KRW bn)   2005   2004   2005 / 2004
                    Amount   D%
Operating Revenue
     11,877.3       11,850.8       26.5       0.2 %
Internet access
     2,562.7       2,470.9       91.8       3.7 %
Internet application
     241.9       185.9       56.0       30.1 %
Data
     1,330.4       1,343.9       -13.5       -1.0 %
Telephone
     4,396.6       4,486.6       -90.0       -2.0 %
LM
     1,773.5       1,882.6       -109.1       -5.8 %
Wireless
     1,155.3       1,123.1       32.2       2.9 %
Satellite
     114.7       119.8       -5.0       -4.2 %
Real estate
     92.6       69.8       22.8       32.7 %
Others
     209.5       168.2       41.3       24.5 %
Operating Expense
     10,209.5       9,723.7       485.8       5.0 %
Depreciation
     2,171.6       2,279.2       -107.6       -4.7 %
Labor
     2,563.6       2,284.4       279.1       12.2 %
Commissions
     659.7       658.5       1.2       0.2 %
Marketing Expense
     824.2       750.5       73.7       9.8 %
Provision for doubtful accounts
     57.7       239.0       -181.2       -75.8 %
Repairs and maintenance
     417.5       418.5       -1.0       -0.2 %
Cost of goods sold
     523.9       554.8       -30.9       -5.6 %
Cost of service provided
     1,903.8       1,746.0       157.8       9.0 %
Research and development
     257.4       254.3       3.1       1.2 %
Others
     830.1       538.6       291.6       54.1 %
Operating Margin
     1,667.8       2,127.1       -459.3       -21.6 %
Operating Margin
     14.0 %     17.9 %     -3.9 %        
EBITDA
     3,839.4       4,406.3       -566.9       -12.9 %
EBITDA Margin
     32.3 %     37.2 %     -4.9 %        
Non-operating Income
     546.9       988.3       -441.4       -44.7 %
Non-operating Expense
     880.2       1,315.9       -435.8       -33.1 %
Ordinary Income
     1,334.6       1,799.5       -465.0       -25.8 %
Income Tax Expense
     337.3       544.0       -206.8       -38.0 %
Net Income
     997.3       1,255.5       -258.2       -20.6 %
EPS (Won)
     4,681       5,957       -1,276       -21.4 %

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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.
Dated: February 3, 2006
         
 
      KT Corporation
 
        
 
  By:   /s/ Thomas Bum Joon Kim
 
       
 
      Name: Thomas Bum Joon Kim
 
      Title: Assistant Vice President