6-K 1 d6k.htm FORM 6-K

Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of, November 2006

Commission File Number 1-14926

KT Corporation

(Translation of registrant’s name into English)

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  x    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):                     

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):                     

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨    No  x

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

November 7th, 2006

3rd Quarter 2006

Preliminary Earnings Commentary

(KRX : 030200 / NYSE : KTC)

Disclaimer

This material contains estimated information of unaudited non-consolidated preliminary financial and operating data of KT Corporation (“KT” or “the company”) as of September 30, 2006 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 September 30, 2006 will be filed with the Financial Supervisory Service(FSS) and th Korea Exchange(KRX) in November 14, 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: takim@kt.co.kr

1

1. Financial Highlights

A. Summary of Income Statement

(KRW bn)		2006 3Q			2006 2Q			2006 3Q / 2006 2Q						2005 3Q			2006 3Q / 2005 3Q						2006 cum. 3Q
								amount			D%						amount			D%
Operating revenue		2,999.7			2,955.7			44.0			1.5	%		2,938.7			61.0			2.1	%		8,853.0
¨ Internet access		604.6			617.3			-12.6			-2.0	%		635.7			-31.0			-4.9	%		1,833.7
¨ Internet application		77.4			65.4			12.1			18.5	%		56.1			21.3			38.0	%		196.8
¨ Data		309.9			307.8			2.2			0.7	%		328.1			-18.2			-5.5	%		926.5
¨ Telephone		1,082.4			1,075.0			7.4			0.7	%		1,087.8			-5.3			-0.5	%		3,218.9
¨ LM		435.6			438.0			-2.5			-0.6	%		445.0			-9.5			-2.1	%		1,312.0
¨ Wireless		356.2			331.9			24.3			7.3	%		285.5			70.7			24.8	%		1,011.4
¨ Satellite		27.2			28.0			-0.8			-2.8	%		29.4			-2.2			-7.4	%		82.6
¨ Real estate		52.8			32.7			20.0			61.2	%		21.6			31.2			144.6	%		111.5
¨ Others		53.5			59.5			-6.0			-10.1	%		49.6			3.9			7.8	%		159.4
¡ SI		41.9			47.2			-5.2			-11.1	%		44.2			-2.2			-5.1	%		121.6
Operating expenses		2,563.4			2,385.4			178.0			7.5	%		2,486.8			76.7			3.1	%		7,181.8
¨ Labor		604.9			607.7			-2.8			-0.5	%		624.0			-19.2			-3.1	%		1,799.3
¨ Commissions		173.3			157.4			15.9			10.1	%		175.2			-1.8			-1.1	%		482.0
¨ Sales commission		144.2			102.3			41.9			41.0	%		73.3			70.9			96.8	%		353.7
¨ Sales promotion		77.6			77.8			-0.2			-0.2	%		89.7			-12.0			-13.4	%		175.9
¨ Advertising		25.1			27.4			-2.3			-8.4	%		25.1			0.0			0.1	%		64.0
¨ Provision for doubtful accounts		-4.1			7.9			-12.0			N/A			9.8			-13.9			N/A			22.3
¨ Depreciation		526.8			473.2			53.6			11.3	%		564.5			-37.7			-6.7	%		1,487.7
¨ Repairs & maintenance		72.7			80.6			-7.9			-9.8	%		137.5			-64.9			-47.2	%		231.7
¨ Cost of goods sold		191.4			154.6			36.8			23.8	%		91.1			100.2			110.0	%		473.0
¨ Cost of service provided		448.7			439.5			9.2			2.1	%		464.9			-16.2			-3.5	%		1,317.1
¨ R&D		46.5			50.8			-4.3			-8.5	%		63.1			-16.6			-26.3	%		139.9
¨ Others		256.3			206.2			50.1			24.3	%		168.5			87.8			52.1	%		635.2
Operating income		436.3			570.2			-133.9			-23.5	%		452.0			-15.7			-3.5	%		1,671.2
Operating margin		14.5	%		19.3	%		-4.7%P						15.4	%		-0.8%P						18.9	%
EBITDA(1)		963.0			1,043.4			-80.4			-7.7	%		1,016.4			-53.4			-5.3	%		3,158.9
EBITDA margin		32.1	%		35.3	%		-3.2	%P		34.6	%		-2.5	%P		35.7	%
Non-operating income		108.5			96.1			12.4			12.9	%		89.6			18.9			21.1	%		372.6
Non-operating expenses		130.3			207.2			-76.9			-37.1	%		172.7			-42.4			-24.5	%		600.2
Ordinary income		414.4			459.1			-44.7			-9.7	%		368.8			45.6			12.4	%		1,443.6
Income tax expenses		96.8			116.5			-19.7			-16.9	%		63.4			33.5			52.8	%		374.2
Effective tax rate		23.4	%		25.4	%		-2.0%P						17.2%			6.2%P						25.9	%
Net income		317.6			342.6			-25.0			-7.3	%		305.4			12.2			4.0	%		1,069.4
EPS (won)		1,528			1,624			-96			-5.9	%		1,443			85			5.9	%

