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2008
SAMSUNG
ELECTRONICS
ANNUAL REPORT

Table of contents

  • Page 1
    2008 SAMSUNG ELECTRONICS ANNUAL REPORT

  • Page 2
    ... Financial Summary Performance by Business 2008 at a Glance 01 10 14 16 18 20 22 DMC Digital Media & Communications Business Product Gallery DS Device Solution Business 28 34 CSR Corporate Citizenship Partner Collaboration Sustainability Financial Statements Investor Information Global Network...

  • Page 3
    THE WAY WE LEAD At Samsung Electronics, we believe that crises are opportunities for innovation and that change is about action. It takes a different kind of strategy to navigate tough economic times and become one the world's leading companies. And we have what it takes to get there.

  • Page 4
    ... how to lead is one thing. Being able to sustain that leadership is an entirely different one. In the next few pages, we'd like to introduce a few of our exceptional people and the unique ways they're helping us lead the way in brand marketing, manufacturing, research and development, and design.

  • Page 5
    ... Tomorrow's Markets And Consumers When it comes to developing premium home appliances for specific regions, it's essential to have detailed data and research on those markets and consumers. The reason our front-loading washers with vibration-reduction technology and French-door refrigerators...

  • Page 6
    ... by close collaboration between each of our departments-from manufacturing and development to marketing and purchasing. And the greater synergy this collaboration enables is helping us lead the way to a more productive, profitable future. Gab-Soo Lee General Manager, Application Engineering Group...

  • Page 7
    ... has the added benefit of easing migration to different platforms, technologies, and markets. And the ability to step back and challenge the conventional is helping us lead the way to a more secure digital future. Ihor Vasyltsov Senior Engineer, Digital IP Development Team System LSI Division

  • Page 8
    ... we unveiled a ready-for-production HD LCD TV with edge-lit LED backlighting when others were just showing mockups. And this ability to consistently be first to market is helping us lead the way to a greener, more profitable future. Yong-Il Kim Manager, Development Team 2 Backlight Technology Group...

  • Page 9
    ...latest and greatest Samsung products. Our staff of "brand ambassadors" strives to provide exceptional service to each customer while delving deeper into their needs to help them make the connection with Samsung products that fit their lifestyles. And those lasting impressions are helping us lead the...

  • Page 10
    ... Grow Markets One of our strategic goals in 2008 was to grow our mobile phone market share in emerging markets. While many of our rivals lost ground in last year's market downturn, our smart, focused product line and resource allocation choices enabled us to achieve dramatic gains in both sales and...

  • Page 11
    ... The inspiration for our TV designs comes out of a product development process that includes extensive research on the user experience, meticulous consideration of each process step, and countless development and marketing discussions. Our sophisticated "liquid crystal" bezel design was the fruit of...

  • Page 12
    Message from the CEO

  • Page 13
    ... the global economic downturn in 2008, we experienced an extremely challenging year with conditions that recalled those we faced a decade earlier during the 1997 Asian financial crisis. This difficult situation was further aggravated as high oil prices fueled inflation, exchange rates increased...

  • Page 14
    ... fields. We aim to leverage our cost leadership to be the top global name in every segment of consumer electronics-from TVs to mobile phones. We also aim to extend our market leadership in components such as semiconductors and LCD panels with cutting-edge technologies and solutions. At the same...

  • Page 15
    ... struCture DMC Digital Media & Communications Business Visual Display, Digital Printing, Computer Systems, Mobile Communication, Telecommunication Systems, Digital Appliance North America, Europe, China, Southeast Asia, Southwest Asia, CIS, Middle East and Africa, Latin America, Korea...

  • Page 16
    ...Semiconductor Sales Division, Samsung Electronics [1996~1998] 4. Sang-Hoon Lee - Executive Vice President, Corporate Management Team, Samsung Electronics [2008~Present] - Head, Management Support Group 2, Samsung Strategic Planning Office [2007~2008] - Senior Vice President, Management Support Team...

