Form 6-K

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 January 2007

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-

January 26, 2007

LOGO

4th Quarter 2006

Preliminary Earnings Commentary

(KRX : 030200 / NYSE : KTC)

LOGO

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, 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 plans, 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, 2006 will be filed with the Financial Supervisory Service(FSS) and th Korea Exchange(KRX) in March 31, 2007.

If you have any questions in connection with the preliminary earnings, please contact Investor Relations Department of KT Corp.

Tel : 82-31-727-0950~59

Fax : 82-31-727-0949

E-mail: shinbo@kt.co.kr

LOGO

1. Financial Highlights

A. Summary of Income Statement


(KRW bn)	2006 4Q		2006 3Q		2006 4Q / 2006 3Q			2005 4Q		2006 4Q / 2005 4Q			2006 cum.
(KRW bn)	2006 4Q		2006 3Q		amount	D%		2005 4Q		amount	D%		2006 cum.
Operating revenue	2,927.9		2,999.7		-71.8	-2.4	%	2,970.1		-42.2	-1.4	%	11,780.9
¨ Internet access	596.4		604.6		-8.2	-1.4	%	630.9		-34.4	-5.5	%	2,430.2
¨ Internet application	64.8		77.4		-12.6	-16.3	%	58.9		5.9	10.1	%	261.6
¨ Data	307.2		309.9		-2.7	-0.9	%	324.2		-17.0	-5.2	%	1,233.8
¨ Telephone	1,028.3		1,082.4		-54.1	-5.0	%	1,084.7		-56.4	-5.2	%	4,247.2
¨ LM	425.1		435.6		-10.5	-2.4	%	450.7		-25.6	-5.7	%	1,737.1
¨ Wireless	338.5		356.2		-17.7	-5.0	%	262.8		75.7	28.8	%	1,349.9
¨ Satellite	27.3		27.2		0.0	0.1	%	28.3		-1.1	-3.8	%	109.9
¨ Real estate	52.0		52.8		-0.8	-1.5	%	29.0		22.9	78.9	%	163.5
¨ Others	88.3		53.5		34.9	65.3	%	100.6		-12.2	-12.2	%	247.8
^¡ SI	76.6		41.9		34.7	82.7	%	103.4		-26.8	-25.9	%	198.2

Operating expenses	2,851.9		2,563.4		288.5	11.3	%	2,710.8		141.1	5.2	%	10,033.7

¨ Labor	747.1		604.9		142.3	23.5	%	645.8		101.4	15.7	%	2,546.5
¨ Commissions	182.1		173.3		8.8	5.0	%	178.5		3.6	2.0	%	664.1
¨ Sales commission	143.5		144.2		-0.7	-0.5	%	48.8		94.6	193.7	%	497.1
¨ Sales promotion	99.4		77.6		21.8	28.0	%	86.1		13.3	15.4	%	275.3
¨ Advertising	30.4		25.1		5.3	21.1	%	47.7		-17.3	-36.2	%	94.5
¨ Provision for doubtful accounts	-4.2		-4.1		-0.1	N/A		9.8		-14.0	N/A		18.1
¨ Depreciation	630.7		526.8		103.9	19.7	%	629.0		1.7	0.3	%	2,118.4
¨ Repairs & maintenance	81.0		72.7		8.3	11.4	%	113.6		-32.6	-28.7	%	312.6
¨ Cost of goods sold	145.6		191.4		-45.8	-23.9	%	102.7		42.9	41.8	%	618.5
¨ Cost of service provided	483.8		448.7		35.1	7.8	%	557.2		-73.4	-13.2	%	1,801.0
¨ R&D	69.3		46.5		22.8	49.0	%	86.3		-17.0	-19.7	%	209.1
¨ Others	243.3		256.3		-13.0	-5.1	%	205.3		38.0	18.5	%	878.5

Operating income	76.0		436.3		-360.2	-82.6	%	259.4		-183.3	-70.7	%	1,747.2

Operating margin	2.6	%	14.5	%	-11.9%P			8.7	%	-6.1%P			14.8	%

EBITDA(1)	706.7		963.0		-256.4	-26.6	%	888.3		-181.7	-20.4	%	3,865.6

EBITDA margin	24.1	%	32.1	%	-8.0%P			29.9	%	-5.8%P			32.8	%
Non-operating income	224.9		108.5		116.4	107.3	%	53.7		171.2	318.6	%	597.5
Non-operating expenses	141.3		130.3		11.0	8.4	%	205.2		-63.9	-31.1	%	741.5

