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104
Of the amounts charged to capital adjustments from the valuation
of interest rate swap contracts, a gain of \380 million will be
realized by December 31, 2007.
(I) As of December 31, 2006, the Co riat A L’Energie Atomique,
02 Micro International Limited, St.Clair Intellectual Property
Consultants Inc., Tadahiro Ohmi, Rambus Inc., Sony Ericsson
Mobile Communications Inc., Orion IP, LLC., Agere systems Inc.,
Fujinon Corporation, Inter Digital Communications Corporation,
ON Semiconductor Corporation and Hitachi Global Storage
Technologies Netherlands B.V. for alleged patent infringements,
and as a plaintiff in six overseas legal actions against Compal
Electronics Inc., International Rectifier Corporation, Matsushita
Electric Industrial Co., Ltd, Rambus Inc., Sony Ericsson Mobile
Communications Inc., and ON Semiconductor Corporation for
alleged patent infringements.
Domestic legal actions involving SEC include seven cases as
the plaintiff with total claims amounting to approximately \9,575
million and 25 cases as the defendant, excluding the Samsung
Motors Inc. case, mentioned in (L), with a total claims amounting
The minimum lease payments and their present value as of December 31, 2006 and 2005, are as follows:
2006 2005
Minimum lease
payments
Present
values
Minimum lease
payments
Present
values
Within one year \4,386 \3,833 \4,346 \3,929
From one year to five years 17,544 14,575 17,384 15,716
More than five years 43,420 24,212 49,802 28,323
65,350 \42,620 71,532 \47,968
Present value adjustment (22,730) (23,564)
Financing lease liabilities \42,620 \47,968
(F) As of December 31, 2006, the Company has various lease
agreements that are recognized as operating leases. Related rental
payments amounting to \61,188 million (2005: \59,646 million)
are charged to current operations for the year ended December
31, 2006.
The minimum lease payments as of December 31, 2006 and 2005,
are as follows:
2006 2005
Within one year \59,156 \44,441
From one year to five years 133,373 110,806
More than five years 51,418 73,704
\243,947 \228,951
(G) As of December 31, 2006, the Company has credit insurance
against its approved foreign customers on behalf of its affiliates
and subsidiaries with Korea Export Insurance Co.
(H) As of December 31, 2006, the Company has forward
exchange contracts to manage the exposure to changes in
currency exchanges rates in accordance with its foreign currency
risk management policy. The use of foreign currency forward
contracts allows the Company to reduce its exposure to the risk
that it may be adversely affected by changes in exchange rates.
In addition, the Company has interest rate swap contracts and
foreign currency swap contracts to reduce the impact of changes
in floating rates on long-term debt and borrowings, and interest
rate swap contracts and foreign currency swap contracts to
reduce the impact of changes in the fair-value risk on fixed rate
long-term debt.
A summary of derivative transactions as of and for the year ended
December 31, 2006 and 2005, follows:
(In millions of Korean won)
(In millions of Korean won)
2006 2005
Type Asset
(Liability)
Gain
(Loss) on
Valuation
(I/S)
Gain
(Loss) on
Valuation
(B/S)
Asset
(Liability)
Forward
exchange \6,319 \7,210 \ - \5,704
(8,866) (9,667) - (7,361)
Interest rate
swap \1,851 \ - \1,673 \9,228
(3,876) - (3,669) (6,202)
Currency
swap \ - \ - \ - \ -
(28,948) (23,468) - (5,480)
(In millions of Korean won)