  • Page 17
    ...] - President, GE Asia-Pacific & Senior VP, GE [1997~1999] 6. Dong-Min Yoon - Outside Director [2006~Present] - Attorney at law, Kim & Chang Law Office [1999~Present] - Director, Social Protection and Rehabilitation Bureau at the Ministry of Justice [1998~1999] - Chief, Planning Management Dept. at...

  • Page 18
    2008 FINANCIAL SUMMARY Samsung Electronics and Consolidated Subsidiaries [in KRW billions] 2006 2007 2008 INCOME STATEMENTS Sales Operating Profit Net Income 85,835 9,129 7,926 98,508 8,973 7,421 121,294 6,032 5,526 BALANCE SHEETS Assets Liabilities Shareholders' equity 81,366 33,426 47,940 93...

  • Page 19
    17 Sales Operating Profit SALES AND OPERATING PROFIT [in KRW trillions] 121.3 98.5 85.8 9.1 2006 9.0 2007 6.0 2008 Cash Flows from Operating Activities Cash Flows from Investing Activities CASH FLOWS [in KRW trillions] 15.1 14.8 13.4 -12.0 2007 -11.1 2006 -13.1 2008

  • Page 20
    PERFORMANCE BY BUSINESS Net Sales Operating Profit DiGiTAL MEDiA [in KRW trillions] [in KRW millions] 42.19 30.52 24.11 0.74 2006 2006 2007 2008 Net Sales Operating Profit 0.40 24,113,883 739,311 30,520,205 1,094,989 42,191,768 396,183 1.09 2007 2008 TELECOMMUniCATiOn nETWOrkS [in ...

  • Page 21
    ..., display driver ICs, and MP3 player system-on-chip devices. We are also on the leading edge of development in emerging high-tech market segments such as solid-state drive (SSD) storage and "fusion" or hybrid semiconductor solutions. Despite rapidly declining DRAM and ï¬,ash memory prices in 2008...

  • Page 22
    ... - Led the global A4 color laser multifunction printer market for the first time in Q2 JULY - Named "Best Managed Company in Korea" by FinanceAsia - Hosted Samsung Future Mobile Forum 2008 - Joined the Korea Fair Trade Commission's Triangle Cooperation Program - Sold 150-millionth mobile phone in...

  • Page 23
    ... Business ViSUAL DiSpLA y DiViSiOn DiGiTAL prinTinG DiViSiOn COMpUTEr SySTEMS DiViSiOn MOBiLE COMMUniCATiOn DiViSiOn TELECOMMUniCATiOn SySTEMS DiViSiOn DiGiTAL AppLiAnCE DiViSiOn Device Solution Business MEMOry DiViSiOn SySTEM LSi DiViSiOn STOrAGE SySTEM DiViSiOn LCD DiViSiOn Series 7 LED TV

  • Page 24
    ...to more easily access and enjoy the myriad benefits of digital technology with state-of-the-art visual displays, audio and video equipment, computers, printers, mobile phones, and home appliances. In short, our high-tech, beautifully designed products are delivering a whole new kind of satisfaction...

  • Page 25
    ... in the video space with an ultra-compact full-HD camcorder featuring a built-in 64GB solid-state drive, hybrid still/video cameras, and a compact digital camera with a 24 mm wide-angle lens and 10x optical zoom. 21.9% 2008 GLOBAL TV MARKET SHARE 03 02. Series 7 LED TVs Showcasing our gorgeous...

  • Page 26
    ... and color laser printers and multifunction printers. In 2008, our focus on eco-performance earned us the top product award at Korea's National Environmental Management Excellence Awards as well as the greatest number of German Blue Angel eco-label certifications in the office equipment category...