Ordinary income	159.6		414.4		-254.8	-61.5	%	107.9		51.7	47.9	%	1,603.3

Income tax expenses	-16.7		96.8		-113.5	N/A		3.9		-20.6	N/A		357.5
Effective tax rate	-10.5	%	23.4	%	N/A			3.6	%	N/A			22.3	%

Net income	176.4		317.6		-141.2	-44.5	%	104.0		72.4	69.6	%	1,245.8

EPS (won)	847		1,528		-681	-44.5	%	482		365	75.8	%

^¡

Revenue

Decline in QoQ and YoY revenue for telephone and LM due to decreased Ann handset sales and traffic volume

Decline in QoQ wireless revenue from slowdown in handset sales, and decline in Internet application revenue due to lower demand for IDC and Bizmeka services

^¡	Operating Expense

Increase in QoQ and YoY operating expenses due to increased marketing costs, increased depreciation expenses from higher CAPEX, and changes in accounting principles for FY2006 in recognizing annual incentive payments leading to increased labor costs

^¡	Income Tax Expenses

Lower QoQ income tax expenses due to decline in income and a rise in temporary tax credit for increased CAPEX in 4Q

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B. Summary of Balance Sheet


(KRW bn)	2006 4Q		2006 3Q		2006 4Q /2006 3Q			2005 4Q		2006 4Q /2005 4Q
(KRW bn)	2006 4Q		2006 3Q		amount	D%		2005 4Q		amount	D%
Total assets	18,007.3		17,745.2		262.1	1.5	%	17,936.5		70.8	0.4	%
¨ Current assets	3,276.0		3,211.7		64.3	2.0	%	3,418.9		-142.9	-4.2	%
^¡ Quick assets	3,182.2		3,108.2		73.9	2.4	%	3,303.0		-120.9	-3.7	%
- Cash & Cash equivalents	1,062.9		927.7		135.3	14.6	%	1,180.3		-117.4	-9.9	%
^¡ Inventories	93.8		103.5		-9.7	-9.3	%	115.9		-22.0	-19.0	%
¨ Non-current assets	14,731.3		14,533.4		197.9	1.4	%	14,517.6		213.7	1.5	%
^¡ Investments	3,861.4		3,834.7		26.7	0.7	%	3,663.0		198.4	5.4	%
- KTF shares	2,765.9		2,774.6		-8.7	-0.3	%	2,556.7		209.2	8.2	%
- Long-term loans	189.2		219.1		-29.9	-13.6	%	311.3		-122.1	-39.2	%
- Others	906.2		841.0		65.3	7.8	%	794.9		111.4	14.0	%
^¡ Tangible assets	10,399.1		10,286.5		112.6	1.1	%	10,411.5		-12.4	-0.1	%
^¡ Intangible assets	470.8		412.2		58.5	14.2	%	443.1		27.7	6.2	%

Total liabilities	9,444.8		9,356.5		88.3	0.9	%	9,893.5		-448.7	-4.5	%

¨ Current liabilities	3,265.7		2,902.2		363.5	12.5	%	3,080.0		185.7	6.0	%
^¡ Interest-bearing debts	709.7		578.8		130.9	22.6	%	800.5		-90.8	-11.3	%
^¡ Accounts payable	649.2		672.2		-23.0	-3.4	%	735.3		-86.1	-11.7	%
^¡ Others	1,906.8		1,651.3		255.6	15.5	%	1,544.3		362.5	23.5	%
¨ Long-term liabilities	6,179.1		6,454.3		-275.2	-4.3	%	6,813.5		-634.4	-9.3	%
^¡ Interest-bearing debts	4,729.4		4,904.0		-174.6	-3.6	%	5,372.6		-643.2	-12.0	%
^¡ Installation deposit	907.5		919.3		-11.8	-1.3	%	958.9		-51.4	-5.4	%
^¡ Others	542.2		631.1		-88.9	-14.1	%	482.0		60.2	12.5	%