^¡ Revenue

- Revenue slightly grew QoQ and YoY due to increase in sales of PCS handset and development of real estate property

^¡ Operating expenses

- Operating expenses slightly increased QoQ and YoY due to hike in depreciation expense by increased CAPEX, sales commission as industry environment became more competitive, and cost of goods sold by increased PCS handset sales

^¡ Non-operating expenses

- Non-operating expenses decreased due to reduction in derivatives appraisal loss

^¡ Income tax expenses

- Income tax expenses fell QoQ due to operating income decline

2

B. Summary of Balance Sheet

		2006 3Q			2006 2Q			2006 3Q / 2006 2Q					2005 3Q			2006 3Q / 2005 3Q
(KRW bn)								amount		D%						amount		D%
Total assets		17,745.2			17,492.3			252.8		1.4	%		18,048.5			-303.3		-1.7	%
¨ Current assets		3,211.7			3,154.9			56.8		1.8	%		3,838.3			-626.5		-16.3	%
¡ Quick assets		3,108.2			3,063.5			44.8		1.5	%		3,706.4			-598.2		-16.1	%
- Cash & Cash equivalents		927.7			855.6			72.0		8.4	%		1,419.8			-492.1		-34.7	%
¡ Inventories		103.5			91.5			12.0		13.2	%		131.9			-28.4		-21.5	%
¨ Non-current assets		14,533.4			14,337.4			196.0		1.4	%		14,210.2			323.2		2.3	%
¡ Investments		3,834.7			3,749.7			85.0		2.3	%		3,494.2			340.5		9.7	%
- KTF shares		2,774.6			2,655.6			119.0		4.5	%		2,446.2			328.4		13.4	%
- Long-term loans		219.1			249.1			-30.0		-12.0	%		341.2			-122.1		-35.8	%
- Others		841.0			845.0			-4.0		-0.5	%		706.7			134.2		19.0	%
¡ Tangible assets		10,286.5			10,155.6			130.9		1.3	%		10,324.8			-38.3		-0.4	%
¡ Intangible assets		412.2			432.1			-19.9		-4.6	%		391.2			21.0		5.4	%
Total liabilities		9,356.5			9,387.7			-31.2		-0.3	%		10,253.7			-897.3		-8.8	%
¨ Current liabilities		2,902.2			2,696.1			206.1		7.6	%		3,329.5			-427.3		-12.8	%
¡ Interest-bearing debts		578.8			332.7			246.1		74.0	%		1,293.4			-714.6		-55.3	%
¡ Accounts payable		672.2			630.1			42.1		6.7	%		609.3			62.9		10.3	%
¡ Others		1,651.3			1,733.3			-82.0		-4.7	%		1,426.8			224.4		15.7	%
¨ Long-term liabilities		6,454.3			6,691.6			-237.3		-3.5	%		6,924.2			-469.9		-6.8	%
¡ Interest-bearing debts		4,904.0			5,177.8			-273.9		-5.3	%		5,412.4			-508.5		-9.4	%
¡ Installation deposit		919.3			931.7			-12.5		-1.3	%		982.5			-63.2		-6.4	%
¡ Others		631.1			582.0			49.0		8.4	%		529.3			101.8		19.2	%
Total shareholders’ equity		8,388.7			8,104.7			284.0		3.5	%		7,794.7			594.0		7.6	%
¨ Common stock		1,561.0			1,561.0			0.0		0.0	%		1,561.0			0.0		0.0	%
¨ Capital surplus		1,440.3			1,440.3			0.0		0.0	%		1,440.3			0.0		0.0	%
¨ Retained earnings		9,156.4			9,052.5			103.9		1.1	%		8,661.2			495.2		5.7	%
¨ Capital adjustments		-3,769.0			-3,949.0			180.1		N/A			-3,867.7			98.8		N/A
¡ Treasury stock		-3,840.5			-4,054.1			213.7		N/A			-3,840.5			0.0		N/A
¡ Gain(loss) on valuation of investment securities		37.3			34.7			2.6		7.5	%		-0.4			37.8		N/A
¡ Others		34.2			70.4			-36.2		-51.4	%		-26.8			61.0		N/A
Total interest-bearing debt		5,482.7			5,510.5			-27.8		-0.5	%		6,705.8			-1,223.1		-18.2	%
Net debt		4,555.1			4,654.9			-99.8		-2.1	%		5,286.1			-731.0		-13.8	%
Net debt / Total shareholders’ equity		54.3	%		57.4	%		-3.1% p					67.8	%		-13.5% P