  • Page 27
    ...'s first mobile phone capable of recording 720p HD video, this upgrade to the original Omnia smartphone features a long list of high-tech features, including a stunning 3.7-inch active-matrix OLED touchscreen and a high-resolution 8-megapixel camera. 07 16.7% 2008 GLOBAL MOBILE PHONE MARKET SHARE

  • Page 28
    ... total solutions for tomorrow's 4G Mobile WiMAX and Long Term Evolution (LTE) mobile telecommunications networks that will make mobile broadband a ubiquitous part of life in the coming years. 08. YP-P3 MP3 Player Winner of a Best of CES 2009 award in the MP3 and video player category, our flagship...

  • Page 29
    ... high-end front-load washing machines and side-by-side refrigerators, we also continued to pursue and win new customers in emerging markets with products designed to match local lifestyles. Our latest home appliances continue to win praise and customers around the world for their innovative features...

  • Page 30
    ... audio and video via both the Internet and home networks. 13. Ultra TOUCH This premium full-touchscreen phone will dazzle with a brilliant 2.8-inch active-matrix OLED screen, high-resolution 8-megapixel camera, and a host of other sophisticated multimedia features. 14. 750 Series LCD TVs With a 240...

  • Page 31
    29 13 14 A

  • Page 32
    ... Design Center in Seoul, our global design network includes centers in London, Milan, Los Angeles, Shanghai, Tokyo, and Delhi. We are also actively involved in nurturing tomorrow's world-class designers through the Samsung Art & Design Institute (SADI) and the Samsung Design Membership program...

  • Page 33
    ...a hard copy of whatever is on the computer screen. 17. SyncMaster 70 Series LCD Monitors Showcasing our eye-catching and ecofriendly liquid-crystal styling, a sleek 30 mm profile, and improved power-saving features, these premium monitors deliver sharp, vivid images with a 50,000:1 dynamic contrast...

  • Page 34
    20 22 A B 21 C

  • Page 35
    ... Application Processor This advanced processor gives mobile devices a powerful multimedia punch, supporting standard-definition video compression and playback, high-performance 3D maps, games, and user interfaces, and much more with an ultra-efficient power envelope. 21. Story Station External Hard...

  • Page 36
    DS Device Solution Business At Samsung Electronics, our global leadership in technology, production capabilities, and cost competitiveness, combined with highly collaborative customer relationships, enables us to deliver the high-tech semiconductors, LCD panels, and other core components that are ...

  • Page 37
    ... at the forefront in developing markets for high performance products such as solid-state drives, fusion memory devices, and next-generation PRAM. In the DRAM segment, we continue to maintain our industry leadership with the world's smallest 50nmclass 2Gb DRAM. We plan to strengthen our eco-friendly...

  • Page 38
    ... at the chip level to help our customers deliver products with increasingly powerful and efficient levels of user functionality. STORAGE SYSTEM We are a leading producer of high-capacity hard drive storage solutions for the mobile, home, and enterprise markets. Our comprehensive lineup includes...

  • Page 39
    ...inch DID with Super-Narrow Bezel With a mere 7.3 mm gap between live screen areas, this 46-inch digital information display is the building block of a virtually seamless video wall solution with one of the narrowest bezel spaces available on the market. 25.7% 2008 GLOBAL TFT-LCD PANEL MARKET SHARE

  • Page 40
    ... digital signage market with 46-inch DID panels featuring ultra-narrow 7.3 mm bezels for tiled video wall applications and high-brightness 46-inch (1,500 nits) and 70-inch (2,000 nits) panels for sunlight-readable outdoor applications. Today, we are leading the way in developing tomorrow's display...

  • Page 41
    39 39 CSR COrpOrATE CiTizEnShip pArTnEr COLLABOrATiOn SUSTAinABiLiTy Corporate Social responsibility At Samsung Electronics, we're making life a little brighter as we share the hopes of local communities around the world. We're building a better tomorrow as we grow and prosper together with our ...

