6-K 1 d181446d6k.htm 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 February 2017

Commission File Number 1-14926

KT Corporation

(Translation of registrant’s name into English)

KT Gwanghwamun Building East

33, Jongno 3-gil, Jongno-gu

03155 Seoul, 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 ☒ 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 ☒

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

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 1, 2017
|  | KT Corporation
By: |  | /s/ Youngwoo Kim
Name: |  | Youngwoo Kim
Title: |  | Vice President
By: |  | /s/ Jungsup Jung
Name: |  | Jungsup Jung
Title: |  | Director

2016 4Q Preliminary Earnings Release

We hereby announce our 2016 4Q preliminary earnings conference material used for conference call, which was held on February 1, 2017.

Attachment: 2016 4Q Earnings Conference Call material

KT FY2016 Earnings Release Investor Relations｜ 2017. 2. 1.

Disclaimer This presentation has been prepared by KT Corp.(the Company”). This presentation contains forward-looking statements, which are subject to risks, uncertainties, and assumptions. This presentation is being presented solely for your information and is subject to change without notice. No presentation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, actuality, fairness, or completeness of the information presented. Please be informed that items included in our operating income have been prepared in accordance with K-IFRS 1001 released on October 17, 2012, which was revised to coincide with the Korean Accounting Standards for Non-Public Entities (“KAS-NPEs”). The Company, its affiliates or representatives accept no liability whatsoever for any losses arising from any information contained in the presentation. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares of the Company, and no part of this presentation shall form the Basis of or be relied upon in connection with any contract or commitment. Any decision to purchase shares of the Company could be made solely on the Basis of information, which has been publicly filed with the Securities and Exchange Commission or the Korea Stock Exchange and distributed to all investors. The contents of this presentation may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose. If you have any related questions to this material, please contact IR department. Tel : 82-2-3495-3557, 3558, 3564, 5529, 5343, 5344 Fax : 82-2-3495-5917

Contents 1 Financial Highlights 2 Business Overview 3 Q&A 4 Appendix

Financial Highlights 1-1 (Unit: KRW bn) K-IFRS / Consolidated Operating revenue 22,743.7bn, YoY +2.1% Service revenue 20,007.0bn, YoY +2.5% Operating income 1,440.0bn, YoY +11.4% Net income 797.8bn, YoY +26.4% EBITDA 4,785.2bn, YoY +3.3% Income Statement 4Q15 3Q16 4Q16 QoQ YoY 2015 2016 YoY Operating revenue 5,958.9 5,529.9 6,021.1 8.9% 1.0% 22,281.2 22,743.7 2.1% Service revenue 5,078.1 5,040.0 5,026.5 -0.3% -1.0% 19,513.8 20,007.0 2.5% Merchandise revenue 880.9 489.9 994.6 103.0% 12.9% 2,767.4 2,736.6 -1.1% Operating expense 5,691.7 5,128.4 5,794.7 13.0% 1.8% 20,988.3 21,303.7 1.5% Operating income 267.2 401.6 226.3 -43.6% -15.3% 1,292.9 1,440.0 11.4% Margin (%) 4.5% 7.3% 3.8% -3.5%p -0.7%p 5.8% 6.3% 0.5%p Non-operating income (loss) -358.2 -90.8 -54.7 -39.7% -84.7% -573.5 -313.0 -45.4% Income before taxes -91.0 310.8 171.6 -44.8% -288.7% 719.5 1,127.0 56.7% Net income -97.1 234.5 93.0 -60.3% -195.8% 631.3 797.8 26.4% Margin (%) -1.6% 4.2% 1.5% -2.7%p TB 2.8% 3.5% 0.7%p EBITDA 1,096.7 1,236.3 1,076.0 -13.0% -1.9% 4,631.5 4,785.2 3.3% Margin (%) 18.4% 22.4% 17.9% -4.5%p -0.5%p 20.8% 21.0% 0.3%p