^¡ Assets

- Tangible assets rose QoQ as CAPEX increased

- Investment increased due to purchase of KTF shares

^¡ Liabilities

- Interest-bearing debts fell due to redemption of bonds and debts

^¡ Shareholders’ Equity

- Shareholder’s equity slightly rose due to positive net income

3

2. Operating Results

A. Internet Revenue

		2006 3Q		2006 2Q		2006 3Q / 2006 2Q					2005 3Q		2006 3Q / 2005 3Q					2006 cum. 3Q
(KRW bn)						amount		D%					amount		D%
Internet access		604.6		617.3		-12.6		-2.0	%		635.7		-31.0		-4.9	%		1,833.7
¨ Broadband		536.7		548.5		-11.8		-2.2	%		560.2		-23.5		-4.2	%		1,636.4
¡ Megapass		524.5		527.7		-3.2		-0.6	%		536.4		-11.9		-2.2	%		1,584.8
¡ Nespot		12.2		20.8		-8.6		-41.5	%		23.8		-11.6		-48.8	%		51.7
¨ Kornet		71.3		72.4		-1.0		-1.4	%		74.9		-3.6		-4.8	%		207.9
¨ Others		-3.4		-3.6		0.2		N/A			0.5		-3.9		N/A			-10.6
Internet application		77.4		65.4		12.1		18.5	%		56.1		21.3		38.0	%		196.8
¨ IDC		36.3		33.3		3.1		9.2	%		20.3		16.0		78.8	%		92.5
¨ Bizmeka		24.3		18.6		5.7		30.4	%		22.0		2.4		10.7	%		59.6
¨ Others		16.8		13.4		3.4		25.0	%		13.8		2.9		21.3	%		44.7

^¡ Internet access revenue fell due to decline Megapass ARPU and sales of Nespot Swing handset

^¡ Internet application revenue rose due to increase in demand for IDC(Internet Data Center) servers and Bizmeka service