  • Page 42
    " In North America, our community activities focus on children and youth. And the most rewarding part of my job is the smiles I help make. " Kris Narayanan Director, Brand Marketing Team Samsung Electronics America CORPORATE CITIZENSHIP We're earning global respect as we share local hopes. ...

  • Page 43
    ... the needs of local communities across Korea since 1995 when we formally launched our service organization. Today, Samsung Community Relations oversees approximately 1,500 volunteer teams serving at community welfare centers as well through a broad range of programs benefitting shut-in seniors...

  • Page 44
    ... lead the world. BUILDING WINNING PARTNERSHIPS At Samsung Electronics, we provide extensive consulting and training support to help our partners improve their technical and manufacturing processes as part of a comprehensive, long-term strategy to foster win-win partnerships. In 2008, we established...

  • Page 45
    ... bezel design that helped us maintain our position as the global TV market leader for a third consecutive year in 2008. Another example is our collaboration to localize production of semiconductor fabrication equipment that has enabled our partner to emerge as the industry's top equipment maker...

  • Page 46
    ... PRIORITY At Samsung Electronics, the greening of management, products, processes, workplaces, and communities has been our top priority since we launched our sustainability strategy in 1996. Over the years, we have implemented ISO 14001- and OHSAS 18001-certified integrated environment, safety, and...

  • Page 47
    ... consumers and NGOs for green products such as our LCD TVs with liquid-crystal styling, front-load washers with "bubble wash" technology, and mobile phones made with corn-based bioplastics. At the CES 2009 show in the US, we won two Innovations Eco-Design Awards, sharing the limelight for the most...

  • Page 48
    ...LEADERSHIP GOES ON...Creative innovation and progressive entrepreneurship are the strategies that will keep us at the forefront of the global electronics industry. And with each passing day, they bring us a step closer to our vision of becoming one of the world's most trusted and respected companies...

  • Page 49
    47 FINANCIAL STATEMENTS REPORT OF INDEPENDENT AUDITORS 48 CONSOLIDATED FINANCIAL STATEMENTS BALANCE SHEETS STATEMENTS OF INCOME STATEMENTS OF CHANGES IN EQUITY STATEMENTS OF CASH FLOWS FIVE-YEAR FINANCIAL SUMMARY 50 52 53 55 57 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 59

  • Page 50
    ...position of Samsung Electronics Co., Ltd. and its subsidiaries as of December 31, 2008 and 2007, and the results of their operations, the changes in their equity and their cash flows for the years then ended in conformity with accounting principles generally accepted in the Republic of Korea. Samil...

  • Page 51

  • Page 52
    CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2008 AND 2007 (In millions of Korean won and in thousands of U.S. dollars (Note 3)) 2008 ASSETS Current assets Cash and cash equivalents Short-term financial instruments (Note 4) Short-term available-for-sale securities (Note 5) Trade accounts and notes ...

  • Page 53
    ...Trade accounts and notes payable Short-term borrowings (Note 14) Current maturities of long-term debts (Notes 15 and 16) Other accounts and notes payable Accrued expenses Income taxes payable Other current liabilities Total current liabilities Long-term debts (Note 15) Foreign...137 2007 2008 2007 ...

  • Page 54
    ... YEARS ENDED DECEMBER 31, 2008 AND 2007 (In millions of Korean won and in thousands of U.S. dollars (Note 3)) 2008 Sales (Note 28) Cost of sales (Note 28) Gross profit Selling, general and administrative expenses Operating profit Non-operating income Interest and dividend income Foreign exchange...

  • Page 55
    ... of changes in scope of consolidation Net income Acquisition of treasury stock Disposal of treasury stock Stock option activities Available-for-sale Securities Equity-method investments Translation of foreign currency financial statements Others Balance at January 1, 2007 Cash dividends appropriated...

  • Page 56
    ... of treasury stock Stock option activities Available-for-sale Securities Equity-method investments Translation of foreign currency financial statements Others Balance at January 1, 2008 Cash dividends appropriated in prior year Retained earnings after appropriations Interim cash dividends Change in...