Total shareholders’ equity	8,562.5		8,388.7		173.8	2.1	%	8,043.0		519.5	6.5	%

¨ Common stock	1,561.0		1,561.0		0.0	0.0	%	1,561.0		0.0	0.0	%
¨ Capital surplus	1,440.9		1,440.3		0.7	0.0	%	1,440.3		0.7	0.0	%
¨ Retained earnings	9,366.2		9,156.4		209.9	2.3	%	8,798.7		567.5	6.5	%
¨ Capital adjustments	-3,805.7		-3,769.0		-36.7	N/A		-3,757.0		-48.7	N/A
^¡ Treasury stock	-3,826.6		-3,840.5		13.9	N/A		-3,840.5		13.9	N/A
^¡ Gain(loss) on valuation of investment securities	4.4		37.3		-32.9	-88.3	%	0.0		4.4	N/A
^¡ Others	16.5		34.2		-17.7	-51.7	%	83.5		-67.0	-80.2	%

Total interest-bearing debt	5,439.1		5,482.7		-43.7	-0.8	%	6,173.1		-734.0	-11.9	%

Net debt	4,376.1		4,555.1		-178.9	-3.9	%	4,992.8		-616.6	-12.4	%

Net debt / Total shareholders’ equity	51.1	%	54.3	%	-3.2%p			62.1	%	-11.0% P

^¡

Assets

Equity investment in KT Capital (KRW 100 billion), acquisition of Olive9 shares (KRW 22 billion), and increase in tangible assets from increased CAPEX resulted in a QoQ increase of KRW 262.1 billion

^¡	Liabilities

Other current liabilities increased due to increased accrued expenses from recognition of incentive payments following changes in accounting principle, and increased payables caused by a rise in operating expenses

^¡	Shareholders’ Equity

Increase of KRW 173.8 billion in shareholders’ equity from positive 4Q net income of KRW 176.4 billion

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2. Operating Results

A. Internet Revenue


(KRW bn)	2006 4Q	2006 3Q	2006 4Q / 2006 3Q			2005 4Q	2006 4Q / 2005 4Q			2006 cum.
(KRW bn)	2006 4Q	2006 3Q	amount	D%		2005 4Q	amount	D%		2006 cum.
Internet access	596.4	604.6	-8.2	-1.4	%	630.9	-34.4	-5.5	%	2,430.2
¨ Broadband	537.0	536.7	0.3	0.1	%	558.7	-21.7	-3.9	%	2,173.4
^¡ Megapass	518.4	524.5	-6.1	-1.2	%	536.3	-17.9	-3.3	%	2,103.2
^¡ Nespot	18.6	12.2	6.4	52.6	%	22.4	-3.8	-16.8	%	70.3
¨ Kornet	62.9	71.3	-8.5	-11.9	%	71.8	-8.9	-12.4	%	270.7
¨ Others	-3.4	-3.4	0.0	N/A		0.4	-3.9	N/A		-14.0

Internet application	64.8	77.4	-12.6	-16.3	%	58.9	5.9	10.1	%	261.6
¨ IDC	30.6	36.3	-5.7	-15.8	%	24.9	5.7	23.0	%	123.1
¨ Bizmeka	16.1	24.3	-8.2	-33.7	%	15.8	0.3	2.0	%	75.7
¨ Others	18.1	16.8	1.3	7.9	%	18.2	-0.1	-0.7	%	62.8

^¡	Decrease in Internet access revenue from long-term customer discounts and decline in Kornet revenue from downturn in demand