B. Data Revenue

		2006 3Q		2006 2Q		2006 3Q / 2006 2Q					2005 3Q		2006 3Q / 2005 3Q					2006 cum. 3Q
(KRW bn)						amount		D%					amount		D%
Data		309.9		307.8		2.2		0.7	%		328.1		-18.2		-5.5	%		926.5
¨ Leased line		270.7		269.4		1.3		0.5	%		291.6		-20.9		-7.2	%		808.4
¡ Local		112.9		114.4		-1.6		-1.4	%		126.9		-14.0		-11.0	%		338.1
¡ Domestic long distance		84.1		84.2		-0.2		-0.2	%		89.3		-5.3		-5.9	%		253.8
¡ International long distance		4.6		4.4		0.2		4.4	%		4.1		0.5		13.1	%		12.8
¡ Broadcasting & others		69.2		66.3		2.9		4.3	%		71.3		-2.2		-3.0	%		203.7
¨ Other data		39.2		38.4		0.8		2.1	%		36.4		2.7		7.5	%		118.2
¡ Packet data		2.3		2.3		0.0		1.9	%		3.1		-0.7		-23.8	%		6.9
¡ National network ATM		18.3		18.3		0.0		0.0	%		17.6		0.7		3.8	%		57.8
¡ Others		18.6		17.8		0.8		4.3	%		15.8		2.8		17.7	%		53.5

^¡ Broadcasting & others slightly grew due to increases in demand of leased lines by broadcasting service providers, specially for Worldcup matches

4

C. Telephone Revenue

		2006 3Q		2006 2Q		2006 3Q / 2006 2Q					2005 3Q		2006 3Q / 2005 3Q					2006 cum. 3Q
(KRW bn)						amount		D%					amount		D%
Telephone revenue		1,082.4		1,075.0		7.4		0.7	%		1,087.8		-5.3		-0.5	%		3,218.9
¨ Subscriber connection		342.8		347.9		-5.1		-1.5	%		348.0		-5.2		-1.5	%		1037.7
¡ Subscription fee		10.6		12.2		-1.6		-13.4	%		14.7		-4.1		-27.9	%		35.6
¡ Basic monthly fee		279.5		281.6		-2.0		-0.7	%		282.0		-2.5		-0.9	%		842.5
¡ Installlation		9.0		10.7		-1.7		-15.5	%		9.2		-0.1		-1.6	%		29.4
¡ Interconnection		43.7		43.4		0.3		0.6	%		42.2		1.5		3.6	%		130.3
¨ Local		251.7		259.4		-7.7		-3.0	%		267.1		-15.3		-5.7	%		777.6
¡ Usage		168.9		177.3		-8.4		-4.7	%		186.2		-17.3		-9.3	%		529.6
¡ Interconnection		34.3		34.6		-0.3		-0.9	%		35.0		-0.6		-1.8	%		104.8
¡ Others		48.5		47.5		1.0		2.1	%		45.9		2.6		5.7	%		143.3
¨ Domestic long distance		170.1		171.6		-1.5		-0.9	%		184.1		-14.0		-7.6	%		522.2
¡ Usage		163.0		164.5		-1.5		-0.9	%		176.5		-13.5		-7.6	%		500.7
¡ Interconnection		6.7		6.9		-0.2		-3.0	%		7.4		-0.7		-9.1	%		20.5
¡ Others		0.4		0.3		0.2		67.4	%		0.3		0.1		46.1	%		1.0
¨ International long distance		52.7		50.0		2.7		5.4	%		58.8		-6.0		-10.2	%		153.5
¨ International settlement		51.5		44.9		6.7		14.9	%		43.5		8.1		18.5	%		137.7
¨ VoIP		7.9		7.5		0.3		4.3	%		5.7		2.2		38.8	%		22.4
¨ VAS		94.1		93.7		0.4		0.4	%		95.0		-0.9		-1.0	%		281.4
¨ Public telephone		6.8		7.1		-0.3		-4.1	%		9.7		-2.9		-30.0	%		20.9
¨ 114 phone directory service		32.3		54.3		-22.1		-40.6	%		31.1		1.2		3.9	%		123.5
¨ Others		72.5		38.6		33.9		87.9	%		44.9		27.5		61.3	%		142.2