  • Page 57
    ... of equity-method investments Deferred income taxes Others 10,095,191 543,980 532,429 62,292 (110,962) 1,070,358 (447,885) 209,357 (748,398) (500,435) 1,289,732 17,885,873 Changes in operating assets and liabilities Increase in trade accounts and notes receivable Increase in inventories Decrease...

  • Page 58
    ... Payment of dividends Acquisition of treasury stock Net proceeds from short-term borrowings Repayment of current maturities of long-term debts Repayment of long-term debts Proceeds from long-term debts Others Net cash provided by (used in) financing activities Effect of exchange rate changes on cash...

  • Page 59
    57 CONSOLIDATED FIVE-YEAR FINANCIAL SUMMARY CONSOLIDATED BASE CONSOLIDATED BALANCE SHEET (In billions of Korean won) 2004 Assets Cash & Cash Eq. Marketable Securities A/R Inventory Liabilities Debt Stockholder's Equity 69,005 8,108 2,868 6,774 5,804 32,604 17,654 36,400 2005 74,462 8,144 1,932 ...

  • Page 60
    ...46 139 2007 14,791 7,421 8,498 (12,002) (12,252) (1,600) (819) (1,825) 421 1,610 2008 13,360 5,526 10,096 (13,128) (14,088) 1,934 1,315 0 817 2,983 CONSOLIDATED FINANCIAL RATIOS (In billions of Korean won) 2004 ROE Profitability (Net Income / Sales) Asset Turnover (Sales / Asset) Leverage (Asset...

  • Page 61
    ... FINANCIAL STATEMENTS DECEMBER 31, 2008 AND 2007 1. THE COMPANY Samsung Electronics Co., Ltd. ("SEC") was incorporated under the laws of the Republic of Korea to manufacture and sell semiconductors, LCDs, telecommunication products, digital media products. As of December 31, 2008, SEC's shares...

  • Page 62
    ... goods Sale of electronic goods Sale of electronic goods Semiconductor sales Holding company (financing) Semiconductor sales Sale of electronic goods Sale of electronic goods Sale of electronic goods Logistics Distribution and sale of electronic goods LCD manufacturing Research center Marketing Sale...

  • Page 63
    ...and sales of facsimile, printer and telecommunication products Mobile phone manufacturing Computer manufacturing LCD manufacturing Mobile phone manufacturing Semiconductor sales Research center Optical cable manufacturing Research center Manufacturing of electronic goods Semiconductor sales Capital...

  • Page 64
    ... Samsung Card S-LCD Corporation Samsung Electronics America (SEA) Samsung Semiconductor (SSI) Samsung Austin Semiconductor (SAS) Samsung Electronica da Amazonia (SEDA) Samsung Electronics Hungarian (SEH) Samsung Electronics France (SEF) Samsung Electronics (UK) (SEUK) Samsung Electronics Europe...

  • Page 65
    ... Samsung Semiconductor Sweden Samsung Electronics Limited Samsung Telecoms (UK) Batino Realty Corporation Samsung Electronics China R&D Center Samsung Electronics Shenzhen Samsung Electronics Football Club Primary Business Service Marketing and service Holding company Semiconductor sales Telecom...

  • Page 66
    ... FINANCIAL ACCOUNTING STANDARDS The Company's consolidated financial statements were prepared in conformity with accounting principles generally accepted in Korea, including SKFAS No. 1 through No. 25. NEW ACCOUNTING STANDARDS AND ACCOUNTING CHANGES The Company has changed the scope of its related...

  • Page 67
    ... at the date of acquisition of the investment are recorded as part of investments and are amortized over five years using the straight-line method. Assets and liabilities of the Company's foreign investees are translated at current exchange rates, while income and expense are translated at average...