1-2 K-IFRS / Consolidated Financial Highlights Operating Expenses 21,303.7bn, YoY +1.5% Labor cost 3,477.6bn, YoY +5.3% General expenses 9,910.6bn, YoY +0.9% Cost of merchandise 3,437.5bn, YoY -5.4% Operating Expenses Marketing Expense 2,714.2bn, YoY -3.5% (Unit: KRW bn) (Unit: KRW bn) ※ KT Separate, Profit from handset sales adjusted / Selling expenses + Advertising expenses 4Q15 3Q16 4Q16 QoQ YoY 2015 2016 YoY Operating Expenses 5,691.7 5,128.4 5,794.7 13.0% 1.8% 20,988.3 21,303.7 1.5% Labor cost 895.8 852.1 915.3 7.4% 2.2% 3,303.5 3,477.6 5.3% General expenses 2,611.8 2,488.8 2,577.2 3.5% -1.3% 9,819.6 9,910.6 0.9% Cost of service provided 586.6 639.6 576.1 -9.9% -1.8% 2,276.0 2,425.0 6.6% Selling expenses 533.2 479.1 566.5 18.3% 6.3% 1,954.5 2,053.0 5.0% Cost of merchandise 1,064.3 668.7 1,159.7 73.4% 9.0% 3,634.7 3,437.5 -5.4% 4Q15 3Q16 4Q16 QoQ YoY 2015 2016 YoY Marketing Expense 741.3 664.6 702.5 5.7% -5.2% 2,813.2 2,714.2 -3.5%

Financial Highlights 1-3 K-IFRS / Consolidated (Unit: KRW bn) Debt Position Borrowings: 8,120.8bn Net Debt: 5,220.5bn Debt Ratio Debt to Equity: 139.1% Net Debt to Equity: 40.8% Debt/Equity Net Debt/Equity Financial Position 4Q15 3Q16 4Q16 QoQ YoY Assets 29,341.2 30,135.8 30,587.7 1.5% 4.2% Cash and cash equivalents 2,559.5 3,460.8 2,900.3 -16.2% 13.3% Debt 17,175.7 17,468.1 17,793.0 1.9% 3.6% Borrowings 8,634.9 8,236.2 8,120.8 -1.4% -6.0% Equity 12,165.5 12,667.7 12,794.8 1.0% 5.2% Capital Stock 1,564.5 1,564.5 1,564.5 0.0% 0.0% Net Debt 6,075.4 4,775.4 5,220.5 9.3% -14.1% Debt/Equity 141.2% 137.9% 139.1% 1.2%p -2.1%p Net Debt/Equity 49.9% 37.7% 40.8% 3.1%p -9.1%p

Financial Highlights 1-4 K-IFRS / KT Separate Total CAPEX 2016 Execution: 2,359.0bn Spent 94.4% to FY2016 Guidance CAPEX Breakdown Access Network: 1,132.6bn Backbone Network: 452.1bn B2B: 516.6bn Others: 257.7bn 2017 Guidance: KRW 2.4tn CAPEX (Unit: KRW bn)

1 Financial Highlights 2 Business Overview 3 Q&A 4 Appendix

Business Overview 2-1 Wireless K-IFRS / Consolidated (Unit: 1,000) ※ Revenue of Handset Protection Plan to be excluded from Sep 2016. (Unit : KRW bn) 4Q15 3Q16 4Q16 QoQ YoY 2015 2016 YoY Wireless 1,875.1 1,884.1 1,803.1 -4.3% -3.8% 7,370.7 7,418.3 0.6% Service 1,651.8 1,675.4 1,659.8 -0.9% 0.5% 6,523.6 6,658.4 2.1% Interconnection 137.9 142.8 62.3 -56.3% -54.8% 536.7 479.3 -10.7% Others 85.4 66.0 81.0 22.8% -5.2% 310.4 280.7 -9.6% Wireless revenue increased 0.6% YoY Service revenue grew 2.1% YoY on increased 2nd device/IoT subscribers Other wireless revenue decreased 9.6% YoY due to abolition of activation fee Continuous net addition and increase of LTE penetration ratio ‘16 net addition amounted to 850k LTE penetration reached 75.5% of total subscribers

Business Overview 2-2 K-IFRS / Consolidated Wireline revenue decreased 1.8% YoY Telephony Telephony revenue fell 11.4% YoY on line loss and MOU decline Broadband Backed by GiGA competitiveness net addition / revenue all exceeded our yearly target ‘16 GiGA subscribers reached 2.4m Broadband revenue up by +11.4% YoY (Interconnection revenue included) Wireline ※ As accounting change had occurred due to internet interconnection reform, from 1Q16 internet interconnection revenue has been recognized under broadband revenue. (Unit : KRW bn) 4Q15 3Q16 4Q16 QoQ YoY 2015 2016 YoY Wireline 1,268.2 1,255.0 1,245.0 -0.8% -1.8% 5,158.7 5,064.9 -1.8% Telephony 553.0 505.1 484.6 -4.0% -12.4% 2,313.7 2,048.9 -11.4% Broadband 440.0 484.4 490.4 1.2% 11.5% 1,733.0 1,929.9 11.4% Line lease 275.3 265.5 269.9 1.7% -1.9% 1,112.0 1,086.1 -2.3% (Unit: 1,000)