^¡ Telephone revenue rose because of increase in sales of Ann handset [Ann handset sales : 3Q06(43.3bn won), 2Q06(11.8bn won)]

^¡ Local and domestic long distance revenue decreased due to decline in traffic

^¡ Telephone revenue fell QoQ due to temporary increase in settlement of 114 phone directory service in the second quarter

5

D. LM (Land to Mobile) Interconnection Revenue

		2006 3Q		2006 2Q		2006 3Q / 2006 2Q					2005 3Q		2006 3Q / 2005 3Q					2006 cum. 3Q
(KRW bn)						amount		D%					amount		D%
LM Revenue		435.6		438.0		-2.5		-0.6	%		445.0		-9.5		-2.1	%		1,312.0
LM interconnection cost		211.6		203.2		8.4		4.2	%		207.9		3.7		1.8	%		626.3

^¡ LM revenue decreased due to decline in LM traffic.

^¡ 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

		2006 3Q		2006 2Q		2006 3Q / 2006 2Q					2005 3Q		2006 3Q / 2005 3Q					2006 cum. 3Q
(KRW bn)						amount		D%					amount		D%
Wireless revenue		356.2		331.9		24.3		7.3	%		285.5		70.7		24.8	%		1,011.4
¨ PCS resale		336.1		315.8		20.3		6.4	%		274.1		62.1		22.6	%		959.7
¡ PCS service		223.2		219.4		3.7		1.7	%		217.3		5.9		2.7	%		660.0
¡ Handset sales		113.0		96.4		16.6		17.2	%		56.8		56.1		98.8	%		299.6
¨ Others		20.1		16.1		4.0		25.0	%		11.4		8.7		76.0	%		51.8

^¡ Wireless revenue rose due to increase in the number of new subscribers and sales of handset

6

F. Operating Expenses

		2006 3Q		2006 2Q		2006 3Q / 2006 2Q					2005 3Q		2006 3Q / 2005 3Q					2006 cum. 3Q
(KRW bn)						amount		D%					amount		D%
Labor		604.9		607.7		-2.8		-0.5	%		624.0		-19.2		-3.1	%		1,799.3
¨ Salaries & wages		437.3		438.0		-0.8		-0.2	%		438.2		-0.9		-0.2	%		1,311.3
¨ Employee benefits		120.3		114.5		5.8		5.0	%		131.0		-10.8		-8.2	%		340.5
¨ Provision for retirement		47.4		55.1		-7.8		-14.1	%		54.8		-7.5		-13.7	%		147.5
Commissions		173.3		157.4		15.9		10.1	%		175.2		-1.8		-1.1	%		482.0
Marketing expenses		247.0		207.6		39.4		19.0	%		188.1		58.9		31.3	%		593.6
¨ Sales commission		144.2		102.3		41.9		41.0	%		73.3		70.9		96.8	%		353.7
¨ Sales promotion		77.6		77.8		-0.2		-0.2	%		89.7		-12.0		-13.4	%		175.9
¨ Advertising		25.1		27.4		-2.3		-8.4	%		25.1		0.0		0.1	%		64.0
Provision for doubtful accounts		-4.1		7.9		-12.0		N/A			9.8		-13.9		N/A			22.3
Depreciation		526.8		473.2		53.6		11.3	%		564.5		-37.7		-6.7	%		1,487.7
Repairs and Maintenance		72.7		80.6		-7.9		-9.8	%		137.5		-64.9		-47.2	%		231.7
Cost of goods sold		191.4		154.6		36.8		23.8	%		91.1		100.2		110.0	%		473.0
¨ PCS handset cost		116.2		97.0		19.3		19.9	%		41.5		74.8		180.2	%		310.0
¨ PDA, WLAN card, others		75.1		57.7		17.5		30.3	%		49.7		25.5		51.3	%		163.0
Cost of service provided		448.7		439.5		9.2		2.1	%		464.9		-16.2		-3.5	%		1,317.1
¨ Cost of service		182.2		186.9		-4.7		-2.5	%		209.2		-27.0		-12.9	%		540.9
¡ PCS resale network cost to KTF		105.8		112.7		-6.8		-6.1	%		105.2		0.7		0.6	%		326.8
¡ SI service cost		39.3		44.9		-5.6		-12.5	%		42.2		-2.9		-6.9	%		115.5
¡ Others		37.1		29.4		7.7		26.2	%		61.9		-24.8		-40.0	%		98.6
¨ International settlement cost		54.9		49.3		5.5		11.2	%		47.8		7.1		14.9	%		149.9
¨ LM interconnection cost		211.6		203.2		8.4		4.2	%		207.9		3.7		1.8	%		626.3
R&D		46.5		50.8		-4.3		-8.5	%		63.1		-16.6		-26.3	%		139.9
Others		256.3		206.2		50.1		24.3	%		168.5		87.8		52.1	%		635.2
* CAPEX		750.5		529.8		220.7		41.7	%		578.4		172.1		29.8	%