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

B. Data Revenue


(KRW bn)	2006 4Q	2006 3Q	2006 4Q / 2006 3Q			2005 4Q	2006 4Q / 2005 4Q			2006 cum.
(KRW bn)	2006 4Q	2006 3Q	amount	D%		2005 4Q	amount	D%		2006 cum.
Data	307.2	309.9	-2.7	-0.9	%	324.2	-17.0	-5.2	%	1233.8
¨ Leased line	269.4	270.7	-1.3	-0.5	%	284.9	-15.5	-5.4	%	1077.8
^¡ Local	113.6	112.9	0.7	0.6	%	123.4	-9.8	-7.9	%	451.7
^¡ Domestic long distance	82.0	84.1	-2.1	-2.5	%	86.3	-4.3	-5.0	%	335.8
^¡ International long distance	6.1	4.6	1.5	33.1	%	3.5	2.7	76.6	%	18.9
^¡ Broadcasting & others	67.7	69.2	-1.5	-2.2	%	71.8	-4.1	-5.7	%	271.4
¨ Other data	37.8	39.2	-1.4	-3.5	%	39.2	-1.4	-3.6	%	156.0
^¡ Packet data	2.2	2.3	-0.1	-5.5	%	2.6	-0.4	-14.0	%	9.1
^¡ National network ATM	16.9	18.3	-1.4	-7.4	%	19.3	-2.4	-12.2	%	74.7
^¡ Others	18.7	18.6	0.1	0.7	%	17.4	1.3	7.4	%	72.2

^¡	QoQ decline in leased line revenue is a result of temporary boost in demand in 3Q due to the World Cup games

^¡	Other data revenue fell QoQ from declining demand for ATM services

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C. Telephone Revenue


(KRW bn)	2006 4Q	2006 3Q	2006 4Q / 2006 3Q			2005 4Q	2006 4Q / 2005 4Q			2006 cum.
(KRW bn)	2006 4Q	2006 3Q	amount	D%		2005 4Q	amount	D%		2006 cum.
Telephone revenue	1,028.3	1,082.4	-54.1	-5.0	%	1,084.7	-56.4	-5.2	%	4,247.2
¨ Subscriber connection	369.3	342.8	26.5	7.7	%	351.8	17.5	5.0	%	1407.0
^¡ Subscription fee	10.5	10.6	-0.1	-0.5	%	14.7	-4.2	-28.5	%	46.1
^¡ Basic monthly fee	278.1	279.5	-1.4	-0.5	%	281.4	-3.3	-1.2	%	1120.6
^¡ Installlation	9.5	9.0	0.5	5.4	%	10.1	-0.6	-6.2	%	38.9
^¡ Interconnection	71.2	43.7	27.6	63.1	%	45.6	25.6	56.2	%	201.5
¨ Local	217.3	251.7	-34.4	-13.7	%	270.2	-52.9	-19.6	%	994.9
^¡ Usage	162.8	168.9	-6.1	-3.6	%	186.9	-24.2	-12.9	%	692.3
^¡ Interconnection	1.6	34.3	-32.7	-95.4	%	36.4	-34.8	-95.6	%	106.4
^¡ Others	52.9	48.5	4.4	9.2	%	46.9	6.0	12.8	%	196.2
¨ Domestic long distance	167.0	170.1	-3.1	-1.8	%	186.3	-19.2	-10.3	%	689.2
^¡ Usage	158.6	163.0	-4.4	-2.7	%	177.9	-19.3	-10.8	%	659.3
^¡ Interconnection	4.0	6.7	-2.7	-40.8	%	8.1	-4.1	-50.9	%	24.5
^¡ Others	4.4	0.4	4.0	895.7	%	0.3	4.1	1338.2	%	5.4
¨ International long distance	50.1	52.7	-2.7	-5.1	%	52.1	-2.1	-4.0	%	203.5
¨ International settlement	37.5	51.5	-14.0	-27.1	%	42.9	-5.3	-12.4	%	175.2
¨ VoIP	7.7	7.9	-0.2	-1.9	%	6.8	0.9	13.3	%	30.1
¨ VAS	104.6	94.1	10.5	11.1	%	96.4	8.2	8.5	%	385.9
¨ Public telephone	6.5	6.8	-0.3	-4.4	%	5.4	1.1	20.2	%	27.4
¨ 114 phone directory service	30.3	32.3	-2.0	-6.2	%	31.0	-0.8	-2.4	%	153.7
¨ Others	37.9	72.5	-34.5	-47.6	%	41.8	-3.9	-9.3	%	180.1

^¡	Telephone revenue declined due to but not limited to following factors

Decrease in local and domestic long distance revenue from decline in traffic

Decline in international settlements from decreased international traffic

Decline in Ann handset sales (4Q: KRW 8.4 billion, 3Q: KRW 43.4 billion)