  • Page 68
    ...value of the long-term receivables and payables are amortized using the effective interest rate method with interest income or expense adjusted accordingly. STOCK-BASED COMPENSATION The Company uses the fair-value method in determining compensation costs of stock options granted to its employees and...

  • Page 69
    .... All won amounts are expressed in U.S. dollars at the rate of ￦1,257 to US$1, the exchange rate in effect on December 31, 2008. Such presentation is not in accordance with generally accepted accounting principles in either the Republic of Korea or the United States, and should not be construed...

  • Page 70
    ...TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED For the years ended December 31, 2008 and 2007, changes in valuation gain or loss on short-term available-for-sale securities are as follows: (In millions of Korean won) Valuation Gain on Available-For-Sale Securities 2008 Beneficiary certificates...

  • Page 71
    ..."personal credit rehabilitation" program in exchange for cash, preferred stock and subordinated bonds. The preferred stock is recorded as available-for-sale securities, while the subordinated bonds are recorded as held-to-maturity securities. Accounts that are valued at present value under long-term...

  • Page 72
    ... CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 8. FINANCING RECEIVABLES Financing receivables of the consumer financing subsidiary, Samsung Card Co., Ltd., as of December 31, 2008 and 2007, are as follows: (In millions of Korean won) Accounts Short-term financing receivables Credit card assets Lease...

  • Page 73
    ...) 2008 Automobiles Electronic system Less: Accumulated depreciation Accumulated impairment losses Operating lease assets ￦ 993,712 2007 ￦ 867,157 6,410 1,000,122 315,471 2,641 ￦ 682,010 12,546 879,703 270,168 1,970 ￦ 607,565 9. LONG-TERM AVAILABLE-FOR-SALE SECURITIES AND LONG-TERM HELD...

  • Page 74
    ... for the number of shares and percentage) 2008 Number of Shares Owned Samsung Heavy Industries Samsung Fine Chemicals Hotels Shilla Cheil Worldwide Samsung Fire & Marine Insurance Samsung Securities S1 Corporation Samsung Engineering Cheil Industries Korea Information Service Saehan Media Tomen...

  • Page 75
    ... recovered, a gain of ￦6,483 million was recognized during 2008. The maturities of long-term held-to-maturity securities as of December 31, 2008, consist of the following: (In millions of Korean won) Maturity From one year to five years Recorded book value Government and public bonds ￦ 97 ABS...

  • Page 76
    ...CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 10. EQUITY-METHOD INVESTMENTS Equity-method investments as of December 31, 2008, consist of the following: (In millions of Korean won, except for the number of shares and percentage) Investee Number of Percentage of Acquisition Shares Ownership (%) Cost...

  • Page 77
    ...: (In millions of Korean won) 2008 Inventories Samsung SDI Samsung Electro-Mechanics Samsung Techwin Samsung SDS Samsung Corning Precision Glass Others ￦ (645) 2007 Total ￦ (475) Property, Plant and Equipment and Intangible Assets ￦ 170 Inventories ￦ 1,810 Property, Plant and Equipment...

  • Page 78
    ...,250 million and ￦1,188 million, respectively. The Company has not applied the equity method of accounting for following investees: Location Korea Subsidiaries Samsung Everland ¹ Allat ¹ International Cyber Marketing Asia Future Technology & Service ² ² Percentage of Ownership (%) 25.64 30.00...

  • Page 79
    ... Amortization expense of the intangible assets for the years ended December 31, 2008 and 2007, is allocated to following accounts: (In millions of Korean won) Account Production costs Selling and administrative expenses Research and development expenses 2008 ￦ 32,801 2007 ￦ 30,327 123,661...

  • Page 80
    ... of consolidation and changes in foreign currency exchange rates. The amortization expense of intangible assets for the years ended December 31, 2008 and 2007, is allocated to the following accounts: (In millions of Korean won) Account Production costs Selling and administrative expenses Research...