^¡ Labor cost

- Labor cost decreased YoY as KT completed collective bargaining and recognized salary increase in 3Q05

^¡ Marketing expenses

- Marketing expenses increased QoQ and YoY as industry environment became more competitive

^¡ Depreciation

- Depreciation expenses rose as depreciable assets increased

^¡ Cost of goods sold

- Cost of goods sold increased QoQ and YoY due to sales of Ann and PCS handset increase

7

G. Non-operating Income

		2006 3Q		2006 2Q		2006 3Q / 2006 2Q					2005 3Q		2006 3Q / 2005 3Q					2006 cum. 3Q
(KRW bn)						amount		D%					amount		D%
Non-operating income		108.5		96.1		12.4		12.9	%		89.6		18.9		21.1	%		372.6
¨ Gains on disposition of investments		12.7		0.8		12.0		1568.4	%		0.4		12.3		3100.0	%		13.6
¨ Gains on disposition of tangible assets		3.0		2.4		0.6		24.2	%		1.8		1.2		65.0	%		6.2
¨ Interest income		18.3		20.5		-2.2		-10.7	%		15.6		2.7		16.9	%		57.4
¨ FX transaction gain		3.1		21.1		-18.1		-85.5	%		3.5		-0.4		-12.6	%		26.3
¨ FX translation gain		20.5		10.7		9.8		91.5	%		-20.4		40.9		N/A			96.6
¨ USO fund		11.6		11.6		0.0		0.0	%		20.3		-8.8		-43.1	%		34.7
¨ Gain on equity method		15.5		1.9		13.6		719.2	%		32.6		-17.1		-52.5	%		41.7
¨ Others		23.8		27.1		-3.3		-12.2	%		35.6		-11.8		-33.0	%		96.1

^¡ Gains on disposition of investment increased as we had disposed some invested securities of Miraeasset securities

^¡ FX transaction gain fell due to redemption of foreign debt of US$ 300 million

^¡ As of September 2006, our foreign currency net debt exposure (total borrowings in foreign currency of US$ 1,511 million - total foreign currency deposit of US$ 20 million) stood at US$ 1,491 million. The US$ depreciated by 13.5 won (958.7 won per dollar at the end of June ® 945.2 won per dollar at the end of September), resulting in FX translation gain of 21.3 billion (FX translation gain of 20.5 billion won - FX translation loss of 0.8 billion won = FX translation gain of 21.3 billion won)

^¡ Gain on equity method increased due to solid operating performance by our subsidiaries, mainly KTF