Business Overview 2-3 Media / Contents K-IFRS / Consolidated (Unit : 1,000) ※ Number of IPTV subscribers differ from MSIP’s release as MSIP number applies “Combined Market Share Regulation” under the IPTV law. (Average of KT’s pay TV subscribers as 1H of 2016(average subs for 6 months) are 5,468,540.) 4Q15 3Q16 4Q16 QoQ YoY 2015 2016 YoY Media/Contents 440.5 494.6 513.7 3.9% 16.6% 1,662.3 1,925.2 15.8% Media 384.0 425.0 419.6 -1.3% 9.3% 1,447.5 1,640.8 13.4% Contents 56.5 69.6 94.1 35.2% 66.5% 214.8 284.3 32.4% (Unit : KRW bn) Media and Contents revenue grew 15.8% YoY Media IPTV subscribers reached 7m with net additions of 490k YoY Media revenue increased 13.4% YoY on improved subscriber mix and enhanced VAS revenue Contents (Nasmedia) Strong revenue on growing mobile/movies advertisement market and NSM acquisition (KTH) Sales expansion on T-commerce (KT Music) Sales expansion on increased ‘Media pack’ subscribers

Business Overview 2-4 Finance and Other service Merchandise K-IFRS / Consolidated (Unit : KRW bn) 4Q15 3Q16 4Q16 QoQ YoY 2015 2016 YoY Finance 983.4 866.4 881.1 1.7% -10.4% 3,411.0 3,427.8 0.5% Other service 510.9 539.8 583.6 8.1% 14.2% 1,911.0 2,170.9 13.6% IT/Solution 226.0 236.5 254.9 7.8% 12.8% 864.0 961.8 11.3% Real estate 82.4 66.1 100.1 51.6% 21.5% 254.1 296.6 16.7% Other subsidiaries 202.4 237.3 228.5 -3.7% 12.9% 793.0 912.6 15.1% 4Q15 3Q16 4Q16 QoQ YoY 2015 2016 YoY Merchandise Revenue 880.9 489.9 994.6 103.0% 12.9% 2,767.4 2,736.6 -1.1% (Unit : KRW bn) Finance revenue Finance revenue increased 0.5% YoY on increased transaction volume of credit/check card Other service revenue Other service revenue rose 13.6% YoY on subsidiaries good earnings and real estate sale (KRW38.8bn) Merchandise Merchandise revenue decreased by 1.1% YoY on less handset sales