^¡	Regulatory changes introduced in September, 2006 for interconnection charge resulted in higher subscriber interconnection revenue and VAS revenue, while causing a decline in local and local long-distance interconnection revenue

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D. LM(Land to Mobile) Interconnection Revenue


(KRW bn)	2006 4Q	2006 3Q	2006 4Q /2006 3Q			2005 4Q	2006 4Q /2005 4Q			2006 cum.
(KRW bn)	2006 4Q	2006 3Q	amount	D%		2005 4Q	amount	D%		2006 cum.
LM Revenue	425.1	435.6	-10.5	-2.4	%	450.7	-25.6	-5.7	%	1,737.1
LM interconnection cost	211.7	211.6	0.1	0.0	%	231.0	-19.2	-8.3	%	838.0

^¡	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


(KRW bn)	2006 4Q	2006 3Q	2006 4Q /2006 3Q			2005 4Q	2006 4Q /2005 4Q			2006 cum.
(KRW bn)	2006 4Q	2006 3Q	amount	D%		2005 4Q	amount	D%		2006 cum.
Wireless revenue	338.5	356.2	-17.7	-5.0	%	262.8	75.7	28.8	%	1,349.9
¨ PCS resale	328.2	336.1	-7.9	-2.4	%	240.7	87.5	36.4	%	1,287.9
^¡ PCS service	233.2	223.2	10.0	4.5	%	215.3	17.8	8.3	%	893.2
^¡ Handset sales	95.0	113.0	-17.9	-15.9	%	25.4	69.7	274.7	%	394.7
¨ Others	10.3	20.1	-9.8	-48.9	%	22.1	-11.8	-53.5	%	62.1

^¡	QoQ decline in handset sales resulted in the downturn of wireless revenue

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F. Operating Expenses


(KRW bn)	2006 4Q	2006 3Q	2006 4Q / 2006 3Q			2005 4Q	2006 4Q / 2005 4Q			2006 cum.
(KRW bn)	2006 4Q	2006 3Q	amount	D%		2005 4Q	amount	D%		2006 cum.
Labor	747.1	604.9	142.3	23.5	%	645.8	101.4	15.7	%	2,546.5
¨ Salaries & wages	572.9	437.3	135.7	31.0	%	462.1	110.8	24.0	%	1,884.2
¨ Employee benefits	111.6	120.3	-8.7	-7.2	%	132.3	-20.7	-15.7	%	452.1
¨ Provision for retirement	62.6	47.4	15.3	32.3	%	51.3	11.3	22.1	%	210.2
Commissions	182.1	173.3	8.8	5.0	%	178.5	3.6	2.0	%	664.1
Marketing expenses	273.3	247.0	26.3	10.7	%	182.7	90.6	49.6	%	866.9
¨ Sales commission	143.5	144.2	-0.7	-0.5	%	48.8	94.6	193.7	%	497.1
¨ Sales promotion	99.4	77.6	21.8	28.0	%	86.1	13.3	15.4	%	275.3
¨ Advertising	30.4	25.1	5.3	21.1	%	47.7	-17.3	-36.2	%	94.5
Provision for doubtful accounts	-4.2	-4.1	-0.1	N/A		9.8	-14.0	N/A		18.1
Depreciation	630.7	526.8	103.9	19.7	%	629.0	1.7	0.3	%	2,118.4
Repairs and Maintenance	81.0	72.7	8.3	11.4	%	113.6	-32.6	-28.7	%	312.6
Cost of goods sold	145.6	191.4	-45.8	-23.9	%	102.7	42.9	41.8	%	618.5
¨ PCS handset cost	88.5	116.2	-27.7	-23.8	%	61.2	27.3	44.6	%	398.5
¨ PDA, WLAN card, others	57.1	75.1	-18.1	-24.1	%	41.4	15.6	37.7	%	220.0
Cost of service provided	483.8	448.7	35.1	7.8	%	557.2	-73.4	-13.2	%	1,801.0
¨ Cost of service	229.6	182.2	47.4	26.0	%	272.2	-42.6	-15.7	%	770.4
^¡ PCS resale network cost to KTF	121.3	105.8	15.5	14.6	%	111.8	9.5	8.5	%	448.1
^¡ SI service cost	73.3	39.3	34.0	86.7	%	99.4	-26.2	-26.3	%	188.8
^¡ Others	35.0	37.1	-2.1	-5.7	%	60.9	-26.0	-42.6	%	133.6
¨ International settlement cost	42.5	54.9	-12.4	-22.5	%	54.1	-11.5	-21.3	%	192.5
¨ LM interconnection cost	211.7	211.6	0.1	0.0	%	231.0	-19.2	-8.3	%	838.0
R&D	69.3	46.5	22.8	49.0	%	86.3	-17.0	-19.7	%	209.1
Others	243.3	256.3	-13.0	-5.1	%	205.3	38.0	18.5	%	878.5
* CAPEX	871.0	750.5	120.5	16.1	%	729.0	142.0	19.5	%	2,371.2