  • Page 81
    ... Interest Rates (%) as of December 31, 2008 Korea Energy Management Corporation Samsung Shinhan 4th Special Purpose Company Others 4.5 4.7 ~ 10 2008 ￦ 68 (In millions of Korean won) 2007 ￦ 282 97,002 671,568 ￦ 768,638 151,881 471,500 ￦ 623,663 (B) Long-term debts denominated in foreign...

  • Page 82
    ... FINANCIAL STATEMENTS CONTINUED Maturities of long-term debts outstanding, excluding premiums and discounts on debentures, as of December 31, 2008, are as follows: (In millions of Korean won) For the Years Ending December 31 2009 2010 2011 2012 Thereafter Local Currency Loans ￦ 9,504 Foreign...

  • Page 83
    ... amounts from changes in scope of consolidation and changes in foreign currency exchange rates. As of December 31, 2008, the Company funded 60% of severance payable through severance insurance deposits with Samsung Life Insurance and Samsung Fire & Marin Insurance. In addition, Samsung Card, one of...

  • Page 84
    ..., Samsung Card has been provided with a guarantee amounting to US$3 million from Woori Bank, in relation to its payment to AMEX. (C) As of December 31, 2008, the Company has technical assistance agreements with certain companies requiring payment for use of the technology or from sales of products...

  • Page 85
    ...4 overseas companies including ON Semiconductor Corporation for alleged patent infringements. In addition to cases mentioned above, the Company has been involved in various claims and proceedings pending in the normal course of business as of December 31, 2008. The Company's management believes that...

  • Page 86
    ...the Samsung Card is obliged to redeem the issued securities. A transfer of the financial assets has been recognized as a sale, and accordingly has been derecognized from the financial statements. Total financial assets transferred amounted to ￦1,575,016 million for the year ended December 31, 2008...

  • Page 87
    ... 30, 2008 and 2007, and as year-end dividends for the years ended December 31, 2008 and 2007. Details of interim dividends and year-end dividends are as follows: (A) Interim Dividends 2008 Number of shares eligible for dividends Dividend rate Dividend amount Common stock Preferred stock Common stock...

  • Page 88
    ... option plan that provides for the granting of stock purchase options to employees or directors who have contributed or are expected to contribute to the management and technological innovation of the Company. A summary of the terms and the number of outstanding stock options as of December 31, 2008...

  • Page 89
    ... tax expense based on statutory rates to the actual amount of taxes recorded by the Company for the years ended December 31, 2008 and 2007: (In millions of Korean won) 2008 Income before tax Statutory tax rate Expected taxes at statutory rate Tax credit Changes in tax rates Others, net Actual taxes...

  • Page 90
    ... for tax purposes Equity-method investments and others Depreciation Capitalized interest expense Accrued income Allowance (technical expense, others) Deferred foreign exchange gains Impairment losses on investments Others Deferred Income Tax Asset (Liabilities) Beginning Balance Increase...

  • Page 91
    ... of the Company's potentially dilutive securities including stock options. Basic earnings per share for the years ended December 31, 2008 and 2007, is calculated as follows: (In millions, except per share amounts) 2008 Net income as reported on the statements of income Adjustments: Dividends for...

  • Page 92
    ... share) ￦ 580,300 ￦ 606,700 27. CONSOLIDATED COMPREHENSIVE INCOME Consolidated comprehensive income for the years ended December 31, 2008 and 2007, consist of: (In millions of Korean won) 2008 Net income Changes in accumulated gain on valuation of available-for-sale securities, net of related...

  • Page 93
    ... years ended December 31, 2008 and 2007, and the related receivables and payables as of December 31, 2008 and 2007, are as follows: (In millions of Korean won) Subsidiaries SJC SLCD STA SET SSI SAPL SEHK SEA SSEG SEO SEUK SEF SSEL SII SEI SELS TSTC SESC Others Sales 2008 ￦ 4,315,405 Purchases...