<Equity Method>

		2006 3Q		2006 2Q		2006 3Q / 2006 2Q					2005 3Q		2006 3Q / 2005 3Q
(KRW bn)						amount		D%					amount		D%
¨ Gain on equity method		15.5		1.9		13.6		719.2	%		32.6		-17.1		-52.5	%
¨ Loss on equity method		8.7		3.8		4.9		130.5	%		-6.8		15.5		N/A
Gain or loss on equity method		6.8		-1.9		8.7		N/A			39.5		-32.7		-82.7	%
Gain or loss on equity method
¨ Gain or loss from KTF		48.7		38.9		9.8		25.2	%		68.1		-19.4		-28.5	%
¨ Amortization on goodwill from KTF		-45.6		-45.6		0.0		N/A			-45.6		0.0		N/A
¨ Other subsidiaries		3.7		4.8		-1.1		-23.0	%		17.0		-13.3		-78.1	%

<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

8

H. Non-operating Expenses

		2006 3Q		2006 2Q		2006 3Q / 2006 2Q					2005		2006 3Q / 2005 3Q					2006 cum. 3Q
(KRW bn)						amount		D%			3Q		amount		D%
Non-operating expenses		130.3		207.2		-76.9		-37.1	%		172.7		-42.4		-24.5	%		600.2
¨ Interest expense		79.5		84.9		-5.4		-6.4	%		100.6		-21.1		-21.0	%		251.1
¨ FX transaction loss		0.9		1.5		-0.6		-37.8	%		7.0		-6.1		-86.7	%		7.3
¨ FX translation loss		-0.8		4.4		-5.3		N/A			-4.9		4.0		N/A			11.3
¨ Loss on equity method		8.7		3.8		4.9		130.5	%		-6.8		15.5		N/A			21.6
¨ Loss on disposition of fixed assets		5.3		13.7		-8.4		-61.4	%		11.8		-6.5		-55.2	%		29.7
¨ Others		36.8		98.9		-62.1		-62.8	%		65.0		-28.2		-43.4	%		279.2

^¡ Other non-operating expenses decreased QoQ due to reduction in derivatives appraisal loss for hedging foreign currency fluctuations