^¡	Labor cost

- Estimating performance-based incentive payments was difficult in the past, hence the cost was recognized in the following year. Continued efforts to enhance this process made rational estimation possible, and incentive payable in 2007 was recognized in 4Q. This change in accounting principle resulted in a temporary rise in labor cost for 4Q, but will revert to previous levels in 2007

^¡	Marketing expenses

- Marketing expenses increased both QoQ and YoY as competition continued to escalate in the broadband industry

^¡	Depreciation

- Depreciation expenses rose as depreciable assets increased due to CAPEX

^¡	Cost of goods sold

- Cost of goods sold decreased QoQ due to decline in PCS handsets

^¡	Cost of service provided

- Cost of service rose following increased SI sales and higher KTF network costs from increased net adds while international settlement cost declined from a fall in international traffic

LOGO

G. Non-operating Income


(KRW bn)	2006 4Q	2006 3Q	2006 4Q / 2006 3Q			2005 4Q	2006 4Q / 2005 4Q			2006 cum.
(KRW bn)	2006 4Q	2006 3Q	amount	D%		2005 4Q	amount	D%		2006 cum.
Non-operating income	224.9	108.5	116.4	107.3	%	53.7	171.2	318.6	%	597.5
¨ Gains on disposition of investments	44.8	12.7	32.1	252.2	%	0.0	44.8	N/A		58.3
¨ Gains on disposition of tangible assets	1.0	3.0	-2.0	-65.2	%	8.5	-7.4	-87.6	%	7.3
¨ Interest income	18.1	18.3	-0.2	-1.3	%	20.5	-2.4	-11.7	%	75.4
¨ FX transaction gain	3.8	3.1	0.7	23.0	%	5.9	-2.1	-36.3	%	30.1
¨ FX translation gain	23.7	20.5	3.2	15.7	%	38.8	-15.1	-38.9	%	120.3
¨ USO fund	22.3	11.6	10.7	92.8	%	-49.8	72.2	N/A		57.0
¨ Gain on equity method	12.7	15.5	-2.8	-18.4	%	24.2	-11.5	-47.7	%	54.4
¨ Others	98.6	23.8	74.8	313.7	%	5.8	92.8	1612.0	%	194.7

^¡	Increased gains on disposition of investment is due to the liquidation of Mirae Asset stocks, resulting in a gain of KRW 11.7 billion in 3Q and KRW 44.8 billion in 4Q

^¡

As of December 31, 2006, our foreign currency net debt exposure (total borrowings in foreign currency of US$ 1,511 million less total foreign currency deposit of US$ 20 million) stood at US$ 1,491 million. The US$ depreciated by 15.6 won (KRW 945.2 per dollar at the end of September ® KRW 929.6 per dollar at the end of December), resulting in FX translation gain of 20.4 billion (FX translation gain of KRW 23.7 billion less FX translation loss of KRW 0.3 billion won = FX translation gain of KRW 20.4 billion)

^¡	Other gains include profit of KRW 17.6 billion from liquidation of inactive assets, KRW 13.1 billion refund of Call-Bonus milage allowance, and KRW 24.8 billion income tax refund