  • Page 94
    ...for the years ended December 31, 2008 and 2007, and the related receivables and payables as of December 31, 2008 and 2007, are as follows: Equity-method Investees Samsung SDI Samsung SDS Samsung Electro-Mechanics Samsung Corning Precision Glass Samsung Techwin Seoul Commtech Others Sales 2008 60,166...

  • Page 95
    ...years ended December 31, 2008 and 2007, and the related receivables as of December 31, 2008 and 2007, are as follows: Seller Samsung SDI SJC Samsung SDI SJC SJC Samsung SDI Samsung Techwin Samsung SDI Samsung SDI Samsung Techwin Others Purchaser SII Samsung SDI SESK Samsung Electro-Mechanics Samsung...

  • Page 96
    ...232 2008 Foreign Currency Amount 678 18,820 6 Korean Won (Equivalent) ￦ 852,338 2007 Korean Won (Equivalent) ￦ 431,733 USD Trade accounts and notes payable JPY EUR Others Short-term borrowings (including document against acceptance) USD Other current liabilities JPY EUR Others Long-term other...

  • Page 97
    ... 154,175 ￦ 531,589 The Company has following major business segments: Semiconductor - memory, system LSI and HDD; Telecommunications - handsets, network system and computers; • LCD - liquid crystal display panel; • Digital Media - TV, monitors, printers and digital appliances; and • Others...

  • Page 98
    ... TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED Operating data according to business segment as of and for the year ended December 31, 2008: (In millions of Korean won) 2008 Summary of Business by Segment Digital Media Gross sales Intersegment sales Net sales 1 Operating profit 2 Total assets...

  • Page 99
    ... transactions not affecting cash flows for the years ended December 31, 2008 and 2007, are as follows: (In millions of Korean won) 2008 Write-off of accounts receivables and others Increase (decrease) in gain on valuation of available-for-sale securities Increase in loss on valuation of available...

  • Page 100
    ... the global economic downturn, we made the decision to suspend our ongoing share repurchase program. Accordingly, we repurchased no shares during the year. INVESTING IN SAMSUNG Investors residing outside of Korea have the option of investing in us through any Korean securities firm or by purchasing...

  • Page 101
    ..., UK Southeast Asia Samsung Electronics Southeast Asia & Oceania Headquarters 3 Church Street, #26-01 Samsung Hub Singapore 049483 China Samsung Electronics China Headquarters 23/F China Merchants Tower No. 2 Dong Huan Nan Lu, Chao Yang District Beijing, China 100022 PRODUCTION NETWORK KOREA Suwon...

  • Page 102
    ...4501-2001 Mexico Samsung Electronics Mexico (SEM-P), Queretaro Tel: 52-442-296-9003 Samsung Mexicana S.A. de C.V. (SAMEX), Tijuana Tel: 1-619-671-1669 United States Samsung Austin Semiconductor, Llc (SAS), Austin Tel: 1-512-672-1000 SALES NETWORK ASIA PACIFIC Australia Samsung Electronics Australia...

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    ... 62-21-5299-1777 Japan Samsung Japan Corporation (SJC), Tokyo Tel: 81-3-6234-2111 Malaysia Samsung Malaysia Electronics (SME-Set) Sdn. Bhd., Kuala Lumpur Tel: 60-3-2263-6600 Philippines Samsung Electronics Philippines Co. (SEPCO), Manila Tel: 63-2-722-7777 Singapore Samsung Asia Pte. Ltd. (SAPL) Tel...

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    ... AMERICA Canada Samsung Electronics Canada Inc. (SECA), Toronto Tel: 1-905-542-3535 Mexico Samsung Electronics Mexico Sales (SEM-S), Mexico City Tel: 52-55-5747-5100 United States Samsung Electronics America, Inc. (SEA), Ridgefield Park Tel: 1-201-229-4000 Samsung Electronics Latino America Miami...

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