1 Financial Highlights 2 Business Overview 3 Q&A 4 Appendix

1 Financial Highlights 2 Business Overview 3 Q&A 4 Appendix

K-IFRS Quarterly Income Statements 4-1 (Unit: KRW bn) Consolidated I/S 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 　 KT Separate I/S 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 　 　 　 　 　 Operating revenue 5,958.9 5,515.0 5,677.6 5,529.9 6,021.1 　 Operating revenue 4,448.6 4,200.9 4,203.5 4,101.6 4,522.9 　 　 　 　 　 　 　 　 　 　 　 Service Revenue 5,078.1 4,899.3 5,041.2 5,040.0 5,026.5 　 Service Revenue 3,614.7 3,608.9 3,675.7 3,658.2 3,584.4 Wireless 1,875.1 1,851.0 1,880.1 1,884.1 1,803.1 　 Wireless 1,854.4 1,834.1 1,859.3 1,864.6 1,780.3 Fixed line 1,268.2 1,278.7 1,286.2 1,255.0 1,245.0 　 Fixed line 1,253.4 1,262.1 1,262.4 1,240.7 1,216.9 Media/Contents 440.5 445.9 470.9 494.6 513.7 　 Media/Contents 234.2 243.3 256.5 271.3 273.8 Finance 983.4 822.6 857.6 866.4 881.1 　 Other service 272.7 269.5 297.5 281.5 313.4 Other service 510.9 501.1 546.4 539.8 583.6 　 Merchandise rev. 833.9 591.9 527.8 443.4 938.5 Merchandise rev. 880.9 615.7 636.4 489.9 994.6 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 Operating expense 5,691.7 5,129.9 5,250.7 5,128.4 5,794.7 　 Operating expense 4,361.2 3,913.6 3,881.6 3,798.3 4,375.7 　 　 　 　 　 　 　 　 　 　 　 Service expense 4,627.4 4,336.0 4,435.6 4,459.7 4,635.0 　 Service expense 3,414.3 3,212.0 3,236.3 3,225.4 3,373.4 Labor expense 895.8 853.7 856.5 852.1 915.3 　 Labor expense 510.8 500.5 492.1 493.3 536.8 General expense 2,611.8 2,405.4 2,439.2 2,488.8 2,577.2 　 General expense 1,791.6 1,667.5 1,668.3 1,688.5 1,765.6 Cost of svc provided 586.6 596.1 613.3 639.6 576.1 　 Cost of svc provided 505.8 519.4 531.9 525.8 459.3 Selling expense 533.2 480.8 526.6 479.1 566.5 　 Selling expense 606.1 524.6 543.9 517.9 611.7 Cost of merch sold 1,064.3 794.0 815.1 668.7 1,159.7 　 Cost of merch sold 946.9 701.6 645.3 572.9 1,002.3 　 　 　 　 　 　 　 　 　 　 　 Operating income 267.2 385.1 427.0 401.6 226.3 　 Operating income 87.4 287.2 321.9 303.2 147.2 　 　 　 　 　 　 　 　 　 　 　 N-OP income (loss) -358.2 -67.0 -100.5 -90.8 -54.7 　 N-OP income (loss) -240.1 74.2 -92.3 -91.5 84.5 N-operating income 94.6 144.3 70.4 218.8 228.5 　 N-operating income 81.6 277.1 62.7 197.5 233.6 N-operating expense 457.0 216.2 174.7 310.0 276.6 　 N-operating expense 321.7 202.9 155.0 288.9 149.1 Equity Method (G/L) 4.2 4.9 3.8 0.4 -6.6 　 　 　 　 　 　 　 　 　 　 　 　 Income bf taxes -91.0 318.1 326.5 310.8 171.6 　 Income bf taxes -152.7 361.4 229.7 211.7 231.7 Income tax 5.4 103.0 71.2 76.3 78.7 　 Income tax -41.2 82.8 28.3 45.3 68.8 　 　 　 　 　 　 　 　 　 　 Income from con op -96.4 215.1 255.2 234.5 93.0 　 　 　 　 　 　 Income from discon. op -0.7 0.0 0.0 0.0 0.0 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 　 Net income -97.1 215.1 255.2 234.5 93.0 　 Net income -111.4 278.6 201.3 166.5 162.9 NI contribution to KT -125.9 186.0 230.1 211.4 83.6 　 　 　 　 　 　 　 　 　 　 　 　 　 　 EBITDA 1,096.7 1,215.7 1,257.2 1,236.3 1,076.0 　 EBITDA EBITDA Margin 832.1 18.7% 1,033.8 24.6% 1,067.1 25.4% 1,053.6 910.5 EBITDA Margin 18.4% 22.0% 22.1% 22.4% 17.9% 　 25.7% 20.1%