<Equity Method>


(KRW bn)	2006 4Q	2006 3Q	2006 4Q /2006 3Q			2005 4Q	2006 4Q /2005 4Q
(KRW bn)	2006 4Q	2006 3Q	amount	D%		2005 4Q	amount	D%
¨ Gain on equity method	12.7	15.5	-2.8	-18.4	%	24.2	-11.5	-47.7	%
¨ Loss on equity method	11.8	8.7	3.1	36.0	%	30.3	-18.5	-61.0	%
Gain or loss on equity method	0.8	6.8	-6.0	-87.6	%	-6.1	7.0	N/A

Gain or loss on equity method
¨ Gain or loss from KTF	55.9	48.7	7.2	14.8	%	57.4	-1.5	-2.6	%
¨ Amortization on goodwill from KTF	-45.6	-45.6	0.0	N/A		-45.6	0.0	N/A
¨ Other subsidiaries	-9.5	3.7	-13.2	N/A		-17.9	8.5	N/A

<Schedule for Amortization on Goodwill from KTF>


(KRW bn)	2004	2005	2006	2007	2008	2009	2010
Total	277.4	182.5	182.5	154.5	141.1	141.1	76.0

LOGO

H. Non-operating Expenses


(KRW bn)	2006 4Q	2006 3Q	2006 4Q /2006 3Q			2005 4Q	2006 4Q / 2005 4Q			2006 cum.
(KRW bn)	2006 4Q	2006 3Q	amount	D%		2005 4Q	amount	D%		2006 cum.
Non-operating expenses	141.3	130.3	11.0	8.4	%	205.2	-63.9	-31.1	%	741.5
¨ Interest expense	79.0	79.5	-0.5	-0.6	%	96.7	-17.7	-18.3	%	330.0
¨ FX transaction loss	2.5	0.9	1.6	170.2	%	1.8	0.8	43.7	%	9.8
¨ FX translation loss	3.3	-0.8	4.1	N/A		6.8	-3.6	-52.0	%	14.6
¨ Loss on equity method	11.8	8.7	3.1	36.0	%	30.3	-18.5	-61.0	%	33.4
¨ Loss on disposition of fixed assets	24.9	5.3	19.6	369.6	%	17.2	7.6	44.2	%	54.6
¨ Others	19.8	36.8	-16.9	-46.0	%	52.4	-32.5	-62.1	%	299.1

^¡	Increase in non-operating expenses is due to an increase in losses on disposal of obsolet equipments

^¡	Other non-operating expenses decreased QoQ and YoY due to reduction other specific reserves

LOGO

Appendix 1: Factsheet


Broadband

	Dec-04		Mar-05		Jun-05		Sep-05		Dec-05		Mar-06		Jun-06		Sep-06		Oct-06		Nov-06		Dec-06
Broadband Subs	6,077,694		6,133,293		6,172,475		6,244,040		6,241,789		6,240,605		6,320,260		6,333,119		6,348,618		6,347,725		6,352,542
Net Addition	12,372		26,022		13,917		15,281		-3,506		-46,961		34,787		26,562		15,499		-893		4,817
^¡ Megapass Lite	4,888,980		4,862,075		4,821,986		4,837,269		4,788,942		4,724,684		4,772,280		4,834,732		4,872,555		4,900,224		4,937,187
^¡ Megapass Premium	662,841		688,997		717,099		724,032		717,866		689,726		671,292		646,839		635,543		622,950		604,485
^¡ Megapass Special ⁽¹⁾	2,765		4,970		5,973		7,206		8,196		8,992		9,035		8,730		8,529		8,352		8,204
^¡ Megapass Ntopia	523,108		577,251		627,417		675,533		726,785		817,203		867,653		842,818		831,991		816,199		802,666

Broadband M/S
KT	51.0	%	50.7	%	50.3	%	51.8	%	51.2	%	50.0	%	49.5	%	45.6	%	45.5	%	45.3	%	45.2	%
Hanaro	23.1	%	22.7	%	22.7	%	23.0	%	22.7	%	28.6	%	28.2	%	25.9	%	25.9	%	25.8	%	25.7	%
Powercomm	0.0	%	0.0	%	0.0	%	0.5	%	2.1	%	3.8	%	5.6	%	7.1	%	7.4	%	8.0	%	8.6	%
Dacom	1.7	%	2.1	%	2.1	%	2.0	%	1.7	%	1.5	%	1.3	%	1.0	%	0.9	%	0.8	%	0.8	%
SO	9.0	%	9.6	%	10.3	%	11.0	%	11.6	%	12.6	%	12.4	%	16.5	%	16.6	%	16.6	%	16.6	%
Others	15.2	%	14.9	%	14.5	%	11.7	%	10.6	%	3.4	%	3.1	%	3.9	%	3.7	%	3.6	%	3.0	%