9

Appendix 1: Factsheet

Broadband
		Dec-04			Mar-05			Jun-05			Sep-05			Dec-05			Jan-06			Mar-06			Jun-06			Jul-06			Aug-06			Sep-06
Broadband Subs		6,077,694			6,133,293			6,172,475			6,244,040			6,241,789			6,269,282			6,240,605			6,320,260			6,319,890			6,306,557			6,333,119
Net Addition		12,372			26,022			13,917			15,281			-3,506			27,493			-46,961			34,787			-370			-13,333			26,562
¡ Megapass Lite		4,888,980			4,862,075			4,821,986			4,837,269			4,788,942			4,787,601			4,724,684			4,772,280			4,778,874			4,784,952			4,834,732
¡ Megapass Premium		662,841			688,997			717,099			724,032			717,866			717,065			689,726			671,292			670,890			663,125			646,839
¡ Megapass Special(1)		2,765			4,970			5,973			7,206			8,196			8,553			8,992			9,035			9,011			8,900			8,730
¡ Megapass Ntopia		523,108			577,251			627,417			675,533			726,785			756,063			817,203			867,653			861,115			849,580			842,818
Broadband M/S
KT		51.0	%		50.7	%		50.3	%		51.8	%		51.2	%		51.0	%		50.0	%		49.5	%		46.1	%		45.8	%		45.6	%
Hanaro		23.1	%		22.7	%		22.7	%		23.0	%		22.7	%		29.2	%		28.6	%		28.2	%		26.3	%		26.1	%		25.9	%
Powercomm		0.0	%		0.0	%		0.0	%		0.5	%		2.1	%		2.7	%		3.8	%		5.6	%		5.7	%		6.4	%		7.1	%
Dacom		1.7	%		2.1	%		2.1	%		2.0	%		1.7	%		1.7	%		1.5	%		1.3	%		1.1	%		1.0	%		1.0	%
SO		9.0	%		9.6	%		10.3	%		11.0	%		11.6	%		11.8	%		12.6	%		12.4	%		16.6	%		16.6	%		16.5	%
Others		15.2	%		14.9	%		14.5	%		11.7	%		10.6	%		3.6	%		3.4	%		3.1	%		4.3	%		4.1	%		3.9	%
WLAN
		Dec-04			Mar-05			Jun-05			Sep-05			Dec-05			Jan-06			Mar-06			Jun-06			Jul-06			Aug-06			Sep-06
WLAN Subs		418,451			455,958			525,718			535,630			519,778			517,735			524,671			516,708			514,145			496,245			492,557
¡ NESPOT Family		238,526			243,902			249,454			242,976			237,259			236,532			230,597			219,650			214,955			205,819			200,883
¡ NESPOT Solo		29,914			32,189			35,871			37,218			38,385			39,133			40,725			41,519			41,719			39,303			39,374
¡ NESPOT Pop		131,882			154,364			180,778			189,955			187,157			184,327			180,959			173,070			168,930			157,625			155,002
¡ NESPOT Biz		18,129			25,503			32,337			43,695			45,814			46,018			60,776			64,205			64,452			65,024			64,458
¡ NESPOT Play		0			0			27,278			21,786			11,163			11,725			11,614			13,925			14,997			14,696			15,318
¡ NESPOT Home		0			0			0			0			0			0			0			4,339			9,092			13,778			17,522
Leased Lines
		Dec-04			Mar-05			Jun-05			Sep-05			Dec-05			Jan-06			Mar-06			Jun-06			Jul-06			Aug-06			Sep-06
Leased Lines		426,633			422,728			417,312			412,160			410,073			407,486			407,999			407,357			404,495			403,258			400,656
¡ Local leased line		390,085			387,080			382,946			378,615			376,620			375,009			376,458			375,501			372,802			371,590			370,349
¡ DLD leased line		36,233			35,404			34,119			33,300			33,217			32,256			31,293			31,480			31,407			31,398			30,028
¡ International leased line		110			105			111			90			91			90			91			95			99			99			94
¡ Broadcasting leased line		205			139			136			155			145			131			157			281			187			171			185
Internet Leased Lines		38,775			39,603			40,995			42,523			43,818			44,398			45,802			51,553			52,542			53,949			49,007
Fixed-line
		Dec-04			Mar-05			Jun-05			Sep-05			Dec-05			Jan-06			Mar-06			Jun-06			Jul-06			Aug-06			Sep-06
Local (‘000)		20,744			20,769			20,729			20,687			20,522			20,528			20,527			20,488			20,470			20,441			20,392
Domestic Long Distance (‘000)		18,897			18,883			18,791			18,699			18,544			18,547			18,629			18,734			18,731			18,700			—
* Ann (‘000)		53			391			782			945			1,066			1,098			1,130			1,267			1,372			1,481			1,610
* Ringo (‘000)		2,072			2,905			3,226			3,303			3,382			3,371			3,385			3,485			3,536			3,626			3,707
* Caller ID Users (‘000)		4,058			4,335			4,600			4,731			4,845			4,874			4,931			5,035			5,106			5,172			5,237
Fixed-line M/S
Local M/S (subscriber base)		93.8	%		93.8	%		93.5	%		93.2	%		93.2	%		93.1	%		93.0	%		92.7	%		92.6	%		92.5	%		92.4	%
DLD (revenue base)(3)		83.7	%		83.5	%		83.5	%		85.7	%		85.6	%		85.3	%		85.6	%		85.7	%		85.7	%		85.7	%
Reference Data
		Dec-04			Mar-05			Jun-05			Sep-05			Dec-05			Jan-06			Mar-06			Jun-06			Jul-06			Aug-06			Sep-06
Population (‘000)		48,199			48,294			48,294			48,294			48,294			48,311			48,344			48,498			48,514			48,530			48,547
Number of Household		15,538			15,789			15,789			15,789			15,789			15,989			15,989			15,989			15,989			15,989			15,989

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.

10

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: November 8, 2006

KT Corporation
By:		/s/ Thomas Bum Joon Kim
Name: Thomas Bum Joon Kim Title: Managing Director