K-IFRS Yearly Income Statements 4-2 (Unit: KRW bn) Consolidated I/S 2014 2015 2016 YoY 　 KT Separate I/S 2014 2015 2016 YoY 　 　 　 　 Operating revenue 22,311.7 22,281.2 22,743.7 2.1% 　 Operating revenue 17,435.8 16,942.4 17,028.9 0.5% 　 　 　 Service Revenue 19,061.2 19,513.8 20,007.0 2.5% 　 Service Revenue 14,202.1 14,300.9 14,527.2 1.6% Wireless 7,316.1 7,370.7 7,418.3 0.6% 　 Wireless 7,242.1 7,303.1 7,338.2 0.5% Fixed line 5,540.0 5,158.7 5,064.9 -1.8% 　 Fixed line 5,477.8 5,108.7 4,982.2 -2.5% Media/Contents 1,508.4 1,662.3 1,925.2 15.8% 　 Media/Contents 671.0 843.3 1,045.0 23.9% Finance 3,221.4 3,411.0 3,427.8 0.5% 　 Other service 811.3 1,045.7 1,161.9 11.1% Other service 1,475.3 1,911.0 2,170.9 13.6% 　 Merchandise rev. 3,233.7 2,641.5 2,501.7 -5.3% Merchandise rev. 3,250.5 2,767.4 2,736.6 -1.1% 　 　 　 　 　 Operating expense 22,718.3 20,988.3 21,303.7 1.5% 　 Operating expense 18,155.3 16,078.5 15,969.3 -0.7% 　 　 　 Service expense 19,376.6 17,353.6 17,866.2 3.0% 　 Service expense 14,805.4 12,863.3 13,047.2 1.4% Labor expense 3,918.7 3,303.5 3,477.6 5.3% 　 Labor expense 3,124.9 1,936.3 2,022.7 4.5% General expense 9,965.7 9,819.6 9,910.6 0.9% 　 General expense 6,750.2 6,860.3 6,790.0 -1.0% Cost of svc provided 2,743.7 2,276.0 2,425.0 6.6% 　 Cost of svc provided 2,007.0 1,935.6 2,036.3 5.2% Selling expense 2,748.4 1,954.5 2,053.0 5.0% 　 Selling expense 2,923.4 2,131.1 2,198.1 3.1% Cost of merch sold 3,341.7 3,634.7 3,437.5 -5.4% 　 Cost of merch sold 3,349.9 3,215.2 2,922.1 -9.1% 　 　 　 Operating income -406.6 1,292.9 1,440.0 11.4% 　 Operating income -719.5 863.9 1,059.6 22.7% 　 　 　 N-OP income (loss) -922.0 -573.5 -313.0 -45.4% 　 N-OP income (loss) -754.7 146.6 -25.0 -117.1% N-operating income 506.5 761.0 662.0 -13.0% 　 N-operating income 582.0 1,288.8 770.9 -40.2% N-operating expense 1,447.2 1,340.7 977.6 -27.1% 　 N-operating expense 1,336.7 1,142.2 795.9 -30.3% Equity Method (G/L) 18.7 6.1 2.6 -57.7% 　 　 　 　 Income bf taxes -1,328.6 719.5 1,127.0 56.7% 　 Income bf taxes -1,474.1 1,010.4 1,034.6 2.4% Income tax -276.0 229.2 329.2 43.6% 　 Income tax -332.3 240.1 225.3 -6.2% 　 　 Income from con op -1,052.6 490.2 797.8 62.8% 　 　 Income from discon. op 86.4 141.1 0.0 -100.0% 　 　 　 　 　 Net income -966.2 631.3 797.8 26.4% 　 Net income -1,141.9 770.3 809.3 5.1% NI contribution to KT -1,055.0 553.0 711.1 28.6% 　 　 　 　 EBITDA 2,919.1 4,631.5 4,785.2 3.3% 　 EBITDA EBITDA Margin 2,304.0 13.2% 3,874.0 22.9% 4,065.0 4.9% EBITDA Margin 13.1% 20.8% 21.0% 0.3%p 　 23.9% 1.0%p

K-IFRS Statement of Financial Position 4-3 (Unit: KRW bn) Consolidated 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 KT Separate 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 　 　 　 　 　 　 　 　 　 　 Asset 29,341.2 29,484.8 28,624.2 30,135.8 30,587.7 Asset 24,222.5 23,981.9 23,590.8 24,287.4 24,700.3 　 　 　 　 　 　 　 　 　 Current assets 8,583.2 9,436.3 8,838.8 10,105.2 9,643.3 Current assets 4,636.9 5,116.5 5,016.5 5,416.4 4,851.1 Cash & cash equivalents 2,559.5 2,791.9 3,043.2 3,460.8 2,900.3 Cash & cash equivalents 1,127.0 1,326.8 1,710.2 2,069.1 1,602.4 Trade & other rec 3,667.6 3,331.9 3,353.2 3,312.4 3,360.2 Trade & other rec 2,974.1 2,867.3 2,723.7 2,644.5 2,590.2 Inventories 525.4 535.2 434.5 365.0 378.0 Inventories 327.2 347.1 239.1 159.0 178.1 Other current assets 1,830.7 2,777.3 2,007.9 2,967.1 3,004.8 Other current assets 208.6 575.3 343.5 543.8 480.4 Non-current assets 20,758.0 20,048.4 19,785.4 20,030.6 20,944.4 Non-current assets 19,585.6 18,865.4 18,574.3 18,871.0 19,849.3 Trade & other rec 679.8 563.6 642.7 568.9 692.0 Trade & other rec 605.2 491.4 567.8 496.5 622.0 P.P.E 14,478.9 13,943.6 13,848.5 13,869.5 14,312.1 P.P.E 12,145.0 11,720.7 11,486.6 11,482.8 11,961.2 Other non-cur assets 5,599.3 5,541.3 5,294.2 5,592.2 5,940.4 Other non-cur assets 6,835.4 6,653.3 6,519.9 6,891.7 7,266.0 Liabilities 17,175.7 17,292.5 16,194.2 17,468.1 17,793.0 Liabilities 13,838.5 13,438.4 12,847.7 13,376.6 13,615.8 Current liabilities 8,639.9 8,961.1 8,608.6 9,271.8 9,466.1 Current liabilities 5,978.8 5,841.4 6,053.4 5,962.1 6,027.7 Trade & other payables 6,273.9 6,251.2 5,705.5 6,586.5 7,075.8 Trade & other payables 4,111.3 3,575.2 3,639.7 3,767.9 4,181.1 Short-term borrowings 1,726.1 2,076.7 2,287.2 2,068.9 1,820.0 Short-term borrowings 1,510.9 1,903.8 2,082.6 1,865.1 1,608.1 Other current liabilities 640.0 633.2 615.9 616.4 570.4 Other current liabilities 356.6 362.4 331.2 329.0 238.5 Non-current liabilities 8,535.8 8,331.4 7,585.5 8,196.3 8,326.8 Non-current liabilities 7,859.7 7,597.0 6,794.3 7,414.5 7,588.1 Trade & other payables 574.0 481.4 477.4 758.6 1,071.6 Trade & other payables 620.3 522.4 518.0 804.2 1,135.7 Long-term borrowings 6,908.8 6,766.1 5,940.3 6,167.3 6,300.8 Long-term borrowings 6,608.7 6,415.3 5,580.4 5,842.2 5,961.0 Other non-cur liabilities 1,053.1 1,083.9 1,167.9 1,270.4 954.4 Other non-cur liabilities 630.7 659.3 695.9 768.1 491.4 Equity 12,165.5 12,192.3 12,430.1 12,667.7 12,794.8 Equity 10,384.0 10,543.5 10,743.0 10,910.9 11,084.5