WLAN
	Dec-04		Mar-05		Jun-05		Sep-05		Dec-05		Mar-06		Jun-06		Sep-06		Oct-06		Nov-06		Dec-06
WLAN Subs	418,451		455,958		525,718		535,630		519,778		524,671		516,708		492,557		485,811		476,290		440,775
^¡ NESPOT Family	238,526		243,902		249,454		242,976		237,259		230,597		219,650		200,883		196,280		191,621		185,599
^¡ NESPOT Solo	29,914		32,189		35,871		37,218		38,385		40,725		41,519		39,374		39,280		39,130		38,260
^¡ NESPOT Pop	131,882		154,364		180,778		189,955		187,157		180,959		173,070		155,002		152,091		148,930		138,436
^¡ NESPOT Biz	18,129		25,503		32,337		43,695		45,814		60,776		64,205		64,458		61,614		60,934		37,011
^¡ NESPOT Play	0		0		27,278		21,786		11,163		11,614		13,925		15,318		16,358		12,784		13,792
^¡ NESPOT Home	0		0		0		0		0		0		4,339		17,522		20,188		22,891		27,677

Leased Lines
	Dec-04		Mar-05		Jun-05		Sep-05		Dec-05		Mar-06		Jun-06		Sep-06		Oct-06		Nov-06		Dec-06
Leased Lines	426,633		422,728		417,312		412,160		410,073		407,999		407,357		400,656		399,944		399,807		400,287
^¡ Local leased line	390,085		387,080		382,946		378,615		376,620		376,458		375,501		370,349		368,658		368,537		368,693
^¡ DLD leased line	36,233		35,404		34,119		33,300		33,217		31,293		31,480		30,028		30,970		30,960		31,283
^¡ International leased line	110		105		111		90		91		91		95		94		99		98		102
^¡ Broadcasting leased line	205		139		136		155		145		157		281		185		217		212		209
Internet Leased Lines	38,775		39,603		40,995		42,523		43,818		45,802		51,553		49,007		64,209		60,192		56,619

Fixed-line
	Dec-04		Mar-05		Jun-05		Sep-05		Dec-05		Mar-06		Jun-06		Sep-06		Oct-06		Nov-06		Dec-06
Local (‘000)	20,744		20,769		20,729		20,687		20,522		20,527		20,488		20,392		20,377		20,356		20,331
Domestic Long Distance (‘000)	18,897		18,883		18,791		18,699		18,544		18,629		18,734		18,718		18,719		18,714		18,688
* Ann (‘000)	53		391		782		945		1,066		1,130		1,267		1,610		1,665		1,708		1,747
* Ringo (‘000)	2,072		2,905		3,226		3,303		3,382		3,385		3,485		3,707		3,726		3,764		3,766
* Caller ID Users (‘000)	4,058		4,335		4,600		4,731		4,845		4,931		5,035		5,237		5,263		5,291		5,315

Fixed-line M/S
Local M/S (subscriber base)	93.8	%	93.8	%	93.5	%	93.2	%	93.2	%	93.0	%	92.7	%	92.4	%	92.3	%	92.2	%	92.2	%
DLD (revenue base) ⁽³⁾	83.7	%	83.5	%	83.5	%	85.7	%	85.6	%	85.6	%	85.7	%	85.8	%	85.8	%	85.7	%	85.6	%

Reference Data

	Dec-04		Mar-05		Jun-05		Sep-05		Dec-05		Mar-06		Jun-06		Sep-06		Oct-06		Nov-06		Dec-06
Population (‘000)	48,199		48,294		48,294		48,294		48,294		48,344		48,498		48,547		48,563		48,364		48,378
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.

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: January 26, 2007


KT Corporation

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