Subscribers (KT Separate) 4-4 ※ Number of IPTV subscribers differ from MSIP’s release as MSIP number applies “Combined Market Share Regulation” under the IPTV law. (Average of KT’s pay TV subscribers as 1H of 2016(average subs for 6 months) are 5,468,540.) Wireless 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 QoQ YoY Subscribers (Unit: 1,000)1) 　 　 　 　 　 　 　 Total (LTE+WCDMA) 17,437 17,637 17,801 18,038 18,180 18,378 18,678 18,892 1.1% 4.7% Net additions 137 200 164 238 141 198 300 214 -28.8% -10.0% Gross additions 1,393 1,179 1,115 1,215 1,144 1,134 1,241 1,244 0.2% 2.4% Deactivation2) 1,219 940 938 958 1,003 936 941 1,030 9.4% 7.5% Churn rate 2.3% 1.8% 1.8% 1.8% 1.8% 1.7% 1.7% 1.8% 0.1%p 0.0%p LTE 11,364 11,883 12,335 12,832 13,209 13,612 13,921 14,262 2.4% 11.1% LTE Penetration rate 65.2% 67.4% 69.3% 71.1% 72.7% 74.1% 74.5% 75.5% 1.0%p 4.4%p ARPU (KRW)3) 34,796 35,357 35,422 35,656 35,268 35,656 35,721 35,452 -0.8% -0.6% Note1) Subscribers: MSIP’s new guidelines for subscriber disclosure (Retroactively applied from 1Q14, MVNO included) Note2) Deactivation: Mandatory deactivation included Note3) ARPU= Wireless revenue*/Wireless subscribers** * Wireless revenue(3G+LTE and IoT included): Revenue of Voice and Data usage(Interconnection/Subscription fee excluded), VAS, Contract/ Bundled Discounts, and etc. included ** Wireless subscribers(3G+LTE and IoT included): Based on MSIP’s guidelines for average billed subscribers in quarter ※ KT: Revenue of Handset Protection Plan excluded starring from Sep 2016 (Retroactively applied from 1Q15). Wireline 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q 16 4Q 16 QoQ YoY Subscribers (Unit: 1,000)　 　 　 　 　 　 　 　 Telephony 17,103 16,951 16,806 16,682 16,554 16,450 16,337 16,266 -0.7% -2.7% PSTN 13,706 13,549 13,403 13,268 13,115 12,993 12,882 12,791 -0.7% -3.6% VoIP 3,397 3,402 3,403 3,413 3,439 3,458 3,455 3,436 -0.6% 0.7% Broadband 8,168 8,229 8,289 8,328 8,375 8,434 8,478 8,516 0.5% 2.3% IPTV 6,042 6,217 6,401 6,552 6,675 6,813 6,928 7,042 1.6% 7.5%